tv Bloomberg Best Bloomberg July 1, 2017 2:00am-3:01am EDT
♪ scarlet: coming up on "bloomberg best," the stories that shaped the week in business around the world. another global cyber attack causes havoc. most u.s. banks pass the fed's stress test. the gop delays a vote on health reform. >> the euro and markets have reacted very strongly to a speech by draghi. >> comments in sintra suggest that august 3 is going to be a tricky meeting. >> italy commits billions to save two banks. the country's finance minister
explains the deal in an exclusive situation. >> it is not a bailout. >> china preaches openness at the world economic forum. the week's best interviews help make sense of a topsy-turvy world. >> there is tremendous potential for aviation in india. >> the scenario has improved from the beginning of the year. >> free trade for future growth, future business development. >> you want to make sure is that companies are making investments based on the inherent value, not on a particular tax scheme. scarlet: it is all straight ahead on "bloomberg best." ♪ scarlet: hello and welcome. i'm scarlet fu. this is "bloomberg best," your weekly review of the most important business news and interviews from bloomberg television around the world. the week began with political
maneuvering in the u.k. theresa may moved to shore up her support in parliament while pushing the brexit agenda forward. ♪ prime minister theresa may strikes a deal to keep her grip on power. northern ireland's democratic unionist party will support her minority government on key votes. >> it gives her some certainty through the rest of the week, which is what she is happy about for now. on thursday, parliament will vote on the legislative program she unveiled last week and now with the 10 lawmakers in the dup, she should be able to carry that through without them -- with some difficulty. scarlet: speaking of parliament, the impact of the deal on brexit negotiations and the future of e.u. citizens in the u.k. >> mr. speaker, this is a fair and serious offer. our obligations -- with the e.u. will be binding on the u.k. as a matter of international law. and we will incorporate it into u.k .law.
>> there are areas of compromise. the big sticking point would likely be the power of the european court of justice after brexit. the e.u. would like it to continue to have a say in u.k. -- the u.k. would like to rid the british of the ecj, and so they're saying that there's no role for the ecj to play beyond brexit. it is something that has been negotiated. >> the ransomware cyber attack struck firms across the globe. the virus locks computers and demands $300 to allow access. the high concentration of victims are in russia and ukraine. including rosneft. british media company wpp and
danish shipping giant maersk have also been struck. the attack was some way to last month's strike and use to similar virus and identical demands. >> one of the piece of connective tissue that links the virus was earlier in may and this infection today, it's main mechanism for spreading is a weak nsa exploit from the u.s. government. that exploit target, a piece of microsoft windows software that has been patched for many months. that is not the only mechanism, but that's the primary mechanism. and it is a reminder to companies that just because that earlier infection was stopped, actually thanks to some careless coding by the hackers, does not mean the future ones will be as easy to stop. and it looks like the attackers took more care in preparing this set of malware. >> the virus advanced from russia and the ukraine.
it went out to europe and ended up in the u.s. it moved on into india with reports it is moving on to china as well. >> so far, there has not been that widespread of an impact in asia. i think that is partly because there is not a stringent disclosure requirement on asian company as there is in other parts of the world. >> senate republicans have decided to delay a vote on the health care bill until after the july 4th recess. at least five gop senators have said they won't even back procedural vote on the measure that was supposed to take place this week. >> vice president mike pence working capitol hill earlier today trying to muster enough votes for the health care passing. but at the end of the day, the numbers did not add up. >> this is a major setback for mitch mcconnell. he was hoping to get this passed pretty quickly. within really a week of releasing the bill, which would've been a swift effort. but he's still got room to maneuver.
he's still got some cards to play. i think he's going to be pulling out all the stops. the name of the game for conseratives is to make sure they remain energized -- >> we are getting the headlines for the second round of the bank stress tests. 33 banks overall acing the stress test result. capital one has conditionally passed the stress test. so it got the ok, but it must resubmit its capital plan, so it is not a clear passing. >> every time they do this with the qualitative section, the fed is vague on what they find fault in. it's prophecies and data collection and all of the other systemic, how they look at their risk. so, they agian mentioned the same thing -- how they are looking at their risk, and they mention one of their biggest, most important material businesses they weren't looking at the risks properly. everyone has passed, even with a conditional, it is a pass.
and that means they are going to increase their dividends and share buybacks. >> the fed told the banks they have more than enough capital and lender's unveiled how they are trying to generate -- -- generate investor interests. citigroup may purchase up to 50.6 in share buybacks. jpmorgan says it is boosting its dividend 12% and may increase share repurchases to $19.4 billion. >> i think the banks thought that regulators asked them to hold too much. the first opportunity they get, they are going to do it. >> the symbolism is that the pendulum is probably swinging away from -- the build up of a bank towards bringing the capital ratios down. the fact that the numbers suggest that banks are going to pay out all of the money they are projected to earn, tells you that the banks are ready to
start reducing the e, the equities to try to boost returns. pretty good for people who own the stock. >> shares of blue apron made their public debut thursday. but the stock gave a muted performance, literally unchanged by the end of the session after the company lowered its ipo price to $10 a share. from an initial range of $15-17 a share. what happened, how much does this have to do with amazon and whole foods? a good bit does have to do with amazon and whole foods. looking at the trading today, the fact it was unchanged, it was unchanged, and close at $10 a share. we had an aftermarket trade at $9.95. it seems like there is a bit more investor concern baked in as well. >> the market story of the week -- treasuries heading for their biggest weekly loss since march and stocks the worst week in two months. >> i think that the bond market has been telling us we will be in a modest growth, modest
inflation for quite some time. it has also been telling us six hikes in two years from the fed is a headwind from the economy, not a reflection of an accelerating economy. so for us, stock valuations are a little stressed here. we are looking for the market to finish this year, 4% to 6% lower than where we are right now. we do not think this cycle is over, but i think the second half of this year, there is multiple headwinds that will be a little bit of a problem for stocks. >> the 100 most expensive stocks in the s&p out of the 500 are, have only been more expensive relative to the rest of the market in 99. so, you could easily see a significant correction in those. that is where all of the capitalization is. scott's right that there's the possibility of that 6% drop but it would be centered in the expensive stuff we might have seen the beginning of that in the last two or three weeks. that's the beginning of what the trading has looked like. >> still to come as we review
the week, italy arranges the arrest of two struggling banks, but the finance minister insists it is not a bailout. plus, ceo's talks about the new reality of protectionism and working around it. and up next, more of the week's top business stories. the world's largest food company becomes a target for activist investors. >> a rather long wish list that we saw coming out last night, saying they should make acquisitions. >> this is bloomberg. ♪
following the seven-year investigation into the company's shopping service. that is the biggest ever competition fine from the european commission, doubling the previous record handed to intel back in 2009. you look at amazon, they are doing credibly well. ebay. likewise. where's the evidence the competition has suffered materially? >> what we have found and started intensively, i think with 5.2 terabytes of data, is that there is a very close relationship between visibility and traffic and traffic and revenue. so, what you see is that google has taken advantage for its own shopping comparison on the cost of its rivals. and been able to do so by misusing the dominant position in general search. and that is the key of the case. >> italy has approved emergency rules for two banks in the northern region, mobilizing as much as a 17 billion euros to
liquidate lender's and sell their good assets. on friday, the european central bank declared the lender's likely to fail and said both would be wound up under insolvency rules. what does tell us about how lenient the commission and the e.u. are when when it comes to bailing in? >> i think first of all we have to say the bail in law make a lot of sense. everybody believes it is a better way to go forward. but i think you have to get to a starting point before before you can actually apply those across the whole marketplace. i think it is really clear italy has its own idiosyncratic problems around senior debt holders and the e.u.'s having to get italy to this point in time with a can say, from now on, it is bail-ins. this is what we are seeing here. >> takata's filed for bankruptcy claiming liabilities of $10 billion and confirmed the sale
of its core business to key safety systems for $1.6 million. >> for car owners, it is good news because it does mean the company will continue to operate and that it will continue to produce the airbags needed to replace those. the takeover by key safety systems means there will be new investment in the company in order to produce the massive number of airbags needed to replace the faulty ones. bond holders, less good news for them. as well for companies that have all kinds of liabilities with takata. you know, now that they are a bankrupt entity, there is less money in the pool for them to pay out. so there will be a big gap between what their liabilities are in the cash they have on hand. and that will have to be worked out in court. >> nestle is coming under pressure from activist investor dan loeb to sell a $27 billion
stake in l'oreal. the aim is to get them to shed in high growth areas. >> a long wish list we saw coming out last night saying they should make acquisitions. at the same time, they should shed underperforming assets. nestle is a huge company with 2000 brands, there are lots of areas where they can improve. he was an to improve their margin. many areas where he sees opportunity to he says there has rarely been a case where there are so many areas where you can improve. >> nestle has announced a $21 billion share buyback and says it is looking for acquisitions days after dan loeb called for a shakeup. >> is this nestle buying time or pursuing a plan that it already had in place? >> it's quite dramatic doings on the shores of lake geneva two days or less after dan loeb bought in. it certainly looks like they are
moving aggressively to respond, whether this was, how long this was in the works, we don't know exactly at this point. but clearly they are signaling a willingness to engage with the activist and other investors. >> shares of the rental car company avis jumping 21% after it reached a deal with waymo, the self driving car unit of alphabet. it'll manage 600 cars in phoenix. avis competitors' shares like hertz are up 13%. what will the terms of this deal be? what is required of avis? >> right. a pretty small deal. some people on twitter are joking that avis is just changing the oil. they are doing just service and storage, but it does show the reason i think that hertz's stock jump is it shows that the rental car companies could play a significant role. >> earlier this hour we learned
that\ apple is working with hertz, testing self-driving technology in a small fleet of lexus sport utility vehicles. >> apple is leasing some of these suv's from hertz, the traditional fleet management unit. so that came on the heels of the avis reports that we did earlier today. so we put out the apple story this afternoon, and as we noted the shares are moving quite a lot on it. >> the bank of england's governor mark carney has planned along with his financial stability team to increase capital requirements by 11.4 billion pounds to tackle risk posed by consumer credit growth and prepare for uncertainty of brexit talks. >> did the boe buy stealth, announce tightening of conditions today, policy today? >> it did, in a way. there has been a big split on the monetary policy committee recently.
and carney, of course, sits on the mpc and the spc, which looks at financial stability. um, and by raising the capital buffer, that's in essence, tightens conditions. so, it kind of gives the mark carney more leeway in terms of holding off on any changes in monetary policy come august. >> a lot of action in the currencies as we hear from the central bankers. the euro's rebounding after falling to against the dollar after the ecb said the market misjudged president mario draghi's speech. meanwhile, the pound is rising as boe governor mark carney says removal of some monetary stimulus is likely to become necessary. >> the euro and markets have reacted very strongly to a speech by mario draghi yesterday. euro depreciated, bond yields
have gone up, all of this is putting in danger the progress that the ecb is doing. it was sort of a message control. it is saying that mario draghi is not signaling any imminent tapering. >> mark carney now saying the bank of england may need to begin raising rates. earlier, week ago, he suggested he was not in that camp. >> his comments now suggested august 3 will be a tricky meeting. i'm not sure you will get a rate hike. we are getting close to that point where trade up between tolerating higher inflation may not be worth it anymore. >> rupert murdoch's 21st century fox inches closer to securing sky. the first we learned from the u.k. government there were a client to refer them to a regulator and then we heard from the regulator that they see no broadcast standard concern. is mr. murdoch happy man for the news out of the u.k. today?
>> it is really interesting to see the sky shares surge. this is not the worst case an -- worst case scenario for fox. the worst case. what the today is said -- what the government has said is that they are planning, they are minded to review this for additional regulatory review which could take another six months but it is definitely not the worst case scenario. >> the alliance has grabbed its merger agreement with right had -- rite aid which was being reviewed by regulars. instead, it will buy 22 rite aid stores. and those stores will be converted to walgreens. >> it's always been obvious the remedies walgreens and rite aid put in front of the regulators were in position, they pushed back the time for getting this done again again and again. what they've come out today i s
♪ scarlet: you are watching "bloomberg best." i'm scarlet fu. the help of italy's banking sector under scrutiny as the government allow the second-largest lender to take over the good assets of two failed banks. bloomberg's mark barton discuss the deal is ghostly with the italian finance minister. mark: one of our columnist wrote, this is a bailout that nationalizes losses and privatizes gains. weren't banking rules meant to stop this?
>> i totally disagree with that statement. it is not a bail out, and everything was done by the rules -- it is not a bailout. it's the national liquidation of two banks declared likely to fail by the ecb. mark: would you not say that those who claimed that this unwind we'll call it undermines confidence in the banking union project? >> i don't think so. as i said, we negotiated the rules with the european institution. the srb, digi competition. digi competition has stated yesterday that state aid is totally legal in this case. so there is no disruption of the rules whatsoever. mark: ok, it's legal, but a week or two ago, spain's popular went down a different route.
it was wound down without state aid. how are these two italian lender's different from banco popular? >> well, i think there is a difference between banco popular -- but between santander and the italian banker decided to come in an acquire the good assets of the banks subject to litigation -- liquidation. but with the clause that the capital ratio of the acquiring bank could be kept unchanged by the operation. so while on the other hand, banco santander had to raise 7 billion euros to raise capital to leave the ratios unchanged. mark: so you don't except the accusation that some have level today that this unwind or whatever you want to call it leads to a non-level playing field in europe? >> absolutely not. this is capital neutral. so, the position of the bank has not changed from that point of
view and as i said, given the fact that this is a liquidation according to some specific rules that was deemed to be totally legal from the point of view of state aid rules. so this is not exactly because it is not changing the level playing field, the playing field that we had, that we had the assessment by digi competition. mark: finance minister, regardless of what you say, there are concerns in germany. might this hinder further eurozone integration as some have suggested today? >> i totally disagree with that statement as well. we have strengthened the euro integration and strengthed in the banking union. and we are working to make an even stronger. -- it even stronger. scarlet: ahead on "bloomberg best," more of the week's compelling conversations, including interviews from the conference known as the davos of asia. ceo's speak about trade and tax reform.
♪ mark: where we see the biggest risk is that as we roll forward, there are going to be changes in government policy, public policy will be made in may, that has an ffect on industries. they will be changing technology. this will shift the competitive landscape quite quickly. and there will be potentially a pull forward in anticipation of such changes. who is going to win, who is going to lose, who is going to benefit, who is going to be
penalized? if i'm allocating capital, i want to know where is the information to make those judgments, and i want some perspective on who is thinking about this so i can make those qualitative judgments about management and risk management but also not the value. carlet: that was mark carney discussing climate change with francine lacqua. he talked about financial disclosures with michael bloomberg. the chinese premier asserted the need to combat climate change in his speech at the world climate for him. he talked about china's changing role in the global economy, a topic stephen engle discuss with several guests. stephen: what did you take away from the premier's speech,
claiming china can withstand all of these challenges, they will meet their targets, there will not be any hard landing? eswar: china was sending a very soothing message but also a very clear point the lead up to the party congress in november, to make inroads with financial stability. next year is the year to be concerned about because we might see some unpredictable consequences, and it could come to a head, but this year is ecure. what is even more interesting about the speech is the international aspect because if the beginning and throughout, there was a motion of taking on the globalization mantle. there was the free flows of capital. all of these have permeated his speech, whether indeed or not we will see them, in principle
china wants to take on this motion, promoting globalization nd it is all for it. scarlet: a number of leading ceo's also spoke with bloomberg this week your he must begin with bmw's chairman. he visited the u.s. to announce a major spending increase that will create about 1000 new jobs at the south carolina plant. he toured that and considers the second home. harald: the united states is still a very important big market for us. being successful in south carolina is a part of the long-term plan. reporter: this is not just about you in the united states. you touch so many jobs and billions of dollars. have you explained this to president trump? harald: i did when i was visiting with the president and his administration. we are the biggest exporter, 70% of our production goes to the
work. that was clearly explained, and the investment and pieces we created, great for the people here, the commitment, the passion, that was well received. reporter: do you think he understood those arguments because even if you met with him at the white house, he went to brussels and told his counterparts the germans are very bad. bmw sells millions of cars here. harald: i am not concerned. this does not worry me. just the facts and our partners in south carolina, it is a great achievement which is acknowledged as well. we need to retrace for future growth, and we need to explain that further. i have sure we will have a good administration relationship.
alex: tax reform is critical for us. for us to get rid of the anomalies, i think the way companies are thinking about where they will be based, for us to be more benefit, we are working very hard with them. as we think, our capital allocation is focused on what our strategy is very looked at dividends, because we know where our investors are depending on us. we have $9 billion in research and development, and we make sure after that we are always on the look for new technologies we can acquire. 50% is external. then we look at other things like imax to make sure we are making more use of that. we take those positions, we try to make sure we are doing them in an appropriate way.
david: the tax rate is over 20%, roughly. f the tax rate comes down to 28%, does that change johnson & johnson at all? alex: the more important question is the possibility of gives to capital employment. you want to make sure there are investments on inherent value, not the tax. things such as in, a lot of that is taking place because companies are being rational based on the tax rate they can be. another example would be how competitive you are on a particular acquisition. if a company comes out here to pay a lower tax rate, it may exclude us from being able to acquire technology for the future. ajay: engine companies are creating huge jobs for americans in america. a company like this one, the one i own, that company has recently
placed an order for 205 aircraft with boeing. this is worth $22 billion, and as for the newest department, it creates 132,000 high paid u.s. jobs within the united states of america. so we are contributing greatly to president trump's america first program, it is important americans understand how much we can do for the american economy. anna: you mentioned the planes you have ordered. do you think there was too much capacity on the markets, and are you going to put it on international? ajay: india is the fastest-growing aviation market in the world. despite the group, only 3% of indians fly today. there is tremendous potential. we will fly these planes domestically and internationally.
spice already flies to seven countries, and we hope to fly to many more as these planes start coming next year. tom: there is increased skepticism now the administration will be able to push through its infrastructure spending plans. you see that in the imf producing its forecast in the u.s. how much of a missed opportunity is this? ulrich: the infrastructure long-term, the u.s. needs to invest in energy infrastructure, the road system, to really have a competitive going forward. looks like there are some dribbles in the system. it is not going as smoothly as it did at the beginning of the year. my vision is it will be sorted out very quickly, and the system gives a good platform to really lift going forward.
tom: to what degree do you see reduction in political risk given the election of president macron in france, or will the brexit overshadow all of the risk and the positive economic fundamentals we are seeing in europe? ulrich: the risk scenario has improved from the beginning of the year. we did not know how france would come out, the german situation was faulty at that time, and you had brexit. france is now sorted out, we know how the french government will be. it looks like that and germany the predictions are also that it will be a quiet environment. the brexit is unfortunate from our perspective, but it will create a lot of uncertainty, insecurity, something we have to overcome has politicians and entrepreneurs going forward.
♪ scarlet: this is "bloomberg best," i'm scarlet fu. the standoff over health care legislation and elementary positioning in the u k were two of the stories that affected markets around the world. let's go to the other stories in washington where the court to be a decision on the proposal travel ban. anna: the u.s. supreme court partially revised president donald trump's travel ban and said the justices will hear arguments in the fall, so partial victory in partial fall? greg: i will go with a partial
victory given the lower courts have ruled against him. this is not a ruling on the erits of this, but the supreme court did say the president had a strong interest of protecting the borders for reasons of national security. ecause of that, we are talking about people with no connection to the u.s., no family member, no job they are going to. we will err on the side of security. >> it is one of the most sweeping security upgrades, but stopped short of the threatened bank on large electronics in cabinets. what does it mean? i am going to new york, what am i seeing? matt: the reaction has been positive because it creates a measure of certainty. it will affect 325,000 travelers a day, but it will not prevent
travelers from bringing laptops which it had before. travelers will have enhanced measures. the department did not specify. we can expect maybe longer lines. the reaction has been positive because of uncertainty for the industry. haidi: president trump and narendra modi have wound up their talks. it was not all happy. ramy: there is talk whether he is trying to replicate the bromance he had with mr. obama in the past few years of his presidency. donald trump: i look forward to working with you, mr. prime minister, to create jobs and create a trading relationship that is fair and reciprocal. ramy: you are looking at the trade deficit with india over
the past few decades. it has been increasing, the more red, the more deficit. precious metals, $7 billion according to u.s. trade offices, machinery and agriculture. on the topic of machinery, there is some sales going on. for example, american planes are heading over to india, about 100 or so. no timeline. donald wants india to sign a deal on american national gas and wants to raise the price. there is a couple of things the white house does have to authorize. they are already authorized by companies. drones. another is the joint production of f-16s, which is lockheed martin as well as taught a. scarlet: increased sanctions elated to north korea. the treasury secretary rohibiting financial institutions from maintaining conclusions after that lender has acted as a gateway for money laundering by north korea. bill: it does seem to be an
effort to send a message to china. treasury secretary's comments came a few hours before the u.s. also announced it would approve a $1.3 billion arms package to taiwan. it is another sign the honeymoon between the trump administration and china is over. vonnie: making some comments on trade, saying trade can continue. south korean president moon have a lot on trade. donald trump: south korea is giving big orders to the united states, as you know the military, as many as 35 fighter jets are lockheed and other military equipment at a level they have never reached before. we will break down the trade deficits.
we appreciate it very much. mark: president emmanuel macron loosening the labor market. they will make it easier for companies to fire employees and have to negotiate their own deals with employees. caroline: further than any labor reform that has been done in the ast. so he wants to lower the cost of hiring and the process of firing, making it simpler, making it easier to negotiate at the company level rather than having everything centralized by a union and industry agreement. and finally he wants to make it easier to fire someone by tapping severance pay. shery: this weekend marks 20 years since the flag came down in hong kong. president xi is making his first
visit to mark the occasion, and thousands of people have been deployed to quell protests. yvonne: he had a softer touch in his opening remarks in hong kong. he said hong kong has always been in his heart, although there were some warning moments when he met with the outgoing executive, praising him for clamping down the small and independent movements that were a big political force during his term. and as well the journalists when they first meet with xi jinping talked about the fate of a chinese jail. nobel peace prize winner went through a transfer for further cancer treatment. xi pretty much ignored that question and walked out. another sign the president may not actually be dealing with critics first face-to-face this
weekend. scarlet: from political disruptions to disruptive innovation, boxed is a three-year-old company that has the convenience of online shopping. with more than $100 million in sales and $130 million in venture funding, the formula seems to be working. the chairman chieh huang explained how they got from small to big. ♪ chieh: boxed is an online warehouse club. we deliver right to you. generally it is two days. moving to manhattan later in life, i did not have a car. i thought, how many other folks around the country have that problem? i looked back into the company, starting it in central jersey, we went after and tried to solve the problem. in the early days we did not have a marketing budget. it was originally zero. it forced us to create very good service by talking about it. people loved the service. sure enough they talked about it, and we capitalize from that
opportunity, went on and raised financing. we moved out of the garage. the gigantic challenge we had came up when we started flipping round the u.s. we had to make a decision of our we short-term or long-term? treating people right is so easy to take away benefits, we pay minimum wage. you see the instant pop on your financial statement. i don't think is a long-term way to drive business. we took the long road. whether it is your first day or you are the chief marketing officer, we are one team and need to treat everyone fairly. in the short term, there might not be a line for increased morale and sense of team, but
over the long run, it pays huge dividends. to this day we take that road and have become who we are. a pretty large amount because we do the right thing. the building footprint is more locations throughout the united states, centers, and office, and a lifetime spent on airplanes hese days. we went from virtually zero in the first year to overnight figures in four years, so it has been a dream of mine to push this button. we have identified and area where there is a lack of solutions. we are not trying to be the everything store. doing wholesale and doing it right. ♪
scarlet: i want to just pull up james' bloomberg function we have, as tlb, which shows you the different customers of takata. the big customers domestically for takata, honda, ford is the next biggest, general motors, toyota rounding out the top four. the bloomberg features about 30,000 functions, and we always enjoy showing you our favorites. maybe they will become yours. here is another function you will find useful, quic . here is one from this week. reporter: u.s. supreme court justices are supposed to be protected from the pressure of election cycles. but in recent years, some decisions by the highest court in the land become more polarized, and approval ratings
sliding. a year-long vacancy highlighted this. here is the situation. in the last year of his presidency, barack obama nominated federal appeals court mary garland to replace antonin scalia -- court judge merrick garland to replace antonin calia. president obama: i nominated judge merrick garland three months ago, but most republicans refused to even meet with him. reporter: in this bold move, they were betting a republican president would get back in the white house, and their bet paid off. donald trump: i, donald j. trump, do solemnly swear -- reporter: they confirmed neil gorsuch to fill the vacancy on the supreme court. since his confirmation, he has asserted his place on the far right of the court, delivering on president trump's promise, potentially for a eneration.
donald trump: and i got it done in the first 100 days. reporter: republicans have controlled this since 1969, leading to 5-4 rights for individuals with guns, corporate campaign spending and class-action lawsuits. the supreme court can shift the political direction. with their appointment, presidents leave a legacy after their term here that is why in recent years, they have selected justices whose convictions are not likely to shift. justice gorsuch: i will not forget to whom much is given, much will be expected. reporter: where much of major rulings did not matter, the 5-4 split has been rising. chief justice john roberts said this undermines the court's legitimacy. it transcends politics. and the slow turnover made the lag for the changing
demographics. half of the justices are still white men. another big concern, no recourse when they violate ethical standards or have conflicts of interest. lifetime appointments made justices can still work after strokes. one solution is to give term limits to justices. in a 2015 poll, americans favored term limits. they would require a constitutional amendment, i high bar to clear. so change is unlikely and the highest court in the land could face division and challenges to its public approval. scarlet: that was just one of the many quick takes you can find on the bloomberg. you can find them at bloomberg.com along with all of latest business news and analysis 24 hours a day. that is all for "bloomberg best" this week. thanks for watching, i'm scarlet
jonathan: from new york city, i'm jonathan ferro. his is "real yield". ♪ jonathan: coming up, yellen says evaluations look somewhat rich. a bond tantrum. did investors misjudge the speech? halfway through 2017 sales are on track with the 2016 record. we begin with the big issue. did investors misjudge draghi's speech? >> i think it was actually very eloquently put