Transcripts For BLOOMBERG Bloomberg Best 20171118

Alix the worlds most powerful central bankers meet in germany. For us, really all guidance should be conditional. It is a matter of policy itself. Alix in zimbabwe, the military seizes power and detains 92yearold president Robert Mugabe in the struggle over the succession of the only leader the african nation has ever known. It is all straight ahead on bloomberg best. Alix hello and welcome. I am alix steel. This is bloomberg best. Your weekly review of the most important Business News, analysis, and interviews from around the world. We begin the week with the president wrapping up his tour asia. During his 12 day trip the president demanded that foreign leaders help narrow the u. S. Trade deficits while advocating his America First policy. President trump a month ago said he was not going to participate in the tpp, and over the weekend, 11 other countries that are in the tpp or were in the tpp say they are planning to go forward with some modified version of it. So President Trump came and talked tough on it, talked about shifting back to bilateral relations. Between the u. S. And individual countries there are some stats that support why the u. S. May be in a better position than other countries to pursue that. But essentially, if you look at trade as part of the geopolitical strategy for the u. S. To play a leadership role in asia and counter or check chinas role, this was not an obvious win for the president this weekend. You have countries Going Forward with their efforts to do their own tpp without the u. S. In it or maybe pressure the u. S. Back into it. It sounds a lot like the way Climate Change worked out with paris. You have president xi jinping of china saying, President Trump may think that trade deals should be bilateral but i think globalization is here to stay and that is what we should embrace. David why did the president go to the philippines . As i recall, he was not going to stop there but he decided to go. What was his goal, and did he achieve it . Guest the president heard that the east asia summit which is going on and which is going to conclude tomorrow was the most important of the meetings that would be taking place in manila. He had heard from a number of different people that that was a very important meeting for him to attend and have the u. S. There because the u. S. Has previously attended such meetings. When he heard there was some pushback to the idea that he would not be in manila, he decided in an improvisational way to do the meeting. There was also some pushback about the idea of him spending time with the president of the philippines, duterte, given his human rights record. It does not seem the president really pushed him on that during their meeting. That was another reason why a number of people were reluctant for the president to his and a to spend a lot of time in the philippines, given the things that dutere has said about the u. S. Government. The stock right now is plunging, right around the time of the financial crisis was the last time it was at this level. What happened during the day that investors are reacting so bearishly to what has been announced . Guest it is interesting. There was a lot of bad news today. Dividends were cut, next years eps forecast was cut, and there was a lot of very frank talk about the challenges they are facing in a number of markets. But i think what you are seeing in the stock is not so much the bad news that was announced today but what was not announced today. I think investors wanted more changes. Some of these problems have become clear over the past few weeks and months, and investors really want something big, some big changes which will get ge back on track soon. Part of the changes ge is telegraphing is they are focusing on aviation, health care, and power. Are these the right three businesses . What is the linkage between them . Guest that is the question. There was no linkage at all. When the businesses are good, they are fairly profitable. Power is a mess, they have a lot of work to do there. They will say the digital tie, but there really isnt. Jonathan the worlds most powerful central bankers met in germany. They discussed the future of monetary policy. The debate on communication had officials an agreement on the use of Forward Guidance and as a tool of monetary policy. Here is some of what they had to say. We are formulating some framework where the various parts of this Forward Guidance, the Interest Rates on one side and the asset purchases on the other, would interact in a synergy. For us, really almost all guidance should be conditional and related to the outlook for the economy. To a much richer instrument. Inflation expectations are formed not only by forwardlooking ways, but also backward looking ways. But in the end, it is about a rounding error, it is more than a rounding error relative to agents in the economy. Households and businesses. It is a matter of policy itself. Jonathan joining us from frankfurt is matt miller, from bloomberg. A fascinating conversation, you put these guys on the same stage together, we will all be listening. What have we learned and how we can apply it to monitor policy and how it may or may not evolve in the next coming years . Guest we have had job growing, but Forward Guidance is supposed to be more transparency, more solid delivery of a message for the economy, and for a number of different audiences. We are focusing on zimbabwe, trying to figure out what we should do next because the president is set to be ready to step down after being in power for almost 40 years. The fallout is quite significant, and will continue to be a very significant one in the coming weeks. How significant is it as it is now and not one year ago or two years ago . Guest it is an interesting thing as you are heading towards the elections next year. It is an interesting president one. A, mugabe, he has just fired his Vice President , Emmerson Mnangagwa who a lot of people are saying could have taken the presidency from robert look at the end is seen as a leader. Not so long ago when the Vice President was fired, that was seen as a way for mugabes wife to step in as a party leader for the political party, zanu pf. That would then take power of the nation as well. So it is quite an interesting one and interesting play. How the scenario will play out is still to be seen but there are people commenting saying that it is a slow coup. Military leaders are saying it is not a coup, instead it is a bloodless correction of the past. Jonathan Deutsche Bank is the bank attempted to turn things around. According to a person familiar with the matter, a stake has been held by Morgan Stanley on Deutsche Bank. Shares are up on the news. Talk to me now about the composition of the investors face right now, and how it may be changing . Guest they just confirmed in a release a few minutes ago, and it is a big change. It is the first time a private Equity Company owns a big stake in Deutsche Bank. One investor i just talked to said it is revolutionary for the bank. Obviously, the question is now, cerberus want from Deutsche Bank with its investment in the bank and we will be working to figure it out over the next few days. I am here in the senate now, a heavy security presence of President Trump departs his meeting with Senate Majority leader Mitch Mcconnell and has House Speaker paul ryan. I caught up with representative cole from oklahoma after the meeting. We spoke with several sources familiar with the meeting and they said that it is largely a rallying troops kind of meeting. They were really trying to get everyone on the same page. This is expected to pass within the next hour and a half, out of the house of representatives, clearing the way for the senate. I am told the vote will come as early as the week after the thanksgiving break. The bill is passed without objection, the motion to reconsider is laid on the table. David there you have it, the official declaration that the bill has passed the house of representatives. Not a surprise, but historic. We have a long road ahead of us. This is a very big milestone in that long road. We have a timeline to get this done by the end of the year we have the Senate Working on doing this right now, we are excited about going through the legislative process, going to congress, getting this done and making the bill even better. I am excited on behalf of the American People or waiting to see us get this done. David that tax overhaul plan may have failed through the house yesterday but the Senate Finance Committee Takes the plan to come up with their own version. Democrats charge that it is all about giving tax cuts to the rich. Before we go home, i think it would be nice to acknowledge that the tax cut is really not for the middle class but for the rich. The whole thing about higher wages is a good selling point but we know that companies do not give away higher wages. This bullcrap that you all throw out here, it is not right. I just it takes a lot to get me worked up like this. David that was the exchange between the democrats and republicans. The republicans have problems within their own ranks. Eric michael they do, and this will make that finance committee look like a garden party after they get to the floor, the week after thanksgiving. The republicans have the senate bill full of problems. Their own party does not even like, for example the tax on businesses that ron johnson doesnt like. And Something Else that will be hard to solve financially for them, the Obamacare Mandate as well. Putting that is upsetting Susan Collins and lisa murkowski. Then you have ron paul who does not like the idea that there is the tax cuts sunset for individuals, people will have to pay higher taxes halfway through this. The deficit itself that it creates is bothering at least three senators including jeff flake, bob corker and langford, who say they do not want to raise that. They can only lose three votes, and they have fixed lost right there. Alix still ahead as we review the week that bloomberg west, an exclusive interview with Philadelphia Fed resident. Retailers battle out Third Quarter earnings as price wars take a toll. The price wars are affecting targets. What is amazing is they put up a sharesarter and we have plunging. Alix this is bloomberg. Alix this is bloomberg best. I am alix steel. Lets continue our global tour, starting with uber uprooting softbanks multibillion dollar stake, setting the stage for one of the largest private share purchases ever. The idea is that softbank along with other investors will put in about a billion dollars in fresh capital and buy about 9 billion in stock for existing investors to take a substantial stake in the company. This will come along with some governance reforms at the company to decrease the influence of the exceo travis kalanick. It will give investors a bit more influence in that respect. Jonathan it could be the biggest tech takeover ever, broadcom going after qualcomm with a 105 billion deal. Qualcomm rejects broadcoms unsolicited proposal. Guest the shares are unmoved, i think it is something the relationship between them has never been good. At the moment it is particularly bad. Obviously, they came hostile while qualcomm themselves were in the middle of trying to do a deal with the Company Called nxp. Jonathan in the semiconductor space, this is deal on top of deal on top of deal. There are like five layers of deals that go into this offering. Are these guys going to get on with integrating the deals on the table . Guest that will be one of the huge challenges. How does qualcomm integrate both broadcom and another company, nxp. I think it is difficult for nxpcomm to pull out of the deal, so broadcom would essentially have to pursue both companies. Like the russian doll, it is a deal within a deal with the deal, the russian dolls. David at t wants to buy time warner but the word now out of the Justice Department is a have some problems with it, on antitrust grounds, and they may sue. Overnight, bloomberg is reporting that the lawyers of both Companies Say that if they are sued, they will seek discovery of everything that the white house had to say to you about the deal. Journey us now is paul swinney, the director of north American Research for bloomberg. So they are saying that we will and get the information about possible or possible white house interference in the antitrust review . Paul yes, i think this is another round of posturing on the part of at t in response to what the department of justice has, and said on the marketplace that they would consider blocking the transaction. I do not think this is necessarily a route that at t and time warner want to go down, but i recognize that their transaction is facing some of the more highlevel scrutiny than they have ever expected or the market acted. David softbank plans to invest as much as 25 billion in saudi arabia according to people familiar with the matter deepening ties between the kingdom and the japanese company. 15 billion would go to the saudi megacity called neom. To take us through the deal, we talked to the bloomberg Senior Editor of global business. Talk to us about this deal, and is it a coincidence that it come so soon to the crackdown by the crown prince . Guest i think what it shows is that softbank and the company are willing to make a bed on the crown prince. This is an investment we are looking about over the next three to four years, and from it, it reflects the fact that softbank is willing to bet that the crown prince will transform saudi arabias economy and maintain stability at the same time. David does saudi arabia really need the money . They have already said they will 100 billion of their own money into it. 25 billion is a lot of money, but is it for the investment or more for the endorsement, as you endorsement . As you say it is interesting to note, there is a bit of recycling going on here as well . Who is one of the best investors and softbanks vision fund, saudi arabia, the saudi wealth fund, pif. So softbank, essentially is investing in saudi arabia after saudi arabia has invested in softbank. Airbus has agreed to the biggest deal in its history. The chief operating officer has confirmed a record order for 430 aircraft from Indigo Partners worth 49. 5 billion. How has the Company Managed to turn things around . It was such a dramatic loser yesterday when it came to the big widebody aircraft in its competition with boeing . You are absolutely right. The deal they wanted to get here so far, they have not been able to secure, that was that 380 superjumbo. They expected to be brought home on sunday, it did not happen. Still, nobody quite knows why it did not happen or whether it was just delayed then today happened. That is a dramatic turnaround for the company. It is the deal that they needed badly to make a comeback. Boeing had done incredibly well, with a deal for emirates, that is the deal that airbus wanted but it did not happen. But it is good news for them. Mark elon musk unveiling the companys new electric truck called the semi. How far can they go . Let us find out . A 500 mile range. [cheers and applause] production begins 2019. If you order now, you could have your truck in two years. Guest it is important for tesla to make a case that electric vehicles are really competent and capable in ways that you would not necessarily think. You have seen heavy truck makers like daimler and even manufacturers like toyota come forward with zero emission trucks but passed out on whether or not batteries make sense in this sort of application. I think this is an effort on the part of musk to further burnish the reputation of electric vehicles. It is important for the company to make its case that there are looking at all forms of transport. Alix walmart is out, one dollar per share versus estimates of . 98 a share. It also boosted its fullyear adjusted earnings view, and if you take into account Fourth Quarter comp sales, they are looking at the high end to be about 2 . They came in at 2. 7 for this last quarter, a killer number for them. I have to say, the expectations were about 100 basis points lower. Walmart is up over 1 on the news. This look likes a very solid quarter for walmart so far. Target shares plunging right now, on pace for the worst day since february, after the companys earnings report. It seems like a price war within groceries is really affecting target. The price war is certainly affecting target. They actually put up a beat and boost quarter. We had shares plunging for the Third Quarter in a row, net income down 21 yearoveryear. Emily tencent in china posted its strongest growth in five years. At 61 rise in quarterly revenue, and tencent is writing riding the success of video games and an expanding internet ad business. The earnings come after the shenzhenbased company ordered a 10 stake in snap. Guest a lot of it is through their wechat service, almost a billion users, which allows them to just not only advertise on the platform but also promote different products including the game business which has proven very strong for them. Alix youre watching bloomberg best. I am alix steel. Philadelphia fed president Patrick Harker has become the latest u. S. Policymaker to nod to a rate hike of the for the end of the year. Speaking in an interview with matt edwards, he said that a move in 2017 is likely and penciled in. We will not see a large move in headline or core inflation, i do not believe, but we may see upticks in wage increases and continued tightness in the labor force. It is really a precursor to inflation. I think if we see those, i would be comfortable with a december rate increase. What would make you uncomfortable with a december rate increase . We have seen that core pce has been weak, and the trend has been down this year. If we do not see that wage and employment support there, would you be prone to vote against a rate increase in december . I would have to look at all of the data. If we saw the continued i have said that i have penciled in. If we see the weakness, i would be ok with waiting a little bit. But i do not expected right now, i expect that i will be supportive of an increase in september. I was just wondering about the yield curve flattening. From our review, at least from our view, it is pretty dramatic. We have not seen a yield curve this flat in over a decade. It seems as if the fed continues to push up the short and with the long end trading flat, what why is the long end picking up at the same time . Guest i think there are a lot of likely suspects there. One is simply that other banks, the European Central banks, bank of japan and others, completely continue to be highly accommodative, which is another reason why we are seeing the long end flatten out. I am concerned about that which is why the pace of removal of accommodation to me has to be gradual. If it is gradual, do you think we will not see any inversion of the curve . Guest i would like to avoid any inversion of the curve. My goal is to remove accommodation in a way that we do not run the risk of inverting the yield curve. Alix coming up on bloomberg best, the debate over u. S. Tax reform hits a fever pitch. The commitment to keep the state and local property Tax Deduction is not concrete. We are educating the public about the tax scam. Alix imf director Christine Lagarde gives us her take on the global economy, and we visit the weeks most compelling conversations on bloomberg television. This is bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Alix this is bloomberg best, i am alix steele. Christine lagarde spoke to us at the apec summit in vietnam. She defended globalization and gave her key takeaway from the summit. The key takeaway from our perspective is that leaders have focused on themes such as inclusive growth. Such as innovation, to produce more productivity, such as creating jobs, adjusting through the digital economy. Those are really leading initiatives which tell me that we have advocated and we believe which certainly we have advocated and we believe we are in Good Condition in our developments around the world. Host is globalization under threat even though the chinese president as it is irreversible . Guest i do not think globalization is under threat. What is under threat and needs to be addressed, is who benefits from globalization . I think that is an area where Everybody Needs to pay more attention. Globalization, as well as the benefit of technologies and innovations must flow to all. There cannot be groups of people or regions of the world or countries which do not benefit from globalization, or who are left behind and excluded. Which is why there is focus on inclusive growth. The second point i would make is when it comes to trade which has been a big discussion in the last couple of days in the non, which is that trade needs to be updated. And by that i mean, the framework, the rulesbased mechanism in which trade is conducted because, technologies, supply chain organizations, the development of the digital economy, prevailing intellectual property protected assets, all of that is new development. And the major trade arrangements, whether they are bilateral or multilateral, they date back to quit a few years. So it is surprising that some leaders are saying that this is not fair, or would need a level playing field, or that we need to restore some order. Yes, there is a need for such an update, and i am pleased to see that some trade arrangements are really including the issue of labor. The issue of protection of the environment, the issue of protection of intellectual property. Readdressing trade with those perspectives in mind, is critically important. Host there is perception that the u. S. Is pulling out of the Asia Pacific Region and we heard from President Trump yesterday saying that he is only looking at bilateral trade agreements as opposed to multilateral trade agreements. Given that most of the countries in asia bar singapore have trade arguments for the u. S. , how challenging will that be . Guest first of all, i would observe that there are some regional trade arrangements that are being negotiated with Great Success at the moment. If some countries prefer to have bilateral agreements, they can certainly do so. Hopefully, all of that would be rulesbased, within the framework of principles that have been accepted and need to be refined, improved over the course of changes in the economy, so that there can be enough integration inside of destruction and the global order. Host henry, here in the united states, financial conditions have been tightening. There are actually easing now recently. What is happening now with the rates being down until recently, credit spreads being down and the dollar, the fed is an action. To date, financial conditions are easier today than when the fed started raising rates at the beginning of the cycle. So our view is that the fed will continue to raise rates. I think Economic Growth is solid, but if you look at net worth at record, i think there are things they want to do to send a signal, particularly where credit spreads are, the fear not going to leave the punch bowl at the party for too long. Host but when you look at the backup that we saw last week, yield spreads in particular, do you draw any conclusions from that . Guest i do. To us highyield spreads are one , of the biggest indicators that we look at. We run a implied default monitor. Before last weeks it was essentially saying that the default rate on highyield was 1 ; to put that in context, in january 2016, it was 8 . So the market has gotten quite constructive. So as an asset class complacent . I think complacent is a good term. As the firm we manage a lot of bank loans, levy loans and our Portfolio Managers have moved into other areas. That is true in europe. If you look at europe today highyield bonds are up less than the dollar yield. If you take a step back, it is a little the offsides to me. Host ok. At the same time, notwithstanding the spec of dust the spike of credit spreads, valuations across all Asset Classes are still very rich. I think thats the headline. I would give you a more optimistic view, this environment reminds me a lot of the late 1990s. It is not like 20062007, in the late 1990s, you had a lot of investors chasing simplicity and growth and left things that had problems around them. Host the hairy stuff. Guest the hairy stuff. That is what is happening today. I we are now nine years into a bull market, you have over half of the russell 2000 trading at 10 times the value. That is pretty incredible, relative to a nineyear bull market. It is the same thing, consumer net worth looks incredible. But when you look underneath, the majority of americans have not had any real wage growth in two decade. To me, our mantra is really by complexity and sell simplicity. The one area i would say in equity market, we are really quite constructive on asia. Japan is a big market for us, and we also see, we have been calling for a return in emerging markets. We know actually think we are entering a midcycle in emerging markets. If you snooze, you will miss it, but right now it is actually performing well. We think that will continue over the next couple of years. Implicit on what im saying is a view on the dollar, we think the bull market on the dollar has largely run its course. Host backscreen Economic Development board bahrain Economic Development board member discusses Economic Issues impacting the country with our bloomberg reporter. Post your job running the agency is to attract investment, promote the development and nation of the economy in the rain. It seems to me that cannot be easy right now, because of government finances and the recent developments in saudi arabia. Tell me about it . Guest the challenge and finances generally, the drop in oil prices has been a blessing in disguise. It has forced governments to take on policy changes and law changes that have been for the benefit i think, of attracting investments. Host that would have seriously been unpopular. Guest absolutely. I do not think we wouldve seen the opening of sectors at 100 per barrel. I think it has made my job a lot easier. We have seen at least in the edb the investment attraction a 20142015, from 140 million 280 million in 216 2016 and we will see over 700 million in 2017. Host in Foreign Direct Investment . Guest yes, coming through the ebb. We are seeing record numbers coming into the kingdom of bahrain. I think it is due to the openness by the economy has always had and also because the government is looking to attract investors to pick up the slack about the government will leave behind. On saudi, i think it is good news. I think people look at the region and see it as a zero sum game. If the kingdom of saudi arabia growth, what will it do to the other states . We do not say that about asia. We see singapore, malaysia, hong kong, different citydates succeeding, and the success of one leads to the benefit of the other. I think we will see them develop. Host 700 million of Foreign Direct Investment in 2017. What about 2018 . Guest it would be hard to much the number but i suspect we will exceed 300 Million Dollars 400 million. We managed to attract Amazon Web Services to set up a data center, what they call a region in vain,. Bahrain. Form. Data between the middle east and africa, we saw an absence of data centers and we were encouraged by amazon, looking to set up something and we convinced them to choose us. Host billionaire investor has confirmed that he has walked away from a plan to rescue the embattled film and tv studio cofounded by harvey weinstein. He spoke exclusively to Bloomberg Tracy Alloway in of would be and says he does not see a longterm future for the weinstein company. Guest i think it is on life support. The existing directors are doing the best job they can to try and put many of the disjointed pieces together, but it is quite complicated. I doubt whether the current plan would be successful for very long. Guest is there anything that would give you comfort in supporting the company . Guest well, it is very difficult. We are just financial players, some might point of view is very limited. I wish the best for all of the employees of the company, that talent and all of the distributors who were involved. It is quite sad for them, but it is difficult when the bright shining star of the company, actually was harvey. So when you take the bright shining star of a company out, for whatever reason, it is a major dilemma. Alix you are watching bloomberg best, i am alix steel. President trumps last chance at a legislative win before his first year and is tax reform. The debate entered a new phase this week with the senate marking up at own bill and the house putting on its own version. Host in the senate today, they begin the markup. The finance committee will be going through line by line the bill, looking for amendments. Expect to see some changes on the senate side. Expect a lot of pushback against democrats. You said everyone would get a tax cut. Host as plain to me as a democrat, what will you have in this. The senate seems to be running this as a republican operation right now . Guest it is unfortunate, because if you look at the 86 tax bill and the history it went through, it was a very long process in which a proposal was looked at and reviewed by many people, adjustments made. There was a lot of buyin, i was looking to dust listening to some of your show early today in which people were saying, even if they got something passed, it would probably get repealed in the future. What you really want out of tax policy is predictability. This legislation they are rushing through and i do not think it will lead to any of that predictability. Guest dear president took 70 of your district. He is in the air and returning to washington. I know he will return with the support of Trump Supporters like you. Can he get at the margin any other people to support him in the coming months on tax reform and the other issues at hand . Guest i think he can on tax reform. Of course, it seems there are two or three people in the senate and in our party who enjoy sticking it to President Trump, but i think you will see some people get serious and come on board. Because with and the tax caps, these they are significant if the task is are significant enough they will help our economy. Guest you have said that you have the votes to get the house to approve your bill by thursday this week. But that is not the only vote, after it goes to the senate, the conference has to come back to the house again. Can we talk about the state and local tax reductions. If it comes back, can you get the votes in the house again . Guest it will not come back, that way. I made a commitment to members in the house that we will restore the state and local property Tax Deduction to up to 10,000, twice the national average. It is important to families across the country, especially to the high tax states, i made that commitment. That the final vote on the final bill coming back to the house will include the state and property taxes action. Host as you know so well, the senate has certain rules to comply with and one of the ways to do that in terms of the big deficit they have is to totally eliminate the soft deduction. Will you under any circumstances go along . What if you do not get any tax or from at all if you do not accept this . Guest look, i am confident that the senate knows exactly what the priorities of the house are. I certainly do, so the commitment to keep the state and local property Tax Deduction is in concrete, i expect that to be the case. Host so just to drive it home, that is a redline over which you will not cross . Guest it is. The idea that you would take health care, the most controversial subject out there, the democrats Just One Bank the Virginia Election in part because of that and introduce it into the tax cut legislation makes zero sense to me. It killed any chance of getting democratic support an overly politicizes it, less to have Health Care Without a mandate make no sense. Host the idea that you need to hundred some billion dollars to plug the fiscal hole that you are expert, on, that is just raising money. Guest any number of things you could do, this is the one thing that will probably blow it up. We have made some great improvements in the house, we know this state and local tax issue is a problem for members of the house and the senate. So i think what you will see is that we will negotiate here. If kevin brady puts a red line down, i know it will be reasonable. If he is not affirmative, i think he feels very strongly and i think it will come out in the Conference Room or. Report. At this point, we are making our mark on it. What do democrats do in terms of tax reform . Do you have a voice on it or do you sit out the debate entirely . Guest we do not sit out the debate, we are on the floor. We were there last evening and we are on the floor right now, educating the American Public about this tax scam. It is not simply tax reform, it is simply something that is going to benefit the richest people in this country. Take a look at the Corporate Tax rate, gone from 35 to 20 while in the lowest bracket, people paying 10 will not be charged 12 . Look at what is going on, it is not beneficial to the middle class. As a matter of fact, we have information showing that those making 75,000 or less will eventually have to pay more taxes. So this is a scam, not real tax reform. Democrats are aware of what is going on and we are educating and unfolding exactly what they are doing. I am hopeful that we will get enough members, particularly on the senate side who will help us to stop this tax reform bill in the way that it is going. Host republicans are trying to thread ready narrow needles in both the house and the senate. It will make negotiations difficult and as you noted, it is only the finance committee in the senate that has signed off, not the senate as a whole. I think what thing that will happen is that the senates tougher approach to detecting state and local taxes will have to move in the direction of the house in order to hold on to enough members to pass the bill in the house i also think the senates inclusion of a repeal of the mandate to buy insurance from the Affordable Care act is likely to fall away because that provision will engender more resistance among voters as the discussion goes on. Host if this package, is it indeed going to trigger growth here or pay for itself, something that tax cuts in the past have not done . Guest right. This bill will probably spur growth of little bit at the beginning, but not nearly enough to pay for it self. By the end of the decade, as we look out, the incentive effects, the positive incentive effects that come from reduction in tax rates will start to be offset more and more Video Commission of government debt. Beyond what will happen under current law. The extra correlation of debt will be a drag on the economy, working against the stimulus that may come from the lower tax rates. The bill would not begin to pay for itself, the republicans budget resolution allows for trillions of dollars of taxpayers which is what would happen under the bill, i think. This is a great function in the bloomberg, it gives a summary of what is happening here, for price targeting, and average volume, we see a lot of selling. What i want to point out is a valuation, trading at relatively cheap, 48 discount. There are about 30,000 functions on the bloomberg and we always enjoy showing you our favorites on lumber television, on bloomberg television. Maybe they will become yours too. Heres another functioning will find useful, quic which will take you to a quick take and you can get fast insight on timely topics. Here is a quick take from this week. 2016 was again the hottest year on record. The previous 17 years have seen our 16 most scorching years. Scientists of all men we agree overwhelmingly agree that Global Warming is a corporate and it is just getting started. Extreme weather, wildfires, droughts, the hits keep coming. What are we doing about it . In 2015, the world took its boldest step yet in a Historical Court in paris. But now comes the hard part. Nations must change policies and invest huge amounts of money and they will likely do it without the united date. States. President trump announced on june 1 that the u. S. Would withdraw from the accord. The reality is that withdrawing is in americas economic interest and will not matter much to the climate. Here is a situation. Decades in the making, the Paris Agreement unit the u. S. , china and other 190 nations. To fight pollution the unsponsored plans and secured pledges to cut Greenhouse Gases in an effort to avoid the environmental disasters the climate models predict. But even if all of this is met, the global is affected to warm the century, more than the u. N. Target of well below two degrees. Meeting that Paris Agreement means governments will have to offer more incentives for clean energy, kill back support for fossil fuels and make omissions more costly and reduce first station. It is estimated it will require 13. 5 trillion of spending through 2013. 2030. Unlike past climate impacts such as the kyoto protocol, each country sets it target and promises to revisit and improve them. The u. S. Was primed to play a lead role but trumps executive order reverses obama era bulls and directives put in place obamaeuro rules and directives in place. The resulting policies threaten the global fight against Climate Change. Other countries may join in abandoning the Paris Agreement making it almost impossible and even more expensive down the line to stop Climate Change. Optimists argue that the shift to a low carbon future is already on the way. U. S. States and cities such as california already investing in wind and solar and taking other steps to make it work. I have been called an environmentalist if you can believe that. Alix that is another quick take that you can find on bloomberg. You can also find them and bloomberg. Com along with all of the latest Business News and analysis 24 7. That is all enough for bloomberg best this week, i am alix steel, thank you for watching bloomberg television. David is a big burden off your shoulders now . You have succeeded a legendary business figure. Jeffrey if i was going to give advice, it would be david the financial crisis of 2008. Jeffrey i kind of want to say, i want my mommy. David if a president were to say come in as a cabinet officer, what would you say . Jeffrey im not sure Business People make great public servants. [laughter] would you fix your tie, please . David well, people wouldnt recognize me if my tie was fixed, but ok. Just leave it this way. Alright