In business to make sense of market turmoil. Markets are being pawed by the bear right now, but theyre going to be mauled. Up 200, down 200. Up 300, down 300. You have to ask yourself, why is that happening . David all of that next on bloomberg best. David hello, i am david gura. Welcome to bloomberg best. A weekly look at Bloomberg News and analysis from around the world. Lets start with a day by day review of the top headlines. On monday, the markets started where they finished the week before, with a big selloff. It was kind of an unbelievable day. At one point, you had the nasdaq off by 3 . But into the close, stocks made contributed to a rally. The s p only off 26 points. The dow only up 177 points. And ugly day, but it could have been worse. Based on where we were a couple of hours ago. What you attribute the selloff what do you attribute todays selloff to . What is this about . There is more anxiety about the financial sector. Even a few weeks ago, it is a relatively new development. Particularly focused on the european banks. But beyond that, there are a few things have been driving markets lower. Last week, most of the economic data, even the u. S. , was on the soft side. It is reinforcing concerns about the health of the Global Economy, even the health of the u. S. Economy. Second, we have had an environment for the past few weeks, where you have seen more effort by some of the worlds Central Banks in japan and europe to either consider or adopt more unconventional monetary policy. And so far, that is not having the intended effect. It is making investors nervous about what happens in a world where Central Banks may be out of bullets. Alix we have been looking for the bond bubble to burst for years. It seems like the bond bears can go home right now, because it is exactly what is keeping the bonds propped up. It has gotten worse. We are in a world right now that defies everything we learned in school. You have close to half the european sovereign bond markets now with negative yields. For markets overall you have 25 of sovereign bond markets with negative yields. That wasnt supposed to happen. You were supposed to have to pay the government for the privilege of lending to them. So rather than rates going up, they have plunged into areas we did not think was possible. Deutsche bank slumped yesterday, after becoming the lender in the biggest lender in four years, to try and reassure investors it has enough cash. A report yesterday raising the specter of Deutsche Banks ability to pay. This is a huge torch paper. That is the gist of the report. Simon adamson wrote this report, questioning Deutsche Banks ability to pay their coupon in 2017. If their 2016 profitability comes in lower than expected, or if there are further litigation costs. Remember, this is a big cloud, whenever we talk about Deutsche Bank, we do not know where they are going to be in longterm litigation costs. What that will do to the profitability. Yesterday, they put out a statement saying, yes, they do have enough capital to cover. What they say is, they have a billion dollars for 2016, that would cover 350 million in coupons due in april. But that is if the sale goes through with what could be a what kiva bank. And that there are not any litigation costs. This isnt just a Deutsche Bank story though. You take a look at lenders in the stoxx 600. All across they are down significantly. You see in 2012 that is when mario draghi said, he would save the euro. Look at how far they have gone down. Quite a precipitous decline. There appear to be two stories. One is a sort of concern about Deutsche Bank and our own ability. But then there is a broader concern about the bank stocks in general. But it looks like Deutsche Bank is taking the brunt of that. So the question of negative Interest Rates came up today during Janet Yellens testimony. She was not sure if they would be legal in the United States, but she seemed open to the idea. In the spirit of prudent planning, it is something that, in light of european experience, we will look at. We should look at. Not because we think there is any reason to use it, but to know what could potentially be available. First of all, its interesting that she, like sam fisher, came out and said, based on the european experience. It makes me wonder if they think it has been successful. If so, what are they looking at to gauge the negative rate experience . And to gauge its success or not. Or if it didnt mess it up. It did not harm it anyway, versus two it actually helping. Later on, she did allude to u. S. Money market funds. She said, they have to study whether the potential advent of negative yields in the u. S. Would disrupt the plumbing of the u. S. Financial system. In particular, money market funds. You are already seeing in japan some money market funds closing down to new investors, because it doesnt work. This model doesnt work. And frankly, europe does not rely on money market funds as much as the u. S. Does. This could disrupt the commercial paper funding system. This could disrupt Companies Funding themselves. This is a very serious step. She did allude to it. She said, it would be remiss for them not to look at it more closely. Alix youve just been listening to fed chair janet yellen testifying before congress for the second day. Scarlet what is the big headline you heard from todays testimony . I think again, negative rates. They were very explicit backandforth on the legality of it, but whether she was prepared to use it. Take a listen. We had previously considered them, and decided that they would not work well to foster accommodation back in 2010. In light of the experience of European Countries and others that have gone to negative rates, we are taking a look at them again, because we would want to be paired in the event be prepared in the event that we needed to add accommodation. The mere fact that she is saying again, confirming this is a tool we are considering. It may be something we are going to use. It doesnt mean we are going to use it. But, we had this axe out. We are sharpening it, and its a signal to the markets. A little bit of theater, psychotherapy, a lot of politics, and very little information. I would disagree with one of brendans characterizations. She was asked about the axe of negative Interest Rates. So, she has to respond. It doesnt mean that they are sharpening it. Janet yellen cannot go to capitol hill and say things are terrible, and we are getting ready to impose negative Interest Rates, because imagine what the Market Reaction when being would be. It is a fourth successive day of declines here in europe. The pressure is building up in japan. It all comes ahead of gross data growth data out on monday. Does this mean we can expect more stimulus from the boj . I think that is the question we are all asking ourselves right now. Governor kuroda was in parliament all morning, talking about how he is ready to employ deploy more stimulus. If it is necessary, that he will not hesitate. I think those are pretty strong comments. I think more action is definitely possible. There are some economists already forecasting that we will get more in march. Look at japan. My goodness, it is like the boj has completely lost control. I think Central Banks have generally lost a lot. Lost the plot. In theory, negative Interest Rates should spurn some kind of action. But in reality, people put their money in the mattress. And doesnt make them go out and spend. Especially, in japan, where you have an aging population that relies on pensions. It is kind of for the economic where the economic theory breaks down with the practical reality. David we will have more on Deutsche Bank a little later, how it rallied from tuesdays plunge, and how it got the whole world talking about cocos. Coming up on bloomberg best, and round of company news from tech to media to beer. David welcome back to bloomberg best. I am david gura. Lets continue our weekly review in business with some Company Activity that we covered on bloomberg television. A big payday, very big. He is poised to become one of the highestpaid chief educatives after googles parent company, alphabet, offered him restricted stock. That is an awfully large, restricted stock grant. At the time that steve jobs got that, he was making a dollar a year, because he was in the mode of turning the company around. Any upside was really something shareholders would be happy to give him, given the performance up to that point. But google right now is just firing on all cylinders, and i think that he has come in and done a terrific job taking over the core property. So, im not surprised they want to reward him. I think it is a testimony to just how successful google thinks it is right now, and how critical he is seen to be in the company. Emily how closely tied are these rewards to performance . Awards to performance . For google, these are payout firms through 2019. And their ultimate value will be the stock price. But the number he is getting is the number he is getting. Emily is he in billionaire territory . If you allowed him to invest all of these today, and he has options, from the company, they would be worth 650 million. Obviously, we are in a down market, so he is getting close. If he stays on, get a few more awards, and google keeps killing it, he could definitely get there pretty quickly. Stock is tumbling by most in almost a year. The japanese Government Fact a backed fund that is bidding for a rescue plan. It is pitching the creation of smart appliances that include another troubled electronics major. Now we have those trying to we have two bidders tried to take control of sharp. On one side we have taiwans foxconn, and on another side we have the Innovation Network core of japan. The bid is pretty complex. They are looking to inject some capital to boost the led business. Lcd business. This is the business that makes glass panels for iphones and other mobile devices. They are also pitching this idea of a smart Home Appliance giant. Foxconn is offering a package that is worth about ¥660 billion. Some of that money would go into sharp in the form of buying new shares, about ¥225 billion would be used to acquire preferred shares. On the other side, ha is offering ¥203 billion to uphold these operations in the future. Both Companies Want to change the operations pretty fundamentally to be able to make sharp more competitive. It has been losing money for years. My question to you is this profit will increase in 2016 with an increasingly challenging external environment. A very confident statement. Looking at the macro picture at the moment. Where are your sales and profits specifically going to rise and 2016 in 2016 . And by how much . We never made that kind of precise prediction, as you know. We have a very diversified portfolio of countries and brands, which allow us to spread the risk. On the one hand, you will have some headwinds, but on the other hand, you have oil consuming countries like vietnam that will benefit from low oil prices. So, overall, our balance and our portfolio footprint leaves us to make that confident statement, while admitting that there will be some headwinds. Where does that leave europe then . Europe also benefits at this time. Does this mean this is an opportunity to get more out of the European Business . Oil prices do not translate oneonone in europe to beer consumption. It would be foolish to make that case. It certainly will bring some additional discretionary purchasing power to people, which beer is a small part of it and we want to play our part. So, no, overall, i think europe can benefit from Lower Oil Prices in the years to come. Philippe dimon made a pledge to investors today to prove doubters wrong and bring by a viacoms floundering stock to a new high. On a Conference Call he said our outlook has been distorted by the naysayers and publicity seekers. Hes been with the company for a while. What does he have planned . This is probably getting back to basics for viacom. It comes to programming and ratings. It is a challenge for this company. This is a company that has some real ratings weakness. Is it because of cord cutting, or because they have not invested in their programming as much . It is probably a lot of both, actually. The company is reinvested in their programming. A lot of new shows. The ratings have started to turn. Lets see if that is a longterm trend. If it is, which they believe it is, they believe that they will start to see real improvements in the Cable Networks by the end of the year, and into next year. Unfortunately, investors are hoping to see the turn a little bit sooner. Disney reported earnings after the bell yesterday, beating all the estimates. Really the best quarter that disney has ever recorded, on every front. You look at profits of 2. 9 billion. That doubles the massive profits from three years ago. A fantastic quarter driven by star wars merchandising activity at the beginning of star wars. Ticket sales, and a suggestion that next quarter we will see a lot more of that. But really a spectacular quarter. And yet, concern that there is a slowdown at espn, and subscribers adapting to a new world of cord cutting. I think that spooked to some longtime shareholders. I saw bob iger went out of his way to say there is an uptick in subscribers. But it did not make the market feel any better. That is the longterm concern here. While there is more revenue per subscriber, there is concern that it will not last. As more bundled packages, that do not offer espn, we will see more people go for that. We certainly have not seen that behavior in the marketplace. Looking at 2016, we have seen a fairly rapid drop in commodity prices. It is not just our materials. It is also oil and gas and a range of products. We are on the front foot. We are taking proactive and prudent action to reduce our costs and to reduce our dividend policy. This is a sensible step we are taking here to protect longterm value to shareholders. What does this tell us about your m a thoughts. Does it tell us about the belief that you are getting ready for those tier one assets to become available . We are trying to get the interested in getting the balance right between growth and shareholder returns. Yes, there are a range of assets that could be more natural than some others. At this stage, there is nothing out there on the market that interests us. But we are holding our powder dry, while we focus on developing our own assets. Stephanie twitter reporting a loss of 90. 2 million in the fourth quarter. Twitters user growth stagnated last quarter. Sales in the current period are expected to miss analysts forecast. It illustrates that jack dorsey is still struggling to make this site more alluring to consumers and advertisers alike. The company so far has kind of been able to get around this stagnation because this is at this is not the First Quarter that growth has flattened out. They have gotten around it by using this function where they are able to trail facebook, but also able to tweak up quarter after quarter. That has masked the declining users. By increasing the amount of revenue you get from your existing users. Thats all a shell game. Until you reach energized user reenergize your current users, your user growth is stuck. Aig posted its Second Straight Quarter loss yesterday. They announced a 5 billion share buyback. This is not great news. It was a really bad loss. People were accounting for some of the trouble at aig, but this was worse than analysts estimates. A lot of people knew Hedge Fund Performance had been bad at aig. Also, i guess activists came in at the right time. Likely they still had 5 billion around to buy shares. So they put a couple of activists on their board. Right. They put john paulson on the board, and they put a representative of carl icahn there. He is also on the board of navistar. Hes been through this before. Why didnt carl go on the board himself . He said he was busy. David you are watching bloomberg best. I am david gura. Earlier this week, doubts around europes largest investment bank. Deutsche banks stock fell sharply. Analysts questioned their capacity to make bond payments. We examined what the implications could be for the Global Financial system. It all began with cocoas. The coceo tried to calm employees saying, Deutsche Bank remains absolutely rocksolid, given our Strong Capital and position. Fears yesterday were triggered by a note from credit sites that questioned Deutsche Banks ability to pay off coco bonds. This is a type of debt that, if things go badly, the bank converts into shares. But theres nothing significantly different. This is a fear that the markets brought up front yesterday. And it is quite amusing in a way. This whole situation, that they convert into equity, sitting as a percentage. This is more about cash in the then the Bank Actually running into genuine by nato difficulties. That is why they got that note out last night to calm investors. I was getting calls from people, are they going to raise more capital . Right. I think some of the european banks have been slow in getting themselves recapitalized and getting their Financial Balance Sheet in the best place they could be. I think Deutsche Bank is pretty sound, actually. At the end of the day, it is a German National icon. I think john is doing all the right things. We dont have a rating on Deutsche Bank, formally. My guess is the shareholders there face some kind of