Murphy. It is all about the year ahead. You write about it in your editors letter. First of all, can you believe we are done with 2017 . Megan so much has gone on. So much unexpected has gone on. As you guys know, so much of the attention has been focused on the political year. Not just in america and around the world. There are so many things in 2017 that happened that we would not have predicted that for 2018, we will double down and predict more things that may or may not happen. The most interesting thing from what i think about it 2018 is things are better than you think. You may have had an incredibly tough year. Regardless of where you stand, we have seen tremendous disruption, tremendous populism, voicing sentiments of parts of this nation, other nations we may not have always liked to see. But underlying, if we look at where we are going if we look at Economic Growth as a baseline measure of lifting tides, we are on a rising tide. Whether or not people will screw that up is another question. Carol there are a lot of things out there that could. Megan the world is Getting Better for people and a lot of people at the lowest rungs of our economy. Carol is that what you want readers to walk away with . Megan i want people to think i learned new stuff about stuff i do nothing was happening, about i did not think was happening. Things that are realistic sooner than i think. Electric cars, microchips, different kinds of the building, new building, new ways of delivering energy. I want people to take a breath and think, ok, 2018, here we come. We are going to make a difference. 2017 is over and lets focus on what binds us together as human beings and push forward. Julia the year ahead, all the different challenges we have faced. Whether it is Central Banks or geopolitics. 2018, the most important factor that can drive us forward . Megan when we look at this breakdown it is the trajectory and the ramp is laid for a positive 2018 for Economic Growth pretty broadly, with the exception of some sectors like latin america in subsaharan africa. But there are huge challenges. And one thing i think we have all been amazed by and we have talked about it time and time again. GeoPolitical Risk, the immense geoPolitical Risk we face whether it is south america, brazil, brexit, germany, the u. S. , mexico, india, has not been the destabilizing force we expected it to be in terms of knocking the economy off course. The underlying fundamentals remain strong. I use even just a little example, Labor Force Participation is back on the rise. Even youth unemployment trending. That being said, 2018 could be the year that geoPolitical Risk does not us all back. These tensions are real. I find it hard to believe 2018 will go by without some big incident. Without something happening. Most likely in north korea or asia, possibly in the middle east. Those regions are still unstable. What is interesting to see is if we still bet everything on a rising trajectory of growth, or whether there will be something on the geopolitical front that is so destabilizing. Julia that means drastic prices. Carol we have more out there in the Global Economy from peter. We have been complaining for years that we had subpar growth coming from the financial crisis. We did, and the International Monetary fund kept having to say it looks like another sluggish year. This year in their forecast which just came out for 2018 they are saying that only did 2017 turn out to be better than we had expected it to be, 2018 will be good as well. By the way, bloombergs own staff economists concur with that. For the first year in this outlook we used some of their data, their country by country growth forecasts for 2018. Bloomberg economics has been building out its set of forecasts. So we said look, lets go with the homebrewed Bloomberg Economic forecast. Julia one of my favorite lines was even the germans are happy. [laughter] julia the story of 2018 is how to we manage the synchronous growth we have seen around the world . There are all sorts of elements coming into play here. Central banks will be a key theme, the fed, the ecb, japan or china. Peter if you are in the lower bound which we were for a long time, Interest Rates could not go lower, it is pretty clear. You just keep rates low. You buy bonds at the long end of the curve and you go ahead and do fiscal policy. You tax cuts, spending. You basically throw all the ammunition at it you can. Suddenly when the economy starts to normalize, now you have a twohanded problem. And all the Central Banks are facing this now. The Federal Reserve is the furthest along because the u. S. Economy is the furthest along in its recovery. You dont want to kill off the recovery by prematurely raising rates. You also dont want to be behind the curve and raise rates too late and allow inflation to kick in. That can be hard. Julia a little bit. Peter we still want more but the projection is if things keep going the way they are, we will go past that 2 margin. Julia creating a cover image for the year ahead was the job of our creative director. Talk to us about the front cover and how you wanted to grab the reader. Alexander we basically wanted to give everyone a feel for a wide range of topics in the issue. What people can expect for the year ahead and what we are looking at now and projecting forward. Covers the topics of technology, politics, economics. The full breadth basically. Carol it reminds me of already being inside the magazine, but having read the stories there is so much that will be going on in 2018. Alexander i think we have an idea of what we are looking at. Carol after a busy 2017. Get ready, everybody. Alexander we want everybody to know we are thinking about this. Julia take us through some of the themes. Brexit, china, space travel. Obviously my favorite. Alexander microchips and the president and the presidency and u. S. Politics. Carol what 2018 could me for could bring for President Trump. Julia plus, why Technology Companies could have more censorship in china. Carol this is Bloomberg Businessweek. Carol welcome back. Im carol massar. Julia and im julia chatterly. You can find us online at businessweek. Com. In the politics section, a look at what President Trumps 2017 may tell us about his 2018. Carol heres matthew philip. Matthew it has been a failure. When you look back at the Campaign Promises he made, drain the swamp, building the wall, infrastructure, repealing obamacare, getting taxes done. None of those things have been accomplished. This is to say nothing of the russia investigation. So it has been a historic bad first year in the oval office for President Trump. When you look back over 200 plus years, you can probably put him in the top three. Carol you highlighted big things like obamacare and infrastructure. I made a list. Pointing on the sir step to get the job done, did he do it . Matthew no, i dont think so. Part of this is also the unanswered phone. I have said recently it is a part of this strategy in kind of draining the swamp and limiting the scope and size of government in american business. But but but but when you dont appoint basic people into jobs to get things done, you are not able to get your policy done to begin with. Carol you are not appointing people, but you have appointed some highlevel people who have resigned or left the white house. That cant be part of the plan. Matthew we always knew there would be a learning curve for this president. I dont think we realized how steep it was going to be and how much selfinflicted wounds he would cause himself on a daily basis in terms of messaging, and when you see the press secretary Sarah Huckabee sanders have to walk out and kind of fight this battle every day and lose the message. Julia he has created dissent in tensions within the gop itself. Mcconnell at times. We have seen some highprofile resignations and say they will not be up for reelection. To what extent the those do those problems continue on into 2018 . These tensions he has created this year . Matthew i think in every extent. The only way to see the second year is look at the past and to know the failures of the first year are going to haunt the second year. Especially when it comes down to taxes. They have a ticking clock of thanksgiving where they want to do something on this. But without the establishment wing of the party in congress you will have a hard time doing that. Our writer does a great job of walking through a lot of the problems. You can envision a scenario he you can envision a scenario where he gets serious and does some major policy agendas next year, but you struggle to believe that scenario. Carol 2018 is shaping up to be the year china cracks down harder on u. S. Tech companies. Julia especially when it comes to censorship. Jeff the regime has already been the most repressive of any in china in the internet era. The states regulators are already pursuing a much more aggressive crackdown on websites they consider offensive in some way, and for a wide variety including political reasons. This past spring alone, they shuttered about 4000 websites that were representing erroneous views for offending or offending them in some other way. They have also enlisted the countrys main internet companies, tencent, alibaba, baidu to help solidify this. Carol they are working with their own companies, the big ones, to help on the crackdown. That is interesting. Jeff and in a bunch of different ways that perhaps would not sound that crazy to someone who is been studying this case closely in the u. S. Around the world. Nonetheless, it is striking for its level of how pervasive it can be. Wechat has more than one billion users. When the Nobel Peace Prize winner died this summer in Chinese State custody, the first time that has happened to a Nobel Peace Prize winner, the service was flooded with messages about lu and images of him. Wechat basically managed to block all of them in short order, and its gone down the line to censoring images of winnie the pooh because there are strong comparisons. Carol one thing i loved in this story was a line that said president xi, it is not about him not understanding the power of the internet but understanding how the internet works and that is why he is so careful about control. Jeff absolutely. Xis life was will forged by his well forced by his familys victimization by ma os communist party. He is a control freak about the control of information and who sees what. Carol as we look to 2018 and what it means for the internet and online in china, what should we expect . More of the same . Tougher in terms of access to material and content online . Jeff based on xis signaling, it seems he is consolidating control for the next five years. Internet companies can expect things to get worse before they get better. Some companies unlike facebook and google are already making concessions to china. Carol they want to be there. Jeff for any service that was to be responsible to its shareholders and earnings season. It is hard to resist the allure of one billion users when markets are pretty mature. Linkedin is starting to censor posts in china. Microsoft has begun allowing access to its source code. Even apple this year started deleting apps from the chinese store they let users get around the firewall. Julia centralbank leaders get ready to play musical chairs. Carol in jim coulter tbg tells us what he sees ahead in 2018. Julia this is Bloomberg Businessweek the year ahead. Julia welcome back. Carol you can also get us on the radio on sirius xm, am 1130 in new york, 1330 in boston, and am 960 in the bay area. Julia and in asia on the Bloomberg Radio plus app. Carol 2018 will see a new Central Bank Appointment in the United States and potentially in china, japan and europe. Julia we asked Christina Lindberg what to expect. Christina we will see three of the worlds major Central Banks begin to withdraw stimulus. Actually two. Japan continues longer than everyone else. That will be a turning point for investors, for economies, for companies in europe that have received support from the ecb. It is going to be a big inflection point. Carol we are talking about tons and tons of money. Cristina trillions. Carol make it easy within the global economies, and now we are stepping back . Cristina it is the moment everyone has been waiting for. That does not mean we will not see some taper tantrums we have seen in the u. S. And europe. There has been a great deal of communication about schedules and the pace of things. In the u. S. We have already started. In october, it was the first month that the fed allowed a portion of bonds on its Balance Sheet to mature without buying new ones. Last week the ecb also is set at its schedule. People that have these parameters and they can sort of try to get their brains adjusted around that. We are going to see a moment in which on a net basis there will be less stimulus going in. That is probably going to have an effect. Julia you say the transparency is as much as they can provide. Still lacking. Inflation points towards a more great acceleration and set of a retraction of stimulus. Cristina for investors we have to think about this sort of flood of money. It has bid up stocks and bonds twice to unprecedented levels. Now we will see this pullback. What happens then . We talked to an investor who said even though we know it is supposed to happen, it is going to hurt. It has to hurt. That is the measure it is working. And from an economic point of view, the real test will be we have gone a decade without knowing whether these economies can stand up on their own. We are taking away their crutches and say walk. That will be the big test. Julia megan murphy has talked about the resilience in 2017 and how optimistic she is about 2018. Does the synchronous Global Growth we are talking about here offset some of the stimulus we are retracting . Can we make that argument. The fundamentals will kick in. Hurray cristina i think we are in a better position for this happening than the what have that we wouldnt have anticipated six months ago. Japan looks like it is doing quite well. The latest gdp figures in the u. S. Were positive. Europe, we see countries like spain have recovered the gdp they lost in the crisis. From that standpoint, yes. But who knows . Julia and the economics section the ceo a private equity firm tpg gives us his thoughts and on the Global Economy and outlooks for inflation. He is very optimistic. He says, look, we have over 200 companies around the world with a front row seat. He says the front row seats to the show is going great. In the u. S. Things are chugging along. His concern is the market is chugging along while there is so much uncertainty in terms of politics and social dynamics. He is also scratching his head about inflation. He sees so much inflation and asset prices, but not that underlying cpi, the real inflation measures. He says that is a little concerning as well to see a disconnect. Carol there are lots of players in the private equity space. Jim coulter is a big deal. A big firm and they have so many different companies. They are one of the major players. On their website have investments in airbnb, energy, burger king, natural resources, health care. They are a great snapshot. Devon they are a great snapshot. It is interesting to see where they are spending a lot of their time now. Much of that is in technology. You mentioned airbnb. They are in uber. Jim talked about these dynamics that are making him excited about technology. It is all about disruption. They are based in san francisco. They have a front row seat for that world, the tech world. They have ingrained themselves in that world. You are seeing dynamics. The big one he is thinking about these days is the shift in Consumer Spending dollars for from material things to experiences. Carol i used to think this was an empty statement, but we have seen in the spending trends. Devon family have seen tpg put and we have seen tpg put their money in this trend. They made investments in things like Cirque Du Soleil in the past year and a half. He said Cirque Du Soleil has the same volume of ticket sales as broadway. You just dont see it because it is not all in one place. Another one is the viking river cruises and ocean cruises. He says people are really spending money on experiences, especially once especially ones they can share. Julia social media driven. He said concerts and live events are things he did not really understand why they were becoming so valuable, but he sees s and all age groups seeking out experiences they can then share with their friends and contacts. It is fascinating. Carol the Biggest NationalSecurity Threat of 2018 according to former cia director general david trias. Julia what it might take for companies to take the threat of hacking seriously enough to make changes. Carol this is Bloomberg Businessweek the year ahead. Retail. Under pressure like never before. 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