with us with the implications for the united states and particularly abroad, george magnus with ubs. ll. george, i'm fascinated with a view from london on the donnybrook we are looking at daily in the united states. it is like chewing glass, isn't it? george: it is. as you know, it is not huge market focus at the moment, but it will be as we go through the year. because it is, people are very -- they rush to judgment about the candidates and the primaries and so on and say this guy has not got a chance. the most likely outcome. we don't know. we don't know what kind events might happen between now and november. tom: i can't see anyone within the group, republican or democrat, going to berlin and giving the speech that president obama gave a bunch of years ago. maybe moren europe into with tensions in the middle east and it is probably a lack of foreign policy from the u.s. that impacts tensions so it is important for everyone around the world who the next president is. without getting into politics, if you are angela merkel or david cameron, is or someone you would prefer in office? g

let's bring in george magnus, my guest for the next 30 minutes. get enthusiastic and almost hysterical -- but are we in a bear market in china? should i be worried? >> yeah, you should. i've said this before. last august, and since the beginning of this year, it is a bit worrying what is going on in shanghai, specifically what we are talking about here. the chinese stock market isn't that important to china, and it is not that important to global markets either. manus: that is why i'm saying should i be worried. >> what you should be worried about is what it's a manifestation of. what is a manifestation of, two things we should feel quite concerned about. one is we don't really understand whether the chinese authorities do have a grip on what's going on in their financial markets and in their economy. that creates uncertainty, because you want to know that the guys in charge got a hand. the second thing, what it reflects much more significantly is concerns and financial markets about currency rather than about the stock market. they are intimately

magnus joins us from london. george, this really started overseas.t started with chinese stocks, and part of that is the instability in the currency as well as the stock market. a famous hedge fund manager looking for a 50% devaluation in the yuan. over with it. what do you say? for him to stay. it is complicated, isn't it? be chinese are quite aware -- the chinese are quite aware of the risks not to the rest of the world but to china itself and to the whole rebalancing of the economy, which they are trying to do, although with great difficulty, i would say. who areess to those looking for a big drop in the currency, i do not think you can't will it out. think thator one, china has not shed its addiction , and because of that, i think the growth in debt is going to continue and that it will weigh very, very heavily on the economy and on the banking ortem in the next six months probably within the next couple of years, and when it does, i think there is a serious danger fall quite a can lot. but they will try to hold the drop and even if the yuan agai

joe: george magnus of ubs, thank you so much. coming out, more on today's market turmoil and the top trades you need to know as we start off this rocky 2016. ♪ these sure to tune into our special report at 5:00 p.m. eastern time. an all-star lineup. scarlet: i am scarlet fu. first word news. >> a man armed with a butcher knife was shot and killed by police in paris as he tried to inter-a police station wearing what officials may have thought was an explosive vest, but were later determined to be fake. it happened after the president spoke at police headquarters honoring law enforcement officers killed last year in terrorist attacks. it was one year ago today that 12 people were killed in an attack on a french satirical magazine. prime minister david cameron is in germany pushing forward his campaign for changes to the european union. is committedister to holding a referendum on eu membership by 2017. before that, mr. cameron is seeking a new deal for britain, including welfare limits for other eu nations intended to control migra

george magnus expects the shanghai composite may stop it slide at 2500 and the gauge fell to a one-yeart week. still a ways to go. may not touch the bottom yet, but a lot closer be -- closer. rishaad: china is said to be considering larger cuts as part of an intensified effort to reduce industrial overcapacity. a look at what the officials are pledging. we have been waiting for things like this to happen for a while now. >> don't tell me. show me. they have made a number of pledges before. on the government website, they put out a statement from the state council meeting that they held on friday that the premier was chairing. they acknowledged that they cut about 90 million tons of steel production capacity over the last few years. they say they are going to plan to cut between 100-150 million tons again over no timeframe. they say they will strictly control steel capacity increases halt new coal mine approvals. it goes back to the cheaper fuel, coal, for the power needs. big,teel, these are state-owned enterprises. interest inested the state-owned enterprises, and you have jobs, jobs,

vonnie: and it goes back to francine's point there, and what you were asking george magnus last week the opacity of the market. saying here that chinese companies are trying to get ahead by repaying dollar debt often by wreathlaying -- funds in theing renminbi. tom: vonnie quinn, thank you so much, in new york, on the theme of stock and flow, as the economists like to say. gary cohn is in charge of making the ship run for mr. blankfein at goldman sachs, the chief operating officer. gary cohn, in conversation. look at that on "bloomberg " this morning. a perfect day in davos. good morning. ♪ francine: welcome back. this is "bloomberg surveillance ." tom keene and francine lacqua in davos. it is gorgeous. we need to get to your data check. tom: looking at the data check right now, it is clearly risk-on, as well as futures up nicely. yields have moved higher in the u.s., and i have said through the show, really in the late evening, the draghi effect -- and he is here today -- the draghi effect of a lower german two-year yield. a -0.44.ear yield is crisis over. all bankers can relax.