abigail: coming up on "bloomberg best," the stories that shaped the week in business around the world. the u.s. and china talk in beijing, and investors are hanging on every word. alex: a lot of indications both sides want to deal. abigail: in washington, a deal on border security heads off another government shutdown. marty: we went from this 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. andrew: we have no shortage of people lining up and threatening to sue. abigail: with the brexit clock ticking down, it is anyone's guess how negotiations will play

out. neil: it is kind of a groundhog day, isn't it? harris: we should stop the clock. give it more time. abigail: earnings season is still in full swing, with companies reporting and executives reacting. james: we have a great operational plan, good organic growth. winning in the marketplace. alexandre: the next three years will all be about profitable growth. tidjane: people want to do things that they are not necessarily in the position to execute. abigail: as global growth shows signs of slowing, experts tell us where they see the biggest risk. paul: i am a lot more concerned about europe. mohamed: 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 all straight ahead on "bloomberg best." hello and welcome.

i am abigail doolittle. 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. there was plenty of optimism entering the week as u.s. legislators announced they would strike a deal on border security and avoid a repeat of last month's shutdown. but on monday, the positive feeling suddenly dissipated. shery: border funding talks broke down between republicans and democrats over the weekend, and that is slashing hopes for a deal to be signed before friday's shutdown deadline. what happened? kevin: well, it looks like they weren't able to come together. i just spoke with a senior 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.

they must have a deal in order to avoid a government shutdown. the 17-member conference committee, bipartisan, had largely been tightlipped about where things stand. david: overnight, appropriators reached a tentative deal to avoid the shutdown scheduled this friday, giving the president money for a physical barrier, although not as much as he wanted. democrats backed off their request to cut the beds available for detainee immigrants already in the country. marty: there is a certain level of flexibility that gives the trump administration 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 i'm happy. i can't say i'm thrilled. david: you have got the deal now, as i understand it. where are you in the drafting? rep. lowey: 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.

vonnie: 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 january. the nasdaq outperforming. tech on a run, but dow jones industrial average basically having nothing in the red. alex: 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 that both sides want a deal and they are making progress. francine: theresa may and the eu are said to be heading for a all or nothing loss in the brexit

-- last minute brexit showdone. 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. therese: everyone has been saying, what does theresa may think? would she really accept no deal? the speculation at the beginning of this week was, maybe she is a leaning toward nodeal. with all the economic news and the poor investment environment, that is something that frightens a lot of businesses. robins revelations suggest what any rational thinking person 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

mp's to some kind of agreement. anna: tidjane thiam, the three-year restructuring at credit suisse group has ended, but he is still confronting a similar problem that plagued his early time at the bank, a trading unit that is losing money. global markets posted worse than expected fourth-quarter results over shattering gains at wealth management. tidjane: 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 dialogue, strong pipeline. the shutdown didn't help. so people want to do things that they are not necessarily in the position to execute. alix: commerzbank reporting net

income and operating profits beat estimates, also increasing dividends as well. so it is actually a good day for commerzbank. stephan: the plan 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 countries around, the negative interest rate is actually weighing on the business now. emily: 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." shira: i think from the beginning, amazon miscalculated

what was happening in new york city. once the headline numbers about the city and state tax incentives of the $3 billion number started to come out, i think that galvanized some of the opposition. it just kind of all fell apart at once. tom: there is a bit of short-term 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. matt: parliament has rejected theresa may's brexit approach once again. lawmakers voted against supporting her plan to negotiate with the e.u. bloomberg has learned that officials are now preparing to compromise on their demands for a rewrite of the brexit deal. parliament 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 p.m.? neil: this is kind of a groundhog day, again, 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 exit 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 now. jonathan: 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? kevin: 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 and vice-ministerial levels." china's state-run news agency said "negotiations between both sides have achieved important progress in another step. next week, both sides are going to meet in washington. i hope you keep up the good work, and push for a mutually-benefiting and win-win agreement." michael: the good news is they are coming to negotiate, so it appears they are making progress. but reports from the inside, including from bloomberg news, are that they remain far apart on the substantive issues. basically, how china remakes its economy to meet the u.s. demands that it not use state subsidies to conquer industries that will be the industries of the future. david: president trump is expected to sign that funding bill and keep the government open, but the spending package

only gives $1.3 billion for border fencing. the president now says he will declare a national emergency to get an additional $6.6 billion for his wall. marty: we went from this shutdown craziness, and 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 we will be talking about for 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. andrew: we have no shortage of people who are lining up and threatening to sue. possibly the new york attorney general, more likely the attorney generals from california and new mexico, and potentially even nevada. the border states where the wall 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," kyle 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. mr. ibrahim: what is important to realize is that they were complicit to the crime. abigail: and up next, a roundup of the week's most interesting earnings reports. kare: 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. among the companies releasing results, japanese automaker nissan still reeling from the recent arrest of chairman and ceo, carlos ghosn. francine: nissan came up short in its first earnings report since the arrest of former chairman carlos ghosn in november. the carmaker took an $83 million charge related to the compensation of ghosn. it also forecast earnings to fall to the lowest level in six years. how bad are the results? stephen: they were pretty bad. we were already 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. again, you know, this is on the

aftermath of the carlos ghosn saga, or in the midst of the carlos ghosn saga. third-quarter results were also disappointing. there are seeing slowing sales in china, which is a very key market, as well as the united states. but really against the backdrop of all of this is the carlos ghosn saga. they will take a ¥9 billion charge on the latest results tied to the renumeration of carlos ghosn, which is of course at the center of the prosecution's case against the jailed former chairman. scarlet: shares of tava, the world's biggest maker of generic drugs plummeted, as the ceo announced it would be going through a trough year. hopes the company will be returning to growth through 2020. kare: 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 what is actually 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 of course the whole dynamic becomes bigger, and the uncertainty naturally becomes somewhat bigger. nejra: a disappointing release from abn amro. the dutch lender hit by an 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? clifford: this year, 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-placed to consider additional distributions for 2019, and we clearly make decisions for the dividend at the end of the year, which is about in one year's time. caroline: it was a strong finish for under armour, as shares as sharesid profits jumped after its release of fourth-quarter earnings showed solid profits. it looks as though there is relief about the turnaround effort going on. sarah: 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 unload a lot of it for mark it down tremendously. 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 selling, which suggests some recent immunization here. anna: pernod ricard 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. alexandre: 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 of 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. so good topline momentum while at the same time driving operating margin, and we mentioned 50 to 60 basis points of operating margin per annum. vonnie: coca-cola shares falling the most since 2008. the lackluster earnings report you could say, 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. james: 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. emily: 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.

chuck: i have been somewhat 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. haidi: australian top gold miner, newcrest, 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 assets being picked up? sandeep: 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 valued.

if you are going to make an acquisition in order to get the returns we are looking for investment, we have to be it able to 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 the downtown coming, thus the downturn coming, and why he thinks the fed will be powerless to stop it. kyle: 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. and given 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. caroline: but if powell and the fed got the message, kyle, you gave him an "f" in december. you said he failed, basically, 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 they took lehman down, when u.s. banks were insolvent, when everyone was worried about aig, we lost 10% that month. we were down 16% in december. the reason i am giving the central bank an "f" is -- look at what is happening in china

and asia, we will call it 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 cut rates 500 basis points. now we can only cut them 225, or 250. it was a week ago that san francisco put out a white paper about the effect of negative interest rates. i 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 arrows in the quiver. so let's hope we learned something from japan and europe about negative interest rates. they destroyed the banking sectors, and they have not helped their economy whatsoever.

i don't think that is the place we should go. i guess i am saying that sometime in 2020, interest rates could be a lot lower than they are today in the u.s. scarlet: final question to you, kyle, 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: i think there will be -- look, 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, eu officials discuss what can be done about brexit. so many sticking points, so little time. and, malaysia wants millions of dollars from goldman sachs to settle charges in the 1mdb scandal. a prominent politician weighs in on the controversy. mr. ibrahim: i support the position of the government, but now, we will not compromise.

abigail: this is bloomberg. ♪

abigail: this is "bloomberg best." i am abigail doolittle. the debate was fierce this week -- does the slowdown in global growth signal an oncoming recession? and how deep and how wide could that downturn become? many guests weighed in, starting with 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 good policy response. and the fed can't cut rates very much. fiscal policy -- 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. yousef: when you look back to the last crisis and compare it to the possibility of a crisis now, is the u.s. and the world in better shape to withstand a crisis? >> no, we are clearly in worse shape. 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 lower than it is now, which i don't think is a big factor objectively. but it is a psychological factor. and we came into the last crisis with pretty remarkable leadership. i mean, you know, i don't want to -- i do obviously enjoy maligning government officials. but the treasury secretary is no hank paulson. i think we are in much worse shape.

we probably don't have a crisis of that magnitude about to hit us -- god help us if we do -- but we are in much worse shape to deal with whatever comes. yousef: 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 basically an adequate consumption for a long time, and it keeps not happening, but it does seem to be getting closer to that point. the other is europe. the euro area is clearly pretty close to a slowdown, close to recessionary levels already. >> 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 bank space, the fed versus the ecb, or in the economic space. the u.s. has dominated the headlines. the ecb has flown under the radar screen, even though it's

policy challenge is much more complicated than the fed, even andcomplicated than the fed, even though it is going to change presidents this year, similarly the european economy has flown under the radar screen for a markets even though growth is slowing in all the major economies. >> the sense i get from you is that you are more concerned about europe than 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 they are not playing anywhere near their potential and there is no teamwork overall? you would not. 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? >> yes, because if you get brexit, then you have italy and france fighting, so who is going to be left, germany? it is 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 think it is a disaster. i don't think people who voted for brexit knew what they were voting on. they said there's a bunch of foreigners coming to take jobs, but it is more than that. customs, trade, currency, and you have these bigger problems, and they just focused on one area. >> you said that when we were together that there is a possibility that they will s deal. >> even if they strike a deal, it will be a mess. abigail: 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 talked with bloomberg this week about the negotiations, starting with the finance minister of cyprus, who

spoke exclusively at the 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, without an arrangement, should not happen. so i really think we should stop the clock and 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. in>> 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 compromise can be met? in >> basically, i'm still optimistic. first of all, we can avoid a no deal brexit. that would be harmful in many aspects politically but also economically. second, i believe we should have as close as possible a bilateral relationship between the eu and the united kingdom. the idea of the referendum and the brexit was not a european one. it was one that was decided by british government at the time there was a referendum, something we respect, but even the respecting it does not mean we do not regret it. abigail: the trial of malaysia's former prime minister for corruption involving the state fund 1mdb was postponed this week, but investigation of goldman sachs' role in the

scandal continues. malaysia's finance minister is seeking $7.5 billion from goldman to settle charges of misconduct. the head of 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 and crime they committed. to obtain $600 million commission, then to secure the bond, then $2.6 billion returned, this is not something which is normal. it is contrary to all financial rules and regulation. whether we can achieve, finally, the settlement of $7.5 billion or not will depend on the

positions, but i support the position of the government now. we will not compromise. they have not only stolen the money through commissions, but they have helped to destroy the economy and the confidence in the system. scarlet: is that $7.5 billion number a justifiable penalty, given that the entire bond deal was for $6.5 billion, and goldman's take was 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 that they were complicit to the crime. the effect being, the whole image of the country, the confidence of investors, and the state of the economy. they must bear responsibility. scarlet: so you reject the argument that there is just a few bad apples in the firm?

>> for such a figure, the highest commission that they got, is not feasible, attainable to assume that the entire firm was not aware. abigail: 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 a cent 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." ♪

abigail: this is "bloomberg best." i am abigail doolittle. 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 a budget. >> the spanish prime minister, pedro sanchez, has called a snap election. this comes after parliament vetoed his budget and laid bear his minority government's inability to pass key legislation. the vote is set to be held on april 28, and it will be the third election in spain in four years. >> you look at polls they could go both ways spirit you could 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. or you could actually have a three-way coalition, which is an unprecedented situation in spanish politics, to get a

coalition government but also to need to rely on three separate parties. that also looks difficult because it has never been done before, 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 juicy bonds can come with nasty surprises. the spanish lender rattled the bond market by saying it will skip an option of 1.5 billion euros of notes next 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 pricing to perpetuity and pricing to call, you could be looking at 3% to 4% of yield difference, clearly for pricing bonds is very important. what we are hearing, santander -- this is not completely 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? >> it is not a panic. you are not seeing a rout, but if you look at barclays, santander, they want bonds -- of course there is plenty of chatter with the court date coming up, but from what we understand talking to investors, this isn't entirely out of line with what santander have done in the past. abigail: 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. >> the two companies are industry champions. the first one is considered by some as the largest private-sector investment company in the nation, and it has interests in renewable energy and the real estate sectors.

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 bond defaulter 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 leaves 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

double the overall contraction of the market. to be fair to apple, we are seeing a significant contraction of 10%. it is just that apple's is 20%. they are not the only one impacted. xiaomi, which is one of the other big chinese phone makers, they reported between a 30% to 35% decrease. so apple is not the one taking the worst of it, they are just the biggest player. abigail: tensions are rising in thailand just a month before the first general election since the coup five years ago. a party linked to the former prime minister has abandoned plans for the king's sister to run for office as 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 and would not be allowed.

>> euro area finance ministers have given their support to the candidacy of 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 academic credentials. 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. the ecb has tried to signal the end of qe. the market is skeptical. and there is the question, 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. >> consumers 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 an 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 it's a-380 double-decker, marking the end of the jumbo jet era 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 by emirates to reduce its orders, with the ambition to have to have 123 a-380's flying, so we have to look at the facts as they are, and there is not enough production to sustain the program beyond 2021. >> data today show that u.s. retail sales unexpectedly fell 1.2% in the summer -- in december from the previous month. this marks the biggest drop

since 2009 despite 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 month. you have the shutdown looming, going into effect later in the month. the stock market was having wild 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 -- fourth quarter of 2018. these are the so-called 13 filings that 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, i checked, it was down about 14% in the quarter, and the last time there was something worse, guess what, it 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, as well as google all in the crosshairs.

millennium also reduced. google, appaloosa, lone pine all pulled out, as well. one of the other big names i want to talk about his warren buffett. he pulled out of apple, reduced his holdings there. we can see the share price react when it came to apple, oracle, as well as jpmorgan. he pulled out his entire stake out of oracle, to the tune of $2.1 billion. apple was his biggest holding, and he did like it, representing 22% of disclosed assets. >> china's factory inflation decelerated for a seventh month. come inside the bloomberg and you can see the white line is ppi, the green line is china industrial profit. if you have lower factory prices, you will not have as much profits and as much to pay down debt or for wages. what was the big reason for this? >> partly to do with falling

commodity prices, but there is also an indication of the broader pressures of the manufacturing sector. like you mentioned, the seventh straight month of decline. heading very close, flirting now with deflationary territory for the first time since 2016. remember, that would be a huge dragon profits and drive up the cost of debt. 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 more stimulus on the way. ♪

abigail: you are watching "bloomberg best." i am abigail doolittle.

tesla gets the lion share of attention among electric carmakers, but there are plenty of companies gearing up to compete for market share. a canadian company is rolling out a new battery-powered vehicle with a price tag is 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 seize. >> the three wheeled ev costs $15,500 and is being handbuilt in vancouver. the company has 23,000 preorders. to meet demand, it will mass-produce an updated model in china. >> the vehicle concept was to always have a vehicle that could be assembled quickly, efficiently, and high-quality in under three hours.

that, it can. >> the solo has 100 miles of range and 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 fit in. 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. electromechanica is looking at car sharing and they are already testing for deliveries. >> we don't need to have two seats in a delivery vehicle or you have one employee, so why is that second seat there? >> investors still need convincing. shares have fallen since the ipo on the nasdaq last august.

the ceo says the solo will be profitable. >> 25% growth profit is built into the design, and that is absolutely fine. >> the company hopes to deliver 5000 china produced solos in 2019 and a further 20,000 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 more passengers for the sporty two-seater all electric roadster. but can it handle the challenge of meeting billions of dollars worth of preorders? ed ludlow, bloomberg news. vancouver. abigail: that will be all for "bloomberg best" this week. you can find more great video and in-depth coverage of this week's top stories at bloomberg.com, along with all the latest business news and analysis, 24 hours a day. thanks for watching "bloomberg best." i am abigail doolittle. this is bloomberg.

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♪ carol: welcome to "bloomberg businessweek," i'm carol massar. jason: i jason kelly. we are at bloomberg headquarters in new york. a special focus on real estate is -- including plans to create the largest home flipping operation the world has ever seen. carol: the trouble building homes for low income residents