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tv   Bloomberg Best  Bloomberg  March 3, 2017 8:00pm-9:01pm EST

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>> coming up on "bloomberg best ," the stories that shaped the weekend business around the world. >> the dow topping, 21,000. respond tos president's optimistic tone in his first address to congress. president trump: we have undertaken an historic effort to massively reduce job crushing regulations. >> did his message fan the program flames? >> healthier markets are something he is hoping for. >> the public equity market enjoys what the president is doing are talking about. >> will recent economic growth translate to a rate hike? the ides of march is nearly upon us. >> the fed has been itching,
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wanting to raise rates for sometimes. >> i don't think there is going to be a hike. >> big changes of the world's largest has front. bridgewater associates. ray dallio is stepping down. >> a lot of big news coming out of bridgewater. i would lead with john rubenstein leaving as the co-chief executive officer. matt: aw, snap. snapchat's parent company snap begins trading publicly. can it live up to thehype? it is all straight ahead on "bloomberg best." hello and welcome. i'm matt miller in berlin. this is "bloomberg best," your weekly review of the most
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important business news and the interviews from bloomberg television around the world. let's take a day by day look at the top headlines starting with monday when a proposed $12 billion exchange merger teetered on the brink of failure. $13 billion attempt to acquire the london stock exchange appears to be on the verge of collapse. a lot of people were saying that politics is going to kill this deal, but it turns out it was the regulator. >> yes, they asked them whether they could give us mts, an electronic trading platform for bonds. lsc said they would not do that. they agreed to sell their french clearinghouse. there was some talk that georgia open toche borse was that. they need to wait for the commission to come back to them which is at the end of this month, may be early april but they say the chances are now
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looking us a good. >> is it a brexit casualty? >> did brexit have a role to play,. absolutely they had downs the deal too much before brexit. if you merge, where is the headquarters going to be? if it is in london or outside the european union and if it isn't frankford -- is in frankford, the u.k. says that is not helping us. there has been much politics around it as well. [cheering] >> let's listen in as the president gets ready to deliver his address to congress. president trump: i'm here to deliver a message of unity and strength, and it is a message deeply delivered from my heart. in the last 8 years, tha passive ministration has put on more new deb than nearly all the other presidents combined. we've lost more than 1/4 of ou
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r manufacturing jobs since nafta and we have lost 60,000 factories since china joined the wto in 2001. i believe strongly in free trade. but it also has to be fair gr trade. whatat can we anticipate, is your first item on your to do list, mr. secretary, and what are some of the policy initiatives we can expect coming from your department? >> much tougher enforcement. there is not a lot of -- making trade deals if you do not enforce them. >> china involved? >> everybody. >> getting back to breaking news on bridgewater associates. the founder is stepping down as interim co-chief executive officer by april. according to a post on his linkedin, your first thoughts on something that's further into this letter. john rubinstein's leading. >> to your point, a lot of big
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news coming out in the statement from ray dalio. i would lead with john rubenstein leaving as the coaches executive officer. john rubenstein was an unusual hire less than a year ago for bridgewater. remember he was a key lieutenant at apple party helps to designing ipod. he left apple years ago, joined bridgwater last year. dalio described as both leadership and technology. dalio thought john rubenstein would be a good fit because he worked with steve jobs in an environment that celebrated disagreement and that time friction. that's what goes on inside bridgewater. that is why he thought jon rubenstein would work out well. jon rubenstein did not and his exit is precipitating a number of other important changes at bridgewater. number one, ray dalio is getting out of bridgewater management by. april 15 and david mccormick, who has
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been at the firm for 8 years, former treasury undersecretary under george w. bush, is being elevated to co-ceo with eileen murray of morgan stanley also who has a deep background in technology. isas you can hear, the buzz building. people are excited for they want to see what the shares are going to be trading at. we're hearing they are closing, as i said, there we have it. we are at 24. $23.61. but remember, this is a big up tick.we are talking a 40% pop up from $17 yesterday. much excitement. and congratulating. the guys telling me that was 24 million shares being traded, 10% to 12% on the 200 million put into the market by snap. many more tech ipo's may be to
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come. >> this is been an incredible week. i was teaching my class. last week, the odds of a fed move in march were very low, maybe 20%. within one week they got to 80%. it is one of those weeks in own mind,fed changes apparently and change the minds of the public to get the markets to go from a low chance to a very high chance. almost a upure chance of a march move. >> janet yellen speaking today. all eyes on what she might say about march. you can see with the markets are saying about march. that the probability of a rate hike is at 90%. what is going to be the word that signals march from janet yellen today? >> i think right now she does not have to prepare markets for march. she does not like the idea of a march rate hike, she has to lean against it. that would be her job right now if she wants to take march off the table. it is curious that a committee ailt has been telling the t
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that we should look at the data, made this u-turn within a couple of days without any better data. >> this committee will evaluate whether employment and inflation aren't continue to evolve in line with our expectations. in which case, a further adjustment of the federal funds rate would likely be appropriate. nonetheless, if we has said many times, and is my discussion today demonstrates, monetary policy cannot be and is not on a preset course. as in 2015 and 2016, the committee stands ready to adjust its assessments of the appropriate path to monetary unanticipated developments materially change the economic outlook. ahead, as we review the week on "bloomberg best," starbucks makes is italian debut with an upscale drink. we talked to howard
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scholz. in france, france while fillon v the presidential race despite a probe into his use of public funds. how global politics is affecting the financial sector in eruope, the --in europe, the u.s. and i ndia next. this is bloomberg. ♪
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matt: this is "bloomberg best." miller. let's continue our tour of the week's top business stories with elections and political theater throughout europe and how t uncertainties affecting the financials. >> alaska to european politics. theresa may as getting ready for a fight on two fronts with
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scotland's government which is said to be preparing to call another referendum vote. her on government when a draft brexit is debated in the parliament. independent french presidential cronidate emmanuel ma opening up his biggest lead helped by his rivals legal troubles. sterling was down against all major currencies. was that times referendum story nothing, or? >> notice that when you have got -- the pound did not go up that much. obviously, the debate over scotland remains, the forefront of people's line north of the border. important to note, though, that the pound's move was exaggerated. if you look at the polling data, hankering as much independence as they hope for. >> it seems like we had a little bit of an easing into risk over the weekend. what exactly happened? >> basically the gap between the
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independent candidate macron and marine le pen has narrowed. emmanuel macron is only two points behind le pen. that's the - concerns.estors the french bond is rising following the polling. u.k. referendum in this year with the french and german elections, people get so upset with these elections, they just lose focus on company's ability to generate chas, the matter what the outcome of these elections are. >> do you wind up protecting yourself, though? because the french election is a risk. do you hedge these bets in any way? is there a trigger that you wind up reversing your view? >> no. what we do is we try to measure how the impact of a french election would have on our
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company's cash flow streams. note, a lot of the companies based in france, most of their businesses outside of france. even bnp has huge businesses in and bank ofnelux the western united states. perhaps what a lot of this instability does cause this pressure on the euor, which aga -- on the euor. ro. you take that hit up front if you are holding stocks and the euro drops, you take ahead. -- a hit. they get an earnings enhancement basedheir forieinggn earnings. this is one of the way the political instability manifests itself is enough weak euro. we do to watch these things. if currencies are way overvalued, as determined by tpp we tend to hedge. but we're a bottom-up long-term
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value investors. we try to identify good companies that for some reason are out of favor. and that reason is often these political events. banksn do we see the u.s. start buying europen an banks tt are dirt cheap? >> i think you are going to see that, in my view -- the scenario could be easily happening in 2018 to 2019, if we were to have a stable political unit. basically, you get out of the election in france, the netherlands and germany. scenario,or a status i've that point, i think there is massive value in europe. and you will start seeing u.s. banks looking at them. alternatively, i give an example. does not have a european onshore regulated entity. they are operating at a branch of a london bank. ,ithin brexit and a hard brexit
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jpmorgan will need an onshore european regulated bank. and so, you will see more and more of a need to be present in europe. >> we spoke about some panel -- how many banks will their actually be left in five or 10 years from now? >> some countries there are too many banks. . germany, italy, there are too many banks i think if we look at the u.s. as a model, probably we could look, we could see in the future which is not so far away, maybe something like 10 important banks in europe, and smaller and medium in smaller banks like in the u.s. so, you know, if we want the market which is supported and clients all over europe that are supported in a strongly like in the u.s., you need banks that are able to operate cross-border easy.
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and there are too many obstacles for the. francine: they should be accommodation of two strong banks? if you put two dinosaurs together, you're not going to make a strong bank. >> it will be the survival of the fittest. le'ts not forget we are competing with a u.s. and europe is much more open than the u.s. to competition. this is going to be an issue we are going to look at very closely. openican-based have an pe field in europe. the u.s. regulator has been tough and european banks lately. >> jamie dimon is speaking at the banks investor day, taking questions on everything from strategy to regulation. bankthink around regulation, the key principles -- it is high time you look at it. no one in the rational mind can say it was a completely original -- rational and did not cut back lending. we are not fanatics about it.
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regulation,lk about wanting more rational regulation, wanting a tightening of the rule. you can expect potentially a piece of small legislation to redefine that. he talked also about tax reform in that that would be good for america. beens comments, he has careful to say that i'm not concerned -- he is concerned to some extent with what is good for the bank -- but in terms of regulation, and turns of reform, he says i am concerned with what is good for america. he says that it why he has participated in various advisory capacities to the president. he also talked about that if wages rises, that 5 million people could come back to the job market. he talked about the regulation has been an issue or overregulation has been an issue for small business formation. so, he also said there are a lot of reasons. there are a lot of reasons people may not want to own 10
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year treasuries. will someone get hurt? would be his stomach? yes -- would it be systemic? yes, but it will not be systemic. >> bloomberg banking and wall street reporter laura keller joins us here. let's talk about yesterday and now we have got him talking a lot of different topics. what is the most important? laura: everything the jamie dimon says about the consumer in the economy is what we want to hear from the bankside because he never says all that much about trading that we will not already know from whatever the company has out there. he talks about modest gains they are seeing this quarter inch rating from last year's 1q, which was interesting. more for reasons for what going to see at other banks and as this them underselling themselves so they can beat later in april? it is really the economy and what is the consumer doing these days and what do we think they will do in the future. >> president trump and the fed
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-- the relfation trade. financials of by 23% since the election. look for another big jump in wells fargo and bankamerica up 2%. do you want to buy the banks here, or do you want to sell them? >> on balance i would say that would have a good run. i do not buy the reflation narrative for the banks because that implies that we will have rising rates. that will imply at some point that the highly leveraged corporate world and the consumer world may see rising debt levels. there is a natural check and balance. i also think as we are seeing from a lot of the retailing sector, there is huge pricing competition that is emerging in the financial sector with what is happening with fidelity and schwabb. i think pricing will come to the u.s. financial. alix: all those guys who were in that short, that is the wrong
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call, you should be going long. >> positioning is positioning for reflation trade. they're short the 10 year for the right reason. if you really think we are at 2360 honor widgets when he 500 on the s&p, we should be at 3% at the 10-year. bond market -- the equity market is dissonant from what the bond market is seeing in terms of the rea economic progress and buoyancy tol come. >> governor patel did mention and express and concern about the potential shifts to protectionism. how do you see the trump administration policies? >> india has a lot of people who are working -- so that is definitely a point of concern as to whether they will be welcome there are not. you know, the strength of the u.s. has been its openness, has been its ability to attract the best of talent from everywhere. goingt think the u.s. is
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to give up that very big strength they have and suddenly close all doors. we are still not turning -- because we cannot afford to. we need a lot of capital in order to grow. you cannot help that if you're going to become a closed economy. overall, i think we still should not overreact to these things. ♪
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matt: you are watching "bloomberg best." starbucks has moved into coffee country, that's italy, the world's largest coffee chain opened its first cafe in milan. francine lacqua sat down with howard schultz who touted the company's culture and core values. >> people know that starbucks
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has created a business plan over the years that was based on the balance of profit and social impact. first company to give equity in the form of stock options. companies that have health insurance to every employee. two years ago, free college tuition. in china, we gave housing allowance to our employees, our partners traveling long distances. not every decision in my view is economic. i think the price of admission has been performance but i do not wake up every day saying, makere we going to more money? saying, how can we create a deep sense of loyalty and our customers based on our guiding principles and listen, we are living in a world today that is very fragile. and there's a lot of uncertainty. and i think we have an obligation and responsibility as a company to add value to humanity and i could say it in
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my own parlance, this a time where i think we as private citizens and as businesspeople need to build bridges, not walls. francine: is that why you announce that the hiring -- of 10,000? >> for me, that decision was not a political decision. it was a decision based on the values of our company and our guiding principles that believe very strongly your station life, your sexual preference, the color or your skin, the country you are born in should not define the opportunities we have as people. if starbucks as a company can create an environment where the is based on spirit merit, then i think we are doing a pretty good job. and that is what i want to try and do is a company.
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francine: do you see the fabric of america changing? >> i 'm still very optimistic about america. we clearly are going through and a change, and inflection point politically that i am the quintessential optimist about the promise of america, the american dream. i want to do everything i can to advance that and be a symbol for american entre preneurialship. francine: do think a lot of ceo's wil follow suitl? >> we have a collective -- to add value back to our society and the people we employ. matt: we have got more compelling conversation coming up on "bloomberg best." samsung stock is on a tear despite the indictment of acting company head jay y lee on charges including bribery and embezzlement. deutsche telecom and ericsson talk about 5g in barcelona.
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in the parent company of snapchat begins trading in the u.s. this is bloomberg. ♪
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♪ this is "bloomberg best." miller.t many of our interviews on bloomberg television this week touched on technology, whether the potential of five g or regulation. our first story however has to do with scandal and the world's largest phone maker, samsung. >> samsung's de facto leader may have to wait months to stand trial for corruption. jay y. lee has been indicted on bribery and embezzlement. what happens to the group while he is behind bars? let's bring in rosalind chin.
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what is next? are things going to be on hold? >> jay y. lee is the vice-chairman of samsung electronics and samsung group. it's not like we will see phones stopping made. the company says there will be co-ceos that do their best to run the company as best as possible and keep operations going as best they can, but it is these leaders we have seen dealing with issues with the company, the note 7 crisis last but it is more likely to affect bigger strategic anisions, things like acquisition, management reshuffle. those are the areas where we might see as slowing down in decision making because a jay y.
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lee as caught up with the legal issues he is facing. the korean special prosecutor's wasce said that samsung directly related to the scandal. this isn't the kind of thing they teach people in business school how to deal with. level, there has been an impact on the corporate strategy office. what does this mean? >> this strategy office was at the group level. this is something the samsung group announced yesterday. this department was linked to the corruption investigation, so the vice-chairman and president and i did yesterday. they both resigned. history, leaders have been in jail before, convicted of crimes, and still managed to lead their conglomerates. , 41 buy, one hole, and
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one sell. >> let's talk about what is happening in barcelona today. coming together to push for next jen high-speed mobile networks. they have put their names to a statement while congress outlining their commitment to get 5g done and dusted. >> we have heard a lot about 5g. it're one of those who wants faster into our hands. >> thank you. thank you for meeting us here. 5g is starting to happening. it isnot mean commercially deployed yet, but operators are positioning their 4g networks and evolving into
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5g, and that is where we can get a lot of learning and experiences for the future. topic of deutsche telekom. it is not just a new network we are building. it is a totally new thing. it is an infrastructure gaming 1000 more percent capacity, 100 times faster than the original network, and 10 times quicker , so a lot of technology coming to the people. >> how does that help deutsche telekom? will it the health care? buildinge been infrastructure on people, but now we are connecting all devices. devices will be connected in our infrastructure in 2020. the wireless marketplace is
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extremely competitive. after the ftc stopped its investigation of free data carriess, all for wire have unlimited data plans. that is good for consumers. our focus will always be what is in the public interest. if it is, we would be more favorably inclined to approve the deal. >> china is allowing more companies to list 18 months after clamping down on the market. is this a signal from the securities regulator that we have turned the corner? to see more want ipo's happening, and that should support the chinese economy. what chinaying for calls appropriately larger supplies of ipos after a stronger than expected recovery from the 2015 market route, $5 trillion wiped out there, so it has taken some time to recover from that and enough that
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regulators think we can release the floodgates of little bit more for ipos. 600 company seeking approval. 280 approved last year of only 248 completed. , but a stable capital market is required for it to go through. thenap has started trading, first tech ipo of the year, and the shares are zooming out of the gates. let's go to the floor of the new york stock exchange. hyde, you have a special guest for us? it is the president of the new york stock exchange. congratulations. , ofuptick almost in one day people questioning that there is too much money left on the table? they job is not to opine on market value. my job was to get this ipo often great fashion.
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i take great comfort that the stock opened a $24 and is trading smoothly around that number. that is what you want on the first day come especially a large ipo. that hold in terms of large ipos, particularly technology ipos? many are looking for dropbox, spotify, are you looking for tech ipos? year ago, we had zero ipos in the first quarter of 2016. this is our 13th this year in the first quarter, and we have march and april. it is not the big tech names, which is the premise of your question. those big tech names are watching closely what happens today, and it can alter plans, pull ipos forward or backwards. i take comfort that this ipo was very smooth and they got what many describe as a health
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evaluation. >> do feel 2017 will be the year of yet more companies coming public? yes, absolutely. things can change. in august 2015, a very volatile day and the ipo market shot. i am not prognosticating. i'm saying the ipo's we are planning plus those in process is very high. youtube is going prime time. it announced a new service called youtube tv that will deliver tv channels to paying customers for $35 a month starting this spring. lucas shaw spoke to ceo of youtube at an event in los angeles. he started by asking her about the details of the new service. youtube, we have a lot of demand for tv content. we think it is a great opportunity with the mobile
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phones because everyone is carrying a tv with them and their pockets, but they are not using them as tvs, so we saw this opportunity to take this amazing tv content and make it available to generations that love content, but wanted on demand, watch it on any device. they want to not have the commitments currently required for tv, so we saw a big opportunity to bring the full tv experience to our audience. these tv networks, these are owned by companies. in the past, youtube has had a difficult relationship with them . did you have to make assurances about those topics? all ofctually work with the large broadcasters on the networks to bring that content onto youtube now. we have clips, shows, so we have had a good relationship with them, and they have seen the
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opportunity to use youtube as a mechanism to get more promotion for their shows, have time shifted versions of their show on youtube, so this is taking it to the next level. ♪
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matt: you are watching "bloomberg best". i am matt miller. u.s.-mexico relations have been at the forefront of president trump's early days, immigration and trade have dominated news headlines. one of the more suggestive headlines came from mexico this week when the country warned it would caught -- cut off nafta talks if the u.s. proposed tariffs. shareelieve we need to more information to get a better assessment of nafta benefits for the u.s.. as you know, basically mexico is the second-largest buyer of u.s. commodities and manufacturing.
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the reality is that many strategic sectors in the u.s. depend on nafta. sometimes when you look at numbers, a help you to understand better the realities of this. for instance, when nafta was signed and you look at manufacturing jobs, they remained constant through the years. 2001changed drastically in when china comes into the world trade is system. that happens to most of the country to have to face new competitors like china. now when you look at manufacturing in the u.s., manufacturing has been growing up in terms of value from 1970 -- from 1997-2015. 38% manufacturing group by in real terms, but has been going down because of technological development and competition with other regions
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of the world. mexicans are very upset with the president of the united states. is there political support in mexico for a renegotiation of the treaty? >> in mexico, the treaty itself has been a very efficient tool to improve u.s.-mexico relationships. aware through history that u.s.-mexico relationship has not been very strong, but fortunately thank to nafta, it has changed drastically in the last 25 years. and today, mexicans feel part a strong part of the north american neighborhood and feel close to the u.s. people. i believe we many of us studied in u.s. universities. a lot of american tourists come to mexico. there are strong bonds between mexico and u.s. citizens. of these goodible relations continue in the future, and one of the elements
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we have to defend his economic integration. >> you have been quite vocal about your concern that the changed administration and u.s. could have an impact on global growth. the specifically do you see impact being on bhp? side, the benefit for business confidence that comes from the trump administration-based what is promised on tax, his desire to cut through some of the politics to get more investment going on in infrastructure, his general commitment to get growth going again in the united states, it can only be good for us. we don't sell a lot of products in the nine states, but that will add to aggregate demand around the world. on the other hand, we are anxious about the possibility that instead we could have bad leadership instead of good leadership on global free trade. free trade is the lifeblood of the economy and makes products
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cheaper for consumers, consumers ,uy more, and there's a result long-term economic growth. long-term economic growth is around 3%. if were going to continue on the journey to pull people out of poverty, we have to get the 4%, and that won't happen under protectionist leadership from the united states, so some good, but some pretty bloody awful. >> you said you were hoping to meet with the epa chief soon. what is the message that newmont would like to bring to the u.s. administration? >> what i have heard him say last week is that he is looking to make sure changes in thelations provide certainty for businesses to be able to make transitions. if we want to make changes, that's fine to let's understand what we are trying to achieve, but let's do it in a logical way so we work our way towards it rather than trying to do it a manner so do it in
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that recognizes the investments made, the impact -- you have to look at that over all as well and see what the right path is to go forward. in much broader strokes, is trump good for gold? >> he was on election night, then it has gone in the other direction. we will see. we continue to watch where his administration comes in on different things. our business is in the u.s., but the other 60% is outside the u.s., so we pay attention to all the countries where we operate. >> 21,000, the dow just hit. your thoughts on that and what it means for public equities before talk about private equities? the market enjoys what the president is doing or talking about it, so the market is very high. ,bviously a lot of stocks
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particular financial services areas, are up. private equity has benefited because when public equity goes up come in the violation of private equity goes up as well. if you're buying things, it makes things more expensive, but this conference indicates that private equity is bullish about the economy. >> what has the president said or said he is going to do that makes people so enthusiastic? >> obviously people from all over the world are here. the united states is dominant in what the private equity world does, so the reason people are excited about it is they feel there will be less regulation of private equity in some ways, the animus to private equity might not be there. i think some people don't like private equity. i think they think that private equity people don't do great things, and so there is something that we are not as good as we think we are. the feeling is the administration will be focused on other things and not beating up on private equity, but
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generally an atmosphere that private equity is welcome into the financial community and the deregulation out of washington and lower taxes would be favorable. onso over all bullish view the president from private equity. >> very bullish view from private equity. i have been here for 20 years and have not seen anything quite as bullish. >> one of the topics that has come up this infrastructure, something we have not heard a lot about. suddenly it is everywhere. how realistic is this $1 trillion figure he's talking about from your estimation? unlikely wet is will have it quickly go into affect. it takes a long time to build infrastructure, get congress to all the rise it, and then where does the money come from. i think the money that comes back from u.s. companies overseas, that money could be repatriated and used for infrastructure. ,t might only be $200 billion
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but to get $1 trillion takes a lot. one trillion dollars may take many years to get it done. behink there will public-private partnerships investing in infrastructure. i think the money is there, but in the old days, infrastructure was called porkbarrel and we are building bridges, dams, we don't need them. now we recognize we need these things, and is not called pork barrel, it is called infrastructure, and infrastructure is a word everybody likes. bewhat ultimate figure could spent on infrastructure and how is it going to be paid for? well, you know, i am not at all convinced they will be able to do much on infrastructure because you saw there was a subtle change of wording and what donald said last night about infrastructure. had been the campaign saying his plan was for $1 trillion of infrastructure, and there is this subtle change that to enable $1an is
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trillion of infrastructure, which i think is something like a tax credit, then the scramble will be trying to get your private projects to count as infrastructure for that purpose. they have already said, the administration has already said that the funding source they want to have for the program is this one time tax on repatriated foreign earnings. a firm upper bound on how much it can be, and i think to $150$100 billion billion cost to the government, so i think the details on that one might be smaller than 80 what the advocates hoped. lift, record all morning, a january trade balance of $1.3 billion, a third of what
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was estimated. we were expecting $3.8 billion. that follows on from the record trade balance back in december at $3.5 billion. some more details dropping, january imports rising 4% from a month earlier, exports falling 3% from a month earlier, so this is perhaps why that figure is coming in weaker than expected. the aussie dollar falling steeply off the back of that news, i qualify that come off a little bit. we were expecting a better number because we have seen iron or prices continue to surge, and drove strong fourth gdp figures on wednesday. just to recap, that trade balance coming in far weaker than expected, still a surplus, but only $1.3 billion. ♪
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att>> an unhappy trading floor deutsche bank, cutting onus is by 80%. bankrevious year, deutsche cut the bonus pool by 17%. dan curtis created a custom index. these bars track the compensation of global markets and investment bank business as a percent of total compensation. there are 30,000 functions on the bloomberg, and we always enjoyed showing you our favorite on bloomberg television. maybe they will become your favorites as well. here is another function you will find useful, quic . to our quickyou takes where you can get context and insight into timely topics. here is a quick take from this week. ♪ >> time now for our bloomberg
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quick take where we provide context and background on issues of interest. the central bank started cutting interest rates to near zero after the 2008 financial crisis. they thought things would gradually get back to normal. now they are wondering what normal means. rates are still super low and unlikely to come all the way back. the reason is the neutral rate of interest which stimulates the economy or cools it down -- trumpember, after donald selection, u.s. bond yields rose , lifted by a promise of enormous tax cuts combined with higher spending on infrastructure. perspective, this rise is a blip after more than two decades of steadily falling rates. these low rates leave central ranks little or no room to cut again if stimulus is required. neutral interest rates have historically tracked economic largelywhich is
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determined by productivity, and productivity is less than 1% the year since 1970 in the united states. the climbing birth rates have led to an increase in the ratio of workers to dependence. save more than dependence. at the same time, the falling price of machine and capital goods has kept spending on investments low and created a savings which has acted to further lower interest rates. toe is the argument, unable cut interest rates further, central banks have had to find other ways of stimulating demand, such as quantitative easing. proposed bylus president is another possibility. budget deficits push interest rates higher. of thehat was just one many quick takes you can find on the bloomberg. you can also find them at along with the latest business news and analysis 24 hours a day. that will be all for "bloomberg
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best" this week. i am matt miller from berlin. thank you for watching bloomberg television. ♪
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