Thing that could happen to the e. U. Unpredictability is not necessarily bad. Rosalind and dont forget about earnings. The week brings a bonanza of quarterly results. I think next year will remain difficult. Record revenue. Record profitability, record margins. We delivered on all the promises we had done. Rosalind its all straight ahead on bloombergs best. Rosalind hello and welcome. I am rosalind chin, and this is bloomberg best, your weekly review of the most important Business News, analysis and interviews from Bloomberg Television around the world. On monday, markets reacted to a Campaign Fran that pledge from frances president ial candidate Marine Le Pen that raises the penalty of more instability. Marine le pen has set out her store. The leader unveiled a 144point program for government that includes leaving the euro and holding a referendum on e. U. Membership if she doesnt get a deal from the rest of the group. Marine once elected, i will announce the organization of a referendum within the First Six Months of my mandate on whether to stay or leave the e. U. Pretty much the program shes been promoting since 2012. I think two points. One, there was a very harsh tone to it. There was almost a trumpian tone describing france as a country completely defenseless borders, you know, ruined by the European Union. It was a very sort of, a very dark speech, expressing a very negative view of the french situation. The second point about the euro. She never actually said leave the euro. Because she knows that that scares some older people because they are afraid of what happens with their savings. She talked about restoring the national currency, which is of course the same thing. Jonathan euro weakness. French bond selling got off the most two points in this session, and that spread french 10 years almost the widest in some four years. The question for you and the f. X. Market, whats going to be more important in 2017, rate differentials or politics . Jane i think its probably politics. I think thats very much the case in g10 markets. It is really quite unusual to be honest to have g10 markets this focused on politics. I think france is again weighing on french yields, but the euro will have a rough ride in the next few weeks focusing on france. Scarlet disney reporting results, missing on revenue for the fiscal First Quarter. Chris thats the headline for a lot of investors. It was a big miss for espn. They have signaled they have been having some problems, 600 million increase in the nba right fees, but still, this was a big drop. Scarlet espn was the crown jewel for disney. We have said that for so long. Its also super consistent for the company. The biggest profit generator. What other parts of the business does disney have that can make up for that . The two big areas that theyve been leaning on, i think they will continue to lean on because they continue to invest in them the theme park business ,. They just invested 5. 5 billion in shanghai. They are building cruise ships as fast as they can put them in the water, which are all Good Business for them from the theme parks and result resorts businesses, and also the theatrical business, the film business has been an incredible, consistent profit generator, unlike any other studio that has to deal with the hits and misses of making movies. For disney, it has been almost a straight linear line up from the operating of their film business. Those two businesses are offsetting what has been a surprisingly, i think, greater than expected decline in the core Cable Network business particularly at espn. , scarlet breaking news on brexit. The u. K. s lower house of parliament gave theresa mays government its approval to begin the formal process of leaving the European Union. This was a vote that was taken and it was approved in the house of commons. When it comes to theresa mays selfimposed deadline of march 31 for beginning these brexit talks, is the government on track for that after this vote . Svenja absolutely. Its like looking pretty secure. Of course the bill now has to go through the upper house, the house of lords, but this was the stage that theresa may feared the most. There were a couple of amendments which had quite a bit from support even within her own party but she managed to clear , all these hurdles. Quite symbolically, as the last amendment was defeated, the Scottish National party mps broke into singing the ode to joy which is of course europes national anthem, which really shows that as far as brexit is concerned, its now pretty much a done deal. Scarlet President Trump is criticizing a Department Store chain that decided to stop selling ivanka trumps brand last week. Earlier today he tweeted, my daughter ivanka has been tweeted so unfairly by nordstrom. She is a great person, always pushing me to do the right thing. Terrible. Of course there have been so many concerns about a conflict of interest here due to his own business, his daughters business, and heres a perfect example of what might constitute a conflict. What kind of reaction is this generating in washington . Whats the buzz . Ben clearly people, i think, are saying exactly what youre saying. Which is that this is one of the most blatant examples, probably the most blatant example weve seen at least since he took the oath of office of him sort of basically trying to do right by one of his family members businesses while hes holding office. But what i think a lot of people here in washington are saying, and he said this, is theres a difference between the sort of appearances of conflict and maybe potentially these moral conflicts and the law. But at the end of the day unless theres an Insider Trading aspect, there may not be very much to do to stop him from doing those. And you know, people who are interested in transparency and Good Government may just have to sit back and say, well, i would prefer the president didnt do that. A san franciscobased Appeals Court has rejected the Trump Administrations request to reinstate the president s travel ban. It means the u. S. Will remain open to refugees and visa holders from seven muslimmajority countries. In the biggest legal setback yet for the new president. Greg this is a 30 decision. There were two democratic appointees, one republican appointee on this panel. Judge clifton, the republican appointee, sounded a little more supportive of the administration during the arguments. Now, taking a quick look at the decision, it doesnt, you know, say that this policy is unconstitutional. It does say that these three judges say that its likely that it did violate at least the constitution in at least some aspects, namely with those people who have been in the country previously. That their Due Process Rights may have been violated. The court did not get to did not say anything about the allegation that this is religious discrimination as well. But you know, in terms of the magnitude of this whole thing, its a pretty big setback for the administration. We have finally have heard from donald trump on his twitter. See you in court, the security of our nation is at stake. David big news today as Prime Minister shinzo abe visited washington. This is interesting, hes going to the u. S. Chamber of commerce before he meets with the president of the United States no coincidence, given the importance of trade with japan. It shows this is a meeting that will be very focused on the two economies, the u. S. And japan, and the trade that goes on between the u. S. And japan. Obviously abe is not happy about the tpp deal President Trump scrapped, but the two leaders will spend a lot of time together over the next 36 hours, specifically talking about how to restart trade between the u. S. And japan. They are going to have a working meeting, go down to gsh go dawn go down to maralago and play some golf and also dinner. Trump talked about being a dealmaker, hopefully they will come out of this with a deal that works out for both countries. Scott is very centerpiece proposal that abe will be pushing for . Definitely i think the core of the package is kind of the soft pledge that abe is going to make to have both private sector investors, banks mainly, and also the japanese government look at investing more in u. S. Infrastructure projects. This is obviously also a top priority for trump. Abe sees it as a way to demonstrate he is really wanting to work with trump to boost both economies. Rosalind still ahead on bloomberg best, insights from some of the worlds leading investors on where the Global Economy is going. Plus more earnings reports from , companies around the world with commentary from top executives. And up next, more of the weeks top headlines. Chinas foreign cash pile isnt quite as big as it used to be. Is that a cause for worry . There was a lot of speculation in the market that 3 trillion was somehow a magic number. Rosalind this is bloomberg. Rosalind this is bloomberg best, i am rosalind chin. Lets continue our global tour of the weeks top business stories in asia with data from beijing pointing to more challenges for chinas economy. Shery chinas lending for january may have exceeded the previous monthly record. That is according to sources citing initial government data. We were thinking that the pboc was trying to curb lending. What happened here . Tom that is the question, isnt it . This is a scoop that broke about an hour ago. 2. 5 trillion yuan possibly is the number that could come out for the month of january in terms of new loans. The estimates by economists is around 1. 4o be trillion yuan. That translates to 2. 4 billion. And as you say, it really highlights the question of whats happening with the deleveraging and the focus on winding in these asset bubbles that policymakers have talked about for so long here. Francine chinas foreign reserves just below 3 trillion in january after the yuan capped its steepest annual decline in decades. This is outflows, this is yuan going down, and the reserves. Its an unholy trinity they can stop all at once. Isabelle i think its interest, interesting there was a lot , of speculation in the market that 3 trillion was a magic number. Now we know the pboc doesnt care, and theyre happy to let the reserves fall below, so thats good. Also it is worth remembering that one reason theres been reserve outflows, theres been record outward fdi from china in 2016 and thats a good sign, a sign of economic health. And i would say generally we are quite bullish on the nearterm outlook for china. Not worried. The aussie dollar rose. That is after rba rates left unchanged. What is the takeaway than from philip lowes decision . Haidi it was no surprise. We hadnt heard from the central bank in two months since last year and they held rates up on hold at 1. 5 which is already a record. It was always much more of a Fact Finding Mission if you will in terms of really having a look at what the wording of that statement said, and all in all it seemed quite upbeat because the rba actually did reaffirm its growth and inflation forecast, saying to expect gdp growth trending at about 3 over the next couple of years. It actually expects inflation to pick up to around 2 by this year as well after that contraction in gdp in the Third Quarter. Betty the reserve bank of india surprising Global Markets when it not only failed to cut its key lending rate as forecast but also signaled the easing cycle may be over. It seemed like it was all based in a rate cut. Kathleen it sure did. But you know what . Urjit patel has done this at every meeting since he took over in september as head of the reserve bank of india. 3439 economist told bloomberg, in fact we were talking about it yesterday, slamdunk, we dont have any doubt about this. Instead the rbi held a key rate at 6. 25 , a twoyear low, then in its policy statement, it signaled the Biggest Surprise of all, the easing cycle may be over. Who would have thought. Heres what they said. The committee decided to change the stance from accommodative to neutral while keeping the policy rate on hold to assess the transitory backs on monetary fax on monetary inflation. They think the decline in inflation may pass. Francine oil falling a third day after Industry Data showed u. S. Crude stockpiles surged, raising speculation that rising supplies from u. S. Shale producers is offsetting cuts by opec. Yousef i sat down with mohammed assada. He was a man today was confident, positive and energetic. He basically shrugged off any suggestion that the inventories werent coming down in the u. S. , that there was more oil coming into the market in the United States. He said you know what, give this opecnonopec plan some time. Were convinced this is going to work, and then we will reevaluate for the future. Heres what he had to say in terms of expectations as to when the market might rebalance. Mohammed i think Third Quarter would be a good estimate for the rebalance. And we can see that there are signs of the market going up, if you like, from contango to backwardation. I think that process will help clearing more and more of the stock. Shares of mullet climbing, after winning an advisory role to saudi aramco on its much initiated public offering. It is a relatively small firm. Aramco is a huge ipo. I imagine this is a big deal for them. Alex its a big deal for them, thats probably why shares are up. Moelis is known for being a boutique m a firm. What aramco was looking for, you remember this is a big Saudi Oil Company looking to raise as much as 100 billion in its listing which is dwarfing the next biggest ipo by four times. And thats only 5 . Alex 5 of the company, right. So massive, massive deal here if this gets done. What aramco was looking for an adviseor to help them pick the underwriters, pick a listing venue, and do some of the things like that. Mole is isnt necessarily one of the underwriters. We will hear about which ipos figure out which investors get the shares but they are going be a trusted advisor here. Along with some of the other firms already working with the company. Oliver intel ceo met with President Trump today and announced that intel is expanding investment in arizona. The chipmaker will spend 7 billion on its Production Facility in the suburb of chandler. Cory the big question is, is this new spending . Is it incremental on the spending already expected . Stacy its in our capital forecast for this year, but it will be the next big factory we build. And as you know, cory, it takes several years to build it. What we announced today is that our next big factory is going to be built in chandler, arizona. Its going to be the most advanced Semiconductor Factory on the planet, and its a massive investment. Over time will be 7 billion of cap ex, it will create 3000 high wage, high tech working directly for us and probably 10,000 in the Community Supporting the factory. So its an enormous investment, it points to how were growing, how weve transformed the company. Ian the plant already exists. Fab 42 is a building already in chandler, arizona, supposed to be online in 2013. There is no way intel would be making a decision based upon jobs, based upon what would make anybody happy. Theyve already made this decision that the time is right for them in terms of technology and in terms of the kind of product that they want to be producing. David a big merger in the Health Care Industry was officially killed yesterday, at least for the time being. A trial court in washington agreed with the government that anthem should not be allowed to go forward with its 48 billion proposed acquisition of cigna. What went wrong with the deal . I think what happened was anthem and cigna were hoping to combine. It would have created the Biggest Health insurer in the u. S. An essentially the judge said, look, thats going to reduce competition. Its not going to help consumers. Plus, you guys dont get along. So even if in some other world this would help consumers, in this one where you guys are fighting im not going to let this happen. David whats next . Anna anthem will appeal, so we will see over the next two days anthem work that angle. Cigna says were weighing our options. Not clear how theyll participate in an appeal given the hostility. David lets talk about donald trump. Hes had his first phone call this time with the chinese , president xi jinping since taking to the white house. Trump agreed to sheeth his request to honor the longstanding one china policy. Trump has already called about 20 other leaders. Why did this call take so long . Let me give you a clue. Lets go back and look at what donald trump said about the one china policy in december when he said i fully understand the one china policy, but i dont know why it has or why i have to be bound by one china policy unless we make a china to have to do with other things including trade. Well, its clear that actually donald trump pretty much didnt really fully understand the one china policy and that china was in no way going to actually Start Talking about the one china policy and trade in the same bag. It looks as if donald trump has actually had to acquiesce to chinas demand that the one china policy be honored. Rosalind welcome back to bloomberg best. I am rosalind chin. President donald trump promised to enact sweeping u. S. Tax reforms, including reductions in the Corporate Tax rates to spur economic growth. In an exclusive interview with Bloomberg Television this week, marathon asset manager Bruce Richards examined a trump tax proposal that isnt getting a lot of attention but could have a Significant Impact on business. Bruce with that Corporate Tax reform, the administration is also talking about a very important other aspect. As you bring down tax rates for companies, doing away with Interest Deductibility and any been accelerated appreciation on interest capital. The interested disability component is something that does not get enough air time. It is very, very critical to understand. Perhaps i can vonnie its for highly levered companies right . Your area . Bruce particularly for highly levered companies. If you run the corporate we have a metric, 25 to 30, 35 to 40. If you bring the Corporate Tax 15, 10. Rate down, thats good for company. More flows to the bottom line, they pay less tax. But for a Certain Company that has debt outstanding, depending on how much debt, if they can no longer write off that debt, then thats bad. So the plus and the minus offset. Vonnie where is the Tipping Point . Six times leverage . Bruce the Tipping Point is at about four times leverage. Thats the Tipping Point. Heres the scenario. If youre an Investment Grade company, and you lower the tax, you have little debt relative to lower tax, you make out and its a windfall to you. If youre a strong double d with three terms of leverage, make out and it is largely beneficial for you, bringing the Corporate Tax rate down to 25 and doing away with Interest Deductibility. If youre around four timed levered, then you start to lose. Five and six turns levered, you really lose, and so let me just walk you through one last iteration. If youre a triplec company, a lot of these companies actually do not pay tax currently because they have lost carryforwards and they are losing money, so they are not currently paying taxes. It doesnt affect the triplec today. Its the middle. Its that single b, weak double b, to brated companies thats a profound effect. And it could cause restructures to happen because these companies, simply put, have too much debt relative to equity. Vonnie are you preparing for that . Where are you looking . Bruce were looking at if donald trump and the administration gets through his tax measure what it means for companies. Vonnie not across the board . Bruce across the board. What companies are most affected, industries and companies are most affected. We know these companies. Industries that have little cap ex and a lot of debt are the worst. So for instance, for instance, a retailer high yield would be profoundly impacted, but it doesnt just stop there. It goes throughout this rest of the system. Vonnie so are you buying retail or shorting retail . Bruce short. For that reason. But the real reason is because bricks and mortar relative to the Amazon Effect is the most impactful. And you see what secular change, what same store sales are. But back to tax deductibility for one second. Just one second. I think it affects the private equity business i think it , affects Real Estate Private equity. The message will be, put more equity in, use less debt, and really why should you, when you think about it, as a company, or real estate operator, be able to deduct interest. That doesnt make sense. Rosalind Bruce Richards was just one of the illustrious investors who spoke to bloomberg this week. Coming up, more conversations with the markets brightest minds making sense of a financial climate thats difficult to forecast. If trump follows the republican agenda, we could go easily go 10 higher from here. If he veers into protectionism, we could go 10 lower. Rosalind this is bloomberg. Rosalind you are watching bloomberg best. I am rosalind chin. The Dow Jones Industrial average and the nasdaq composit index both reached alltime highs this week, but with political winds and trade relations in flux, investors see the Global Economy heading for unfamiliar territory. What will this new reality look like . That was a topic of conversation throughout the week on Bloomberg Television. Henry i think this is the first time in probably 15 or 20 years where we have an inflection point, and what we are trying to highlight really is a couple of things. One is we see a major shift from monetary to fiscal. Which i think is a big deal. We have had all of the Central Banks running the show. Now i think you will have Government Spending driving incremental growth. That is a big deal for implications of growth and all volatility. Second thing, i travel all the time, the authorities with whom we speak are moving from global agendas to domestic. That has implications for trade in other parts of the world. The third thing, i think you heard some of this last week, was we are moving back from reregulation to deregulation. Particularly as you think about energy, financial services, i think health care in the mix at some point as well. I think you are moving towards a world where a lot of the volatility has been in currency markets, really not in the equity markets. Equity market volatility has been periodically high, but most of the volatility is currency markets as people wrestle with qe and devaluation of currencies. Our view at kkr is we are shifting over the market and probably over time into equities. Erik people may look at those four forces or themes that you are going to run the macro environment and say it sounds about right for the United States. Maybe it sounds a little bit right for the u. K. , where some of the same forces are playing out with brexit and a little reflation, but what about the rest of the world . Henry what may be missed by many investors, there has been talk about brexit, President Trump. If you think about china, based on our estimates, we think chinas deficit is closer to 10 to 11 , not the 3 reported. It is a huge difference. The First Quarter last year alone, they put 1 trillion of stimulus into the economy. You annualized that, it is about half their gdp. So there is a lot going on behind the scenes where governments are trying to use fiscal to really get i would say some reflation, so we have had slow growth, monetary policy, disinflation, and that in my mind ended right after brexit. Vonnie you have been calling for dow 20,000 since march 2015, saying it would be fairly valued at that point. Now that we are here, are we undervalued . Jeremy well, let me say the following. If trump follows the republican agenda of lower taxes and lower regulations, we could easily go 10 higher from here. If he veers into protectionism, currency manipulation, we could go 10 lower. So i am pretty surprised that the vix is as low as it is given the fact that i could see 10 higher or 10 lower depending on which direction trump goes. Of course i guess the market says it will be a standoff for a while, and no one is no one will prevail in the short run. Mark can you make sense of the lack of volatility right now . Why are we seeing volatility so low across Asset Classes we when clearly Economic Uncertainty is at high levels because of the Geopolitical Uncertainty . Jeremy you one thing you have to understand is the vix moves opposite the stock market. The level of the market. When the stock market is at or near the alltime high, volatility is low. When the market takes a big fall, people get nervous, buy puts, send the premium up, and it goes higher. One of the reasons the vix is low is that there is more confidence now. The bulls are coming out, there is less fear of a big market drop. Ronald i do think we might actually be at an inflection point. If we look at the cyclical indicators that was happening in the World Economy particularly , the u. S. , we have seen over the last four years is a grinding increase in wage pressure. So where we had 1. 5 wage growth back in 2013, now it is almost 3 at the end of 2016. During that time, prices declines have scared some of that pressure. Now we think over the next year you will see wage growth accelerate towards 3. 5 , which is more in line with historical norms and oil prices have doubled from february a year ago, which might mean you can see these pressures more visibly. Mark what sort of level is the treasury market going to show in the coming year or so . What sort of yield are we looking at on the u. S. 10year Going Forward . Ronald i do think the base Case Scenario is grinding higher of inflation, not a spike. That could mean that we actually could see the 10year trending towards 3 . I think what is really important is questioning whether that structural shift comes. Because if we see the structural shift, which could well be a accompanied or a key feature of that shift, then we could see substantially higher rates it was you that coming to pass in the u. S. And other countries. Mark do you think we will see this structural shift . Ronald for the last few years, i have been looking at deflation. I have worried about the eurozone slipping into inflation. Now i am looking at this and say, our lens needs to shift from 1 inflation as the risk to 2 or 3 being the risk. So that is the starting point. Erik britain is leaving the e. U. Elections are coming in france and germany. Frictions are rising between greece and the imf. The Trump Administration is crying foul over the price of the currency. Davide okay. I think the probability of having either as president can be positive for france because basically you will get a guy that does not think left or right but thinks forwards and backwards. That is the key. If it happens, markets will be bearish. In germany, i think the spd, the socialists in germany is fantastic news. The guy is proeuropean. And the Trump Administration and brexit, it is the best thing that could have happened to the e. U. The reason is because so far it was too comfortable to be in the European Union where you always look up to the u. S. When you had to make a decision. The u. S. Is saying listen, we will look after ourselves. Brexit in the u. K. Has been the same, so europe is to come together and say, are we together or not . If we are, what is the program . Erik so you think the chances of the eurozone breakup are diminishing . Davide the european breakup is a fantastic anglosaxon wet dream. Erik moments ago, we had a sudden selloff in greek debt, yields touched 10 . I know that sovereign debt is not oaktree specialty. But when you think about what is going on in the world and some of the unpredictability, how does that affect the way you think . Howard unpredictability is generally undesirable, and it, in my opinion, the more unpredictability there is, the more you should build in caution. But on the other hand, you have to acknowledge that unpredictability is not necessarily bad. Sometimes things go unpredictably well. 2016 was an unpredictably good year, and i think that it exceeded everybodys expectations in terms of Market Performance and the people who at the beginning of the year i was on here a year ago, and things looked dicey, and everybody was saying the market is collapsing. Isnt that a sell signal . I ran back to my office and wrote a memo entitled what does the market know . You were the inspiration, or your organization. And i dont think that we should take our signs from the market, but i do think that when the world is highly uncertain and unpredictably good or bad things can happen the next day, i think we have to prepare for that by raising our level of caution, and in each of our strategies that is done a different way. Erik so in other words, dont freak out when we see greek yields at 10 . Howard that is the most important thing is dont freak out. You cant be a good investor unless you are emotionally stable. And most people are wired with every bone in their body to do the wrong thing. To buy when things have been going well for a while, and to sell when things are going badly for a while, which is the opposite of what we should do, if anything. Rosalind this is bloomberg best. I am rosalind chin. Our week in review continues with a look back at a torrent of earnings reports, starting with results from some major european oil companies. Statoil has reported an unexpected loss. This was for the Fourth Quarter numbers, on u. S. Shale assets, the adjusted net loss excluding financial and other items was 40 million compared to a profit of 158 million just a year ago. 2. 3 billion. What catches my eye is that this is in part part tied to the longterm assumption on prices. This concerns me the most. Eldar well, our results are obviously impacted by the still very low commodity environment. Statoil is predominantly an oil and Gas Producing company, so oil and gas prices are very important for us. And still even this quarter, we have below 50 a barrel. In terms of impairments, we had impairments this quarter of 2. 3 billion u. S. Dollar net. The main reason for that is related to the fact that we have adjusted downward on longterm price assumptions mainly for , oil. So now we are looking at an oil price in 2020 at 75 per barrel. Francine bps fourthquarter earnings have missed estimates after prices after failed oil estimates to compensate for lower income in refining. Javier that is the same from similar trend from everyone who has reported so far. On exxon, shale and bp, or exxon said it is bringing profits in the upstream units, the ones who produce the oil and gas, but the increase in the profitability has been more than offset by lower profits on refining that, because of higher crude usually these to lower margins in refining. You can see at the moment, it is kind of the worst time for big oil. The price is not really rising enough to bring high profits for upstream units, while at the same time, downstream, a key money generator in 2015 and 2016 when prices were low, they are really coming under pressure. Haidi the National Australia bank has its firstquarter results. Our finance reporter emily komen is here with a few more details. The First Quarter tends to be an incomplete picture, but what we setting up for . What do we know . Emily i think it is clear the year ahead will be tougher for the banks. Nothing bad about these results. They are broadly in line with what they said, gross profits down a little bit, but not that bad. But is probably a sign that the whole run we have seen is going to increase and decrease. We are probably drawing to a close. Haidi we saw an increase. Is that worrisome at this point . Emily we are talking about a 5 increase for cost. Some of that was wages essentially come down to the , fact you hope you get a pay rise most years, but they also note regulatory costs are increasing. I think as a goes throughout the year investors will want to see more detail on how they are managing the cost program. Caroline bnp paribas has missed estimates for the Fourth Quarter as earnings fell at the french Consumer Banking business. Net income doubled to 1. 44 billion euro from a year ago, but that fell short of the 1. 63 billion analysts expected. Caroline on french retail, do you expect to return to Revenue Growth in 2017 and when exactly . Lars during the year we have improved our lending rates, so we have increased the lending rates in the last quarter am and improved by 4. 2 lending outstandings compared to the year before. However, the low Interest Rate environment will most likely remain for the year to come. So next year, it will remain difficult, although the trend is positive that lending picks up. Caroline so the return to growth could be towards the end of 2017 or even early 2018 . Lars we have to see how it goes, but it is not on the next arising in the next quarter. Anna Societe Generale fourthquarter estimates exceeded estimates, helped by a surprise jump in earnings from its french Consumer Banking unit. Severin we could have in the second part of the year better and more telling what could be the new framework, which is still pending under discussion between the authorities. Anna so you dont think that basil is dead . Severin no, we dont think so. There are still discussions between the different authorities. Caroline if you have a new basel deal and no doddfrank anymore, does that put european banks at a disadvantage . Severin i dont imagine at all that you will have a basel agreement without the u. S. General motors announced fourthquarter earnings 30 minutes ago. You had a record year. Chuck record performance across the board, record revenue, record profitability, record margins, record free cash flow, record earnings per share, just a very, very strong year and importantly really fueled by north america, which had another record year of 12 billion of profit and 10 plus percent margins for a second straight year, and china, so we are very pleased with the overall results. Matt french Drugmaker Sanofi said profit may drop this year as the Company Pursues new drivers of growth to offset declines for its bestselling diabetes treatment. Let me ask you first of all what you think of Donald Trumps comments that drug pricing is a problem and we could see negotiations for medicare soon . Jerome i mean, the increase on prices which have been happening in the past years are not necessarily all cases justified, unbearable on the general economy. At the same time, we need to find a way, and i think this has been recognized by President Trump as well in the meeting he had with the pharma ceos in the u. S. That there is a need for room for innovation, and innovation has to be priced properly. And i think that as long as industry shows responsible attitude when it comes to price increases, there should be a way forward. Jonathan the u. K. s biggest drugmaker, glaxosmithkline, warned profit may drop if rivals are able to sell cheaper copycat versions of one of their topselling drugs in the United States. The president of this country supports drug Company Price negotiations. This is something we have heard again and again from them. I want to understand how that impacts gsk directly and how it may shape the industry as a whole. Andrew i think marketbased solutions are the right way to go, specifically from a gsk perspective. If you look at Medicare Part b, we have almost no exposure in that space. So the changes in that space would have been immaterial to zero effect on gsk. On Medicare Part d, a bigger business there, but whether we generics later this year or there is reform on pricing in that space, you cant lose it twice, if i can put it that way. So the impact of gsk is not significant. This is not a massive exposure for us. Actually if you think about the guidance we have given for this year, where we have said, if indeed there is a generic, we dont know but if there is we have shown people what the impact is and we can still essentially hold our own in flat. Jonathan Mining Company rio tinto has delivered on its promise to reward investors, emerging from an industrywide downturn, the company blasted dividend estimates, and said it would purchase 500 million of u. K. Listed shares throughout this year. Jeansebastien it is clear we have delivered on all the promises we have done. Your member last time we talked was in november when we went to the market to explain what our liquidity story was about. And today we are proud to say we have delivered everything we promised to deliver in terms of cost savings, cash generation, in terms of strengthening our portfolio, and last but not least in terms of cash return. And today we have disclosed 3. 6 billion of cash returns, which is above expectations. We have done it in a way where at the same time, we were able to invest for the long term and maintaining the strength of the balance sheet. Rishaad softbank shares, lets have a look at what they are doing because what we have here is the Japanese Company posting thirdquarter profits of 814 million. Up 2. 6 , the best results since this Company Announced a 50 billion investment in the United States. What do these earnings actually tell us about softbanks business . Peter the business in the u. S. , the sprint business, continues to be challenging for the company. They did add subscribers in the last quarter, but the business continues to lose money and that is a problem for them. They have been trying to plug that hole. Sprint has fallen in the market. They are already down to number four behind tmobile. Fortunately for softbank and masayoshi son, the Japan Business is stable and quite profitable. So the profits from the wireless business and Internet Business in japan has helped give them the cash they need to make the kinds of investments that they have been making Going Forward. Julie twitter shares are tumbling after quarterly revenue and profit outlook missed analysts estimates. The social network is having trouble luring advertisers to the platform despite President Trumps frequent tweets. It is not as though expectations were actually stellar going into this report. Why does it seem to be such a surprise here that twitter is struggling . Cory i mean, hope springs eternal . I dont know. Twitter has been very consistent. As i have always said. Contrary to indicator as any, but twitter has consistently had this longterm problem in bringing new users onto the platform. Now they have masked that somewhat by getting more revenue per user, and they actually had some progress there in the most recent quarter. Revenue growth per user did increase, and it is a positive thing, particularly with the super weak number they put up last year in the Fourth Quarter. Nonetheless, it is not making up for the lack of growth in users, and that lack of growth is disconcerting because it suggests that twitter universe we see now is the twitter universe that we are going to get. Matt eu gives you a breakdown of the financial and that situation of the European Union and the political conditions. You can see that le pen and macro are doing better than fillon. Kevin im looking at the mrv function. Basically what this looks at is the market relative value, and basically what this looks at is valuations for pricetoearnings price to book, and dividend , yield. Essentially this is showing us the s p has the lowest valuations for, getting over the last three months it has gotten to this point where you could argue it is a little frothy. Rosalind there are about 30,000 functions on the bloomberg, and we always enjoy showing our favorites on Bloomberg Television. Maybe they will become your favorites. Now here is another function you might find useful, quic. It will take you to our quick takes where you can get important context and fast insights in detailed columns. Here is a quick take from this week. President trump the nation of china is responsible for almost half of americas trade deficit. President trump were bringing down your taxes. We are getting rid of your regulations. Rosalind 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 Business News and analysis 24 hours a day. That is all for bloomberg best this week. Thanks for watching. I am rosalind chin, and this is bloomberg. David what propelled you to pick google as a company . Who cares about his Search Engine . Eric i did not think google was going to be a successful. David is it awkward when you are the ceo dealing with founders . Eric our dress code, you have to wear something. David you have been in one of these cars and you feel safe . Eric we are doing this to save lives. David europeans seem to not like google as much as americans do. Have you resolved those issues with europe