♪ >> coming up on "bloomberg best," the week and conversation from the world economic forum in davos leaders in business, economics, politics and finance share their insight and outlook on critical global issues. >> you have markets in global high but we know that these things do not go in a straight line. >> it feels stupid to own cash in this kind of environment. >> i think it is one of the big crimes that we do not talk about. >> high-profile guest address topics of high importance. >> it is important for the future of the city of london. >> we have to face our social

and environmental challenges. >> lives are being saved for very small amounts of money. >> it is all straight ahead on "bloomberg best". ♪ haslinda: hello, i am haslinda amin. from the world's economic forum in doubles, switzerland, welcome -- in davos, switzerland, welcome to us to show edition of "bloomberg best". we have met with the most influential people in the world discussing what they think are some of the most challenging things facing business and society. we have also been keeping our eye on the stories shaping business around the world. starting with yesterday with the agreement to reopen the u.s. government.

>> sanders, duly chosen and sworn, the motion is agreed to. reporter: the senate moving to end of the u.s. government shutdown after three days with a temporary spending bill funding the government through february 8. reporter: president trump has signed a bill to end the government shut down which leaves the dreamers fate still unresolved for another three weeks. reporter: are another -- there are a lot of good people in congress and the senate but the system is broken. -- but the business model is broken. this bipartisanship is a dirty word and it gets you hurt in your primary, if that is the case, then we are doomed as a country. reporter: president trump has long talked tough on trade, putting tariffs on solar panels and washing machines. >> obama had tariffs on the

solar panels. it is not a new thing. i thought it was wrong when obama dated and i think it is wrong when trump doesn't particularly, when it is a -- accompanied by his detection -- protectionist rhetoric. it is bad for the american economy, that for jobs in the united states. >> does the president's decision to slap a tariff on solar imports change anything for you. reporter: for us, it is not going to change our approach. it will not change our direction on develop solar projects. >> were you planning on making investments on that? guest: we still have plants in the united states to what we bought into in december was about 40%, in the united kingdom. so, i do not know how exactly this will change our direction.

>> u.s. treasury rick perry steven mnuchin says -- a weaker dollar is good for us as it relates to trade in opportunities. >> he said a weak u.s. dollar is good for america. do you agree? guest: i think it all depends why. if you think about the dollar today, it has weakened and it has baffled some people. there are two likely scenarios out there. one is what we talked about at the of that, in terms of the surprisingly stronger europe, the stronger rest of the world has now moved central banks into a position where they can start to normalize and raise rates. like we saw in the u.s. in 2014, it was a pretty robust move in the dollar as the fed started that. if that is what it is about, some adjustment, that is fine. the other side of the potential argument is that there is fear and it is a precursor to a protectionism and potential trade wars and causing people to

shy away from the dollar. if that is what is causing the dollar underperformance, it is more concerning? host: the ecb holds steady. mario draghi seeing very little chance of a rate hike this year. the 10 year level in its highest level since 2015? host: how can you be so sure that inflation will come to europe? guest: because we see it in the last two years. if you remember two years ago, we saw a danger of deflation. it is now over there we had the first success of our monetary policy, and it was a message that we expressed yesterday, a message of confidence and patience. we are confident that in the past of gradual normalization of our monetary policy, this

gradual normalization is progressing in an efficient way to word -- toward our inflation targets, but patients, because we are not yet? host: it has been a tumultuous week for the dollar, on wednesday, steve mnuchin laying a weaker dollar is good for us as it relates to trade in opportunities. the currencies short-term value is not of concern at all. yesterday though, president trump said that mnuchin may have been misunderstood, saying -- our country is becoming strong in other ways and the dollar is going to get stronger and stronger and ultimately, i want to see a strong dollar." host: there is so much talk about whether we are entering currency and trade wars. if we are, how much will that complicate things? guest: it is the last thing that the global economy needs today.

we live in a world where things -- interest rates should not be targeted for competitive purposes. let us stick to that. we have seen lots of activity come and i think it is not helpful, the recent statements. >> i am here to deliver a simple message, it has never in a better time to higher, build, invest and grow in the united states. america is open for business, and we are competitive once again. host: he sold america first as america for everyone, and did a very good job i think, of speaking to his audience. he almost appeared to be a globalist in some ways. >> we are also working to reform the international trading system so that it promotes broadly-shared prosperity and rewards to those who play by the rules.

>> i think the people there and people around donald trump will think it was a great decision to go to davos and i think they will be invited back next year. haslinda: still ahead, uber's new ceo discusses the company's cultural turnaround. >> there are no excuses for not doing the right hang. haslinda: and, the biggest names in finance tell us how they see the global economy, up next. >> we have seen the numbers up with growth, but trade even higher. ♪

haslinda: from the world's economic forum in davos, switzerland, this is bloomberg best. i am haslinda amin. getting there read on the global economic climate from the world's financial leaders, what

are they excited about and what worries them? we start with the imf managing director, christine lagarde. >> we upgraded our forecast for 2018 and 2019. the characteristic of that upgrade is that it is significant. 3.9% for both years. second, it covers a wide range of countries, not just of the emerging markets leading the charge, not just the advanced economies. that pretty much across the board but for some countries which are not seeing a capital basis income growing, that is primarily that sub-saharan african countries. when you look at japan, the u.s., turkey, some of the big emerging market economies, we have upgraded very much a cross our range of countries. the only one that did not get an upgrade is the united kingdom. we left it where it was? host: if we see more protection, does it hurt the forecast, going

forward? guest: what we see is growth going up but trade even higher than growth. trade is a significant engine of growth, of reducing inequality between countries and clearly, trade has to be fair and in accordance with the rules and reciprocated. that is the area where people will rally around some of the use of president trump. -- some of the teams of president trump. it is not an issue of being protectionist, because protectionist measures generally do not help trade or growth. looking at the rules, resetting some of the rules eventually, and we have seen that happen in the last 10 years, whether it is through automation or financing, that needs to be looked at on a

regular basis, it does look like the immediate future is pretty good. guest: to put geopolitics aside, there is nothing like leveraging in the system that we had in 26 -- 2006 and 2007. we had prime funds, lbo's overleveraged, hedge funds were much more leveraged than we are today. it was wild. host: in some respects, it anticipates when next question. is there any reason to believe that this part of the cycle, 2018-2019, are going to be the next 2006, 2007? the euphoria before the crash? guest: i do not think so. you need to have the expensive leverage. we are going to have a recession

one day, and when that happens, stock prices will go down. hopefully it will be a normal thing, not that i am wishing for it, but it is going to happen. >> at this point, i am less worried about monetary hollis policy and the realignment for a more natural stands starting in the u.s. and europe and eventually moving to jump in, then i am -- moving to japan. we have markets at record highs, and we know that these things do not come in a straight line? host: you run a big equity shop. do you think that the prices are very high? imagine that i was one of your clients? guest: i think that markets are expensive but they are not ridiculous. if you look at some of the

so-called fang docs, they are trading at very high models, but they have extraordinary growth. the way that you value equities is by looking at the net present and your future earnings and you look at whatever market model there is today. futures are growing and that growth. so, global economic growth, earnings growth, made earnings growth, you will see the s&p reaching new highs. host: because of volatility levels in the market, it has been a tough year in general for investment banks is 2018 expected to be better? guest: if you refer to my comment of taxes come i think it was a huge positive for the u.s. economy and the world economy. if the u.s. economy is doing well, it is important. there will be a lot of investment in the u.s. economy. if the u.s. policymakers want more investment to come in, they will have to be pragmatic.

over all, it makes me optimistic. since the beginning of the year, we have had a rare combination of markets going up, volatility going up. this is a very good conjunction of volatility increasing a little bit and market going up. but you cannot draw too many conclusions from 2017? host: you've had a few weeks now to evaluate the tax bill. how it affects your business, how it affects the competitive environment. what conclusions have you drawn? guest: relative to the place of american business in the world, our competitive business has improved. i think we have caught up to the rest of the world, and i think it is what we need to do to make american businesses competitive with other businesses in the developed markets? host: does it change the competitive environment for your

industry? guest: our industry was a relatively high tax-paying relatively high tax-paying , and now we have converged with other countries. they did a good job of widening out the base, and there is a common rate for everybody. the have equalized the consequences of keeping money overseas versus heaping money home. it has made the system more sensible. so to that extent, we like operating in a sensible them? host: do you believe the united kingdom regulators are looking at the u.s. and ready to relax the rules themselves? after all, brexit is happening. guest: post the financial crisis i think there was a consensus around the major economies of the world that we needed to deregulate the financial markets that do it in a way that maintained parity while speaking across those markets. so that no institution could arbitrage one regulator against

another. i think a lot of important new regulation was brought into the financial system over the last 10 years, and we consistently or i consistently supported a more regulatory environment. but now, there is a new equation to it and its teams like the u.s. is willing to be very much on the front foot in terms of making the u.s. market competitive. barclays is a transatlantic tanks, so 40% of our revenue is generated in the united states . hasof the sudden, the u.s. become one of the lowest tax regions that we operate in. there are a lot of cash on the sidelines.

investors have cash on the sidelines, banks, consumers, and they feel that they are being left out. they feel stupid to own cash in this environment. i think it will be great for earnings and great for the stimulation of growth. we have to look beyond that to say, what is monetary policy going to be? how difficult is monetary policy? so, let us take a look at that. we could look at step one, the blowup stage of everything? host: before we get to monetary policy, how long do you think we are going to enjoy this perfect environment? when i say we, i do not mean just the financial community, clearly it is good for risk assets and earnings, and stock prices but companies are raising wages, doing hiring and investing. some of it is trickling down to the real economy -- how long will people be able to enjoy that? guest: if you look at it, it will be a 12-18 months growth spurt, and then when that is

happening, the central bank will have to tighten monetary policy. >> here we are, financial markets are up three times since the financial crisis. three times. the pool of money sitting in cash worldwide has never been greater. it is a problem. china, 40% of this it -- disposable incomes sitting in a bank account. if you speak to the french financial minister, 72% of all french savings are in a bank account. in germany, no interest. can you imagine the type of inclusion we would have worldwide, if we had better financial literacy, more investing over the long run? the type of financial gains that people would have in their 401(k)? i think that is one of the bigger crimes that we do not talk about, and the reason why i believe we have more momentum because of the money that is

sitting around. >> there could be an alliance between authoritarian states and these large data-rich i.t. monopolies that would bring together a nascent system of corporate surveillance within already developed systems of state-sponsored surveillance. they may even result in web of totalitarian control. the likes of which not even aldus huxley or george orwell could have imagined. the countries in which such unholy marriages are likely to occur, first, or in russia and china.

the chinese i.t. companies in particular, are fully equal to the american ones. they also enjoy the full support and protection of the president xi jinping regime. the government of china is strong enough to protect its national champions at least within its borders. ♪

♪ haslinda: welcome back to number is, i am haslinda amin at the world economic forum in davos. uber has been under a global microscope, mired in controversy as well as burning cash.

the new ceo has set aside -- set his sights on changing the culture and tearing the company towards profitability. he discussed his goals with bloomberg editor in chief john micklethwait. host: i think you lost $4 billion last year. is profit one of the things you would like to get? guest: at some point, we have to become profitable. that is one of the plans? host: do you thought have a goal -- you have a goal to be profitable by 2022? guest: i think we will be laughable by then? host: would you like to go down a bit maybe 2020? guest: i do not want to name a specific year, but this is a business -- the ridesharing business can be profitable within three years in riyadh we will continue to make very aggressive invest in an building out our economy.

we think that is a terrific economy, building out new technologies such as uber elevate, where near-term profitability is not a goal, but long-term growth is. we will look at that but as a company, we will always be a company that makes things go fast and take risk. host: what about this culture change, you talked about making money, but not at all costs. do those two things? guest: i do not think profitability and culture are the issue. the company in the past was willing to make trade-offs as it related to how we did is this. and i think we are guilty of hubris. we were guilty of thinking that we knew better than others, and i think what we know now nearly, is that -- clearly is that

breakneck growth can hide cultural issues that there are no excuses for not doing the right thing. as a management team, we are typically talking about the trade-offs that you have to make and we have to be patient sometimes, because working with government regulators sometimes takes longer. but in the and, you build a more lasting business. haslinda: coming up on bloomberg best, much more from the world economic forum in davos. leaders in government speak frankly about the most pressing challenges. >> with brexit, we would lose the most important voice in terms of the liberal economy. haslinda: and bill gates shares his perspective on the role of the u.s. in addressing mobile problems. >> i am in there saying, come

on, let us keep up the good work. haslinda: this is bloomberg. ♪

♪ haslinda: you are watching "bloomberg best." review of the week income conversation at the world economic forum. i'm haslinda amin. many of them spoke one-on-one with bloomberg television. let's start with you cape prime minister theresa may who sat down with an exclusive conversation with john mickelthwait. >> obviously, the news is brexit. he said he could imagine a deal where financial services could be somehow elongated. only if you went back on things like human injustice and things like that. your red lines.

will you be prepared to trade at all on that in order to get more access to business, especially finance, the biggest industry we have? >> the city of london is hugely important in the u.k.. it is also important to the global financial center for the european union and around the rest of the world. the future of the city of london, i think london is an attractive place. people sometimes use the word ecosystem of support around the financial services interest-rate in the united kingdom. >> would you be prepared to try to keep that access, which you be prepared to do it macron said which withdraw some of the red lines, in order to get more access? theresa may: when i am working for is in december, we reach successful negotiation on the first phase of our brexit talks with the eu. what i am now working for is looking at the implementation period. in that time, which will enable to adjust to our new relationship after we have left the european union. i'm clear that we want to develop a deep and special partnership, and company has a free trade agreement. we want to ensure that we can continue to see this financial services, ensuring the city of london retains its role. i've been talking to financial services, as i have done previously. they are positive about the advantages the u.k. has. i want to build on those. to make the u.k. even more of an attractive place. >> what would you ask in return for access to financial services? >> i would like to see the united kingdom remain in the single market. i respect that. rocks we can negotiate something that is not very different to that? >> what kind of agreement do you think we will get? a canada plus?

>> it is difficult to speculate. i think it will be a new agreement. an agreement between the united kingdom, so it is difficult to compare it to norway which is a relatively strong -- small country. i think it will be a specific agreement for the united kingdom. as ireland, we want that to be

as close as possible. we would have a norway plus, but i think we need to get into the detail of what that means. there has been sometime since the referendum happened. we need to get down and dirty with the details. >> if you were to give me two

priorities for the eu, what would they be? >> how to elect brexit or with brexit and the u.k. leaving, we will lose the most important voice in terms of the liberal economy. free trade agreements. i have always found theresa may and david were fighting with me and others to do that. we are four times smaller than the u.k. we are the biggest one in terms of completely supporting the agendas. we are working with other countries in the eu to maintain that voice of liberalism. it's crucial. it has an impact on the u.k., on their economy. it will also be an impact on the eu. secondly, how do we maintain the necessity of reforms within the

hat. then we get talk about all sorts of new structures. the most important thing now is everybody is doing what they, as a country, needs to do in terms of fiscal sides, the stimulus in terms of making sure their economy gets back on course. how worried should people be about that? are they someone who could take it out of the eu? >> i think the risk -- not only for it early -- four italy, who should be close to derail the mechanism. in the last years, it brought us almost -- to the dynamic of growth. the issue in italy is we are on the right track. we have to continue in fiscal responsibility, in decreasing of our public debt, and we have to face our social and environmental challenges. the real mission and commitment of the government is to try to

ntinue to have the confidence of the voters and to continue this reform process after the elections. they if we stop the process, -- because if we stop the process, the results we reached in the last years, and we reached them with sacrifices of the community, the workers, the enterprises, these results would be at risk. it is a national interest to go

would make you change your mind about your membership? >> if europe is part of the solution. this is the question i need to get answered. i'm not so sure the euro is over with their issue. i myself was an expert in optimum currency areas.

♪ haslinda: this is "bloomberg best." i'm haslinda amin. we continue looking back at the world economic forum in davos. from big picture issues such as gender equality and finance, to specific topics like china's infrastructure program. our conversations covered a lot of territory. one story we delved into was the progress of negotiations under north american free trade agreement.

>> the mexican economy, they have much better -- done much better in 2018.

the growth rate was higher than expected, around 2%. i have to tell you, although we are still not done, we believe we can find solutions for these negotiations that will accommodate the three countries involved.

>> so you are sounding a note of optimism? >> i always say i am not an optimist. i am a positivist. which i believe working on something, you can get it done. a negotiator cannot be an optimist. never. >> would you look at negotiations, what is the percentage that nafta gets ripped apart or it is renegotiated to a point that president trump says yes, we are still in? >> our plan a is we will approve nafta. i think the way we get to that as being the outcome that should be expected of is we say, nafta provides 9 million jobs in the united states. it obviously has been very positive for mexico. it's positive in canada. our supply chains are interrelated. the current agreement is working. what we all recognize is it was done 24 years ago. there are places we can improve. >> yesterday in davos saying a weak u.s. dollar is good for the u.s. economy. are you worried we are seeing currency wars research? >> i hope not. is right that the softness of the dollar is helping u.s. exports, u.s. manufacturers reassert their position. to the extent that helps to answer some of the questions in the u.s. about the global trading system, make americans feel the system is fairer to them and ease the pressure around the trade system. i think that is a good thing for all of us. >> the pound has been depreciating. would a weaker pound help u.k. exports? >> the u.k. is a very open economy. a weak pound has two effects, it helps our exports by raises the

our imports. one of the challenges we have had has been a weaker pound has led to higher inflation and a stagnant real wages. that is driving some of the challenges that we face a home. getting that inflation rate down and a rising pound will help to do that. it helps to drive increases in real wages. that is good for our economy and good for us. >> you have committed something like $20 billion in china's growth. why has china become a strategic market for you? >> we have committed to financing of about $20 billion from here up to 2020. the road i believe is a formidable issue coming from china. we are talking about threats to globalization. it is good to see things that are happening in the east, the commitment to have the transpacific alliance on trade delivered in a few months. a lot of good things are coming from china. the road may be the single most important positive driver for globalization in this century, if well executed. >> the imf says the economy will

grow 1.9%. the government says it will grow 3%. are you more bullish than that? >> i think 3% is a good number. i think this number is being revised up by a good number. including the finance ministry. the economy is getting better and better and better. actually, the numbers increase by the second half of last year because the market was stronger, they economy was giving signals that it would perform better. everything now, 2% is a solid number. >> any chance of the boj tapering this year? >> i am a bit cautious. as you know, we are going to have the presidential election, next year, the end of september. also, the administration has to increase. which means we would like to keep the japanese economy, which means that he wants to -- it depends on the bank of japan. the bank of japan and the government is now appropriately communicating quite closely. having said that, it will last for a couple of years. >> we saw demonization take place. we saw them implement it. those came at a cost of growth. what does he need to do right to get to 10%? >> you have to look at the things he did as perhaps laying the ground for dramatic growth. this -- to be honest, it is a a lot of people snipe that it has slowed down the economy. how about that old adage of

taking one step back for two steps forward? when he realized was to get the resources we need for reform and high-growth, you need more people paying taxes. you need more people coming into the tax, a miserable faction -- fraction of people pay income taxes. what he was doing was demonetization more than technical exercise, he was signaling we need a clean way of life. we need to move people into the grow. the second one, even the goods and services tax brings a large number of smaller businesses into the tax night. india's economy is in or miss when you come into the sector. if they can tap into those resources, you look at the money

to invest for the growth you are talking about. >> can you actually, within the whole industry, make money in bonds? >> it is a challenge. it's a real challenge. the key is flexibility. f i have ever heard. >> when you have a bond fund, all he can do is on treasury. -- all it can do is make treasury. it can go along, short. it has the flexibility to move by geography. it has all of those tools. it has multiple levers to add value. you can see that coming through. the bond funds which make money in this environment are the ones with the flexibility. >> i would go into emerging market bonds.

e a leader among women in the

american banking industry. what needs to be done for there to be more people like you? finally, a woman running a large american financial institution. >> the more women in senior management, the more likelihood we will get somebody to be the ceo. you have to have succession that includes women. i do think we have had a lot of think we have had a lot of change. ryan, -- brian, when he became ceo, he put in place a management team, 40% of our executive management team are women.

>> the balance of hard power, soft power, the u.s. has the ratio in terms of hard power. of whether you grow state department of the same time you grow the prodefense market, even the decorative dress even though the death of -- even though the documentary sedate citizen rally. it is part of these budget discussions, the question of do you grow the state department at the same time you are growing the defense budget? even as secretary of defense has been eloquent in not wanting to give up your soft power tools. >> i would not say it is unique.

the relationship with the united nations has been happens -- has its ups and downs. keep certain things from the go? to be -- how far do you health, lives are being saved for very small amounts of money. you can aim to lift up the country, and get rid of the disease. it is not a commitment you are stuck with forever. these ones, even in this atmosphere, make a lot hot and -- make the cut. >> that's the area where i have .hosen

i understand that money can be very well spent. i am in the saying, come on, let's keep up the good work. it has been a fascinating week in davos. you can find more conversations and panel discussions from the world economic forum at bloomberg.com, along with all the latest is this news and analysis 24 hours a day. that is all for "bloomberg best." thank you for watching. in demos, i'm haslinda amin. this is bloomberg. ♪

♪ carol: welcome to bloomberg businessweek. i'm carol massar. we are inside of the headquarters in new york. the next generation of digital currency. america eyes energy independence, and an inside look at one of london's most secretive members clubs. all that ahead on "bloomberg businessweek." ♪ carol: we are here with the editor in chief of "bloomberg businessweek." joel webber. a lot of good stories this week.