tv Bloomberg Best Bloomberg September 17, 2017 6:00am-7:00am EDT
♪ scarlet: coming up on "bloomberg best," the stories that shaped the week in business around the world. damage from irma falls short of projections. >> numbers out of florida are not apocalyptic, merely bad. scarlet: leaders on capitol hill are setting a date on when to unveil a tax plan. the fed holds rates. and apple launches with stand fanfare. >> they really need to put the hammer down on the augmented reality theme, something that is that x factor. scarlet: goldman sachs set a strategy to fix troubles. >> we have identified $5 has marginalizes of 30%. >> europe's banks are preparing for a barrage of challenges.
>> i think we will have fragmentation and consolidation at the same time. >> i don't think anybody in an investment bank or a client will say they have it all figured out. >> from ibm to alibaba, ceo's share insights in exclusive interviews. >> we are slowly heading back to normalization. >> i believe when trade stops, work starts. scarlet: the future of the auto industry looks electric. >> this is a long-term trend. something we see will be a move that will get stronger. 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 analysis from bloomberg television around the world. the week began with attention focused on the state of florida, a region still under siege from a powerful storm.
>> hurricane irma weakened as it moved past tampa, leaving 5.8 million people without power and millions temporarily displaced. >> we are getting a sense about how long it will take for public oficials in the state florida to get a grasp on the damages. naples got 130, 135, 140 mile per hour winds. they had a storm surge, as well. they are going to have to wait to get into aircraft. helicopters and planes to survey the area before they can come up with even preliminary damage estimates. the hurricane, while bad, was not nearly as bad as it might have been. vonnie: the total damage could reach $49 billion. it is dramatically lower than earlier predictions after the harshest wind began to slow but there will also be some kind of an impact on the data, if not the gdp number for the year. >> data will be messed up for a while. we saw that begin to happen after harvey. jobless claims went up 62,000,
this enormous jump. we will have a big jump for retail sales in september because everybody bought generators and water ahead of time and then it will fall off for a while. one of the more interesting things to watch is going to be auto sales. summary cars destroyed. half a million to one million cars lost in houston estimates. add in florida, and if you were pricing in any kind of fed move for september or october, you wouldn't now. the data will be confused for quite some time. >> some estimates suggest losses -- citrus losses are in 10% or 20% of the crop. is that what you are hearing? >> the numbers coming out of florida are not apocalyptic merely bad. , merely bad is a sigh of relief to the market. scarlet: apple wrapped up its venture, unveiling the new iphones, including the iphone 10. the 10th anniversary edition. the iphone x eliminates the home button and has a super retina
display and uses facial recognition to replace the fingerprint sensor. the price tag starts at $999 and will be shipped november 3. is this first date available late compared to other iphone cycles? >> it definitely feels late. it is several months after the grand unveiling. i think there will be pent-up anticipation and room for competitors, like samsung, to sell more of their own high-end smartphone. the reason we think this may be the case is because of supply chain issues. the new screen is crisper and brighter, curved around all edges, a great addition, but it is very difficult to manufacture and there are only a small handful of manufacturers around the world that make this screen. because of that, they want to push back the launch date to make sure they have the supply capacity. >> the overall price of the phone did inch up today. i think in order for that
particular segment to catch fire again, they need to put the hammer down on the augmented reality, something that is that x factor. i do not know if the phone delivered on that, but i do know it will deliver on returning the iphone too comfortable 10% to 15% growth. ♪ >> long-awaited details on the speaker of the house paul ryan on tax reform, a process that has been spearheaded a group that has come to be known as the big six, lawmakers and administration officials led by the chairman of the house ways and means committee, congressman kevin grady. >> that starts with the outline that will be released the 25th and then we will get tax feedback and input and then they will produce their bills in the weeks ahead. >> what can we expect in the next few weeks? >> the speaker and mr. brady have been getting getting pressure from anti-house republicans who are eager to see the details, anything specific
on what they are selling to their constituents. are they going to pass this in the next couple of months? and that is the context in which brady told members on the week of september 25, some framework or documents put out there. it's not clear how detailed it is going to be, but it will move the process along and by mid-october, they hope to pass a budget resolution that unlocks the reconciliation procedure. after that, they will have 28 legislative days to get a comprehensive tax reform bill done by the end of this year. that's according to the house calendar. it is a tall order. this is the schedule he is putting out there now. >> we are a little bit skeptical on the timeframe and also on the scope. if you look back at precedents for president reagan, under more auspicious circumstances, it took him three years to pass tax reform. the idea they can get from basic principles to legislative tax through regular order, plus the budget by december, we are skeptical. ♪ jonathan: the bank of england on hold, the monetary policy voted to hold interest rates at 0.25%
in a 7-2 vote. they have maintained the push which would have a 25 point increase, which would reverse the rate cuts immediately after brexit. sterling spiked off the back of this because we have heard the story from the bank of england before. why is it different this time? they seek scope for reduction in the coming months. >> it is a hawkish hold and they are worried about the erosion about slack in the economy and that could accelerate inflation, which reads 2.9%, which is close to its highest level in five years. >> carney said this repeatedly. based on where we are relative to the output gap, we should be hiking. and where we are in inflation, the fear that there is this monster of brexit coming down the road is what is stopping them. he probably thinks there is a long time until november. who knows what will happen? >> the un security council has called an emergency meeting for friday after north korea
fired a second missile over japan in as many months. japan did not shoot down the missile, which flew over the frozen islands before landing -- flew over the northern islands before landing far away in the pacific ocean. >> the japanese are saying this is unacceptable, yet another missile lobbed over japan. it is kind of interesting. i was looking at the south korean reaction. president moon in perhaps his strongest language yet said there can be no diplomatic talks with north korea in the current situation and said south korea could pulverize north korea if needed. >> this provocation comes days after the united nations improved harsher sanctions against the north korean regime. u.s. secretary of state rex tillerson saying, this only "these continued provocations deepen north korea's isolation." >> this provocation comes days after the meeting. this only deepens north korea's economic isolation.
in particular an embargo in oil exports. we have had the debate before and china has made it clear that they do not favor further economic sanctions, especially on oil. the market reaction was calm. we had the usual responses, but they gave up those gains early on. there is a sense this can be resolved through diplomatic channels, but it is unknown given the pace of missile tests we are seeing in the north. scarlet: still ahead as we review the week on "bloomberg best," harvey schwartz of goldman sachs goes in-depth on the firm's plan to turn around its trading business. we will talk about the future of european banking and an exclusive conversation with 's jack ma.baba more of the week's top headlines, jamie dimon slams bitcoin in no uncertain terms.
♪ scarlet: this is "bloomberg best." i'm scarlet fu. let's continue our global tour of the top business stories with the slew of august economic data out of china. ♪ >> china's factory prices climbed for a 12 month as domestic demand remains resilient and government continues to produce excess industrial capacity. the producer price index rose 6.3% in august from a year earlier, up from 5.5% from july. >> the reflation story in china doesn't seem to be over. >> it is important for the profit side of things for china's companies and good for the debt service side of things. the question is, what is behind the ppi resurgence?
is it cutting down spare capacity or two shutting down cold fronts or due to actual genuine demand on the ground? i think the jury is out on that. there is a feeling that most of it is infrastructure spending going on. it means the government still very much is at the center of all this. nonetheless, it is a good headliner on ppi, for sure. >> china's economic expansion unexpectedly cooled last month after factory output, retail sales all slowed and data came in below analyst expectations. what does this data set tell us? should we take a step back? >> it tells us it looks like growth peaked in the first half in china. people have been calling for slow down. it has not been coming and now, it seems to have. it seems to things are going on here. one, the push to reduce excess capacity is starting to bite. and secondly, the housing market does seem to be coming off the boil. ♪ >> jpmorgan ceo said he would fire any employee trading bitcoin for being stupid.
speaking in new york, he also said it would not end well for the cryptocurrency. >> you can't have a business where people can invent a currency out of thin air and think people buying it are really smart. [laughter] it is worse than to loo to look bulbs.p >> bitcoin recovered before falling again. >> there are a lot of science that cryptocurrency is headed for maybe not a crash, but a major correction. we have china cracking down on initial coin offerings, which is when startups invent their own coins to fund their development and sell them to the public. i think there is the price. you have seen bitcoin has multiplied sixfold in the last 12 months. ethereum, the number two currency, is up 3000% this year. to someone like jamie, that has to scream bubble. ♪
vonnie: in israel, the world's largest generic drug maker has a new ceo. schulz will be the chief executive, which has been trying to revive sales and reduce debt. schulz has been ceo of the danish drugmaker. >> i'm the kind of person who likes challenges, so i have been inspired by challenges. if it is challenging and complex, i normally thrive on that. what excites me about it is that teva has a strong heritage and they are the leading manufacturer in generic medicines, supplying high-quality medicine to people in the world and they have developed within a seamless area, areas like multiple sclerosis, and so on, and they had unique, patented products, so an interesting combination. ♪ >> european commission president gave his state of the union
address, where he unveiled plans to deepen eu integration after brexit. >> let us make the most of the momentum, catch the wind in our sails. >> the main message here today was that europe is back. economically, it is doing well, politically, it has calmed down , and now is the time to push through changes and integration that will prepare the eu for the post-brexit world. brexit negotiations are on hold for a little bit, but that seems to be because theresa may has said she is going to come out with a major policy statement in the next week or so. they postpone the next round of negotiations. it will now be september 25, the day they decided. ♪ >> president trump and malaysia's prime minister are looking to boost trade ties while they have announced a multibillion-dollar deal for malaysia airlines and general electric. how significant is this deal for
relations between the u.s. and malaysia? >> it seems like the meetings have gone well. najib went to washington, eager to burnish his trade investment and agenda, and that seems to be what has happened. he said he wanted to help strengthen the u.s. economy and that is why malaysia airlines is investing in more boeing planes as well as ge engines. it is a deal that could be worth more than $10 billion. that would definitely help relations with the trump administration. >> president trump has blocked a china backed investor of buying lots of semiconductors, citing concerns over national security. the deal has been terminated and there is concern for other deals where chinese buyers are seeking u.s. security clearance. >> it was kind of a hail mary pass to even try to get it past trump. it failed three times. the thing to remember is that it is not the final arbiter. they merely make a recommendation and the decision
heads to the president. on the, continuing this line about 11 deals to go through, the reason why it was worth making a hail mary pass is we were not really sure what donald trump's position was, especially as he talked about trying to make jobs and making america great again, creating jobs for american workers, and so forth. they tried hard to engineer the deal around the fact it would save lattice and create jobs. at the end of the day, national security reigns supreme, even over the possibility of saving some american jobs. >> we have to talk about saudi arabia. it is said to be preparing a contingency plan for delay of the initial public offering of their state owned oil company, saudi aramco. the partial sale is scheduled for 2018, the timetable is looking increasingly tight, and it could be pushed into 2019. what would the reason be for it to be postponed? >> the main thing they struggled
with is understanding just how difficult this will be. it is unprecedented that a company this size and complex, with the current ownership and has now, is able to get to market that fast. we started off as 2018, then the second half of 2018, now there is a report that there is a possibility that if the timetable flips, they have to think about what the we need to do if it's out a few months? that does not mean it is over, but it is a fluid timetable as a figure out all the things they need to get done. ♪ vonnie: president donald trump had dinner with house and senate leadersinority last night and today, he tells the press he sees the dreamers deal happening in the next six months. he discussed a future for the u.s.-mexico border wall. president trump: we have to have a wall. if the wall is going to be obstructed, if we need the funds at a later date, we will determine how much we need and then we are not doing anything. >> it will be interesting to see just how the president is able
to keep republicans together on this. we should also note already within the last 24 hours as this has heated up, he has received criticism from ultraconservatives, most notably representative steve king, republican from iowa. he has called this amnesty. it looks like the white house is really trying to walk a political tightrope to get some type of deal within the next couple of months. ♪ >> several people were injured in an explosion on a subway train in london. police said they were treating it as terrorism. a number of people suffered injuries and facial burns, and some were hurt in a stampede. that's according to the press association. >> it looks like an improvised explosive device. it does not look like it went off as expected. if you see footage on social media, it looks like a bucket with wires coming out of it. jonathan: what was the response from the government and how high
alert will they have to be in the coming days? >> the government is on a severe terrorist alert. london in some ways still feels like a city under siege. this is the fifth attack in the u.k. and the fourth in london in the past few months. theresa may was quick to come out and say her thoughts are with the injured and the emergency services, but right now, this is treated as a live, ongoing event. as far as the government is concerned, this is not over yet. ♪
schulz discussed it on bloomberg television in an exclusive interview with alix steel. >> on growth, we outlined a broad series of initiatives across the firm, identified $5 billion, which has margins of 30%. within that discussion, we spent a fair bit time talking about fixed income. our position in the marketplace, what we have done with the business over the last years, taking resources out of the business, and we identified a billion-dollar for growth opportunity. that is part of the $5 billion collective strategy. alix: let's start with fic. if you are looking at net $1 billion revenue over the next years, to someone like me, that does not sound like that much. >> we assume nothing in the environment changes, and we went through business by business, fic, banking, and identified market revenue opportunities across the next three years. it totaled to $5 billion, but critically these are achievable because they grow our client
footprint and they are accreted to the firm. and importantly, these are not new. these have been underway and there are detailed plans behind all of these. alix: if the vix stays at 11 this year and the year after, are we going to have to have a very different conversation? meeting, banks navigated in that direction for years, so walk me through what happens with that. >> the difference between us and the universal banks, some of the differences are obvious. $2.5 trillion balance sheet versus our $900 billion balance sheet. the underlying assumption is that the environment doesn't change. where is the growth? in fixed income, we identified $600 million, which allows us to drive revenues as we grow market shares. how is that built? by very specific client plans. as we talked about in the conference, we are number one with hedge funds, but number three with asset managers, and
we are not satisfied with that. it is unacceptable. we can provide lots of value for those clients. alix: what i was getting at is other banks have made those changes. i'm thinking of morgan stanley, in particular, of course, because they trumped you guys in terms of trading. the question becomes, are they also better at navigating that new environment, and are they taking on more risk, where may be you aren't? >> morgan stanley is a great firm. i don't have any insight into what they are doing. i can only talk about what we are doing. in fic, if you step back, and we talked about this at the presentation, the industry went through dramatic growth from 2005 to 2009. in 2009, our market share peaked at 19%. industry revenues were cut in half. our response to that decline was two things. one, we focused on our clients and maintained presence. but we also took resources out of fixed income.
we cut capital risk-weighted assets close to 50%. we reduced the balance sheet. we were able to do that during that decline. what that enabled us to do is reallocate capital across the firm, but we also returned $35 billion to shareholders in the past five years. that is 40% of our market cap. what we created was tremendous operating leverage. if i had to billion dollars of $2 billiond to billio of revenue opportunity, i would share those with you, but the billion dollars with our operating leverage, as part of the $5 billion, it is quite significant. scarlet: coming up, more exclusive interviews with the biggest names in finance and business including a conversation with alibaba founder jack ma. plus, a deep dive into the auto industry's electric future. and prominent bankers voice concerns about regulation and automation. they are at the top of the list.
♪ >> i think that we have had these very accommodative central bank policies around the world and we are heading back to normalization. normalization to me is maybe real growth in the economy with a couple percent growth in labor force, 1.5% growth in productivity that defines growth, 2%, inflation at 2%, nominal gdp of 4%. i think the fed fund belongs at 2% rather than 1%. the 10-year government will eventually get to 4%. >> but where in the u.s. do you see the return to normalcy?
>> we are heading towards that. the fed fund dropped 150 basis points, and the 10-year government was 1.38 at the lowest, now 2.17. in the next couple of years, i expect a fed fund rate to be 2%, the government to be 4%, the s&p multiple will be 17 times. we have a $138 estimate for next year. and the market is reasonably valued and not overvalued. scarlet: that was leon cooper, the hedge fund billionaire on the state of global markets in an exclusive conversation with betty liu. in europe, business is about to change in a big way for the region's banks. regulation affects are supposed to go into effect for the start of 2018. there is the start of brexit and the tax. we discuss challenges on the horizon in the sector with several industry leaders. let's begin with erik schatzker's exclusive interview
with ubs investment bank president. >> it will be challenging and rocky, meaning there are contrasting forces. the first force is if i need to unbundle and pay separately, i will start saying i don't want to pay for this or i want to pay less for this. >> that's what every client should do. >> exactly. but something in the opposite direction is before, because of strong relationship and bundling, i was buying a service from operator a, which actually is not -- when you look at the facts -- top quality. now i can't justify buying that service from competitor a. our view is i need to justify that i am paying something for that service, so competitor b and c, who are better than competitor a, should share in -- should gain volume and share in those segments. how is that going to land? lots of movement and lots of reaction as people react to that. that is just one scenario.
we could find a way to make it work. the problem is as i stand in september, i think everyone has run scenarios. i do not think anybody in the investment bank or client will tell you they have it all figured out. and on january 1, i know how to approach it, and all my providers know it. by definition there will be adjustments throughout the beginning of next year. ♪ >> who are the winners and losers in this? on the sell side do bigger firms, can they take more of a cut? >> i think the winners are the clients because they will see the execution cost reduced and in many ways the losers are the investment banks that will have to ration how much they invest in their research departments and portfolio managers, who will take on their own p&l. broadly, you might argue -- and i heard regulators outside of europe say this -- you might
argue the richness of research available in a particular market will suffer. time will tell. francine: all of this onus in regulation will clear in part from consolidation, but most consolidation was because it has been passive versus active. how much does regulation exacerbate the movement? >> on the banking side? francine: on asset managers. >> i think it is massive. the cost of our compliance and legal department, our risk department, has risen many folds over the past five years. i don't know exactly the number, i just know that is the biggest area of full-time employee growth we have seen in the past few years. similarly, if you look at the number of regulatory exposures we have on a constant basis, it
is massive. we operate in 26 countries. a lot of smaller players we have seen consolidation there are taking the view it is no longer profitable to invest in these types of resources given the margins they can expect. francine: when will robots be advising us on what to do with our money? like properly, a robot advisor type asset manager. >> i don't know. are we talking robots or androids? they will not be advising me. ♪ >> give us the sense of how banking will look like in 10, 20 years. will there be credit consolidation? will there be smaller banks as opposed to what we see now? what kind of jobs are we looking at? >> i think it will be enormously competitive. the industry has to focus on the client. i know everybody says that, but if you do not, somebody else will. i think there will be a lot of specialized providers, and you talked about consolidation. yes, i think you will have both. fragmentation and consolidation at the same time. fragmentation for specialist people who can offer you great services, consolidation among incumbents as they try and figure out how to deal with what is happening with the new startups. i see a banking world going from large financial institutions to
one that is more decentralized. >> citi says 1.7 million jobs will be lost in the next 10 years. banking jobs will be lost. what is your own estimate? >> everything with artificial intelligence and robotics, all of that will make processing easier. it will change the back office. i would not be surprised if there are a lot of jobs that are not -- that will be replaced by automation and robotics. we have done a lot of work with some of our companies, and we think in the next five years, 30% of the jobs could disappear. ♪ scarlet: let's stay focused on the future of business. this week, bloomberg hosted a sooner than you think summit at cornell's new campus in new york. some of the biggest intellectuals attended the event and sat down for exclusives with bloomberg intelligence. ♪
>> we are on a path to hit one billion people having a decision impacted by watson in some way. so, financial services. it is interesting to watch. some of the biggest banks in europe have adapted far more quickly to this. customer call centers, credit mutual, you take 350,000 emails a day, you don't sort them by keyword for urgency and how to solve them, these are sorted by importance, sentiments of a client, customer stats, that's what they use watson for and what is the possible answer. i was saying that financial crimes, you think people spend all their times decisioning. if i am doing a dossier, it can take me five hours to pull data together. now i get the data and spend 15 minutes gathering. >> you touched on the criticism of watson out there, it is still too dependent on human interface. that if we talk about in the
health sector or financial services, mapping financial crime, mapping risks, underwriting risk, it cannot learn fast enough, and it has not been transformational enough to live up to some of the dependency of ibm and how it is being marketed. how do you respond to those critics? >> well, ibm is an $80 billion company. when people say, why hasn't this grown ibm by two? i think that is an unreasonable expectation. ♪ >> can you give us a quick update on where you are with your plans for an online tv service? >> yeah. this is becoming a crowded field, but it is an important element of the overall portfolio for verizon. because of our old properties, our yahoo! and aol properties. more and more, the internet is video, everyone knows that.
we have relationships with the nba and nfl. we are doing soccer and such. you have to deliver those efficiently over the networks. an over-the-top platform is critical for us. we are evolving that as we evolve our content deals. whether we go out and do -- we use that as a platform to deliver that content or we go out and offer it as a standalone product, we have not made a decision yet, so it will be a combination of something we do or a partnership with someone else. we will firm that up in the next six months or so. >> we will have a better sense in 2018 of where you guys are? >> the content deals follow. we have the network and the platform, and the content deals will decide how far we push that to the public. ♪ scarlet: this week marked the 18th birthday of alibaba. bloomberg's stephen engle traveled to the company's headquarters for a rare and exclusive interview with the
founder and executive chairman, jack ma. >> this is our vision. we should build an electronic world trading platform. we are making sure a small business, young people can benefit from that. i think 80 years is enough for us to improve globalization instead of killing globalization. i believe when a trade stops, war starts. >> what is the u.s. strategy right now? >> we never changed our u.s. strategy. we went to help u.s. medium and small companies and help young people sell to china and sell to asia. this is what we think. we don't want to go to usa and be the local e-commerce company. which i think amazon, ebay, so many nice, interesting immerse -- e-commerce companies are already all over the usa. >> you don't want to take on amazon doing what they are doing? >> no. >> you talk about the coming winter when the winter came pretty quickly with the collapse of lehman brothers and we saw collateral damage, and i was watching your progress to the
tech bubble and that bursting. you have these challenges that wiped familiar names off the board. are we facing a similar kind of tech bubble right now with these billion-dollar unicorns and the inflated tech scene? are they are any similarities? >> no. >> none? >> not that much. i think the challenge at that time, a lot of people do not understand how powerful the internet is.
how to do internet and whether internet can sustain. people just started jumping in and doing it, and people have crazy ideas but they don't know how to operate and make their dream capital. today, everybody knows the internet is powerful and will change human history. and also, the infrastructure of the internet and technology is much better than 10 to 15 years ago. if you are not that greedy, if you are not that stupid and crazy, it is easy to survive today than yesterday. ♪
>> china will set a deadline for automakers to end sales of vehicles powered by fossil fuels. that has become the biggest market to date to do so. the government is working with regulators on a timetable to end production and sales. what are the implications for china's car market? >> if further justifies the bet that has been made on the av sector that have invested in electric vehicles. there are subsidies in place and big pushes by policymakers to focus on electric vehicles. clearly, this decision to phase out gasoline and diesel cars by a certain period just solidified that push. they want to take a dominant position when it comes to the batteries involved in these autos and the electric vehicles themselves. also this regulation has implications in the auto sector and beyond, the utilities company, oil and energy companies. it is a significant move in the
number one auto market in the world. >> volkswagen will invest 20 billion euros to develop and build 300 models of the electric vehicles in its fleet. >> volkswagen has learned from the past. over the past two years, we have understood what people understand by sustainable mobility. this roadmap e that we have announced, which you alluded to, is a self commitment and it will be our yardstick going forward. matt: is there going to be the infrastructure? i mean, in germany, i do not see supercharger stations all over the place. even in the u.s., outside of major urban areas, and that is a much bigger country, there is a lot of work to be done. >> yes, you are right, and that is a legitimate question, but the world is not just germany. we are a global company, and we want to offer our drive systems in the entire world, and that is what we are going to do.
matt: how much bigger did this push toward electrification to to sort of the post-german diesel crisis? >> that is the situation we have been growing over the years. it is four years almost to the day. over the intervening period, we have brought nine electrical models to the market. we will do 100,000 vehicles this year. the many will hit the streets in the not-too-distant future. and we have a hybrid that tells you this is a long-term trend, something that will get stronger in the future. matt: will you be able to ramp up sales in electric quickly enough to meet co2 emissions targets in 2021? >> it is already ramping up. it took us three years to get to 100,000, and now we will do 100,000 in one year. the momentum is already there. as we continue the r&d investment, efficiency is
coming, so all this scaling effect is part of our long-term strategy. matt: do you need to make a bigger push into electrified vehicles and in doing plug-in hybrids for a long time? many of it is smaller vehicles. do you need to redouble its -- those efforts? >> i think we have a good plan. the roll out our first all electric vehicle passenger car in 2020. on the commercial vehicle side, an important part of our business obviously, we recently announced a partnership to be the biggest reducer of electric vans in europe, starting later this year. we are also trialing a plug-in hybrid in london. i think it is important for us to get a good balance on both our commercial vehicles as well as passenger cars on electrification. ♪ matt: bmw said it is prepared to invest in mines and it is looking to secure critical supplies of cobalt and lithium used in electric car batteries. i was at the frankfurt car show a couple days ago. it seems like a sea change, every automaker is trying to outdo the other with how many billions it will invest in electric cars.
is this really going to happen? >> on the risk side of where this could go wrong, there are things to keep an eye on and one of them is policy support. they are still dependent upon policy support. the u.s., europe, all have supportive policy for them. if those were to change, some of the inevitability of this might slow down. the other is, we are depending on battery prices falling further. they have come down a lot, over 70%, but they need to come down another half to be really competitive on an up front basis with combustion vehicles. that is something to watch. if that slows down and doesn't keep declining, the crossover point for where this stuff takes off gets delayed. ♪ scarlet: at a time where many large companies were expanding commitment to sustainability, young startups are finding success while going green.
swell is a case in point. the company's reusable water bottles come in a multitude of designs and colors. users can make an environmental impact and fashion statement. founder and ceo explains how the business has grown in this week's "small to big." ♪ >> the idea for swell was i wanted to create a better looking water bottle that would convert people to actually carrying water bottles everywhere they went. to stop using plastic water bottles. i started it with my own personal savings. i invested $30,000 and worked with a team of industrial engineers. the bottle is triple wall, stainless steel with a layer of copper. it is almost indestructible. the first year when i started swell, i went to 17 trade shows myself. i stood in a lot of booths and talked to a lot of customers. they would tell me, could you make it in this other color, or
could you make it in a bigger size because we would like to take wine to the park? really the first year was a learning lab. it has been a wild ride. we went from $3 million in sales to $10 million, $50 million, $100 million really fast. we are now in 65 countries. one of the challenges we faced, we outgrew our office. we outgrew our systems. we were running this company with $100 million on our spreadsheet. we outgrew our website. it mostly kept up until somebody famous tweeted about us and then it came down. it was hard to turn might intention inward. it has been hard not to take every marketing opportunity. every sales opportunity, every innovation opportunity. we had to put a lot of things on pause while we build the infrastructure, tilting the -- building up the leadership team, moving the office, warehouse and website. we can be a billion-dollar company because we have this
system. last year in 2016, i had the idea to launch a new line called sip by swell. we originally launched in target stores nationwide. it is less expensive, part of my idea to create something new for a different type of customer. our customers love to collect them. we found the average customer that has swell at home has 5.5 bottles at home. we are a self-funded company and we have no outside investors. i do not have a board, metrics, i do not have anyone telling me i need to hit any numbers. we don't need the capital, but i'm always interested in potential advice and expertise, how could we partner with someone who could help us grow bigger, faster, stronger? i'm not saying anything is coming, but you never know. i still see people with plastic water bottles. however, i think the balance of seeing the plastic versus seeing
♪ scarlet: take a look at the bloomberg quickly, we have analyst ratings on the stocks. no sell ratings even in the wake of this, and most of the analysts saying if there is a risk here, it is short-term. we have learned from these breaches in the past that it is not necessarily a long-term effect. >> what i'm looking at here is the total put open interest versus the call open interest ratio on the bottom panel. i am using ratio analysis on the bloomberg . scarlet: there are 30,000 functions on the bloomberg and it is our plan to make them your favorites. here is another function you will find useful. to our quick takes
that lead you into insight from timely topics. here is a quick take from this week. >> stocks and bonds have bounced back since the 2008 financial crisis. the public's trust has not. not with high-speed trading, banking scandals creating the sense financial markets are unfair. many politicians and regulators see leveling the playing field as unfinished post-crisis cleanup. a vast set of new european union rules will force unprecedented transparency on bankers. the eu rules will apply to any institution trading european securities. here's the situation, traders are scrambling to comply with the revision of the eu's markets and financial instruments directive, which goes into effect january 2018. it will upend the way brokers share information, sniff out prices, and get paid. many of those rules are designed to give regulators information to reconstruct events quickly if things go wrong. others unravel conflicts of interest. like the practice of broadening trading commissions to firms in return for investment research. some of the guidelines go much further than the dodd-frank regulations in the u.s. here is the argument. banks and brokerages say regulators are overreaching. critics say by forcing the disclosure of prices, market liquidity might be reduced, cutting into bank profit. authorities, on the other hand, say the new rules will help restore trust and strengthen
consumer protections while fostering competition and encouraging independent research. ♪ scarlet: that was one of the many quick takes you can find on the bloomberg. you can also find them on bloomberg.com, along with all the latest business and analysis. that will be all for bloomberg best this week. thanks for watching. i am scarlet fu. this is bloomberg. ♪
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: maria sharapova is here. she is a five-time grand slam tennis champion. she is one of the world's most recognizable athletes. she has been ranked number one on five different occasions through her career. in 2016, she was suspended in competition for two years after testing positive for a banned substance. her sentence was shortened to 15 months after the court found she bore no significant fault and did not intend to cheat. she writes about that ordeal and her personal journey to the top of the tennis world in a book