♪ coming up on "bloomberg best," the stories that shaped the week in business around the world. uncertainty in germany, political pressures mount for angela merkel. the department of justice tells at&t, see you in court. investors search for policy clues in the minutes from central bank meetings, and privacy of on a black friday. -- bright results on black friday. high-stakes for the british government on budget day. >> no one should doubt our results. >> and in the u.s., the debate on tax reform heats up. >> the budget deficit is a

serious problem and it will get worse. >> the war of the rich on the port is astounding. is at everything in here bad idea. >> is all straight ahead on "bloomberg best." ♪ >> hello and welcome, i am ramy inocencio and this is bloomberg best, your weekly review of the most important business news, analysis and interviews from bloomberg television around the world. we begin with a political crisis in a european nation that has been a rare model of stability. angela merkel's negotiations to form a coalition government collapsed on monday. >> angela merkel attempt to form a new government. those have collapsed. with of the free democratic

party walking out of coalition talks last night. the breakdown of discussions throws the future of her fourth term into doubt and raises the possibility of new elections in germany, something which would be completely uncharted territory in the postwar period. merkel says she will consult with the country's president later today. >> it is a day of deep reflection of how to move forward in germany, we will do everything possible to ensure this country will be well led through these difficult week. >> what exactly happened that brought these come at the final moment, to a collapse? >> it was clear at the end that the whole package of things they have negotiated is not good enough for the ftp. immigration was a sticking point. they could not get austerity through. looking at the whole package,

they decided it was not good enough. >> we are seeing the euro gained against the dollar. isn't this bad news for europe? >> the markets are telling us this is a local issue that will be quickly resolved, and that means without much fanfare. this is important because right now, the key to europe and brexit talks and further process -- progress of integration hinges on strong german leadership. >> the u.s. justice department is suing to block at&t's takeover of time warner. to thes a major blow telecommunications empire. >> the bottom line is we cannot and will not be party to any agreement that would even give the perception of compromising the first amendment protections of the press. any agreement that results in us forfeiting control of cnn, whether directly or indirectly, is a nonstarter. >> unprecedented. very odd coming out of the

republican administration generally considered friendly to big business and mergers good we have -- and mergers. we have no example. the last time this winter court was 1979 and the department of justice lost. >> the department of justice will have to demonstrate that consumers will be harmed. there are a lot of things in the complaint that would raise concerns for competitors of at&t, the question is, will consumers be harmed? oj has athe oj -- d daunting battle in front of them. >> the white house trying to signal this is not anything to do with politics, despite the president's complete assertion against cnn. i continue the department of justice has largely taken a cautious approach, and everyone is weighing in, including mark cuban. he has suggested that when it goes to trial, will ultimately the bad news for facebook,

google and silicon valley. the argument is that the vertical merger is a signal for them to play with tech titans. >> did you take government says economic outlook is getting worse. a warning was delivered in parliament today. our he invested almost 700 million pounds in brexit preparations. today i am setting aside over the next two years another 3 billion pounds, and i stand really -- ready to allocate further funds when and if needed. speaker, no one should doubt our results. >> he give us 3 billion pounds to deal with exit uncertainties. is this to deal with the situation of no deal? is that what the 3 billion is for? because it was previously said he did not want to set aside money for a no deal scenario. >> we've already allocated 700

million to prepare for all of venture out of and that includes no deal. it also includes the preferred option of a transition period plus free trade deal. that's what the 3 billion is for. money we will need to spend to get ready for leaving the european union. quite a lot of things we would need to do in a no deal scenario, we would still need to do in a deal scenario. it is rightly make the preparations i think people will expect the government to stay on top of that. yellen isn't the only fed official expressing more doubt when it comes to inflation moving higher. novemberes of the meeting show a deeper than ever divide between policy member -- policymakers. the november minutes are interesting, it has a lot to do with the words the fed uses, many, that is more than half, a strong consensus. there ready to hike.

hike is inch rate question and the pace of hikes next year. a few, that is not even half, but probably a few significant said inflation has to be rising on a sustainable path toward inflation before they will look for a rate hike and they say the fed will have to monitor inflation developments closely. overall, a lot of consensus on the economy doing better, that there is deepening concern over inflation, which is not playing along. the ecb has released minutes of its october monetary policy meeting and they are learning that officials expressed concern about a firm date for quantitative easing. have we learned a little more about the divide the currently dominates the council? meeting inast october, when they decided to extend quantitative easing but at a lower case, they did

discuss how they want to implement that, first of all. they also discussed how they can change policy guidance, or whether they should shift policy guidance because at the moment, progress on inflation is very much linked to asset purchases. thate ecb decides to end program at some point next year, that will have to change, and that is what they discussed. talks collapsed around coalition talks in germany the social democratic party said it is open to discuss a government led by glenn merkel. it could restore political stability. how close are we to breaking the political deadlock in germany? >> the speculation is growing that this move today, that angela merkel and opposition leader martin schulz will meet, it is pointing us toward a rerun of the government germany just

had for four years. the social democrats are still very much hedging their words, but there is the overarching issue of german stability and there will be appeals to that in the days going forward. black friday, spending is very strong, off to a good start. i 5:00 p.m. yesterday, up 17% year-over-year according to adobe analytics. >> what responsive you seen from shopper so far? the fourth start to quarter, and yesterday during black friday, we saw that. it started well online and we opened our stores at 5:00. last night, in a lot of our stores, it is tracking quite well. one of our hallmarks is the ability to transact online, on a mobile device and in-store. black friday is a national pilgrimage, and having great value but also being where

shopping is happening. 70% of america shops during the black friday window. >> you have been closing some stores. you're going to keep about 600. would be moreer like 245, it was said. could we expect more closures? >> we announced we were close 100, we have 30 more to go. there might be properties here and there we will be closing, as awe serve nationally national brand. the interplay between the online business and tricks -- brocks business is important. expect us to way that very carefully. >> still ahead as we review the week on bloomberg best, a bold call on bitcoin. plus, thoughts on the gop tax reform bill from paul krugman and others.

also, chinese automaker aims to bring its brand to the u.s. market. >> our process is just taken off. >> this is bloomberg. ♪

>> this is bloomberg best. i'm ramy. it's continue the tour of this week's top business stories. next, another chapter in a controversial saga with the keystone pipeline. >> transcanada has cleared one of the last hurdles for building the keystone xl pipeline. shares of transcanada rising on the news and has given permission to build across the state. , anaska's public service alternative route for the pipeline put uncertainty into

the mix. >> what the commissioned it is a proven alternative to what the company had proposed, that there were three alternatives that they were looking at. thathis is one of the ones i want to continue with the project. >> it is certainly a good first in our a good next step goal of getting more energy infrastructure to be able to moreour products efficiently, less expensively, and more safely. >> that will turn out to be an incredibly stupid decision, whereas we should be spending our time creating good paying jobs all across america. in every single rural and urban community to build the kind of sustainable infrastructure that will let our country be

healthier and richer. this decision that lead to the old-fashioned kind of elusive -- pollution. >> uber covered up a massive hack attack covering up 57 million accounts. of stole the personal data 15 million customers and 7 million drivers. uber, including travis kalanick kept the breach concealed for a year rather than report it. they paid the hackers $100,000 to delete the information. >> it is so crazy. or than a year ago, uber heard from the hackers the day it found a way to get information, names, telephone numbers, that sort of information on 50 million writers. and 7 million drivers, most importantly, drivers license numbers for 600,000 drivers. that is information that uber was required to disclose and did

not. more than a year later with a new ceo, the company is deciding here isforward and say what happened. planning to raise money for its assets to avoid being delisted from the tokyo stock exchange. what kind of pressure is toshiba facing over this delisting? >> they have been in trouble for a while because of the nuclear assets in the u.s.. this is the westinghouse business it bought a few years back. a very troubled foray into this business. a multibillion-dollar losses. because of that, they've had to raise capital. the shareholder equity is negative and they need to move that back in a positive territory by the end of the fiscal year which is this

upcoming march. they are in a process selling the chips business. they have a tentative agreement to do that. the regulatory approvals may take longer than that date. capitalt to raise separately from that, so they go through the process of raising $5.5 billion to be able to fill that. >> looking to build itself, doing so by buying arrival. -- a rival. how much of this is triggered by what we have seen with the broadcom deal? >> there was a lot of consolidation. on the one side, chips for hard drives. side, the other networking process is much faster growth.

and specializing in a traditionally. asking fiat chrysler to deep in the tie to try to relax some regulations. speaking exclusively to our china correspondent, the president said the company is poised to enter the u.s. market. >> at the current stage, the internationalization process has just taken off. we have lay down the groundwork and carried forward car sales and service options in 14 different overseas countries this year. entering the u.s. market will be a huge breakthrough. >> there are cars manufactured in china and sold in the u.s.. although does it. if they succeed to do that in 2019, it would be the trump-xi brand.

branding will be crucial, of course. >> the confirmation of this, according to the fed, this is not unexpected. janet yellen's term on the fed as a governor runs until 2024. so she could stay on. it's been done once before. but today, janet yellen is making it official. she has submitted the letter of resignation effective on her successors swearing-in. is put pressure on the administration to try to hurry up and name some additional fed governors. a lot of work to be done. this is one of europe's biggest airliners, the revenue for the full year. he much bang in line.

5.01, and this is a very fluid changing landscape. a busted flush. >> you can see in the statement we've made today, that the first half is looking extremely positive. it is a direct result. out, they have taken some capacity out as well. and it is part of consolidation. it is very good news and we've come in at the top end of guidance. the forward outlook is good. >> the hpe shares after

companies said that effective february 1, we will see meg whitman step down and be replaced by antonio narrowly. >> high-growth software, spending billions and billions on acquisitions. and it just isn't working. she hasn't been able to turn that trend around. all the strength of reorganizing these businesses. the one-time restructuring charges for this company and over $10 million a week right now. i think when we look at what going on, it's not so much that she's getting pushed out. she's not delivering the results. more rollbacks of obama era policy. the fcc chairman announcing plans to overturn net neutrality rules, calling the measure

"imposed, heavy-handed, utility regulations." practically, what would we see as ramifications? , in the't think short-term term, you will see changes. in the long-term, what you have the possibility to see is changes in how internet service providers operate. address itules that them from it bars prioritizing traffic. they are talking about wiping away all those rules. they don't want to do that, but it would allow to do them in the long term. ♪

>> welcome back to bloomberg best. bitcoin began the week on a roll, hitting a new all-time high on monday. but safety concerns dragged on cryptocurrencies. the company behind another digital currency. how can investors keep these swings in perspective. mike is starting his own cryptocurrency hedge fund. the principles and practicalities of the market on bloomberg daybreak america's. >> this whole revolution came out of a breakdown in trust. trust say, we no longer financial institutions or governments. it is hard to trust central bank. the centralized revolution that ,itcoin is the poster child of it's a response to the breakdown of trust.

>> is it investment or trading? there was a cryptocurrency i never heard of, called tether. there was some theft of that and it drove bitcoin down. >> we're in the second or third inning of this revolution. coins areese individual ecosystems. bitcoin, the largest, is really a decentralized system of money. 30-40. we have their own system. far, likeices move so anything, people are nervous. they are going to get back. about total market cap is

$250 billion. $30 million got hacked. stolen. we spend a lot of time thinking about security. when you have a smaller amount invested, i have a lot less time. ati think we end the year 10,000. it is a decent move from there and we end it close to 500, in theory. left and morey compelling conversations coming up on the need to resolve the briggs it impasse, and the republican tax bill may soon come to a senate vote. >> we can make a gift of $1.5 trillion for the superrich.

>> this is bloomberg. ♪

possibility is the quite low. but japan would like to make a persistent effort to persuade the u.s. to return. itemseve the fact that 20 put on hold will encourage the u.s. to come back to the table. that was japan's economy minister speaking exclusively with bloomberg about the future of the transpacific partnership. meanwhile, in europe, continued negotiations for a separation. talks continue to creep forward on issues related to the u.k.'s

divorce from the european union. anxiety is rising over the slow progress. new rules and conditions await. >> is there anything the u.k. can and should do now to break the impact? >> it must rake the impasse. and you can do so. it confuses the ideas of british public opinion. >> what is out there, after all the attention is the amount to be paid. and today, the government may authorize the substantial increase. ,t may give the public opinion the amount of a

penalty that has been inflicted to the u.k.. this is absolutely not the case. just what happens when there is liquidation of any company. shareholders take on assets and liabilities. ifwould be much preferable aboutsums had come out how objectively the u.k. has to pay. and there are other negotiations, of course, on the many other aspects. it is a pity, i believe. it would be a bit offended.

>> it depends what you see. >> the politics is to dominate emotions. says there is a 50-50 chance that there will be an agreement at the december summit. is it higher or lower? >> it is better than me. i think it might be a 50-50, probably. germany is not in a political vacuum. reduced chancellor, the reduced strength in germany. -- can thatback hold back? union european union is a of 28 democracies. there are all these elections somewhere. there is coalition building somewhere.

it does not always go smoothly. >> on the subject of brexit, we might see the relocation of some clearing businesses. investors are concerned about higher cost, raising money for eu-based businesses. is this can something that is the higher cost of funding? we not in a state of negotiations. the first seting of issues. at the irish border, only then futurestart discussing relations. and it will impact business at the eu. part of is going to be those conversations.

clear that, it is the brexit model will choose them. , financialgle market institutions based in the u.k. will lose eu passports. they will have to rely on forms to continue. >> meanwhile in washington, the u.s. senate is preparing to vote on his version of the tax reform bill. guests on bloomberg television have plenty to say about the proposals under discussion, starting with nobel prize-winning economist. case that the marginal tax rate has the two highest tax rates. 35% is too high of a margin. , paul ryan'sm original proposal said that it

is a pretty decent proposal with a lot of bipartisan support. it died because of republican opposition. the tax breaks ,hat upper-middle-class people the state and local tax to duction. is there an argument that the text duction that people feel like they have a right to, or sacrosanct, it is time to get rid of them? mortgage interest to duction is not a good thing. it is starting from scratch and probably shouldn't exist. state and local governments are there for a reason. we mostly do education. it we really want to discourage states. that is not a good one.

not everything in there is a bad idea. after, notonly goes so much blue states, but after good things people do. let's repeal,le, say, a tax. >> if you look at the middle-class tax cut, do i like it? no, it increases the deficit and doesn't increase growth. the middle-class consumes more government services than they pay intact is. do i like that piece of it? likencome taxes, do i shifting it from professionals to job creators? yes. it really comes down to the corporate tax. >> how will the taxes increase the consumption of federal help to the middle-class. >> if you are paying less for government services then you are

receiving, you tend to want more government services. you will vote for increases in government spending is the taxes don't go up proportionally. you charge people for the government services you consume. we have real issue. how is that distributed to the rich versus the poor? i think most conservative economists would say it is going to cost $500 billion in tax revenues over the next 10 years. a small change in capital investment can have a large impact on productivity. war of the rich on the poor is really astounding. on top of the huge budget deficit, unprecedented inequality. top, they want more and more. sitting withe

republicans on the fence, collins, mccain, flake, mr. corker of tennessee. what would you advise them about the longer-term picture versus ?he medium clinical needs >> patriots should oppose this because our budget deficit is already huge and rising. this is pure populism. populism by the super rich. in.s pierpont bill is the idea that they have gotten in recent weeks. 1.5 trillion, that we can give away. it is not seriously government right now. governance is flaky in this country. make a gift of 1.5

trillion to the superrich for is reallyof it shocking. tax reform will get the rates down and in exchange for eliminating the and exemptions. presidentess and this isn't inclined to step on very many toes. that's obvious in the failure to take on the real drivers of the deficit which are medicare, medicaid, and social security. how accurately does the budget deficit represented the fiscal situation here in the u.s.? >> the budget deficit is a serious problem and it will get worse. we have passed the rubicon where there is a generally accepted belief that it is very hard to pay back your debt. of 60%.gdp ratio we are at 72%, 73% range. we are headed towards 90%.

there is nothing that looks good on the area. an almostarily totally driven by the health care needs of the baby boom generation. aat generation which i am not member of is just starting to draw down on the health care. it hasn't even hit the long-term accounts that are even more expensive. unless this congress and this president want to step up and do something constructive, which they have not done. this congress doesn't have the courage to put it back on. ♪

ramy: you are watching bloomberg best. let's return to our review of this week's top stories.

moving markets around the world. >> the meeting a few moments ago ended with the president saying that he was going to be designating north korea as a state sponsor of terror. tomorrow, the treasury department will announce additional sanctions. a very large one against north korea. at this cabinet meeting, this support for international terrorism. it's the first time north korea has been on this list. >> it will be the fourth nation back on this list. north korea has already probably the most isolated nation on the planet. withes have trade ties china. by and large, it is restricted from trade. the un security council has passed to fresh rounds of sanctions.

finance,new avenues of this really cuts off for north korea. perspective, it does at a little have to their argument when they meet with the other countries that still do some trade and allow north korean workers in their countries. zimbabwe, waking up in the nation this morning to a new post -- era. as presidented yesterday, ending the 37. have the vice president, due to return to the south african nation. is that a certainty? >> it is a certainty, to actually be sworn in for president of zimbabwe. hopefully lead a more social

economy that will allow former partys, and this imposing . it have big it is, will only be seen in time. as it's get to turkey moves once again. ?hat is the central bank why are they given the central bank the thumbs down? morning,eacted this split to a record low and bond yields spiked. funding that banks had access to. it is by 25 basis points, effective as of tomorrow. a lot of investors still remain

unconvinced, unimpressed. they think the central bank, some believe it needs to push interest rates up higher to combat accelerating inflation. the ability that monetary policy remains loose. >> the fifth round of nafta talks will draw to a close tomorrow. canada and mexico were standing firm on the resistance of one of the headline demands from the u.s.. american officials are waiting for the two other countries to bring alternatives to the negotiating table. to be lowered it key to make progress on the lesser issues they felt could be moved forward. it doesn't appear they were getting far on that desire either. the u.s. a man's for the rules of content, the sunset clause where nafta would end after five years, they would agree to continue. those are proposals. really move forward

because it appears the u.s. wants to settle these talks. it is very difficult to reach agreements. >> opec ministers prepare to meet in vienna next week. it bloomberg first reported opec and russia have crafted the framework of a deal to extend production until the end of next year. inhave essentially priced opec production this year. they will be able to deliver them. price, an the market extension of this agreement, several weeks ago, in fact. hook to now on the deliver. i think we see a repeat of what happened in may. one.ps even a stronger

announcing that extension on the 30th of november, that has been the sticking point. -- adding his name to the list of government officials settling in buyout shots. >> it becomes not, is he going into finance, but there are bidding wars that go on and a lot of meetings that go to the circuit. we do something like that. jack lew is a fairly understated treasury secretary. this is not one of the mega buyout shops that we know. all of them have hired former government officials.

more traditional mainline private equity firm that does family-owned businesses and that sort of thing. >> trump although cars, uber planning to modify to permit economist driving. it is a private company owned by a chinese firm not affiliated with that public although -- volvo ab. >> one of the things a volvo has for it is it is quite reliable and quite safe. >> they have tested them in pittsburgh. essentially what happens is, they are kitted out with lasers and radar. it's so they can drive around on their own. person, justackup in case something goes wrong. it has proven pretty positive. it suggests that they are reasonably happy with how the test went.

i think they had a hundred of those for the trials. that's what they are doing. >> nestle could be going shopping, said to be heading to healthier food through a .otential purchase a maker of vegetarian foods. they may not be alone in the interest. companies,e of these a lot of interest in a little bit of the company. really attractive assets. are they going to do the transaction or just try to cherry pick? they will not sell off the crown jewels. the equity company to take out the whole of the business and identify the assets.

♪

>> take a look at the bloomberg, > function that shows short interests. look at the percentage of float. 17%. a pretty high number even though short interest has been trending lower.

>> there are about 30,000 functions in the bloomberg and we enjoy showing you our favorites on bloomberg television. a maybe they will become your favorites, too. another function you will find useful, q uic go where you can get quick takes and fast insights into timely topics. here's a quick take from this week. >> large numbers can be caught with little or no effect on the population. because of natural reproduction. at least, that is supposed to be the case. or overexploited, risking total collapse. fish account for nearly 20% of the animal protein consumers. here is the situation. united nations food and agriculture organization

concluded fish stocks have continued diminishing since the 1970's. and the situation in the mediterranean and black seas is alarming. sinces have fallen by 33% 2007. 59% of stocks are overfished. sonar and satellites used to locate fish have sent catch rates soaring. pockets of the ocean are practically vacant. there are countries like china which has overfished waters near its shores. those that encroach on the traditional fishing grounds of other nations. here is the argument. regulations can only be set by governments and their exclusive economic zone which extends 200 not all miles from shore. but they have been mostly ineffective. seasons don't seem to curb

the stress put on the fish population. another approach that has been more successful is a catch share programs. these grant a portion of allowable harvests to individual communities or companies. they can use those rights to catch fish or they can sell the rights. since fisher's one of their shares to rise in price, they have incentive to maximize the value of the catch. slowing down during spawning season, and therefore, limiting damage to the fish stocks. another potential fix is agriculture, or fish farms. in 2014, farm raised fish have passed while caught fish a source of food for humans. but this solution may come with an environmental price. critics are concerned that they are damaging coastal ecosystems by releasing pathogens that harm wild fish populations.

they are being experimented with as potential solutions. it is starting to stink. >> that is one of the many quick takes. you can find them at bloomberg.com along with all of the latest business news, analysis, 24 hours a day. thank you for watching. this is bloomberg. ♪

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