treasury secretary hank paulson contributed to the discussion of crisis management.e led the response to the collapse of lehman brothers in 2008. he sat down with erik schatzker at the new economy forum. >> trade and investment as we know it are apt to change significantly. i see the real prospect of an economic iron curtain where we have both sides throw up walls and unmake the global economy as we know it. >> when you use that term economic iron curtain, you were harkening back to the days of the cold war, and the divide, cultural, economic, military that separated the united states from the soviet union. >> we are not in a cold war now. people who say that, it is overblown. we have the real threat of a cold war if we continue down this trajectory. it is a dangerous trajectory. what i see happening is a growing consensus in washington that china is no longer a strategic competitor, but in danger of becoming a strategic adversary. >> you do not see the risk of china would be a strategic adversary? >> i see the real risks, i see that trajectory. >> a trajectory that

after 8:00 a.m., we will speak with the former treasury secretary hank paulson.ll be a conversation you will want to tune in for. later, we will be speaking to the chairman of s4 capital and the former ceo. that is --this is bloomberg. ♪ manus: well, it it happens politics has dominated the theme. democrats are poised to reclaim the house of representatives for the first time since 2010. riding a wave of voter anger and discontent with president trump. they were fueled by strong support from women among suburban voters with higher income and education levels. nancy pelosi spoke as results came in. she is expected to be the next speaker of the house. anna: in the senate, the republicans made gains. in one of the most closely watched races, senator ted cruz fended off a well-funded longshot bid by a democrat. for the first time ever, 100 women have an elected to the house of representatives, including the first native american woman. some expected,ve but not far from the market's expectations about what would happen in the sam -- house and more women than we have s

. >> separate from all of this of course is hank paulson speaking in singapore about warning againsteconomic iron curtain with china. >> that happened today he's been saying that for some time hank paulson was at the university of chicago just last week at a u.s./china forum as well i heard him speak. and he reiterated or said that for the first time where he talked about how concerned he is that even if you get beyond tariffs, he thinks this cold war with china will go on for a long time >> i think we're in for a longer period of tension in the economic area. it's going to be more complicated, it's going to be more tense we could talk about it for a long time. >> when it comes to china, guys, i wouldn't be surprised if the president brings it up today it's one of his key talking points he'll probably also talk about federal judges, the judiciary, anything he can paint as a win i think the way he's handling china right now, i think to his -- in his mind is a real win for him. >> john, i'm curious what you make of this because cashin for example, just a moment ago suggested that maybe

hank paulson warns of an economic iron curtain between china and the u.s. goldman sachs is the biggest risk is an overheating economy. david: welcome to bloomberg daybreak on this wednesday. it is of course the day after the midterms. that is the white house where there are some happy people led by the president. he has been tweeting he is going to have a news conference at 11:30 this morning to discuss success in the midterms. alix: back to work is what he said. you pointed out that the moderate republicans did not make the showing we thought. it was still sort of the fringe which is interesting for president trump's agenda going forward. david: interesting when you have , the moderate senate -- lost in the in general, it seems that the moderates did not do so well and some of the more extreme republicans did better. alix: that gridlock or confusion reflected in the market. it feels like a risk on rally, a goldilocks kind of scenario. despite the fact you get that split congress, it is a weaker dollar story. euro-dollar up by 5/10 of 1%. it was a bull flat

failed max yet an interesting side note from that bell out history hank paulson was against this all bailout of citibank at the time he wanted to nationalize citi bank we find out it was barack obama who rallied to the defense of the big banks on wall street a lot of people don't understand his role in that particular part of financial history and also i should note that the swiss national bank just sold from what i understand they're apple holding they had a very large business and apple stock they've said they're selling that stock central banks have been buying stock unusually now they seem to be on a winding that stock that could put some downward pressure on the markets if they start on why these positions what about gold mess it's not doing much except trading treading water any thoughts it's been turning water now for almost two years z z. it's started to rally late two thousand and fifteen and i think that is certainly that's one gold mine or there's a bottom and they took off and many are two and three times a head some of the juniors are four and five even more times ahead

one in four is there a chance of a trade war, but we have the former us trade secretary, hank paulsonc tensions as a result of this reaching a breaking point, could tip into a full—blown cold war. i now see the prospect of a full—blown economic iron curtain, one that throws up walls on each side, an un—makes the global economy." and that is the 25% risk. that's why most people would say don't embark on this strategy because 25% probability of something really bad... if i tell you there's a 25% probability that, god forbid, on your drive home tonight, you will have a massive crash. you say ok, it may be a small probability but it's a huge event. i always ask when people say that, "i agree with you, but what probability do you attach to that?" so therefore their meeting, the next meeting in argentina, which is at the end of this month, is significant, when the us and chinese leaders meet. not just significant, critical. and if the chinese are able to come to the table with three things, we could have a good outcome. the three things being? 0ne — some measures, especially on energy, to r

flake: yes it did. , i have spoken with hank paulson and george w. bush years later who did not want to do it, but we had to do it at that point. and i left my colleagues carry my water for me. i regret that. recentlyu of course made a lot of headlines with brett kavanaugh. what is your take away? what is our lesson from that? sen. flake: i think in an earlier era, he would have garnered 95 votes or maybe 97 or 100. but we are in a different era now. one thing that i felt near the end of that process is that we did not have full due process. we could have done more. we republicans should have called for an fbi investigation earlier, and that is why i felt that we ought to hit the pause button and do what we can to make sure that people in this institution felt better about it. i got to that committee that morning and just saw the food fight between republicans and democrats. democrats threatening to walk out of the vote, and thought this was not good. this is not good for this institution and certainly not good for the court have something who is eit

and what the future did hold it also ahead treasury secretary hank paulson and federal reserve chair ben bernanke really critically concerned with lehmann did what was next with contagion from lehmann and perhaps others who could fall destroy the economy and still nobody knew the financial risk of those dark o.t.c. markets with those bundles of bad mortgages in the credit default swaps fearing the worst total economic destruction paulson and bernanke headed to capitol hill with a three page document seeking more than seven hundred billion dollars to buy what they called troubled assets held by large and small banks and insurance giant ai g. which should ensure the o.t.c. dark market products for many of the banks and it did become law for more we're joined by legal journalist molly barrows at the ring of fire network molly some of our viewers may have only a really a vegf recall of tarp or know the acronym the history is pretty muddled take us back to a tarp one hundred one if you would. sure have our will as you said secretary paulson and fed chair ben bernanke frame this as dire an

you have the likes of henry kissinger, hank paulson, the former mayor of new york mike bloomberg. together and the keynote speech delivered right here was in china's vice president, who said it essentially that china was committed to finding some sort of resolution to the trade war with the united states and what is really crucial is that he pretty much i cared what his boss president xi jingping said yesterday in shanghai, at the china international import expo. xijingping at the china international import expo. xi jingping reiterating at the china international import expo. xijingping reiterating that china is a champion for globalisation and free trade and that china would start to open up its markets to foreign investment. what is really interesting in hearing from these two top brass in the chinese government at these international forums the chinese government at these internationalforums in the chinese government at these international forums in the space of two days, it pretty much suggests one thing, that they are incredibly worried about this china/ us trade spats and th

and peter navarro are not bob rubin larry summers hank paulson or timothy geithner though well bill ross spelled out like two or three times already yeah but they're also you know they they believe in reduce storing american manufacturing and robert rubin larry summers tim geithner they they thought the only deplorable do manufacturing and it should be financial services so these guys like highs are wilbur ross and peter navarro are very very much like we need an industrial heartland we need to as also a matter of national security because even say look at venezuela venezuela is a basket case now because they have to import all their food and if you have to import all your food you're at the whims of the global markets and and somebody sending you food and you have to pay for the food and not in your own currency so here the same situation is america is vulnerable anybody is vulnerable if you're you have no manufacturing capacity at all don't take chances within is like with like your shoes are full of these blowers watch kaiser report after the break we're coming back with a lot more so

if you saw what hank paulson said last week, he is listening to different folks.olks in china that want to see reform. shery ahn: president xi jinping got the limelight in asia. was this a strategic mistake that president trump missed? >> it would have been important for him to make the trip. more of long-term american interest will be in asia, the south china sea, india, it is important for our government to spend more time in that part of the world. china mark warner slams on intellectual property. >> that is a huge challenge. china has made advances. we are not near where we need to be. our system is predicated on intellectual property rights. the chinese do not have that. they will get there when they have brands that are worth protecting. kevin: there was a shift when folks were saying, the u.s. would have the upper hand, now it seems the u.s. in terms of the pr war between the countries is on the back foot heading into g20. how does the u.s. get the upper hand? >> we are still, we still have the upper hand. who is up and down and the horse race is not the be

there -- they are dealing with the henry kissinger's and hank paulsons of the world.there is profound discontent with their trading practices. let's put aside the trade war, we talk length about that every day but if you look at what is going on structurally, how much of that can be blamed due to the external forces and how much as i suspect you will comingre the chickens home to roost? christopher: very little of what is happening in china and be blamed on the trade war. if you look at the drop in credit growth that we have seen over the past year, that is about 30 times larger than the impact on the trade war. that having much larger impact than anything donald trump can do. i think there is a lot of concern in china that this is -- the slowing of credit growth has had an impact on asset prices and an impact on investment, consumer spending, all of these issues and that is causing a lot of concern. a lot of analysts in china are expected of a stimulus package the only question is how will it be and where will it go exactly? they made for the dinner, what might be an

hank paulson, the paulson institute chairman and founder. this will be from singapore.morrow at the bloomberg new economy forum. it is election day. please vote. ♪ francine: this is bloomberg surveillance. i'm francine lacqua in singapore. you can see a beautiful shot of the skyline overlooking the skyscrapers that were not here 15 years ago. this is a testament to the city being the pivot point when it , a lot oflobal trade supply chains either start or finish year and that was one of our key themes at the new economy forum. economy,et more on the the vice president of china talking to a saying they are looking for an agreement -- talking to us, saying they are looking for an agreement as long as they do not get bullied. here is taylor riggs. taylor: president trump made one less pitch to voters before today's elections. president campaigned in ohio, indiana, and misery, warning that republican successes could be erased by democratic gains. need 23 seats to regain control of the house. experts got it wrong two years ago. republicans are expected to hold onto the senate

third thing, i was troubled when i woke up and read "the wall street journal" and listened to hank paulsoning being cautious in china. so far the numbers look good the runway has to be clear, and if we can't solve the problems with china and i'm looking forward to the summit between xi and trump or the meeting that's likely to take place later this month at the g 20, i think it is hard for multiples to improve. bull markets are about earnings but they're more about multiples, i think the thing at risk is the multiple. >> i want to go back to a point you were making about tech being more than a few big names. i wonder what size you think is perhaps the most overlooked. there are lots of midcap tech stocks, up starts trying to build, make a name for themselves, maybe working in ai or cloud areas some are getting bought up which of those many by sector or specific names do you find most interesting? >> there are a lot of interesting stories. i am glad you brought it up. i think within tech specifically and communication services post the split, there are a lot of names of interactive media, l

hank paulson has talked about it as being an economic iron curtain. have you talked about the ?ossibility -- [no audio] >> as an example, with our clients, what we would be doing is examining supply chain and their dependents on in this case, goods coming out of china. , if there was limited access to whatever those goods in this case may be. companies have had to plan for that. we have help them think about, knowing the places we operate and the things we do, to help them with their contingency plans in place. hard to predict where it goes. we have seen the pieces in terms of agriculture. .ard to predict david: before you get to that extreme version, are we seeing effects on global growth? several months ago we were talking about global growth. it seems to be softer. are you seeing effects already in disruptions that are affecting global growth. the answer is yes but minimally. we had third-quarter numbers out of germany and japan and both cited slowdowns trade related. not necessarily significant numbers but as we would describe, growth going in the wrong direction as a result

we hear from the cochairman of -- the secretary, hank paulson. o of goldman sachs, hank solomon. let's get to juliette saly, standing around with business flash. she matters every day. juliette? juliette: thanks. second quarter profits topped analysts estimates and a solid performance from a sprint corporation. they rose to ¥706 billion after september, far exceeding the 373 -- ¥373yellen averages billion averages by bloomberg. they are shorting to british banks over expectations of a no deal brexit. steve eisman says the u.k. is the biggest threat his watching. but he's not sure which bank he's shorting. eiseman said he has a list of companies he may bet against. market says much of bank and cyb g are the most short of financials in the ftse. the russian aluminum giant sanctioned by the u.s. reported a rebound in third-quarter sales as it recovered. revenue jumped 30%. that's probably as a result of a low base in the second quarter after sanctions were announced april 6. they benefited from higher prices of aluminum and alumina, which it sells to

and saying, no, no, this is not the right way to go -- >> although it was very interesting that hank paulsonna that really blasted china. i mean, he has been a tremendous advocate of close ties with china, engaging with china, and he really basically said what i think is totally true. their obstinance on this trade war and their continued theft of intellectual property and all these misdeeds that they've been accused of, he said the world's turning against them, and i think that's totally true. and i think as we go into this very, very important meeting at the end of this month, november 30th at the g20, i think there's going to be constant signals, and this is a signal from navarro -- and it may be right, that was him just sounding off, but i think they're really presenting to xi xi jinping, ok, you know, donald trump may make overtures to you, he clearly wants a deal but don't think it's going to be easy, because i think they're afraid. look, they think they're winning. >> he singled out goldman sachs, you know who used cowork there -- to work there? steve mnuchin. [laughter] david: he --

treasury secretary hank paulson has warned of a curtain dividing the world if the u.s. and china failed to resolve strategic differences. speaking at bloomberg's new economy forum in singapore, he argued the u.s. and china have interests in critical areas that and 17 yearsde after china entered the wto, it has not opened its economy to foreign competition in many areas. also sounded a cautious note on china-u.s. relations after the midterm elections. there's anthink instinct your for the trait -- instant cure for the trade issue. after theould say midterm elections, the white house administration will understand they have to solve trade issues. i think china would like to solve the trade issue. we will bring the best of the conversations from the second day of the new economy forum in singapore throughout the day on labor television. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more .han 120 countries this is bloomberg. anna: thank you very much. next, adidas raises its profitability forecast. we will sp

secretary, hank paulson. fascinating voices to tune in for. let's get back to the market stories.marie hordern has your movers. annmarie: let's start with siemens health, of more than 4% after they reported fourth-quarter earnings. they bet on an increase in sales for their new diagnostic systems, bernstein's putting out a note saying while they were 1% below consensus, they did see organic growth beat consensus. that's why we are seeing the stock jump. roche also up. the ceo was talking to us and saying it expects to maintain is leading position in cancer drugs and in the next few years, a bunch of generics will be coming into the market. he says they will maintain position. finally, st micro down .7%. that stock under a bit of pressure this morning. anna: thank you very much. let's talk u.s. politics. it seems timely because americans had to the ballot box for elections. democrats on track to win back control of the house of representatives, but the market edge narrowed amid heavy campaigning of president trump. let's talk the u.s. economy with megan greene, still with us. we ta

hank paulson on bloomberg, just a few days ago, talked about the potentially long-winded between thential falling of the iron curtain again. the economic iron curtain, that's no joke. we spoke to the evercore president and ceo and talked about what economies are looking at when it comes to uncertainty. >> uncertainty is the enemy of m&a activity. there is a huge amount of uncertainty as to how most chinese regulators and the u.s., through the city is processed, process wille -- react to larger m&a transactions. alix: where is the easy antitrust road? think you are exactly right, domestic things are where it is mostly domestic or single country, or eu and u.s.. but the eu is getting tougher as well. bob: but people aren't going to shy away. i go back to where i started. technology and globalization is what is driving the bus. that's not changing. if anything, it will continue to accelerate, so companies that just stand still and count on their asset race, they are going out of business day by day, you could argue. alix: does that mean we will see smaller deals that add on, or will it

alix: we heard yesterday from hank paulson in singapore that there was an economic iron curtain comingp between the u.s. and china and they would be fighting for different things. he painted a pretty grim picture. what part of that would be your base case for us to get there? see 20%ink you will tariffs on all chinese imports coming in. it will trim u.s. growth, but not derail the u.s. economy. this idea of an iron curtain or new cold war is brewing. for the chinese side, if they are thinking about 2049 and this dream plan to be the global haveonic power, they will to get gdp per capita in line with korea and taiwan. alix: what will be a win? no more tariffs and we will talk? is that considered a win for trump? is it reducing the deficit with china, caving on intellectual property? timee trade deficit at a where they are the largest buyer of our debt is a difficult discussion, which you want. is a consensus between these two powerful presidents that shows some meeting of the minds in the middle. , theseld is saying, wow powers could be at odds with each other. sides, on both intellectu

federal reserve for nokia, hank paulson wok until the present of the united states by 5:00 this afternoon by close of business. we need $1 trillion cash and solution. if we don't get it, the american financial system will implode and 72 hours in three days after that and we will have global anarchy and chaos. the greatest enemies of the united states, mussolini, hitler, the soviet union, al qaeda, osama bin laden. nobody has ever brought the united states to its knees like bad day. who did that? who's responsible for that? the populace donald trump? no, the elites. the financial, the corporate, the permanent political class that runs washington d.c., that is who did it. what was their solution? to. create money and build themselves out. on the day that happened, the ballot should federal reserve was $808 billion. when donald trump took the oath of office january 20, 2017, it was $4.5 trillion. just like the bank of tokyo, european central bank party at dallas, the elite felt themselves out. the biggest gap in history you can underwrite a bond in the united states because you'll make up fo

the very stark warning that hank paulson gave this morning about a potential cold war is very concerningmy only experience in shanghai a few weeks ago, a couple of weeks ago would go along with that, in the sense that i think the offended,re deeply wrongly or rightly, by the american action on tariffs. both sides of it have to be dealt with. the chinese and the level playing field, dimwit intellectual property rights. the chinese have established, whether we like it or not, technological leadership at this stage in a number of categories. ate howly underestim powerful and -- i think we underestimate how powerful and strong they are with technology. maybe president trump and president xi will come to some sort of agreement. francine: you will have to come back and talk about brexit. martin, thank you so much for joining us. now, executive chairman of us for capital.let's get to bloomberg first word news . won a: the democrats have majority in the u.s. house for the first time in eight years. have regained control of the u.s. senate as a gop candidates unseated incumbent democrats in india

hank paulson's speech in singapore is one of the best pieces of evidence.the chinese, we are going to take care of mr. trump for you. don't believe this, don't make any concessions. it's all america's fault. they attack president trump. and if they're misleading the chinese, i don't think it's intentional, but the chinese tend to think, okay, we have no problem with trump. we can get away with offering nothing, and that's maybe what they do. charles: what do you make of those people who say, you know, this is sort of -- you know, for instance, you know, china's got a million muslims in concentration camps. if that was a million property stabilities or a million jewish folk, people of the jewish faith, you know, would the goldman sachs, wall street, anybody in this country say, hey, let's be so conciliatory? why do we look the other way on so many things here, but we want to sever relationships with saudi arabia over a horrific, ugly incident, but also understanding we have very few allies in that part of the country? the inconsistencies bother me a lot here