tv First Up With Angie Lau Bloomberg March 13, 2016 6:00pm-8:01pm EDT
♪ ramy: coming up on "bloomberg best," the stories that shaped the week in business around the world. iron ore prices go berserk, rallying and plunging. the ecb reaches into its toolbox again for more easing. >> they are doing everything they can, and it is targeted as narrow as possible. to where the problems are, and where their mandate is. >> it is not firing blanks, but he also is not the only one who should be holding the gun. ramy: we choose the best from a bunch of powerful conversations. >> we have a lot to a town for, we have made a lot of mistakes. ramy: women's day. >> it's getting better, but not it is not getting better quickly enough.
>> especially among millennials and extras are getting opportunities to lead. ramy: wall street mourns the loss of a foundational figure. it's all ahead on "bloomberg best." ♪ hello and welcome. i'm ramy inocencio. this is "bloomberg best." a weekly review of the most important business news, analysis, and interviews from bloomberg television around the world. our day by day look at the top headlines begins with a vigorous look at the rally in commodities. >> oil is continuing its run of gains with brent crude at its highest so far this year. that's above $39 per barrel. talk us to the latest development. >> i was getting these warnings, these alerts in my bloomberg terminal telling me that oil prices were below $30 a barrel.
we might have to go down to four dollars a barrel, we are tantalizingly close with brent crude reaching that level there are a few reasons why this is happening. you have u.s. drillers in the united states, they have the least number of active rigs out there in less than six years. they are at a 60-month located, and in the background you have the possibility of opec meeting with russia over this deal to freeze out the current levels. i suppose, as oil prices have been gathering momentum, speculators, some speculators are rather laying down in front of the oncoming train and there are bets that oil prices is down. this is filtering through into the market. i suspect $20 a barrel oil has been banished for now. >> there is another rally going on in commodities. iron ore is soaring the most ever. chinese manufacturers are
willing to boast economic growth. the market has gone berserk are in will the rally continue? >> prices are surging, as you have seen, but we have not seen any fundamental data to justify the price level. what i mean by that is, during the month of february, the entire china country goes on holiday. kind of like the christmas holiday in the western world. during that time, we don't have a lot of data coming out of the country. it's hard to read what's going on. i have yet to see at this that we have a hard turn it. >> the npc said it would help cut overcapacity in steel. you would think that would leave to a curbing of demand. but iron ore jumped by 18.6%, the biggest gain ever. what is going on? >> it must be me being here on bloomberg that caused the price to go up. i think what is going on, there has been a disconnect in the market between the fundamentals on the ground and the trading on a day-to-day basis.
with the iron ore rally we have seen, this is not an anomaly. it follows what has been several weeks of strong gains in the metals market. but again, i think it's a lot of trading on rhetoric. but it went comes to reality, reality does not have the higher prices yet. shery ahn: we had abysmal trade data out of china. exports fell to the lowest level since 2009. that was during the global financial crisis. >> this latest figure out of china for february, yes, there are seasonal distortions, but significant numbers are down. exports are down 25.4%. we were expecting the median 14.5% down. so it is significantly worse than that. january was down 11.2%. this is the eighth consecutive month we have seen falling exports year over year. >> because of the lunar holiday, we have to treat february with caution. part of the issue is, not just
of course that factories should end the week. the data is also skewed. last year, the holiday was at the end of february and there are rest to get trade down. there was a rush in exports. this year, the lunar holiday came at the start of the month. so with that distortion, i think there is a feeling the numbers feel downbeat. just goes to show you there is a challenge ahead. we have numbers like this, it will embolden those were calling for depreciation. this goes to show it will take really significant exchange rate devaluation for china to get anything for their buck on the export side of things. when you consider the commentary from the authorities, look for more on the stimulus side. look for more on the physical side, look for more from the central bank, prime lending to
get the economy going. they are not going to get a shot in the arm from exports. >> it was a big night for bernie sanders. he scored a surprise win in michigan. he was down as much as 20 percentage points. but in the race for delegates, he is still behind hillary clinton for delegates. he is down 21 points. on the republican side, donald trump step delegates. he had wins in hawaii. ted cruz pulled out a win in idaho. let's start with the bernie sanders. he has the minnesota win, it gives them some momentum. how far will that all his campaign? >> what we are going to be looking at is how much he can carry this into ohio which is voted next week, next tuesday. the demographics of michigan and ohio are very similar. very white, he did very well with working-class voters he did well with young voters. that is key for him. he did better with african-american voters in
michigan than we have seen them do. if he performs well that those voters, she still has a huge leap could he can even rode her support in ohio, illinois, in -- states in the industrial heartland of the u.s. >> donald trump won in michigan, he won in mississippi. does this stretch the ability of him to win across very different areas, across different demographics? megan: he has won in all areas of the u.s. that is the thing about donald trump. he has both a broad coalition of support. he has stitched together a broader support level than people expected. last night he showed real resilience, and i think the establishment will be looking at that carefully today and trying to weigh their next move in the stock trump campaign. >> the ecb has cut all of its interest rates.
qe has been boosted to 80 billion a month. they have also increased the assets available to buy to include non-bank corporate debt. >> the way i read it is the following. in the last few months, it's been an ethics game. whatever he said, it was about expanding the balance sheet to see about weakening the currency. they are buying corporates. they are going straight out and trying to help that sector. and really importantly, they are now making money available at maybe even zero and maybe negative rates for banks to borrow. this has changed from an external game to a domestic demand lending game. >> this is about the fundamental economy and getting loans to corporations and individuals. >> absolutely, this is not just the exports. this is what they should have done. i think they did the right
thing. it is targeted as narrow as possible and to wear their mandate is. >> europe's biggest investment bank, deutsche bank, cutting by 11% has rising legal expenses that hurt earnings. you have heard them talk about this again and again and again. does this come as surprise when you got that paycheck? >> i don't think it is much of a surprise. it's 11% for the whole company. 15% for the investment banking division. that actually is not quite as severe as many expected. this is certainly not unexpected, and the company will be underpaying relative tapirs peers as they work through some legal issues. >> how does he think he's going to keep people in their seats there? it, it is a culture led firm. >> they do have the historical repetition of paying pretty well. there is going to be a transition there. i think he is hoping to hold on
and preach for things bouncing back in the next few years. but then again, they also said that trading revenue for the industry is probably going to be down in 2016 given the rough start to the year. there is not a lot of places right now that are on big hiring sprees. you always have risk, losing the 1% or 2% top people. there's not a competition for hiring right now. it's more keeping your job. ramy: coming up on "bloomberg best," more reaction to mario draghi and his latest monetary moves. and a roundup of company news from around the world. ♪
♪ ramy: welcome back to "bloomberg best." thursday's ecb meeting it was the centerpiece of a dramatic week in european business and politics. from the migrant crisis to reaction on mario draghi's latest policy plans, there was plenty to discuss and analyze on bloomberg television. >> bank of england governor mark carney is testifying before u.k. lawmakers today.
in his testimony he said the boe will avoid telling people how to vote in the upcoming june referendum. mark carney: nothing we say should be interpreted as making any recommendation with respect to that decision. >> can the bank of england avoid swaying voters here? >> without actually thinking the boe with swing voters, what does not want to be seen as saying is brexit would be a disaster. he is trying to elegantly footstep the situation, but he almost lost his patience a couple of minutes ago indexing answering one of the more conservative members of the committee saying, you have selective memory. there is risk to financial stability. it has the potential to end the
fight previous risks. >> the time to get a subsidy, or is it just political theater? >> it's a little bit of political theater. at the same time, people are trying to understand the implications of what a brexit would be. >> what's the dynamic you see in london? >> you see the political fragmentation, and you see people playing on the frustration and the anger of what is happening in individual countries and people play on it. you see what's happening here with the rise of, say, donald trump, playing on the anger against him. the same thing is happening in europe. >> the concept of free movement across borders within europe was central to the original eu. let me give you some numbers. until last autumn, 2.4 trillion a year moved across borders within europe without people interfering. 700,000 people a day moved across borders without interfering.
now just a slowdown that will come from any kind of enforcement doesn't just affect refugees, doesn't just affect people like that, it affects daily commerce. my guess it will take 0.1 of a point off eu growth. >> the ecb pushed beyond expectations with its relief. is it fair to say draghi dazzled? draghi delivered? joining rot out the bazooka. >> he certainly put something through the market. he announced all the qe package and the rate decision. but you are right, one of the key focuses was that comment where he said we don't see the need for any further reduction in interest rates. that signaled the floor being hit. he went on to qualify it and said things could change. >> i think it's dominated by that signal, that phase of negative interest rates and
using negative interest rates as one of the tools has effectively come to an end. draghi has given the signal that tool is exhausted. >> what about the decision, andrew, the decision to buy noncorporate debt? it wasn't predicted by many. has that taken you aback? is that a game changer to some extent? >> we are not surprised by it. it came a bit sooner than we thought. but it's a logical extension of, you know, and closing this chapter on interest rates. opening the new chapter on creative easing. i would push back a little bit on this view that monetary policy is running out of ammunition. there is a lot that can be done in the credit easing space.
once you start purchasing corporate bonds, nonfinancial bonds, it's not a far step to go into equities in the future if there were ever to be needed. francine: is this draghi pushing a panic button? or is this a carefully thought-out plan? catherine: i think it represents not a panic button, but a tailored approach to the problems facing europe. the issue is getting credit to the banking system to borrowers. that is what is essential to getting europe back on track. he has matched the negative deposit rates. to try to promote the flow through of credit to the borrowers. that is what is necessary to get europe growing again. we all know that he can't do it alone. he needs the fiscal policy. and structural ones. francine: want to show you a quote, he is firing blanks. draghi is effectively throwing
good trade money after bad. you don't believe that's right? catherine: he is not firing blanks. look at the markets. he is not firing blanks. he also isn't the only one who should be holding the gun. paul: are we getting closer to the point where these policies become ineffective? >> ineffective in the effects market, but looking at the credit channel, it was clear yesterday that he once the -- he wants the market to focus on that. can he make that away from the credit channel? do you think it may actually just take a lot more time? >> it certainly takes more time, but as the u.s. is finding out, while he is pressing the accelerator, the regulators are also pressing the brakes. that's why you don't get the impact on credit that you expect. the u.s. is lucky. it has other engines of growth. whereas europe does not.
>> this may be the key question for central banks, can they affect demand? >> it's not probable. demand is being held back. by lots of things. first, we have the ability to spend from the spender. more importantly, we are lacking a number of structural reforms and give confidence. third, it is the companies that are not responding. i look at this and it's another attempt. good for him. good for the ecb. they should have done it. but i hope that behind closed doors, they are coming to the end of the road. ♪
♪ ramy: you are watching "bloomberg best." i'm ramy inocencio. let's take a look back at some of the week's most important company news, starting with the sweeping deal that links a pair of money giants. >> this is after the announcement of the biggest iron ore miner, valet. what was behind this decision? >> this is a memorandum of understanding that lies at a platform for the two companies to work together and explore opportunities to create value. the key one of those is blending
of our ores together for our customers in china that will provide a blend ideally suited to minimize the cost of their supply chain. secondly, to buy a potential stake in his shares on a market, a minority interest, and that is at valet's discretion. >> till is a little bit more about this decision and the benefits of all of this. >> if we are able to forge a long-term relationship with valet, that it provides an opportunity for us to lower our costs further. furthermore, it allows us to better match our products to our customers' needs and china. scarlet: dick's sporting goods timed the fitness trend better than most. they are interested in sports authority's real estate.
>> of the 140 stores that a sports authority plans to close, maybe there are about 40 that are potential to play for them. they could take over the lead and some sort of acquisition of the property. scarlet: do you have any ideas? >> we've done a bunch of work. the stores that they closed are i think it is going to be five to 10. i think it is going to be nothing. they are closing them for a reason, lousy locations and so on. there are some they may come out. i think there is more to come with sports authority. i think that if they survive, they are going to get sold and closed another one hundred stores before that happens. by the end of april, if they don't figure it out, they could go away completely. that is where it could get very interesting for dick's sporting goods. >> u.s. authorities are turning their focus to tim, questioning
if funds were misappropriated. we are talking about one mdb, a malaysian funds. keri: essentially goldman was a conduit for this fund, which was supposed to be used for infrastructure in investment projects and development in malaysia. and so he was the investment banker. they raised over $6 billion in bonds, and the key point is, was any of the money went back into let mdb, embezzled, use for illegal purposes are moved around without permission? >> and what does this mean for goldman sachs? is is a return of the reputational issues, or is this separate? keri: it is something they are looking into. you see this happen with banks a lot when you work with emerging markets.
sometimes they have issues with their client and sometimes they are blown back. it is important to note, it is not really clear at this point if goldman did anything wrong. >> cafe for civic, the largest international airline, has has a jump in income of 90%. that the on savings, but they were partially offset by hedging losses. give me a sense of your hedging position. >> we never had 100%. while we have some heads losses, but the net fuel cost to us has gone down by $7 billion hong kong, which is like 18%. so on the whole, the business benefited on the whole situation, and the low fuel to do is it strong passenger market and strong contributions by companies, all help you contribute to a better result.
francine: do you want to have figures that make your modeling user desk easier, or is it risk management because the price of oil may go back up? >> we have positions to protect the operation. and protect the earnings of stability. we do take those positions. we will take hedging gains when the price is high. but we would rather have hedging losses because the business benefited. scarlet: a showdown is underway at united continental. to investors are nominating six directors to the board. among those is the former continental airlines ceo. he was credited with turning around continental after bankruptcy. this is all coming after the current united's current ceo returns from medical leave after undergoing a heart transplant. >> apparently some investors were just upset and didn't think the company was making, doing
the things they needed to do to turn around, so they had gordon to shake things up a little bit. scarlet: what do you help to a cobbler is by bringing back gordon bethune? >> they are more talking about the problems united has had rather than what they want to see going forward. but they set about united in the past is that the company just has a languishing stock price. it hasn't performed as well as delta or american. and i think these new investors just want to shake things up. they want new blood on the board, and they think that will help a turnaround quicker. >> revenue is rising 40% in the squares first full quarter as a company, for profitability may be the real concern. what do they cannot sales growth year combined with the lack of profitability?
>> they had a huge quarter, they grew 60% in the quarter. there clearly firing on all cylinders on that front. they are expanding to other categories. square capital division is something people are really looking at, and they have offered loans to merchants with $7,400 in loans just in the first year. that is exciting cross sale opportunity just in the first year. emily: how strong is their product pipeline? chris: it is amazing for the ecosystem, it will accelerate the use of mobile payments, if you look across merchant locations, the actual places you can use android play or apple pay, they are quite limited. to think of them rolling it out to the 2 million merchants they use is a great development overall for consumers. angie: bridgewater has hired jon rubinstein as co-ceo.
the current co-ceo is set to turn his focus on his investing role. this higher comes after reports of tensions between the two, who was considered next in line. katia: bridgewater has a culture of fighting things out internally, debating, having people vote on who is right. it is very weird to anybody outside of bridgewater, but inside, this is the norm. really what this is all about of having jensen focus on investing versus running the company as ceo, co-ceo, that is a more administrator role at bridgewater, so this is emblematic that they want him more focused on investing. jensen is known to be a very smart man, and that is what they are focusing on. who they hired, rubinstein has an extensive career in technology. mobile -- angie: a strange fit, then. katia: more and more, people are describing bridgewater as a
technology company. the utilize quantitative strategies, if you will, to make a lot of their decisions. ramy: still to come on "bloomberg best," highlights from a week full of interviews and international women's day inspired us to ask, what is the state of gender equality in business? insights straight ahead. ♪
♪ ramy: welcome back to "bloomberg best." i'm ramy inocencio. each week on bloomberg television, we welcome leaders in business and politics for exclusive, in depth conversation. we start this week interviews with the chairwoman of the u.s. securities and exchange commission, mary jo white, who sat down to discuss financial regulation and reform with our very own eric shatner. mary jo: it's always an evolving landscape in terms of what is optimal regulation, including watching what their impacts are as they go forward. you want attention to rulemaking going forward, but nobody wants to relive the financial crisis. and many, many of those rules that the agency, that other agencies have executed on, have made us much more resilient to that as a market structure, as a financial system. nobody should want to do that. erik: if we were to roll back some of what the sec and other agencies have done, you believe
we would be exposing financial markets to greater potential for another crisis? mary jo: without question. erik: recognizing all the accomplishments you have had as chair of the sec, what you have done and what you have done in concert with other regulators, i think it is fair to say it is to change the culture on wall street and financial services. to what degree have you been successful? mary jo: i think both in, and wall street, it has been significantly successful, but there is a distance to go. changing culture is not an overnight or even a five-year project. what you find when you try to change culture, particularly in significant ways, you change it at the top. i think we have been successful there. you may even change it in the trenches, but you have a big swath of middle managers where you have to make sure the
message is taken in, absorbed, lived. it is an evolving responsibility. on the part not only of the regulators but also wall street. stephanie: foreign policy is going to be extraordinary important and difficult for the next resident of united states, maybe even more difficult than any president we will see in our lifetime. what is the most important thing that needs to be employed in those first 100 days? what do we need the most? samantha: and investment in diplomacy, a lot of talk in certain circles in the campaign of military force, where we would use it, what we would do. but truly building these coalitions is what is required to bring about political solutions. solution. there is not one conflict on the global stage that can be simply settled by the barrel of the gun. even a terrorist challenge, where we have invested of course and willing that militarily, building the coalition, you have to cut off financing, share
information about who is who in in order to protect your people, make sure the wrong people don't come into your country. stephanie: i feel like diplomacy is the least of what we have heard of it all of these debates and meetings. samantha: it is not, i am a diplomatic nerd, but it does not make a sound bite, it does not make the bumper sticker. go do diplomacy, go listen. that will not necessarily work on the campaign, but one hopes that cooler heads will prevail. you know, there are a lot of career foreign-policy professionals who are also, fewer and far between across the administration, regardless of who is in place, so we hope investing in the kinds of coalitions you need, understanding that military force can be a component of dealing with violent people especially, but it has to be a part of a full strategy. that is something -- because you cannot succeed otherwise, ultimately, people will come to that conclusion. >> like a lot of investment banks, we have dramatically had
to reduce our risk and assets. we have taken the risk on our investment bank balance sheet down in half. faced with that headwind, actually from 2014 to 2015, we doubled our return on equity. we doubled the profitability. we have a long way to go. it we have got to do a lot on managing the cost in our investment bank. we will not rest until we deliver a bank that covers the cost of capital. >> that is an industrywide problem. wishing is not going to fix it. >> we are not going to wish, we are going to execute here at barclays. but i do fundamentally believe that if we are going to rely on the global capital markets, which is pension fund, i don't believe the world will feel safe if we rely on a world where the intermediaries, the investment banks, cannot raise capital, cannot earn a fair return to
their shareholders. it is not a stable platform. for the world economy. >> how long before a course corrects, what is the catalyst? >> i think it is happening now. >> do you? >> of course. all of the banks are looking at how to manage these balance sheets with far less risk on them in a way to deliver to clients, but in a way that delivers profitability to our shareholders. >> here is the third argument, the culture simply cannot be fixed. your bank has played £20 billion in fines. a lot of that started here at the investment bank. >> i have said this before, i do believe that wall street lost its ways in the late 1990's. i do believe money became too much of a motivational factor. i think banking has got to reverse back to the time when it was a profession, when being a practitioner in the profession of finance was like being a lawyer or being a doctor. we have a lot to atone for, we
made a lot of mistakes, but no doubt, the only existential risk to barclays is if we get it wrong in the future on conduct. everyone in this room knows that. >> why are you certain you can change that conduct and change that culture? >> i started in the banking industry that had the right conduct, that had the right culture. it is going back to something i have seen before, and everybody in this room wants to get there. ♪
back and there's a study that shows it can save companies money in the first year. closing the gender pay gap is advancentinuing to women in business and promote health and the gender investing that women's hundreds of thousands if not millions of dollars over the course of their career. i wish there were one answer but there are several answers. tom: everyone knows wall street is getting better. are we just waiting for time to get us where we have women with stem caliber abilities or we can we not wait for that time to happen? >> it is not getting better. on walls less diversity street than three the crisis, so i would take the opposite side. why? women are not investing to the same degree that men are. you think about my old business, merrill lynch, mostly male
financial advisors, i love every one of them. i love every one of them, but they do a much better job for men. they lose their mail clients at a rate of 2% to 5% a year. in the year after their client dies, the wife, the spouse, leaves that same financial advisor at a rate of greater than 70%. >> i call myself an impatient optimist. i am impatient because the world is getting better for women, but it is not getting better quickly enough. we need to do a lot to move that forward. >> we blame corporate america, but is a corporate america or is it society? when it comes to take my child to the doctor, the school calls me. the doctor's office called the woman. i consider myself the primary caregiver, i am the mom. is the corporations, is a government, or is it us holding us back? >> it is all of the above. i think we need to make governmental policies for paid family leave, to work in this country areas we don't have a great paid program.
i think it's a policy change but i also think recognizing this is work at home, and as a society, say that we want to change that. economists say you can do three things, recognize it, reduce it, which we have really reduced it here at innovation, and then we had to distribute it. we have to have these conversations in our homes and that role model in society. >> in terms of productivity and companies that do the best, they are here in the u.s. presenting the right messages in terms of policies, maybe they can't afford it. look at the tech sector. >> the tech sector decided to be competitive, but if they want to keep their best women in the workforce, they are offering very generous paid family leave policies. not just for women, but for men, too. and you need to have it for men, say it is ok to take time from your job. in california, the business
community pushed back a lot when they put their paid family leave policy in place, but guess what? it did not decrease competitiveness of california companies, and they have been doing it for a decade. >> in this day and age, we should have more women in key leadership position. whether it is government, business, academia. women represent 50% of the population. i'm a big believer, i am innovation junkie, i believe diversity equals innovation. yes, i mean gender, nationality, but i most importantly mean innovation comes from diversity of thought. and so, if you are in a board room, i know this, i am on a board. you want more diverse perspectives, more diverse experiences to advise you, to help represent the shareholders, because that is where the world is going. it is about more input, not less. >> that is agreed upon in theory, but in practice, when you see more and more proxy fights, and the rubber hits the
road, the numbers are not there. >> i am more focused on the numbers. at the end of the day asking ourselves, are they like me, or are they good? >> in the last five years, five biggest activists have sought 174 board seats, got 108 total. they have filled them with less than 7% women. at the same time, if you look at the s&p, who has filled 446 seats, icon, low, nowhere to be seen. >> first of all, there are a couple things. the data tells you the more diverse your boards are, the better performance you will get. and the second thing, i have good news on that front. the national business report yesterday talked about the survey of business owners and we now have 10 million businesses owned by women in this country,
which is a clear tipping point. and the rate of growth of women-owned businesses have been 2.5 times all businesses. today, it represents $1.4 trillion of revenues and 8 million jobs. so as more women own more companies, there will be greater opportunities which are not even counted by the 500 or 1000 that are not counted today. there will be more opportunities, assuming we keep the pressure around access to capital. >> small and medium enterprises, where the growth is for women. that is where most of the economic growth is. >> that is because the women are doing it on their own. you have guys like carl icahn putting 30 and 34-year-old guys on 5, 6, seven boards. if they have the expertise across industries, would it not help women to be on these big boards? >> as you see more and more women go into senior positions,
that argument will become defunct. as we talked about last time, there are more women, especially among the millennials who are getting opportunities earlier to lead. even as the traditionalists did. as more data comes out to talk about performance -- remember, those who do not get it will have the data. the more data that comes out that talks about performance of divorce boards, the more you will see change. ♪
♪ ramy: wall street lost a legend this week when john gutfreund died at the age of 86 as the head of salomon brothers in the 1980's, he was a transformational figure. his impact can be found in the financial industry. we recalled his life and discussed his legacy on bloomberg television. vonnie: back in the 1980's, a good friend became known as the king of wall street, turning salamon into one of the most successful banking firms. a lost the job because of a trading scandal. tom: i take real issue with john gutfreund did this and that. he invented the modern age. just simply invented the modern age. vonnie: he foresaw that people would remember him with a negative taste in their mouth. tom: let's make it up for mr. lewis if we can. he took the pulse of the place
simply by wandering around and asking questions of the traders. he was the last person, nerve-racking, he saw a chill in the balance, gutfreund, gutfreund, gutfreund. mark: he gave "the new york times" a quotation in the 1980's saying that he changed the way that the fundamental world was. tom: i think that is beautifully put. mr. gutfreund would say what people have forgotten is a limited tool for risk as they invented modern wall street. they did not have the hedging mechanisms. they did not have the derivative trades that we had. what is so important about this is the when of it. it is no different than bob dylan picking up an electric guitar at the new york folk festival. it is when john gutfreund did it. mark: we must not forget that he
hired and fired our very own esteemed owner, michael bloomberg. tom: i was not going to bring that up. mark, you are a brave guy. i know that michael has immense affection for him. and his time at salomon brothers. i would suggest that we heard the fabric of the past from mr. staley today. i was really taken by his comment today, that it was like being a doctor or lawyer. staley wants to take the modern wall street and his barclays back to the fabric that henry and others know. that really struck me. on this day. mark: he was a big part of "liar's poker." he said, it made michael lewis, but it ruined him. tom: i would put that over to immense graciousness. when i ran into him the few
times here at bloomberg over the years, he was immensely gracious about how things had ended out in his public service forward, which was really the social fabric of new york city in its philanthropy. john went from where he was, to the collapse of the career, but he made something of it afterwards, which was really important. ramy: that is all for this edition of "bloomberg best." river you can always find the latest business news from around the world at bloomberg.com. i'm ramy inocencio. thanks for watching. ♪
sitting in for angie lau. up.re seeing equities we saw industrial production rising 5.4%, but missing estimates. that is the lowest we have seen since 2009. retail sales also were a miss. we have seen the momentum weekend when it comes to retail and industrial production. let's cross over to new zealand real quick as we see equities about .5% up. the new zealand dollar also taking a dip today. cutting into the intro. we are expecting machine orders to come into japan today. expecting about 1.9% growth.
slowly and increased to 4.2% in december. up at 5%. we are seeing modest gains in futures today, suggesting we could see modest growth on the equities side. the japanese yen still seeing some strength. let's go back to china now, the latest eco-data from china means more pressure on the leadership. slowed.al output steve, good morning. how is the government going to meet this goal? i think the big question, does it really matter if they have reached that goal? some have said they do not need to reach this goal because it is
unrealistic. lest year they had 6.9%, but all numbers indicating it is a slowing. to hit that target they are going to have to do something, but already we are hearing from the governor that they are not any majorntroduce stimulus this year unless things deteriorate rapidly and there is significant turmoil. more on that in just a minute. the latest numbers, we combined the january and february numbers because of seasonal distortions. but still, the numbers are significantly down. am's bring up factory output a industrial production. for january and february combined, we are seeing below estimates for that number. coming in on the weekend at 5.4%. forsurvey of economists was 5.6%, the previous month was
6.1%. we are seeing a deceleration of growth on the factory floor. obviously reflected on that ppi number. 40 plus straight months. that is indicating weak demand at home, weak demand from abroad. this is a key number because the at their meeting, they want to boost the consumer, they want to get the consumption trends really going. februaryles and january. are coming in at 10 .2%. the median estimate was for 11% growth. after a record number for new credit, aggregate financing ae previous month, we saw sharp drop-off. so there is slowing credit as well. so, something has to give if they are going to hit that target. targets --did here
comments from the governor over the weekend. he did project a sense of calm after the press conference. what message is he trying to send here? stephen: i think he is just trying to send the message of calm. if he was nervous and shaky, that would send a worse picture. he is saying they are going to keep this policy. i think a lot of their marching orders, when they come to these press conferences, don't make news. auraou wanted to give an of calm and that they have their hand on the tiller. premier league chang has said repeatedly that china's export products, especially manufacturing export products, are very competitive, although tore are increasing cause
changes, it remains quite good. the national people's congress is wrapping up midweek. we will be here to cover all that. back to you. steve mentioned, the governor emphasized china does not need to devalue its currency. let's go to david for a closer look at the currency. david: i think it is the perfect time right now to look at these measures of the yuan. i will take you through a few of these charts. what you have now in front of you, that is dollar you want in green, and in red you have dollar offshore. there is a difference, obviously. there is also with the market
things. broader disagreement in the market of what the fair value should be. perfect time to look at these because they have diverged. the blue line is the cutoff, basically the new year. the you want erasing all the weakness for the year. that is this bid right here. is the line. again, both the offshore and onshore rate for dollars you want. in fact, at the moment there is a premium. investors think this might go short-term. the other chart i want to show you is this one against the basket of currencies, which is what china has been saying is a better gauge of what the yuan is. this is the bloomberg version of it. up with a basket of 13 isrencies, the dollar
obviously heavily weighted. it is at the weakest level of december 2014. just to explain where we are and how we have got here. this big dip right here, that is the devaluation back in august. this little bit right here of thes the strength japanese currency. this shows you all other currencies involved in how we get there. very quickly, let me show you this last one. you can see, it is a third story. this puts both of those charts together. this shows you the divergence of where it is going against the dollar and where it is going against a basket of other currencies. i will leave it there for now. yvonne, back to you. david, thank you so much. let's talk about some other headlines. the hong kong financial secretary has --
the ratings agency downgrade the outlook from negative to stable because of a credit profile check in china. it is a totally wrong assessment and they can just look at economic conditions we actually, maybe it is really time to consider an upgrade to hong kong. yvonne: the international monetary fund says agents should step up and take a leading role in guiding the global economy. the managing director described in the region is the most dynamic in the world. she printed asia will drive nearly two thirds of global growth over the next four years and urged officials to keep monetary policy loose while boostfiscal policy to growth. they are still planning to post
output to 4 million barrels a day, to levels not seen since 2008. the uranian agency says the minister says iran will cooperate with others only once it has reached those levels. insurance is adding to its portfolio in the u.s.. $6.5ing up resorts for billion. they are perhaps best known for by new york's waldorf astoria last year. this deal is basically to buy hotels and resorts for about $6.5 billion. 16 pieces of about accommodation across the u.s..
for example, the four seasons, the carlton, the essex house in manhattan. that they are willing to pay, is about $450 than what they bought it for just back in december. they had been intending to sell off properties one by one, but they came in with a different offer to buy the entire company. there has been no comment from either about the deal so far. as you mentioned, they are best known for their purchase of the waldorf-astoria earlier last year. but it is also bought other properties. fidelityreed to buy for about $1.4 billion in cash. chairman said only a few
months ago that new york has a lot of investment opportunities. it looks like they may be looking for more. yvonne: we have seen a lot of insurance companies up interest in the past couple years. rosalind: their rules have loosened, meaning they could invest overseas, specifically , aboutgh-end properties 50% of their total assets can be invested overseas. been looking at the waldorf a story, and they are continuing to go shopping for these trophy properties around the world. mapne: trying to put their on the real estate map. an policy it may lose later. ♪
♪ back, it is 7:15 here in hong kong. at least 35 people have been killed in an explosion in the turkish capital. police say a suspected suicide, as blown up. the blessed comes less than a month after another suicide bomber killed dozens of soldiers in a convoy. the attack was claimed by separatist who say it was a response to the turkish oteri campaign. -- military campaign. officers that the military. is fundamental to combat efficiency. technologicalrds
and theoretical research. he also called for what he describes as unique advantages in key areas. korean and u.s. forces have stage their largest ever exercise. the drills are defensive and routine. the commander of u.s. forces says he must assume that they have the ability to launch a nuclear missile that could strike anywhere in north america. this is bloomberg news, i'm haidi lun. it's going to be a busy week ahead. let's get more on what is going to happen. you here.ave after the ecb launched of this bazooka, do you think the fed is going to deliver with the ecb
failed -- where the ecb failed? >> i don't think the fed is going to interest -- increase interest rates. markets haveial stabilized. but we are not completely out of the woods. i think the fed is going to hold its head. very likely the fed will increase rates in june. almost 50% probability fed rate hike by june. i think the fed is going to provide the markets with some consolation. capas strong as the ecb off -- ecb pulled off. some rooms for gains
today. in terms of the ecb reaction, here in asia we saw less impact. we saw a turnaround on friday, especially in japan. was whatened -- happened in europe and overreaction in your eyes? was that too much of a focus here? i think what they did was great. it helped european stocks to climb higher. i think the initial reaction out of asia was not very positive. i think to some extent markets have become a little over department -- or dependent on easy policy. expectation is to set the template for other banks.
adopt a cautious stance. that is not exactly bad news for equity markets. i think given that backdrop, markets should pull back and they rebounded. i think what they do this week will complement with the ecb has done. the fed isiously going to be watching international movements as well, that the oil markets, let's talk about that. we did see some headlines saying the oil prices have bottomed out. how significant is this, because they are not the first ones to call a bottom. we have seen several people say that an they were wrong. what determines bottom? low sometime in february, they have rebounded. the question is, do we see oil prices going from here to below $70 a barrel? i don't think so.
i don't think the supply demand fundamentals justify that kind of price. rebounded. if you look at the supply demand balance, i don't think it justifies it. production toased 4 million barrels a day. leave us a long. i think that means -- leave us a long. -- leave us alone. but i think we will a big rebound back to the old days. i don't think that is want to happen. yvonne: thank you so much. .ave a great week coming up, a startup that could make movies available at home the same date they are released in theaters. we will hear from the man behind the plan, former napster boss
♪ welcome back. president founding and napster cofounder sean parker has a new business plan. making movies available at home on the day of their release. users would pay a fee for the secure anti-piracy set-top box. >> consumers turn to piracy, by and large, when they can't get the product through legitimate channels. so, there needed to be a legitimate market offering coming from the record labels, and they couldn't get their act together for years to put that in the market. it was frustrating to watch this ang collapse of the --
industry that was producing something i loved so much. that was never my intention. music sales peaked in 1999 and since there it is been years of decline. you are now on the board of spotify. do you think that streaming services can and the years of decline --and the years of decline? decline?e years of sean: it looks like it has bottomed out. couldwild, spotify replace the the client cd sales and decline in downloads, but not both. how do you convince people to pay for services when there is so much available for free online? the music has played
industry as far back as radio. with companies like spotify that monetize at a really great rate, or receipt users coming into a aee channel, we see at least third of those users over time becoming a customers. added value,ously and that added value is convenience, it is the ability to make a playlist, share playlists, organize your music library, it is all of the things we do to help service music. emily: you are known as the guy who dropped the from facebook. i know you and mark were very close. give me a status update. sean: we do not talk nearly as much as we used to. generally speaking, it is a good relationship. is a scene in "the social network" where you and mark meet for the first time.
meet with, you go and the ceo of uber, this was before cooper. is that true? sean: i think mark went out to a club. travis hasn't really changed at all. he is sort of in some ways the perfect ceo of this -- hey because he enjoys enjoys, he feeds off of the conflict and the controversy. with very good at dealing complex situations where he is being attacked by all sides. is -- i think he would thrive as a wartime leader. he is really good under those circumstances.
know, there are a lot of companies that would have been way too boring for travis. yvonne: you can catch more of that interview with sean parker later on today. that is at 1:00 this afternoon, hong kong singapore time. before we go to break, let's talk more about movies. " has coasted to an easy victory, taking $50 million in its second week in theaters. the film features talking animals in a satire of modern society. in cloverfield lane" was second, "deadpool" was in third. next, we have major oil producers, they may be
planning a global production freeze. we will have details of that. details after a very short break. ♪ find fantasy shows. when it comes to the things you love, you want more. love romance? get lost in every embrace. into sports? follow every pitch, every play and every win. change the way you experience tv with x1 from xfinity.
♪ we are minutes away from the opening of trading in seoul and japan. we have already seen the aussie and new zealand dollars drop today. you're watching "first up." rising on china's leaders as key economic data is low on the first two months of the year. by less than expected, 5.4% in january and february, while retail sales
missed estimates. major stimulus is not required. the governor says he will continue to pursue what he calls prudent monetary policy. the international monetary fund says asia should set up and take a leading role in guiding the global economy. the managing editor describe the region as the most dynamic and the world. nearly twowill drive thirds of global growth over the next four years. there are reports that blackstone is going to sell strategic hotels and resorts. $6.5" dollar billion -- billion deal has been struck.
last year, they bought new york waldorf-astoria hotel. this is bloomberg news. let's check in on markets in asia. we did see equities on the rise, 0.07%.ing those gains, up pretty much flat right now. to new zealand real quick related see gains in the equity markets. kiwi dollar is still down. japan machine orders coming out later on today. now,e seeing futures flat and a possible drop in the tokyo
markets today. yen, we arear seeing yen strength once again. china is powering ahead with plans to reform the economy, from the bloated state sector to the financial markets. a senior regulator says authorities are planning to combine more of the biggest state-owned enterprises to cut overcapacity. let's bring in shery ahn with the story. how is this different from what china has done in the past? seeing,ight now we are bigger is better, basically seems to be the vision. according to the chairman of state owned assets commission. he says reform will happen into tracks. oversupply in some sectors, and at the same time foster growth and other areas like aerospace, nuclear power, and high-speed rail.
the key difference is china will thatee that massive layoff we saw in the last round of reform in the 1990's. back then, 40 million workers lost their jobs. aroundeformed this time also means you must balance the interests of various sectors, especially of employees. in somewe have seen reports the last could be one or 2 million. what to authorities and to do about the financial risk, if the economy continues to slow down? concern is financial risks will be to unemployment, social unrest. employees have come out down to fight right until -- fight financial crimes. his department will prioritize investigations into finance, securities, and insurance.
also have the president of the people's supreme court saying his priority will be to strengthen oversight of financial crimes involving the internet. so, what happens if we see another stock route like what we saw last year, which wiped off -- wiped out five dollars $5 trillion. we are hearing from china's new security chairman saying that it is far too early to think about the state rescue fund leaving the market. he says chinese authorities will , decisiveive actions intervention if the stock market is in a panic mode like we saw last year. yvonne: maintaining some social stability in china. china's ongoing national people's congress has heard publicity said about the
soaring property prices, and that is among growing concerns. an increasing number of would be homebuyers buyers are resigned to a life of renting. >> the view from the window is a constant reminder of either a so far missed opportunity, or a beckoning big mistake. if i really,ring really need to buy a house. it is a dilemma shared by many of her generation, where owning is seen as essential for many, especially for marriage. but it could cost more than 20 years salary just to cover a down payment. >> for most people, a house is the most important thing to consider. but for me, work is most important here i love -- most important. i love my job.
my job is mostly in beijing. >> the goal was to reduce the excess inventories in tier three or cure for cities. the unintended consequence was it drove up prices in tier one cities, where prices are up 10% over the past year. in shanghai, prices are up 18%. it has a sparked what state media has called, panic buying. >> people still have the intention of jumping in. >> it is being filled not only the home front -- felt not only in the home front, but the workspace as well. why not share overhead instead of showing every thing out yourself? >> they help tremendously. you make you feel like you are
in a larger environment where other people are doing innovative things. >> i really enjoy working here and sharing a lot of this. have one private company, you feel said, the whole company feels said. what sheis exactly needs right now. will she resigned herself to renting or the early mortgage her future? you need to buy or you are going to raise the price. some will say, oh, don't buy it, you will pay your whole life. so, i don't know. >> stephen engle, bloomberg news, beijing. let's take a look at
the property developer. it is getting into the railway business. the deal is part of a plan which more thanthe bank by $9 million in assets. no details have been released. they saw profit rise by 15%. economy continues to slow, that boeing delivered a record 200 planes to china last year. boeing is predicting more orders this year as carriers gear up for service. the 200 deliveries set a record for boeing in a single market. airbus delivered 150 planes. they are hoping to double their output. chinaontinue to expand in
and are expected to grow 10% in china this year. decision to make the within a month. shays -- shares have almost tripled. -- automaker says the most 1000 2014 cars were recalled due to a risk of fire. some of theook at stories making headlines. yvonne: some of the world's leading oil producers are moving ahead with a plan to freeze prices. but iran is refusing to play ball. haidi: leave us alone, at least for now. iranianording to the students news agency quoting the oil minister. saying they should leave us
alone until production and iran had 4 million barrels a day. this is clearly in reference to this accord between some of the other oil producers to try and freeze output levels at a certain level to try and track all this supply glut we have been seeing over the past one or down 55% when it comes to that three-year chart there. that iran plans to boost output by another one million barrels a day. suppliers that have been talking since the meeting that we saw with russia, to try and considered some kind of arrangement where we can tackle the supply issue. we haven't seen this extraordinary oil rally since january when we had those 12 year lows. interestingly, the iran oil
seeing $70 a barrel as acceptable. oils set to meet russia's -- russia's energy minister sometime today. to talk about trade as well as oil, but we do not have many details about what is on the agenda. the markets were waiting to see whether chiron would be part of the discussion. emerging markets, acids and stocks taking back what we saw with his oil rally. haidi: i want to bring up this interesting charge. -- chart. this is a four-week chart, all the way from january through now. a very interesting correlation. u.s. equities have been tracking. last week, we had i think the
highest quotes of the year for the s&p 500. we have seen this pushing oil stocks. that is really pushing the rally in u.s. equities and also global equities since the summer of this year since we have seen that recovery in oil prices. the s&p is now just down 11% for the year after the sustained rally. this is the strongest because of gains we have seen since november. this is an interesting correlation we have seen. this is the longest rally we have seen for those two metrics since 2013. obviously, this is introducing some positive sentiment or at least making people feel a little better. it is good for credit output, banks, good for energy fires as
hundreds of thousands of people have rallied across brazil, protesting against corruption and calling for the impeachment of the president. brazil is a suffering is worst secession since the 1930's and dozens of lawmakers are embroiled in a corruption investigation known as carwash. it is machines three, man one. the 32-year-old world champion called the victory priceless, having apologized to fans for defeat. he says -- the to play their final match in seoul in june.
this is bloomberg news. yvonne: during a two-hour top story. forecast andbelow retail sales were slowing in january and february, and new credit was a slow. -- was slow. .et's assess all of this she joins us now live from singapore. great to have you here. this is his fourth appearance in a month. has it been effective, what were some highlights you got from his speech >>? ? he particularly emphasized that there was not a case for the evaluation.
the economy is more and more demands. investment the gains are more limited than they work in the past. i think that is the message he has been trying to put forced -- fourth for white sometime. believe that the central bank does not want to are just facing a lot of market forces that are pushing down the currency. yvonne: one thing i also got out of it from the press conference was that major stimulus is not typically prudent, or i should say necessary to grow. is this actually appropriate, because it seems like it is a pushback from the monetary stimulus we have seen from the npc. this is more a message of moderation. julian: the central bank has been calling the central bank
prudent for a long time, despite fact they have cut the ratio multiple times over the past year. so i don't think we should necessarily read too much into his statements. he did leave plenty of scope, and i do think -- the policy will remain fairly going forward. it is the first time they have increased that since 2009. i do think despite his claims about the policy being prudent, i do think overall most of the signals are 22 a looser policy this year. yvonne: i want to bring some breaking news out of japan where machine orders rose 15% in january on the previous month. that is a big beat here. the estimate was for 1.7%, so we are extending the game we saw in december where there was a 4.2%, but that is a big spike there. the year-by-year figures rose
8.4% compared to a drop of 3.9%. exceeding in terms of the corporate surveys, what they were forecasting by about 8% growth. we will see how that looks. a quick check of the yen right -- do we haveen't it? it is a big beat. let's return now to our discussion on china. talkedto talk about, you about the yen. there is no rush to buy u.s. dollars. was he successful in tempering down fears about the yen? the government raising that supply target, that means there could be more pressure for the currency. i think things have come down.
-- calmed down. to us, that suggests that probably the outflow does have a limited scope to run because china has a relatively small amount of debt it can pay down. a lot of that debt is needed to trade. we do think that perhaps concerns about outflows have been overdone. at the same time, there are still pressures on the currency, and ed -- and as we have seen in the past, any missteps can come back to the floor again. so we are being quite cautious. we do not think it will fall too much against the dollar. we are forecasting 5.8 against the dollar for this year. sorry, 6.8.
but there is some small risk of a sharp the evaluation. -- devaluation. yvonne: what does this mean for growth? do they even need to reach that 6.5%? growth i think potential is already below that level, so it is a struggle. there is a diversion between government says economy is growing versus where it actually is growing. 6.5s already below the level. our suspicion is the problem with these official targets is since 2012 they have come under a lot of pressure, and that has put political pressure on the statistics bureau to overstate the pace at which the economy is growing and we suspect that will continue. so although they may hit the target on paper, in reality the
not in over sold territory yet, and they have seen big moves a month ago, so we will see what happens. haidi: they are reportedly setting up a property fund. some of that excess capital that will be flushing around. they plan to collect capital from domestic institutional's, pension funds, insurance and the such. they are looking at and any worry -- annual return of about 5%. people are saying the housing stocks in japan are looking more attractive. the stocks highlighted are based on news events. hour, wet the next will speak to world management