all those fronts. we will at least try to avert another government shutdown. try to avoid a government shutdown. it looks like either president xi jinping in china is meeting with our u.s. delegates out there, another positive sign. results the fomc hiking in now., at least for i think this positive momentum in the market is because we climbed these walls of worry. broadly, it is probably how much of the u.s. growth flow, earnings flow, etc., which is hanging there. >> optimistic ringing from the market. >> we did trade higher on the nasdaq, but it closed near a flow of the session. over the last half hour, they saw a paring of those advances from the afternoon. >> between yesterday and today, we arranged the hiccup last week. here.ll a four-day gain

>> s&p now up about 17% from the december low. that is exactly as you are saying, one by one, the bricks thin of the wall of worry are falling out of place. >> abigail, what are you watching? >> i am looking at the momentum about. are talking the s&p 500 up 17% from the december low, erasing last week's blip to the downside. this is a chart we have looked while. not for a s&p 500 is at the green line, showing that the index is oversold. above the red line, it says it is overbought. last year it was overbought for a while and then consolidated in range. last time we were in this range on this chart, the s&p 500 hours i had been contained. at 867,s breaking out suggesting that we could see bounce back up over the

70 bowler and even extend into overbought territory. technicians actually like when it climbs, which is perhaps happening right now. and looks a bit more bullish than bearish at this point. romaine: a lot of bullish activity and bullish sentiment. remember that emergence trade, and work down in october of last year when everyone was worried about recession. those fears continue to be dissipated. goldilocks seems to be back in the house. when you look at the outperformance of u.s. stocks versus the rest of the world, it is giving you a bullish signal. for about four of the 56 weeks in the past, u.s. stocks have outperformed -- four out of the past six weeks, the u.s. stocks of upper from the rest of the world. the russell 2000 cloud its way out of thei bear territory yesterday. talks are mired in

correction territory and for others, this is all tied to the expedition on economic growth in abroad. and we are seeing a bit more stability here, a bit more positive sentiment in the u.s. than in the rest of the world. stability in the u.s., at least not so much in a russia today take. a look at the dollar-ruble cross, the dollar gaining over the ruble this year, after a bipartisan group of senators propose instituting sanctions on russian banks, oligarchs, etc., due to interference with the us elections. setting up a fight with president trump, but also setting up a real problem for russian banks, companies others. take a look at the shares of the biggest russian banks, falling about 4% in after-hours trading.

to give you some perspective, senator graham, a republican, is one of the lead writers of the bill, making it a bit heftier in terms of its potential for getting through. much,rlet: thank you so lisa and our markets team. froma allianz global investors is still with us. if you have china trade talks, you have steve mnuchin and robert lighthizer there, what are investors pricing in, exactly? >> i think the narrative of that is that there will probably be some compromise on the trade imbalance side, and we are starting to see more purchases for example with the soybean. whether or not we can get. in the in permits on the structural side, the technology transfer, i don't think that is priced in yet. people are expecting the perhaps that will be an ongoing negotiation.

i do think anything will happen in a nice couple of weeks that will change china's structural view on this. i think president xi jinping bringing his presence to the table is really putting some weight and gravitas to the process, and it is a positive sign. u.s.-china trade negotiations are one category of a bigger story, the dichotomy between the u.s. and the rest of the world. we really saw it today with the european industrial production having one of its biggest falls in a long time. we. see it with the dollar index rising four straight days -- for eight straight days. oh, i think we have earnings out. scarlet: yes, sorry to interrupt. cisco, networking equipment maker, coming in a bit higher than estimates. revenue of $12.4 billion pretty much in a line with expectations. so revenue for the quarter ended

in line for this quarter, an %.crease of 4.6 >> i will listen in on the call to see what they are talking about how the government shutdown petition have impacted the business overall. scarlet: and third quarter adjustment earnings per share also around $.76. yelp also came out with its numbers. joe: there we go. scarlet: and the let's make sure you know, tomorrow at the open, at 9:00 a.m., we will be speaking at the seat -- with the ceo of cisco, chuck robbins. joe: to my question, how are you taking of global exposure and what kind of risks should investors be taking either with overseas stocks, or with companies with global exposure?

aboutwe have been talking the barbell approach to global economy, and one hand on the barbell continues to be the u.s.. be the best from a development perspective versus a european economies. the other thing is that the barbell continues to remain. china and selectively parts of in particularna as a place where not only have evaluations come in positive, from the trade deal, but they have been injecting stimulus. it hasn't had the more immediate effect that markets anticipated, but we think it will come through probably in the second half of the year. from a dollar perspective, that is the one area we are watching closely, because as you mentioned, the dollar has strengthened. people were calling for dollars stability or even dollar weakness. but when the fed went on pause, it helps to stabilize the dollar and the rest of the world followed -- bank of australia, bank of england, so the rest of

world is catching up. a $50 strengthening is the one thing we are watching on the em side. we continue to watch this approach. europe is still no man's land, we have to get through the brexit process and eventually europe may become a place for yields. a place that becomes valuable from the perspective. we are talking about countries. sectors that are likely to outperform if we get some sort of china deal going? mona typically: what you see is that the sectors most exposed to china technology, parts of energy that are driven by global demand, china is part of that -- industrials as well, those sectors of actually are ready done quite well. they are part of the leading conference. >> is that priced in, then?

mona: i think so. and sectors like industrials and energy had been bitten up last year, so we're seeing the rebound. i don't yet think we are fully there in terms of getting full valuations, particularly on the technology side. we continue to like these winners from disruption, that is the name we have for them, areas like cybersecurity, global parts of it and the robotics, areas that have long-term circular growth. that is an area that we like longer-term. again, doing another barbell here, alan's about a bit this year with a little bit of the defensive names like staples, parts of health care which had .agged but can do well >> we talked earlier about how we are quite is different walls of worry, what is one area of concern to the could cause us to

revisit the lows we saw in a december? the: i think the big one is fed. we talked about the 180 they did earlier this year, they have taken themselves out of the equation for now. but we can envision a scenario where a trade deal gets done in some form and jobs reports continue to come in stronger. and receive which growth accelerated. than perhaps, the fed comes back in, they still have two rate hikes in their dot plot, perhaps not in march, but perhaps in june. at a think that is priced in all. markets, if you look at the bloomberg chart, it is zero for this year and easing next year. scarlet: so the data continues to firm up that the fed may have no choice but to raise? mona: actually think they will be data dependent. have really moved based on what he said. scarlet: mona mahajan, thank you

take.h for your that does it for the closing bell and for me, and romaine bostick is stepping in for "what did you miss?" from new york, this is bloomberg. ♪

♪

headquarters in new york, i am caroline hyde. romaine: and i am romaine bostick. joe: and i am joe weisenthal. what a jew miss? >> buybacks backlash. center dot marco rubio announces he will introduce a bill to tax dime backs on equal footing with dividends. it takes some steam from the week's rally. caroline: then president trump is looki to grudgingly sign a mortar deal. and a weak link in the global economy. industrial production across the eurozone fell at the fastest pace since the financial crisis. ♪ romaine: a quick update on earnings, fossil group is the watch handbag and jury maker, their comp sales for the fourth quarter came in at -7%, below estimates, and earnings per share for the fourth quarter coming in at $.94 a share. the estimate was for $1.21 a share, so we are seeing shares move a bit lower on that, caroline. caroline: now, wait and see in washington. president trump is edging

towards approving the border security negotiated by congress. .ut begrudgingly we bring in bloomberg government reporter from capitol hill. it looks like we could get a certainly, thet white house could still antagonize congress somewhat by managing to beef up the amount towards the border wall, offense, whatever you want to call it, by taking money from other parts? >> yes, so far the word is that it looks like this measure to fund the rest of the government including homeland security, will be released tonight and probably pass through both chambers of congress and signed by the white house if there are no surprises. but there have been conversations of directing military funds, taking it from 1.4 billion 10 maybe $2 billion or evener fencing finding billions elsewhere under a national emergency, so it is not the end of the debate, but

it does probably get us past the friday deadline to fund the government and avert a second shutdown. joe: and it seems likely at this point about when the text of the language is out, the trump will most probably sign it? expectation, the but this is contingent on there being no surprises in and the details such as restrictions on where they can build fencing. we are told they have a great on a handful of areas in texas where space x owns land and doesn't want fencing running through it. if there are no major surprises, no makers believe it will pass with significant support and is likely to be signed by the president. romaine: jack, one thing the market has been paying out attention to the says the issue with the market, is the bill floated by senator marco rubio to change the tax status for buybacks.

how much doing the about the details of the proposal and what kind of support he has in congress for it. jack: we don't have the details yet, we don't have any cosponsors he will have on the bill and haven't seen the exact language. he says he wants to tax the stock buybacks the same way as a dividends, and also allow immediate expensing for investment in capital investments. it is an attempt to push back on some of the criticism about the last republican tax bill, encouraging buybacks, and shift the focus towards encouraging investment in the economy that would create .obs and improve productivity joe: what does it say about politics right now though have politicians on both sides of the theirwho, although approach may be different and are not proposing the same thing, they feel comfortable in some way taking aim at something that is are popular among shareholders? jack: there hasn't been many bill on the republican tax

recently, but leading up to the midterm elections, there was a disapproval rate that was higher than the approval rate for that bill. any may have heard republicans lawmakers talking about the bill less. the have started the process of talking about increasing the corporate tax rate. we don't have a number on that, but they have become a democrats will be aggressive in starting their preliminary discussions on rolling back the tax bill. i think republicans feel the need to have a risk on's and say that they are willing to take some actions to make sure this is not a corporate giveaway, whether it is something that would actually help the economy in the long term. caroline: i am interested that the market took this so seriously. it took the wind out of the sails of the rally. how likely is it we could see such a policy put into place? would it ever get any citizen support? the senate is still ruled by republicans.

jack: i would be skeptical about in individual bill being introduced having a great chance of passing. this is a divided government, so house democrats and senate republicans ended president trump all getting on the same page would be a significant challenge. i think may be the reaction from the markets and have been a response to how high-profile this is. the fact that you have a republican senator offering this criticism and taking it as a warning, that there will be changes eventually to the tax code. they eventually will have to extend the individual tax breaks 2025. expire in so when the next piece of major tax legislation comes up, there may be aspects of a rollback in periodic caroline: jack fitzpatrick reported from capitol hill. thank you. talking of buybacks, a edgy is talking about boosting net ofbacks to $2 billions

shares. there are seeing an adjusted loss in the fourth quarter, loss per share of 60 three cents and earnings-per-share estimates were $.42. we have to dig into whether are seeing such a surprise loss. there are saying this in a are saying that it is from declined investment. maybe they were struck by the fourth quarter declines, significantly impacted they say they were by market performance. romaine: and carolyn, we also have cisco outcome of the hardware equipment maker that has been trying to transition to more software and services, be in by a smidge on second-quarter eps and revenue, giving their three q fiscal guidance, revenue and eps well above what analysts were expecting, of love the top range. so we are seeing shares move up a bit. the company also announced it added $15 stock buybacks, and if you add that to the existing by

back out there, it a monster about $24 billion. more on that ahead. this is bloomberg. ♪

♪ stories: a look at what are trending right now, terminal users are reading about nbn asset management colleagues who are preparing to start their own hedge fund. fund is likely to start trading in the second or third quarter with a 10 member team and help inst plans for the start of 2019. plus, tesla may have found its much. bloomberg.com has a story on a canadian car company redefining .he commute with a

electric car with only three wheels thousands will be zipping around the streets of los angeles by december, with an additional 70,000 to be delivered in the next two years coast.the west tictoc on twitter is reporting that an insurance company is giving its employees a chance to put their money towards student loan relief. the catch, they have to up five paid vacation days. the company estimates at least 30% of its employees will use the benefit. you can follow all these stories on the terminal on november, and of course, on a tictoc, on twitter. >> i just want to recap earnings from the big telecom and broadband provider, shares down as much as 50%. the reported earnings, that the real news seems they are cutting their annual dividend to one dollar per share. share,been at $2.16 per so they are cutting it by more than half. didn't quite say what the reason for the change is, but centurylink seems to be having an effect on shares for that.

earlier, cisco also reporting that are moving higher as big eat most estimates that wall street had for the company -- as they beat most estimates wall street had. let's talk to our bloomberg intelligence analyst, which in -- wu-jin. moving away to be from the legacy hardware business. how much does that factor into the results this quarter? guest: the long-term story has been the move, the transition to software. software and security, they were the two key drivers in driving results on the quarter and will probably continue to be the drivers in terms of forecast. when you look at software applications, they were up 18% on a year by year basis, security up 20%.

one thing on the guidance, i want to caution the audience, i know that they got the gun is from 4% to 6%, that is actually in line with consensus on an adjusting basis, i think the on ansus was on 2% unadjusted basis. so we're looking at third quarter revenue forecast that is in line. on theseto the margins new businesses compare? security and software versus the legacy hardware model? woo: if you look at software, %-plusughly in the 70 range and that will be recurring over time, versus switching to hardware, which tended to be in the upper 50's-low 60's. we are talking about hardware up over time, he

will still be a drag on the margins, but over time, we should start seeing the software margins driving up growth. caroline: i am sorry, every time i seem to have a curveball thrown in your direction. i am looking at the dividend and share repurchase authorization, a hot topic, considering we have marco rubio talking about taxing share buybacks. how important is this shareholder return for cisco. woo: and i love the curveballs, caroline. anderms of the dividends the share buybacks, the by backstory has been a big part of the fiscal story is 2018 and 2019.into prior to that $15 billion in dividends, there was $19 billion on the plate. so they will have to -- it is going to be a continual part of the story. caroline: always great to get

your opinion. this is bloomberg. ♪ this isn't just any moving day.

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mark: i am mark crumpton news.erg's first word president trump is eyeing a path to avoid another government shutdown, where he would accept of a congressional border security deal at an attempt to tap other funds for his wall. bloomberg reports about a person who spoke to the president on tuesday and asked not to be identified, says trump is likely to sign the legislation and then immediately use his executive authority to fund additional border measures. president trump spoke to reporters today as he met with the visiting president of columbia. >> where i will take a look at it when it comes. i don't want to see a shutdown, it would be a terrible thing.

i think a point was made with a less shutdown, people realized how bad the border is, how unsafe it is, and i think a lot of good points were made. but i don't want to see another one, there is no reason for it to riyadh mark: white house officials say they have yet to receive full legislative language on the back tentative bipartisan deal. house appropriations committee chairwoman nita lowey says the attacks on the u.s. border deal notut text on the deal may be released until negotiators continue to iron out the details. she spoke to bloomberg this afternoon. >> well, i'm hoping that all the details can be worked out within the next 24 hours, but you never know, it is in the interest of everyone to get this done and not to take any more time going back and forth on little details. they are reaching out to everyone and i hope there will be strong support. i am always an optimist and i

think we're almost there. mark: the democrat warned republicans, and her fellow democrats are against inverting the agreement. she said she wouldn't there predict whether president trump would support the measure and avoid another partial shutdown after funding expires friday night, but she said she is hopeful he will. 's opportunity, the mars rover of the was built it for three-month but kept on going, was pronounced dead today, 15 years after it landed on mars. >> opportunity made us martians, what i mean by that is that since january of 2004, there has been a team of people who go to work every day on mars, operating the rover that is exploring mars. mark: with project costs reaching above $500,000 a month, nasa decided there was no point in continuing efforts to contact

opportunity. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪ joe: the euro area missing the mark. industrial production falling at its fastest pace since the financial crisis, leaving the expansion for the area at risk of billy topping 1% growthless year. for more, i want to bring in the senior fellow on the council of foreign relations, my guest. previously wrote that no more than ever, there's a clear argument for german fiscal stimulus. crazyw there are not about spending money there. their own fiscal surpluses huge. the johnis it time for government to loosen its pocketbooks? a long-term commander has been a case that germany should spend more largely to help its neighbors out, help the

brea down germany's external about 8% of gdp in germany. another is a domestic case for stimulus as well. germany's own economy is slowing, it was actually one of the weaker euro area economies in the industrial production server and in a gdp numbers, which were slightly negative. q4 was only slightly positive. so there is a domestic as well as external case for fiscal expansion. caroline: let some would counter that what germany has done up to this point has been relatively good for their economy, despite some of the issues they have had in the last six or seven months. is there an argument to be late but keeping these twin surplus is going or list not getting in the way of them would be prudent in the long-term, and that maybe the short-term pain is worth it? brad: i think there is a long-term argument that germany naturally will run, because of aging, in modest current account

surplus. i don't think that explains an 8% of gdp current account surplus. germany has a fiscal surplus of 2% gdp -- 1.7%. to 0%, run a balanced budget, and still provide its own economy with a substantial boost, even judging germany on the most prudent of measures, there is scope for germany to do more. caroline: i have worked for bloomberg and lived in berlin, really. is cultural, they don't, like to spend, they want to be able to save and in many ways, loosening the has beenngs called on for years. during the last financial crisis, everyone was calling on germany. they are terrified of inflation because of their own history, and even of always heard of their side of the acb trying to pull back. how do you change that perspective, and also, where should they be spending to get

the most bang for their buck? brad: you could argue that it is cultural, but it is also political. democrats have blocked tax cuts, democrats blocked spending increases, so there is scope for compromise. how germany spends right now matters of a less than it did previously. germany's own economy has basically stalled. any increase in spending or any cut in tax would generate a positive impulse for demand. but if you want the biggest bang for your buck, the obvious place to look is to increase germany's public investment, which has been low for a long time. the only difficulty there is that it doesn't kick in quickly and you could probably bridge to that with immediate measures. joe: one of the arguments people made for a long time is that germany should simply spend more

because it would boost the rest of the euro area, it would boost be neighbors and probably good for sustainability of the project as a political entity that continues. if they were to increase domestic investment, infrastructure, how big of an impact could it still have on its neighbors, the rest of the either?g very well brad: you can come up with a lot of different estimates, i like to use of the imf's estimate for the amount of a fiscal stimulus if it spills over, is about a third of yet not huge, but right now, it is helpful. the overall euro area could use too.help, romaine: with michael on her way out, do you think they will transition to a political environment where something like this could happen? brad: the coalition agreement does envision a modest fiscal stimulus this year. the finance ministry in germany has a long history of underestimating revenue growth, so germany tends to outperform

its own forecasts. . will that continue? perhaps. perhaps, but maybe there is an argument that germany should and will change. 2% of gdp is a large fiscal surplus, you have a lot of space. joe: one thing we haven't talking about is the size of the fiscal surplus and the slowing growth, we haven't talked about the fact that bund yields are back to zero on a negative basis. on a nominal basis, how does this bolster the argument that essentially money is free at this time? free forey has been germany for a while. [laughter] but it honestly enhances the financial case. germany can make money on a five or eight year horizon by borrowing more. i think finance twitter has that one right. when you have a negative cost of unds, your immediate party

does it need to be paring down your debt. caroline: and the current airport as nine years later and currently $5 billion over budget. brad setser from the council of foreign relations, thank you. coming up, from europe to the u.s.. consumer prices were flat in january, the impact on the fed rate hikes. this is bloomberg. ♪

♪ romaine: the cost of consumer goods and services was unchanged in the january, thanks to falling gas prices largely. another sign that inflation poses little threat to the economy right now. for more, we welcome federal reserve reporter matt bowser. when i look at the report, the

numbers look ready some dude, but there are some areas where you are seeing some inflation -- apparel, cars, what else? matt: that's right and we had the core inflation rate that everyone watches closely, itluding food and energy, came down a bit in january. one of the big reasons was this their decline we have seen in motor vehicle insurance inflation, something we were talking about a year ago when it was really high and boosting the index. it has come down a lot because what happened is back in 2015, 2016 come at was can uptick in auto accidents, and auto wererers adjusting their prices to reflect that. it was one of the big sources of core inflation in the u.s.. the this chart shows is white line, a contribution to the overall core cpi inflation rate for motor vehicles, it has dropped off a cliff in the last

three months and come down by 20 basis points. many accidents? matt: and that is a good know.on, we don't the other line item in the charter that helped to boost core inflation higher than it would've been is goods. we talk about the services side of the economy as the one that responds to a tight labor market, but we are seeing that in goods because of tariffs, and part of that because there is this january effect where there seasonality. it was the highest in six years in january, so it might reverse in the coming months. joe: i drove by someone a couple of years ago and there were looking at facebook while driving, so that is my theory. caroline: the on a person who was looking at facebook stories. [laughter] joe: it looks like we're seeing ,ome breakout of real wages basically wages deflated by cpi. tell us about this chart

cpi had hit its highest level in a decade, 2.4%. in the last six months, that has been coming down. but at the same time, which growth has been taking off. the white line shows which growth deflated by core inflation, you can see that in the uptick. the blue line is wage growth, and it is back up to 2%, basically up to 1990's levels of yet the chart shows you that a, a lot of the inflation has been shelter, rental inflation, but if you look at the difference between what is stresses are charging for the prices of goods and services, and of the wages they are paying to laborers to produce those, the gap keeps going up, so we are seeing really strong a real wage growth. it raises a question of, what will businesses do going forward? will they try to boost productivity to match those high ridges or raise prices to offset wages, or raise

prices to offset that? especially when think about fed policy and what the fed will be doing with interest rates six or nine months from now. caroline: matt, we thank you. and if you haven't got enough, we have more charts for you. we will be talking about the latest market analysis. let's head over the abigail doolittle. abigail: thank you, caroline. what zimmerman, chief technical strategist, driving up. we had this rich rally this year but we also had a rally this month in the dollar. sessions, some people are saying it has to do with the feds. some are saying that it means other central banks, true for the new zealand central banks, credit get dovish, and therefore, the dollar will look at. what do you see on this chart? walt: if you look at the big picture dollar, there is a 16 year cycle, eight years up,

eight years down. the high back in 2016 was 103.8 0, then it fell hard. formit has done so far is isit of a bearish rise, 98 the .618 retracement. expect that retracement in a bear market correction. there is precedent for that. no question is, well that be all that we get? will it be able to clear the 98 hurdle or not? because at the 10, that retracement is 100. from 103 to this december low, and this shows that there is a bear market correction. it will not have a happy ending.

the longer term trend is down. the question is, will this bear market correction peak this side of 98, or will there be one pop higher to 100 for it keels over and yields put up longer-term's -- yields to that longer-term cyclical decline? abigail: if you alright, think that would be good for commodities. let's look at brent crude. walt: yes, if you average all years from 1989 and you extract trends, yourk average winter to spring rally is a 43% gain in spot contract value from an average load date of december 25 to an average high date of april 28. low, 49 .93, hit on december 28, only three days from the 30 year average seasonal cycle low, if the

seasonality persists, it should $71.40 by april 20 eight. coincidentally enough, the brent decline is coming off a high of that4, very close to $71.40. the presumption is that we will go to $72 plus by april, the question is how do we get there? is there a correction between now and then? i suspect if the dollar has one more pop up, it will give us the necessary or suggested correction of lower in brent before the final seasonal cycle .o abigail: overall, it looks like a seasonal rally continuing for brent crude. winky so much for joining us for more charts. -- thank you so much for joining smart charts. caolline: coming up, the disappearance and rear here and's of china's highest paid

actress last year has thrown the industry into chaos. more on that ahead. this is bloomberg. ♪

♪ caolline: malaysia will not : malaysia -- caroline will not compromise ongoing after goldman sachs for the 1mdb scandal. the country's minister in waiting spoke exclusively with our own scarlet fu. >> they were complicit to the crime. the effect being the whole image of the country, the confidence of the investors and the state economy, they must bear responsibility. scarlet: so you reject the argument that there were a few bad apples? figure, probably the highest commission may have got, it is not feasible or that the topsume

personalities in goldman sachs were not aware. scarlet: should've malaysia safeguard itself in any way against foreign banks, against foreign institutions or foreign players? >> know, we have adequate safeguards and policies. rigid the safeguards, there are crooks running the system. they can always navigate. so it is important to have institutions and rule of law and to have edible leaders with a very high ethical standards -- credible leaders. scarlet: china is also heavily invested in how 1mdb's gets results. what kind of relationship do you want to see between china and malaysia as of the malaysian government works to resolve 1mdb? >> china is not involved directly, or complicit to the

crimes of 1mdb. they were brought in, if of all, at the last stage, to try to resolve the funding. but we have made very clear to china, they remain a very important partner in trade and investment and we want to work china.osely with but they have to accept the fact that this is a new democratic government, very transparent and accountable to our people, which the project must be reviewed. .e cannot defend the costs now, if we can achieve this understanding that the price is acceptable, normal, transparent, and, the project will benefit local contractors, then we can proceed. you are referring to the structure deal -- the infrastructure deal that china had struck with the previous government. talking about transparency, you

are referred to as malaysians prime minister in waiting. what is the timeline for you to become prime minister? >> there was an agreement between party leaders, not just mahavir, that i would assume office in time. mahavi irion with want him, to be effective and to be given the latitude to govern effectively, so we cannot give an immediate date. scarlet: would you be having to wait -- would you be happy to wait five years? >> now, we have given him five years. caroline: meanwhile, goldman sachs has responded in writing that the 1mdb bond offerings were designed to benefit asia, wasthat 100% of the revenue deposited into 1mdb accounts. none of the funds were moved or redirected under our authority.

instead, a huge portion of those funds were stolen to benefit members of the malaysian government and their associates. it is clear that members of the government light to goldman about the proceeds of these transactions. joe: now to asia. bibg, china's highest grade movie star disappeared in a july. when she reappeared in october, she agreed to pay back taxes, but the incident is still wreaking havoc on of the chinese movie industry. bloomberg shery ahn here with more. the view of the government is that the chinese film industry is riven with tax fraud. shery: yes, we have seen her with the dual sham contract, so they are thinking that this could be very prevalent. we have industry tycoons having

to cough up more than $1 billion in back taxes, a lot of money going to the chinese policymakers right now and this is basically shutting down film. this happening in july, the actress left, and no history >>kdrop in films released? that is because people are afraid to get involved in the industry. even actors are reluctant to go about and start making all these films. joe: how much of this is from the government's perspective skepticism, versus towards anyone with a gigantic following, gigantic social media or clout? littlei think it is a bit of both. she was the top paid actress in 2015, 44 million dollars, so it might be a crackdown on access in the economy. caroline: will still watch and wait for more chinese films.

shery ahn, our chinese super horror. chinese superhero here. for more on these stories, log on to the bloomberg terminal. joe: have a great evening, this is bloomberg. ♪

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♪ emily: time emily chang in san francisco and this is "bloomberg technology." u.s.g up in the next hour, lawmakers blast t-mobile's proposed purchase of sprint. the heads of both companies testified before the new democratic-led household plus, putting a stake in the ground of silicon valley. but will the tech industry welcome the