Transcripts For BLOOMBERG Bloomberg Best 20180218

That what we have seen is a it is really working. Major disruption. It is a much better they are sophisticated environment for our clients. Investors. They understand markets. For our client franchise. And recognize volatility as a part of trade. Nejra while some of the sharpest minds in finance and we are trading more, which is increasing our trade revenues. Investing show their insight on if you take asset management, instability. History doesnt tell you which has more than doubled, 16 always the right answer. One diversifies, rebalances. Billion of inflows. What should happen at the end of the day . Not hour to hour. Two thirds of that come from our national connections. The Way Television works. That connection is strong. Ofra plus, a bonanza are their parts in the market where people are saying, i do earnings reports with not want to transact at the commentary. Asia will be one of our moment . Growth engines. For us, digital. It is hurting the primary market. The growth is a very well we see a lot of activity in spread over all the categories. The secondary market. Nejra it is all straight ahead on bloomberg best. But the primary market issuers are reluctant to issue when volatility is high. Things seem to be settling down now. We do not believe that what we nejra hello and welcome. Have seen is a major disruption. I am nejra cehic and this is bloomberg best. The correction was unavoidable your weekly review of analysis in equities. Everybody expected it. We look closely at the credit market and the spreads. And interviews from Bloomberg Television around the world. Investment grade has held up on monday, with equities coming very well. Off their worst week in two years, u. S. President donald you have not seen a contagion which means the fundamental trump made two major announcements, unveiling his economy is healthy. 2019 Budget Proposal and a you see the growth in the u. S. , unemployment is at a historic longawaited infrastructure low. Plan. Is President Trump seeing his growth in europe is coming back. Growth in emerging markets is very strong. 2019 Budget Proposal cutting 1 trillion from entitlement Company Earnings are going up. Programs like medicare. Is there anything that will emerge from this proposal . Impacts from the tax reform in the u. S. , we do not see a downside scenario in this maybe if you little things. Economy. I have been doing this for 40 years and every president s did you expect a contagion . Budget is always dead on arrival to the credit market . We dont expect one. On capitol hill. Because the president proposes, we believe credit markets will hold because the underlying congress disposes. Economy is so strong. They decide how to spend the money. There is no prospect of he wants 23 billion for border defaults. Security, 18 billion for the or unemployment, an event that wall. Slows down consumption. Prop obligations republicans you do not see any indications of such negative developments. Will probably push that. The budget calls for cutting nejra our conversations about market volatility brought out medicare significantly, 237 quite a range of opinion. Million and 1. 7 trillion in let us start with jason kellys interview with stephen entitlement spending cuts. Those wont be adopted. Schwarzman. I hate to say it but it is is this volatility we have as the omb, the been seeing normal . Is it a new normal . Office of management and budget how do you look at it . I think it is like pretty normal. Says, because it does not if you look at the world the incorporate the agreement the president signed into law just last week, so they will have to come up with brandnew numbers developed world will probably grow around 3 this year. During the next four to weeks. Five very little of this will could be wrong. See the light of day, except for it could be 3. 25 or less. The defense increases. Nejra after campaigning on a promise to rebuild america, President Trump released his the stock market was up about longawaited infrastructure 7. 5 8 . One month. Plan earlier today, pledging at multiply that by 12 months. Least 1. 5 trillion in new investment. What do you get . The president called the proposal bipartisan and common sense, but upgrading public stock Market Performance if you works is still looking like a just annualized that somewhere in the 80 to 90 with 3 tough sell to a skeptical congress. Growth. It is tough to say how they get infrastructure done ahead of that is simply ridiculous. Midterm elections. This is a policy proposal that has eluded both democrats and republicans in the past. You had to stop that kind of it is something they say they want, but they have yet to reach compounding or else you have almost a whole years their goals on this. Performance in one month. It is looking to make a what is going to happen in that scenario . Permanent fix to what it sees as it has got to go down. A broken system for funding and Building Infrastructure in the United States. And then it will go up and then down. On one hand, they think there it will be a more volatile world. Has been an overreliance on federal funding that states and i look at what should happen at localities need to be encouraged the end of the day. Not hour to hour. To spend more, find more of the Way Television works or their own revenue sources. Traders work or day to day or but also the permitting process week to week. Takes way too long and prevents projects from getting built. The Worlds Largest hedge i think with the economy looking fund led by ray dalio has so good around the world, that we will have an up year. Disclosed a 682 million short bet against unilever. It cannot be hugely up because we already did huge last year. The stock has dropped in a final disclosure. It will find its way. It is part of new and larger wagers against shares of do you think more dealmaking or less in terms of private european companies. When this first started, we equities . Had bets against italian banks generally, you have more that seemed very specific. As you said, we have been seeing deals when markets feel good and this really large buildup people are confident in quietly building up against prospects for their own business. European companies, some of the largest. You seldom buy someone elses unilever, adidas, across business if your business is industries, but one thing to having trouble. Keep in mind is that when you as Business Confidence remains look at these company shorts, at high, you will probably see more least at the very largest companies, this is a recreation activity. Of the european index. These short positions are built people are playing a psychological game. Based on the larger the company, it is not just patterns of earnings. The bigger the weight in the index, the larger short position they are expressing. They are wondering, when are other people going to sell . That is hard to model or inflation making a comeback. Predict. U. S. Consumer prices rising more what you do as an investor . Than estimated in january, adding more fuel potentially to the feds fire. Diversified, rebalancing, stay away from faddish things. It is clear that inflation is theranos. Moving higher, especially the last six months. But what i found striking last on a sixmonth basis, inflation week, what investors might rotate to for a safety trade might not hold off. Is now moving at 2. 6 per year. You did not really want to own that said, january is a month treasuries because they cap selling off. Where you often get upside gold sold gold sold off, as surprises at the discounts we well. Saw in december and november, utilities were hit because of higher yields. Taking out of the markets. If you need to rebalance, how do i would not read too much into you do that . One print, but there is a clear acceleration in inflation going you will rebalance across sectors, stocks, and countries. On, and people should start rethinking traditional relationships between stocks, the u. S. Has been recently the most expensive stock market in the world. Bonds, how the portfolios are allocated, whether they should have real assets. There should be a big rethink in markets. And i think that is not a reason the data today is largely in to avoid the u. S. But i think it line with what the fed has been telling or hoping for. If anything, it takes in that 75 is very much time to consider whether your investments in u. S. Basis points people are looking for the year. When you look at futures, that stocks have become overbalanced. Is what traders are saying. They are bringing themselves up last week, the default to the 2. 7 , three quarterpoint rate hikes for the year. Response from so many people before even looking at the we could see it go a little bit numbers and the data was blame the machines. Higher than that, but you are not seeing any real panic. Blame the machines. South africa is changing why can we not blame the machines on the actions of last Leadership Today after jacob week . Zuma who has ruled the country was there selling by ctas for nine years had announced he last week . Has resigned effective absolutely. Immediately. Parliament is meeting to elect ramaphosa until elections are held next year. They came in long risk. There was mounting pressure long equities, short volumes, short the dollar. On a former president jacob zuma that was the wrong positioning last week. To resign, this coming from the were they doing some reshuffling of positions . Yes. Ranks of the ruling african did they cause the selloff . No. Are they part of volumes Going National congress. Through the market . Absolutely. Many members of the Ruling African National congress say did the narrative exacerbate the selloff . They want their president to really come in and steer can you say they exacerbate the government into a new direction. Selloff, the downdraft . We know that former president if you buy when markets are zumas tenure was marred with going down, you decrease the allegations of corruption and selloff. Scandal. If you sell when theyre going down, you technically increase it. It seemed as though the ruling party wanted to regain some why shouldnt you sell positions of the support it lost ahead of the 2019 elections. When the market moves . Which the party will contest. They are not doing it indiscriminately. It seems as though ramaphosa the same as humans would do it. Will be sworn in today as the new interim president of the it is the thought process of whether you should be, republic of south africa. Everyone should buy a dip, it is really a new era in south africa. Folklore in the markets. I would say history does not there is a huge amount of tell you that buying dips is the confidence and hope about where right answer. South africa is headed with a decade ahead that will look very unlike the decade we have been when volatility in the market through. Regulatory filings revealing increases, you should run less a bet against some of europes positions. When volatility is low, you can run bigger positions. Largest companies has grown to it is about taking the same 18 billion at bridgewater. Amount of risk all of the time. One of the rationales i have heard around this is that all some of what happened last the conditions are in place to week was related to volatility start getting short. Which is essentially a funds, being overly aggressive. Countercyclical view. I think there is more of a we had raging Interest Rates, regime change going on. Growth on all cylinders, so from monetary stimulus to fiscal perhaps that is the rationale, stimulus. And that makes sense. Starting with the u. S. , we think that ultimately will transcend the senate hitting a wall in the search for 60 votes, failing and go global. To advance any immigration plan today. We were talking to steve the motion is not agreed to. Schwarzman earlier this morning and he said this level of volatility feels pretty normal. It is far from clear what happens next. I think President Trump is the key to getting anything signed. Do you agree or is this an he has to support a proposal aberration . That can get more than 39 votes later cycle, i agree, you in the senate. The sweet spot in the senate have more volatility in the equity market. Seems to be as we have seen with what is changing is you are losing the cover of the federal these other proposals, a daca reserve around Interest Rates. We have had the fed protecting a majority short of 60. A daca six combined with border us for quite some time and now security. The reason these failed is that they are clearly changing President Trump wanted interestrate policy. Additional cuts to legal, familybased immigration that we have not seen that in europe. Democrats were not willing to give. We are hearing a hint of that in japan, we had the opposite where President Trump once legal they are still very accommodative. Immigration cuts, democrats do i have a slight difference in that there is a shift in not want Legal Immigration cuts. We are stuck. Monetary policy leading to more volatility. Robert mueller announcing an we are seeing it in Interest Rates right now, not necessarily indictment of 13 russian in credit. That makes sense. Nationals. The defendants conducted what they called Information Warfare this is more about changing the risk rate than the conditions of against the United States with corporates around the world. The stated goal of spreading a lower tax rate in the u. S. Distrust towards the candidates probably makes corporate profits stronger this year. And the political system in general. I was truly expecting mueller to do something to the heart of his inquiry, which was russian collusion, and he delivered on a grand scale with credible details that go beyond the social media efforts to divide this country. It talks about unwitting members of the Trump Campaign who were approached. It points to something that may beyond the pages of this indictment. There are references in here to a conspiracy with people known to the grand jury and unknown to us who were also involved in this effort. We dont necessarily think it ends here. Nejra still ahead as we review the week on bloomberg best, insights into market swings with lloyd blankfein, steve schwarzman, and others, plus a barrage of earnings reports. Up next, the weeks top business headlines. This may have been the moment when global diplomacy became an olympic sport. Clearly whatever the Charm Offensive or Propaganda Machine they instituted over the olympics, it has worked. Nejra this is bloomberg. Nejra youre watching bloomberg best. I am nejra cehic. It has been another whirlwind week for corporate earnings report. Our roundup, starts with the Worlds Largest food and beverage company. Nestle posted fullyear sales that rose to the slowest pace in more than two decades. Revenue was up 2. 4 . Missing estimates. The Swiss Food Company was aiming for a 2 4 increase this year. Confidence last year, how broadbased the growth is. All categories contributed to growth. We expect the same thing to happen this year. It is one of the strongholds of nestle. The focus is broadbased and not just resting on one or two product groups. That will remain the same. Within that framework, geographically speaking, asia will be one of the growth engines. And we have categories such as coffee and pet care. The water business should also recover. Is this going to be still challenging in 2018 in terms of a pricing environment . Nejra this is bloomberg best. Im nejra cehic. Lets continue our global tour both volume and pricing we were somewhat soft last year. Of the weeks most important we are optimistic in terms of 2018 and beyond. Business stories with a shuffle at americas largest private equity group. Credit suisse shares trading over 3 higher after a narrow another management takeover loss reported in the Fourth Quarter. On wall street. This time it is alternative the market swings in the past asset manager blackstone, as the week have a negative impact on Investment Firm named john gray as chief operating officer. The banks advisory unit. But he could not be more pleased in the performance of the trading businesses. And as he starts his new role, tony james will transition to another fulltime role as my biggest satisfaction, q4, executive vice chairman. This has probably been one of the start of the year has been the worstkept secrets in the world of private equity. Very strong. John gray has long been we indicated numbers. Considered the likely successor Global Market revenue is up 10 . To tony james and eventually q1 last year was very strong for us. To steve schwarzman, founder and up more than 10 . Ceo and chairman of blackstone. The french bank posted a gray has really distinguished Fourth Quarter revenue that beat estimates. Himself as one of the worlds field by tax cuts. Leading real estate investors, so this really completes the especially in the u. S. Puzzle for the private equity the lender reported a 7 trading business as an industry decline in terms of equity and transitions to a new generation of leadership. Fixed income. Smaller compared to the drop of some of their big european barclays has said the peers. How do you describe the first Serious Fraud office, the sfo, six weeks of 2018 . Markets have been much more volatile for the beginning of has brought charges against its the year compared to the end of Barclays Bank operating unit in a case linked to a 2008 2017. Fundraising at the peak of the financial crisis. We thought barclays had faced we say that volatilitywise, one charges on this. Explain this second leg we are of the reasons for the slowness seeing here. In june last year, the Serious Fraud office in the u. K. Charged the Holding Company and and the return of volatility is four of its top executives, offering opportunities for banks like ourselves to help our clients. Former executives, including the we see good activity since the former chief executive officer. Beginning of the year. So what has come up now is that the operating company here is being charged as well. Better than expected increase in new money for clients in all banks receive their 2017. The swiss asset manager saw inflows of almost 6 billion francs beating estimates. Operating licenses based on the total assets, 26 . Operating units, so that is why people really care about what is happening to the operating the total assets under company here. Management, the results one part of your business in on to the fight for fox now. Comcast mulling another bid after its initial offer was particular what has been turned down for a deal with disney. Driving that . Net new money. If comcast doesnt want to clearly, the demand for a come back they will be a strong risk oversight product credibleedibly be a that can navigate an environment where everyone is afraid of rising Interest Rates. We delivered. Bidder. They have a tremendous track record, tremendous support on the street. Recurring income, stable, i think Rupert Murdoch and 20th century fox prefer the disney foreseeable performance patterns in an environment that becomes deal for two reasons. One, they believe it has less regulatory risks than a comcast ever more choppy for investors deal. Comcast is not the most well to navigate. Loved company in washington, d. C. Let us get straight on to maybe even more importantly, i airbus and shares there have jumped the most in almost six years after the company promised think Rupert Murdoch would prefer to own disney shares. He and his family will be the an Earnings Growth of 20 in the largest owner of the walt disney current year. Company, and i think he likes his position in that company this comes despite engine issues slowing the production and a 1. 3 better than he would at comcast. Billion euro charge against its north Korean Leader kim jong un has invited south Korean Military transport plane. President moon to meet, a given the fact we only just found out last week about the dramatic gesture that may raise latest problem with the whitney prospects for easing tensions on the korean peninsula. The invitation was delivered by turbo fan, do you have the visibility to have confidence in those targets . Kims sister, kim yojong. Yes, you are right. Will this Charm Offensive work . The guidance we have given the obviously, i think it has, market in 2018 is dependent on amongst other things, that our considering that there are calls for talks with kim jongun. Engine partners deliver the requisite engines. Clearly the local media here was all over her visit. But that was not different in she overshadowed the olympics. 2017. Forget about the opening we have had more teething ceremony. Problems with the new engines, very fuel efficient engines. Bright side. Today, there were significant yes, there is a new glitch that developments a few hours ago, when Vice President pence in an interview said the u. S. Is was discovered roughly a week ago. Willing to engage in talks with we are assessing the north korea without the implications. This happens early in the year precondition that there were and i am quite confident that we before, that the u. S. Would not can work through this and talk with north korea until they recover whatever needs to be had started dismantling their Nuclear Weapons program. Recovered in terms of deliveries clearly whatever the charm throughout the year. Offensive or Propaganda Machine that they instituted over the shares of cisco surging to its highest level in more than olympics, it has worked in a 17 years following stronger than expected earnings including its practical sense because there is diplomacy now. First revenue increase following a one time charge related to a a record bet on i. T. That tax overhaul plan. Could shake up the defense industry. The company is revealing some General Dynamics, the maker of big plans increasing its dividend by 14 and a 25 tanks and nuclear submarines, billion stock buyback. Has agreed to buy csra for 6. 8 billion, the largest ever we are not a capital intensive business. We do not spend a lot of capex on an annual basis. We had said the three areas that acquisition for the defense contractor which is looking to expand its i. T. Offerings. They are in i. T. Spaces where we would focus on as we got tax reform would be to reduce our General Dynamics is not. Share count through the buyback which you saw us announce in other words, it has a big yesterday. Footprint in dod, homeland as well as continue our capital security and other federal agencies. Strategies of returning cash to our shareholders. Gd has some footprint in those we increased our dividend yesterday by 14 and we also left ourselves plenty of dry agencies, but it is concentrated in the defense sector. Powder for ongoing m a activity things for gd. That lines up with our things for gd. Strategies. The other thing that may be going on is the federal government is about to announce heineken is the worlds a huge cloud contract. Secondlargest brewer. Before the end of the fiscal it has reported an adjusted year. This could be 10 billion for 10 years and it may be is looking output that beat analysts to position itself to get that. Expectations. There is an important story the dutch firm a forecast to be told around economic profitability of this year will growth in japan. That slowed sharply in the be a below its mediumterm Fourth Quarter. Target after integrating a brazilian business in bought official figures show expansion from japanese rival, kirin. At 0. 5 for the previous three months, half of the 1 is this the case where you will economists had estimated, and try to invest a lot, expand the down from 2. 2 growth in the Third Quarter. Business, take market share away where does that leave the boj . In terms of what it has to do . From the number one contender in brazil . I think these numbers show the acquisition in brazil is that even with the conditions putting our strategy into action. There and the labor market as tight as it is, they are nowhere winning in the premium segment near their inflation target. Which we have been doing in there is no evidence that brazil with the heineken brand. Inflation there will accelerate rebuilt to a 2 million brand. Anytime soon like the boj and then, if we want to play with a full portfolio, having a wanted. I think all the indications are number one or a strong number that they will stick to the course. Two position in the market. Committed to the stimulus. Dont forget, we have the together, now, we are covering expected appointment of governor kuroda coming up, which is the full territory and we are expected to double down on the ready to deploy the strategy. Sentiment and no sign it will let us have a look at shares change materially anytime soon. Of rising. The Prime Minister of japan, we were up 3 . 2. 6 now. Shinzo abe, nominated governor after company, cut 2018 guidance, improving competition. Kuroda to lead the bank of japan for another fiveyear term. Abe also appointed to deputy governors. We should see monetary heading prices across contracts. Stimulus here in japan continue aggressively for at least the underlying, 485 million aussie. Next few months. We have another meeting coming up in march. The math tells me we should nobody expects any change. Expect slight moderation in there will be a great deal of earnings. I will talk about earnings interest when we get to april. That is the first meeting we get with the new leadership in place over a full 12 month period. With the two deputies alongside kuroda. What i am saying is, the perhaps moving into this new Earnings Guidance range is term will give him a chance to sound. We have to recognize some of the things we have to implement as rethink, to recalibrate, and we will be watching with a lot of part of the regulators decision interest, especially the april meeting. Will cost a few million tons as the cleveland fed president well. Is said to be among the contenders for vice chair. Profits rising 50 in the you have got a fresh fed chair. Third quarter beating estimates would it be best to surround him and earnings show a strong operating performance. With established figures to be the company is going ahead with able to guide him through the its corporate transformation first year . Program. I think loretta is an excellent person and would be a are you sticking with the previous timeline of the joint venture with tata at the beginning of 2018. N excellent choice. She is someone who has a very i can confirm that. At the end of last year, we good grounding in Economic Research on the regulatory side and the Monetary Policy side. She has been in the federal could not reach an agreement with our union. Reserve system for a long time and then president in the having said that, what we are cleveland fed and knows the system well, so i think that is still working on is the Due Diligence and on the other side, it a good power duo. On the tata side, agreements with their unions and workers representatives. The tories began their it needs to come to a signing. We will stick to the timeline. Roadmap to brexit this week in a series of public speeches outlining their views on how signing early 2018 and closing expected by the end of 2018. Britain should leave the eu. Foreign secretary Boris Johnson gucci saw comparable sales gave the inaugural address rise 43 in the Third Quarter of 2017. Titled a United Kingdom attempting to reach out to britons who voted to remain. Surging past rival, hermes. Growth is well spread across it is not an economic threat, all of the categories and all of but a considerable opportunity. A few things became clear, he might still be interested in the job of Prime Minister. The geographies and over all of the clienteles. On the transition, he says it is very strong. Fine, everything can stay as it what we have put in place in is. Terms of supply chains will help he does have red lines. And he is sticking to them. Us cope with growth and production. He wants divergence. He says wet without any lack of being are leaving for a reason and this has to happen. He has shied away, an implicit demanding for quality. Way, we need to be chilly toward this is all in place. Brexit and we are not as it is very efficient growth. Positive about it. I am very confident that we will some of the biggest Fund Managers in the u. S. Are reporting what they bought as be able to continue at that well as sold last quarter in momentum of 44 . But to grow significantly above their 13f filings. The growth of the market. I see that the fangs have been could gucci become bigger in souring. It looks like investors are slowly selling out of the fangs, bigger than Louis Vuitton in terms of sales . I hope. Why not . Acceleration in the cloud. French i. T. Giant says the and this has been a really important area for stock pickers demand for digital and cloud because they have lamented the Services Show growth in the Fourth Quarter. Rise in growth stocks, while up highert meandered now accounting for 40 of its business. Business seems to be ok. What do you think the biggest with the stock market. Risks are in the next 12 months . We saw a lot of managers sell out of some of their fang holdings. Warren buffett has just about had it with ibm. I would underline that in the Fourth Quarter we accelerated Berkshire Hathaway reports it growth, notably in the u. S. Has cut its stake in the company the u. S. Was the weak point at by 94 in the Fourth Quarter. The end of 2016. We dont know to what extent we committed other turnaround, it is warren himself, the now, we have fully accomplished influence of his investing growth there. 5 growth in north america deputies, but it is a different tact. You saw in this quarter he alone. Boosted his apple stake while we ended in the Fourth Quarter reducing ibm. With more than 12 growth. For us, digital is the engine. It raises the question of maybe and it now accounts for 40 as Warren Buffett is trying to you just said. Figure out how the world is when you speak of risk, maybe changing as he is adjusting his businesses. Protection is something we had he is adjusting towards teva as well. Been handling for a while. Definitely. That was kind of the big news last night. He invested in teva. That was the first time we have seen that stake disclose. You are wondering if he is betting on the turnaround or if there are other things drawing him in. No deal. Qualcomm rejected broadcoms latest offer to buy the company for 82 a share saying it materially undervalues the company. This is an ongoing saga. But is this the last chapter . Is there more to be written . It depends on how firm the last and final is. This is oldschool negotiation. If you look at what qualcomm and broadcom are saying is qualcomm is interested in keeping its company together, Licensing Company together, and feels 82 a share is unequivocally low. Broadcom on the other hand believes that this stock is trading at 65, earnings fell, weak. Ill be very this will be a long, drawnout process. Qualcomm investors, take your money and run. I have got inspiration this morning. This is your 3d yield curve. I knew you would like this. Especially for you. If i turn it around, you see the steepening off the curve. Nejra there are about 30,000 functions on the bloomberg. We enjoy showing you our favorites on Bloomberg Television. Maybe they will become your favorites. Here is another one you may find useful. Quic. It will lead you to quick takes. Here is a quick take from this week. There is a global trend taking place. A lower percentage of people are smoking cigarettes. This has forced Tobacco Companies to create products that can keep them profitable. Their answer may come in the form of an increasingly popular alternative to smoking, vaping. But does that come with its own issues . Here is the situation a chinese pharmacist and smoker nejra you are watching developed the ecigarette in bloomberg best. 2003. Im nejra cehic. The device uses no tobacco at all. A battery heats nicotine liquid. This week, bloombergs david which the puffer inhales and westin spoke with lloyd then exhales paper. Blankfein at the 10,000 Small Businesses summit in washington there is another product. Dc. They discussed the sudden return a much lower temperature than a of volatility to financial regular cigarette. Markets and what it has meant they are said to have a taste and nicotine boost comparable to for the banks trading business. A traditional cigarette. Things are going to happen. A boost that is better than an there will be something that happens in the world. Ecigarette. In both devices, no burning tobacco and thus, no smoke or tar. Someone will get elected that shouldnt happen. There will be a natural the u. S. Food and drug disaster. Administration in mid2017 essentially embracing vaping. A company will go under. There will be a cyber event. Vaping, as a way for smokers to quit. War, pestilence. Something will happen that will cause the relationships of one the market is estimated at 7 asset to another to readjust against each other. It has been an unusual period billion a year and growing where that has not happened. People are not sure the reason rapidly. Here is the argument. Why is. My own best guess is that when i some Health Groups believe that this may be a gateway to make kids start smoking cigarettes. Look to assets people will say that because of qe and Central Banks around the world buying risky assets, as much as they could get almost as fast as debt the increase however, the was issued, they bought them, rise was counterbalanced by a drop in use of conventional tobacco products. That tends to be a little according to a 2013 survey,s blanket over spikes in asset prices and that probably kept aping may be as effective as nicotine patches in helping smokers trying to quit. Things low. As the market and people the practice is too new. Anticipate that coming off, i think we will see more volatility. However, a 2015 independent review of the evidence concluded if you were planning this. That vaping is 95 less harmful this is your job. Contingency, you are planning for the possibility. Than smoking. Is it fair to infer that goldman is doing pretty well right now it is still early to say for sure, but they being may be the in trading, commodities, fixed breath of fresh air that smokers income given what has happened have been looking for. With volatility . We have heard for a few nejra that was just one of the quarters from goldman and others, the problem with trading many quick takes you can find on bloomberg. Was a lack of volatility. This is a much better environment. You can also find them on even if this is a much better bloomberg. Com along with all of the latest Business News and environment. Look, we sell insurance to people. Analysis 24 hours a day. We take risk away from each other. That will be all for bloomberg best this week. Thank you for watching. If there had not been a i am nejra cehic. Hurricane on the east coast for this is bloomberg. Years, people stop buying insurance, and those that buy insurance dont want to pay a lot. If you have four hurricanes, the like the year of katrina, the next year everybody buys insurance and they pay whatever you ask them to pay. Not that the risks have changed that much because anything can happen anytime, but their sentiment has changed and anxiety has changed so it is a better environment for our client franchise, and the answer is a better environment on any given day we could be positioned wrong and have to position inventory based on our best guess as to what our clients will want the next day, week, or month because we deal in liquidity. So it may not work right every day, but the environment is good and gives us a chance and makes us valuable to our clients. Nejra coming up, another view on volatility from the head of another leading investment bank, the Credit Suisse ceo. And how much do computers have to do with sharp selloffs in the markets . Luke ellis says machines should not take the blame. Did they start the selloff . No. Did they cause the selloff . Retail. Under pressure like never before. No. Are they part of the volumes and its connected technology thats moving companies forward fast. Going to the market . Yes, absolutely. Ecommerce. Nejra this is bloomberg. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Show me the olympic winter games leaving every competitor, threat and challenge outmaneuvered. Like ive never seen before. Xfinity x1, yeah, i always know the scor. Triple corks in 4k. Lookin so sick. Stream live on every screen, every win, every trick. 2000 hours of coverage, get your mind blown. 50 olympic channels, yup, youre in the zone. And if theres something that you want to see, pick up that voice remote and just say show me. Experience nbcuniversals coverage of the olympic winter games like never before with xfinity. Proud partner of team usa. David when you told people you were going to raise a 100 billion fund, did they tell you you were crazy . Masayoshi some people said. [laughter] david did you suffer discrimination growing up in japan . Masayoshi that made me stronger. David how did you feel losing 70 billion of net worth . Masayoshi i was so close to, you know, fall down from the cliff. We almost went bankrupt. Somehow, i survived. Would you fix your tie, please . David well, people would not recognize me if my tie was fixed, but ok. Just leave it this way. All right. David i dont consider myself a journalist. How worried are you about how the brexit negotiations are going at this point . What is your biggest concern as we move forward . I have been an open book as far as brexit is concerned. I felt it was a disaster for the u. K. And sad for europe. I think the facts are beginning to be clear, what brexit is what a disaster brexit is going to be. Sadly, it is the very people that voted for brexit out in the rural areas of britain that the latest research has shown will be hardest hit by brexit. I am still hopeful that when all of the facts are on the table in front of the house of commons