♪ coming up on "bloomberg best," it is business around the world. britain goes to the polls again. the ecb says no more rate cuts are coming. high drama continues on capitol hill. >> i do not think it is for me to say the conversation i had with the president was an effort to obstruct. >> this is reality tv. this is not a serious investigation yet. michael: apple hopes they will have another home run. strategic inside into their strategy. >> we wanted something that,

number one, sounded unbelievable. michael: president trump says it is time to focus on infrastructure. business leaders tell us what they see in his plan. >> we are going to have to find a way to get more private capital involved. >> we have got to invest, thanks things up. michael: plus, wall street's brightest stars shed light on important issues in finance. >> we seem to be picking lots of fights these days. >> you basically tell you investors it is a changed world. equity they look at markets are fixed income markets, there is that margin for error. michael: it is straight ahead on "bloomberg's best." ♪ michael: welcome. i am michael mckee. this is "bloomberg best," your

weekly review from television around the world. the week was found to be tense and the u.k. with elections looming thursday and the weekend terror attack in london raising the level of political urgency. may is in a meeting that comes after saturday night's terror attack in central london, which left seven people dead. sterling is weaker this morning. the election is days away. theresa may: we cannot deny the threat from islamist extremism is one of the greatest. >> jeremy corbyn has come out and said theresa may should step down for the fact that the number of police officers were cut under her watch while she was home secretary. theresa may has said, actually, it is not just about the number of lease offices but the powers

you give to those of police. she is referring to the fact that she said jeremy corbyn has voted against every piece of antiterrorism legislation to the time she was home secretary, so she said it was not a mark of leadership. arabia, egypt and the have cut their diplomatic ties, shutting down much of the airspace and sea and land crossing in the dramatic worsening of al qaeda's relationship with iran. over theen building up attention of the muslim brotherhood years earlier. and otheretween qatar gulf countries being cut off, that is the big deal considering qatar exports a lot to saudi arabia. meanwhile, citizens in the e.r.a. are being asked to leave the country within two weeks, the most recent spike that has set the fire of life have to the

ar,ments we saw from qat criticizing mounting iran rhetoric. qatar claimed the statements were the result of a hack. it looks xm gulf states are not --like some gulf states are not buying that. this comes off of the visit of donald trump in the middle east. we saw him circling around the arab allies and making a lot of anti-iran comments, and that is probably the biggest catalyst for this. most sinceell the 2009 after they cut off ties over links to iran. weighing in,trump supporting the move to isolate the gulf nation turkey wrote -- during my recent trip to the middle east, i stated that there could no longer be funding of radical ideology. leaders pointed to qatar --

look! >> we have seen implementation of the announcements in the airlines dropping and canceling their flights, with some of the ports coming out and saying they are beginning to stop qatar ships to pass. at the same time, we are seeing efforts to mediate in the whole issue, with them on the way to make the saudi king. >> president trump announcing today he will nominate former justice department official christopher wray to replace james comey. but do we know about why he picked him -- what do we know about why he picked him? >> p is not a politician. it is reasonable to say some people withdrew from this

process. this is someone interested in the job. mueller.ps with he was very involved in all the terrorism aftermath and supportive of the patriot act. he ran the criminal division from 2003 to 2005 and went back to private practice, or he has done criminal defense work -- where he has done criminal defense work, particularly white-collar crime. although he has a legitimate career, he is not at the same stature as mueller. a republican and most notable, he was chris christie's lawyer, so when he got into trouble, and bridge gate blew up on him, he went to this person. >> the ecb ruling out further interest rate cuts and assign it is moving closer to a nexen permits stimulus program -- to a

stimulus program, saying, they will have rates remain at their current levels for an extended amount of time and dropping the line or lower. >> the objective was to begin the early stages of the next phase of this monetary cycle by highlighting successes that would be for the statement of , and balancetlook with no longer down cited risks. the removal of the need for further easing at this stage, but the inflation story has complicated matters. three months ago, we would have expected may be june would have been the time to signal tapering, but inflation forecast do not allow that at this stage. in the last question, he said the deflationary risks have dissipated. he did not say disappeared. they have dissipated, which have

that's what is on their mind at the moment. highlighted what is on their mind at the moment. >> over the course of about three hours, comey offer details on the nine interactions he had with the president before he was fired. >> i do not think it is for me to say whether the conversation i have with the president was an effort to obstruct. i took it as disturbing, a very concerning thing. >> he accused the president of united states twice in 45 minutes of being a liar. he was' questions of the president intentionss -- he raised questions of the president's intentions. to answer a couple of questions about whether he believes this rises to the level of obstruction of justice. that will be the question going forward area and >> as he said -- forward. >> as he said yesterday, the president feels vindicated and

is ready to continue moving forward with his agenda, the business of this country, and with this public cloud removed. >> this is reality t.v. what is happening behind closed doors in the senate intelligence committee may make a difference. we have to understand counterintelligence, not just whether the president feels vindicated. the best person to investigate this in more quiet and cerebral rooms is bob mueller. we will learn what we learn. promised strong and stable. what we have this morning is anything but. theresa may's snap election gamble backfired. is actually losing rather than gaining. jeremy corbyn has outperformed. we are hearing from a u.k. official, this is bloomberg reporting theresa may is poised

to fall the government to it than northern irish party. this is what she needs to do to form any sort of majority because the number of seats the conservatives have won in the selection have fallen short of the 326 majority. >> we will continue to work with our friends and allies in the democratic union party, in particular. this governmental guy the country through the brexit talks. they begin in just 10 days, securing a new partnership with the eu, which guarantees our long-term prosperity. >> she is the lady at number 10, the one who is fighting it out. she is down but not out but has reduced the majority. a majority of around 17 when she went into this, she finds her suck the majority at all. -- she finds herself without the majority. gilbert, inrom mark

the aftermath of the election, there is a balancing act between the pessimism and the optimism of the softer brexit. where do you stand on the idea that a hung parliament produces a softer brexit? >> hung parliament produces a weaker, unstable government. even if you have a government willing to pursue a softer track, is that government going to be able to get through if it is the same period of time? it feels like people should be worried about the new prospect of the election. to come as we reviewed the week on "bloomberg best," an interview with apple ceo tim cook. summersmie dimon, larry and bill gross. coming up, more of the top business headlines. gm shareholders sent a message to jerod einhorn. >> sure of buying up more shares

in making in other push for the next proxy, there is not much i think he can do at this point. michael: this is bloomberg. ♪

♪ "bloombergis is best." let's continue our global tour of the week's top business stories in washington. that --rump campaign campaigned on improving america's infrastructure and he offered his first concrete proposal. >> president donald trump picking up infrastructure week. he asked congress to hand over the reins of the u.s. traffic control system to a noncorporate corporation. what does he hope to see happen? >> the crux of all of this is this new type of committee

privatizing the regulatory regime, similar to what we have seen in other industries like financial services. this is a big win for airline companies like american airlines, delta, but the second part of it, and this is what the president did not get to specific details is how we are going to pay for it because that is the division in the republican party. aides are looking at this as a benchmark as part of what they hope will be an introductory they'd on a larger infrastructure plan. general motors has sided with management and rejected a proposal from david einhorn to split the company stocks. einhorn when it to divide them into two classes, want to collect dividends and the other on the value of earnings. >> is that the end of the? does it go away? another pushaking for the next proxy, there's not much us i think he can do. he lost by over 90% that voted

against his proposal. he did not hear their shareholders coming out and supporting him, so i am not sure he has momentum. raise 7 billion to euros and the move comes as the european central bank was likely to fail due to deterioration of its liquidity situation in recent days. >> inmates strategic sent -- it makes strategic sense. in spain, we will be the leading bank for small and medium-sized companies. in portugal, it makes us the leading private rank. of theretail customers bank, i think they will be relieved they are taking over, but for those customers that actually hold equity in the bank or any kind of bond or so forth, there could be problems. one of the big runs to look for

going forward is going to be litigation. in spain, shareholders have the right to sue any company or issuer that may have misled them frauded it them in -- them in any way and there could be legal battles to come. >> stocks have bounced back from a full day drop as the ua's foreign minister said he wants the governments of qatar to show concrete evidence they have stop supporting terrorism treat are we expecting this isolation to continue for a long time? >> the latest on the political friends, they are -- political front, this is part of the regional towards a patch things up. nothing clear or concrete as it stands. the other parts of this global partners aligning -- powers

aligning themselves. on one hand, you have turkey latest qatar with the bill to add troops there and you have the united states last week. the question remains, what will happen with russia and china? >> oil falling out of bed, extending declines after a 5%, yesterday. here is what happened yesterday, this is u.s. crude and product supplies at its highest since 2008. you can take a look at the terminal and that is what caused a deep slide in oil. the velocity of that move yesterday's surprising because i thought they were already shaken out. put that into perspective. >> the market was looking for another slow draw. we have a massive increase. as pointed out, it was the largest increase in u.s. petroleum inventories since october 2008.

it was not that the long have to give to be late -- have to capitulate, it is for some people who believe the market is not rebalancing and opec is failing. jpmorgan coo is leaving the bank, the possible successor to jamie dimon, making the announcement. there is a big glass ceiling at jpmorgan and it is in the form of jamie dimon. >> [laughter] possibly. been,k jp -- i wonderful and talented executives have commanded jpmorgan and i imagine this is a similar situation, where he got and therer level probably isn't enough upside and there might be greener pastures in another organization. in 2014,kavanaugh the

the presumed successor, there are some people left. hass not as though dimon driven everybody out. there are people on the operating committee and the chief financial officer, and they are daniel pinto, gordon erdos and mary marianne lake. >> we went to take you back to the house floor, where they have passed the rolled back to dodd-frank. there is is a significant legislative move from the house to roll back one of obama's made accomplishments. this is not mean anything at. there is a high hurdle in the senate. >> in the senate, a chairman -- is actually writing his forlegislation and he hopes them to consider their choice act and he said he wants to work with democrats on that, which

changes what is feasible and likely to get it to go somewhere. hopefully, we can get capital back into our economy. too much capital is on the sidelines. what we know under dodd-frank is big banks have gotten bigger, small banks a gun fewer, our the house lied, and says no. gottenanks have fewer, our economy is lagged, and the house says no. ♪ fewer, our economy is

♪ conference kicked off in california. events ofle's biggest the year. this year, the company announced updated macbooks, ipad pros and a major overhaul of the

operating system and topped it off with something new. >> it is beautiful and recall it homepod. [laughter] >> apple is going off to amazon and google with a new home smart speaker. >> i think it is the product of the day, the first new piece of apple hardware, something significant in about two years to three years since the apple watch was announced in the fall of 2014. michael: hours after apple introduced the homepod, tim cook sat down with bloomberg for an interview. emily chang asked him about the strategy behind the new product. iswhat we have tried to do so music is deep in our dna. dating back from itunes, and

ipod, so we wanted something that, number one, sounded unbelievable. it,people who listen to they will be shocked over the quality of the sound, and of course, it does a lot of other things, right? and all of those are important, as well, but we wanted a high-quality audio experience, as well. emily: you are focused on how this can reinvent music in the home. will i be able to make it phone call, order groceries? >> there are a lot of things you can do with it. one of the advantages we have is there are a lot of things siri knows how to do from the phone, so we will start with a patch of phil show today during the keynote and there is a nice follow along activity. emily: you have been engaged

with the white house. you called president trump and urged him not to pull out of paris. he did not listen. but does that mean for your relationship to the present -- what does that mean for your relationship with the president? >> i would described that differently. he did listen to me but i think he decided wrong. i think it is not the best interest of the united states butway he cited,he -- sided, in terms of the way i look at do you interact with politicians or do you not? my view is, first and foremost, things are about, can you help your country? if you can help your country and you do that by interacting, then you do it. if i get the chance to go pitch pariserrorists -- the

agreement again, i will do it again because i think it is important we engage to fight climate change on a global basis. this is not something where you can solve it country by country. action,res a global emissions created in one country affect another, so it is something we feel strongly about . i wanted to do every single thing that we could do to tell how important it was to stay in the agreement. unfortunately, he decided something different. ♪ this has been a remarkable week for exclusive interviews on bloomberg television. conversations with jim chanos end of the show the bloomberg invest summit in new york. straight ahead, big names in business weigh in on trump's and

the structure plan. >> i applaud the vocus on infrastructure and to have air traffic control -- focus on infrastructure and have air traffic control be the leading edge. michael: this is bloomberg. ♪

>> we can't reduce our carbon footprint unless we deal with transportation. transportation is 40% of the greenhouse gases. the only way we can do that is with clean cars. they will not just come out of california, they will come out of china and other parts of the world. china is a real driver in the money that invest, the diligence of their innovation, i want california to partner with china in that endeavor otherwise we won't be able to achieve our climate goals. >> how much of a threat you think his post to u.s. innovation? how much of that as under threat

from president trump's decision to pull out of the paris ccord? > the role of america in the what has been my dues because of trump's pullout. in general, i would say the chinese are on the move, they are a rising power. >> that was california governor jerry brown speaking with tom mackenzie in beijing after discussing clean energy technology, trade and investment with china's president xi jinping. meanwhile, this was an important week for donald trump's economic agenda. the president outlined plans for a trillion dollar infrastructure program. can he muster the political capital to get it done? we just discussed the state of the trump economy.

>> how do you see the u.s. economy right now? in the second quarter, trading value is taking a dip. i know that is the markets. maybe we'll talk about the economy. >> i think it was a waste of ime. to me, when we do trading, we serve clients around the world. if you say over 20 years, it will go up. i couldn't possibly tell you. this economy has been chugging along just under 2% growth rate for years. it is a long recovery, a weak recovery, half of the average recovery. i think it is a great we spot in the american economy. i think we can grow the economy more. i'll even relegated to slow

rowth. >> china is pushing infrastructure. what needs to be done in the united states? asked we haven't built a major airport in 20 years. it takes 10 years to get the average permit to build one bridge. we haven't built a bridge in new york city, the top as he was epressed and 50 years. i scan from hong kong, it is embarrassing. we just need to get back to a can-do attitude about infrastructure, it is our country. we are getting behind and we should not. it damages growth. >> i could support they reform in air traffic control, they are right about that. they are right about radar being bad and the gps being good and radar. here is the problem, the center

of their plan appears to be a nonprofit quasipublic corporation. the only one that i can think of is the post office and amtrak. i will think most americans would regard that as a usually successful formula. i want to see why they think that this change in organization is really going to be enough to change things. i applaud the decision to focus on infrastructure and have air traffic control debut leading-edge -- be the leading edge. will they find a way of going at it or will they use this buzzword of privatization. >> if you had to pick one thing that would help change the dynamic here in the u.s.,

health, growth, maybe 2%, 3% gdp, what would it be? the one thing? >> rational immigration policy. >> what other chances that we get that? >> well under 50-50. we spent our time on budgets that don't add up and on candals and on tweets. >> what do you make of the president so far? starting with air traffic control. doing a to be talking about touch changes to municipal law -- do we need to be talking about changes to municipal law? >> this subsidizes invisible onds -- municipal bonds. in total, we spent about $150

billion a year at the federal level on infrastructure. that represents 3% of the federal budget. it pales in comparison to what we spend on defense, what we spend on medicare, what we spend on social security. these are the kinds of investments that drives federal growth. we are spending less and less at the federal level. when we has suggested is that if the federal government -- the budget it has at the federal level one feet resolved anytime soon, fundamental divisions between the republicans over tax rates and tax levels and between the democrats on other spending priorities. entitlement programs. then we're going to have to find a way to get more private capital involved. and in order to get more private capital involved, the states and the municipalities, the water systems and airports and ports, things that we're paying for as users today. we've got to get those things off their balance sheets and

into the private sector. so we have to encourage privatization in order to find he funding to do this. >> how do you get that done across the board? >> the way to get it across the board's you can encourage the state municipalities to privatize their assets by giving them financial incentive. use $20 billion a year to get the states to sell their assets that they are under investing in, the airports and america, the water systems in america, get them to sell them and use a federal fund as an incentive.

>> i think this is a good time for infrastructure. generally, because it is one of the few areas where democrats and republicans need to have an overlap that more is better. it is an asset class that has really suffered from a onfluence of good intention in terms of loss -- laws and olicies. over all, it has made it impossible for people to build things. for example, the united states could take 10 years or 50 years o get something permitted. -- 15 years to get something permitted. in germany and canada, it is two years. it is stunning. hese are real countries. this is like g7. are these two of the g7? doing tease without any adverse environmental consequences.

>> i'll ask what we asked duncan earlier. is there a political will to do that in the united states? >> i think some of these roads and other types of infrastructure are getting to the point where you are wearing out cars, it is a consensus hich travels abroad. it is vastly inferior. i think we were rated d-by one of the big civil engineering firms, we're 16th in the world. i think most people have said that this is enough, we have to

invest, we have to fix things up. so in a way, it is a political question. do they have the will? >> you urge president trump not to pull out of the paris climate accord with other business leaders, hours later, he pulled out. how did that impact your relationship with the president? >> i was on the other side. i am lifelong republican. i endorsed hillary clinton. president trump ran, i wrote a note that says president trump has won, we have to give him the benefit of the doubt, we are. but when we think something is not in our best interest or in the country's best interest, i'll speak out. it is my fault they ought to stay in the paris, accord. the next generation of industries around clean energy is an important thing for the united states of america. it doesn't impact our elationship.

people can disagree and we happen to disagree on this issue. >> tim cook says he thinks that the president decided wrong. he plans to keep an open dialogue because he thinks it is important for america, important for the company. what is your strategy and the number one things on your priority list when it comes to discussions at the white house? >> we are in favor of tax reform, we believe the idea to repatriate overseas is important. we think a lower corporate tax rate would spur growth in the united states. on the other hand, we are not for the border adjustment tax. that is difficult for companies that import a high degree of their cost and work on relatively low margins. the retailers, a lot of the tech companies, we'll take that is in the interest of the united states. that was what this country was

built on, the ability to disagree without being angry. ♪

>> welcome back to bloomberg best, i am michael mckee. some of the heavy hitters ogether. we showed several panel sessions on bloomberg television as well as exclusive interviews, here are some of the highlights, starting with thoughts from jim chanos. this is the shifting u.s. relationship with china. >> that is one of the interesting things about the dministration, china was the boogeyman in 2016 in the

campaign. following one visit to mar-a-lago, the president and xi jinping appear to be best buddies. remember, we're not macro people, this policy could change omorrow. and i think that that's something that has a lot of people a little bit uncertain in that you have this currency manipulator. you had trade problems. and the administration is focused on trade. china all of a sudden, is our best friend in the western pacific. i don't know, clearly, people are focused on north korea as they should be. the south china sea is still being developed militarily by china. you have the chinese currency stabilizing.

posting mar-a-lago which is probably a good thing. we will have to see, this administration seems to make it up as they go along. what the policy is going to be six months or a year from now, i ave no idea. >> the trade war has been removed? >> a trade war with china, i think that anything that will bring tariffs is a dumb idea. and i'm a free trade guy. i think that will extend well beyond china. that will extend to our partners in north america, europe, they -- we seem to be picking lots of fights these days. china seems to be where we are not picky. in general, rising tariffs are the general drop in global trade. it would have to be bad news, i think.

>> how do you balance the caution with the need to earn some return? what do you own? >> you own what you think are the most attractive and least overvalued assets. i would suggest as we do that there are attractions and closed in bonds of five to 10%. their lever to some extent up of the cheap leverage. you go there and you basically tell your investors that it is a changed world. returns are going to be lower. if you want to sleep at night, you need to accept the market as it is, low volatility requires low returns. >> what about treasuries? what about cash?

>> i think treasuries are the ost talked about in the market in comparison to 25 basis oints. 190 basis points. and they are all relative of a j.g.b. that is 205 basis points. it is more attractive on a yield basis. i would suggest they are overvalued price-wise. and underyielding and investors should be cautious in terms of how much they want to on. >> you have a cash position? >> a large cash position. >> how large? >> i put in a durationle -- urational content.

this is a zero duration benchmark. it has a negative one or two-year duration. it is a lower than cash like return. >> at this stage of the cycle, i i think it is prudent that investors figure of preserving capital and protecting against a negative scenario like an economic slowdown which could be a two-week cash to weigh increased. >> if we saw a downside surprise somewhere, where would that surprise be? >> it is usually the risk that you don't tend to think about. we spend a lot of time at our form over the past couple of weeks talking about risks to the market. there are plenty of risks, some of which are geopolitical in ature. asia is a region where there is political uncertainty. the middle east is still an area where we have seen other signs of instability as well.

there is plenty of risk from a geopolitical perspective. nother risk we have been monitoring for a few years sentiment o this anti- that exists around the globe. we have seen it over in europe, in terms of their political cycle, we saw it with this year -- this ration -- recent residential election in this country. there's a lot of antiestablishment traction that is building. it is occurring at a time where economic growth is not too bad. if you have any unanticipated shock that hits unemployment rate, you can have an acceleration of this process. those are a few examples of the risks. the final point i will mention is when thinking about risks, it is very important to think about valuations, early 2016, people were worried about a lot of things, the valuations were such that there was enough margin for

error when things stabilized and you can afford it. whether you look at the equity market, there is no longer that margin for error. i think it is a market where you will be particularly susceptible to bad news, even small doses of bad news going forward. ♪

>> i want to show you this, this is to get perspective on some of the credit. we have abu dhabi, we have qatar, here are some of those credit default swaps. they have moved sharply in comparison to some of its peers. >> there are about 30,000 things

on the bloomberg. we always enjoy showing you our favorites on bloomberg elevision. quic go, this will give you insight into our topics. here's a quick take from this week. >> actors are not like they were n the 80's and 90's. now, cyber criminals can be state sponsors, breaking into service and disrupting national elections. >> they introduce chaos and division. >> they could know in multinational landoll corporation by threatening to elease piles of sensitive data or they could be agents looking to expose the cia's on capabilities. these professionals are always finding new ways to gain entry into governmental, industrial and financial networks.

luckily as, he's get more sophisticated, there are safeguards to protect this data. here's the situation, in 2005, with a 5400 databases have been disclosed. the biggest think the adobe act of 2014. and individuals are not the only ones at risk. the u.s. has been battling an escalating cyber war with china and russia for years. in 2016, multiple u.s. agencies concluded that russia was behind the hack of 20,000 democratic national committee emails hoping to push the election in donald trump's favor. this is something that vladimir putin denies. if proper precautions have taken, not all habitats have unhappy endings. in may of 2014, many numbers were stolen from target. those numbers were useless because the pin codes work ncrypted and the banks

immediately closed all the compromised accounts. cybersecurity is at the worst and best it has ever been. the safeguards protecting individuals and corporations are always being improved. the massive 2014 hack of jpmorgan did not result in losses for customers. they were covered by consumer protection law. it did inspire jpmorgan to build a vast cyber security operation. the u.s. eventually identified he hacker. keeping data secure requires constantly updating technology. and expensive human monitors watching for any signs of trouble. high-security comes with a high price tag. >> that was 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 is this news and analysis 24 hours a day. that will be all for bloomberg

best this week. thanks for watching, i am michael mckee. this is bloomberg. ♪ . . .

♪ david: what was it like when you came here? did people make crocodile dundee jokes? james: people would say to me, is it true that all australians wrestle crocodiles? i would say, well not all of them. david: wall street ceo's are thought to be people who throw things at the walls, scream and yell. james: i think if you are the seventh of 12 children, you don't want to be the thrower. david: are you in favor of repealing dodd-frank? james: that is a terrifying thought to start again. what will replace it? the world doesn't want the large banks to be unregulated. david: you have been a ceo for seven years. that is pretty long. james: what are you telling me, david? [laughter] >> would you fix your tie, please? david: well, people wouldn't iz