Energy situation. It is all ahead on a telling chart. This is bloomberg best. Alix hello. Welcome. Im alix steel. This is bloomberg has to, a review of the most important Business News and analysis from around the world. Starting with a surprising turn in apples legal showdown with the u. S. Government. With drawing legal action against apple. This after the fbi bypassed the log on the iphone from the San Bernardino shooter without apples help. The fbi has been able to access the information it was seeking from the San Bernardino shooters iphone without the us distance of apple. It looks like there was a third arty that gave them the capability. Likely some kind of mobile forensic expert that contracted with the government in the past. It looks like the fbi is dropping the request to have apple write code to certain than to the security features in the existing software. Doing no who did it . The rumors ive seen, a company, cellebrite. An Israeli Company that works with the government on similar inuests and is savvy backdoor hacking around security features. What is your take on what it means with apples relationship with the federal government, the fbi, and the Justice Department . It will be presented as a win. What youre finding out is the product is so insecure that people are lining up to say we can provide you with access. Im not sure this works in anyones favor. It puts off a legal day of reckoning and proves that iphones are not secure in the first place. For consider it appropriate the committee to proceed cautiously in adjusting policy. Caution is warranted because of the federal fund rate is so low, ability to use Monetary Policy to respond to economic disturbances is asymmetric. Janet yellen the Economic Club of new york with what markets are interpreting as a very dovish speech. Did you feel like markets reacted appropriately to a very dovish yellen . It was surprising in the direction that it went with janet yellen doubling down on the dovishness. Tuple were thinking because the other central bankers had hadrmined what yellen initially said that she would be more hawkish. It was a surprise that it ended up being a positive. Now there might only be one rate hike, there will not be one in april. People were thinking that now is a good time to consider back to continue back in socks. Alix there seems to be some kind of divergence in the language out of the bed. What is your take . A language coming out of the fed. You getyour take . Different to like you would on any committee. But we will see Going Forward is more of a narrowing. It does seem a little too tentative. It is important to be cautious, but there is also the risk of being too tentative. Metlife, winning a big victory against the u. S. Government. The less labeled it too big to fail, that designation. To gete of four nonbanks that designation. They had been battling that designation. A court ruled that metlifes favor. There are now up by 4 . What are the implications of the ruling . It has implications beyond metlife. Metlife was one of four nonthings designated. They were the first to challenge it. Others challenge the process, but never taken it as far as a litigation. Technically, it is known as a too big to fail designation. What is the argument . He made a lot of arguments. He has had other successes in repealing doddfrank rules. He made a due process argument see thelife cannot process, that it wasnt transparent enough. Where he did get traction from the twopage order is the f stock did not properly assessment lies vulnerability to material financial distress. Saudi arabia has big plans for the climbing price of oil. A 2 trillion megapump. Editorinchief got details on house daddy arabia wants to evolve its economy. He sketched out his plans for the kingdom. He has an obsession about moving the saudi economy away from oil and basing it around something new. This 2 trillion pounds, it will go. It is enough to buy google, microsoft, the alphabet, the whole lot of them. Warren buffett. They could all go into one thing and have change to spare. Into that will go ram ramco. It is roughly twice as big as any other, more than twice as big, then any other front. The volatility on the saudi oil price and that we have concerns that they havent done structural roof Structural Reforms needed . There are now moving on to other things. It is a dramatic plan in terms of the Economic Transformation of the country. All of us were weaned on robert laceys books, they were already cover to cover. The first window into the royalty. This is a generational change. You get that tone in your interview . If it is a generational change, where they heading . His father is the king. He is the crown prince, the deputy crown prince. There is the element of a group of young performers who want to , step on the acceleration, of change. 200 15,000 jobs created in the month of march. That is more than the economists we surveyed expected by 10,000. The Unemployment Rate taking up to 5. 0 . The first increase in the Unemployment Rate since may of 2015. Make amonth does not report, but this show some of the resilience to that chair the ambiguity, she dealt with in her speech. It is a good report. We just did better than expected. Jobs are doing about the same. 200,000 plus. They are good numbers domestically. Fed,strikes me about the is that the fed is clearly countering the ecb and boj, whether it is intentional or not. Minute by minute, the dollar is weak or against both the euro and the yen. Is they are data dependent, focusing on jobs, Unemployment Rates, and wage growth yet it is global as opposed to domestic conditions s attention. Yellen i dont think the markets were confused, but clearly they are confused about where to be bullish. Economic datamore ahead. We crunch the case schiller housing numbers with Professor Robert shiller himself. Japans latest budget and how brexit fears are shaping thinking policies next on bloomberg best. To bloombergback best. I am alix steel. Signs the Real Estate Market is getting hotter. In january rose 6 of according to the schiller index. We had the perfect expert on hand to analyze them. We just broke the january casers for the s p schiller index. The home prices rose 5. 7 year on year. To some insight, who else, the cocreator of the index, robert shiller. Looking at house prices, despite what is happening globally and domestically, things are still looking ok . We are threatened by the world economy, but here is looking ok. In ang prices are going up number of places. That is a sign of our general optimism. As opposed to the general yearoveryear gains were sent in cisco, portland, and seattle. Is there a danger that we are seeing more in the shiller data it is those hubs creating bubbles and not the rest of the country is benefiting from the housing upturn . Right now we are in a mood in the world economy. Trusting technology and not trusting our hands to do labor. On the other hand, other hightech cities like boston didnt do well. It seems to be regional. It is interesting to see how much home pricing movements correlate over communities that are hundreds of miles in diameter. Governments around the world are looking to signs of string and growth. In most regions signals have the next. Economic policy was squarely in the spotlight this week. Over to japan to the world of politics and Economic Data. Releasing economic sales into spending data. A mixed bag. The figures were encouraging, and Prime Minister abe is frontloading spending. Will that help . The Economic Data was retail sales and Household Spending adjusted for leap year. They both fell. The economy is really struggling to rebound after contracting last quarter. This gets back to one of the criticisms of abenomics. Even though we have seen the yen weaken and corporate profits increase, we have not seen those benefits trickle down into the real economy. Budget and load the spend money up front to stimulate the economy. I want to increase the sales tax next year. They would do that, barring a lehman type of the. Want to increase salaries for child care workers. A big issue with getting women in the workforce is that there are not enough childcare facilities. He is reiterating a lot of things they have been speaking about for two years. Have to see if the policies allocate enough money and if the policies are effect is. To see if thee policies allocate enough money and if the policies are effective. A warning shot about the brexit. It could get ugly. Risks around the british referendum could push up foreign costs here at the boe announced it will tighten mortgage lending and move ahead with plans to require some banks to hold extra capital. The brexit risks really fit into a lot of these other risks. Risks around certain credit areas in the u. K. , mortgage lending and car finance. Riskssly, international in terms of market volatility and emerging markets. Outlookl stability since a last meeting in november, the big victories that the bank of england will become active on the credentials side. The Biggest Political Party in brazil delivering a fresh russo justsident before her impeachment. She is a very resilient and define character. There are no sign she will step down, but these things are continuing to unfold. The markets will enjoy the ride, because they see that the endgame is very close. The ultimate impeachment or resignation of president rousseff. Time that impeachment is mentioned, a rallies away. To stock market is beginning believe that a new government would reduce rates. It difficult to escape the conclusion that since the Interest Rates might come down in brazil after a long time, three years or four years in which they have almost doubled 14 ,seven percent to now morales very strong. That reigns in inflation. We saw a deceleration in inflation in february, and that has fed into the swaps market. Interest rates could come down by the end of the year to 13 . Made a Campaign Pledge to keep canadas fiscal policy down. A plan already broken by your first budget. What message does that send to investors, Foreign Investors, who you need to buy government of canada bonds . The message we want Foreign Investors to have, the same message we want canadians to have, we are focused on growth. Growth that will help canadians. Our gender is to help middleclass canadians succeed after challenging era. We want to help them in the next generation. We have made a commitment to grill in the economy, something that will make a difference to grow in the economy, something that will make a difference in the next generation. That is what we are setting up. Is it safe to say looking at the budget that you and your government believe that spending is the only way to kickstart an economy like canada at this point . Dont call it spending. We are making investments in the future of our country. There are places where the investments might look like spending, but investing in education for Indigenous People will help more people in the workforce over time. People would say that yes, we need to do things to enhance growth. Fiscal measures are a prescription for what we should be doing given the canadian situation. With a very educated workforce, to take advantage of a more Innovative Society is a positive thing for us. Alix you are watching bloomberg best. I am alix steel. Aces recall costs in disneys spreads its magic to china. Those are couple of the Major Companies in the news as we continue our review of the top business stories. Pandora shares are going down. The company ceo since 2013, Brian Mccann Andrews is out replaced by founder tim westergren. Is this a surprise . Losing his job . I dont think so. Tim coming back, more so. He hasnt run the company in more than 10 years. Being operational is not his strength. They want him to come back and an advocate for pandora. The person speaking out on its behalf to potential customers and in the record business. Telephone monopoly is expanding its reach in north america. A unit of ntp data is acquiring a portion of all systems. Why would dell sell this now . I think 10 billion is roughly the target. This would pay down some of the debt. They announce that sort of late last year. This is part of a free telegraph process by dell as they try to pay down debt. It is the hottest ticket in town in pudong. The shanghai theme park sold out. The first and is three times the size of the hong kong disneyland. Are expectedsitors to walk through the gate. Said this is as important as opening orlando. This is a big deal. It is a play on the growing burgeoning middle class in china. Disposable income, trends toward commercialism and consumerism. Disney has been there with its films, but not with its resorts, which has historically been a fantastic business for disney. The resortargue that business is better than disney, so china is a place that they have to be. The door is wide open. A pretty surprising move. A competing offer from rivals of chinas insurance. They have been very vague us to why they decided to drop out. Not a lot of details. Various Market Conditions they said, which could mean anything. I had been working with flowers and primera capital. Were offering 14 billion. We have heard from the founder of Primavera Capital in an at thet the reason end of the day, on the anbang takata shares plunged to a record low. Rising costs with the biggest recall ever. The recall an airbag inflators could the 24 billion. The market value has been cut after getting lower. Estimated 7 billion before, now it is 24 billion. This is a doomsday scenario figure. Any stretchily by of the imagination something set in stone. How much of this is in good faith, how much is a negotiation with the automakers. 24hey have to pay million they would be bankrupt. This is overwhelmed takatas balance sheet. It is something that will have to be resolved both with takata and the automakers. Takata will not be able to shoulder the cost burden itself, even if we dont get to the point of a total recall situation. smpanies like honda, takata biggest customer, toyota, nissan, but also american and german carmakers. Takata has many customers around the world and often the reef walls and will likely have to shoulder some of the burden that will be wrecked out of the course of negotiations. Finally over. Winning a big discount on the original price. The final bill coming in at 3. 5 billion and will be signed on saturday. He managed to get a big discount . The month of wrangling and pushing the deal to the breaking point wasnt for nothing. 100 billion discount on sharp they are paying . 88 per share. Was not the deal said without shards board members. Two directors out of 13 voted against it, which is an unusual sign of just. Unusual sign of dissent. Were still looking out for information. To dust begins settle, the question is, whats next . Sharp has reversed its operating profit into law spirit of operating profit into loss. Assignment challenges ahead. More layoffs on wall street. Blackrock will take 400 jobs, 3 of its workforce. Give us a sense, how big of the deal is it . It is a big deal if you look at what they have done historically. They have only done one another layoff in 2013 where they laid 300 people. If you look at the broad employee base, it is small as they have 13,000 people, but it is significant that it is happening at this time. Is it because they suspect their earnings will be down . Resounds like it is driven by market volatility, which drove them to look at their businesses to see where they would focus resources. There are estimates that revenue will be week for the next couple of quarters. Tesla unveiled its new more affordable model 3 sedan to break through to the masses. 60 . Stocks rose will the new reveal help keep the companys momentum in the fast lane . Musk can sellon cars. Can he make them . How many does he need to make . Is a good question. He hasnt talked about how many he will build. Have so many orders. They have the giga factory. He could probably meet demands. I dont know if he can sell 134000 and build them in the first year or not. But with this demand and his ability to raise money, this is probably something they can do. , can they question is make money doing it . They have been good at selling cars, but they have yet to turn a profit. Are their profarmers they give you a sense of how many he would have to make money . Theres a fixed cost across more units. It is a matter of getting battery costs down. They have been pretty good at it. Some reports suggest this will be a Profitable Program where the model s wasnt. It was sold over 100,000 and
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