Transcripts For BLOOMBERG Bloomberg Best 20170312

And on International Womens day, thoughts on the Journey Towards gender equality. Companies that have more gender diversity reform perform better. It is all straight ahead on bloomberg best. Scarlett this is bloomberg review of theekly most important business news, analysis and interviews from Bloomberg Television around the world. The week began with another u. S. Order from u. S. President donald trump. President trump has signed a iraqravel ban, it removes from the list of seven countries whose citizens cannot travel to the u. S. For the next 90 days. It also revises the treatment of syrian refugees. This will not go into effect until several weeks from now. You have the administration to put for the message that they are trying to correct some of the mistakes from the First Executive action that was shut down by the ninth the district court. What is the legal perspective, how did the white house address this . They are trying to narrow the would seem more reasonable and have scrutiny under analysis such as due process. Courts question in the is what is the significance of President Trumps earlier statements in which he explicitly said he thought to impose a ban on muslims. What is at the significance of the interview his friend and colleague Rudy Giuliani gays s purpose wasrump to find a way to accomplish a muslim ban without saying so. If the court gives credence to the statements, this order to be just as vulnerable. Scarlet House Republicans unveiled their longawaited legislation to repeal and replace of the Affordable Care act. Today on twitter President Trump touted the plan i saying the new Health Care Bill is open for review and negotiation. Obamacare is a complete and total disaster and imploding fast. Its a there any middle ground, is there any meeting . Things we are seeing from republicans on capitol hill, you are seeing senator paul making statements like a dead on arrival and you see donald trump saying it is open to negotiation. We are at the beginning of a long legislative process. Yes to show it will not not increaset will the deficit. That will be difficult to do for them. Even if they are able to use of the reconciliation process already seven of their members in the u. S. Senate is it is a nonstarter. This socalled revised the program is pretty much dead on arrival. It is dead on arrival, we wanted to be repealed and we wanted to be replaced with something that allows more people to get insurance at a cheaper price. This is another Government Program with a new entitlements and a new taxes. House of representatives jim jordan said he is going to introduce a bill tomorrow that will be a clean repeal of obamacare. Jordan plan to introduce plans that will be straight up repeal obamacare. Is look,e are saying lets to do something every single republican voted on, voted for, lets just repeal it, but the same piece of legislation on President Trumps desk as we did president obamas desk. The united kingdom, budget responsibility delivering a 23. 5 billion pound cut from plant barring over the next five years planned borrowing. Raising the 2017 Economic Forecast to 2 to 1. 4 . To beforecasts have had raised at least in the near term for 2017. The further you go out, the more the cuts come through. I would call this cautiously optimistic and upbeat with a few giveaways. The growth forecast waved from 2 to 1. 4 but every Consecutive Year until 2021, the forecast was either changed unchanged or downgraded. There is still the prospect of brexit looming. The growth forecast has been boosted. For this year the u. K. Economy could be ok. 2 is possible . It is possible. We dont really get into the meat of the brexit until next year. Next year we will struggle to get to two. Rates unchanged at the ecb, 0 , and you mine with what the people forecast. Purchase will be 60 billion euros a month for the month of december. Ecb keeping aphid arches at 8 million a month until the end of march. The headline that everyone was looking for, ecb rates at record low levels for an extended time and passed the qe horizon. Again to draghi communicate that the ecb is going to start to wind down its qe program . Theow and when, i think sequencing for the exit is first that,e guidance, changing then changing the asset purchases, the tapering and then. He policy rates that came through in todays press conference but i think the real change would come earliest at the june meeting. I think they want to get over the French Election hump, the potential for an outcome that can put their Economic Outlook onto a completely different trajectory. It is not our baseline but i think they want to get some of those uncertainties behind them and if we keep on giving the same momentum we are seeing in the global data like the u. S. Labor market that keeps on going, then we should be at the point in time when we should see a significant change on for guidance. Foward guidance. The payrolls report coming right now. Wall street traders mailed it, economists didnt, 235,000 jobs created. Both higher than the 200,000 economists had forecast. The Unemployment Rate 4. 7 . 6. 2 unchanged for the u number. 0. 2 rise in average Hourly Earnings brings the yearoveryear to 2. 8 . Solid overall, especially good for wall street because it has a goldilocks element in the andext of a fed hikes cycle less good for main street because wages could have been better. The federal reserve, does it what hasnt changed for them in the last two weeks which a drug been to change the way they are spoken to us over the last several months . This report means that we definitely have to hike next week. If it does not mean we have more than three hikes for 2017. That is why the market likes it because of the market expected a hike next week. The only thing it was worth about was a do we get a higher past of future wage and this support suggests we dont. Scarlet still to come on bloomberg best, jamie dimon explains why he wants european banks to thrive and we hear from the leaders of the Auto Industry played. Plus International Womens day brings a gender issues under the microscope. Car companies consolidate, what drove the deal. This is bloomberg. Scarlet this is bloomberg best. Im scarlet fu. At the nationals Peoples Congress in china where the government announces key economic executives objectives for 2017. Saying the is is is will be on stability and reducing risk. He said the clear message about who is in charge in china. Give us the key takeaway . Gdpt was at that softer product of about 6. 7 . The other targets between things like cpi, 3 deficit, then the yuan, the liberalization of the yuan. The concept is that it seems to suggest that the reformers who debated it backandforth over the last few months you have the upper hand. Scarlet is there any doubt that china can hit the 6. 5 target . In a politically sensitive year like this one they will do Everything Possible to achieve a 6. 5 target. I dont see any problems because now the economy is a doing very well. You have the Property Market booming, the old economy, the Traditional Industries were covering. Is growing industry at a rapid pace. The growth target cant be met. Scarlet Deutsche Banks ceo is bringing a turnaround plan. That change is offering a billion euros in stock. In terms of stability of Deutsche Bank over the last year there was a lot of worries about the existential future of this bank. And should give it a rest keep clients coming back in. The big question for shareholders is when will we see a profit. The upfront costs, this is a costly strategy. There is a lot of uncertainty. I personally feel much more comfortable sitting in the seat i sit this time this year than i would have done last year. We are feeling much more positive and the environment is good. Were seeing growth again and we have done a lot of the hard work but theres still a lot to do. If they regulators are listing, we are still improving control and efficiency. General motors has agreed to sell its long struggling european opel and vauxhall units. The deal will create europes secondlargest carmaker. It took a lot of discussion with unions and governments. This is her swansong, g. M. Exiting europe finally. Get, scale, size and brand. 1. 7s expected to deliver billion euros between now and 2026. What about gm, share buybacks are on the agenda. That is what gm intended to do with the proceeds. Europeperspective is the from a regulatory perspective perspective has the average somewhat from our Global Operations and we need to find a way to get more scale locally here so we can make the investments necessary to be successful going forth. Leverageportunity to to iconic brands is a big opportunity for a company like ours. We can expand the brand with a wider range of customers. And if we have a hard brexit as an example, it is much better to source from inside. Onlets turn to the latest brexit. Stirling is falling to a sevenweek low against the dollar. Prime minister theresa may faces a new step back in the house of lords. Added tondment will be this draft bill. Is area they are looking meaningful vote to try to get theresa may to subject any deal she does strike to parliament for a vote. Downing street does not like this. They view it as an impediment to negotiations. A worry that undermining the negotiation position and they would like to see none of that. It is a bit of a disappointment. We are looking into next week and there is some chatter that wen if she gets permission, might even look towards the end of march before this is triggered. The national Peoples Congress in beijing, attention is now shipping abroad. The foreign minister has been addressing the media, touching on topics including china relations with the u. S. , a summit between Prime Minister xi and President Trump. The chances of a summit, is this possible . Have yet to know when or where that is going to take place but it is going to be a reset of relations between u. S. And china. After that phone call between president xi and President Trump, he said he expected to have a positive relationship. Rex tillerson will be in the region next week. He also talked to and addressed of the north koreans. He called on them to stop their nuclear program. He also called on the u. S. And south korea to dock their military exercises. He wants to see in gauge meant and talks and says china is ready to play a role in facilitating those talks. Number two telecoms maker is being fined for violating u. S. Restrictions for the sale of American Technology to iran. As 2. 2 pay as much billion. As 2. 2ll pay as much billion. 1. 2 billion. They are pleading guilty to three felonies including violating export laws and instruction of justice. It is a big deal for the company and it is the Trump Administration trying to make a example of the company. Wilbur ross held an example a press conference saying this is an example of how the administration is Holding Companies into account. Even though the case began earlier, theyre using this as an example of how tough they are going to be. U. S. Production is moving higher. U. S. Stockpiles moving higher. Harold hamm ceo of continental said more shale investment investment could kill the market. We saw something massive in that net long position. It was sustained that way over several weeks. What were seeing in the market at the moment i dont think we are anticipating a massive plunge in prices. It is more they are taking bets off the table, they are not expecting a rally. At the moment this is not we calculation we data like this really puts the nail and because in. They need to extend and coordinate further. The question is how far opec wants to go. The question is how hard they want to go and that is an open question. The fall of a president , south koreas High Court Says of that parks impeachment is legal. She has lost all her power and her immunity. Scarlet the justice explaining to the public why President Park be removed from office. They said President Park had continually violated laws. She is a close confidant of President Park and they were accused of colluding to get brides and also other bruising of using her power. They say she violated the constitution, that she abused the president ial power among other charges. Scarlet welcome back to bloomberg best. Im scarlet fu. Jamie dimon with for an exclusive interview. Yes and what donald trump will be able to do for the u. S. Economy . Here is what is positive, you look at the policy, look at between, look at the tweets, you have the top people on the ground, serious people with a deep knowledge and deep experience and their mission is to have a growth agenda and that agenda is reducing corporate taxes, building better infrastructure, reducing some of the Regulatory Regime that is held that growth. I think a growth agenda is good for all americans. Confidence has a jumped a lot. Probably because of the progrowth agenda. Do you have any doubt he will be able to follow through . Ive been watching politics for years, the governors the republicans have the house, the senate, the governorship. I do not know the timetable. I am pretty high confidence. Corporate tax rate is too high in america, the reason we dont have infrastructure is because we waste money. It is time to look at the Regulatory Regime and recalibrate and make sure it is conducive to growth and does not hurt Small Business formation. A lot of european banking ceos are terrified that if donald trump a deregulated wall street too much, you are not on the level playing field. International cooperation is a good thing. While there has been criticism, at the end of the day, steve mnuchin, they will work it out. American banks have far more capital and liquidity. I want the european banks to thrive. If the european banks dont thrive, europe will not thrive. The regulators should look at those things and help the european banks compete and thrive to grow their economies. Much more importantly here in the United States because they finance 80 of the economy. How do you rank the european Banking System at the moment . Are we heading at consolidation . We were that close to fixing it. Im so proud of our people for doing it. E could have done it the banking problems are not as bad as people say. He only took so much of the loans. Five or 6 billion in new capital will fix the problem. In the old days banks were going european. Because the crisis as they are going back. I think the right way was a pan european it creates more efficiency in the system. I think eventually you will see emerging acquisitions among european banks. Is the euro going to implode . Their devoted to keeping it together and moving forward. There should be more devotion to looking at what the problems are that are creating some concern about the populations. The worst case is that someone major decided to leave the Monetary Union at one point and that is hugely disruptive. Plenty of interviews ahead on bloomberg best. A former fed official says it is high time for a rate hike and matt miller makes his rounds at the gm motor show. Coming up, the new commerce secretary explains why nasa needs a fix. Needs a fix. \ crude declines to 55 for the rest of the year. Theframework for discussion, we talk about the demand and supply response. Walk me through a radar with those. When we think on the Positive Side of the ledger, we have seen two things. An upward revision to 2016 demand levels, and also very positive macro data that suggests air is upside risk in growth to demand in 2017. Opecyou have had core complying much better than what we thought. On the negative ledger, particularly in the u. S. , the supply response seems to be gaining momentum gains, but also access to capital. The positive things offset the negative things and we end up in the same place. We are confident you will see those inventory drives come through. Anchor that was just korea Goldman Sachs explain his forecast for oil. Despite Upcoming Elections that could further cloud the future of the eurozone, he is keeping a positive outlook. Transition, be a but towards what, a reinforcement of the eurozone. We spend time to save politicians, think strategically about the next 10 years. When you look at the next five issue what is the biggest right now . Which is the bigger headache for you . Currently uncertainty, but does not translate so much in the business or economy climate. The economy is doing relatively well in the eurozone, and in france in particular. Beyond this, as you said, a normalization of Interest Rates is going forward, because it would mean that you will have more growth, you will have also the additional political steps which will help to norm is a to normalize the policy. The other question of got for you, many a bank are coming out with a report saying european financials deserve a lower evaluation against their u. S. Peers because of the complexities of politics and the situation in the economies. Things are still relatively weak. Do you believe it should be a cheap valuation applied to your bank compared to a similar u. S. Institution . To say the u. S. In the short term would benefit from a more dynamic economy in that Interest Rate environment. In the eurozone, we have more work ahead. We have more work to build the financial service, which is more balance between Capital Markets and banks. We have to wait for full monetization of the full normalization of the monetary policy. I remain optimistic. Ande stepbystep, more more positive steps in the european banking sector. In the u. S. , Health Care Legislation dominated headlines this week. Investors are waiting anxiously for the Trump Administration to move forward on trade policy and immigration plans. Ross told david westin where he stands on nasa. Its an old treaty. Our economy is very different from what it was when that treaty was entered into. You didnt have the Digital Economy services. Further, we have now had decades of experience with the treaty. Very hard to get a several thousand page document right at conception. There are some things in it that were missed. There were some things that were not done correctly to begin with. A lot of things that might have been ok back then, but dont work now. Theres a lot to fix. Anchor both the canadian and mexican governments have said it is an old treaty, room for negotiation. Thats one model. Another model is, we have a substantial trade deficit with mexico we have to fix. Which one is driving the commerce . Both. Anchor how mindful are you of the possibility of what the markets talk about as a trade war, or sanctions would be taken that might escalate . How mindful are you of that danger . We are in a trade war, and we have been for decades. Thats why we have the deficit. The difference is our troops are now coming to the ramparts. Thats the only change. Anchor it sounds like its going to be a shooting war now. Its not going to be a shooting war. Anchor do you have a view about the border adjustment task with tax . Adjustment i am studying it. As we understand more of the intricate details and helen and how it interacts, thats when we will take a position. Help me with the american interpretation of international trade. How do we get back to a , or isteral dialogue that dead . Youre asking me political questions, like with the wto. It has done a good job. Maybe there are places we have gone too far, places where we havent, but it seems the wto is still the place to do business. Anchor and the border tax . Im not against the border tax. I think it can do good things, give incentives to firms to take their profits were they take place. Its not a solution to everything. One thing ive heard which is wrong is that the border tax will be paid by the foreigners. It will not be paid by the foreigners. Taxake money on the border as long as we have trade deficits. One day, if we have trade deficits, we will have to have trade surpluses. What is positive tax revenue wow tax revenue now will be negative spending on taxes in the future. Form of thatch a finance which will be financed by the u. S. Taxpayers. The notion that foreigners are going to pay for it is wrong. We are very optimistic on growth. One thing we are going to do in the white house is set very realistic growth projections. Weve looked back at all the prior administrations in the beginning and solidly put out for gdp forecast at the beginning of their administration, and none of them got close to meeting their gdp productions. We are actually going to put out gdp projections we think we can beat. We would rather underpromise and overdeliver than overpromise, because we think it is relatively easy to do in the part of the cycle we are in. Seeing the activity we have seen from all the ceos we are engaged with and the fact that we are rolling back regulation, bringing out new tax policies, we are very optimistic about the gdp growth we think is coming. Anchor if you look at the projections out there for gdp growth, its something in the low twos. Do you expect something materially better than that . We are already in the middle of this year. In moving that much higher, it is going to be tough to move that dramatically higher this year, but yes, we would like to outperform the 2. 3 or 2. 4 prediction for this year. Next year orer the two, we think we can substantially improve on the number as we get tax reform done in the second half of this year, as we continue to get the jobs thated from the company committed job growth in the future. We think the gdp is going to be relatively inline with our projections. They are cautiously optimistic, and we think we can outperform them. We will continue to see growth, that this year is starting to be baked in. The fomc holds its march meeting next week. All signs point to a rate increase. Former fed president is one of many experts who say it is about time. He digs deeper into the upcoming decision. Anchor you say the fed is running out of excuses not to raise rates. Is there any left . Theyve been pretty creative the last couple of years. I think they just about run the ,amut of those, and i think particularly given the signals they have already sent, they would do their credibility a lot of damage if they didnt do it now. The other important part of this twoday meeting is that it comes out with his summary of economic productions again. There was a narrow consensus in december for three Interest Rate increases in 2017. Do you think that consensus might get bigger or move to four rate hikes . My. Was always on the was always on dot the highend, but i think it will be closer to three. I think they are being very cautious. What we have seen since the election is that, in fact, the market has gone up, the forecast looks better, but there is a lot more uncertainty around it. In other words, what policies of the Trump Administration are going to deliver . Nobody really knows for sure. What the fed sees is there is a lot of uncertainty, but what they call the risks are to the upside. Thats what they see. Thats how to interpret what they are doing. Anchor you are watching bloomberg best. The worlds leading Auto Executives gathered this week at the geneva auto show. We spoke with them about the challenges facing their companies in the industry. Frankly, i dont think it will affect anything for the very simple reason, i have ays said, the industry is you will see more players trying to gain in term of scale. In terms of footprint and the variety of your product, that is very difficult if you are a small car manufacturer to be facing the future. What is happening is something which was predicted, forecasted, and in my opinion, already integrated in our own strategy. Anchor youve artie got involved in consolidation youve already gotten involved in consolidation yourself. Is there anyone else you are looking at . We are going to do it. We know how to play scale. We know how to transform scale into higher level of competitiveness, whether it is about cost or technology or quality. Because we know how to do that, obviously we want to play to the maximum. The mitsubishi operation has been done in a very short period of time. This is adding to the performance of mitsubishi and nissan. Is a huge impact for the number one player in the market. 30 of our european sales are in the u. K. The weakening of the currency of sterling as about a 600 million headwind. At overall profit base is 1. 2 billion. In good news is we have been business 100 years. We know how to adjust to issues like we are seeing. There are things we can do about it. It means we are going to have to be more and more diligent on our costs. Reporter what does that mean . Are you going to have to lose jobs in england . Know, but there is certainly more pressure on the cost is no, but there is certainly more pressure on the cost base. We have to make sure we are is efficient as we can be. We made significantly progress last year, and we need to do it again this year. Europe is the most important market, and that means we not only sell goods into europe, but also by components out of europe. Given that, we need free and fair trade. Reporter what about the plants, the production . Do you have any special agreements with the British Government . Do you think they can offer you something . Concessions are being made to other carmakers. We dont see any concessions. We have a fixed operational footprint, and we cannot change that quickly. , thefore, the Product Customer will decide. Bloomberg television focused on Critical Issues of opportunity and diversity in business on International Womens day. Experts, work global leaders, and influencers offered their perspectives. The currentwith governor of tokyo. She told us how she evaluates the progress of women in japan. Theres a little improvement since the new policies towards women have been taken. But unfortunately, i should say that the speed is not so fast yet. And one stepancing going behind. Reporter you are one of the most popular politicians in japan. Would you say the country is becoming more open to female leadership . Yes, and i like to believe that. I hope that as many women as possible can run for the assembly. The election will take place in july. By selecting as many women legislature or women politicians assembly,al tokyo will surely make tokyo change. Anchor less than 1 10 of u. S. Fund managers are women. Thats lower than the rest of the world, average on one in five. Why do you think the u. S. Is so far behind . I think the problem is twofold and comes from two sources. Indont have enough women the academic arenas that fuel Portfolio Management. We see women represent women underrepresented in stem. I thinknd issue we have is really a matching problem. If you are a young woman coming into finest today, you dont see a lot of successful women Portfolio Managers that you can actually relate to. Is a complicated question, but i think those two things, the pool problem and the matching problem are probably the most important sources or barriers to seeing womens presence increased in Portfolio Management in general. With deregulation coming for the financial industry, with this reflation trade gathering momentum, will Financial Companies that now have more to look forward to in terms of growth put aside some of the gender equality initiatives they have put in place . We certainly hope not. If you look at female representation at all levels of corporation, it is pitiful. If you look at ceos, it is less than 5 . Boards is less than 20 . Thanr leadership is less 25 . We dont think those numbers are good enough. Companies that have more gender diversity actually perform better. They have better return on equity, better managed from a risk standpoint, and we think that finally Corporate America has woken up to that. Anchor and you guys are doing something about that. You are going to companies you have investments in and saying, you have got to do something about putting more women on board. 3000 does not have even a single woman on their board. 15 or more0 have female representation. We are going to be engaging with those boards and looking to make meaningful change. I wanted to bring up some proprietary data we have put together here. It is the gender equality index. What we do is track mobile firms practices in the gender equality space. There are about 30,000 functions on the bloomberg. We always enjoy you showing just we always enjoy showing you our favorites. This will take you to our quick takes, reason get important context and fast insight into timely topics. Here is a quick take from this week. The palestinians must recognize the jewish state. Reporter the election of donald trump has emboldened israeli Prime Minister benjamin netanyahu. Weeks after the in duration, net yahoo s government announced it would build the first new settlement and one girls inauguration,e Prime Minister netanyahus government announced it would build the first new settlement and one quarter century. I would like to see you will hold back on settlements for a little bit. We will work something out. Situation. Eres the the west bank is populated mostly by palestinians who have to make it part of an independent state, palestine. Territoryel conquered half a century ago, is really numbers have increased. Since 1995, the population of settlers has grown four times faster than israel itself. Every Israeli Government has supported the expansion of settlements. So why do israelis choose to settle in the west bank . Three main reasons. One, religion. Many religious jews point to the bible, which says the land was promised to them by god. Two, security. Some israelis think settlement act as defense against attacks, the kind that occurred in 1948, when arab countries invaded israel. Three, portability. Others like the relatively High Standard of living made possible by government subsidies for the settlements. According to the International Court of justice, israeli settlements are in breach of international law. Heres the argument. Barriers, buffer zones, and the presence of Israeli Soldiers to secure settlers make life difficult for palestinians. Palestinians and some israelis argue that settlements play into a bigger problem. It prevents peace by eating up for aviding the land left viable palestinian state. Would have to take on the tough task of removing tens of thousands of settlers from the west bank. Settlers inmoved the past, but those were smaller numbers. Even if every single settlement were beaten dismantled tomorrow were to theysmantled tomorrow, would still have to make difficult choices. Reporter such as how to share jerusalem and how to ensure each side security. Each side security. Anchor that was just one of the many quick takes you can find only bloomberg. You can also find them on bloomberg. Com 24 hours a day. That will be all for bloomberg best this week. Ask for watching. Im scarlet fu. This is bloomberg. Pride after the fall saying the truth will eventually come out. Betty a change of strategy at the white house. A top adviser expense present expects President Trump to soften his dental china. He wins the big state india and is expected to in the second term as Prime Minister. Betty and we will look ahead to the fed decision in the countdown to brexit