We had a massive stimulus package. It is all straight ahead on bloomberg best. Welcome and hello. I am alix steel. This is bloomberg best. Interviewsview of from Bloomberg Television around the world. It has been a momentous week for Monetary Policy with Rate Decision from the bank of japan, the u. S. Federal reserve, endobag of england. On monday, the top headline was disappointing data from china. Latest data from china likely to get more pressure on the leadership as they try to meet this years growth target by 6. 5 . Retail sales slowed. Output rising just 5. 4 . That is below estimates and that suggest sluggishness in demand from abroad. Factory deflation is persistent now for some 48 consecutive months. Retail sales is a key barometer for the government for consumption trends. It climbed to 20 . That missed the 11 of forecast of economists surveyed by bloomberg news. We are also seeing pressure on the currency. Of calmroject a sense at this annual press conference on saturday. What message is he trying to send it . No rush to buy u. S. Dollars. He did say that. Isis saying chinas economy steady as she goes. Excess of policy stimulus is not necessary to achieve that growth target i mentioned. He says as long as there is no big financial turmoil, they will keep its prudent Monetary Policy with a slight easing bias. The bank of japan today held its new benchmark Interest Rate unchanged at. 1 despite risks to growth. Economists served by bloomberg the additional easing coming into japan later this year. John ripley used a term i have not heard, fiscal evasion. Have we reached the limits of fiscal evasion from the ucb last week and now the bank of japan . Japan has become a testing for the rest of the world. They are the people who keep trying this stuff end up not doing it that well. They did not manage to get their economy going despite a very long time of qe because the government is not do enough. I dont sense a railway that this is going in the right direction despite current affairs. The longer it goes on, the longer it get part of it. It just goes to show how deeply embedded lowflation is in that economy because the outcome of that is not set to be any real wage hikes. It looks like a tight labor market. Time is a big issue. That is the one place where it hits retail sales. Possibility of japan is deflation. If you keep on thinking something will be cheaper, then you are more likely to keep your hands in your pocket. Change in Interest Rates, clearly, scarlet. Important, the feds scaled back its planned for rate hikes through the end of the year. Policymakers expect to raise the targets by one half of a percentage point. That is a big change from where we were in december, just three months ago when fed policymakers anticipated a full point of increases through the end of play 16. Through the end of 2016. Plot the dot plot. Taken out two rate increases and move down to a 290 basis points at the end of the year which would imply two rate increases. Tot comes down from 1. 4 almost 1. 5 in december. Then they lose another 50 basis points in 2017 to 1. 9 . In 2018, 3 . England, Rate Decisions, they voted unanimously to keep rates unchanged and highlighted uncertainty around the socalled is that the big take away . This is certainly the first time that the bank as a whole has expressed an opinion about how this will affect the economy, so we have had mark carney express a view, but this is the first time we had seen it in the official minutes. The bank of england is quite smug to the fed in its outlook. Does the domestic economy look fine . The external economy is not looking so good. You can see in the minute that they havent the emerging markets as an area of slowdown similar to what the bed was saying last night. Domestically, they are saying inflation should pick up. Where are we on rates, am a . Or seven years where are we on rates, emma . With theurgency uncertainty surrounding the referendum. I know we did a survey yesterday, which they talked about Interest Rate cuts. Interesting. There was no mention of a cut. Last month, we had carney saying that the bank had room to loosen. It wouldfficial said not take much for him to vote for a cut. But today, in the decision, there is no debate about that, so while the market is pricing the chance of a cut, economists say the chances of a cut have risen, the bank does want to go there yet. Back to this breaking story. European leaders has reached a deal with turkey on a refugee crisis. Been ryanat has chilcote has been covering the story. Give us the details. For thethis does European Union is a game changer potentially. Turkey has agreed to accept refugees and migrants that have already made the journey from turkey to the European Union. They will begin sending refugees and migrants back to turkey as early as this sunday. Beyond that, turkey is saying it will work harder to stop the flow of refugees from turkey to greece in the European Union so we dont get into this problem. In exchange for that, turkey gets some other things it was looking for, maybe not to the extent. It gets the additional 3 billion euros they were seeking. As compensation for dealing with the refugee crisis. It gets a promise that there will be more of an effort to help turkey get the eu membership to turkey off the ground, and finally, there will be an effort to expedite visa free travel for turks who want to get to the European Union. That byould like to see june. The eu is saying as long as you meet all of the criteria we have for you, we are happy to see that. The show, we will have more reaction to the weak elements in centralbank policy with insights from bill gross and former fed chief alan greenspan. Coming up, review of the weeks Biggest Company news including valeants worst day ever. Bloomberg best. Welcome back to bloomberg best. welcome back to bloomberg best. Im alix steel. Shares of Valeant Pharmaceuticals fell 60 . Major investors lost 5 billion. Lets look back at italians terrible tuesday. At valeants terrible tuesday. The drugmaker cut its forecast lower than what they predicted in december. What have we learned . This is one of the craziest things. They put out guidance earlier measures wasmain going to be 6. 2 6. 2 billion. Then they said, oh, it is actually 6 billion. This iss almost going very badly. What does that say about mike pearson . When he came back into the company, they do not come out with numbers because he said, we are not ready. Here they are, boom, a big mistake yet again. Who is checking the spelling over there . I am at a loss for words. Mike peterson reassured everybody and in the time he has been on the telephone with analysts, the stocks fell more percentage points. Things are getting weird. The approaching square coming out, saying the vice chairman is going to be on the board. They still say the underlying business franchises are worth multiples of what the current market price is now. When you hear things like that, how do you interpret that . He isan interpret it that wrong and has been wrong. He is a very astute investor. But he has been wrong. That theyss model adjusted to when they built this company in the past several years is gone. The capital for them as high. Delivered is massive. The products they their leverage is massive. The products they look to grow have been going down, not up. Alix other companies took aggressive steps in keep growing. Two giants merged. Star word shares are moving. The 76 per share bid started at my . 9 billion. Wow i was shocked. This is three months after blackstone closed on the acquisition of strategic. Is a netherhis example of Chinese Companies thisg inroads into the is another example of Chinese Companies making inroads. They are putting 20 billion almost into the united states, hotels, real estate in the country. Does marriottwhy not have this locked up . It will be challenging. Is there a breakup fee . 400 million. That is what marriott would get from starwood. That eases the pain a little bit. In the next couple of weeks, they will meet with her bankers and lawyers. It is an all caps she offer and a big jump from what marriott was offering a couple of months ago. Seen a jump ins profits. The volatility in chinese markets. Can upon second largest insurance said profit grows rose. Doubledvestment income well written premiums jumped to 19 . What was the key driver . 2015, they achieved a Significant Growth across all businesses. In particular, you just mentioned premium increased to 20 . Besides that, we had a good year on internet finances, would be the key related in terms of new customers, users, and the gradually migrate them to our financial customers. Three times a charm. Has agreed to merge a third time. A deal has been attempted. The merger would create one of the largest exchanges in the world. A lot of people said a merger of equals. Not thinkople who do this exist, what you tell them . It is true it is a merger of equals. An appreciateize each others strengths. The management team, the board have come together to develop the strengths and this is what we have done and delivered. Damon west end can to my desk and look at how profitable it was. To shareholders this is not a dilution of earnings . I think the business sits between the companies are complementary. That is one. And the growth that they have driven all the last few years is deeply impressive. That has resulted in multiple expansion, which is impressive and overall, a trajectory of growth in its globally diversified businesses, which is very attractive. Is deutsche the perfect thing for msc . The lse group . 100 behind the transaction because it brings together two companies that are presenceaving a global , but whose Portfolio Products every highly complementary. It would offer very significant market. Ry capital and it would bring together to highly complementary index products, leadership position in the u. S. And europe, in china together with highly branded euro stocks. Muchacle shares popping as as 4 in afterhours trading. Down 3 yearoveryear. Suggested by pointing 9. 3 billion. Faste good news is the past business which is their application in their platform and cloud. Scorching growth. The margins did disappoint people. Emily how does that compare to the big names . It is doing better, but a part of that trend moving away from legacy software. Oracle has a report saying they have been back for a long time. Look at Revenue Growth, Topline Revenue growth, you can see a trend that you see with other companies. That is their legacy business of software they sell by the pile, but the Revenue Growth over all is not growing anymore. When you look at the cloud results, which was which pat was referring to, the cloud is growing at a fantastic pace. They are taking on the biggest Cloud Software vendors and adding significant customers. About what is happening with andat the head of copper coal. It came out of the blue. It is not a huge surprise. Sam walters took over after the ceo had to resign. He is 66 years old now and said he did not want to do the job for more than three years now. What has he done . He has relentlessly focused on costs. It looks in much better shape. Mark he has outperformed his sector peers. In relative terms, he has been a very good job if you look at the share prices. He has outperformed hp, glencore. What is interesting about the rio is very much an idol company. Doess are asking is this signal a shift to more copper . You are watching bloomberg best. Im alix steel. For the third consecutive week, multiple u. S. State Health President ial primaries. On wednesday, president obama unveiled his nomination to fulfill the Supreme Court vacancy and combine that with Regional Elections in germany, but it day in the u k, and the close of the National Peoples congress in china. It all adds up into an exceptionally busy week in politics. Overdriven chancellors refugee policy, as the Democratic Party failed to capture two Western State in Regional Elections. It is hard to underscore how disastrous this is. The decline that they have had in key states. It is all anyone is talking about. What you see of the map is where you see the christian Democrats Holding on in the east. Look at that blue state. 4 unemployment rate. By all accounts, things should be going well. Birthplacelly the of the cdu. They also did not win back the other eastern states. This is a Rightwing Party that initially sat on itself in opposition to the euro. Now they have gone ahead and moved to the right, especially on the refugee question. Voters are unhappy. There has not been any indication from local that she is going to change her tactic and stick with her refugee policy regardless of how unpopular it is. There are no obvious challenges to her and her own party. What other chances of springing surprises . I am thinking of three major risks. The markup in the white house. I think the last of the three is the least likely. I am most worried about the possibility i hope i am wrong on this. Populism would lead one to think there is more strength than the polls have shown so far. Of our elections, i have been wrong every inch of the way over last six months, so my predictions are no better than anyone elses. I dont know who is going to be the republican nominee now, much less the president of the united states. Donald trump did not get the sleep you wanted. But he won three of the five states. Marco rubio is out of the race. What happens to his money . Verys supporters will be up for grabs, especially his money. Is saying i am an open tent. Rubio is an establishment favorite. It is not a great fit. It is hard to see if those people will move to ted cruz, or to donald trump. Side,the democratic morery has 400 plus delegates than bernie sanders. What happens for her to win over the independentd . S . Had a great night last night. We are watching to see if ohio. For her, it was really a big night of delegates, which is what it is all about. She has the game from a on her side. Are the chances of a contested Republican Convention rising . High in ted cruz and john kasich continue to plug off delegates. That is a huge risk of the republican party, not only for the cycle, but for years to come. Journalists asking the chinese this is the annual news briefing at the National Peoples conference. About been fairly candid growth prospects. Talking about a weak Global Economy effecting what is going on with his country. He says we see both difficulties and hopes in the economy. We will push ahead. There is severe overcapacity in some sectors and he also says, there is much room for china to boost industrialization and urbanization. Most of the big cities urbanization has been a big push up premiere. Nonetheless he minutes, he also touched on the u. S. President ial Campaign Season saying the u. S. President ial election will not effect u. S. china ties, but also added the campaign right now is eyecatching. Mark the chancellor in the u. K. Outline the budget for Great Britain and revise the growth forecast and avoids corporation tax. Also, imposing a sugar tax in the u. K. En suite drinks. It was a politically astute budget. It had a lot of popular things in it and one or two unpopular. Cuts. Ng and tax i was delighted he says he can stick to his plan of implementing the budget deficit. That is important indeed. That was good. He says he will finance these goodies by unspecified savings and aernment departments blitz on tax evasion. I wish him luck. We will see if the devil could be in the details. A lot of debate. The g20 were talking about how we need to see more fiscal spending to stop the Global Economy from slowing. This chancellor has made a habit or virtue of sticking to his austerity drive. Is he on the right track . He is right and the g20 is wrong. You think so . Absolutely. Certainly in the u. K. Context. President obama has nominated Merrick Garland to the u. S. Supreme court. He is a judicial moderate who currently serves as chief judge at the d. C. Circuit court of appeals. Fightlection sets up a with Senate Republicans who have vowed not to hold hearings on any nominee until after novembers president ial election. What is his reputation as a judge . Scrupulously fair, incredibly well prepared. Wrights opinions with incredible care. Focuses on the particular case. He is not someone out to make right statements about the law. He is someone that sides the legal issues placed before him based on the case, based on the law and the facts. Patrick leahy has tweeted saying it has been an average of nominatedr the person formally to get appointed. Chances of this before memorial day. Said fromsident has the beginning the senate will have pledge of time to see this nomination through, to hold hearings, to have meetings. The Senate Republicans who control the senate have said they dont see that happening. They dont want to hold meetings. They dont want to do hearings. There will be a fight outside the senate with outside groups on both sides of the aisle, making their argument, taking their argument to the voters and trying to press the Senate Republicans. At this point, we have not seen any signs the Senate Republicans will move even though the president says he is nominated a consensus candidate. Coming up more highlevel political conversation with canadas prime minister. Trio more reaction to the of central bank decisions. That is also to come on bloomberg best. Alix welcome back to bloomberg best. I am alix steel. The most intriguing interviews on Bloomberg Television this week, a chat with the c. E. O. Who led jcpenneys turnaround in Blackstone Tony James explains why his company is bullish on energy investing. Lets begin with our exclusive conversation with Justin Trudeau who sat down with john micklethwait. John a lot of people look at canadas economy. You have a budget next week. They see an economy growing by one and a half percent a year could they think it needs stimulus and not longterm spending like infrastructure. Your government seems unable to mention the word. We had a massive stimulus you can say stimulus as many times as you like following the recession in 20082009. We are talking 80 billion in debt that we kicked off with. This is much more modest. Much more responsible. Is not soe looking at much trying to jolt the economy into life as trying to lay the groundwork and foundation for better growth, better productivity, over the longterm and not just an instant influx of cash. I think the challenge when you are trying to shovel money out the door is it does not always get spent on the right things. For example, what we have decided on infrastructure spending, which is going to be a massive investment over the next 10 years, the first two years we are going to do the unsexy things governments hate to announce. Recapitalization of infrastructure, making upgrades, the things you dont get to cut a ribbon and announce a shiny new building on. Signals on subways and things necessary to keep the pace up in terms of transit of people but that dont get the flash, but are desperately needed. That is what we are focusing on in the coming couple of years. And then we get into the bigger, longer term things once we have been able to plan them through. John how will you pay for all of that . The issue comes up repeatedly, the idea you will need to raise taxes at some point. Nowes, we are aware right the Growth Profile of our company is not giving us the kind of tax revenues we would like. That has been the case over the last 10 years. We have had lower growth and we should have. The platform i put forward in the Election Campaign was designed around recognizing our growth is not great and we need to increase growth. The question is how you improve growth rates. Do you cut the economy or do you invest in the economy . We think you invest in the economy. He put money in the pockets of the middle class and create opportunities to grow. You mentioned energy trade on Energy Patience has proven lies. Did you miss the window . I hope not. Right abouteen projecting energy prices. When oil prices go up, you will have suddenly a lot of companies that were in the process of cutting back that need capital because they control can drill wells profitably. They dont have access to capital. They dont have access to equity. They will need our capital even when prices go up. I think we will have a lot of activity. Most activee your investment this year . Yes. Erik we thought it would have been last year. That did not prove to be the case. We were lucky we did not do much. Now we have a lot of dry powder and interesting deals. Weve started to make transactions already. We just bought a big interest in the largest north sea field. I think we have made great investments and will just get better. Do you have an overall Revenue Target . Growth a estimates 3 year, it would take 10 years you back to that level should things go well. What level are you targeting . The business is different. 2011, consumers shopped in a different way. To us, we are simply going create a strategy that will allow customers the way they want to shop. We are not setting a sales target as our goal. We are setting a growth initiative. We want to grow for 2016 between 3 and 4 . We think that is achievable. We want to create a strong, sustainable return. There are a lot of Great Companies that have revenue less than 20 billion. We are not trying to get to an artificial target. We are trying to create great return for our shareholders and consistent growth year over year. We think we can do that. Last year, we grew 4. 5 . That was significant. We are targeting 3 to 4 growth in 2016. We have growth projection similar to that for the next two years. Stephanie we have seen retail get slaughtered. Your china orders surged. Your numbers are great. What do you know that the rest of the retail climate does not . It is all about connecting with the the athlete with the consumer. All athletes, global to everyday athletes like you and i. Stephanie you dont think i am worldclass . I think you are worldclass in a lot of ways. Im talking about olympic level. The important part is to connect with the athletes and give them something they need and want. It could be something from a performance standpoint critical for them to perform at the highest level, but also something that aesthetically puts them in the right frame of mind, that they feel good about, that is empowering. Stephanie you said you want your womens business to double in the next five years. Are you still on track . Absolutely. Womens business to us is incredibly important. Women are more active than ever before. That is not a trend. That is a movement. We expect that to continue and want to lead in that respect. Stephanie when we think about women, we often think of names like lululemon. We have seen you advertise with maria sharapova. The womens opportunity for nike is huge. We are excited to be part of leading the effort. How has the marriage with facebook been so far . It has been great. We have gone from shaking hands with mark with 60 people too many hundreds of people in two years. We have relocated onto the facebook campus, so the food has improved. We get free ice cream. It really has been great. You guys are under a two minutes amount of pressure. Expectations are high. That constrain any marriage. How are you dealing with that . When we got acquired, it definitely woke everyone up. It was something we knew would happen. It was a moment where mark got up and said vr is the next platform. The world took notice, more than when we had been pioneering as a startup. There are a lot of people in the space. This is what we needed. It is the best thing for vr. There has to be lots to do and a huge ecosystem of content. The more people investing in vr, the more likely that is to be. How involved is mark personally . I think he is quite involved. How often do you talk . Given how exciting the space is and how many breakthroughs will come from oculus and in the vr space, mark is really dialed into what we are doing. Whenever a president visits, he takes them into the oculus toward box shows them the latest demos. It really is the next big platform. Alix you are watching bloomberg best. I am alix steel. This week, the bank of japan held firm on negative rates. The bank of england kept its benchmark at a record low and the scant vetted has scaled back its rate hike for hot forecast. What does this mean for the World Economy . Experts brought strong opinions to Bloomberg Television starting with bill gross. Does todays press conference amend your portfolio . Will you make immediate changes . I think to some extent. Obviously, it is a more dovish fed. It seems to me stan fisher has been overruled to some extent by janet yellen in terms of the forward policy. I still think it is interesting the market in terms of forward expectations for libor and fed funds only anticipates 30 to 40 basis points a year for the next several years. The fed is to looking at 100. The fed is still way above the market. To the extent the market is lower, to a certain extent treasuries are fully priced at these levels. I am looking at the plot on the bloomberg terminal. You can see the december dots plot and ois curve below that. The big argument was the fed was out of step with the markets. Plot andto the current curve. They are chasing their tail. Ois is going down because everyone is selling treasuries. Is the fed at all connected to what is going on in your world . I think to some extent. They are connected to the stock market. The old bernanke put so to speak. Perhaps the yellen put is still in effect. If the stock market went down by 5 or 10 tomorrow, the fed would respond. I dont think they are fully responsive to the effects of Interest Rates zero bound or in negative territory. The effects are as such. They affect pension funds, insurance companies, Bank Net Interest margins. Basically, finance companies today in terms of the market are doing poorly because they sense Interest Rates will go up less fast than previously. It is a negative for the finance industry, for pensions, and savers. Going forward, they cannot earn as much as they should. The First Time Since the asian and russian crises of the late 1990s, u. S. Monetary policy is a focus on the rest to Global Growth risk to Global Growth. What is asia signaling to the fed . It demonstrates power shifting. Once upon a time, the fed would have woken up and the domestic economy would have been a dominant factor in the thinking. Now janet yellen looks at what is happening overseas. It is increasingly part of their mix. Asia used to be a great growth driver of emerging markets. That picture is more subdued now. The big part is china. It grew at a 25year low last year. They are not getting traction. Korea is one of the great postworld war ii economic knuckles. Look at japan swinging in and out of growth and contraction. When you consider that, in have mobile gdp, and increasing heart of global gdp. That is what janet yellen is cautioning. Central banks are focused on growth. Do you agree that is the fundamental problem . What should be done about it . It is certainly not the Central Banks fundamental problem. The fundamental problem which confronts Central Banks is to maintain sound currency. Andave gone far from that have requires he brings to do much of what the fiscal system we have required Central Banks too much of what the fiscal system tends to do. Stagnation is a fiscal problem, not a monetary problem. If you look at the data, what you get struck by is the fact productivity growth on average over the last five years for virtually all of the major countries and a number of emerging nations are less than 1 . Is a productivity problem at base . It is a productivity problem they face. It is ultimately a fiscal problem. They are not all like the united states. The best way of looking at it is in terms of what is being produced. Why is there a shortfall in Economic Activity . Why . Basically because the longer lived assets, those which are the most risky to invest in, have been very significantly curtailed. Nonresidential construction and assets of all types have been suppressed. Plants and equipment namely. Do you think janet yellen was trying to move because the rally was getting uncomfortable . The central bank is dovish. People are trying to make a connection to the shanghai meeting. Did we see an accord here . Was it all about to break the u. S. Dollars uptrend . In the short term, there is an element of that. In 1985have to consider where we did see an agreement, the fundamentals were different to current fundamentals. You have huge output gap differentials. In asia, you have wide output gaps. If you try to coordinate policies in order to keep the u. S. Dollar from rising, how long is this going to be in an environment showing higher returns and asia lower returns . I know shares go down, people lose money. Maybe someone gains on the short. Who has lost money when we have seen the yen go 10 big figure since that meeting a couple of weeks ago . Who have been the losers of yen strength . First of all, you have to think about what a strong yen does to economics. I would say economics this year is a loser. Alix as we wrap up bloomberg best, here is a story of innovation for your ears. How do you get Movie Theater quality at home . They are looking to pump up the volume. This young woman from taiwan is meeting with the head of a hollywood giant, lucasfilms skywalker sound. Quite a feat for a medical student turned entrepreneur just two years ago. I was watching transformers. The picture is so huge, the building falling down. Everyone is running around, dinosaurs. It sounded so funny. I was sad about that. He is one of the most important in the sound industry and says it will keep the more relevant as more people experience movies outside the theater. It is a concern to us if more people are expressing entertainment on smaller devices if they cannot hear what we are doing, it is harder to justify doing it in the first place. The hollywood sound veteran with seven oscars could not believe his ears. What got me excited was the ability it gives people in all sorts of venues, and also the ways, to hear a surround mix. That is exciting. The more people can hear the mix the way it should be, the happier i am. The technology is so new only a handful of people have heard it and immediately invested in it. Ambidio deciding the deal with disneys skywalker as well. Experienceoundman their work for the first time. A scene from gravity given the ambidio treatment. Here ford the audio you so you can, too. As a sound guy, you think it is going to change . Oh, yeah. Definitely. It is like a theater experience on your laptop. Alix if you go to bloomberg. Com , you can find a demonstration of ambidios surroundsound experience as well as the latest Business News from around the world 24 hours a day. That will do it for bloomberg best this week. Im alix steel. Thank you for watching Bloomberg Television. Welcome to this edition of the best of with all due respect. We had yet another super tuesday. After which, four republican candidates went down to three. President obama nominated judge Merrick Garland to be on the Supreme Court and the donald continues to take the spotlight even when he is laying low. We begin with the nation dealing with the fallout from one of the most monstrous moments in the race. We look back at when protests broke