tv Bloomberg Best Bloomberg April 9, 2017 6:00am-7:01am EDT
♪ david: coming up on "bloomberg best," the stories that shaped the week in business around the world. trump and xi come face-to-face, in france, candidates face-off. in the u.s., workers face tougher visa rules. jamie dimon's letter to shareholders. >> the bank is preparing for a hard brexit. >> the argentinian president speaks about his country's relationship with the united states. >> we will find a way to improve and increase our commercial relations. >> jack lew speaks his mind in another exclusive. >> i think it will be a big
mistake to do a big, expensive tax cut that is not paid for. >> where in the world you should put your money. >> european growth looks to be pretty soggy over the next 18 months. >> whenever the fed in the past has taken its foot off the accelerator or taken its foot off the brakes, somebody slams through the windshield. >> all ahead on "bloomberg best." ♪ hello and welcome, i am david gura. this is "bloomberg best," your weekly review of all of the most important business news, interviews, and analysis. let's take a day by day look at headlines. on political turmoil in south monday, africa undermined confidence in that nation's economy. >> president jacob zuma may face a no-confidence motion, the
parliamentary speaker has asked for a request. the rand held low after falling drastically last week. >> some of the top officials of the ruling south african national congress are speaking out against the cabinet reshuffle, saying he did not consult them and more speaking out against the firing against -- firing of the former finance minister pravin gordhan. it is interesting whether this motion will succeed or not. >> do you think he should step down? >> yes, i do believe. the highest court in the land judged him to have breached the oath of office. that in itself makes it difficult for him to command the kind of respect which would be able to rally and unite the various sections of the south african population.
>> s&p has cut south africa to junk, outlook negative. political risk front and center with pressure on jacob zuma to resign. >> we are concerned about the political impact on the fiscal and economic story. it puts policy continuity at risk. there is an increased likelihood that economic growth in fiscal outcomes could suffer. >> richmond fed president jeffrey lacker resigning today, six months earlier than his planned retirement after he disclosed his role in a 2012 information leak regarding the fed's discussions. quote "in 2012, my , conduct was inconsistent with those important confidentiality policies." >> he is saying he is not the leaker. he was presented with information by the analyst. he said he should have ended the conversation then, and the risk
is that by not doing that somehow the information was correct. it is a nuance, a significant one. >> this is a very serious breach of information, highly sensitive information was given to an investment analyst on wall street who passed it on to clients who may well have paid money for it. -- made money from it. i would say there is still a lot more to come. >> the fed released minutes from its march meeting earlier this afternoon, and it showed that the fed favors plans to start shrinking the balance sheet. the minutes indicate their general attitude on rate hikes in 2017, stating "most are -- most dissipating's anticipated -- most participants anticipated gradual increases in the federal funds rates will continue, and likely be appropriate later this year." what is your big takeaway? >> the markets were looking for
a possible start of the balance sheet unwind in q4 or early next year. the minutes provide that guidance he pushed into 2017, which in essence the fed is sticking to three rate hikes and that is like almost pushing another rate hike into 2017. a little bit more hawkish, a little bit of maybe too much push from the fed. see the reactions in equities and treasury yields. jonathan: how on earth do you calculate how many hikes the federal reserve will deliver on 2018, on a good day never , talking about normalizing the balance sheet? >> getting the number is hard but the context is obvious. the fed will slowly raise rates and address their balance sheet. for years, since the great recession we have had the fed as , a tailwind for the stock market. they are turning it around and are going to become a headwind. that is what investors need to know. >> president trump is about to open a high-stakes summit with
china's xi jinping at his mar-a-lago resort. we have a lot on the agenda. the threat of nuclear ambitions of north korea are hanging -- and tensions over trade are hanging between the meeting -- -- meeting. >> they have been saying they are proud to have both president xi jinping as well as the first lady in town at mar-a-lago. tomorrow, that is when the hard stuff comes. for example, they are going to be talking about u.s. jobs and the export of u.s. jobs to china. one other interesting thing is the trade surplus that china has with the united states totaling about $347 billion in 2016. when they get to the substantive talks tomorrow donald trump will , be trying to figure out how he can get china to buy more u.s. goods and services. >> breaking news crossing the bloomberg, u.s. missiles launched against targets in syria.
mr. trump: tonight, i ordered a targeted military strike on the airfield in syria from where the chemical attack was launched. >> to be honest, this does not change the balance of power in syria. it was a very targeted strike. they knew the assets they wanted to get. they warned russia it was going to happen. the next steps will be very crucial. this has catapulted tensions with the u.s. and russia to the highest they have been since trump took the presidency. where do we go? do they ramp them up or will the tillerson visit to moscow, is that a potential point for them to de-escalate? >> 180,000 is your estimate for payrolls in the bloomberg survey. here is the payrolls report from d.c. >> how do you spin this one? just 98,000 jobs were created,
98,000 jobs in the month of march. the unemployment rate falls to 4.5%, the lowest since may of 2007. >> i would not extrapolate this to say it is a weak jobs report. we had 178,000 and will probably settle around 150,000 eventually, and wage growth was as expected. this tells you the economy is gradually transitioning from job creation to higher wages, and i think it is in line with the gradual recovery we have experienced. >> overall, we are pleased with the jobs numbers. when you look at the unemployment numbers going down, both the 4.7 number going down as well as the higher, they use number coming down by 3/10 of 1%. when you take that and put on
top of that what we know is coming with the jobs being created by the companies we have talked to and moving manufacturing back to the united states, we are very excited. david: still ahead as we review the week on "bloomberg best," exclusive conversations with the president of argentina and the former u.s. treasury secretary jack lew. sheila patel' says she sees investors surging toward emerging markets. would you believe that tesla's market cap blew right past ford this week? >> any good news on tesla tends to send its shareholders into rapture. david: this is bloomberg. ♪
>> the h-1b visa process has officially opened despite trump's plans to undermine a -- plans to reform a program that he says undermines american workers. they issued new guidelines that require additional information for computer programmers. >> we were expecting a lot more tougher rules coming out of the new administration. we have not seen that and without knowing what can come in the future, i would expect a lot of technology companies will use this window to file for as many as they can. >> when we talk about tech employees in silicon valley, a lot of them are coming from india. who exactly will be hurt by this? >> you could see a tightening for the outsourcing companies. in a way that would reduce their use of these work these as and visas andese is --
that made leave more of the american technologies companies, they use this programming. when it was initially set up three decades ago the idea was to bring and workers from overseas who companies could not find in the u.s. it may go back to more of that original intent of the program. >> tesla shares have shot up more than 5% today after the smallest u.s. carmaker reported deliveries that exceeded analyst estimates. it is now $2.7 billion more than ford motor company. how is this possible? >> tesla over the weekend said their sales were 25,000 on the quarter, a few hundred more than they said, but any kind of good news on tesla tends to send its shareholders into rapture, particularly those who are bullish. all of the established automakers were showing month of march sales that were a little
softer than analysts thought, in some cases a lot softer. we are not going to see a lot of growth. there are more incentives being spent on to see the sales going, the inventories are rising. it is not a bad market but it is heading that way and tesla has growth. >> the latest on credit suisse, they are facing a tax evasion and money laundering investigation spanning five countries that could involve thousands of account holders. who exactly is being targeted and is credit suisse cooperating? >> the evidence suggests that the bank is not being the target in this investigation. this is about several thousand account holders, individuals who may have held accounts at credit suisse at some point in time and there might be some money laundering involved.
the bank is looking into the matter and has pledged, if we find any wrongdoing on our part we will take measures against it. >> jpmorgan ceo jamie dimon addresses concerns about europe and brexit negotiation, and what factories are causing damage to -- what factors are causing damage to the u.s. what does he have to say about brexit? what does he say about how the process is unfolding and what he hopes to see as the u.k. said's -- sits down at the table with the european union? michael: he says the bank is preparing for a hard brexit, which i think most are at this point, which would mean a loss of passporting and having to adjust their businesses to serve e.u. clients. he said he is not expecting a lot of job movement in the next two years but after that they will face pressure from the e.u. to move things into the trading bloc and not do everything from london. jonathan: jamie dimon asserted that government imposed capital
requirements from governments is holding back lending. neel kashkari responded, saying those assertions are demonstrably false. >> when a wall street leader -- and i know jamie dimon and i like him -- when he says things that are incorrect it is my responsibility to speak out. the fact is too big to fail has , not been solved. the biggest banks are still too big to fail. the american people and congress need to know that and we have offered them solutions in the form of substantially higher capital requirements. >> gary cohn wants to take banking back to the old days. he told lawmakers he would like to separate banks' consumer lending businesses from its investment banking, basically bringing back the depression era glass-steagall act. >> the bloomberg news story says that everybody was surprised to hear him to suggest this kind of proposal.
i remind you he has had a long career as a trader in the history of goldman was mostly as a lender. if you think of the trader and imagine -- trader mentality in a managed -- and imagine that by splitting up banks, they might have a little bit of an advantage. it might not be so crazy to see why he might be opposed to that idea. >> we are worried about this one-size-fits-all regulation. right now we have this massive set of regulations built to regulate all banks as they are equal. if they come up with a 21st century modern glass-steagall, we may be able to tailor regulations for different aspects of the financial markets and different aspects of the financial institutions. that would allow banks to get lending more aggressively to small and medium-sized companies. >> let's focus on france, television debate gave platform
to all presidential hopefuls but 11 allowed for fiery exchanges between the two favorites. >> we need to put in place a level of protectionism because we cannot accept that our product -- collection will be in competition with those that do norm.ld the same >> nationalism is war. i come from a region filled with cemeteries and do not want to go back to that side of the black line. >> the far left candidate far outperformed. >> marine le pen was attacked by both sides, by those who want france to stay connected with europe, for her anti-european views, and two candidates much further to the right of her who basically attacked her for being soft, saying they are the ones who favor frexit and she is soft. she got rattled a few times. it was not a great night. i cannot say macron did that well but he stayed out of the
line of fire. he managed to avoid any mistakes. you would have to say that macron came out on top last night. >> shares of panera bread surging after jab holdings agreed to buy the chain for about $7.5 billion, 19 times earnings pays which is much bigger of a premium than most restaurant brands. >> it is a huge price. i think we knew when we broke the story on monday, i think we knew it would command an extremely high price. it puts it in line with something that we have seen more recently with popeye's louisiana kitchen bought by the owners of burger king, and that was a similar takeout model. this is a huge brand that has enormous presence across the the country and jab has paid to get access. >> steve bannon has left the
national security council, been removed, rather from his role. why has he been removed from the nsc? >> this was an exclusive by our very own jennifer jacobs, steve bannon has been removed from the national security council. this comes with fewer than two months in which general h.r. mcmaster has taken over as president trump's national security adviser. one of the first hires the general mcmaster did was to bring over dina powell as his deputy to the national security council. powell, a former goldman sachs executive was previously working in the administration for first daughter ivanka trump. what you are seeing unraveling before us on this very busy day at the white house is a restructuring of president trump's inner circle.
we should underscore that steve bannon still does have significant influence on a host of policy areas including infrastructure and politics. >> samsung reported a higher than expected profit. shares remain on a bit of a tear this year, up more than 16%, all despite this bribery scandal and that exploding phone note 7 debacle as well. >> what is important to look at is the profitability of the company. all-time high profit for the first quarter of this year, up mainly year on year. and is powered by the strength in components. that is really the most important thing for the stock, is the earnings of the company, and that is surprising everyone to the upside at the moment. >> the senate has confirmed neil gorsuch to the u.s. supreme court 54-45.
neil gorsuch will be the next supreme court justice. it was all about a formality and yet the senate needed to have that vote this morning. >> everyone knew this was going to happen yesterday after senate , republicans voted to change the rule, make a historic rule change. they advanced the nomination to a final vote with a simple majority of 51 votes. the supreme court confirmation is a huge win for conservatives going back to their base and saying, we delivered something. it is a big win for president trump who has had a troubled start to his legacy. -- to his presidency and not gotten any major legislation done. ♪
best, i'm david gura. my colleague erik schatzker troubled of when is on ice -- buenos aires for an exclusive conversation with the president. -- president of argentina. they face large fiscal deficit and high inflation. while argentina has a cordial relationship with the united states, they must establish ties with a new administration. erik asked what will be on the agenda. >> discussing about the future relations in both countries. when we talk on the phone, he believes we have started with obama's administration, is the base, and we should be be -- we should believe we have a space to deepen our relations and find out ways of mutually benefiting future cooperations. erik: he is a protectionist and
you are a free trader. >> i believe that we can find ways of increasing the relations between argentina and the states a lot, because we have very weak relation. erik: on what basis, where does argentina fit in and america -- in an america first policy? >> in spite of what we can talk in terms of the regular relations between argentina and the united states. erik: you need to have a united front. >> we are going to work together in that future relationship and i expect we will find a way to improve and increase our commercial relations together, with any other spaces of
cooperation. for example, against drug trafficking, against the region, in favor of peace. there are many ways in which we can cooperate. erik: there are many ways in which you can compete as well. america wants some of the export markets that you want. >> that happens always. we can focus first in which areas we can be complementary and then to compete, there is always time. david: we have more exclusive interviews ahead. i went one-on-one with jack lew, president obama's treasury secretary and we gathered a wealth of information about asset sectors and market trends. up next, frank talk with some ceos. peabody energy is back from bankrupt -- bankruptcy. >> we think there are inherent
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and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. ♪ david: this is "bloomberg best," i'm david gura. a number of prominent ceo's spoke with bloomberg television this week. the most interesting conversations with aol's ken armstrong. they prepare to absorb yahoo's internet assets. how is it going? exactly how is this merger going to work? the main question i always ask, can you run up against your old shop of google and facebook? >> first, let me start with verizon. verizon has a long-term strategy in the media space.
overall, we were the first acquisition they did. yahoo! was the next one. we are going to touch over a billion consumers. i think we are in a very good position to launch what is a house of trusted brands in the digital space. google and facebook and amazon are all partners of us, we are focusing on a business model on brand advertising. i have done advertising for 20 years. i see an open lane in the space of advertising. alix: is marissa mayer going with you? >> we are planning all the executive outcomes that will come in terms of leadership which we will announce in q2. marissa will stay through the next phase. you can expect half the executive team to be from yahoo!. >> talking about bringing back coal mining jobs, you employ 6700 around the world. how many more coal mining jobs
can you create around the united states? >> the actions of the administration today, we have seen bold and sweeping statements, the actions we have seen have been targeted protecting jobs. we are currently recruiting across our operations in the united states, but i also believe that the foundations have been laid to enable clear signals to occur around the
generation environment, to either delay, defer, or turn around but we see about 50 gigawatts of planned capacity in the next five years. if we can get exports of coal going forward, that would be future increases. we think there are inherent benefits with coal, its scalability, affordability, and reliability. >> the coal market has been shrinking over five years and the president makes remarks. >> i think we have seen 2017 being higher than 2016, that is the way the current projections are. that is largely a story of natural gas. i think the competitive environment for coal is much better today than it was a year ago. >> there is no more global industry than the aerospace industry. when you think about it, our supply chain is completely global, has been for years. the customers we sell to our airline customers. their job is to fly people on a global basis and the passenger'' job to promote global trade and international business.
so there is no more global industry -- we are totally intertwined. in the case of airbus, around 40% of our airplanes come from the usa. airbus is the largest export customer. our competitor boeing, about 40% of their aircraft come from global suppliers. from japan, italy, canada, the u.k. and so, the global aerospace industry is very intertwined and it is going to be difficult to unwind that. >> do you see more pressure coming from this administration to source components locally? >> we are not sure yet. we have not seen that pressure. we assumed we would be seeing that pressure. have not yet. >> if that pressure does come, what will you do on the margin side? will you just suck it up or do you have to do something on cost? >> we are not ready to take a smaller margin. we are always adjusting our cost
and looking to be more cost competitive, and encourage our supply chains to do the same. >> would you be willing to source components in the united states in exchange for no back tax? >> we already source from the united states. >> would you be able -- willing to source more? 40%, does that go to 60% or 70%? >> when we go to source our supply chain we look for the best deal, quality, price, and on-time delivery so we are not planning to trade that for border adjustability tax. david: another important guest was former u.s. secretary treasurer jack lew. i sat down with him for his first media interview since leaving his government post. something that came up numerous times on the campaign trail has come up less when the president
took office, the issue of currency manipulation. this is something that is the treasuries purview. here you have china with a trade deficit. is that enough to declare china a currency manipulator? how cautiously should the treasury proceed? >> if you look at the criteria, the key issue is, are they taking actions to drive down the value of their currency to gain unfair advantage? the way you look to measure that, are they intervening in order to devalue their currency? for the last year china has been intervening to prevent the devaluation. that makes it challenging to look at the current situation and reach a conclusion that there is currency manipulation. clearly, there is a transition underway from a very managed exchange rate to a more market oriented exchange rate, but it is not a pure market oriented exchange rate. right now, the interventions are in the opposite direction from what you look at in terms of measuring manipulation. david: you have a president very keen on implementing tax reforms.
the white house is adamant that they are driving the train. how much of that would fall under treasury department? you have heard the reports that offices are empty, positions are unfilled and names have not been named. how deficient are they? >> what you do not have is your policy leaders, your emissaries who can go and represent you the way you would if you had a full complement of deputy secretary, under secretaries, and an assistant secretary for tax policy. it is not a perfect situation but i think it would be a mistake to think that treasury comes to the tax reform debate without very substantial resources.
the question is where the decision-making in the administration will fall and whether the policy of leadership will be at the treasury department or elsewhere, and within the white house, which camp will make the recommendations and shape where the president goes? they have a lot of support for business tax reform to clear out loopholes, lower rates, but if you want to do something even bigger, we proposed going to 28%, it gets expensive. you see congress looking for ways to pay for going to a lower rate, particularly the border adjustment tax, and that is problematic for policy and politics. the first question is, how big is it? do they do it on a revenue neutral basis or do they create a big hole in the deficit rate at we are at the point where we ought to be thinking, what do we do when the baby boomers hires are in full force? it would not be good for the
♪ david: you are watching "bloomberg best." i am david gura. throughout the week, investors and asset managers offered insight into global markets at a moment when fiscal trade and monetary policy seemed to be facing a host of potential inflection point. here are some highlights. give me your sense of what is going on in retail right now. >> retail is a mess, to say the least. from a 10,000 foot view, this trend, these retailers have had declining top line for a number of years.
this is not a cyclical issue. the economy has been good. consumer sentiment is good. unemployment is coming down. oil prices are low. this is a secular issue, a forever trend. when you think about how things look 10 or 20 years from now, our parents will be dead. our kids will be adults. do you think more people will be shopping online or less? this is the amazon affect and this is forever. to get along these credits they are trading in the distressed debt role that is -- not aa stable business, declining business. we are not long any of this. >> they are overvalued? >> yes, they used to trade at three to four times. >> when we say "they" we mean those that people are familiar with -- neiman marcus, macy's.
>> that is part of the problem. most of these retailers are actually smaller. you listed the larger ones but there are about 50 companies that could file for bankruptcy. >> 50 retailers that could file for bankruptcy? >> american apparel is already gone. that's filed twice. it's liquidating. think about companies like rue 21, claire's. these are reasonably sized, but they are not be neiman marcus's of the world. >> we talk a lot about energy and whether that has been played out, we talk about retail. talk to us a little bit why europe and where. >> in the european credit space, the 800 pound gorilla is very much in the room, the european central bank.
the bank was buying 80 billion euros of credit of credit a month, now they are buying 60 billion. that is a big move and we are seeing that in the credit face. let's take high-yield, specifically the credit suisse european high-yield index is about 4.6% but if you take out the u.s. dollar denominated bonds, it is closer to 3.5%. to us, that does not sound like high-yield. they almost have to change the name. when you look to the investment-grade space, the european investment-grade index trades less than 1% yield. let's think about that. u.s. 10 year treasuries, 2.3% and change. european corporate, less than 1%. i think on the long side we are looking for opportunities, shorter duration, defense and less correlated things to do. we are looking for smaller and under followed capital structures, and staying idiosyncratic on the long side. >> it feels like e.m. is a little bit more stable than developed markets. are you hearing that from investors that they want the yield and a little bit of safety, they will go to e.m. instead? >> a number of investors say emerging-market feel more stable. they are looking for the pickups that e.m. offers. they are saying in many cases em is decoupling from dm.
it is not about how much china trades with the u.s. they trade with europe and around asia. it is not what india is doing anywhere else. india is almost purely a domestic story. that is why you see people investing in things like the msci etf, but taking a step back and redeploying that money into more active strategies, because if you look at the indices in em, they are backward looking. when you look at emerging markets the growth is an internet, mobile banking, things that are forward-looking.
>> in the msci etf, when that winds up moving does it move to specific regions or sectors? how to the allocations happen after that? >> in some cases, looking at country specific allocations so if they are in more of a broad e.m. allocation, what country do i have confidence? india is one, china, they are cautiously optimistic. i have seen more clients saying they are on a trip to latin america in the next month or two over the last two weeks than i've heard in two years. >> european growth looks to be pretty soggy over the next 18 months. >> i thought we were getting better pmi, core inflation came off a bit so where is the soggy? >> compared to the u.s. growth rate, which we think will be well above 2%, you will have more subdued growth in europe and this year we are more bearish on the ecb. importantly for the ecb, there is no inflation. if you look at a place like germany, if you were to get
inflation in europe germany would be the place to see that but the reality is we are not getting any wage gains even in germany. if you go to italy and spain where there is still a lot of market slack you can see how difficult it will be to get inflation. without inflation it will be stuck at these low rates and continue the quantitative easing program. >> is this the rhetoric we are going to see that is not really
material change? >> it is not unusual to hear the german contingent. the northern europeans talk about taking off some of this easing but you have to look at the fundamentals. without inflation, i think mario draghi is going to sit there and say we cannot take our foot off the accelerator too soon. i think the quantitative easing program continues into this year and we will talk about tapering in 2018 but there will be a lot of all, they did support through 2018. >> last night we saw a real shift from the fed. they are talking about a passive and predictable manner to reduce the balance sheet. how do you interpret a passive and predictive manner at pimco? >> i think there is if they go about it very cautiously, phase out the reinvest gradually and do not put the market out cold turkey. i think the risks are rising that they are making a hawkish policy mistake. >> the debate this morning on the bloomberg, can they really stick to three hikes and reduce the balance sheet at the end of the year? what do you make of that? is there a potential interruption in the hike half?
>> i think they will probably pause after hiking two more times and will probably announce in december they are exiting, reducing the balance sheet. i think you will get a slight pause in the rate hike cycle, but i think they are quite keen to get away from the dreaded zero bound for interest rates. and again, i think this raises some risks because whenever the fed in the past has taken the foot off the accelerator or slammed on the brakes, someone goes through the windshield. >> the biggest whipsaw in equity market yesterday in 14 months. from a risk perspective from the bond, equity, fx perspective, where's the biggest risk from this potential policy mistake by the fed? >> the biggest risk is for the riskiest assets -- equities, high yields because they benefit a lot from qe. we had the term premium compressed.
investors went out of bonds into higher-yielding assets, into equities, so when the fed reverses that policy, the biggest threat is for equities and high-yield. >> in the bond market, one of the biggest movers has to do with south africa, downgrading the rating to junk. not only dollar denominated debt but local currency debt. this is the market reaction. you can see the jump in yields we saw on that. two schools of thought, too much risk and bank of america says you might want to go in and buy. you are tentatively buying south africa this morning. >> it is a question of, there will be a time to buy south africa and i think we have to give it a little bit of time to digest. the political situation is a bit difficult to ascertain, where you can pick up 9% plus in brazil where you know inflation is coming down.
you are getting an awful lot of yield with inflation coming down. you are getting an awful lot of yield with inflation coming down. mexico in the seven's. i would rather take that risk at this point and give south africa a bit of time to play through. >> there is political risk in south africa and mexico. and brazil as well. how do you factor that in? is it fully priced he in? do you hedge against it? >> there are a series of metrics we look at when you evaluate, where do you go into a country or company, and that is a big one in emerging markets particularly. the politics usually is a bigger driver than anything else and you saw that play out in argentina for years, brazil four years. the politics you have got to be acutely focused on policy. you can get spiked moves like you just saw. ♪
♪ >> i am looking at one of my favorite functions on the bloomberg. it's supply chain analysis, and one of the reasons it is so relevant today is that imagination technologies, a u.k.-based company that does chips discovered that apple, which pays them for their chip technology, will no longer be using or licensing their technology. on this splc function, you can see on the right who a company's biggest customers are, and at the top, apple accounting for over 50% of revenues. david: there are about 30,000 functions on the bloomberg and we always enjoy showing you our favorites in the hope they will become your favorite. quic will take you to our quick takes for you can get important context and fast insight into timely topics. this week explores climate
change. ♪ >> 2016 was again the hottest year on record and the previous 17 years have been our 16 most scorching. scientists overwhelmingly agree, global warming is the culprit and the carnage is just getting started. extreme weather, wildfire, droughts, and the hits keep coming. what are we doing about it? in 2015, the world took its boldest step yet to stem climate change with a historic accord in paris, but now comes the hard part. nations must change policy and invest huge amounts of money, and it may be without the united states. the world's richest nation and second biggest polluter. >> i am taking historic steps to lift regulations on american energy, to reverse government intrusion, and to cancel job killing regulation. >> 68 days into his new
administration, president trump signed an executive order that stops just short of withdrawing from the paris agreement. here is the situation. decades in the making, the paris agreement united the united states, china, and other countries to unite in the fight against fossil fuels. the emissions trap heat in the earth's atmosphere. in order to avoid rising disasters the climate models predict. even if all pledges are met, the globe is expected to warm by as much as 3.4 degrees celsius this century, more than the target of well below two degrees. governments will have to offer incentives for clean energy, make emissions more costly, and reduce deforestation. the deal will require $13.5 trillion of spending. here is the argument, unlike past climate pacts, each country set its own paris target and promised to revisit and improve
it. the u.s. was primed to play a lead role, but trump's energy independence order encourages increased production of coal, the dirtiest fossil fuel. mr. trump: my administration is putting an end to the war on coal. clean coal, really clean coal. >> the resulting policies make it hard for the u.s. to keep its commitment to reduced emissions. even if trump decides to pull out of the accord, the paris agreement would live on. businesses, cities, and u.s. states such as california are investing in wind and solar, and taking steps to make it work. mr. trump: i have actually been called an environmentalist, if you can believe that. ♪ david: that was just one of the many quick takes you can find on the bloomberg and also at bloomberg.com, along with all the latest business news and analysis 24 hours a day. that is all for "bloomberg best" this week. thanks for watching. i am david gura. this is bloomberg. ♪
♪ announcer: from our studios in new york city, this is "charlie rose." charlie: we begin with the chinese-american summit in florida. chinese president xi jinping arrived today for a meeting with president trump. it is the first bilateral meeting between the two leaders and an important step in improving relations. trump is expected to press his chinese counterpart on trade deficit and north korea. president xi jinping is seeking assurances that washington will adhere to the one china policy. joining me now is tom donlon. he served as national security advi