>> coming up, the central banks act and the markets react, from washington to brussels to beijing, it has been an intense week of focus on monetary policy. earning season is here. some companies missed targets. get the stories beyond the numbers. controversy rocks valley and pharmaceuticals. a new casino opens in macau. plus the most compelling digital video and telling charts from around the world in the last five days. this is "bloomberg best."

david: welcome to "bloomberg best," a weekly review of the most important news coverage, analysis, information, and in-depth journalism from bloomberg's intelligence networks. central banks and monetary policy made headlines in the u.s., europe, and asia. >> i do believe that there is some evidence that the fed is getting increasingly nervous about being at zero for seven years. unemployment rate likely to grow. and yet we are still at emergency policy settings. it is an extraordinary period.

>> vice chairman fisher agrees that we are at emergency levels. >> and is the big question -- what many said is the pieces were in place. i know we didn't have anybody else who is examining this very closely. >> michael mckee is in washington with a question. michael: in the boilerplate about when they are going to raise rates, they have been saying for months and months in determining how long to maintain their target range they will assess progress on inflation. in determining whether it would be appropriate to raise the target range in its next meeting. how much of a commitment to you see that being and how hard would it have been to get that into the statement?

>> regardless of what the outcome is they will debate the issues on the merits. i obviously wasn't there. you have a lot of the same debates take place in this meeting that you didn't in the previous meeting. many have kept saying in 2015 and the meetings are all live meetings, there was a debate whether a press conference would matter or not. i think they are keeping it on the table. >> he would once again reemphasize you do not cover up the importance of the exchange rate. my first question would be the expansion of the qe policy.

how much of that as a response to the ecb last week? >> we have to be vigilant when it happens. expanding our qe program and creating clarity. going another six months until next summer. that may be easier to understand. incredibly active over the last 12 months. they wonder why the central bank is being so aggressive. what is it about the effects channel that is causing concern that it is pushing the central bank to do more? >> if they were to depreciate quickly it would be harder to get inflation around 2%.

given that inflation has been low for a while we need to get inflation up to 2%. what happens really matters. >> within this is an idea of pushing markets or telling the yield curve what to do. tell me what humility and new model building you have learned in the last couple of years. if the model is old, what is the new new for you and your bank? >> time will tell when things settle down what those models will look like. we have to use many different tools to get inflation up to 2%. >> we have been talking about china stimulus moves. the rate cuts were not the most interesting part of the announcement. >> it wasn't too much in a

surprise. promising is the remove with the deposit rates. it should make a big difference. over to the plan of opening up capital markets in terms of expectations going forward, we are going through a easing environment. something says the rate cut is not the end of the story here. >> is the economy generating enough growth to create employment opportunity that will essentially be soaking up 10 million urban jobs? if it can i think it will be comfortable. if not they could do more. >> the stimulus comes as china's

leaders gather in beijing to formulating plan for the nation. expect plenty of policy continuity as manufacturing and construction growth continue to fly. >> what we are looking for is a little more detail. for example, green industry. that is something moving up the agenda. still not quite clear on what the parties overall strategy is on this. that is the sort of area where we can look for more details.

david: it has been a busy period for quarterly earnings. let's take a look at the companies in the spotlight this week. >> let's head out and bring in hans nichols, international correspondent. the guidance not great, either. 2015 sales in line with 2014 sales. >> i think the operating profit

loss is that it is bigger than analysts estimate. more of these numbers are going to be trickling through every second. the numbers are important. we should take note of that. what would be more important is the conference call later on today. that is when the new ceo will get on. remember they have already set aside 6.5 billion in provision. they still don't have a solid idea of what this is going to cost them and what their technical fixes. the 1.8 and 1.6 of the decent engine. in some ways these have been bouncing around. not overly surprising. we basically got a good sense of where they are heading. still waiting to see what the october numbers. they lost a little bit of market share.

about 1% in the european market. sales of audi and porsche, those are two profit centers for the volkswagen group. >> net income more than doubled. wall street estimates and the stock is falling. >> thank you for joining us. let me ask about the bottom line. pretax profit was better than a lot of most analysts had forecast. >> let's talk about the estimates. we blew through the revenue estimate. in terms of cash flow we blew through that as well. there was a tax rate difference of one percentage point.

we came in at 33%. that is the difference of the penny. overall we outperformed and nailed it. >> we had 40 have -- you came in at $.45. the shares are off. what do you think is driving the stock loss? >> we actually met expectations with revenue stronger and cash flow stronger. our net income was $1.9 billion. we grew volumes up, revenues up. once we get pass the quality of the performance they delivered, the value will be recognized by the market.

>> you guys missed on eps. for the investors who want to see profit growth, what do you have to say about them? >> i cannot predict day today stock prices. what we announced was one of the most completely in line with the company. 1.1 million postpaid customers. 843,000 postpaid phone ads, which is as many as at&t lost. 42% increase year over year. a cash flow of 400 11 million,

normalized to 487 million, which was a tremendous result. both of which we anticipate will continue. i am really pleased with the overall results of the company. >> there are analysts who say this is the first disappointment from t-mobile in a wild. from t-mobile in a while. >> i think these things will settle down. we kept our guidance the same. our surface revenue growth was 11% year over year. there is short-term what people have misinterpreted last quarter's tax rate. one time commissioning costs. the net income and earnings per share is directly in line with

what we expect to do and continue to do. >> when you reported the numbers this morning it looks very disappointing. >> it dug deep into its pockets. not sure how much you are actually touching. it is a 10 million by back. we do know details off of that already. bringing this back into the treasury and they will be canceling altogether. quarterly dividend starting next year. let's get those results we talked about.

based on the exchange rates it is based on four 5 billion u.s. dollars. -- 45 billion u.s. dollars. and the net income. 4.6, which i should note is less than half of what apple reported yesterday. many other things like mobile phones. >> mobile phones faces what we are interested in as well. >> it came in a little lower than last year. roughly about 23.8, if i remember correctly. apple was over 11%. >> let's bring in bloomberg intelligence analyst, good for

you to join us. >> i would say this comes as a huge surprise for investors. the chair by back was roughly -- -- the share buyback was huge. it came down slightly from the maximum 5% gain this morning. that 5% is enough to put the share price up today. some people also question the management. it is widely talked about. they keep saying no. they're doing this huge by back to boost up the share price. they may have something else in the pipeline.

a lot of people are speculating -- in order to make the inheritance of the share from the chairman to the next generation cheaper. they can have a better ratio. it seems they are telling the market they are not there yet. >> to get optimistic, maybe it is too soon. the downstream continues to insulate the company by this price. >> i would say that does well with trading oil. bob dudley announced plans to make the company work $60 in oil.

we can defend our dividends, the key issue for him. >> the opposite view going forward, when you look at the earnings in the rest of the sector, a huge week for big oil. >> we have 50 to 60. if you cut the cost down to that level that will mean a lot of possibility in the years ahead. >> that is a subtle shift in there by someone widely respected. why are southside analysts finally getting optimistic? is about cost-cutting or some form of revenue stability? >> i think the cost-cutting is key.

oil is not going to default but we will start to see those cost cuts take effect. some analysts are saying this is the bottom of the earning cycle. it may not be the bottom of the oil cycle. >> real simple here. this is inflation-adjusted commodities. down we go breaking through new commodity lows, getting near that multi-decade trend. >> oil has the ability to flow quickly. it is hard to store and the issue is that winter might be if you do see oil support -- it has the ability to crash quickly. natural gas is set to break through below two dollars.

that is huge for the american economy. >> that has been part of the issue. it has been almost an iphone 6 hangover. especially in terms of the december guidance. our stock starts to not just tread water but they prove there is a lot of gasoline on success. >> where is all that coming from? >> there are two major issues. you have an existing base of ios users that are probably not upgrading their phones. customers can get close to upgrading every year where they were unable to do that before.

this will create a new virtuous cycle. not only in this december quarter but going out until next year. >> about one-third -- what they are seeing is 30% of those for placing their phones are coming from android phones. >> it really is about how much room there is. >> that is naturally the key. that is a moving corner. ve-me quarter.ro ♪

david: excitement over growth and concern over controversy. that sums up a week in health care.

the companies ceo singled out the founder which initially raised questions about the accounting practices. >> to protect our shareholders we promptly coordinated with our outside regulatory counsel to make a request that the sec investigate citroen. our counsel has met to discuss the matter. >> have you been contacted by the sec? >> no i have not. >> what is your response about citroen research? >> valley in stock was down 35% based on some of the comments that came out of bernie sanders.

my first two articles wished to discuss price gouging and operations. the stock was down and earnings. it was last week the stock took another leg down where i started to discuss their undisclosed relationship. what is most unsettling is one key made analogy of yelling fire in a crowded theater. what i did as i walked into a theater, i smelled a lot of smoke, and i said, excuse me, there may be a fire. there is a big difference between the two. investors had a chance to walk through the theater, see the response of the owner, and they actually decided to leave the theater.

let's keep exactly what they said in context. >> i wanted you inside bloomberg terminal to show you how valley and traded during the market and are you as her hero when they added the headline. saying the accounting issue was confirmed as appropriate. when the conference call began and mr. pearson made the comment about you yelling fire in a movie theater. instead we have seen the stock reached its highs of the session, although it is off three dollars. i wanted to get your reaction to some of the action the company has taken. what does that signal to you? >> they have made a lot of money. him joining the board is like my mother saying my report was correct. what does that mean? it is irrelevant. >> what about the reaction from analysts saying the concerns are

overblown? is that disclosure sufficient? twofold.swer is as for making a small percentage of overall sales, the important part is what it represented to their organic growth. if you compare them to a johnson and johnson, they are still relatively expensive. the reason they are given this premium is because of organic growth. as for no accounting fraud, in my opinion, through the research of publicly available information, if this is not an accounting fraud, it is an insurance fraud.

insurance fraud will eventually lead to accounting problems. as much as mr. pearson has made me the poster child for someone shorting his stock, i have to say some of the best workout there was done this weekend. i feel flattered he has made me poster child. in my the one who laid off -- am i the one who laid off everyone, raised the price of heart medication? there are reasons why his stock was here. it is not because of me. >> it is kind of like some hedge fund guys are going at each other. does it matter if there's a bigger story at play here? >> the short seller put out a report. his claims haven't necessarily been borne out quite honest anything about these false customers and inflated sales, valiant has been a lot of things

to refute them. what they did do is raise a whole bunch of questions about how they have relationships to distribute drugs in the united states. why they had not disclosed some finance interest that they had in them you and how aggressive their practices are and are they pushing to our to inflate or -- pushing too far to inflate or distort the demand of the u.s. markets? there is still a lot of questions and how these operate. >> almost a poster child for m&a and pharma. model thatllenge the it was developing for the rest of the industry? >> they are perhaps special cases because their entire model is built on acquisitions. there are companies that have

used models have this slogan. i think the search and development, not research and development. the rest of pharma does not follow that pattern. products inr development or they give access to people for research and development. ♪

david: business newsmakers from around the globe find their way to bloomberg every week. here are some of the most intriguing interviews from this week. >> with equities in general, do you think we are going to see a shift? >> with last weekend with amazon and with google, there is this at scale play. alibaba is a very aggressive company. i like what they are doing with the states. lots of investment in e-commerce companies here. comcast had good numbers today.

they had him creating new investment arm. these companies are very aggressive going up trying to consolidate. >> when you say the bigger getting bigger, only because they said if you were positive evaluation is here i have to give money because they are going to get closer. that is not necessarily the case. >> there seems to be zero-sum game winners in each of the categories. social networking is one big player. see if twitter can get in that group. google certainly separated itself in dramatic fashion. i would say alibaba is the main player. amazon with so much momentum and so much momentum with the walmart.

it is flipped now. the new media has become the traditional, how everyone will be transacting and doing their work. >> there with such positive news yesterday and a huge win for yahoo!. is it too late? >> i think it is a difficult transition for them. from an advertising standpoint when you are so dispersed around the world. they don't have a real subscription kind of business. they are struggling on their e-commerce business. they have one revenue stream, which is advertising. the market doesn't value advertising these kinds of revenues as they do e-commerce or software. >> you mentioned liberty media. they did come here and make some

investments. do you see alibaba as making an amazon move from e-commerce into a content company? >> they launch their own kind of prime service streaming video. if you are in the web service business and conference business, really a big data platform. bringing buyers and sellers together. you have running after those opportunities. >> do you merely look and say there is such a massive amount of human capital that you wouldn't be discouraged by the fact we are seeing a slowdown in the overall economy? >> i think if you get that position quickly and they are doing a good job, i would be buying alibaba right now. >> extremely proud of the entertainment proposition

delivering. probably more gaming attractions attractions than the rest of the integrated resorts in all of macau combined. at the same time to review new test the revenue we generate from gaming is always much much higher. for us it is important to follow in the footsteps of what the government wants. as a point of differentiation, ultimately casino gaming is be the financial end. without that component we wouldn't be able to build these amazing fantastic things. >> you only got 250 tables out of the 400 you wanted. what does that signal to you, given the environment and annual growth rate environment. we are happy because there could be much worse scenarios. significant impact in terms of

the model we are looking at. at least two for three years ago. we built these properties for 20 years down the road and we are very confident given that what we are offering your so different it is going to be a success. there are some macro forces causing this. they are not targeted in the gaming industry. ultimately the customer basis china. china going through its own challenges right now. longer-term it is still the best graphical location. >> how concerned are you that this refugee crisis will stifle moderate politicians? politics in europe will become more extreme? >> i think that is europe with

hundreds of billions of people can accept hundreds of thousands of migrants. on one condition, that we have a common quality and we don't think to leave the burden only two border counties. -- only two border counties. it is unbelievable that we didn't have a common european policy on migration. we are slowly building a new comment policy. -- a new common policy. without it, the crisis will be ever and ever serious. >> how do you feel about angela merkel who was becoming europe's only leader. >> in the next three months the migration lows from the mediterranean through italy and the oriental rules, turkey and greece, i don't think we have to blame turkey for this kind.

turkey can have a role contributing to the solution. the origin of the crisis is not turkey. >> you mentioned syria. and there are live pictures of the human tragedy. how concerned are you the eu -- that we have so many divisions at heart that it is a most impossible to have a border, let alone coming up with a common policy. >> we have to think to the fact that until the last amount of april, there was no migration common policy. italy asked and convened a summit on migration at the beginning of may in the mediterranean area and then we build some basis of a common policy.

the risk is the single countries are blaming their neighbors and everybody is saying the border countries, italy, greece should have the burden. i think this is ridiculous and such a major problem should be faith by the entire european union. and some positive steps are there. we need a little bit more engagement. ♪

david: welcome back to bloomberg best hit this time to sample the best stories. >> james bond and product placement have gone hand-in-hand since the films were produced. sean connery references dom perignon. in die another day they had 20

brand partners on board. daniel craig and his interpretation of bond. it is more real and authentic to his interpretation of james bond. very obvious placements. eva green's character as to james bond on a train she is going to size him up. that has me be gone a little too far. >> i'm your best chance of staying alive. >> the websites have been going crazy about what james bond is wearing, what he is going to be drinking.

they changed the belvedere logo to make it the mi five offices. wherever bond goes he represents and personifies their brand and their image. that is why you have heineken. really wanting to get behind premium brands. wanting to get behind someone who represents who they are. >> excellent choice. this article is from 1925.

in 1956, g.m. unveils a futuristic concept car, but it is not the firebird you know. it is kind of like a fighter jet controlled by a magnetic strip. gm teams up with rca to develop a driverless car with radio frequencies. the cars are supposed to be commercialized by 1975. that doesn't happen. g.m. teams up with the driverlessto explore technology. google is found in 1998. in 2005 the grand challenges is held. a car named stanley wins. at the 2007 challenge they

placed second on the gm carnegie mellon team. g.m. cuts jobs. it unveils an autonomous concept vehicle built with the same technology built in the 2007 car. google expands its driverless car program. and the race kicks and high gear. -- kicks into high gear. in 2011, g.m. and segway make the final version of their earlier model. google unveils a fleet of test vehicles in 2012. states start passing laws allowing driverless cars. in 2014 google expands into gm's territory and build its own car without a steering wheel or pedals. it looks like a cute little toy.

2015, gm shows up to cadillac with the super cruise feature. they plan to sell the sedan in 2017. maybe. google says they have driven over one million miles in their driverless cars. but they have not been tested in heavy rain or snow and i sometimes cannot distinguish between trash and people -- and they sometimes cannot distinguish between trash and people. >> speech recognition, artificial intelligence, all part of the work done here at the silicon valley arm of the chinese internet search giant. >> i think we are in a unique position to see the best ideas from beijing and to put them together to create things no one else has created. >> meet the mastermind behind google brain. less than five miles away from google's headquarters.

>> i'm excited about the potential of ai transforming health care. we are working hard on that. >> what is next is one of the first projects to emerge from the deep learning unit. the learning unit. -- the learning unit. a medical doctor in an app called at the doctor. >> the system has a lot of intelligence. people can describe their symptoms and the symptoms will use speech recognition. >> this is all part of robin

lee's grand vision of letting users connect with nearby businesses who their smart -- through their smart phones. in total, they have set aside $3.2 billion over the next three years for off-line-online research. and that number is only expected to grow. >> if we can get speech recognition to a level where was completely natural, where it didn't just have 90% accuracy but 99% accuracy, that would be totally transformative. ♪

david: let's take a look at some charts that tell the story of the week in business. >> it is hard to imagine doing business without money. for thousands of years, people did get along without money. living with simple. fomc just got the announcement. as expected, the fed did not raise rates. they seem to open the door for a rate hike in december. they removed a line about global growth concerns. they talked about what it would take to get a rate hike in december. you can really see that showing up. this is a one month chart on

yields on government bonds. they are highly sensitive to fed policy. a big surge today in the yield on to your government bonds. -- on two-year government bonds. we can really see the instant market reaction to the fed, anticipating higher rates that people -- than people had thought. some of the u.s. economic data lately has been mediocre. that was seen as a reason to maybe delay a hike until next year. it definitely looks like there is a possibility of a hike this year. >> let's get to the chart. it was all about the fed, the fomc took no action. take a look at expectations for a rate rise before and after the meeting. a dramatic change.

they spike after china changed its one child policy. a jump in share prices. and deutsche bank, shares in germany's biggest bank, plans to revise profits failed to impress investors. just a monster month for october. the biggest month of gains. ♪

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