betty: 7:00 a.m. in hong kong we bloomberg's asian headquarters. welcome to "bloomberg daybreak: asia." asian stocks headed for a mixed start as the fed delivers a bloomberg's asian hawkish hold. signaling inflation rising above 2%, remaining on track for gradual hikes this year. york, wherein new it is just after 7:00 p.m. this wednesday. ing not to submit to u.s. threats. elon musk says tesla should generate cash on profit in the

second half as model three production accelerates. ♪ yvonne: shares of tesla falling on a weird conference call that elon musk just held, which we will talk about in a moment. what isn't falling is inflation, it seems. we got some indications in the fed statement they might let inflation run hot. that seemed to spook the markets. i want to pull up this chart that shows where expectations appear to be headed according to the markets. the five year treasury yield, the forward rate even, they are merging with the price of wti crude. expectations are oil prices will perhaps be driving some of those inflation expectations.

it looks like the markets might be agreeing with the fed, that we are going to see inflation run away just a bit. yvonne: that causes the markets to go lower. betty: it's interesting come after the fed statement came out, it seems like there was tint to it.vish then of course the reverse you just mentioned. it makes you wonder where all of the bulls are. [laughter] betty: the markets were deep in the red. we closed near the lows of the session for the dow, s&p, and nasdaq. int sets up for a lower open asia. yvonne: we are pretty mixed so far. in new zealand, things kicking off in the last couple minutes. we are flat as we digest through the fed statement. the dollar continuing that tear. the kiwi pretty much flat, $.69.

trading in australia is under an hour. seeing some small gains today. we are counting down to the open in korea. no trading in japan as the nation observes a public holiday. no treasuries trading until monday. the yen trading a little bit closer to kissing 110. in the meantime, let's get you caught up with first word news with courtney collins. courtney: china says it will not threatsto what it calls on u.s. trade. the statement from a senior official came just before talks begin with trump administration officials. the official told bloomberg beijing will not accept as abandoningh its long-term advanced manufacturing ambition, or narrowing the trade gap by $100 billion. the world economy shows signs of stabilizing after a recent

as abandoning activity strengthening for the first time this year. a faster pmi across 40 countries rose 53.5 in april, from march's six-month low of 53.3. it reinforces advice from moderation, with manufacturing economists not to bet against the world economy just yet. president trump's meskill fiscal stimulus plans are adding to the u.s. debt overload, forcing them ue bonds. the u.s. boosting the amount of debt it sells this quarter to $73 billion. it is also investigating adding another five-year sale to its regular calendar and planning to issue a new two months bill later in 2018. and the political consulting firm at the heart of the facebook data manipulation

scandal is shutting down. cambridge analytical says it will begin insolvency proceedings in the u.k., citing what it calls numerous on founding -- numerous unfounded accusations. it says it is being vilified for activities that are not only legal, but widely accepted in online advertising. global news 24 hours a day on toc on twitter powered by 2700 journalists and analysts in 120 countries. i'm courtney collins. this is bloomberg. betty: the fed has acknowledged inflation is nearing its 2% target. as a wreps up his meeting, leaving interest rates on hold, let's get to kathleen hays, here to digest through the statement. no change in fed policy, but a change in the wording. pretty meaningful. kathleen: one word is being

heard around the world, the word symmetric applied to inflation in the fed target. there are people on wall street saying,saying, look, the feds td the 2% inflation target. in this policy statement, signaling theyre are willing to hike rates a little quicker. but less but less gradual. the fed says inflation moved close to 2% in its statement, said it did not declare -- a lot have said it did not declare victory just yet. this chart looks at inflation versus the fed's target of 2%. the main number is touching 2%. the core energy close behind. it has only been at 2% twice in more than six years. presumably that is why the fed

will remain somewhat cautious on rate hikes this year. i want to look at the wording in this statement. in t sentenceswo -- in two sentences, they added this word -- symmetric 2% adjusted. they have not used that word before. in many statements, in interviews, in speeches, officials have talked about this being a symmetric target. in otherin other words, 2% is ne ceiling for the fund, the fed ling for the- cei fed, the fed could let it drift above 2%. it noted consumer spending was moderate. it was a somewhat weaker than the first quarter, but they also ling for thsee stronger business investment. they also see stronger job growth. a lot of people sees on the fact seesthe fed says it

inflation expectations unchanged. you can see it tracking crude oil. at the top of the chart, you can see they have leveled out. what is compelling about that chart is inflation expectations moving up just because of oil prices, maybe the fed looks past that. maybe that is something they are not too concerned about. think bottom line. everyone thinks they will hike the key rate in june. they think inflation will stay around 2%. 4% another hike on, do instead of 3% this year --that is what they are continuing to debate. let's hear senior fellow at the institution at stanford university. you have been watching this for a long time. what do you make of -- what is the fed trying to tell us by "symmetric?"rd

>> they are trying to say they will let it bounce above 2%, as long as they think it will bounce back again. inflation is noisy "symmetric?" >> and not well measured. if they see signs of inflation expectations breaking out, watching them -- expectations breaking out, watch them to go nuts. yvonne: in your view, the fed does too little and inflation gets out of control, is there is andsk the fed does too much they take an eight month year expansion and tilt it toward a recession? john: right -- if they need some uick hurry to move, that -- hurried move, that would be the danger. a perfectly normal late september business cycle. unsurprising interest rates are going up. they should be drifting up. things are quiet.

yvonne: you say there are plenty of other risks to worry about. is it the risk of a trade war that could hobble the economy a bit? is there something else on the horizon, even looking overseas? john: deficit, trade war. there is a lot of private and government debt around the world some are not sure how it will get paid back. sooner or later something bad will happen. probably not the fed sneezing. let's hope that is in some are not sure how it will get paid back. a while. betty: i am curious what you made of the reaction in the markets, where you saw stocks tank, and the dollar giving up some of those gains. how do you think markets are interpreting this statement? john: boy, i'm not that great of the market psychologist, and no one else is either. there are parts of the report

worth paying attention to. bethey say it is going to low for a long time, that is a big debate inside the fed. are we in a new low interest rate regime or head toward 3%, or will we go back to what we are used to, 4% or 5%? so what is the trend that the fed talks about? yvonne: this is another meeting overseeing by the new fed chair. reading this statement, do you think this jay powell fed is more inclined to stay the course? they want to stay the course, and there has to be a lot to get them to move. they are inh exactly at the inflation target they want. the economy is growing nicely, not too fast.

it would make sense they sit pat them talk about interest rate rises. ofis as natural as the price strawberries going up in january. they told us, data dependent. if something breaks out, they will do something about it. in the meantime, it is nice and quiet. betty: you mentioned nice and quite, but inflation expectations are rising higher than what we have seen with oil prices and commodities. u.s. corporate are higher as well. that is feeding into inflation expectations. toyou think is pricing power raise risk? john: inflation does not come from pricing power. it comes from the price of everything going up. defend thinks expectations -- the fed thinks expectations are

anchored, that commodity prices will reduce themselves. if they get expectations commodity prices are less angered, coming back to 2%, that would be something to get them moving. yvonne: we have news from treasury financing as well overnight. looks like they will be selling more debt to the low end of the curve, suggesting the yield curve could flatten more. do you think the fed will allow that? john: the fed has less control of the yield curve than we think. if it is something you want to stay up late worrying about, it is the treasury and the debt they have to sell in the couple years. the fact they are selling short-term debt means we have to roll it over all the time, which will add to the treasury's woes if anything that happens. -- bad happens. yvonne: i want to ask you about a conference that kicks off at stanford university and goes

full tilt friday. luminaries from around the world, hoover fellows -- the theme seems to be global this year, looking at international gains.ry trade policy p what kind of like do you think that is going to shed on what this fed is doing? john: a lot, i hope. this is a chance for policymakers to come out to california and take a deep breath, think big thoughts. also where monetary policy goes with financial regulation, central banks and treasuries controlling currencies moving from one country to another -- we get to ask those big questions. yvonne: do you think people ask the simple question -- three rate hikes or four? john: we trying to stay away

from fed prognostication, sorry to disappoint you. we like to think about bigger issues. we know what the fed is going to do. it will be gentle rises in interest rates. that they will respond to anything they think is getting out of hand, one way or another. we're going to leave it there. thank you so much, our global we're going to leave it politics and policy editor kathleen hays and john cochran. the fed steady as she goes daybreak.dlined on bloomberg subscribers can go to dayb on their terminal. still ahead, president trump's trade delegation goes to china. will they make inroads on tariff s? the president of the foreign trade council next at this hour. yvonne: spotify investors disappointed with the subscriber game. we look at the first quarter as

a public company in just a bit. this is bloomberg. ♪

yvonne: this is "bloomberg ."ybreak: asia betty: now to some of the after the bell earnings that created a big moves in extended training. spotify shares plunging. sprint preparing for the merger with t-mobile. bloomberg's su keenan here with more. su: spotify the big surprise. a company that was a highly ." anticipated ipo. this is their first public earnings as a public company. let's go to the chart. [laughter] it didn't go so well. a major flop.l it shareholders have grown

increasingly bullish. they pitched of themselves as the dominant player in streaming. they posted a 40% jump in subscribers. that's not bad. it wasn't enough to please this bullish crowd. look at the run-up on the stock in just the past month. it has been up in a huge way. there is one analyst who points out the guy whose fundamentals were solid, he views the after-hours reaction as -- are you ready for it? -- an expectations correction. there you have it. it could very much impact thursday trading for spotify.let's go to sprint after hours. sprint involved in the merger with t-mobile up after hours. the ceo talking about moves related to the merger, a shuffle in senior management. they are talking about possible divestitures. they will not be divesting. they will view themselves as buyers of spectrum.

you see the big run-up in the chart recently. has declined on regulatory scrutiny concerns, but sprint views this merger with t-mobile as a bailout. it looks like positive for the stock. , they have been doing well lately with their rop after hours d on the bottom line. take a look at the year to date chart. the ceo saying aig has made progress with consistent results,rop after hours on the bottom line. take a look but what failed then first-quarter profit is that they had some big disaster losses. n a bigly that has taken hit. let's look at stocks in the regular session. spotify in a down day.

it shows you the expectation for this company. the music industry has consolidated in a big way. some believe it is coming back. the big question that hangs on the spotlight in the thursday's session is, can they get a piece of the rebound, or is this thing going to hurt them? yvonne: thank you, su. plenty more interviews to tell you about on bloomberg television. catch our exclusive interview with national australia bank ceo. paul allen giving us that interview and 11:30 a.m. hong kong come, 1:30 p.m. joining us from sydney. betty: don't miss this, "bloomberg daybreak: america's" to american petroleum on the $23 billion endeavor to become the largest oil refiner in the u.s. and a discussion on his company's to american big earni. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." betty: good doctor is set to debut this friday on the hong kong stock exchange. reports say it may be over 600 times oversubscribed. the ceo of being on investment subsidiaries tells us the chinese investor has an opportunity to be bigger than its tech industry. >> when you are deploying money, you have to be concerned. we are at a time when liquidity is abundant. there is a lot of capital chasing good ideas. medium,to focus on stage to later entrepreneurial countries. i won't call them startups. companies that are four to seven years into their lives. if they have revenues, customers, a business model, a platform, and a good

introductory, chances are they will be well valued in the marketplace. our challenge is to find good evaluations and the ability to build partnerships that can be additive and can on the one hand reduce risk, build capabilities for us, and make aggregate propositions. >> earlier you talked about the at $6octor valued billion. how much potential is there? could it be as big or bigger than the financial sector in china? >> that is why we are so excited. china spends $5 billion per capita. the u.s. is at 10,000. companies like australia and the u.k. are in the $2000 to $4000 range.it is not unimaginable china's spending needs to get to somewhere like the 2000 to 4000

level in the next 10 to 15 years on an inflation-adjusted basis. there is a massive transition that needs to happen in the china health care system. it is not just about money, it is about access to skills, trained radiologists and specialists. china historically has not had a primary health care system in recognize inuld the west. china and the government fully understands the challenges of what they have, and they understand what they need to do, but there is going to be an interesting mix of investment on the one hand, recognize in the but also the use of technology to overhaul traditional health models in achieving china's aim. we are the largest health insurer today in china, private health insurance. have a business that focuses

on reporting the state health insurance system, which pays for 50% of health cost in have chin. we have the health cloud, which basically tries to assemble data on everyone we touch, and make that data useful for all of the health-related businesses we have. we see it as an exciting opportunity, and it could be as big or bigger than finance in the long-term. >> that was jonathan larson speaking to bloomberg's haslinda amin in beverly hills. let's have a quick check of the latest business flash headlines. announcing plans to spin off its valuation and asset management business. the lender says it is targeting its mlc brand by the end of 2018. it warned of funding pressures in the second half. yvonne: cbs says it is making

good -- cvs says it is making good on regulatory approval to aetna.urance company first-quarter estimates of $1.48 a share, beating estimates. this is bloomberg. ♪ mr. elliot, what's your wifi password?

wifi? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome.

betty: 7:30 a.m. thursday on a soggy morning in the victoria harbor in hong kong. betty: 7:30 p.m. wednesday, pretty sunny in new york. a gorgeous day. market closing pretty grim, red across the board after that fed statement. liu betty liu -- i'm betty in new york. yvonne: i'm yvonne man in asia. acknowledged fed inflation is close to target without indicating any intention to veer from the path of gradual

tightening. growth in the first quarter, removing and reference in the first statement that the economic outlook has strengthened in recent months. they balance that out by noting solid growth in business investment. starbucks has settled with two blackman wrongfully arrested -- two black men wrongfully arrested and promised to pay for their college education. they settled with the city for a symbolic one dollar each, and the promise of a $200,000 program for young entrepreneurs. starbucks has called the arrest reprehensible and closed thousands of stores for staff training. trump's lawyers says they are still open to him giving an interview to robert mueller, despite a key departure of an advocate. rudy giuliani spoke as the president's legal team challenges unfolded. ty cobb is being represented --

is being replaced by a lawyer who represented bill clinton during his impeachment hearing. peter describes the current situation on the ground as a threshold that will shake the way humanitarian work is conducted both in syria and iraq. >> the big actors will either situationut of this some consensus to stop the war which,go into a phase in of more tranquility, or we will then see again a very dangerous situation where possibly at the fringes of those spheres of influence in syria, you will see new combat operations. kathleen: global news 24 hours a day on air and on tic toc on

twitter, powered by 2700 journalists and analysts in 120 countries. i'm courtney collins. this is bloomberg. . yvonne: we are counting down to the opening in sydney and seoul. japan closed today for golden week. we have a lot to digest with the fed the statement. >> bond markets will likely sigh c didrelief after the fom not signal tightening. asian stocks will sufferasian sh the u.s.-china trade talks feeding nerves. a lower open, but small gains seen in australia building approvals data. we have reaction in the markets into beijing. we will look into the aussie dollar as well as the yen. escalation of conflict could spark a rebound in the yen. a breakthrough is looking unlikely. should china open up its markets more to u.s. economies, that

could boost the aussie dollar, struggling to stay above 75 u.s. cents after rebounding. we are seeing the aussie suffer. betty: i think we are on ten-month lows on the aussie, on bets that rates will hold. where is it going to go? >> we can visualize the bets on this chart after the rba studied this week, barclays is among 12 callback their rate hike calls. this line in blue is the six-month cash rate showing you this sinking bets. rba waitingrba -- the waiting for more tangible signs of recovery. barclays is not totally discussing the move in november this year. bluemerrill lynch recommends te

is still the case for rba to draw at years end. renewed bullishness in the dollar has renewed forecasts. we will see more pressure in the aussie dollar ahead. beat the streets expectations for first quarter results. elon musk expecting beatprofitability. shares went into reverse in late trade after a testy conference call with analystss. joining us is bloomberg tech reporter dana hull in san francisco. for those that missed that call with elon musk, i want to play a part of it that took some of the analysts by surprise. youtube.re going to go sorry. these questions are so dry, they

are killing me. [laughter] went down why shares afterre kind of drilling into went down after hours? >> possibly. elon aboutts we financials, when will you need to raise capital, talking about cash flow. elon about elon was very testy and dismissive, saying the questions were boring. he said, let's go to youtube, there was a retail investor agitated on the call. i believe the transcript was out. he asked about 13 questions. some of his questions were very good. it was unusual for analysts to be cut off, and for a retail investor to get more questions on the call than anyone else. betty: in the end, did he dodged questions about cash burn and their balance sheet? >> he was clearly more interested in talking about the product roadmap, the tesla

semitruck. that is what he liked to talk about. he was dismissive of the concerns about the balance sheet. i think you are seeing shares decline because of that. yvonne: the one thing we got out washe analysts is capx going to be lower in the second half. how do we read into that kind of statement? will they delay production targets to hit 10,000 a week? dana: the focus was to get 5000 by the end of the week of june. they are being conservative with capx. they said they have learned a they said they have learned a lot about how to automate. they admit they automated too much, and they have dialed that back a little bit. overall it was a positive report. it was interesting shares went into decline during the call it self. -- during the call itself. betty: he said he got so frustrated he was not talking

today traders. ifa: he said something like, you are not into volatility, this stock is not for you. then someone urged him to be more transparent about progress, saying it is a hard time for investors. all tesla earnings calls are kind of wild. this was among the more wild i have listened to. i think those that were on the call would agree. yvonne: we are used to seeing unusual conference calls, but certainly this was a bit different experience. dana hull, our bloomberg tech reporter. you can also turn to bloomberg for more on tesla and that unusual call. you can get analysis from bloomberg's expert editors. moving on, biologics one of the most performing stocks on the hang seng, the first and only

company to manufacture a fda approved biologic in china for the u.s. remy inocencio spoke exclusively with the ceo about reform trade, and the company's stellar growth. re in a wait we a and see approach. we hope the trading issue can be resolved by negotiation. china and u.s. want to work together to resolve the issue. strategy is part of the medication towards that. -- of the mitigation towards that. remy: there is a lot of innovation in this sector. what excites you the most? >> there are a lot of tailwinds in china. the most significant is allowing cmo's called mah. if you have a product in china,

you build your own facilities, you cannot ask someone else to make it for you. starting this year, they will officially allow companies like to manufactured drugs for chinese companies. that are so many biologics being developed in china. we certainly believe we will benefit from a huge deal with this reform. mainland, hong kong is changing their way of listing for an ipo. what is the opportunity for wuxi ? >> it is exciting. a lot of the pre-revenue companies are already my clients, my partners. i enabled them to develop their portfolio. they are looking at more money. most likely they will reinvest this money with wuxi. it is certainly a big boost for wuxi as well.

remy: we talked about the good things for wuxi. what keeps you up at night? what makes you nervous something might take the company off track? >> a lot of investors ask me that question. i couldn't think of any issues to take us off track. i think we are growing very healthy, a very high-speed. we are attracting talent. talent is key, having the right people that can execute and deliver is always keep for us. and usd, does that keep you up at night? >> that will affect our earnings this year. there is nothing we can do as a company to control the extenuating circumstances. that is something we have to work on. betty: an exclusive interview with wuxi biologic's chris chen.

steve mnuchin said to discuss trade and economic issues with china. what will they accomplish? we speak with former wto deputy director next. this is bloomberg. ♪

betty: this is "bloomberg daybreak: asia." i'm betty liu in new york. yvonne: china says it will not succumb to what it calls threats on u.s. trade. the statement came hours before talks begin with a delegation of trump administration officials in beijing. let's get to our china correspondent joining us there in this morning. china drawing some red lines ahead of this meeting. >> certainly trying to give the impression they will not be steamrollered by team trump. these two days of meetings

kicking off. we have the likes of steve nnuchin and others, all i these two days of meetings. an official gave a briefing said there would be no preconditions. china will not step away for thf meetings. its support of advanced manufacturing, and will not take any radical steps. it will not agree to reduce the surplus it has with the u.s. to trade by 100 billion u.s. dollars, which has been a trump demand. it will not agree to reduce the china trying to draw a line in the sand, at least publicly. we had u.s. officials over the weekend saying we should not expect a major breakthrough from these talks. secretary ross even suggesting they could be cut off reactively if theyff preemptively are not going in the right direction. both sides trying to temper

expectations for these two days of meetings. those are the hard lines or china. what steps might they take to appease the u.s., or will they? tom: china has already said, for example, it will reduce import tariffs on a broad range of goods. we are waiting for the details on announcement. they said they plan to reduce the tariffs on imports of foreign cars by about 10% or %0%, from the current -- 10 or 15%, from the current 25%. china has been pained to say these steps are not as the result of pressure from the u.s., but more broadly their moves to develop the economy. there are moves that will please those in washington, but china says it is not directly related to the pressure they are feeling

from the trump administration. betty: what about the move to weaken the yen ahead of this summit between the u.s. and china? is that hostile? tom: that certainly took a number of economists by surprise. fixing, weaker than expected. said this was an aggressive move by the bank of china. merrill lynch says we should expect thechina trying to draw n the yen to weaken in the next six months. we have seen export components weakening. the export sector is coming under pressure. it is tempting for china to and the basket of currencies. bml saying we should expect further weakness in the yuan. betty: tom mackenzie, setting of

what is expected in this meeting between the u.s. and china delegation. let's bring in national foreign trade council president rufus y erxa, also former wto deputy director general and former u.s. trade representative. we heard from the white house not to expect much breakthroughs. what are we expecting out of this? rufus: i don't think we will know for a while. this is the first sit down they have. many of the things the u.s. is complaining about, the intellectual property things, are complicated issues. it will take a while for any real agreement to take shape on those. in the first phase, you might just have good faith measures on both sides to show they are willing to continue negotiating. at least, that is what we hope will happen.

we hope the trump administration will refrain from imposing counterproductive tariffs, which really aren't going to solve the problem american companies have in china, and are going to raise the risk of a wider trade war. guest earlier a who said this could go from worse to worse if these trade measures are taken. we have heard hardline comments from either side. is that normal posturing before these negotiations? rufus: i would say so. i negotiated these kinds of things. certainly both signs trying to position themselves -- sides try to position themselves to see if they can probe some weakness on the other side. i think in the end both countries will have to approach this pragmatically, they need to know how to do business with each other. i think it would be disastrous

for us to have a major rupture in the economic relationship. i think there are things the chinese government needs to take seriously. i'm also worried about too shoot first and ask questions later attitude the trump administration has shown. a preference for the president to say, if i threaten tariffs, everyone will do what i want -- international trade doesn't work that way. chinese policies are problematic, we have to find a way to get the world on our side and convince she's in pain that xinpingd -- convince xi that they need to make some moves and stay away from hasty unilateral action that will give china more sympathy than getting

results. this president is more of a shoot first and ask questions type later leader. he is certainly emboldened after seeing what resulted in north korea. might that embolden him to continue this kind of line with china? rufus: in the trade and commercial world, things are a bit different. arth korea is definitely serious problem for the rest of the world. they are an isolated nation. i think we have to realize as much trouble we have with chinese policies, they are engaged in business with lots of countries around the world. many american countries are doing gangbusters business in china. they also have a lot of complaints about the way the chinese treat them. thanis a different issue

north korea. it is two large economies that out how they work with each other. i agree out how they work with each other. i agree with the administration that china has to address some of these very serious kind of discriminatory practices and they have to open their market more. it is a question of how we get there. yvonne: if you see the u.s. delegation following steve mnuchin, larry kudlow, robert lighthizer -- some of these twole, they are kind of sides of the spectrum when it comes to their views on trade and the u.s. china relationship. how does this delegation reconcile this dichotomy of opposing views? who should china listen to? rufus: you make a good point. a very important part of being successful in these negotiations is having a coherent approach as a government. between therence major parts of your government

that are engaged in this. we hasn't really had a coherent strategy at. you hear different things from secretary ross then you do from ambassador lighthizer. those should be resolved before they get too deep into negotiations. the u.s. needs to highlight what it's expectations are of china, and to get other major trading partners to support us in that effort. they will not support us if we are busy slapping tariff on u.s. steel and aluminum and having traded squabbles with our closest traded partners. it will be harder to show leadership in the rest of the world in addressing china's need to reform. yvonne: we will leave it there, we appreciate your time. revis yerxa joining us from washington dc.

you can find analysis on bloomberg radio. tune in 8:00 a.m. in sydney. you can down download bloomberg toio plus or go bloomberg.com. this is bloomberg.

yvonne: this is "bloomberg daybreak: asia." betty: a quick check of the latest business flash headlines. shares jumping in late trading after a first-quarter profit of $.89 a share exceeded analyst estimates. sales in the u.s. for kraft heinz generates 70% of its revenue dropped 3.3%. shares have been hammered since last year's unilever takeover attempt. about asprint talking

merger with t-mobile. fo takes over as ceo by the end of may. job changes at the end of the quarter, sprint's 11th straight increase. betty: billion or months -- softbank talking about buying a betty:stake in the second-bigget reinsurer. we are told the discussions have come to a standstill. sources say the two sides disagree on a price and size of the state. -- size of the stake. softbank tries to reshape it into a technology investor. yvonne: coming up on "bloomberg daybreak: asia," more reaction to the federal statements and bearish on emerging-market debt. plus plenty of interesting ipos

on the horizon. a discussion at 8:40 hong kong time. market coming up. this is bloomberg. ♪

>> 8:00 a.m. in hong kong. we are live from bloomberg's's asian headquarters. welcome to "bloomberg daybreak: asia." stocks set for decline after wall street put a hawkish spin on wall street's growth and inflation views. china valves in beijing it will to u.s. threats. betty: and from bloomberg's new york headquarters, i am betty tolived, just after 8:00 on ths wednesday evening. we are talking about what could be a $10 billion listing. plus elon musk getting testy onr tesla, telling analysts

a post conference call they are just not cool. cool. ♪ it to: we were expecting be a no change policy meeting for the fed. certainly some things to digest. metrics seem to be the one that caught everyone's eye. when it comes to inflation outlook for the fed, they are willing to overshoot a little bit. that sent the dollar continuing its tear. this chart has been rolling a lot of em recently in weeks. now we are seeing the dollar in overbought territory, that momentum the highest since the postelection surge. interesting how much higher we could go when it comes to the dollar. how desirable is that for the fed?

how much can this strengthen before it tightens conditions and does the job for the fed? betty: in the rate hikes we have seen in the past 12 months, we have seen the dollar fall. looks like currency traders are waking up that inflation is here and might run a bit more hot, roiling the emerging markets. some of the asian currencies are hitting these 2018 lows. that is causing some issues for the central banks. let's get to the first word news with stephen engle. stephen: the world economy showing signs of stabilizing after a recent moderation with manufacturing activities strengthening for the first time this year. markets three pmi across 40 countries rose to 53.5 in april from march's six month low of

53.3. on advice from goldman sachs and j.p. morgan chase not to bet against the world economy just yet. president trump's fiscal stimulus plans are forcing the government to drive up bond issuance as the fed shrinks its balance sheet. the treasury is boosting the amount of long-term debt it sells to $73 billion. it is adding another five-year sale to his regular calendar, and planning to issue a new two-month bill late in 2018. the political consulting firm at the heart of the facebook data manipulation scandal is shutting down. cambridge analytical says it is filing insolvency proceedings in the u.k., citin what it callsg -- citing what it calls numerous unfounded accusations. they say they are being vilified for policies not only legal, but widely accepted in online advertising.

the war in syria has entered what he calls the post battle era, peter describes the way humanitarian work is conducted both in syria and iraq. >> the big actors will either generate out of this situation, some consensus to stop the war and go into a phase of more tranquility, or we will then see again a very dangerous president where possibly at the fringes of those spheres of influence in syria, you will see new combat operations. stephen: global news 24 hours a toc and on air and tic powered by 2700 journalists in 120 countries. this is bloomberg. yvonne: looking at the market opening, pretty slow going with

japan closed for the rest of golden week. let's check with sophie kamaruddin. sophie: looks like the fed report will dominate attention followed by u.s.-china trade talks. pup. kospi could be sent for a second day of losses. aussie shares having a pretty good start to the month of may, rising for a fifth straight session. with u.s. futures looking steady, range trading could hit as a bounce as the day progresses. we have the aussie dollar trading near an 11 month low as the dollar past year to date highs. we are going to be watching the aussie as well as the yen to reaction to the u.s.-china trade talks. we are keeping an eye on the korean won. won will beed the

the focal point of pain. for the latest anyone export numbers showing the decline of 2016 to manufacturing declines, won on a second day of losses. we have good news from john day motor and -- hyundai motors and kia. says sales are in a recovery in china. they say they are on their targets to meet at the end of the year. yvonne: china says it will not succumb to what it calls threats on trade, an official saying this just before talks begin with u.s. ministers and officials. china seems to be drawing red lines ahead of this meeting. >> that is right. we had this the official

briefing yesterday in beijing, in which the official tried to stress china' resolves in not wanting to bend to the pressure from washington. we had a number of commentaries from public state media as well. china is trying to take a tough won on a second day of stance ahead of team trump arriving in beijing for these by days of talks, led secretary-treasurer mnuchin. china said it would not commit to preconditions ahead of these negotiations, around for example the trade deficit, and around byits china 2025 strategy. also interestingly saying china, is unique political system and centralized form of government, means china is better able to w than theade issues u.s. certainly a toughening stance from chinese officials.

we have heard similar lines, at least from the u.s. side i wantingn to play down expectations, the likes of wilbur ross suggesting the talks could be ended if they are not going in the direction washington wants to go in. he said president trump would be signing off on any agreements they come out with. betty: what step might china take to appease the u.s.? tom: it has already made certain suggestions around policy changes that it could make. itsays this is in line with longer-term development strategy, that it isn't about china bending to the will of washington. what it has said in the last few it will reassess cars,s on the imports of

cutting them from 29% to 10% or 15%. there are a number of steps that china is taking that could play well in terms of the key concerns for washington. china saying this is not about having a gun to their head and bowing to pressure from washington. a keychina saying this is not cn china and the u.s. on technology. clearly china is committed to the state back claim for manufacturing -- plan for manufacturing. the u.s. is concerned about the security applications and access to u.s. tech. yvonne: is a lot of moves going on in the currency markets as well. these weaker fixings we have seen, you could blame it on the stronger dollar, but these are pretty aggressive moves as well. tom: that is right.

o analysts described this as an aggressive move. it comes on the back of these private sector pmi data, with exports suggesting we were seeing a softening export picture for china, likely as the result of these trade tensions, at least according to bloomberg economics. thisn this move -- you saw move to 3.67. that took some by surprise. merrill lynch saying you should expect further weakness, about 6.5 in the next two to three months. there is that expectation. of course you have the stronger u.s. dollar. you have seen the yuan strengthen. there is concern from policymakers they would like to give their export sector a bit of a let up.

yvonne: it seems like more than a coincidence for now. tom mackenzie joining us from beijing as talks begin between u.s. and china. inflation in the spotlight, we may be reaching the fed's 2% inflation goal. that does not mean investors see a green light. kathleen hays is here with a look at what the fed said and what it did not say. no change in policy, a significant change in wording. kathleen: that is what these policy statements can be all about. when you are at a fed meeting when there is no press conference, ruling out entirely the fed would make a move on rates, the question becomes, what happens beyond? these subtle changes of working, with these fed officials right these policy statements, they know everyone around the world will be parsing carefully. movedd said inflation has

close to 2%. not exactly beating the drum and dance, suggesting they are ready to step up the pace of rate hikes. let's look at this chart on inflation. yellow line, 2% is the target. at 2%.'s key measure is energy measures very close behind. bloomberg economics pointing out the quarter is not quite there yet, may show the fed is not entirely convinced they are firmly at the target. sustainable? the chart showed you in the last year the fed got to 2%, then fell below at 2%. perhaps they are being cautious. something in the statement they look at closely, they talk about a symmetric target in the past, but they sustainable?

added this word "symmetric" in this statement. for the acknowledge inflation on a 12 month basis is expected to run near the committee's symmetric 2% objective over the medium term." something bloomberg economics wrote today, something others said as well -- this seems to be a cool statement from the fed. we are willing to let inflation run a little bit hot. it has been below 2% for so adds long. the door is open. will defend do -- will the fed do three rate hikes, four? there are no signs yet. betty: what are the expectations for inflation? kathleen: we will share with you in just a moment -- well, let's just look at it now. terms of expectations

made a change. earlier we spoke to a senior fellow terms of at the hoover in and stanford university. here is what he said about the word symmetric. >> if they want to say they will let it wants above 2% -- bounce above 2%, it makes sense. they said expectations. they said if they see signs of inflation expectations breaking out, wait for them to go nuts. yvonne: let's look at another chart youage on this can follow on your bloomberg terminal if you choose. i love this chart because it shows two things. it seems to me crude oil prices have a significant impact on inflation expectations. that should boost inflation, at least on the headline number. it shows there has been a flattening out on the far right. yes, they are rising, but they

seem to be flattening out. in terms of something the fed left out, it is no longer including the statement "monitoring inflation developments closely." perhaps they achieved that goal. that is something they took out of the statement. slowdown, butmer business investment strong. june is when they will be willing to signal more rate hikes if and when they feel they are needed. ourne:, kathleen hays, bloomberg politics and policy issues editor. bloomberg subscribers can go to dayb. we will have the discussion i had with an emerging markets twist. why tesla says, it's days of burning cash may be coming to an end this year.

this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." betty: markets got only a brief respite from the fed signals it will keep a gradual tightening pace. let's take a closer look at how this impacts the emerging markets with our next guest, who has managed over $6 billion of emerging-market debt. very emerging-market local debt fund has been 96% of its peers. ricardo, thank you so much for joining us. it has been so interesting to see how the emerging markets have reacted to inflation expectation, global growth projection. after seeing the fed statement today and these concerns in the market about inflation running

think, how do you emerging markets will absorb this, particularly as the dollar continues to strengthen? ricardo: the dollar strengthening is always bad news for emerging markets. however when looks at emerging markets, the need is at an all-time low. it shouldn't be something very dramatic. it should be very temporary, the effect. yvonne: so transient, the impact. what about these trade frictions? normally in the past it has driven some flows into the emerging-markets. i would not call it a safe haven, but perhaps outside this u.s.-china trade war, u.s.-japan trade war. how do you think this friction will affect flows? ricardo: a trade war itself or the trade restrictions the u.s.

imposing is with europe and japan. imposing is with europe and japan. it would indirectly affect china through emerging markets. most emerging markets china into developed markets. the conclusion would be if trade restrictions reflect negatively thate chinese economy, would affect emerging markets. we do not believe that is the case. we believe mark emerging markets -- emerging markets should not be too affected. emerging markets do not lead a lot of foreign money anymore. emerging markets should not suffer as a consequence of that. betty: it was just and what we have seen a year ago, analysts saying em is insulated from this. it seems there was a bit of

complacency to the risks we are seeing in the world. it seems things are not as benign as they used to. is this a correction from this open position in when it comes to -- over positioning when it comes to em? ricardo: we don't think it is a permanent collection. we think it is a temporary correction. we believeover positioning by se investors thinking the world has changed for good. we don't think this is a permanent correction. the emerging-market, as i said, they don't need a lot of financing from the rest of the world. yvonne: even if the dollar keeps rising? ricardo: even if the dollar keeps rising. fed policies have been negative for he was -- for u.s. productivity. the tax reform has come at a time when the u.s. economy is

almost overheating. those policies are negative for any economy, including the u.s. the strength of the u.s. dollar doesn't seem to be a feature that could last very long. yvonne: it is interesting when it comes to yields as well, we are having trouble breaking on the u.s. 10 year. is it about these deficits? what is driving yields at the moment? ricardo:ricardo: it seemed the t was affecting the u.s. as an emerging market economy. countries we can, their rates go higher. that is what was happening to on the u.s. 10eks year. is it, the market started to realize the spread between u.s. yields and other developed yields was too large. that doesn't seem to be a

permanent phenomenon. it cannot be a permanent phenomenon. the u.s. economy is getting he's -- these because as these policies become more unsustainable. yvonne: you like malaysia, you like the philippines. malaysia interesting with what we have seen with currency. how do you square all that? ricardo: malaysia has had many elections in the past. we are having an election coming up. surprise.xpect a big we don't think the conditions are for malaysia to suffer a change. if it were, it would potentially be an opportunity for malaysian politics to clean up a little bit and get more transparent. that long-term is positive. either way you cut it with elections coming up, we see it

as good policy. joiningricardo adrogue, offrom braings, head emerging markets debt. you can dive into any of the securities or functions we talk about. you can send betty and me instant messages if you have questions for our guests. this is for bloomberg subscribers only. check it out on tv . this is "bloomberg daybreak: asia." ♪

yvonne: a quick check of the latest business headlines. chinese state media says it regulators are reviewing ubs's

application to increase its brokerage to 51.1%. ubs'limits were listed application to increase its brokerage on april 20. the second biggest stakeholder. sprint is shuffling its top ranks ahead of the proposed $26 billion merger with t-mobile. cfo takes over as ceo by the end of may. the job ceo by the end of may. the job changes, the end of the quarter, an 11th straight ofrease, a posted net income $69 million where investors expected a loss. nearing an agreement to pay as much as $1 billion to resolve two u.s. investigations into rigging and allegations of bribery in libya. the deals could be settled as early this week. they would end years of scrutiny that led to rate rigging

charges. coming up next, we are and expecting an announcement on its ipo on its new listings and outlook in asia. this is bloomberg. ♪

it is 8:30 a.m. in singapore. i am yvonne man in hong kong. in newi am betty liu york and are watching daybreak asia. china says it will not succumb to what the cost threats from the united states on trade in the comments, from a senior government official hours before talks begin with delegation of the trump administration officials. officials told bloomberg patient want accept any u.s. preconditions suggest abandoning

long-term ambitions and narrowing the trade gap by $100 billion. the fed left interest rates unchanged, close to target and that indicating any potential to veer. signaled weakness in growth and removing a statement in the march statement that economic outlook started in recent months and balanced it up a noted solid growth in business investments. starbucks has settled with two black men wrongfully arrested at a philadelphia store for an undisclosed sum and promised to pay for their college education. does a settled with the city with a's symbolic one dollar each and promise of $200,000 programs for young entrepreneurs. starbucks described the reprehensible and closed stores for staff training. trump says he is still open to giving robert mueller an

interview. as theuliani spoke latest changes to the president's legal team unfolded. veteran who represented booklet to drink his impeachment hearing is now part of president trump's legal team. global news, 24 hours a day, on the air, and at tictoc on twitter. powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: breaking news that xiao ini has filed for an ipo hong kong and the biggest since 2014 since alibaba and the biggest ipo this year. there are rumors leading up to this confirmation that it was going to be at least a $10 billion hong kong ipo and a rca market cap of $100 billion. big one wheno be a it opens in the hong kong

market, and it's been in our guest from a senior partner of asia-pacific services. after we wereone, expecting a flood of giant tech companies and biotech companies listing and heading care because of the looser entry rules we have seen. how big of a game changer is this? >> is going to be the only credible architect to protect the u.s. when it comes to scale. what about singapore? >> the market speaks. there is a lot of noise out there. yvonne: $100 billion in terms of valuation. is that ridiculous to think about? recovery in the past year come up with us in slower growth in china and did not make a whole lot of money when it comes to phones themselves. is there a reason to doubt a little about the prospects of this? think they have been

raising capital and this is proof of price. they come to market improve price in market and will see what happens. it is a big number, but we will see, the market is willing to take sizable prices recently. we have had good ipo action, so let's see what happens. withe: there is a caveat all of these, which is the cash crunch. out orfferings go hundred times oversubscribed because investors are brushing in a borrowed heavily to place orders. what does it mean for hyper rates? keith: we saw in the last week now a blip in the market. in history we have had over thousand times of oversubscription, so we will see. it is on the retail trench and not the whole of the trench, but it is a factor out there.

think isat do you happening that is making hong kong more attractive than other exchanges? we have been nasdaq competing and a lot of times they are competing on how much marketing they are offering companies and how much cheaper the price is to list on their exchange. what does the attractiveness of hong kong? keith: yet the think job are free predominately. we're on the doorstep of mainland china, which is a hot text market and a lot of innovation is going on. inulators are more relaxed terms of extremity in the market, so a lot of innovation going on across the border and beyond. there is a lot of exciting companies. you had a lot of action coming out of silicon valley, mainly in new york, and now it is china's turn.

betty: his present a consideration? consideration? what are the macro benefits and other factors in terms of these tech companies? keith: you are spot on. in the last year or so we have seen a rise in the hong kong market, so the price of these companies are on the up, and the chinese opening to investors in the mainland where we have seen multiples go skyhigh multiple times is quite appealing. either one of the tech titans can come to hong kong or we see companies coming out of china, they are going to generate a lot of excitement in the mainland by domestic investors who know their names. betty: as we see these listings go to major exchanges, do you

expect those who are left out of the game or are not getting as much of these superstar ipo's threshold we see more mergers on the exchanges and the bigger wants to swallow up the smaller ones? keith: i think over time oc more of a reflection of that. -- i think over time you will see more of a reflection of that. think in the cash equities space, we're are moving forward to a more polarized world. but that is ahead of other products that are invested in. yvonne: why is there a push for biotech and companies spending millions dollars of drugs that in the failing, or turn up unprofitable, or stock prices are volatile? it seems they put in safeguards to not completely open the gates. to think the safeguards are enough? biotech is a well-defined

space and the exchanges looking for people who passed phase one trials. as you allude to, it is a protection for the market and for investors that they know someone has looked at these companies. yvonne: are we putting much faith? when you look at one class shares, some of these companies family businesses and they don't align with shareholder interests. is that something that is a buyer beware? keith: as always, buyer beware. this is a securities market. the marketplace needs to go on an education journey. it is good to start with biotech, a defined space with revelatory involvement. there's a huge amount of interest and biotech, not just

at home, but around the planet with interest of what could happen in hong kong. yvonne: is china going to be a big threat to hong kong? keith: not necessarily, it might come back to hong kong. yvonne: what threat could be to the hong kong market? keith: we'll will have to see how it plays out, take a tencent a $400baba, around billion and $500 billion market cap. maybe hong kong has a role to play. yvonne: maybe second time is the charm? usth, thank you for joining on the hong kong ipo market. and shall make filing for the next some ofnduct wall street's biggest backers protecting themselves against cyber attacks in an interconnected ecosystem. this is bloomberg. ♪

yvonne: this is "daybreak asia". betty: tesla beating street expectations for first-quarter results but the stock dropped 5% after hours as elon musk that eight 2.5 hour earnings call. ramy inocencio joining us for more. you never know what to expect on these calls. is always a wild ride, and this is one of the wilder ones. it seemed as if elon musk got tired or annoyed by these analyst questions. here is what he had to say. >> we are going to go to youtube. sorry, these questions are so dry, they are killing me. you really shouldn't say

that on an earnings call. the point of this is investors do not like this and it ended down 4.5%. your called boring. [laughter] the: we saw expiration at 6:00 p.m. eastern time when it started to crumble here. with that said, there is good stuff that came out of the earnings results. as you want to through those -- let's walk through those come adjusted eps was less than expected in terms of a lost, the 25 per share, and auto margins because 19% and had a goal of 25%. everything is hunky-dory moving into the second quarter. they said the cash flow will be positive in the third as well as fourth quarters. no on to the bloomberg and

show you when of my terminal charts looking at the production of cars in the most recent quarter, almost hitting 35,000. the good news is tesla is keeping its target of 5000 model three vehicles per week and two months time and said they produced model threes at a rate of 2000 or so over the last three weeks in april. the cash for was one big think, is the second bloomberg terminal the cash billion was burn in terms of six consecutive quarters and we can see this is not going well. there is some salvation by could be seen because if you bring your cash now, yet a big great flame production and that is the hook investors are banking on. yvonne: ramy, thank you so much

and will talk about those tesla earnings and just a bit. the facebook cambridge analytica bridge highlighted issues, but hacks are happening to financial institutions and we discussed this with larry thompson joining us in hong kong. facebook, is not just we are talking about xiao mei coming into the market and becoming a public company and ecb's chinese tech players becoming more like authentec, and tencent, and alibaba. is there a need for relation more than ever? is a need for the real place in the financial industry to get together with a growing consensus as to what standard should be. and also begin to look at what is going on so we can come up with a response and the broader issue of how do we deal with

resiliency and recovery when there is an attack on the financial industry? yvonne: we had one recently in malaysia, a separate attack involving fraudulent transfer request summer to what we saw from the bangladesh bank heist 2016. our safeguards enough at the moment? larry: there has to be more data sharing as to what is the nature of those breaches. unfortunately we do not know all of the details for what has occurred. both the national regulators as well as global regulators to work together in a much more coordinated action with the private industry to come up with standards in terms of what the sharing should be so we all have the right information so we could protect the financial industry on a global basis. yvonne: that is the issue, how localized relation has been. when it comes to hong kong and

singapore, there is a race to become the next fed tech hub. how do you create a global revelatory platform when there is different political, economic, social, and how technically advanced these regions are. larry: you hit upon a very important issue. what we need is standards set up the private sector and public sector. then conjunction -- but paper where we layout guidelines in terms of what should be happening in the financial industry. one of those is it should be preparation made in terms of scenario planning so we can look and see what is happening with regard, and contingency plans so financial institutions are going to be out for a period of time, there is a recovery phase. grunt anderattacks of

the parties has grown, how do you incentivize firms to make sure they are protected? for so long, spending on securities was not a priority, it is now with financial institutions. how do you incentivize them? arry: every six months we do systemic risk," we found the last three years is 36% and growing on cyber risk is the number one risk they are facing. 78% of respondents in the financial services industry say cyber is at the top five. my judgment is they are incentivized to be at this issue but we need a more coordinated response the private sector and public sector working together to make sure there is greater information sharing going on

between those institutions so we have information to protect ourselves. betty: how does blockchain play into this? could that technology and that it is so transparent addressed some of these issues? technologyelieve the of blockchain is one distributive technology that has some promise in the future. there are layers of encryption and technology. there's also the possibility that you have a decentralized validation set up back at the tip better protection as well. however, it is early in the process and evolution of ledger technology to be certain that is going to be the panacea to solving the issue of data security when it comes to cybersecurity. ofnne: a lot of questions how to regulate something that is decentralized. we saw goldman

talk about their trading desk that once had 500 people, and now it is three as they have 9000 on the staff when comes to engineers and stuff focused on relation. do you think that is a start of a trend? not, but it ispe my belief you will have technology, especially fintech, bring greater efficiency to the financial industry and that will help in the cybersecurity fight. thompson, great to have you here and joining us in hong kong. for breaking news, we have launchup with twitter to tictoc on twitter design for social media offerings and likely to coverage and hourly updated top news reports us.fied i asby this is bloomberg. ♪

yvonne: this is daybreak asia. betty: biologics is one of the best-performing stocks this year with shares up more than 60%. the first and currently only company to manufacture the

approved biologics in china for the u.s., ramy incipio spoke to something with their ceo about companies still are growth and expansion plans in ireland. sound, whorgy is want to hit two birds with one stone. europe is the second-biggest market, but we only account for 4% of revenue and growing at 200%. send a operation in ireland will help us be closer to the customer. want to enable partners in ireland and enable european partners to discover manufactured biologics. ae second part is related to geographic diversification. most of our operation is based in china. and it is so hard to make, and

having geographical diversity is key to have a robust supply chain. myt is why it is exciting, team is excited about it. ramy: when i think of ireland i think of tax break. to what degree did not have a role in pushing you there? question, a very good ireland has a very attractive tech system, especially for manufacturing. is that compared to china labor costs are significantly higher, but the tech spec will help us get closer with the margin -- the tax break will help us get closer with the margin in china. yvonne: that is our exclusive interview with chris chen speaking to ramy there. a quick check of business flash headlines, profit rising income

the senaterank for in the $2 million the lender says the credit so especially with costs on nonperforming to 12down 49 basis points points and the interest margin of 1.84%. jumping,aft shares exiting analyst estimates with revenues of $6.3 billion, early missing projections and sales in the u.s. where they generate 70% of revenue dropped 3.3% and chairs were hammered last year's sales. national australia bank notes is a selloff in asset management business, the lender says they are targeting a separation of the 50 two in fund manager by the end of 2019 through an ipo. sold at 2.1 billion

u.s. dollars and funding pressure in the second half. david is here with a preview of what to expect on the work markets. the ceo is coming on the show 2.5 hours from now and his first interview about earnings. the exit they are planning from the wealth management business and preference for an ipo trade sale. we will get an idea of how much she wants for that part of the business. behavior issues of bad in the history and whether or not he thinks that would be a challenge when it comes to returns going forward. xiaomi, talked about and the issue with these ipos. of goodbeutel portion doctor was 650 times over's

subscribed. when theypecially list here in hong kong the next couple of months. >> it indicates a lot of funding pressure in the catch csh crunch. and what already is a market that has no momentum. and we are also going to be joined by bank of tokyo mitsubishi. betty: that is it for daybreak asia. stand by for "bloomberg markets". this is bloomberg. ♪

david: you actually started out, you wanted to be an actor. leslie: i was sort of a mediocre actor. i was also tending bar more than i was acting during those years. david: so what was your skill set, the scripts or the talent or both? leslie: we had the hottest comedy and the hottest drama in the world on television on nbc. david: companies like netflix and apple and facebook and amazon, they're in the streaming business. leslie: money alone doesn't lead to good programming. it is tough. we're competing with companies that could eat use live. -- us alive. david: when "survivor" came, that was an unusual show at the time. leslie: i said that's the stupidest idea i've ever heard. [laughter] >> would you fix your tie, please? david: