Transcripts For BLOOMBERG Bloomberg Best 20160703

There is a lot of uncertainty. Uncertainty is the enemy. Shery does big pharma have a prescription for brexit side effects . It is all straight ahead on bloomberg best. Shery hello, and welcome. I am shery ahn. This is bloomberg best, your weekly review of the most important business reviews, analysis, and interviews from Bloomberg Television around the world. This week has been all about digesting last thursdays u. K. Vote to leave the European Union. On monday, the market moved in uncertainty, and nowhere else were things more uncertain than in britain, with the leadership was thrown into chaos. Nejra it is interesting what the next step will be, because logically the next step would be for the u. K. To trigger article 50 and actually start those negotiations on leaving the eu. Actually, other governments in europe are not expecting David Cameron to do that when he needs other eu leaders on a meeting on tuesday. What they will want is some kind of plan for what happens next. John the leave vote is understandable. The will of the voters is to be respected. I dont see this where it is essentially or necessarily the calamity that many are saying it will be. Mark disruption within the parliamentary labour party, widened the noconfidence vote for jeremy corbyn. It was a resounding defeat, 172 votes to 40. Therefore, there is no confidence in the labor leader from within the parliamentary labour party. Michael i am running in his leadership contest for one reason and one reason alone. I want the country i love, which has given me so much, to have this opportunity for change, with optimism and conviction. Theresa i have invited you here today to announce my candidacy to become leader of the conservative party, and Prime Minister of the United Kingdom. Nigel two of the circumstances in parliament i have concluded, that person cannot be me. I dont care which man or woman wins the tory leadership and becomes the Prime Minister, provided they have first and foremost in their mind 17. 5 million voters who voted to get back the ability to make our own laws, have our own court judgments, and control our own borders. Guy remember friday, post the announcement the u. K. Was going to leave, we saw sterling slide very sharply. We are now below those levels once again. Roy you look at the yen, it has recently passed levels when the japan unilaterally intervened in the second half of 2011. If volatility continues to strengthen further, you will see intervention by the g7. In our view, japan right now, the conditions for the unilateral intervention have been satisfied even though the volatility in the yen is relatively extreme. With regard to g7, i think they are likely to wait and see how Financial Markets react this week. Vonnie we will be speaking about the biggest story of the hour, and in fact of the day, the s p cutting the uks top Credit Rating by 2 . Matt it was not expected unexpected but the ramifications could be large. We could see Fund Managers who are only allowed to own aaa debt, forced to sell because of that. Let me ask you why you decided to go two notches here. It is not a one notch move. Is it in your view such a serious matter that it could go even further . Mortiz yes indeed, it is a major event that has just occurred. If you have followed what we have been saying over the last months and quarters, you will know that we and other people expected the vote to go the other way, to remain. We have been quite clear that if the British Population were to vote for brexit, this would hurt the ratings. We also said the ratings would go down by more than one notch depending on the circumstances. Mark the Economic Outlook has deteriorated, and some Monetary Policy easing will be required over the summer. James there is the issue about whether there will be further contagion. I dont see that either. We will keep an eye on it. We will definitely wait and see that so far i do not see a big impact on the u. N. Howard we have a toolbox, we think we have put limits on the qe program. We can do more of that, more forward guidance. We can do a lot of work in the u. S. The u. S. Is a close to outdated its mandated outcomes. Unemployment is at the national rate, and inflation is 1. 84 with a target of two. You are very good in terms of meeting mandates in the u. S. If we had to, or if some shock came along, we certainly could do more. I think that on the plus side, the bank of england was well prepared and there was liquidity in place. Markets have functioned effectively. Guy how you think about this market . Patrick this lack of certainty, this uncertainty right now. The investment decisions, return on equity, return on capital employment for companies are going to go down right now. To be chasing this rally will not pay off in the long term. David you are setting record lows in government bonds around the world. It is the ultimate risk off trade . Mike when you have this much uncertainty, you are afraid of what comes next, you hide under the bed. U. S. Treasuries and other government bonds are the bed right now. It is kind of a shame because the yields are so low. If you hold to maturity, you will lose money if there is any inflation at all. What else are you going to do right now . Mario i tried to find a word which describes our feelings. I was just chatting about this a moment ago. I think probably the best word would be sadness. David the tone of the meeting was one of sadness and regret. Our partners in the European Union are genuinely sad that we are planning to leave this organization. Francine the german chancellor Angela Merkel said before, she sees no backing out to a brexit now. Michael fuchs, always great to have your perspective on these things. First of all, you heard that chancellor merkel was very clear. There will be no renegotiation with probably no access to the Single Market. What do you expect . What are the negotiations going to look like . Michael first of all, the u. K. Has to trigger article 50. That is number one. As soon as this is out and as soon as this has been made, we have to form a team to negotiate. Of course, there will be no free access to the Single Market anymore. This has to be renegotiated. To say it bluntly, there aint no free lunch. It is not for free. You have to pay something. They have to accept a certain terms and conditions. Mervyn think the most important thing at this stage is for everyone to understand Central Banks are prepared to supply liquidity if and when it is needed. It is not clear a large amount will be needed but nevertheless, Central Banks will provide it ondemand. And the economic position, one in which much countries feel if only the rest of the world would grow properly we will be fine but they are not so what do we do . We try to lower the exchange rate. I think Central Banks should not compete in trying to push down their exchange rates, but there will be big changes needed if we can get back to a stable position, so we should not try to resist that. Tom michael mayo, the u. S. Banks, are they going to lose jobs because of this crisis in london . Michael u. S. Banks of the worst Revenue Growth in 80 years before brexit. There is no question banks need to control costs. You are going to be reducing jobs, your going to be reducing compensation, and the followup the fallout for the large u. S. Banks would be the cost of business goes up, there are Capital Market headwinds, increased complexity, currency risks, and Central Banks have lower for longer Interest Rates. Jeanclaude scotland wants to be heard in brussels. So i will listen carefully to what the first minister will tell me. Nicola i have stated our desire to protect our relationship with the European Union. Tom what is the leverage miss surgeon has to advocate for scotland in brussels . I dont see it. What is it . Sony the optics of her actually having meetings in brussels and starting preliminary negotiations, whether they have any Legal Authority or not, is more than enough to essentially send the signal to the whole of the u. K. That a brexit is equal equivalent to a breakup of the United Kingdom. I think that is the best thing she can be doing both for scotland as well as for the rest of the u. K. , and that is what she will continue to press. Shery still ahead, no shortage of opinions on brexit. We hear from the worlds top portfolio managers, economists, politicians, and central bankers. More bloomberg best is next. Shery this is bloomberg best. I am shery ahn. Our global tour of the weeks top business headlines continues with financial and Economic Conditions tied to the brexit. Uncertainty seems to be the word used most by Money Managers and economists, and there was good reason for what happens next to remains anyones guess. Joe you say you are not convinced that this brexit vote would be the spark for the Political Class to get smarter about more inclusive growth. What would be that catalyst . Mohamed im afraid to say it would be a bigger crisis, a bigger economic and financial crisis. And step back. As you know, i have this notion the role we have been on characterized by two things, low but stable growth on one hand and Central Banks able to repress financial volatility, that growth is coming to an end. We are seeing all these unthinkables and improbables. Negative Interest Rates and many more. That world is coming to an end. If politicians do not preempt further problems, then you will get a crisis, economic and financial, and the question becomes, how big a crisis do you need to wake up . I hope is we can avoid the crisis, i suspect we may end up needing a crisis in the wake of fall. You have seen what has happened to the pound. Arent you a little concerned about the economic chaos that brexit has created . Nigel lets get a few things straight. Sterling is down a bit. A bit . It has been in a bear market. We have seen the in currency for a long time. It is 12 up since february last year. Still way down from friday. Nigel it is 12 up from february. Lets get a sense of perspective on where these markets are, ok . Draghi may have a point. If we dont come to a grownup trade deal between the United Kingdom and the eurozone, it will hurt the eurozone. Which is why today in parliament i was urging a grownup approach. Mark carney, you said you would like to see him resign. Why . Nigel he is the governor of the bank of england. He is supposed to be independent. He has played a completely partisan role. Yvonne you think that the u. K. Leaving is a good thing. Why do you think that is a good thing . Marc we have a constitution. Already the 13th century, we swore we would not pay taxes to a foreign leader, and we would never accept foreign judgment. And that is basically what the European Countries have done. They transferred their sovereignty to essentially unrelated bureaucrats in brussels. I believe that countries function better if they are small. I believe the u. S. Will be a better functioning economy if it would consist of 50 different states, not just one federal government running the place. Yvonne some really say this was a result of backlash on globalization, every country for themselves right now. Does this actually play an impact on Global Growth, which we were talking about before the brexit vote has been very, very slow . Marc well, Global Growth has contracted. In other words, growth rates have been reduced and many countries are in recession already that has nothing to do at all with brexit. The Global Economy has begun to slow down 18 months ago. The u. S. Economy began to slow down at the end of 2014. That is why bonds have been so strong in 2015 because the bond market new the economy is weakening. Alan it is a terrible outcome in all respects. It did not have to happen. I always thought that the real problem in europe was the euro, which i thought what basically an unstable currency. Cannot exist from the existing structure. It never entered my mind that sterling was an issue. It was a floating currency. And britain was in fairly good shape economically. Tom if your attention is on europe, would you request from chancellor merkel and what would you request from brussels . Alan i am not in a position tom we would like to know. Alan let me start off with what i think ought to happen with respect to the euro. First of all, the euro has been pulled apart basically by this existence of greece in the euro structure. Greece got in by mistake. Or should i say, miscalculations of the data they submitted for the purposes of entering the euro. It became very clear when the next government, greek government showed up that the data which have been submitted is not accurate. They have been a foreign thorn in the side of the whole euro structure ever since. They should never have been in the euro. They should get out as soon as possible if you want to maintain a fundamental euro structure. Tom we think about the new russia and how they respond to brexit, what should we listen for from mr. Putin . How should we respond . From what i have seen, he is very pleased with what has happened with brexit. This works to his advantage because one of his agenda items is to cause disruption in the European Union to make sure it splits apart. I think the important part is how nato will continue to function together, and also what signals there are for the eu generally is supposed to be doing. Michael that as a key question about nato. There is a school of thought that says, we will have trouble with security arrangements in europe because the europeans and may not getting along. Another says, because they are not getting along and dont know what is going to happen, they will fall back and rely more on nato, and this could reinvigorate that organization. What do you think . Madeleine i do think this could continues to be the stabilizer in many ways and the alliance that has held together the longest. I think they will be looking to see how the security arrangements continue to be strengthened. A lot of the issues at the summit are going to do with what nato is going to do in central and eastern europe. Jes we have thought a lot about this referendum, and obviously went one way that will have economic consequences. Barclays is going into this process, eyes wide open, Balance Sheet exceptionally strong, people very motivated and committed to the economy of the United Kingdom. Erik so i take that the answer is yes, you can sustain the issues before you. Jes yes. Erik your leadership skills going to be tested like never before, perhaps. Are you ready . Jes i will find out. We spent 13 months getting ready for this referendum. We created a situation room which we invoked last week. We had full Committee Meetings about four times in the week, thursday through the early part of this week. Erik four times a day . Jes yes, it was what was happening in the call centers. On friday alone, we made 1500 loans for Small Businesses across the United Kingdom. To know what was going on in the Foreign Exchange markets, in the Early Morning hours of friday, we had Foreign Exchange trading through the system that we normally have in a full day. The corporate clients are asking, institutional clients i think we were very, very prepared, and i feel good about the ipo itself. The other thing is, it is quite different than what we may have seen with previous crises, the corporation between large banks and regulators. Shery you are watching bloomberg best. I am shery ahn. Even though the brexit both brexit vote aftermath dominated the news, bloomberg brought you the very latest in other news around the world from settlements to stress tests. Michael the first round of a stress tests show they have adequate capital. This was round two. The qualitative tests where the Risk Management systems that, as you can see, the unit of Deutsche Bank, Deutsche Bank trust did not pass. Tom stop there. That is misleading. That is hsbc, and a and toronto dominion. That is not Deutsche Bank. That is a tiny part. Michael that is the clearing and of wealth management. Tom they handle that michael according to Deutsche Bank people, it was about 5 of their Balance Sheet. Santander said they were going to fail, but they are still working on their risk controlled systems. Both of these are going to be folded in two separate Holding Companies in the United States starting july 1, it is a new fed requirement. They will be stress tested with all of the other portions of that instance in the u. S. Starting next year, in 2018. If they dont pass, they cannot send profits to their home country, because they have to retain some of them to meet their capital requirements. Francine so the stress test, in terms of the u. S. Banks, they can pay out dividends. Bob the u. S. Banks actually do really well. After years of taking up costs and cutting capital, they can withstand some pretty severe stress tests. From a credit quality perspective as a bond investor, they look pretty attractive to us. David take us through this settlement. 14. 7 billion. What are they paying for, and does this take care of all of it . Matt it definitely does not take care of all of this. It is a large chunk of uncertainty taken out of the picture. First off, volkswagen has agreed to either buy back cars at precrisis levels and customers that want to get rid of them, and give customers as much as 10,000 for their trouble. Or, recall the cars and fix them so the customers can drive them legally in the states. That is going to cost about 10 billion. That is an estimate, but that is how much they figure it is going to cost. And then about 4. 7 billion is going to go to two things. 2. 7 billion is going to go to the epa and the California Air resources board, and 2 billion they are going to invest in clean energy technology, which is, something they would have done before. Now that is mandated. Alix lions gate will be buying stars 44 . 4 billion. 32. 73 a share. It looks like starzs shares are halted while lions gate shares keep popping. Malone owns about 4 million shares of lions gate. Starz swapped some of its shares for lions gate. That led to speculation there could be a merger between the two. John malone talks a lot about getting scale in the media industry. Starz has the platform, lions gate has the tv production side of the unit. This will be a creative story, funding the purchase with new bank and bond financing. Shery still ahead, a raise hike negative Interest Rates, and whether the u. K. Brexit will actually happen. We will get insight from some of the World Largest Money Managers. First, the side effects of britains vote to leave the eu. You are watching bloomberg. N on shery you are watching bloomberg best. I am shery ahn. This week, we got unique perspective from the chief executives of the worlds most notable pharmaceutical companies. This is all part of bloombergs new series, focus on pharma. Yvonne it is focus on pharma we week here at bloomberg where we are looking at the lowing Global Business of test growing Global Business of pharmaceutical technology. Allergan ceo and president Brent Saunders live from shanghai. Great to have you. I want to get your take on this brexit vote. I know allergan is based in dublin. But does the u. K. Leaving the eu change your business at all, or put the Health Care Industry at all . Brent i think it is a bit too early to talk about the impact on the industry. With respect to allergan, we are headquartered in dublin, but we only have 1 of total sales in the United Kingdom. So outside of perhaps currency, we see the Immediate Impact as minimal. I think longerterm term, we will have to see how things like Regulatory Approvals go, but that is a few years away. Yvonne you are known as a deal guy, but you talk about operations as well. I was hoping to ask you about this brexit. How does it influence or shape the way you move your facility to the u. K. . Would you essentially move out of the region . Brent i dont think so. We have our International Headquarters in marlowe, the u. K. We have a fantastic team there. We are very committed to voting, and the u. K. E and certainly to our people there. No plans to change anything in the way we operate, and hopefully we can remain committed to our operation in marlowe for the longterm. Yvonne lets talk about m a. What has recently dominated headlines is that allerganpfizer deal that was brought down. You said before you have been blindsided by what happened, ready once this is complete. You have a lighter Balance Sheet right now, more cash. How are you going to spend it . Brent we were a little disappointed by the u. S. Treasurys involvement of the pfizer deal, but allergan is in a good position. We are in the final stages of closing our deal to sell the global generics business for about 45 million. And when that is closed, the proceeds will be spent 10 on a about 10 billion on a Stock Repurchase Program and about 10 billion in payment. That will leave us with cash flow about 20 billion to invest for growth. We will be looking at buying intellectual properties, r d assets, and of course m a. With respect to m a, it will be a smaller scale talkin deals that really support our therapeutic areas of leadership and innovation. David i want to take a step back and talk about generics. You are a major player worldwide in generics. What role do Generic Pharmaceuticals play in the Overall Health care is less . Heather they play a very significant part of the round the globe. If we start in the United States, generics have become the backbone of the Healthcare System. We represent 80 of all the 88 of all drugs in the United States. As you work your way around globally, different parts of the world have different utilization rights. We do know that every Health Care System is looking for Cost Containment and health care solutions. We work very hard to break down those barriers to provide access literally to the worlds 7 billion people who need health care. I think there is never a more important time, whether you are talking about developing countries, emerging market, or throughout europe, we continue to fight and increase generic utilization and have a more sustainable Healthcare System in these countries. David as you say, heather, Affordable Health care is terribly important, and that takes us to the price of of drugs. How concerned are you about possible regulation of drug prices Going Forward under a new administration . Heather again, what we have said repeatedly is that if we are going to look at the system, lets look at the whole system. If we are going to talk about trying to fix a piece of it, you end up not getting to the root of the problem. I would argue that here in the United States, we have got that pretty right. Hatchway xmen put into place in 1984, really established that balance with competition. That is not to say there are not abusive actresses that can affect that. Overall, we have been able to represent 88 and drug utilization. We have saved 1. 6 trillion for the United States Healthcare System over the last decade. That balance of innovation and competition, we think, is incredibly important, and letting the open market and supply and demand. We have a competitive marketplace, and our markets have horse pretty quickly when something has gone awry, or there has been abuses to the system. We think the system works, we have got to be challenging ourselves and the governments and the Regulatory Regime to maintain and keep pace with the globalization of the industry on really every front. But like i said, i believe foundationally, our system is the right one, and it provides the most motivation in the world. It has provided the best of care and we just need to make sure we can continue to provide access so that everybody is afforded the luxury of actually getting the health care. It should be a right, not a privilege. Leonard we have this conundrum. We have to have drug pricing that makes people feel like they are getting value and they can afford to get the drugs. It does not do us any good if all these new drugs and processes are invented and people cannot afford to get them. On the other hand, we do have to have prices that encourage investment in the industry. No place is it purely known better than a bloomberg that capital is agnostic. It flows the way people make money. If it doesnt make money in the biopharmaceutical industry, they will not be here. Therefore, all the hundreds of countries, the young entrepreneurs who want to develop the next cure for cancer or alzheimers disease, they will not get funded. So we have to have this balance of shortterm, people being able to afford it, and sufficient incentive to make this grow, make the industry grow. You know the patent system, which gives us pricing power, i love the quote that president lincoln said about that. He said the patent system provides the fuel of interest to the fire of genius. It is a great quote. It explains why, in the United States, most of the drugs of the world, by the way, are not invented in britain. They are not invented in asia, not russia. Plenty of smart people in russia. They are invented in the good old United States. And why is that . We have a system that encourages that. Ken the debate about health care today is polarized. I think it falsely pits pharmaceutical companies against society. And Society Needs these drugs. The reality of the world is, if we dont have a sufficient return on investment, we will not get the significant capital that we need, that we have to put up significant risks, periods of time for the current research. David is that message getting through to the populace overall . You look at the race for president , it doesnt appear candidate loves the pharmaceutical industry. No one wants to go after pharmaceutical prices. Why is it people and politicians do not have appreciation for this . Ken i have to say most people that i encounter really do think what we do is important. I think there is a legitimate conversation that needs to be had about, how do we make health care more affordable . I think unfortunately, in the heat of the political season, the discourse around pharmaceutical prices becomes overheated, and when we finally select a president , we will be able to focus on what works for our society. David i will not ask you to pick a president today, but what you know if us far, will it make a difference which candidate will be president . Ken it is hard, because they have various portions of their platform that are not good for innovation, not good for competition, and not good for patient access. Erik many of the most advanced remedies are often expensive to develop, and the companies are incentivized to generate the maximum profit possible. I am thinking of things like valeant. Things like hep c, immunotherapies, blood disease, and other drugs. What in your mind is the best way to control cost so these medicines and treatments are not just available for the very rich and insured . Bill i think the Current System, despite extreme cases that i think have probably been labeled as inappropriate, i think the Current System is better than one other that others can imagine. This is not a phenomenal thing. You have multiple Drug Companies competing in terms of equality and the price they are offering. The Drug Companies are turning out miracles. And we need their r d, and they need to see the opportunity. The thing about the alzheimers, they can reduce medical costs so dramatically and improve the human condition, and the pharmaceutical companies are great partners to our foundation. But we need help in doing science. They are unique in what they can do. Also, they are good about tiered pricing. You take about hep c as an example, i think that, and all the responsible companies do this, for the poor countries, had an approach that was not oriented toward making money, just driving access. Tier pricing is often the way to come upon the idea that accidents and new miracles, you really want to fund it. Shery you are watching bloomberg best. I am shery ahn. Some of the largest Money Managers gathered in aspen, colorado, this week for the aspen ideas festival. Among topics, Central Banks, Interest Rates, and brexit. Erik schatzker was there. Erik given that pearson generates a vast majority of its revenue here in this country in the United States, how bad the brexit be for you . John that is a very good point. We see that reflected in the view that shareholders have taken. Erik yours is one of the few stocks to rally on friday. John we made 65 of sales and profits here in america. Have a strong Balance Sheet, financial position. For me point of view, it is business as usual. Erik have you considered or perhaps contemplated in light of thursdays vote the possibility of moving the company to another jurisdiction . John pearson has been a British Company ever since it was founded erik 173 years ago, right . John so i think now is the time for everyone to be calm, not to overreact, and get on for business as usual. But hope that common sense will prevail in we will see a solution work through that reflects the legitimate concerns of the british electorate, but also doesnt lose britains influence in the wider world or the importance of the markets in which we operate. Erik can you see a rate hike this year or possibly even next year . Larry i would say with certainty we are not going to see a rate hike in july. We probably wont see one in september. Lets see how the world progresses. I think theyve always been independent. There is still a modest possibility they could do 25 basis point thing in december. If not, we will have to see. I actually believe the brexit will lead to more uncertainty. It will lead to moderately slower growth. I am under the opinion it is highly probable they will not do any tightening this year. Erik janet yellen and her colleagues have faced a lot of criticism over that data point. People argue the data were there and the fed that have raised Interest Rate at some point over the course of the first two quarters. Now that we have seen the brexit and furthermore the Financial Market volatility in december through to mid february, can we look back and say, they were right to keep their feet on the gas pedal and to keep Monetary Policy as loose as it is . Larry they being the fed . Erik yes. Larry i do not agree they should have tightened. I dont think the data is entirely there. You have modest inflation. We have a weakening economy. They revived the First Quarter from one to oneone. We have weakening quarter corporate profits. So you are that up, i actually believe it was appropriate for them to pause. Erik what do you think happens, your operating assumption for the future of britain . We do not know what is going to happen, but you have to decide for yourself. Do i think britain is going to stay . In other words, not respect the mandate of the referendum, maybe kind of muddle through with europe, or the be something more disorderly . David my view is britain will not exit, because when it becomes clear the terms of the exit are so expensive, not only because the eus demand expensive terms, but also the consequences of leaving is so significant, i think the Prime Minister of england will not invoke article 50. In my view, this will take may be a year or two to play itself out, but in my view the consequences will be too severe. For example if scotland has a , vote to exit, scotland has north sea oil, the submarine bases, and scotland is a very important part of the u. K. It would be not good for britain. And Northern Ireland might follow. Absolutely. Erik not so Great Britain and a longer. David 5248 vote, democracy does not say if you have a majority, that requires you to do something. So in our constitution, to get a treaty approved in the senate, it takes two thirds. If you want to amend, it takes two thirds of the senate and three quarters of the house. This is not a binding vote. A 5248 vote does not mean you have to do something. Whether the Prime Minister regretted it or not, that is another issue. In the end, the next Prime Minister will take a hard look at it, assess the terms. My own view, not based on inside information, my view based on general knowledge is it is unlikely written will actually exit in one or two years. Unlikely that britain will actually exit in one or two years. They may negotiate for a while. The terms are going to be so expensive. Erik many people are hopeful that you are right. Lets say you are wrong in britain david i have been wrong before in my life, yes. Erik would that make carlyle inclined to do less business or reduce its presence in the u. K. Or europe, for that matter . David the devil is in the details. So what are the terms of the exit . We do not know. This will probably be expensive. It may be possible some of the big banks will have to do something differently. I dont really know yet what the terms are, so i cant say what we will do, but i am reasonably optimistic that britain will come to its senses, leaders will come to their senses and realize brexit is not in anybodys interest. Erik how do you think Financial Markets, prediction markets, for that matter, every established leader in europe and elsewhere for that matter kind of wrong on got it wrong the on brexit . David the polling firms, the betting operations, nobody got it right. That is because the was a shift in the last minute, the last hour or two, a couple of hours before the vote. Maybe because people were just too distant from people who did the voting. Many of the people who voted against it were in parts of england that a lot of the leaders do not spend a lot of time in. There may be lots of factors. It makes one wonder about the polling system in england, because they got it wrong on camerons election. They did not think he would have in overwhelming victory. The most important thing is to not panic, not say the world is falling apart. The world survive this. It will not happen overnight and suddenly have a calamity. It will take a long time before we know the consequences are. Weve already seen a rebound on the markets. They are coming back a bit. They are not back to where they were, but they are coming back as people realize this is a longterm operation before we notice going on. David does it make david do anything do anything as the coceo is carlyle . Do you think is way more prolonged, that can create challenges, as Asset Management . Opportunities as well. David there is no doubt there will probably be a slowdown in the u. K. Economy. We have to assume the economy is going to grow at a lower rate, make some difference in financing. We dont know yet. We look around the world, are there any other brexits that could happen . Are we assuming that someone wont happen that to might actually happen . So i think a geopolitical assessment of whether possible brexits around the world is a good thing to do. This is a chart we are looking at for a lot of different assets, hrh on the bloomberg. It basically looks set to the outliers, what are the moves we are seeing. This on friday, 10 standard deviations out from the northern normal moves we have seen over the past. Matt i have chart 1813, and for the european viewers, they will understand why this is very important right now. This is the spread between italian 10year yields and spanish 10year yields. Shery there are about 30,000 functions on the bloomberg, and we always enjoy showing you are at our favorites on Bloomberg Television. Maybe they will become your favorites. Here is another function you may find it useful. Quic go. Here is a quick take outlining the secular stagnation. Vonnie secular stagnation, and it is an ugly phrase among economists. It means busts cannot turn to booms, tried and true growth policies will not work, top jobs will not be regained. Here is the situation. Since the u. S. Recovery began, products has grown 15 , a very weak comeback when looking at this. Europe is worse. Growth in the euro area has stalled. This can be given to aging populations and the efforts of governments to build Foreign Exchange reserves. With inflation low and phenomenal Interest Rates at zero, real Interest Rates cannot fall enough. There is the background. The term secular stagnation, meaning longterm, slower growth, is new. It was coined by a harvard columnist in 1998. Larry summers gave the idea new currency, and it appeared at the International Monetary fund in 2013. Suggesting the floor on Interest Rates might the a systemic inhibitor of growth. Here is the argument, one source believes the new era of slow growth may have begun. But there is disagreement on the cause. The lack of policy tools to attack it. Others, the diminishing inflation. Many other economists, including former chairman ben bernanke think this is overdone. There are concerns demographics are hard to dismiss. Shery that was just one of the many quick takes you can find on the bloomberg. You can also find them on bloomberg. Com along with all the latest in Business News and analysis 24 hours a day. That will be all for bloomberg best this week. I am shery ahn. Thank you for watching Bloomberg Television. Announcer from our studios in new york city, this is charlie rose. Charlie tom friedman is here. He is a threetime Pulitzer Prize winner and a columnist of the new york times. He is known for tackling big ideas and wideranging subjects from Foreign Policy to globalization to the role of technology. Recently, he turned his focus to the 2016 president ial election, the british vote to leave the European Union, and the moral implications of emerging technologies. For all those reasons, i am pleased to have tom friedman back at this tab