♪ betty liu: coming up, the story that shaped the week in business around the world. from a landmark change in china's currency status, we have the bottom line on the top global headlines. will recap a week of corporate shakeups and a possible breakup. and we hear some big names in politics and business speak their mind. >> the u.s. tax system is noncompetitive in a global sense. betty: all that and more. this is "bloomberg best." ♪

betty: hello. i'm betty liu. welcome to "bloomberg best." a weekly look at the most important news around the world. let's begin with a day by day review of the week's top stories. starting on monday, when the imf welcomed the chinese currency. >> the inclusion of the rmb is recognition of the significant reforms, which have been conducted. of the significant opening up of the chinese economy, of the financial, more market-driven principles that are being used by the chinese authorities going forward. >> short-term it doesn't mean a lot. to put things in perspective, you're looking at the total allocation of $318 billion.

that is roughly 6% of the daily trading volume in total foreign exchange. >> just 6%. >> and one third of global gdp, less than 1% of total trade. it is a drop in the bucket. it is much more of a psychological effect. >> is that significant? >> i don't think so. it is symbolically important for china because to me it is an officially an endorsement of what china has achieved in terms of financial market. and a formal recognition of a very important role played by china in terms of global trade. stephanie: michael plath, the founder of bluecrest capital, currently running $8 billion, made an official announcement, they will be returning all client money. he will instead focus on managing his own wealth and that

of his partners. i want to bring in the whole team here. let's take you back three years. blue crest was a $36 billion fund. on track to be one of the largest hedge funds in the world. >> they made it one of the larger funds. i think it is a sign of the big change that we have seen in the capital markets. morgan stanley cut as much as a quarter of their fixed income jobs. michael platt comes from the fixed income world. had been hiring people from the street from that world. things have changed a lot. >> what i am wondering, tim, you are a structuring guy. you do with a lot of hedge funds, do you think they feel the same anxieties? >> i don't think you can say everyone feels this way or that way but big on wall street is

not as popular as it used to be. all of these people are stuck in a regulatory buying. it is a tough market to be investing. i think a lot of people, and i had friends do it, say, i would rather invest it the way i want to invest it not talk to lps or, all over the world trying to get money and just enjoy the active investing and make as much money for themselves. >> we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals. such an abrupt tightening would risk disrupting financial markets, and perhaps even inadvertently push the economy into recession. >> she came out and said the fed is ready to move the economy, ready for a rate increase. we have a strong enough economy

in terms of job creation and in terms that we should get faster inflation once we stop seeing the downward pressure from oil prices. both of those things should fade in 2016. she warned if they wait too long we could see market disruptions, bubbles form. so the fed, it was all but guarantee that unless something happens between now and the 16th of december they will raise rates. >> 74% chance probability of a move there. the consensus seems to be leading that way. >> that could go up significantly. people will say this is going to happen. they are leaving wiggle room. you will never get to 100%. the fed has convinced the market at this point that a rate increase is coming. they have got what they wanted and the need to keep them there for the next two days. >> so, we have to do more. let me say this very clearly.

we are doing more because it works. not because it fails. we want to consolidate something that is a success. >> we got the cut, we got the extension. we didn't get the expansion we hoped. we need to add in market technical. we saw a rally leading into this in the u.s. dollar. seeing that reverse, a lot of that is profit-taking. the expectations around mario draghi are no different from the expectations we often see from the fomc and often disappoint. we have to factor in the trading happening, not necessarily long-term impact. >> there is a big squeeze happening here. we have to factor in the ecb credibility. they guided these markets to expect something big. he told us to look at three things on the asset purchase program. the size, the composition, and the duration. they have widen the asset pool, they have extended the generation.

on the size of the purchase program, they did nothing. for the market that is a big disappointment. the euro backing back. the 10 basis point move, that is significant. you see it in the equity market as well. markets disappointed, the top one for a lot of people will be overpromised, under delivered. >> we are 30 seconds away from the jobs numbers. we are joined by an economist. stephanie: i was sitting here talking about how we have become a service-based economy. we have the same number of manufacturing jobs today as 1941. >> wow! stephanie: we saw a decline in the payroll number in august and september. this number is big. what is it? >> 211,000. that was the number for last

month. the unemployment rate at 5.7%. -- 5.0%. where do those gains come from? 211,000. well, construction jobs rising the most since january 2014. adding 28,000 health care, and food services and retail strong. >> for more, we're here with bloomberg businessweek economics editor peter. tell us what you are focused on? tell us what you are focused on. peter: i woke the broad measure of underemployment in the economy. it includes discouraged workers, people working part time who would rather be working full-time. it is a broadest measure of slack in the labor market. it got more slack actually. we were happy when the number got back under 10%. but in november, it ticked up from 9.8 to 9.9%. these are the numbers janet

yellen pays a lot of attention to. because she says, the 5%, we want pay attention to that, but the numbers show that back in 2004, 2005, we were at 8%. then it trended very nicely down. we are still above the levels of slack we had before the recession. that shows that the labor market has not completely healed. >> we will dig deeper into the impact of the announcement and more reaction to the u.s. jobs report as bloomberg best continues. ♪

♪ betty: welcome back to "bloomberg best." i am betty liu. it remains to be seen how the ecb's interest rate, decision, and economic numbers will affect the market. this week, we discussed the possibilities. >> all the different measures the ecb announced what was the most significant? >> it was not the thing that they announced, it was the thing they didn't announce. an additional amount of bond

buying each month. they are extending stimulus by six months. they will buy a larger total number of bonds. they are not going to buy more each month. markets were really focused on that, thinking that you to be done to get the stimulus they are looking for. a lot of people were betting you would have a weaker euro. a bit short trade today. a big squeeze hurting euro traders. because as the euro goes up by significant amount over 108 on this news, it is at 105 when the press conference started. so, a lot of disappointment, super mario does his first face-plant. into this meeting they have been consistent about telegraphing. what you think it says about the dissent in the ecb governing council? >> that is a very interesting question. they are 19 countries now in the eurozone. too many to have everybody vote.

they are taking turns. they rotate the voters. they do it on a meeting by meeting basis. unlike the fed which does on a year-by-year basis. in this meeting, the germans of were voters. they have been less enthusiastic about additional stimulus, and that may have heard mario draghi. there may have been push back as part of a compromise to do with a dead, cutting the deposit rate should have some effect. and extending stimulus should have some affect. he didn't get as much as he would want. >> they cut it by 10 basis points. it was already negative. a goes further into negative territory. there is no clarity right now, whether the ecb could cut that once again in the future. will that have in effect? >> we are working on a theory, not reality. because this has not been tried

in the past. what they are doing is, this is equal of late to excess reserves the fed pays on people to leave their reserves at the fed. they are charging banks to leave money with the ecb. they figure that will make the banks taken away and portion into the economy and lend it. but that is not happening. we are not seeing huge gains in lending. we will have to put more pressure on them to squeeze profit margins. where you are seeing the impact is the bond market. where they are moving lower and they pushed down rates. the ecb changes a moving target. in this case because he disappointed, yields have gone back up. we could see possibly a positive impact. it is quite a take a while to

play out. betty liu: we are going to take you to bloomberg radio where our -- stephanie: we are going to take you to bloomberg radio where our team is speaking. >> this is in train now. bill gross: well yes. they are certainly set to go and something i have been encouraging for a while. it not because of the fact that wages are increasing. or the tightness of the labor market. as a matter of fact, wages were up .2%. there is no pressure from the standpoint of wages but the fed is ready to go. i think because of concerns on the real economy, and it is an interesting experiment over the next three months or so. as they shift to a new policy in terms of determining the fed rate. using the excess reserves in

terms of an interest rate. and using reverse repose. they are going to use that -- they are going to need three months. >> please address how janet yellen can avoid international mediocrities including the problems mario draghi has. >> the fed has backed off of their qe 12 months ago. mario draghi's policy statement yesterday was quite interesting. he gave the market most of what they wanted. he did give them quantitative easing for six more months. it seems like a very eminent type of forward statement. but the market had a sense that the amount wasn't increased, perhaps the ecb is the last

bastion of quantitative easing and monetary policy. >> right. i want to cut in. how many billions of dollars did you lose yesterday? >> oh no, i made money yesterday. lots of calls, from five and tenure german points. [laughter] i think the u.s. is in a better position with their yield relative to germany and the eu. to be fair, $60 billion a month has been extended by six months and 18 months to go. that is a trillion euros to go. that puts their balance sheets close to 4 trillion euro's relative to the fed's balance sheet of 4 trillion euro's. it is a lot of firepower left. it pays to be careful when a central bank employees a martingale strategy, double up

to catch up. ♪

♪ betty: you are watching

"bloomberg best." i am betty liu. among headlines, several stood out including the yahoo! board may sell the core internet business. and a gloomy forecast for commodities for mining company ceo. let's start with a story that involved companies operating on three continents. cars. november auto sales were strong in america. it played out differently in the united states, asia, and europe. auto sales have been rolling out today. we heard from volkswagen. u.s. sales tumbling more than 24%. other automakers did better. fiat chrysler reported a 3% jump in sales. the united states is set to log its best november yet. joining us now is matt miller. go behind the surface numbers.

because this is really about trucks and suvs. crags it is. especially in the case of ford. the volume was down 11%. truck volume was up 18%. they are selling fewer cars and more trucks. trucks on the big high-margin products. suv's, jeeps, tracks. crags it was winning and who is losing? matt: everybody is winning except for volkswagen. they are in so much trouble because of the diesel cheating. it is very robust. everyone is winning. november in particular, toyota did great. nissan did well. hyundai was in a funk earlier in the year, they are doing it with the crossover utility vehicles that everyone likes so much. you know, with some of the new ones, like hyundai with the santa fe, they are making some inroads.

nissan, and toyota is in the transition with the rav4. what they were selling last month for the old ones at some pretty attractive prices. they really put it to ford and honda. rav4 had a great month, up by 30 plus percent. those were the big winners. >> the shares are trading lower after the german carmaker revealed u.s. sales fell by a quarter last month on the back of the emissions scandal. hans is standing by, when we talk about this story, the chief executive has been speaking to stern magazine. what did he have to say? >> we have him saying he things it will take several years to get to the bottom of this. he has given an updated schedule on when volkswagen will release their strategy.

what we had last night is a bit of the preview. the chairman of the holding company that controls volkswagen. the main spokesman for the family, he said he will do whatever it takes. he said, i will personally do my point. he is indicating that he wants to stand with the workers. the workers council wants a clear, ironclad commitment that there will not be job losses, or job cuts. >> another dramatic chapter, the yahoo! soap opera, the company's board begins meeting today to stop the bleeding. one possibility is scrapping alibaba, and selling the core internet business. joining me, a fairly significant position in yahoo!, with me in the studio, om malik of true ventures. he is an early investor in

alibaba as well. you have not been shy about your feelings about marissa mayer and yahoo!. and criticism. what do you think now? >> yahoo! losses relevance a -- lost its relevance a long time ago. consumer internet companies are very much social logical and demographic, you know, places. generations move on from those products are they become irrelevant. yahoo! relevance is the question here. from my standpoint what are they going to do? i am not surprised things didn't work. there is not a single must use product that yahoo! has. they have not had a single must-use product since google. emily: as a yahoo! investor, how -- do you respond to that radio >> i don't disagree. we are big fans and investors as well. his point is right on. we are investors because the market is valuing an asset that

we see value in at zero. zero is usually a good price to pay for something. we invested early in alibaba. we cleared the alibaba stake. they are worth a lot of money, $43 billion collectively. that leaves the current core business worth zero. so, we like the yahoo! stub and we think the private equity guys will come in and buy that asset and do what should have been done a number of years ago, have more of my financial engineering approach, a dealmaking approach to that business. i agree with the point that obsolete technology, even more than disruptive technology is a problem in the valley today. ♪ >> samsung is giving its mobile business a makeover. naming a new smartphone boss. -- naming a new smartphone boss. the company is on pace for its lowest profit in five years. -- four years. a second straight annual decline.

joining us to discuss, cory johnson joining us from san francisco. walk us through the changes we have seen. corey: the change is a result of what is going on. if we look over the performance of that business over the last couple of years, you see a really dramatic decline of the success, of the high-end for samsung and galaxy phones. low-end phones. on a profit basis the high-end phones haven't been the last two years. >> a lot of people thought that it would be much more extensive. that the reshuffling would have seen a lot more players changed around. >> right. it is not just consumer electronics. they have an interest in so much more. you have shipbuilding, construction, natural services, insurance, and so forth.

it was an interesting time where people were expecting more changes. first, it comes in the midst of a power transition. a lot of the other business haven't done well. like shipbuilding and construction, for example. typically, what happens in this rotation of management is the heads of these units that don't do so well typically get moved. ♪ >> i'm seeing the moves in copper. that to matters to your business. are we at the bottom? crags and i think the markets ours -- >> the markets are still searching for the bottom. it is going to be the drivers. supplies going to be some time to work out. before we see what actually happens with that chinese economy. is it a soft landing or something disruptive? we have a market-making event over the next 30 days. that will see what happens to u.s. interest rates in u.s. dollars these of the other trade currencies. that will be the immediate

catalyst i would watch in terms of telling me of all the drivers that are out there, what is guiding us in terms of >> i'm interested in your perspective. i just want to know, what is the overshoot? >> i think that copper at these prices, 75% of the copper miners are keeping their head above water. >> right. >> a quarter of them are probably not or struggling. in aluminum you have half of the aluminum producers underwater for cash flow perspective. ♪ betty: coming up, some of the week's most interesting conversations including tech talk with the ceos of salesforce and paypal. ♪

♪ some influential leaders share their thoughts on issues. our roundup begins with emily's -- stephanie ruhle's conversation with mark benioff. stephanie: microsoft seems to have lost its group. if you were a mature tech company, like microsoft, what

would you do? what can they do? >> the world has really changed. you can see that walking around the streets of new york. and talking to our customers. the conversations are radically different in the post-2008 world where the most prized commodity is growth. every ceo wants more growth. they know if they do not have more growth, they will have something else they don't want. which is an activist shareholder. when they don't have growth they , do not have market capital improvement. this is a serious issue. it does not matter which industry. that is a precious commodity. my advice is simple. let's talk about what is your vision between now and 2020. what is your vision to connect with customers in new ways? what is your customer growth strategy? stephanie: all of these

buzzwords, the importance of social, the internet of things, being a disruptor, the valley, they start to feel gimmicky. when you think about who the ultimate disruptors are, it is activist. you are a leader, a founder, and an activist gets to come and tell you what to do? >> back in silicon valley, where -- we are the dreamer of dreams. stephanie: that is nonsense. that is giving silicon valley too much credit. >> this whole country is based on the concept of ideas and innovation. that is what we do in that is what makes the united states great. that is what makes the silicon valley great and different than -- from everyone else. what i love about my job is creating value, but i have to tell you where those values come from. you can be the dreamer of dreams but at the end of the day the dreams come from the customers. any major city in the world, come to me with the customers is

to listen. to listen deeply. to our customers. >> what changes are you willing to contemplate to dodd frank? >> it was a response to the worst financial crisis since the great depression. as a result of the implementation, we are reducing the risk of another financial crisis. damage toinestimable the economy of the united states in the global economy. one of the things about dodd-frank is it is not one size fits all. our regulators have a lot of tools in how they do their business so it is cheered -- tiered to terms of applying standards that are appropriate i -- by size of institution. we have encouraged regulators to use their flexibility to the greatest extent they can. so they can be sensitive to the

differences in risk. >> some of this is going to require an actual change. contemplate -- he would support something that excused banks under $2 billion in assets from the rule for example. is any change you would contemplate? reflectof the proposals a desire for clarity which legislation can provide. i think it's important for regulators to use the ability they have to provide the kind of flexibility that is needed. what's worried about in the legislative debate is small and what it means to different people. in terms of certain requirements in dodd-frank, suggestions have been made that a $50 billion threshold be changed from $100 billion to $500 billion as if it is the same thing.

it is not the same thing. $500 billion institutions are more -- enormous amongst the , largest financial institutions in the world. even when $150 billion are that large. i think we have to be careful not to get into a conversation where we start rolling back the core protections that have made our system safer and sounder. >> as we look at things like the pfizer proposed deal, how much pressure does this put on other companies to seek a competitive tax rate? now you are competitive against someone who will lower their tax rate substantially. >> it is important for us to focus on as a society. the u.s. tax system is not competitive. in a global sense. we have to come up with a tax system that allows u.s. companies to be in competition globally for talent, and competition for investors, and be in competition for ip assets to make this industry run. i think that deal should be

something that serves notice to our policymakers, that good american companies feel no choice but to do things like tax inversions to remain competitive globally. >> what i think is most important is financial health. so, it is basically teaching people how to manage and move their money in a way that allows them that safety and security that they need in their everyday transaction. most people don't have expenses that are higher than the revenues. what they have is typically a a -- a cash flow issue. there is a medical emergency that happens, there is a one-time thing that happens. you lose a job temporarily. what i think we need to be able to do is use data and information to get people past those one time hurdles. >> the solution is credit, not savings? >> i think it is a combination of both.

i think what you can use with technology is the ability to show people and incent people to do savings. >> i want to ask you first about the tragic event in california and your thoughts about it from a personal point of view and someone who lived there, and your thoughts from a public policy point of view. based on the facts that we know now. >> from a personal point of view i have been in that building. i have been many times to san bernardino. it is a community under stress in so many ways. this is an unspeakable tragedy. i cannot imagine the stress the community is going through now. they contemplate their dead and wounded, and their first responders, it appears more and more likely a terrorist in their midst. >> based on what we know now, do the -- you have any early thoughts on things related to public policy that you can take a look at? or is it too early to say? carly fiorina: i do think it would be helpful if our

president and mrs. clinton would acknowledge islamic extremism and terrorism as a real threat in our homeland instead of immediately talking about gun control. california is a state with some of the strictest gun-control laws in the country. they clearly didn't matter here. so, i think that would be helpful. >> which foreign policy debate within the republican party do you find most interesting? carly fiorina: one of the debates going on that i do not find particularly enlightening is should we return to the patriot act, or did we do the right thing? i think that misses the point. as someone who has come from a technology industry, the technology has moved beyond the patriot act. we have levels of encryption that didn't exist even two years ago. rather than having the typical political conversation, is it this bill or this bill what we

, ought to do is sit down with private sector technology companies in this country and saying what is the state of the technology today? ♪

♪ ♪ betty: world leaders met in paris to discuss environmental issues and discuss environmental policy at the conference on climate change. some of the best stories on bloomberg television dealt with those same topics. here is a sampling. >> scientists almost entirely agree the last few decades have been successfully warmer at the earth surface than any since 1850. the northern hemisphere, it has

been the warmest on record in the last 800 years. while there is evidence that sea ice is increasing in our tikka, it is increasing -- decreasing in the arctic by 4% a decade. in the summer months that can increase threefold. that is like losing the size of japan, vietnam, and malaysia and ice every decade. shrinking lashes have also added to rising sea levels. that the rise in the last century has been faster than the previous two millennia. while a 1.7 millimeter increased as not seem too fast, it has risen twice as fast they hand in the previous 20 years. this is thanks to rapid organize asian. just over 20 years, global greenhouse gas emissions have risen 40%. in 1990 the biggest offender was

the usa with nearly 17% of the world's emissions. china's ascent as a global power has seen it change the top spot with 22% of the world's emissions. the asian powerhouse gave the green light to 155 coal plants this year alone. despite overcapacity. with warnings of the planet facing irreversible damage, time is running out for the world's advanced nations to come to the most important agreement of our time. >> it is a wonderful close to a day here of this meeting of the cities and what they can do about climate change. and, it is of course let's buy -- led by the thought of new york. mike, what did you learn today? what was a surprise? >> 400 mayors here from around the world, they all understood we have a problem with pollution and they are all determined to do something about it. they all said their

constituents demand that they solve this problem. that is why we are here. the one that deserves a lot of credit for bringing them here is the head of the united nations , the secretary-general who said cities are where the people are, where the pollution is, where the solutions are. he wanted us to push the national governments. remember when the national , governments do something, pass a law or have money, it is at the cities where where the execution is. it is the mayors who are delivering -- are being held responsible. cities are responsible to disclose. >> mark carney is the head of the bank of england, a canadian that has a job as the head of the bank of england, has created on behalf of the g-20 an organization which i am lucky enough to head, that is going to collect data on who is doing the polluting on a comparable basis,

and make it disclosable. once that happens businesses are going to have to clean up their act because they have stockholders who say we don't want to run any risks. stop this pollution or we will value your company less than others. they can turn to governments and say this other city, this other country, people are living longer than us and this is why. i want you to fix this and if you have the data, that is enough to get people to act. >> the first signs of a new cotton crop nudging through the rich soil of the liverpool plains. >> the soils are black. the water retention ability of these soils is like no other anywhere. >> this farm sits on the frontline of a battle between australia's potential dining room and fading mining boom. underneath the high-quality soil is high-quality coal. china has a license to dig it out.

study says it will destroy the water table. >> the miners have been instructed to make good. but you cannot make good with with the quality of water required here in agriculture production. >> the agriculture minister opposes the mine and opposes his own government. he cannot understand how it is economically viable. >> the fact that you have sole responsibility of an $800 million dollar bill and probably $300 million worth of reclamation work, that would be a hard thing to get across any board. >> and that is an inferred or -- and that is from oil or coal prices gone from bad to awful and a global commodities route. approaching $50 per ton. no one would be interviewed for the story. in a statement, the company said this project is viable regardless of the current cold -- coal price. it said as groundwater impact

studies exceed anything else done in the state of new south wales. shenhua has been spending up, building everything from a new office to a skate park for the locals. it is winning plenty of friends and the local mayor who rejects the idea of the area being a food bowl. >> 70% to 90% of the groundwater used is used to grow cotton. not food. we understand why people are producing cotton. it is the biggest return on crops. ♪

♪ betty: as we wrap up, here is a peek at some of the charts that

told the story of the week in business. >> today i am looking at u.s. manufacturing data. it was pretty ugly. we got the isn report, a survey of manufacturers where they ask how business is doing. it is not that great. this white line fell to its lowest level since the financial crisis, 2009. it has been deteriorating. the yellow line is worse. this is the price that is paid index. what is the cost of goods after collapsing. if you are worried about deflation, this is one chart you want to look at. the good news, manufacturing is a small and shrinking part of the economy. we will get services data later this week, it should be a lot stronger. but people still care a lot about this data because historically people cared a lot about this. and when you see these things rolling over with no signs of a bottom people start to worry. >> the central bank in australia, keeping rates unchanged today.

they have been rising highest level since the middle of october while iron ore has been falling. that is the divergence. it is interesting. because look at the movement. they have been moving in tandem for the last couple of months. if you look at the chart going back years, they pretty much move in tandem. australia being in export. australia's currency is rising. do you know why? because expectations for rates hikes are being cut for the first quarter of next year. chill out. that is what the governor told the economists's last week. they were talking about expectations for rate hikes. he said we have got christmas, we should chill out, come back in february and see what the data says. would janet yellen ever use the term chill out? if the fed hikes, great. it will be fascinating to see what happens to the australian

dollar than. >> brian, we looked at two big -- -- too big to bail. the credit rating adjustment yesterday and the fact of the matter is the big banks from the bottom have outperformed the broader s&p 500 as well. will let the too big to bail banks do better than good in 2016? >> we think they will. good morning by the way. at the end of the day, at the end of the day we think we have a major shift coming with respect to private client investors. moving away from bonds and into stocks. that is a pretty profitable and longer-term business for the banks. this downgrade of credit is more noise than anything. the longer-term viability of cash reserves and balance sheet sander levin stronger. -- has never been stronger. i think this quote unquote to downgrade of credit to is noise. i think it is all kind of headline that noise. betty liu: that is it for

"bloomberg best" this week. remember, you can always get more business news around the world at bloomberg.com. i'm betty liu, thanks for watching. ♪

>> the contemporary art world is vibrant and booming as never before. it is a 21st-century phenomenon, a global industry in its own right. "brilliant ideas" looks for the artists at the heart of this. they have a unique power to inspire, astonish, provoke, and shock. in this episode, south korean artist lee bul. ♪