that is according to ben bernanke.ren dollars in corporate tax cuts and $300 billion increase in federal spending makes the fed's job more difficult all around because it is coming at a time of very low unemployment. argentina has secured a $50 billion standby arrangement from the imf to help restore investor confidence. that is the government takes aim at double-digit inflation and a widening deficit. the program would run for 36 months. it would depend on how much the government -- it comes amid an emerging markets selloff that has shaken developing economies including brazil, indonesia and mexico and is forced central banks to hike interest rates. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . very risk off for the final trading day in asia. you are seeing tech players drag. a lot of selling coming through in large cap chinese stocks. australia closing pretty flat and it is weakness it has -- it is weakness we

ben bernanke warns of a wily coyote moment. trump goes after canada on twitter as they duke it out over trade and climate change and i run. and deutsche dilemma. and stocks take a hit. daybreak.""bloomberg david westin has left me. we are ending the week with a bang. the safety of dollar-yen here down .4%. 110.00bounce above the level. crude is getting wrapped up in the risk off feel. .4%.by we are now joined by michael mckee and lisa abramowicz. happy friday. what happened over the last 48 hours? dropt a nine basis point and then a recovery. what happened? lisa: we should be clear that people don't know. i'm not going to pretend that whate have an idea of happened. years ago there was a 76 page report that it inspired from five government regulators to understand the market structure and what happened. the result? we don't know. it is probably benign. there are more algorithms at play here. does it have to do with emerging market assets? we don't know. it doesn't mean there is something pernicious going on. alix: but you had t

former fed chair ben bernanke says the u.s.ld face a slow down in 2020 as trumps stimulus fades. this is "bloomberg surveillance." we have to talk about the g7. much worse than expected economic data out of germany. and the wily e coyote moment. it was a cartoon where you see a cartoon a -- a coyote running after a road runner and he falls on his back. tom: we will see which warner bros. character comes to the rescue. this g7 meeting is front and center. it is extraordinary what has gone on in the last 24 hours. i have no idea what we will see this morning -- saturday morning if the president stays around into saturday evening. francine: i think he is leaving early to attend the summit with korea. to be the is said most acrimonious world summit in years. face off trump will against six other leaders when the group of seven meets in kobach. european -- meets in the back -- meets in quebec. presidentt -- predicts next week's summit with kim jong-un will be a great success. he says the two may sign a treaty formerly ending the kor

ben bernanke says the u.s. economy could fall off a cliff.sfaces a major slowdown fiscal stimulus starts to fade you'd he says tax cuts and higher spending make the job for the fed harder all around. ben bernanke said it could be a wily coyote moment, just like the car from that cartoon, but it won't be funny. >> we are getting stimulus when the economy is at full employment. happens, buthat the current lot with the economy in a big way this year and next year. 2020, while e coyote will go off the cliff and they will be with drawn at that point. >> china's efforts to globalize its bond market are getting dual headwinds. borrowing costs are climbing as it works to reduce financial leverage. that contributed to defaults by s so far thisr year. 11 have been private companies and one was a state owned enterprise. 1mdb investigation is set to arrest two people, including a former goldman sachs banker. the anticorruption commission has yet to issue charges and it is not clear why warrants are being prepared. malaysia says $7 billion went missing an

that is according to former federal reserve chairman ben bernanke. coming at a point of very low unemployment. let's get peter's take on this. bernanke is worried about 2020. he thinks that the u.s. economy starts to fade at that point. what is priced in in terms of the markets right now and where do you see? -- it? market has been expecting less monetary tightening from the ecb cut -- from the fed in 2020. we are of the view that that should continue. our fear is that the tightening of financial conditions that are taking place now, you see how treasuries have reacted. look at what is happening in equity markets. we think this is the start of the end of the current cycle in the u.s. we share his view but we actually think that the collapse happens earlier. we think this is a 2019 story and this is why we are moving into that steepening bias on the curve. don't like a riskier asset classes in dollar denominated products generally, so really don't like equities here. you have to discount them with a higher rate. now that you have got a positive real re

heard from ben bernanke and from the imf about expectations of growth being ok in the next couple of but moment as ben bernanke talked about or looking a little less robust was what the imf was pointing toward. are you looking for that kind of trajectory for the global economy? guest: we are in a good position, we have pretty decent growth across europe. the u.s. economy is doing very well. strong growth in the u.s. looks set to continue for the rest of this year. for next year, some of the tightening we have seen happening already across the major economies is likely, in our view, to moderate growth. we are not looking for a downturn in 2019. we cannot ignore the fact that the u.s. economy is looking very mature. the expansion now carries on for another year. -- longest expansion in 100 years. that does not necessarily mean it has to come to an end but some of the support for the economy is starting to fade. may be looking after 2020, it will be -- growth momentum will not be so strong. haslinda: we watching thea ecb, the fed, the doj. re that should be the one to -- that should be

half of them being neutralized which was in my opinion a very misguided policy implemented by ben bernanke so you're view is that these meetings should be not open or what they should they should all be like i agree with you now why in the world should taxpayers have to foot the bill for for meetings if policymakers are going to be so paralyzed that they can't take any action because they don't have a press conference afterwards to explain themselves you know make every meeting live and then the fed has much more flexibility and transparency with the public you know and you don't necessarily need a press conference if you just watch the deal you can count on i don't know news networks to do the news and people that comment upon what they've done but i agree more transparency the better your let me ask you about housing you know we did see housing construction increases in april and we spent a lot of time last week talking about the high cost of copper actually a key component in you know new construction do you see housing going down you know . well housing is in a really tough spot right

ramy: ben bernanke

possibly taking a swipe at andld trump's tax reform referencing ben bernanke's wiley coyote moment. vonnie: the trade rhetoric escalation and how it will affect the economy? thank you to matt miller and we will return to him later. fascinating. what is going on in europe? mark: theresa may won the key brexit vote in the house of commons. it has been about the key part of the brexit legislation that allows parliament a more meaningful vote. there has been a compromise. we will discuss the compromise later when we talk to jim hertling. thatarly view seems to be she has proven the queen of delaying, because this will have to return to the house of commons possibly next month when the trade bill comes back to the house. that bill is essentially -- do we want to make -- the a part of the customs union? once again, theresa may has postponed a very important debate, which will have to take place and could highlight the ever present ructions within the conservative party. and an eye on sterling other u.k. assets. theresa may has gotten through today, there are certain hurdles in the next mo

to the next recession is that what yoer saying >> potentially yesterday, we had ben bernanke talking about the wile e., coyote of the u.s. running off the cliff in 2020. we have a larger fiscal deficit, protectionism, that is not a great growth mix in 2019, i think the rirvegs of a recession are increasing and the buffers to counteract external shock is diminishing. >> a lot to chew on there. going back to the g6 plus one summit, what do you think the likelihood is of the g6 releasing their own statement without the u.s. here. that's unprecedented >> it is but it's something macron has been pushing for this morning, he had a very strong statement saying if the u.s. doesn't want to play this game of reducing trade tensions and agreeing to some form of pullback in terms of the iran deal, they would actually act as a group of six but really, you need the u.s. in these types of agreements. you need the u.s. at the table when it comes to trade in particular >> forgive me if i get philosophical. as an economist, you focus on numbers and data is this not the big man theory of history where

the: ben bernanke fears u.s. economy could be heading off a cliff.e says the recent tax cuts will trigger a wily coyote moment. hello from new york where it is past 6 p.m. on thursday. i'm ramy inocencio and this is daybreak australia. we are two hours away from the open of asia's first major market. haidi: it is just past 8 a.m. in sydney. happy friday from the asian markets getting underway. i'm haidi lun. we will take a look at how the action and wall street will play into the final trading day for the asia-pacific region. a weekend separates us from potential history be made. all looking ahead to this trump-kim summit. ahead of that, we have the bilateral meeting between the japanese prime minister and president trump. in president spoke about, the joint conference at the rose garden, spoke about wanting to sign an agreement with north meeting,that tuesday potentially to put a formal end to the korean war. you think that will happen but it will probably be the easy time. the hardware comes after that. as we go into the weekend, the g7, g six plus

ben bernanke saying yesterday that theamerican economy could face a tough time in two years as stimuluses and the economy overheats. bonds reacting a bit as well buyers coming in bait. yield rg falling to 2.91%. oil sliding just a bit, as well. as global growth concerns taking oil down, about 25 cents to 65.70 a barrel >>> ahead of this weekend's big meeting, president trump lashingous, specifically at france and canada. let's get to jay gri, live in quebec, with more. jay? >> hey, good morning, brian. an interesting dynamic the president scheduled to land here in just a few hours this is a city on edge, obviously concerned about protests that always seem to follow the g7. it's a group of allies at odds with some of his latest policy decisions. at the top of the list, new tariffs on steel and aluminum. something that really has enraged this group of six plus one many are calling them now. they're anxious to get a chance to speak with the president. there's been a duel in the media as well as twitter overnight by both the prime minister in canada and the president of france with presiden

the was a paper by ben bernanke that highlighted for every shrinkage, that translates to 25 basis pointsn rates. given the path of the fed's sixnce sheet, that means effective rate hikes. that puts us toward tighter than expected territory. mean you do not want to own asian stocks going forward in 2018? >> i would not go so far as to say we do not own. fromve reduced asia preferred status down to core, which represents neutral allocation. we would not be adding at this time, just holding our positions until we get greater clarity on the dollar. matt: thanks very much. is head ofnell equity investment at standard chartered. a hot topic after the moves overnight, but of course, we were watching this closely the last several weeks and months. we are minutes away from the open of european equities. we're going to take a look at the stocks you will want to watch of the open, including deutsche bank after hitting an all-time low. the lender is the only one to fail the fed's stress test. maybe not a surprise, but not a reason to buy the stock. this is bloomberg. ♪ matt: welcome back to "the eur

that if you go back to 2007-08 when ben bernanke was cutting the rates aggressively, the biggest impact that had was a huge slowdown in the u.s. economy. in fact, the global economy. remember what was happening to shipping prices. how much of the driving season so from their perspective particularly at that point in the economic cycle do they want to kill the goose that laid the golden egg, probably not so oil prices are somewhere in the -- between 70 and $80 a barrel. >> a bit of a push and a pull. you have the saudis looking at the domestic budget thinking we can do with every penny above 80 bucks a barrel that will help us recreate the currency curves and then you have the americans saying trump in particular, we don't want people spending more money at the pump. >> at a time when u.s. are pumping record amounts of oil with the advent of shale. >> you're right. it is a balance and the fact they went to borrow the money and the bond market was astonishing. but it's the case of the longevity of this and also the politics between the u.s. and saudi. i think it's that -- that's what real

if you were the imf looking at the global economy over the past 15 years, ben bernanke is said theres a global savings glut. largely, that was asia running trade surpluses. central and eastern europe are running current account surpluses. italy is running a current account surplus. germany's current account surplus got bigger. this is a rerun of the global class. trump if you stand back as the first international leader to say that's not acceptable because european fiscal and monetary policy is effectively free writing on global demand. we say it's just national accounting. the private sector is going to run a surplus. the public sector is going to run a surplus in europe, which ,eans we run a trade surplus and that is by design. trump is the first person who has called merkel out, and merkel has gone on the defensive, because she is suddenly trying to pretend germany does not have a trade surplus. -- e is a point and a logic joke: if his style were different, he could fit in right a davos? >> absolutely. julie: you cannot sort of separate him from the style, seemingly, so even if he

let me ask about ben bernanke's comments on that. he said the u.s.ce a wily coyote moment in 2020. the visualization is amazing. gives him more room to run and when it is over, he drops. does the u.s. economy faced such a dramatic moment? so dramatic.e not the risk of a slowdown is clearly there, because the tax reform will peter out and in 2019, the u.s. side is very long. we have rate hikes coming by the fed. matt: can the fed keep hik into that? carsten: maybe into that, but not as long. the fed will realize they are slowing down the economy already. this wily coyote moment might not be that strong, but the downswing toward the end of 2019 is clearly possible. matt: i thought it was interesting we saw bridgwater come out and say they are worried about the fed hikes and the rate path. everyone is fairly complacent about the rate hikes, should they be? because the fed will realize at some point, the hikes will bite. they will slow down the economy. any external event, you still have a dollar that is strong now, but petering out after the tax reforms

jenna: former fed chairman ben bernanke says the u.s. economy could fall off a cliff. his warning that growth faces a major slowdown as the trump administration's fiscal stimulus starts to fade. he says tax cuts and higher government spending make the fed's job harder all the way around because it is happening at a time of low unemployment. be a wilyays it could coyote moment, just like the cartoon, but it won't be funny. >> what you are getting is a stimulus at the very wrong moment where the economy is at full employment. under current law, we will see what happens, if it is renewed or not. it's going to hit the economy in a big way. in 2020, wiley coyote is going to go off the cliff, and it will eventually be drawn down. the one jenna: and indeed the investigation is said to be ready to arrest a joe polo, including a former goldman sachs banker. we're told the anticorruption commission has yet to issue charges, and it's not clear if the warrants are being prepared. malaysia says at least $7 billion went missing from 1mdb. global news 24 hours a day on , powered by m

yvonne: we heard those lines from ben bernanke just last week. talking about how the u.s.his wily coyote market. thus he have a point? does the fed have a temper position in two years? that youonomy dictates need the stimulus when the economy is already running hot. having a fiscal stimulus at that point, it is less effective. it is not an effective, just less effective. when you're already at or above capacity, that as to a little bit in the near term. this is the sentiment continuing. these activities are all continuing. also, it adds to inflation if you're already at capacity and running the economy even hotter. in the near that is fine. the inflation is rising a little bit. that helps the fed's case to raise and stick to his non-libation plan. the other thing that it helps the fed do, it helps them get to a place where it is more comfortable when that downturn comes. you need to build that monetary policy space. the higher the terminal rate you're able to set, that gives you more of a cushion in terms of how much you're able to cut back when that downturn hits. whether

. >> i would say there is a new sheriff in town, because ben bernanke after the crisis and janet yellen tended to be glass half-empty come in the sense if there was an excuse to pull back and be cautious, they tended to do so, and the paulo fed seems to be a glass half-full type person. german pal fed seems to be a glass half-full type person. alix: our next story is mario draghi, glass half-full, glass half-empty? he has a delicate balance today. he has to upgrade inflation forecast, but not growth, but temper expectations. chief of the ecb has dropped an enormous hand that they are talking about the exit from qe at the meeting today. will they come to a definitive decision and let us know? if you ask 100 people, 50 say yes, 50 say no. do know is qe as currently scheduled is slated to end abruptly in september, and they will want to go on a collide path. the consensus overwhelmingly is that will be done by the end of endyear, qe will end at the of the year and targeting a rate hike by the middle of next year, but the challenge from mario draghi is not to pre-commit too much. they want

conversationg a with ben bernanke about the feds latest meeting.thought the stress was there? and he said he did not think so. well.believes that as what we are seeing in these various countries -- it is more political than economic to an extent. it is not related to the fed. we should not believe that the fed will slow its rate hikes down yet. tony, however, emerging markets falling out -- can it hurt world growth? global growth nominally come real plus inflation, will be a little more than six. that is the same as last year and we would project that would be the same for next year. this is up four percentage points from a few years ago. equities inead to the double digits. based on the msci index of low teens or so. by index has been driven china despite the stress in the emerging markets now. the em currency plunge harkens us back to history and two other crises where the u.s. central bank becomes central banker to the world. are we there or will we be there in 2018? i don't believe so. tony is right that politics has played a role in certain of

. >> fiscal policy ben bernanke talking other day fiscal stimulus in the system from tax cuts, also supplementals comt could take steam out of economic growth. >> economic issues on trade this morning i have op-ed in realclearpolitics headlined china deal breaker property rights talking about trade by persuading president trump the sanctions busting telecom zte should continue to enjoy access to u.s. technology, china has achieved one of its top priorities in trade negotiations with u.s. in return trump should did he manned better treatment for u.s. companies is that mak such technology my point china can buy as many agricultural products energy products they want that doesn't address most important issue for american business which is ip the forced transfer of technology. >> i.t. theft. >> congress making this argument zte isn't dead yet looks lies did he have authorization defense authorization going through congress could put provision in to overturn trump's detail. >> so mar not pushing ban may be resis but not so far. >> very important. >> republicans democrats tend to agree with the argume

. >> that is interesting i know hank paulson ben bernanke tim geithner working on 10 years later lookt in the fall to take a look at 10 years after the financial crisis but you are right, hank palmson was known as expert on china i was wondering are they going to tap into knowledge good that you say he this is fact working with this mings. dagen: among. >> you bring up. dagen: going to say quickly james that among those urging talks between the -- the u.s. and china to reopen talks, and kind of fend off what would be a trade war again just a dispute now according to secretary mnuchin, hank paulson is involved blackstone steven schwarzman acting as back channel between two governments according to james' paper. >> they should get hank greenberg in there too i mean he his company -- >> right. >> the first company really to open stores in china american company. >> you open financial crisis, i believe there was in spring of '08 hank appall sen was -- hank paulson concerned about china investment in fannie and freddie some bailouts probably arguing about that next several months as we see