tv Bloomberg Best Bloomberg June 3, 2018 9:00am-10:00am EDT
♪ scarlet: coming up on "bloomberg best," the stories that shaped the week in business around the world. upheaval in italy. a political stalemate sends shockwaves through the global market. >> italy is basically a country that is raking down. >> we are in a situation today where the fundamentals of italy are very good. kevin: what we are seeing basically across the board is reduction of risk. scarlet: another week of actions and reactions on global trade. >> it no longer appears to be america first. it is almost like america alone. scarlet: chinese equity markets open up as the mainland shares join mainland indexes. the u.s. jobs report provides
another data point for investors and the fed. >> the fed hawks basically think that they can move forward once, twice, some say three times. scarlet: canadian prime minister justin trudeau gives us an exclusive on his nafta stance. mr. trudeau: no nafta is better than a bad deal. scarlet: and how seriously should investors take europe's turmoil? experts show their insight. >> i don't think we are facing an existential threat at all. >> the trend is still heading higher in rates and gradually higher in equities. >> the italian situation shows you that uncertainty can certainly rear its head at any moment. 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, analysis and interviews from bloomberg television around the world. oil entered the week on an extended losing streak after some of the world's major
oil-producing countries signal that they may be ready to do away with curbs on output. >> oil continues to struggle in asia this morning after plunging on friday, the most in about a year. this after opec and russia saying the market rebalanced back in april. the output managed to curb the -- global surplus. are we at peak oil or past peak oil? >> there's a lot of speculation that the next opec meeting will say that they are going to increase supplies after a long period of having contained supplies. so that is obviously a negative factor. and apparently, president putin sees oil prices at $60 per barrel, which is still somewhere below where the market is seeing it at the moment. he is probably talking about brent oil, which is higher than wti. so if he sees brent oil at $60, than wti would probably go back into the 50's. >> what i would like to stress is that yesterday and today, no decisions were made. we discussed possibilities which
were always on the table. and the decision will only be made when all the ministers are gathered in june. rishaad: so in italy, the president has just asked an economist to form a government on sunday. the aspiration of populist leaders to form a government fell apart as the president rejected their choice of a euro-skeptic finance minister. just tell us a bit about who he is, what does he believe in? >> he is quite strict on budgets, as everybody has been mentioning. he is a former director of the international monetary fund. he is well known in italy, and at one point a few years ago, he was in charge of what was called a spending review. and he is known here as "mr. scissors" for his interest in cutting budgets. >> italy's populist leaders are preparing for an election as soon as september, even as the country's premier desperately
works to form a cabinet. in a failed bid for power, the leaders of the five-star movement and the league are urging supporters to stage protests. >> italy is basically a country that has fractured right down the boot. basically, we are going to see or we have already started seeing demonstrations across the country. on paper, we could see elections even in august. but the speculation is that the president would like parliament, the parties to take initiative and agree to delay elections until september. you can't really have campaigning on the beaches. mark: italian influenza spreading across markets. the two-year yield surging the most in four years. political tensions escalating. >> i think the selloff is not justified. we are in a situation today where the fundamentals of italy are very good. of course, there is political uncertainty, but i think the fear of italy leaving the euro or leaving the eurozone is something that is overdone, and
this is what has prompted the selloff. >> he can say that his corporate clients are happy, but at the end of the day, it is difficult to argue that this political uncertainty is going to stop in 24 hours. joe: let's take a look at where the real center of the action was today, the bond market, particularly, sovereign fixed income. in the u.s., massive flight to safety. basically, some of the biggest moves we have seen across the curve, more or less, since brexit. and there you see the italian two-year yield. >> it's not unprecedented, but it is really remarkable. i think what we are seeing across the board is reduction of risk. >> the tariffs are back on. the white house is going ahead with their plan to target chinese goods, announcing that a final list of affected products will be released on june 15 and go into effect shortly thereafter. now beijing is responding to the
u.s.' $50 billion threat. so the commerce ministry came out with a statement. what did they say? >> they are disappointed and surprised at the same time that the trump administration would do this. they thought they had an agreement with the administration, that wilbur ross would come over to beijing and they would put together a list of things china would buy to help lower the trade deficit. in their statement, they said though, "no matter what happens, what measures the united states takes, china has the confidence, ability, and experience to safeguard the interests of the chinese people and the chinese core interest." in other words, don't push us too far. >> whether or not there ever was a trade war with china, the ceut is now officially over. this according to peter navarro, who went on npr to call secretary mnuchin's agreement on the trade war "an unfortunate soundbite." >> it is hard to keep up with this administration and their politics on trade. this is a big step, given that we are headed to the third round of talks. commerce secretary wilbur ross is headed to china this weekend.
now we are here, and we are all questioning, i mean, are we doing this? are we not doing this? tariffs on or off? it seems to be changing by the hour. vonnie: italian yields and stocks over there stabilizing as well today after a better than expected bond auction. the country sold $6.5 billion u.s. worth of fresh debt. >> it is definitely a signal to the market that things are calming down. and there is appetite for italian exposure and italian bonds. >> i think the market definitely showed some overreaction yesterday. if you look at the 10-year, 10-year bonds for italy, they went up about 3%. you might say that is where they should be, but long-term, bond yields try to measure nominal gdp. last time i checked, italy nominal gdp has not been anywhere near 3%. we have seen numbers starting to come down. so i think rationality will come back over the next couple of days as people start to reprice
in essence what is most likely to occur, rather than the worst-case scenario. >> commerce secretary wilbur ross announced the united states will proceed with tariffs on imported steel and aluminum from canada, mexico, and the e.u., effective when the exemptions expire at midnight tonight. what is the reaction? >> the reaction, as you can imagine, is one of perhaps anger but not surprise. they anticipated this might happen, particularly the europeans, after a series of negotiations with the commerce secretary and u.s. trade representative in paris over the past few days. these are the 25% tariffs on steel imports, 10% on aluminum imports that the president imposed a couple of months ago but in suspended pending these negotiations. every member of the g7 is affected. japan was never exempted from the tariffs. the e.u. is now included, and canada, the host country, along with mexico, the two countries that got an exemption because of nafta talks, and those talks have not preceded far enough, wilbur ross says.
they have not accomplished enough, so those two countries join the others in being sanctioned. tom: it has been an extraordinary 24 hours for anybody that studies trade. it is an historic moment. >> these tariffs are totally unacceptable. >> whatever they do in terms of trade actions that affect trade close to today, it will be encountered by a similar weight action from mexico. >> it no longer appears to be america first. it is almost like america alone. >> mexico, they say they are going to have tariffs on flat steel, pork, lamps, apples, cheese, and then canada came out right quick, and they said aluminum, steel, yogurt, pizza, whiskey, table cloths. >> the e.u. response has really run the gamut from befuddlement to anger. the european commission president yesterday saying he is lost when it comes to donald trump, but the e.u. will strike back against about 2.8 billion euros worth of american imports. and those could take place as
soon as this month. jonathan: italy's populist party striking an agreement to form a government after weeks of negotiations. a law professor with no political experience set to be sworn in as prime minister. italian bonds climbing for a third day, sending yields back close to where they were a week ago. >> what really the market and investors have been focusing on is the new appointment of the finance minister coul. the thing with him is that he has publicly called for a debate on europe. he is not as euro skeptic as paolo savona, but this article he wrote is making the rounds. people who call for unconditionally leaving the euro as a cure for all ills are not right, but neither is the central bank president mario draghi when he says the euro is irreversible. jonathan: the economy adding 223,000 jobs in may, beating economist estimates. the unemployment rate falling to 3.8%.
average hourly earnings, they rose to 2.7%. bill gross weighing in on the report. bill: i think the most importan number to me was the average hourly earnings at 1.3% and now annualized at 2.7%. so you know, are we making america great again? i guess from the standpoint of jobs and gdp, inflation moving higher in terms of wages, so you know, it is pretty much a scenario where the fed, the fed hawks basically think they can move forward once, twice, some say three times. i say june is the last. >> we have been asking questions about the wages for a long time. when are we going to finally see it finally pick up? this might finally be it. every company we have talked to is saying we are increasing bonuses, increasing wages just to hire more people. we might finally be seeing that affect in the may report. >> we have a new leading indicator maybe on the
president's tweets. "looking forward to seeing the employee numbers at 8:30 this morning." what do you make of that? >> he saw the numbers, he liked them and he wanted to tell everyone. he couldn't help himself. scarlet: still ahead, as we review the week on "bloomberg best," exclusive interviews with morgan stanley c.e.o. james gorman canadian prime minister , justin trudeau, and st. louis fed president james bullard. up next, more of the top business headlines. canada's government spends $3.5 billion to buy a pipeline. >> they hope to be able to flip it, like a really expensive condo or something. scarlet: this is bloomberg. ♪
the nation's plunging currency. >> central bankers to the rescue. the volatile turkish lira is leading currency gains. rising as much as 2.6% against the dollar after the country's central bank said it's planning to simplify its monetary policy system as of june 1. give us an idea of what the central bank has done today, benjamin. benjamin: what is interesting about the decision today is they raised most of the main interest rates significantly, but it is not referring to this is a rate increase. at the same time, what they have done is switched the benchmark rate, they have declared a new benchmark rate as the repo rate, and equalized that with the current top rate, which was the only one they have been using for the past year and a half. this is something the central bank governor has been promising to do since 2016, when he first took on the job, and something that investors have been asking for just to get more predictability and a better outlook for turkish monetary policy. but over that time, actually
turkish monetary policy has gotten significantly more complicated. today they are going back to a simple policy and something that investors are cheering. >> there is now new hope for the once-canceled summit between the u.s. and north korea. president trump has confirmed that kim jong-un has sent an aide to the u.s. for talks. former spy chief kim young chol will become the highest ranking official from north korea to visit the united states since 2000. well meanwhile, we have a u.s. delegation in singapore meeting a north korean delegation. >> it appears all systems are go ahead of the june 12 in singapore, the meeting between president trump and kim jong-un. earlier this morning, president trump tweeting, "we have put a great team together for our talks with north korea, and meetings are currently taking place concerning the summit. kim young chol heading to new york. solid response to my letter, thank you." it looks like they are planning to go through with it. >> mike pompeo, the secretary of state, said that real progress
was being made during talks with the north korean delegation here today. president trump: we will be meeting on june 12 in singapore. it went very well. it is really a get to know you kind of a situation. the big deal will be on june 12. and again, it is a process. it doesn't go -- we are not going to sign -- we are not going to go in and sign something on june 12, and we never were. we are going to start a process. and i told them today, take your time. we can go fast. we can go slowly. i look forward to the day when i can take the sanctions off of north korea. >> a week-long truckers' protest leaving brazil with a massive bill, lower growth expectations , and the possibility of more strikes to come. you have the brazilian real hitting the lowest level against the dollar in more than two years. their state-run oil company also suffering its biggest plunge in at least two decades. >> the government has announced a few times that the strike is
over, but we are still seeing protests in most states. fuel is still scarce everywhere. supermarket shelves are a bit empty. so it is unclear at this point the overent has t almost all the truckers' demands, and now you are getting reports of people calling for military intervention or for change in government. and it is just unclear what the category wants. >> canada's pipelines will be expanded. the government here has agreed to buy kinder morgan's transmountain pipeline for $3.5 billion. are we shocked that the government is essentially nationalizing this? buying it from a publicly traded company and turning it into a tax owned asset? >> i don't think we even need to say essentially. for now at least, they are at least nationalizing it. this is farther than they wanted to go in first time. they started off with an indemnity, saying we are going to backstop you for political losses, so now it looks like they need to go sort of all in
to do this. they hope to be able to essentially flip it, like a really expensive condo or something, that, where they can get it off to a third party or a collection of third parties before they really have to sort of become pipeline magnates one way or another. but i think we are going to see the federal government hold onto it for a while because there is still a lot of uncertainty, and these things take years to build. shery: the federal reserve board of governors voted yesterday to change the volcker rule, which regulates banks' trading activities. before other regulators vote with the fed, it will be the most substantial win yet for financial regulation in the trump era. >> there is many agencies in the volcker rule. it is an alphabet soup of d.c. agencies, security exchange commission, the office of the comptroller of the currency. they all have to submit their proposal for public comment. this is a particularly sort of controversial rule, so they are probably going to give banks, investor advocates, you know, anti-wall street people like
elizabeth warren, months to weigh in on this. you know, we might not see a final rule until the end of the year or potentially even into 2019. >> let's go to china, because it i a very big day for the country with more than 200 mainland stocks making their very long-awaited debut on msci's emerging markets indexes. now, this move will open up the world's second-biggest equity market to global investors and further bind china to the rest of the global economy. what is the feeling like there? >> certainly in places like shanghai, where of course, home to the shanghai composite, there is enthusiasm from investors that we have been talking to about this. but beyond china as well of course, we have heard from the likes of jamie dimon saying he thinks that despite the moves being relatively limited, it is going to help educate people about chinese stocks. we spoke to james gorman from morgan stanley yesterday, and he said this is very positive and would closely or more closely integrate the
chinese market with the global market. so he saw that as something to tick in terms of a positive so far. we are talking 234 shares being included in the msci emerging markets index. they are taking 5% market cap from those a shares. it is a further move again toward integrating china's market, the second-largest equity market as you said, into the global financial system. it is the symbolism as much as anything else at this stage. >> spanish lawmakers have voted to oust rajoy, making pedro sanchez the premier. means rajoy was overwhelmed by the drumbeat of corruption revelations that have gone throughout his seven years in office. >> spain is out with the old and in with the new. prime minister marciano rajoy is no longer prime minister. he has been ousted from office. it has been an unprecedented move in spanish politics. no prime minister has ever been unseated by parliament, now he
♪ scarlet: welcome back to "bloomberg best." i'm scarlet fu. this week in toronto, bloomberg's stephanie flanders sat down for an exclusive interview with canada's prime minister justin trudeau. they discussed the halting progress of nafta talks, but trudeau insists he is not worried. mr. trudeau: we continue to believe deeply that there is a win-win-win opportunity for canada, mexico, and the united states on improving, modernizing nafta. we are continuing to work constructively with the united states, with mexico to do that. we know that trade is a powerful
lever to create opportunities and jobs, and growth in our economies. we understand there is an anxiety about trade out there in sort of a large segments of the population that don't feel it has worked well for them. and that is why as a country, we have been working hard to make a case for trade. working hard to demonstrate that we can sign progressive trade deals, like cita, or even the cptpp with asia, where we demonstrated that issues like protection of the environment, gender equality, workers' rights are integral in creating the success of trade deals that create growth. stephanie: and how do you think it is going to affect the summit if the u.s. has just slapped tariffs on canadian steel? friday is the deadline for that. mr. trudeau: well, i think taking a step back and what the actual summit is focused on, the g7 is fundamentally a gathering
of the world's most advanced economies to talk about the economic challenges that we have in common. and there is one big economic challenge that is shared right across not just the g7 but much of the developed world, and that is, how do you reassure people that all the changes we are going through in our workplaces, from automation to ai to greater trade deals to globalization in general, how are these factors going to ensure that the growth we create is fairly shared by everyone? stephanie: in the next few days, you have to make some real headway with the americans to have a deal, to have a prospect of a renegotiation this year. are there things you're willing to give up as part of the conversation? mr. trudeau: as i've said many times, i'm not going to negotiate in public in terms of how we are moving forward. but in any trade deal, there are always, you know, ways to look for compromises and ways to
understand that we can get to a win-win-win. but i have also said very clearly, and canadians know this of me, i will stand up for canadian interests, and i will only sign a deal that is good for canada. and no nafta is better than a bad deal. and we have made that very clear with the president. we know that there is a good deal to be had that can create gains for all three of our countries. that is the nature of the non-zero-sum game when trade is done properly. but we are not going to move ahead just for the sake of moving ahead. scarlet: coming up, we will cover the week's top company news. jeff bezos faces protests at amazon's annual meeting. and a top executive steps down at royal bank of scotland. plus, more compelling evidence -- conversations amid an anxious week for markets. we have expert perspectives all straight ahead. >> we've seen this environment where there will be some geopolitical news, there will be a spike in yields, and yields will relax.
scarlet: this is "bloomberg best." i'm scarlet fu. let's revisit some of the week's more interesting interviews on bloomberg television, starting with tom mackenzie's exclusive conversation with morgan stanley chairman and ceo james gorman at the china summit in beijing. james: we have extraordinary global synchronized growth, everywhere from japan through to the u.s. doing well, china doing very well, southeast asia, across continental europe.
global synchronized growth. we have had these political eruptions, which is what has disrupted -- whether it is brexit, what's going on now in italy and spain with the coming elections, angela merkel trying to pull together the coalition. it is this almost competition between inexorable corporate growth earnings improvement, economic strength against political instability and rise of populism. and the latest italian, you know, many crisis which lasted all of about 24 hours is another manifestation. tom: it sounds like you take a more nuanced view than george soros, who says he thinks what is facing is potentially another global financial crisis and the euro faces an existential threat. james: yeah, i think -- honestly, i think that's ridiculous. i don't think we are facing an existential threat at all. i think this has been something that has been playing out over 10 or 15 years, and there are
essentially, in many countries around the world, a sense where the average performance of the economy is much better than the individual performance of the citizens in that country. and that is what has given rise of the wave of populism. this has been a long, evolving political trend that we are facing. so no, i don't think the eurozone is in jeopardy. tom: so how do investors position in this environment? james: listen, you don't react to 24 hour news. you know, the 10-year in the u.s. moved down 30 basis points, more or less, overnight, then rebounded. you don't -- you can't respond, we are not traders, these aren't hedge funds. the average investor out there is trying to preserve their capital for the long-term and generate decent returns. it is not something you respond to. so my, my reaction is you don't. you watch it for a while. david: does it seem like a flashpoint? could the spike in yields we
have seen trigger a new distress in europe? >> it is always this way. when you look back, you say, of course, of course it happened, of course, that was a trigger. i have no idea. it could. i'm hopeful it will not. and i'm hopeful the euro union will stay together, and it will be a part of it, but you know, outside, outside our control. >> but if interest rates, market rates, yields rise, and spreads don't compress, it is going to become that much more expensive. for companies to plan. >> absolutely. absolutely. and we have seen this environment where there will be geopolitical moves, there will be a spike in yields, then yields will relax, come back down. there is the general mindset of things have been pretty great with low interest rates, and we
don't want to mess it up. i don't know where that leaves us long-term. as i said, this is a grand experiment in monetary policy, which no one can predict definitively how it will go. but it sure feels good having low interest rates. >> clearly, december-january in the equity markets, we got ahead of ourselves. we gave some back. in february, there was a weird technical thing that set it off, but it was basically, people were too long, the same you could argue on friday. the bond market, we got a reasonably sharp selloff, just because so many people were short. but the trend is still heading higher in rates, and gradually higher in equities, until we get some significant inflation. >> when you look at the fed and its tightening cycle, is there a sense we could be closer to the end because there is no
inflation, because we are nearing the business cycle, than they actually think? >> well, we are closer than we were at the beginning of the tightening cycle, but whether we are really at the end, i suspect it's more likely that this environment goes on for another 12 months than we will suddenly get something different. the fed will keep raising rates until they really see a change in the environment. but at the moment, u.s. growth is pretty good. you know, the sort of second quarter is clearly weaker in europe. and there has been a few disappointments. people got caught up in the idea that european growth was going to be very strong but a bit weaker in europe. but u.s. growth is pretty good. chinese growth is pretty good. and that provides a decent background -- backdrop for equity markets. >> you've got two new governments, one in spain, one in italy. what can you tell us about what you know about the italian government? >> well, this is democracy at play. we have to continue working with all countries in europe to progress in our agenda.
i'm looking forward to meet the two new finance ministers. it's going to be a continuation of what we have been observing in europe. we have an agenda and we have to pursue this agenda. >> are you concerned that italy may be less than enthusiastic about staying in the union? >> we need to make the eurozone and the euro our common currency a source of enthusiasm for everyone. because it is a crucial element for the development of our economies, and i'm sure we will be able to make it. >> will the euro group do anything to try to convince italy to stay in? i am particularly thinking of perhaps an aid package for use with the migrant issue in italy. >> well, the political agenda in each of our countries is quite broad.
we need to make sure that we provide economic conditions for our people, and that is the goal of the discussions we have in europe. >> the spanish government, not as big a change. do you think the new administration there? they are more friendly towards the euro. mario: the discussion there is good, but yes, we will continue to work with spain. we have been working very closely with the two previous finance ministers of spain, and i'm sure it will continue to be like that. scarlet: what will the federal reserve make of this week's economic data? st. louis fed president james bullard spoke exclusively with bloomberg before the jobs report. but there was still plenty to discuss on monetary policy.
>> what about the political crisis in italy, which had such an outsized impact on market this week? -- markets this week? how does it affect your view of the proper course of fed policy? does it make a difference? james: i think uncertainty about the future of the euro is certainly a big issue in the last decade, and the rise of eurosceptic parties in italy is a serious matter. so we will certainly take that on board and discuss it. we have certainly been through this before, with the sovereign debt crisis that raged in 2011 and 2012 in europe. so, it is a major factor, but i would also say that, you know, when we have been projecting out what the fed would do, i always felt it was priced for perfection as if nothing could ever happen, or nothing could ever go wrong. i think the italian situation shows you that uncertainty can
certainly rear its head at any moment. >> looking at what's happening in italy, as well as what is happening with all the trade tensions, not just with the u.s. as allies but with china as well, to what degree do you think that this is more ammunition for yourself being the strongest dove on a slower rate hike, slower expectations? james: well, as you know, one of the things i have been concerned about is that we go ahead too aggressively, and too much on the timetable, and not sensitively enough to incoming data. and this is a type of thing that could give a person pause. i am not saying that it will, but a renewed crisis in the e.u. would, would certainly be a major factor from the u.s. point of view in how we want to proceed. i don't really think we are to that point yet. it sounds like the italians have formed a government, and we will have to see how this plays out over the summer. ♪
scarlet: this is "bloomberg best." i'm scarlet fu. let's resume our review of the top business stories starting with a roundup of company news with a report of the major deal that warren buffett did not do. >> a bloomberg scoop, warren buffett proposed investing $3 billion in uber earlier this year, but it fell apart amid disagreements over the terms and size of the deal. we know it is kind of warren buffett's m.o. to jump in situations of crises, but what did he actually see in uber to want to invest $3 billion? >> i think crisis is exactly right. there are echoes of sort of going into goldman sachs during the financial crisis, except
this time, you know, uber is in a crisis of its own making, but it seemed sort of vulnerable and sort of a good opportunity to wear a company with sort of benefit having sort of warren buffett behind them. they were talking with buffett about different sized deals, potentially above $3 billion, and then there was a proposal for $2 billion, and ultimately it fell apart. mark: let's talk about rbs. big story today, the cfo has resigned, yes. ewan stephenson, a respected, four-year veteran, who piloted the bank through restructuring, has left the company. why has he gone? >> it is an odd time to announce it. i mean, rbs seems to be coming out of the woods after a decade restructuring from the crisis. it looks like the government will be able to sell its stake in the company, and he's off. he's gone somewhere else. you can only imagine he has had a good offer from somewhere. mark: somewhere. eric: maybe in australia. he is from new zealand.
maybe he had a good offer from a bank somewhere in that region and he has decided to take it up. it will be interesting to see what happens and how quickly. jonathan: the u.s. subsidiary of deutsche bank getting added to the federal list of troubled banks. deutsche bank's ceo says he is committed to the united states, saying his firm might pull back from a couple of business areas, but fundamentally the united states has been the most important market for us. >> the day's news, they remind ambassadors of the difficulty they are facing in the u.s., clearly it means a special attention from the.s. regulators clearly doesn't make your business dealings in that country any easier. >> deutsche bank's credit rating has been cut by s&p and another blow to the ceo's turnaround plan. >> it has really fallen behind a lot of its rivals, as s&p noted in its report. barclays, commerce bank, even rbs have all restructured, and deutsche bank is behind. morale has to be an issue inside
the bank. they addressed that in a letter to staff just this morning, the morale issue, what he called the bad news flow coming out. you have to wonder what impact that has on clients? open to an approach from an is anchor investor after talks with softbank failed. the two businesses have announced an end to four months of negotiations. they are said to have disagreed over the price and size of the stake. what would swiss re have gotten out of this deal with softbank? >> both have been really quiet about exactly what their motives are, but we can infer from the type of investor that they had hoped to get a lot more access to asian markets, which of course are very popular with the insurance industry, and probably also some help in improving their technology, which is a big issue in the insurance agency. >> would swiss re's board be willing to give up some control? to attract a large investor? >> the inference was that swiss re didn't want to create new
shares, and softbank did want them to do that. that may be a whole reason why this deal fell apart. >> earlier this morning, general motors had a big announcement. it said that softbank's vision fund has invested $2.25 billion in gm's cruise automation. >> this is a big, major deal for general motors. they made some announcements late last year about some of the ambitions they had for cruise automation, their self-driving unit, and talked about getting a self-driving taxi service on the roads by 2019. so, what you are seeing is this is as being a big endorsement, and sort of a major help toward getting some legitimacy around these plans to put cars on the road and contend with the likes of google and self driving cars. >> i think it is a big recognition of the rapid progress we've made over the last couple years in developing this technology. so i think even more important, it is recognition of the huge potential impact, positive impact that this technology can have on the world, the business
opportunities that will come around that, and we are delighted to have softbank on board as a partner sharing in the vision we had for what autonomous could do for the world. >> amazon's ceo jeff bezos says the company will handle increased government scrutiny with flying colors. bezos spoke at the company's annual general meeting in the hometown of seattle. the normally low-key event is being swarmed by not just investors though but by activists and protesters too. he is not doing too badly, and neither are shareholders, in his role as the ceo and chairman, yet some people out there would like to see those roles separated. how welcoming is he going to be of that view? >> you know, there was a group here, and a group some of us, they were protesting outside. some of them had signs, one saying "bezos needs a boss." one of their members spoke inside for the proposal, saying
that amazon should not be structured this way with the board chairman also serving as ceo. amazon's board recommended that shareholders vote that proposal down, and it did lose i think maybe 20% of shareholders, in favor of splitting up the role, but it was handily defeated, and the main argument of the board of trustees against the proposal was, just look at amazon's performance. we did so well under the existing structure we have, so don't mess with success, was the message they had in response to that. >> shares of some iphone display suppliers fell in asia following a report that apple would use ninth generation screens for all of its new models next year. most analysts are skeptical apple could adopt the technology so soon, saying the switch is unlikely to happen in 2019. >> it seems like a chicken and egg scenario. the big problem is it is organic light displays. it is hard to get production levels high quickly. the biggest two manufactures of the technology are samsung, which of course is using it for its own phones, and apple might
get what is left over, and lg display, which can only be used in small displays like apple watch. the reason all these shares are falling in asia because those guys can't make it. if they can't make it, how will apple get the technology? that seems to be the strange dichotomy in the middle of this. rishaad: we are looking at china's biggest ipo since 2015. winning the backing of some country's top tech companies. who is buying into this foxconn share sales? tom: baidu, alibaba, and tencent are all buying into this as strategic investors, 21.8 million shares apiece roughly at about 13 to 14 yuan per share. this is the unit which is the main assembler for apple. the company unit is called foxconn industrial internet, and clearly baidu, alibaba, and tencent want to get a slice of the action. they are hoping this company to
raise about $4.3 billion u.s. they will plow into things like 5g wireless and smart manufacturing, and again, it highlights not just interest in this unit, but the clout of these companies, baidu, alibaba, and tencent, when it comes to investing across the tech space in china. >> the u.s. is open to starting talks with the e.u. to try to reach a settlement over illegal state subsidies that block paid to airbus. that is according to a person familiar with the matter. a resolution could potentially avoid billions of dollars in sanctions against brussels. now how significant is the proposal put forth by the u.s.? >> it came unexpectedly. we were expecting yesterday at the wto dispute settlement body, that the u.s., the u.s. tr, trade representative, would come forward and start the process for sanctions against the e.u. as result of illegal subsidies to airbus. the result was actually a proposal by the ustr to come forward and say, actually, we
are prepared to talk. that potentially averts billions of dollars in potential trade and tariffs, trade sanctions and tariffs against the e.u., on all it is a pretty good deal.irbus. mark: just over six weeks after his resignation from wpp, morten sorrell will leave when the company acquires a new company. any reservations on his side, given the manner, the way he departed wpp? >> it is hard to say, but i think what you just said answers the question. which this is largely an endeavor started by sorrell. s4, a company being acquired by sorrell's fund, he is backing this with his money. we do have some indications he has got some financial backers should he find a big acquisition he wants to make. but this is largely sorrell's endeavor.
mark: should he find a big acquisition he wants to make, any idea what he's going to spend that money on? >> there's lots of speculation that sorrell is going to focus on the ad industry that he just departed. the one that analysts speculate the most amount, but it is a pretty big ticket item, is kantar, a unit that he was differently fond of. ♪
economists had forecasted, but it is the fifth month of drop off after optimism reached a 17 month high in december. scarlet: there are about 30,000 functions on the bloomberg, and we always enjoy showing you our favorites on bloomberg television in the hopes they will become your favorites. here's a function i find useful, quic . it will lead you to quick takes, where you can get important context of fast insight into timely topics. here is a quick take from this week. ♪ >> 2016 was again the hottest year on record, and the previous 17 years have seen our 16 most scorching. scientists overwhelmingly agree, global warming is the culprit. and it's just getting started. icecaps, extreme weather, wildfires, 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 energy policies and invest huge amounts
of money, and they will likely do it without the united states. president donald trump announced on june 1 that the u.s. would withdraw from the accord. pres. trump: the reality is that withdrawing is in america's economic interest and won't matter much to the climate. >> here's the situation. decades in the making, the paris agreement united the u.s., china, and more than 190 other nations in a push to limit fossil fuels pollution. the u.n.-sponsored plans to cut greenhouse gases, the omissions that trap heat in the atmosphere, in order to avoid other environmental disasters. but even if all pledges are met, the globe is still expected to warm by as much as 3.4 degrees celsius this century, more than the u.n. target of well below two degrees. meeting the paris agreement means governments will have to offer more incentives for clean energy, scale back support for fossil fuels, make emissions more costly, and reduce deforestation. it is estimated that the deal
will require $13.5 trillion of spending through 2030. here's the argument. unlike past climate pacts such as the kyoto protocol, each country sets its own targets and promised to revisit and improve them. the u.s. was primed to play a lead role in climate change, but trump's energy independence executive order reverses obama era rules and directives put in place, and expands production of coal, the dirtiest fossil fuel. the resulting policies threaten the global fight against climate change. without the u.s. commitment to emissions reduction, other countries may join it in abandoning the paris agreement,. this could make it it even more expensive and impossible down the line to stop climate change. activists argue the shift to a lower carbon future is already underway. businesses, cities, and u.s. states, such as california, are already investing in wind and solar and taking other steps to make it work. pres. trump: i've been called an environmentalist, if you can believe that.
scarlet: and that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with all the latest business news and business analysis 24 hours a day. that will be all for "bloomberg best" this week. thanks for watching. i'm scarlet fu. this is bloomberg.
♪ david: george herbert walker bush asked you to help him in his campaign. james: i said, george, that's a great idea. except i don't know anything about politics. number two, i'm a democrat. david: he loses to carter. james: that's because you are in the white house advising. david: was it difficult to prepare reagan? james: the red light goes on, and he is perfect. david: as secretary of state your job was to go around and , get the coalition put together. james: it was a textbook example of the way to fight a war. david: what was the reason you were so successful? james: lucky. >> will you fix your tie please? david: well, people wouldn't recognize me if my tie was fixed, but ok. i'll just leave it this way. all right. ♪