Transcripts For BLOOMBERG Bloomberg Best 20160924 : vimarsan

Us is 10 times what it is now. Plus, wells wells fargo under fire, samsung under pleasure, and the Transpacific Partnership under a microscope. Tpp is not the answer. Global trade will go on , whether we are participating or not. Its up to the United States to lead. Its all straight ahead on bloomberg best. Hello and welcome. I am angie lau. This is bloomberg best. Your weekly review of the most important business reviews from Bloomberg Television around the world. The week began with ageold as with a jolt as the u. S. Government officials investigated weekend bombings in new york and new jersey. An arrest on monday answered some questions and raised others still. A man identified as a suspect in planting bombs in manhattan and new jersey was captured today following a shootout with police. The weekend attack has put terror back on the front burner for the president ial campaign. You can see theyre a live shot of donald trump in fort myers, florida. My question to you is that the bombings seem to play right into his hands, giving his rhetoric on closing down borders and kicking muslims out of the country. Do we presume he makes hay out of this the next few weeks and drop issues like Economic Policy down by the wayside . I think so. I think this will be the single most important thing they will talk about on the campaign trail the next few days. It becomes about who can drop the the most, most bombs, and who can offer the most aggressive and fierce response, than donald trump will have a leg up, but if its about can have the most measured response and who has the experience and background to not overreach, than Hillary Clinton has a leg up. Matt breaking news on wells fargo, the ceo just finished taking questions the Senate Banking committee moments ago. Struggling to calm outrage in congress after the banks employees openly authorized accounts for its customers that the customers in many cases did not know about or did not want. What was it like a that room . Erik of all the hearings i have attended, and i have attended a lot featuring ceos that was the , most merciless beatdown of a hearing i can imagine. They gave john stumpf no quarter. They turned him into a pinata. That is a word that comes to mind. John stumpf rejected the accusation that this was a scam, that it was widespread and systemic. He said it only affected 1 of the wells fargo 268,000odd employees. That did not really go very far with the senators, who kept coming back to the fact that it was some 500 employees who have been fired, with some 2 million accounts. And the senator from montana, he directly toat to him you have done something that has not happened in 10 years in uniting this committee and not in a good way. What is your biggest take away from mr. Stumpf . My biggest questions is when did this start . Did it start in 2011 . Is it widespread with other big banks . I hope it is not, but its very indicative of some of the things that have gone on with some of the biggest banks in the country. A lot of people just do not trust. Angie their boj has shifted its focus to controlling the base. Governorcorona kuroda said the base target which they previously faced may now fluctuate in the short term. Talk us through the details of have been announced by the people in the room behind you. As far as the expansion of stimulus is concerned were talking the two main levers negative rates and expansion of the Asset Purchase Program they basically kept those things unchanged. They kept the policy rate at 10 basis points. But the key take away from what they did was the refocusing. Their main focus now is on the yield curve. They dont want the yield curve to flatten. As far as the boj is concerned, they have said a flat yield curve is very bad for the economy. They said they have given up this idea of a time frame of inflation. they have lost credibility, so they are waving the white flag. They are talking that taking enough measures to make sure they overshoot 2 , assuming that was once a central bank thinking. That is only going to undermine credibility around the boj. It has been a day of mixed signals and disappointment that the boj has not taken new steps to keep the economy ticking over. It is more of a pat on the back for themselves that things are going smoothly. Thereally, poor lending at half. Scarlet Erik Schatzker is standing by as get closer to the announcement. Erik no change in Interest Rates, no change, but a strong suggestion that there will be a quarterpoint hike before the end of the year. You can see it, of course, in the dots. 14 of 17 fed officials expect to and 2016 with a benchmark rate of at least 50 points for the First Time Since december of 2014. We are talking about almost two years. Three policymakers dissented three, from the majority. Mester,engren, loretta and another voted to raise Interest Rates to half a point at the meeting. Matt did you think we got what we expected . I think the major breaking news is definitely the dissents. For a long time, we have been interpreting all kinds of fed speak. Some have moved in one direction and some in another, but at the end of the day, the vote matters. Matt but didnt we know that . They each had given a speech in the past few weeks indicating thats what would happen. Torsten previously, we have had speeches where they have not dissented. Now the fact they are voting for this makes a huge difference, and it sets us up for expectations in the future because part of the committee has it i have been loyal, but now i feel its time to go, and i think its an Important Development that we should Pay Attention to. Matt Hedge Fund Manager leon cooperman is being accused of Insider Trading by u. S. Regulators. Over his buying and selling of Atlas Pipeline Partners shares before material event. The sec is charging that he used his status as one of the largest shareholders in the company to get access to confidential information about those events. For his part, he disagrees with the sec, saying he is not engaged in any unlawful conduct. The sec alleged that mr. Cooperman and omega had inside information from Company Executives inside a Company Called Atlas Pipeline Partners. An oil and gas producer. The charges relate to trades around 2010, particularly the summer of 2010. And they say the hedge fund had information ahead of time that atlas was going to sell an asset in july. When that sale happened, the stock jumped about 30 . Matt how bad can this be . Bringsly when the sec charges, you end up with a fine. Maybe you cannot trade for a year. Leon said he can settle for less than he gives to charity every year. For him, this is about his reputation, which is sterling and massive in the industry historically. He is going to fight it all the way. Vonnie breaking news out of the eurozone. Manufacturing pmi is better than expected and services pmi is worse than expected and its also a fall. Services pmi falling to 52. 1. Manufacturing actually better than expected. That means we may see a little bit of strength in germany. We did have some contrasting, to say the least data over the last , couple of weeks. Mark when you look at the comp was it services and manufacturing, we are at a 20 month low. Does that tell us we need more stimulus from the ecb . The big reason was germany. The Service Sector there barely eking out any growth. In many ways, this is disappointing. If you are the ecb and started your qe program, march 2015, you would be hoping it had a very big effect. It did not have a very big effect. Well he did, but now it does not. The number we had today was skewed lower by germany. The Services Sector not performing. The outlook for the germany Manufacturing Sector is better. But taken in the round, you are looking at a number of 52. 6. That is the lowest number since qe was announced in january of 2015. We have been having a conversation about whether or not Monetary Policy is able to deliver from here on in. I think today, maple we have some data that suggest the eurozone is not reacting the way it once did. The ecb is getting less bang for its buck. This points to a q3 gdp print of around angie later in the. 3. Program, we will have more reaction to the bank of japan and policy decisions. Plus, conversations with president s. World leaders tell bloomberg how they plan to turn their countries around. This is bloomberg. Angie this is bloomberg best. I am angie lau. Lets continue our global tour of the weeks top business stories. In china, where official attempts to cool down the redhot Property Market does not seem to have an effect. August proved to be a bumper month for china. Property sales the value of homes jumped 33 last month. If you look at it and you lies, 62. 4 shanghai house prices on the way up. That is more than a bubble. It is pretty staggering. And if you look across the board, the statistics board in those, 74oks at, of saw price rises. That compares to 51 in july. If you break it down, some of the best cities where you have seen policymakers put in place policies to help try to cool the property figures. For example, making it harder. Yet the putdown more of a deposit. On the other side, the conundrum china faces. The third and fourth tier cities where there is a surplus of apartments, and policymakers there are under pressure to offload those. Prices remained flat, if not falling, so this conundrum continues. We heard from a chief economist from the pboc, who said they will take action to tackle the bubbling Property Market. Alix allergan is making a purchase. Take a look at that rally in tobria shares. Up over 670 . The premium is what is writing. The premium rate almost 500 . If all the goals for tobria is met it could be much as 1500 , premium. Right. This is a really big market opportunity. That is what allergan is going after. They have a gastrointestinal enterprise, but this would build it out to a large opportunity. This is a bigger opportunity then have the slightest that hepatitis c, which is huge in the news. Its a Fatty Liver Disease thats not caused by alcohol but more on the genetics side. Its a huge opportunity and a huge cause of liver transplants. Allegan a setting themselves up , and the deal is structured right. They are paying 1 3 now and 2 3 later it successful. Samsung is trying to distance itself from problems with the note 7 in the crucial chinese market. We have heard reports of smartphones in china, but samsung saying dont blame the batteries . The batteries used in the samsung note 7 on sale in china is a Different Company than those we use in the worldwide recall. Excluding china from south korea to the u. S. Those batteries, which we know have overheated, were made by samsung fdi, an affiliate of samsung. But in china, they used another company. They have done a proven investigation of overheating in china, and found it does not have anything to do with the battery. This is a crucial win for samsung in the crucial chinese market. It is the Worlds Largest smartphone market. They are trying to push ahead and make sure they maintain market share over apple. But as a precaution, they will recall close to 2,000 samsung note 7s in china for presale. Angie hanjan shipping shares up to 30 south korea after its largest shareholder, korea air, signed off on an emergency loan of 54 million. The question is is this a bandaid solution or have they woes ofe cure to the hanjin shipping . Unfortunately, no. They have not. This will be a temporary relief for hanjin, because they have been incurring so much cost from these vessels that have not been returned. It will help them briefly from compiling more debt than they need now. But it will only be temporary. The fundamental issue will be what the Court Decides and what sort of revival plan the hanin hanjin management comes up with. We will only know when they submit that. Transport giant mirsky is splitting into two. It will split its shipping and energy into two separate companies. The worlds biggest Container Shipping Company has been suffering due to low freight rates and a 60 drop in crude oil over the last couple of years. How much value does this unlock . Lets say 10 . 1000 at 1500 per share. Francine how do you analyze the companys . Do you look more at macro environments to suggest the health of the Company Going forward . Or is this an individual Company Story . It is a macro story going forward, of course, and an individual story going to the energy side. Fun mentally its about the , container market. We are seeing quite a significant improvement through a wave of consolidation. There is a lot of scrapping going on. No new orders coming in. Moeller is true in the next 18 months. That would put a significant lift earnings in the maersk line. Alix oil was declining 1 . They moved positively. The saudis offered to cut oil output if iran freezes in their output. This is a five day chart of what has happened to oil. What is it about . As the opec meeting monday . Is it about the fed or the dollar . Is it a risk on rally . I think the oil prices this week benefited from the fed. And some stats we got from the department of energy showing crude oil dropped again a second consecutive week. But i think oil caught a break. The next big thing coming up is a producer meeting in algiers. And an official opec meeting in vienna in november. It is no sweat off the saudis back to say they will cut production, because their production seasonally declines. The real issue is whether iran will freeze production at 6 Million Barrels per day. Angie welcome back to bloomberg best. I am angie lau. Political leaders from around the world gathered at the United Nations General Assembly this week, and several heads of state to time to speak with Bloomberg Television. Brazil and turkey are both dealing with political controversy and economic challenges. Here are our highlights with the conversations with their president s. Mr. President , how long is it going to take to close the budget deficit . How many years . Because i think it has to be years. Before brazil has a primary surplus. Pres. Temer thats true. We took office and inherited a 750 brazilian reals. We have established measures to reduce the deficit to 130 billion brazilian reals. In we will still have to live 2018, with a small deficit. But all of that is the result of fiscal policy aimed at lowering inflation. Theres also a trend that we will reach the center of inflation target, which is 4. 5 next year. And as i said before, we also want to create many jobs. I confirm what you just stated. It could be two or three years before we totally eliminate the deficit. But i must say that some time ago, i got this very telling research finding indicating that if we had had spending that we had four years ago, we wouldve had no deficit now. Erik the support you relied on impeachment is fragile, as we say shall we say. The brazilian people themselves are not in love with the idea of austerity. How do you maintain the momentum with the bold reforms you have announced over the past four months is interim president , the very same reforms domestic Business People and Foreign Investors are counting on to revive the economy . How do you maintain that momentum . Pres. Temer we are totally changing the Business Climate in the country. Furthermore, may i stiffly the record that there has been a tremendous resumption of confidence and trust. First, we were able to reestablish hope, and now we are managing to reestablish trust, which will trigger an inflow of more investments. Of course there is some degree , of resistance to innovation, at times. It all depends, a certain extent, on the way we are able to communicate or the way we are able to properly explain the reforms. At this point in time, we already see brazilians and the brazilian population beginning to understand that these reforms are key and essential recovery and resume hope and trust in the country. Earlier today, the Central Bank Cut Interest Rates. Are you happier with the current level of Interest Rates . I see the Central Bank Cuts as a steady, careful, and balanced cut. Because it is not right to make sudden moves up or down that could contain some violence that could create a tremor in the economy. But i believe it will be beneficial to continue this steadily. Right now, the new administration of the central bank, since they took office, they have been carrying out cuts and taking into consideration the Interest Rate policies of the government. I think this is an important signal, especially investors. My hope is that the other banks will take this signal that the central bank has given, that they also heeded and opened the way for investors. You remove investment in the country if you raise the Interest Rate. In a country where there is no investments, we cannot talk about development. We can only talk about development in a country where there is investment. We have been pushing this issue, but we still have not seen the speed and stability in investments we wish to see. If interest were low, investors get would credit immediately and start to invest. When Interest Rates are high, they cannot invest. Right now, despite this, our investors are making investments. I say lets look at am