carol: ray dalio has some thoughts on tomorrow's threat.his is "bloomberg businessweek." ♪ jason: welcome back. carol: you can listen to us on york,on sirius xm, in new boston, washington, d.c. -- areason: and in the bay and in london. carol: 10 years ago this week, lehman brothers collapsed. jason: one of the big questions everyone is asking -- are we better equipped to deal with the inevitable next crisis? if there is a crisis, and inevitably there will be another one. you can do everything you can to prevent them, but they are going to break out. what then? the apparatus to stop a crisis once it inevitably starts? my concerns is that we are less prepared in that department than before. jason: why? peter: partly because of what the crisis engendered. engendered a real anger in the public. the bad guys got let off while the good guys suffer the consequences. >> there was no old testament justice. peter: right. meted oldey had testament justice, people would still be angry. the recession dragged on for so long because the republicans were n

>> i may have a somewhat more optimistic view than ray dalio.e has many billions of dollars more than i do. think it ishat i very hard to get a recession when the real fed funds rate is zero. which it is right now. i think frankly that there is a good chance the cycle will last quite a bit longer. he said we are in the seventh-inning and i think there is a more chance we are in the fifth inning. that the cycle could last quite a bit longer. that has a lot to do with the potential supply-side impact of the tax cuts, which i think a lot of people are viewing the tax cuts as a one-shot deal. there is a chance, i think, if the corporate tax cuts are used for capital spending, you could have a much more longer cycle that people are anticipating. vonnie: will they be -- it feels like if there is uncertainty about trade, do we get corporate spending and for how much longer? >> there was a san francisco paper that was just released on this topic. a good portion of the cash flow has gone to share repurchases. about one of the things that was it -- but on

carol: ray dalio has some thoughts on tomorrow's threat.is "bloomberg businessweek." ♪ jason: welcome back. carol: you can listen to us on radio on sirius xm, in new york, boston, washington, d.c. -- >> jason: and in the bay area and in london. carol: 10 years ago this week, lehman brothers collapsed. triggering the worst financial crisis in about a century. jason: one of the big questions everyone is asking -- are we better equipped to deal with the inevitable next crisis? carroll: peter coy read through a lot of research. here's what he found. >> if there is a crisis, and inevitably there will be another one. you can do everything you can to prevent them, but they are going to break out. what then? the focus of the story is on the what to then part. to stopve the apparatus a crisis once and inevitably starts. a littlen is we are bit less prepared in that department than we were before. jason: why? peter: partly because of what the crisis engendered. what it engendered is a real anger in the public. out whatuys got bailed a good guys, the

we have ray dalio on this morning. >> again, not benefiting "squawk box. >> he's not intentionally --> you do breakfast with buffett at 11:00 >> it was lunch. yeah >> none of this gets cleared with me before where were they at 8:00? >> unavailable washing their hair >> hank, ben -- that's a lie that's a lie tim maybe. okay let's talk about the broader markets. joining us for that is ed keon portfolio manager at qma, and david bondeson from hightowers bondeson group you are good as good as we got in terms of people just not overtly bullish. neither one of you i would say are buy with both hands bullish. you have some weird phrase called bearly bullish, b-e-a-r so tell us about this. >> there's a time coming for a shift in leadership, and what has been the leader, this high-te high-tech, new tech, cool tech stuff is due to cool down. my thesis is not so much about the next month or two but going forward. i think the cultural and political forces at play with the f.a.n.g. stocks are very likely to suppress valuation >> if you look at the leadership of what we've seen in the last year or

we have been speaking with ray dalio. chatzker is discussing the extraordinary response from policymakers to the financial crisis. ray: i think it is broader than that and will end up being broader than that. i don't think it is large enough to be a major problem, but i do know that it will grow. question, i dour know that the regulations don't withde the freedom to deal those things as well erik:. the regulations we have today -- as well. erik: the regulations we have today. ray: right. the laws are written in such a precise way for things that don't have yet -- are unknown. be ank that there should act incy economic powers which the president -- if the president of the united states, the head of the federal reserve and probably the representatives of two houses of congress all agree that the circumstances are not properly anticipated in the law, that they could with agreement to do the things that are necessary. i think that is a big risk. when i look at countries like china and the debt issues that they will have, i am

a new warning from investing legend ray dalio what the bridgewater boss said about the markets that every investor needs to know and the short story, investor john fichthorn and how far they could fall >> we are joined by joe terranova, stephanie link, jim lebenthal, and one of barron and forbes' top advisers the key to our stocks overall will go in the weeks ago out in california, all this as ubs takes the price target to 250. jim lebenthal, sure seems apple is the key to the market >> i think it's going to go higher let's just call it as easily as that it will go higher. a lot of reasons for it. i think the biggest one is you're coming into the holiday season it's been a good economy, job growth is good, wage gains are picking up people can afford to buy these much higher priced iphones than two years ago, and they are much higher priced. the key is the average selling price. >> four-day losing streak, looks to be about to end today stocks at the high of the day, the market is at the highs of the day. >> we've had the refreshing pause and here we go the tariff issue was nothing >> you o

earlier this week, i spoke with ray dalio. about shadow banking as the potential catalyst for the next financial crisis and he worries that policy makers may not have authority to cope with it. here is what he told me. ray: i do know the regulations do not provide the freedom to deal with those things well. erik: the regulations we have today? : right, because we are trying to write the laws in such a precise way for some things that are unknown. i think there should be an -- economicwer powers act in which if the president of united states, the head of the federal reserve, and representatives of two houses of congress all agree that the circumstances are not properly anticipated in the law could, with agreements, have special powers to do the things that are necessary. i think that is a big risk. when i look at countries, countries like china, and the debt issues that they will have a miami less worried because their debt is denominated in their currency and they have the flexibility to do the things that are necessary. in th

earlier this week a spoke with bridgewater associates founder ray dalio.ncerns about shadow banking as a potential catalyst for the next financial crisis. and worry that policy makers may not have enough authority to cope with it. here is what he told me. >> i do know the regulations don't provide the freedom to deal with those things well. >> the regulations that we have today. >> because we are trying to write the laws in such a precise way for some things that don't have -- that are unknown. i think there should be and bank an emergency economic powers act in which the president, the head of the federal reserve and probably the representatives of two houses of congress all agree that the circumstances are not properly anticipated in the law, that they could with agreement have special powers to do the things that are necessary. i think that's a big risk. when i look at countries like china and i look at the debt issues they will have, i am much less worried because their debt is denominated in their own currency and they have the flexibility to do the t

earlier this week, i spoke with ray dalio. shadow banking as a potential catalyst for the next financial crisis, and he worries that policy makers may not have enough already to cope with it. here's what he told me. ♪ i do know that the regulations don't provide the freedom to deal with those things well. >> the regulations that we have today? >> right. because we are trying to write waylaws in such a precise for some things that are unknown. i think -- ideally i inc. there should be an emergency powers act in which if the president of the united states ahead of the and probably the representatives of the two houses of congress all agree that the circumstances are not and the lawicipated could have special powers to do the things that are necessary, i think that is a big risk. when i look at countries like and i look atay, the debt issues that they have, i am much less worried because their debt is denominated in their own currency, and they have the flexibility to do the things that are necessary. in the last turnaround, it w

tuesday, former fed governor dan .arullo ray dalio of bridgewater's coming up.ly looking forward to that. alix: markets, we are waiting, half an hour from the jobs data. s&p futures are down after closing at its lowest level in two weeks yesterday. the euro-dollar was stronger despite softer data out of your. -- europe. seeing a little selling on the margin. a little more on the front end. going to be dictated by any trade conversation today. david: it is time for the morning breeze. coming up this morning, it is going to be u.s. nonfarm payroll for the month of august. president trump may be imposing tariffs on an additional $200 billion on chinese imports. so they come a swedish voters go to the polls where once again population into immigration candidates are challenging to take over the government. for news outside the business world, we go over to seb saleck. seb: president trump got some pressure to not impose $200 billion of tariffs on chinese products. countries largest retailers are pressuring the president to withhold on imposing tariffs. china has vow

erik: it is always great to talk to ray dalio. new book template for understanding big debt crises. to me, the underlying message of this book is that history is doomed to repeat itself. have i got that right? ray: everything happens over and over again for similar cause/effect relationships. erik: that sounds like an awfully depressing reality. does it need to be a depressing reality? ray: it is like any reality. you have to embrace the reality and know how to deal with it. there are debt cycles and debt cycles provide great opportunities and they provide real problems. i think it is just like a progression, a disease. wasreason i wrote the book a compendium of research but i wrote mostly before the financial crisis. it is because i think it is essential for everyone to understand the sequence of events, the logical sequence of events that makes these all the same. there, they in all play out the same. basically in 60 pages, i want to convey that template. erik: let's talk about one of those two types of debt crises, the inflation

jonathan: you touched on something ray dalio talked about earlier this week. do we really face a scenario, a risk-averse scenario where treasuries are the risk-free asset that people bid for in a drawdown in risk assets? do we really face that scenario at some point in the next couple of years? gershon: we've been arguing forever that level matters. how much can we rally starting from 3%? we saw that, we got a couple of years ago to 1.5%, and that could happen in the short-term. it's much harder to see that the long term. but yes, in the short-term, when you have stress, people are going to go to safety. safety is going to be the dollar, safety is going to be treasuries in the u.s. krishna: janet yellen said the fed should prepare themselves for a rerun of zero rate. that tells you how the policymakers are thinking. today, because of fiscal stimulus, everything looks hunky-dory in the u.s. and will probably grow at a rapid clip. but a year from today, two years from today, if that scenario plays out, the fed tightens six times in 2019, expecting u.s. growth to

ray dalio of bridgewater spoke about the markets, cautioning investors to be defensive. >> right now,e defensive, i would then be in a more defensive posture whatever your strategic asset allocation, you know what your strategic mix is i would be less aggressive rather than more aggressive. >> joining us this morning, jeff klein at charles schwab and director of macro at fidelity investments. good to see you. >> good morning. >> jeff, the jolts number we just got, new high on this quit rate ties right into what we got out of nfib today and maybe what yields are telling us. what do you make of this job market how tight can it get and dwindling numbers of available workers? >> well, it's an interesting question hopefully we'll see productivity come back. the real key isn't what level of unemployment but where inflation is relative to unemployment. i've talked about this in the past what we've seen is when the unemployment rate and inflation rate are the same number, that shows an overheating economy and usually precedes a recession, peak in the stock market that was true for each of the

erik: when i sat down this week with ray dalio, founder of bridgewater associates, the world's largestedge fund, we explored a different angle on the aftermath of 2008. i asked if having just lived through a once-in-a-lifetime debt crisis, do we find ourselves in the midst of another bubble? ray: no, i don't think we are in the midst right now of another bubble. let me maybe clarify. when you hit zero interest rates, you have a different kind of debt crisis. you are more likely to have a depression. the period we are in is similar to the 1935, 1940. let me explain that in a minute. 1929 to 1932, we had a debt crisis and interest rates at zero. 2009 we have a debt crisis that hit zero. , in both of those cases, there is one thing for central banks to do and that is print money and buy financial asset. they print money, buy financial assets and puts liquidity in and contributes to a greater wealth gap because though whose -- those who own financial assets benefit. in both periods of time in the wealth gap and the economy not improving for large segment of the population, we have populism

bridgewater associates founder ray dalio says the u.s.s about two years from a downturn, which will see the dollar plunge as the government prints money for a slowing -- he said trump's tax cuts will fade in about 18 months. rising tensions and health care costs will hit the budget. >> i do not think we are in the midst of another bubble. let me clarify. when you hit zero interest rates, you have a different type of debt crisis. you are more likely to have a depression. i think the period we are in is similar to the 1935, 1940 period. >> the bloomberg billionaires index shows the continent's 131 richest people lost $102 billion this year. 4 richest americans gained $130 billion. much pony mae how loss -- lostoups come a comes to almost $19 billion. 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. i am jenna dagenhart. this is bloomberg. shery: we just heard from jenna the difficulties among asia and stock markets. let's get to sophie kamaruddin in h

a new warning from investing legend ray dalio what the bridgewater boss said about the markets that everyestor needs to know

bridgewater's ray dalio speaking on "squawk box" earlier today about where he sees us in the economy. we're where interest rates are being staged maybe we have two more years, i would say, into the cycle. something like that. it won't be the same in terms of the big bang debt crisis it will be a slower growing more constricting sort of debt crisis that i think will have bigger social implications and a bigger international implication. >> well, dalios says president trump's tear ufives are not that big of a deal and that china is probably more concerned about its relationship that he goes on to say that he will keep the economy and stocks moving forward the fed should not raise interest rates faster than the market expects what should investors do for now? >> right now whatever is more defensive i would then be in a more defensive posture whatever your strategic asset aallocation issue is you know what your strategic mix is i would be less aggressive rather than more aggressive. >> as d >> is dalio right? chief market strategist. jeff, chief investment strategist with raymond james. g

i am talking to a lot of real money managers, and also people like ray dalio, who say they are looking for a turned lower in the dollar. despite bullish positioning from hedge funds and speculators, we have real money folks out there saying we the maximum positive story for the dollar is our debased in and we know the fed will gradually tighten rates and if there is any pullback from that, whether we look forward to what the ecb is doing, convergence and global growth, that is a negative signal for the dollar. about some oftalk the comments made at the united nations security council and the idea the president doesn't want china interfering. how much of a rebuke to china was this? is this something we need to be aware of? is this market moving? >> i think it exacerbates the existing tension. say what you want about trump, but he is certainly forthright in his comments. i think we are at an interesting juncture for china in the sense has, you could argue whether it has been in over or implicit tool for china to counter some of the terrorists into -- tariffs in terms of the yuan weakenin

ray dalio, that will be fascinating. let's get the bloomberg business flash right now.or that we go back to hong kong and debra mao. has raised the billion dollars after pricing its u.s. ipo below the bottom of the market range. the chinese electric carmaker atked by tencent sold shares 600 -- $6.26 each. representative did not immediately answer phone calls seeking comment. is u.s. attorney general exploring the potential investigation of social media companies. onf sessions will be briefed september 25 by republicans state attorneys general who are examining practices. a meeting which will include a representative of the doj antitrust division is intended to help sessions decide if there is a federal case to be made against facebook and twitter for violating consumer protections or antitrust laws. itse is expected to unveil biggest and most expensive iphone later today. it is thought to be part of a line up of three new models aimed at widening the products appeal amidst slowing sales growth. the technology giant is expected to release a handset with updates to last y

i'm not talking about a ray dalio who has been bearish on the market for a long time but others think that it's a good time to take some risk off while still being positioned to benefit from the upside. at this point i believe those are in it 100%, have that fear of missing out, and that's really why they're there so dave's very focused on the bets he's making he has been knocked out or has taken some exposure down in the battleground stocks of facebook. >> forgive me for interrupting you, i do want to call your attention, everybody to what's happening with the dow jones industrial average at this very moment you can see stocks have really taken a turn down. granted they're only down 20 points, but it certainly has been a precipitous fall on some headlines that you're looking at the bottom of your screen the president apparently wants $200 billion worth of tariffs on china goods despite the talks. there was some news the other day that the white house, perhaps, was seeking new talks with china we'll have to see how all of that develops. you can see how sensitive that issue remains in

we have ray dalio, mervyn king. you can rewatch all of our shows using tv anytime you want. this is bloomberg. ♪ matt: tomorrow marks the 10th anniversary of the collapse of lehman brothers. we have been speaking with key figures to look back on this historic event. mervyn king discussed risk that still remains in the financial system, and what we still need to do to mitigate the next crisis. >> the banking system is safer than it was then. but it is not safe. there are things we ought to be doing in order to make a run on the banking system less likely. it is debatable whether banks have issued enough capital. >> if you look at the financial landscape -- >> the big lesson was people could see what was happening in the world economy was unsustainable. you could not forecast where the problems would blow up. i do not think it makes sense to say, where will the next crisis the? the right question to ask is, when the next crisis occurs, what are we going to want to do? we will need to lend money to the banking system to keep it afloat. have we put in place a system of regulatio

. >>> still ahead on the closing bell, billionaire ray dalio out with a warning for investors, the market call you need to hear coming up. >>> it has been ten years since the collapse of lehman brothers. we'll ask the ceo of century 21 about how the market has changed and steps being taken and we want to hear from you. you can reach out to the show on twitter, facebook oren sd us an e-mail we are back in a couple. making my dreams a reality takes more than just investment advice. from insurance to savings to retirement, it takes someone with experience and knowledge who can help me build a complete plan. brian, my certified financial planner™ professional, is committed to working in my best interest. i call it my "comfortable future plan," and it's all possible with a cfp® professional. find your certified financial planner™ professional at letsmakeaplan.org. >>> welcome back to the closing bell coming up we'll talk to the analysts who made this call. that's in an exclusive to make his case >>> all right. we have been previewing ten years since the financial crisis a look at banks then an

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