>> stories that shape the week in business around the world. blockbuster ipo in japan to the latest in a job support. how investments top headlines. some of the biggest banks scaling back their forecast and cutting their work horse. we will dig into the megamergers that keep on coming. and will introduce you to a company that is making things the old-fashioned way. one unique item at a time. the most intriguing interviews and revealing charts. this is "bloomberg best."

♪ scarlett: welcome to "bloomberg best" a weekly review of the most important news coverage, information, and in-depth television. let's begin with a tour of the top stories from the trading week in the u.s. and europe and asia. >> tom mckenzie in istanbul for us. the polls are not just that in the u.k., they are dead elsewhere as well. >> i can't count him the elections i covered this year with the polls have got it completely wrong. they got it very badly wrong in turkey. shock and surprise across the board last night. a clearults showing majority winner. problems,ecurity

turmoil and unrest in turkey. atrios breaking down between kurdish militants, isis bombings, and the oppression of the economy which is slowing growth to around 3%. by representative from arch bridge capital. we are seeing the markets in turkey rally on the back of this election result. is this indicating a more positive sentiment, and more positive outlook for turkey into turkish assets, or is this a short-lived relief rally? >> we think this is a short-lived rally. turkey has a couple of points that it needs to overcome in their structure. one is a large current deficit which they need to finance. they continue to finance by a short-term assets and foreign assets. every time there is a dollar liquidity squeeze, that changes and makes the country fragile. the next point is that simply

there is a vicious circle between the currency and inflation rates. everyone else in the world is fighting a deflation, turkey is struggling with high inflation. the depreciation is feeding into further inflation and vice versa. to break out of that takes a lot of concerted effort to achieve. we don't necessarily think that even a single party is going to be able to achieve that, especially when in our minds, the election mode is not over yet. the first thing on the agenda is going to be installing a presidential turkey. that is going to take up the next 5-6 months. >> the political risks in your mind are still there for turkey. we had a guest in london that thinks this majority is positive, the political risks have been pushed off the table. you are not so sure about that. >> no, we don't think about that. yes that single party could achieve a lot of things. but there are more stress -- more threats still in play.

central bank independence has been consistent throughout the party's rule. the presidential agenda has been put forward for a long time. that is one of the reasons why there was a second election. hence, we don't think that is disappearing from the table. holdings and its banking and insurance arms have soared. investors flocking to the group's $12 billion ipo. shares in the insurance inside the business jumping by more than 50% after trading began. the holding company jumping as much as 18%, with a 16% gain for the bank. we can hear from japan president, who says he believes the listing will benefit both investors and the wider economy. i think the listing of the japan post group companies will cause a huge impact on the industry and help rejuvenate the entire economy. japan post shares should be

considered at assess where one can expect a stable return. brian fowler joining us now. -- ryan fowler. post holdings jumping more than 50%. is this stock jump surprising to you? ryan: there is a huge amount of demand for these chairs. a lot of excitement about the ipl in general. sit atnoted, these ipos the tops of their ranges. they were oversubscribed five times and 15 times. we saw the shares on looking up between 5% and 8%. this morning, this story got away for me while i was sitting in this chair. werere seeing that the more than twice the amount of offers going into this. jeffries had put out a fairly ambitious price target hundred

for the banking unit. highertime that was 10% than where it was in the gray market. jefferies have to come out with a new more ambitious price before the morning is out. >> past this initial excitement, 14%.e seeing trade past they are surging right now. what about the long-term prospects for these companies? >> the long-term prospects are pretty good. we had a story just yesterday talking about the historical performance of japan's biggest ipos. we found that over the first decade -- sorry, over the first 12 months, the biggest ipos all rose by 40%or more. that is especially true if there was a state backed element. with these japan units, they are all 89% owned by the government even now. a lot of state support.

it means a lever japan. this is not just about a few companies being privatized. -- it means a lot for japan. it's a lot for reform, steering appetite in a nation that needs it. 11 people, especially in the countryside -- we are going to see a lot of people, especially in the countryside, 24,000 branches across the country. you will see a lot of people becoming interested both in the stock market and in the general concept of reform. widens.w scandal the carmakers as an extra 800,000 vehicles may be involved in another emission scandal. that's after the carmaker found faulty emissions reading in petrol vehicles, watching a crisis that so far be set on the jewel agent. -- diesel engines. take us through the latest twist. who made this latest revelation,

and the price tag that could be attached to it? >> it significant that the folks like an self disclosed. they came out -- this is significant that volkswagen self disclosed. they came out that this hidden carbon dioxide. we haven't talking about carbon dioxide -- nitrogen-- >> messing up in terms of their pr and to indication strategy. >> i would not go that far. in some ways they are doing what is crisis management 101, which is to get to the bottom of what they know. and if they know it, disclose it. we are six weeks into the scandal and they discover they have a carbon dioxide irregularity as well as i might undoubtedly -- as well as a nitrogen dioxide irregularity. this goes hand-in-hand, a direct relationship between fuel economy and carbon emissions.

have been cheating on your carbon emissions, you are likely going to have inaccurate fuel economy ratings. that could trigger not only another round of lawsuits, like with the not region oxide -- the nitrogen oxide emissions, but it could be epa violations as well. the epa has find automakers -- fined automakers heavily when they lie on co2 output. >> volkswagen stock down 9%. we will keep you updated. let's bring in global chief investment strategist at blackrock, which manages four and a half trillion dollars in assets. blackrock and yourself put out a report, the price of climate change, whether you believe it or not, it's now an investment issue. it's not going away, is it? does this story feet into the big picture for you? >> the way i look at it is what is -- climate change is uncertain. the science is well-known, but the timing is uncertain. but extremely unexpected loss is

a real definition of risk. just as we saw with european utilities, a function of the japanese soon on the in 2011. --japanese tsunami in 2011. >> when you look at something like vw, it's a corporate crisis that has echoes for some people. that is the view of some people. as you look at that's equation, is it the build to reduce the risk? -- is it difficult to reduce the risk? 85 percent of emissions come from the transportation sector, if you have a process of screening or excluding, or actively investing in mitigation, you can reduce the risk of this exposure quite materially. over the last several years, it hasn't cost you anything in terms of performance. janusning us now from

capital out in california. i am sure there is a bright glow emanating from c streets in washington that you can see from there. >> i think so. i am glued to 6 of my bloombergs, they are all telling the same story. almost 100% that the yellow light changes in december to bright green. before i go to bed last night, i cap elated that any jobs number over hundred 50,000 would be sufficient. over 150,000 would be sufficient. analyzes it on a phillips curve lens, somewhere around 5.25 percent which is low that at five. they are ready to go. >> what are they waiting for? why not have a special meeting and say, this is extraordinary and get out front and provide

the leadership that the markets desire? bill: that is not the nature of the fed, i think we would agree. and they wantal to make sure markets are prepared. they are unlike volcker, who at one point in the late 1970's, shocked the market with a 2% increase before telling anybody. i don't think that's the nature of this fed. i think the market obviously is anticipating a rather quick increase of 25 basis points as evidenced by that rise in the 2 year. >> i want mike mckee to get back to the jobs report. i believe this is yields higher, bond prices down. how do you adjust in an unconstrained manner this morning? it asefully you go into we did at janice with a negative generation. --negative duration. that is the beauty of constraint to prepare for a mild their market.

there is certainly a down day price like today. very early this week, negative durations going short, the 30 year treasury as opposed to long. obviously making money at the moment. market may not be prepared, because hedge fund and retail investors will look at the line and use etf and maybe even mutual funds as an exit vehicle. they all can't get out at the same time. ♪

scarlett: welcome back to "bloomberg best." international banks under pressure. income andpact on sparking major strategic shifts. this led to some consternation and much conversation during the week. it was a challenging quarter. in addition to everything you just mentioned, think about the summer. you go from an environment in which the fed was doing exactly the opposite, big changes in emerging markets went up on the

geopolitical fronts. i'm very glad that not only we managed the risk of the bank effectively, but we've managed in good times their risks. that is the biggest success for us. >> looking at wealth management. it has been a pretty darn tough quarter for everybody. commodities imploded. anybody's guess what is happening in china. still, wealth management just didn't deliver the kind of target that the market wants. profitability dropped by 10%. i think the essence of that conversation just heard, i asked him on a scale of 1-10, how concerned are you? he still thinks china has potential to be the generator of wealth. seems pragmatic when you talk to him. on this occasion, he seemed fairly stoic about china and asia were going to be the core

of where the growth comes from. >> we will talk about that in just a moment. we've had a series of headlines in the banking industry this morning. not just ups, but standard chargers, 15,000 in job cuts. raising 3.3 billion pounds. potentially more to come. two questions, why now? and how long is this transformation going to take? >> i've long said the banking industry is an enormous period of transition. we had particular stories at the moment, standard chartered is a good example of a story. we also have the evolutionary twist that is going on just now. we start off with standard chartered. for a long time we've been looking at standard chartered and wondering what's going to happen next? is it going to either run into another regulatory crisis, or was it likely to become on somebody's wish list as an acquisition?

i think this morning they have taken losses, a bit of kitchen sinking under the new ceo. i rather suspect that we could see after the initial stock folds this morning, that people will look at standard chartered and think about it in a different way. it does have an excellent franchise in asia. that is one story. the other side is that this wealth management thing. i am just wondering if the wealth managers, the banks are now focusing on this, missing something downright blinking obvious. wealth management is about wealth preservation. it's an old economy business. it's about the third and fourth generation, making sure they don't blow the money. all the money now being traded, the wealth being treated across the planet today is happening in the expanding economies, the asian economies, and even elsewhere, where people are first generation entrepreneurs

and they are not putting their money with some swiss bank to manage it. they are the guys that are making their money sweat. with the world changing, the block chain, we are going to see a complete evolution that leaves many of these people in the dark. china.ing at huge numbers. more millionaires than billionaires and anywhere else. sending money abroad at unprecedented levels. our senior editor has been tracking this story for us. we are talking about gargantuan amounts of money. >> it is absolutely enormous and unprecedented in the history of china, perhaps since 1949. this month of money going out of china last year through these money flows, people taking their money out of china and putting it overseas for safekeeping. estimated to be about $304 billion last year. this year alone, those number seven going. -- $324 billion.

>> i think you will refer to what happened in just august. >> when china devalued the yuan august 11, immediately in those three weeks afterwards, $200 billion. again in august -- september, we began to see similar levels. $194 billion left again in september. these are staggering numbers. rishaad: all very well to talk about. we will come to that in a minute and the effect that they have. 50,000 u.s. dollars per person per year, is that right? >> those of the currency controls. rishaad: how do they get the money out? >> chinese people use various means, some very creative. one is to come to a hong kong money changer. you take the money here, you open a bank account in hong kong. when you go to the money changer

in hong kong, to give you an account number back in china for you to domestically transfer your money from a chinese bank. then when you told the money changer that that money has been transferred, they then transfer the money to you from the hong kong money changer into your hong kong bank account. no money actually crosses the border. rishaad: that is called smurfing. >> that is actually a different technique. you ask different people -- everyone gets a court of 50,000 u.s. dollars. u.s.ota of $50,000 in we can all our money legally into an account overseas. rishaad: there are other ways as well. >> some people to get across in a suitcase. underground banks that you can go to across the border in china. you give them your money in yuan, they give you a u.s. dollar check, take it across the

border in cash it in hong kong. once against to hong kong, it can go anywhere in the world. -- once it goes to hong kong. this is why property purpose -- property prices are searching. chinese buyers are becoming the biggest foreign buyers of real estate in the u.s. they are buying 1/4 of nerw homes. they had inflated puppy prices in vancouver, london, everywhere around the world. -- property prices.

♪ scarlett: welcome back to "bloomberg best." billions of dollars changed hands in mergers and acquisitions. value of the mess transactions for 2015 now approaching $5 trillion. let's look at some of the weeks notable deals end of the analysis that followed. >> francine, bring us in on this europe angle. that is a big deal, isn't it? >> 22 billion euro deal. visa basically said it has acquired or in the process of acquiring its former subsidiary, visa europe. this means they would get control of 3000 out letters -- banks. it is putting more pressure on

its competitors. visa announcing this as part of reported an it also $85 billion buyback. this was expected. but the valuation is surprising because it's a huge number. it means that they see value in europe. if you look at it from a macro perspective, this is visa citing -- saying they wanted that massive subsidiary back. >> how profit and revenues fold into the economy. this is a perfect example of no nominal gdp, when in doubt, synergy, and combine. i know you can comment on visa per se, but we are seeing this industry to industry, aren't we? and belowtes are low, even the levels that we deserve in some respects. >> halloween may be over, but a sweet candy deal. activision bought king deal

entertainment, the maker of candy crushed, and a $5.9 billion deal. at st say, this struck us first blush a strange marriage between call of duty and candy crushed, which are quite two different games. [laughter] >> brutality meets suites, a bit of a bizarre next are. -- meets sweets. king is actually headquartered in ireland, making this a rather appetizing corporate tax rate. this is the 6 billion -- close to $6 billion bet on mobile. the call of duty maker and world of warcraft has started to get a taste of mobile dating. they've had hearthstone which stalled particularly well. dutch which sold particular -- which sold particularly well. this maker has made more than

200 games. i don't know about you, but i can only think of 2, the two candy crushed games. they have to be more than a one trick pony if they are going to live up to $6 billion worth of value. today, as existing percent competitivether -- ipo pirrice. this is 20% under that. >> what is the value for position for activision? did they want to get into the smartphone game? >> that is exactly right. when you go to any tech event, this is the biggest startup event in the world. over 40,000 gathered at the moment. do their consumers computing on mobile. they are going to move enterprise onto mobile as well. onhink this is a big bet mobile gaming and on

smartphones, particularly when everyone is still playing candy crush. >> on track to smash records and 15, at the current pace, only tapping $4.5 trillion by the end of the year. today alone we seen an original $40 billion of transitions with the merger monday. when familiar name at the top of the leak, that would be goldman sachs. -- one familiar name at the top of the league. goldman's global cohead of m&a. deals haveee what been done, what deals have been announced, and which deals are under discussion. but we can't see the pipeline. that is where you have some visibility into the future. doesn't look as good as -- does outook at good 3-6 months as it does today? >> the pipeline continues to be strong.

if you ended the year today, you would have a second business m&a year on record. we are on pace to top where we were in 2007. the nature of the transactions are big strategic deals between corporate and large transactions. that continues to be what we see in the pipeline. shareholders receiving these deals quite well. the logic of the transactions makes sense. as we look at the pipeline, we are encouraged about activity going forward. >> how many big transactions? >> 10 deals over $1 billion this morning. >> and you were in how many of those? >> seven. it was a good morning. >> vice chair of the banking division at barclays still with us. barbara, do you agree? >> i do. it is the largest m&a year we have seen on record, ever, in terms of size. this is in terms of size. there are actually fewer deals that have occurred, this is bigger. least 70% of the transactions

are over $5 billion. what greg alluded to is major strategic actions amongst corporate. you are seeing the accommodation of size, scale, scope reaching for revenues and cost reduction, trying to address technology changes to increase productivity. i think it will continue. >> companies this earnings season have been ratcheting down guidance for next year. do you expect that to drive even more dealmaking because profits are so hard to come by? >> yeah, there are actually -- most companies are making their profit estimates. people guide over a year period. where they are challenged is on revenues. a large part of that is coming in, where can we grow? where is global growth today? that speaks to the macro environment. whether you have china, where they were stable at six have percent, -- 6.5%.

with rates at all-time lows, 12 trillion qe. you put your pedal to the metal and cash is king. ♪ buddy- nice place, nice car what happened?

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from people that run companies to people that run for president. every week we feature interviews with some of the most influential and intriguing figures. let's run through some of the best interviews from this week. >> i'm always curious about why the airline industry is so focused -- here we are in silicon valley, the heart of innovation. airlines, cruise ships, trains, notes, music industry -- known for a lot of innovation. group madergin is a international industries. if you walk on a virgin american plane, you will feel this is special. people cheer. people are innovating all the time. can have aay we

cruise ship company that makes money is to have the most innovative teams setting it apart from everybody else. company, we got the most exciting new trains and doubled the number of people traveling. we enjoyed trying to shake of industries. ♪ mark: this morning we spent some time with the real donald trump here in gotham city. we asked trump about politics and the tax issue, about which we knew he would have a lot to say about corporate inversions. john: corporate inversions. you said this is a tremendous problem. you said that you've taken advantage of angry the loss. corporations have done that. how is this different? is this legal? how is it different?

mr. trump: you can stop it easily. $2.5 trillion, it could be for or five. this is money that wants to come back to this country. the corporations want to bring it back, but they can't because of the tax laws. they are so prohibited and that income located. now what is happening is that companies are leaving our country -- you are reading about it. you see pfizer -- they are leaving our country and think about massive numbers of companies needing to get that money. also to get a better tax deal. that is what different. john: what you're saying is the law is the problem, not the company's behavior. it's not bad what pfizer is doing. mr. trump: no, and there's no way you can stop it other than allowing the taxes. they'd have to pay so much they would have to be fools to bring it in. under my plan, and a couple of others, but no one even knew about corporate inversion until i brought it up.

these undercabinet stone even know what corporate inversion is. i really know. we lose hundreds of thousands of jobs to other countries because of corporate inversions. bring thethe taxes, money and so that we can use that money to build and do things in the u.s. josh: you are not criticizing pfizer at all. mr. trump: no. look, in the old days you would leave new york and go to florida. we would go to save taxes. now because the world is so different, you leave the u.s. and you go to ireland in different places in asia, and you go to europe. i mean, it's a different world. we have to compete better. 2 personalnish with questions, somewhat interlinked, some would say. the first is, do you have any information -- any ambitions to stay beyond five years? the other, do you have any reaction to the events in canada of the recent elections? [laughter] >> very good.

on the second, i would congratulate mr. trudeau and his new cabinet. his cabinet is very strong. to working with the new finance minister. role, we have a tangential role in the upcoming discussions in paris. which, if i may, which brings it black to -- back to bloomberg, potentially sets up a market-based role on climate change. with respect -- i'm not even halfway into my five years. it's far too early to answer that. ♪

scarlet: welcome back to "bloomberg best." you can voice find fascinating feature stories around the world on bloomberg tv and on bloomberg.com. here's a sampling from this week starting with the first episode of "made" a new series of short films that show how everyday luxury objects are created.

>> cunningham materials to manageable sizes. -- cutting down materials to manageable sizes. preheat those up in forges and use our hammers to shape them into knifelike shapes. the hand eye coordination, where you want to put the hammer, the angle of the face is very precise. it looks like brute force. but it also requires very fine-tuned motor skills. forging is something we have always enjoyed. it's a big part of the process. we can use of so many recycled materials. we can operate our forges up to about 2800 degrees. forging is very physical, something we can't do all day. something that when we went

full-time, it took me about 6-8 weeks to be physically capable. the shape needs to be cleaned up on a grinder, kind of the final finish of the knife. profiling, we stamp our logo onto the knives. after we stamp the knives, we normalize them. which essentially is heating the knives up above a critical temperature and holding them at a high temperature, allowing all the alloys to spread out and relieves all the stress within the steel. them in alench pacific this custody -- in a specific this custody -- vis

cosity fluid. we usually use liquid nitrogen. we heart and the structure of steel. for some steels, they will have to call from 1500 degrees to about 900 degrees in 0.6 seconds. the signs that drives us. -- it is the science that drives us. it incorporates a lot of metallurgical science. to do it well there is some much you need to know. for me, it's getting my phd in science, it gives me a way to geek out. i can never learn all there is to know. ♪ ago, myanmar pull up the blinds, unlocked the doors, and said, we are open to business. the end of direct military rule in 2010, and the lifting of sanctions two years later led the outside world in, along with

its investment dollars. >> two years ago i said a lot of people were coming in. >> in partnership with yoma strategic holdings, it introduced first major western fast food chain. sitting up in a country which is essentially a blank slate presents unique challenges. particularly when it comes to infrastructure. >> in a lot of cases we have to first build the roads in order for us to access the particular spot. challenging a more process. >> but it is paying off. a piece that rivals more developed markets. the economy is also rocketing along. in the past five years, myanmar's annual growth has averaged more than 7%. the asian bank sees the economy expanding 3.8% this year, and close to that in 2016. >> there are 20 work for

investments still to come, but it's waiting in the wings as investors hold of any election. they are focused on how free and fair it is judged to be and the stability of the government. >> both major parties have said they will prioritize a revamped investment laws to reduce the number of troops which -- hoops which foreign companies must jump. despite the genetic changes so far, investors watching from afar want the pace to step up even more. >> we like to ski the market open up faster. particularly the capital market. we think it's incredible opportunity, but there is need for more opening and more education. >> the potential is huge and very obvious. it's hard to believe how the country has developed so slowly in the last 50 years. >> the clock is ticking, but for ambitious investors, and myanmar's hungry consumers,

sunday's election can't come quickly enough. iceland, new dawn for a country moving to rest itself from the capital control being credited saving it from financial meltdown. >> we've taken small steps this year. we are allowing investments outside of the economy. we are very optimistic we can take more steps. >> right now, the country's economy is going. it's been helped by a booming tourism industry, with more than one million visitors expected in 2015. the fisheries sector is also doing well, benefiting from robust european demand. against that backdrop, the government taking steps to reign in restrictions, to reopen the

doors to foreign investment. >> i would've liked to see this happen much earlier. but it is a really come the kids issue. it is about assets. >> capital controls, which stopped stabilize the currency, have created distortions. icelandic pension funds, far from investing abroad, have pumped the money into the stock market and real estate. creating a significant cultural shift for a society used to widespread homeownership. soon adults will figure out they may not be able to own their own apartment. that will be a shock. they are going to be stuck wrapping for the rest of their life. >> there are risks to listing capital controls. no one is quite sure how removing the controls will impact the historically in currency.

lifting the restrictions can't come soon enough. >> i understood the currency control. we need to have a plane to get out of it. what is the bigger issue? >> most agree capital controls need to be eased. just how quickly they are reigned in and by how much could prove crucial. ♪

scarlet: as we wrap up this admission of "bloomberg best", let's look at church that till that charts that tell the stories of weeks in business. >> november, 28 roaring start. first off, december goes live.

janet yellen suggests a 2015 rise is still on the table. rise to over 55%. the shanghai composite close. tony percent -- closed out 20% after heavy state intervention, halting a $5 trillion crash. bank of england governor wrestled down the currency strength to continue push down infraction. the most since august against the dollar. >> we are back with chief global strategist at deutsche bank. ofhave also seen a lot influence into bonds at the expense of equities. how long do you think that is going to last? bond flows are currently a most $800 billion above normal. pretty incredible. >> yeah, and the shortfall in

equities is even bigger, about $1.4 trillion. in a normal cyclical mechanism, it has been absent from this cycle. that is federate normalization. how long will this go on until the fed begins to normalize rates? if the fed begins to normalize rates in a december, it's going to become time in the cycle when the market basically reprices the curve, which is what typically happens at some point in the rate hiking cycle. it is that point at which you see a reallocation from fixed income into equities. we have a recent example too. alix: we are looking for the fed to normalize and go on a pack to normalcy. what about the other central banks -- even if we don't believe they are going to move right away, does that push off that reversion?

>> the point i would make is as uro is currency -- the e an important determinant of financial conditions in europe. with that depends on is the relative -- you don't necessarily need to loosen in europe. scarlet: that does it for "bloomberg best" this week. you can always get this is news from around the world at bloomberg.com. i am scarlet fu. thanks for watching bloomberg television. ♪

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