Transcripts For BLOOMBERG Bloomberg Best 20160904 : vimarsan

No punches Central Banks are a topic of conversation with prominent banks that pull no punches. The work is never done, and i do not think you can say one and done and that is it. Raising by 25 basis points in september, and then doing it again in december. Nejra plus, a oneonone with russian president vladimir putin. Pres. Putin we will work with if someone says they want to work with russia, we will welcome it. Nejra it is all straight ahead on bloomberg best. Hello and welcome. I am nejra cehic. This is bloomberg best, your weekly review of the most important Business News, interviews, analysis from Bloomberg Television around the world. The week began with the markets still buzzing from friday when remarks from Federal Reserve chair janet yellen signaled that the case for higher rates is strengthening. If investors were worried, mondays Equities Trading did not show it. Joe the s p 500 index is on pace for its best day since august 5, rebounding from a threeday slide. Right after yellen spoke, we saw the big rally in everything, stocks, bonds, treasuries at the same time, then it reversed. Today, were seeing a reversal of that. Everything is flying from treasuries to stocks, sort of trading as if the fed is not really in the picture or a problem. What do you make of the Market Action recently and what we learned from the fed speakers in jackson hole last week . Russ the short answer is not much, or at least you know, not enough to dispel the confusion. Today, the market is moving higher on good economic data, which is probably the right thing. Friday was was confusing. It is confusing because on the one hand, we know september is in play. We will probably get a hike later this year. At the same time, if you listen to the comments by janet and other members of the fed. What is apparent is even if the , fed goes this year, this is going to be a shorter, shallower cycle than what weve seen in the past, which means the fun rate is lower, bash fund rate is lower, which confirms that in the cycle, we are still a woeful environment. We have a combination of better economic data, people are not overly worried about the fed. That is producing some good market movements. The European Competition or, thet best figure European Competition commissioner has ordered apple to pay a record tax bill. How is ireland responding . How has apple responded . There is massive shock here today. Reports were saying the arrears could be as low as 100 million euros, yesterday afternoon, the sentiment has changed. Figures might be in the billions, but i do not think anybody was prepared for a figure of over 13 billion euros, so it was a huge shock here. It sparked an intense debate about what they should do next. It is not clear that apple is not very happy, pointed out that corporate environments have paid its taxes and everything right, and it is not fair that it should be treated this way. There has been an angry response from ireland and apple back to the commission. Mark there is disappointment from both parties as well as the u. S. Treasury. Why did you feel the need to act unilaterally when the oecd has made so much progress over the last three years . Margrethe the case here is specific because we have a longstanding prohibition of Member States handing out benefits or advantages to specific companies. This is the case here, more than it is the case of taxation because these benefits, they can come in all forms. They can come in a form of cheap piece of land, a generous loan, a grant, or a tax benefit. That is the case here much more , than it is a case of interfering of the work done in the rain of g20. Why fight this decision . Is apple putting pressure on you . Mr. Noonan no, apple is doing it separately, and the Irish Government will make a decision tomorrow to reveal to the court of justice. We are repealing it because we do not accept that the irish authorities did anything improper, incorrect, or illegal. Secondly, we think that confidence under european law is with sovereign governments and we think the Competition Commission in europe is trying to get through a back door to influence tax matters and portray them as state issues. David apple insists it did nothing wrong. Tim cook says, apple follows the law and pays all of the taxes we owe wherever we operate. What does this mean for apple and their mode of doing business . This bob this is a small hit to them, even if they are forced to pay it. Longerterm, how they think about dealing with europe, does it impact of other companies impact europe . I think there is a possibility. Caroline the ceo of germanys largest lender, john kline, shooting down a merger with saying he would like to see his Bank Actually shrink. John part of the work we are doing is to make our banks smaller in order to make it a bit simpler. We want to set Higher Standards for control, but we want to make be more successful. Caroline this news, this report, was it really news . Elisa it certainly was, and it comes on the backlog. We have seen european banking shares coming under a lot of pressure. Banks, italian banks finding a solution, but there has been a great deal of focus on the power of the banks, managed, restructuring, very difficult market conditions, negative rates, squeezing further. It is on the back of that, it is a lot of focus on whether this is something that might have been on the table at some stage as a means to grapple with these longterm difficulties that the banks have. Caroline there still seems to be cause for consolidation in the german banking market. We heard from the ceo of commerzbank is saying exactly that. I am sure they are talking about the land is bank elisa yes, that is right. There is a lot of competition in germany. They shouldve gone with one of the smaller players, not the large players. The larger the banks become, the more capital, and the regulators asked them to set aside and this is precisely the difficulty Deutsche Bank is up against. To build up the capital buffers, it is hard to see what they what combination would solve this in the immediate term. Angie a bit of optimism, you could say, from chinese manufacturers with the official , factory pmi rising to a twoyear high. What do the numbers tell us . John they tell us it was a surprisingly robust number for official manufacturing pmi out of china, coming at 50. 4, and that signifies a beat over the median estimate of a reading of 49. 8. This is the highest reading since october 2014, and it shows that julys dip, as you can see here to 49. 9 may have been a bit of an aberration caused by severe flooding we had in southeast china that affected about 1 5 of chinese economic output. Guy is this just a blip . Can we take a trend on this . Tom you are correct to question it, guy. I think people tend to over interment small movements in the pmi survey. In this case, you can be a little bit reassured. This is a slightly longerterm trend and secondly, it is broadbased. We have not just seen an improvement in the official pmi. We have seen a range of different measures from an index based on satellite images of Chinese Industrial zones, to the flash reading on koreas exports, which tends to move closely in line with chinas exports, all improving slightly in august. Erik 151,000 jobs. That is the increase in nonfarm payrolls last month, the Unemployment Rate steady at 4. 9 , annual rate growth slower, wage growth slower, it adds up to a disappointing jobs report for the month of august. Far from a disaster, of course, but falling short of expectations by enough to throw a rate hike at the feds next meeting into doubt. Bill i think september is on. I do not think it is 100 on, but i think it is close to 100 . I think janet yellen told us not just in jackson hole but in other places that she looks at jobs, jobs, jobs, and that gdp is not at the top of the list. If these types of jobs dont do it, i am not quite sure what does. Alan i do not see alarm flags in this report. I suspect it is less likely that the fed will act in september, which i always thought was a low probability to start with. I do think there is enough here to keep them on a path to raise rates by the end of the year. Mohamed this is going to ultimately come down to one fundamental issue how worried are fed officials about the Collateral Damage and the unintended consequences of a protracted period of low Interest Rates . If they are as worried as i am, then this report is a green light to hike. If they are not worried, then they will wait. Nejra the august jobs report gives the Federal Reserve more data to digest. Later, we will get further fed insight from tom keenes exclusive conversation with Stanley Fischer. Plus another exclusive interview interview in chief editor in chief john sits down with , russian president vladimir putin. Robert shiller on home prices. Eduardo li oil market and bill gross on why Central Banks need tough love. This is bloomberg. Nejra this is bloomberg best. I am nejra cehic. Economists, investors, and policymakers around the world were watching closely this week for positive signs of global growth. Indications continue to be mixed. Lets look at the best, starting with the prospect of more centralbank easing from japan. Rishaad the bank of japan has reiterated that it will boost stimulates stimulus if needed. Kuroda says he has ample room for additional raising when he addressed central bankers at jackson hole. What clue does this give us to this meeting next month . It means we have a tense wait until the next meeting. Governor kuroda, as you mentioned, is signaling with again, as he has before, that an increase to Foreign Policy is possible. We know negative Interest Rates could be cut further. It also could mean an increase in asset purchases. He is certainly pushing back on the view from some that he is running out of ammunition. On the one hand we have analysts indicating that he is up against a limit on bond church bond purchases that negative rates can further but we do have some , other analysts starting to question the idea about whether the bank of japan could move in to local government bonds or government corporations, and we can see the effects on the funding infrastructure projects. Alix if you take a look at home prices, up 5 , personal income up over 2 . How much housing appreciation can we see without income rising just as much . Dr. Shiller there has been a lot of momentum in home prices. They are different from the stock market. They have been going up since 2012, but at a slower pace. It was more like 10 . Now i am kind of worried that it will slow further. Seasonally adjusted, we are just about flat in the latest month. No change. Half of the cities are down slightly. It seems to be a weakening mark. Market. It was still an apparent uptrend caroline in london, the minute we see a cooling down, panic strikes. We focus so much on what that makes us feel from a consumer point of view. Does this spell doom and gloom Going Forward for the u. S. Economy . Dr. Shiller doom and gloom is too strong a word. But i agree. , i have done research on this myself with some partners. Housing has a very strong wealth effect because housing is held , more broadly than stocks are, and it is not held in a retirement portfolios. People see it, and they are very aware of these house price movements, so i think it is possible that there could be weakness coming this fall when the seasonal pattern no longer boosts home prices. If the fed should raise Interest Rates, it might be a kind of a signal that the market is headed down, and so there could be a change in confidence. We have not seen it yet, though. Caroline this morning, we have gotten fresh data out of the european area. Inflation failed to accelerate in august, adding to signs that the euro era of Economic Outlook has deteriorated. These numbers came ahead of the ecb decision, but not 2. 4 lackluster. , a surprise . Paul not massively. A lot of this is still the energy price. That oil price is lingering on. The important point about inflation, when we are looking at inflation is we should not be sort of dazzled by the decline in the energy price. Look at the underlying trend. In some countries in europe, and some of the underlying trends show signs of picking up. In germany, for example, we have got some signs coming through there. Core inflation was not great, but do remember that core inflation still includes energy. Even though it says it excludes energy, it does not actually exclude it. It includes airfares which are strongly influenced by industry price. I am not too worried about this sort of level. If it were coming in a 0, i would be a bit more concerned, but. 2 is ok for now. Caroline it gives you more breathing room for mario draghi to act next week. Paul i do not think he is going to act. Even a serial easer, i think even somebody that is addicted to accommodation. Even he will have to admit that additional action over and above all that they are doing is really not required at the moment. The economy in europe is not falling off the edge of a cliff. Europe is not exactly a dynamic economy, and it is performing reasonably ok in most parts of the euro empire. Tom the sport of oil means you must speak with edward morse of citigroup. We speak to dr. Morse about the certitude that he sees, which is an either or world. I love that phrase. What you mean by that . Edward the market is receiving a lot of reasons to be short and a lot of reasons to be long. Which is going to be right . A lot of this is whether your focus is on opec, or on the rebound that u. S. Wildcatters can have. I usually do not do a 200day, but it works here. Massively range bound. With a flat line 200 day moving average. What is the citigroup call . Edward 48 for this quarter. We are there now. 50, 52 for next quarter. 65 by the end of 2070. 2017. Tom so it works higher. Edward it should work higher. Francine does it mean there is no shell cap on the price of oil . Is that a false analysis, or should it change . Edward it is really a moving target. The moving target has to do with one of the things we cannot you not really talk about all the time, and that is how much does it cost to produce oil in the United States . That price keeps going down. How much does it cost to produce oil in deepwater . That cost is going down here and we are in a cost deflationary environment and that models the dlesure that mud the picture. We have not really been in a position where we are in a cost deflationary era, and we have u. S. Shale. It is a big experiment. Bill i think Central Banks are addicted to low and negative Interest Rates now and are addicted to quantitative easing, so lets call it what it is. How do you cut the addiction how do you move from heroin to methadone in perhaps a normal economy Going Forward . There are two ways. One, to gradually raise Interest Rates and to take your medicine and to hurt the economy now as opposed to hurt it later, which i think they are trying to do in terms of their addiction. The second way is sort of conceptual, but out there in terms of standard deviations. That is to keep on doing what you are doing talking about , Central Banks, the bank of japan as the lead dog here, you basically keep on keeping on by buying up government debt, and ultimately down the road, the central bank basically says to the Fiscal Authority that they do not have to pay any more. That is the longshot way out. Erik that is not a shot, if you will, that you are arguing for, though. Bill no. I would say, come on, lets raise Interest Rates in september by basis points and 25 and six to nine months, lets do it again. Lets realize that capitalism cant really do well, they can survive, but it cant do well with 0 Interest Rates or negative Interest Rates because, as i pointed out, it is an interesting concept, 11 trillion worth of government bonds in negative Interest Rate territory for those that hold them that is not an asset at , all, it is a liability. Nejra you are watching bloomberg best. I am nejra cehic. Later this month the federal , reserve open Market Committee will meet, and fed officials insist they will continue to be data driven in that decision. In an exclusive interview on Bloomberg Television this week, tom keene asked Stanley Fischer how that approach will affect policies in both the shortterm and longterm. Tom can you do one and done our or even two and done, or do you have to go to a measured set of rate increases like we saw a decade ago . Stanley well, the work of the central bank is never done, and i do not think you can say one and done and that is it. We can choose the pace, but if we choose the pace on the basis of data that are coming in so i do not think we know at the time we start whether it is one and done or several. It depends entirely on what is happening in the economy. Tom in your speech, you stated, i am an optimist. You are surrounded by pessimists. We speak to them everyday on Bloomberg Television and bloomberg radio. I want you to redefine markets, the comment in jackson hole of pervasive pessimism is out there. It exists today. How do you push back against that . Stanley what is the pessimism about . Its not about employment. Full employment is very close to employment, it is about growth. And that is largely about productivity growth. That is something which is very hard to control by policymakers. It depends enormously on what private individuals are doing in their companies. It is very slow at the moment. It changes from time to time. We do not know when it will change. I expect it will change somewhere down the road. There are remarkable things going on on the technological front, but they are not yet in the data. Tom you mentioned also the unmitigated blessings of the United States. Certainly you and chair yellen are running a central bank that are distinct from the challenges that other Central Banks have. The december meeting, do you feel, go again that you are the , central bankers to the world, or can you be discreet and only look at the United States economics . Stanley well, the world is becoming increasingly interconnected, particularly in the Capital Markets of the world, so what we do affects many other countries. That was always so. It is also true that what they do affects us, so were dealing with interconnectedness, and we are probably the most important of the Central Banks, but the European Central bank is operating in an area of about the same level of gdp, and what it does matters a great deal and so on. Tom within the debate that you are having for september and december, are you sensitive and aware to Global Finance and Global Banking having to do with negative Interest Rates, just as one example . Stanley well, we are sensitive to what is going on. One hears about it tom you just have to look at the stock prices in europe. Stanley yes, we take all of that into account. The United States is fortunate where Interest Rates are negative or have to be negative, and we are not planning to do anything in that direction. But we certainly follow the debates, and we certainly follow the theory of negative Interest Rates. Nejra that was Federal Reserve former chairman Stanley Fischer that into account. In an exclusive interview with bloombergs tom keene. Still ahead, john speaks with russian president vladimir putin. Oneonone with one of the worlds most powerful leaders. This is bloomberg. This is bloomberg best. This week bloomberg editorinchief sat down to an exclusive interview with russian president vladimir putin, a rare opportunity to directly engage with one of the worlds foremost political leaders who exerts a vast influence on the global economy. Here is a portion of that conversation. Who would you rather have at the other end of the telephone if there is a geo political situation, donald trump or Hillary Clinton . I would like to work with a person who can make responsible decisions and implement any agreement we reach. The last name doesnt matter. Of course its necessary for that to include the trust of american people. The political will to field all those agreements. Therefore we never intervene, do not intervene and try not to intervene in domestic political processes. We will closely monitor what happens and wait for the Election Results and then we will be ready to work with the administration if they want that. Back in 2011 you just accused Hillary Clinton of seeking to trigger the protests you were facing in russia at the time. I am just looking at some of the about donald trump said you. Back in 2007 he said putin is doing a great job. In 2011 he praised you for your no nonsense way. Next year he said you are his new best friend. Next year that you were out smarting the americans. Are you really telling me if you have a choice between a woman who you think may have been trying to get rid of you and a man who seems to have a great affection for you, youre really not going to make a decision between those two . One of them would seem to be a lot more favorable toward you. I essentially already answered the question. Ill say it again in different words. We are ready to work with any president of course. If someone says they want to work with russia we will welcome it. If someone wants to get rid of us that will be a completely different approach but we will survive it. It is not clear who has more to lose with that approach. I have repeatedly seen the antirussian card laid during domestic campaigns but i think this is a very shortsighted approach. At the same time, they send up all sorts of signals from all sides. In previous administrations thats the way it was, too, during the campaign. We will restore everything later. There is a level of responsibility that lies on the shoulders of the u. S. I think that all this should be more dignified, calm, and more balanced. As for the fact that someone you know, for example, one of the members said that russia allegedly paid money to the Clinton Family foundations. Whats that . Does that mean we control the Clinton Family . Of course i dont even know which funds. Both one side and the other side are using it as a tool in the political struggle and thats bad in my opinion. If someone says they want to work with russia, we will welcome it regardless of what last name that person has. The other accusation youve faced, or theyve said a lot is that people connected with russia or backed by russia were the people who hacked into the democratic partys data base. That you would also say is completely untrue. No, i dont know anything about that. You know how many hackers there are today. There are hackers from a series of countries. It is an extremely difficult thing to check, impossible to check. At any rate we did not do it at the state level. Isnt it time that we all is that really important . Does it matter who hacked the data from the Campaign Headquarters of Hillary Clinton . The important thing is the content that was given to the public. There should be discussion about this. And there is no need to distract public attention from that by raising some side issue with the search for who did it. I want to tell you again i know nothing about this and on a state level russia would never have done this. And to be honest, i couldnt imagine. The Campaign Headquarters works in the interests of one, in this case mrs. Clinton so even from this point of view we couldnt have officially penetrated it. You understand to do that. You understand to do that you need to have a finger on the pulse and give the specifics of domestic policy in the u. S. M not sure thats even do you not think this is sort of a time when everyone should sort of come clean about this if russia tries to hack america, america tries to hack russia. China tries to hack america. China tries to hack russia. Everyone tries to hack each other. One of the purposes of the g20 is to come up with a new set of rules so this can become a more ordered version of Foreign Policy when everybody is doing it . Allegedly. I think that would be better not to get involved with this. She is mainly concerned with the global economy. If we have squabbles or even not squabbles but very serious issues as relate to World Politics then we were overwhelmed with the g20 agenda. Instead of working on issues of changes to the economy, taxation, and so on, in place of that well endlessly argue about Serious Problems or some other World Problems and there plenty and well talk about the middle east. It is better to find other venues and other forums. The u. N. Security council for example. Youre watching bloomberg best. Lets return to a story that sparked discussion and debate throughout the week on Bloomberg Television. The European Commission ruling that apple must pay ireland more than 14 billion in back taxes. The impact of the decision clearly extends far beyond the interest of a Single Company or a single country. Has come out and said, dont appeal. Accept the money. Why dont you just accept the money and shut up . 13 billion euros plus interest. Thats a lot of money. Because as minister for finance i have a responsibility for advising the government on these matters. This is the government that rescued irish ireland from the verge of bankruptcy from 2011 on and Foreign Direct Investment and the creation of high level jobs is fundamental to our economic policies. We stand by our economic policies and were going to protect our economic policies. Were not going to get into a situation of shortterm gain for longterm damage to the economy. What have we heard from other Tech Companies . This is as we have yesterday i think some analysts, people were saying its on the scale of one to 10, 10 being extremely damaging, the lower end about 2 to 3. The thing is ireland has 140,000 people employed by u. S. Largely Tech Companies. The risk is those jobs start to be put at risk and it ceases to be the automatic place American Companies might go if they go to europe. On the flip side if you are any other country in europe ireland is like 180 billion euros in debt from when the bavenlgs were bailed out so this 14. 5 billion will go toward paying that off. As a german citizen youre thinking why should i subsidize apple to have jobs in ireland . A lot of Companies Make use of ireland. We kind of consider it like the austin, texas, of europe. There is a Tech Community built up there. Ireland has developed favorable tax laws. You also have a big contingent of life science pharmaceutical companies in significant operations in ireland because it is a good place to be. There are favorable tax laws and also favorable treatment in how the taxation system treats these transfer pricing agreements. This is a little bit of a warning shot from the European Commission and may cause some companies to take a look at whether they negotiated maybe too sweet a deal with ireland and at corporate structures and how the overall Multi National setup is working for them. The truth is, ive located in ireland. Many companies have done that in belgium and ireland. Its just that apple has been smacked. Exactly right. They went in the early 1990s when they werent making any money. Steve jobs in pictures from the mid 1990s kept turning up there. That is the reality. Its just the legislation. It is a much wider debate about the global tax structure and whether its acceptable. Which it isnt. It is ridiculous. American companies in ireland, all over the place. Not just american. Everyone is doing it. Is this to the United Kingdoms benefit . Did the United Kingdom with brexit become the new ireland . They certainly seemed in a good position to do that. If theyre out of the eu and out of the reach of the European Commission and its tax regulators they can certainly say come on, guys. Were a much nicer place to be. We welcome your investment. We welcome the jobs. Itreas ireland is saying looks like the eu is pushing back against that. Your job is to talk to them and encourage them. Give me a sense of the scale of how big a shock wave this is causing. I think companies are taking stock but i think its the outcome of this and it is a really dangerous precedent. Foreign investment could not rely on the statutory tax basis of each Member States taxes. It would open up to the commission at any point in time. Retrofitting its very damaging. I think that is the most worrying thing from yesterday in the short term is the commission who on the one hand should be promoting job creation, Enterprise Development within the European Union that desperately needs this, on the other hand has undermined the ability to attract foreign investment. An unusual moment here. Were seeing the u. S. Saying it doesnt want to collect. Ireland saying it doesnt want to collect. The eu telling them they better do it. Does the u. S. Want the Tech Companies to be lured back to home . That is part of it. On the one hand the u. S. Like apple tim cook says it is over reach by the eu to go after this money. On the other hand part of whats going on here is clear the u. S. Is saying wait a minute. Theres almost 2 trillion in money offshore from u. S. Companies. Theyve done it deliberately to keep their process of being taxed at u. S. Rates. Now theyre thinking, hum. If the eu collects some of that money there may not be so much for us to go around. It is really putting up the pressure for the u. S. To address its Corporate Tax system. Part of that might be what people have talked about as a repatriation holiday where companies are allowed to bring some of that money back to the u. S. At a very low tax rate. We have clearly, clearly articulated our concerns and i think that the way forward with this is we continue to make clear the concerns we have. It is also important to emphasize along a parallel track weve been engaged in a constructive effort which we see as being more policy led forward in the g20. Promising way forward in the g20. Over the last year a fair amount of work has been done but on exactly this issue of how do we optimally and appropriately tax Multi National firms . And take steps to ensure that theyre paying their fair share. There will be those who say in light of that, multi lateralism is a good thing. But if one of those parties isnt doing anything, why wouldnt the European Commission just go out and do this on its own . There has to be some frustration with how glacially tax reform has been moving here in the u. S. Yes, treasury has done some things on its own but congress has not thus far. Well, we at the treasury and administration have been clear about the need for tax reform to shift incentives. As you say it takes a broader effort including congressional action to actually make that happen. I think clearly that would be the first best outcome. The statement, congressman levin of michigan wrote, in criticizing the European Commissions decision treasury and everyone else must totally avoid legitimizing the practices of multinationals in some nations rigging the tax system so the Companies Pay little or no taxes for their operations. We criticized europe but we really should look at ourselves and when we criticize europe and some of the retroactive part of what was done may be questionable. What we have to be clear we dont condone a system that allows companies to shift overseas often in name only and essentially avoid paying taxes almost anywhere. Representative levin, what are your thoughts on retroactively taxing a company because the tax benefit would go to ireland since it is already headquartered there. I think its an issue. You know, there was a deal between ireland and apple. It involved whats called technically transfer pricing. There were some real issues as to whether apple was going to end up paying a fair share of taxes anywhere. And they keep all of their profits in europe. They dont bring them back here. So the typical citizen, this is what i hear, we pay our fair share. We want multinationals to pay their fair share. And we should not say anything that condones when that doesnt happen. Representative levin, is the answer potentially a Lower Corporation tax in the United States . I think we have to lower it, but it has to be done in a responsible way. We have to do it in a way so that everybody is paying their fair share. And that isnt happening today. Apple c. E. O. Tim cook is confident the company will win the battle over taxes with the European Union. He spoke with the irish forecaster about the eu decision. Its maddening. Its disappointing. It is clear that this comes from a political place. It has no basis in fact or in law. I have faith that eventually what is just and right will occur. Is it in line with what we have from tim cook in Public Opinion . I think it is split. You have people in the streets saying hold on this is the worlds Richest Company and were trying to help them save 13 billion euros that could be used for hospitals, roads, and paying on national debt. We shouldnt really help them. On the other hand we have those who said today ireland has not got the remotest chance of getting this 13 billion euros and it should tell the commission to get lost and should help apple as much as it possibly can. So there is a big split in Public Opinion on this particular issue. Im looking at a function here that i hope will get even bigger than it is for bloomberg clients. Im looking at a function here that i hope will get even bigger than it is for bloomberg clients. Thats. This allows you to be competitive not only with colleagues at your own company but with colleagues at other companies and place gentlemens bets or gentle ladies bets i guess. I dont know the term for that. On various things. There are about 30,000 functions on the bloomberg and we always enjoy showing you our favorites on Bloomberg Television. Maybe theyll become your favorite. Here is another function youll find useful. Quic. Itll take you to our quick takes where you can get important contacts and fast insight on timely topics. Here is a quick take from this week with another angle on apple. Apple has the most cash, strongest brand, and worlds best performing Retail Stores but a recent sales take off underscores questions about whether apples Business Model can endure. Here is the situation. Apples number one seller the iphone accounted for twothirds of the companys 2015 revenue. Right now it is the biggest source of concern. Earlier this year the Company Reported its first year on year decline in Quarterly Sales in more than a decade. Now apple has been ordered to pay a record 14. 5 billion plus interest after the European Commission said ireland illegally slashed apples tax bill. Apple said it would appeal but certainly could afford to pay with more than 231 billion in cash and equivalents on hand. Heres the background. After founder steve jobs was ousted in 1995, apple stopped coming out with new hit products and was days from declaring bankruptcy when jobs returned as c. E. O. In 1997. Jobs slashed 75 of the companys existing product to focus on just four. Market share slipped below 2 in 2003. But then came a windows compatible version of apples itunes music store which turned the 2yearold ipod into a sensation. Sales ballooned from 6 billion in 2003 to more than 24 billion in 2007 for the iphone. Here is the argument. Since jobs death in 2011, c. E. O. Tim cook hasnt strayed from the one blockbuster at a time model even in a saturated phone market. The Company Shifts 1. 6 million apple watches between april and june. That was less than half as many during the same period last year according to i. D. C. Perhaps bigger Growth Potential is in services. That could be customers ever more tightly into the web of apple products. Apples longterm prospects look good enough to warren buffet. He bought out the shares worth about a billion dollars earlier this year. That was just one of the many quick takes you can find on the bloomberg. You can also find them at bloomberg. Com. Along with all the latest Business News and analysis 24 hours a day. Thatll be all for bloomberg best this week. Thanks for watching. This is bloomberg. Announcer from our studios in new york city, this is charlie rose. Charlie you are at your best when you are challenged . What would make a very invigorating and challenging race for you . Lewis the challenging races are generally when we started. Younger, we did not have the best equipment. W