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tv   Bloomberg Daybreak Europe  Bloomberg  March 17, 2017 1:00am-2:31am EDT

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>> standard chartered boss bill winters said global trade could be set back decades if president trump attacks the wto. he said it is an assault on -- he sediments -- he said i'm assault on agreements would be a bad outcome. icngapore's domestic imports have the biggest increase. increaseds exports 17% in the period. a former boj officials as the
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ofk may have a paper loss $86 billion in fiscal 2021 as it starts to exit qe. it is estimated it will continue until 2029. the governor has so far brushed whathe need for details of will happen when his program comes to an end. bloomberg. now let's take a look at the markets,fter -- at the afternoon trading just getting underway here in china. hang seng up about 3/10 of 1%. --nge in up 3/10 of one for 1%.zhen up 1/10 of ♪ caroline: i'm caroline hyde. this is "bloomberg technology."
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coming up, waymo editor battle it out. the latest on the five that may prove to be a roadblock to uber's autonomous car dreams. plus, tesla returns to wall street asking for more cash. why do investors think that is a good thing? and visas are in the spotlight again. a new study supports trump's claim that visas hurt the american tech workforce. first, to our lead, the alert of autonomous cars has two silicon valley giants facing off. a lawyer for uber told a federal judge the company plans to go to private arbitration within two weeks. waymo and uber are embroiled over a lawsuit over proprietary information, with waymo saying uber is using stolen secrets obtained from a former executive. joel rosenblatt joins us on the
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phone with more. you have been in the court, reporting. we understand you broke the headline that they will be seeking arbitration with uber. what does that mean in terms of the process? >> it was a rather routine hearing. this was a bit unexpected, but hoover -- uber said it would push the entire dispute into arbitration. the larger picture is that waymo is seeking a court order to block over from using the technology. if they can push it into arbitration, the court might not get a chance to world on that, an arbitrator would. we can go over that a bit, if you want. caroline: wouldn't it make it less public in terms of the battle in the courtroom? what did not become that much more private for uber? thus far, they have not dealt with it in a public relations point of view. >> that is at the top of the list of what would be most beneficial. you and i, for example, would not be talking about it like this anymore.
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it would be behind closed doors, not in a public courtroom. you and i and the rest of the press would not get the information that we have so far going forward. also, any award would be confidential. if google won, an award would be confidential. if uber one, that might be -- if uber won, that tina might be-- that too might confidential. we would be less likely to learn that information in arbitration. caroline: take us inside the courtroom. what is it like? what is the tension like? reporter: the lawyers on both sides are very well-established silicon valley lawyers. i've seen them in high-profile cases, like apple versus samsung. it is a real polished,
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professional -- lawyer familiar with technology and each other. the judge is an older guy. he is cranky and irritable. he does not put up with much. i think that could be one reason that uber wants to move this into arbitration. in arbitration, you have more control over the decision-maker. if they do not like the judge, that may be another reason to move it into arbitration. caroline: fascinating reporting. joel rosenblatt, thank you for joining us. waymo and uber's legal dispute is a complex one. it is featured in the latest edition of "bloomberg businessweek." mark berman wrote the story and joins us. it is the lead story of this "bloomberg businessweek." what fascinates me is that this dates back months, when waymo started investigating what happened to their data. tell us, it is the light made of they are most concerned about. reporter: waymo is google's self
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driving company. they renamed themselves on the same day an employee received a accidental email. they discovered that auto was something that looks like their own, and that is when they move this into an internal investigation and lawsuit. that the auto team and several other former employees stole critical technology for self driving cars. caroline: guest and auto, the sf driving truck unit that uber bought, that is what sparked the investigation. the founder of auto had been working at the google self driving car unit. had quite a lot of autonomy before. he had several companies that he had separately to google. reporter: this lawsuit in many ways is the changing nature of google. a lot of former google people would say it is really rare for the company to go after a former employee like this.
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at the same time, he was a good example for what the company needs to be. he was described as a rogue force of nature. he was running side companies that google leaders knew about. some people said they even kind of encouraged it. caroline: they bought them? reporter: yes, some of them were foundational to their mapping and self driving car company. caroline: this is unprecedented for google to go after and start suing previous employees. it is against their ethos. is, and that some people said this means they have . pretty airtight case alternatively, we have people saying this is a sign -- in the new structure at alphabet, it have been possible that -- google has been the leader in autonomous vehicle development. now you see companies like tesla , general motors, ford, and now uber are putting up competitive programs as well. this might be google's way of holding onto their technology.
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caroline: a bit of fear factor coming in. also, otto being bought by uber came as a complete surprise. they did not know until the deal was announced. perhaps they felt they overspent. reporter: there is some tension there. travis kalanick, the ceo at uber, had basically pilfered the robotics department at carnegie mellon. now 15 of the 40 people he has hired have left. you get a sense there is some tension there. they brought in a new boss to oversee them, without them knowing about it. he has been quietly consulting there for months, even before the acquisition. waymo has said that he was planned to be acquired all along. caroline: lucas it is a fascinatin -- caroline: it is a fascinating case. i urge everyone to spend a cup of coffee or two over this article. amazing inside knowledge on what has been going on with uber and
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waymo. mark berman is a co-author on that piece. in the meantime, uber drivers across the globe are fighting for benefits like overtime and paid time off. the question keeps on arriving, do the drivers actually work for the ride hailing app? that is being debated in courts. bloomberg's caitlin meehan reports. reporter: are uber drivers contractors or full-time employees? that is the battle uber is facing in courts around the world. it aims to keep its drivers classified as contractors. why? uber claims it is not an employer, just a platform that connects drivers to customers. in a blog post last year, uber ceo travis kalanick said uber drivers value their independence as contractors. as such, uber is not responsible for paying drivers minimum wage, providing insurance, or holiday pay. but critics say many drivers work more than 40 hours a week, and therefore should be entitled
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to these benefits. authorities across the globe have taken different stances on the matter. in europe on wednesday, a paris tribunal dismissed a request for uber to make social security payments to drivers. this, after the u.k. said drivers should get minimum wage and holiday pay. in the u.s., uber and lyft are arguing in courts from seattle to l.a. that drivers are contractors, preventing drivers from unionizing and collecting benefits like overtime pay. in a statement, lyft told bloomberg news that its drivers are independent contractors, and federal law prohibits independent contractors from collective bargaining. under current seattle law, uber and lyft would have to provide driver names to the union beginning april 3. caroline: john that was bloomb's caitlin meehan. still to come, tesla taps the market for more cash. elon musk says this will probably be the last time this
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year, but still, does the company have enough money to meet its goals? this is bloomberg. ♪
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caroline: tesla ceo elon musk the capital raise the company announced on wednesday is enough to keep them from seeking more cash this year. tesla is raising a billion dollars from a combination of stock and debt sales, all in order to strengthen the balance sheet and reduce risk to investors. it comes at a crucial time as it prepares to roll out its model 3. the company already burned through $970 million last quarter. -- $917 million last quarter. despite the new issuance, the stock is up. joining us now is the detroit bureau chief and a senior automotive analyst. thank you for joining me.
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first of all, i want to take it out to you, david. the stock is bouncing. what we have heard from elon says this will be a capital raise for 2017. >> there is an 80% chance that he will not have to go back for more money. that is what one of the tech websites reported, but analysts are skeptical. yesterday, we are still hearing he will have to go back and get more money. one possible explanation is that it will be a soft launch of the model 3. in other words, later in the year, we will not see a lot of production of the car, so they will not be ramping up so rapidly, and they will be holding quickly next year, and that is when they would come back for more money, early in 2018. caroline: are you convinced that $1.15 billion is enough? they are burning like mad.
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>> thanks for having me. i do not think it is enough. i'm surprised it was not a bigger transaction. you have to strike when the iron is hot. there is a lot of positive sentiment among the investment community looking ahead to the model 3 launch. the other guest mentioned -- his comment was accurate, we are going to see a continued spent as the model three progresses from a soft launch well into 2018 as they try to work their way over to 500,000 units a year overall. just surprised that they did not take this opportunity to raise more capital and put that risk off into the future. caroline: david, there might be potentially a larger than 1.15 billion tap to the market. but what else do we think in terms of the money that elon musk himself is putting behind
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the steel? he is number one stockholder in tesla, and he is contributing more. >> he is buying another $25 million worth of stock. that's what elon does. he borrows money, he secures it against his own shares in the company, he does not take a salary. the money he borrows from his underwriters is essentially what he is willing on. -- living on. he continues to buy more shares. he has a lot of skin in the game, and investors like that. i think that is something they have always admired about him. he will probably need to come back and get more money, though. that is the consensus here. investors are prepared for it. maybe it is a matter of waiting until the model 3 cash needs stretch out and a half -- and they have to go back to the market again. caroline: you think the price target is bullish. you think the price can rise further. does this mean there has to be a smooth process to the model
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3 coming onto market, or have you factored in any other risk factors here? >> i think it has to be reasonably smooth. if it slips from the third quarter into the fourth quarter, then it is game over. but i think they have talked about the back half of the year, not late 2017, so the implication is that there will be some production in the third quarter. investors are polling suppliers right now, trying to make sure they are on pace to keep on track for that third-quarter soft launch or otherwise. the risk factor is that they do not hit that target, that could be a negative catalyst. clearly there is going to be more cash burn here, as there always is with any product launch, so i look at the quarterly results as an seemednity for bears to in and say, look at the cash going out the door, it is more
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than we thought for the model 3. that is when you have to take a more balanced view. they're spending a lot of money on the model 3, but also spending on infrastructure and extending globally. 10% to 15% of what they are spending on our products we have not heard about yet. that has been the case historically. there are more negative catalyst around the corridors. definitely around the model 3 heading that third-quarter target. caroline: nevertheless, a phenomenal market capitalization still held onto by tesla. some $42 billion. jamie, i have to ask you one interesting thing that has come to light. the day that the capital raise was announced, we have a wheeling back from the government on environmental standards for cars. does the incentive to buy electric vehicles diminish with donald trump in charge, or does that not take away the demand? >> the hay is in the barn. the industry has invested in
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electric vehicles. ultimately we will be investing in autonomous vehicles that will predominantly be electric powered. we are building infrastructure. consumers are warming up to the fact that they have 200 miles of range for a much more reasonable entry price. residuals are holding up. the technology is holding up and proving to be a lot lower in terms of cost of maintenance over time, relative to gasoline propel vehicles. i don't see this working backwards. auto manufacturers look into decades long views when they think about investment strategies. there could be a big inflection in political will eight years from now, if not four years from now. i just don't see demand falling off here. i think we've got good products out there, good products coming, and i think that will keep propelling it along from here. caroline: great to get your perspective. senior automotive analyst at consumer edge research, from
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washington. speaking of elon musk, his other company, space x, has launched a communications satellite from -- after a two day delay. capeocket lifted off from canaveral, florida, early thursday morning. this is the second launch from the kennedy space center's iconic launchpad on the apollo missions. also, spacex won a contract from the u.s. military. it was a big win against industry giants. coming up, adobe out with its first-quarter earnings, and it is a 12 straight quarter of revenue increases. we will take into the numbers next. this is bloomberg. ♪
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caroline: nvidia continues to raise towards its goal of creating autonomous vehicles. the chipmaker will combine with bosch.
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the idea is that they will build a supercomputer designed for vehicles using their technology. also, nvidia confirmed a new partnership with one of the world's largest makers of transport trucks. paccar will challenge other startups, including one owned by uber. adobe reporting first-quarter results after the bell. the software company posted revenue of $1.6 billion. it adds to a string about the reports that have propelled the stock to a record. shares are up. joining us to break down the numbers is bloomberg editor at large cory johnson. quite remarkable. record profit and cash flow for the first quarter. cory: pretty positive quarter for this company. stocks responding in kind. the sck price is at an all-time high for this company. it is a richly priced stock trading at 45 times earnings. twice its earnings growth rate. they keep raising and beating,
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and that is the name of the game on wall street. an interesting change for this company. they were early on at getting rid of the software approach, going to downloadable software with regular payments under -- from their users, and it is working. caroline: the shift to the cloud paid off. it's interesting that have also announced partnerships, like azure.crosoft as year -- they are getting a few more competitors as they expand. cory: there is an interesting australian competitor. on the creative side, the creative business is not only growing, it is becoming a bigger percent of revenues. if you go back six or eight quarters ago, it was only 8% of revenues -- it was 48 percent of revenues, now it is 55% of revenues. the core creative business is growing even faster than their other businesses, all of which are growing. caroline: international growth, china is a new top growth area. how is it doing internationally? cory: it seems to be doing well
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internationally, as well. we don't have as many breakdowns and categories, so we don't know how they are doing, but apparently they are firing on all cylinders. what really happens here is there is an underlying trend of digital content creators being minted everywhere. more and more people are creating pictures and changing their pictures using adobe photoshop and so on, that they are getting more users into the area where they are already dominant. caroline: it successfully moved into marketing. will they move into any other products? have a hinted at expansion? cory: the marketing business has not grown as a percentage of revenue. it has kind of stayed flat at about 35% of revenue. it has been that way for quite a while. it does not seem to be growing at an outsized pace, as you might expect -- an outsized pace as you might expect.
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caroline: is oracle competition? >> it is more of an advertising product. not so much oracle. what is interesting about this business, and one of the reasons the stock has a high valuation, is this notion that this is the kind of company that oracle might want to buy if it was at a lower price, but at this point, it will not happen. caroline: always great to get your analysis. bloomberg editor at large cory johnson. speaking of, shares hit a new record high at one point, this after the company signal cloud-based services are taking up in earnings results. this offsets declines in legacy software licenses. coming up, h-1b visas are in the spotlight as president trump repeatedly tries to crack down on immigration. now a new study is reporting trump's claims that visa programs hurt the american tech workforce. this is bloomberg. ♪
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>> i'm denver mail, with an update of the top stories. rex tillerson has called for a new approach to north korea, saying trying to persuade pyongyang to abandon its nuclear program has failed. but he insists the country should not fear the u.s. or its allies. tillerson is in south korea and flies to china tomorrow. peopleh korea and its need not fear the united states or its neighbors in the region, who seek only to live in peace with north korea. with this in mind, the united states calls on north korea to abandon its a listing missile programs and refrain from any further provocations.
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and at&t executive is being investigated by the u.k. over his residency status. the government is not making any allegations of impropriety. gulliver has spent significant time living in asia. china's most indebted developer is said to be making his first dollar bond offering in a year. he is taking advantage of the fed rate hike to sell a bond at a price hike of seven point 5%, and a five-year bond at about 8.5%. -- 7.5%, and a five-year bond at about 8.5%. let's check on how markets in the asia-pacific have been trading. here's juliette. juliet: good gains from a lot of the markets, though you have seen the nikkei -- about to
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indent the session down by about one third of 1%. fives comingf through in these emerging-market assets. you have seen malaysia's currency rise, up 6/10 of 1%, that ring it adding to the solid moves -- the ringit adding to solid moves. australian notes up 4.686 points after falling yesterday -- 4.6 basis points after falling yesterday. crude oil is looking quite good. if you have a look at this graph of crude oil over the course of the week, remove or that being 2.7% following the saudi arabia news on tuesday? that has pre-much been reversed, and we have seen solid numbers coming through, crude set to end
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the week higher by about a quarter of 1%. we are going to be live from london at the top of the hour for bloomberg daybreak: europe. we will have more on markets in that our. this is bloomberg. ♪ caroline: this is "bloomberg technology." i'm caroline hyde. back to a story we've been following, president donald trump's second travel ban was blocked by two u.s. judges hours before was meant to go into effect, marking a group of states, universities, and tech companies that continue to challenge trump's immigration reforms. the tech industry has been concerned with trump's plan to slow h-1b visas. remember, these are the visas that tech companies use to fill high-skilled positions they say can't be filled by u.s. workers. but a new report out by the national bureau of economic research suggests the visa program tends to hurt the tech workforce. joining us is one of the authors
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of this report, also a fellow at the center for global development and assistance, professor at the university of california-san diego. wonderful to have you joining us. key takeaways here -- you studied the years from 1994 to 2001 and it seems to show that h-1b actually limited, suppressed wage growth and u.s. workers getting into the tech area. david: -- guest: right, caroline, we do find that wages would have been higher for u.s.-born computer scientists, but the main message we have in our report is that on the whole, the u.s. economy is better off due to immigration. the average u.s. worker is better off, and also every worker other than u.s.-born computer scientists are better off, even those in the tech sector. because we have more computer scientists, we need to hire more managers in these jobs, and that raises the demand for managers
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and raises their wages and some u.s.-born computer scientists switch over to managerial positions. that is why you find there are fewer u.s.-born computer scientists working in computer science occupations, and at the same time, because of high-skilled immigration, there has been some depression in wage growth for these u.s. born computer scientists. caroline: overall, it is a net positive from the gdp perspective, because also it helps reduce the overall cost of some of the technology they are helping to perpetuate, and reduce the cost for consumers, and indeed, perhaps, drive more corporate profits. gaurav: right. like i said, all other workers are better off, but the bulk of the benefits are going to consumers like you and me. we are using better software, more efficient apps because of this increase in i.t. production. like you said, profits for i.t. firms are higher, and it induces
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new i.t. firms to enter the industry and produce newer products that may have been produced elsewhere in the world but now u.s. firms are producing them. caroline: it also inspires and induces, perhaps, those technology companies to keep on backing h-1b visas, if they are able to get the tech talent they need for a slightly cheaper cost. do you believe that perhaps do you believe that perhapso the reform could be necessary to the h-1b visa? that the slowing of the process, would it be a hindrance or help with the tech sector adding gdp? gaurav: that is a question for the policy maker, but i can tell you what the academic facts are. the academic facts are how this kind of innovation in the i.t. sector driven by computer scientists coming into the country has actually improved u.s. gdp as well. like i said, this software is
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not just used by you and me, but also by other sectors in the economy. the financial sector uses better software, bloomberg tv uses better software because of, basically, innovation that is driven by computer scientists, some of which are actually immigrants. caroline: of course, this is globalization at work. this is market efficiency, so to speak, being able to bring labor in at a cheaper cost. but are you worried potentially that the numbers you come up with, the fact that wages have been suppressed by 5%, the fact that u.s. workers within the i.t. space are 10% less than they would be -- do you worry it gets grabbed as a headline that the h-1b is not a net positive? gaurav: well, i mean, yes, the discussion about immigration has become rather politicized. but like i said, we are unbiased academics and we do our
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research, and we put the numbers out there, and we find that on the whole, the u.s. economy is better off, but it is not a win-win situation. there is a certain slice of workers, those concentrated in computer science occupations, those u.s.-born computer scientists actually have lower wages because of immigration. but almost everyone else in the economy is actually better off, and on the whole, the benefits are outweighing the costs. caroline: is there any area in terms of key growth that you have seen particularly helped by h-1b visas, and indeed, any areas that have been hindered by them in particular? do you see any parts of the economy or technology, the innovation drive, that have particularly won out through immigration? gaurav: that is a little harder to pin down. these immigrants -- like i said, most h-1b visas go to computer scientists, and most of these scientists, and most of these computer scientists are centered in the i.t. sector. but you also have computer scientists in other sectors as well. all the software we use
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really disseminates to all sectors of the economy, including, say, the financial sector, for instance, automobile production, or any kind of sector that uses software. there has been other research -- not by me, but other researchers -- showing how i.t. productivity growth has been the major driver of gdp growth in the last 15 years. and some of this should be attributable to innovation due to immigrant computer scientists, as well. caroline: i'm sure that argument will be made fiercely by the tech community in terms of innovation and the growth to gdp. gaurav khanna, fellow at center for global development, thank you very much indeed. coming up, one medical tech startup is incorporating machine learning to other physicians of abnormalities. how artificial intelligence can change health care. that is next. and a feature we would like to bring to your attention is our interactive tv function. you can find it on tv on the bloomberg. you will not only be able to
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watch us live, but also see previous interviews and dive into any of the functions we talk about. you can be part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only, i'm afraid. check it out. this is bloomberg. ♪
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caroline: bmw is on track to deliver a fully self-driving car by 2021. the german carmaker says it plans to offer vehicles with level three, level four, and level five capabilities. at level five, vehicles are capable of navigating roads without any driver input. bmws decision to leapfrog to the most ambitious levels of
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driverless technology is ambitious, but it does have a foothold in this space after announcing a partnership with intel last july. as trump tries to roll back parts of the affordable care act, alivecor, the tech company that makes health devices, is going forward with incorporating artificial intelligence into its electrocardiogram. the cardiopro would allow users to send ecg readings directly to physicians in real-time and even send notifications when the test does not match previous ecg. the company also announced a $30 million infusion from mayo clinic and omron. vic gundotra, alivecor's ceo, joined the company in 2015. previously he was an executive at google for seven years, where he led google plus. i asked about the company's latest technology. >> our new product is aimed at physicians. it allows a physician to monitor all of the patients who are using cardiopro, and it not only
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allows the doctor to see the ecg -- caroline: electrocardiogram, monitoring your heart. vic: that's right, but it allows the doctor for the first time to see things like hypertension, blood pressure, the patient 's activity, and their weight. doctors, for the first time, have a complete picture of the patient's health taken at home, and they can see what is happening in between visits. caroline: do you feel like the health care area is looking towards data and technology with open mind, open heart, willingness to learn, or is it reticent? vic: i think there is an appropriate amount of skepticism. doctors today are overwhelmed with information. they spend too much time in front of the computer screen already. i think doctors rightfully are going to be skeptical until they have proof that the data they are seeing is useful, that in some way it helps them adjust, for example, medication for the patient.
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otherwise, this stuff becomes noise, and we are kind of thrilled that the early reaction we are seeing from doctors, because we think we have done the right amount of work from the regulatory standpoint, and also in the software, so that we don't overwhelm the doctor with noise, but really service the doctor the appropriate information they can act on. caroline: talk to me about the geographical presence of your product. it's interesting that the united kingdom has been adopting this, my own hometown. vic: we have been thrilled with the reaction in the u.k., particularly the nhs, which has started to really, for the first time, make our product reimbursable. caroline: national health service in the uk is the number one employer, a huge presence. vic: the number one employer, the largest and oldest privatized health insurer in the world. they are really setting the pace. we are seeing in the united commercial the
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insurers follow the lead of nhs, and also look at these devices because they see the value. if you can spend a small amount of money and catch someone who has atrial fibrillation, that is a lot better than that person having a stroke, which is the most costly and long-term disability in the united states. for a small investment, you can find a person and get them appropriately medicated, and prevent a much worse outcome. caroline: talk to me about the investment you have been making in your own business, the software you are building on. you are looking towards machine learning as well. vic: we think machine learning is going to play a profound role in medicine. we think doctors are going to use ai as a tool. in fact, we can't imagine half a decade from now that doctors will not be using this tool, just as you would not go outside at night without a flashlight. a flashlight extends human vision. these ai techniques, particularly the kinds we are using, allow a doctor to see more, beyond what the human eyes could see in the electrocardiogram. the ecg has been out for 100 years, but the work we are doing is discovering new signals that
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have been hidden in the human ecg, that the machines can see and human doctors may not be able to. caroline: you announced $30 million coming into the business. congratulations. where does that go? does it go into honing your product or pushing it worldwide? vic: the $30 million investment that we just announced with omron, the world leader in blood pressure technology, and also mayo clinic -- having mayo clinic invest in the company we think is a pretty amazing statement as to where we are. we are going to use that to continue the engineering work that we have been doing. we have been doing some amazing work around deep learning. we will continue to invest in that space. and it is our goal as a company to be the leader when it comes to deep learning and ecg's. caroline: i wonder about the regulatory risks and the adoption, and the hoops you have jumped through to prove to the fda have been clearly
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surmounted. how much does political risk play into your business, because at the moment we are seeing a lot of changes made to the affordable health care act. does that affect the way the business goes? vic: absolutely. it certainly affects where our business goes as the broader health care picture emerges, which is very turbulent. we don't know where that is going to go. but at the smaller scale, because our device is so inexpensive, and in the united states in particular, consumers will spend the money, less than $100 -- they will go to the website and just buy it. that aspect is largely not affected by these bigger health care concerns. consumers are willing to make a small investment if it means they can take care of their own heart. caroline: there is almost pressure from the consumer going to doctors saying, i've got this, i bought it, and now i want to use it. can you start learning how to adopt s -- how to adopt -- vic: absolutely. we hear stories like that all
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the time. this is a revolution in health care. instead of very large, expensive ecg machines where you might get it taken once or twice a year maybe, and that involves you going to the clinic, taking off your shirt, having a clinician attach leads and spend 30 minutes -- and expensive, versus having a small device you carry and you can do it every day, that is the future of medicine, including lowering the cost of medicine. caroline: that was vic gundotra, ceo of alivecor. another high-profile twitter account hacked on thursday. the corporate handle for the fast-food chain mcdonald's was compromised. mcdonald's acknowledged a security breach, but not before a rogue tweet was sent out criticizing president donald trump and calling for president obama's return. the tweet has been deleted, and mcdonald's says it is investigating. friday on bloomberg television, former cbo director doug elmendorf joins "bloomberg daybreak: americas" to give his reaction to president trump's budget and repealing the affordable care act. do tune in for that.
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we bring you the company that sees factories growing from a seed. the more on that story. this is bloomberg. ♪
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caroline: samsung's new galaxy s8 will use facial recognition technology for mobile payments within months of release, according to people familiar with the matter. the company is already working with banks to help them embrace the technology in the coming months. the device will be unveiled later this month with a lot on the line. the note 7 before that cost the company billions of dollars. ginkgo bioworks is at the forefront of bringing biology to tech. this startup is building tools for a future where factories are powered by biology, not traditional manufacturing. the company is helping clients design flavors and fragrances by ofifying the dna microbiology used -- of
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microbes. ellen huet got a behind-the-scenes look at the company. ellen: a team of phds from m.i.t. started ginkgo bioworks in boston, just a few miles away from their alma mater. inside, they are building tools for a future where factors stop manufacturing goods and start growing them. >> at the heart of biology is digital code in the form of dna. we have the ability to read that code through dna sequencing and the ability to write it with dna synthesis, and if you can read and write code, you can program. can you program biology to make stuff? yes, because dna is code. ellen: before they can grow their own iphones, ginkgo is focusing on something simpler, reprogramming microbes like used to produce artificial flavors and scents. it is refining the process in this robot-filled lab.
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>> this is our second generation lab. if you zoom in, it looks like a regular lab, but if you zoom zoom out and see all the robotics, that's what we are trying to do. we are trying to make this move faster. ellen: right now, ginkgo is using genetically modified yeast to create a peach perfume for a client in the fragrance industry. to do that, the researchers studied the part of the peach's genetic code that carries the desired scent. they compare it with the yeast dna and modify it to make a similar smelling substance. then the process becomes a lot like producing beer. the yeast multiplies and produces the peach scent as a byproduct. scent can extract that for clients. >> each of these is a different gene combination that is going to make a slightly different smell. let's see what we've got. ellen: well, it smells a little vinegary, which i think is the yeast. kind of a fruity smell. samples that pass the smell test
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are destined to be inside perfume bottles and the like. but once you really start thinking about it, you can see this technology applying to pretty unexpected places. >> what if this was a microbe that could live directly on your skin? and so on your skin, you are producing your perfume. you don't need to frisk yourself of perfume. your microbiome is producing that on its own. a lot of the smells you might associate with human bodies are actually already coming from microbes. imagining that those microbes might be a little bit different and make a little bit different smell isn't that hard to believe. ellen: things are looking good these days for ginkgo. ♪ ellen: they recently bought a dna-splicing company and raised $100 million from investors. it is too soon to say if they will ever make a quantum leap from perfume to grow your own electronics, but ginkgo sees this gene modified yeast as the
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first step towards a factory where biology can make almost anything. >> in the future, we could use biology to make a semiconductor chip. if you look into biology, its ability to place atoms is superior to intel today. if you just knew how to program it, you could do that. the applications for this are sort of endless. caroline: fascinating. that was "bloomberg technology's" ellen huet reporting from boston there. that does it for this edition of "bloomberg technology." tomorrow, catch our conversation with oracle ceo mark hurd, at 4:30 p.m. eastern time right here on bloomberg television and radio. and remember, all episodes of "bloomberg technology" are live-streaming on twitter. bloombergtechtv, weekdays, 5:00 p.m. in new york, 2:00 p.m. in san francisco. that is all for now. this is bloomberg. ♪
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♪ >> dealing in diplomacy. u.s. treasury secretary steve mnuchin strikes a softer tone on -- tone on trade. we're live in bonbon ahead of the g-20. theresa may has pledged a closer union with scotland as she rejects nicholas sturgeon's bid for a brexit vote. donald trump's proposal of sweeping spending cuts comes under fire in congress. warm welcome to bloomberg
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daybreak: europe. i am and edwards. let's look at how we have performed on markets overnight in the asia session. let's have a look at the equity market rally because it has been a big week for the ventral -- central-bank scene. fed hiking in a dovish fashion. we have start market, global equities, all on the chart to my right. global equities climbed to fresh records this week. has that been overdone? no acceleration in that fed rate hike path. that was the thing that really ignited a fire on the global equities. into the overnight session, is pretty flat to negative actually. some of the emerging market showing a different pattern. some divergence going on there. touching a new record, malaysia and south korea going higher. japan is weaker and as you see,
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the asia-pacific broadly negative in the session. u.s. stocks yesterday seemed to run out of steam in the rally post fed decision. stocks around half a percent away from the snp new high. volatility retreating after that dutch election result. let's have a look at a couple of currencies. the pound, pretty flat at 123.55. really raising questions about how long it would take -- how far behind with a b. an interesting comment coming out of the next leader of the snp but on a day that the snp starts there conference. scotland could abandoned the currency union with the u.k.. a big talking point over the weekend. the euro, 107 point72. we saw a bit of an ups -- uptick in the euro during the session. an austrian member of the ecb talking about a rate increase
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maybe not far away. talking about deposit rates, they may increase before prime rates, suggesting a different way to leave kiwi from what we saw. we got tillerson still on his tour in asia, steve mnuchin over in europe at g-20. lots to talk about there. let's get the bloomberg first word news with juliette saly. juliette: thank you. in the u.s., president trump proposed big spending cuts in august every domestic department . these savings would be used to boost funding for the pentagon, veteran affairs, homeland security and transportation. john mccain responded to the plan saying "it is clear the budget proposed cannot pass the senate." british officials have complained to the white house after press secretary sean newsr cited a fox commentator's report saying barack obama had enlisted u.k.
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intelligence to spy on donald trump. statementq said a dismissing the fox pundit's reporting. the white house wouldn't confirm whether the british white house -- or whether it was under consideration. the winters says global trade could be said that -- set decades if president trump imposes border taxes. he says antagonism between the u.s. and major partners are an assault on multilateral agreements, would be a bad outcome of 30 years of globalization. working potential trade regulations for some time. in japan, unofficial says the -- 80 $6 million in fiscal 2021 as it starts to exit quantitative easing. estimates the red ink will continue to run until 2039. the governor says -- has brushed
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off the need for details of what will happen when asset program comes to an end. global news 24 hours a day, powered by more than 2600 journalists and analysts in more .han 120 countries you can find more stories on the bloomberg at top . as anna mentioned, we have seen weakness, the naked -- nikkei down 4/10 of 1%. if you take japan out of the picture and look at the regional index, x japan, we are out for six succeeded -- consecutive sections. stock, we have seen toshiba in focus. reports that its memory chip business has about 10 potential bidders. share prices rose, closing higher by three and a half percent. carmakers in china and hong kong had down pressure as concerns of the discounting that the carmaker's offering will weigh
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in on their earnings. health care on the tear in sydney. this after a technical correction. michael mccarthy saying it is not very often you get a very strong quality stock at a low pay. we're always talking about the convergence between the japanese equity markets and the again, but they are narrowing. goldman sachs saying decoupling in this relationship and if we start to see the global economy, the japanese economy do well, we could see the yen and equities rise this year. anna? anna: thank you, juliette saly in hong kong. that's talk about g-20. steve mnuchin met with german finance minister ahead of the g-20 in berlin yesterday. minutia described the talks as both extremely productive. this in contrast to other administration officials who 's $68 trillion
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-- 68 trillion deficit needing to be counted. here is what mnuchin said. >> the united states has had one of the most opened trading markets of anywhere in the world and is one of the largest markets of anywhere in the world, so the president is thatested in making sure our agreements are reciprocal, but they are fair and they are reflective of making sure that leasterican worker is at at the same playing field to compete. for: steve mnuchin arrived the two date meeting with finance ministers and central bankers from g-20 countries. trade is on top of the agenda. let's head to baden-baden or matt miller is standing by.
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good morning to you. what role is germany playing in this question mark -- in this? they are trying to force a consensus on global trade. what we are hearing from as well asermany people in the u.s. who declined to be identified because this communique is a released until saturday, is that the germans -- trying to give minutia steve mnuchin and u.s. a little ground by not forcing statements that reject protectionism and call for a multilateral and rules-based trade as previous communiques have. the u.s. wants to have a clause in the communique that asks for fair and equitable trade and they are getting pushback from france, among other countries, as well as from the european commission. is all hinges on a few minor
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word changes, but the key here ofthat it is a loaded term protectionism, something the u.s. is rejecting and they are asking for the terms "fair and which other countries are rejecting in the g-20. this is one of the main sticking points. anna: rings into question, if the u.s. is questioning rules-based trade and where the w e -- wto heads, it has taken little time for president trump to put it seemed together, hasn't it? matt: it has, and remember, he just came into office at the end of january so it is not even two months yet. the issue is he hasn't got a full team together. steve mnuchin doesn't have a full team together, they are still waiting on some officials to be confirmed by the senate in the treasury. so that has been a question of
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many of the germans i spoke to over the last few days, there was a conference in frankfurt so webered to their axel about some of these things. while ford it takes a these things to get put together and right now, steve mnuchin might not have the manpower to work on this entire communique. he is asking for fair and equitable trade, as well as the previous clause against currency manipulation that has been taken out of the communique. the u.s. wants that back in the communique because they feel the trade deficit, especially when you look at trade surpluses, the germans have a trade surplus of 8% of their total gdp, he feels that is the problem. semanticsr have the of the g-20 communique seemed so relevant. miller joining us in baden-baden. plenty more coming from the g-20.
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we will have the top guests from that meeting, including debt southan commission's, africa's finance minister and the australian treasurer. conversatione the about trade themes coming out of the g-20. joining us on set in london, jeremy kurtz. jeremy, it is fascinating to tussle that is going to go on around the communique. it seems the u.s. wants to drop multilateral and rules-based and want tonce institute a fair national trade reference. the fact they are talking about rules base has led to the -- something the g-20 has to wrestle with. simon: -- jeremy: we saw one of the first was ttpump did on trade is dead in the water.
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no one has talked about it. leches hurdlesf that trade has to jump over over the course of the next couple of months, couple of g-20 meetings. we know exactly what this trump administration truly wants. with a small team, probably not doing the job trump wants to do yet. perspective,ropean steve mnuchin lending a different tone yesterday. hadgermans and europe have cognizance of what trump thinks of the eu and having to fight the quarter around the currency. i have the chart. this is u.s.-german trade balance. this from the u.s. perspective showing trade deficit with germany. very much a part of the conversation between the u.s. and germany. how does this move your world? this conversation on trading, these definitions on their sites, how does this move the
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euro? jeremy: a lot more than used to. the administration view is that a trade deficit is a good back to loss -- de facto loss for the u.s. and something that has to be remedied and we are having to look at, where is that flow likely to go if not to the united states? what is going to happen to these german manufacturers who have previously looked to these export markets. that is the brakes it has been putting on the expectations for the euro at the moment. strong dollar, weak dollar policy we are getting, the communiques out of the trunk administration about a weaker dollar, or full ross also talking strong dollar, increases the uncertainty about euro-dollar, dollar against a lot of the trading nations that we see a current account deficit. anna: we saw the euro get a
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little support by comments in the last 24 hours. talking about how cloaked -- close a rate increase could be. he talks about a deposit rate going up before the prime rate. we have had guests talk about this. there might be other ways for quantitative easing to come to an end, not just the way the u.s. did it. are you looking for something creative from the ecb? jeremy: i would hope to see the deposit rate moved by the end of the year. there wasn't too much of a timeframe and everyone looking at the data out of the eurozone at the moment would suggest we are likely to see some form of moving away from the altar crisis accommodation we have seen over the past couple years. whether that happens before they taper off their qe is something that could easily happen by q3, q4. but we need to see a continuation of the rise in
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wages, the broad pier 1 data. nothing in qe playbook that says it must end before rates? jeremy: draghi came out and said he would like that over the year, but as it stands at the moment, they can be level with it. anna: jeremy stays with us from world first. here are the highlights of your day. 10:00 a.m. u.k. time, we get eurozone trade balance that it and at 1:00 p.m., we get industrial production numbers out of the u.s. u.k. conservative party begins its spring conference in cardiff's, in wales. the national party, the s&p has its conference in aberdeen. a lot to talk on the political front. we speak to the phillip chew on p.m..t 7:00
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something to watch out for on bloomberg television. theresa may faces up to a demand for scottish -- a scottish folk on independence. we will look at that political story. plus, we will break down the winners and losers from the u.s. president expenditure plan. as dutch politicians get started on forming a government, we focus on the next test for european popliteal -- populism. ♪
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♪ welcome back. 6:19 in london. mrs. bloomberg daybreak: europe. in hongthe afternoon kong. asian equity markets in general under a little pressure. emerging markets doing nicely in the overnight session. let's get the business flash with juliette saly. juliette: blackstone is shutting its $3 billion distressed debt fund.
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investment fund has been given the option to send money into other disk dressed -- distressed radicals. reflects the desired to shield themselves from quarterly redemption which can be difficult to bear with -- when investing in volatile markets. toshiba shares have gained in tokyo trading. its memory chips business is said to be attracting more potential bidders, including government-backed entities. bank of japan is considering a joint offer with u.s. financial bidders. a representative from toshiba declined to comment. stuart gulliver is being investigated by u.k. tax officials over his residency status. gulliver lost a court bid to end an inquiry that started in 2016. centering on where he was living in the previous tax year. the ruling says the government is not making any allegations of impropriety. an -- a has spent
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significant time living in asia. authorities have joined the u.k. in a corruption probe of airbus. allegations of fraudulent practices related selling planes and arranging aircraft financing. the probe follows steps by the u.k.'s office in august, related to third-party consultants. airbus, which is cooperating, has said it dropped the question . former barclays ceo is said to be poised to return to london's financial center with rocard -- according to people with knowledge of the plan, diamond's atlas merchant capital and qatari investment are prepared to announce an agreement to take the 141-year-old stockbroker private. of 9.2s a market value million pounds.
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that is your bloomberg business flash. to the u.k..urn theresa may will pledge to forge a closer union within the u.k., going against demands of scotland's national party leader nicola sturgeon. a day after may rejected the scottish bid to hold a second referendum, arguing the brexit talks should take priority. >> the reason i say it is not the time is because all issues negotiations into with the european union, to make sure we get the right deal. the right deal for scotland and the whole of the u.k.. right now i think to look at this issue at this time would be unfair. anna: she is expected to unveil a "plan for britain" today which addresses the spring conference. she will say sustaining the union is at the heart of her plan. jeremy is still with us.
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lots of threads on the u.k. story to go together. i want to get to this interview. that scotland might be prepared to lead the currency union with the u.k. and digging into the detail, he said they are ruling out joining the euro but scotland could introduce a new currency and perhaps use sterling without any say in monetary policy. in 2014, this was a sticking point. jeremy: this was a hot button issue. we are going to keep the pound regardless what happens and westminster said no. i wouldn't be surprised, i wouldn't be surprised they would be consider not using the pound. 55.45 -- 55-45 to remain in the eu and some polling post-brexit has shown that
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relationship may have shifted closer to 50-50. i don't think it is a win for the independence group at the moment. divides theey -- middle ground a lot more. anna: theresa may is standing in the way of holding a legally binding sector -- second referendum. in terms of the currency, in 2014, around the independence referendum, we talked about if -- how far below 160 the pound would get. where do we sit now? the brexit conversation, you can tell me where you think the pound is, but what extra dimension has -- does scottish independence add? jeremy: not much in the short term. even if they are granted a referendum, it won't happen anytime soon. it will probably happen at the end of brexit negotiations, once
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theresa may can show scottish voters -- the conservative party have been performing a lot better, for example the labour party, they don't want to let go of those gains easily. show those voters that at the end of the two year fiscal brexit negotiations, this is our new relationship the european union. once article 50 is actually triggered, the performance of the pound depends on two things. data, which remains quite weak headed into 2017, and whether we see quick wins for what the u.k. negotiators against the eu. they will provide a running commentary they have said, the best thing about negotiations is there is always two parties. i'm sure the eu would be happy to tell everyone how well they are doing against the u.k.. don't get anything candidates six weeks and we are still arguing over fishing rights, we haven't heard anything about financial service
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equivalents, and the pound is going to be look pretty weak. anna: nothing suggests quick. calendarhe electoral shifting around. that takes us -- i have the ftse currenciesous illustrating how key currency is to your investment. wanted to get your thoughts on a we had from the bank of england yesterday. many caught off guard by this dissenting voice. how soon before others follow? jeremy: difficult to say. obviously, the meeting concluded, some members agreed with her. maybe michael soreness, we just don't know too much about his stance at the moment. in june.aves him a resistance to the middle ground. we won't see too much change
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soon. anna: jeremy, thank you. 6:26 in london. the white donald trump's budget is coming under fire in congress. this is bloomberg. ways wins.
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anna: welcome back. this is bloomberg a break euro. 3:30 p.m. if you are in tokyo. just checking out where the nikkei is right now. 1% at thee third of end of the trading day over in tokyo. weakness in japanese equities part of the story today. let us take a look at the broader architecture in nejra: you mentioned the weakness. a little bit off on asian equities if we look at the benchmark gauge although we are seeing

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