alix steel is off. we are heading straight to davos where erik schatzker is sitting down with steve schwarzman. here in davos be with steve schwarzman. good to see you. as the world knows the president will be here later this week. he is expected to arrive on thursday. he will be making some public remarks on friday. you are a friend and supporter of the president. what do you expect he will say and do while he is here? >> that's always a tough one for sure. you find him equally unpredictable. >> there is a certain unpredictable quality. i have heard they have been working on this speech for some time and the person working on it has done some very good speeches for the president. erik: who is that? >> i don't remember his name.

i think it will be a pretty polished sort of thoughtful speech as opposed to just off-the-cuff. there is a lot of anxiety. you may have detected it already about the kind of tone that the president is going to strike. what kind of tone would you like to hear from him? >> i think he's basically economically focused. with theconsistent world economic forum. he has spent a lot of time in that area whether it's on tax reform which was successfully and whether it's getting rid of regulations and other things to boost economic growth. i don't know what is in this speech. i would assume there will be a bunch of time spent on those

and the goodness that can happen when you get an economy growing at a much faster rate than we did for the previous eight years. erik: blackstone is a global investor. you travel the globe almost incessantly. is there a risk to the president and the united states if he were to beat the america first drum too loudly? >> i think it has been pretty loud. i don't know that you could make it louder here. my sense is that wouldn't be exactly why you would come to davos. i think there must be a more presentation of the same type of theme and at the moment the u.s. is doing quite well.

is china and the other asian countries like india and so is europe. we have a simultaneous expansion going on. erik: you were a big proponent of corporate tax reform. we got a lot of it in the tax bill that passed just a few weeks ago. not everything the trump administration did in its first year can be considered a success. what would you like to see the president and the white house do differently in the second year of his term? >> i would like to see them address infrastructure scenario that both republicans and democrats want to do something with. it's a $2 trillion estimated fall short in the united states and if you travel globally you would feel that missing $2 trillion when you return to the united states.

i think that's an important thing that they should be doing. one of your long-standing policy goals is to open retirement savings accounts to alternative assets. is that something we have to see this year? >> i don't know. i think it's an important thing. all around the world -- i just met with somebody from japan this morning where they have very low interest rates and they have significant needs to fund their retirement benefits and they have a shrinking population so it's even worse. there is a need for higher returning safe kinds of investments. the alternative class does that. for some reason people think it's not safe. data thato empirical supports that unfortunately for the people who believe that. right now the american retirement system is underfunded

. in some cases very significantly. there are very few ways to solve that problem. governments put in more money or employers do. or you earn more or you run the place cheaper. higher returns for the best antidote and so it seems logical to me that these types of things will change over time. erik: not necessarily now. >> i can't call the month or year. erik: you have a dialogue with the president. i don't. >> i just know that when you have a problem that's going to hurt virtually everyone retirement you better do something about this because it's in the best interest of the normal person in the united states. erik: you were waiting for the

passage of the tax bill before deciding whether it makes sense for blackstone to convert from a partnership to a corporation. the tax bill has been passed. what are you thinking now? >> we are always thinking fortunately but we can't comment on anything at that time. erik: why not? >> because we don't make our policy on bloomberg as much as we like bloomberg. which way -- based on what we have seen in the tax bill perhaps you can share with based on what we have seen now argues more for such a conversion and what argues against it? >> you have lower tax rate right now. we pay ordinary income tax on our ordinary income and so it would involve converting to a c corp. which would double tax you on certain other --

it could solve one of the big issues you have raised for a long time which is valuation. >> it could. obviously we take a it could sot these things. there has been a major change and so we logically work our way through the numbers and see what the trade-offs are. erik: how long before you do make a decision? >> you are a persistent little person. we will take our time and take a look. erik: clients keep giving blackstone more money and asking the firm to do more. that's the reason you are raising an infrastructure fund. the saudi's offer you $20 billion. what's next? i don't talk about what's next and the reason i don't talk about what's next is in finance there are no patents and when you lay out where you're going it gives other people a chance

to think through whether they should be doing the same things. i'm very careful about that. is thatg i would say the firm itself is doing something really fascinating. we used to only do the highest .eturn products in the world ranges in the 18% to 20% over 20 to 30 years. now we are providing product that institutions and individuals want in a 10% to 12% kind of range. erik: and they're willing to give you their money for longer. >> and they are very happy to get that kind of return. know you takeg i great pride in its blackstone's reputation and in the credit market blackstone's reputation is taking a bit of a beating over a deal one of your businesses did with a homebuilder in new jersey.

did you know about this trade before it became such a controversy? >> we were aware of what was going on. building company and we have financed them repeatedly. it was a complex trade that was put on by hedge funds who were trying to short or go along or whatever they were doing. it didn't work out in the interest of one of those funds who is very unhappy. companyther hand -- a not a hedge fund is very happy and their board of directors is very happy and they are going to get money for business purposes on a favorable basis. how this understand

all works. it is mysterious to other people. as i understand it, they agreed to default on some of its bonds could provide it with a different form of financing. even the neutral parties in the market say that that deal and the way it was structured puts the cds market in jeopardy. is that the kind of trade you want blackstone to be doing? >> all i can say is we checked us onaw firms who told this situation this was something that was completely within the normal bounds and and we of what was done proceeded. we have a very happy client and the only person who is unhappy is apparently this one company that bet against it. and we proceeded. i can't stand up for every investor in that sense. there is a whole technical part

that goes along with this deal and our lawyers have told us this is like a fine thing to have done. agreed toy's lawyers the board of directors agreed and they got significant moneys to expand their company and that's part of the reason why finance exists. end it there with the explosions being set off in the hills to trigger the avalanches. great to see you at the world economic forum. it's steve schwarzman. chairman, ceo and cofounder of the blackstone group in davos, switzerland. isa: thank you, erik schatzker. notartzman saying it does undermine the cds market and the ofy person upset is a couple hedge fund investors. interesting interviews from davos. let's get you caught up with the

actions right now. one of the biggest leaders. ftse 100 up behind that. s&p futures dipping a bit on pretrade and nasdaq futures up just a touch before the market opens. the dollar was getting somewhat of a bit today and bitcoin actually falling yet again. at one point it fell below $10,000 the first time since early december. german ten-year and u.s. 10 year yields both dipping a bit with the central banks promising to always be there. that bloomberg dollar spot price getting a bid after some pretty steady weakening. jpmorgan came out with some news today saying they were going to be putting a lot of their money into their employees.

$20 billion in investments over five years. they also said they are going to anst wages from $15 to $18 hour. we are seeing that wage pressure we have heard so much about. let's turn to johnson & johnson. they just reported fourth-quarter results. the stock is ranking positively in the news this morning. shares are trading higher in the premarket. we welcome dominic caruso joining us from headquarters in new jersey. good to have you here. >>we welcome dominic good morni. thanks for having me today. expectationsat the of earnings per share. congratulations. that's going backwards. you are driven largely by pharma. what are you expecting in 2018? have a strong fourth

quarter and overall strong 2017 and that positions us very well moving into 2018. as you mentioned pharma continued to perform well and by the way products within pharma continued to grow. new products are being filed for approval and we expect two new approvals next year. that led to the pharma growth we are already experiencing. --a: can you give us a sense you said you're going to see a benefit from the tax overhaul. you didn't give a sense of what you are going to use the extra money for. jpmorgan is using it to increase salaries for employees. what about you? we expect to increase our investment in innovation. world's largest and most diversified health-care company the best that we can do with the money that comes to us from the very favorable

treatment for overseas earnings and lower tax rate is two invents more in innovation -- to invest more in innovation. we're going to invest more incrementally in innovation than we ever have before. lisa: does that mean that you are going to be making more acquisitions after the deal or that you are going to be hiring more people opening more plants? what does that mean and how much money are you talking about? >> we think it means both. we have always increased our innovation spending both internally and externally over the years and we expect to do that incrementally going forward. about 50% of our growth comes from external innovation. that does mean specifically investments more in the u.s. in our r&d organization and we are very proud to be able to do that. david: what about possible sales?

sign a care has said they are in talks with you about buying one of your units. where does that sand -- stand? don't comment on rumors or speculation but we did announce that the diabetes business is under review for various strategic options. there's nothing to report on that just yet. david: where are you in margin? what are you looking at in 2018? in 2017 we experience a slight decline in our pretax operating margin but that has to do with an incredible increase in our r&d investment which i said we are going to do more of going forward. level7 we had the highest of r&d investment ever in our history. that was offset by some lower tax rate and gains from divestitures that we are always able to put back in the business to invest for the future. in 18 we expect margins will actually expand positively. david: how much of that r&d is

going through a telly and? how much is johnson & johnson as such? in 2017 we had incremental investment in r&d of greater than 16%. a few percentage points has to do with the addition of the actelion deal and we spun out and we exercised an option to acquire one of their products which was promising in our view. some aspect of the growth was the addition of actelion but most of it was our own internal r&d including the new deal we for therapy for multiple myeloma. lisa: can you put a dollar figure for how much your r&d spending is going to increase due to the tax overhaul? >> i can't put a specific dollar figure on it. we are going to look at all opportunities. it will be a significant

increase. to the mostp significant amount of r&d spending we have ever done in our history and we expect to expand on that going forward. david: thank you for joining us, dominic caruso johnson & johnson cfo. erik schatzker is sitting down with bp ceo bob dudley. erik: good to see you at the world economic forum. just the other day saudi arabia and the russians appeared to agree to be willing to cooperate on production supply management in the oil industry effectively be on the end of this year. how important is that? >> it doesn't surprise me. people didn't think they would aoperate in the last year and half -- they have. it will always be a debate but it doesn't surprise me at all. i think it is important. erik: a half -- they have. why? world needs an oil price

range. it doesn't need to be too high or too low but it needs a range. having open lines of communication and cooperation makes sense to me. erik: can the extension of those production cuts counter the impact of the growth and supply from the shale patch? >>range. it doesn't need to be too high or too we will see the growth ad supply in the u.s. 10.5 million barrels a day some people are saying. it is also slow to ramp up this time. there is financial discipline happening here. i think it will happen. i think he will have another factor which is if the price is high like it is now it will dampen demand a little bit. there will be a lot of factors to watch on the price of oil is also affected by the dollar. the lower dollar is bringing the price up. erik: one of the criticisms of hasshale business until now been that much the production was undisciplined. oil was being pumped at unprofitable rates. at 70 dollars is shale of viable business that can generate a return for shareholders? >> no doubt about it. there is really good shale.

the heartland of these areas certainly can. erik: oil at $70 is going to generate more cash from bp than it has seen in years. how are you going to deploy it? >> we are going to be careful and everybody should be including shale producers. prices wen on these can repeat a cycle. i think demand is continuing to come up. we are not planning on a continuation of these prices for all of 2018. expecting?are you >> we are in the $55 to $60 range. erik: that's what you think is prudent. >> expecting? >> we have said to our shareholders we're going to keep capital discipline and cost discipline. in terms of spending we are going to plan on the 55 to 60. was in thewhen oil low 40's you and i talked about the challenge at opportunities of perpetuating some of the cost savings that companies like

yours and others were able to achieve during the oil price collapse. at the time you said you were hopeful that you would keep about 70%. how is it going? >> the only place we see it oilfield inflation right now is in north america. the costs are being maintained. it's not a one-size-fits-all around the world. profitableuch more on average is a $70 barrel of oil now? >> we are going to take our breakeven below 50. we want to drive costs down below 40. by the end of the decade and i'm sure we can do that. we will see some spikes up and down. of supply and demand and bring the stock levels down to reasonable range and some coordination is happening i think we're going to see u.s.

shale will be a shock absorber on the upside and opec will be a shock absorber on the downside. accost calculus hasn't changed that much outside the united states. why is that and? is that likely to change? ? >> in the u.s. you've got onshore and certain rig crews wherere made for onshore there's a shortage right now. a lot of activity. you go around the world it's not the same around the world. it got offshore equipment. some oversupply. there is still downward pressure on a lot of our costs. erik: bp just reentered the solar market. why? >> very different way. at one time in nearly 2000 bp had third-largest solar company in the world. they have been commoditized. for us it is solar development companies combining that with natural gas offers around the world.

does the president's decision to slap a tariff on solar imports change anything for you? actually read the details of that. for us it's not going to change our approach. it's not going to change our direction of developing solar projects. erik: were you planning to make investments in the united states that you may reconsider? >> we still have plans in the united states. what we bought into in december was 40% in the u k which was the largest solar developer in europe and has projects in the middle east and india. that's the focus of that company. i don really know exactly how this will change our direction. seriously are you considering this italian solar sale? we willfor let the helicopter passover. they are keeping us safe. it goes by the acronym rtr.

>> i've read about it on bloomberg. themeam may be talking to but for the amount of money that was reported i wouldn't know about it. point $8 billion that definitely crosses bob dudley's desk. bets you one of the need to make to ensure that bp remains a viable energy company a quarter century from now? got lots of experience in an noble energy. we still have very large window and biofuels businesses. we didn't lose the expertise after the deepwater horizon. we've got people that know about this and we haven't made really big bets the we are scanning and screening everything. we are only going to make bets like that if it's economic and this solar investment is economic. we are not going to be behind in this. thing for bp is to get

its balance sheet really strong and then we will be able to do whatever we think is the right thing to do. erik: the balance sheet isn't quite strong enough yet. >> we still have a narrow fairway. the company is growing now quite strongly. but let's give it some time. when you say bp is not going to be behind in this give me a sense of -- what are your ambitions in solar? how big do you need to be not to fall behind and to remain relevant in that industry? the manyis just one of industries in her noble. the cost curves are coming down. developing projects for us. i think an offer of natural gas with renewables is really important for us in the future with countries and other things because they can swing back and forth between the technologies. does that suggest -- i want to ask you one last question. donald trump reopening the arctic national wildlife refuge to drilling. is that a good idea?

will bp participate? >> we have a contract signed in 1997 with chevron and they are the operators. as he has lifted that we actually have leases in the an hour area. if you have ever been to alaska you have giant mountains, crystal blue streams entries up there. it's really a continuation of the coastal plain where all of the north slope reduction is from. this can be done safely with an extension of what's there. i think it is perspective and i think alaska would like to develop their resources. we haven't made any decisions on it. great to see you. thanks for spending time with me. it's bob dudley. here at theo of bp world economic forum in davos, switzerland. davos we will go back to

with the year ahead lunch with a one-on-one with uber ceo dara khosrowshahi. >> we believe in our mission. we believe in a service being available to consumers everywhere at a reasonable cost. 2018 is to get distractions and get the company back to business. get the company back to normal. there's a lot that we have done in the past six months as far as bring in new investors. driving a new culture of norms were doing the right thing period comes first. we havea lot that gotten done. this is a company that knows how to execute. a service. mobility as a service is something that is universal and needed in the world and i just want to get back to doing business. said true believers. normally they are the last

possible people where you are able to change a culture. can you explain about that? they understand that mobility as a service bringing the cost of transportation down. making transportation services available to anyone and everyone and partnerings with cities to be a solution to traffic and pollution. that is a mission they'll believe in. -- they all believe in. i think to some extent the crisis the company has gone through is a benefit because everybody at the company knows now that we need to change. that we need to break with the past as far as the way the company was run. we need to go from growth at any and to responsible growth growth in partnership with other players out there. that's clear. now i've got to get the company down to the normal execution of

building great technology and i think we are going to get there. you talk about execution is profits one of the things you want to get? >> profits would help. at some point we absolutely have to become profitable and that's part of the plan. >> do you think you should be profitable by 2022? >> i think we will be profitable before 2022. the business itself -- >> do you want to come back a bit closer? 2020? >> i don't want to name a specific year. business, the ridesharing business can be profitable within three years. we will continue to make very investments in building out autonomy because we think that's a terrific opportunity. for building out new technology such as uber elevate where

not aerm profitability is goal that long-term growth is. -- will john: to what extent does that drive fight against this culture change? you talk about making money but not at all costs. dara: i don't think that profitability and culture are the issue. the company in the past was willing to make trade-offs as it related to how it did business. hubris,it was guilty of guilty of thinking they knew better than others. i think what we know now clearly is that breakneck growth can , that therel issues

are no excuses for not doing the right thing, and that you do have to make trade-offs. as a management team, we are specifically talking about those. sometimes,be patient because working with government it sometimesd takes longer. maybe what we went through was necessary, but we are here. we can control our actions from this moment onwards, and everyone at uber from this moment onwards, wants to build a great company not only in terms of growth, but in terms of the kind of company anyone would want to work with. hangover from last year, all the regulatory programs -- problems and all of the cases against you, six criminal probes. dara: lawyers are lining up.

john: which ones do you fear the most? dara: listen, i think that all of them are serious issues. my response is that we are going to be transparent and take responsibility for our actions in the past. there are that certain circumstances where there was smoke but no fire. i think as a company we have to defend ourselves and work within the appropriate frameworks. my goal is to just get beyond this. john: some of the stuff like pricing policies go to the heart of what uber is, or am i wrong? dara: i think they do, but there is a way of being strong but transparent at the same time, and that is where we have to take the company. dara: when you talk to governments john: -- when you talk to governments privately,

do they talk differently than they do publicly? dara: i think they are honestly a bit relieved with how we are engaging with them, because i think the engagement is now real. i think they feel like we are out there, we are genuine because we have learned our lessons from the past, and i think that we can take for example, the data that we have in terms of traffic and in terms of movement of our drivers and riders, and use that data to partner up with cities in order to solve congestion issues, because congestion does not help anyone. it wastes enormous amounts of time for consumers, it hurts the environment, and i think we are aligned with cities to partner with them in a fundamental way to solve these problems. these are conversations that a number of regulators and cities have wanted to have with us for many years. i think we are really engaging

with them at a depth that i think is going to create a real win-win. john: do you think you were too confrontational before? dara: yes, i do. i think the company was pushing growth and listen, any innovator to some extent, the innovation present questioning practices, it is about breaking things. we just went a step and a half too far. what i want to keep hopefully is the best of both worlds, which ,s the spirit of innovation etc., but the responsibility of partnership. we don't know better what -- then you. we are going to work with you and have dialogue and our respect -- and respect for our city partners, and continue to

take risks and do daring things. i think we can accomplish that. john: you can imagine this audience is a collection of city officials, and this is the year ahead conference. depict with the years ahead will be like. how far is driverless car is going to go? you talked about the idea that there will be flying cars in 10 years time. what do you think transport will look like? dara: we think there are three keys to transport and where the industry is going. autonomous, electric, and shared. i think all three are necessary in order to get to the next level of city planning, etc. cities, 1/5 of the space is taken by parking and storing cars. you need autonomous, electric, and shared.

i think it will take some time. true autonomy for every single use case is some ways away. what we bring to bear his are developing autonomy, and we will have autonomous cars on the road, i believe within the next 18 months, not as a kind of a test case but as a real case. time, we willof bring our's hotness -- autonomous transportation and feather it in with non-on-time is transportation. john: what does feather it in maine? dara: if you were for example in phoenix and you make a request to go from a to b, which is what you do with uber, 95% of cases we may not have everything

mapped perfectly or the weather may not be the right weather, or there may be an accident on the road, or you may not have two to three ways of getting there, or you might say, that is not an autonomous use case. for 5% of cases, everything will fall into place. we will send an autonomous car. the user will be able to pick, do you want an autonomous car, and we will be able to service that. 15% to will go to 10% to 20%, and as our computers and algorithms learn more and more about what it takes to drive in a city in a real-life situation, and every minute of every day, that driver, that computer will get better and no phoenix better and better. in five years, we will have the perfect driver in phoenix.

we will have to reach rain that driver in every single city. rain --have to -- reach retrain that driver in every single city. wait.l have to john: will a child born today ever need to learn how to drive? dara: no, i don't think so. john: so within 20 years from now -- dara: i don't think so. i heard a couple grounds. 1.3 million people die from car crashes every year. 1.3 million people die from car crashes every year. that does not count an estimated 20 million to 50 million people injured. this is actually a public safety issue. if you look at cars, 96% of cars are sitting there not being used.

it is a huge amount of pollution that is caused by these cars being on the road, and a huge amount of wasted time. the safety is there, electrification is key, and sharing these platforms is going andllow us to be much safer also put our assets where they add value. john: when you first came in, i remember you sounding more skeptical about self driving cars. dara: the choir has spoken and i'm listening. it is pretty exciting technology out there. it will be a hybrid technology for some time. john: what about flying cars? dara: that is a great project we are working on called uber elevate. it is about battery technology. john: it would have helped a lot of people here. dara: i wish it was available. we will launch it here, if we can.

battery technology allows us to have multiple rudders on planes or helicopters. s that are much smaller will be much quieter and much safer than helicopters. if you add sharing into the equation, you can get the economics. we think within five to seven years, to a place where normal people would think about taking these flying cars, that will be the beginning. then it is about scaling. we are working with a number of partners. john: do you think the regulation all flying cars -- regulation all flying cars will be easier on driverless cars because you need to deal with existing roads, and flying cars you are essentially going into unconquered space? that i think that mayors

are forward thinking understand the traffic and pollution are a real issue. i think flying cars can be a significant solution to traffic issues in cities. these cars, to start with, will be very specific. there will be highways in the air, specific routes these flying cars go on. they will not be able to take you to your backyard and land. there will be sky ports, specific routes that you go on. if you build a regulatory framework that has that kind of structure around it, i think you get to a better solve. john: can i drag you back to the real world? last week, he said over should existinghould improve markets rather than going to new

ones. dara: the fundamental strength of uber is the global's -- global scope we have. john: everywhere for everyone. do you want to make it some places for some people? dara: no, we like everywhere for everyone. it is much sexier than some places for some people. i think the global scope our company brings is important. building able to technology we can amortize essentially everywhere in the world is hard, but is part of the fundamental value that we introduce. i would look at uber very much as a global brand. that said, we are going to look at all opportunities but if this point, we are leaning forward. 2018 will be a lean forward year for the company. john: i am not trying to create more boardroom tension, but it would appear that softbank is

idea. on a different dara: softbank is an important shareholder, our largest. many of our shareholders have opinions over what is the right thing to do. the governance of the company will be at the board, and we will have those discussions at the board and set our long-term strategy and acute. john: -- execute. john: one of the things that uber played a role in is the sexual harassment question and everything to do with that. do you think you have sold that part of the culture? d think that this time this is a real revolution and it will stick? dara: i think that what was happening at cooper was serious -- uber was serious. what uberat while, , thishrough was difficult

was probably one of the best things that happened and it started a movement that is incredibly important. i would be reticent to say it is solved, but it is not an indent make issue within the culture of issuempany -- endemic within the culture of the company. i think the company took harsh and appropriate steps to make sure that kind of behavior, it is clear that is not accepted in any way, shape, or form, regardless of where you are or if you are a great performer or not. i think we are at the right place for uber as a company, but i think in general, we are not where we need to be in terms of women in senior positions, making sure that we are welcoming of women in technology, and we help women really build their careers within our company. there is a great bottoms up energy there, but we are not

where we need to be and we have a lot of work ahead. john: you talked about the top performers. is that, looking back and looking forward, if you had to give lessons to other people looking at this issue perhaps more seriously than before, it is a really bad issue and i am thinking about the media industry. is giving top performers more room for maneuver, or more discretion than people thought, do they need to be treated the same as everyone else? dara: i think they need to be held accountable. one of the valuable lessons i got early in my life was through jack welch. he said, it is very tempting to allow top performers to miss behave in any way, but for me he was talking about being aligned with the ceo. sometimes you will let them get

away with behavior that is not the right behavior because they are so good. what jack told me early on is it is the top performers that are problematic culturally, that are the most dangerous as they have followership within the company, because people look up to them. whos like, the dumb person is bad culturally, he is not the problem as everyone says that is a dumb person so who cares. it is the smart person who has islowership, so it incredibly important for the top performers to be held to account more radically than anyone else, because they have followership and they have to set the example. for me personally, that has absolutely guided how i have managed -- expedia was a company that had excellent cultural values, and one of the first things we did at uber was to go out and reset our cultural values, and we call them norms.

it is not just these values that people put on the wall and stare at, it is about behavior. we set out to change behavior at uber, and i think the company was thirsting for it. , and istarting on a path believe it will be a positive path. john: i hope you will not regard this as a cheap shot, but you talked about smart people who have followers. travelers would seem to be the epitome of that. do you think of them being in that category of people jack welch was talking about? dara: travis was ceo and he had incredible followership, and he was held to account. he is no longer the ceo of a company, and he is a board member. he is a big investor, so he is absolutely going to play a part on the board, but we have also been very clear as a company that we do have to make a break

with the past, with how we behaved as a company, and to some extent, with the new ceo being a different kind of ceo. in the end, you have to be held accountable. i think travis was held accountable and he is a board member, and a constructive one. john: if you look around the world, where do you see the next competitor to uber? you have lyft breathing down your neck. where else do they come from? dara: as you were of -- move into a world of autonomy, the position of car manufacturers, of google, who is developing waymo and waymo autonomous technology, you will get a lot of players interested in the space. a lot of people think about uber and ridesharing as a significant enterprise, and it is, but the fact is that we account for less

than 1% of miles driven on the road now. when autonomy comes in, that number over the next 10 years will be closer to 15% to 20%. we are not yet a true alternative to car ownership, and i believe that as you bring autonomous and you bring the price of mobility down and make it available to everyone everywhere, then we become a real alternative to car ownership and that opens up the market to us and also opens us up to competitors. john: is google at the forefront of those competitors? dara: google is one of many. they have developed strong autonomous technology, but what thisink is exceptional having autonomous technology and the network under one roof, which allows us to use autonomous in a practical way. john: what about the car companies? which of them has gone furthest

to embracing the world you are describing? dara: basically, all the car manufacturers are working on this technology. we have a terrific art ship with a number of them such as volvo -- partnership with a number of them such as volvo and toyota. we have been listening to john mickelthwait in davos, speaking with the uber ceo. that is a fascinating discussion. he thinks they will be practical in three years and he thinks they went to bank far too fast fast, and heo thinks autonomy is coming, just not as last as we thought. real autonomy will be down the road while. only account for about 15% to 20% of the cars on the road, rather than 90% to 100%. david: that is so much more than

now, a huge growth for uber and lyft and others. lisa: he is trying to toe the line between being a rock star and getting enthusiasm going for the company again, and not looking like a cowboy, which is what his predecessor was. i want to get you caught up on where markets are right now. we do see that the dax, off of some of its earlier highs but still solidly in the green. the major at ibex, amazing game, or the 9%. nasdaq futures up. s&p futures down just slightly. flip up the board. right now, we will be back with you to bring you the latest on trade. from new york, this is bloomberg. ♪

david: here is what i am watching today. president trump decided he will impose tariffs on solar panels and washing machines, big decision he will sign today. this will be the first real step he has taken to close down our borders to trade but it might not be as big as it claims to be. lisa: there is a relief rally and korean solar panel and washing machine makers. shares actually rising after this came out because traders have built in expectations of some sort of tariffs as high as 35%. they came in at 30% and will be phased out over five years and going down. david: the phasing out is really important. this is a particular, seldom

used aspect of the 1974 trade act which says if there is a sudden increase in imports, a country can take action to keep that down for a time so their industry can catch up. it is temporary and is provided for in international trade agreements, so it is not as confrontational as what he could have done. lisa: there was a piece on the bloomberg talking about the winners and losers. the winners were listed as qingdao higher company. also first solar. the losers, american workers because they accepted -- expected thousands of layoffs. a potential loser is the investment company in renewable energy which can be viewed as a crackdown. david: the question is, what comes next? -- they have people on

the department of commerce because the government is back to work. your husband is back to work. lisa: he has always been to work here it in every left, but now will probably receive a paycheck. it has exposed some divisions within the democrats and hardened the lines on immigration. david: and coming back february 8. lisa: it is going to be fun. david: coming up in the next hour, we will head back over to davos and hear from william , a managing partner of a big force in private equity. this is bloomberg. ♪

♪ david: getting tough on trade.

as the government gets back to work, president trump clamps down on solar panels and washing machines. davos.in. roche -- in taking the crown, netflix shoots the lights out in the third quarter and says there is more to come, taking its market cap above $100 billion. daybreak,""bloomberg i am david westin along with lisa abramowicz. lisa: netflix has a bigger capital than amazon. david: did you watch "the crown?" lisa: i did not, but you are helping boost their market capital. , leadings solidly up european indexes. s&p futures down just slightly and nasdaq is up heading into the open. some news about specific

companies, j&j up about 2%. they are off the earlier highs, up less than 1% -- 1% after reporting better earnings-per-share. verizon was up about 2%, despite an earnings-per-share miss. tesla was up about 1%. gains, 1.4g on those percent, with signs that elon musk was going to extend his tenure at the helm of this company. he will not get a salary or bonus, just the dream. david: time now for the morning brief. at 10:00, the senate banking hearings on fed nominee marvin goodfriend. at 1:00, president trump signs into law the new duties, and after the bell, continental and united report their earnings.

kailey leinz is here with first word news. : the battle over the u.s. government shutdown has ended but the fight over immigration has just begun. senate democrats broke the impasse by agreeing to a vague process -- thomas that college -- congress what address immigration. -- would address immigration. president trump has taken his first major protectionist move one year into his term by imposing tariffs on imported washing machines and solar panels. south korea condemned the move in china called it a misuse of trade measures. in japan, the central bank maintained massive monetary stimulus and kept their price and economic forecasts unchanged.

the boj said expectations for inflation have stopped falling. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. leinz.iley this is bloomberg. david: want to head back over to davos, switzerland where erik schatzker is joined by william mcglashan. you. thank he is ceo of the rise fund. good to see you. william: nice to see you. billion forised $2 the rise fund, a landmark number in the short history of social impact investing, and you completed half a dozen deals. william: nine deals with a few more pending. erik: how much have you committed out of the $2 billion? william: about 25%. erik: how quickly do you anticipate spending the remaining 75%? william: our normal pace would be over a three-year period, but

this -- but there is no fixed number. millennials, entrepreneurs, governments, corporations are drawn to the idea of working with a fund that highlights the impact of their business, and partnering with our founding board members. it has been quite a great sourcing fund. erik: interesting. how are the investments working out? william: it is early and hard to prognosticate. we had our first version of quarterly reporting on the impact side, so they are performing well. the businesses are performing well. erik: on the financial side. william: on the impacts side, it was for the first time a compelling opportunity to see quantified impact generated over that time, and presentable in a manner we can present to our

investors. it was the first time we got to see it, and it was remarkable. erik: so you are already at the proof of concept stage? william: we are still proving it. it is early days and we need to stay humble and deliver on the promise, but there is a lot of promise. erik: you mentioned the founders and got a lot of intention -- attentionb. no is on your board, richard branson. what do they do? of each the whole idea of these founding board members is to have deep capability and a particular ceramic -- sector. is deep into education and the environment. melanie hobson also deep in education. erik: and finance. william: exactly.

each of them has a sector where they had unique insights and capability, and most of them represent a large platform of people and talent that are accurate -- actively engaged. capricorn and impact media, these are impact -- individuals who bring all that. he brings a $20 billion industrial platform that is doing a lot and renewal bulls and agriculture, and deep capability -- renewables and agriculture, and deep capability in india. erik: let's talk about the sectors, or industries. you have set seven as targets -- education, financial services, growth infrastructure, telecom, food, food in a -- media,

and agriculture. you have been active in some but not so much others. why has it proved slower to find investments? william: it is not actually slower. there is sort of an organic pace to the way you invest, and interesting opportunities show up in a given sector. we are about to announce more financial services investments. and these are global. we are about to announce a very exciting platform in africa, in nigeria, our first rise investment in nigeria. they come in waves and over the course of a fund, i am often asked how much are you allocating to a specific sector? we do not allocate, because that would be an artificial focus on a sector that may not map to the investment opportunities, so we want to deliver great financial

returns an impact. erik: are you a believer in crypto and blockchain? william: it is a function of the investment opportunities. we are seeing deals now showing up in the portfolio for growth and rise that have dimensions of blockchain the drive the capability of the platform. investor, whatth do you see in cryptocurrencies and blockchain that others are willing to dismiss? william: where blockchain is so interesting, there is bitcoin and the currencies themselves, and you can debate whether bitcoin will be a store of wealth. erik: what do you think? william: as an american, it is tough to imagine, but if you grew up in summer like nigeria. erik: or venezuela. william: the potential for a currency that is not governed by fiat is enormously compelling.

i honestly do not prove to be an expert and i would not prognosticate on whether that is highly likely are not, but as an american with the dollar being effectively the global currency, it is hard to imagine. blockchain is a methodology that has lots of different applications, and there is a lot of word going on in many different sectors that are easily -- utilizing blockchain. erik: a couple of questions about tpg growth. -- let a justppen preface this by saying, uber has been one of tpg growth's most successful investments. william: that is right. erik: what has to happen before uber fully recovers from the damage done by the management style under the former ceo travis, and the company culture he created? , it is: i think dara

obviously a new dynamic with a new leadership team and the new governance model that just came into effect when softbank investments. there is now the framework for -- it takes time for culture to change. erik: measured in quarters or years? william: i don't know. the company is doing a very good job of executing on its core business. it is working very well. this is a company that is and will be a great company. it is in its core business. culture is hard to change and images even harder. i often thought if rise existed at the time we invested in uber, it would've been nice to have part of that investment in rise because the impact of uber is extraordinary. when you look at statistics around drunk driving, it is a

job creation. erik: quick question before we will- a child born today, they need to learn how to drive? william: it is funny you say that, because historically one of the key issues in our office is getting a parking pass and associates today do not ask for one. i am not sure they will need to drive a car, much less have to know how to drive one. good question. erik: great seeing you here. thank you for taking the time out. it is william mcglashan of tpg growth and the social impact fund the rise fund. david: coming up, president trump clamps down on imports of solar panels and washing machines. we will discuss that next. this is bloomberg. ♪

kailey: this is bloomberg daybreak. i am kailey leinz. proctor and gamble can tell any new board member that things are not that bad. counter a push for more radical changes at the world's largest consumer products company. beat estimates at johnson & johnson and they posted sales higher than expected. they will take a one-time charge of 13.6 billion dollars related to the recent corporate tax overhaul. verizon expects up to a $4 billion windfall this year from the corporate tax overhaul, giving them a boost during a challenging time. there fourth quarter process --

profits missed estimates. they are investing heavily in 5g. that is your bloomberg business flash. david: president trump has long and ittough on trade looks like you may be taking some action, putting tariffs on solar panels in washington -- washing machines. -- and washing machines. we welcome michael mckee. this is a special provision that says if there is a surge of imports, we can protect an industry, and it phases down over time. onhael: it puts terrorists imports from around the world, so not necessarily one country, although the administration makes it clear they are targeting china and south korea. slapped tariffs on -- in 2012 and they

moved their asian production. south korea, with the washing machines, they are more targeted. david: will this be good or bad for solar power in the united states? michael: yes. you try to figure this out, it is very confusing, and you have to get into the unintended consequences. there will be may be more jobs created at solar cell producers and it may bring in jobs from overseas, but there are producers from china who are going to build here who may not. there are solar panels, and there are more installers and manufacturers. they argue fewer people will buy solar installations. lisa: trade is complicated. a lot of people are trying to dig into this initial trade salvo president trump has issued with an eye on china, and trying to figure out where we are going. what we see more severe shots

fired in this trade scuffle, or is this it? michael: a lot of people are afraid this is the opening gun in the trade war, that the president is determined to make an issue of china. the white house sees china as an adversary rather than a competitor. every indication we get is that they are going to ramp this up. they have two decisions hanging out there that will be significant, one on imported andl and one on aluminum, the whole issue of whether these are national security industries, these are coming down the pike. they are looking at chinese intellectual property theft which is a big issue. david: they are much more hostile to the trading environment, because what they did yesterday is provided for in our agreements around the world. a country can temporarily impose these tariffs. is anotherat

question, what does donald trump want to do about wto? he has talked about pulling out of it which would hurt the global trade system. tariffs imposed yesterday were imposed by george w. bush in the early 2000's, and china took the case to the wto and one bank, and they tookon, or the tariffs. lisa: has there been any response or china? michael: they are taking a look at this. they are probably taking a broader look at where the administration is going from here, but there have been some warning shots fired. they imposed stricter conditions on imports of soybeans. the experts say the chinese would likely target congressional districts in the united states with anti-chinese

representatives, and try to concentrate the pain and let them know that china has some power in this. david: thank you so much for being here, that is michael mckee. mna's blockbuster start to 2018, we will look into the prospects of growth. this is bloomberg. ♪

david: we are only three weeks into 2018, and there has are ready been over $152 billion of mergers announced, the highest since the technology frenzy in 2000. we asked dominic caruso about what it could mean for them. : we have always increase our innovation spending internally and finally over the years, and we expect to do that

incrementally. we are going to continue to do that. that means specifically investments more in the u.s. in our r&d organization, and we are proud to be able to do that. david: for an early read on the breakneck start to the year, we welcome ed hammond. what a new dad needs. moment.et is lit at the everything seems to be coming together. the mergers are happening sort of at pace. we saw a little bit of evidence that this might happen toward the back end of last year with a strong q4. david: how much is because we know what the tax laws will be? ed: obviously, the clarity was a lot in helping people get over the line for deals.

the kinds of deals you are seeing, these are not high risk deals. sanofi,s, if you take this is a company that has been needing to do a big m&a transaction for a long time, so there is a lot of logic. lisa: there are also accusations they are vastly overpaying, giving the high equity valuations. you have some seeing this m&a boom and saying it reminds us a lot of 2000 since we saw a big rush of issuance, and we know what happened after that. is this the preceding factor that is going to lead up to the next downturn? ed: it is a great point, and we are seeing these very high premiums. if you look at celgene, it is a 91% premium, one of the highest in the biotech industry. there are some question marks.

a lot of the deals that has -- that can be done have been done. if you are a company that wants to acquire investors, you will have to pay up. i am not sure the deal is being done on high risk. so peopleuite tight, are not seeing the deals being out of the box, unexpected trades. david: let's talk interest rates. plots m&a activity against the 10 year yield. the 10 year yield is in blue and as it goes up, mna comes down. -- m&a comes down. how concerned are we? howeverhtly concerned, where we are in the m&a market, gathering pace. i think we are going to see more.

there is a ton of deals people have been waiting to do, waiting for clarity, waiting for trump to say this is what we will do with taxes and people coming into the u.s. lisa: treasury yields are still very low and borrowing costs are low. it is a great time to do this because you can pay for it with that. -- debt. are we seeing a lot of debt financing behind these transactions? ed: the debt markets are wide open and the banks are desperate to lend. because equity values are so high, companies are doing mna &a witheir own stock -- m their own stocks. the other trend is likely to mark 2019 -- 2018 into 2019 is convergence. at&t, time warner, very large mna transactions where -- m&a

transactions where they see a threat. with: is there any pattern regard to the sector? we saw a few drug deals yesterday. ed: we always see a good run on biotech earlier in the year. we see a fall off after that. david: ed hammond, thank you for joining us. coming up, we will hear from deanna mulligan live from davos with erik schatzker. live from new york, this is bloomberg, and that is dollars. davos. ♪

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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. lisa: this is "bloomberg daybreak." i'm lisa abramowicz. let's take a look at markets, germany leading european industries, gain at three

quarters of a percent. mixed open drumming down to the open in the u.s. we will get you caught up across the asset classes. will movement in the two-year yields, up three basis point. the euro losing against the dollar. a little bit of strength for the dollar against the canadian loonie. david: headlines from outside the business world. ailey: president trump has signed a bill that will end a three-day partial government shutdown. not capitol hill is expected to fight over immigration for the next three weeks. senate democrats agree to a deal from mitch mcconnell, they gave in on the spending bill and mcconnell has agreed to address demands that the congress protect immigrants from deportation. the u.s. and turkey stepping up their war affords, over -- of w ords, over fighters armed against the u.s.

u.s. weapons shifted to the kurds would eventually be used against turkey, but the u.s. says that the turkish attacks distract from the state. and the most active volcano in the philippines spewing ash again today, more than 50,000 people nearby evacuated. the volcano is about 210 miles southeast of manila. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. david: back of to the world economic forum in davos where we deannaik schatzker with mulligan, president and ceo of the guardian life insurance company. erik: this is your first time at davos. deanna: good to be here. erik: they are a bunch of investors.

is this the great restructuring of the life insurance industry? deanna: i've been in the industry for a long time and there is always a great restructuring, but fortunately for me i am working for guardian, life insurance company of america and we are 158 years old. we are owned by our policyholders and we work for them, so restructuring is not a part of our game plan. erik: how is the competitive landscape changing for you? deanna: as you know, insurance is in the later stages of being disrupted by technology, but we believe it is going to happen and if you look at the statistics, the early disruptors tend to have about three times faster profit growth, and two times faster wage growth. we are looking to be in that category. we are working on a lot of initiatives to be able to disrupt ourselves, so to speak. erik: how do you do that without cannibalizing yourself? deanna: we are working on a

number of interesting technologies. a lot of people are afraid that technology is going to replace them and we are working with our people to encourage them to work with technology. for example, our back office recently had a robot play date, where we had some of our phone acquired their own robot, so they could understand what technology could do to help them serve customers, and where it might not be there yet. we are doing a lot of experiments, a lot of test and learn, facial recognition technology to help us with underwriting, for example. four blockchain to help with the cybersecurity -- or blockchain to help with cybersecurity. and everybody is taking classes in agile. erik: you hit on one of the focal points of the debate over innovation and it does revolve around the degree to which technology will replace people. you cannot be too high balanced,

the way that you did things in the past and try to preserve jobs that should not exist in a more coming can you -- more, can you? deanna: you can't, but i think that people can be retrained. erik: you do not think that in 10 years you will employ fewer people? deanna: we are growing and we have almost doubled in the eight in termsave been ceo, of profit, in a time where it has been difficult for insurance agencies. we are doing some very interesting things. for example, we are using general assembly to come and keep the actuaries -- data analysts. we are looking ahead to how we can redeployed people. erik: given the fact the industry is going through restructuring, if not the great restructuring, do you see opportunities for guardian to grow and expand in ways that are not organic? what i mean, by buying stuff you think you would like to add to

your portfolio capabilities and services? deanna: absolutely. we have been growing organically and in organically. we are in the health care business, in the dental business, and we are big in the absence management business, not a lot of people know that. we have been growing inorganically, we have gone now for 25 mine customers. -- million customers. erik: if we are going to talk about m&a, what type of appetite do you have as ceo to grow the company in that fashion? deanna: what we are looking for is acquisitions from which we can learn and we have a strategic acquisition fund, where we have taken small stakes in companies that have cutting edge technology that we think we can use. we are concerned about, concerned is the wrong word because it should be a positive word, we are excited about the future of health care. health care impacts our business and we underwrite mortality.

so we've been very conscience of how long people will live in the future, so that we make the right pricing decisions. we actually have some doctors employed to help us evaluate future medical technology and one of the ways we have done that is through partial acquisitions and a portfolio stakes. erik: any new product lines you would like to get into that you are not in right now? deanna: i think that we are in the businesses that we want to be in, but we are always open. when business we are in that people do not really understand is the immediate annuity business, the payout annuity business, it is different from the variable annuity business and we are very concerned about the retirement crisis in the u.s. with one in four americans having saved nothing. we feel it is our social responsibility to help educate the public about retirement and help provide products in the retirement space. one place we would really like

to innovate is retirement. erik: you mentioned annuities, are immediate annuities affected by the sort of best interest standard that the state of new york has been talking about for life insurance and annuities? deanna: there is discussion about the center standard in new york and we have felt like we have always worked in the best interest of our clients, so we are for working in best interest and we can work out the details of what that means, but our philosophy for 158 years has been working with clients. erik: it must be difficult as a ceo in your industry to navigate the changing winds the labor department passes, the fiduciary standard, the new government suspense and the fcc is working on their own fiduciary standard and we do not know when or if we will see it -- - is that challenging? deanna: we have been here for

158 years and we plane had to be here for more and we continue to act in our policyholders' best interest, we will always do the right thing. erik: it does not matter what the government does. deanna: we work with regulators and we want to be seen as having a good reputation and working on the side of customers. i do not want to say it does not matter what the government does, because government is important, but we want to be on the right side of any regulation that comes up. the way to do that is the focus on doing the right thing. erik: you are one of the few women in a leading role in the insurance industry, why are there not more? deanna: since i've become ceo i think there have been five more women ceos in the fortune 500, the fortune 1000, and i expect even more. we have quite a few women on guardian who are coming up to the ranks who have an exciting future. erik: given who you are, you do, but what will it take for other insurance companies for the rest

of your industry to become more diverse in terms of gender and race? deanna: the other companies are working very hard on becoming more diverse in terms of gender and race. erik: you are confident about that? deanna: i am confident about that. the pipeline may not be as big as we would like it to be, so we are focused on providing insurance -- on providing internship opportunities for women and minorities, so we can bring them up through the company. they are very highly sought after in the industry, so we need to just make the pipeline wider. erik: have you achieved equality in terms of paying compensation between men and women? deanna: yes, we did an internal study on that recently and we have. erik: congratulations. thank you for spending time with us. deanna mulligan, president and ceo of the guardian life insurance company. we are in the swiss alps, back to you. had a coming up, netflix

great fourth quarter and it has pushed its market cap over $100 billion, up with goldman sachs and qualcomm. more on their plans for 2018, coming up next. as you commute in you can tune into our college from 7:00 a.m. until 9:00 a.m., and from 9:00 a.m. and till 10:00 a.m. bloomberg surveillance can be heard in washington dc and across the united states on sirius xm radio. this is bloomberg. as we go out, we will show you davos. ♪

lisa: -- >> this is bloomberg daybreak. we are in the hewlett packard

enterprise green room. coming up, the hilton worldwide president and ceo. we go now to washington with a special guest, mark short, the white house director of affairs. you have been a busy man these last few days. i want to start with a tweet from the president, nobody knows for sure that the republicans and democrats will be able to buth a deal on daca, everybody will be trying with a focus put on military strength and border security. dems just learned a shutdown was not the answer. let's go there, how will we avoid having this repeated in february what we just on january? >> i think, honestly, we were making progress on negotiations with daca. the democrats had moved significantly in understanding

the border security requests. when they heard border control -- patrol say that here is where we had the biggest lapses, they were beginning to accept that the president's proposal makes sense. our side was accepting the request to expand the population that would receive legal status, those in the daca program, between 16-36 and who have work permits, the mike trout said say thathe democrats there were a lot of people afraid to register and we needed to include them too. so we were making progress before the democrats decided to shut down the government. i do not think we will be there again in february, we will make significant progress in the next few weeks. and we need a budget caps to make sure we get the government funded for the next two years. david: specifically on the daca deal, what would make the deal?

i have heard from chuck schumer as well as from gutierrez from chicago, they are saying, ok, there can be a wall. it sounds like they are willing to do that, how big is that? how much money do you need to get appropriated for that southern border security? marc: the request for the next seven years that the customs officials have put forward is about $33 billion, but that includes the technology that the democrats have traditionally been ok with. that is a multi-your request. here is our concern, the democrats have a voted for wall funding that is authorized, but it is a clever game because you authorize it and never appropriate to dollars. let's not play the game again. if we are going to vote to support what we think is needed for physical barriers, let's make sure the money is appropriated. lisa: there has been a lot of drama around the government shutdown and there will be a similar amount i suspect with respect to the debt ceiling,

does this suck the air out of any effort to kind of get some infrastructure a bill on the docket for this year? marc: i don't think so, infrastructure is a bipartisan priority into something the administration will roll out in the next couple weeks. the president will make it part of his state of the union speech and i think we will be off and running. all the other issues are important, but they have deadlines, so i think the budget cap, the debt ceiling and daca situation will be intense, but it will be something that over the next six weeks will happen then the spring will be in infrastructure battle. lisa: you say it will be a bipartisan effort, but we are reading articles about the animosity between the parties and even internal battles. have we gained any ground in bringing people together, or have people gotten so far apart that a bipartisan bill is looking impossible? marc: i think we can find bipartisanship. we had it last year, when we had

the continuation of the three months of dr, and the debt ceiling where there was a deal struck with nancy pelosi into chuck schumer. people know that we need the infrastructure package, and we need to resolve the immigration issue and i think the president can make this possible. david: you have given us cents on how a deal could be made with border security and daca, given the money is appropriated, but what about the budget caps? is there a deal? i understand there was a difference of opinion, the republican saying we need to increase military spending and we do not want to increase -- the democrats want to say dollar for dollar, so is there a deal? marc: i think we are very close to a deal. the democrats said they did not want to move anything unless it was altogether, so they want chip, plus the disaster help from the hurricanes, plus budget caps and docket altogether.

their position was, if they are not altogether none will move. but we are now past that. there is no reason we cannot move forward on the budget caps, now that we have an agreement to bring up the daca bill in february. i'm going back to the hill today to continue the conversation with republican and democrat leadership staff. lisa: how involved has the president been in the ongoing conversations and negotiations? marc: very involved. last thursday there was a vote in the house and it looked like it would have trouble. there were members of the conservative freedom caucus that fell that we would needing to stop this. and the president said, get on board, because if we shut down the government it does not help leverage. he helped to get it to the house. on the senate side, he was engaged in conversations with leader mitch mcconnell and he helped to put together the strategy over the weekend of

what our communications would be, what essentially, if democrats were going to take hostage 320 million americans who were paying taxes to solve the problem for a legal residents, we would not negotiate for that. and this is where we find yourselves. david: let me bring up the deficit, something we do not hear about anymore. the hawks, i cannot find any in washington. getting through all this, saying we get through it, what happens with the deficit? $1.5 trillion and i understand you think will be less, but something if it amount of deficit because of tax cuts, other spending cuts that will be waived and the caps will be lifted, so are we worried about that? marc: we are worried. america is bring about foreign dollars, as we said, by having a one-time repatriation rate. i think it is helpful and i think we will generate growth.

i am excited about where we are going on that front. but you are right, the deficit and spending habits of washington dc are something that need to be addressed. as we look at the budget caps deal secretary mattis said, i have been put at a disadvantage by the resolutions over the last several years and i need a plan, so if you allow me to plan, then democrats say we need a higher defense spending number, and that only continues to add to the deficit. you are right, it is something we need to address more seriously. lisa: how big could be infrastructure bill be in dollar terms? marc: that is why you see the team pushing for public and private partnerships, saying if there is a portion the public can put florida that will be leverage for the private sector to come in and put more dollars available into the ever structure projects. that is at the root of why we are pushing for these partnerships, the deficit concerns. david: thank you so much. you do not have much time these

days, so good of you to take time with us. coming up, netflix pushing market cap over $100 billion and more on their earnings, coming up next. if you want to check out tv , you can click on our charts and graphics and interact with us directly. live from new york, this is bloomberg. ♪

came out with a earnings and is worth more than $100 billion after it reported a knockout fourth-quarter and said that they will get stronger and the new year. paul sweeney, the man we always turn to when we need to know anything about media. tell me about netflix, it is better than i expected. increasepite the price they put in, still we have blowout numbers for subscribers in the u.s., which is surprising because the market is ensuring,

but now they are looking at international markets and that has been really strong. david: they have been promising that and it has been lackluster the last couple quarters, but now they are really coming forward and through on the international credit paul -- on the international. the: as they ramp up investments, they need the growth from international markets. the u.s. market is approaching maturity. so we see this across the board, latin america and india in particular. lisa: not to be a debbie downer because shares are up in pretty shade -- pretrade activity, but burning through $4 billion of cash this year, up from $2 billion last her, so why does nobody care? paul: the bulls are running the show and the story is simply that yes, they are burning through cash and they are financing their budgets with debt, but the story is long-term they continue to add subscribers

and that will generate revenue and free cash flow, which will pay for the programming, which is $18 billion off balance sheet, that will be funded as long as they continue to grow. lisa: and they have to sell more debt this year. paul: absolutely. david: what about skye? there is trouble in london. paul: it could be interpreted as a negative ruling from regulators, but it opens the door for rupert murdoch to be able to create remedies, maybe the sale sky news to get the deal done. the stock is trading up and i think expectations are he will eventually get the deal. if he does not, disney with a purchases fox, will get it. david: they could sell it to disney and it would not be the crossownership anymore. paul: that is right, so there are remedies in the interim that can get the deal done. when they by fox they have

indicated that they will likely pursue and by the remainder of sky. said that hastings the deal is a good idea with disney. paul: it is acknowledgment that disney needs to go direct to consumer. you can never have too much content, and that is what bob iger's is buying when he is buying 21st century fox. david: paul sweeney, thank you. coming up next, "the open." doingo of equities jonathan ferro, right here on bloomberg. ♪

jonathan: from new york city i'm , jonathan ferro. 30 minutes until the start of trading. this is the countdown to "the open." ♪

jonathan: coming up, the president keeping to his promises, imposing tariffs on imported solar panels. and kicking shutdown politics down the road, wall street picking up where it left off. earnings fueling enthusiasm, netflix with a subscription surge. so goes the story. and count on to the opening bell, 30 minutes away. futures a little bit softer, down by a 10th of a percent. call it three points. and the treasury market finding a significant bid, yield at three basis points and 261 on the u.s. 10 year. let's talk about twitter on a five-day losing streak, sliding again, the stock down as twitter announces the departure of the coo, resigning from his position as the chief operating