♪ david: coming up on "bloomberg best," the stories that shaped the week in business around the world. turnover in washington. comings and goings shake up the trump white house. >> donald trump has obviously decided that skill set, notwithstanding, it is important to him to have people who agree with him. >> at the end of the day, the president makes his own decisions. and if he decides that you are not going along with his program, you are fired. david: goldman sachs sets the stage for a ceo succession. china plans new frameworks for financial regulations. broadcom's blockbuster bid for qualcomm gets blown up. >> you have to look at this as a chilling effect on m&a. >> this notion of broadcom as somehow a chinese company is nonsense.

david: trade is a trending topic. distinguished guests share important insights. >> you need a normalization of access between countries. it is called fair trade. >> i think all of this talk about trade wars is overdone. >> i don't think president trump for the u.s. administration will do anything ridiculous. david: and, canadian prime minister justin trudeau insists his country will keep pushing back against protectionism. >> we will continue to make these arguments in a firm but polite way because we are canadian. david: it is all straight ahead on "bloomberg best." ♪ david: hello, and welcome. i'm david westin. this is "bloomberg best," your weekly review of the most important business news, analysis, and interviews from bloomberg television from around the world. on friday last week, it was reported in the wall street journal that lloyd blankfein

would step down as ceo of goldman sachs by the end of 2018. blankfein immediately brushed off the report via twitter, but on monday, a move by goldman brought the succession story back to the fore. >> more clarity on the line of succession at goldman sachs. david solomon is now the sole president and coo at the firm, putting him in line to be the next ceo. harvey schwartz is stepping down. >> 15 months ago, goldman named two co-chief operating officers, and after 15 months, the board obviously made a decision that david solomon will be the next ceo. our best estimate is that lloyd blankfein will step down in 2019. that'll be the 150-year anniversary of the creation of goldman sachs. clearly, david solomon's strength is on the investment banking side. he is head of the area with good growth and one of the best corporate rolodexes around. i mean, the relationships

between goldman sachs and corporations and governments is as strong as it can get. the challenge and opportunity is for goldman sachs to better leverage those corporate relationships to do business across the firm, not just investment banking, but also in -- on the trading side. >> let's be clear, this is still lloyd blankfein's firm. lloyd blankfein is going to step down as ceo when he wants to, on his timetable. we just know now who his clear number 2 is, and it will be up to the number two to grow goldman beyond what we know of it now. >> broadcom ceo meeting with treasury officials today. his goal was to address u.s. government concerns that his bid for qualcomm threatens national security. >> it sounds like it went well, from a broadcom perspective. they were able to make their case to cifius as to why they would not be a threat to national security. i think they talked about investments they have already made in the u.s., and that they will continue to make that would be positive from a national security viewpoint.

vonnie: donald trump sent shockwaves through the technology industry yesterday after issuing an executive order blocking broadcom from acquiring qualcomm. the president ruling that it threatens to impair the national security of the state. is this the end? >> there is no appeal process. once the president weighs in and blocks the deal, that is generally it. >> the thing is, you find me a company these days that has any global footprint and doesn't have any chinese connections. this notion of broadcom is a chinese company, it is nonsense. they are not a chinese company. they are a company that has a legal address in singapore for tax reasons, but they are essentially a u.s. company. most of their business is here. this concept of them being a chinese acquirer, and i know that is what trump and a lot of people in d.c. are saying, but it is hogwash. vonnie: president trump

announcing his decision to fire secretary of state rex tillerson and replace him with cia director mike pompeo. the president spoke about this major shift to his national security team earlier this morning. president trump: we disagreed on things. when you look at the iran deal, i think it is terrible. i guess he thinks it was ok. >> it is amazing he lasted this long. he disagreed with trump on almost everything important -- the iran nuclear deal, the paris climate talks, whether to talk to north korea, even the saudi blockade of qatar. so, there was issue after issue after issue the president and rex tillerson did not see eye to eye, and when that happens, the president usually wins. and now, rex is out the door. >> donald trump has obviously decided that skill set notwithstanding, it is important to him to have people who agree with him on foreign policy. and mike pompeo has developed a very close, personal relationship with donald trump, so he is now going to be secretary of state, assuming he is confirmed by the senate, and he probably will be. >> broadcom officially dropping its bid for qualcomm after

president trump's order to block what would have been the company's biggest deal ever. the company issued a statement saying, "although we are disappointed with the outcome, broadcom will comply with the order. radcom -- broadcom will continue to move forward with its redomicilation process." where does it leave all the individual semiconductors now? >> you have to look at this as sort of a chilling effect on m&a. what was so striking on the part of the president is we don't even have a deal, and the problem the government raised with broadcom buying qualcomm has nothing to do with broadcom's nationality. what they are concerned about is broadcom's business model. they are worried they will gut r&d spending, and that would put -- hamstring the company in a race for 5g technology and hand the competitive edge to huawei. that raises questions on what will be able to get done going forward. >> prime minister theresa may has announced the u.k. will expel 20 russian diplomat's due

-- as retribution for the poisonous gas attacks on the ex-spy and his daughter. prime minister may: their response has demonstrated complete disdain for the gravity of these events. >> may is trying very hard to be very firm. she has her party behind her. at the same time though, from what we've heard from analysts in russia, these measures look a bit soft. >> a big chunk of the diplomatic presence from both sides. each have about 60 diplomats in the other capital, so it is a substantial reduction. may said it is the biggest such expulsion in more than 30 years. so far, analysts have said this will not really affect the markets. there's not likely to be broad sanctions. the result is to be an amount of relief. >> the president selecting larry kudlow to be his top economic advisor, and he has gotten straight to work, pushing a tough stance on china and promising a new phase of tax cuts. wall street weighing in on gary cohn's replacement.

>> larry is a confident guy. he is thoughtful. >> we are not looking at something quite different, not that simple anti-china and trade tariffs. that is not larry kudlow. >> i think he is trying to be a force of moderation, but at the same time, he just cannot go in there and say, we need free trade and forget about tariffs, given the administration's perspective on all of this. but at the end of the day, the president makes his own decisions. if he decides that you are not going along with his program, you are fired. >> he is an articulate advocate for free trade, but i think his job will be to refine the white house's agenda and the president's agenda, not set it. >> larry has talked in terms of not being totally against tariffs, but wanting to target the tariffs so they are most effective. i think that will be his job, to take this unmolded mass of

substance and turn it into something more substantive. more refined. >> the white house merry-go-round reaching a fever pitch. multiple sources reporting the national security adviser could be next, a potential third high-profile departure from the administration in just over a week. the denials came quick and fast from the white house. denying reports mcmaster is on the way out, press secretary sanders tweeting, "just spoke to potus and general h.r. mcmaster. contrary to reports, they have a good working relationship and there are no changes at the nsc." >> any moment, folks are operating under the assumption that at any moment, the announcement could come. >> there are only two departures that would be earth-shattering. one would we jeff sessions, a sign that trump is thinking about firing mueller. the other, i think, would be the chief of staff, general kelly. those are the two big ones. otherwise, i just can't see it having that big of an impact. >> i think there are only two

things that matter when it comes to washington. trump is cutting regulations like no president has in american history, and the market is applauding that. anything that would upset that, anything that would maybe make you think that trump was going leave or change that course would probably be taken as a negative in the markets. mcmasters firing, gary cohn leaving, ludlow coming -- i don't think it is anything for markets to be concerned about. david: still ahead, as we review the week on "bloomberg best," canada's prime minister justin trudeau explains why he is optimistic a nafta deal be done. plus, conversations with stephen schwartzman and others on the bigger picture of global trade. up next, more of the week's top business headlines. mario draghi promises not to shock investors as the ecb eases its way out of qe. >> she is more hammering home up next, more of the week's top the point of what has been referred to as the three p's. david: this is bloomberg.

♪

♪ david: this is "bloomberg best." i'm david westin. let's continue our global tour of the week's top business stories, with important economic data coming out of the u.s. and china. jonathan: goldilocks continues. inflation in line with expectations, boosting futures and weighing on the dollar. how does this cpi report this morning fold into the views of some of the key members of the fomc? >> and keeps them on track for a march move and for at least three moves this year. it could add pressure for a fourth. even though we saw stable numbers, we are seeing a slow build in inflation. over the last three months, we are expanding at a more than 3% rate inflation rising, so we are starting to see it build. it isn't out of control and no reason to panic, but there is

reason to believe that they will hit the 2% target, maybe by the end of the year. >> china's latest data goes somewhat against the narrative that the country is shifting away from old industrial drivers towards a consumption-led economy. put that in perspective for us, especially in light of a looming trade war between the u.s. and china. >> some surprisingly strong numbers out of china this morning, haslinda. industrial output defying expectations to accelerate in the first couple of months of the year. beneath the surface, though, we see some signs of weakness on domestic demand. in particular, we saw land sales crumbling. of course, if domestic demand is weaker, that raises the stakes for china in terms of what we might see in any kind of trade war. because if domestic demand is not there, china needs to rely even more on those buyers in the united states. >> china announcing this morning plans to merge its banking and

insurance regulators as part of its wide-ranging overhaul across a lot of its major government agencies. take us through the topline proposals here out of the powers that be. >> this is the biggest major overhaul for the banking regulators since about 2003, about 15 years. the banking regulator oversees about 4000 banks, so it gives it some indication of the scale and size of this. in terms of what it allows the government to do is of course have greater oversight over two industries that have been responsible for a lot of growth of shadow banking. we have also been hearing about proposals to retool the pboc, some regulatory oversight given to pboc, and prudential oversight as well, pointing to a stronger role for china's central bank. >> regulation in focus for the u.s. senate, taking the most concrete steps so far in rolling back bank regulations imposed in the wake of the global financial crisis, passing a bipartisan

bill yesterday to ease the laws on smaller lenders like regional and community banks. >> the version the senate passed now heads to the house. house lawmakers have said that they want to see additional changes. they want to see the rollback of dodd-frank go even further. however, you have moderate democrats, more than a dozen of them in the senate, who are crucial to seeing this bill advance in the senate, who have said that they will walk if it comes back to them with any sort of major changes. so, this is going to possibly stretch out for some time, but those differences are going to be ironed out, and it could get a little sticky. >> japanese finance ministry admitting that the names of prime minister shinzo abe, his wife, and the finance minister deleted from documents related to this land scandal. aso apologized but refused to resign. his boss suggested that may not be enough. >> it is a very complicated scandal.

just to sum up quickly, we know the sale of public land was made to the school at about 1/7 of the market value. so that looks a little bit strange. we also know that prime minister abe's wife has been affiliated with this school. we have seen no evidence directly suggesting that there was political pressure from the abe camp to sell the land at a discounted price. so, the big question is, though, if the scandal continues and deepens, does it start to force resignations from the abe cabinet, and does that then undermine abenomics? that is what we are waiting to see. >> mario draghi says inflation is still too low for the ecb to make any sudden changes to its stimulus plan. at a conference in frankfurt, the ecb president says he expects the euro area inflation to average 1.7% in 2020, and that investors should not expect any policy surprises.

>> adjustments to our policy will remain predictable and will proceed at a measured pace. >> any deviation from draghi today, from the message he delivered a week or so ago? >> i wouldn't call it a deviation. he's more hammering home of the point what has been referred to as the three p's, persistence, patience, and prudence. a couple of slightly tougher messages as well. he did point out the concerns over the euro and any further strength -- he did say, which is quite important, that the euro gained almost 17% over the past year against the dollar are not entirely due to the euro area's economic expansion. that is one concern as trade policy in the u.s. is another concern. the process has to be slow and steady for now, but no surprises. >> it is too close to call in the pennsylvania special election that some see as a

bellwether for this fall's midterms. democrat conor lamb holding a razor-thin lead over republican rick saccone with some absentee ballots still to be counted. what remains left to be counted, and when will we actually get the outcome? >> julie, they are calculating absentee ballots. of course, this is too close to call, but for all intents and purposes, it looks like conor lamb will be able to pull this out. he, of course, declared victory here last night. house speaker paul ryan addressing reporters in the nation's capitol, saying that he believes democrats will not be able to replicate the win of conor lamb, because he was running on a republican message. on the flipside, democrats totally disagree. they say, look, candidate trump carried the district by 20%. the outside money that poured in here, more than $10 million in the half of republicans, all indicate that progressive grassroots are fired up, and they are hoping that this will

be the start of a blue wave come november. >> the u.s. is issuing financial sanctions against two major russian intelligence agencies and a st. petersburg-based troll farm and other russian citizens and businesses indicted by special counsel robert mueller on charges of meddling in the 2016 presidential election. what are the penalties listed on the treasury department's website? >> this will essentially blacklist these organizations from the u.s. financial system, and these individuals. it will have some effect. i'm not sure the gru has an account at citibank in its own name, but it is an important symbolic impact, and it means that these individuals who were indicted by mueller not only will never be able to travel to the united states, but they will also face financial penalties around the world. >> south africa's ex-president

zuma is to be charged for corruption. we are also hearing the south africa's chief prosecutor saying that he sees the prospect of a successful prosecution. what can we expect now? >> 16 charges. that is of racketeering, as you have said, corruption, money laundering, all reinstated against former president jacob zuma. the case is likely to continue for quite some time. you can then move forward into the 2019 elections and then start saying that we have indeed started stamping out corruption, and here's a clear example. ♪

♪ david: welcome back to "bloomberg best."

i'm david westin. this week, bloomberg's michael mckee traveled to saskatchewan to sit down with canadian prime minister justin trudeau. they met in a steel mill where trudeau was speaking with workers about the impact of u.s. trade policy. he told michael canada is prepared to step up the pace of negotiations on nafta. >> canada does not have the same kinds of pressures that both the u.s. and mexico have. we are happy to move forward and make progress. we are diligent about doing our homework, showing up, and making sure we are delivering creative ideas and forward movement at the table. i understand the time pressures our partners are under. we are happy to accelerate so we can accommodate them. canada is not the one creating time pressures at the table, so we will continue to work at whatever speed the others want. >> if the talks were suspended, would that affect, as far as you understand, the 2-3-2 exemptions? >> the president has said, as long as there is a nafta, there

will be no tariffs, we have a nafta now and we will have one as soon as we improve it. it sounds to me like we are pretty good on not getting tariffs. >> you say that we will have a nafta, and you have been very upbeat about the possibilities. i have to ask, given all the conversations, all the talk from washington, why? >> nafta has been good for the united states, good for canada and for mexico. it has been good over the past 25 years. there are always opportunities to improve it, but the level of collaboration, coordination, and integration of our economies has positioned north america better able to take on the world. i know that there are greater opportunities to that. canada is a trading nation. we have signed trade deals recently with the european union, 500 million people. with the ctpp asian economies, close to 500 million people as well. canada knows how good trade can be for creating growth, and we need to do a better job ensuring that everyone gets the benefits from that growth.

that is why we are being thoughtful and progressive with some of the ways that we are putting forward on labor standards, women's rights, to make sure that the fears people have around globalization are actually allayed by demonstrating that that growth can benefit everyone. >> another day, another duty. this time, the u.s. puts tariffs on canadian newsprint. what does donald trump have against canada? he campaigned against mexico, but he is governing, it seems, against canada. >> i think one of the things is canada is so present in so many different areas of the american economy in positive ways. the u.s. sells more goods to canada every year than it does to china, japan, and the u.k. combined. we obviously have all sorts of links. with the more protectionist approach the u.s. has given, there are certain companies who have decided to see if they cannot make a profit off pushing back against their competitors. some of whom are in canada. we saw it with boeing.

unfortunately, what boeing did was drive the great canadian c series into the arms of their biggest competitor. now we have a partnership with airbus. so, sometimes it will backfire on american companies trying to challenge canada. these cases will result in higher costs for american consumers. the same way that the lumber issue led to higher housing prices, because canadian lumber is more expensive for homebuilders in the united states. we are trying to make these arguments. we will continue to make these arguments in a firm but polite way because we are canadians. david: coming up, more of the week's big company news. prudential spins off its european operations. deutsche bank moves forward with a turnaround plan, and a megamerger rocks germany's energy sector. and we will revisit some compelling conversations. blackstone's steve schwarzman cuts to the chase on the subject of free and fair trade. >> we needed a level playing

field, and the best products and services win. ♪ david: this is bloomberg.

♪ david: this is "bloomberg best." i'm david westin. in the days since president trump announced he would impose tariffs on foreign steel and aluminum, investors and policy makers have been concerned about global retaliation and, ultimately, trade wars. it was a topic of conversation throughout the week on bloomberg television. let's start with former franklin templeton chairman mark mobius, who spoke with us on "bloomberg daybreak: americas." >> you believe the market may be overpricing risks such as nafta or more generally, for trade wars and make it artificially depressed? >> yes, i think so. i think all this talk about trade war is overdone. i do not see that happening. you will see in the u.s. the

negotiations are bilateral, they are beginning to have positive effects. you see positive news coming out. so we have to be aware of that. alix: i understand from a macro perspective it might not underscore your investments, but a trade war has real fx implications. particularly if we're talking about the mexican currency. how do you factor that into your investment thesis? >> what we do is we look at how much fear there is. i mean, if there is really a fear of a trade war, there might be opportunities. it will not be as bad as it appears. just look at the u.k., brexit in europe and so forth, there's no way they can have a real brexit because they are just too closely tied together. this is true of latin america and other parts of the world. david: putting aside whether there actually is a trade war or not, talk about the rumors of -- affect the volatility in fx. it is driving fx up and down. how do you handle that? do you hedge?

mark: what we do is we try to make an assessment about whether a currency is over or undervalued based on price parity, then we invest accordingly. for example, if we think a currency is undervalued, export would be the place to go. so it depends on the individual company. that is the only way that you can really hedge. otherwise, it gets very expensive if you try to hedge the whole portfolio. >> i would much rather see our country sit-down with our allies, talk about how do we deal with overproduction that is generated primarily by china? yet, the united states only imports about 2% of its sales from china, but china is -- steel from china, but china is flooding the global market, so it needs a global solution. the oecd has a mechanism for dealing with overproduction. that's the road i would recommend. vonnie: ambassador hill, it is quite clear that republicans are not behind this, lawmakers on the democratic side are

not behind this either. so, who is this for? >> i think that the president is talking to a group of workers that are concerned about their jobs. my heart goes out to those workers, but i do think that we should deal with improving the economy and helping them take the jobs that are generated. >> president trump has made a lot about the trade surplus that china has with the u.s. would cosco consider buying more u.s. agricultural, food or other products, as a way of redressing that imbalance? >> i think cosco has been trying very hard to serve that purpose. if you recall, in november last year, president xi and president

trump, the signing ceremony of a trade memorandum between cosco and adm, to buy u.s. soybeans. >> is that something you are counseling the chinese government against, using the soybean trade as one of these tensions? >> i don't think president trump and the u.s. administration will do anything ridiculous you know, to really make the homework very complicated. for china, right now, i think china government steel is very much encouraging the commercials to buy u.s. soybeans. i don't see anything that china would do to affect normal u.s. and china agricultural trade. david: blackstone group chairman and ceo steve schwarzman understands both sides of the u.s.-china relationship as the international investor, and, as an advisor to president trump. in an exclusive interview with

bloomberg's betty liu, he put the debate into perspective. >> there's no doubt that there is a serious imbalance between the u.s. and china in terms of market access and tariff levels and nontariff barriers. investment limitations. part of this happens in the natural course of things. when you are a less-developed country, you have higher tariff laws. but we did that in the united states in the 19th century, and it helped build the united states behind the protection of those restrictions. the issue now is that, with china having such a large economy, even though per capita, it is not as big as one would think, but in terms of aggregate size, it is the second biggest in the world and it is growing at double the rate of any

developed economy that it is sort of time to make that change, to make that transition. i think that the senior people in china well understand that, because it is in their interest as well as other countries. because, if you don't normalize this, then populism develops in the developed world and people in those populations demand some kind of action. >> and then it actually swings all the way back to the other side. steve: it starts spinning around and everybody is a loser. betty: so if i can infer from what you are saying, are you saying that there could be some justification for these tariffs here, to make it a more level playing field or no? steve: i did not talk about tariffs. what i was saying is that you

need a normalization of access between countries. it is called fair trade. in other words, no one country should be keeping somebody else more or less out while they get to go in. it is not fair. so i think we need -- betty: so we need a more level playing field? steve: we need a level playing field, and the best products and services win. and i think that is all that is trying to be accomplished. this will take some period of time, but responsible, intelligent people know that this is something that is going to have to be done. it should be done in an orderly and thoughtful way and i am hopeful that that will be the case. betty: not to belabor the point, but if not tariffs, steve, what other levers could be pulled to level the playing field? steve: there are lots of levers to get somebody's attention.

my sense is that attention has been gotten, and we should be moving on to an execution phase, which would be good for everyone. ♪

♪ david: you are watching "bloomberg best." i'm david westin. let's return now to our round of -- roundup of the week's top business stories. broadcom's bid for qualcomm met its end this week, but there is a complicated deal on the table in germany that could reshape the country's energy industry. >> yesterday, eon agreed to acquire energy from german rival rwe. if approved by regulators, the acquisition will transform the country's energy industry as utilities grapple with the accelerated shift to renewables. this creates a company that is focused on old-school utilities.

is that right? >> breaking this down, you have eon, essentially they will end up being the service and network provider here. rwe will take over the renewable assets of these two companies and the utility assets, and rwe will own a significant stake in eon, so there will be a close link between these companies, which by the way, historically have been huge rivals. it is difficult to see how this will actually play out. it is a real reversal from what these companies were saying a couple of years ago when they both were spinning off assets. >> what will rve become? will you turn into a green asset holder at a bigger scale? >> our operating business so far has focused on conventional power generation and now this combines two large renewable platforms.

we are actually the number 2 in wind in europe and number two in renewables in europe. >> deutsche bank says it plans to raise as much as 1.8 billion euros in an ipo of its asset management unit. a successful offering would mark an important achievement for chief executive john cryan. he proposed the sale year ago to help bolster the lender's capital. a lot rides on this successful ipo for john cryan. >> correct. when he announced the plan, the funds raised from the ipo going to deutsche bank's coffers, i think that story has moved on now and people are not so concerned about that anymore, but it is important he gets this key part of the plan out of the way, which is to make their asset management business more independent. at a time when asset managers are facing a lot of competitive pressures and being more independent could enable it to potentially gain scale as well.

>> deutsche bank, germany's biggest lender, awarding its staff $2.7 billion in bonuses, four times higher than the previous year, despite the bank's third annual loss in a row. >> if you were outside the finance industry, you might think what are they going to gain? first of all, it was a paper loss, due to not necessarily operating problems, but u.s. tax reforms. that is one part of the argument. it will not carry water for many people. on top of that, deutsche bank has to hang on to its people. that is the needle he has to thread in that he has to hang on to his key revenue generators and to do that, you have to pay. >> the largest insurer in the u.k. plans to focus on growth outside europe. prudential has divested $16.7 billion of british annuities to rossi life.

they also plan to spin off its m and g prudential units. >> investors already looking beyond the m&g's spinoff. is the u.s. the next one, maybe? >> there are no plans at the current time to look at spinning further. i think we've always said that we are an active manager of the business, in the shape of a group. but, if you look at where asia is going directionally, the ability to solve complex retirement issues will be a skill set we absolutely need, and the u.s. is the market leader in that. our jackson team. there's a lot of synergies, and we will display a few more of those in the upcoming months. we think it is an appropriate combination of market positions, capability, earnings, diversification, lots of good things. having the two together. >> adidas has reported a 19% jump in fourth-quarter revenue, led by sales in china and north america.

is china really what is behind this positive outlook? >> last year, we were at 16% topline and 32% bottom line, on -- an outstanding year. the three main growths were u.s., china with almost 30% and our online business at 57%. those three components are really what drove the company forward to a record year. we're very profitable in china, and it is helping our profitability, but i also wanted to say, most of our contracts are the large superstars are found in the u.s. and europe which makes the chinese look better than it is, because of course, they get the benefit. >> dropbox has set up a price range for its ipo. the filesharing company plans to sell 36 million shares between $16 to $18 each. at the high-end of the range, dropbox would have a market

value of about $7.1 billion. >> this is about a 25% cut from their last private value, which was $10 billion, when they last sold shares privately in 2014. that is definitely going to be on people's minds. it is not necessarily an operational indicator of dropbox, but it continues to tell the story of the differences between the premiums that private investors are willing to put on these private share sales of tech companies and what the public market is willing to pay. what i will be keeping a watch on for this dropbox deal as they hit their roadshow before they are scheduled to list next week is questions around user growth, specifically paid user growth. the other thing that i am sure investors will be asking management is about churn. that is going to be something that the public market buy-side will want to know a little more information on. >> the end of an iconic retailer, toys "r" us saying it plans to close down u.s.

operations after failed attempts to find a buyer or reach a debt restructuring deal. you can easily burn private equity. >> a lot of people do. the debt of the company was never able to get out from underneath. covering the company for a number of years and executives would often say after they left the company, we had some big plans, we wanted to revamp certain parts of business, but the private equity owners, they would not allow for that kind of a robust investment. it looks like private equity can largely be blamed for this. it is not just an amazon story, as some people are reporting. >> another company facing bankruptcy, iheart media, the owner of the most radio stations in the u.s., filed for chapter 11 bankruptcy protection wednesday, which would allow them to keep operating as it tries to reform. the company is more than $20 billion in debt. how did it end up with so much debt?

>> with iheart, their struggle is a two-part story. iheart was taken private by private equity companies, back in 2008, unfortunate timing as the crisis got underway. they loaded up about $20 billion of debt on the balance sheet. meanwhile, simultaneously, we have seen a lot of technological development in the radio space. you have competitors coming online like sirius, spotify, pandora. iheart was struggling just to make those interest payments on their debt, let alone invest in the company to develop, grow, and keep up. >> vw announcing it's secured $25 billion worth of battery supplies to fuel the automaker's electric vehicle push. the vw chairman and chief executive spoke to our very own matt miller in berlin regarding the company's focus on raw materials. >> commodities have always been part of our sourcing and procurement.

we're not just buying from tier one manufacturers, but we try to secure the provision of raw materials at reasonable prices. we've been very successful in the past with that and will continue that strategy. >> the sec is suing theranos and its founder, elizabeth holmes, as well as a former president of the company, with authorities accusing her of elaborate fraud. holmes neither admits to nor denies the allegations. so this isn't that surprising. she has been dealing with the sec for a while. but we are finding out the size of the fine. can you put that into some scope for us? is it bigger or smaller than you would expect? guest: i would say it is a bit smaller than i expected. a $500,000 fine for elizabeth holmes, and she has to give up control of the company and a portion of her equity stake. but compared to the size of the fraud, as you mentioned, the complaint alleges they raised

$700 million through this scheme, through basically lying to or misleading investors about a whole host of things. it does seem pretty small, especially when you consider that we just saw martin shkreli, another adjacent in a way, fraudster, get convicted for seven years in prison for a loss that amounted to $10 million. >> unilever is consolidating its headquarters in the netherlands, abandoning its british base that it has maintained for nearly a century. this is as theresa may and the country prepares for brexit. >> they are basically moving a registration. they have the double entity at the moment in the u.k. and the netherlands and they are taking that and moving it to the netherlands. it doesn't necessarily mean that you are moving a lot of jobs, in fact, it could only be a handful of jobs. they have 7000 plus people in the u.k. they will stay here, and 3000 or so in the netherlands, they will stay there. the actual operating units like the health business and home business will stay in the u.k.,

food business stays in the netherlands. none of that changes. it's headquarters jobs, the registration, but there is a lot of symbolic importance with the political backdrop. >> walmart shares plunged after a whistleblower claimed the retailer issued misleading e-commerce results and fired an executive who complained they were breaking the law. under chief executive officer doug mcmillion, walmart has invested billions to catch up with amazon in e-commerce. what, matt, is this whistleblower claiming happened? >> this whistleblower, who was hired from amazon in 2014, his job was to basically grow this marketplace business. this is a business that amazon also runs, where third-party vendors sell the goods and walmart gets a cut of the sales. this gentleman is claiming that there are improprieties in the business, it was a growth at all costs mentality. internal controls were overlooked.

when he brought these issues to light, he was at first ignored and then eventually fired. >> hong kong's top business mogul has ended his career. he amassed one of asia's biggest fortunes from building skyscrapers, sold soap bars. the 89-year-old chairman of ck hutchinson holdings and ck asset holdings will stay as an advisor to the group after stepping down in may. how big a deal is it that he is now giving the reins to his son? >> it is a very big deal symbolically, because he has for decades, been the richest man in hong kong. really personified a whole generation of tycoons who in the postwar years built fortunes in hong kong and spread around the region. he did announce back in 2012 that his son, victor, would be taking a bigger role in managing things. so it may not be that much of a change when it comes to the management of the companies. ♪

♪ >> this is an historical spread function on bloomberg. what you are looking at is the russell 2000 futures, which are buying, and you would be selling the s&p 500 futures. what you are going to do within a ratio of 3:2, about $240,000 long versus $280,000 short. so you have a small net short position but a paired trade. >> this is a function in the bloomberg, it's a valuation function. there are a few things to point out. first of all, these blue dots tell us netflix's valuation is near its historic high, but what i want to focus on is that the fact that the forward p/e is at 12 times, so a rich stock. david: there are about 30,000 functions on the bloomberg, and

we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites as well. here is another function you'll find useful, quicgo. it will lead you to our quick takes, where you can get important context and fast insight into timely topics. here's a quick take from this week. ♪

david: that was just one of the many quicktakes you can find on the bloomberg. you can also find them at bloomberg.com, along with all the latest business news and analysis, 24 hours a day. that will be all for "bloomberg best" this week. thanks for watching. i'm david westin, and this is bloomberg. ♪

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jason: i'm jason kelly. carol: i'm carol massar. what new and let's not about the fresh crop of leaders on wall street. jason: we are going to the hottest local can -- all ahead on bloomberg businessweek. carol: with your with the editor in chief of bloomberg businessweek.