>> coming up on "bloomberg best," the stories that shaped the week in business around the world. the trump transition rolls on as the president-elect meets the press, and hearings heat up on capitol hill. >> the plan put into place is basically trust donald. >> he's not moving where he needs to move. >> contentious is an understatement. >> brexit worries bring down the pound. china causes global concerns. >> what you're seeing is a bumpy road. populism in politics could change the game for drug companies. leaders tell us what they are expecting. >> at the end of the day it's

about what value is being generated for the patient. we have to be careful not to lose the baby with the bathwater. >> and more political pressure, top c.e.o.s explain how they plan to steer forward. >> we have more in common with the administration and the president-elect than we have at odds. >> we want to have good paying jobs, a good paying economy, because eventually, that helps my business. >> it's all straight ahead on "bloomberg best." ♪ >> hello and welcome. i am michael mckee. this is "bloomberg best," your weekly review of the most important business news and analyst from bloomberg television from around the world. let's start with a day by day look at the top headlines. on monday, the spotlight fell on china contending once again with , an -- with volatility. >> fx reserves slumped by

another $41 billion last month as the yuan tumbles. >> they have tools. >> how much more willing can they let these reserves drain? >> yeah, you can see that they are using -- they have acknowledged that in the reserve statement that they did use their foreign exchange pile to kind of defend the currency but they are also increasing the capital controls so you can probably expect more capital controls so they don't have to drain as much of the reserves, going forward. but you can only go so far on both fronts, right? >> without hurting confidence. >> right. let's look at the numbers. the reserves pile fell by another 41 billion u.s. dollars. that was in line with forecasts, but it's getting down to that $3 trillion threshold. it was $4 trillion in june 2014. 10 straight quarters now, the fx pile has dwindled. >> is the pboc defending that $3 trillion line? >> well, finally china only has $3 trillion.

we've been talking about this inefficiency of $4 trillion for reserve and ridiculous developing country financing -- and now it's down. i think from long run trend, this is a good news. >> you expect further measures to contain the capital outflows? >> i think the market is starting to respond, so from that point of view, i don't think they will go further on that. >> china's reinflation stories gets a lift again. factory gate prices climb. >> cpi study about producer prices overshooting. >> it was just a few months ago, it seems like yesterday we were talking about continued persistent deflation at the factory gate but now four straight months of inflation, and higher-than-expected, faster than expected as well. the main reasons, commodities rallied. oil and iron ore and other commodities are up. >> don't make too much of these

numbers. they are headline grabbing higher expectations, but keep in mind a year ago prices were down , by almost the same. so over a two-year period actually prices are unchanged, so what looks like a big reflation is not the beginning of hyper inflation, rising inflation, rising price pressures. >> the flurry of confirmation hearings kicked off today on capitol hill beginning with jeff sessions, the nominee for attorney general. contentious hearing and it got off on a rocky start. give us your highlight. what were you most surprised by in today's hearing? >> contentious is an understatement. several protestors interrupting senator jeff sessions' hearing here on capitol hill to lead the department of justice. i put the question to sessions spokeswoman sarah flores about whether or not sessions would weigh in on the at&t time warner deal and what she told me is he would defer that to the leader -- the assistant attorney general at doj with regards to leading up the acquisitions and

mergers section of doj. so, you know, if you're in the business community, and you're watching today's hearing, the takeaway is that sessions will not be as critical of this deal or of other mergers and acquisitions as president-elect trump has been, and the facts that i heard from the spokeswoman that sessions did not speak to trump at all in their meetings about time warner and at&t specifically. >> president-elect donald trump ending the first news conference he's given as president-elect. the first news conference he's given in almost 170 days. >> what was your main takeaway from the news conference? >> this news conference was originally promised about a month ago to be specifically focused on president-elect's conflicts of interest in his business and that was a big takeaway from this, was he finally addressed that. that was one big takeaway. another was just on russia, that he did acknowledge really for the first time that russia was responsible for hacking the dnc.

>> what do you make of the plan that was laid out by the lawyer that said, you know, he wasn't going to basically have anything to do with the trump organization? >> the plan they put into place is basically trust donald and trust donald's judgment. they have taken none of the steps that trump's predecessors in the white house have taken to make sure the president is insulated from conflicts of interest, an actual blind trust -- divestmentent of assets that could create conflicts. >> he's not moving where he needs to move. that is, we need to have him divest. he needs to get rid of his business interests and he needs to put them in what's called a blind trust. >> so you don't buy when it his attorney just said it would be impractical to have a blind trust? what's your response to that? >> it's not impractical. people do this all the time. >> pharmaceutical and biotech stocks took a dive when donald trump commented on the industry's drug pricing methods earlier today. >> they are getting away with murder, pharma.

>> if you had any doubt that donald trump still had the -- didn't have the power to move markets anymore, in the span of a couple of seconds he surprised everybody at this press conference and said that the pharmaceutical industry has been getting away with murder, and promising to have the u.s. government negotiate prices on behalf of consumers. it just absolutely destroyed the nasdaq. biotech index, the index of big drug makers, the pharmaceutical index, as they reacted, they thought trump would be relatively friendly to drugmakers, hillary clinton and sanders were the ones going after the industry. trump seems like a pro-business kind of guy. it's not the case. he's a populist. >> meanwhile on capitol hill >> tillerson continues to x tillerson continues to testify before the senate foreign relations committee on his nomination to be secretary of state, in the trump administration. >> the issue of russia and the u.s. policy under a trump white house has continued to come up and i think what we're noticing here is that rex tillerson is looking to win over the support of republicans like senator john

mccain as well as senator lindsey graham, the type of republicans who, quite frankly, are a little bit skeptical of tillerson's ties to russia. i would also note that tillerson unlike trump said on capitol hill today that he actually supports the transpacific partnership and would want to take a look at it and perhaps reform it but that's different from trump who said he would oppose it. >> biggest decline ever in fiat chrysler shares listed in milan. the eps said to have alleged diesel cheating by fiat chrysler. it has notified them of clean air act violations. shares fell as much as 16%, barely above that now. >> compare this with the volkswagen story. i see that these allegations are covering around 104,000 vehicles. >> it's much smaller but that doesn't mean it couldn't do a lot of damage if fiat chrysler ends up being guilty on this one. they are saying that the devices

they have in there did not cheat. they are going to fight this. they are going to continue to work with the epa. there are some very specific things that need to be known before you can really look at how big of a financial impact this would have on fiat chrysler. the epa is not seeing these defeat devices that is basically cheated emissions test. what they are saying is there were eight devices on these vehicles software devices that , the company didn't disclose. that is a fineable offense, not disclosing those devices but if they didn't cheat, then they wouldn't necessarily have to be replaced in people's vehicles, the fines would be much smaller so before you start to look at this as something on the proportions of volkswagen's $24 billion cost, it has to be known whether or not fiat chrysler cheated and we just don't know right now, and the company is certainly defending themselves and saying that there is no wrongdoing here. >> three of the major banks out with quarterly results this morning. bank of america revenue missing estimates but fixed trading revenue was up by 12%.

jpmorgan profit beating, up 31%, wells fargo falling 5.4%. >> looking at these three sets of earnings, if you were going to give us one headline that you think summarizes the most important point what would it be? >> i think the most important thing that i have seen this morning is the share repurchase from bank of america. going into this earnings season, the stocks have had a huge run. investors are looking for signs of optimism. i think that's a signal from bank of america towards the future. looking at the fourth quarter numbers, everyone is focusing on fixed, that tends to be one of the more volatile items, setting the run rate going into next year, there are more questions than answers just because there is so much we don't know with regard to regulation, tax policy and interest rates and those really the key drivers, not just in 2017 but over the next few years. >> we had a reflation story that began last summer. we've had the trump rally, that's fueled the next leg up in bank stocks as well. which bank is better set to capture that story because there are two sides to me, the more

nimble j.p. morgan on the one side and the bank of america with this huge deposit base ready to take advantage of the yield curve. which is it on balance? >> if you look at the overall, return on equity, that's the key metric. jpmorgan and wells fargo still leading. wells fargo despite all the troubles, a lot of focus on their sales culture and going forward but still these banks earning relatively higher. >> still ahead on "bloomberg best," deliberating over two huge multinational mergers. discussing some of the regulatory decisions in 2017. plus more on the hot-button issue of drug pricing. from c.e.o.s of the world's top pharma companies and up next, more headlines from the week in business. jack ma visits trump tower. alibaba makes a big bet on brick-and-mortar. >> they see an opportunity here with n time and a couple of other retailers that they have invested in. >> this is bloomberg.

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♪ >> this is bloomberg best. i'm michael mckee. let's continue our stories. in the u.k., where prime minister theresa may is preparing to negotiate britain's the european union, and this week anticipation of a , so-called hard brexit appeared to have an impact on the pound. >> theresa may has signaled the regaining control of immigration and law making are the brexit priorities even if it means leaving the single markets. the prime minister said, "we will be able to have control of our borders, control of our laws, but we still want the best possible deal for u.k. companies to be able to trade in and within the e.u." we want to go straight to bloomberg and talk about where sterling is. >> it's looking negative technically. only has cable broken that

support at 122 which had been like a double low in the last couple of weeks since the recovery after the flash crash but not only that we're seeing , the bloomberg pound indexes also breaking its clean nice upward trend that it had since the flash crash. that's even more negative. at the moment there is a dollar uncertainty. it is looking quite bad after may's comments. >> japanese drugmaker takata pharmaceutical will expand its footprint. a $4.6 billion deal that it expects to close by the end of february. shares jumping on that news the , biggest move since 2003. walk me through if you would the to $24at it took to get a share on a stock that was trading at $13. >> you just look at product by product, as well as the pipeline, you say, how promising this product is. the most promising product. >> the lung cancer drug?

>> lung cancer drug. we believe it can be the best in class, we believe it can be -- its sales can be north of a billion, so that's how the math work. >> if you believe the product has the potential, you can justify the price. >> the latest big business figure to roll up to trump tower in manhattan. jack ma, the president-elect, discussing u.s./ china ties. creating a million new jobs in the u.s. over the next five years. >> jack ma promised to donald trump for creating a million jobs is based on the assumption they are going to track one million small businesses, brands onto alibaba's platform and if each of them can create one more job, then that brings it -- [inaudible] if you think about it maybe a lot of them are already doing the selling right now, what we know is they are selling 7,000 brands that are selling on alibaba's platform.

they might come into direct competition with ebay which has 10 million sellers so there will be a lot of overlap in the space. >> it's making a big bet on brick and mortar. the e-commerce giant is looking to buy out department store chain in time retail group for as much as $2.6 billion. it adds to alibaba's physical holding in retail. growth beyond a slowing online business. >> china's retail market is much more fragmented and much less efficient than the u.s. market and they see an opportunity here with a couple of retailers that they have invested in to try to bring some of their know how, customer experience, and some of their technology frankly to bear on the retail sector that hasn't been operating so well. remember the backdrop here, chinese economy is slowing quite a bit. chinese government is trying to shift from an export driven economy to more of a consumer driven economy. so there is an appetite here for trying to cater more to consumers and give them more of the kind of choices that you

would have in, say, the u.s. retail space. >> $1 billion in assets in two deals, a big first step in the drugmaker valeant's quest to bring in cash and ease its debt burden. the story, is it still all about the debt load? >> it absolutely is. they announced $2 billion worth of sales. they are sitting on $30 billion worth of debt. that will come due over the next several years. it eases things but it's a sign -- but investors take it as much as a sign of good things to come probably as opposed to, the problem is over here. it's certainly in the right direction. if you look at the valuations they are getting, pretty positive. they are selling this cancer asset for more than they paid for it which is the big worry, that they would be doing fire sales and they are selling some dermatology assets which are , while core to their main business they are selling those , at what people say is a good valuation. all in all pretty good news, as a start to what's probably going to be a long asset sales process.

>> but a credit shareholders approved a capital increase, almost twice its market value. this is twice as much as they -- as monte dei paschi tried to raise. we know what happened there. is it going to be a smooth process when this gets to the markets? >> certainly there is quite a bit of optimism on the part of the c.e.o., who told reporters he is indeed quite confident that they will be able to get that. we also had some comments from some of the investment funds that were present at the assembly today. it is a different story compared with monte dei paschi, which needed the funding to survive. still a profitable bank and it -- while unicredit is still a profitable bank and it needs this to bolster its capital buffer since it's an important bank, a so-called systemic bank and that's what it needs this money for. >> amazon says it plans to

air 100,000 people -- hire 100,000 people across the united states over the next 18 months. the announcement comes amid pressure on the technology sector by president-elect donald trump to create jobs. amazon is creating a hundred thousand jobs over 18 months. how many jobs does it how many jobs does it typically create, say in 12 months? >> in the past five years, amazon has created 150,000 jobs in the u.s. so this is a pretty massive jump. it's 100,000 jobs as you said in the next 18 months. but if you really look at it it's not all that surprising that amazon -- >> they also lose jobs over the course of 18 months? >> and they are also growing so massively and so fast. they are expanding into hardware. they are trying to get more into groceries and apparel. they are trying to deliver goods faster to people, opening many new fulfillment centers, and all of those efforts require a huge ramp up in work force so it's not too much of a departure from what we're expecting. >> lee is back home after 22

hours of questioning, as a suspect in korea's undue influence scandal a prosecution spokesman said he denied most of the allegations, and that the investigation will now be widened. >> this has certainly been a difficult period of time for jay y. lee. he appeared at 9:30 entering the prosecutor's office. he stopped briefly, he was surrounded by reporters and activists and cameras and he was asked about this. he briefly apologized for the company's behavior and then he went in. as you say, he spent 22 hours answering questions. he was held overnight. he was released about 7:30 this morning local time. the prosecutors have also been questioning other executives at samsung. at least three that we know about at this point. on monday, they questioned some. last night they questioned another one. they are digging deep into these allegations to try to figure out exactly what samsung's role has been in this broader influence pedaling scandal in south korea

that's already led to the impeachment of the president there. ♪

>> welcome back to "bloomberg best." i'm michael mckee. -- does not shy away from tough decisions involving multinational companies. as 2017 begins her commission is , reviewing two agrichemical megamergers. she discussed this case among others in an interview with david gura. >> let me ask you first about that dow-dupont merger, that proposed merger. amidst this consolidation in the agrichemical space what needs to , happen to satisfy you that fair competition will continue? >> as you say it's a very concentrated sector already. what we're looking at is very obvious, that farmers still need

to have choice. so these are the things that we're looking at. the outcome of the merger is still very open. we have the hearing just today. >> pursuing merger, you've been looking into that. you prize the investigation. what have you learned here in the last couple of months? >> first of all, even though these companies are in similar or overlapping markets, the mergers are very different in their nature when it comes to what markets they address and what are the merging companies. chemchina is very much focused on the chinese market. wants to improve, wants to improve the products in their market. to that degree there is a degree and --e is a question of oh innovation that of innovation and how to make that happen also in the chinese market.

that may be the one thing that they have in common with the du pont merger where, of course, innovation is a very important thing as well. >> let me ask you about a few financial companies. monte dei paschi, you will be looking at that case. what does the bank and italian government have to show you to give you the sense here that its plan is a good one? >> well, it is as it's been before. we're obliged to see a restructuring plan that will allow for a viable bank on the other side of the recapitalization, and here, of course, is the detail that counts. how it actually spells out. but we'll start working on that and probably it will take a , couple of months or maybe slightly more before the restructuring plan is in place. also, because obviously, it's the main work of the management of the bank. >> i know you've raised concerns about deutsche bank and the london stock exchange.

what are your concerns about consolidation in that particular space, about competition in the exchange space? >> it's the market where you have very high barriers to entry. but where competition is very important in order to make sure that you get the right prices on a number of different products. also, when it comes to clearing. we're in discussions now with the companies and it still remains to be seen what will be the outcome of this case. >> our review of the week continues on "bloomberg best" with compelling interviews from the j.p. morgan health conference. ceo's discuss political challenges buffeting their business model and politics was top of mind at the auto show in detroit as automakers respond to pressure from president-elect donald trump. how do they negotiate the road ahead? >> we're very proud of the fact that our strategy is to build. >> we have a strategy to

localize production as much as we can. >> this is bloomberg. ♪ ♪. michael: this is bloomberg best.

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regulations. earlier in the week, erik schatzker spoke with a number of pharmaceutical executives at the jp morgan health care conference in san francisco. while the president-elect not yet fired a shot across about, that was still a general expectation that 2017 would bring the changes to the industry. >> we generally believe that the u.s. health care system will continue to reward innovation. and there is so much that still needs to be done in medical research. especially in areas such as neurology.d we have an optimistic view. erik: an optimistic view because you think what is going to happen? >> there has been discussion about the pricing environment in the united states.

this discussion is natural. people are talking about how to best use resources in health care. we believe that global medicines are usually a very, very good way of investing in health. erik: but the price-setter for so many drugs in the american market are the pharmaceutical managers. >> that is a competitive system. erik: right, but the managers arefit not about to reward you for innovation. their goal is to crush you on pricing. >> this is what business is about. you are negotiating price in the marketplace. at the end of the day, it is about what value is being generated for the patient. and the u.s. health care system is one of the systems that rewards that better than others. >> what kind of drug pricing environment do you expect from the trump administration? >> i think the issue of pricing is going to be central to the debate.

i think we need to really achieve a pricing represents the value. it is very clear, in my view, that we have to be careful not to lose the baby with the bathwater, and that is innovation. the best way to do it, in my view, in totality, is to make sure that the price of non-innovative drugs, generics are made in such a way that they become accessible. that the price of innovation be recognized for the value it provides. >> do you think the trump administration will take a lighter touch approach to drug pricing than obama and the democrats did? >> i really don't think so. i think it is a bipartisan concern. last year, we had the same conversation. people want transparency. you want to understand what is

happening. frankly, we are blaming the pharmaceutical industry. the system is not working properly in terms of being able to provide value as for both innovation, and remember, once we discover a job we have to give it to the public in a few years. >> who are you pointing your finger at? the pharmacy benefit managers? >> everybody. everybody. i think the entire system, in my view, needs to be transparently reviewed and readjusted. >> the environment here is clearly different from the environment in europe. do you have any hope that we will begin to see indication-based pricing and some of the major european countries like germany or france? if so, when? >> we have been working at this for five years with our cancer medication. innovation-based italy. right now in

>> i am thinking of elsewhere -- germany and france. >> oh, ok. we do some work now at the hospital level in france. in switzerland, we have accommodation-based pricing where we look at those patients who need more than one of their -- need more than one of our medicine for the treatment course. we look at pricing does medicines as a pair or a triplet as we look forward. there are more than 20 countries in europe today that are ready to instigate the systems. i think in the next five years, we will see -- >> it is going to take that long? >> no, it is happening today. in the next five years, more and more countries will be adopting this, without a doubt. >> the largest public pension fund in the united states lowered its assumed long-term rate of annual return from 7.5% to 7%. this week, the fund's chief investment officer told erik schatzker that they also have a strategy to reduce fees by overseeing its assets through in-house managers.

>> it is a difficult space in the stock market to be an active investor. they are very efficient. we have brought just about a huge majority of our assets internal. we are very proud to have over 70% of the portfolio managed internally. most of that is in our public asset classes -- stock, bonds. much of that in the stock portfolio is index oriented. 30% of the portfolio is pursuing various active strategies. erik: let's go back to that question then. 70% now. 70% now. if you had your druthers, calpers would manage what percentage in-house? >> 75% or 80%. somewhere in that --

erik: that is bringing in billions of dollars. >> it is a big deal. that 70% we have in-house currently, we pay four basis points for that. we have done very well in the fixed income and global equity portfolio with attracting talent. very proud of the teams we have in sacramento. michael: now, let's head to the ubs greater china conference in shanghai. they confirm the banks is in talks to increase their foothold on ther footprint mainland. he spoke candidly with tom mackenzie about risk and opportunity in china. >> what you see as the key risk for china, or key challenges for 2017? >> the first one is the leadership change we are going to see in terms of policy priorities we are going to see. the current administration and central-bank leadership has been in control rather long. we have the longest serving governor.nk

he was there when i joined in 2004, and he is still there today. so, the chinese monetary policy has followed a very steady course of opening up, and becoming a part of the international community. it is now part of the special growing rights of the imf and that requires china to be part of the international community. >> given what we have seen on the capital control, the yuan has taken a big step back, hasn't it? >> well, no, what you will see is that these processes are never smooth or straight lined. there are periods when things go easy, and periods when things move in a rocky way. what we are seeing around the globe is a large amount of political uncertainty. if you look at the united states, it could mean a totally different policy for china. it is the risk for u.s.-chinese relationships and for global/economic relationships.

i think you are seeing more risk in the global economy then you have seen in the past years. in the past, political risk was an emerging market political risk was an emerging market factor, and now it is a developed market factor. >> tom mackenzie also spoke exclusively with the head of the president of the china-led asian infrastructure bank about china's current debt load and the impact of capital controls. >> chinese debt is basically domestic debt. china does not have external debt at a very high level. so it is easier to handle. i believe growth can solve some of these problems, and chinese government will be able to address all of these issues.

what is most important is to make sure that we in china adheringo ahead to the fundamental issue of restructuring and address some of the structural issues. >> on the issue of capital control that we have seen rolled out in the past you months, does it suggest that the imf was premature in including the yuan in their basket? >> it is my reading that the chinese government would adhere to the principle and keep the chinese currency as a convertible currency and keep it, increasingly, a currency in the basket. still, i believe that some measure is necessary. and i hope things will stabilize

very soon. and some kind of panicking on the part of investors will disappear. ♪

♪ >> fiat chrysler is getting more than 2% right now. that company has announced it will invest $1 billion in making three new jeep models in the u.s. they say they are going to spend a billion dollars through 2020. ford is also going to cancel a $1.6 billion investment in mexico and save some of the jobs it would have lost in the u.s. are these carmakers doing donald trump's bidding or are they just kind of throwing him a bone? >> no, i think there is currently a competition of announcements of who will invest what in the u.s. most of it has been committed before.

we know that fiat chrysler is spending a lot of money on jeep in particular. so, i think especially around show, everyoneo just wants to come out and make some kind of announcement that they are spending money in the states. >> breaking news from general motors -- the forecast has been raised to $6.50 a share. a buyback of $5 billion worth of shares. >> analysts have been talking about global auto sales tapering off or sinking in the u.s. market next year, being at best, flat. gm is not saying that the market will be much better, but they are saying there retail sales and revenue is going to be better. they are saying that they will be able to grow profit even as the global auto market and some global economies are sputtering along a little bit. >> volkswagen has agreed to plead guilty in the united

states of america to the emissions cheating scandal. they will pay $4.3 billion in penalties. prosecutors also announced charges against five individuals in germany. >> how does this settlement affect volkswagen? well, this basically clears the deck for them in terms of u.s. military disputes over this emissions cheating scandal. the focus in that regard will shift to the individuals that of -- have been charged. in terms of volkswagen's future in the states, they are not going to be able to sell their diesel vehicles, or at least they said they will be unlikely to be selling them anytime soon. michael: it was another busy week in the automobile industry, which has been under pressure recently from president-elect donald trump to increase more in thed investment united states. trump did not appear at the north american auto show in detroit to make his case in

person, but bloomberg's david westin was there. he talked to several ceos on donald trump's impact on their business. starting with gm. david: as you look forward to this new administration, what are you anticipating or planning for? >> i think there is a lot of opportunity. we have more in common with the the administration and the than we have at van odds. we are looking to strengthen the country. we provide over 100,000 very good paying jobs. we are also looking for some revelatory streamlining. those are all things that will improve our business and allow us to reinvest. david: so there is opportunity for you as you look forward? >> i definitely believe there is. people need to understand this

is a very complex business with long lead times. the traverse we just launched was built in lansing, michigan. those decisions were made a few years ago. we need to understand how investment is made, but then look at the opportunity. david: it is also complex in terms of the supply chain. borders ands cross assembly is done someplace else. what are your interests in trade as far as a cross border tax? would that help or hurt gm? do you have a sense of that? >> it is too early. i would be speculating because it would depend upon how the rules set was put together. we are proud of the fact that our strategy is to build or we have built for the most part. 75% of the vehicles are built in the u.s. we are the highest u.s. content of all the manufacturers. so, we have a lot of jobs here, and we are going to look to make sure that it recognizes the significant investments we have already made in the country with the jobs we are providing. david: what is your view on the trump administration as a come in and formulate their trade policy? >> i have a good relationship with him. i talked to him from

time-to-time. i spoke with him last week about our plan here in michigan. and you know, he is very interested in all of the things we are interested in. taxes, trade, currency manipulation. all of the things that affect american corporations. i am very encouraged about what type seen about his policy potential. david: if you were to write the ticket right now for an atmosphere that would be helpful to the auto industry, what would you ask of the new administration? >> one of the things he has already done is a point an outstanding transportation commissioner. i have known her well. she knows her industry. our industry is changing so much with autonomous driving coming, and all of the technology. we are going to need a partner in government to make all of this happen. i am very pleased she is the choice. david: do you agree with the trade subject from the

transition team? it could have some negative effects as well as positive. >> we are working with them. we think it is important that they understand our position. we have built vehicles for well over 100 years all over the world. i mean, we have been in mexico for over 100 years long before there was nafta or anything else. we think that is important for any administration to understand. david: you made a little bit of news with the president-elect last week with the plant in mexico to build corollas. what is your plan after that? >> we do build our cars in mississippi, as well. strategically, we made decisions six years ago to realign our manufacturing footprint in the u.s. the realignment would move corolla out of canada and move it down closer to the plant in mississippi. the decision was made five or six years ago. david: we now have a new president coming in. does that change your plan at all? >> again, we are a relatively

small player in mexico. if you look at all of the product made in north america, only 5% comes from mexico. so, we are a pretty small player. we were late moving into mexico. we will have to take a look. obviously, we understand what the president wants to do. and i think we all agree with the president that we want to make america strong. we want to have good-paying jobs, good economy, because eventually, that helps business if i am selling cars and a strong economy. the fact of the matter is if -- it is difficult to look at mexico in an isolated area. we have been in the country 60 years now and invested $22 billion in that time period. over the next five years, we are going to invest another $10 billion in our plants when it

vehicals andomical vehicles.mous david: we do have a new administration coming in. if you did talk to donald trump, and were to tell him what changes you want to see for the auto industry, what would they be? >> frankly, i think everything that is being done in collaboration with the industry is much easier to be done. no matter what the administration wants, the industry can do a lot of things as long as its collaborative efforts, as long as we have some kind of visibility on what is going on, we can do a lot of things. is only thing we don't like to be surprised, taken by surprise. david: one of the things that have been surprising are some of the tweets coming out of the president-elect. some of your compatriots have woken up in the morning to see tweets about what they are doing in mexico. do you have a particular vulnerability there? >> we came up with a business strategy a long time ago to localize production as much as

we can. because there is a big thing that no carmaker can control -- exchange rates. the yen goes down, the euro goes up -- we decided a long time ago to localize production as much as possible. if your revenue is in dollars, your cost is in dollars. if we build cars sold in the united states, we're fine with it. ♪

♪ >> someone should look at what look like in terms of biotech. if you go into the bloomberg, you are seeing $11 billion a week from biotech. >> this function on your terminal, you can take a look, this is the debt that development carries.

2018, they are starting to come under stress, but 2020 is where they have some serious money coming due. michael: there are about 30,000 functions on the bloomberg. we always enjoy showing you are favorites oon bloomberg television. maybe they will become your favorite? here is one function you might find useful -- quicgo. it will takeou to our quick takes where you can get important context and fast insight into timely topics. here is a quick take that breaks down brexit. >> britain and the european union are on course for a messy divorce. in june 2016, the u.k. voted to leave the european block on arguments that it was too expensive and a source of uncontrolled immigration. >> we wanted independent united kingdom. how about that? >> britain's exit from one of the world's most powerful trading blocs jolted financial markets and sent the pound

tumbling. britain's prime minister, david cameron, resigned. .eur d c himampaigned for david: i think the country requires fresh leadership to take it in this direction. >> it is now up to theresa may to chart a course that will inevitably have global implications. teresa: brexit means brexit and we are going to make success on this. >> here is a situation -- to begin the complex negotiation or exit, that a look at article 50 in the treaty of lisbon that requires formal notification of a country's desire to withdraw. said she would do it before the end of march 2017. britain will then have two years to negotiate in terms of its separation, including unwinding things like trade, financial agreements, and safety standings. it also requires the backing of a majority of european union

government. the establishment of trade relations could take much longer -- perhaps even longer than five years. here is the argument -- the pro-brexit vote was based on populism and a backlash against europe's political elite. can they successfully exit the european union without a significant blow to the economy? it is a tricky negotiation for theresa may. it could cause global companies to cut investments or leave. no country has ever left the e.u. before, but a trade deal struck by norway and switzerland, two countries never a part of the e.u. and canada in turkey might provide a guide to the u.k.'s future. ♪ michael: that was just one of the many quick takes you can find on the bloomberg. you can also find them on bloomberg.com along with all of the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week. thanks for watching. i'm michael mckee. this is bloomberg. ♪

♪ announcer: from our studios in new york city, this is "charlie rose." charlie: ash carter is here. he is the outgoing secretary of defense. president obama appointed him in december of 2014. it was a capstone for eight decades-long career at the pentagon. he was awarded the defense intelligence metal and the department's distinguished service medal five times. confirmation hearings for the man who will succeed him started in the senate today.