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tv   With All Due Respect  Bloomberg  December 9, 2016 8:00pm-9:01pm EST

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>> coming up on bloomberg best, italy's prime minister steps down. the ecb adjusts qe. open a stock markets little lighter. >> we have seen the offshore you lower since these tweets. monthhas been a monster since donald trump's election. investors tell us what they expect when he takes office. >> the consensus will be good for some markets and bad for others.
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>> i'm looking for a 2% economy. 3-4% economy. >> we are hoping to do better. it is all straight ahead on bloomberg best. scarlet: hello and welcome. i'm scarlet fu. this is bloomberg best, your review of the most important business news and interviews from bloomberg television around the world. let's start with a look at the top headlines. the week began with change at the top in italy after voters rejected their prime minister's proposal for political reform. the prime minister says that he would quit in the early morning after losing the
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referendum. thatthink the expectation the result of this referendum would have a disruptive impact on italy and possibly on the eurozone, were grossly exaggerated. it was not comparable to the brexit or even to the vote in the united states, which signaled much more fundamental political change. >> what would you be asking of the new government of italy? >> that the new government must we have significant public debt. in a difficult situation like 2011. 50% was in debt. so huge like in 2011
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but we have to continue the process of reform and to add a reform on the recovery, that absolutely must be completed. >> donald trump turning up the heat on boeing. in a tweet donald trump said boeing is building a brand-new 747 air force one for future presidents. control. out of more than $4 billion. counsel order. why did he tweet this? where did this number come from? >> i am not sure where the $4 billion came from. this may have come from, why this spring to mind could be a washington post article published last night that talked about $125 billion worth of administrative waste at the pentagon, a large portion of a defense budget.
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i think this is interesting. isald trump mind -- he returning to the campaign discussion he had about getting rid of waste at the pentagon. it won't just be boeing in the crosshairs on that. there is a whole defense establishment and other programs that could be saved. scarlet: softbank visited donald tower today.trump he has agreed to invest $50 billion in the u.s. towards businesses and 50,000 new jobs. he made a comment about how he would never done this if the trunk ticket made the election. -- the donald trump ticket made the election. >> me to have the details. he pointed to deregulation is being behind this. we do not really know for sure what the whole back story is. is going to create new
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jobs in the economy. he is going to show cause and effect. >> big stories out of the banking sector today. the eu was fined. a total of $521 million for collusion. the banks conspired to break the arrival rate. more costs cuts are coming. alleging to cut $1 billion in expenses. how many times will he have to adjust his turnaround plan? this is number two. >> he laid it out in 2015 and came back in march with aggressive coyotes. he said the markets are not cooperating with push to increase revenue. you're going to have to be more aggressive. >> will he have more focus on cost costs than worrying about
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revenue growth? had some skepticism from the outset when they laid out this plan a year ago. some said these look very optimistic. you are seeing the bank come back on those and walked those back a little bit. >> we had headlines there is a settlement in the -- fixing probe. how do they measure up with what is expected? >> the fines are not the biggest we have seen but they certainly are of reasonable size. the banks have said that they may appeal these. they may fight these. agricole,nd credit their statement were stronger given the hsbc fine was lower. this may not be the end of the story. there may be some appeals. scarlet: the ecb is leaving it a far as it range unchanged.
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leaving its refinancing rate unchanged at 0%. the ecb will buy $80 billion of your -- euros until march. does say the outlook becomes less favorable, they will increase the programs. is this a dovish take? >> good question. 60 is less than a deep. i see this as tapering to the extent that it is open-ended if there is some dovish elements to it. they have put in language in there to increase the run rate, increase the duration. literally draw the has turned towards the exit. move,it more as a hawkish
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confidence on their side that they are reaching a goal. average inflation rate, they are forecasting to 2014. i really see this as backing away a little bit from there 2% target. 1.5% is the new 2%. >> the ecb has refused italian time.'s request for >> the question is why? >> the ecb did not see any moretage in asking for time. the plan has been in the cards for a long time. private investors have not stepped up. there is not a huge likelihood that someone will step in and the next 20 days given the instability there is right now in italy. >> the government is continuing
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a decree law for the rescue of the bank. shares of the bank tumbling today. >> the italian government, this caretaker government is moving quite rapidly after the decision by the ecb not to grant the bank additional time to put together this capital increase. they are trying to put together a decree that would have to be approved by the italian government. that would essentially provide a rescue for the bank. we do have a lot of details yet. bondholders are going to be effected. presumably the government strategy is to soften the potential blow for retail investors. some have claimed they were not providing sufficient information to make investment choices in the past buying securities. we don't know the mechanism italy is going to use to try and
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engineer this rescue. still ahead. much more on global politics, and markets seem to like the prospect of a donald trump presidency. prominent investors tell us how much they think the honeymoon will last. and tough business stories, vladimir putin cut say oil deal -- cuts an oil deal. this is bloomberg. ♪
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scarlet: this is bloomberg best. let's continue our global tour of the top business stories with another tweet from donald trump that struck a nerve in beijing. >> donald trump has taken on china via social media hitting
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back on criticism of his decision to take a phone call from the president of taiwan. >> he has been hitting a of the taxesation of the yuan,, and the south china sea. the question really is whether this is more empty rhetoric from donald trump or if it confirms that he is going to be taking a more confrontational line with china. >> the word is he is not president yet and that perhaps he has been badly advised. they are doing everything to take this out. >> does this so the need for donald trump to nominate a secretary of state as soon as possible can advise them and explain his thinking? >> i think yes on the one hand. people are keen for him to
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appoint the secretary of state. then the question is even if you did get an articulate secretary of state, to what extent could you believe what the secretary of state says? wideningve the trade in october. the september revision was revised slightly better at 36.2 billion. the trade deficit continuing to widen. >> there is an escalation between china and the trump administration. china came up more powerfully. >> they are feeling each other -- like twooxers boxers. donald talking about how trump halve the hole idea of whether they were manipulating
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currency backwards, look at what happened in the trade data today. trade balance with china is lower on a year-over-year basis. this is the first time in many years this has happened. trade starting to see balance go in the other direction. the american people have that in their mind. it's a good move for him. it doesn't square with the facts right now. >> the stock link connecting hong kong here giving foreign investors more than 800 chinese stocks. investorsforeign perspective, it is the story of growth read if we look at next year's growth expectations, we are expecting on average 20% versus shanghai. that drives the momentum.
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a smaller cap. changesost significant the removal of the overall quota. that quota initially was put there because there was a pilot and not a clear certainty as to whether it would work, whether it would create unintended consequences. the removal of the quota is the manifestation of a great confidence this program is going to be great not only for investors but allow the risk management to work. >> potentially challenging and moved by u.s. health-care giant johnson & johnson to acquire europe's largest firm. why would they would be stepping
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in now? johnson & johnson was far along in the process to buy it. we report this kind of thing 10 days ago. we think those companies are in discussions. they are trying to work out does this fall apart? >> let's talk about money. who can pay more? what is the knockout figure? >> it's a good question. i don't know there is a knockout figure. there is this unusual set of circumstances. is it about money? is it something completely different?
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or maybe he decides i'm going to keep this company. no one is going to buy it for any price. a the u.s. high court upheld insider trading decision. let's start with what the court decided. but while they asked to decide? >> the issue was whether somebody can be convicted of insider trading when the insider didn't do anything of value for it. if the insider was just getting it to a friend or relative as a gift. that was enough to support a trading conviction. the supreme court said yes it is. >> what does this mean for regulators? >> it won't revive any cases where courts have thrown out convictions such as in the newman case. it puts the law back to where a lot of people thought it was in one key aspect.
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>> at&t defenses companies $85 billion deal for time warner. he says it will challenge cable and hasten the development of five g networks. he testified on competition. >> for your constituents we believe the benefits are substantial. >> what power does the subcommittee have? >> they could raise concerns the regulators might get into but this is more of a show. it is a little theater. i don't think anyone believes this is going to get blocked despite what donald trump said in october that he's going to block this deal. i've talked to the bankers and lawyers. i talked to the investors. none of them really feel like this is going to get blocked. 80-90% likelihood it is
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going to go through. >> china's exports rebounded in november. the man held up. and surprise numbers. the want to focus on is 0.1%. that is the export number increase in november year on year. it compares to a drop of 7.3% the previous month in october. that 0.1% is looking very healthy indeed. >> it is a sign the global economy is healing. we have had a week period for industrial production. it is a sign that things are looking better. sells $11 billion stake in its largest oil producer to glencore. vladimir putin went on tv to tout the deal as one of the largest acquisitions in the oil and gas sector in the world in
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2016. >> what is in it for russia? >> in terms of lynn core, this ona company that was founded this kind of trading. it was a big forte in recent years. this is a big signal for glencore that it owns russian oil. is a huge itself it win for them in terms of getting big international names into the sector. it gives a foreign exchange the point they have to sell off a special -- it is starting to chip away at this notion that russia is isolated. these are big names to have on its side. ♪
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scarlet: this is bloomberg best. i'm scarlet fu. oil prices began week after opec members made a deal to curb production. the rally stalled. there were doubts nations will agree to the cots. the challenges ahead in exclusive interviews at the most influential summit in albert dobby. -- abu dhabi. >> if oil prices continue to , willow bay opec act again? early to answer that question. i think it will be enough to achieve the market balance.
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if we move 1.8 million barrels per day i don't think the market will stay at the average of the 2016. if we truly achieve the 1.8 . we are very confident. >> if you look at the track record, it has been very accurate. >> i think historically we have not done what we have done. opec's position to leave the market, to balance. and react when the market is about to balance, this is a new phenomenon. we are looking at a new world. a new dynamic. >> you probably don't really want to deal with this scenario. you make this move, demand is
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weaker. she'll recovery is faster. does opec flex its muscle further? >> hard to predict. months outlook position, let's see what happens. nothing too dramatic is going to happen in six months. >> given what has happened in november. >> in terms of real effect, you're going to have some of that. on the focus,ork cutting the volume and the pricing, we will get there. it is not as predictable as it used to be. we are going to keep watching the envelope as we go. >> what is that going to do to your outlook? around $25? >> we are hoping to do better.
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towards quarter one. opec is committed to the cause they have committed. scarlet: coming up, a look back at an eventful week in global politics. renowned moun investors look ahead to a donald trump presidency and what it could mean to global markets. >> the financial sector, the defense sector, and the science sector. >> this is bloomberg. ♪
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♪ that donaldand trump's transition team has requested that you and the president-elect hold a conversation shortly. when will that happen and what
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do you expect to talk to him about? >> it will happen in the next couple of days. the message from my side will be, my dear president-elect, please think about the small and midsized countries of this globe. they need open markets and an based inet philosophy opportunity, and i help to have the opportunity to of the futureeds of economies. >> that was switzerland's president speaking with guy johnson about donald trump.
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we discuss the outlook for global financial markets in a donald trump presidency. the weeks since have seen a surge in equities and a stronger dollar. bill gross doesn't think the markets are getting everything right when it comes to the longer-term picture. >> what they are getting wrong in the longer term is there are a lot of negatives in terms of anti-globalization policy. anti-trade to a certain extent. many of them promote a strong dollar, which sounds good, but ultimately puts u.s. corporations at a disadvantage. negatives as opposed to positives and all of this, and none of it will come to fruition with 100% probability. >> the devil remains in the details. cause the market to reassess and price in the
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long-term negative effects of that stronger dollar? what would be the catalyst? >> i don't think anything in the short-term, right? he has not even been sworn in. that takes place in january. i think perhaps some statements by some of his appointees in the, something the market interprets negatively in terms of capital, but for the moment, smooth sailing. i would say we sailed upwards in terms of in the green by 5%, 6%, market, stocks in the and one could argue that much of the positives have been built in. claims for instance that are3% or 4% real growth suspicious. the old standard 10-20 years ago is being affected by structural
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.actors that can't be dismissed i'm looking for a 2% of economy, not a 3% economy to the extent investors begin to agree with me, then their expectations for profit growth are diminished to some extent. >> the last 5-6 years have been characterized by complete consensus between governments and central banks, within countries and across the globe. everybody has been following the same playbook, the same set of policies, and the mixture of first to brexit, now trump, aly suggests a situation where the consensus might break down. it will be good for some markets, bad for other markets, and we might get a break down in the high correlation and something between and
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interesting active management environment. assetn you look at broad classes which one would benefit from a breakdown in correlation? ityou have to look at regionally rather than asset class. clearly if trump comes up with a set of policies that are cutting tax rates aggressively in the u.s., increasing tariffs into the u.s., about getting people to repatriate cash and the u.s., about making it easier for private-sector infrastructure building, i would say that looks sector infrastructure always takes much too long, all of those things would be bullish u.s. equities, steepening in the yield curve, bullish for the u.s. dollar. >> you have an quite positive on the donald trump victory. you are saying he is down to
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earth and will bring the american economy back to its feet. doesn't it imply a stronger dollar, even if he goes on a fiscal spending spree. we are at record highs on the bloomberg dollar index. in the short-term, the dollar gets stronger, but in the medium-to-longer-term, the heavy spending that he will embark on, and spending not only on infrastructure, but also defense , will result in people starting to think maybe this dollar should not be as strong as it is. we will probably see a weaker dollar. also, remember that one of trumps objective is to help american industry. when does that mean? they have to export. in order to export, you need a weaker dollar. i think down the road we will see a weaker dollar. >> do you think donald trump has overpromised and under delivered? >> well, one person is not
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capable of delivering. you have to be able to lead to make that happen. i think the reaction to the markets is first in the united states that it is over. years, there is just a relief that it is over, so that is your first reaction. i think the other reaction is giving more freedom to the youthree industries where would expect immediate reaction, financial sector, defense sector, and bio-science sector, and all those have moved a great deal in a few weeks. view and vision as you travel the world, the next big set piece of change and economies and markets. next change here is how are we going to create jobs.
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in a democracy, if the majority do not feel they have a future, the will be a change in we have a, so reeducation, a substantial reeducation effort in front of people skillsure match the jobs of the future, and sometimes you get these imbalances. there is in any major industry today in the world that isn't undergoing some disruption, starting with agriculture. the media business was a focus of conversation this week. chief down with executives at the ubs global media and communications conference in new york, starting with les moonves of cbs. youo accomplish everything would like cbs to accomplish, can you do it without owning some distribution? do you need to have an ownership
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interest in some of these distribution platforms? >> i don't think so necessarily. we are small when you compare us to disney or comcast. premium content company. our job is to do great content for cbs, showtime, late-night sports, etc.. if we do that, they will pay us for what we are offering and we do not need to be in distribution. >> at&t said they needed time warner, so they went and bought the thing. at some point, you have distributors saying we need choose cbs. we don't want to do a license deal. we want to buy you. >> i'm sure there are distributors who want to do that. we are a controlled company, so that is more difficult, but i can imagine people out there, especially when you see at&t paying a lot of money for time
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warner, that a company like ours would be very valuable in the open market. we have seen a really astonishing surge and subscriptions, principally digital subscriptions, and good news on the print front as well. butjust headline audiences, people willing to pay for the kind of journalism we do, which accurate,f as thoughtful, without fear or favor. >> can you quantify that of that? >> we have seen 10 times as many net subscribers as the same week previous year. overall, we guided the market to more00 net subscribers, so than twice as many as q4 last year, well over 200,000 already
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and we are nowhere near the end of the quarter. >> this comes amidst an overall trend. >> and the rate has been accelerating. normally with the subscription model you would expect an initial growth spurt, followed by plateauing. we have seen an attractive curved where it has been accelerating for two years now, and our belief now knowing what we know and thinking about our opportunity in america and around the world is that we can grow substantially further. unrealistick it is to imagine 10 million digital prescribers or more. ♪ digital subscribers or more. ♪
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>> you are watching "bloomberg best". i am scarlet fu.
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waseo renzi's resignation one of many important political developments around the world this week. let's again our roundup in new zealand. the new zealand dollar has fallen after the country's prime minister announced his surprise resignation a short time ago. >> why is he quitting? it was a bolt out of the blue. >> family reasons being one of the reasons he gave, saying it's time to spend more time at home, but he also says he has nothing left in the tank after eight years, and a good leader knows when it is time to go, and it is time to go. he was the former head of global exchange for merrill lynch. he has made one of new zealand's economy one of the fastest in the world and sold the country through the financial crisis and devastating earthquakes. the new zealand dollar sank on the news, everybody caught by surprise. john t going out on his own
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terms and on top. >> european populism has been an issue across many countries, many different elections. that right-wing populist movement has suffered a setback president, as next green party backed candidate running as an independent. do you see this as a turning point, a pro-european candidate not all and maybe it is about right-wing populist movement sweeping over the continent? >> know, in short. i think this is a limit to populism in a european state, around memories of the 1930's and 1940's. i think the extreme right wing will struggle to get into power, even in places like austria. >> what about france? >> france is a different story.
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marine le pen's agenda has shifted towards social policies, tax giveaways and benefit giveaways. there is a risk that because she has moved away from the more flowery rhetoric and copying strategies that she could do very well in the second poll. french prime minister has confirmed he will run for the presidency next year. as prime minister today in order to prepare for the two-round primary in january. the current presidential front runners are marine le pen and the republican. valls vowed to unite the left. can he? >> probably not. he cannot unite the hard left. the question is whether he will
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be the candidate for the socialists. he has a good chance. in no way i find it reassuring that at least the sort of leading candidate of the centerleft is a reformer. france seems to be yearning for reform, but the centerleft field seems to be splintered. probably the centerleft does not have much of a chance to make it into the final runoff off of the presidential election anyway. german chancellor angela merkel was reelected as the christian democratic union chairwoman. level of support that she has received in her chairmanship. great result for her. to get less than 90% for the first time since she has been a sitting chancellor, at a time
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when she has absolutely no opponent, is a very poor result. on the other hand, she is trying the right ando appease members of her party who angry about her decision to let in some of the refugees. she rolled back her open-door immigration policy and went on record as saying she does not think that muslim women should be allowed to wear a full face veil. taxtalked about corporate dodgers the germans have long seen as a problem going to other places to do business. there was that story about the eu telling the irish how to deal with their tax policy. the germans are concerned they are losing a lot of money. is concerned about a balanced budget. they have had one for three years in a row.
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it is interesting at a time when you have negative interest rates to be that worried about a balanced budget. at thee were protests u.k. supreme court as judges heard the government's appeal against the lawsuit attempting to force it to pass a new law before britain's exit from the european union. >> what are the chances of the supreme court overturning it? slimthink the chances are that the supreme court will overturn the high court ruling. >> do we believe them when they say this is a purely legal case? >> yes, the case will be decided on the legality and correct procedure to trigger article 50. >> is the honeymoon over?
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how is she going into the new year? >> in relation to brexit, i think she has a couple of concerns. the brexit story was entirely hers. she controlled the narrative when she said brexit means brexit and she has the power to trigger article 50. it is likely to change again when the u.k. supreme court rules, so there is a counter narrative building up, how brexit can be achieved. then we have a question of where we end up. it can't be the state's quote. status quo. there has to be some shifting of ground and compromise, and we don't know as of yet what the compromise will look like. >> south korea's parliament has impeachingvor of president park. what does this mean for the presidency? >> the president park geun-hye
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has been suspended from duties and the prime minister takes over as interim leader of the country. has said she expects the voice of the respects the voice of the parliament and the people. the motion goes to the constitutional court, and six out of nine judges need to uproot the motion to go forward. presidentialns, elections will be held within 60 days. the whole process could take as much as eight months, but much think it will be shorter than that. by theets thrown out constitutional court, we could see president park geun-hye come back and a swelling of public anger towards park geun-hye and what they see as the close ties between big business and government, and the anger it has
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fueled in the country. ♪
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rrg go on ther bloomberg. they are in the lagging quadrant. they have been prized for defensive features and a dividend payout. investors have not been buying those. we have a function here that shows a possible reaction to the euro, or a range of reactions you could look for in the euro after the ecb decision tomorrow. you can put any asset class into , then seew box here what the range of possible
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movements will be after the decision. the upperline is bound average over the last year, the red line is the lower bound average over the last year. >> there are 30,000 functions on the bloomberg, and we always enjoy showing you our favorites. here is another function. . here is a quick take that explores fake news. ♪
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>> that was one of the many quick takes you can find on the bloomberg and on with business news and analysis 24 hours a day.
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that was "bloomberg best". thank you for watching. ♪ this is bloomberg. ♪
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