that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [theme music] sterling tumbles below 120 to the lowest level since 2016 helping the ftse outperform it's european peers while european bond yields hit fresh record lows. >> downing street warns the snap election could happen next month and they block a no deal brexit today as boris johnson insists he will take the u.k. out of the

eu no matter what. >> there's no circumstances in which i will ask brussels to delay. we're leaving on the 31st of october no ifs or buts. >> five people are killed as hurricane dorian ravages the bahamas while more than 1 million are evacuated while one of the most powerful atlantic storms on record edges closer to the u.s. coast. >> lebanon gets set for an economic emergency catch hadley's exclusive interview tomorrow. >> a warm welcome to street signs. all eyes on westminster here in the u.k. let's take a look at sterling

and how the currency reacted to developments over the last 24 hours. sterling has tumbled below 120 against the dollar to an almost three year low this comes on the back of mps coming together today to make a high stakes decision the pressure on the pound is supporting the export heavy ftse 100. it's now trading about 0.12% lower but in terms of the detail, what's going on today, this comes as speculation grows about an early election in the u.k. a government official told british media that prime minister boris johnson will call a snap poll for the 14th of october should conservative rebels join forces with opposition parties to stop a no deal brexit. >> the legislation forces the prime minister to request a brexit delay until the 31st of january 2020 unless a new deal

with the eu or no deal by the 19th of october. however, in a statement outside downing street, boris johnson said he would never ask the eu for more time. >> i want everybody to know there are no circumstances in which i will ask brussels to delay. we're leaving on the 31st of october no ifs or buts we will not accept any attempt to go back on our promises or scrub that referendum and armed and fortified with that conviction, i believe we will get a deal at that crucial summit in october. a deal that parliament will certainly be able to scrutinize and in the meantime, let's let our negotiators get on with their work without that over their necks and without an election without an election. i don't want an election you don't want an election.

>> very interesting time in westminster. let's focus on one day at a time do mps have the votes to push this vote through? >> it certainly seems that way someone that can perhaps answer that question better than me is drew, he's a member of parliament for the third largest party in the parliament here do you think you try to block no deal to actually postpone until the end of january. >> we avoid the katz tcatastropa no deal. >> any sort of brexit is damaging for the u.k. and the scottish economy in particular but a hard no deal brexit is particularly deaf stating. >> boris johnson made clear what

his public tactics are when it comes to the eu. give us a better deal when it comes to the irish backstop. a, do you think that has a credible chance of succeeding and could it be a successful campaign platform? >> there is no chance that the eu are going to back down on the backstop because that's part of a peace agreement. this is something for a long time that stopped the troubles there and the economies of both companies increase and improve and also the society there to benefit from those changes so why would that be thrown away and why would the eu leave ireland and northern ireland in that position? they wouldn't do that. it's a fantasy that they'll make any change there boris johnson will see or do anything including getting his

way. just try to force through what he wants to see. >> if you end up with an election, howell do you think your party will do in scotland versus conservatives do you think he can stand to lose further seats in scotland >> people in scotland have seen the shambles, the chaotic mess here unfolding through the whole process, the scottish parliament where every single party voted to avoid the scenario. that's being completely ignored and 62% of the scottic -- scottish electorate voted. we see more and more people are looking toward the future where scotland gets a choice about whether or not it can become an

independent country and take it's seat in europe just like ireland is with the benefits they're seeing at the moment i have no doubt that we'll increase dramatically and in for a shocking result even worse than the worse ever result during the european elections, since 1966. >> is there a potential irony in your mind? we have seen how an instable majority could be one reason boris johnson could feel the need to call for a fresh election do you think there's a chance he could end up with a more stable majority down the road >> between both parties, the conservative main parties, it's very difficult to see how they will get a resolution within themselves unless they choose a

different ath. but what i can say is in scotland we have a very clear view and the only way to avoid it is make sure that scotland's voice is heard loudly and clearly. >> thank you so much >> member of parliament scottish national party talking up his party's chances were there to be an election. at least their chances north of the border. >> thank you.

it will cause a significant destruction. will the role in the future be tariffs when it comes to trade between the u.k. and the eu at least for the foreseeable future do you feel the world in totality is moving toward more economic nationalism more tariffs more protectionism >> the world as a whole is becoming that way. i think everything in terms of narratives but one thing that happened is the world war ii narrative is fading in our memories this used to temper people's

nationalist enthusiasm >> to what extent does having a floating currency in the form of the pond give them the chance to adjust medium term rather than if they had a shared currency like the euro. >> the euro was controversial to the start. the advantage was more psychological and it was an inspiration. and world war ii was the background that developed this but the loss of the euro is a sign of not such friendly times

unfortunately and it goes even beyond europe. >> so speaking of narratives, one of the other narratives that has come up is people don't believe the economists they don't believe the economic forecasts or what the bank of england is publishing or what the government is publishing, how worrying is that for you as an economist >> well, it's worrying and that's what is behind much of fake news and it involves mistrust of other elements of society this is, i would say, a very unfortunate development, especially at time of the internet and social media.

so it's developing polarization all over of people starting to communicate with people that share their crazy ideas and they don't trust someone that fact checks. >> you mentioned there earlier about the rise in populism and i'm curious if you think that policy makers are doing enough to address this issue and whether we should see pollty makers put in place new market structures to try to address the challenges of changing demographics and the rise in populism that's come along side or on the back of that. >> and wealth and equality also. >> people merge into conventional financial arrangements when they're mistrusting. at least you know they have been around for a long time. >> plenty more to discuss around

this show. robert shiller, professor at yale university. let's see how markets are trading this morning let's take you to a picture of european stocks right now. almost all of the heat map is trading in at the red this morning. i'd say about 70% in negative territory and of course we have two major focuses in europe. we have number one at the return of the u.k. parliament from summer recess and are set to go head to head versus the u.k. government we also have a vote taking place in italy within the five star membership so keep an eye on that trading down about .4%. ftse 100 is the actual relative out performer and that's because it's dropped below that 120 level as we were just talking about.

very export oriented so the weaker cone benefits the index one of the reasons it's holding up but if you look at the individual sectors there, home builders, travel, banks are also right at the bottom of the index. it's about .5% and then ftse mib, big day for italy today. all eyes on how the five star membership party vote goes ahead. the results will be released at about 5:00 p.m. london time. i also want to take your attention to what's happening in fixed income space we have the u.s. yield curve briefly inverting again to around minus one basis point all eyes today on the u.s. it's going to be very important to watch for direction of u.s. duration from here remember, yesterday was a u.s. holiday. it was u.s. labor day and today we expect volumes to come back again. you can see the picture from europe a bid yet again across all fixed

income yet another record low keep an eye out. we have that meeting coming up on september 12th. 10 year btp also as well. >> we're going to take a short break but coming up on street signs, china turns to the wto in a bid to break the trade impasse with the u.s more when we come back fun fact: 1 in 4 of us millennials have debt we might die with. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi. check your rate in 2 minutes or less. get a no-fee personal loan up to $100k.

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he told members quote there is no right or wrong vote on the potential partnership which would see conte stay as prime minister party members will hold an online ballot today between 9:00 a.m. and 6:00 p.m.

prospect of the potential snap election in italy we're not particularly out of the woods there. >> u.k. is not the only potential election to be watching let's step away from election territory and into china and the latest there china filed a complaint against the u.s. with the wto over washington's tariffs on chinese imports. the u.s. slapped a 15% levey on a range of goods on sunday that beijing says violates an agreement reached by president xi and president trump in osaka. >> and it could be more hurtful than the immediate impact of tariffs. let's get back to author of narrative economics and professor at yale university

the book examines how viral stories help drive economic events and what could be done to protect and limit financial crisis and recession great to have you with us. let's talk more about the book and what's your focus on in narrative economics. is there some element of refle t reflectivity in this off line we were talking about the yield curve inversion and it seems as though people are more and more focused on this topic because people have become so worried about it that it may become a self-inflicting recession indicator. what do you have to say to that? >> every time we have an inverted yield curve the narrative gets stronger that it's a leading indicator but historically it's not. if you go back 30 years, not talked about very much i don't think economists take enough account of what the talk

is right now the theory is when short rates are higher than long rates that's a sign of long-term pessimism. it sounds logical but nobody was saying that before and now that we had inverted yield curves before the recession people think it's a sure thing almost that we'll have a recession and that will cause them to lower their spending lower their investing and lower their hiring and bring on the very thing that is feared. >> you've done a lot of work on this sentiment, driving consumer activity and business activity, the trade war is another narrative coming into play now how is that impacting people's animal spirits. >> the term animal spirits was coined -- well, in economics was coined in 1936, right during the depression and that's what he thought was driving the depression

and it's to emphasize that nobody can really forecast accurately when you go into business you go in on a hunch and inspiration. if you were really rational, thoroughly rational you'd probably think it was too risky, but we do these things because we're human. they seem to be at the moment, although it's hard to predict these things >> it's essentially these funds, the market structures exacerbate the effective animal spirits rather than inhibit it so sort of playing into your concept of narrative economics, how do you think about the rise in passive investing and how that's effecting market outcomes >> it's just following rules that have been revealed by past research but then you always

have to consider what will be the effect of millions of people following these rules? so they have to be adjusted all the time i'm not against passive investing. some active element responding to changes in conditions >> one risk area we have been discussing late in the show is to do with liquidity mismatch. clearly this is a problem for etf credit funds offering daily liquidity but the underlying assets don't trade daily so how do you think about this risk when it comes to markets? >> well, this is a risk that will widen people have lost a lot of money betting that it won't. it's been a remarkably strong new idea

and i like it. >> rates continue to move ever lower. we're in a locked negative environment in central europe and japan. >> we have limited ability interest rates being at near so zero limits their ability to cut rates. they can't cut them by several percentage points anymore. also the narrative effects the psychology it was a big event and it brought to mind the japanese story. in the 1990s, that was the first

celebrated example of zero interest rates and it was the lost decade and went on to be longer than that just following up on that question, do you think we could be in the middle of the largest credit bubble we have seen in history or is this is new norm where rates remain low effectively on the fact that we have little inflation and very little growth. >> i don't think i can be authoritative. i don't think anybody else can either i think having negative real interest rates is not the normal situation. it's driven by a narrative at this point in time. >> what actually breaks it central banks are acting because they're anticipating a recession but the recession doesn't happen because central banks are

acting what's going to be the breaking point? >> well, i think that a world recession now wouldn't necessarily break us, but, you know, i tend to think that it's not as simple as an economic indicator turning a certain direction. it's a new narrative so there has to be a different story that is contagious a counter-narrative, i call it because otherwise people just don't -- the narrative can stretch on for years and years. >> yeah. something we'll pick up in the next segment. >> yeah, so stay with us thank you for your time. sterling professor of economics at yale university and author of narrative economics. we'll take another short break but coming up on the show, saudi arabia appoints a new chairman ahead of the long awaited ipo. that story ahead

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european bond yields hit record lows. >> downing street warns a snap election could happen next month if they block a no deal brexit today as boris johnson vows to take the u.k. out of the eu no matter what. >> there are no circumstances in which i will ask brussels to delay. we're leaving on the 31st of october no ifs or buts five people are killed as hurricane dorian ravages the bahamas while more than 1 million were evacuated while the most powerful storm on record edges toward the u.s. coast.

>> lebanon gets set to declare an economic emergency and speed up reforms catch the exclusive interview with the lprime minister tomorrow >> let's get back to our conversation with robert shiller, professor at yale university just before the break she asked you what could change the narrative and what could break the current environment that we're in and i'm curious what you see as the counter narrative. what could it be that changes the way we look at the world >> no one knows this it's hard to predict just like it's hard to predict what will the next hit song or movie be narratives are hard to understand but if there is a

coming world recession as many people are starting to fear, that could revive old narratives and make them stronger so for example, the trade war narrative, people in the great depression, many of them blamed the circumstance on the trade war started in the united states by tariffs that is a strong narrative because it ties into the great depression narrative as well those are the -- they're just hard to imagine though what -- the unemployment rate that may go up in the great recession, the next great recession, might rekindle old narratives about machines replacing jobs, artificial intelligence

replacing jobs that's a powerful narrative but it's kind of dormant right now. >> another narrative is the rise in global debts. global debt reached $264 trillion that is about 320% of global output but it did increase in government debt. it's going up and up even though productive hasn't gone up much and inflation has gone nowhere is there an argument for the theory that governments should borrow more and more and more and invest and not really worry about inflation? that's a round about way of saying monetary theory >> well, that is another narrative. excessive debt it goes back thousands of years. it comes back and back so these numbers are now scary but people don't seem that scared by them it depends on how somebody

creates a new narrative that will become viral and that can happen in an economic crisis. >> so we'll leave it there thank you for taking the time to chat with us and run us through your book. i'm very interested in it. >> that was what we were just talking about. i also want to bringyou today at a that we're getting out of the u.k. it's a big day for politics in westminster but also construction numbers are coming in at 45 versus expectations of 45.9 and previous number of 45.3 so actually just to put it all together and paint the picture of the u.k. economy here, services is holding up, manufacturing is weak and construction continues to be a very, very weak point in the u.k. economy even though it's a small fraction of overall gdp. but disappointing construction

data out of the u.k. a lot of focus on the pound today. >> thank you let's go right to the pound. below 120, though. there it is again below the 120 mark it's hit the lowest level since that crash in 2016 now this of course comes as mps come together today to decide on whether they're going to take control of the business and pass an emergency bill to block a no deal and of course we heard from boris johnson, yesterday the prime minister really warning that we -- we may see a snap election before the deadline and investors are pricing in the possibility and we're seeing big moves in the pound as a result the euro is trading weaker versus 2%. let's see what the currency moves that means for equities.

ftse 100 has been outperforming all morning as you expect the weaker pound contributing supporting the exporters in the u.k., still in negative territory that we got the domestic names underperforming ftse 100 down 0.2% and the cac and ftse mib is also lower let's look at european yields next lower across the board here. the italian ten year is 0.9% and we're seeing record lows this morning. they both hit record lows this morning. the strong bid continues there and finally let's take a look at u.s. future. that labor day holiday yesterday meant that u.s. markets were closed this is the first day in trade since the imposition of the fresh tariffs. they came into effect on september 1st. it looks like we're in to a

negative start for the month of september looking at the three major indices there. >> not a pretty start to the month for u.s. equities and the u.s. and poland found a joint declaration calling for 5g network providers. washington the looks to encourage providers to exclude huawei from its roll out plan. mike pence said he hoped the agreement would set a vital example for the rest of europe >> huawei landed over 50 international contracts despite mounting pressure from the u.s we're joined with more fill us in >> the message is very clear here from huawei they can be resilient and strike

deals from major carriers. they have more than 50 contracts now and that puts them ahead of the closest rivals, but it does come amid major head winds for the chinese telecoms giant they're on this u.s. blacklist and they can apply for licenses. they're not getting access and huawei does not get access for the u.s. technology and that's a big problem because it relies on components for various products and smartphones due to its laptops or it's networking gear so there's a lot of questions about what happens long-term if huawei does remain on this u.s. blacklist. i had the chance to catch up with one of huawei's board directors and i asked him whether this situation is making the company try to reduce it's reliance on the u.s. technology

and wean itself off of that american tech. let's listen in to what he had to say. >> huawei welcomes an open and collaborative world. we continue with our strategy. striving for an open and collaborative and win-win world. >> you develop your own technology like chips as well? >> because chips are part of the solution, huawei first developed it's own chips in 1991 and those chips can help huawei in making better products by providing more cost effective offerings and making huawei more competitive in the market. therefore we will continue to develop our own chips. >> if huawei remains on this u.s. blacklist for a long period of time, over the long-term, will we see huawei invest more money in some of these core technologies like semi-conductors? and will we also look into other components to begin to source them from elsewhere outside of the u.s. >> huawei welcomes u.s. companies and suppliers to continue providing their products and components to

huawei but at the same time we support worldwide collaboration in the supply chain. we believe we can only achieve mutual win by collaborating. >> what if they can't supply huawei what do you do then? >> you can see what you suggest has already happened but against these circumstances, huawei's business remains robust and stable the reality is this blacklisting is already effecting the company. huawei will push ahead with a lunch of their flagship smartphone the company subsequently confirmed that that will be without a license from google's android operating system when they sell this phone in the international they won't come with many of the google

services it's now bringing out it's own operating system as well it's no doubt going to move further away from u.s. companies and look elsewhere for its components guys, back to you chl. >> all right thank you for bringing us the latest on huawei there and of course about a company that's under a lot of pressure. >> well, coming up on the show, tensions simmer between he has hezbollah and israel we cross live to beruit, next.

welcome back to street signs. it's a huge day for westminster and huge week coming up. speculation about an early election in the u.k. is growing. you can see we have broken through key levels here at 120 now we're trading at 11990 levels not seen since i believe the end of 2016.

and he's in westminster standing by. >> one of the instigators. we're going to see today that we'll seek to block no brexit and postpone the brexit deadline until the end of january >> it's threats coming from the prime minister and this notion and build up, i think we have. >> it's also very key as the party was operated and it shows a degree of ruthlessness and introduction of the ideological element. it does the party immense damage

to proceed but it's a match for the prime minister i have no idea what he's going to do. >> do you think the lack of unity inside of your party would be reflected were there to be a election in the last three weeks? >> i think the problem is not just within the party but it's the core voters. 36,000 people voted conservative in my constituent cy in 2017 this prime minister is approaching brexit it continues on this on the narrowing band of support. >> just for those watching around the world what happens next?

>> it has to get through the house of commons and the house of lords we hope that will happen in the course of a week now, at the same time, the prime minister announced the general election and for that he has to have 2-thirds majority support in the house i have no idea if he would be able to get it what's the next case scenario? >> if the legislation goes through my hope would be that it would force the prime minister and sections of my party to reset the discussion to start thinking sensibly about the way out of the whole which we have succeeded in digging for ourselves as a country my own personal views and course of action is to have another referendum which can be

determined it's very elusive or potentially we could have a general election but a general election is at great risk of delivering a hung parliament and if that happens we're not making any progress. >> do you think the prime minister is reseptember i have to that idea given that you had a schedule that got cancelled? >> well, i have no idea. what happened on monday is illustrative of a problem. going to meet with people this morning. >> thank you so much >> let's switch over to the middle east. relationships between israel and hezbollah remain tense after they exchanged fire over the past weekend hezbollah accused israel of two drone attacks in southern

beirut it prompted them to reach out to the u.s. and france for help they have now entered a new phase. one without red lines. it's ready to declare an economic emergency hadley, give us the word from the ground. >> economic head winds hitting this country, geopolitical head winds hitting this country but all eyes will be on the prime minister as he attempts to move forward when it comes to getting that 11 billion before investors that made commitments in terms of helping that economic situation and whether or not he's going to get members of the government on board and he is a very well-known lebanese economist and banker walk me through what we have seen over the last 24 hours. essentially the prime minister has come out and said he's

prepared or preparing to declare an economic emergency. what does that actually mean. >> you know, i am a positive person by nature i believe that what i witnessed yesterday is very promising. it means this is quite positive. but have to look to see empty half of the glass. should have political commitment yesterday in terms of what has been decided >> it's going to really give confidence to investors. >> i heard this morning talking about the net profile of the country which is really

conservative, you know, among foreign investors, you're right. but still has a lot of available and neutralized ources the depending side of the budge, due to present another 11% of gdp. it's 20% of gdp. can you imagine? it's one third of the revenue gap and just also savings and in

order requests to estimatea 7. 3 to engage and whatever, all kinds of political administrative reforms but i don't believe that they're really sensitive. in order to put lebanon back on

the right track. and sustaining growth rates and this has been, i mean, estimated by the imf which will translate to 40,000 jobs a year and raising product population ratio and 30% to 75% and capital income level five years down the road. to a certain extent it's granted to lebanon as important financial support. but what about the remaining $5 billion? because the administration cannot spend more than $1.5 billion a year in terms of investment standing. >> we're going to have to leave it there.

>> but one quick question before i let you go the prime minister, i'll be asking him all about this tonight. is this something he has the political will behind him to really move forward on >> he does in order to provide confidence to the private sector, it's two political understandings to define an understanding in order to provide the private sector confidence, in accepting lebanon and what is needed i mean for the private sector. lebanon won't be driven into whatever legitimate or senseless war which will make him lose his investment >> let's wait and see what the prime minister has to say. guys i'm going to hand it back over to you.

>> thank you for bringing us the latest at least five people have died and thousands of homes have been destroyed as hurricane doria dorian pummeled the bahamas. >> yes, we're right in the middle of the forecast cone now. if the storm ever decides to move, unfortunately the islands in the bahamas still being pounded by this storm which has been there more than a full day now and you have to feel for the people there as it slowly edges and eventually begins to take aim at the u.s. coastline. again we're right in the middle of a forecast path will it make landfall? if it does it would be in north carolina later in the week right now it will just shadow the coastline. close enough to do significant damage they expect hurricane force winds in many areas. evacuations under way. more than a million people from

florida through the carolinas already moved to higher ground and that's going to continue today. here in savannah, nice conditions right now, the port is closed, evacuations here as well and most of the businesses are closed and they're prepared for this storm everybody participating right now except for dorian. it's just not moving at this point. if it does, we expect to see the storm off the coast here sometime late wednesday into thursday. >> thank you for bringing us the latest our thoughts are with all of you guys on the coast. >> u.s. futures, you can see all the indices are pointed to open up and that is it for our show wday. >>orldwide exchange is next.

it's 5:00 a.m. here in new york here's your top 5 at 5:00. after the best week for stocks in a month, futures are falling right now. new tariffs over the weekend is currency falling? as britain faces what could be it's third election in less than five years a possible state of emergency after a weekend of violent clashes. all of this ahead of what may become the biggest ipo in the history of the world. >> tragedy in th