tv Bloomberg Best Bloomberg January 22, 2017 6:00am-7:01am EST
♪ >> coming up on "bloomberg best," the week in business as seen from the world economic forum in davos. a new u.s. president takes command. how will trump lead the economy and where? >> president trump represents the hope of globalism. >> saying you're going to do things and getting them done are different things. erik: brexit comes into sharper focus. theresa may comes to make her case. >> i want to negotiate a free-trade trade agreement with the european union. erik: business and financial leaders share their outlook for the year ahead and their insight into changes on the global horizon. >> there is an expectation that 2017 will be better than 2016. >> we are placing bets on technology.
>> the middle class is disillusioned about the future. >> the eurozone may not survive. >> the most influence in the world right now is populism. erik: it is straight ahead on "bloomberg best." ♪ erik: hello, i'm erik schatzker. welcome to davos and welcome to "bloomberg best." your weekly roundup of the most important business news, analysis and interviews from bloomberg television and around the world. here at the world economic forum, we had the chance to discuss the week's biggest stories with some of the worlds finest minds. let's take a day by day look at the top headlines. ♪ >> 2017 is starting out as the year of geopolitics led by brexit and the incoming trump administration.
no single country is likely to have more effect on the global economy than china. their president spoke for the first time at davos. >> nobody will emerge as a winner in a trade war. >> i saw the president of china's speech as a major message that says, let's recognize the fact that we are interdependent. therefore, we need to communicate using the same language. there are gains from trade. >> sterling rallying today after prime minister theresa may gave her most explicit vision yet for brexit. she vowed to seek a smooth and honorable brexit, but remains committed to honoring the will of the voters. >> i can confirm today that the government will put the final deal to a vote in both houses of parliament before it comes into form. >> i think there are two things that great britain must do. i think it is pretty clear that the european relationship will be kind of status quo.
it won't be as good as it was. i think they can negotiate many things. it's important for them to step aside and renegotiate the rest of the world. their relationships on trading and financial services. >> theresa may made it very clear, brian, that it will be a hard brexit for britain. provided of course she gets the parliamentarian approval. you've got, what? 5000 people there? >> everybody thinks you pick up a mobile home and move it across. but these are real people's lives and these are real things. let's work our transition plan. >> citigroup and goldman sachs wrapping up the big earnings this morning, with both companies reporting results that beat analyst estimates. >> goldman sachs has seen some some stabilization, seeking some -- seeing some upticks, and this comes after a year of very steep declines. that uptick is a very key focus for investors. erik: it is 2017, the crisis is
ancient history, and goldman sachs is so much more profitable than morgan stanley. in the fourth quarter, 11.4%, roe for goldman sachs morgan , stanley is at 8.7%. >> it is called interest rates. goldman sachs is a massive beneficiary of the quantitative easing program because there is a massive shift in trading. -- in fixed income trading. people have been buying bonds the last four years because 12% to -1%.rom you lost money three out of four times buying bonds. and as they have one of the highest market shares, they have benefited. >> rates unchanged from the ecb at 0% on the resting rate. the marginal lending facility maintaining basis points. -- maintaining at 25 basis points. the asset purchase program, at least through march. through april, it went from 80 billion to 60 billion euros a month. and it will carry that through
to the rest of 2017. >> the main concern for germans right now is inflation. european inflation jumped up in december, but german inflation shot up 1.7%, double the rate it had been the month before. germans historically don't really like inflation. it is a concern for the biggest economy in the eu. >> we will suffer some political problems in explaining to the german audience that the inflation rate is likely to raise to 2%. with zero interest rate, we will get some problems, but we will andto explain to our voters a public, any decision, the -- any decision has some advantages and disadvantages. >> steven mnuchin in his bid to become the next treasury
secretary. he told senators at his confirmation hearing that he will be a steward of the post. >> i am committed to be very responsible in my position there and make sure that i properly provide the support from the treasury department. and i would take my responsibility very seriously. >> the conventional wisdom is that it will be great for goldman sachs to have so much of the firm's dna in the white house. is that a safe bet that it is good for goldman sachs? or do you take the other side? >> i think it is terrific to have a bunch of pragmatic business people participate in the process of washington but all of those people will be very focused on the reputation in -- and their business, so we will see how that balances out. i think that this administration is going to be focused on growth. to did -- to the degree that the people working in the administration can think in
practical ways, it provides opportunities and jobs. it is a good thing and in that environment, goldman sachs will benefit. >> i, donald john trump, do solemnly swear. president trump: i donald john trump do solemnly swear. >> that i will faithfully execute. president trump: that i will faithfully execute. >> the office of president of the united states. president trump: the office of president of the united states. >> and will, to the best of my ability. president trump: and will, to the best of my ability. preserve, protect, and defend the constitution of the united states. >> so help me god. president trump: so help me god. >> congratulations, mr. president. erik: donald trump now officially president of the united states. he was the focus of much discussion throughout the week in davos. plenty of trump talk coming up and up next, the latest words on
erik: welcome back to "bloomberg best." i'm erik schatzker in davos, site of the world economic forum annual meeting. britain's exit from the european union is the most pressing unresolved issue facing global business today. u.k. prime minister theresa may is developing a plan to start resolving it. she spoke this week with our bloomberg editor-in-chief. theresa may: we want to build a truly global britain, one that is an advocate for free trade, free markets around the world, and ensuring we are taking those
opportunities. i want to negotiate a good free trade agreement with the european union. i want the best possible access for trade, operating within the european single markets. both goods and services. i value financial services in the city of london and i want to ensure that we can keep that global britain. i believe we will do just that. >> you do not think that financial services deserves a bit more priority given the value to the british economy? theresa may: of course, the services that fit around the banks and asset management companies as well are important to us. but as we look ahead to the britain of the future, the global britain. britain outside the european union. i want to make sure we have a good relationship, that good partnership with the eu. that we have negotiated a good trade agreement between britain and the european union.
that will ensure that stability and jobs and prosperity in the u k -- in the u k. >> you don't see a contradiction between being free trade on one hand and on the other, wanting to intervene in different markets? do you not see a contradiction between those two things? theresa may: i don't see a contradiction between saying that we want to be free traders and also want to make sure that markets are working properly. i think that's what gives people the confidence in globalization which sadly has been eroded. >> on confidence, you have the pound. it's gone down by 1/5 and you seem to be fairly relaxed with that if i can put it that way. i wonder, is there a level where it gets to parity with the dollar and you worry about the pound? theresa may: we have seen different movements in the past few months. but what we have also seen in the economic data is the
strength of the u.k. economy. the imf has made the point last year that we were the fastest-growing major economy. this week we had figures that , showed unemployment coming down once again. so we do see a fundamental strength in the u.k. economy. >> you put forward this version of britain that is free trading. singapore on the thames. i look across the atlantic and i see donald trump that takes a protectionist attitude towards trade. what do you say to him on that? theresa may: if we look around the world, there is a question about free trade. it has been questioned and it goes back to what i was saying earlier, about the people, sometimes they feel that globalization has left them behind. that's why think it's important for us to go out and show responsible behavior and that government is taking the right moves to ensure that the economy works for everyone. show people the value of free
trade. that it is enterprise and the engine of growth that is the engine of our economies. ♪ erik: global bankers are bracing for brexit. jpmorgan ceo jamie dimon has been very frank about the potential negative impact of the split. not just for his business, but for the global economy. he also sat down with john nickelthwaite. >> she has made it very clear she is prioritizing this over -- prioritizing immigration over the single market and does not want to give a special deal for financial services. you are a global bank based in london and hire a lot of non-british people to work there. generally, britain is heading in the wrong direction for jpmorgan and other banks. jamie dimon: london is a center, we have huge economies of scale that include the people of europe.
it is passed on to the customer. when they change the rules, yes, we will remove some of those people and reduce jobs there. the brits will decide how we want to compete around the world. it's not up to me, it's up to the prime minister and the parliament, at this point. it looks like there will be more job movement than we had before. >> coming back to new york as opposed to -- jamie dimon: we don't know yet. the eu can put in rules which requires some of the jobs to move in to the eu. it could be more flexible. it depends. remember, 27 nations. this negotiation will take quite a while. >> another election coming up this year. france. have you looked at the possibility of a le pen presidency and what it will do for the european union? is that one of the worries you have? jamie dimon: it wasn't just the effect on britain, the gdp, the
u.k., etc. it was really the long-term of health of europe. the wishful thinking was that brexit would cause the european union to look at what went wrong and fix it. because what went wrong is going wrong for everybody, not just britain. in some ways it looks like they are doubling down. >> europe is not fixing its problems. jamie dimon: you have a constant -- you have the same political things about immigration. who controls the laws of the country. how much power goes to brussels, how much inflexibility you will have. i'm still hoping they do it. but if you have a le pen presidency, it is a very complex thing. the eurozone may not survive. it is a long-term pessimistic view of europe. >> unless they change. jamie dimon: unless they change. things will have to change. they have to more competitive globally. they are doing ok right now. they are doing 1% plus, which is ok. i say this out of respect for
the european people. but they have to change. it may be forced by politics or new leadership. we will have to see. erik: more of the week's conversations from davos coming up. donald trump has been talking tough on china. should the world worry about a trade war? >> multiplying things they get anxietycreate enormous i think it's a little overdone. , erik: this is bloomberg. ♪
♪ erik: you are watching "bloomberg best," i'm erik schatzker. donald trump did not appear in davos this week, but his presence was certainly felt. here is a tape of the conversation about trump starting with trump's advisor who sold his stake in sky bridge capital to join the white house. and came here to speak on behalf of the new administration. >> that there is one message you
want to convey on behalf of the president-elect. to this gathering right here. >> it is a really basic message. the administration wants peace and global prosperity, but one of the past so that for us is to help working-class families and middle-class families of the united states. we want to see real wage growth, in the united states and that , would be great for the world because the purchasing power will filtrate back into the world and lead to more global growth. in a lot of ways, president trump represents a hope for globalism. if you can fix and cure the wage situation in the united states, it will lead to global demand. erik: what is the question you keep getting that you are trying to answer? anthony scaramucci: he has a very interesting communication style. the more you get to know him and the more time you spend with
him, you understand his communication style. erik: it's not working for these folks? anthony scaramucci: these folks are used to a certain buttoned up politically correct style. it is more synthesized to be inert. the president will say things that are inert that will not cause an issue. i think he has an authentic, refreshing delivery system. and i think people will start to appreciate that more once he is president. erik: of all the things donald trump has promised to do, i would like to know which specifically is of interest or concern to you and carlyle. and i want to start with deductibility of interest expense. something you have to be thinking about running a private equity firm. >> i view myself first as an american citizen and i am worried about more the country and those issue then what affects carlisle. i'm not worried about of anything he said, but i look at things more than a perspective from carlisle.
from a carlisle perspective, we want higher growth. he said he will produce higher growth. clearly, we would like some tax relief in the corporate world and he said he would produce that. we think less regulations would be good, he said he would produce that. as i know from working in government, saying you're going to do things and getting them done are different things. the congress and the united states really takes care of tax legislation. it takes a long time to get it done. we don't know what it's going to be like. there will be some uncertainty for a while. >> will he spur animal spirits? >> i think he already has. if you talk to u.s. chief executives, they are bullish. and i am bullish on the u.s. economy. but not for a long time. i would guess the next two or three years, maybe before the next election if he seeks reelection. it will be quite a difficult picture because there will be a big deficit. what he is proposing will not reduce the deficit, it will probably increase the deficit to some degree.
those repatriated funds, will they go into capital expenditure and innovation? it drives topline growth. or will go to more dividends and buybacks. i see the s&p 500 effectively shrinking. they have paid out more in dividends and buybacks. so management is basically abdicating responsibility. >> right. but that is expected to change and is priced in. >> it will change. i think that is good. the issue of trump, the u.s. economy might be good, but what does it mean internationally. the u.s. wins, you lose on the international front. >> what we see is an administration talking about growth. talking about infrastructure spending, tax reform. and you know, things like repatriation and things that are progrowth. we like that. erik: if they were to change the
tax policy on repatriating, or a it were a been minutes -- diminished amount, or if it were a holiday entirely, how much would you bring back to the u.s. from overseas? >> i think you will see our company, companies like ours across all industries bring capital back onto the balance sheet of the united states. which is likely to be a good thing. we are very supportive of that. >> i was in mexico and business officials are concerned about president trump. but the team that he selected, both people being appointed into government and the advisory council he has put together all indicate a level of engagement at a business level that is reasonably encouraging. clearly again, there will be changes to the way that nafta is constructed. and a renegotiation of the treaty. and often what he's talked about is not that he's against free trade, but the agreements put in place were not great deals for
the usa. >> behind that there is a presumption, he only sees exports as good. >> clearly, we would probably disagree with that. put aside the word globalization that has some pejorative tones to it. free trade in the market definitely results in a lot of people prospering over the last 20 or 30 years. by that, people coming out of poverty and there are endless world bank and imf studies that prove that. global trade, free trade, it's regarded as a force for good, generally. erik: many people have told me they are very concerned about what donald trump might do with china. what do you make of the saber rattling? >> i think part of it is that the u.s., generally, has a pretty unbalanced relationship
with many countries in terms of taxes that get paid to enter another country. we let people come to the u.s. basically free. he had it so that will last -- that whole aspect is being looked at by the new government. china.e has singled out do you worry that if he were to pursue an aggressive policy on trade with the chinese that american companies would lose some of what they've had in china? the market access for example, that companies like yours have had? >> i was at lunch yesterday and talked to the president of china. it was a good conversation. erik: what did he say? >> he was very positive on a long-term relationship between the countries. erik: the president told you this? >> that's what i just said. erik: i'm just making sure everybody understands. >> yes, they understand.
and that he was ready to engage when the time was right and the u.s. had figured out what its positions were. and that they've gone through many u.s. administrations with many chinese administrations. he was anticipating being able to work things out. as are the u.s., despite the kinds of language that, from time to time, is employed. it's early days, erik. so multiplying the things that get said to create enormous anxiety. it's a little overdone. erik: still ahead on "bloomberg best." much more from davos. ray dalio say populism is the number one issue that markets had better be ready to deal with. and heads of global banks give their forecast for 2017. >> the economies are beginning
things were much different. positive, negative, it is the same for everybody. you know, the elections in france, netherlands, germany. some positiveeen and some less positive. theo you worry about regulation. playingnot on the same field as some of your peers over there. start the to discussion with the customer. we want competition because that provides innovation. so a level playing field for us is not negotiable. we hope we can achieve. >> we have heard that a lot of the european banking sector is
too complex. do you think that 2017 is a year where they de-complex themselves? >> i think we are owning the process. we are all trying to achieve these same thing which is to make ourselves simple, more resilient, more compliant. that is what we are doing. in our transformation program, in 2016, we completely changed the organization. a completely new structure. we introduced a cost-cutting and cost efficiency programs. .ignificant 10.2% when i arrived, at 12 now, so almost 200 basis points in 12 months, that is material. so in 2017, it is solidifying that platform and also, as we go we will be launching initiatives that are medium and long-term to really change the way we do
business. >> do you feel more optimistic or perhaps more pessimistic about the outlook for your businesses based on what you hear about the global economy and where it is headed? >> in terms of the global economy. it is still solid. you know, people are wondering about politics, and that is a big discussion, but they feel good about the prospects in the country. they all are still trying to figure out what is going on with the election cycles, what is going on in our country as the administration changes this week. but still very solid, and that is what we see in the united states. there is a growing economy, people are spending money, so we feel good. >> do you think 2017 will be the first year in a long while that your bank and others might be be able to focus on strategic priorities instead of reacting to the regulatory environment and being forced to cut costs because there is so much pressure on the top line?
>> let's go back. we have been focused on that every day for a long time. so think about what we did in the consumer business. when i became ceo, we had 5700 branches, now about 4500. we had 15,000 salespeople, now 25,000 teammates. relationship managers at branches. so, there has been a massive transformation. we did not even know we could deposit checks. chip cards were invented, so massive strategic transformations in our business, it will go on no matter what the regulatory environment is because it is driven by customers. so why are we driving this? mobile technology has changed the way customers interface with institutions. it is growing 15%, 20%, those are numbers -- >> let me ask you this, what can you do if the regulatory overhang goes away?
>> i think it is more about capital liquidity than the way we operate the company. we will not change the way we operate the company in terms of doing the right things for commercial clients. and our treasury service business. it has not changed basically for the last six or seven years and we focus on driving it, driving it, driving it. >> i think there is a sense that right now the economies are beginning to slowly grind to a higher growth rate, which would be better hopefully for all of us. and the banks, including barclays, we are open for business and providing credit, and hopefully 2017 is a good year for the markets. >> are we going to see more volatility, binary markets, as we figure out reflation in america and brexit?
>> let us see the long-term impact of brexit, my own view is it will not create an economic shock. whether we lose 10-15 basis points per annum, that is something that will have a price, but we hope like the prime minister does that, you know, the entire world is taking a new look at the united states, u.k., and europe about trade agreements. the pacific trade agreement did not go through at the end of last year. we hope, like i think a lot of people, that the world continues to be integrated as an economic matter, and we hope the political rhetoric settles down and the u.k. can negotiate trade arrangements with the european union that are beneficial for europe and the u.k. >> you can't quantify it, but if you could qualify it, how disruptive would this be to your business? >> i think if rational minds prevail, and we will, we will get an agreement between the
european union and the u.k. that will be no more disruptive than what barclays had to do in the united states, creating a bank holding company to exercise our business activities in the united states that we did last july. so, you know, there is uncertainty, which no one likes, but i do believe this system will come out more rational and there will be some movement, we will use other offices at times to books in trades, but i don't think it will fundamentally challenge the importance of london as a financial center for europe. >> you look at the markets, brexit, trump, everyone was saying how the markets would go down. was that wrong? did people get trump and brexit wrong? >> i thought there would be a shock because it was so different than what the pundits were calling for, but i never thought the markets would go down. again, markets, the economy but first of all, the markets were trending more favorable anyway, but if you look at the policies that trump has committed himself
to, they are quite stimulative and market supportive. >> you have now heard from theresa may, she wants to be out of the single market, her position is to prioritize curbing immigration over the single market and i will not give priorities to financial services. you are a global bank in london, and you employ a lot of non-britons, and in the single market, so how do you sell across europe? >> i think the thing speaks for itself. who am i? i take that vote has primarily a vote on immigration, so she as a politician, i think that has to be her declared priority, but at the end of the day, as you are correct, the financial service
industry is so important to the british economy, it will take account and that will become an important priority and britain will have to take those issues into account. it won't be dominant. they won't be doing that to please our industry or goldman sachs. it is, it will be in the best interest of the british people in the british economy to be accommodative towards this important industry as they can possibly be. >> do you think there is this strong possibility that the main gainer will be new york? >> so far, i would say that it is already a bit of a gainer. if we were operating our business to maximize global potential, we would get into the u.k. as much as we could, so if business needed to be done in the u.k., it was always there. but if a business could not be done in the u.k., we start to migrate.
the time zone of europe is the best time zone from which to survey the entire world. you wake up with japan, and you go to bed at the close of new york, so that is the best place. if you live in new york, it is hard to watch asia, so we are on track to move more global activity and operations and technology, all those things made more and more sense to operate out of u.k. and out of europe. and so now we are slowing down that decision, and now we are moving there. we have to move there because we want to preserve our optionality. valuecause we don't but we do not value doing things twice. erik: more conversation from davos coming up. this is bloomberg. ♪
♪ erik: welcome everyone. this is "bloomberg best." i am erik schatzker. from oil production to film production, we touched on a wide spectrum of business issues with a wide range of guests in davos. here are just a few of those conversations. >> i think there will still be volatility in the markets, but the agreement on the 30th is a milestone event in the industry. if you look at what is happening in terms of reductions of output, it does appear real, countries are coordinating and working to reduce output, and we are at $55, $60, versus $45. so it is significant for countries and companies in the industry. >> if these production cuts don't go to plan or people cheat, what kind of level do you have to base your forecast on oil this year? >> next year, we are planning $55.
we look at the compliance, curtailments out of the middle east and russian companies. it looks like there is a real commitment. there is always cheating on the margins, it happens, but the big players are cooperating. we have felt for a while that the markets are essentially in balance. month-to-month, there will be ups and downs, but we think now that we can plan solidly, but we will be disciplined in how we spend capital. >> you have been given the job of running saudi aramco, an enormous transition now in saudi arabia. do you think the saudi arabia that will emerge because of what has happened will be a different saudi arabia than what there was a couple of years ago? >> i think they are diversifying their economy and not relying on one commodity. that is something that is
important and critical and this is the right time to do it. >> do feel the weight on your shoulders? >> i think we will do our best and should help and support, because even though we are in oil, gas, and petrochemicals, we would like to have less reliance on the sector to support the economy. and i think diversification, we are putting more into chemicals, more into tools, and we are getting into renewables, so we are looking at different markets. so as a company, we are also trying to diversify. the kingdom is also trying to diversify and be less dependent upon one commodity. at the same time, we are maintaining our strength in oil and gas and expanding it. >> we have asked the chairman of the film association of the u.s. to pass a message to mr. trump, let's leave the entertainment industry alone.
no war, please. >> is there some way that entertainment is different? you talked about earlier that the chinese have limits on the number of films that come in from the u.s. is it better to have no limits, or is there something about entertainment where people should be able to limit what comes in and what goes out? >> well, in china, although we say there is control, as i said, there is also different categories -- coproduction, outright purchase of rights, and different channels into china. in the u.s., more and more companies now are doing co-production. for example, they will allocate a few films to coproductions, that is one way of bypassing control. but i would like to say that the
u.s. government, if it were to control investment, that would be a bad thing. >> it's great that china joined wto, that they participate in they have been a huge deflationary contributor, have done a lot of programs in their country. there are financial imbalances, there is certainly democratic deficit in the way they run the country, so i would not say they are a model, but they are doing a lot of things right. the fact they want to engage in the world, i think that is great. >> you mentioned philanthropy, so do you see them beginning to emerge into philanthropy, jack ma beginning to give away money? >> the sector that jumps in
first is the tech sector, so people in india, a lot of the tech people are doing great philanthropy there. in china, the same thing. they are still in their 40's and 50's, still pretty young, but already whether it is health, environment, education, starting to give gifts, a lot of good dialogue between our foundation and their foundations about what works and what doesn't work. >> what do you consider to be the biggest risks right now, keeping in mind that we are talking about what appears to be an optimistic world? what are the biggest risks and how are you managing them? >> biggest risks for us or the markets? >> both. >> oh, um -- i think the biggest risk of the markets is the geopolitical uncertainty. it is ironic to be here and everybody talking about populism, which is not exactly what the davos crowd is all about, so --
>> that is an understatement. >> coming to a recognition that things geopolitically have changed dramatically, the brexit vote, the presidential elections in the u.s., a number of other regional political movements, they are not, that is not a flash in the pan. i think there has been a fundamental shift, and i don't think that anybody understands what will turn it and what the implications are. does it lead to legitimate trade wars and protectionist behaviors, etc.? so the biggest risk is the economic-political risks backed up by geopolitical risks, you know, international terrorism, the refugee crisis, etc.
in terms of morgan stanley, we have risks every day in our business, but it is not obvious that i can point to one. there is not an outsized position we are taking. i like the business model. ♪ >> the word to describe the most important influence in the world right now is populism. it is no longer central banks most important, through my lifetime, they were the most important economic factor, no longer traditional fiscal policy. the biggest force and how it plays out in the world over the next number of years will be populism. populism could be populism of the left or populism of the right. it tended to become more extreme. i think we are entering a time when worldwide it will be a more important issue. those extremities where the communists and socialist on one end and the fascists on the other. if you follow that through in terms of degrees, populism is a force that needs to be understood and dealt with well, because the real question is, is it going to be smart or stupid? we need to be calm, collected.
he sees there industry heading. tom: where is the future of big banks in five years? >> well, we are placing our bets on technology. we are not sure the fundamental nature of products will change much, although regulation tends to impact that. we don't think the demands of our clients and counterparts will change too much, and that will help us predict ourselves and use technology to improve our own controls and efficiency. and we can then use technology to improve the customer service. tom: do you need people there within the technology and innovation in the future of finance? do you still need someone on the watch? >> we do need people. we need that common sense. the more complex our
algorithms get, the more we peop himle to monitor them. we have a mantra internally, exactly as mario said, we need to replace a lot of people who are actually performing the functions of computer. we want people to stop using their hands and eyes and start using their brains. when we upscale the work, people have much more value, then we get computers to automate what we hope will be much more standardized business. erik: in a panel called the crisis of the middle class, francine lacqua discussed the challenges of globalization with an imminent group of guests. >> if we have a middle-class that is disillusioned, how do you change that and get them back? >> i don't think there is any single bullet. there are obviously elements of the middle class looking up and seeing how well an elite has lived, and seeing all the various benefits that have gone to people at the top of the income distribution.
i think it is a mistake not to recognize that the middle class in my country, and i think in others, is also very concerned that people do not feel that the government is fighting for them. they feel that everybody else is being looked out for, the wealthy look out for themselves, others who are poor and they feel they are not being heard, and they have expressed that they are not being heard in the brexit vote, in the italian referendum, and of course the u.s. presidential election. >> we now probably, i hope, now have an opportune time to put into place the policies we know would help. i completely agree with larry that there is no silver bullet response to that. it is really time to say what policies do we have in place? what more can we do? what measures do we do to reduce inequality? what kind of safety net do we have for people?
>> the middle class is disillusioned about the future, disappointed about the job prospects for their kids, disappointed about the security that they can get out of the welfare system that may become unsustainable, and it is expressing this disillusionment in terms of saying no to what ever the policy leaders suggest, and of course, we all know very well that it is especially difficult to build up a solution, to design and implement it, then it is to say no. the fact is that no is now dominating the political landscape. erik: that wraps up this special edition of "bloomberg best" from the world economic forum annual meeting in davos, switzerland. you can find more coverage from davos and the latest business news at bloomberg.com.
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: tomorrow donald trump will be sworn in as the country's 45th president. inauguration marks the culmination of a surprising and tumultuous season. an estimated 900,000 people are expected in washington, d.c., more than 60 democratic lawmakers are expected to not attend in protest. trump will enter office on friday with less popular support than any new president in modern times. a recent abc news "washington