jason: blackstone is the king.ught it is the prince of-- barada is the prince private equity. he made his name doing big deals around more than entertainment. we talked -- merlin entertainment. with talked about that and what blackstone sees ahead. >> as we look at our portfolio, there are small pockets of weakness. maybe the auto in china and at some point in the u.s.\ hot housing is strong -- u.s. housing is strong, consumer spending seems to be strong. there is certainly a deceleration in topline growth. we are not seeing the telltale signs of a recession in the near-term. jason: europe is especially interesting, the people here, here, but- to people also to you. you did some of the seminal deals for blackstone. legoland, marvin entertainment -- merlin entertainment. you are instantly meet -- intimately knowledgeable about that market. how do you look at europe right now? >> the recovery of europe has been a bit of a disappointment in terms of the amount of economic growth. brings it was unforeseen and is an iss

deals for blackstone. madame tussauds, himlegoland, madame tussauds, -- putting it all together, merlin entertainment. you are intimately knowledgeable about that market. brexit is obviously high on the mind over there. how do you look at europe right now? joe: i think europe, the recovery of europe has been a bit of a disappointment in terms of the amount of economic growth. brexit was unforeseen and is an issue. i think if you look at the u.k., we want to price things with a little more margin for error. we are investing in the u.k. we think it's a great economy, but there are some unpredictabilities. so maybe you are going to pay a lower price than you would have in a pre-brexit world. for us, europe is a selective market. we have to find a company we can really do something fundamentally to transform its growth, which will be harder to come by in the european economies and in the u.s. jason: so i checked four years ago, and you name checked warren buffett on the stage. you talked about long-term capita

we talked about that and what blackstone sees ahead.look at our portfolio, there are small pockets of weakness. maybe the auto build in china and at some point in the u.s. housing is strong, consumer spending seems to be strong. there is certainly a deceleration in topline growth. we are not seeing the telltale signs of a recession in the near-term. jason: europe is especially interesting, to people here, but also to you. you did some of the seminal deals for blackstone. legoland, madame toussaud, merlin entertainment. you are intimately knowledgeable about that market. how do you look at europe right now? joe: the recovery of europe has been a bit of a disappointment in terms of the amount of economic growth. brexit was unforeseen and is an issue. we are investing in the u.k. we think it's a great economy, but there are some unpredictabilities. maybe you will pay a lower price than in a pre-brexit world. for us europe is a selective market. we have to find a company we can think we can do something fundamentally to transform its growth

blackstone and carlyle are trying to get into the business.y are able to invest in credit assets more heavily. this is a huge part of the strategy. they got into it right after the crisis and bought the insurance assets on the sheets. now, they are expanding globally and that headstart is helping apollo catapult above everybody else. carol: in the economic section, we have a scorecard for president trump's tax policies. jason: bloomberg analysis showing that they have done little to boost growth and tax rates may not be that important when it comes to corporate investment. carol: we have got more from our economist. >> this is a very hard thing to measure. a lot of people have taken a stab at it and the range of investment and impact is quite broad. that said, i put a lot of time until looking at we had a lot of promises from the white house about what this would do for the economy. we have heard about consumer spending. we heard about investment, but are we actually going to see this second piece from investment? the takeaway is yes, it's jus

blackstone has not set a limit for the fund as it approaches a record. was $21.7t pool billion at the height of the market in 2007. after the financial crisis, it took almost 40 years together $16 billion for the next fund. the european central bank has said to be cut its forecast by -- to justify new lows for banks. it shows extensive downgrades for inflation and growth this year. officialast isn't until mario draghi speaks after the ecb latest policy meeting. the u.k. government is said to or monday benday the deadline for talks about leaving the eu. recentand brussels admit negotiations have been difficult. facesa may's brexit bell a comment on tuesday and if she fails, she will not send negotiators back to brussels for more talks. of huawei has the first 8 for theng on may release of the cfo. two canadians have been arrested of spying in china. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. woes and a dropping oil supply. these are two concer

through our partnership with blackstone, we're provided with access to risk analytics tools that allow us to conduct a factor analysis of our portfolio using more than 5,000 different factors. we conduct this analysis to determine expected returns based on monthly exposure data that we receive from the portfolios' underlying managers, and this provides us with values that we then compare to actual performance. this analysis has shown that our program is consistently generating alpha relative to what the factor exposure indicates the portfolio should be earning. for example, during the market selloff in q4 of 2018, factor analysis suggested that our portfolio should have earned a return of -4.6%, but the actual return was -3.5%. when the market bounced back in january, factor analysis suggested our portfolio should have earned 2.1%, but the actual return was 2.6%. again, providing us evidence that our portfolio is generating alpha both during declining markets, as well as rising markets. on page 12, we have a summary of where we are relative to our guidelines and an indication that we a

suddenly that will be the big we just well wait all companies over and you have something like blackstone taking up all the banks. mortgage. you're going to have funds rich in ash all of a sudden getting money by always bankrupt companies and then you're really going to see a monopoly but as we have seen before so well received. big red and ram we can sit out by these lower rates enriching yes oh yeah well of slaving. over. and well well well we won't want to eat savings and white. and so pretty much were listening to it words were if you will listen and it really made or are already under me the world hasn't seen really since your blackstone already has oh more than six trillion dollars under management it's the biggest money manager in the world that's pretty recent and they've done so by using all these wall street tricks and the revs and introducing e.t.f. six change traded funds which are just rent seeking layers on top of rent seeking layers over and over again you bring up feudalism and the condom is mimicking a feudalism i have a suggestion for a book it could be called super feud

blackstone already has oh more than six trillion dollars under management it's the biggest money manager in the world that's pretty recent and they've done by using all these wall street tricks and derivatives and introducing e.t.f. six change traded funds which are just rent seeking layers on top of rent seeking layers over and over again you bring up feudalism and the condom is mimicking a feudalism i have a suggestion for a book it could be called super feudalism you know it's a neo feudalism when you have this amount of concentration in so few hands and you have that is basically feudalism right so i think this is a concept that people are not readily embracing you have a few big macro situations burrowing you have dig lobel ization with the u.k. is separating from the e.u. you have the just announced that they're falling out of a trade partners with the united states you've got the america is now doing new trade deals with china so de globalization is really the watchword of twenty nineteen which would mean dollar ization to a certain degree and so what you're describing is a scramb

ployipping point was this that blackstone had with the stymie homeowner.said you are not in great shape, we will offer you a great deal, just make sure that whatever you do gets is a win for the cvs market. that is when everybody gets panicky and worried about that. you had things move in a direction where it didn't bring a lot of good publicity to the markets and market participants realized if they didn't come up with a fix, regulators would force action on them. caroline: so the overseeing body managing this, is it a game of whack-a-mole? that the more clever ways in which they try to regulate or put in place some sort of rules, the more clever ways there will be to dodge them? sridhar: that will be the problem. you can find various loopholes in this kind of situation. they seem to be working toward a solution that closes one loophole, but what stops someone else from trying something else? withrobably shy with participating -- shy away from participating in this because it will not said good light here. that might be a good way -- reason to enter the m

there are great institutions out there like blackstone. compete with those other firms. clients ises, your deciding to invest with you instead of with blackstone or carlyle or kkr and the list goes on. bruce: i think there is room for many. this is a $50 trillion market. a lot are doing this themselves. some are giving it to others, some are giving it to us, there is a large institutional world. erik: this may be the biggest shakeup ever in the alternative asset management industry. how do you expect the other players to respond? howard: i was asked that last week. will this set off a wave of consolidation? the challenge is who else will you find like brookfield? criteriaink about the we've been discussing, the culture, the meshing of the products, there is not a second candidate. like topeople would produce combinations, but i do not think there is a natural one is obvious as this one. other firmsere are in credit, hbs, oak hill, owl rock, and just as oaktree was there still principally in one asset class. do both of you think the future

currently, blackstone is the world's largest alternative asset management -- manager.pults the companies that have been large but not quite the stature of blackstone into a new arena. they are now to be reckoned with more so than even before. is this a late cycle move? cycle, butate in the it is interesting. private equity is operating today in its own rhythm. has been for the last year and a half at near record levels. the leaders of the firms are bullish on the next few years and what they can do with their capital. if you are a distressed credit fund, you are anticipating what is going to happen if economies move into recession. if you a private equity by up shop, you've -- by out shop, you are looking at prices falling. late cycle, absolutely. at the same time, these firms are positioned well to take advantage of it. vonnie: how will they best use each other? the bill is so active and so focused on every thing. same with all of the brookfield principles. look at they do together? >> it is interesting. they say they're going to operate these companies independently.

they are among the potential bidders for blackstone group. that is blue water.he bluewater business is also attracting interest from another energy group. of 1.5d such a price tag to $2 billion in any sale. agreement has not been reached. blackstone and other parties could decide not to sell bluewater. >> coming up next, boeing says finding a software fix for the 737 max 8 jets has been more complicated than expected. we will have details. this is bloomberg. ♪ we are seeing a flight session ahead. equities.s. i am in sydney. >> i'm shery ahn in new york. you are watching daybreak australia. with get to first word news. theresa may is promising to resign as the u.k. prime minister if members of parliament drop their opposition to her brexit deal. two members are said to have told colleagues they will back down and support her. bayer has lost a second court case about roundup causing cancer. awarded damages of $80 million to a man who became ill after spraying the herbicide on his property for decades. they say scientific studies show roundup is safe and it they i

out of some of these businesses and in stepped much more lightly regulated firms like apollo and blackstonewhy has apollo been so especially successful here? >> partially because of his leadership, josh harris, leon black, they came from a jump on titan. they know these markets. from the large banks talent also left. im selzer was formerly at citigroup. he has brought on citigroup talent. >> this guy wants to create the ge capital of tomorrow. ofcifically looking at some the former ge capital assets. something interesting about this , he could a metaphor have said cit. he could have said anything else really. aftering about ge is having 500 billion in assets it is selling a lot of those assets. as some of these assets come to market apollo is in a good position. a small group of players can take these assets on. >> what is it about apollo that they will make their version of ge capital work when we saw what happens to the former ge capital? >> the insurance piece of the puzzle is not a small piece. it is something equity firms are trying to regulate. capitalg the permanent they are able to

erik schatzker posed that question to blackstone chairman -- blackrock chairman and ceo, larry fink.china is slowing to 6%. >> that's what they say. >> ok, 5%. actually, the cities are growing nicely. it is the outer regions. china has experienced the same two-phase economies where one part is growing well and one is slowing down. they will experience populism and unrest in the future. that is another story. japan is growing at 1%. southeast asia is growing quite nicely. you are seeing supply chain's moving from china into the southeast asia region. europe, compared to where we were march of 2018, we were much more pessimistic. i am very worried about europe. that doesn't mean you're will be europe will be in recession in 2019, but maybe just maybe 1% growth, maybe closer to zero. the u.s., we have the sugar high from the tax reforms. we all anticipated the economy will slow down after the sugar high, and that is what is happening, but where is the u.s. economy this year? 2.5%, 2.6%, 2.7%. consumer confidence is still good. i would call this a goldilocks moment, where it is not so ba

blackstone is signaling the appetite for private equity isn't over yet.learned the firm expects to reach around $20 billion when it completes the first phase of capital raising for its flagship fund. blackstone said in january they plan to take in $100 billion this year. that is your bloomberg business flash. vonnie: checking u.s. majors, we are in the middle of a down day for u.s. stocks. the s&p 500 is down 7/10 of 1%, being led lower by kroger. the cfo talking about the lack of share buybacks being one of the reasons investors are punishing this stock so much today. more reasons in there as well, which we will get to later on. the dow jones industrial average is down 9/10 of 1%, and the nasdaq down about 7/10 of 1%. ies one of theog industrials taking a bit of a pounding today. guy: we are being knocked lower by the banks here in europe. one factor that is influencing the ftse 100 today is that it is thursday, and that means stocks dividend. stocks like rio tinto have gone ex-d. we are certainly seeing a rotation out of cyclical stocks. we are seeing r

in january, blackstone said it planned to take in $100 billion this year.online at tictoc -- on air and on tictoc on twitter. been too long since we checked in on the challenges of e.u. banking. all of this is wonderful given that we will speak to corrado for sarah -- how is the anglo-saxoning going? give us an update on how e.u. banking is adapting and adjusting to 2025. >> that is a pretty big question. from they different italian banks dealing with the bad debt they need to bring down to be able to return, to lend more aggressively to banks such as deutsche bank grappling with a question of what they want to be, that they can find a way to sustain profitability. it's a pretty big question. i think there are a lot of challenges and you can see that with european banks trading at a deep discount. remembere months ago i the drama of carter showing up like a bad hollywood sitcom and the people getting out and going to the bank and the regulators were going to check on the bad bank. what is the regulatory pressure on deutsche bank and all the other e.u. banks

the cusp of an io boom, you've got exit strategies for the kkr, blackstones. have you so many alternatives to banks. why gamble that loan growth that we haven't seen through the heart, the fat part of the psych is going to drive it. >> because the bullish thesis wasn't predicated only on loan growth. >> it was on interest rates. >> the economy was going to be all right and interest rates would tick up. the economy seems to be pretty good j. powell didn't say otherwise he had every opportunity to say otherwise recently on 60 minutes. they took their growth forecast down. >> they never forecast the inflection point that's not surprising, scott >> he said in his word i'm now paraphrasing that this could go on for a while. there's no reason to think it can't. >> it could. that's a little stronger statement than saying the economy is good. >> he's not going to kill it which is important i hope for always a long awaited cyclical lift in productivity growth if that happens, the cycle will extend itself for a number of years. the likelihood of that is low. therefore t

ra: blackstone expects to reach $20 billion when they complete the first phase of capital raising forts flagship fund. the firm has yet to set a limit, but they told investors the first may, in march and april. blackstone is benefiting as the private equity market outperforms other asset classes and hedge funds. totsche bank has made cuts 2018 bonuses. some bankers may be getting nothing. the overall pool has been cut to less than 2 billion euros. moreank is making selective payouts in an effort to keep more -- howard is having a rough start to 2019. bloomberg understands the master fund has declined over 8% in the first two months of the year. erodes the macro fund's 30% gains last year. that is your bloomberg business flash. anna: thank you very much. let's check futures. we are 13 minutes away from the start of the cash equity trading day. futures point lower. u.s. futures pointing down. euro stoxx 50 futures down by 0.3%. ftse futures down 0.4%. we are expecting to see the negativity we have seen in asia. we are expecting all of that to infiltrate europe. the u.s. picture looks we

you go back to blackstone's acquisition in 2008 of gs so.re able to keep that as a little bit of a separate brand but also integrate it. that would seem to be the playbook. bruce a coupleto of weeks ago at here is what he had to say. business,vate equity called industrial in-service bio business, is now relatively small, but we are putting a lot of effort in it, and i think it will be large. it will be as large as many of those businesses eventually. alix: is this a brookfield play or howard marks being like, i am going to be autonomous but it will be late in the credit cycle? ason: i think it is brookfield play. i caught up with bruce a couple weeks ago in berlin at the private equity conference. notable that he was there given the ambition that he laid out. they invested heavily there, in infrastructure, and investors increasingly want this whole suite of products. it, there wasnd great reporting. brookfield made this play initially back in october. they have been talking for several months, and it was not inbound, as we understand, throug

joining o joe, chief investment strategist at blackstone. ce to have you with us. >> thanks for having me on the program tonight. >> even though we have those two kind of headline risks out of the way now, you still see some volatility for market ead? why? >> i think we will see it because we have this tug of war. on one side, we feds and the possibility that a trade deal with china and that's priced in. stocks have had one of their best starts to the year since i 1991 ahink that reflects the bullish sentiment on the fed. and the tug of war is a realizationco thaorate profits are real a really strong story over the past two years. in 2017, corporotets were up over 10% for the year. in 2018, corporate profit growto accelerated about 20% for the full year, butr earnis whic beg to be reported in the next few weeks, there's uae realization that profits growth could teer and for the full year, it's going to be relatively flat. i think that will drive volatility ove couple of months. e b the resurgence of technogy stock, but you have utilities amo

ariel and man ul who only threw a party a year ago on the celebrating the kingdom who joined the blackstone group with billionaire group ahead richard branson goldman sachs and over on the list the players who have abandoned talks or canceled agreements and investments from the saudi public investment fund or the the rejection of saudi capital is likely to reverberate in washington as well as hollywood because mr emanuel is the brother of former obama white house chief of staff and outgoing chicago mayor rahm emanuel and devore and the p.i.a.f. both refused to comment on reports of the return funds. and the new jobs numbers are out from the department of commerce bureau of labor just to six and a holy moley did they surprise almost everybody only twenty thousand jobs were created last month although the unemployment rate did drop to three. point eight percent here discusses the managing partner at f.b.i. consulting both boris rashard and conservative commentator steve malzberg whelp and both of you steve i want to start with you this really is unexpected right i mean i was listening this mo

else that's the host hosting this parasite called jamie diamond goldman sachs you know industry blackstone the money management sector you know they are essentially a cancer in the cancer is growing quite rapidly and eventually the host will be killed and then the cancer will die as well but not before it kills the host city michael adams book killing the host we've you know our politicians fiscal policy trade policy industrial policy no longer is ever even discussed it's all monetary policy and when you do monetary policy the only way the central bank can operate and try to help the economy is to print money and they only people they can give it to are those bankers and those bankers get it for a zero percent by the time it trickles down fifteen to twenty percent on a credit card for example for the ordinary person so they get all the tainted money with tainted with fraud and leverage but again here so the real economy donald trump has all these trade wars going on and the tax cuts and the tax credits were supposed to bring some of the industry back to the united states but it didn't us p

nation and the same folks that caused that crisis then started private equity groups like like blackstone and they bought up all this housing stock and they're renting to many of those same people that lost homes so this illegal behavior had absolutely no consequence yet we're where we're not giving loans to the very people who lost in the victims of this ponzi scheme and so i really believe that we are in and i think the numbers support this we are not in a crisis of economic resources right now we're in a crisis of moral priority and if we continue to go down this path we're going to we're going it's going to be peasants and kings and less we can figure out a way to prioritize those that are truly in need instead of writing welfare checks to billionaires to build luxury we're going to be in a lot of trouble tomorrow i could the group the more the good you get the mail right there on the head with just this kind of where we are out there we are in a moral deficit right now because we have the resources we have that we're not following through on that what does that tell you guys when we

blackstone will own more than 71% of the company after the deal goes through, making an offer on thes been offloading assets to pay down one of chinese biggest debt mountains. ramy: a merger of deutsche bank and commerzbank is a step closer as germany's largest listed lenders are running out of time to show they can grow as standalone companies. they are intensifying talks as the turnaround efforts butter and the deutsche ceo is said to have ended his opposition to a deal. we are told deutsche's management board has approved a negotiation with commerce bank. from: an $850 million deal mining canada, extending a recent round of dealmaking in the sector. it will crest to 70% interest in interior metals in british colombia. in january, imperial metals forecast 29 production at up to 38,000 ounces of gold and about 76 million pounds of copper. coming up next, as emerging markets equities make their best start to the year since 2012, we speak to one fund manager who thinks the rally will continue. ♪ haidi: this is -- kathleen: this is "daybreak: asia." i'm kathleen hays with the first wor

backs -- blackstone and llog pledging to invest over $1 billion in the project.ber rival increasing ipo to $72 per share. it needs to raise $2.2 billion. it will still offer 30 million shares in the listing. it starts trading friday. said to be the biggest u.s. trade offer so for this year and the biggest tech offering since snap two years ago. coming up, we will be live in singapore with an interview with the julius baer group ceo. this is bloomberg. ♪ bloomberg. ♪ >> this is daybreak asia. i am selina wang with the first word headlines. u.k. lawmakers voted on a string of options and failed to support any of them. theresa may promising to resign as prime minister if conservative rebels dropped opposition to her brexit deal and ratify it. hardliners including boris johnson agreed the small irish border party that has propped up the government so far refused to back her deal. u.s.-china trade talks resume in beijing later thursday with president trump saying he is anticipating excellent deal. sides say the agree on some outlines, but china is pushing back on some

hna is selling its controlling stake in a hong kong construction firm to blackstone for $900 millionthey will own 71% of the company after the deal goes through. hna has been paying down one of the biggest debt mountains and managed to bring $20 billion so far. ramy: a merger of deutsche bank and commerzbank as germany's largest lenders are rising out to show they can have a standalone companies. turnaround efforts are sputtering and christian is said to have ended his opposition to a deal. the management board has approved negotiations with commerzbank. up next the latest out of ethiopia, a second boeing 737 crash in the past five months is raising fresh concerns about the safety of that best selling jet. this is bloomberg. ♪ loomberg. ♪ 9:30 a.m. in sydney. futures looking like a downside, down a quarter of 1% when trading gets underway, asian equity futures lower, lower aussie dollar. wall street had the worst year of -- week of u.s. stocks all year. i am haidi stroud-watts. inocencio.ramy you are watching daybreak australia. let's get to first word news. sayseen: the pboc governo

. >> he's been downtown in his suite at the sheraton blackstone watching on television looking at usill feel it's all a dream. when i was teaching school 20 years ago, i never knew that this event would happen tonight. >> mr. vice president, why do you want to be president of the united states? >> these lights are a little warm. i think this nation has a destiny. i think every individual has a destiny. >> richard nixon. >> and i am convinced that if america does not give the world, the free world, the leadership that it needs that the clouds of freedom will die forever. >> you're going to have dick nixon. >> with faith in america and in her people i accept your nomination for president of the united states. [ cheers and applause ] >> it's the centennial convention of the republican party. 100 years since the nomination of lincoln. it's come now from abraham lincoln to richard nixon. ♪ everyone is voting for jack ♪ 'cause he's got what all the rest lack ♪ ♪ everyone wants to back jack ♪ jack is on the right track ♪ 'cause he's got high hopes ♪ he's got high hopes >> when i first met k

that moments after this went to press, as it was going to press, a good scoop from bloomberg how blackstone already got $20 billion lined up. carol: and got more money to put to work. jason: upbeat. a lot on the horizon. carol: great story. speaking of private equity, titans in the finance section with a story about apollo global. jason: that's right, potentially recreating what used to happen at general electric without the taxpayer bailout. carol: our reporter has that story. >> apollo is one of the biggest private equity firms and is known for buyout prowess aired . it is not known for what it is much bigger in -- credit. now, they have multiple insurance companies, they have a stake in directly in a mortgage -- indirectly in a mortgage lender. they have commercial real estate lending, they actually lend to deals for other buyout firms that are much smaller. they have a huge conglomerate that operates in lending markets that are unregulated. >> part of this happened because the financial crisis, big banks got out of these businesses and some much more lightly regulated firms like apollo.

. -- still hot with blackstone group expected to raise $20 billion for flagship funds.some background and how you will manage to carry out this big fund raising. >> they managed to do it because investors have an anonymous -- an enormous appetite for these long-term, private equities investment. these firms do not invest in companies, they invest in real estate, and credit, and what investors are finding is that the firms are delivering returns in the times that hedge funds are struggling and assets are not making the money they would like to see. investors are going where returns are. >> tesla's downward turn. shares have been sliding after elon musk made a surprise announcement to shift exclusively to online sales. the ongoing conversation, but he did seem to spook his workforce. >> a lot of these employees found out when everyone else did that the stores were closing and they were probably out of a job. we are talking about hundreds of stores around the world and last quarter, tesla touted their retail store strategy. they open several new stores, more new stores tha