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tv   Bloomberg Best  Bloomberg  August 12, 2017 8:00am-9:00am EDT

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♪ >> coming up on "bloomberg best", the stories that shaped the week in business around the world. heated rhetoric between the united states and north korea sending a chill through the markets. president trump: they will be met with fire and fury, like the world has never seen. >> the rhetoric continues to ratchet up almost by the hour. >> south africa's president of dividing a political challenge, and china's tourism boom spurs a surprising partnership. >> the marriage of online to online, or online to off-line. >> sheryl sandberg saying that facebook is committed to using its power for good. >> we are not perfect. with so many people posting to facebook, we make mistakes.
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financeds' -- france's minister sees banks flocking to paris after brexit. >> we will win the race, of attractiveness. >> james bullard explains why he wants right to stay on hold. >> i think we have a ways to go in inflation. >> and we sort the earnings reports. >> the results are underpinned by strong strategy. >> we would like to move away from talking about just pricing, it is about volume. >> we obviously have the great brands to be able to reach consumers directly. it is a combination of trends, technology and consumer trends. >> it is all straight ahead on "bloomberg best". ♪ rishaad: hello, welcome. i am rishaad salamat and this is "bloomberg best," your weekly review of the most important business news, analysis and interviews on bloomberg television around the world. geopolitical tensions dominated
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the news this week, starting with a pointed exchange of diplomatic signals on monday. >> china says that it is confident that the new u.n. sanctions on north korea will bring the reclusive state back to the negotiating table. the issue was discussed front and center at the foreign ministers meeting in manila and t the weekend. how realistic is it to expect that we will get new talks and this will draw pyongyang back to the table? >> china came up with a pretty strong response in china, and says that it is confident that the sanctions will put a stop to the nuclear weapons program in north korea, but it also cautions that this could take that tension a step further, taking it to a critical phase. it said what is important to realize that sanctions are not the end goal, that the denuclearization of the korean peninsula must come through negotiations.
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talks are essential. >> there was a statement out from the north korean government today "we will not, under no circumstances put our nuclear program or rockets on the negotiation table and will continue to bolster our forces ." nuclear forces >> if you take north korea's statement on faith, it is is important to get back to the negotiating table before they get to the point where they can deliver a nuclear warhead to the united states. secretary of state tillerson said on his trip in southeast asia that it would be helpful if north korea reduced the pace, slowed down its nuclear test. it is hard to see that happening, given that this is really north korea's primary goal, to develop this missile system, then be able to force people to the table. >> the dow has hit 35 record highs this year, but is it still
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too good to be true? many renowned investors believe so. >> now, joining the ranks is the double-blind capital -- double line capital ceo, saying that this is not a time where you can say you can buy anything and not worry about the risks, the time to do that was a 18 months ago. >> jeffrey wants everyone to know, it is not that the market is about to crash, it is that things have risen so far, so fast, that trees do not grow to the sky, it just cannot continue. he does not see a recession, but valuations are so rich, that something has to happen at some point. >> i think that the driver of the markets right now, is the synchronized global recovery, and the fact that inflation and therefore policy remains subdued. as long as that is the case, the likelihood that we will see the end of the cycle, which is what they are predicting, i don't
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think it is likely. i think this will be the longest business cycle, and therefore the longest credit cycle that any of us have ever experienced. and it does not end in 2017 and i don't think in 2018 either. >> i am nervous about the markets are super complacent and good downshifting correlation has facilitated that. but i do not think that story has any farther to run. i think all relations have hit bottom now. i am really nervous about what might happen over the fall or the winter when we finally start to see a re-acceleration in wages, which will raise some questions about the stability of margins, and where our earnings go next year. ♪ >> u.s. stocks closing lower, turning negative in the last 30 minutes of trading following donald trump's remarks on north korea. president trump: north korea best not make any more threats to the united states. they will be met with fire and fury, like the world has never seen. >> the north koreans are famous for this sort of rhetoric, and
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president trump seems to be willing to match them one for one. the worry is that we really do not understand how the north koreans interpret things like this. this could only probably escalate tensions between the two countries. >> the north korean news agency, kcma says that they would start -- strike the u.s. territory of guam. >> the question is how much closer are we to war? there are no signs on the ground that a military buildup is occurring or an attack is imminent. this kind of rhetoric is just that, for the moment, rhetoric. ♪ >> president trump threats against north korea sent stocks lower for a second straight day and he continued his rhetoric this morning, with the president tweeting: "my first order as president was to renovate and modernize our nuclear arsenal . it is now much stronger and more powerful than it ever was before. hopefully we will never have to
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use this power, but there will never be a time that we are not the most powerful nation in the world." >> rex tillerson seemed to dial back some of the president's comments, he did support the president, of course, as you would expect from a cabinet member, but he also said that the president spoke bluntly because in the past, kim jong-un has not responded to the niceties of diplomatic language has been used. the military option, secretary mattis said today when he arrived in seattle, but all the scenarios around wargames with north korea are grim particularly for the people of south korea. ♪ >> japan and south korea are warning the north that it would face a strong response if it carries out a threat to launch missiles towards the u.s. territory of guam. >> north korea was reacting to trump's "fire and fury" comment and they basically called it "nonsense." they reiterated their plans to launch missiles, four of them
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specifically, they got into incredible detail as to where exactly they would launch them, what flight path they would take, and basically landing about 30 or 40 kilometers from guam. of course, this is a very challenging thing for south korea, because they would literally fly right across the south korean sea, and across the southern parts of japan. and of course, japan responded by saying that when it does, they will have the legal means to shoot it down. so, the rhetoric continues to ratchet up almost by the hour. president trump: if north korea does anything in terms of thinking about attack, of anybody that we love or we represent, or our allies were -- or us, they can be very nervous. i will tell you what, they should be very nervous. because things will happen to
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them, like they never thought possible. >> it is a situation that is probably the most serious one we had, the u.s., with another country since the cuban missile crisis, back in the early 1960's. >> inflation has been the word of the week for the federal reserve, maybe for the month, maybe the word of the year and this morning, we got the latest read with u.s. inflation in july, coming in at the top of -- nominal line. >> we had factors that people are pointing to that as the excuse that the federal will be looking at those. two of them, lodging away from, hotels are down 4.2%, a little unusual for this time of the year. used cars and trucks were down .5%, new cars were as well and are those transitory one-off factors? yes. the problem for the fed, is that it has been continuing a transitory one-off price, and it appears that companies are still
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without pricing pressure. >> we have to step back and not be too cuteannot with carving out means and just look at what is happening here. we're seeing an inflation slow down. ♪ rishaad: still ahead as we review the week on bloomberg best, we dive into a torrent of earning reports and hear from bob iger on disney's new streaming technology. sheryl sandberg says that facebook recognizes its very serious responsibilities, and australia's trade minister insists that tpp can still work without the united states. up next, more of the week's top business headlines. a controversial memo making waves in silicon valley. >> our lack of ideological diversity has actually hurt our product. rishaad: this is bloomberg. ♪
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♪ rishaad: this is "bloomberg west," i am rishaad salamat. let's continue our global tour of the week's top business stories with a double dose of economic data from china. >> china's exports moderated in july with exports rising 7.2% in dollar terms, adding to the uncertainty that the possibility of a trade route with the u.s., as president trump continues to talk tough. imports, exports, they all missed estimates on dollar terms. they are so much lower than we had expected. so what is going on here? >> quite a big miss compared to estimates, as you say. a 7.2% increase in exports in the month of july, compared to that forecast of an 11% increase. imports falling more while they increased, but below estimates
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11% in the month of july, below estimates of an 18% increase. the other point to point out is that the trade surplus came in at around $47 billion. >> the trade china has with the u.s. has not budged all year, despite the rhetoric. despite all expectations. beseems that trade war might pushed back a little bit further, because of the big development that we had over the weekend with the security council and the u.n. agreeing to sanctions on north korea. with china supporting the sanctions, president trump might step back and see how it goes. but the back drop of the trade deficit means that the trade tensions have not gone away, they are just delaying the inevitable for now. so it is a risk that hasn't totally disappeared. >> china producing consumer prices in july to just over half an hour ago, a little bit below expectations, upi up in july,
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-- ppi up in july, 5.5%. the cpi, 1.4%, slightly below the consensus estimate. what is it telling us? >> it is telling us inflation is not the consideration of the pboc right now, you have food inflation going backwards, -- down about 1.1%. >> the bloomberg one, is showing half a percentage estimate higher, right? >> exactly. consumer goods coming off the boil as well. they are rising 2% from a year earlier, so that is coming down as well. so, inflation is continuing to give the pboc room to prioritize other topics like de-leveraging and some of these drive-through -- drive to rein in in some of the financial risk out there. on the ppi side, things are holding a far better than economists thought they would, at 5.5%. ♪ >> south african president jacob zuma, beat back a no-confidence vote that was held in secret today.
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the south african rand slumping as much as 1% against the dollar after the decision was -- outcome was announced. >> the lawmakers from the anc rallied and closed ranks to outvote the opposition party, and a motion of no-confidence. the motion was defeated by 198 votes to 177, nine of the 384, lawmakers present in the national assembly on tuesday, opted to abstain from the ballot. markets not really reacting positively to the news that jacob zuma will still be president for the next four months to five months in the very short-term. we know that the african national congress will be going to elect a new leader in december, which may mean that he may be asked to step down from status phase after a new leader is brought in in december. >> google has fired the male engineer who was at the center of an uproar in silicon valley.
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this after he authored a n internal 10-page memo asserting that there are biological causes behind gender inequality in the tech industry. critics of the move say that it is censorship, and encourages employees to file complaints. how do you describe the firestorm? >> i would say that there are two major camps of people who think that the memo was not arguably -- it was hurtful, offensive and it did not belong at google and that he should have been fired. and then people who see that google firing him for speaking up about saying that conservative or unpopular viewpoints are not accepted at google as proving his point, that he brought up these points that were not widely well received, and that he was fired for it. so -- you know, i think it was already a contentious matter over the weekend and their decision to fire him makes it only hotter. >> google is making products for the world. don't you need to have all kinds of people making those products? >> yes, i support diversity and inclusion.
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i think that also, our lack of ideological diversity has actually hurt our product. ♪ >> marriott international became the biggest hotel group in the world after its merger with starwood. its ambitions do not end there, it is nearing its names and services with alibaba, to help tap into the tourism boom exploding in china. describe to us, particularly as it relates to the asia business, how exactly this will work between marriott and alibaba? >> you have got the words right. it is a marriage, a marriage of offline to online. or online to off-line. that is the new acronym, o-to-o. we have taken the two companies, the best and the brightest minds, you have 500 million people on alibaba's platform and we are marrying them with 100 million of marriott
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customers. you got 125 million trips by chinese travelers, and the largest percentage of those were to asia. so the biggest benefit of this, is of course, to asia but it will benefit companies around the world. >> u.s. payments process agreed to buy the uk's world paid group. billion, part of a trend of increasing consolidation in the payments industry. should investors be happy with the deal? >> if you come in at the ipo, it is being sold for around 63% higher, but it is a stock deal. if you come in around this year and you are looking at a 22% premium, it is in line with some of the other deals that are happening in the sector now. it is such a fascinating company though, because if you remember , this is a company that rbf was supposed to sell as part of its bailout, but it sold it to private equity in 2010, then they flipped it around and put it on the market two years later
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and now it is getting bought out. >> another day of potential megadeals in the u.s., cable providers acquired suddenly a few years ago now has its sights set on charter. so, this is not completely out tice?e question for all t' >> there is a blueprint for altice. they just went public in the u.s., so they have a currency, but this is a $22 billion market company, compared to charter , which is about eight $122 million company but you don't have to look back to many years ago. charter bought time warner cable in a similar circumstance. the reason altice is looking at charter at this point is that softbank is also looking at charter. softbank has not decided whether or not it will also bid on charter, and the same goes for
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altice who have simply hired banks and lawyers to contemplate the idea of buying charter, rather than allowing it, theoretically, to go to softbank. ♪ >> tesla is making its debut in the primary corporate bond market, it is planning to sell $1.5 million in bonds to support spending on its model 3 electric car. the sale will also bolster its balance sheet, even though tesla learned through a record $1.3 -- burned through a record $1.3 billion in cash in the second quarter. what are you hearing from investors, are they loving it? >> they are loving it. they say a company like this, they are basically raising a quarter's worth of cash, they are burning through cash so rapidly -- however, it is a brand name that people love and elon musk is selling the dream. he is calling out to the true believers and even in a week where we are seeing geopolitical risks playing up again, they around 4ady sold
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billion already of orders. so we still have all of today to go as well. ♪
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♪ rishaad: welcome black to "bloomberg best," i am rishaad salamat. this week, bloomberg presented emily chang's exclusive interview with the chief operating officer of facebook, sheryl sandberg. they discussed the company's efforts to connect the world on its social network. emily: mark talked about concerns about isolation and nationalism that have risen despite facebook's efforts to connect the world. groups coalesced around like-minded views, and interests, do you think facebook is part of the problem? >> any technology that has ever been invented has been used for good and sometimes for a bad to
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-- and we were hard to make sure the bad is not on facebook. i think groups are helpful, i think they bring people together on different issues. we see a lot of groups that are pretty broad. one of the women that i met with as a group bringing women of muslim and jewish faiths together. so, very much on purpose, bringing people together. there are a lot of groups that serve the purpose of bringing people together who would never otherwise connect online, and of the technology, based on part of our user base has a cross-border connection. i think about that in my own life, when i was in high school or college, i did not know anyone outside of my country. i grew up in miami, and i barely knew anyone who wasn't from miami. [laughter] if i were on facebook now, i would probably have a cross-border friend, or at least one friend from another country. emily: would you ever consider showing people news or information from the other side of the aisle, like people who think differently then me, what
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are they thinking? >> we do that. i think people worry that facebook puts you in a newsfeed with all people that have the same views as you, but that is not what happens. because of facebook, you can hear from other voices, and by extending to more voices, you actually see broader views that you would not otherwise see. that is not everyone is lasted by views from the other side. a are not. on average, facebook broadens views. i still think that we all can do more, to learn more about what other people think and what their experiences are. emily: what'sapp is now partially blocked in china. is mark's dream of connecting the world now highly unlikely? >> we have always said that the world includes china. and facebook remains blocked there. mark told david kirkpatrick that facebook is more like a government than a company. emily: even more so now, at this scale. how does facebook manage the scope of its policy, media and all of these different responsibilities in this modern
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age? >> we try to do it by empowering local teams. we know that we will not get everything right from menlo park, but with public policy, we've hired local teams on the ground and we have extraordinary leaders around the world. they make sure that we understand what is going on in other countries. we are not perfect. with so many people posting on facebook, we make mistakes. but we are trying to address those mistakes quickly and correct them. we are also working on opinion -- investing in community operations, and we are hiring 3000 people more to work in our communities, hiring them from all around the world. we want to try to get the policy right, get there quickly, and make sure that we are staffed so that we can be as responsive as possible. ♪ rishaad: coming up on "bloomberg best," earnings season is going out with a bang, as disney announces a major new initiative. plus, more of the week's most compelling conversations. the fed's james bullard making his case for holding interest rates in place. >> we have already moved the policy rate three times.
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why do you need to do that in this environment? rishaad: this is bloomberg. ♪ got you outnumbered.
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the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. find your awesome with the xfinity stream app. included with xfinity tv. more to stream to every screen.
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♪ >> are you losing confidence in what is going on in washington, is that affecting your business? >> no, no, i am not losing confidence in washington, i think that these discussions will always end up in levering a new platform, and as i said many times, as president trump got into the white house, he wants to reset some of the rules, and i am not quite sure whether those are good for both sides. or either side, but the conversation about renegotiation of nafta, i'm a little bit more focused on that.
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the u.s.-china, i think eventually they will get to a point like -- two business people talking, they eventually get to a point eventually where they have an equilibrium. i'm hoping that it will be good. i do not think that -- i think that dialogue, is healthy, and a ratcheting up the tensions, of course, is not. there needs to be a balance. ♪ >> that was blackberry chairman and ceo john chen speaking with bloomberg's betty liu. tensions between the united states and north korea were not the only political issues on the minds of investors this week. global trade policies are a matter of concern, and so is the economic future of europe. top government officials addressed these topics on bloomberg television. let's start with the exclusive conversation with the french economy and finance minister. ♪
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>> we want to reduce taxes, they are too high, and they are a burden on all companies, and we want to put some stabilization, and more stable rules for everybody as far as taxes are concerned. these are the two decisions that we have taken with president macron. we will lower the corporate tax from 33% to 25%, till 2022, then, the second step, we would like to have tax harmonization, among the members of the eurozone. you have 19 members in the eurozone. you have one currency, the euro. and you have 19 levels of taxes. and you have 19 different economic policies. we cannot go this way anymore. that is why we are advocating for tax harmonization. the first step of the tax harmonization on the open level will be a tax harmonization between france and germany.
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i am quite convinced that no later than 2018, we should be able, with germany, to have a common corporate tax, and it should be the basis for the harmonization of all corporate taxes at the level of the 19 member states of the euro. >> in the battle, post-brexit, apart from hsbc, no major international bank has chosen paris to relocate its staff. why do you think paris is losing the race to frankfurt? >> we will win the race. we will win the race. of attractiveness, because we are taking the right decisions, and because we are standing firm. i think that the questions, that arose during the last month, we -- will they stand firm? we will stand firm. we will take the difficult decisions, we will lower the
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french taxes. we will make our country more attractive. we will take the structural reforms and structural decisions that are needed. for instance, we will simplify the labor market. i think that many banks, many investors, should be aware that france is changing. and that this is not something fake, this is something true. things are changing, deeply, in france. and that is why we will win the battle of attractiveness. ♪ >> australia and yourself, due to host the next round of the tpp negotiations. i mean, this has been dragging on for so long, dealt such a blow with the u.s. withdrawal. what are you hoping to achieve from this? >> certainly, we would like to
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tpp to have come into effect with the united states and we were disappointed but not surprised by the u.s. decision. president trump did flag for quite some time that he was withdrawing the united states. that has required the remaining 11 parties to come together. there are other jurisdictions that have expressed interest in joining the tpp and we have to work through it methodically and sentimentally. -- and fundamentally. there are still good gains to come from the tpp 11 and that is what i am trying to implement if we can. >> i am curious whether the more tense relations between the u.s. and china, how you are watching that in australia, and how big of an impact that will have on you? allies, wey with have had really constructive engagement with the united states trade representative. i found him warm, i found his commitment to try to do good deals to be positive.
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from australia's perspective, we of course are a very trade-exposed nation. china is our biggest partner. they are australia's fifth largest source of fdi, so we want to engage with china in the motorway, and we have had a very good trading relationship. i have to say on balance, from australia's perspective, we will continue to show our national interest with china, japan, korea and the united states. in a way that serves the national interest but also cognizant of what those countries want to achieve because ultimately, like any good trade, it is a two-way street. these things are never one way. ♪ rishaad: in the area of monetary policy, bloomberg spoke with the federal reserve bank president james bullard. he believes that interest rates should remain on hold given that inflation is lacking well below the feds 2% target. he elaborated on that with our kathleen hays. ♪
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kathleen: is one more rate hike this year a problem? >> i think we have been surprised by inflation, coming into the downside during the spring, and not by a tiny amount, but really by a large amount, compared to the progress that we made in 2015 and 2016. so if you look at the chart, we were creeping up towards 2%, altering 2015 and 2016, then in 2017 most of that progress has been undone. i think that is, at least in my mind, leading to a reevaluation of our story about whether our policy is leading inflation back towards target or not, so we will have to see how the data comes in for the second half of the year on that. >> so are you saying, let us wait for the data and then when it is stronger, i would be in favor of a rate hike? >> of course, we are always data
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dependent, and i am not too optimistic that we will have higher inflation measured on a year-over-year basis by the end of the year. we are still predicting a 1.6% for core inflation by the end of the year. so, we would still be well below target and not too far from where we have been in the last couple of years. so i think we have a ways to go here on inflation. >> if inflation is not responding much at this point, is it a good idea to even normalize the funds rate up? what is the harm? would it lead the economy into recession? >> what you would be doing his moving preemptively against future inflation by moving against the policy rate. we have already done so three times, why do you need to do that in this environment? you have low inflation in the u.s., inflation expectations measured by markets below where you would like them to be, and other countries with low inflation rates in the developed world.
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it just does not seem like inflationary environment where this is going to get away from us, so i don't think we need to be preemptive in this situation. ♪
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♪ rishaad: you're watching "bloomberg best," i am rishaad salamat. it has been another week full of quarterly earnings reports, and our run-up begins with results from an entertainment giant. >> disney, a beat on the bottom line. a miss on the top line. the real announcement here is disney agreeing to acquire majority ownership of this entertainment company? a big stake in a streaming technology company. in addition to that they will also unveil a disney branded direct-to-consumer streaming service starting in 2019.
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as part of that, it is ending a distribution pact with netflix. >> we obviously have the brands to reach consumers directly because there is great passion for them. you need technology to do that as well, which is no easy task. it is not simple, particularly when it comes to streaming live sports. we have consumption at a very high level and it is all at once. so we bought a third of bantech a year ago, and we have a celebrated our controls and we are moving at a faster pace and -- accelerated our controls and we are moving at a faster pace than anticipated. it is a combination of brand, technology, and consumer trends. ♪ >> cbs reported second-quarter earnings after the close yesterday, and beat analyst estimates on revenue and earnings per share. strong revenue from the ncaa basketball tournament. >> i think yesterday's earnings were quite remarkable in that
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they demonstrated the shift from the company's ad relying non-ad revenue streams. content licensing, otc, etc. i think the company has really made some remarkable strides over the last several years to a different business model. overall we still think cbs is an of the more better positioned media companies to take advantage of these trends. whether it is that monetization of delayed viewing or ott, over the top, or direct-to-consumer, showtime and cbs all access, there are also making some remarkable gains with subscribers, and there are getting ready to launch some of those internationally. so all in all, i think the team has been really executing and tracking ahead of plan. ♪
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>> let's talk about softbank, profits beating estimates, thanks in part to the improving performance at sprint. the results highlight softbank's movement into tech and other deals. the chairman and ceo says that he is mulling areas options to merge sprint with t-mobile. what does he want to do with softbank, what is his plan here? what is his grand plan here? >> he wants to be the planet's biggest most ambitious tech investor, and he wants to be at the forefront of every disruption and innovation that will happen over the next several decades. >> therefore, he is an uber, he is trying to get into ride hailing, and ai. >> yes, and he is trying to get beyond that, about a world where every inch is covered in satellite and there'll be devices feeding data into the cloud that will be analyzed by ai, so he is thinking, high in the sky, as well as the next five to 10 years of disruption.
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years of disruption. -- >> stock is trading higher this morning, here are the headlines direct the company has posted second-quarter sales and net income beating analyst estimates. at the same time, the danish-based drugmaker has cut its forecast for the next year. the only thing the market really wants to know about at the moment, is what the pricing picture in the united states looks like. what can you tell us? >> we have mentioned that we see low pricing in the u.s. for 2018. we have guided that before hand. we would like to move away from just talking about pricing because it is also a matter of volume, and if you look at 2017, we also had price pressure there. and in the first six months of 2017, we saw a value growth of 7% in the united states, though -- so price is one component. it is really about the volumes, and the mix we achieve and they are doing well in a challenging environment in 2017. >> intercontinental hotels group has reported first-half revenue, mixed analyst estimates, but the
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company says that it remains confident in the outlook for the rest of 2017. >> i think we had solid results in the first half, revenue was up. our net systems are up 3.7%, and our underlying earnings are up 7%, which is strong performance which enables us to increase our interim dividend by 10% year over year. the solid set up results underpinned by strong strategy. >> avis budget group plunged, after slashing their profit forecast and missing earnings estimates after struggling with dust asinventory and the rental car company struggles with dwindling inventory. >> whatever could go wrong did. you have seen a lot of cars out there in the market, all-around car rental companies have too many vehicles. you really have a double whammy for rental car companies. they're all fighting for rental car customers, and dropping prices, so they are hurt on them
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margin side, and new car prices are falling, so trying to sell their high mileage cars in the market, they are taking a big hit on those. the cost for avis winds up 10% in the quarter, the biggest cost they have. so they have revenue pressure and we will see earnings for the rest of the year taking a hit, according to the forecast, and investors run away. francine: the insurance and investment giant prudential has released its latest earnings. thatting profit came in 2.6 billion pounds a year ago. there was speculation that you may sell off your entire back book. any truth to that? >> we are looking at both internal and external ways to the risk -- derisk the business so we are considering selling some of it, but i think that the key to that is long-term shareholder return, not
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short-term cash. we are not in any hurry to do transactions in that space, but we have exited that space on a retail basis, but we would not do anything to affect the consumers products adversely, or do anything that would diminish total shareholder return. it is a profitable back book and we are very efficient at running it. it is producing very good cash flow but it is very capital intensive and where we are going with the u.k. business more of a capital like model. matt: glencore misses the mark, according to estimates it missed the average analyst estimate. there is no change on the dividend policy yet, despite the company hinting that there may be extra payments for shareholders six months ago. and six months from now. >> what today's lack of a dividend shows is that really, they are building a war chest. they definitely have the financial room to pay more dividends if they wanted to, the ratio of earnings to net debt has fallen back to one, and their target is two, so they clearly have a lot of financial headwind.
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upy have to be found -- beef the balance sheet to do deals. >> toshiba has revealed a 2016 net loss of 8.8 alien dollars -- $8.8 million after releasing its audit. qualified earnings results. what is it? it seems a million miles away from all kind of approval? >> this is a step in the right direction for toshiba, they have been struggling to get their auditors to sign off at all on their financial statements over the past couple of quarters. this is the auditors giving them a qualified stamp of approval to the latest financial figures. of course, toshiba is struggling with this devastating foray into the nuclear business in the united states. they had to take a right down of about $6 billion because of troubles with their westinghouse nuclear business, so they are trying to sell off assets in order to restore their shareholder's equity deposits, including the chips business, which is their most valuable asset.
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♪ >> snap shares are plummeting in late trading after reporting second-quarter earnings. the company's growth fell short of estimates again, feeding the fears that competition from facebook is blunting snap's potential, just months after its ipo. >> i think 100% of the problems we're seeing in snapchat are self-inflicted. they are not doubling down on at core areas of expertise that we thought they could capitalize on like the content side of the picture and they are not really educating existing users as well as potential users on the new product iteration. when you look at the metrics, i thought the user number was fine, not too far off from what the street was looking for, the issue was the monetization side. you are seeing a much more flatter trajectory than what was expected from the company at this stage. i think that is why the red flags are starting to go up. >> the hope was that they would have this big and growing platform and grow a lot of users and basically turn on the ad.
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that is not what is happening and we can see that from the numbers. this company is showing that they are having some real issues, just doing the basic blocking and tackling to make their business available for the revenues that might want to come to it. ♪
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♪ manus: this is the s&p, this is your ea function, and you said good numbers, but were surprised by the lack of oomph in the action. >> take a look at the bloomberg year, i have a look at the bloomberg intelligence tool, the international gain in rev par, this is historic, going back to the second quarter which is the white line. here in north america, the orange line. rishaad: there are about 30,000 functions on the bloomberg, and we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites. here is another function you will find useful, quic go which will lead you to our quick takes come over you can get important contact and info on important topics. here is a quick take from this week. ♪ >> venezuela does not have enough food to feed its 30 million residents. it also cannot guarantee them electricity or medical supplies in hospitals. it is a country staring down social of people, political unrest and bordering on economic collapse.
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multiple states of emergency have been declared. how did this happen to a country with the largest oil reserves in the world? for years, subsidized oil bought a government influence support at home, but collapsing oil revenue in an economy dependent on it has caused civil unrest and caused the ouster of the unpopular president nicolas maduro. maduro has responded by successful attempt to consolidate his power and quash the unrest. here is a situation. venezuela's current crisis started long before maduro, with his predecessor, the late president hugo chavez who revolutionized venezuelan politics with an ideology called chavismo and fiery anti-u.s. rhetoric. while in power, chavez focused all of the country's resources on one thing, producing oil. this meant that almost everything venezuela consumed besides oil needed to be imported. chavez barbara a lot of money to fund at all. while oil prices were high, it works. in 2013, the first domino fell. chavez died, and maduro took over for chavis and in 2014, the second domino fell. the price of oil started to crumble. revenue for oil accounts for a over 90% of its country's wealth, and once that happened when his will of found itself steadily short on cash. the government responded by groceries, medical supplies, were reduced to avoid defaulting on its debt. it also started printing money to reduce inflation which surged into the triple digits without an end in sight. the economic freefall has exacerbated problems. it has got so bad that food shortages have prompted major riots. the coalition opposed to maduro won the majority in 2017 but its attempt to remove maduro from office have failed. maduro recently formed a task
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group called la constituyente to rewrite the countries constitution. he snatched the opposition leaders from their home at gun point and then there is the july election. all opposition candidates boycotted. the only option was to vote for maduro's allies. after the election, u.s. treasuries put sanctions on maduro's personal assets. >> all assets of maduro subject to u.s. jurisdiction are frozen. the u.s. is venezuela's largest oil consumer, so sanctions would almost certainly be devastating. here is the argument, maduro's critics say that he has watched -- botched his presidency so badly that he should resign immediately. however, some say that the alternative would not be better. the opposition alliance is still made up of more than 12 parties with no unified plans for the economy and no single leader to do it. venezuela owes almost $90 billion in foreign debt and oil
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prices are not likely to hit the previous highs that kept the nation's economy afloat, which raises the chances that the country could default. stuckw, the citizens are with the failing economy and a leader focused largely on paying in power. ♪ rishaad: that was just one of the many quick take that you can find on the bloomberg. you can also find them on along with all of the latest is this news and -- business news and analysis, 24 hours a day. that will be offer "bloomberg best" this week, thank you for watching. i am rishaad salamat, this is bloomberg. ♪ ♪
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♪ david: you are now both former presidents. mr. clinton: no one plays a song when you walk into a room anymore. [laughter] mr. bush: i did not bring the coffee. david: what do you say to each other? mr. bush: generally, when does this program start and when is it going to end? [laughter] mr. clinton: give shorter answers. david: what was the biggest surprise the first day you are in the oval office? mr. clinton: it really surprised me how easily i could be turned into a two-dimensional cartoon. mr. bush: my dad, i said, "welcome, mr. president." and he s


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