Transcripts For BLOOMBERG Bloomberg Best 20170305

Wanting to raise rates for a while. I do not think there is going to be a hike on march 15, but i could understand why the odds climbed. Matt big changes at the Worlds Largest hedge fund. Bridgewater associates. Ray dalio is stepping down. A lot of news coming out of bridgewater from ray dalio. In a statement i would lead with , John Rubenstein leaving as the cochief executive officer. And aw, snap snapchats Parent Company begins trading, publicly. Can it live up to the hype . The excitement is palpable. Matt it is all straight ahead on bloomberg best. Hello and welcome. I am matt miller in berlin. This is bloomberg best, your weekly review of the most important business reviews and analysis from Bloomberg Television around the world. Lets take a day by day look at the top headlines starting with monday when a proposed 12 billion Exchange Merger teetered on the brink of failure. Deutsche banks 30 billion attempt to acquire the London Stock Exchange appears to be on the verge of collapse. A lot of people are saying politics will ultimately kill this deal, but it turns out it was the regulator. They asked them whether they could divest nts, which is a electric Trading Platform for european government bonds. They were not willing to do that. They already agreed to sell their french housing unit. We dont think that is going to happen, so they have to wait for the commission to come back at the end of this month. They are saying the chances of this going through are looking not so good. Is it a brexit casualty . Did brexit have a role to play . Absolutely. They announced the deal before the days before it happened. It was a debate about if you merge, where is the headquarters going to become a right . If it is in london and they are outside the european union, but if it is in frankfurt, it is not if it is in frankfurt, then england says it is not helping us. There has been so much Politics Around it as well. [applause] lets listen in as the president gets ready to deliver his address to the joint session of congress. Pres. Trump i am here to deliver a message of unity and strength and it is a message deeply delivered from my heart. In the last eight years the past , administration has put on more new debt the nearly all of the other president s combined. We have lost more than one fourth of our manufacturing jobs since nafta was approved and we have lost 60,000 factory since china joined the World Trade Organization in 2001. I believe strongly in free trade, but it also has to be fair trade. What can we anticipate . What is your first item on your to do list, mr. Secretary, and what are some of the policy initiatives we can expect from your department . Much tougher enforcement. There is not a lot of point in making trade deals if we dont enforce them. About china as well . Everybody, everybody. Getting back to breaking news on bridgewater associates. Ray dalio is stepping down as interim cochief executive officer by april. This is according to a post on his linkedin. Erik, your first thoughts on something that is further into this letter. John rubenstein is leaving. Erik a lot of big news coming out of bridgewater in a statement from ray dalio. I would lead with John Rubenstein leaving. John rubenstein was an unusual higher, hire, less than a year ago for bridgewater. You may remember, he was a key lieutenant of steve jobs at apple and helped design the imac and the ipod. He left apple years ago and joined bridgewater last year. In this role ray dalio described as both leadership and technology. Dalio thought John Rubenstein would be a good fit because he worked with steve jobs in an environment that celebrated disagreement and, at times, friction. That is what goes on inside bridgewater and thats why he thought John Rubenstein would work out well there. John rubenstein did not and his exit is precipitating a number of important changes at bridgewater. Number one, ray dalio is getting out of bridgewater management by april the 15th and david mccormick, who has been at the firm for eight years, former treasury undersecretary under george w. Bush, is being elevated to coceo with eileen murray, formally of morgan stanley, also who has a deep background in technology. As you can hear around me, the buzz is building. People are excited. They want to see what these shares are going to be trading at. We are hearing they are closing. There we have it. We are at 24. 23. 61. This is a big uptick. We are talking a 40 top on the share price. Much excitement and congratulating. The guys telling me that was 24 24 million shares being traded about 10 to 12 on the 200 million that were initially put into the market by snap. It is a fun day and many more tech ipos maybe to come. This has been an incredible week. Last week, the odds of a fed hike in march were low. Maybe 20 . Within one week, they got to 80 or 90 . It is one of those weeks in which the fed changed its own mind and the minds of the public to get the market to go from a low chance to a high chance of a march move. Janet yellen speaking at 1 00 p. M. , all eyes on what you might say about march. You can see what the markets are saying about march. The implied probability of a rate hike is now a 90 . What is going to be the word that signals march from janet yellen today . I think right now she doesnt have to prepare markets for much anymore. If she doesnt like the idea of a march rate hike, she has to lean massively against it. That would be her job right now if you wanted to take march off the table. It is curious that a committee that have been pounding the table that we should look at the data and it is all data dependent, to make this uturn within a couple of days without any better data. The committee will evaluate whether employment or inflation and inflation are continuing to evolve in line with our expectations. In which case, a further adjustment of the federal funds rate would likely be appropriate. Nonetheless, as we have said many times and as my discussion today demonstrates, Monetary Policy cannot be and is not on a preset course. As in 2015 and 2016, the committee stands ready to adjust its assessment of the appropriate path for Monetary Policy if unanticipated developments materially change the economic outlook. Matt still ahead as we review the week on bloomberg best, starbucks makes its italian debut with an upscale roastery. We talked to the ceo on the companys core values. In france, republican candidate Francois Fillon vows to stay in the president ial race despite a probe into his use of public funds. How Global Politics is affecting the Financial Sector in europe, the u. S. , and india. This is bloomberg. Matt this is bloomberg best. Im matt miller. Lets continue our global for tour of the weeks top business stories with elections and political theater throughout europe. Lets get to european politics. Prime minister theresa may getting ready for a fight on two fronts with scotlands government which is expected to call another referendum vote. Her own government wanted to draft brexit laws in the house of lords. Meanwhile in france, candidate can he will candidate Emmanuel Macron opening up his biggest lead yet. Helped by his rivals legal troubles. Was that times referendum story nothing . That is that when the pound andt when the not go up very much obviously , the debate over scotland remains at the forefront of peoples minds north of the border. Important to note that the banks say the pound move was exaggerated. There is not a great hankering as much for independence as much as perhaps Nicola Sturgeon would hope for. It seems like we had a little bit of an easing to risk over the weekend. What exactly happened . Basically, the gap between the independent macron, Emmanuel Macron and marine le pen, macron is two points behind le pen. That is easy. Some of investors are concerned. We have seen the 10year french yields pushing to the fiveweek low as french bonds are rising following this news over the past two days. With the u. K. Referendum and this year with the french and german elections, people get so obsessed with these elections they just lose focus on companies ability to generate cash no matter what the outcome of these elections are. Do you wind up protecting yourself because the French Election is a risk. Do you hedge these bets in any way . Is there a trigger that you mind up reversing your view . What we do is we just really try to measure how the impact of a French Election would have on our companys cash flow streams. A lot of Companies Based in france, most of their business is outside of france. Even bnp has huge businesses in italy and may even have a bank in the western United States. Perhaps what a lot of this instability does cause is pressure on the euro, which is actually, though you take that hit up front in you are Holding European stocks in the drop, you take a currency hit. On the other hand, those Multinational Companies get an earnings enhancement from their foreignbased earnings if they have a weak local currency like the euro. This is one of the ways that this political instability and volatility manifests itself is in a weak euro. We do watch these things. If currencies are way overvalued, it is determined by ppe, we tend to hedge. We are bottomup longterm investors trying to identify Good Companies that for some reason are out of favor. That reason is often these political events. Tom when do we see the u. S. Banks start buying on european bultmann european banks that are dirt cheap . I think you are going to see that, in my view the scenario could easily happen in 2018 to 2019 if we work to have if we were to have a stable political union. Basically, you get out of the election in france, the netherlands, and germany assuming for that scenario, that at that point there is massive value in europe and you will start seeing u. S. Banks looking at bultmann. I will give an example. Jpmorgan does not have a european on shore regulated entity. They are operating by paris, which is a branch of the london bank. Within brexit and a hard brexit, jpmorgan to do business in europe will need an on shore regulated european bank. You will see more and more the need to be present in europe. I think we spoke about some panel a couple of minutes ago. Comedy banks will be left, how many banks will be left five , to 10 years from now . In some countries, there are too many banks. In german and italy, there are too many banks. I think, if we look at the u. S. As a model, probably we could see in the future, which is not too far away, maybe Something Like 10 important systemically important banks in europe and Smaller Banks medium and Smaller Banks like in the u. S. If we want the markets to support clients all over europe that are supported in a strong way like in the u. S. , you need banks that are able to operate crossborder regularly and there readily and there are too many obstacles for that. This would be a combination of two strong banks . If you put two dinosaurs together, you will not make a strong bank. That is clear. I think it would be survival of the fittest and lets not forget, we are competing with the u. S. And europe is much more , open than the u. S. To competition. This is going to be an issue that we are going to look at very closely. We have to look at it. American banks have an open field in europe. The u. S. Regulators have been very tough with european banks recently. Jpmorgan Ceo Jamie Dimon is speaking at the banks investor day, taking questions on everything from strategy to regulation. I think around bank regulation, i didnt marry into prices of key sensibles. Principles. No one in their mind could say what we do is completely rational and perfect. That it didnt hurt america or cut back money. Were not fanatics about it. We know there was a crisis. Indeed, he did talk about regulation, wanting more rational regulation and wanting, perhaps, a tightening of the vol ka rule or some redefinition of it. He says you could expect potentially some small legislation. In his words, small regulation to redefine that. He talked also about tax reform and that it would be good for america. In his comments, he has been careful to say i am not concerned. In terms of regulation and reform, he says he is concerned with what is good for america and he says that is why he has participated in various advisory capacities to the president. He also talked about if wages are higher and rise, 5 Million People could come back to the job market. He talked about that regulation has been an issue overregulation has been an issue for Small Business formation. He also said there are a lot of reasons people may not want to own 10year treasuries. Will someone get hurt he says . Will it be systemic . He says yes, they could get hurt, but it will not be systemic. Also following this event, bloomberg banking at wall street reporter laura keller joins us. Lets talk about yesterday. We got him talking a lot of different topics. Look to you is the most important . What to you is the most important . Everything that jamie dimon says about the consumer and economy is what the want to hear from the banks side. He doesnt really say that much about trading that we wouldnt already know. He talked about a modest gains so far this quarter and trading from last years q1. For reasons of what are we going to see at other banks and is this really the reason of them under signing themselves. Underselling themselves . It is really the economy and what is a consumer doing these days and what do we think they will do in the future . President trump and the fed reflating the reflation trade. You can see it reflected in bank shares. Financials up 23 and look for another big jump. Bank of america up 2 . Do you want to buy the banks here, or do you want to sell them . On balance i would say they have a good run. Really buy the reflation narrative for the banks. That implies we will have rising rates and that would imply at some point that the highly leveraged corporate world and the consumer may see rising debt levels. I think there is a National Natural check and balance. I also think, as we see from the retailing sector, there is huge pricing competitions emerging in the Financial Sector with what is happening with fidelity and schwab and everything. I think pricing will come to the u. S. Financials. That is before we all bank on our phone. All those guys who are net short, you are saying that is the wrong call . Neil i think positioning is for a reflation trade. They short the 10year for a good reason. If you really think we are at 2360 and on our way to 2300 2500 on the s p, we should not be where we are. The bond market is different. The equity market is dissident from what the bond market is seeing in terms of the real economic progress of buoyancy to come. Governor patel did mention and expressed concern about the potential shifts to protectionism. How do you see the Trump Administration policies how could that impact india . India has a lot of people working in these risks, so that is definitely a point of concern as to whether they would be welcome there are not. The strength of the u. S. Has been its openness and its ability to attract the best of talent from everywhere. I do not think the u. S. Is going to give up that strengthen they that strength that they have and suddenly close their doors. , we are still not turning inwards because we cannot afford to. We need a lot of capital in order to grow, and you cannot have that if you are going to become a closed economy. Overall, i think these two should not overreact to these things. Matt you are watching bloomberg best. Im matt miller. Starbucks has moved into coffee country, that is italy. They Worlds Largest coffee the worlds coffee chain opened its first roastery cafe in milan, and Francine Lacqua sat down with starbucks ceo, who touted the companys culture and core values. Howard people know that starbucks has created a Business Plan over the years that was based on the balance of profit and social impact. The First Company to give equity in the form of Stock Options and comprehensive Health Insurance to every employee and college tuition. In china, we gave housing allowances to our employees traveling long distances. Not every decision, in my view, is economic. I think the price of admission is financial performance, but i do not wake up every day saying how are we going to make more money . I wake up every day saying, how can we really create a deep sense of loyalty with our people and our customers based on our values and our Guiding Principles . We are living in a world today that is very fragile and there is a lot of uncertainty and i think we have an obligation and responsibility as a company to add value to humanity. If i could say it in my own parlance, this is a time where i think we, as private citizens and business people, need to build bridges and not walls. Francine is that why you announced the hiring of 10,000 refugees . Howard that decision was not a political decision, it was a decision based on the values of our company and our Guiding Principles and i believe very strongly that your station in life, your sexual preference, the color of your skin, the country you were born in should not define the opportunities that we have as people and if starbucks as a company can create an environment where the entrepreneurial spirit and opportunity for everyone is based on merit, and i think we are doing a pretty good job and that is what i want to try to do as a company. Francine do you see the fabric of america changing . Howard i am still very optimistic about america. We clearly are going through a change and Inflection Point politically, but i am the quintessential optimistic about optimist about the american dream. I want to do everything i can to advance and be a symbol for american entrepreneurship. Francine to you think a lot of ceos will follow suit and what you are doing . Howard i think more and more people recognize we have a responsibility not just to make money but added value back to our society and the people we employ. Matt weve got more compelling conversation coming up on bloomberg best. Samsung stock is on a tear despite the indictment of acting company had on charges including bribery and embezzlement. Deutsche telekom and Ericsson Ceos talks about 5g from the mobile World Congress in barcelona and the Parent Company of snapchat begins trading in the u. S. This is bloomberg. Matt this is bloomberg best. I am matt miller. Many of our interviews on Bloomberg Television this week touched on technology, whether the potential of 5g or evolving regulation. Most chatter surrounded mobile devices and how we will use them in the future. Our first story, however, has to do with scandal and the Worlds Largest mobile phone maker, samsung. Samsungs de facto leader may have to wait months to stand trial for corruption. Jay y. Lee has been indicted on charges including bribery and embezzlement. The question is, what happens to the group while he is behind bars . Lets bring in rosalind chin. What is next . Are things going to be on hold . Or is someone going to be able to fill the void . Rosalind i think things will slow down. But certainly, i mean, jay y. Lee is the vicechairman of Samsung Electronics and the de facto head of samsung group. Its not like we will see phones stop being made. The company says there is to be coceos that do their best to make sure they run the company has best as possible and try to keep operations going as best they can. It is really these leaders that we have seen dealing with these issues with the company, dealing, for example, with the note 7 crisis last year. Not so much jay y. Lees face on those issues. It is more likely to affect the bigger strategic decisions, things like acquisitions, Major Corporate management reshuffles, those are the areas where we might see a slowing down in decisionmaking because jay y. Lee is more caught up with the legal issues he is facing. Now, the Korean Special Prosecutors Office said that samsung was directly related to the scandal. Which led to the president being impeached. Samsung, of course, denies any wrongdoing in that. This isnt the kind of thing they teach people in Business School necessarily how to deal with. At the group level, there has already been an impact on the Corporate Strategy office. What does this mean . Rosalind this Corporate Strategy office was at the group level. This was actually disbanded. This is partly because this department was actually linked to the corruption investigation, so the vicechairman and president both indicted yesterday. They resigned. They will make their own Business Decisions now. If you look at history, leaders table leaders have been in jail before, convicted of crimes, and still managed to lead their conglomerates. If you look at what analysts are saying, in the bloomberg we saw samsung has 41 buys, one hold, and one sell. Shares have been doing better than ever in the last six months. Jonathan lets talk about what is happening in barcelona today. Some of the biggest telecoms coming together to push for the next introduction of nextgen highspeed mobile networks. At tthan 20 companies, others,obile among they have put their names to a statement while congress outlining their commitment to get 5g done and dusted. So much buzz about 5g. You are one of the cigna you are of the dignitaries to wanting it faster into our hands. Realistic . Thank you, first of all, for coming here. 5g is starting to happening. That doesnt mean it is commercially deployed, yet, but what we are starting to see is operating spurted operators positioning their 4g networks and evolving into 5g, and that is where we can get a lot of learning and experiences for the future. 5g is the topic of Deutsche Telekom. It is not just another mobile center or a network we are building, it is a totally new thing. It is an infrastructure gaining 1000 more capacity. It is 100 times faster than the original network and it gives you a 10 times quicker response time, ping rate for internet. How does that help Deutsche Telekom . Will it be health care . What connected devices will you be bringing . We have been Building Infrastructure on people, but now we are connecting all devices. 50 billion devices will be connected in our infrastructure in 2020. The current wireless marketplace is extremely competitive. Recently, after the ftc stopped its investigation of free data offerings, every single 1 all 4 wireless carriers in the United States announced unlimited data plans. That is good for consumers. In the context of any transaction, our focus will always be what is in the public interest. If it is in the public interest, we would be more favorably inclined to approve the deal. China is allowing more companies to list 18 months after regulators clamped down on the market. Is it a signal from the Securities Regulator that we perhaps have turned the corner . I think they are signaling essentially they want to see more ipos happening and that should support the chinese economy. They are saying china is ready for what they called appropriately larger supplies of ipos after a stronger than expected recovery from the 2015 market route, 5 trillion wiped out there, so it has taken some time to recover from that and enough that the regulator thinks we can release the floodgates of little bit more for ipos. 600 companies or more seeking approval. There is a bit of a backlog. 280 approved last year of only 248 completed. Stability, but a stable Capital Market is required for it to go through. Snap has started trading, the first major tech ipo of the year and the shares are zooming out of the gates. For a snapshot, lets go to the floor of the new york stock exchange. I have my director to thank for that. Caroline hyde, you have a special guest for us . Caroline i do indeed. It is the president of the new york stock exchange. Congratulations. Congratulations we are up. 50 uptick almost in one day, of people questioning that there is this is a bit too good and there is too much money left on the table. My job is not to opine on the market value. My job was to get this ipo off in a smooth fashion. We have a great team here for doing that and i take great comfort that the stock opened at 24 and is trading smoothly around that number. That is exactly what you want on the first day, especially of a large ipo. Will that hold in terms of large ipos, particularly Technology Ipos . We know that many are looking towards two big, private companies whether it is dropbox, spotify, are you looking for tech ipos . If you go back a year ago, we had zero ipos at all in the First Quarter of 2016. This is our 13th this year in the First Quarter and we have a whole bunch more in march and april. It is not the big tech names, which is the premise of your question. I will tell you, i know firsthand those big tech names are watching closely what happens today and it can alter plans, pull ipos forward or backwards. As a person who runs a business that benefits from ipos, i take comfort that this ipo was very smooth and it got what many describe as a healthy valuation. Do feel 2017 will be the year of yet more companies coming public . Yes, absolutely. Listen, things can change. In august 2015, a very volatile day and the ipo market shot. I am not prognosticating. I am just saying the number of ipos we have planning a particular date plus those that are in process is very high. Youtube is going prime time. It announced a new Service Called youtube tv that will deliver an assortment of major tv channels to paying customers for 35 a month starting this spring. Bloombergs lucas shaw spoke to the ceo of youtube at an event in los angeles. He started by asking her about the details of the new service. We see that on youtube we have a lot of demand for tv content and we think it is a great opportunity with the mobile phones because everyone is carrying a tv around with them in their pocket, but they are just not using it for tv. We saw this giant opportunity of how we can take all this amazing tv content and make it available to a generation that loves content, but they want their content on demand, they want to watch it on any device, they want to not have the commitments that are currently required for tv and so we saw a big opportunity to bring the full tv experience to our audience. With all these tv networks, these are owned by companies that in the past you have had a tortured relationship with fighting over copyright and things like that. And you have to make assurances about those topics . We actually work with all of the large broadcasters and the networks to bring that content onto youtube now. We have clips, shows, so we have had a Good Relationship with them and i think they have seen the opportunity to use youtube as a mechanism to get more promotion for their shows, have time shifted versions of their show on youtube, so this is taking it to the next level. Matt you are watching bloomberg best. I am matt miller. U. S. Mexico relations have been at the forefront of president trumps early days, immigration and trade have dominated news headlines. One of the more suggestive headlines came from mexico this week when the country warned it would cut off nafta talks if the u. S. Proposed tariffs. I believe we need to share more information to get a better assessment of nafta benefits for the u. S. As you know, basically mexico is the secondlargest buyer of u. S. Commodities and manufacturing. The reality is that many strategic sectors in the u. S. Depend on nafta. The Agriculture Industries and the Manufacturing Industries as well. Sometimes when you look at numbers, they help you to understand better the realities of this. For instance, when nafta was signed and you look at manufacturing jobs, they remained constant through the years. They changed drastically in 2001 when china comes into the World Trading system. That happens to most of the countries to have to face new competitors like china. When you look at manufacturing in the u. S. , manufacturing has been growing in terms of value from 19972015. The u. S. Value in manufacturing grew by 38 in real terms, but has been going down because of Technological Development and competition with other regions of the world. We know, given what has been said, that mexicans are very upset with the president of the United States. Is there Political Support in mexico for a renegotiation of the treaty . I believe that in mexico, the treaty itself has been a very efficient tool to improve u. S. Mexico relationships. You are aware that through history, the u. S. Mexico relationship has not been very strong, but fortunately, thanks to nafta, the view in mexico has changed drastically in the last 24 or 25 years and today, mexicans feel a strong part of the north American Neighborhood and feel very close to the u. S. People. I believe many of us studied in u. S. Universities. A lot of american tourists come to mexico. There are strong bonds between mexicans and u. S. Citizens. We are responsible that these good relations continue in the future and one of the elements we have to defend is economic integration. You have been quite vocal about your concern that the changed administration in the u. S. Could have an impact on global growth. What specifically do you see the impact being on bhp . I think it is twosided. On the one side, the benefit for Business Confidence that comes from the Trump Administration, based on what is promised on tax, his desire to cut through some of the politics to get more investment going on in infrastructure, and his general commitment to get growth going again in the United States, it can only be good for us. We dont sell a lot of products in the United States, but that will add to aggregate demand around the world. On the other hand, we are very anxious about the possibility that instead of that good leadership, we could have bad leadership in the United States on global free trade. Free trade is the lifeblood of the economy and makes products cheaper for consumers, consumers buy more, and as a result, we see a broader Economic Growth. Longterm Economic Growth now for the world is probably around 3 . If were going to continue on the journey to pull people out of poverty, we have to get the 4 , and that wont happen under protectionist regime, protectionist leadership from the United States, so some good, but some pretty bloody awful. On your Earnings Conference Call you said you were hoping to meet with the epa chief soon. What is the message that newmont would like to bring to the u. S. Administration . I think what i have heard him say and what i heard them say last week is that he is looking to make sure changes in regulation provide the certainty for businesses to be able to make transitions. If we want to make changes, that is fine, lets understand what we are trying to achieve and lets do it in a logical way so we work our way towards it rather than trying to do it abruptly. Do it in a manner that recognizes the investments that have been made and look at the impact overall as well and see what the right path is a going forward. Listening from the ideas and industry is where some of the gaps are from. In much broader strokes, is trump good for gold . He was for a while on election night, then it has gone in the other direction. We will see. We kind of continue to watch where his administration comes in on different things. 40 of our business is in the u. S. , but the other 60 is outside the u. S. , so we Pay Attention to all the countries where we operate. 21,000, the dow just hit. Your thoughts on that and what it means for public equities before we Start Talking about private equities . The public equity market enjoys what the president is doing or talking about. The market is very high. I dont think anybody anticipated this on the day of election. Obviously a lot of stocks, particular Financial Services areas, are up. I think private equity has benefited because when public equity goes amounts,tain valuations of private equity goes up as well. If youre buying things, it makes things more expensive, but generally i think this conference indicates that private equity is bullish about the economy. Why is private equity so bullish . What has the president said or said he is going to do that makes people so enthusiastic . David obviously, people from all over the world are here and they are not affected by what happened in the united dates completely, but the United States is dominant in what the private equity world does. So the reason i think people are excited about it is they feel there will be less regulation of private equity in some ways, the animus some people have might not be there. I think some people dont like private equity. They think that private equity people dont do great things and so there is something that we are not as good as we think we are. The feeling now is that the administration will be focused on other things and not beating up on private equity, but generally an atmosphere that private equity is welcome into the Financial Community and the deregulation out of washington and lower taxes would be favorable. Overall bullish view on the president from private equity. David at this conference, very bullish on private equity. I have been here for 20 years and have not seen anything quite as bullish. One of the topics that has president lot and the his addresst in last night is infrastructure. Something we have not heard a lot about. Suddenly it is everywhere. How realistic is this 1 trillion figure hes talking about from your estimation . I think it is unlikely we will have it quickly go into effect. It takes a long time to build infrastructure, get congress to authorize it, and then where does the money come from. So far, no sources have been identified. I think it is possible that that money comes back from u. S. Companies overseas could be repatriated and used for infrastructure. It might only be 200 billion, but to get 1 trillion takes a lot to get it done. I think there will be publicprivate partnerships investing in infrastructure. I think the money is there, but the interesting thing is the old days, infrastructure was called porkbarrel and we are building bridges, dams, we dont need them. Now we recognize we need these things and it is not called pork barrel, it is called infrastructure, and infrastructure is a word everybody likes. What is doable . What ultimate figure could be spent on infrastructure and how is it going to be paid for . Well, you know, i am not at all convinced they will be able to do much on infrastructure because you saw there was a subtle change of wording in what donald trump said last night about infrastructure. He had through the campaign he had been saying his plan was for 1 trillion of infrastructure and there is this subtle change that now the plan is to enable 1 trillion of infrastructure, which i think means Something Like a tax credit, then the scramble will be trying to get your private projects to count as infrastructure for that purpose. I think they have already said the administration has source said the funding they want to have for this this onetime tax on repatriated foreign earnings. That kind of puts a firm upper bound on how much it can be and i think that is 100 billion to 150 billion cost to the government. I think the details on that one might end up being a lot smaller than what the advocates hoped. A bit of a lift we have been talking about a record all morning. A january trade balance of 1. 3 billion, a third of what was estimated. We were expecting 3. 8 billion. That follows on from the record trade balance back in december at 3. 5 billion. Just waiting on some more details dropping now. January imports rising 4 from a month earlier, exports falling 3 from a month earlier, so this is perhaps why that figure is coming in weaker than expected. The aussie dollar falling reasonably steeply off the back of that news. I say reasonably, i qualify that, coming off a little bit. We were expecting a better number because we have seen Oil Prices Continue to surge, and that is what drove strong fourth gdp figures on wednesday. Just to recap, that trade balance coming in far weaker than expected, still a surplus, but only 1. 3 billion. Unhappy Trading Floor at Deutsche Bank, cutting bonuses by 80 . Storieshe mostread today. Bloomberg the previous year, Deutsche Bank cut the bonus pool by 17 . This chart is thanks to our producer, dan curtis. He created a custom index. These bars track the compensation of Global Markets Global Markets and Investment Bank business as a percent of total compensation. It has fallen to 44 at the end of 2016. Matt there are about 30,000 functions on the bloomberg and we always enjoy showing you our favorites on Bloomberg Television. Maybe they will become your favorites as well. Here is another function you will find useful, quic. It will take you to our quick takes, where you can get context and insight into timely topics. Here is a quick take from this week. Time now for our bloomberg quick take, where we provide context and background on issues of interest. When Central Banks started cutting Interest Rates to near zero after the 2008 financial crisis. They thought of it as an emergency measure and thought things would gradually get back to normal. Now they are wondering what normal means. Rates are still super low and unlikely to come all the way back. The reason is the neutral rate of interest which stimulates the economy or close it down has fallen and perhaps, permanently so. Here is the situation. In november, after donald trump election, u. S. Bond yields rose, lifted by a promise of enormous tax cuts combined with higher spending on infrastructure. Seen in the longer perspective, this rise is a blip after more than two decades of steadily falling rates. These low rates leave central ranks little or no room to cut again if more stimulus is required. Here is the background. Neutral Interest Rates have historically tracked Economic Growth, which is largely determined by productivity and productivity has grown less than 1 a year since 1970 in the United States. Declining birth rates have led to an increase in the ratio of workers to dependents. Workers save more than dependents. At the same time, the falling price of machines and capital goods has kept spending on investments low and created a surplus of savings, which has acted to further lower Interest Rates. Here is the argument, unable to cut Interest Rates further, Central Banks have had to find other ways of stimulating demand, such as quantitative easing. Fiscal stimulus, as proposed by president trump, is another possibility. Bigger budget deficits push Interest Rates higher. Matt that was just one of the many quick takes you can find on the bloomberg. You can also find them at bloomberg. Com along with the latest Business News and analysis 24 hours a day. That will be all for bloomberg best this week. I am matt miller from berlin. Thanks for watching Bloomberg Television. Announcer from our studios in new york city, this is charlie rose. Gillian good evening. Im gillian tett of the financial times, filling in for charlie rose. It has been a busy week in the tech industry. Shares of snap inc. Opened at 24 thursday morning, pricing its initial Public Offering above the marketed range. The Company Behind the disappearing photo app went