♪ abigail: coming up on "bloomberg best," the stories that shaped the week in business around the world. a report from china roils the bond market, but it may prove to be a passing storm. >> certainly, yields could hit 3%. abigail: another automaker faces cheating claims. earning season kicks off with results from big banks. the ecb releases the latest set of minutes. >> a rate hike in 2018 is too much to expect. 2019 is definitely in play. abigail: ubs ceo sergio ermotti shares of shares exclusive insight on the global economy. >> at least not as strong as we thought in 2017. abigail: plus, conversations with heavy hitters in health care and technology.

>> we need more room for experimentation. >> we need to make sure we have a strong lineup in our motion picture releases. abigail: it is all straight ahead on "bloomberg best." ♪ ♪ abigail: hello and welcome. i'm abigail doolittle. this is "bloomberg best," your weekly review of the most important business news analysis and interviews from bloomberg television around the world. the week began with a strategic signal from u.k. prime minister theresa may, who promised to inject new blood into her cabinet at the start of a critical year for her government. reboot got underway monday. >> new year, new cabinet. yes, after losing three ministers last year, prime minister theresa may kicking off 2018 with a cabinet reshuffle. >> the main thrust is about

bringing in new blood, more diverse, more dynamic, more youthful slate of new mp's. this is all part of theresa may trying to grab turf in the party from jeremy corbyn, saying we can do diversity, reach out to the youth, recapture some of those votes. >> theresa may's cabinet reshuffle didn't go quite as planned. the prime minister's office flagged yesterday's events as a refresh of her top team, but things went off script. first jeremy hunt, then justine greening were locked in discussions with her. >> a couple of ministers she wanted to move, in one case, he stood his ground and ended up keeping the same job. the other case, she ended up quitting. she is someone -- justine greening. she potentially could become a rebel voice and a thorn in may's side in parliament. that is one of the consequences

of this reshuffle. the other is that the narrative coming out of this reshuffle is one of weakness, that may has a --has not been able to stamp her authority on the cabinet. brexit is going to be incredibly tricky this year. some big concessions are probably going to have to be made by the u.k. to get the brexit deal they want. to make those decisions and keep the negotiations going, strong leadership and the ability to unite the cabinet is going to be crucial. >> where are those bond bulls? the yield in the 10-year did hit 2.6% reaching the highest levels since march 2017, and the bond bears out in force. bill gross tweeting yesterday the bond bear market confirms today 25-year-long trendlines broken. jeffrey gunlock as well. saying if the 10-year goes above 2.63%, it will accelerate higher and equity markets will be spooked. maybe that is the cocktail that is coming our way. >> i think calling this a bear

market and thinking 10-year yields will go to 4% or 5% is probably a bit premature. we don't have the economic fundamentals to drive us there. that being said, certainly, yields could hit 3% before finding a new level and stabilizing. >> let's take it back to the bond market share. today, it is china sparking the concerns. officials from the world's biggest foreign holder of u.s. treasuries has recommended slowing or halting purchases of treasuries as the u.s. prepares to boost its supply of debt. >> recent evidence suggests they have been liquidating treasuries. there is supposedly an effort to diversify their portfolio. perhaps. in any case, the liquidation in treasuries as opposed to the accumulation of treasuries by china is certainly a negative. we have a worldwide situation in which central banks in total, add in the fed that is actually reducing their portfolio. the world of central banks in

total are not adding to their portfolio as they have in the past. there has been $14 trillion bonds bought by central banks. that appears to be close to an end. >> beijing rebuffs. china is claiming the bloomberg report saying officials reviewing the country's fx holdings recommended slowing or halting purchases of u.s. treasuries might have quoted a wrong source or maybe fake news. the bloomberg report cited people familiar with the matter and noted it wasn't clear whether the recommendations had actually been adopted. this is a huge deal in how -- if china wants u.s. treasuries or not. how do we get to the bottom of it? what happened? >> today, the state administration of foreign exchange, they are an arm of the central bank in china, they put out a carefully worded statement

where they fell short of the denial of our story, a full and complete denial. they went on to say they pursue a policy of diversification when it comes to investing, foreign reserves, and that they always look to market conditions when it comes to u.s. treasuries. >> the latest account for the ecb meeting has particular importance this month. there was growing speculation central bank may want to end qe altogether in the fall. even raising rates before the year is out. here is what they said. the view was widely shared among members that the governing council's communication would need to evolve gradually without a change in sequencing. if the economy continued to expand and inflation converged further towards the governing council's aim, the language could be revisited early in 2018. is this a hawkish tint? >> i think it is further baby

steps on the way to policy normalization. i think it is interesting that the ecb has said the messaging may change in 2018, because we have already seen some of that happening. we have had two people from the e.c.b. come out and sounding more hawkish than i have in the past. it seems that this is concerted, something the ecb is preparing the market for. it is a slow, steady process, but they are moving towards their goal of policy normalization. i think a rate hike in 2018 is too much to expect, but 2019 is definitely in play. >> german chancellor angela merkel has spent months trying to put a governing coalition together. it appears she may be making progress with an announcement that negotiations with the social democrats will go past the first round. >> there is not a lot of details in the agreement. it is just a preliminary deal, but what we can glean is the new german government, if it does come together, is there is an

intention they will respond to president trump's america first agenda. i say that because in the agreement, they talk about strengthening the e.u., spending more money on the e.u. the talk about the tax cuts in the u.s. and that they need to do something about the corporate tax rate within the e.u. as a whole. in terms of where we go, this is just a preliminary deal. the social democrats next have to take it to their members. that will happen a week from now. they will have to vote on whether they agree with this preliminary deal, and only then do we get into formal talks where they hash out who controls ministries. a big step forward today but still a long ways to go. >> it is the unofficial start. jp morgan reporting a larger than estimated decline in fixed income trading. the tax bill leading to a boost in its 2018 revenue. wells fargo didn't have to wait to see the benefit. it already saw an earnings boost of $3 billion. shares are falling after their profit and revenue came in short

of estimates. can we start with jp morgan and go through the tax-related payments, tax-related charges? >> the key question is what we learned about the future. jp morgan did as good of a job as it could in terms of giving us the forward-looking impacts. the key negative is worse than expected trading revenues. that matters in terms of the run rate going into 2018. fixed income equities coming in a little weaker. wells fargo, to me, the big number is the $3.3 billion pretax charge, related to litigation, plus consumer issues. we did actually expect them to take a charge related to litigation. it is bigger than we thought. >> the effective tax rate 19% over jp morgan this year. is it what we expected? >> it is on the optimistic side of expectations. that is a good thing. wells fargo also giving us guidance. that is good news for investors, but to some extent that has been expected.

abigail: still ahead as we review the week, what is driving global growth from sergio ermotti. and the goldman sachs chief economist. plus, autonomous cars may be on the markets sooner than you think. >> i would say 2021, 2022. abigail: coming up, more of the week's top business headlines. a bitcoin champion unveils a plan to build the goldman sachs of cryptocurrency. >> as far as his crypto net worth is concerned, he is all in. abigail: this is bloomberg. ♪

♪ abigail: this is "bloomberg best." i'm abigail doolittle. let's continue our global tour of the week's top business stories in asia, where north and

south korea held their first formal talks in more than two years. >> north korea said it will send athletes and a high-level delegation to the winter olympics in south korea next month and wants to resolve issues through dialogue and negotiations. delegates said south korea wants both nations to march together at the games. the two sides are holding talk s in the village along the heavily fortified border. >> overall, a positive mood, because both sides have a lot to gain, at least on the olympic issue. the south koreans kick off the winter olympics in one month from today. pray don't want -- they don't want the specter of war hanging over those olympics games that are supposed to foster brotherhood and unity around the world. and the north koreans want to participate. they have two ice skaters that have qualified for the olympics. they got their concessions from the south koreans. they will send a high-level delegation to pyeongchang.

they will send athletes and a cheering unit as well. for the south, they have peace and stability, at least for now. >> the south korean president has promised to never accept north korea's nuclear program a day after a rift emerged in talks between the two sides. when you talk about denuclearization, pretty frosty discussions. >> that is right. we have always known that president moon favored dialogue. he did not want to take the full on sanctions tactic like the united states and the u.n. security council. he wanted to engage as fellow koreans. it's interesting to hear president moon talk about the issues of the inter-korean issues and also denuclearization. they are not separate issues. he is on the one hand saying to the south korean people we need to have this dialogue, but we also must insist on denuclearization.

that was the overriding theme in his comments today. they cannot accept north korea as a nuclear state, and they must ultimately push for denuclearization. >> saudi arabian bankers chosen to take saudi aramco public. goldman sachs and citigroup will take the lead in managing the ipo. others serving as global coordinators. this is according to people familiar with the matter. does this tell us this is about to happen this year? >> that is the hope. next week, i will probably be talking about another five or six banks being added, but when you are talking about $1 trillion to $2 trillion even if the government gets what they have been looking at, that is a number that will need a lot of banks. >> give me an idea of fees that could be paid. the biggest ipo ever,

potentially. >> typically deals where the government is involved, the fees are really small. maybe the banks can make commissions from the investors. the fees are like a fraction of a percentage usually, based on the other ipo stories we have been writing about. when the governments do these deals, and it is more a question of prestige. like, i worked in the biggest ipo in the galaxy. >> saudi arabia's market regulator has announced a series of new rules aimed at targeting qualified foreign investors. what impact on flows from abroad are you expecting from the tweaking of these rules? >> we have already started to see, because of the deregulation of many facets in the saudi capital markets, an increasing amount of investor registration with the existing regime. one of the things we have seen is that more than 20% of qfii

investors have been licensed in the last month to month and a half of all qfii's that have been licensed. we are looking for that pace of licensing to accelerate even further with the additional deregulation of the qfii regime. >> china is shaking up the currency market. the country's central bank has made a change to the way it manages the currency. analysts say the change shows china's confident in the yuan's current trajectory. it is heading for its biggest decline in two months versus the dollar. explain in the simplest way what china has signaled. >> there was an override. the government sometimes didn't agree with what the market thought it should be priced at. this is an override to reduce volatility. basically, they have been seeing the currency strengthen. it is at a level they feel comfortable with, maybe strengthening a bit too much. they said, time to get rid of this override.

they probably haven't used this override in several months. it doesn't change anything meaningfully. but it sends a signal that we are now willing to let the market again fully set or set as much as they wanted to the exchange rate. with that said, if things turn the other way and they don't like what they are seeing, this could quickly come back. >> one of bitcoin's most outspoken champions plans to build a goldman sachs of crypto. wall street trader michael novogratz says will start a merchant bank with bitcoin and blockchain ventures. walk us through what we learned this morning. >> he is going institutional. that is one way of thinking about it. at the moment, you can buy bitcoin futures or the tokens themselves. mike novogratz is creating a firm. he is going to take it public. that will give people another way of publicly investing in bitcoin.

he is starting a merchant bank he is calling galaxy digital lp. he is taking all of his crypto assets, $400 million of tokens and stakes in startup ventures, and rolling it into this merchant bank. as far as his crypto net worth is concerned, he is all in. >> china's factory deflation eased to the lowest level since november 2016. last month, output slowed. ppi rose 4.9% in december while cpi rose 1.8%. >> i think the ppi is one we look at. it is obviously slowing for sure. the question is, are we now heading into a more pronounced deceleration for ppi in china? are we heading towards negative territory again? that is the question. it is hard to say right now. for the moment, it remains positive. that is a good thing for company profits, a good thing for their debt servicing costs.

it seems to be a slowing trend. it is a question of whether ppi in china is headed to negative territory. let's not forget, china was once a big source of inflation. it seems to be a dimming part of that trade now. >> oil extended gains from the highest closing in three years. the u.s. industry data signaled crude stockpiles dropped. where does oil go from here? >> there is two offsetting dynamics. one is we look at the underlying economic background. it is one of the strongest global synchronous growth backgrounds we have seen since 2004 when commodities went sharply to the upside. the offsetting force is this new oil order, meaning the shale revolution is very much underway. putting downward pressure on oil prices. while we expect oil prices to remain flat and slightly down, the investment returns will be significant, really being driven by the shape of that forward curve.

investors buy at a discount, roll up on the front end. prices could flatten down, but upside and returns driven by curve shape. >> this afternoon, we had dueling headlines on trades. canadian officials said there is an increasing likelihood that president trump will give his six months notice to withdraw from nafta. a white house official is now saying there is no change in the president's position on nafta. irrespective of what the president and the u.s. negotiating team feel, the canadians seem to be getting increasingly nervous. that is the bottom line. >> i think the question is what prompted this? we have seen an escalation of other trade disputes between canada and the u.s. over aerospace, lumber, and we are heading into the sixth round of talks. the canadians have characterized the chance of saving nafta as heavily, if not entirely reliant on u.s. nafta defenders speaking

up to pressure donald trump not to abandon the pact altogether. you wonder whether this is hoping to spur that kind of thing. whether the u.s. chamber or other senators or the congress looking at the canadians and saying we are worried, and going to trump and saying we need to take a step back off the ledge. ♪

♪ abigail: welcome back to "bloomberg best." i'm abigail doolittle. ubs held its greater china investment conference in shanghai this week. bloomberg's tom mackenzie caught up with sergio ermotti for an exclusive interview and asked for his thoughts on the global macroeconomic climate. >> we continue to see a robust economic growth.

the 3.8% we saw in 2017, the mix of this growth is going to be different. we will probably lose momentum from the u.s. or not a strong as 2017. some from the rebound of commodity prices, generally speaking. some of it from the property in china. on the other end, we expect brazil and india to develop well. of course, we need to watch on the other end. we need to watch the repercussions of the normalization of monetary policy by central banks in the future. >> are the u.s. and europe starting to look frothy? is that synchronized recovery underpinning valuations? >> i think we can say that starting the year, we believe equities are still a good place to be. at least in terms compared other assets.

at current levels we believe it is a good place to be. but of course valuation across , all asset classes are high. therefore, we focus attention on quality and diversification. >> what are you seeing in terms of trading activities in your clients, in terms of volatility? are we starting to see a pickup now? are you starting to feel more bullish about that? >> january is too early in the quarter, but in general, you expect january and the first quarter to be more active. but in terms of market volatility and realized volatility on financial markets, it is still very, very low. therefore, i don't see a change in the trend from the last six to nine months. if i am looking to 2018, i expect a more normalized environment for volatility than the one we saw in the last two

quarters. >> how do you factor in this move to normalization from the central banks? from the boj, the ecb? and from the fed? how is that going to play in? >> to a large extent, they are anticipated. they are discounted in the market, and therefore a look at -- i do look at the positive side for normalized rate environment. it will create also some benefits to savers and also in general, a normalized rate environment should have positive effects on the rest of the economy. abigail: still to come, more of the week's most compelling conversations. top names in technology and media talk to us from the consumer electronics show in las vegas. and the health care industry is facing challenges in 2018. we hear how some of the sector's c.e.o.'s are meeting them.

>> we need to innovate and create new ways for people to afford medication, even if they have insurance. abigail: this is bloomberg. ♪

♪ >> you have recently put out a forecast of 4% growth in 2018, up from 3.7% in 2017. is this largely due to the new tax package that has just come through congress? >> that number refers to the global economy. as far as the u.s., we are thinking 2.7% is our number for 2018. that is up about half a percentage point. we have seen a pretty synchronized improvement. obviously at different rates with places like china and india growing more quickly than the advanced economies. drivers in the

u.s.? i would say two things. one, and this is a backward looking view, but still relevant in 2018, the change in the impulse from financial conditions. financial conditions were a big drag on growth, and it took a while for the market to start digesting the rates of fed rate increases. that weighed on things, mainly through the exchange rate. that really swung and we have gone from an impact of minus one percentage point on growth to financial conditions to almost plus one percentage point. i think in 2018, given what has happened to financial conditions and have went markets -- how buoyant markets have been, we will see positive impulses for the next few quarters. abigail: that was goldman sach'' chief economist discussing his forecast for global growth in 2018 with bloomberg's matt miller. that was at the global strategy conference in frankfurt.

jp morgan held its annual health care conference this week in san francisco, and our erik schatzker was there to speak to some of the industry's top executives. let's go to eli lilly's ceo. he weighed in on the sensitive issue of drug pricing. >> we have done some work as an industry to try to help patients afford their medication at the pharmacy counter. we announced a program to discount medicines for anyone who shows up at the counter by 40%. if you are in a high deductible plan, a cash payer. we need more of that kind of innovation. as you know, the insurance system is bearing less of the cost of medication, and it is being shifted to the consumer. we need to innovate and create new ways for people to afford the medication at the counter. even if they have insurance, the prices are going up. the final thing is new pricing on new innovation. last year we saw tremendous new scientific breakthroughs. gene therapy. erik: it is expensive. >> it is expensive. you have development processes for a small group of people.

how do we spread out the cost? how do we back value for those and make sure the health care system is paying for something that works? we need more room for experimentation. cms, which sets the guidelines in the u.s. for a lot of that, has been slower than what i would have expected with new frameworks to do that. i would expect more action to allow drug companies to do different things, for instance spreading out payments over a longer period of time. or value pricing, pay when it works. >> indication based. outcome-based pricing. >> we are still waiting for some of those policy moves. >> can you do any of it on your own? >> we do do that on our own. the places it can work are in advantage plans where you have a plan provider for a senior that has all of the cost and they have some latitude to trade-off hospitalization costs for drug expenditures. and in some forward-looking commercial plans, typically on the coast, who want to see a movement towards a value-based scheme. we have several dozen of these,

particularly in diabetes, where we take risk on lowering blood glucose. we get paid when the drug is actually working. >> will the net effect of the repeal of the individual mandate or the elimination of the individual mandate be a weakening of the health exchange system that the aca created? and will it ultimately also hurt companies like yours and others by disincentivize thing healthy disincentivizing healthy people from participating deteriorating the risk pool? >> it will have a destabilizing effect in the commercial market. in our case, no impact, because the individuals we insure, 250% of the federal poverty level or lower, they get 100% coverage.

100% reimbursement. it is not a case where it will cost them anything to stay in the plan. >> how do you see the dynamics of the affordable care act changing over the months ahead? >> i am hoping and we are working to change it, to stabilize it. i think we need to stabilize it. >> how? help.st, the csr's would our recommendation has been to drop the medicaid extension to 100% of the federal poverty level. then put in an exchange and subsidize costs. $20 billion a year. help people understand how to buy insurance. if they move up the socioeconomically, they understand that. there is some bipartisan support for that kind of movement. >> is vertical integration in health care, in delivery management payment the future? >> i don't know. i don't know. clearly, it is being discussed a lot. our view is that at a minimum, virtual vertical integration is important. let me expand on that. aligning the incentives and enabling the suppliers and the

intermediaries to be more aligned toward joint value creation for patients or individuals. that is what we have been all about. an example. we have 500 collaborative care relationships in the u.s. they span 33 states. they are with primary care physician groups, hospital systems. we work with them, sharing information and sharing care coordination resources. nurses, health coaches, behavioral professionals, case managers, etc. we like that model a lot. putting the customer up front and center. driving innovation. doing it virtually by getting the best of both organizations through alignment. at a minimum, we think that is a winning proposition. you have been willing to contemplate and pursue a transformative merger with anthem. there is still a government block. what would it take for you to go down the "transformative road," not with anthem, conceptually?

>> it goes back to a basic framework. does a potential combination of our opportunity create an the ability to accelerate value for the market, deliver better value to the customers and clients on a more sustainable basis, and as a result help the value for your shareholders? before the anthem transaction was announced, we had industry-leading shareholder return. over the last six years, we have delivered 30% compounded returned to the shareholders. that is tremendous. double-digit top line, double-digit bottom line. you have to be open to innovating your corporation. as we are able to layout compelling guidance for 2018 for our company, we will again grow our revenues significantly and earnings per share and invest significantly back in the company. abigail: another gathering of business leaders took place this week at the consumer electronic show in las vegas.

high-profile figures in technology and media took time out for a conversation with bloomberg. starting with sony's ceo. emily: a lot of consolidation happening in the movie business with disney purchasing the fox assets. curious what your strategy is given the increasing consolidation and how you will compete with such a giant. >> i think the industry in the motion picture business is rapidly changing in terms of the its landscape. we need to make sure that first and foremost, we have a strong lineup in our motion picture releases. we have done that with spider-man: homecoming, jumanji, number one in the u.s. blade runner 2049, internationally. we had baby driver. i think we are on a path to recovery in that space. we also want to make sure that we continue strong in the tv production business, where we supply a lot of programming to

non-sony networks. we want to grow the business has as well and ride the wave of the golden growth in the industry. emily: bloomberg also reported that you spoke with the murdochs about potentially buying the fox assets as well. why was that an option you wanted to explore? >> i think we want to make sure that as these deals come into the forefront that we are able to be a part of those discussions. ascertain whether an acquisition here makes sense or not. and make sure that we continue to be a major industry player in hollywood and can continue to explore deals where we feel they could be appropriate as a strategy going forward. emily: has sony considered selling its film or tv studios? >> i think that for now the strategy is, as i said before, to shore up our motion picture business and then make sure that

any of the deals that we may consider in the future that we are in the driver seat and not in a situation where we have to give up control of the assets we have grown over the years. emily: when do you think we will have fully autonomous cars on the road, and how will people use them? >> i think it is going to be down the road within the next four years. i am talking about mass marketing. i'm not talking about having prototypes ready for use. we already have prototypes working very well. it may take three to four years before the regulation allow this to be massmarketed, before we make sure that the system is totally robust in any conditions. i would say 2021, 2022. emily: wow. that's soon. how do you see u.s. tax reform impacting auto demand? do you think there will be a shift towards the luxury segment?

>> i think this obviously luxury activity, supports spending, and supports consumption, which means that i think this is going to be good for the auto industry in general. and the fact particularly that the support and incentives for zero emission cars has been maintained, it is also good news for the development of the electric car. i am seeing it very positively. >> the security issues that have been uncovered here are quite serious, quite fundamental about the way that microprocessors have been designed for many years, decades in fact. it is really important that people understand that as security updates get pushed out to their devices from whichever vendor, it is important that the software gets updated to provide maximum protection against what some bad person might do in trying to exploit these flaws. so it is a very serious issue, but it is one that the industry

as a whole is taking very seriously. it is one we are taking very seriously. we are thinking about our future designs and how to further mitigate against issues such as this. we are working closely with our partners to make sure that our the software mitigations we've developed over a series of months and are distributed, people are installing them correctly and we can provide the maximum safety to any user of our electronic systems. emily: how long before remedies are fully in place? >> i think it will depend on which system, which type of device you are talking about. for some, it is relatively straightforward to update devices. in other cases, there is a vast number of companies involved in the overall supply chain. it may take some time. ♪

♪ abigail: you're watching "bloomberg best." i am abigail doolittle. let's return to our roundup of the week's top business stories. another automaker faces accusations of manipulating emissions data. >> ford has just become the latest carmaker to be accused of diesel cheating. the stock taking a hit. now falling the most since december after bloomberg reported that the company is being sued by truck owners claiming 500,000 of the diesel truck engines were rigged. tell us the details of the lawsuit. >> this is at least the fifth carmaker in north america to be accused of diesel cheating. what does that mean? the carmaker, ford in this instance worked with robert bosch from germany to create an algorithm in the computers so that when the car was tested for its emissions, it would tell the computer that it is compliant with epa standards and

california standards. in reality, when the car is on the road, it is emitting these pollutants at levels almost 50 times higher than legal limits. these are the allegations in court, and the claim is that there are at least 500,000 cars on the road in violation of these standards, and consumers paid almost $8,400 more for these cars than their gasoline alternatives. >> gopro could soon put itself up for sale. the camera maker is set to have hired j.p. morgan chase. the company announced it would cut more than 20% of its workforce and exit the drone business. >> bloomberg has just reported that j.p. morgan has been advised of a potential sale. can you confirm this? if so, how far along in the process are you? >> i can confirm that j.p. morgan is our banker, but we

have not engaged them to help us sell the company. if there were an opportunity for gopro to partner up with a larger organization that could help us scale, scale our brand, our reach to consumers, then that is certainly something that we would consider, but it is not something we are actively engaged in at the moment. >> fourth-quarter profit missed the estimates by almost $1 billion. they were lowered by chip prices. a stronger yuan eroded the value. what is the biggest challenge here for this business? >> the fact that there is a big gap between the estimate and the actual earnings just announced, it means a lot for the company. actually, you would want to blame the memory chip prices leveling off. what i see is the fact that south korea's currency is

getting so strong in the past quarter, it has started to hurt the earnings of many companies. not just samsung but lg. the yuan rose 7% against the dollar in the fourth quarter to be the strongest currency in asia. there is a lot to blame on it, actually. >> they said their belgian rival project either takeover advances. they are pressuring the board open talks on a bid that could value the business as much as 2.6 billion. the maximum payment, 44% more than what the stock is priced on friday. what is the industrial logic here? what does novo hope to achieve? >> this is the world's biggest insulin maker trying to make itself less vulnerable in the diabetes market, which is its main market. this is beefing up its hematology area. it is fairly rare to make an m&a play like this. it has a very large cash pile.

they have clearly done their homework. >> do you have red lines that you will not go over, or are you ready to negotiate? >> our intent is to get into a dialogue with the board of directors and get a deeper understanding of the value it ablynx provides. in such dialogue it is certainly possible that prices can be raised if we get additional information about the value drivers in ablynx. >> the dutch cable provider altese is spinning off its u.s. unit. it will be dealing with the company's $50 billion debt burden in europe. tell us about the plans, what is the intent? >> it is a move creating value for a company that has been struggling because of the european operations. if you look at altice usa shares since the ipo of last june, they have lost 30%.

so, of course, it wants to give some assurances to the u.s. shareholders that he can create value with the u.s. business. he spent $24 billion in the u.s. over the past couple of years buying cablevision, and he says he does not want to stop there, in the u.s. mark: nestle has emerged as a front runner to purchase merck's consumer health unit. other suitors have dropped out of the sale process. merck is looking to divest its food and vitamin is this to focus on pharmaceuticals. why does nestle need this consumer health business? >> it is the maker of nutritional supplements, which is good right now. for nestle, under the new ceo mark schneider, and it has been just over a year since he took over, they have been shifting focus and going more into health

care. schneider is a german health care industry man. they have been looking at these spaces that nestle has not spent much time on earlier. in fact, in december, they did their biggest deal in 11 years when they bought aetrium innovation. a little known supplements maker. now, the price tag we are talking about, $5 billion for merck would be almost double what they paid on their last deal. david: walmart has announced it is boosting starting wages to $11 an hour and paying bonuses up to $1000. america's largest employer is crediting tax cuts for these pay increases. a big announcement because it's a big employer. >> donald trump just gave a million walmart workers a pay raise. they are the nation's biggest private employer, and as they move, other retailers move. you will recall about three years ago, walmart did another

pay hike moving to $9 an hour and then $10 an hour for most hourly workers and many retailers followed in their wake. what is different this time is when walmart last did this, unemployment was 5.7% and now it is 4.1%. >> facebook is making major changes. in a post, mark zuckerberg announced the company will shift users news feeds back to post s from friends and family and away from businesses and media outlets. it is a move that could mean people spend less time on the site. why did he do this? >> he wants to bring facebook back to its roots. over time, the newsfeed has exploded with advertisements and branded content. he really wants to bring facebook back to being a social network. that means they will change their algorithms so it prioritizes posts that spark engagement and responses and back-and-forth conversation. we are seeing shares reacted negatively to this because the implication is that this means less engagement. less engagement means fewer

impressions, and that could lead to a lower ad load. ♪

♪ company announced job cuts for a selected region. it also displays job loss percentage changes and the headlines from stories announcing job cuts. the bottom panel shows how the stock prices react to the announcements of the job cuts. this is a new function. loss . abigail: there are about 30,000 functions on the bloomberg, and we enjoy showing you are favorite on bloomberg television. maybe they will become your favorite. here is another function you will find useful. quic . it will lead you to quick takes. here's a quick take from this week.

>> opec has functioned as a textbook cartel. the 14 members of the organization of petroleum exporting countries produce 40% of the oil used every day, giving the group strong influence over oil prices and the global economy. like a championship boxer who has dominated in the ring for decades, in its more than half a century existence, opec has fought off challenges from new technologies and competition from petroleum discoveries outside of its member's domains. the group is really up against the ropes now. as the u.s. produces record supplies of frack shale oil, and the planet against to embrace renewable energy, to stave off the competition and this prices, opec has cut output. this strategy has worked in the past, but will it work now? here is the situation. production cuts by opec and its allies gave prices a quick boost when they were agreed upon in november 2016, but they did not last. the real question is whether

opec can prop up prices went the u.s. continues to increase production by fracking deposits of shale oil. here is the argument. opec's agreement to cut output includes several nonmember countries, which should help it reading control over prices. some forecasts suggest oil consumption will continue to rise in the next 20 years, which seemingly would benefit opec and its allies. it is unclear how opec's strategy will play out. analysts are divided over whether the cartel will finally succeed in eliminating the supply glut that has depressed crude prices for several years. plus with increased innovation and renewable energy, oil consumption may peak sooner than expected. that could leave opec knocked down with no chance of getting back up. ♪ abigail: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with all of the latest business news and analysis, 24 hours a day. that will be all for "bloomberg best" this week.

thanks for watching. i am abigail doolittle. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered.

leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ david: what was the strategy that you used? paul: i was completely determined to recapture my parents' money that i had lost. david: how does somebody raise $5 billion in 24 hours? paul: it was first come, first served. david: you have an image of being a person that strikes fear in a lot of ceo's. some people are probably afraid they are going to get a call from paul singer. paul: it does not bother me anymore. david: if someone had invested with you in the very beginning, what rate of turn what that have been compounded? paul: one dollar became $160. david: is it too late to invest retroactively into that? [laughter] >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪