♪ essentialsp, the react -- the central banks react. it has been a week of intense focus on monetary policy. some companies beat the streets, some companies miss targets. the stories beyond the numbers. and --ersy rocked valley valley pharmaceuticals. the most compelling digital video and the most telling charts from around the world in the last five days. this is "bloomberg best." ♪

david: hello, i'm david clara -- david guera and welcome to "bloomberg west." in the u.s.,moves europe, and asia. >> i do believe there is some evidence that the fed is getting nervous about being at zero 47 years now. -- zero years now. we have an unemployment rate around 5% and likely to go lower. that is awful close to what anybody would describe as the fed is meeting its goals and mandates. we are still at emergency policy standings.

it is really in its ordinary. . period. we are at emergency levels? >> what many have said, tom, they miss their opportunities, the pieces were in place, we have had someone examining this very closely. >> michael mckee is in washington. charlie, and the boilerplate about how they're going to raise rates, they have been saying for months in determining how long to maintain their target range, they will assess progress on the inflation. today they say in determining whether it will be appropriate to raise the target range at its next meeting. how much of a commitment to you see that as being and how hard would that have had been?

>> i don't think it is a commitment. for some been saying time that every meeting is a live meeting. that is a message they had been trying to send. they will debate the issue on the merit. don't know, i wasn't there, but isis that you have a lot of the same debate take place in this meeting in previous meetings. , 2015,eakers kept saying meetings are all live meetings. it is a debate on whether a press conference would matter. i think they are keeping it on the table. that is not a commitment to do other things. emphasized theee reemphasized the

importance -- you saw it because we have to , part of that is to make sure by expanding our qe , withm to create clarity the qe and that makes it easier to understand what we want to achieve. i'm sure no one would accuse the bank of -- some people are confused. they wonder why the central bank is the so aggressive and what is it about the fx channel that is causing concern for you within the swedish economy that is pushing the central bank to do more? depreciatewere to quickly, it would be harder for us to get inflation up to around

2%. given that inflation has been low, we need to get inflation up to 2%. >> within this governor is the idea of the connors pushing markets, tell me what humility and what new model building you have learned of the swedish bank to ? >> many things have been very unusual. time will tell when things settle down with those new models will look like. different tools to get inflation up to 2%. >> we have been talking about china's stimulus moves. fidelity worldwide investments say the rate cuts were not the most important part of the announcement. >> it wasn't too much of a

surprise. we were factoring in other cuts. what is promising is the removal of the ceiling with the deposit rate. >> that makes a massive difference, shouldn't it? >> it should make a big difference. in the ultimate plan of opening up capital markets in terms of expectations going forward, we are going to remain in the easing environment. they are mindful that the weight of opportunity is getting smaller. the rate cut is not the end of the story here. is thebottom line here economy generating enough growth for more employment opportunity? force is joining the urban market.

if it is not, -- tim summers says to accept plenty of policy continuity is and construction continues to slide. for is ae are looking little more detailed. green growth, green industry, dealing with the environmental challenges. that is something that has been moving up the agenda rapidly. still not clear what the party overall strategy is on this. that is the area we can look for more detail. ♪

♪ welcome back to bloomberg best. it has been a busy. fort has been a busy period quarterly earnings. the focus some of the companies in the spotlight this week. sales set to be in line with 2014 sales. what you make of them -- what

you make of the numbers this morning? bigger-- 200 million than what was expected. how big volkswagen's challenges are going to be? ways, what is more important is the conference call andr today from the ceo answer some questions. analysts will be growing him. they had already set aside $6.5 billion in provisions. they don't have an idea of what this is going to cost them. in terms of the sales figures, in some ways, they had been bouncing around saying 2015 will be the same as 2014. not surprising because we have a good answer where they are heading. sales are down a little bit. we are still waiting to see what the october numbers are.

in september, they lost a little bit of market share, about 1% in the european market. we'll see if the numbers will continue to climb. sales of audi as well as porsche, those are two profits for the volkswagen group. they missed -- matt miller is speaking with bob who is in detroit. matt: your pretax profit was more than what most analysts forecasted. did they not calculate it did they to mark -- not calculated correctly? >> on the operating pretax result, we were spot on.

originally to a quarter and came in at 33%. that is the difference of the penny. andall, we outperformed nailed it. a $.45 eps andin the shares are off the percent or 4% today. would you think is driving the stoploss? we met expectation on pretax. cash flow far stronger. our net income was $1.9 billion. up.rew share over time, once we get past, did the beach or not? and people understand -- did t

hey beat or not? >> that suck about earnings. eps, you are adding 2.3 million customers, but for the investors, what do you have to say to that is t? >> i cannot predict a two-day prices. but we announced from the nasdaq was one of the most complete numbers. million branded customers. 595,000 prepaid ads and 18 basis points decline in turn, which is the biggest we had. year-over-year, cash

$138 million worth of positive netting. i'm really pleased with the overall results of the company. >> what you have to say to investors t? they said this is the first disappointment from t-mobile in a while. >> i think things will settle down, emily, what we did was we actually increase the amount of growth that we forecasted and kept our adjusted the same. our growth was 11% year over year. there is a short-term issue for people have misinterpreted last jumpoffs rate as a point. the net income and earnings per directly in5, is

line what we expect to do and will continue to do. they are quite good results. when you reported the numbers this morning, looked very disappointing until we got the surprise from samsung. >> it came to minutes or three minutes before the markets opened. i am not sure what they are getting on the balance sheets. buyback, they will do it as much as four rounds. buybackthey are using over $3.5 billion. they will bring it back into treasury shares. let's get to those results.

51.7 trillion, roughly around $45 billion u.s. dollars. samsung has its hand in very many other things. the mobile phone space is what we are very interested in as well. >> they were able to hold onto their market share. it came in a lower bit -- a little bit lower. roughly about 23.8. yes, there we go. apple was actually just a little bit over 11% for the iphone 6. in bloomberg analyst a

nthea lie. i would say this comes as a huge surprise to investors. the share buyback amount is huge. it is roughly 5% of the total shares outstanding. it came down slightly from the 2% mom price to about one or -- 1% or 2%. expectation, some people also questioned the management t.d they keep saying no, the expectation is that they are doing a huge buyback to push up the share price.

they may have something in the pipeline. lots of people are speculating wants to depress central share price. they pay cheaper inheritance tax and they can have a better swap ratio. they are telling the market that we are not there yet. to get optimistic is too soon. >> they have a huge trading operation that is going well. the key for me is bob announced costlan, so he is cutting

and saying we can defend our dividends. outfront shares an opposite view. it is a huge week for big oil. for the othersan based on the numbers this morning? >> we are going to see more hunkering down across the injury -- industry. more cost cuts. if all does not back, and you cut the cost down to the level, that will mean a lot of profitability in the years ahead. that is a subtle shift by someone widely respected, why are analysts finally getting optimistic russi? is it about cost-cutting? >> cost-cutting is key. next year, we'll circuit see the

cost cuts take place. some analysts are saying this is the autumn of the earnings cycle. it may not be the bottom of the oil cycle, but down -- the bottom of the earnings cycle. tom: this is inflated adjusted commodities going way, way back. through newbreaking commodity lows and getting back to that multi-decade trend. how do you factor oil into the other commodities? >> i think will have the ability to subtly fall very quickly because it is hard to store. the issue for the oil market this winter is if you do see some oversupply, there is nowhere for the oil to go. it has the ability to crash quickly. the other commodity is natural gas, which is set to break through below two dollars.

that is usually the american economy. -- part is a herculean of the issue, almost and iphone 6 hangover. i think they had done better than feared. the industry was expecting the worst. tohink as the stock starts improve, there is a lot of gasoline in the tank on success. >> for is on the purchasing coming from you >from? >> they are probably upgrading their phones. there were issues in the u.s. reached -- restricting your ability to upgrade. taking share. and for customers are now converting to apple and this will create a new virtuous cycle for providing growth, not just

in the december quarter, but going out into next december's quarter. >> i think he said about a third -- 30% of those who are replacing their phones are coming from android phones. >> arthur made a great point. it is about how much room there is. upgraded the success. , and that is really the key. was an improving quarter and you will see that over the the next few quarters. ♪

♪ west." is "bloomberg excited over growth and concerned over controversy. let's take a look at vanda pharmaceuticals. ant from cynical's. >> valeant of this morning with

its relationship with phil llidor.-- phi it initially raised questions about valeant's practices. >> we promptly correlated with outside regulatory counsel to make and request that the sec investigate citroen. andrew, have you been contacted by the sec t? the first thing, valeant stock was around 30%. some follow-up articles from the "new york times." article that

discussed price scouting. the price was down on valeant earnings. what is really 70 most unsettling, was when he made the analogy of a fire in a -- of yelling fire in a crowded theater. i am very well aware of yelling fire in a crowded theater. what i did was i walked into a theater, snow a lot of snow, and said to people, excuse me, there may be fire in this theater. there is a difference between the two. the investors have had a chance andalk through the theater get a response. let's keep it in context. >> i want to take you inside the bloomberg terminal to show you how valeant traded.

, it added valuea x saying that the accounting issue was confirmed appropriate. the second was when the conference call began in mr. pearson made the comment about you yelling fire in a movie theater. the conference call ended at 9:13 and we have seen the stock off by three dollars. i want to get your reaction about how -- about the direction the company has taken. what does that signal to you? act has made a lot of money. supporter of long the company. he is married to the company, that is irrelevant. >> what about the reaction from says thathat jpmorgan

harmasecialty pahra make up a small portion of sales. is that truthful? >> the important part is what do specialty pharma represent organic growth? if you compare them to johnson & johnson, they are still relatively expensive. the reason the are given this premium is because of its organic growth. fraud, inaccounting my opinion, notice what i said here, in my opinion of publicly available information, and the scenario, if it is not accounting fraud, it is insurance fraud. insurance fraud will eventually

lead to accounting problems. why do i say this? as much of mr. pearson has made me the poster child for someone shorting his stock, i have to say some of the best work out there was done by the "wall boiled over at surf. it is not andrew, it is very nice, and i feel flattered that he has made me a poster child, and my the one? everyone, who has raised the price of hard medication? there are reasons why his stock is here. it is not because of me. have hedgen europe fund guys, they are going at each other. it does not really matter. is it the biggest story? >> the short seller put out a report. his claim had not been borne out. many of these things he claimed

they have said a lot of things to refute them. but, what they did do is raise a whole lot of other questions, how they have relationships with the pharmacy that the used help report and distribute drugs. why had they not disclose some of the interest? exactly, how exactly aggressive their practices are. are they pushing too far? so, there is still a lot of questions out there. valiant, the poster child for m and a. does it challenge that model? the model that they have been developing? i think as we have been talking, they are special cases, their entire model is built on acquisitions. the entire deal is that we do not do r&d.

are companies who have used a similar model before. they use search marketing. they will find the drugs that are already a long way down the road. it is not necessary. dealsook for a lot of the , they look for products in development. or, they give access to people. i do not think this is necessarily going to be a huge impact. ♪

♪ >> i'm david during. business newsmakers go to bloomberg every week. from thisnterview week. >> september 29 we saw alibaba hit an all-time low. as far as he when you look at earnings, do you think we will see a shift? >> i think what you have been seeing, i think apple has strong numbers. there is a scale play. the bigger is getting bigger and the smaller will get marginalized. alibaba is a very aggressive company. they are making lots of good investments.

people have been doing a lot of good media deals. comcast had good numbers today. that is a good move. they put their cfo and had them create a new farm. i think they will be very aggressive. arehen you say the big getting bigger, it makes me think of uber list. they said if there evaluation is i havend lift is here, to give money to lift because the need to get closer. that is not always the case. >> that is not the history of the internet. there seems to be a bigger some game-winner. even with social networking. will see of twitter can get into that group. google, googlend is certainly separating itself in dramatic fashion from yahoo! back in the day. so, yes, alibaba is the main player.

amazon is the main player. you can see amazon was so much see the opposite with walmart. it has flipped. the new media has become the traditional of however but he be transacting in doing their work. >> do you see yahoo! as relevant? they used to be so positive. is it too late for them? >> i do not think it is too late. i think it is a difficult transition for them. it is hard to monetize from an advertising standpoint when you are dispersed around the globe. they need to generate other revenue streams. they do not have a real subscription business. they are struggling on the e-commerce business they have one revenue stream. the market does not value advertising revenue. as well as they do e-commerce, or other software.

>> they came here and made some investments. they had some content related companies. do you see them making an amazon kind of move? >> very much so. attended that in japan. they launched their own prime service. they had streaming video. if you are in the web service a big datahey have platform. you have a marketplace bringing buyers and sellers together. you may feel that you have an open field running. alibaba, do you see a massive amount of humans, human capital. consumers in china that you would not be discouraged by the fact that we are seeing a slowdown. that if you get the big position quickly, they are doing a really good job. i would be buying them right now.

>> we are proud of a proposition we're delivering. it only has more non-gaming attractions and the rest of the resorts and hotels. it is all of macau. thehe same time, macau revenue that we generate from gaming is always going to be much much higher. therefore, for us it is imported to follow in the footsteps of what the government wants. there is a time, point of differentiation. ultimately, casino gaming will be the financial engine. without that component, we would not be able to build these fantastic stocks. >> he mentioned that you built all the boxes but only got two and 50 tables. what does that signal to you? rate,en the annual growth we are happy.

there could be worse scenarios. >> how was the impact on your projection? >> there were a significant impact. least three years ago. at the same time, we build for these properties for 20 years down the road. we're very confident that given what we are offering here, and the fact that it is so different, it'll be a success. market will come back. there are some macro forces. they are not targeted specifically at the gaming industry. ultimately, it is our biggest customer base. china is going through its own challenges right now. we understand that. if you look at macau, it is in the best year location wise. >> how concerned are you that the refugee crisis will stifle >> thee politicians?

crisis is there, but i think that europe has hundreds of millions of people and it can accept hundreds of thousands of migrants. >> there is one condition that we have a common policy and we do not try to leave the burden only to border countries. it is unbelievable. we are slowly building a new common policy. this, the crisis will be ever and ever more serious. >> how do you feel by the role played by oracle? he is becoming europe's only leader. >> in the next three months, the migration passed from the central group towards italy. turkey, greece, i do not think

we have to blame turkey for this kind of flow. turkey can have a role contribute into the solution. but, the origin of the crisis is not turkey, it is the syrian crisis. you mentioned syria, we are seeing life pictures of this. youster, how concerned are that the eu has never been sweep? is almost 11 eu border force. >> we are concerned. we have to think about the fact that until the last month of april, there was no migration policy. italy convened a summit on migration at the beginning of may. there is a tragedy in the mediterranean. since then, five months, we

built some basis of common policy. the risk is that simple countries are blaming the neighbors. everybody is saying that the border countries, italy, greece and tomorrow, whatever, should have the burden. i think that this is ridiculous. it is such a big problem that it should be shouldered by the entire union, some positive steps are there. we need a little bit more engagement.

♪ david: welcome back. it is time to sample the weeks test stories. james bond product placement have gone hand in hand. since the films were first produced. you think sean connery references don perry on 53. brosnanthe days appears

and his final outing is bond and i know the date were yet 20 brown pardons. young daniel craig and they pad it is more real and more authentic to his interpretation. in certain bond movies there have been very obvious placements. in casino royale even brings sheacter says to james bond is trying to size them up and she says rolex deco -- >> that is a bit too far. her reaction is ready audience went oh. that is a product placement does not work. with specter, prior to release there has been a lot of websites going crazy about what to james bond is wearing, what he will be

drinking come all of this. there has been a limited-edition bottle to make it the m five office. they are doing a new campaign. herever bond goes come represents and personifies their brand. that is why you have heineken, that is what you have gillette, or tom ford. they really want to get behind premium brands. they want someone who personifies you they are. >> excellent choice. >> how long have people been trying to make our stride themselves? almost as long as there have been cars. this product for a

remote-controlled car is from 1955. in the 50's they try to really create and at times vehicle. in 1956 a created a concept car called the firebird two. it looks almost like a fighter jet. 1958 they teamed up with rca to create a driverless car that used radio frequency. the cars were supposed to be introduced by 1975. that did not happen. mellon creates a driverless chevy band with a knack that one. gm sees potential and teams up with the university to explore driverless technology. 2004 google is published. in 2005 the grand challenges held worth $2 million to a team that crean create a driver's car. run later goes on to found their

secretive tech research program google acts. the 2007 challenge the man and his team placed second. they had the 70 top across. in 2008 the financial crisis hits. gm teams up with segway and unveils an autonomous concept vehicle built with the same technology built in the 2007 car. google with cash expands the driverless car program in the race between google and gm going into high gear. create an earlier model. in 2012, google unveils a fleet of test vehicles. start passing laws allowing driverless cars. 23 google cars drive themselves in california to texas. 2014 goggle they expanded to gm territory. they told a car without steering wheel or pedals. people seem to like it. in 2015 gm has a super cruise

feature that drives itself in traffic. they plan to start selling the sedan to the public 2017. meanwhile, google says they have already driven over one million miles. but, the vehicles have not been tested in rain or snow. cannotmetimes distinguish between fresh in people. despite that, we could see their car be used in 2017. >> speak recognition, deep learning, artificial intelligence, all part of the work done here in usa. the silicon valley arm of the chinese internet search giant. >> we are in a unique position to have the best ideas from beijing. and we can put them together. >> of meat and her lane. the mastermind behind google brain. one of the most ambitious artificial intelligence programs

to come out of google. he made a big splash in 2014 when he was recruited to run the ai lab, less than five miles away from google's headquarters. >> i'm excited about the potential. i think there is a huge gap between what we can do and what we have accomplished so far. cracks what is next is one of the first projects for the deep learning unit. a learning cop meets web m.d.. the medical app. has a lot of intelligence built into it. first of all, it has speech parts. people can talk to the app. they can describe their symptoms, then they will use deep speech to do voice recognition, then they will meet the need can

to see a doctor. >> this is part of the ceos and grand vision for the future in online off-line services, or letting users connect with nearby businesses through their smart phone. >> it is a vision he believes and so deeply, he is willing to bet billions of dollars, risk investor relations, and sacrifice profit today all without a money that guarantee on future growth. in total, he has set aside $3.2 billion over the next three years for online-off-line research. that number is only expected to grow. speakthink if we can get recognition to a level where it is totally natural, or it is more than 90% accuracy, that would be transformative. ♪

♪ david: as we wrap up, let's take a look at some of the charts that tell the story of the week in business. corrects it is hard to imagine to the business without money. >> for thousands of years people got along without money. in present days, living simple and using what is needed. >> i'm the cohost of what you missed, we just got the announcement, as expected of the rays did not raise rates. everybody knew that would happen. it was interesting, because they seemed to open the door for a rate hike in november. a line about global growth concerns. they even talked about what it would take to get the hike in december. now, there is a lot of tension. you can really see that showing

up. this is a one-month chart of yield. these short-term's interest rates are highly sensitive to the policy because the fed controls short-term interest rates. as you can see, there is a big surge today. all of theseeing reactions. stocks slipped a little bit. you can see the instant reaction to the fed. they have higher rates than what people thought. some of the u.s. economic data lately has been a little bit mediocre. what we have seen is a reason to delay a hike until next year. it looks like there is still a possibility. >> let's get to the charts. this week, it was all about the fed. action thattook no hinted at the possibility of hiking rates in december. take a look at expectations. we are rising before and after

the meeting. we have a dramatic change. shares.ook at china announced a change to the one child policy. now, couples can have two children. shares in germany's biggest banks found stocks planned to fail to impress investors. that is the week it was. now for the month it was. a monster month for october. it was the biggest month of gains since 2009. ♪

x it is right is one of the top companies, its products are used by 2 billion people every day. in over five years paul taubman has had a positive impact on the environment. in an exclusive interview i speak with him about sustainability, cop 21 and what it takes to be a good leader. >> think is a much for speaking to bloomberg. there is a lot of talk about spend ability. paul: