Not a 3 or 4 economy. Maybe this dollar should not be as strong as it is now. Scarlet and opec has a deal to curb oil production, but they have got a good deal more to do. Were looking to do better. We are hoping to be able to get to scarlet it is all straight ahead on bloomberg best. Hello and welcome. Im scarlet fu. This is bloomberg best, your weekly review of the most important business news, analysis, and interviews from Bloomberg Television around the world. Lets start with a day by day look at the top headlines. The week began with change at the top in italy after voters rejected their Prime Ministers proposal for political reform. Italian Prime Minister matteo renzi says he would quit in the early hours of this morning after losing a referendum. He called to push constitutional changes. I think the expectation that the result of this referendum would have a disruptive impact on italy and possibly even on the eurozone were grossly exaggerated, frankly. It was not comparable to the brexit referendum or even to the vote in the united states, which were indeed signaling much more fundamental political change. What would you be asking of the new government of italy . Basically that the new government must actually continue the process of reform, no doubt. We have significant public debt. It is probably today not in such a difficult situation as in 1, because you not forget because do not forget. 50 of the debt was in the hand of international investors. It is not so huge like in 2011 , but they have to continue the process of reform. And to add a reform on the recovery, that absolutely must be completed. President elect donald trump turning up the heat on boeing. In a tweet, donald trump said boeing is building a brandnew 747 air force one for future president s. Costs are out of control. More than 4 billion. Cancel order. What might have brought this about . Why did donald trump tweet this this morning and where did this 4 billion come from . I am not sure where the 4 billion came from. Lets get this out of the way first. Where this may have come from, why this is front in mind for donald trump, could be a Washington Post article published last night that talked about 125 billion worth of administrative lets call it waste at the pentagon, which is a large portion of the defense budget, which is 600 billion. I think this is interesting. Donald trump, he is returning to some of the campaign discussion he had about getting rid of waste at the pentagon. So it will not just be boeing that will be in the crosshairs on that. There is a whole defense establishment and a lot more money and other programs that could be saved. Scarlet softbanks ceo Masayoshi Son visited the trump tower today. Donald trump has now tweeted that Masayoshi Son has agreed to invest 50 billion in the u. S. Towards businesses and 50,000 new jobs. Then he went on to make a comment about how he would never have done this if the trump ticket not won the election. We do not have the details. He pointed to deregulation as being behind this. The deregulation expected under a trump administration. But we do not really know what the whole backstory here is. He is trying to say that the act his is taking with just very election is going to create jobs and new investment in the u. S. Economy, and he is trying to show cause and effect. Mark big stories out of the Banking Sector today. The eu has find j. P. Morgan chase a total of 521 million for collusion. The e. U. Says the banks conspired to rig the arrival rate. Meanwhile, more cost cuts coming at credit suisse. Playing to cut an additional 1 billion in expenses. How may times will mr. Thiam have to adjust his turnaround plan . This is number two. Yes. He laid it out in october 2015 and came back in march with more aggressive cuts. Here again, saying the markets are not exactly cooperating with our push to increase revenue, so we are going to have to be more aggressive on the cost cuts. Mark thiam, if he has more time, will he be a burden will he be able to deliver more on cost costs than worrying about Revenue Growth . Michael i think you have some skepticism from the outset when they laid out this plan a year ago. Some analysts saying they were looking at optimistic growth assumptions here, and you are seeing the bank come back on those and walk back on those a little bit given the market environment. We also had headlines that there is a settlement in the fixing probe. How are those fines how do they measure up with what is expected . How severe are they . Michael the fines are not the biggest we have seen, but they certainly are of reasonable size. The banks have said that they may appeal these. They may fight these. Obviously, jpmorgan and credit agricole, their statement were perhaps stronger giving hsbcs fine was lower. So this may not be the end of the story. There may be some appeals. The ecb is leaving its deposit facility rate unchanged. Negative. 4 , no surprise. It is also leaving its refinancing rate unchanged at 0 . The ecb will buy 80 billion euros of assets a month until march. They will keep going until april. Then they will go at 60 billion euros until december. Alix the ecb does say if the outlook becomes less favorable, they will increase the programs and qe will run longer if needed. Is this a dovish take . Or a hawkish ease . Good question. 60 is certainly less than 80. I see this as tapering to the extent that it is open ended. Yes, there is some dovish elements to it. They have put in language in there to increase the run rate, increase the duration. If the situation deteriorates. Clearly, draghi has turned this super tank qe towards the exit by cutting the run rate down. I see it more as a hawkish move. You know, confidence on their side that they are reaching a reaching their goals. Although we look at the average inflation rates that they are forecasting to 2014. It is only 2. 5 . I really see this as backing away a little bit from their 2 target. 1. 5 is the new 2 . The ecb is said to refuse italian bank monte dei paschis request for more time to recapitalize. Shares plunged. Jonathan the question everyone asking is why . Alessandro we can imagine the ecb did not see any advantage in giving monte dei paschi more time. The recapitalization plan has been in the cards for a long time. Private investors have not stepped up. There is not a huge likelihood actually a very small likelihood someone will step in and the next 20 days, given the instability there is right now in italy. Which is very difficult if it will clear by the 20th of january. Italian officials telling bloomberg the government is finalizing a decree law for the rescue of the bank. Bondholders will be affected and the measure, shares of the bank tumbling today. The italian government, this caretaker government, if you will, is moving quite rapidly after the decision by the ecb not to grant the Bank Additional time to put together this capital increase. So they are trying to put together a decree, obviously, that would have to be approved by the italian government. That would essentially provide a rescue for the bank. We do not have a lot of details yet. We do know that obviously, bondholders of the bank are going to be affected. Presumably, the Government Strategy is to soften the potential blow for retail investors. Some of whom have claimed that they were not provided sufficient information to make their Investment Choices in the past in buying securities. We do not, however, know the mechanism that italy is going to use to try and engineer this rescue. Scarlet still ahead on bloomberg best, much more on Global Politics with developments rocking governments from austria to new zealand. Plus, markets seem to like the prospect of a donald Trump Presidency. Some prominent investors tell us how long they think the honeymoon will last. And up next, more of the weeks top business stories. Vladimir putin cuts and big oil deal with glencore. It is starting to chip away at the notion that russia is isolated. Scarlet this is bloomberg. Scarlet this is bloomberg best. I am scarlet fu. Lets continue our global tour of the weeks top business stories with yet another tweet from donald trump that struck a nerve in beijing. Donald trump has taken on china via social media, hitting back at criticism of his decision to take a phone call from the president of taiwan. He has been hitting back at china over what he sees as the devaluation of the yuan, what he sees as taxes on u. S. Imports to china and over the south china sea. U. N. Ve seen the offshore versus the dollar traded slightly lower following these tweets. The question really is whether this is more empty rhetoric from trump or whether he will be taking a more confrontational line with china. Very much the word out of beijing is he is not president yet. And also there is a sense that perhaps that he has been badly advised. They are doing everything they can to play this out. Does this show the need for president elect donald trump to nominate a secretary of state as soon as possible who can, a, advise him and, b, explain his thinking to foreign governments . John that is a very good question. I think yes on the one hand. People are keen for him to appoint a secretary of state, someone who can decode trump for the rest of the world. Then the question that comes from that is even if you did get an articulate secretary of state, the question would still be out there to what extent could you believe what the secretary of state says . You have the trade balance widening out in october, coming at 42. 6 billion. In fact, the september revision was revised slightly better at 36. 2 billion. But that trade deficit continuing to widen. There seems to be an escalation between china in the one hand and the Incoming Trump administration on the other. Yesterday, china came up more powerfully. Is this escalating . Probably not. They are probably feeling each other out like two boxers at the beginning of a match, trying to see where the others strengths and weaknesses lie. Interestingly, yesterday, we were talking about how trump had the whole idea of china manipulating currency backwards. Trying to manipulate it stronger, not weaker. Look at what happened in the trade data today. Our trade balance with china is actually lower on a yearoveryear basis. This is the first time in many years this has happened. I have a chart that shows we are starting to see the trade balance go in the other direction. And the American People have that in mind. Politically, it is a good move for him. Economically, it doesnt square with the facts right now. The stock link connecting hong kong and shenzhen finally giving direct investors access to more than 800 chinese stocks. From a Foreign Investors perspective, shenzhen is the story of growth. If we look at next years growth expectations, we are expecting the average citizen to grow about 20 , versus shanghai roughly flat. That really drives the momentum for the stock. Definitely, there is more of a small cap, which probably a foreign investor would shy away. I guess the most significant change is really the removal of the overall quota. That quota, initially, was put there because there was a pilot, and there was not a clear certainty as to whether it would work, whether it would create unintended consequences. I think the removal of the quota is really the manifestation of a great confidence that this program is going to be great, not only for investors to be able to trade freely and easily, but at the same time allow the Risk Management to work. French Drugmaker Sanofi is reportedly preparing a bid for switzerlands actelion, potentially challenging a move by by u. S. Healthcare giant Johnson Johnson to acquire europes largest biotechnology firm. Why would sanofi be stepping in now . It seemed like Johnson Johnson was far along in the process to actelion. Ian we think this is the case. We obviously report this kind of thing 10 days ago. We think those two companies are still in discussion. I think potential buyers, sanofi the most obvious, are trying to line up around the edges trying to work out, does this fall apart . Potentially does actelion say j j,have spoke with the looked at what they had to offer and it is not quite what we want, and they will see if other people want to bid. 250 is the news that Bloomberg News says that j j is going to pay. Who can pay more . What is the knockout figure . Its a good question. I dont know there is a knockout figure. There is this unusual set of circumstances where you do not know. Is it about money . Is it something completely different, like him keeping a portion of r d or him deciding that he loves the company and will keep it and no one will buy it for any price . The u. S. High court upheld an insidertrading conviction. It is a ruling that will make it easier for prosecutors to bring cases against people on wall street. Lets start with what the court decided. What were they asked to decide on and how did they rule . The issue was whether somebody can be convicted of Insider Trading when the insider, the person who provided the tip, did not get anything of value for it. Whether the insider was just giving it to a friend or relative as a gift, that was enough to support a trading conviction. The Supreme Court said yes, it is. David what does this mean for regulators and prosecutors to go after those they think are guilty of Insider Trading . It wont revive any cases where courts have thrown out convictions, such as in the newman case. But certainly, it puts the law back to where a lot of people thought it was, at least in one key aspect. It will help revive a crackdown. At ts boss defends his companys 85 billion deal for time warner. He says it will challenge cable and hasten the development of 5g networks. Stephenson testified today before a Senate Judiciary subcommittee on competition. For your constituents, we believe the benefits are substantial. David what power does the subcommittee have . They could raise issues or concerns that the regulators might get into, but the reality is this is more of a show. It is a little theater, if you will. I do not think anyone in the market really believes this is going to get blocked, despite what thencandidate trump said in october, that hes going to block this deal. Ive talked to the bankers and lawyers and the people around this deal. I talked to the investors. None of them really feel like this is going to get blocked. I would say it is a 80 , 90 likelihood it is going to go through. That is how they view this. Chinas exports rebounded in november. Demand held up. That boosted competitiveness. And surprise numbers. The one to focus on is 0. 1 . It does not sound too glamorous. That is the export number increase for november year on year. The reason it is important is it compares to a drop of 7. 3 the previous month in october. Prior to that, exports were down 10 . So that 0. 1 is looking very healthy indeed. It is a sign the Global Economy is healing. We have had a really weak period for industrial production. Of course, china stands at the center of the worlds factory system. It is a sign that things are looking better. Russia sells an 11 billion stake in its Largest Oil Producer rosneft to glencore. Vladimir putin went on national tv to tout the deal as one of the largest acquisitions in the oil and gas sector in the world in 2016. What is in it for russia . What is in it for glencore . I think in terms of glencore, what is important to remember is this is a company that was founded on this kind of trading, to some extent. In recent years, it has lost out on pole position, so this is a big signal for glencore that it now owns russian oil. Or at least the International Trading of russian oil. For russia itself, it is obviously a huge win for them in terms of getting Big International names back into the sector. It gives them an injection of Foreign Exchange to the point where they do not have to sell off the ruble. And it is starting to chip away at this notion that russia is isolated. These are really big names to have on your side. Scarlet this is bloomberg best. Im scarlet fu. Oil prices began the week at a 16month high after opec members made a deal to curb production. But the rally stalled on the report that output rose in november to record levels, as well as doubts that nonopec nations would agree to the cuts. Bloombergs yousef gamal eldin spoke to officials from several opec countries about challenges ahead in exclusive interviews at the most influential summit in abu dhabi. Yousef if Oil Prices Continue to decline, would opec act again . Minister al mazrouei i think it is premature to answer that question. We have studied the level of production cuts needed for the market recovery. I think it will be enough to achieve the market balance. If we remove the 1. 8 Million Barrels per day, i dont think the market will stay at the lows of the average of the 2016. If we truly achieve the 1. 8 Million Barrels. Yousef are you confident russia is going to deliver its part of the promise . Minister al mazrouei we are very confident. Yousef if you look at the track record, it has not been very accurate. Minister al mazrouei i think, historically, we have not done what we have done. So opecs position to lead the market first, to balance. And then react when the market is about to balance. This is also a new phenomenon. So i think were looking at a new world. We are looking at a new dynamic. Yousef this is a scenario that you probably dont really want to have to deal with. You make this move, take oil out of the system, demand is weaker, shale recovers faster, oil price comes back down. Does opec flex its muscle even further and followup with further cuts . Minister ibe kachikwu it is hard to predict. We are looking at six months outlook position. Lets see what happens. Nothing too dramatic is going to happen in six months. Yousef have you seen what has happened in november . Minister ibe kachikwu but tha