♪ reporter: coming up on "bloomberg best," the stories that shaped the weekend business around the world. >> parliament is on the brink of wrecking any deal. >> there is no sense. reporter: u.k. lawmakers vote to stop and stop the snap elections. >> the poison of a no deal. >> gone from some big sublime to utterly ridiculous. reporter: a new round of tariffs as the u.s. and china prepare for another round of trade talks. >> it is a sharp acceleration in the terms of the two sides. >> neither side wants to be the one that walks away from these talks.

reporter: hong kong drops and unpopular law but unrest continues. >> you can see the level that has been built up. reporter: argentina's debt crisis deepens. >> they have to do something to contain the flow of dollars out. reporter: the fed given more food for thought. >> a strong correlation with the session ahead. >> not a great report, it is decent. >> we want to remove obstacles to economic growth. reporter: the top interviews on topics from trade to race. >> these give us reason to double down our efforts. >> low interest rates have significant effects on turnover. >> we have the fundamentals right to deal with a slowing bubble economy. reporter: it is all straight ahead on bloomberg best.

hello and welcome. i am kailey leinz. this is bloomberg best, your weekly review of the most important analysis and interviews from bloomberg television and around the world. let's start with a day by day look at the top headlines. the week began with the u.s. and china entering a new phase of the trade war with tariffs imposed by both sides kicking off sunday. paul: u.s. tariffs on $110 billion on chinese imports are now in effect. china will retaliate. even so, president trump trade talks in washington this month are still on. mr. trump: we will see what happens, but we can't expect china to rip us off anymore. we can't allow china to take $500 billion a year out of our country. we can't do that.

paul: this is a sharp acceleration in terms of the tit-for-tat tariffs. we saw the u.s. side putting 15% tariffs on $110 billion of hinese imports including shoes and textiles and technology components like the apple watch as well. the next round of tariffs for the u.s. side will be on december 15, targeting $160 billion worth of chinese imports and you have got all of china's imports into the u.s. market hit by tariffs. china put tariffs on things like soybeans, beef, chicken and they will impose them on december 15, u.s. autos as well. about $75 billion worth of u.s. imports in total in terms of september 1 and december 15. business groups say the time for a tariff truce is here. people are looking at negotiations. trump says may still happen

later in september in d.c. >> the u.s. and china struggling to agree on a schedule for planned trade talks. they delay the latest tariffs. >> they are having trouble getting to the table quite frankly. furthermore, there has not been moments to set the contours of the decision, what would be on the table, what might not. it's not a break, but it is a pause, but we have more contours and it turns out the difficulty is we are not sure what we will talk about. we are not sure when we will talk about it. >> we are getting some manufacturing dado. this is in keeping with ism and pmi across the globe. the s&p taking another leg lower after that. >> truly awful report some of the purchasing managers index alls more than a point to 49.1

from 51.2. it's the biggest drop and it is the first contraction since 2016, january. even worse the underlying numbers, new orders 47.2, unemployment 47.4%, inventories rise to 49%. when you have inventories rising faster than new orders, there is a strong correlation with recession ahead. >> britain could be going to the polls yet again. boris johnson will try to trigger a snap election. if he loses a crunch about in parliament this evening. >> the first thing that may happen is mp's will have to ttempt to seize control of the government agenda, the order paper. then there will be a vote

sometime this evening on whether r not the first hurdle of that rebel bill will be allowed. what mr. johnson said is if that happens, he loses that tonight, he will tomorrow table a motion to dissolve that parliament when they just got back and call the election for october 14. pm johnson: the country wants this done. they want the referendum respected. we will be by october 31 in all circumstances. there will be no further pointless delay. david: well he was speaking, the arithmetic changed significantly. this morning he had a majority of one. during his statement an mp from the conservative party walked to the other side of the house and joined the liberal

democrats. it went to minus one. we now have a minority government in the united kingdom. >> the ayes to the right, 328, he noes 201. >> not a good start, boris. >> i don't want an election but f mp's vote tomorrow to stop negotiations and to compel another pointless delay to brexit potentially for years, that would be the only way to resolve this. i can confirm we are tonight tabling a motion under the fixed term parliaments. >> here! >> he wants to table a motion for a general election. fine. get the bill through. first in order to take no deal off the table. >> a dramatic move in hong kong with chief executive carrie lam saying she would remove the

extradition law which triggered 13 weeks of sometimes violent protests. >> it was long in coming according to the protesters. they have been demanding this from day one when she said she would not formally withdraw this controversial extradition bill. she would suspend it and basically calling it dead. but today, in her words, to fully allay the public concern, she is withdrawing this bill. but she addressed the other four main demands but did not acquiesce to any of those demands including setting up an independent inquiry into what protesters say was excessive force by the police. that has led to a slew of criticism from the pro-democracy camp. you can see the level of distrust that has been built up by the protest community to the

government. >> boris johnson's bid to trigger an election has been blocked. the british prime minister suffered a string of heavy defeats. johnson was thwarted twice in the house of commons by the opposition parties and tory rebels to block the new deal brexit which came in second and hird readings. later, he failed in an attempt to force a snap general election. >> the answer for an election today is like an apple from snow white and the wicked queen. what he is offering is the poison of a no deal. >> it is absolutely unbelievable. it is totally unfathomable about what is going to happen. there are some who believe there is some machiavellian master plan. from the outside, it doesn't look like that now. >> china and the u.s. are planning to have negotiations to end the tariff war in washington next month. skepticism remains on both

sides that any progress can be made. >> it is good that they are talking and have agreed to have these face-to-face negotiations. it is good that they are talking. these were at the ministerial level which were scheduled to take place this month, september so we see a delay. both sides trying to manage the markets, neither side wants to be the one that walks away from these talks. there is no harm in meeting. >> the showdown over brexit got personal today. the prime minister's brother quit the government in apparent protest over the brexit strategy. johnson is still arguing for a snap general election in an address today. pm johnson: i don't want an election but the only way to get this thing done and moving is to ake that decision. >> what we are hearing is the government will ask mp's once again monday to approve an early general election and they plan

to do that because they expect a bill working through parliament to prevent a no deal brexit. it will be back at the comments i will receive royal assent. there are on monday, we will have another showdown with mp's. >> we are euphoric on the news. we don't have any specific date, but who cares. we are above the 50 day moving average. >> bond bulls were given a tough wake-up call thursday on the enormous surge in yields on the treasury curve showing bond trading is still a two-way street. this is the biggest bond rally in years. >> it was depending on which part of the curve you are looking at, shery, but no matter what part you were trading, you got hit hard if you were not expecting this to happen. this was something to see. probably the biggest one-day

move we have seen in 10 years. vonnie: companies creating a a below forecast amid trading uncertainty and slower global growth. the jobless rate held steady at 3.7%. >> it is a decent report, it is decent. there was a big miss on job creation but higher wage growth, hours worked, decent. it shows you the labor market is holding in. sec. kudlow: we want to remove obstacles to economic growth. we want to remove obstacles to economic growth. an inverted yield curve and a premature hiking of interest rates last year, maybe the year before, generated an obstacle to economic growth. let's remove that, and you will see this economy with low taxes, low regulations. those are the factors that will lead to 3%, 4% economic growth

and keep this job story as strong as possible. >> jay powell make remarks in switzerland. it is his final comments before the blackout period. mr. powell: we will continue to watch all of the geopolitical things that are happening and we will continue to act as appropriate to sustained this. >> jay powell was extraordinarily disciplined. he stuck to his talking points. he made the case that the u.s. economy is in a good place, continues to perform well and he is used this line several times. >> still ahead, as we review the week on bloomberg best, a fund sticking with you can investments no matter what happens with brexit.

the e.u. trade commissioner said the forecast is cloudy for a deal with britain when it finally leaves the bloc and more on the top headlines. angela merkel's coalition staves off a populist challenge. >> it means there was unrest which will quiet down for some time. kailey: this is bloomberg. [note]

♪ kailey: this is "bloomberg best." i am kailey leinz. let's continue our global tour, of the week's top business stories in china where the government in china responded to economic headwinds with moves to stimulus. paul: the council of china is signaling a reduction in the amount of funds a bank of reserve must hold is on the way, a move aimed at releasing cash into the slowing economy. what did the council say? >> the state council was asking for the targeted and brought use

of ratio cuts in a timely manner, after a meeting held by this was the premier, and it is expected the pboc will follow the heed. this is what happened in january. they also called for the issuance of special bonds to be used by local government to boost infrastructure spending. many economists are expecting this cut to come as early as this month. it doesn't come as a surprise given the pressures facing the economy. we had many economists lower their forecast to below 6%. there is a lot of headwinds facing the economy and we heard from the state council themselves the external pressure is placing enough downward pressure on the economy the reserve ratio is necessary. tom: there is breaking news, china moves the reserve ratio is important and some banks will see a full percentage point.

>> this is about the ongoing slowdown of the chinese economy, ongoing headwinds from the trade war with the u.s., but the ongoing concerns the government has about what would happen if it let loose with stimulus, it could cut interest rates or flood the economy with liquidity. it is fragile and it risks bubbles so what happens this evening here when essentially limits that using step which could put a floor under the slowdown. >> angela merkel's ruling coalition stems the surge of far-right populism. the eurosceptic alternative for germany didn't make a breakthrough in the local elections in the eastern states of brandenburg and saxony. the result could stave off a deeper political crisis in berlin. that was little bit of a surprise for merkel. do you think the key is whether

they can carry through on this? >> you can say merkel's party and the social democrats are partners, they are breathing a collective sigh of relief. polls had shown the alternative for germany would actually win the election outright. that did not happen. they did come in second and had a strong showing, but the social democrats hung on. what does it mean for the coalition here in berlin? that's what we all care about. the unrest entially that will quiet down for some time. >> in a rare sunday intervention, argentina's president imposed capital controls in a blunt policy result aimed at containing the country's escalating financial crisis. the announcement came after $3 billion of foreign currency reserves friday and thursday. this is about containing

argentina's economic crisis or about containing the president's political crisis. >> it is hard to separate the two with elections eight weeks away. this started because of the primaries. august 11, he had a stunning loss nobody saw coming and the money started flowing out of argentina. $3 billion in two days, it has been $12 billion since august 11, so they had to do something to contain the flow of dollars out of the country which will impact inflation and everything lse. it is the president trying to make it to the end of his term, but also trying to fix the economic situation in argentina which has become a massive crisis very quickly. >> the ecb has signaled a note of caution on restarting quantitative easing. he told a french magazine the central bank doesn't have to use all of its policy tools at once. he joins a rollcall of others

making hawkish or not dovish noises over stimulus. how significant are these comments? >> they were pretty technical in nature. he clearly remains potentially open to being convinced qe should be restarted. he labeled the main concerns, one is the two things the ecb is after changing is inflation expectations and short-term market yields. hey are best dealt with by forward guidance and official rates. >> the u.s. placing additional sanctions on iran after france tried to extend the economic ifeline by restarting with $15 billion of free purchases. 15 entities were designated. >> iran keeps rejecting our efforts to resolve our differences diplomatically. we will intensify our campaign of economic pressure.

iran has a basic decision to make. they can behave normally or watch their economy crumble. >> a month after being forced from power, the italian president finds himself at the head of the new government coalition. investors rallying behind his second term as premier. there is a history of bad blood between the two parties. >> this government has a tall order because first of all it should undo part of what the previous government did. it would require much more leadership than honestly he displayed in the first government, but certainly he has matured. he has shown more leadership ow, and the renewed good climate with the european union would be a very poor component.

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kailey: you are watching "bloomberg best." i am kailey leinz. the head of the largest sovereign wealth fund is looking past the medical turmoil and will invest in the u.k. no matter what. but the ceo does consider negative rates of significant concern. he spoke with our editor in chief, john mickelthwait. >> we are a long-term investor in great britain no matter the outcome. norway also as a country has lived being outside the e.u. but still within europe. britain is close to europe and will be long-term.

we have 2% of the u.k. market substantially and we will continue to be that. i think also for countries we are invested in, it is good to know we are long-term committed to the countries and we are able to investor and stable investor. >> the fed is leading the central banks towards lower rates and you have negative yield and a variety of things. you are trying to receive 3% a year. bonds are negative. how do you do that? >> 3% is what you have with people spending and backbone, we achieve that, that is challenging. the worries we have with regards to markets, one thing on top of our agenda should be the urpose, lower interest rates

will have significant effects on the return over time. john: this relentless push towards ever lower interest rates all the way around the world? >> i think the market has been quite surprised so far this year. there has been a change from interest rates going up in the .s. and turning and interest rates half world now actually is approaching that territory. kailey: coming up on bloomberg best, more compelling stations. a top chinese bank executive explains how the pboc's plans to fix rates will foster growth. australia's trade minister and new zealand finance minister. another official keeping an eye on brexit, the e.u. trade commissioner who would like to make a deal with the u.k., but the leadership is not making it easy. >> there is an agreement. the basis is if mr. johnson and

the british government want to change that, he has to come up with proposals. kailey: this is bloomberg. [note] we call it the mother standard of care.

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this is how we inspire hope. this is how we heal. cancer treatment centers of america. appointments available now. kailey: welcome back to "bloomberg best." i am kailey leinz. last month, the people's bank of china unveiled a major reform to its system of benchmark interest rates. it will release a low prime rate each month hopes to encourage investment and fostering growth. ceo cg lai told bloomberg told bloomberg exclusively why he thinks the new policy makes sense. cg: you look at the lpi, it is almost like the equivalent of primary loan, and when they announced that and forced everyone to apply for this rate, when you look at the first day of the fixing, it was down at 4.2%.

at that time, the medium lending facility was priced at 3.25%, in the equivalent of the best of the corporate clients in china, if they were issuing the bond, the yield would be 3.05%. so you can see the gigantic parity between the two. when you consider the chinese market is about 80% of the lending market, you can see the need to drop the rate further and further to be much closer to the median lending rate, and also the bond yielding. when they do that, they will force the bank to divert their lending into small and medium sized businesses and this , would be where the growth will be. david: the economy is not doing very well, so banks, i would imagine, would be attaching a larger risk premium to lending to those small businesses. talk to us about demand for credit. cg: yes, the risk would be higher, but then again, we are

also spotting a lot of the new trends in china. there is a new trend where a lot of the companies are diverting business into the third or the fourth tier markets and also the city, and we start seeing the report on q2, among many of the companies who start finding a new growth area. and this will push up the consumption, and this will push up the credit demand, all of which will be important for the banks to sustain their growth and their profitability. kailey: bloomberg also spoke exclusively this week with cabinet officials from australia and new zealand, two nations hit hard by trade wars in the global economic slowdown. let's begin with the australian trade minister simon birmingham, who discussed waiting for the u.s. and china to resolve their differences. mr. birmingham: our position has been clear all along, that we do understand some of the points of

concern in relation to forced technology transfer, protection of intellectual property, and that australia shares those with -- as do many other countries of the world. unilateralelieve the application of tariff hikes is the way to solve these issues. we are concerned about the impact on the global economy and on economies like ours as a result of these ongoing measures that are clearly having a direct and real impact on trade volumes, and from then on economic growth. paul: you have negotiated free-trade agreements with other countries and the eu as well. is it getting hard to conclude those when the climate could change in the breath it takes to type a tweet? mr. birmingham: it is always hard to conclude trade deals, but i don't think the global environment is making it harder. if anything, i think it is providing political momentum that the other countries of the world are actually determined to

demonstrate, that we stand committed to open markets and open trade, to growing those opportunities. certainly from australia's perspective, these types of tensions we are seeing give us reason to double down and make sure we create those new market opportunities for families and -- farmers and businesses, and that we work extra hard to seize every incremental game we possibly can. mr. robertson: there certainly are some challenges for the new zealand economy. we are a small, open export-based economy, but the fundamentals of our economy remain strong. we have low public debt. we have budget surpluses that are forecasted and good quality job growth. we have the fundamentals to deal with what we all agree is a slowing global economy. haslinda: they surprised markets with that 50 basis point cut.

do you think that was the right move, especially when you consider the methods you are sending to the business -- message you are sending to the business community? mr. robertson: i think most commentators have priced in a 25 point cut. they went for a 50 point cut. i think obviously that had some impact on the market but overall unexpected. obviously new zealand has a little bit of room to move still but we certainly accept the point that monetary and fiscal policy need to work together. and clearly unite, as i say, and do our own forecasts. government spending would be part of helping the economy grow even more solidly into 2020. that monetary policy shift was not unexpected, albeit a 50 point cut in one go was surprising to a few.

kailey: e.u. trade commissioner cecelia malmstrom also facing challenges on multiple fronts. europe is in early talks to rework trade agreements with the united states, and it will also have to establish new trade relations with the u.k. depending on the terms of the divorce. in another exclusive interview, david westin learned how she is approaching sensitive negotiations. comm. malmstrom: we are talking two tracks, one is a limited trade agreement focusing on industrial goods. the other track is focused on regulatory corporations, certifications standards, and we , are advancing to see if we can facilitate access to each other's markets by recognizing some of the standards and regulatory procedures. david: this comes against the backdrop, obviously, of section 232 proceeding here in the united states where we are finding on european auto imports. that has been delayed by 180 days. that is coming up in the middle of november. is there any prospect that will be extended?

comm. malmstrom: i don't know. we hope it will be extended, because it is not based on facts. the european union and our exporters of car parts to the u.s. are not security threats, it is based on normal trade. we disagree with the findings of the report and we hope we can focus on a common positive agenda to facilitate trade between us and also cooperate on other trade obstacles with other people in the world, and also on china and other threats. performing the w to and so on -- reforming the wto and someone. so on. -- and david: europe has a fair amount of exports to great britain and the united kingdom, and we are watching this play out right now, even as we speak, in parliament in london, as a practical matter. where is the european union in negotiating potential trade deals, with the eventuality that the u.k. leaves the common market? comm. malmstrom: well, if the u.k. leaves, with or without a deal, obviously the u.k. is a friend and partner and ally and

neighbor, and we will continue to cooperate and continue to trade. until we know the conditions in which they are leaving which is , very much subject to debate internally in london right now, we cannot start negotiating. once they have left, we will set together in negotiated trade agreements. it will take time, the. david: that's what i am puzzled by. what happens in that interim period? between the time they leave and we know what the rules are, what could happen in terms of disruption of exports, particularly from europe into the u.k.? comm. malmstrom: well, that's a question you have to put to london. what we have offered is a transition period where they leave but they stay in the internal market for a period of time. under that time, we continue to trade with each other on the current basis, and we negotiate a future trade agreement. if they leave in a hard brexit, meaning no deal at all, on the 31st of october, that means the u.k. becomes a third country, and we will trade under the

rules of wto, which will make it more complicated and more expensive. that is why we would very much like them to leave under a deal. but that is a decision that has to be made in london right now. david: are there any discussions at all going on between your organization, particularly the trade commission, and the u.k. on the possibility of hard brexit and how exactly that would be handled, or is there no discussion at all? comm. malmstrom: the whole european union is representing the 27 countries, it's always open for talks. there is an agreement in the basis, and mr. johnson and the british government will exchange -- will change that he has to come up with a proposal. the door is always open, but right now they are meeting and talking, but we still need to see a hard proposal from the u.k. on how to avoid hard brexit. ♪

kailey: this is "bloomberg best." i am kailey leinz. let's resume our roundup of the week's top news into business, finance, and politics. a change at the top for saudi aramco signals that the world's most profitable company is moving closer to an ipo. yousef: saudi arabia has again shaken up its energy sector, with the new chairman ahead of the much-anticipated ipo. it is the second time they have been scaled back in a week. he already had parts of his ministerial job are taken away, leaving him to focus only on the oil market. al-falih will be replaced as aramco chairman by yasir al-rumayyan, the head of the saudi sovereign wealth fund. there is an indication that the

saudi government is a lot more in a rush to get this ipo. matthew: that is a completely fair interpretation. if you look at the rationality, it is about separating the energy ministry from aramco for the first time in decades, where we have seen the energy minister not also sitting on top of aramco. i think moves like this just show that they are very determined to get this ipo trade done in the next 12 or 18 months. shery: huawei accusing washington of orchestrating a campaign to intimidate employees and launching a cyberattack to infiltrate its internal network. is hauwei backing these claims with any evidence of what they are saying? peter: it was really a strange announcement. it sort of began as a statement about an ip dispute between the company and somebody who accused them of stealing some ip for a panoramic camera, and then it

segued into this very offensive attack on the united states and said that the u.s. government is threatening its employees, coercing them, even sending fbi agents to their home. the company did not provide specific evidence about any of these allegations, but this is a sign of increased aggressiveness from huawei, where they are trying to go on the offense. i think we will see more of this from huawei, where they try to take the fight to the u.s., despite the u.s. claims that the company represents a security threat and it should not be allowed to buy critical components. francine: danske bank, still reeling from the fallout of the euro's -- europe's biggest money laundering scandal, has a new chief finance officer. it is a name that will be familiar to those who follow european banks. the cfo leaves denmark's biggest bank.

to the latest reshuffle suggests more difficulty for the bank? philip: i think it is the case of the ceo getting his own people on board, people he knows from the market. they have been in and out for seven years, so he has experience, and they have taken control of how they want to take the bank going forward. shery: "it is clear to us that the status quo is unacceptable." that is the walmart ceo speaking to news that the retail giant will stop selling some types of ammunition and ask customers to not openly carry firearms in the aisles. what impact will that have on walmart's bottom line? matthew: well, it will have an impact on their sales of ammunition. they control about 20% of ammunition sales in the u.s. and said today these measures will reduce their market share from

20% to between 6% and 9%. they denied it saying it but there is a broader financial impact where they will see a reduction in earnings or specific sales. they wouldn't go that far today, but it will certainly have an impact on their ammo sales. romaine: oil is falling to a one-month low as the trade war stokes demand concerns. this as copper hits a two-year low on a global slowdown. some would say it's a canary in the coal mine. some people say nothing to panic about. mike: it is a canary in the coal mine. copper was the first metal, a leading indicator that dropped 20% to august, and then crude oil made a new high. i look at that as good support is breaking down, but it is way oversold. so it is very short in our database, yet crude oil can get

down around $42 a barrel which , is basically another $10. romaine: wow. vonnie: the u.s. east coast is bracing for hurricane dorian, the storm that has just been downgraded to a category 2 but still registers as one of the strongest hurricanes ever on record. it is only one of eight storms to have winds reach 180 miles per hour in the atlantic. matthew: the bahamas really took the brunt of dorian so far. aside from the human and total economic costs, if you just isolated the potential insurance company losses, you could look at 2016's hurricane matthew, which produced losses of about $1 billion. this will be probably worse than that, but it is still unknown -- still a manageable number for the insurance industry. renita: hurricane dorian is battling north carolina's outer banks. the storm has weakened to a category one with winds of 90 miles per hour. further north, virginia has ordered a round of evacuations. meanwhile, in the bahamas, the

death toll from dorian is up to 30. health workers expect to find more victims. romaine: another fine for google. this time youtube agreeing to pay a record $170 million to settle claims that it violated child privacy laws. most of that money will go to the federal trade commission, about $34 million will go to new york state. i mean this is like 1/10 of 1% of what google earns in a typical year. what it is the point? ben: the point is that this is a very large fine for children's privacy. it is no question that it's a drop in the bucket for google, it will be easy for them to pay it. looking through the couch cushions for loose pocket change for them. but this is a large fine, 30 times the previous record from just a few months ago for tiktok. the ftc is thinking that they got back their own budget for the bureau of consumer

protection. it goes to the treasury. and they got 30 times what they had gotten in february. that is what they are thinking here. taylor: stock shares are plunging in after-hours trading after the company gave its first earnings report as a public company. now while slack beat analysts' expectations for second-quarter revenue and earnings, it projected slower sales growth for the second half of the year. nico: this is an instance where slack was not good enough. we have seen for years this was one of the most hyped unicorns in silicon valley. it raised at least $1.3 billion because all that anticipation, and the stock went down 15% today. the stock went down about 20% after that first pop when it went public in june. the reason why is because the company is decelerating. slack is a money-losing company. from an investor perspective, if you are not making money, you need to be growing.

and if you are not making money and not growing as quickly as you want you to, we are a little concerned. shery: wework's ipo may not be quite the celebration they hope for. the working space company is said to be seeking evaluation of about $20 billion to $30 billion when it goes public. that is less than half the valuation the unicorn secured from softbank just a few months ago. so, gillian, what happened? gillian: yeah, we saw uber and lyft, other two big ridesharing companies that went public, markets saw where they came in and people are now projecting ahead, looking at the performance with early feedback from investors was maybe not with the bankers were looking for. that feedback has been compared to the company, and now expectations have been lowered. ♪

mr. herrmann: if you look at, like, the dots and stuff, back in december, we were saying don't hike in december, keep rates low and prepare markets for cuts. at that time, 11 of 17 officials said not only hike in december, rates low and prepare markets but two or three hikes this year. that was 11 of 17. in march, it goes to 15 of 17, saying hold steady or one hike. june, it is nine of 17 say let's hold things steady. no cuts. they have been erroneously hawkish for the last nine to 12 months. kailey: there are about 30,000 functions on the bloomberg, and we always enjoy showing you are -- our favorites on bloomberg television. maybe they will become your

favorites. here is another function you will find useful, quic go, which will take you to our quick takes, where you can get fast insight into timely topics. here's a quick take from this week. >> in a tweet threat exchange with jetblue on april 17, writer mackenzie fegan had a few questions about the new boarding procedures -- no boarding pass, no i.d. instead, a camera and screen verified her identity against a u.s. customs and border patrol database, then let her on the plane. some passenger might consider the increasing use of facial recognition and everyday life convenient, some might think it is orwellian, but it is already everywhere. the question is -- how far will it go? turns out even some of those developing the technology are scared of what the answer might be. this is your bloomberg quick take on facial recognition. theay, san francisco became first u.s. city block police from using facial recognition software. jeremy: the biggest concern

are around civil liberty, whether you enable a totalitarian state with this technology, which seems to be the direction things are heading. >> so how did we get here? like other artificial intelligence applications, facial recognition initially developed slowly in the 1960's. with the help of newly available high-def cameras, machine learning, and giant databases of photos to increase accuracy, it advanced in a hurry. jeremy: facial recognition is technology that takes images from video cameras and tries to identify the faces of people in those images. it does this by taking key points in the face usually and doing measurements of the distance between those points. >> in december of 2018, arrests were made based on facial recognition after crosschecking tourist hotspots against a database of new criminals. in new delhi, police identified 3000 missing children in four days.

so if it involves catching criminals and missing children why would anyone be against it? , for one, you might look at the most developed facial recognition network in china. jeremy: it has been used in combination to create this vast surveillance apparatus, applied against certain ethnic minority groups. even in western democracies there is concern about using technology to try to find suspects, or even people who might be involved in legitimate protests so they can be tracked. >> and those are just concerns about the technology working as intended. a study from the m.i.t. media lab found white men were correctly identified 99% of the time, while error rates of up to 35% were found with darker-skinned women. jeremy: microsoft came out last year as the first major tech company to say they are

uncomfortable with deploying this technology out until there is clear regulation around it. they were then were joined by amazon, which seconded the calls. it seems like other companies are flying ahead without such qualms at all. >> to stake out some guidelines, the algorithmic justice center and georgetown university law center unveiled the safe face pledge, which asks companies not to provide facial ai for autonomous weapons or law -- sell to law enforcement unless explicit laws are debated and passed to allow it. a few companies have signed on, but notably not microsoft or amazon, possibly loath to lose the opportunity to sell facial recognition to police department and governments the world over. so what is preventing your image from saying a whole lot more about you than it used to? face it -- not much. kailey: that was just one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with all the latest business news and analysis, 24 hours a day.

that will be all for "bloomberg best" this week. thanks for watching. i am kailey leinz. this is bloomberg. ♪ we call it the mother standard of care.

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