abigail: coming up, the stories that shaped the week in business around the world. let the early u.s. banks lead the way in quarterly results pour in. they are cutting costs. >> the surprise was in fixed income trading. abigail: the latest data from china shows tariffs taking a toll. have brexit in a good way. abigail: facebook moving to cryptocurrency comes under fire on capitol hill. >> we continue to work really hard to get better. abigail: iran's foreign minister speaks about the future of its nuclear deal.

>> united states has shot itself the in the foot. conversations about the global economy from the g7 finance meeting. >> we need to be thinking about what happens if there is more than a slowdown. >> you now need countries that have the fiscal space to stimulate their economies. abigail: it's all straight ahead on "bloomberg best." hello and welcome. i'm 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's start with a day by day look at the top headlines. on monday, investors digested a slow economic data

that came out over the weekend from china. >> china's economy continues to slow with sluggish domestic output and trade tensions pulling gross down since the early 1990's. gdp grew 6.2%, matching estimates. how bad is it? >> it's slowing on a quarterly basis and the takeaway is the activity numbers for june that picked up in retail sales will stop also fixed asset investments all headed in the right direction, all eating -- beating estimates and of you look at retail sales, a pickup in cosmetics sales on a turnaround in the car sales sector. it points to an economy that has a long way to go before it can be said it's truly out of the woods. at the same time, it hinted at some kind of stabilization after a rocky period. >> a busy week of earnings

for citibank. they topped analyst expectations for the second quarter, they reported profit and revenue gains despite a 5% loss and trading revenue. what struck me is the praise. we know from deutsche bank, you cannot cut your way to growth. how is citigroup's cost-cutting better than other cost-cutting we have seen? >> for one, there is cost-cutting to improve efficiency and the amount of money you have to invest. citigroup is benefiting from the fact that they are becoming more efficient in some areas and that's allowing them to continue to invest. the bottom line is they reaffirmed their return and common equity targets is the metric despite they have revenue headwinds. they are cutting costs. >> earnings week for the big u.s. banks underway. quarterly increases and wells fargo boosted its income since 2017. -- 2016.

pretty much powerhouse balance sheets but the problems of margins are out there. >> we are three for three in terms of the biggest u.s. banks. net interest margin missed estimates and jpmorgan brought down their guidance. wells fargo have brought down their guidance a couple of times and missed the estimates. the more negative thing for wells fargo today is the expense side of things. they sort of kept their guidance for this year, coming into the higher and of that range and flat expenses. next year, goldman sachs is a different story with equity trading revenue for that business coming through and i think that's what investors are happy to see as well as better fees. >> wall street fell from a record on the offshore oil weakened as president trump reminded us that the trade war is far from over. pres. trump: we have a long way

to go with tariffs in china with another $325 billion we can put a tariff on if we want. >> what can we infer from those latest statements? >> this confirms expectations by many lawmakers in beijing that a clear pathway to a deal is nowhere in sight. you heard from trump there is a possibility of raising tariffs even further but it's a precondition on the part of beijing for the talks to continue. we have heard from statements just coming out that china is prepared to weather the storm with the increasing protectionism and global growth slowdown and they are prepared to adjust fiscal and monetary policy as appropriate. >> bank of america is the next to report with a record second-quarter earnings but missed on the interest income despite a beat on fixed income trading revenues. >> fixed income trading is pretty much unchanged from a year ago which is surprising because all the other banks that

have reported including goldman had sizable declines in fixed income trading but bank of america held on and that's a good sign. equities are down but almost everybody was down. we knew that net interest income would be under pressure because interest rates are falling and the fed has signaled it will cut rates and long-term yields of -- have already dropped because of that signaling. the numbers maybe didn't shock people as much than what they were expecting but the surprise was in fixed income trading and it was good. >> morgan stanley is the last of the big u.s. banks to report earnings just this morning. they beat of course. >> we have all of the big banks out. what is your biggest take away on the banks so far? >> muted trading environment, over all muted revenue environment, probably coming out of this quarter because trading, we got a little bit of excitement at the end of the quarter but that immediately

faded so not enough to stop the debt interest revenue environment has had estimates come down across all the peers for that and the thing to watch is the whole global macro geopolitical uncertainty because that drives sentiment met tends to be an indicator for deals. the key concern is will that eventually feed into the u.s. economy and could that be a risk to core businesses for banks? >> global stocks are rallying today after dovish comments from both federal reserve vice chairman and the new york fed president. at a speech for the central bank research association, williams said it's better to take preventative measures than to wait for disaster to unfold. his comments immediately boosted market expectations for 50 basis point cut this month. and with fox news later, the fed number two said you don't need to wait until things get so bad to have a dramatic series of rate cuts.

investors does expectations after a new york fed spokeswoman took the unusual step of clarifying his remarks saying they were from an academic speech on 20 years of research and it was not about potential policy actions at the upcoming fomc meeting. david: they must know that this is just before the quiet time and i -- they must know the end of the month is a really important meeting. are they trying to send that kind of signal? >> they are counting that traders don't listen to their speeches and they trade on their headlines. john williams was going to give an academic speech on how people make hollis he and a time when you are close to the zero lower balance and you can do things and as the new york fed later try to characterize, it was 20 years of academic research. the headlines came out that said williams said you have to act quickly and everyone said 50 basis points. it was late in the interview

about considering that. they said if we needed to we wounded. but the headline says the fed would and everybody rushes often trades on that. >> it's irritating as a former practitioner that the market probability went from 30% before williams spoke to 60% after he spoke and then after the clarification, back down to 30%. it may well be an academic exercise for mr. williams but if you are the poor sucker that paid the top and had to top out, your loss is very real. it's not just something you learn in the classroom. abigail: still ahead, as we review the week, an interview with the foreign minister of iran. plus, conversations from the g7 finance gathering in france and up next, more highlights from a whirlwind week of earnings reports. european banks tried to reassure investors that they are moving on from on a laundering scandals. >> it's important to be viewed

as a safe bank. abigail: this is bloomberg. ♪

this is "bloomberg best." i'm abigail doolittle. let's dig deeper into one of that week's biggest stories, corporate earnings. our roundup of this week's results continue with european banks. >> they have beaten the street in terms of net income but the big headline is the policy was slashed. money laundering probes continue which is a dramatic headline. is that in any way tied to your concern about money laundering investigation and what might end up having to perhaps facing charges?

-- face in charges? >> the change in dividend policy is the backdrop that swedbank will be a low risk bank. it's also the fact that we have seen, during the past 18 months, that long-term interest rates and fx together with increased capital requirements coming from swedish banks in september are pushing down the buffers to levels which we do not find acceptable. it is important to be viewed as a safe bank but you have to recognize the fact that we are in a very special situation at the same time and you need to take that into consideration. you need to be responsible and build a safety buffer. >> second-quarter operating income missed the lowest estimates. the biggest nordic bank by

assets is under pressure from investors to improve revenue after years of focusing on cost cuts. the group says the results are not satisfactory in a needs to -- and it needs to review its capital and dividend target. should investors prepare for a dividend cut? >> i'm not going to comment on that right now. when we look at where we are, in recent years, we invested heavily in digital compliance. we concentrated into the nordic markets and we have entered a new phase of customer focus. most importantly, we expect to have better clarity on our requirements and we will comment on that after the third quarter but it's really in that context that our shareholder investors have asked for this and in the fall is the right time because then we have visibility into the banking union and those requirements we get from there.

>> scandal plagued banks about new capital the banks as extra compliance costs and a tougher trading environment forced it to lower its outlook for this year. danke has been in survival mode since its money laundering scandal erupted last year. >> let me ask what you would expect as far as capital needs for the remaining year, for 2020? >> basically, the dialogue we have with our regulators is about some of the compliance issues. we were publishing a couple and we anticipate in the mid-single digit billion range is what we write in our report. that is what we are disclosing. this is not asking something that should come out until we have further notification but given that we want to be more transparent and open some of the

anticipation, we are coming out and giving this message to the markets so they don't get surprised when we get the actual mid-single digit range. >> ericsson's earnings have missed on estimates for the first time in six quarters and it says the rollout of the five g mobile networks in asia will weigh on profitability. the swedish network of test equipment profit rose. all of ericsson's business units except networks posted results below estimates. how far away are you from completing the turnaround plan? >> we continue to execute on the plan we put out our focus strategy where we -- where we invest in technology to have competitive products and achieve competitive core structure. we are going according to that plan so we are putting ourselves

on plan for the targets we put out for 2020 and 2022. that's what we manage and what drives the business. we are on track for that with another solid quarter under our belt. >> the trenchcoat maker is up the most since 2012 after new designs went well with the chinese market stop the rebound helps store sales growth 4%, double what analysts expected. what are they doing differently? should we be calling burberry it -- a trenchcoat maker? >> bit forced alliances with pop-culture icons. it opened up this parisian couture house to people like kim kardashian who has millions of followers on instagram and pop stars like madonna and beyonce. they brought those people with them to burberry. the new designs are bringing attention to the house but that

message is being amplified on the internet. >> the world's most profitable distillery beat analyst expectations with net income growing nearly 27% in the first half. revenue was up 17%. what stood out to you? >> the revenue numbers stood out. by any measure, this revenue growth would be impressive for most companies. but we have come to expect more out of them. if you look at the revenue growth for the first half, this level is its lowest since 2016 and well below its tenure -- 10 year average. perhaps we are seeing weaker consumer sentiment at play especially in the lower range but this company is in a league of its own and analysts are saying they are not too phased by these fluctuations and a lot of people are very fixated on the very healthy profit earnings that have been pulled in.

david: johnson & johnson released second-quarter earnings about an hour ago, reporting results better than analyst expectations. it looks like pharmaceuticals led the way. give us your topline analysis of second-quarter earnings. >> it is a pleasure to talk about our results which i think the results solidified the first half of the year and a strong way. pharmaceuticals did lead the way. we continue to perform beyond the market in which we play. if you think about how we entered this year with somewhat average expect haitians for that -- expectations for that particular unit given by a similar and generic competition we faced, most companies with a $3 billion headwind would talk about contraction and we have how to growth -- we have had growth based on our strong portfolio and are able to bring new products to market. we are seeing improving trends in our medical device send consumer unit so it was a good start to the year. >> netflix tumbling after they reported a surprising loss of

u.s. customers for the second quarter. this renewed concerns about its growth prospects at a time of looming competition. netflix says it lost one hundred -- 130,000 customers in the united states as a result of higher prices and a weaker slate of shows. what's your topline reaction? >> i think price increases probably drove the subscriber lost a mystically. -- loss domestically. i think they are probably bumping up again to what they can charge and continue to grow. i personally believe they will keep 80% of their domestic subscribers as high as $20 per month. their last 10 million subscribers are probably middle income households and they notice when prices go up a couple of dollars which they did in january. i think you will see continued defection as content migrates away from the site and its competition starts to materialize. disney plus in the fall and warner next year.

leaving at the end of this year and the end of next year. >> microsoft shares popping after a reported fourth-quarter results that topped estimates in the driver was continuing strength in the cloud business. another big quarter for microsoft was expected. what's the takeaway? >> almost every line item was good and we found no mistake in the quarter so far. or anything negative. the macro concerns could keep them from head bins but the market for cloud is so large and it just seems the tip of the iceberg at this point. the market potential in the enterprise space is an enormous. we think microsoft is better positioned than any company out there. ♪

abigail: welcome back to "bloomberg best." i'm abigail doolittle. tensions between iran and the west have risen significantly from the u.s. withdrew 2015 nuclear agreement and imposed severe economic sanctions. tehran responded by breaching the yield caps on and this uranium but this week am a both sides hinted a diplomatic path forward might be possible. john micklethwait spoke about these issues with iran's foreign minister.

>> there is an agreement come a multilateral agreement and normally, it can be implemented unilaterally. everybody has to chip in. the year paeans believe this was important for their security. if it is important for security, you invest in your security. you don't just get security by praying for it. you must invest him a you must -- he must invest, you must do what is necessary. the europeans need to take the necessary action. the united states has shut -- shot itself and its foot by withdrawing from this agreement. john: what is the necessary action the europeans need to take? do they need to buy oil on credit? mr. zarif: it's up to them to decide. they have made a commitment in the deal. they made the commitment after the united states left the deal and they knew the u.s. was leaving. they knew the u.s. impact on their economy.

but they committed themselves to allowing iran to sell oil and repatriated money, have shipping, have insurance, and we have none of that. they need to live by their commitment. if they don't, then we don't have a quarrel. we have a mechanism within the jcpoa, within the nuclear deal. we negotiated this deal with open eyes, without trusting each other, nobody trusted the other side. that is why we have mechanisms within the deal that we reduce our commitments until they comply. once they comply, it can be reversed. but if we go beyond certain limits, the reverse would be more difficult and more costly. john: if they don't comply, you will continue -- mr. zarif: we will continue with the steps and the steps are legal and in line with the agreement. we are not going to build nuclear weapons because if we

wanted to, we could have done that long time ago. john: you are clear about that. people talk about breakouts, do you think you could build nuclear weapons tomorrow? mr. zarif: very rapidly. had we wanted to build nuclear weapons, we would have done that during the time we paid the price of building a nuclear weapon. during the previous administration in iran, we had all the sanctions, all the pressure. had we wanted to build nuclear weapons, we would have built them then. john: do you think you could build them within a year? zarif: if we wanted to do that but we don't. abigail: coming up, more of the week's top business news including another wave of protest in hong kong and another round of tech hearings in washington. plus, more compelling conversations as global growth starts to slow down, central banks are pulling out their policy tools and david lipton of the imf has a warning for them. >> the first admonition is do no

harm. abigail: this is bloomberg. ♪

abigail: you are watching "bloomberg best." i'm abigail doolittle. it has been another uncertainty is affecting corporate decisions with reports that hp and dell could move as much as 30% of note put production away from china to avoid tariffs on u.s. bound goods. dell cfo declined to comment on the news but told bloomberg that flexibility in supply chain is helping the company navigate through complications. >> we have a global supply chain that has flexibility in it. we have 25 manufacturing facilities across the globe. we are balancing the needs of our customers with the environment we are in.

i think we have done nice job of balancing the tariff dynamics and we will continue to work our way through that and hopefully, the two governments will come to an appropriate agreement at the right time. >> what does that mean in terms of adjusting your supply chain? you have 25 manufacturing sites but when will you have to start adjusting prices or have you started already? >> if you recall, we've been able to -- there have been three tariff lifts that we have been able to delegate so far. by far, we have been able to mitigate the impact through shifts in the supply chain and working with our supply base. we've adjusted certain prices on a small minority of products as a result of our inability to mitigate. while we have done some price adjustments, by and large, we have been able to offset the impact to date. abigail: this week, christine

lagarde announced she will be stepping down as imf managing director on september 12 as she prepares to leave the european central bank. the deputy managing director. has been filling in. he spoke with bloomberg surveillance about how central banks may help counter a global economic slowdown. >> right now, our baseline is for sluggish growth, slightly stronger in 2020 our base is not a slowdown, let alone a recession. the first admonition is, as christine lagarde has said, do no harm. it's important that trade tensions and technology tensions not tip the world into recession and the reason is we have fewer tools. our tools have less policy space than we had at the time of the global financial crisis. monetary policy has already been expansionary, fiscal policy likewise.

the first rule is do no harm to avoid recession. the second i think is all policymakers should be responding in a data-driven way. they need to see what comes. the central banks have to keep an eye on the circumstances in their particular jurisdictions and try to keep their economies on the right trajectory to achieve their objectives. all need to be ready in case there is a significant slowdown, we need to respond more forcefully. >> in the case of a significant slowdown, which part of the world do you expect to provide the biggest downward drag them -- on global growth? david: it is hard to say because we don't know what shocks are coming but europe is in a situation where the policy tools are somewhat less ready at hand

and as mario draghi has been saying, it's important that there is not an overreliance on monetary policy in the event of a downturn especially a severe downturn and all policy levels be ready to be used. abigail: g7 finance ministers and central bank chief met this week in france with a host of issues on the agenda. trade wars, global wars, cryptocurrencies, all up for discussion. many of the attendee spoke with bloomberg and here are some of the highlights from those conversations. >> if you don't know if you are going to be able to sell, then you don't invest because you only invest to produce and you only produce to sell. you don't know at what tariff you can sell and therefore, you

don't invest. this is what is happening and this is why we have seen this slowdown, mostly because of the trade tensions which are moving into the territory of investment and creating uncertainty. david: the question of what is to be done about that? one response in the united states as you know that the chair of the fed has said because of trade uncertainties, we may become more accommodative in our monetary policy and we have seen a dramatic growth in negative yielding debt around the world. will that ameliorate or reverse what you are describing because of diminishing trade? : central bankers are heroes but remember, over the last 10 years when we have been dealing with a crisis, they have brought down the rates to about zero, the fed was reversing somewhat but right now, it has given signals it may start cutting rates going forward.

the only problem is that you now need the fiscal policy. you now need countries that have the fiscal space to stimulate their economies and invest more and it doesn't mean they will lose control of their deficits or their debt, it is just that there is room in many economies and they should use it. >> we need to reflect about fiscal policy. it's high time that we build the right policy mix because what we see today is a slowdown in the economy everywhere. also the need to address the very risks that could become concrete together. there are trade tensions between the u.s. and china. >> one of the things the americans say is the dollar is too strong. do you worry the administration

will try to talk down the dollar? >> i am not commenting about monetary policy because currency is eminent domain and when he to think about what happens if there is more than a slowdown. i'm not saying this will happen. our forecast as optimistic. we also see there is a risk relation. we need to reform the rules and re-for -- and reform the imf quota. we need to design school policies which are coordinated because some of our economies have a large fiscal gap and we need to use it to invest more and create growth. some of us still have a high-level of deficit and they need to reduce that. >> i know you had a one-on-one

with steve mnuchin. -- of the things they think one of the things the administration has said is they think the dollar is perhaps a little too strong. do you worry they will try to talk down the dollar? >> it's up to every nation to take its decisions as a nation. as far as europe is concerned, we are of the view that policy must remain in the hands of the central bank which sees an independent central bank. the ecb is independent and it's up to the central bank and only them to take the decisions related to monetary policy. this is the french position. this is the european position and it will stay that way. >> we are going negative and the market is already pricing in a rate cut but do you worry that could have serious repercussions on the european economy?

>> it might be interesting for the depth of the key question for the eurozone is that the lack of growth. you cannot explain to the people that the euro zone is aid -- is a success because you have stability, but not growth. people are not waiting for stability, we have stability. but they are waiting for growth, prosperity, jobs. i really think that all the 19 members of the eurozone should think about the possible tools they might use to feed growth within the eurozone and have a stronger growth which means more prosperity and more jobs for everybody. ♪

abigail: this is "bloomberg best."

i'm abigail doolittle. let's resume our round of the week's top news and business finance and politics. the european parliament avoided a messy deadlock and filled a key executive post. >> he has been confirmed as the next president of the european commission. she became the first woman to hold europe's most powerful policymaking post when her term starts in november. >> she managed to get the nomination with only 383 votes which was tight. i was told by senior members of the european parliament that anything below 400 votes is a very weak mandate and it's not a good start. it is not a good look. she has a lot of challenges ahead. she's got trade, the relationship with donald trump that has become rocky over the past month and brexit. >> it is not the end of something, it determines the beginning of the future relationship between the united kingdom and the european union and we want to be partners.

they are our neighbor and we have common interests so i'll put a lot of emphasis that we will have, if necessary, a brexit and a good way knowing we have a partnership. >> facebook back in the hot seat. david marcus, the executive responsible for the proposed cryptocurrency labor spent much of this morning appearing before the senate banking committee, trying to reassure skeptical lawmakers. >> we have made mistakes in the past and we have been working and are continuing to work really hard to get better. >> not a real warm reception for david marcus this morning. to the extent he was hoping to limit the discussion to the cryptocurrency plans, it very quickly veered away from there. the top democrat on the committee basically said because of facebook's track record that the senate would be delusional to trust facebook to go ahead

with this project. it was like everyone had a swing at facebook. they were also talking about libra which is, in that context, facebook's plan to do something that has never been done before and potentially change the way the world uses money. >> bank of korea has lowered its benchmark rate and we will wait to see if the federal reserve takes the lead. i think it was 10 out of 25 economists they got it right. it's seen as a sign that tumbling experts have created an urgency for policymakers. the first rate hike comes less than a year after a hike, what is next for the central bank? >> the big question is will they cut rates again and if so, when? it's a surprise and exciting and fun when central banks to -- do something not entirely expected. six months in a row, exports

have been down. bok cutting its 2019 gdp forecast and citing weak exports. in the background is a u.s.-china trade war that's not ending. that's affecting exports around the region and japan is going head to head on their own version of a trade war, cutting the 2019 cpi forecast. this is another reason why they are cutting rates now. >> ab invest has the hottest offering but has shelved it. it struggled with its plans to clear its own debt. let's start with hong kong itself. how important was this deal for the exchange? >> it was important for the exchange. it could have doubled or almost doubled the first fundraising in hong kong.

it was about 9.4 billion u.s. dollars. from a number perspective, it's very important for the deal. >> why? >> there wasn't sufficient institution demand for the ipo. so a lot of the long-term investors found the valuation of it too rich. they also had concern over the growth prospect. >> ab inbev of agreed to sell its australian holdings for 7.3 billion u.s. dollars. that accounts for almost cap the -- half the beer market in australia and the belgian company says it's considering an ipo of its asian subsidiary. does this tell investors or not telling investors that they are serious about cutting their debt pile? >> it's interesting that they moved so quickly after the dash

to the ipo. it makes you wonder whether this was the plan b and if the ipo was what they were expecting and whether that was something they were concerned about. they don't really have huge pressure to do such a big deal so quickly. the timing is quite interesting. >> dozens of people were arrested in hong kong after demonstrations amid reports that beijing has rejected carrie lamb's offered to resign. are there signs that the protests will start dying down? >> the protesters have been keeping up the momentum quite well. they had tens of thousands yesterday in a suburban area of a hong kong and have been trying to mix things up. they are not occupying one location, but they are going around to different locations all over hong kong each weekend and managing to get sizable crowds.

there are some scraps every 90. -- 90. we saw that again last night. two policemen had their fingers bitten off which were gory. these sorts of clashes have died down and settled for the week. protesters are then right back out there the following weekend. still attracting sizable crowds. even if beijing is upset with carrie lamb, if she steps down, that reflects badly on them and provides an example of where mass protest can remove a leader they have appointed. for them, that is a line they cannot really cross. >> the broadcom acquisition of symantec appears sidelined. there was a report that indicated broadcom is still very keen on doing a deal.

where do things stand? >> i don't think it's dead. it has stalled. what we understand that happened is that everything was ready to go. everyone was flying down to announce something tuesday and materials were being shared between the two sides. at the last minute, broadcom found something that didn't like in the due diligence. we don't know why then they cut the price. they cut the price. they said what they agreed on was not sufficient for the risk. they tried to reduce it by over one dollar. the question is, can broadcom come back with some kind of offer in between what they originally said and what they've cut it to to get symantec over the line? it makes a harder for symantec to come back and take a lower offer. >> buyer has won a ruling slashing a verdict to $25 million over claims its roundup pest spray causes cancer.

the same judge who reduced the damages rejected the company's request for a new trial. they had about to keep defending its weedkiller. how good is this news for them? the reduction in the amount of punitive damages, at least? >> on the surface, it looks good. 25 million is nicer than 80 million. but what they were hoping for came on friday when the judge rejected a new trial. now they have to formally appeal this case which will take quite a bit of time. this is the second of three trials that bayer has already lost. given friday's news, this was the best case scenario. >> iran's revolutionary guards says it has seized a british oil tanker on the strait of hormuz. the u.k. government says it's seeking more information and the u.s. government says the latest episode to escalate violence by iran.

pres. trump: this only goes to show what i'm saying about iran. trouble, nothing but trouble. >> 12 hours ago or less, we were talking about the potential for both sides trying to find a way to reach a diplomatic solution and open talks. what we have just seen in the last couple of hours makes all of that much more difficult. there are reports that two tankers, not just one but possibly two tankers have been seized and directed into iranian territory. that has ratcheted up the tension in a very narrow way where about 1/3 of the seaborne oil passes through the strait of hormuz. ♪

>> interesting to see where the

gloom is coming from in this earnings season. i saw in your notes you were talking about the positivity. i was thinking it did not feel that way. we checked out the ea function and i believe we have seen some positive sectors. today's earnings season changed the balance a little and we see more gloom. it feels as we watched communication coming through this season from corporate. there seems to be gloom out there. abigail: there are about 30,000 functions on the bloomberg and we enjoy showing to our -- showing you our favorites. maybe they will become your favorites. here's another one you will find useful. quic go. it will take you to our quick takes where you can get important context and fast insight into timely topics. here is a quick take from this week. >> let's say you've given up your law-abiding lifestyle to pursue a life of crime. you just made your first big score, perhaps from selling

drugs, taking a bribe, or other corrupt acts. you cannot just spend it or deposit it in your bank account without attracting attention from authorities. the pesky money trail might serve as evidence of the crime you committed so you need to get that dirty money clean. there are three steps to any money laundering scheme. first up, placement, where funds are moved from direct association with a crime and then layering or disguising the money trail to foil authorities and finally, integration where the funds are once again available to spend without worry of being caught. what are your options? one option is forming a shell company. it's fairly easy and there are plenty of law firms that can help. it should take them a bit longer than signing up for a new eu mail address. launderers may turn to switzerland are places where you can set up anonymous shell companies like the cayman islands or the u.s. states of delaware and nevada. once it's set up, make up fake

transactions for goods and services you pay for with your dirty money. suddenly, the dirty money looks legitimate. it also helps to find people in banking who don't care if you are a client. after the fall of the soviet union, launderers sought out weak spots throughout europe where oversight was poor. billions have been funneled through banks in cyprus, malta, and the baltic nation of estonia and latvia. if you prefer to use the stock market, you can trade technique called mirror trading. you use your money to purchase shares and then you sell shares worth the same amount summer abroad. -- somewhere abroad. the trade functionally cancel each other's apogee of -- cancel each other out, but you have successfully turned your rubles into clean euros. a similar method is a back-to-back deal where a russian takes out alone one -- out a loan in country like austria that's guaranteed by a deposit of dirty money back home in russia and then defaults on the loan. the bank in austria seizes the russian deposit is she still ends up with the proceeds of the loan, no strings attached. maybe you like to visit casinos. another method is mixing dirty

with clean money. cash businesses like restaurants and casinos are attractive to launderers. a common schemas to buy a bunch of casino chips, make a few small wagers, then cash everything else out his winnings. or finally, there is smurfing. though you will not need anything blue to get your green. you hire a bunch of associates called smurfs to individually deposit small amounts in different accounts in different places. u.s. banks are required to report any transaction over $10,000. you might need to find a lot of smurfs. you can see there are lots of ways to launder money but unfortunately for you, there is no guarantee you will not get caught. abigail: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com along with the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week, thanks for

watching. i'm abigail doolittle, this is bloomberg. ♪ we're the slowskys.

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