♪ >> coming up on "bloomberg best," the stories that shaped the week in business around the world. the u.s. and china top trading .- talk in beijing, and investors are hanging on every word. >> a lot of indications both side want to deal. abigail: in washington, a deal on border security heads off another government shutdown. >> we went from shutdown craziness and now we will go to a new phase. president trump: the order is signed and we will have a national emergency, and we will then be sued. >> we have no shortage of people lining up and threatening to sue. abigail: with the brexit clock

taking down, it is anyone's guess how negotiations will play out. >> kind of a groundhog day, isn't it? >> we should stop the clock. give it more time. earnings season is still in full swing, with companies reporting and executives reacting. >> we have a great operational plan, good organic growth. winning in the marketplace. >> the next three years will all be about profitable growth. things, there are not miss certainly in the position. abigail: as global growth shows signs of slowing, experts tell us where they see the biggest risk. >> i am a lot more concern about europe. >> i expect the u.s. to be in a minor recession by the middle of 2020. >> it is all going to be a mess. abigail: it is also ahead on "bloomberg best." ♪

abigail: hello and welcome. i abigail doolittle. am this is "bloomberg best," your weekly review of the most important business news, analysis and interviews from bloomberg television around the world. let us start with a day by day look at the headlines. the idea of optimism entering legislatorsu.s. announced they would strike a deal on border security and avoid a repeat of last month's shutdown. on monday, the positive feeling suddenly dissipated. >> border funding talks broke down between republicans and democrats over the weekend, sla that is slashing hopes for a deal to be signed before friday's shutdown deadline. what happened? >> it looks like they weren't able to come together. seniorspoke with a democratic staffer to a democratic house member who told me the hopes of getting some type of deal or quickly diminishing ahead of the friday deadline.

the 17-member conference committee, bipartisan, had largely been tightlipped about stand.hings >> overnight, appropriators reached a tentative deal to avoid the shutdown scheduled this friday, giving the president money for a physical barrier, though not as much as he wanted. theirats backed off request to cut the beds available for detainee immigrants already in a country. >> there is a certain level of flexibility that gives the trump administration of the ability to shift money around to increase detention beds, for instance. in a normal world, you would think trump would take the deal and move on, but we are not living in normal times. president trump: i can't say them happy. i can't say i'm thrilled. >> you got the deal done, where are you in the drafting? >> 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.

>> president trump says he is open to letting the march 1 deadline to raise tariffs on chinese goods pass without penalty if the sides are nearing agreement. that may send a conciliatory signal as talks continue. president trump: if we are close to a deal where we think we will get it done, i could see myself letting that slide for a little while. >> s&p 500, best day since the january. nasdaq, outperforming. tech on a run, but dow jones industrial average basically having nothing in the red. >> i it is good news. trump said that as a deadline and said there would be no extension. it is in the federal register. the fact he is willing to extend it and the fact that you see steven mnuchin and robert lighthizer arriving in beijing, probably means they are making progress. >> theresa may and the eu are said to be heading for a all or

nothing loss in the brexit show done. itv news is reporting that may's top brexit aide had said she will wait till the last moment before putting a deal to parliament. he allegedly said that may would force lawmakers to choose her deal or a potentially lengthy brexit deal. >> everyone has been saying, what does theresa may think? what she really accept no deal? the speculation at the beginning of this week cause maybe she is -- and this week was, maybe she is a leaning toward a no-deal brexit. with all the economic news and the poor investment environment, that is something that frightens a lot of businesses. robins are relations suggest what any rational thinking would say, that a government could never take that risk. and what robins has said, what the government has said, is that may is not going to go for a no deal option, she is willing to go for an extension.

it would be a long extension, and she is hoping to corral her mps to some kind of agreement. >> the credit suisse group 10-year for the ceo has ended. the three-year restructuring at credit suisse group has ended, but he is confronting a similar problem that plagued his early time at the bank. a trading unit that the losing money. global markets posted worse than expected fourth-quarter come over shattering gains at wealth management. >> we as a bank don't control the environment. all we can do is be agile and be organized so we can support different needs for clients at different points in the cycle in different parts of the world. it is a contrasted image, where you still see quite a bit of confidence in the corporate sector, very strong strong dialogue, strong pipeline. the shutdown didn't help. so people want to do things, they are not necessarily in the position to execute. >> commerz bank reporting net income and profits were

positive and beat estimates, also increasing dividends as well. is to keep on doing the things that have been working the last few years, which is basically growing revenue and cutting costs. in that sense, i think that going for a proper return is what every management team is striving for. but again, given that germany is one of the most deposit rich country around, but negative interest rate is actually weighing on the business now >> . >> amazon has scrapped plans to build half of its new headquarters in new york city. the tech giant faced major backlash after the city and new york state promised it nearly $3 billion in financial incentives. a company statement reads, "a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go

forward." >> i think from the beginning, amazon miscalculated was happening in new york city. once the headline numbers about the city and state tax incentives off the $3 billion number starting to come out, i think that galvanized some of the opposition. it just kind of all fell apart at once. >> there is a bit of short-term thinking here. best short-term mis-thinking here. at the same time, there has also been this major shift in the political winds, where big tech has been portrayed rightly or wrongly, some of it a little bit of both, as the enemy of middle-class americans. >> parlid theresa may's brexit approach once again. lawmakers weren't against supporting her plan to negotiate with the e.u.. bloomberg has learned about you can officials are now preparing to compromise on their demands for a rewrite of the brexit deal.

probably meant essentially voted against theresa may having the mandate that parliament gave theresa may just a couple of weeks ago. what are they doing to their prime minister? >> this is kind of a groundhog day, isn't it? parliament is continually contradicting itself in terms of what it wants and expects from the prime minister. the last amendment which was defeated was nonbinding, so on the surface, it doesn't matter. what it does show is prime minister theresa may has utterly failed to bridge the gap between brexiteers, the european research group, who abstained last night in the referendum that would have supported her negotiating to ask with brussels, and a softer e.u. exit as part of her party. it is making her look even more isolated than she was before. >> another morning of positive noise around trade talks. we have been saying all week, it felt like a week of happy talk.

any substance here whatsoever, any progress? >> a bit of progress, better late than never. that said, the white house saying -- these detailed and intensive discussions led to progress between the two parties. much work remains, however. next week, discussions will continue in washington at the ministerial levels." china's state-run news agency said negotiations have achieved important progress in another step. next week, both sides coming to washington. i hope you keep up the good work and push for a mutually .enefiting win-win agreement >> the good news is they are coming to washington to negotiate, so it appears they are making progress. but reports from the inside, including from number of news, are that they remain far apart on the substantive issues. basically, how china remakes its economy to meet the u.s. demands it not use state subsidies to conquer industries that will be the industries of the future. >> president trump is expected to sign that funding bill and keep the government open, but the spending package gives $1.3

billion for border fencing. does the president now say -- he now says he will declare a national emergency to get an additional $6.6 billion for his wall. >> we went from this shutdown craziness and is now we are actually going to go to a new phase where he is all must surely going to be challenged on constitutional grounds for declaring an emergency and that is going to be something will be talking about four weeks and months. president trump: the order is signed, and i'll sign the final papers as soon as i get into the oval office, and we will have a national emergency, and we will then be sued. >> we have no shortage of people who are lining up and sue.tening to possibly the new york attorney general, more likely the attorney general's from california and new mexico, and potentially even nevada. the borl is going to be built, where land is going to be appropriated, and where people are going to be most directly affected by president trump's declaration.

is this an emergency? is it not an emergency? that will be the question on the merits that the courts will have to tackle. abigail: still ahead as we review the week on "bloomberg best," kyl bass, paul krugman and mohamed el-erian share their thoughts on recession risk. plus the leader of malaysia's ruling party speaks exclusively about goldman sachs and the 1mdb scandal. >> what is important to realize is that they were complicit to the crime. and up next, a roundup of the week >> i've been communicating for the last year that 2019 would be a trough year. abigail: this is bloomberg.

abigail: welcome back to "bloomberg best." i'm abigail doolittle. this week saw another parade of corporate earnings reports. japanese nissan reeling from the recent arrest of chairman and ceo, carlos ghosn. >> nissan came up short in its first earnings report since the arrest of former chairman carlos ghosn in the carmaker took an november. $83 million charge related to the compensation of ghosn and earnings to fall to the lowest level in six years. how bad are the results? >> they were pretty bad. expecting them to miss the consensus estimates from analysts, and they sure did. they also ratcheted down the fiscal year forecast to the lowest level in six years.

this is on the aftermath of the carlos ghosn saga, or in the midst of the carlos ghosn saga. third-quarter results were almost disappointing. there are seeing slowing sales in china, which is a key market, as well as the united states. really against the backdrop of all of this is the carlos ghosn saga. ¥9 billionake a charge on the results tied to the renumeration of carlos ghosn at the center of the prosecution's case against the jailed former chairman. , the world'stava biggest maker of generic drugs have plummeted, as the ceo announced it would be going through a trough year. >> i have been communicating that 2019 would be a tough year for revenues and operating profit, but when you get to the finer details, sometimes analysts will be more optimistic, more pessimistic than is the case.

but if you look at our communication and guidance, i think it is extremely trustworthy. i have for more than 20 years not missed a quarterly guidance, so i think we can say that there will always be some uncertainty on the future and if you have a very dynamic situation like we have with key products going down in revenue, other key products going up in revenue, then the holden amick becomes bigger and the uncertainty naturally becomes somewhat bigger. >> a disappointing release from abn amro, hit by an increasing -- increase in bad loans and additional costs related to money laundering prevention, covering the banks plan to increase the dividend. what reassurance can you give to shareholders that you will be increasing the dividend at any point after keeping it unchanged in today's release? >> this year, was have paid out -- we have paid out 62% profit, our policy is 50% target, and an additional amount depending on

where we are in capital. so for 2018, we paid 52%, up on 50% last year. what i can say is we are well to consider additional distributions for 2019, and we clearly make decisions for the dividend at the end of the year, in one year's time. >> it was a strong finish for showedrmour, as shares earnings profits, jumping after fourth-quarter earnings -- as shares jumped after its release of fourth-quarter earnings showed solid profits. there isas though relief about the turnaround effort going on. >> last year was a story were under armour ended up with huge amount of bloated inventory, some of it because of a sheer lack of operational discipline, and some of it because they made a lot of boring products that people did not want to buy. so they had to offload it.

the fact that we saw this increasing growth margin this quarter suggest that working through the inventory is behind them. they say that they got to do fewer promotions in the quarter and less off-price setting, which suggests some recent immunization here. >> this company raised its full-year forecast earnings, posting the fastest profit growth in seven years. it bolsters defenses against activist shareholder elliott management, which is demanding cost cuts and improved margins. >> i am very open to dialogue with our investors, including elliott, and we have had an open dialogue. but to be fair, governance is something that has been improving over the years, ever since i took over chairmanship dicard -- pernod

ricard, and we will keep improving. as for improvement, it is fair to say the past few years of ricard's story were investment to generate topline growth, now at the top end of industry growth and in the next three years will all be about profitable growth. good momentum while at the same time driving operating margin and we mentioned 50 to 60 basis points of operating margin. >> coca-cola shares falling the most since 2008. though there are many bright spots, the company is one of the challenging year ahead as well, between currency pressures, politics, and weakening consumer sentiment. >> 2019, we've got a great operational plan, good organic growth, winning in the marketplace. some headwinds from currency and interest rates, but there is a long way to go in the year and we are very focused on managing our business to drive the best results for the shareholders as possible. >> cisco out with an upbeat fiscal second-quarter report, the tech giant giving a strong forecast for the current quarter, saying it is considered

the corporations are continuing to spend on their computer networks. >> i have been shocked at the resilience of the global economy. obviously, there are data points this morning indicating maybe some weakness, but we saw consistent demand from the beginning of our quarter to the end. we saw consistent performance across our geographies, across customer segments, and across all of our technology areas. so we were quite pleased. minertralian top gold doubled first half profits, boosted by a weaker aussie dollar. you are keeping the powder dry when it comes to going against the wave of dealmaking we have seen emerge as a trend in the sector. why is that, and what would you potentially be looking for in an appropriate partnership or the assets being picked up? >> when it comes to m&a, the thing we look for is where can we add value? because assets around the world today are particularly in gold, are pretty well valley. if you are going to make an

acquisition in order to get the returns we are looking for investment, we have to be it would add some value. we are looking particularly for what we call t-1 assets. ♪

abigail: this is "bloomberg best ." i'm abigail doolittle. hedge fund manager kyle bass has joined a chorus of voices warning that a u.s. recession is on the horizon. this week, the founder of hayman capital management told "bloomberg markets" when he sees thus theown coming, downturn coming, and why he thinks the fed will be powerless to stop it. >> i think economic activity will begin to wane in the back half of 2019 and by the middle of 2020, we are most likely to be in a recession. the conflict between the democrats and republicans in

congress, my guess is the democrats aren't going to let trump stimulate going into an election year. they are saying behind the scenes that he has taken the economy hostage and they will let him shoot it. so i expect that the u.s. will be in a mild recession by the middle of 2020. >> but if powell and the fed got the message, you gave him an "f" in december. he said he failed the emerging markets when they continue to hike. what sort of path are they on now, and what score would you give him thus far? kyle: listen, we had the worst december in stock market history, the market dropped at one point, 16% in a month. think about this, the month that , when u.s.ehman down banks were insolvent, when everyone was worried about aig, we lost 10% that month. we were down 16% in the reason i

december. am giving the central bank an "f," look at what is happening in southeast asia, in europe from the economic perspective. the u.s. stimulated at full employment, with our tax cuts, that stimulus is about to wear off. the last three recessions we had in the u.s., we can't rates 500 basis points. or we can only cut them 225, 250. there was a white paper put out about the effect of negative interest rates. hope that is not where we are going, but we can only cut rates 225, 250 basis points. this point of normalization should have happened long ago, not now. they were really late in the cycle in raising rates and now they are stuck. so when we get into even a small recession, i don't think we have the errors in the quiver. so let's hope we learned something from japan and europe about negative interest rates. they destroy the banking sectors and they have not helped the

economy whatsoever. i don't think that is the place we should go. i guess i am you that sometime in 2020, interest rates could be a lot lower than they are today in the u.s. caroline: final question, when it comes to u.s. stocks, is it more likely we will get a revisiting of the september highs first, or a revisiting of the december lows first? kyle: the markets will rejoice to the extent we get to quote a win on a trade deal. it will be short-lived. my guess is that by the end of this year, u.s. market will be lower than it is today. abigail: coming up, more conversations from this week on the topic of the recession risk in the u.s. and the worsening economic picture in europe. plus a discussion of what should be done about brexit. so many sticking points, so little time. and, malaysia wants millions of dollars from goldman sachs 1mdb to settle charges in the 1mdb scandal. a prominent politician weighs in

on the controversy. >> i support the position of the government, but now, we will not compromise. abigail: this is bloomberg. ♪

>> this is "bloomberg best." the debate was fierce this week -- does the slowdown in global growth signal an oncoming recession? and how deep and how wide the downturn become? many guests wait in, starting with the nobel prize-winning economist paul krugman. he told yousef gamal el-din he's expecting a recession to hit u.s. economy. ♪ >> it seems pretty likely. there seems to be accumulation of smaller problems, and then the underlying backdrop is that we have no policy response. the fed can't cut rates very

much. there is a vast fiscal space, if we were prepared to use it, but it is hard to see that the current leadership will respond in any kind of nimble way. so yeah, i think we will have a recession. >> when you look back to the last crisis and compare it to the possibility of a crisis now, is the u.s. in the world in better shape? >> we started -- we came into the last crisis with interest rates above zero but lots of room for interest rate cuts. we came into the last crisis with public debt essentially lower, which i don't think is a big factor objectively. we came into the last crisis with pretty remarkable leadership. hank paulson -- i think we are in much worse shape, and we probably don't have a crisis of that magnitude about to hit us, but we are in much worse shape to deal with whatever comes along.

>> when is the biggest risk facing the global economy? >> i'm not sure which is the biggest. one of them is china -- i'm in the camp of predicting a chinese crisis over inadequate consumption for a long time, and it keeps not happening. but there does seem to be getting closer to that point. the other is europe. the euro area is clearly pretty close to a slowdown, recessionary levels. ♪ >> the u.s. has captured all the attention, and europe has flown under the radar. you've heard me say this over and over again, whether it's in the central banks race, the fed versus the ecb, or in the economic space. the u.s. has dominated the headlines. the ecb has flown under the radar, even though it's policy challenge is much more

complicated than the fed, even though it is going to change presidents this year, similarly the european economy has flown under the radar, even though growth is slowing in all the major economies. >> the sense i get from you is that you are more concerned about europe and china. would that be correct? >> i wouldn't say slightly. i'm a lot more concerned about europe. i keep on taking the analogy of a sports team, would you bet on the team where your major players are having issues, and there was no teamwork in terms of the overall thing? you wouldn't. that is what we are seeing in europe. this is not an economic issue, this is a political issue.

♪ >> are we underestimating the risks from europe? >> if you get brexit, then you have italy and france fighting, who was going to be left? it's like, you are risking dismantling the european union, which has been a very good, positive story. personally, i think brexit is the biggest -- i'm sorry for everyone who voted for it, i don't think people who voted for brexit new what they were working on. they said there's a bunch of foreigners coming to take jobs, it is more than that. there are customs, the currency, and you have all these other, bigger problems, and they just focus on one area. >> you said that when we were less together. there's a possibility that they will strike a deal. there is a possibility. >> even if they strike a deal, it will be a mess. ♪ >> economic data from across europe certainly bears out a bearish forecast, and as the deadline approaches for britain to leave the eu, many predict that a disorderly brexit could further dampen growth. several officials from the eurozone talks with bloomberg this week about the negotiations, starting with the

finance minister, harris jury llamas, who spoke exclusively with maria at the nicholson meeting in brussels. ♪ >> i actually think we should stop the clock, take a pause, postpone the exit. that's the best i can think of, considering where we are. we fully respect the brexit decision, but exiting without a deal -- i really think we should stop the flow, give it more time to come to an agreement. i'm not saying this out of concern for the economy, this is a big european and global issue and i think we should be very sensible about it. ♪ >> clearly, the eu and the u.k. are at loggerheads concerning reopening the agreement to debate, but chancellor merkel a

few weeks ago said it would be a shame to look back in 50 years and not have done as much as possible to compromise. do you think a cover by can be met? >> basically, i'm still optimistic. first of all, we can avoid in no deal brexit. that would be harmful in many aspects, politically and also economically. second, i believe we should have as close as possible a relationship between the eu and united kingdom. the idea of the referendum and the brexit was not a european one, it was one that was decided by british government, there was a referendum, that is something we respect, but even the respecting it does not mean we do not regret it. ♪ >> the trial of malaysia's former prime minister for corruption involving the state fund 1mdb was postponed this week, but investigation of goldman sachs's role continues.

malaysia's finance minister is seeking $7.5 billion from goldman to settle charges of misconduct. the head malaysia's ruling party sat down exclusively with bloomberg and told scarlet fu why he believes the bank should pay. ♪ >> it's important to know what excesses in crime they committed. to obtain $600 million commission, then to secure the bond, than $2.6 billion returned according to his own personal offenses, this is not something which is normal, it is contrary to all financial rules and regulation. whether we can achieve, finally, a settlement of $7.5 billion or not, i support the position of

the government now -- we will not compromise. they have not only stolen the money through commissions, but they have tried to destroy the economy and the confidence in the system. >> you said $7.5 billion or not, is that number a justifiable penalty, given that the entire bond deal was for $6.5 billion, and goldman paid a fraction of that? would it make sense for them to pay the equivalent of the fees they collected? >> no, i leave it to the team to decide.

what is important to realize is they committed a crime. the affected being the whole image of the country, the confidence of investors, in the state of the economy. they must bear responsibility. >> so you reject the argument that is just a few bad apples? >> for such a figure, the highest commission that they brought, it is not feasible, tenable to assume that the entire firm was not aware. ♪ >> goldman sachs has since responded, writing, "the 1mdb bond offerings were designed to raise money to benefit malaysia, and 100% of the net proceeds from the transactions were deposited into 1mdb accounts. not assent of those funds ever passed through any account controlled by goldman sachs, and a huge portion of those funds were stolen for the benefit of members of the malaysian government, and it is abundantly clear that members of that government and 1mdb lied to goldman." ♪

♪ >> this is "bloomberg best." let's continue our global tour of the week's top business stories. in spain, which became the latest eu country facing critical upheaval after its government couldn't muster the votes to pass the budget. ♪ >> the spanish prime minister, pedro sanchez, has called a snap election after parliament vetoed his budget. the vote is set to be held on april 28, and it will be the third election in spain in four years. >> it can go both ways, you can't get a socialist government, but it is a replay of a very unusual, very shaky, very weak government that we've seen for the past eight months. you actually have a three-way correlation, which is an unprecedented situation with spanish politics, to get a coalition government but to rely on three separate parties. it has never been done before,

it has never been tried before, never been tested. what we have seen increasingly is very short, fragmented governments that are unable to get any legislation done. ♪ >> santander has reminded investors that gc bonds can come with nasty surprises. the spanish lender rattled the bond market by saying it will give an option of 1.5 billion euros of notes last month. this seems like a pretty important vision of santander, which could reprice the market. >> what's clear is that the market is struggling with price of volatility. you could be looking at 3% to 4%, clearly for pricing bonds, that is very important. what we are hearing, santander -- this is an out of line with

what they've done in the past. not a huge surprise. this was being talked about over the past month. >> does it have wider implications, or do you think this is just a market panic? >> you are not seeing a rout, but if you look at barclays, santander, they want bonds -- of course there is plenty of chatter, but from what we understand talking to investors, this isn't entirely out of line with what they've done in the past. ♪ >> just when we thought the credit concerns were receding in china, we get news of this. two large chinese borrowers missed payment deadlines this month, in the market that is witnessing the most company failures on record. >> but to companies are industry

champions. the first one is considered by some as the largest private-sector investment company in the nation, and it has interest in renewable energy and the real estate sector. the other company is a big coal miner in central china, and it has already defaulted on a lot of its debt. it was the second largest in china last year. among those two companies, investors are definitely paying a closer attention to china investment, because that company has a huge amount of debt. $34 billion worth of debt, among the highest in chinese private sector companies. ♪ >> apple shipments plummeted at the end of 2018, which means the door open for rivals like huawei to take apple down. >> what we are seeing is pretty much a significant decrease in iphone sales in china. we are seeing about a 20% decrease year-over-year in the fourth quarter, the final quarter, around that december and january holiday. why that is notable, it's about

the overall contraction of the market. so to be fair chapel, we are seeing a significant contraction of 10%. it's just that apple was 20%. xiaomi, which is one of the other big chinese phone makers, they reported between a 30% to 35% increase. apples not the one taking the worst of it, they are just the biggest player. ♪ >> tensions are rising in thailand just a month before the first general election since the coup five years ago. the former prime minister has abandoned plans for the kings sister to run for office, and the monarch publicly opposed the idea. >> it has been a remarkable turn of events, from a princess being nominated as the prime ministerial candidate of the party affiliated with the king, to the king coming out with a statement 12 hours later saying that this was inappropriate in would not be allowed.

♪ >> euro area finance ministers have given their support to philip lane to become the new member of the executive board of the ecb. >> it was a coronation, not a competition. the irish government really wanted a seat at the table at the european central bank. philip lane is very well regarded, strong economic evangel's. he is seen as one of the best at the ecb now, and really this is a key job. the chief economist works very closely with the european central bank. mario draghi will leave at the end of the year, and we do know based on sources that lane agrees with the analysis that the european economy is in slow down, but not headed to a recession. nonetheless, it's a key time. ecb has tried to signal the end of kiwi.

the market is skeptical. we have seen the bigger question of who will replace mario draghi. ♪ >> lawmakers told the ceos of sprint and t-mobile that the merger is raising red flags. john ledger had this as a defense. >> we will win with lower prices and better services. how? our costs will drop sharply and our network capacity will expand tremendously. >> this market, the wireless market, is already very concentrated. there are four companies, at&t and verizon are the dominant companies, followed by sprint and t-mobile. this would further consolidate and already consolidated market. right off the bat, the two companies are facing an uphill battle with regulators. they need to convince them that despite that, there are going to be benefits that outweigh any harm to competition.

as you know, t-mobile really has been a maverick in this market, competing very hard against at&t and verizon. regulators are wondering, if the industry gets cozier, does that competition go away? ♪ >> airbus scrapping if a 380 double-decker, marking the end of the jumbo jet euro in this particular form. production of the flagship model will end by 2021 after a handful of remaining buyers receive their last orders. >> the decision that was made to reduce its orders, with the ambition to have 123 a three 80's flying, so we have to look at the facts as they are, and there is not enough production to sustain beyond 2021. to sustain beyond 2021. ♪ >> later today, u.s. retail sales fell 1.2% in the summer from the previous month. this marks the biggest drop since 2009, defying a slight increase economists had been looking for. >> it was definitely surprising, but i don't think we are at a point where we should panic yet. december was sort of a funky months.

you have the shutdown looming, going into effect later in the month. the stock market was having while gyrations, headed as the year closed. i think it is possible that what we are seeing is a bit of an aberration. it is not indicative of what is to come throughout 2019. ♪ >> in the u.s., it is deadline day for hedge funds to disclose equity investments for the first quarter of 2018. these are the so-called 13 names. give us a peek into what is in and out of favor? hedge funds, all about protecting past performance. >> yes. because of all the risk we saw in the fourth quarter on the s&p 500 -- it was down by about 14% in the quarter -- the last time there was something worse was during the financial crisis, down about 22%. no surprise that hedge funds are pulling out, in particular the technology stocks. for example, apple, amazon, google all in the crosshairs. millennium also reduced. all of these companies pulled out.

one of the other big names i want to talk about his warren buffett. he pulled out of apple, reduced is holding. you can see the share price react when it came to apple, as well as to oracle, as well as to jpmorgan. he pulled out his entire stake out of oracle, to the tune of $2.1 billion. apple was his biggest holding, he did like it, representing 22% of disclosed assets. ♪ >> china's factory inflation decelerated for a seventh month. you can see the white line is ppi, the green line is china industrial profit. lower factory prices, not as much profit if you don't pay down debt. what is the big reason for this? >> there's no doubt that they

need to deal with the following commodity crisis, but there is also an indication of the broader pressures of the manufacturing sector. it's like you mentioned, the seventh straight month of decline, heading very close, flirting now with deflationary territory for the first time since 2016. and remember, that would be a huge drop in drive up the costs. some economists say it might export deflation. i should point out that we did have some upbeat numbers in the china story, which were bloomberg credit numbers suggesting that policy is gaining traction. when you consider what's happening on the factory price side of things, and what's happening with the broader manufacturing sector, most economists say there is something similar underway. ♪

♪ >> you are watching "bloomberg best." tesla gets the lion share of attention among electric carmakers, but there are plenty of companies gearing up to compete for market share. electromechanical is rolling out a new battery-powered vehicle with the price tag of only $15,000, and it's a little different. we got an inside look. >> all electric like a tesla, priced like a ford fiesta, and one of the weirdest looking vehicles you've ever seen. introducing the solo. >> a clean energy electric vehicle for one person was an opportunity that was too great not to see is. >> the three wheeled ev costs $50,500, and is being handled in vancouver. the company has 23,000 preorders. to meet demand, it will mass-produce an updated model in china. >> the vehicle costs could be assembled quickly, efficiently, and with high quality in under three hours. that is talent. >> the solo has 100 miles of range in charges in three hours. it is designed with a specific group in mind.

>> the company says 83% of north american commuters drive to work alone each day. the question is whether those commuters would be prepared to drive to work in something like this, that you can just left. the company's optimism isn't backed up by the numbers. >> seven out of 10 of what the consumer is buying is a truck at this point. the idea of a single seater i think limits you to a very specific user. >> but there are areas bloomberg intelligence sees as more promising. electro-mechanic is looking at sharing, and they are already testing delivery. >> we don't need to have two seats in a moving vehicle. why is that second seats there? >> investors still need convincing. shares have fallen since the ipo on the nasdaq last august.

the ceo says the solo will it profitable. >> 25% growth profits, that is absolutely fine. >> the company hopes to deliver 5000 china produced solos in 2019, and a further 20000 and 2020. longer-term, production could be brought back home. general motors announced in october it was closing offshore sites after more than 100 years of manufacturing in canada. the ceo says the company is interested in the site. they are also eyeing where passengers for this or the two-seater all electric roadster. but can it handle the challenge of meeting billions of dollars worth of preorders? ed ludlow, bloomberg news. ♪ >> that will be all for "bloomberg best" this week. you can find more great video and in-depth coverage of this week stories at bloomberg.com, along with all the latest business news and analysis, 24 hours a day. thanks for watching "bloomberg best."

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>> why did you decide to write a book on leadership. doris: what intrigued me was our leaders born or made? does the time make the man? david: you considered suicide at one point? doris: she said you must rally or you will die. when they become great leaders is when ambition for yourself becomes ambition for the greater good. a leader needs to help the citizens come together to feel that they have a sense of common destiny. david: i thought people wouldn't recognize me if my tie was crooked. let us leave it this way. alright. i do not consider myself a journalist. nobody else would consider myself a journalist.