coming up, the stories that shaped the weekend business around the world. the political future hangs in the balance. parliament says no to a snap election as the clock ticks to arts -- to another brexit deadline. the ecb takes steps towards a new stimulus passed. the question is is he doing everything it takes? offerings. and china tariff relief. >> more optimistic. .

>> investors did not like it. the printsabia puts in charge of the kingdom's oil ministry. he has a strong personality when it comes to the market for. >> -- the market. >> [inaudible] i suspect they will do one or two more, but then it is time for a pause. >> on conventional wisdom to a changing financial environment. assetporate bonds are an class that provide more risk than return to red >> bonds are not a safe place to be dreaded traded --e to be place to be traded -- place to be. >> it is all ahead on bloomberg best.

hello and welcome. this is bloomberg best. let's start with a day by day look at the top headlines. the tension between boris johnson and u.k. lawmakers ratcheted to new levels monday as the pm stuck to his do or die brexit plan and parliament came together in opposition. >> the british parliament is about to suspend its operations for a month at the request of force johnson and the order of the queen, but not before an act of legislation barring the prime minister from leaving the european union without an agreement. does this mean he cannot leave without an agreement? to request an has extension from the european union if he cannot get an agreement. there's some question about whether he will find legal wiggle room or if he will make

it so unattractive to grant the extension which needs to be done unanimously by the other 27 members, then they would refuse it. roadblock ina huge force johnson's way and the other roadblock is the election that he has been seeking is probably not going to happen. parliament is set on the nine that. -- denying that. >> force johnson says he will continue to work for deal while preparing to lead without one. over anotherng attempt to call a snap election. many timesr how parliament tries to tie my hands, i will try to get an agreement in the national interest. >> parliament is out of the door

for a few weeks, five hole weeks until the middle of october. the prime minister, last night trying to get a deal. 17th,rliament gets back 18th of october and that is the moment johnson says europeans will offer some sort of deal. it is not -- she is not going to do what parliament told him to do. there's a lot of rhetoric coming sides.m both it is such an eventful week for parliament. anything can happen. -- revving last in up its latest product on deal. unveil.al -- on the >> they have been steadily increasing the price of their

phones and setting new benchmark prices for the entire interesting -- industry. which is the, least expensive, the successor is getting a $50 price cut. by comparison a few years ago, that is about where high-end smartphones started two or three years ago and now that seems cheap. it is unusual for apple to lower the prices of its devices. unveiled its first list of tariff exemptions september 17. pork is not on the list. is this a bullish move? >> on paper, it sounds like the move towards conciliatory towards china, but what they have done is a fairly narrow group of products from the

tariffs. fish food and the like, but the big one that remains on the .ariffs are pork and soybeans it goes to the crocks of u.s. farming when it comes to tariffs. it could be viewed as a positive gesture, but a way to go. >> president delaying his tariffs on chinese goods, tweeting that did this -- the respect for out of the 70th anniversary of the people's republic. raise it onid to the first of october, but that has been pushed back by two weeks. >> moving it away from that holiday is very important. it is a big event for xi jinping. it is very important to him and

also, if you compare this to earlier in august when we had both sides raising tariffs under contrast, this is much more optimistic what we are seeing now. >> the full-scale of the damage could cause u.k. has been revealed. last night, a document codenamed operation yellow hammer. it warns of food shortages and disruptions of the supply chain if the u.k.pressure crashes out of the eu. >> incredibly startling, something coming out last month. , inou put it all together fact one part of it was redacted

, it looks pretty start and it undermines his assertion that a no deal brexit would not be the equivalent of an apocalypse and will actually be ok. >> the european central bank cutting interest rates 10 more basis points to -50, now nothing plans to start open-ended bond purchases. did mario draghi deliver more than what economists were looking for? did becauseays he the asset purchase program and quantitative easing that he is reinstating is open-ended. he will buy bonds november 1 and theoretically could go on forever if we feel [inaudible] >> blowing rates as expected. he is fearing what the banks have to pay in terms of excess reserve and lowering rates on theyr owes, especially if

exceed the market lending. it seems like he's doing a lot, the question is if he is doing everything it takes indy answer from the markets of far is no. >> mario draghi overcoming an unprecedented level. >> members of the council left thinking maybe we made a policy mistake today. >> i'm sure this idea cross to their mind to some people --crossed their minds. change not after tomorrow, but i would think it is there for the next two decades. >> bloomberg reported yesterday that the trump administration is considering a cease-fire in its trade war with china. >> it is something we would consider, but we are doing well. >> china announced it would

exempt pork and soybeans from additional tariffs. towards thes we go high level between both sides, but a word of caution as well. when the news came out that said china has always been in the market, they need more pork because of outbreaks of swine flu. on the one hand, there's certainly evidence of goodwill gestures going on, but no signs of a major breakthrough just yet. selloff, sending the 10 year yield to the highest in six weeks. newhere was not a town of news today, except we have retail sales better than expected. we also got a sentiment number better than expected, plus not terrible news on the geopolitical trade front and that is causing a very intense selloff. >> still ahead as we review the

week on bloomberg best number and isuzu conversation with morgan stanley chairman and ceo james baldwin. plus, one of the most influential voices in chinese media shares the latest developments for trade. and come up more of the weeks top headlines. john bolton becomes the latest to lose a position with the trump administration. >> there were issues we would never see eye to eye on. >> this is bloomberg. ♪

this is bloomberg best.

let's continue our global tour of the week's top business stories in china, were the latest trade data puts more pressure on the government to increase stimulus. >> bonds reacting to the bad data we had, in part of trade numbers from china, shrinking last month. shipments plunging -- amidst to the u.s. plunging. , almostslumping 5.6% -- $35lion to edit billion. [inaudible] >> the bad news from the manufacturing sector is you have additional sectors in the and the pmi data suggests it is an contraction and external demand will continue to remain weak. removing one more

hurdle for investment into capital markets, scrapping the billion purchase of bonds. >> it is significant in that china is opening up more capital markets, but the immediate consequences will be small. global investors no longer need approval to buy quotas or chinese stocks and bonds. they have lifted the $300 billion cap on that. thissts think that while might have long-term significance, it does not really matter in the short run. summonedarabia's king has installed a royal family member in charge of oil policy for the first time. takes overe official

after the removal of someone else over the weekend. >> in the knitting from negative views -- imitating [inaudible] know,h the personality i he is very decisive and a strong personality when it comes to the market and he understands the producerso all of the of that leadership and i'm -- not expecting changes. i think of will be a continuation of good work. demand pretty fine right now, but any discussion of for the

cuts will wait until december. >> no change immediately in the opec policy. there is continuity there come a but the real problem was revealed in a report that the next year they will have a mountain to climb. softeningemand growth . at the same time, output continues to expand, so opec probably going to have to come to release make the right noises. quentin -- president trump says he did not agree strongly with many positions of john bolton. the announcement comes days after the president abandoned and plan to bring taliban leaders to camp david for peace talks. >> we don't know if there was a final straw between donald trump and john bolton.

we know that john bolton came into the white house with decades of very well-known, hawkish views about foreign likey issues with things iran and north korea. he was not the type of person to bend to the presidency views or the white house on those. he came in with certain opinions and came -- stuck to those. there were some huge issues that i think the two of them were never going to see eye to eye on. theloomberg has learned u.s. discussed easing iran's sanctions. thatikely is it likely president trump may be changing his position? dependsnk he russian -- on what his position was in the first place.

has always believed inserting himself into the negotiations and looking at foreign leader in looking aproduce -- foreign leader in the eye can produce breakthroughs. the approach is that this maximum pressure campaign engineered over the last year or so is exactly the thing that is going to persuade iran to come the negotiating table. >> in germany, a finance minister sticks to the balanced budget, while providing insurance in case of a crisis. he said it is essential that we are in a position with the fundamentals we have two respond with many billions if indeed an economic crisis a wreps. do you agree with him? >> it is more international because everybody wants to get

the economy, especially in europe going. it is more the feeling of the until thereg well, is no decline on a considerable scale. the german government is unwilling to give up a balanced budget. >we have billions and billions f euros ready, but at the moment, there is really no crisis and at the moment not really doing anything. >> that is because the mortgage giant scored an important legal victory. seemingly, billions of dollars of company office currently go to the government could end up winding to be happy hedge funds. >> the policy that these hedge funds are fighting over is that

billions of dollars of profits in every quarter go to the u.s. treasury. this was basically their first legal victory and up to this point, most courts have shot aem down, so it is a win, but lot of hurdles to get across because there are several court decisions out there that said it was perfectly legal for the federal government to perfectly take off, so now you have an outlier and that is going to have to sort its way to make it all the way over to the supreme court. >> president trump is taking aim at one of his favorite targets and that is the federal reserve. federal reserve to take rates down to zero or less. he also referred to policymakers as boneheads. >> today, he had a new argument, which was lower the cost of the federal government which was the

framework of someone in the private sector and that meets the description of donald trump, -- what is right for the trump organization is not always right for the united states. they are trying to set interest rates at a place that is healthy for the u.s. economy or businesses and consumers, which is different than trying to minimize the cost of the federal government. ♪

best.s is bloomberg this week, morgan stanley

chairman spoke effusively with the merck about these rate of the economy, that policy and the global trend towards negative interest rates. he joins on the council of columbia business school in new york. >> it is a conundrum. at one level, we have record low unemployment and we still have mobile growth. the u.s. economy is performing strongly. china is performing strongly. mixed, butbviously has been mixed for two decades. on one level, it is quite strong. there is a sense of inevitability we are at the end of a cycle. aatistically, there is recession every seven years, but it doesn't have to be. not hadalia, they have

a recession for 28 years in a row. >> why then, so much pressure on the federal reserve to continue to cut rates? andhe economy is slowing the job of the fed is to balance monetary policy with economic outlook and fiscal policy. when the economy is getting hot, they should raise rates and the reverse. i report -- i supported the latest fed cut and i expect they will do one or two more, but then it is time for a pause and really absorbed this because the problem with cutting, it is one of the few tools that you have got. if you give away too easily, what do you have when you have a real problem? this negative yield world that we are living in, how does that change your view of the market? how does it change the way you deploy some assets and your teams around the world? personally surprised where the

rates are. i would expect the 10 year be around 3% all stop i was dead wrong -- 3%. i was dead wrong. [inaudible] as former chairman yellow -- janet yellen said, it is not necessarily lead to a recession. >> how does it change our business? it doesn't. we run our business on how we see it for the broader economy rather than any particular day. we will see. we have more compelling conversations coming up. the editor-in-chief for china's most prominent state run newspaper offers insight into beijing's trade policy. plus, why he is staying away from corporate bonds. blowing rates does not make

things better all of a sudden. it does not work that way. this is bloomberg -- >> this is bloomberg. ♪

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european auto executives speaking at the frankfurt auto show about the uncertainty and volatility currently shaking up the industry. uncertainty and volatility have affected financial markets, and this week several prominent investors discussed ways they are adjusting to the new normal in conversations with bloomberg television. we begin with the former president of guggenheim partners who runs eldridge industries. he told erik schatzker why he thinks investment grade bonds .re a bad deal sto >> the american demographic will continue to age and as it continues to age it is going to want more and more certainty with what to expect in the future stop we believe that annuity companies are well-positioned for that. obviously we have to take that money and put it to work. we then sit back and say what

are the strategies we can use to put that balance sheet to work. >> most annuity providers would buy corporate bonds. >> and we believe that investment-grade corporate bonds are an asset class that provides more risk than return. are going tok they implode, and if you look at the top 10 triple b companies out in the world, there is approximately $1 trillion of equity value in the aggregate supporting their debt position. we think people are alarmist a little bit about this and we think that 3%, 3.5% isn't a rate of return we are happy with. therefore we have to go find other ways -- we think by originating in sourcing that with experienced management teams that are experts in what they do and ultimately have access to lots of market

opportunity and i diverse way, it is the best way to be building a diversified asset base for security benefits. ♪ a set of policy announcements and the idea is that we are still only looking at a modicum of inflation by 2021 even with all these measures. >> it is actually pretty sad to see for a few reasons. all this is doing is putting treasuries in europe and around the globe at further negative rates. you have 17 trillion in treasuries training, which is crazy. number two, doing nothing to stimulate demand. at least zero growth, and much of europe mired in what is a very slow economic environment. three, the equity markets

in terms of average demand and what it does to earnings is not responding either. think this is nothing more than further financial repression, a way of governments around the world bearing negative rates to finance the big deficits and it be a tax on savings. >> how do you think about corporate europe in that environment? is it investable with these companies getting more and more money for less and less interest? >> all this does is create more of the debt bubble. it allows companies to borrow at cheaper rates and it does nothing to stimulate demand. monetary trap has been created and it's actually a very unhealthy environment. for the time being, the markets are stable and will do well, but

at some point, it creates a toger games, where they go earn an attractive rate of return. trillions and trillions of treasuries, treating more negative returns. ♪ complicated kind of i the fact that the have these crosscurrents going on. when rates are low they raise the value of things like sacs but at the same time there is this historic flight to quality. crosscurrents, and it's not clear what we will see but with the negative rates we are seeing throughout the world, i think it is plain to see that bonds are not a safe place to be, certainly not a good risk strategy. >> from an investor point of view there are number of ways of looking at this. you should be concerned about the risk you are taking relative to the reward you might get but

some people are just looking for returns and they said a year ago that 10 year treasury was yielding 3% in some people think it is headed negative. if that is the case, i just need to hold and i will make a lot of money. >> you make a great point. we need to think about bonded nesting as more of a tactical allocation as opposed to a strategic one. tactical would be you have to make this macro call and you better be right. strategic would be more about structuring your portfolio, how you will raise your creative compounding based on how all these pieces move together. it is important that people understand when they are putting all this money -- it is no longer a very good strategic allocation but it might be a good tactical one, i don't know. ♪ broughtrger berman

another perspective to wall street, like many analysts cc a global slowdown that could signal a coming recession. he discussed his outlook on "bloomberg surveillance." ♪ > have been even if the u.s.-china trade concern is dealt with? if we have a deal, could we still look at a possible recession? >> the industrial slowdown was taking place before the trade war were heated up. there are two major issues. one will be a deal between china and the u.s., and i have my doubts, but i don't have any more insight. the more interesting thing to talk about is what the global central banks are doing, and how long that will take to work and whether it will work. the fed started lowering rates in june. any economist will tell you that the transmission mechanism takes at least a year. the earliest that the u.s.

economy should start to pick up his next summer. that seems to be missing from people's analysis. they think everything gets better all of a sudden but it doesn't work that way. the more interesting thing to does the normal transmission mechanism of the fed lowering rates work at this low level of rates? i'm starting to have my doubts about that. the problem is, and this isn't discussed much, at this level of rates, one has become free. every deal has been done, every project has been funded, every stock has been bought back, every vc deal has been done, every private equity deal has been done, every startup has been funded. what free money has done is create global overcapacity. why lowering rates should solve that -- i have my doubts. ♪

>> finally, to another bloomberg exclusively. the editor-in-chief of "global times," china's most prominent state-run newspaper, sat down with tom mackenzie and shared his thoughts on the state of play the u.s.-china trade dispute. ♪ >> i think the possibility of achieving substantial progress is greater than before. why is that? i sense that the u.s. side is also anxious, because the trade war has caused adverse effects on the u.s. economy. i can see a substantial reason why the united states would continue to fight the trade war with china for a long time. >> china has announced it will make some exceptions to the tariffs it imposes on u.s. goods. should we see that as a concession from the chinese side ahead of those talks in october? as at's not think of it concession, it is a goodwill gesture stop in my opinion it

shows psychological strength and self-confidence. it is different from a concession. >> is there an argument going on within the government about trying to wait out president trump beyond 2020? is that part of the discussion? >> someone may say this on a certain occasion but this is not a serious route or strategy. china has always hoped to make an agreement sooner, which would be best. if the united states continues to apply maximum pressure with the bullying attitude, trying to force china to accept, then whoever will be elected is not an important factor in china will continue to hold its ground for a long time. ♪

♪ this is "bloomberg best."

let's resume a roundup of the week's top stories in business and finance with a potential megadeal involving stock exchange operations on two continents. ♪ stock exchange has made a surprise $36.6 billion offer for the london stock exchange group. any deal would upend the acquisition. they say they remain committed to the deal but that they will consider the unsolicited proposal. but this deal into context -- it would be a massive deal on the part of an exchange operator in business. >> took holiday politically sensitive situation be an understatement, given what's going on in hong kong. the hong kong exchange has interestingly positioned itself as a more global player rather than a hong kong or chinese one,. that is something that they really need to consider.

but it could really stop her the deal, this deal with hong kong would be contingent on the deal not going through. >> -- to provide financial news, data, and information. >> the board of the london stock exchange group has unanimously rejected the takeover bid with hong kong exchanges, and in rejecting the bid the exchange says they have fundamental flaws in rejected claims it could be rejected swiftly. they also waived regulatory concerns and concerns about the uncertain political environment and hong kong impacting the portion of the bed. watchers sayarket they expect hong kong to bid once again for the alessi. ♪ >> concerns if installed we work ipo are continuing.

is office rental company apparently pushing the company to postpone its offering amid concerns of a drop in valuations. >> the problem is that once other investors got a look at the details hind we were in its perspective, they just didn't like what they saw. $690saw huge losses, million in the first six months of the year alone. they saw a complicated corporate structures. they saw all kinds of potential conflicts between the ceo of the company and investors just didn't like it. >> we work has picks the nasdaq as the venue for its embattled listing. they are also making changes to the corporate governance. are there enough changes to be made to satisfied investors? >> that's the main question. there's clearly a bounty of changes. one thing they wanted to see was a shrieking of the multiclass structure. we haven't seen that.

they added the lead independent director. the board will have the ability to remove it if it so wishes and the successor will be chosen by the entire board, not just what was previously construed as to directors and his wife. ♪ >> saudi aramco is said to pick as many as nine banks for lead ipo rules. among them, bank of america, j.p. morgan, goldman sachs, and credit suisse. do you have a time for the ipo? >> they have tried to accelerate this process but it is important to know that there will be a listing in re-at only. the international part of the ipo, it isn't clear when that will happen, but it seems that they are determined to get the -- ne it includes assets from south

africa, 31% stake in tencent. it is the third largest listed company. processain focus of the is the next wave of growth. we have become a really substantial part of the original 16 where we are close to 25% of the index and we are still growing fast. is inganic growth rate the 30% range which means we will keep growing and we need the right place to keep growing. ♪ of ab invev's asia unit is back on just two months after it was shelved. bloomberg has learned the company is aiming to waive about $500 billion in hong kong at the end of september. what do we know about the deal so far? >> the company is now looking to raise $5 billion usd instead of

$10 billion usd, which which was thinking two months ago. i would say it would be a boost for the market. been subdued for a while after the u.s. trade war and the ongoing protests. markets havethe been really exciting about the deal coming through. ♪ >> smile direct club. shares fell from their initial public offering in its debut. you can't find a company of this size having this type of one-day drop. >> they're offering was many times oversubscribed, which is -- they were able to price and you need to be confident that you can trade off. a bada bad look for them, look for j.p. morgan that underwrote the deal. it's a good lesson for ipos to come about where to price.

even if you feel like you have strong demand, maybe it is better to be conservative rather than going for gold. ♪ less than a year after the ghosn, -- to step down. how big of a setback is this? >> this is really big. from the beginning of this scandal, you had questions raised about him and how long he would be able to stay at the top of the company. down all the reforms they had been planning to make at the company and implement changes, including the partnership with renault and mitsubishi motors, getting that straight, and possibly forming other alliances, which is the big issue in the car industry in

general, boosting up the capacity by forming these alliances that are necessary to compete in today's world. ♪ today,es of at&t higher this after elliott management got a new $3.2 billion position in the company. the plan is to boost the stock by 50% by divesting assets and crosscutting. it's a multipart plan and we have an outline -- part of it is to explore divesting with directv, some of the landline businesses that aren't helping them out, running a more efficient operation by making some of those big m&a purchases. they recommend some candidates for the board but overall there is the idea that this stock is undervalued relative to the s&p 500. if they can boost the stock

hired to perform in a better manner. ♪ >> there's a growing risk of a strike at gm. union leaders from across the u.s. wanting to debate the latest contract. they have to decide whether to submit to a vote or go on strike. what does the uaw want, and what is gm prepared to offer? >> that is what's going to tacks,get down to brass because they have a deadline of once thereght, and is a union that has seen four years of prosperity that we didn't get to participate in because the old contract was done before it and gm is saying not so fast, we had to cut. the big issue will be jobs. plans,now, gm has four unallocated status, which means they are probably going to close , and the union wants products that guarantee jobs, and that is

what will the big fight -- that will be the big fight. ♪ enough careers for a half dozen people, the reputation as a corporate raider, billionaire energy investor for wind and natural gas power. yesterday he died in texas at the age of 91. >> i am sorry for your loss. i know you were close friends. what will be the biggest thing you remember about your relationship? >> well, we are going to miss him. he had a life to celebrate. thingmplifies the very that i got involved in this and that was a legacy of giving and generosity by so many very highly successful people. he's going to be remembered for that, what he's done, particularly with the school he loves. ♪

♪ >> don't forget, our tv function, tv . you can watch us live, catch up on interviews, and dive into any of the security bloomberg functions we talk about. you can also become part of the conversation by sending us instant messages during our shows, to tell us whether or not you agree with trump sentiment about the fed being a bunch of bonehead. > there are about 30,000 bloomberg, ande we always enjoy showing you are favorites on bloomberg television. maybe they will become your favorites. the function are ich go will take you to the bloomberg index, where you will find jack ma close to the top.

china's wealthiest man stepped down as executive chairman of alibaba, handing the job over to the ceo. the company has revenue of more than $56 billion in the last financial year and has given its founder net worth of more than $40 billion. we took a closer look at his remarkable life and career. ♪ started out teaching english more than 20 years ago for just $15 a month. in 1999, he jumped on the internet train, setting up a platform for business-to-business selling. that was alibaba. after that, he took aim at ebay with taupo, which lets individual sellers work with each other. it was a milestone is alibaba listed its business division in hong kong only to d list five years later in performance sagged. however, the company made a big comeback in 2014, raising $25 billion in new york with the

world's biggest ever ipo. >> everybody should have a dream. what if that dream comes true? >> asset markets aside, he leaves an empire that expands aggressively to retail, cloud computing, health care, sports, finn tech, and news media, to name but a few. it's in the face of growing competition in the slowing chinese economy could be sustaining the growth. he was warned about the u.s.-china trade war, saying the impact could last decades into the future, also urging businesses to find opportunities from it. -- september 10 is teachers day in china. ♪ that was just one of the many explanatory videos 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 it for "bloomberg best" this week. thanks for watching.

i'm nejra cehic. this is bloomberg. ♪ here, it all starts with a simple...

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♪ >> i'm taylor riggs in san francisco. this is "bloomberg technology." coming up, the office space rental company's initial public offering conditions, is it enough to calm investors nerves? plus, much fan flare. in jumps in its trading debut after raising $25 million. who says all unicorn ipo's