>> coming up on bloomberg "best." the stories that shape their week in business. the panama papers create a tsunami of controversy. >> no one said mr. putin was involved. >> the u.s. comes down hard on inversions with implications for deals. the fed did discuss an april rate hike, but what should we make of that? christine lagarde on challenges to global growth and opportunities for companies committed to clean energy. all of this and the week's most

telling charts on bloomberg "best." hello, welcome. i am scarlet fu. this is a weekly review of the most important is this news, analysis, and interviews. let's look at the top headlines with a release of a report on monday. documents that became known as the panama papers. that worldt says leaders, criminals, and celebrities use shell companies to hide their wealth. according to investigative journalists to billion dollars in transactions involve vladimir putin. the information comes in files from a panama law firm. these are newspapers lining

up with interpretations of 11.5 million documents. >> about putin. that will get you clicked if you put it in the head line. it is 11 million files from an offshore law firm. if you are trying to conceal your wealth or identity, that is not illegal. the law firm you are with, you are looking at how much protection may have. this is a huge security breach. tom: a lot of this is legal stuff. panama is used by high net worth individuals for a state planning to reduce taxes in a completely legal format. then there is the "yeah,but." >> is it in their sinful world leaders? >> it depends on where you are. it is met with bluster and outrage. >> there is dramatic video of

reporters sitting down with the prime minister of iceland. what do we know about you this affects? >> there were calls for resignation, or snap elections. he is on the hot seat or the prime minister of pakistan was also there. >> where do you think reporters will be looking for? fifa has been a big scandal. the documents show there a lawyer on the ethics committee that has done work for some people that have been charged scandal.y in the fifa credit suisse, hsbc according to of tens ofts set thousands of shell companies on behalf of clients. it is a fight against corporate inversions. pfizer and allergan terminated a $160 billion merger, ending what would have in the largest health care acquisition.

is this the end of pfizer's is it allroad, or versions on the table? in the first case, there is no question the u.s. government went after riser allergan specifically. to allegations were written specifically target pfizer allergan. it is clear that if they try to do it again there will be a similar response inasmuch as the white house hosts its current occupant. in the future, who knows. if this is the end of an virgin's generally, we will see. a lot is riding on the political process in the u.s. and if congress can remove the incentive in the future. >> i think the administration was focused on riser, not our again. the rules were to stop the inversion.

we have a competitive advantage in that they built a wall around the u.s. to lock u.s. companies into being less competitive globally. a double-based company can operate more competitively. halliburton is being sued by the u.s. antitrust department who claimed their planned takeover of baker hughes should be blocked because it takes over competition. the companies are going to fight the charges. what is the justice department worried about? theyis was a deal where were trying to take the oilfield services, the number of people competing, from three large players to 2. that is what halliburton was trying to do. that was so they could probably charge more and have one less competitor. that is some ring that usually the doj and regulators will resist. no one was surprised by the announcement today.

>> we are moments away from looking at the minutes from the arch meeting with the fed. we will hear from these minutes ellene how dovish the y said is. -- fed is. >> you can see the meeting centered around the question if they rate increase would be advisable at the april meeting. they held off in march because the minutes show that many participants expressed the view that the global economic and financial situation still have downside risks. >> i think some are surprised at the risk that the rate hike was still as he did as it was. as it was.d what does that tell us about the debate? >> did the minutes say it was heated? >> we are looking at a back-and-forth. you did not all agree. >> people are passionate about

their positions. they should the. these are hard decisions to make. >> are you watching inflation expectations, the payroll? been concerned about inflation expectations. you have the five-year forward, and in elation measures below 1.5%. that got me nervous and we flagged those. they have recovered back to december levels. . find that comforting i would like to see those numbers higher than they are today. , somehow, the credibility of the fed and the stability in the long run inflation target of 2%. jamie dimon issued his regular letter to shareholders about emerging geopolitical risk and predicting u.s. among othere,

things. he took shots at regulators saying our shareholder should bear in mind that the u.s. government requires a capital surcharge that is double that of international competitors. it may ultimately put u.s. banks forisadvantage international competitors. >> there are many places in the letter were jamie dimon is confident and strong. there are other places where he feels he is under attack. by people like elizabeth warren and others. here is a quote. americans to any look back in 20 years and try to figure out how and why america's banks lost the leadership physician. if not us it will be someone else, likely a chinese bank. now how theo see chinese bank will get into that situation. >> the eu referendum is a

political risk. the best case scenario and worst case scenarios, what are they? erik: in the event of a brexit, mark, the best case scenario is that britain and the eu renegotiate trade agreement and business continues as usual. the bad scenario is where britain breaks apart from the eu or the eu becomes defensive takes retaliation against britain for the actions. the worst case scenario by far is a dissolution of the eu. not just by britain leaving, but by other states leaving the eu. this great european experiment that has been underway would fall apart. moreet: we are learning about the potential buyers for yahoo! verizon and yahoo! are among the suitors. challenges,the

yahoo!'s assets are valuable? bought aol. yahoo! and well share similar businesses and come with a big digital reach. scarlet: why would they want them? is to marry plan data to users. verizon has 100 million subscribers through their wireless and fires. if you can take the digital data that you get from aol, yahoo!, and marriott with advertising out knowledge he that uses the rhythms to show digital advertising and pair it with the digital advertising products which verizon has introduced -- that appears to be the plan. because they are similar there is synergy with verizon that you may not get with any other company. that is why verizon is taking a hard look at the yahoo!.

scarlet: could a another bidder come up? alex: we know several private equity firms are interested. they will make first round bids. ,ome of the big players comcast, disney, microsoft, they all have limited to no interest. that narrows the field. up, reaction to the panama papers and repercussions that have been felt around the world. ♪

♪ scarlet: this is "bloomberg best." . am scarlet fu over 11 million documents were leaked in the panama papers. it will take time for the full impact to the clear.

it unfolded dramatically. we highlight coverage on bloomberg television. waso one said mr. putin involved. not his name registered anywhere . some people who know mr. putin have offshore businesses. what is wrong about this? i have many comments. russia has no offshore zones. i've never read anything that was involved with mr. putin directly. [beep] story, sorry. >> it is very simple. we only accept structures if they serve a legitimate purpose. that was not one of them. we do not engage in the. -- in that. otherwise they have to leave the bank, and there is a structural

beneficial process of knowing who is a beneficial owner. anyone who is not, we will not engage. we feel the practices are very strong. an iceland bombshell with the prime minister resigning one day after the data leak known as the panama papers linked him to offshore accounts. book aboute the wealth hidden offshore. what is the most significant aspect of the leak? >> we thought that we had made a taxof progress in enforcing to comply with laundering regulations. we discover that even today some lawsem are violating the on a regular basis. the basic rules of know your

customer, the owners of the wealth that you manage, i routinely violated i some of these firms and tax havens. investigation in the so-called panama papers is putting the british virgin islands, a cluster of islands in the caribbean east of puerto rico, under scrutiny. it is home to half a million companies. tell us about the u.k.'s relationship with its territories. >> more than half of the companies exposed were virginred to the islands. prime minister david cameron has put pressure on overseas territories to set up a public register of beneficial owners to companies. they have ignored his calls. he is facing pressure from opposition politicians, like

jeremy corbyn, to take direct control of overseas territories that flaunt a u.k. tax law. >> hong kong and china are the top markets at the center of the panama paper leaks. 1/3 of the offshore and shell company set up. what is the latest about china? >> the significance for the law firm's business setting up offshore entities. they set out more than 16,000 offshore companies are chinese and hong kong business people, relatives of the political leaders in some cases. this is their most important market. 89 in hong kong. they made good use of their presence. scarlet: xi jinping seems to be the focus with his relatives have a offshore accounts. very inconvenient during a time

when he is trying to drive his anticorruption efforts. are not a lot of smoking guns. it goes to the contradiction between the efforts to crack down on corruption and all of the senior chinese political elite dabbling in offshore entities. one standing committee member set up her first offshore company when she was a freshman in stamford. -- stanford. it has ensnared in cameron after four days of questioning involving his and is meant in offshore accounts. he finally gave the details on his interests in the holding fund. >> we had a joint account where we owned 5000 units which we sold in january of 2010 worth

something like 30,000 pounds. i paid income tax on the dividends. there was a prophet, but less than the capital gains tax here it i did not pay capital gains tax, but it was subject to all of the u.k. taxes. >> how big is this? >> as he pointed out, he did nothing illegal, but the fact by ait was organized supposedly dodgy company is a blow. it comes at a time when you have the brexit vote in 11 weeks here do have problems with the u.k. steel industry, and the meanderings about the budget, pensions -- it is an element where cameron, despite winning the victory last year, is stumbling. it took him five different iterations to come out what was a fairly simple thing to say.

yes, he had shares and he sold it. ♪

♪ scarlet: you are watching "bloomberg best." . am scarlet fu let's continue our global tour with a look at company news. we begin with a merger of airlines. alaska air will buy virgin america for 2.6 billion dollars, a 47% premium since bloomberg first reported that richard branson's back to airlines was looking for a buyer. been toldnews has that it is unlikely the u.s. government will seek the stretchers. did not bid significantly below alaska air. it was not as bad as we thought. basically, they lost because

alaska air was willing to pay more per share. they are a bigger company. they had the wherewithal and the desire. they have been unable to get ore gates in new york at jfk in d.c. at reagan. virgin america gives them access and helps their cachet. there are not a lot of airlines. that is why they are paying so much. the scarcity value. is significant. you do not see that much, perhaps in pharma biotech. some of the smaller airlines, there are not a lot of big deals that can be done in the airline space. as iting a new president battles the u.s. export and

threatens to hurt the business. it has pushed back the release of results until next month. the bloomberg economist is with me now here at what kind of mess have they gotten themselves into? >> a goes back to 2012 or was buying ande shipping it to iran. the u.s. had sanctions to iran. alleged to have done so and gone further by using runt and shell companies do skirt restrictions. the u.s. department of commerce has said, they cannot punish zte directly, so they went after companies that supply to cte -- zte and said we cannot allow you to sell to them. they had changed their management. they are pointing a new

chairman, the founding chairman. he is no longer chairman. that is unusual in asia, and something they are doing to speak to the issue the u.s. has peopleetting rid of the that are alleged to have done nothing us stuff. zte has said that they will start making changes. >> the disney ceo is stepping down. no reason was given. he will remain at disney, but bob iger. he was widely seen as eiger's successor. >> he was the cfo for a long time. he was being groomed for more than 10 years along with jay ruzulo.well -- with jay apparent, widely anticipated. the board and senior management

of disney have had 10 plus years to look at tom staggs and his qualifications before naming him the coo. for the board to say maybe you are not the right person is surprising. >> disney likes to promote from within. would it be a big surprise if the successor to iger was an outside man or woman? >> the problem with disney is that bob iger ran a good succession plan. he identified two very strong able executives, grooming them over a long time to succeed him. that worked well and bob iger was getting points for that. it didn't work at the end. the company is now left with few internal candidates. they will look outside for an executive to come in.

world, they would have loved to have taken one of their internal candidates. >> twitter making a push into online programming. the company will stream 10 thursday night football games to the public for free. who wins and who loses? >> the fans in the anna l win. -- and the nfl win. they are looking through the windshield, not the rearview mirror. this device looks like a small football field. they are taking chances, being entrepreneurial. if you look at the 50th anniversary of the super bowl in silicon valley, our nano second attention is perfect for this device. >> it is also a win for twitter. get intolows them to the game with one of the most powerful broadcasting entities. the nfl is helping to price the

values of the rights. this is a new area. instead of going ahead to go for the highest price, they will see how it works for twitter. is moving forward to sell assets to curve is $30 billion of debt burden. they bought a minority stock in agriculture unit for $2.5 billion and will own 40% of stake in the business. you have identified the agriculture deal as a major proponent on what he wants to do to reduce his debt burden. >> it is a big part of the debt reduction plan, reducing it by $30 billion. glencore is trying to reduce between $5 billion and $6 billion of assets. selling the agricultural business was the center. glencore has more to do.

you think about the company battling low copper prices, relatively low oil prices -- all of the commodities that glencore produces are still trading low. >> they were 30, they're trying to get to 17. where are they now with the sell ? >> with some of them already gone, what is left potentially selling the cultural unit they can sell 20%. they sold 40%. they could potentially sell the mine in chile. spot oning a premium the london stock exchange. pursuing the london listing. are you ready? there is little evidence as to whether or not this is the right time. the price to book on bank of cyprus, 4.5. you are still priced as a

recovery story, as a stock with problems and issues with mpl. why the step on the big stage to london? why's that the right ring to do? >> the german banking sector is priced at about the same as us. that is a new reference point for you. we have been talking about finding liquidity for more than a year. the athense it clear and cyprus exchange liquidity is too low for a balance sheet with more than 3 billion and equity. we need more long-term investors and greater liquidity in the stock. we need to tell our story to long-term investors. is the nature of having an active investor in your stock. the london listing was initially my idea. >> is not saying i need london to get out? board is saying, we

need the highest standards of cooperation, transparency, tell our story to a wider audience, and to know that this stock with this equity can be owned by long-term investors. >> preliminary first quarter earnings coming in. smartphoneaxy s7 proving to be a surprise. is this a research and see in samsung? >> remember the new galaxy debuted into a market where there were not any real competitive products. the iphone seven is probably coming toward the end of the year, and that will be the gadget to be. -- to beat. >> it is about an array of different products. >> the trip division has been the most profitable.

they also have problems. apple is predicting its first sales declined in a decade. the entire global and chinese smartphone market is eroding prices for components like chips and displays that samsung makes will also fall. that will be a big headwind. still to come, u.s. secretary of state john kerry explains why clean energy is good business. next, an exclusive conversation with christine lagarde. ♪

♪ scarlet: this is "bloomberg best." to replay the most interesting conversations. there is no better place to start than francine lacqua's interview with chrisne lagarde

in frankfurt. they discussed christine's concerns. >> we see the baseline a slightly lower. we see downside risks on the horizon. we do not see much upside. we believe the three key risks of china, change of business model, and lower growth. the lower commodity price for longer. financials as of a result of new monetary policies that have just begun .nd more probably will come out those are the three key factors on the economic front. we feel concerning geopolitical reats that impact economies around the world. >> then you have the exit. is that on your list?

-- then you have the brexit, is that on your list? >> is part of the uncertainty in in theopean union and financial sector, because of the financial sector size that london represents. >> if all of the concerning news were to come true on the geopolitical or politics front? >> what we have is a new mediocre that i have warned about. nowould mean weak growth, new jobs, no high inflation, high debt. all of the things that should be low and are high, continuing that trend. we called for policy actions. what i have named a three-pronged approach, structural measures, fiscal policies, and monetary policies. together, not just one after the other -- we seeing a lot of

monetary policies at the moment -- but we need the three fast. is real growth and fundamentals have to go up to match the higher level. the one thing that will save us a strong growth. if we get strong growth, the asset prices are amplified by strong growth. perhaps the asset prices. the problem is that we have to until thatry policy happens. in a world happening with the imf managing director believing in mediocre. , it is qet qe infinity. we keep doing it because it will not meet. that is a concern. we go backin a while

to fundamentals, which is lower than the level they are kept. that is the risk. some central banks say weight. -- say wait. then we go back to the higher level. i do not think this is a stable situation. either we need stronger growth or reduce limits of monetary policy and slowly, not abruptly, get back to normalcy across the world. >> what about the messages coming out of the federal reserve members? it seems they are not giving cohesive -- there's a lot of talk about going a soon as april. >> there have been a number of people that have talked about the rate increases, 2,3, or 4.

the communications strategy, looking at the charts or funds, the dot charts, if anything the dot charts show that there was more agreement for the smaller in 2016. increases a lot of the commentary is people who have 1 more this year. thinking the data might be stronger. that is why we have meetings. it could be two or three, it will depend on the data. in june? i am looking for 2. i would not be surprised if that was one in the middle of the year, one at the end of the year, or it could be one in the fall and one at the end of the year. i will be open-minded for sure. >> unveiling the final version of the judiciary will to ensure

investment advisors are putting their client's interests ahead of their own. what is the problem and why is this the right solution? are addressingwe is in the retirement landscape, it has changed dramatically over 40 years. in the world of ozzie and harriet a had a defined-benef it plan, they didn't have to worry about the pension running drive because it was a plan for life. in the world of 401(k)s and iras, the consumer has to take ownership over how to spend their money. as we are doing is making sure the regulatory landscape keeps up with the changing retirement landscape. making sure the bedrock principle of consumer protection, putting customers first, is put into place in the retirement space. >> why is it the right way to do it by broad regulation that

affects everyone rather than just going after the bad actors? >> i appreciate your question. this is not a case about people who have malice in their heart. i've said that repeatedly. advisors are not bad people. i've spoken to so many here they are trying to do the right thing. this is a case about a system that is structurally flawed. >> how do you view silicon valley right now with talk of unicorns? the idea that silicon valley can play by different rulebook then everybody? >> i'm worried. i'm excited and delighted and proud of the companies in silicon valley. the innovation is exceptional. sometimes they are disconnected. in dce, people talk about being inside the beltway, in silicon valley they are sometimes out of

touch with what people are thinking around the country or the world. sometimes they get caught up in valuations. valley,ons in silicon in new york, they tend to be too high. i have a chapter in the book about cities in the middle of the country where great entrepreneurs are building great companies. it will be a part of the third wave where valuations are more modest. venture will look at these. >> you talk about fintech. why have we not seen a bank by facebook or google --buy facebook or google? >> they are too expensive. you you're large-company slip into being a defender and the entrepreneurs are the attackers. ♪

♪ scarlet: you are watching "bloomberg best." i am scarlet fu. held aek energy finance global summit on the future of energy. businessuential leaders joined us on bloomberg television. here are some conversations, leading off with secretary of state john kerry. >> what is it that you are asking the private sector to do that they would not otherwise do? >> make energy conscious decisions in their business. in the plans, how they power, how they do it, and in their choices for national policy with the respect to energy. to a lowo move rapidly carbon energy-based economy. that would be not only significant in terms of omissions and the negative consequences for the -- in terms

and the negative consequences for the planet, but there are millions of jobs to be created in making energy conscious decisions. and a lot of savings for companies. if you power your plant efficiently, you will save millions of dollars. >> are companies missing the boat? >> there are major companies that are understanding this. withrt is working to deal climate change. pepsi, coca-cola, general electric. i can run a long list of american brand name companies, but other people are also engaged at smaller levels to make wiser choices about their energy use and production. >> are you encouraging the greater stepstake to account differently for the cost of climate change? >> not regulatory, but we would urge -- accounting is

supposed to be an exercise in transparency, accountability, and truth. real and counting on energy does not take into account the costs the american taxpayer is paying. enormous sums of money. $70 billion from hurricane sandy. there is a huge transformation that has potentially negative consequences. the accounting needs to reflect those realities. impose a federal minimum carbon price unilaterally? have you tried to impose things on canadian provinces? >> i have not. >> i do not think you would be particularly popular. we do talk to the premier, and the prime minister has done it twice.

there have their own carbon pricing mechanisms. they talk about the national objectives and then determine the best mechanism for us working together to get there jointly. >> economies have been hit by low oil prices. do you think the lower revenues from oil will cut into the potential investment in renewable energy? >> i hope not. i think the entrepreneur and innovator all has his or her mind on what is next. investment in what is next becomes part of a priority when it is such a time. we know there are meetings in alberta that have come together as an alliance to waysresources to look at -- aside from intellectual property interests -- to find

sectoractices the will share. in some cases it could be more difficult during a time of low commodity prices. we see companies are making those decisions anyway. >> one country leading the charge on clean energy is chile. they are aiming to get 70% of its power from a new opel by 2030. wind power has soared and projects were solar will grow in five years. and wereis a boom nobles. no fiscal subsidence. that is important because it is sustainable. energy represents the sector in the economy with the highest investors, even more than we used to have in mining. now energy is number one.

we are building new power generation capacity and new infrastructure. we have more than 2000 kilometers under construction today. more than 58 power plants under construction. billion in duration and transmission to enable the renewable energy to come under abrasion. >> something that has happened during this has been the fallout of commodity prices. mining was the number one thing for chile. if you have alternative energy to power mines and they shut down, what does that do for the demand of alt energy? in othere another 2/3 sectors of the economy. we need to restructure our energy matrix.

it allows opportunity for renewables. we are in a region of the world that has huge opportunities for integration and interconnection. ♪

♪ fdi was on a fabulous long trend for years. it speaks to a new globalization. >> if you look within the company, this shows us not just the stock chart since the big bump, but the miniscule amounts of buying and selling. green is buying and red is selling. >> allergan and the acquisition machine, you can look on the bloomberg byp. of functions array to enhance our business news . #btvgo to can useg

access charts. i want to ask you about the divergence in equities. it is interesting if you look at a longer-term picture here that ,s a 10-year look at the msci then the entire world without the u.s. component. you can see a convergence. the stoxx 600 l to a five-week low. a couple of days ago the s&p 500 was at its 2016 high. why is that? will it continue? i think the real reason is earnings. what you are showing is the price. i don't think europe' fears earnings has grown -- europe's earnings have grown in five years. health. has a better

care sector, technology sector, it's banks are better. line, theyown the should have a huge premium. the combination of earnings growth and safety of the environment. both. >> you had a great chart earlier showing the trade weighted yen. it has been in a downtrend. the move that we have seen in the past several is barely a blip. the long-term trend has been weaker on a trade basis. >> showing you the magnitude of some of the moves we have seen. >> this is the base of the yen and what it has done. all of the major currencies that have crossed with the yen are seeing declines. the south african rand has been seeing it steepest declines. you can look at the year to date and you will see similar movement. a more magnitude. it is all of the major

currencies falling versus the japanese yen. the pound falling the most versus the japanese yen. i'm looking at forecasts for the yen. fc looking at forecasts for various currencies. this is the work casts -- and the forecasts of strategists. this is where they are trading, what the market and strategists are saying. an interesting divergence. >> going big on britain. big on brexit. it is our fascination in the u.k. at the moment. the stock market doesn't care. #btv 811 go.go to g we have not seen it so expensive since 2005. you have 8% versus the stoxx

600, trading at 16 times estimated earnings. the stoxx 600 is thriving at 15 times earnings, estimated earnings. we have never seen the stock market seen so much of bearish reduce. every week since the referendum was announced since february bearish bets have been coming down on u.k. stocks. the british pound has come down 4% versus the u.s. dollar. may be that helps exporters. energy stocks doing well. we have created a function dedicated to the brexit. go allows you to monitor the polls and indicators. you can monitor news 24 hours a day on bloomberg.com that does it for "bloomberg best." thank you for watching bloomberg television. ♪

♪ john: welcome to this edition of the "best of with all due respect." we saw wisconsin deliver a big boost to ted cruz and bernie sanders, and they blow through clinton and donald trump. we watched as the race came to the empire state, home turf of the two front runners and birthplace of bernie sanders. in an interview following her loss, hillary clinton gave her rival a taste of new york magic. >> jeff weaver said something very interesting, inflammatory on the air, saying the clinton