♪ rosalind: coming up on "bloomberg best," the stories from business around the world. the trade deal as the u.s. and china returned to the bargaining table. >> both sides said there was progress made. >> a long way from conclusive and final trade agreement. anchor: more signs of a tech slowdown. tesla breaks ground on a factory in shanghai and the u.s. government shutdown drags on. >> both sides doubled down and dug their heels on their current strategy. >> fomc releases minutes on where policy is heading. >> we are trying to get to the point where we are very consistent with our dual mandate. rosalind: plus, are the markets overreacting? reasonable people can disagree. >> we do not see likelihood of a recession anytime soon. >> the risks, things can get

ugly. rosalind: that is all straight ahead on bloomberg best. ♪ rosalind: hello and welcome. i am rosalind chin and this is "bloomberg best," your weekly review of business news and analysis and interviews from around the world. let's start with a day by day look at the top headlines. on monday, investors found reasons for optimism as u.s. and china delegations began talks aimed at resolving the trade impasse. >> u.s. and chinese officials begin face-to-face trade talk today. they began them for the first time since president trump and

president xi announced their 90-day standstill. with six weeks ago, they have a lot to sort through. >> the fact that china's top policy negotiator and advisor to president xi jinping arrive earlier on, kind of reinforces the idea that the chinese are taking these talks seriously. >> this would seem to be a gesture from china, the fact that the top trade czar showed up. it would seem to be a show of good faith that china is taking talks seriously. what it will come down to is if china is willing to make these big structural changes to its economy, and that is really the substance of the deal, and that is going to be hard to achieve. >> the trump administration has expressed optimism it can reach a deal with china. >> the fact that we have had talks are happening, is certainly points for some kind of congress. but we know that there are trade

hawks on both sides of this. we have not yet heard from the likes of richard lighthizer and peter navarro. the sentiment is better on this story, but we are still a long way from really signing off on a conclusive trade agreement. >> president trump will address the nation for his first primetime speech from the oval office. he will make the case there is a humanitarian and national security crisis at the border of mexico and that a wall must be built. are we expecting him to say there is a national emergency? >> at this point, trump's allies are urging him to short-circuit congress and undertake a national. however, we are being told by white house sources that he is not going to do that tonight. he is still trying to put pressure on democrats and use the oval office address to make the case to the public that $5 billion should be spent on the wall. president trump: the federal

government remains shut down, for one reason and one reason only -- because democrats will not fund border security. >> our suggestion is a simple one. mr. president, reopen the government and we can resolve our differences over border security. >> the president did not offer anything new to democrats. there was the thought that there would be an olive branch. suggesting he would have the wall made of steel instead of concrete. not something the democrats want either. both sides just essentially double down and dug in their heels on their current strategy, so we are nowhere further than we were almost 19 days ago when all this began. ♪ >> in moments, the federal reserve will publish the minutes of its december meeting and further forecast increases despite pressure from president trump.

>> the fed was much more straightforward on december 19 when they announced their rate move, than the minutes suggested they were in a meeting. a lot more caution and concern, including a few members of the committee who wanted to keep rates unchanged at the december meeting. no believe in the markets that anybody would do that. so they saw something coming. there were also concerned about what they saw in financial markets given at that time. the worst disruption came after the fed meeting. so fed officials very much on top of uncertainty about the economy, the meetings show that. it does suggest that their caution was warranted. the markets reacted badly to jay powell's speech. they went down. now, everybody is talking about the possibility of the fed on hold for quite some time. >> the china-u.s. trade talks got mildly positive reviews. china describes them as deep and detailed.

robert lighthizer said the two sides explored ways to achieve fairness and balance. >> it seems like there was an agreement. both sides are saying for china to buy more agricultural products, some energy products and other related products from the u.s., in a sign that they are trying to move to some kind of agreement. both sides said there was progress made. the real question is, can they get this done by march 1? it is not just about dealing with tariffs. they really have to come to some kind of agreement on business and industrial practices in china, that the u.s. says need to change. that is the real question.

and march 1 is really not that far away. >> there are a growing number of times that the parliament has a will to reject theresa may's deal. the prime minister suffered his second defeat in two days. this time, losing control of the timetable. if that is the case, where are we? >> what happens next, that is what everyone is scratching their heads about. it certainly seems impossible for her to win this vote. you see what has happened in the last couple of days. she has lost. she is unable to really control any of the legislation at the moment in the commons so it seems likely that the vote will be lost. the question is, how much is she going to lose by? downing street for the first time admitting that they are contemplating losing the vote, saying that the prime minister will come back quickly with some sort of plan b. so what it should going to do? was she call another vote? is she going to dissolve

parliament? general election? we know that the labour party is going to table a no-confidence vote immediately after as well. >> jay powell stepped back into the spotlight again today, reinforcing comments from his central bank colleagues, saying that the fed can be patient when it comes to interest rate moves. >> i think the strategy was to play defense, to reassure financial markets that they are listening to them, and to get out and say, we don't see the economy is changing substantially, and we still think there could be some room to this expansion. >> day 21 of the shutdown. no end in sight. south carolina senator lindsey graham says both sides are stuck, as the impasse now ties for the longest on record. >> they said it would be the last resort, and they were there. >> a staffer says essentially democrats want to be with dealing with president trump and

his trip to the border declared that if no deal is imminent, then he is going to declare a national emergency and going to build this law by bypassing -- build this wall by bypassing congress. speaking with republicans, they are hoping that cooler heads will prevail, but there does not appear to be any end in sight. >> another busy day on the brexit front, theresa may's office has ruled out extending article 50. even as britain's evening standard, ministers think it likely. this is gaining traction. >> absolutely. it is true that theresa may's spokeswoman today ruled it out, but i think what we have seen in the last week from theresa may and her director is they have been rather careful with their words when it comes to addressing the issue of an extension. steven markley said it was not governor policy to extend. theresa may has become less categorical about extension. it is worth remembering that the e.u. isn't a an extension, it would have to be unanimous. reporting from brussels suggests that as long as it is short,

then an extension would not be necessary at all. rosalind: still ahead as we review the week on "bloomberg best," an exclusive conversation with the boston fed president. plus, the bright side of the 2019 economic outlook, but the world bank issues a darkening forecast. german industrials are poised to take a dive in a november. >> markets are shrugging the data off today. it is a known narrative. rosalind: this is bloomberg. ♪

♪ rosalind: this is "bloomberg best." i am rosalind chin. let's continue the top business stories. a major deal in the pharmaceutical industry. >> 2019 off to a big start when it comes to m&a. in pharma, eli lilly will acquire loxo. >> this is the largest transaction eli lilly has ever done according to bloomberg data. it is interesting. there are paying about $8 billion, and investors seem to like it. it is certainly a premium price, but they do have a premium product. it is less risky. >> it is an incredible little

company that took advantage of breaking science that allows doctors to identify the exact reason tumors are growing through genetic testing and then they make a drugs but block that action. it is entering the world of what we call precision medicine. it adds to our oncology business. the kind of transaction we said we would be interested in. strong innovation, compelling data from patients in terms of survival rates and complete response rates. we are excited to add it. >> german industrial production took a big step down in the last year, raising the prospect of a technical recession and european economic confidence has fallen to its lowest level in nearly two years. what is going on? >> well, i will tell you i think markets are shrugging this off. this is data from november and around that time, both the bundesbank and the german

finance ministry warned investors that germany would suffer through a slowdown in the latter part of 2018 due to some idiosyncratic factors that would be temporary, that would be transitory, but that it would lead to a slowdown. i think as a result of that, markets are shrugging off today because it is a known narrative. it is something they have been prepared for already. the bundesbank came out today and said, you've got to look through this data point. growth in the fourth quarter will still be solid. i think that is why markets are taking this in stride. >> signs that the trade war is hurting china, continuing now for six straight months. down sharply in december, continuing the slowdown for a straight six months now. >> more concerns that china is entering this deflationary scenario once again. >> we hear from the likes of cicc, the chinese investment bank, saying that deflationary pressures are now building. as you see, a slowdown in demand domestically and external demand looking weaker as well. in terms of consumer price inflation, it is down as well, 1.9% from 2.2%. it is now concerned about deflation moving to front and center for some here in china. >> samsung shares swinging

between losses and gains after quarterly profits end sales missed estimates in the last three months of 2018. demand for memory chips slumped. >> when i saw the numbers come out, i thought, this is a big big miss. what is going on? >> you are right. it is the big miss. at operating level, miss by 20%, the largest in two years. that is a miss against the sell side analyst expectations. the buy side, investors have been selling stocks for the last few months anyway. they knew that there were issues ahead and in october, they told us what they were expecting. and that was 10% below what everyone else have been expecting. samsung was cutting the spending by even more. that indicates they knew there were tough times coming. especially in the memory chip sector. but remember, they make phones,

they make lcd displays and other things. they knew tough times were coming and they prepared for it by reining in spending before it is too late. i think they are a company that may be more ready for it than others. >> the opposition leader of the democratic republic of congo has been declared the surprise winner of last month's presidential election. if the country's constitutional court validates the results of the election, it will be the first transfer of power since congo gained independence nearly 60 years ago, peacefully. how much of a surprise was this? >> it was a huge surprise. people have put their bets on the outgoing president, he came in third which is usually influential. -- he came in third.

the catholic church, which is usually influential in congo, had suggested or leaked that the opposition candidate was the likely winner. and as it turned out, it was the one who won. it was really unexpected and unfortunately, and a lot of analysts believe the results may have been altered by the electoral commission in favor of the person who won, because he is seen as a safer candidate in my be willing to do a deal with the outgoing administration. >> the white house is announcing a former economist withdrawing from a seat on the central bank's board of governors. what happened, why is she

withdrawing? >> her area of expertise is financial stability and regulation and supervision. some people who watched this closely say that this was really the result of a concerted lobbying effort on the banking industry's part, which has sort of gummed up her nomination process and kept her from getting confirmed last year, when she was nominated. she said she is looking at this as career limbo and that is why she is withdrawing her nomination. >> as hedge funds report their 2018 performance, a chasm has grown between those are performed and of those who were down. bill ackman's version square are performed others, but still ended the year in the red. one of the worst performers was grennlight capital, which saw the worst performance in its 22 year history. >> everyone complained and waited for this volatility to return and finally when it arrived, they were on the wrong side of it. they could not exploit it. that led to huge losses.

it all started in february, when short volatility traits imploded. many hedge fund managers were smashed. then again, it happen in october and december, which was really bad. >> 2019 supposed to be the year of big tech ipos. uber, lyft, palantir, and more. but, with the u.s. government shutdown hitting its 19th day, the market could be facing a slowdown. the fcc is one of several federal agencies down to a skeleton staff. so just how bad is this situation? >> uber and lyft have both confidentially filed and what this shutdown means is that none of the paperwork is getting looked at. companies can still put in their basic filings, but with all the

staff furloughed, there is nobody to review them, nobody tell communicate what else might be needed before they move on to the next step. >> asset managers under pressure, blackrock cutting some 3% of its global workforce, that is 500 people, the largest reduction since 2016. there are a litany of issues. across asset management in particular. you are worried about volatility in the market, disruption of technology. what seems to be at play at the moment here? >> in the memo announcing the layoffs today, the president of blackrock cited a number of things including shifting investor preferences, market volatility and uncertainty. in the bigger picture, they are trying to trim down the

headcount as they move forward. and, like you said, this is the largest number of layoffs we have seen since 2016 in the firms. ♪

♪ rosalind: you are watching "bloomberg best." i am rosalind chin. a week ago, jay powell said the fomc would be flexible with 2019 rates. michael mckee sat down for an exclusive conversation with eric rosengren, the boston fed president, and asked him to clarify how the fed's patients might play into policy. >> we are trying to get to the point where we are very consistent with our dual mandate, and at a time when forecasts are telling us we are more than likely not going to have a bad outcome, in fact, we will have a good outcome come in terms of the unemployment rate drifting down and relative gdp

being strong, at the same time, the financial data is much weaker. it is implying may become a bigger slowdown in the economy. so when we have these two differences, i think we need to get a little bit more understanding of why they are different and my guess is that we will see in 2019 the economy is going to be reasonably strong. the unemployment rate will continue to drift down from 3.9%, and about the financial markets will recover. but i also realize that my forecasts can be quite wrong and that financial markets might have a different view. the last couple days have been negative and quite volatile. so i have to take those financial market considerations into account. michael: assuming we don't get a weird outlier in the numbers, how long is patience? is it a quarter, half of the year? eric: it would be data dependent. i would expect that as he get into the second quarter, we will have more information about the concerns that are embedded in the financial market show through to real data.

my best guess is we won't see that much of an impact and as we get into the second quarter, we will continue to grow and the unemployment rate is declining. and hopefully the stock and bond markets and other financial markets will reflect the fact that some of the risk of a seem to be pricing at a hypermobility turns out to be a much lower probability. michael: you do have a slowdown in china. the market volatility, the yield curve flattening. does it worry you maybe markets are seeing something you might not be? eric: the way i think about it is that they may be pricing the risk more likely than i would expect. if you look at private forecast provided by fomc participants, after the last meeting, private forecasters, there are basically

not seeing the risks that we are seeing in financial markets. i can tell a more dire story, i just think it is less likely. my baseline expectation is that markets will reprice and reflect the fact that the economy is doing better over time. but there is certainly risk. china is certainly slowing down. there are financial stability issues that i think are relevant in china in terms of the amount of leverage they have. they are also engaged with the united states in trade negotiations that could go poorly and we would have a much more dire outcome on your economy than on our economy, but we would be impacted as well. rosalind: coming up, more of the week's most compelling conversations. big pharma ceos hold court at the j.p. morgan health care conference and ubs thinks markets are over bearish. he still sees plenty of strength in the world economy. >> there are difficulties we need to watch, but overall, i think the sentiment is not as

good as it should be. rosalind: this is bloomberg. ♪ i am a family man.

i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome.

rosalind: welcome back to bloomberg best. i am rosalind chin. leaders in the pharmaceutical and health care industries gathered in san francisco this week at the annual j.p. morgan health care conference. research was a central topic of discussion. also, global policy. this could profoundly affect the sector in 2019. bloomberg's taylor riggs spoke with several top executives at the event. taylor: what are your contingency plans to prepare for any brexit scenario? >> we have known for some time. we have a date at the end of march for the u.k. exit.

there is some uncertainty as to whether the votes will come over the next few weeks. we have been preparing with the british government very strongly about contingency plans and on public record. our number one concern is to make sure that patients and consumers can get their medicines and vaccines that they need. we are well prepared for that. we are a global company. we have less than 4% of our global sales in the u.k. it is a very important country for us. it is my home country. it is where we are listed. we have a lot of employees there. this is something that we are prepared to navigate. taylor: what are your contingency plans if there is a repeal of the aca? 25% of operating income comes from that.

how concerned are you about any repeal of aca? >> i am not. i will never say that it is bulletproof. nobody on either side of the issue believes that it will make it through supreme court. i called two weeks ago and said that this judge will rule that way. everybody knows it. they knew the outcome when it was placed in that court. they already filed the appeal. they asked for an accelerated review i the appeals court. if the appeals court reverses it, the supreme court will refuse to see it. >> the drug pricing debate is not in the u.s. only, it is everywhere in the world. there is this issue of health care financing. i think our strategy and response is to deliver medicines that are highly impacting the lives of patients and pricing them in a way that is

sustainable for the health-care system. this is a mindset that we have. it is important that we find this balance in the u.s., especially, but everywhere. if we don't find a balance, eventually, the rnd will be impacted. we need a balance between investment and reward with sustainability of the health care issue. taylor: talking to that balance in japan, your headquarters are in japan. bloomberg is global and we have an audience in the headquarters in japan. what are you doing to conquer the pressures from the japanese government to rein in health care costs? >> there is pricing pressure and price cuts but there is recognition that innovation

exists and that innovation should be rewarded. highly innovative medicine can have a good price and a good reward in japan. it is finding this equilibrium in order to make the health-care system sustainable. rosalind: ubs held its greater china conference in shanghai. the chairman spoke exclusively with bloomberg television. he told shery ahn he thinks the global economy has been stronger than recent markets suggests. >> the market in my view is taking a too buried view on the economy. the economy is still doing well. there are difficulties we need to watch but overall, the sentiment is not as good as it should be. we are still in the favorable growth environment. that seems to get overshadowed by most of the discussions. shery: what is the environment like in shanghai as you speak to all of these companies in china? axel: monetary policy and the retreat of monetary policy, the fed raising rates and possibly going into a pause now, the european central bank stopping

it's purchase program, those are all events that have changed what the global economy was driven by for the last couple of years. markets have to get used to that. that adjustment is a difficult one, but i think markets will manage. monetary policy will be very responsive to economic situation. the economic situation is cooling off somewhat. there is less upswing then we might have seen last year. there is no reason to be skeptical. we still have a relatively good global economy. we still have a relatively good performance on trade. yes, there are trade disputes but at this stage, it is setting the stage for the future collaboration between the major economies rather than already embarking on some confrontation. there are some ongoing discussions. as long as they are ongoing, we

are in a good place. >> by central banks being responsive, do you expect the fed to react to the downtrend in the global economy? calling off rate hikes this year or just changing the timing in these increases? >> our economies had already penciled in a pause for the fed in the last quarter of the last year. that did not happen. some of the impact of the trade dispute has been less frontloaded than expected. we clearly expected for the fed to be data dependent. since inflation has not really surged and is not really a major problem yet, the fed can take it in stride. they will be cautious in the first half of the year and look at the data. that will lead them to a pause in the march meeting. i think it is unclear what the second half of the year will bring. i think the market has run a a little bit ahead of itself on the expectation that there may be rate hikes on the horizon.

we do see the economy less dynamic going forward. we don't see any likelihood of a recession anytime soon. i would have a question around the fed moving in the opposite direction that quickly after they continued to raise rates throughout the year with four rate hikes. we see less rate hikes in the future but not clearly a change in direction. >> the bullish outlook was somewhat undermined on wednesday. the bank slashed its estimates for emerging market growth by half a percentage point. they say the downside risks have become more acute. citing what it called disorderly market movement as well as the escalating trade dispute. shery ahn spoke with one of the leaders of the report. >> we have downgraded our global

growth forecast relative to last year. growth is going to slow down from 3% to 2.9% this year. advanced economies are going to see a slowdown, emerging markets will see a stalled growth. in the context of em, economies, we reduce our growth forecast by .5 percentage points. when we think about global economy, we had three major engines -- the united states, the euro area and china. these three together account for about 50% of global gdp and 60% of global growth. all three will see lower growth this year. given the risks, things can get ugly. >> what are the upside risks if you see any? >> there are major upside risks associated with these trade

tensions. we see that the united states and china are talking to each other. so far, all signs indicate that talks have been productive. if the united states and china resolve their differences in a timely manner and then take this risk off the table, the global economy can get a kick out of that. the confidence can go up. if trade tensions escalate, and we see a deeper slowdown in the united states and china, the impact on other economies could be quite significant. ♪

♪ rosalind: this is "bloomberg best."

i am rosalind chin. we will round up the top business stories in europe. bloomberg delivered a series of banking scoops. among the stories, we were first to report plans to slash the bonus pool at deutsche bank. >> the management board is planning to cut the bonus pool by 10%. bloomberg sources say awards will be more selective to keep top bankers around. they have to get costs in order and they have no other option. is that right? >> that is right. they have no options. they are facing a situation where morale is already low. they want to keep the top people. it is a delicate situation. you need to bring costs down and keep the good people. they will cut the bonuses and try to give those people the

money that they really want to keep. they will monitor for the rest of the year if it will pay off. rosalind: an activist says that he has lost confidence in his dealings with this british lender. a 5% owner says that he will seek 5% approval for board changes. this after barclays spurned his offer to become a nonconsecutive director. >> this is one of those cases where we see and activists ratcheting up pressure. the ceo of barclays has been resistant to any kind of change. he believes that the investment bank is the core and the linchpin of the strategy. this activist investor wants them to shrink it. they are at odds on a very fundamental issue. >> this lender is said to have had contact with potential buyers. according to a bloomberg source, the bank has expressed potential interest provided that they reduce the nonperforming loans and borrowing cost. is this potential for a big problem for italy? >> the timing is key.

carige has a balance sheet in the order of 20 billion euro. it comes at a time when banks have been under strain. administrators are still trying to find a private solution and find a potential partner. at the same time, government is putting money on the table should that be needed. >> ford announcing it will cut thousands of jobs in europe and may close production plant in the u.k. jaguar is announcing that it will slash jobs as well. >> this has been coming for quite some time. that is why we have seen jaguar and ford be the first ones here.

both are majorly dependent on the u.k. where brexit has been a factor. we have other factors at work as well. ford has an aging model lineup. not many suvs that are very popular with consumers at the moment. the focus on smaller cars that are not very lucrative. vonnie: tesla ceo elon musk breaks ground on a $5 billion factory in china. this is going ahead in spite of all the problems elon musk has been experiencing. he has had great successes, like spacex. will this be another success? >> he has been coming along on the tesla side. the big question is going to be -- are we talking in musk time and whether or not this factory is going to be able to deliver for him in the time that they are talking. they are being aggressive.

there are talking about starting initial production of the model three by the end of this year. they have a long way to go before they get this factory built. getting a model three assembled in china to avoid import tariffs regardless of whether they're coming down a little bit. it is expensive for them to be trying to sell that car at the price point they are at right now. >> the engine for the car industry has been thrown into reverse. china recording its first yearly falling sales in decades. the day had to come at some point. if you take a look at the numbers and break them down, what is the narrative at play? >> there are a couple of things in play. first and foremost, it is the trade friction. it has slowed down the chinese economy. it has dented consumer confidence. there is talk that the chinese government will implement

another oil stimulus. chinese car buyers are pretty savvy these days. they have been accustomed to these incentives. they may be waiting for new incentives coming up. >> shares of gm are higher. the automaker issued a surprise forecast for profit gain this year. >> this is the result of what we have been working on since the 2015 timeframe. working to transform both the core business and investments we're making in e.v. connectivity. we see all that coming to fruition. still have more work to do. we are focused on this transformation. we are making sure that general motors is strong. we are demonstrating that we can continue to deliver results in a cyclical business. >> this man says he has been wrongly accused in his first chance to give his version of events after his arrest in japan.

the former nissan chairman appeared in court today to deny allegations of undisclosed compensation and says he had acted honorably and legally to strengthen the company. what did we learn from the hearing today? >> there wasn't a lot of legal precedent or legal ramifications from this appearance in court. it was chosen by carlos ghosn's defense team to give his side of the story. in the japanese legal system, the narrative really is dictated by the prosecution. he is continuing the fight. he has given no indication that he is going to sign any sort of confession. it doesn't look like a man who once headed nissan and mitsubishi motors and still the head of renault is going to give up the fight anytime soon. >> despite carlos ghosn's plays of innocence, japanese prosecutors are adding to the

serious charges against him. he, greg kelly, and nissan itself have been indicted for breach of trust. the legal team will apply bail after he was indicted. the prospects of that being granted is slim to none at best. a motion to have him released from detention earlier this week was rejected by the tokyo district court, prompting appeal to a higher court. >> pg&e plunging today. the utilities giant stock falling over 20%. the company is considering whether it should file for bankruptcy. the move would protect them from billions of dollars of potential wildfire liabilities. there is pressure on california legislators to bail them out. >> what is happening right now is pg&e, that is the largest electric utility in california is facing massive liabilities from a string of wildfires in california. they are looking at about $30 billion in liabilities.

there is concern that the company may not have a way to pay off all of these claims. now, what we are talking about is the state legislature and the state regulators may have to step in to provide some financial support for the utility if it will stay out of bankruptcy court. >> the richest person in the world is getting a divorce. amazon ceo jeff bezos announced on twitter that he and his wife mackenzie have decided to split up after 25 years. mackenzie played a significant role at the company in the early years and was there when he wrote the business plan. according to the bloomberg's billionaire index, jeff bezos is worth more than $137 billion and if the couple split their fortune equally, they could leave mackenzie with $69 billion, making her the world's richest woman. >> watching the state law and it is set up to divide things up quite equitably between spouses when it comes to property acquired work obtained during a

marriage. how this will play out, we will have to see. there could be a prenup in place. if that is the case, they have already decided what will happen. there is this law that things should be split equally only applies if there is no agreement in place. we have seen it in prior divorces when there have been couples that were worth quite a bit of money that there are many ways that you can slice and dice fortunes. >> a number of retailers releasing sales figures today, stoking fears about a consumer slowdown and prompting a sector and broader market selloff. macy's is the worst offender. shares plunged 19% after cutting annual sales and profit forecast. what went wrong was a loss of momentum. >> the macy's ceo saying the holiday season began strong. what we heard today is after

black friday and cyber monday and cyber week, momentum dissipated. they did not see the sales they had been expecting. we heard from target, kohl's, all done poorly in the market today. ♪

>> here is the gc 3-d function. i have the bunds in the chart. you can see that if i go out even seven years, we are still negative. we are still below zero at seven years. >> there are about 30,000

functions on the bloomberg. we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites. here is another function you will find useful. quic go. you can get some important context and insight into timely topics. there is a quick take from this week. >> late last year, jack ma was confirmed as a member of the chinese communist party. he has a very un-communist net worth, $50 billion. even though china remains committed to a communist future, with the equality for all and wealth distribution based on need, its history of capitalistic compromise has made it the place to turn personal millions into billions. this is your bloomberg quick take on chinese billionaires. by one estimate, china has a new billionaire every two days. the seeds of the billionaire boom were planted in 1978.

this communist patriarch opened the country up to private enterprise and investment. since then, china began shifting away from agriculture and increased on manufacturing, eventually leading to growth that turned the country into the second largest economy behind the u.s. >> there is this discussion of what is socialism, what is capitalism. they are not poverty. >> the lines between business and politics have become increasingly hazy after president xi jinping led a campaign to make sure that the communist party leads in all aspects of society. >> the internet companies are a shining example of what china hopes it can become. that is cutting edge, smart, people doing cool things and making products that people around the world want to use. they are a lot less enthused with massive amounts of private wealth that often creates. >> china has not given up on communism. it made full communism a goal. no timeframe. on the roadmap to communism, the company will have to become

fully socialist first, which xi has set the goal to 2035. >> china is a communist country. it is a one-party state. it is very intensely focused on making sure they can take on this full stability at the expense of civil rights and other freedoms. populations in other countries take that for granted at times. >> jack ma is one of the men who was honored. this marks 40 years of china economic reform. evidence that on the issue of communism, china is more than content to wait. rosalind: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com along with all of the latest business news. 24 hours a day. that is all for "bloomberg best" this week. i am rosalind chin. this is bloomberg. ♪

♪ carol: welcome to bloomberg "businessweek." i'm carol massar. in this week's issue u.s.-china trade talks front and center. jason: the magazine has several stories looking at china and its relationship with big tech, emerging economies and its impact on the digital economy. carol: on the cover the technology giant, we're talking about zte. jason: can paypav