♪ coming up on bloomberg best come up the stories that shaped the week in business around the world. damage from falls short of projections. >> they are not apocalyptic, merely bad. >> leaders on capitol hill are setting up a plan. >> they really need to put the hammer down on the augmented reality fame, something that is that x factor. >> goldman sachs says strategy for the fixed factor. >> broad series of issues across the firm, identified $5 million. >> europe's a bank are preparing

for a barrage of challenges. >> i don't think anybody and an investment bank for client will say they have it all figured out. >> ceo's chair insights in exclusive interviews. >> we are slowly heading back to normalization. >> when trade stops, work starts. >> the auto industry looks electric. >> this is a long-term trend. it will get stronger. >> straight ahead on bloomberg best. ♪ scarlet: hello and welcome, i'm scarlet fu, your weekly review for weekly business news and analysis from bloomberg television around the world. the week began with attention focused on florida, region still under siege from a powerful

storm. weakened as itma moved past cap, leaving millions of people without power and millions displaced. >> we are getting a sense about how long it will take for people to get a grasp on the damages. 130, 135, 140 mile per hour winds. they will have to wait to get into aircraft. helicopters and planes to survey the area before they can come up with culinary estimates -- preliminary estimates. damage could reach $49 billion. it is lower than earlier predictions after the harshest winds began to slow, that there will be an impact on the data, if not the gdp number for the year. >> data will be messed up for a while. we saw that happen after harvey.

it went up 62,000, this enormous jump. we will have a big jump for retail sales in september because everybody bought everything ahead of time or it then it will fall off -- time. then it will fall off. so many destroyed, half a million cars lost. if you are pricing in any kind of that move in september or october, you would not now. the data will be confused for quite some time. >> some estimates suggest losses are in 10% or 20% of the crop. is that what you are hearing? >> the numbers are not apocalyptic, merely that. that -- bad. that is a big relief to the market. scarlet: apple wrapped up its venture, unveiling the new iphone.

homephone x intimates the of and uses facial recognition to replace the fingerprint sensor. $999 and tag starts at will be shipped november 3. is it late compared to other iphone cycles? >> it feels late. several months after the grand unveiling, there will be sent up anticipation and room for competitors to sell their own high-end smartphone. this is because of supply chain issues. the new screen is crisper and brighter, a great addition, but difficult to manufacture and there are only a small handful of manufacturers around the world that make this screen. they want to push back on state to make sure they have the capacity. >> the overall price of the phone did inch up today. i think in order for that

segment to catch fire again, they need to put the hammer down on the augmented reality, something that is that x factor. i know it will deliver on returning the iphone to comfortable 10-15% growth. >> long-awaited details on the speaker of the house paul ryan on a process that has been spearheaded come to be known as the big six, lawmakers and administration officials led by the ways and means committee, congressman kevin grady. >> starts on the outline and that it takes feedback and input and then they will produce their bills on the weeks ahead. >> what can we expect in the next few weeks? >> brady and the speaker happen receiving requests from congressman who want to see details. to pass this index

couple months and that is the context in which brady told members on the week of september 25, some framework or document out there. it's not clear how detailed it will be, but it will move the process along and by mid-october, they hope to pass a resolution that unlocks the reconciliation future and they will have 28 legislative days to get a comprehensive tax reform bill done by the end of this year. it is a tall order. we are skeptical on the timeframe and scope. if you look back at presidents moreresident reagan, under auspicious circumstances, it took him three years to pass reform. the idea they can get from basic principles to legislative tax through regular order plus the budget by december, we are skeptical. the bank of england on hold,

the monetary policy voted to hold interest rates at 0.25% in a seven-to vote. the push maintained which would have caused reversal rate cuts and ely after brexit. -- immediately after brexit. we have heard the story from the bank of england before. what is different this time? >> it is a hawkish hold and they are worried about the erosion about the slack and economy and that will accelerate inflation, which reads 2.9%, goes to its highest level in five years. >> carney said this repeatedly. based on where we are relative to the gap, we should be hiking. the fear that there is this monster of brexit coming down the road is what is stopping them. he probably thinks there is a lot of talk to november. who knows? >> the un security council

called an emergency meeting after north korea fired a second missile over japan in as many months. japan did not shoot down the missile. it landed our way in the pacific ocean. >> the japanese are saying this is unacceptable, yet another missile lobbed over japan. looking at the south korean reaction is interesting. president moon said there can be no diplomatic talks with north korea in the current situation and said south korea could pulverize north korea if needed. this publication comes days after -- >> this provocation comes days after the meeting. north korea'sens economic isolation. >> it is another call from the

u.s. for greater sanctions against north korea and an embargo on oil exports to north korea. we had this debate before and china made it clear, saying they have favor of further sanctions. we had the usual responses, but they gave up those gains early on. there is a sense this can be resolved through true depomed channels, but it is unknown given the pace of missile tests we are seeing in the north. still ahead as we review, harvey schwartz of goldman sachs goes in-depth on the firm's land to turn around it trading business. talk about the future of european inking and an exclusive conversation with alibaba. more of the week's top headlines, jamie dimon slams did -- bitcoin in no uncertain terms. >> that has to scream bubble.

scarlet: this is bloomberg. ♪

♪ scarlet: this is bloomberg best, i'm scarlet fu. let's continue our global tour of the top is the stories with the economic data out of china. prices climbed for a 12 month and the government continues to produce excess industrial capacity. in augustrose 6.3% from a year earlier, up 5.5% from july. >> it seems to be over. >> it is important for the profit side of things for china's companies and good for the debt service side of things. the question is, what is behind the resurgence? spare capacity to much shutting

down cold fronts or due to actual genuine demand on the ground? that.ry is out on there is a feeling that the interest chapter spending going on -- infrastructure spending going on. >> china's economic expansion unexpectedly cooled last month after factory out put, retail sales all came in below analyst expectations. what does this data set tell us? should we take a step back? >> it tells us growth peaked in the first half of china. people have been calling for slow down. it seems to have come. two things are going on. one, the push to reduce excess capacity is starting to bite. secondly, the housing market seems to come off the boil. ceo said he would

fire any trader trading bitcoin for being stupid. he also said they would not end well for the cryptocurrency. >> you can't have a business where people can invent a currency out of thin air and think people buying it are really smart. it is worse than to look up all's. there is a lot of signs that cryptocurrency is headed for maybe not a crash, but a major correction. we have china cracking down on initial coin offerings, which is when startups and vent their own coins to fund their development and sell them to the public. i think there is the price. you have seen bitcoin has multiplied sixfold in the last 12 months. ethereum, the number two currency, is up 3000% this year. to someone like jamie, that screams double. largestrael was the

drugmaker, they have named a new ceo. to revive sales and reduce debt. >> i'm the kind of person who likes challenges, so i have been inspired by challenges. if it is counting and complex, i normally thrive on that. what excites me about it is that they have a strong heritage and they are the leading an effect for of generic medicines, supplying high-quality medicine to able in the world. -- two people in the world. -- to people in the world. unique product. it is an interesting, nation. -- combination. >> he gave his state of the

union address where he and the plans to deepen immigration after brexit. will want to catch the wind in our sales. message is match -- that europe is act. it has calmed down -- is back. it has calmed down and it will prepare the eu for the post-brexit world. negotiations are on hold because theresa may has come out with a major policy statement in the next week or so. they postponed of negotiations. 25, the dayeptember they decided. >> president trump and malicious prime minister are looking to boost trade ties while -- malaysia's prime minister are looking to boost trade ties.

how significant is this deal for relations between the u.s. and malaysia? >> it seems like the meetings have gone well. that seems to be what has happened. he wanted to help strengthen the u.s. economy and that is why malaysia airlines is investing in more boeing planes and ge engines. the deal could be worth more than $10 billion. stoppeddent trump has for china investor of buying lots of semiconductors, citing concerns over national security. dealsis concern for other where chinese buyers are seeking u.s. security clearance. >> they failed three times. the thing to remember is that city is is not the final

arbiter. fina decision.e a we were not really sure what donald trump's position was, especially as he talked about trying to make jobs and making america great again, trading jobs for american workers. they tried hard to engineer the deal around the fact it would save lettuce and create jobs. at the end of the day, national security remains supreme. >> we have to talk about saudi arabia. it is preparing a contingency plan for delay of the initial public offering of their oil company, saudi aramco. it is scheduled for 2018, the timetable is looking tied to a 19. what was the reason be for that?

>> the main thing they struggled with his understanding just how difficult this will be. that unprecedented accompany this size and complex, is able to get to market that fast. 2018, then theas second half of 2018, now there is a possibility of the timetable being flipped. it does not mean it is over, but it is a fluid timetable as a figure out all the things they need to get done. >> president donald trump had dinner with house and senate minority leaders and tells the press he sees the dreamers deal happening in the next six months. he discussed a future for the u.s. mexico border role. -- border wall. >> we have to have the wall. we will determine how much we ord and then we were not --

we are not doing anything. >> it is amazing to see how trump intends to keep republicans together. he has received criticism from ultraconservatives, most notably from steve king, republican from iowa. it looks like the white house is walking a political tightrope to get some type of deal within the next couple months. >> several people were injured in an explosion on a subway train in london. police said they were treating it as terrorist, a number of people suffered injuries and facial burns, and some were injured in a stampede. >> it looks like an improvised explosive device. it is not look like it went off as expected. like a bucket with wires coming out of it. >> what was the response from the government, as high alert as

they have been? severegovernment is on a terrorist alert. london still feels like a city under siege. this is the fifth attack in the u.k. and the fourth in london in the past few months. theresa may was quick to come out and say, our thoughts are with the injured and the emergency services, but right now there is alive ongoing event. this is not over yet. ♪

♪ welcome back to bloomberg best, i'm scarlet fu. this week, goldman sachs unveiled a strategy to turn around its fixed income trade harvey schulzdent

discussed it on bloomberg television in an exclusive interview. a on growth, we outlined broad series of initiatives across the firm, identified $5 billion, which has margins of 30%. we also spent time talking about fixed income. our position in the marketplace, what we have done with the business, taking resources out of the business, and identified a growth opportunity. that is part of the $5 billion collective strategy. >> if you are looking at net $1 million bit revenue, to someone like me, that does not sound like that much. >> we assume nothing in the environment changes and we went through business by business, but also banking come up markets leading platform, and identified revenue opportunities across the next three years. it totaled $5 billion, but these are achievable because they grow

our client footprint and they are good for the firm. these are not new. these have been underway and there are detailed lance behind all of these. 11 --n you have a big at vix at 11, walk me through what happens with that. >> the difference between us and the universal banks, some of the differences are obvious. the underlying the subject is that the environment doesn't change. where is the growth? identifiedcome, we $600 million, which allows us to drive revenues. how is that built? by very specific client plans. as we talked about in the conference, we are number one

with hedge funds, but number three with asset managers and we are not satisfied with that. we can provide value for those clients. >> other banks have made those changes. i'm thinking of morgan stanley in particular. they trumped you guys in terms of trading. the question becomes, are they better at net a getting that new environment and are they taking risk where you aren't? >> they are a great firm. i have no insight into what they are doing. i can only talk about what we are doing. the industryack, went through dramatic growth from 2005-2009. in 2009, our market share. at 19%. industry revenues were cut in half. our response to that decline was two things. one, we focus on our minds and maintained presence.

but we also took resources out of fixed income, at capital, close to 50%. 30%,re just competition by reduce the balance sheet. we were able to do that during that decline. what that enable us to do is reallocate capital across the firm. we also returned $35 billion to shareholders in the past five years. 40% of our market cap. we created tremendous marketing leverage. if i had to billion dollars of revenue, which are those with you, but the billion dollars with our operating leverage as part of the $5 billion, is quite significant. coming up, more exclusive interviews including a conversation with alibaba founder. plus a deep dive into the auto industry's electric future.

regulation and automation are at the top of the list. >> we think and a next five years, 30% of the jobs will disappear. scarlet: this is bloomberg. ♪

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delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. ♪ >> i think that we have had ande central bank policies we are heading back to normalization. normalization to me is may real growth in the economy with a couple percent growth in labor force, one of 5% growth in productivity that defines growth , 2%, inflation at 2%, nominal gdp of 4%. the fed fund the lungs to 2% rather than 1%. >> where in the u.s. do you see the return to normalcy? >> we are heading towards that.

they dropped 150 basis points and the tenure was 138 at the lowest now 2.17. in the next couple of years, i expect the funds rate to be 2%, the government to be 4%, the s&p will be 17 times. we have a $138 estimate for next year. scarlet: that was the hedge fund billionaire on the state of global markets in an exquisite conversation with eddie live. in europe, -- betty liu. -- in thes known as start of 2018. start of brexit and the tax. several industry leaders. let's begin with the exclusive interview with investment bank president andrea or sell. it will be counting and a

rocky, meaning there are contrasting forces. the first is, if i need to pay separately, i am going to say, i don't want to pay for this or i want to pay less for this. >> that's what every client should do. >> exactly. but something in the opposite direction, before, because of strong relationship, i was buying a service from operator a , which actually is not top quality. now i can't justify buying that service from competitor a. our view is i need to justify paying for that service so competitor b and c, who are better than competitor a should share in the segments. how will that land movement and lots of reaction as people react

to that? that is just one scenario. we could find a way to make it work. the problem is, everyone has run scenarios. i don't think anybody will tell you they have it all figured out. on january 1, i know how to approach it and all my providers know it. but the definition, there will be adjustments throughout the beginning of next year. >> who are the winners and losers in this? bigger firms, can they take more of a cut? >> the winners are the clients because they will see the execution cost reduced and in many ways, the losers are the investment banks that will have to ration how much they invest in their research departments and portfolio managers, who will take on their own p&l. probably, and i've heard the buzz that europe say this, you might argue the richness of

research available in a particular market will suffer. time will tell. >> all of this regulation will plate apart and consolidation. most of it has been because of the passive versus active. how much regulation exacerbate the movement? >> on the banking side? massive. the cost of our complaints can the legal department, our risk department, has risen many folds over the past five years. i don't know exactly the number, that is the biggest area of growth we have seen in the past few years. if you look at the number of regulatory exposures we have on a constant basis, it is massive. we have smaller players seen consolidation there, are taking the view it is no longer profitable to invest in these types of resources. >> when will robots be advising

us on what to do with our money? >> i don't know. robots or androids? they will not be advising me. howive us the sense of banking will look like in 10-20 years. will there be better consolidation? smaller banks as opposed to what we see now? what kind of jobs are we looking at? >> i think it will be at enormously -- the enormously competitive. there will be a lot of specialized providers and you talked about consolidation. you will have both. fragmentation and consolidation at the same time. they can offer you great services, consolidation among incumbents as they try and figure out how to feel what is happening with the new startups. from a banking world going

large financial institutions to one that is more decentralized. >> city says 1.7 million jobs will be lost in the next 10 years. what is your own estimate? >> everything with artificial intelligence and robotics, all of that will make processing easier, it will change the back office. i would not be surprised if there are a lot of jobs that are not -- that will be replaced by automation and robotics. withve done a lot of work some of our companies and we think in the next five years, 30% of the jobs could disappear. scarlet: let's stay focused on the future of business. bloomberg hosted a summit at hornell's new campus in new york. some of the biggest intellectuals attended the event and sat down with exclusives. >> we are on a path to hit one billion people having a decision

impacted by washington in some way. financial services. it is interesting to watch. some of the biggest banks have adapted quickly to this. customer call centers, credit 350,000 emailse a day, you don't sort them by keyword for urgency and how to solve them, these are sorted by importance, sentiments of a that's customer stats, what they use it for and what is the possible answer. that financial crimes, you think people spend -- if i am doing a dossier, it can take me five hours to pull data together. now i spent 15 minutes gathering. >> you touched on the criticism out there, it is still too dependent on human interface.

we talk about in the health sector or financial services, underwriting risk, it cannot learn fast enough and it has not been chester nacional enough to live up to some of the dependency of ibm and how it is being marketed. >> ibm is an $80 billion company. when people say, why hasn't this going on ibm? that is unreasonable expectations. >> can you give us a quick update on where you are with your plans for an online tv service? >> yeah. this is becoming a crowded field, but it is an important element of the overall portfolio for verizon. because of our old properties, our yahoo! and aol properties. more and more, the internet is video, everyone knows that.

we have relationships with the nba and nfl. you have to deliver those efficiently over the networks. an over-the-top platform is critical for us. we are evolving that as we evolve our content deals. whether we go out and -- what we used to have is a platform, or we go out and offer it as a standalone product. a decision yet, so it will be accommodation of something we do or a partnership someone else. we will from that up in the next six months or so. >> we will have a better sense of where you guys are? >> we have the network and the platform and the content deals will decide how far we push that to the public. this week marked the 18th birthday of alibaba. bloomberg's stephen engle

traveled to the headquarters with a rare and exclusive interview with the founder, jack ma. >> this is our vision. we are making sure a small business, young people can benefit from that. i think eight years is enough for us to improve globalization instead of killing globalization. when a trade stops, war starts. >> what is the u.s. strategy right now? >> we never changed our u.s. strategy. we want to help young people sell to china and sell to asia. we don't want to go to usa and be the local e-commerce company. there are already all over the usa. >> you don't want to take over amazon doing what they are doing. >>. > no.

>> we saw collateral damage and i was watching your progress to the tech bubble. you had these challenges that white familiar names off the board. are we facing a similar kind of tech bubble right now with these billion-dollar unicorns and inflated tech scene? other any similarities? >> no. >> none? >> not that much. i think the challenge at that time, not a lot of people understood the how powerful the internet is. and whether internet can sustain. people started jumping instead of doing it or it people -- and doing it. people had crazy ideas. they don't know how to make their dream capital. they, everybody knows internet is powerful and will

change human history. and also, the infrastructure of the internet and technology is much better than 10-15 years ago. if you are not that greedy, if you are not that stupid and crazy, it is easy to survive today. then yesterday. ♪

♪ scarlet: you are watching bloomberg best, i'm scarlet fu. we examined the rise of electric vehicles and how their expansion is tied to the world's biggest economies. our coverage began monday with important automotive news from china. china set a deadline for automakers to end a sales of vehicles powered by fossil fuels. they have become the biggest market to do so.

the government is working with regulators on a timetable to end production and sales. were the implications -- what are the applications to china's car market? implications to china's car market? invested inan electric big -- electric vehicles. there is a push to buy electric vehicles. this decision to phase out these justby a certain period solidified that push. dominantnts to take a position when it comes to the batteries involved in these autos and the electric vehicles themselves. have regulations beyond, the utilities company, oil and energy companies. it is a significant move in the number one pot market in the world.

-- auto market in the world. >> they invested 20 billion euros to invest in all 300 models in its fleet. >> volkswagen has learned from the past. we have understood what people understand by sustainable mobility. this roadmap that we have announced, which alluded to, is a self commitment and it will be going forward. >> is there going to be the infrastructure? in germany, i do not see supercharger stations all over the place. even in the u.s., outside of much urban areas, there is a lot of work to be done. >> you are right and that is a legitimate question, but the world is not just germany. weare a global company and want to offer our drive systems in the entire room -- entire world and us what we will do. >> how much bigger to this push

toward quantification get to diesel prices -- electrification to get to diesel prices? >> over the intervening. period, we have brought nine models to the public. the mi iss going -- going to hitni in the not-too-distant future. that will tell you it is a long-term trend, something that will get stronger in the future. >> will you be able to wrap up sales and electric quickly enough to meet co2 emissions 21?gets in 20 >> it is already ramping up. the momentum is there. as we continue the r&d investment, all this scaling effect is part of our long-term strategy. >> do you need to make a bigger push into electrified vehicles

as opposed to plug in hybrids for a long time? do you need to redouble its efforts? >> i think we have a good plan to roll out our first all electric vehicle. they come in 2020. on the commercial vehicle side, we announced partnership with streets bigger, so we will be the biggest producer of electric vans in europe this year. i think it is important for us to get a good balance on both our commercial vehicles as well as specialty cars on electrification. >> bmw said it is prepared to critical supplies of cobalt and lithium used in electric car batteries. changet auto shows a sea , every automaker is trying to outdo the other with how many aliens it will invest in

electric cars. -- billions it will invest in electric cars. is this really going to happen? >> one of the things to keep an eye on his policy support. europe, all have policy support for the utes. if those were to change, some of the inevitability of this might slow down. the other is, we are depending on battery prices falling further. they have come down 70%, that they need to come down another half to be really competitive on and up front basis in terms of combustible engines. if that slows down and doesn't keep declining, the crossover point for where this stuff takes off gets delayed. at a time where many large companies were expanding commitment to sustainability,

young startups are finding success going green. swell is the case in point. their water bottles come at a multitude of design and colors. make an environmental impact and fashion statement. the businessct how has grown in this week's small to big. was, iidea for swell wanted to create a better looking water bottle that would convert people to actually carrying water bottles everywhere they went. to stop using plastic water bottles. i started it with my own personal savings. i invested $30,000 and work with a team of industrial engineers. it is stainless steel with a layer of copper. it is almost indestructible. when i started swell, i went to 17 trade shows myself. i stood in a lot of booths and talked to a lot of customers. they would tell me, did you make it in this other color or could

you make it in a bigger size, because we would like to take wine to the park? really the first year was a learning lab. it has been a wild ride. we went from 3 million in sales to 10-50-100 million sales. really fast. one of the challenges we faced, we outgrew our office. we outgrew our systems. companyrunning this with $100 million on our spreadsheet. it kept up until somebody tweeted about us and then it came down. it was hard to turn my attention edward everett it has been hard not to take every market in -- attention inward. it has been hard not to take every marketing opportunity. movingmoving offices,

warehouses, moving websites. we can be a billion-dollar complete because we have this system. last year, i had the idea to launch a new line called sit by swell. we initially launched in target stores. it is less expensive, part of my idea to create something new for a different type of customer. our customers love to collect them. the average customer has 5.5 bottles at home. we are a self-funded company and we have no outside investors. no board, no metrics, nobody telling me i need to take a number. capital, but to i'm always interested in potential advice and expertise, how could we partner with someone who could help us grow bigger, faster, stronger? i'm not saying anything is coming, but you never know. i think the balance of seeing

the plastic versus seeing swell starting to change. we have education to do, but i'm feeling good about the progress. ♪

♪ take a look at the bloomberg quickly, we have analyst ratings on the stocks.

no sell ratings even in the wake of this and most of the analyst saying, if there is a risk here, it is short-term. we have learned from these breaches in the past that it is not necessarily a long-term effect. >> what i'm looking at here is the total put open interest versus the call open interest permits i'm using gracias --. -- interest. analysis. scarlet: here is another function you will find useful. to you i see go. here is a quick take from this week. stocks and bonds have bounced back since the 2008 financial crosses. -- crisis. the public's trust has not. financial markets are unfair. many politicians and regulators

see leveling the playing field as unfinished press crisis -- post-crisis cleanup. the eu rules will apply to any institution trading european securities. to complye scrambling with the revision of the eu's market and financial instruments directive, which goes into effect january 2018. it will upend the way brokers share information, sniff out prices, and get paid every many of -- paid. many of those rules are designed to give regulators information to reconstructive ends quickly if things go wrong. others unravel conflicts of interest. some of the methods to guidelines much further than the dodd-frank regulations in the u.s.. here is the argument. banks and brokerages say regulators are overreaching.

by forcing the disclosure of prices, market liquidity might be diffuse. authorities say the new rules will strengthen consumer protections while fostering competition and encouraging independent research. 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 the latest business and analysis. that will be all for bloomberg best this week. ask for watching. this is bloomberg. -- thanks for watching. this is bloomberg. ♪