♪ >> coming up on "bloomberg best," the stories that shaped the week in business around the world. while the u.s. economy since a promising signals. >> the number is good. >> the future is now with the consumer show in las vegas. we have the latest from the biggest ceos. >> you want to get to 2 billion consumers. erik: and the debate heats up as china's growth goals down. how much of the worry about a hard landing? >> you can look at topline gdp and conclude where china is going hard or soft. erik: bernie sanders blast

bankers. all straight ahead on "bloomberg best." ♪ erik: hello, i'm david bureau. look into "bloomberg best." 2015 with the year of significant volatility in global markets and the 2016 trading year has begun the same. we kick it up with a manic monday. >> a new year ended numeral a coaster. chinese markets -- trading has to be closed early because circuit breakers kicked in. the composite was down by more than a percent. -- more than 8%. >> do you think the circuit breakers -- actually contributed to it? >> they're going to say it intensified the selling. as it got closer to 5% and after 5%, people wanted to get out as quickly as they could. it took seven minutes to get from 5% to 7%. >> it is hard to forget the worst start to the year for european markets. mark parker wrapping up the traits. >> the worst year prior to today fell by 1.7%. looks like we are going to close

around 2.7% lower, a third of last year's 6.8% has been wiped away in one trading day. >> not a happy new year. the dow industrials closing 276 it took seven minutes to get from 5% to 7%. >> it is hard to forget the worst start to the year for european markets. mark parker wrapping up the traits. >> the worst year prior to today fell by 1.7%. looks like we are going to close around 2.7% lower, a third of last year's 6.8% has been wiped

away in one trading day. >> not a happy new year. the dow industrials closing 276 points. at one point, it was down as much as 467 points. the first were state of trading since 1932. -- the worst day of trading since 1932. >> it triggered although circuit breakers early in the afternoon. we're just going to pull the plug. it was that ugly. >> china overnight, the plunge protection team getting to work very early in 2016. sources say the nation has taken steps to deport us equities, a 7% tumble in the shanghai

composite. it reminds me of the summer. it is not the stock route that concerns me. it is the policy response. wired a -- why are they doing this all over again? >> we had sleeping intervention today by the government. they intervened. they want financial and field stocks. they intervened to put in the system to keep a lid. capital flow is leaving the country at a record pace. they are trying to project that they want the wan to be withdrawn by taurus. the commonest party clearly struggling with the idea of

letting the market have too of a free hand. they have got into the worst possible start. >> just a few seconds away from some important effect news. -- fed news. >> what about the word gradual do you not understand? that is my word not theirs. keeping the rate of unemployment unnaturally low to get inflation up. it is something they are very concerned about. despite the anonymity, several participants a it was a close call with their decision to raise rates. they are talking about inflation. here is a four letter word for you, credibility. there -- they are worried about

market expectations on a coming up 2%. another thing, they are worried about expectations. some members the expectations are lower than they were for inflation. what that means is perhaps, perhaps expectations have been anchored at a lower rate and will be even more difficult to get them back up. there was discussion of how cleveland measures inflation. there is a lot of talk about understanding inflation. that they have to do is keep the 2% target credible. if they use the word credibility, that means they are concerned about it. but we saw was -- we are seeing more cautious fed.

>> tiny stocks regulators has scheduled an unscheduled meeting. a selloff in stocks forced them to shut down for a second time this week. >> the circuit record that has been instituted will need some tweaks. there is a halt of 15 minutes after the market falls by 5%. this of trading is suspended for the day at 7%. as soon as you start to get the 3% or 4% down, the market really starts to panic. everyone wants to unload their trades before trading gets suspended. there is a snowball effect. clearly, there are going to need to be some changes. >> if the chinese authorities called you up today and said, what do we do? do we open tomorrow? do we have a longer hiatus? do we change the circuit breakers? what would you advise them? >> i would advise them to have a less restrictive, or wider circuit breaker and to see if the market can actually find it bottom. >> china has second thoughts as it suspense it circuit breaker rules. the chinese authorities have

control of their capital markets right now? >> i don't think in the short-term they do. i really mean in the next few days. the way that chinese stock markets were, these bull frenzies we saw in 2014, 2015, is -- there's not a lot of good information. the government can't control their movements over a couple day. -- over a couple day period. it is not connected to fundamentals. because no one knows what the proper levels of the market is, it is a casino in the ugliest sense of the word. whenever the government seems to be taken all of these emergency steps, it disturbs everyone's confidence even more.

>> 292,000 jobs. unemployment rate unchanged at 5.0%. the number is good. good lord! it is not up slightly. 62.6, that is the number janet yellen has been looking at. >> that this report confirm janet yellen's action? does it say she will need to be more proactive as we go into the year? >> the three or four fed steps -- dan fisher and janet yellen seem to control, probably are on track at least in terms of their verbiage. i don't think it is possible to raise interest rates by 100 basis points in this levered economy. >> is this a federal reserve that must pay attention to international affairs? bill: serving in the past few weeks, they have to take into consideration global affairs and movement of currencies. will they? i think it is number three or

four on their list. >> we will drill deeper into china's issues. we showcase the work slightly debate. more of the week's top business news, including more bad news for chipotle and vw. ♪

♪ welcome back to "bloomberg best," i'm david gora. our view of the week's top stories begins with a high-powered transportation

partnership. >> general motors is getting a major boost to lyft. they plan on developing a fleet of self driving cars. >> we are really aligned about where we see the future going and how we are going to work together to make it happen. we are really a line between the two countries. -- two companies. this will be a very deep relationship. the level of integration the needs to happen to bring together what we want to bring together. on-demand network. it will require two companies to work together really closely. it will be a very special kind of partnership. >> volkswagen stock down this morning by almost 2%. the german carmaker is facing further problems with the u.s. justice department. is this going to snowball? >> is going to turn into an

avalanche. it is close to $80 billion. before, they were talking in billion dollars -- $18 billion. they are adding those up trying to get a big headline number. this could get reduced in negotiations and be resettled out of court. it is clear that volkswagen is in trouble. volkswagen has only set aside 6.7 billion euros. a small fraction of that $80 billion we're talking about. that is on most 100,000 more than we have previously been reporting. they have added the three liter engines along with those two liter engines and loving them altogether. there is no agreement between the epa and volkswagen on how they are going to fix those vehicles that have those devices and stalled and what the recall procedure is. remember, in europe, they are

getting close to a solution. >> is a time for yahoo! to face the music? urging the company to make changes. in a letter, it appears that investors have lost confidence in management and the board. what can you tell of -- tell us about it? >> they are focused management changes. they don't have a track record of large dividend. they don't have a track record -- they want to see structural changes. it is important to know they

hold less than 1% of the outstanding shares. they need people to come aboard. the reality is, in terms of what is next, the entire board comes up for reelection this summer. this is the first shot on its way towards a proxy fight. >> if they get new leadership, how does that even begin to address some of the most fundamental problems the company faces? >> new leadership in the proxy and selling the core assets. i hate to agree with anyone from columbia -- [laughter] >> that could happen. >> only here, right? i think something is about to happen. the narrative about complaining about -- it is going to be a narrative about the board. >> more bad news for chipotle, the restaurant reported a worse than expected first-quarter sales. to fully struggling to rebound after multiple outputs of foodborne illness. it has been subpoenaed in a criminal investigation. let's bringing craig.

let me ask you first of all. we suspected the sales would be bad. >> they are a percent to 11% decline. that is huge for them. they are saying 14.6%. the hit was worse and expected. >> in response to one specific case, one reaction. >> we don't know what investigators are looking for. the fda is not really commenting. it is an interesting question. what is the federal jurisdiction? why the feds even involved? >> morgan stanley shares are down at this hour following news that greg fleming is leaving. fleming led the retail brokerage unit. michael moore who covers morgan stanley for bloomberg news is here with more. tell us about this shakeup that led to his departure. what happened here? >> fleming was considered the succession media term candidate. maybe even five to seven years more. >> was a speculation he might step down soon?

>> not soon, maybe the three to tell us about this shakeup that led to his departure. what happened here? >> fleming was considered the succession media term candidate. maybe even five to seven years more. >> was a speculation he might step down soon? >> not soon, maybe the three to five range. that extended timeline, he wanted to have a president in place to allow him to focus on some longer-term things. so, when he put him in that position, that in the extended timeline is what prompted fleming to leave. he is a morgan stanley life or and brings a background that

gorman does not have. having him provides reassurance to some of the longtime morgan stanley people, it is not just about the brokerage, but the trading the vision. i think it allows some room for that next generation to be groomed over the next few years while gorman is in place. >> next up on "bloomberg best." the leaders of the top technology companies intervened in las vegas. when we return. ♪

♪ david: you are watching

"bloomberg best," i'm david gora. las vegas unbuilt gadgets and discuss innovations at the 2016 consumer electronic show. liver television spoke with several of the world's most savvy tech ceos about the prospects of the year ahead. >> for the interesting things going on with acquisition. what is the biggest difference for you? >> our goals has been to been -- be the largest technology company. we augmented that to focus on mobile with the verizon acquisition. we have also done a deal to handle microsoft's global advertising. we are at a place where we have 200 million consumers.

we ended when he with 700 million consumers. we have bigger goals for 2020. we want to get to 10 million creators on our form. we are really focused on the stretch targets and moving the company in that direction. >> it is an interesting blend between content and add technology. and beyond that. the microsoft deal exemplify that. >> someone said, you guys are the only hybrid company. you are in mobile, content -- that is been our long-term goal. content meets technology and will eventually be 6 billion people on high-bandwidth smartphones is the place of the future. that is where we are angling all our decisions. >> one of the things we discussed at the electronic show is virtual reality. i know you have a virtual reality product. talk to me about it. >> virtual-reality experience that will -- we will be bringing to playstation.

obviously, the most important content that will be fueling station br is the game content. we have more than 200 developers who have signed up for playstation vr. in 100 titles are in active development. we can look forward to good, vast library of catalog titles and content coming out that will be play off of playstation. >> how many silly games have you developed -- how many sony games will be developed? >> others will be built on the ground up. it is hard to pin down. just a round number, usually first quarter titles being about 20%, 25% of our overall generation. give or take. based on historical numbers.

>> on the self driving front, talk about the pace of it. where you see that developing? what are the speed bumps along the way? >> that is what we call our smart mobility plan. seeing how people live their lives. they want to stay connected. they want to be bubble. -- they want to be mobile. in the case of autonomous vehicles, we want to show that we are tripling our autonomous vehicle fleet from 10 cars to 30 cars. we had been at this for 10 years. what you are seeing is the technology, the camera technology, even the algorithms, the software algorithms that control the brain of the car. they are moving very, very fast. the thing that will be an inhibitor is the regulatory and legal framework. we are reaching out and having sectors come together so we can figure that stuff out before the

vehicle gets here. >> what we provide, a resource management and application, to meet all the interfaces like apple or google, so car manufacturers, engineers, they then add on to it and use my technology under the foundation of how you securely connect all these resources in the car. these are required technologies, but not for just an autonomous car, but the connected car. >> are you concerned that google and apple would want to own the entire software stock? why would they want to want to work with q&a? >> we provide a secure layer on all these different things, process control, safety, how they talk to each other.

that security is very important. what we are known for with qnx is the security part of it and connectivity part of it. we happen to create more modules. we happen to have an open interface. i am not concerned about their wanting to own the entire stock. that would just give us licensing opportunities. >> don't think sneakers when you think of an electronic show, but you do? >> the convergence -- the more people exercising workout, the more shoes and shirts they have to buy. that is what has led us into this world of the connected life.

that was december 2013, today with our other two acquisitions, there are more than 60,000 registered users. of our four apps, we have 192,000 downloads just on monday. scale is extraordinary. think about how little you know about your own health and fitness. i could tell you my bank balance and my stock price but ask me about my health and it is a subjective answer. we have a new app we launched on monday and the record platform gives you the snapshot, a daily dashboard saying how do you feel? every single day. >> how does put you ahead of companies doing fitness

trackers? >> license relationships we have, a partnership we have, $400, simple, off the shelf, we have a product in our new headphones. what makes it unique is the three-pronged approach, not just how much did i sleep or how many steps, a picture of what i did to make myself feel better. ♪

♪ david: welcome back to "bloomberg best." i am david gura. bernie sanders and a member of the wu-tang clan, they both talked business on bloomberg television, we will get to the highlights shortly. our top interviews begins with loretta mester who sat down with

brendan greeley. >> we see a disruption this morning in financial markets, some numbers as bad as they have been since the 1930's with the start to the year in trading. do you see that playing out again now in january? >> underlining fundamentals in u.s. economy remain sound, there will be volatility in the market, the nature of financial markets. the news out of china, they released manufacturing data that was weaker, that started a downturn which spilled over to the u.s. stock market.

i am not that concerned about that in terms of the u.s. economy because, as we have seen over the last six years, the u.s. economy has been growing 2% to 2.25%. there have been ups and downs but i think the u.s. economy has come back quite significantly from the great recession and the expansion is on solid ground here. >> what is an example of greed on wall street today? a specific thing. sen. sanders: when you have wall street whose greed and recklessness created the worst economic downturn in the modern history of the united states, where millions of people lost their jobs, their life savings, and their homes. i have not heard an apology. >> a current example of recklessness? sen. sanders: we have not yet changed, wall street has not changed its business model. instead of investing and making affordable loans available for small and medium sized businesses, if they continue to come up with complicated financial instruments which i think have the potential to do serious harm in the future. >> who are the economic thinkers who have influenced your views on these issues? bernie sanders: robert reich, the former secretary of labor. >> who are the classic economic

writers who inform you on these issues? sen. sanders: i'm a keynesian in many respects. i believe trickle down economics, tax breaks for the rich and large corporations, i do not think it has ever worked. i believe in putting money by raising the minimum wage and creating jobs and putting the money into the hands of working people, not only improving their lives with more disposable income, they will spend more money and create more jobs. >> as amazing as network computing has been, the real productivity enhancer was indoor plumbing. internal combustion. will network computing actually provide the productivity boost

that the model t did? >> i agree with robert gordon, that the 20th century was a hard act to follow. my grandfather says he was born when there were horses and buggies and he saw a man walk on the moon. it is difficult to get boons like indoor plumbing twice. the kind of technological innovations we are seeing are pretty incredible. >> are they creating economic growth? many things they create then become free. >> look at the gps system, they had a big measurable productivity impact on the shipping, trucking, logistics industry for obvious reasons. in the late 1900s, early 2000's, and the price has fallen so much that everybody has a gps system and you do not get lost, the kids are not crying in the backseat. that is a big corrective the increase in reality but it does not show up in gdp across production. >> the kids are always crying. >> he enjoyed the music. i could not measure if he was a guy in college. >> let's say he goes to jail for

security fraud, does that bother you that the guy has one copy of this record? he said he has not listened to it yet. >> he bought it, he can do what he wants, the power of art, i could never discriminate if the most greatest man in the world was the one who wanted to possess it. it would havef been his objective. if my enemy came to an auction and was like, "i want that picture to throw darts at it," it is an auction so i could never, ever, at this stage in my life, discriminate who appreciates art. >> is there any way, given the contract, for more of the world to hear the record? >> he has the power.

if he wants to be philanthropic, he can do something that would allow more people to hear the record. >> maybe whether or not they have detonated an h-bomb is beside the point because this is a very troubling development in north korea, right? >> not only for north korea and south korea, but for the world. if this is an h bomb thermonuclear weapon, it would pose a more serious threat to japan, to china itself, and south korea, but also alaska, hawaii, the western part of the united states. this is serious if it were a hydrogen bomb. it is doubtful at this point, we will have to wait and see. it cannot be ignored and they cannot be appeased, we need to ratchet up the pressure to the north koreans, we have to say

you cannot continue to destabilize markets or pose a global threat without a consequence to the north. we have to have a comprehensive program, we do not have one right now. ♪

♪ david: you are watching "bloomberg best." i am david gura. a catastrophic week in chinese markets. it is feeding investor anxiety but experts are still split on whether china is heading toward a financial crisis or it can steer through its crisis and pull off a soft landing. we heard arguments from both sides this week on bloomberg television. >> a disconnect between real economic activity in the world

and asset prices. most everywhere, with a few exceptions where markets have adjusted significantly on the downside. in general, market asset prices are high and economic activity in real terms is very poor in china. it was evident already for two years that the economy was slowing down. eternally optimistic fund managers that essentially have to advertise the products to make money, they remain bullish of a chinese economy, import and export out of taiwan to china, they pointed out to a meaningful slowdown for 1.5 years. >> you are not seeing a hard landing? you think we will get a lot of volatility on markets and how much will the one big record buy? >> we have a hard landing in the stock market already and a hard

landing in commodities. we might have a hard landing in the economy. we have a colossal credit bubble in china. i would rather be overly cautious on china than overly optimistic. >> the hard landing school views china is growing much worse than expected, on the cusp of rising unemployment, nothing could be further from the truth. urban job growth through the first three quarters of this year is running at a 14.4

million annual rate. that is above the 13 million of the previous two years. well above the targeted increases in the last several years of 10 million a year. how can china be slumping its gdp and doing better on employment. it works when you understand the shift to employment jobs and labor intensive services -- services require 30% more jobs creative output than does the old economy -- manufacturing and construction. by doing the structural change, it generates more jobs. this throws nothing but cold water on the hard landing story in china. china is a transitional story, you cannot look at topline gdp and conclude about where china is going harder or soft. you have to look at the pieces, the mix, the mix is far more constructive than the china bears would lead you to believe. >> we hear an increasing amount of talk, fear if you will, concern that the chinese economy

will have a hard landing, do you share? >> i do not, clearly the economy is slowing down. it is hard to have expected a smooth transition in the chinese economy from a manufacturing, export, investment, economy to a service, technology, consumer, economy. no country in the world has been able to do that transition smoothly. we went through the bumps but i would not want to bet against the government authorities in a country that is largely state-owned. they have a lot of leverage in what they can do in monetary policy and fiscal policy in foreign exchange policy to revive the economy. i am not a believer that it will be a hard landing. >> there are two issues, one which has to do with the economy, and can the chinese government soft land its economy without a big disaster? the answer is yes.

another question -- what to do with financial bubbles in the chinese economy? there are pockets of excessive risk-taking and that is harder. the stock market is part of it. they have fallen in the same trap we fell into which is to encourage an activity, in our case it was homebuying which has social benefits. it goes too far, they encourage share buying, stock buying as a way to spread the market economy and it went too far. the chinese will succeed in soft landing their economy but they will have a lot more problems soft landing the financial market. >> what does a chinese landing look like when their economy is geared toward services and consumption rather than the old model of investment in exports? >> it looks like an economy that grows at 5.5% to 6%, not 8% to 10%, like an economy that we orient its growth engine from the externals to the internals and one that will be less move than in the past.

this is part of the process of development, the so-called middle income transition, it is tricky and messy but they do have the tools to deliver on it. ♪

♪ david: welcome back to "bloomberg best." there will be an ambitious large-scale work by christo, the gates made internationally famous, and 2016 he will unveil a new project in northern italy. >> lake iseo is 60 miles east. in that lake, there is a small island, home to about 2000 people, a population totally dependent on boats and ferries. christo, who has outlined whole islands with bright pink cloth,

got an idea. >> next year they will walk on the water. literally walk on water. >> on a path of yellow fabric, on top of 200,000 plastic cubes. the first project he will do without his wife who passed away in 2009. the floating peers will be in place for a limited time. he and his team will disassemble it after about two weeks. >> when the project has happened, after a few days, the people know the other side of something. every human is unique and they like to witness something unique. >> what is also unique is how these projects are financed,

early on they decided to need to do things out of necessity. his collectors and dealers are notoriously slow payers. >> we cannot say to our workers we will not pay them because somebody has not paid yet. >> in 1982, he at his wife formed a corporation headquartered in delaware that sells his original works of art from the 1950's to the present -- drawings, collages, fabric. there is a subsidiary for each project, right now he is working on three of them, including the floating peers. he also buys back his artwork if he sees it on the market and thinks it is undervalued. >> we are the biggest owners of work of art we have. >> these projects often take years, it took 24 years for he and his wife to get permission from new york city to do the gates from then mayor michael

bloomberg. as you have become better known, is it easier to get past the regulatory hurdles? >> no. never. >> he keeps busy, he was days away from a trip to abu dhabi to work on another of the three projects he is doing. he is 80 and we asked him if he has even more projects. >> there is a saying, if we have a new idea we tell you right away. if i have a new idea, you will know right away. david: he is loading a project estimated to cost $11 million and open to the public for 16 days starting in mid-june.

that is all for this edition, you can always get more business news from around the world at bloomberg.com. thanks for watching. ♪ . .

♪ announcer: "brilliant ideas," powered by hyundai motor. narrator: the contemporary art world is vibrant and booming like never before. it is the 21st century phenomenon, a global industry in its own right. "brilliant ideas" looks at the artists at the heart of this. they have a unique talent to aspire, astonish, provoke, and shock. artists like zhang huan. ♪