tv Bloomberg Best Bloomberg September 1, 2018 12:00pm-1:01pm EDT
>> coming up on "bloomberg best," the stories that shaped the week in business around the world. north american trade talks moving forward, one partner at a time. president trump: we're going to call it the united states mexico trade agreement. >> canada cannot be seen catering to u.s. demands. >> you can always make the trade deal stronger. >> president trump has plenty to say in an exclusive interview with bloomberg news. president trump: the european union is almost as bad as china, just smaller. >> tesla's plans to go private takes a u-turn.
toyota makes a big bet on uber. >> it is saying uber is worth more than tesla and these big tech companies. >> in switzerland, leaders in finance speak on the news of the week. >> some countries in the past used currency manipulation to be more competitive. >> plus, if you are seeking insight, who better to listen to than warren buffett? >> we keep buying as long as we find something attractive to us. an attractive business at a reasonable price. >> it is all ahead on "bloomberg best." ♪
>> hello and welcome. this is "bloomberg best," your weekly review of the most important business news, analysis, and interviews from bloomberg television around the world. the week began with nafta negotiations as the u.s. and mexico laid the groundwork for a larger deal. >> president trump saying he will terminate nafta and sign a new trade accord with mexico. president trump: we're going to call it the united states mexico trade agreement. we will get rid of the name nafta. has a bad connotation. it the u.s. was hurt very badly by nafta. dead?nafta officially >> nafta is not dead. this is a breakthrough in a general sense with mexico. they still have to get canada to sign onto it. there is a lot of progress that needs to be made in order to do that. administration officials have walked back toward the president said. the two agreements reached with
mexico, 75% of auto content has to be made in the u.s. or mexico, presumably canada if they sign on. .hat is up from 62.5 percent they are changing the ways they calculate that. it won't be this automatic change. then sunset agreement. instead of the administration demand to end it after five years, it is a 16 year agreement. they still have to deal with canada, a dispute resolution ,and dairy, two big issues. >> president trump is googling himself today after he said "only shows the viewing of fake news media." google then responded they do not bias results toward any political ideology.
>> like the president's twitter attacks, we can't totally ignore them, because he is the president of the united states. there is a germ of truth and not truth. it is true google and facebook posts quarter results based on algorithms that are secret. those algorithms have bias, but not in the way the president says. in general, it is good there is more scrutiny on these companies. i don't think there is much to the idea that they are stifling conservative points of view. >> the u.s. is pressuring canada to join an updated nafta agreement friday. the canadian foreign minister spoke with reporters. >> mexico has made some significant concessions, which will be really good for canadian workers. on that basis, we are optimistic
about having very good productive conversations this week. >> canada cannot be seen to the -- be caving to u.s. demands. there is a sense they are being bullied into this agreement, and they don't like the tension between trump and trudeau. i believe in order to get a political win, canada will need some concession from the u.s. that is the big question right now. what can they take back to canadians that is worth giving up on their side? >> president trump wants to impose additional tariffs on $200 billion worth of chinese imports as soon as next week. why next week maybe the d-day for these tariffs. >> we have been talking about this all summer.
president trump has made it no secret he wants to put pressure on beijing. the big deadline next week is expiring of a public comment period on this list of 6000 products worth some $200 billion he would like to slap a 25% tariff on. that is the trigger point. word is he does not want to wait around. >> today the president of the united states conducted a wide-ranging oval office interview with bloomberg news. among the topics discussed, and capital gains tax break, the wto, tech and google and facebook, the president's feelings about fed chair jerome powell and his embattled attorney general jeff sessions. >> he is combative, confident.
he he radiates a confidence not everyone agrees with, but he feels he is winning the biggest battles. he is not done thinking of new ideas. he wants to rewrite trade rules around the world. president trump: i would say the wto was the single worst trade deal ever made. if they don't shape up, i would withdraw from the wto. >> he was particularly bellicose on europe. the fact that he immediately rejected the offer from the europeans to go to zero tariffs on cars was interesting. he said that was not good enough, i want a much broader deal than that. president trump: the european union is almost as bad as china, just smaller. >> the overall impression of someone feels the world is going in his direction. for better or worse, that is the president america has at the moment.
>> president trump says he is optimistic a deal will be reached by today's deadline. canadian officials are raising serious doubts. >> we are committed to speaking for canada to a good deal for canada, not just any deal. we are very good, as canadians, as finding win-win compromises. at the end of the day, we will only sign a deal that is good for canada. >> you have to read into the pessimism, the body line which in her statement, the idea that they keep having to stand up for canada's interests suggests they have reached a point they are not going to get any more ground on. if they can reach a deal today it looks a little bit darker , right now. >> this is an artificial deadline. this is the president wanting to
send congress a notice he will sign the treaty before pena nato nieto leaves office september 1. -- the artificial deadline may be making this a little harder. >> the ongoing negotiations with canada are not complete, and we continue to negotiate with the united states. so that is why we are coming back next wednesday, and we are going to continue talking until we reach a good deal. >> the canadian minister does not want to look like they are being railroaded into a deal. they are coming back next wednesday. a source told me a deal this week was always a long shot. good news they are still coming back next week to talk. ramy: still ahead as we review the week on "bloomberg best,"
high-level trade talks from mexico's economy minister and u.s. commerce secretary wilbur ross. plus an exclusive interview with the head of thailand central bank. and a conversation with warren buffett. leaders in italy say they won't support the eu's next budget. >> the eu is a place where things are negotiated slowly, but they want action right now. ramy: this is bloomberg. ♪
>> the u.k. and european union pushing back the deadline for a brexit deal. both sides aim to finalize the divorce terms by mid-november the latest. another indication negotiators are struggling to make progress, despite the u.k.'s assurance to speed up talks. what are the reasons this deadline is being pushed back? >> the reason both sides are not you>> the reason both sides are not able to agree on a divorce deal is northern ireland. they have a commitment between southern and northern ireland, and they can't seem to make it work. they were supposed to agree something at the june counsel, and now looks like they will not be able to agree the october counsel. they may need a special summit to make that work. >> what is being seen as a policy turn the chinese central , bank strengthened the interest rate as pboc banks have resumed use of the countercyclical factor in the pricing of its yuan reference rate.
talk about why this is the second. >> this is significant. >> the u.s. has been accusing china of deliberately pushing the currency down. the stories have already made it more difficult to short the yuan. now they have come out with is very technical measure. essentially, what it does it makes it harder for the u.s. to push currency down. the lost in the past three months seems to be the tolerance level. it may be no further from here. >> the u.s. department of agriculture announced u.s. farmers will receive $4.7 billion of initial farm aid. who is the biggest winner and loser in the agricultural sector? >> the agricultural sector would tell you there are no winners.
you have $3.6 billion going to soybean producers. every statement i have seen so far is, you can give pork $290 million of direct aid and $559 million dollars of government purchases, you can give money to corn, wheat, dairy -- none of it matches the economic losses farmers are facing today. you would say, on paper, these are the winners of the package, but most of the commodities are feeling like losers as the trade war goes on. >> in the u.s., second quarterly gdp data coming up above estimates. >> a good news story on gdp this morning. we saw a revision upwards of 4.2% from the previously reported 4.1%. that is on the back of a really solid intellectual property investment.
as you see companies investing in software, that could lead to productivity gains and make growth more sustainable. we got a first rate on corporate profits, which was the biggest gain since 2014. all good news in this gdp report. >> italy will start the process of opposing the eu's budget after the member state field to follow through on a deal in june. why are they trying to block this deal? >> at this point the italian government has been dealing with the migrant situation. they feel abandoned. this has been true for past governments as well. now we have this populist government trying to change things. they are reacting more violently.
the eu is a place where things are negotiated slowly but they want action right now. they are saying things much stronger than in the past. >> argentina's economy growing right now. the president has asked the imf to speed up bailout payments as the country heads to the second recession in three years. is this good news for investors, or bad news because it raises uncertainty about the economy there? >> argentina is pulling out the stops to raise investment confidence. from an investment point of view, this is meant to clear up any doubts argentina could not cover its payments for this and next year. argentina says thousand of capital with the imf deal without issuing more debt. the peso down 40% this year. that is the worst selloff in an emerging market. we have a recession coming this
year. this is meant to help alleviate the pain, economically and from an investment perspective. >> the peso fell to a record low, argentine lawmakers raising the interest rate. still we are not seeing the argentine peso react that much. we were expecting rates to hold steady at 45%, but they had to move. tell us what investors are thinking about the central bank situation. >> there is a crisis of confidence in argentina. the public wants to see a clearer strategy of how they plan to reach their fiscal deficit target. today was an emergency measure to defend the peso. so far, it is not working. >> legal woes in nigeria are costing its wireless carrier dearly.
the central bank ordered to return $8.1 billion that the bank says was improperly repatriated. mtm reacted to that decision. does that have an impact? >> mtn's reaction so far has been one of confusion. they are not clear what is happening. the group's ceo in south africa said this morning on an investor call that it was very strange that mtn was being penalized for this. all of the people affected by it, not just mtn, but the banks who helped them repatriate funds are also affected. they are figuring out what is going on. >> president trump on steel and aluminum tariffs, saying it is necessary and appropriate for u.s. national security. he also drafted waivers for south korea, argentina.
>> the statement are these tariffs imposed on steel and aluminum earlier this year, the beginning of a hawkish period in trade policy. it is said these are needed to protect u.s. industry, but on the other hand there are some exceptions granted. in the case of steel, these are not small exemptions. you have brazil, argentina, and south korea excluded. together they contributed about 1/4 of u.s. steel imports last year before the tariffs came into force. i want to say this is a material easing of import restrictions. >> europe says it is willing to include cars among u.s. goods that could be imported duty free. >> the eu would be willing to go to zero on automobile tariffs with the u.s.
this is something that began under the obama administration. ttip was being negotiated between the two sides, up until donald trump killed it when he came to office. it would have had the tariffs on cars go to zero on both sides. we are willing to bring car tariffs down to zero if the u.s. does the same." the u.s. has 25% tariffs on light trucks and suvs. automakers in the u.s. may not be interested in doing that. however it has given shares of european automakers a pop. it doesn't appear to be something new, and does not appear to be something the administration is embracing.
market, it isck on a record tear. you draw a distention between price and value. are we seeing a run-up in value or price? >> value gains from year-to-year. i do fallt a business back a good portion of your earnings in the business, you are going to have something more valuable year after year. sometimes the market is crashing. the stock market bills and value from year-to-year. i bought my first stock when the dow was under 100 when i was 11. >> one of the things you take a look at is the measure of the value of the stock market. if you look at that graph, it is the highest it has been since the tech crash in the late 90's. does that mean we are overextended?
is this the time to be cheerful rather than grady? -- greedy? >> i am buying stocks. i am buying them because i think they will be worth or money 10 or 20 years from now. i do not think whether they will go up or down. i know they are good businesses. you have to measure investments in relation to each other and the alternative foremost is fixed income. years. 3.02% or 30 would you rather invest in a company earning 50 or 20% underinvested capital? it?h can never more own that areere are stocks good bargains. when the market is up, that means values have gone up. you are sitting on a lot of cash. don't we have to have more fear in the marketplace before you are deploying that cash? >> i don't love it for the
country as a whole but that creates prices that make me want to get the shovel out the money as fast as i can. we have been shoveling out the money. it is not as attractive as when i was buying in 2008. 1974 with the best year for buying in my lifetime. that will happen from time to time but you cannot sit around. you are never going to catch the bottom and everyone will be terrified. we keep buying as long as we find something attractive. business,n attractive and i love it if it is a juicy price, but i keep buying. rami: coming up, we dive back into the week's business dues with earnings from china's biggest bank and a sneak peek with the iphone's apple will be launching. the first compelling conversation, including an interview with ceo junkyard.
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time get 150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need rami: this is bloomberg best. i am ramy inocencio. the trade relationship between the u.s. and mexico and canada, let's revisit some of lumet television's interviews, starting with wilbur ross. he spoke about rules that would effect the auto industry -- affect the auto industry. >> one of the most important economic issues we saw and the deal with mexico is increasing the nafta content and the american content of the automobile industry. autos are the largest single
source of our trade deficit with mexico. mexicok that will help get more business back from southeast asia and we hope it will help the u.s. to do the now somewhere between 40 and 45 -- 40% and 45% of the content of components has to be from countries where the rages -- wages are $16 an hour or more. mexico wages are nothing like that nor are they in southeast asia. that is the provision that and if canada comes in, more or less it would help canada because their wages are similar to ours. david: the president said now is not the time to negotiate trade relations with china. you reiterated that.
why is this not the time and when will be the time? exact datet have an as to when will be the time, but you are aware that two delegations met last week. there was no substantial breakthrough that came from that session at all. that is one indicator it is not the right time. the united states is scheduled to impose tariffs on more product from china coming in here and the president is interested to see the impacts those moves have on the potential negotiations. is 40% of proposition the content is made in a highways to zone. -- high waist zone. that refers to canada and the u.s. but 60% is made in any way
stone. --waste zone. thatexico, 70% can meet for the firstle of january 2020. give certainty that anytime they adjust to a new role, they will basically never pay more, which is 2.5%. that is something that will have concealowing effect: the -- in mexico and create space for growth ahead of us. experts of today, we keep the rules and we keep exports growing in the mexican economy. when hedid mnuchin mean
said there was a strong currency protection chapter? >> it is only the first time. tossingt when we were gdp. -- some is something countries in the past use -- to be more competitive. these understandings we are doing basically send a signal to other regions in the world that america will not tolerate -- as a way to attract trade. >> we are looking at the long-term. this trade deal another trade deals we are negotiating is about a generation from now. we are setting the table for the next generation of canadians. we are free traders. we believe it is in our relation -- interest to establish relationships around the world. >> you have suggested some
progress can be made realistically. what progress can be made? >> we know what the issues are. been clear with the canadian people. we need stability. we need predictability. we want investors to know when they are making a deal with canada under these rules, that those rules are going to be around for a while. make a trade deal better. make it stronger. modernize it. we came into these discussions with that objective. we are working through it diligently and i am hopeful we will come out the other end. thailand is one of many countries watching global trade developments closely. in and enter be a, the governor of the thai central bank told gloom -- bloomberg protection them is a growth risk. he said he is not feeling immediate pressure to hike
rates. up -- are saying that rate hike is not likely to happen because it is too early. factorsve a number of and -- to decide. >> what is the biggest concern now? is it the stress of the tie -- that could be a hindrance or supporters? >> that is a concern. pace.ears, a faster -- has appreciated significantly during the past. normally the bat would move in line with -- currencies. to investors -- as a cost among emergency market -- emerging-market currencies.
resulted in the tightening of the domestic liquidity condition. we have concerns with other risk factors. we have to keep our eyes on the recovery of the tourism factor from incidents in the south that have started a decline in confidence among chinese investors. we saw a drop in activity serving the past. transportation is something we have to keep our eyes on. it would have to be to remind you strong positions, the need for thailand to increase the policy rate is not that eminent as other emerging markets. to another bloomberg in china, a ceo was this week to step down with bloomberg's tom mackenzie.
no emerging markets. economies are -- in order and deficit. , there is no contagion from -- economies to political economies. the countries under pressure, it was why. that makes them vulnerable. important to -- the fiscal situation responsibly, it is important to --, and is important to have financial reserves and you find emerging
economies are in a bad position. the once in a historic year, brazil have more fundamental micro comic problems. theresenior authorities and it is clear argentina has but challenges to deal with to extend that to emerging economies. >> in terms of contagion from turkey in particular? will benot think there much contagion overtime. over the short term, there is a very strong spontaneous reaction but -- >> any impacts on european banks? >> banks are in a different situation than they were back then. look at the size of the turkish economy. -- career is very good in turkey.
rami: this is bloomberg best. i am remy inocencio. it's resume around with a week in business with a focus on company news. tesla resolved the question of whether with would follow through on a plan to go private. the answer is no. made a u-turnas on its attempt to take tesla private. a blog post that the carmaker will remain public. ofwrote i knew the process going private would be challenging but it is clear that it would be even more time-consuming and distracting than initially anticipated. after considering factors, i met
directors's board of and i believe a better path is for tesla to remain public. is this something analysts can forget or is tesla going to be plagued by uncertainty? >> i think there will be issues surrounding musk in that week. i do not think it will be some bad punishment but i leave he will be fined. i believe he will be able to keep his ceo role. i believe this was an issue of that process and governance and i think was motivated by his own frustration of dealing with reduction issues and market issues and journalists and analysts that motivated him to send a tweet in the first place. apple plans to triple down on the iphone x, offering three new models this fall. tell us about these new models. what can we expect? >> there will be new models and
update the existing iphone x, likely come -- called the iphone x s. six-inchhone over screen rise that is going to be lower cost is going to be a hot seller over the next year. it is going to be the same price as an entry-level iphone now, so around $750. maybe as low as $650. many higher-end features, it is going to be a big boom for apple. people are going to be interested it comes in most -- multiple colors. stuff i am in is going to be a big consumer this year. -- is making a $500 million bet on uber. >> it is not surprising from toyota because they had a small investment because they wanted to stick their toe in the water, experiment with it. car companies want to get into this space. they want to learn.
what is surprising is that big of an evaluation. that is saying uber is worth more than tesla and most major car companies. and you have a subscription or service revenue without owning the cars and uber does not, you can and money on a business like that and that is where they think it is going. is a car, it is an icon, it is a roller coaster. spin.d like to take a aston martin has a plan to list on the london stock exchange, evaluation is going to be key and alan wants to know the ticker they might use. >> if you look south to ferrari, they took the rate so the rate is on to find something exciting. could be bonds. we shall see. we shall get details on september 20 but they came at it with a chunky statement this morning, saying we want to float.
revenue is up. earnings are up. unit sales are up. all those things combined, they feel that now is the time to do this. they are thinking if they can do it, why can't we? sinopec has raised digital payout by 60%. by improving refining profits and a rebound in prices, oil and gas exploration -- breaking even. refining member interest 33% in the first half. that is at the base of the higher oil price. price work at the royal material. higher, oil prices get and impacted a good job in terms of cause -- cost control.
in terms of upgrade. investors have a warm response to their performance. big bucks bust. tesla taking a tumble -- today. it is fascinating. this is a ritual on best buy earnings where they post strong results, and earnings per share but the guidance does not go where investors are hoping it goes. they get the jitters. tiffany is a shining bright and raised its --. the race continues. >> they have been doing well over the last two quarters. they have seen a resurgence. particularly with the local consumer. that has been great.
it gives them confidence that their marketing initiative and product initiatives are gaining traction. over to china, and despite a deleveraging push, the country's biggest banks have posted stable earnings growth in the second quarter. what sets the big names apart? >> the state owns lenders have been doing well this -- despite the deleveraging pushes. the smaller rural lenders have not. we have gotten results from four of the big five. numbers, not blowout rather stable. that is good given the beatings the banks have taken. the deleveraging pushing crackdown on that has pushed business to these larger state-owned banks. >> -- is starting the first day of the rest of its life after
she noticed back to controversial rescue plan. saye the investors ready to we want to come out of this with something. we will go along with everything? hopethink what they got is . it was a choice between hope and nothing. i guess they went for hope. whether that hope plays out remains to be seen. >> this is a company that has gone from a $12 billion market cap down to $190. i look at this as a financial collapse of every participant in the financial ecosystem and i think the singapore regulators need to step up and do something about it. dams will start paying back investors early next month. the firm stunt investors by suspending tim heywood.
that triggered a flood of retention requests. they have done is say we are going to pay out money from the sons which have been -- funds which have been liquidated. look more closely and people are going to get their money back at different times. $3 billion of that cash is in domiciled hedge funds. that is less liquid people are going to get their money back less quickly. crimes are going to be affected. there are going to be voters looking for opportunity, thinking what is in those less liquid came in funds and how quickly is dam going to have to sell it? tele-can't, in a $15 billion land to strengthen it has been a, complicated and high-pressure environment for the whole sector.
does this improve the outlook? >> they have had coverage issues. what this deal does do is pack tgv's strong presence in the fixed broadband space with relative strength in the mobile space. it could propel them into another level in terms of the australian market. raising theike white flag because you have struggled with trying to get market shares? >> if anyone thinks anyone is raising the white flag or sticking the -- in the market, good luck to them. this is bringing together the best of both worlds. isthe u.k. lifted stock serving the most in nine years. koster toto sell its coca-cola. this is a way of doing the cost her spin off effectively. >> it is interesting.
allison britain was mentioning how coca-cola has approached them in the recent months. it was a quick transaction and i think that is part of the reason we have seen the shared price reaction we have this morning. it has been a higher self and what others had been expecting. it is interesting. is goingexpectation it to generate more cash holders as well. ♪
nafta or a replacement for nafta. >> there are 30,000 functions on the bloomberg and we enjoy showing you are favorites on television. maybe they will become yours. here's another function you will find useful. that is cute uic go. here's a quick take from this week. ♪ >> investing has always carried one objective. the goal remains the same but a number of investors want to know they are backing companies that advance environmental outcomes as well. it is called sustainable investing and it is getting popular. a broad done -- broad definition of the approach reached -- in 2017. >> investors use methods to reach environmental goals. are low carbon
investing, i am already trying to invest in water. >> profits and losses can be measured precisely. environmental impact are harder to quantify. >> there are no rules about company stability. it has to be comparable with other countries. >> some countries take that let -- companies take that latitude too far. >> companies are investment managers. there is not a lot of regulation around the terms. volkswagen at the top of the dow jones, is the most sustainable automotive -- automaker. >> the earliest attempts at based investing, sparked one of the first global
movements. it may have unique advantages. companies with strong social governance minimize exposure to bonner ability. >> an explosion at bp, they had a spike. that was a time when something could have happened and that would be something -- they pay attention to safety issues. executivess business to wake confusing array of choices. them does theing different goals gets tough. ♪ that was just one of the many quick takes you can find on the bloomberg. find them at bloomberg.com along with the latest business news and analysis 24 hours a day. that will be all this week. thanks for watching.
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david: one month after you take this job, you get a heart attack, and they say you need a heart transplant. oscar: they said get the surgery, because that is the only way you are going to live. david: i assume you are not flying on private planes anymore. you notice a lot of people have what you call emotional support animals? oscar: we just had a recent experience where one of the emotional support animals required another emotional support animal. [laughter] >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but okay. just leave it this way. alright.