Disillusioned about the future. The eurozone may not survive. The most important influence in the world right now is populism. Erik it is straight ahead on bloomberg best. Hello, im Erik Schatzker. Welcome to davos and welcome to bloomberg best. Your weekly roundup of the most important Business News, analysis and interviews from Bloomberg Television around the world. Here at the World Economic forum, we had the chance to discuss the weeks biggest stories with some of the worlds finest minds. Lets take a day by day look at the top headlines. 2017 is starting out as the year of geopolitics, led by brexit and the Incoming Trump administration. But no single country is likely to have more effect on the Global Economy than china. Earlier this morning, their president spoke for the first time at davos. Nobody will emerge as a winner in a trade war. I saw the president of chinas speech as a major message. It is a message that says, lets recognize the fact that we are mutually interdependent. That we therefore need to communicate using the same language. There are gains from trade. Sterling rallying today after Prime Minister theresa may gave her most explicit vision yet for brexit. May vowed to seek a smooth and orderly brexit, but remains committed to honoring the will of the voters. Prime minister may i can confirm today that the government will put the final deal to a vote in both houses of parliament before it comes into form. I think there are two things britain needs to do. I think it is pretty clear that the european relationship will declined of will be kind of status quo minus. It wont be as good as it was. I think they can negotiate many things. It is also important for britain to step aside and renegotiate the rest of the world. Their relationships on trading and Financial Services. Theresa may made it very clear, brian, that it will be a hard brexit for britain. Provided, of course, she gets that parliamentarian approval. What is be of a going to do in england if that is the case . 5000 people there . Everybody thinks you pick up a mobile home and move it across. But these are real peoples lives and real things. The idea is, everybody keep calm and work out a transition plan. Citigroup and Goldman Sachs wrapping up wall streets Big Bank Earnings this morning, both Companies Reporting results that beat analyst estimates. Goldman sachs has seen some some stabilization, seeing some optics after a year of very steep declines. That uptick is a very key focus for investors. Erik here we are, 2017, the crisis is ancient history, and Goldman Sachs is so much more profitable than morgan stanley. In the fourth quarter, 11. 4 , roe for Goldman Sachs morgan , stanley is at 8. 7 . It is called Interest Rates. Goldman sachs basically has been a massive beneficiary of the Quantitative Easing Program because there has been a massive shift in fixed income trading. People have been buying bonds for the last four years because rates went from 12 to 1 . The last 40 years, you lost money three out of four times buying bonds. And as they have one of the highest market shares, they have benefited. Rates unchanged from the ecb at 0 on the resting rate. The marginal Lending Facility maintained at 25 basis points. The depot rate maintained at 40 basis points. The Asset Purchase Program cap 80 billion euros a month at least through march. After that in april, it will drop down from billion to 60 80 billion euros a month. And it will carry that through to the rest of 2017. You can see the main concern for germans right now is inflation. European inflation jumped up in december, but german inflation shot up 1. 7 , double the rate it had been the month before. Germans historically dont really like inflation. It is a concern for the biggest economy in the eu. We will suffer some political problems in explaining to the german audience that the inflation rate is likely to raise in germany up to 2 . With zero Interest Rate, we will get some political problems, but we well try to explain to our voters and to our public, any decision has some advantages and disadvantages. Steven mnuchin on capitol hill today in his bid to become the next treasury secretary. The former Goldman Sachs executive told senators at his confirmation hearing that he will be an attentive steward of the post. I am committed to be very responsible in my position there and make sure that i properly provide the support from the treasury department. And i would take my responsibility very seriously. The conventional wisdom is that it is going to be great for Goldman Sachs to have so much of the firms dna in the white house. Is that a safe bet that it is good for Goldman Sachs . Or would you take the other side . I think it is terrific to have a bunch of pragmatic Business People participate in the process in washington, but all of those people will be very focused on their reputations and their businesses, so we will see how that balances out. I think that this administration, as all administrations, is going to be focused on growth. To the degree that the people working in the administration can think and practical raise about how to accelerate growth, which provides opportunities and jobs across the opportunity, that is a good thing and in that environment, Goldman Sachs will benefit. I, Donald John Trump, do solemnly swear. President trump i Donald John Trump do solemnly swear. That i will faithfully execute. President trump that i will faithfully execute. The office of president of the United States. President trump the office of president of the United States. And will, to the best of my ability. President trump and will, to the best of my ability. Preserve, protect, and defend. President trump preserve, protect, and defend. The constitution of the United States. President trump the constitution of the United States. So help me god. President trump so help me god. Congratulations, mr. President. Erik donald trump now officially president of the United States. Of course, he was the focus of much discussion throughout the week in davos. Plenty of trump talk coming up. And up next, the latest words on brexit, straight from Prime Minister theresa may. Prime minister may we want to be free traders and trade around the world, but we want to make sure that markets are working properly. Erik this is bloomberg. Erik welcome back to bloomberg best. Im Erik Schatzker in davos, site of the World EconomicForum Annual Meeting. Britains exit from the European Union is perhaps the most pressing unresolved issue facing Global Business today. U. K. Prime minister theresa may is developing a plan to start resolving it. She spoke this week with our bloomberg editor in chief john micklethwait. To build a truly global britain, or britain that is an advocate for free trade, free markets around the world, and a britain that is ensuring we are taking those opportunities. I want to negotiate a good Free Trade Agreement with the European Union when we come out. I want the best possible access for trading with and operating within the european Single Markets, both goods and services. I Value Financial Services in the city of london and i want to ensure that we can keep that in the city of london and global britain, i believe will do just that. You do not think that Financial Services deserves a bit more priority given the value to the british economy . P. M. May of course, the services that fit around the banks and Asset Management companies as well are important to us. But as we look ahead to the britain of the future, the global britain, britain outside the European Union, i want to make sure we have a good relationship, that Good Partnership with the eu. That we have negotiated a Free Trade Agreement, which i believe will work for the u. K. But also for the European Union, that will ensure that stability and jobs and austerity in the u. K. John you dont see a contradiction between being free trade on one hand and on the other, wanting to intervene in different markets . Do you not see a contradiction between those two things . P. M. May what i have talked about specifically is the National Security aspect, but i dont see a contradiction between saying that we want to be free traders and also want to make sure that markets are working properly. I think thats what gives people the confidence in globalization , which 70 has been eroding. On confidence, the pound has gone down by 1 5 and you seem to be fairly relaxed with that, if i can put it that way. I wonder, is there a level where it gets to parity with the dollar where you really begin to worry about the pound . P. M. May we have seen different movements in the pound over the past six months. But what we have also seen in the Economic Data is the strength of the u. K. Economy. The imf has made the point last year that we were the fastestgrowing major economy. Fastestgrowing major economy. Only this week, we had figures that showed unemployment coming down once again. So we do see a fundamental strength in the u. K. Economy. John you put forward this version of britain that is free trading, singapore on the thames. I look across the atlantic and i thedonald trump, who on face of it takes a protectionist attitude towards trade. What do you say to him on that . If we look around the world generally, there is a question about free trade. It has been questioned. It goes back to what i was saying earlier, about the people, sometimes they feel that globalization has been negative and has left them behind. Thats why think its important for us to go out and give that message and show responsible behavior by business, that government is taking the right moves to ensure that the economy works for everyone. But also, show people the value of free trade. It is free trade, trading around the world, enterprise, the engine of growth, the engine of our economy. Erik global bankers are bracing for brexit. Jpmorgan Ceo Jamie Dimon has been very frank about the potential negative impact of the split. Not just for his business, but for the Global Economy. He also sat down with john micklethwait. She has made it very clear that she is prioritizing immigration over the Single Market and does not want to give a particularly special deal for Financial Services. You are a global bank based in london. You hire a lot of nonbritish people to work there. Shortly, generally, britain is heading in the wrong direction for jpmorgan and other banks. One of the things, not just with banks london is a fabulous Financial Center, huge economies of scale that include the people of europe. It is passed on to the customer. When they change the rules, move some of the people, yes, it will reduce my the jobs there. The brits will decide how we want to compete around the world. Its not up to me, its up to the Prime Minister and the parliament, at this point. It looks like there will be more job movement then we would hope for. John coming back to new york as opposed to jamie dimon we dont know yet. It depends on the equivalency and the requirements. The eu can put in rules which requires some of the jobs to move in to the eu. Or they could be a little more flexible and allow equivalency between the u. S. And europe, so it really depends. Remember, it is 27 nations. This negotiation will take quite a while. John another election coming up this year, france. Have you factored in the possibility of a le pen presidency and what it will do to the European Union . Is that one of the worries you have . Things i worried about brexit was not just the effect on britain, the gdp in the u. K. , etc. It was really what it says about the longterm of health of europe. The wishful thinking, which i was a little bit, was that brexit would cause the European Union to look at what went wrong and fix it. Because what went wrong is going wrong for everybody, not just britain. But in some ways, it looks like they are kind of doubling down. John europe is not fixing its problems in response to brexit. You have the same political things about immigration, who controls the laws of the country, how much power goes to brussels, how much flexibility you will have. Im still hoping they do it. But if you have a le pen presidency, the eurozone may not survive. That is a very complex thing. John that is a testament sick that is a pessimistic view of europe. It is a longterm pessimistic view of europe. John unless they change. Unless they change. Things will have to change. They have to more competitive globally. They are doing ok right now. They are doing 1 plus, which is ok. I say this out of respect for the european people, but they are going to have to change. It may be forced by politics or new leadership. We will have to see. Erik more of the weeks conversations from davos coming up. Donald trump has been talking tough on china. Should the world worry about a trade war . Multiplying things that get said to create enormous anxiety , is, i think, a little overdone. Erik this is bloomberg. Erik you are watching bloomberg best. Im Erik Schatzker. Donald trump did not appear in davos this week, but his presence was certainly felt. Here is a tape of the conversation about trump, starting with trump advisor anthony scaramucci, who sold his stake in sky Bridge Capital to join the white house, and came here to speak on behalf of the new administration. That there is one message you want to convey on behalf of the president elect to this gathering right here. What is it . It is a really basic message. The administration obviously wants peace and global prosperity, but one of the paths for that is to help workingclass families and middleclass families of the United States. What i want to explain is that if we can come up with the policies to see real wage growth, in the United States, that be is going to be great for the world because the purchasing power would filter back into the world and lead to more global growth. In a lot of ways, President Trump represents a hope for globalism. If you can fix and cure the wage situation in the United States, it will lead to more global demand. Erik what is the question you keep getting about donald trump that you are trying to answer . I think he has a very interesting communication style. The more you get to know him and the more time you spend with him, you recognize what he is doing and you understand his communication style. Erik its not working for these folks . Usedthink these folks are to a certain type of buttoned up, politically correct presentation style. Clinically correct is the wrong word, but it is more synthesized to be inert. The president is designed to say things that are inert that will not cause an issue. I think he has a much more authentic, refreshing delivery system, and i think people will start to appreciate that more once he is president. Erik of all the things donald trump has promised to do, i would like to know which of them specifically is of interest or concern to you and carlyle. And i want to start with the deductibility of interest expense. Something you have to be thinking about, running a private equity firm. I view myself first as an american citizen, and i am more worried about the country and those issue then what affects carlisle. I am not worried particularly about anything he said, but i dont look at things only from the perspective of carlisle. From a carlisle perspective, we want higher growth. He said he will produce higher growth. Clearly, we would like some tax relief in the corporate world , and he said he would produce that. We think less regulations would be good, he said he would produce that. As i know from working in government, saying youre going to do things and getting them done are different things. The congress and the united the congress of the United States really takes care of tax legislation. It takes a long time to get it done. I suspect it will take nine or 10 months and we dont know what its going to be like. There will be some uncertainty for a while. Will he spur animal spirits . I think he already has. If you talk to u. S. Chief executives, they are bullish. And i am bullish on the u. S. Economy, but not for a long period of time. I would guess the next two or three years, maybe before the next election, if donald trump seeks reelection. It will be quite a difficult picture, because