so concerns about supermicro's products, that has emerged.sclosed a couple of years ago that they lost a couple of very high profile customers. one of them was later found to be apple. again, that's been in the public domain. customers asking questions about the reliability of their product. they also had high level departures in recent months. they've had questions about revenue recognition that resulted in them being d- listed from the nasdaq just in august. there have been these questions resolving their accounting, questions around personnel moves, questions around the reliability of their products, again, raised when apple dropped and another customer dropped them as a provider, so this stuff has been at a time when their sales have been rising, there has been demand for their product, there has been concerned about them as a company and their share price had been declining even before our story went out. emily: a lot going on behind the scenes. i know we're continuing to pull the string here. tom giles, our executive editor of bloomberg

supermicro again is the company at the heart.esearcher said supermicro was a victim here and it is not the only one used as a conduit, so we are pursuing all those angles. emily: supermicro continues to deny even this latest story, saying the security of our customers and integrity of our products are core to our business and company values. we take sure to secure our products and supply chain security is an important topic of discussion for our industry. we have no knowledge of unauthorized components. you have apple and amazon continuing to deny the original story. you have u.s. and u.k. government officials weighing in and saying there is no reason to doubt the company's denial. how do we square that? tom: companies have talked about their involvement. they said we didn't discover these chips in our networks. we had to weigh that against what we have been told by unknown sources. emily: 17 sources. tom: he is not talking directly about amazon and apple, to be clear. they have stuck to their denials. they are detailed and we ta

and supermicro is once again the company at the heart. researcher said supermicro is a victim and they are not the only one that is used as a conduit. we are pursuing all of those angles. supermicro continues to deny even the latest story saying the security of our customers and integrity of our products are core to the business and company values. we take care to secure the products and supply chain security is an important topic of destruction -- topic of discussion. you found apple and amazon denying the original story, usn u.k. government officials saying there is no reason to doubt the company's denial. tom: the companies have talked about their involvement and they said we did not discover these chips in our networks. we have had to wait at against what we been told by a multitude of sources. emily: 17 unnamed sources and now an 18th named. apple have stuck to their denials and we take them very seriously. out and said it is possible that they do not have oversight over those agencies that are involved in the investigation we talked

- supermicro assembled motherboards. think about this as an infection hardcoded into your computer. you cannot get rid of it without throwing the machine away. a very powerful attack. very few countries would have this capability. what has alarmed u.s. officials is that china's control over manufacturers of -- manufacturing of computer hardware makes this possible. emily: steve, what do you make of this? we recognize a hardware-based implant would be one of the most powerful ways for a nationstate to spy on a data center infrastructure. required ismately that there is a chain of trust. applications need to trust the underlying operating system or cloud software, and that software has to trust the underlying hardware. if you are able to tamper with the hardware, you are able to have access to all of the other things that sit on top of it and would provide tremendous insight and data to an adversary. iily: given the seriousness, want to read the responses of the companies in full. amazon said it is untrue that aws to about

in 2014, the obama administration became aware of this problem with the supermicro servers. and they didn't know what to do because they said you know, it is a private company. we cannot go public with this and destroy a private company. this is the fundamental problem, the mismatch of systems. the chinese can exploit their businesses further geopolitical game, whereas in the u.s., a free market, we cannot. we have to figure out how to solve this. erik: another question -- you have got up against many large companies that have challenged your assertions and your forensic work. apple, amazon, supermicro, the chinese government all full throated lee denies -- all oatedly denies our reporting. what do you say to that? welcome to my world. bloomberg wrote there were 17 sources, so none of them were named. i'm going to assume you guys did your reporting well and assuming you did. that is pretty significant. obviously, supermicro, the reason we have been short has been the accounting story, but there has been a real problem with its business, with revenue. they announced they lost

supermicro has servers in so many countries and government agencies. rep.: unless they find some miraculous way to check all of this and make sure it is safe, they are going to have to. i believe it is going to take some time, but at some point in time, we will have to recognize that threat and find a way to move the supply chains elsewhere , at least with allies we trust and partners we can work with. emily: meantime, an update on the russia investigation. there are 54 transcripts being scrubbed of classified information. when do you expect those transcripts to be released to the public? rep. quigley: most of those should have been released already. the fact of the matter is the vast majority involve only unclassified material. we attempted on the democratic side to get those released immediately and we were met with opposition. the rest of it will be scrubbed by the intel community and we are fine with that. the fact of the matter is we asked this information be released half a year ago. on the last day that we were in ofssion, in that all the kavanaugh h

you were too -- s mentioned this -- the strong denials from the amazons and the apples, even the supermicro? >> apple and amazo are known for being farrell guarded when it comes to public comments and theact that they came out with an official statement that they broke down and dissected the story definitelyaused me to, you know, take a close are look or closer look at the story. it's important that apple kind ofd hed and did say they did t find anything wrong wi their servers. the story didn't say that. they never mentioned apple t discoverin chiep that other parties like amazon -- and it's important to note that amazon cut ties with supermicro. maybe they know more than ty are leadi on. appit's unusual that both and amazon came out so strongly against the article. >> so maybe the truth is somewhee in the mid there. and if it is, do the tech companieo have rethink whether or not they produce some of their products in china? >> i mean, whether or not this is -- thiis valid, i think all the companies are looking up and down the supply chain, really seeing if there are any issues. you know, t

supermicro said we remain unaware of any such investigation.n the meantime, the chinese government is not directly addressing questions of manipulation of supermicro servers, issuing a statement reading in part "supply chain , safety in cyberspace is an issue of common concern. china is also a victim." jordan, what is your response to these companies pushing back so hard? jordan: the story speaks for itself. the constellation of sources that we gathered from the story, again, it encompasses senior-level officials across the government and senior individuals inside both the named affected companies. i cannot speculate, that is not my position, on why they might deny these allegations but i want to clarify where i did speculate on the why the companies would deny this. that's not really my place. i can say the sourcing is brought in robust. multiple levels of corroboration between individuals and companies and the government. and the story included the companies' denials in full, which is our typical policy for transparency purposes. emily: the e

this supermicro company is a u.s. company but they do manufacture in china especially when it comes to their core product motherboards. tol us how china was able weaponize its manufacture supply chain. >> our sources tell us that it has subcontractors in china that build these motherboards. a unit of the chinese army was able to get chips at the start of the supply chain and they made their way into the united states. this is a scoop of bloomberg viewers, and explosive story. it may change has supply chains look. it may means that no chipmakers will locate in china in the future. the writers knew that it was a big story. they spent over a year working on it. with over a hundred and gott people confirmation of hardware manipulation from 17 sources. >> we appreciate your time today. for more on the super microchip hack we welcome dave merkel. in terms of the fact that the it will beed, unsurprising, the sheer scale of it are you surprised that? i think we are going to work on his audio. we will take a quick break. more

supermicro is based in the u.s. with a large santa fe headquarters.nufactured in china, and that is where the attack occurred. some details we found fascinating about what that process look like. it's not like you go to the ceo and say we will plant malicious chips on your motherboard. this was a highly targeted, highly sophisticated chinese government operation. it is not easy. tom: jordan robertson thank you very much. they will go to the emotion of this article. idea it up right now, the of the yangtze river. it is akin to throwing a stick assuringze river and it washes ashore in seattle. spies appear to have found a perfect conduit. has been way out cyber.eporting on this will jump the conversation. what will the likes of mark warner do? there could be congressional hearings. vice president mike pence is set to deliver an address in terms of hacking. coupled with our excellent reporting of business week and now the midterm election 30 days , the administration looking to pounce and move the conversation away from russia and onto china. what the vi

report -- --ple report that supermicro assembled the servers.using market bloomberg data shows the kleins of that magnitude -- declines of the magnitude have proceeded the last four downturns in hong kong home prices. general electric's new ceo will receive more than $21 million in annual compensation and could pick up shares worth more than 100 millions but only if you reverses the slump. he will get 2.5 million and for a and is eligible three and three quarter million dollar bonus. awards are dependent on performance. 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. for a three and three>> global news 2n air and @tictoc on twitter powered by journalists and analysts in 120 countries. this is bloomberg. >> thank you. let's look at our asian markets. not a happy friday. >> not a happy friday. asian stocks extending losses. tech shares beginning to drop. samsung gaining ground. 1.5% after profit topped estimates. kospi. helping boost the checking in on the

- supermicro assembled motherboards.hat a malicious microchips is, think about this as an infection hardcoded into your computer. you cannot get rid of it without throwing the machine away. a very powerful attack. very few countries would have this capability. what has alarmed u.s. officials is that china's control over the manufacturer of computer hardware makes this possible. steve, you have had a lot of oversight over the supply chain over the years. what do you make of this? steve: we recognize a hardware-based implant would be one of the most powerful ways for a nationstate to spy on a data center infrastructure. what is ultimately required is that there is a chain of trust. applications need to trust the underlying operating system or cloud software, and that software has to trust the underlying hardware. if you are able to tamper with the hardware, you are able to have access to all of the other things that sit on top of it and would provide tremendous insight and data to an adversary. emily: given the seriousness

supermicro has denied the knowledge and -- >>> amazon is shopping for a spot to open a new store.s filed paperwork to put up signage for an amazon go store in the financial district. there is new information from paul chambers. >> reporter: it would be perfect if you're someone like me who hates to wait in line. this could be the site of the first amazon go. if you want to shop. we only need an amazon account, cell phone and the mobile app. you going to the store, grab what you need and walkout. erlines.>> reporter: amazon go could be the future of shopping at convenience stores. this video shows how you use the stores app, grab what you need and walkout. there is very little action which is appealing to some. >> you can walk in and grab things and get out. >> it is convenient. you had to stand in line or count money. >> it will shut down local businesses. >> reporter: it offers ready-to- eat items for people to grab and go. camera >>> what you plan to buy. there are five in the country. twee in seattle and one could soon be here in the financial district at the corner of californ

we moved to new evidence of the supermicro hardware in the network of a major telecommunications companythat was back in august according to a security export -- expert working for the company. anna: the china hack story lives on. donald trump says he is considering goldman's dina powell to replace nikki haley. amazon web services, the cloud computing division, has signed combined $1rth a million. also on the bloomberg terminal, uber is sending out investors on a bond sale after it attacked the leverage loan market. you can find those stories and more across all of our platforms from tictoc to the website to the terminal. manus: we are global. let's talk about the oil market. it is trading at the moment on brent we are at nearly $85. wti at almost $75. there are concerns the united states may exacerbate the supply crunch. production down in the gulf of mexico by 40%. higher prices could put the world economy at risk. who better to divine the oil market? it is michael tan, oil and gas commodities strategist. great to have you on the set in london. heard the oil markets are entering a red

melissa: supermicro mother board sounds like an oxymoron like jumbo shrimp but what do i know.hank you, hillary. >> china uses debt diplomacy to expand its influence. today that country is offering hundreds of billions of dollars of infrastructure loans to governments from asia, to africa, to europe, even latin america. yet the terms of those loans are opaque at best. and the benefits invariably flow overwhelmingly to beijing. david: vice president mike pence describing an insidious tactic that he alleges the chinese are using to squeeze everything they can out of nations that can least afford it. for more, we go to marc lotter, former press secretary to vice president mike pence. this is almost like the aliens in "independence day," they stop in one place and squeeze everything they can out of it like lock cuts and move on to another place. is that what the vice president saying it? >> basically. too many people think of our disputes with china as relates to trade, manufacturing, cheap products, things like that, but what we have to identify is the level that china is trying t

they were designed by supermicro but the alleged breaches happened at factories in china.litary operatives allegedly gained access with threats of government inspections. the hardware was used in tens of thousands of machines all over the world including u.s. military servers and data centers of dozens of companies. sources told bloomberg when the droids are switched on the spy chip alters the court to accept modifications like not requiring passwords. the chip could also contact other tainted hardware in search of further instructions. apple denied this, also denied working with the feds. saying we are deeply disappointed that in your dealings with us the reporters have not been open to the possibility that they or their sources might be wrong. amazon released a statement saying -- denying they found modified or malicious hardware in motherboard saying "there are so many inaccuracies in his article as it relates to amazon that they are hard to count." in a press release refuse claims, the company said they have never been contacted by any government agencies and strongly

david: it was interesting to me apple, and, supermicro came up with very specific, very emphatic denials. that is not typical. jimmy: it's not. it is a big story. date is a big and unusual incident we are reporting on. we feel as though it rests on more than a year reporting, more than a hundred people, and that led to 17 who confirmed hardware manipulation. david: some of the sourcing was from inside apple, inside amazon, as well as inside the u.s. government. jimmy: that's correct. david: so we have senior-level people telling us this. jimmy: that's right. david: what is going on in the markets? emma: everything is lower, red across the scene -- the screen. the tech heavy nasdaq getting killed. the s&p 500 down a percentage point. every asset is in the red. just financials and utilities squeaking into the green. one of the biggest losing sector, the biggest is tech. some of the biggest losers within that are the tip stocks. every single one of the 30 members are in the red, icron.ing amd, ma this came from a note from deutsche bank who cut estimates. investors are concerned about the d

reporter: this does not affect every company that has used supermicro before.ccording to that our sources, almost 30 companies were impacted. a small fraction of the bigger number. this does expose this vulnerability that can affect so many different industries in a place that no one has been looking before. what can we do about this? the story explains, there are not a lot of great commercial options for doing this. x-ray machines where you're looking for a chip the size of a grain of rice, most companies are not going to be able to do that. it turns to if there is a network solution. i imagine that bloomberg and other outlets will continue to mom -- monitor this story. host 1: this comes at an interesting time. and-china negotiations trade going to the next level. reporter: the trump administration has talked a lot about china and how tariffs have been directed toward computers and networking. what this is about, it explains some of the bigger backdrop. it has not been disclosed to the public. that is why we decided to publish. host 2: while we have you, we h

made by a company called supermicro computer.placed to do this. their brew well-placed, that's right. this year—long investigation, a p pa re ntly right. this year—long investigation, apparently hugely well sourced. it seems this alleged attack is giving beijing access to 30 large companies and all those federal agencies you mentioned. however, the likes of amazon and apple are vehemently denying this, saying there is no evidence for this but you might say they would say that because if true it's a huge compromising of the supply chain. of the global supply chain. what's interesting is bloomberg said the denials had been countered by testimony from six current and former national security officers as well as insiders at both apple and amazon, who have details of the investigation and its aftermath. they'll have to bring them out. donald trump could declassify this with the stroke of a pen or a tweet. if so it could be deeply embarrassing because it could bea deeply embarrassing because it could be a wholesale compromising of thei

supermicro, amazon, and apple have all disputed our stories, and those denials are accounted by current and former security officials who detailed the discovery of the chip for this story. more reaction to the revelations next. a chinese strategist joining us. shery: also find out how foreign businesses can prosper in china despite these ongoing trade tensions. the brazilian currency raising losses as markets speculate on the upcoming elections. we will be live in sao paulo later. this is bloomberg. ♪ haidi: welcome back. our next guest says current china tensions are not down to trade deficit, but go down far deeper. studying the relationship between the economic giants is becoming ever more difficult. he is a longtime advisor to the chinese government and the author of "how china leaders think." thank you so much for your time. some people say this could be the new cold war. are in the unhappy world of self-fulfilling prophecy, where the reaction to a perceived threat on the other side creates reactions that make the perceived threat more from theoretical to reality. in the u.s., the

supermicro is denying the claims the company's shares tumbled in trading closing out on a 52 week low amazon and apple stock sold off on the news and the news drove the tech stocks lie were. fremont police about a missing autistic teenager who left mission san jose high school at 2:50 pm and has not been seen since they believe he may still be in the area or possibly gotten off the campus >>> they are accusing racial bias. julie watts took a closer look at the lawsuit which is connected to police activity back in 2013. >> reporter: it stemmed between 2013 and 2015 where they partnered with the da and now they say they were doing what they were told. >> in san francisco, drug deals, overdoses and arrests our daily occurrence this videos from a ride along with tenderloin division please a group known for their active twitter feed promoting drug arrests but today it's the focus of a lawsuit by the aclu a gene racial -- alleging racial discriminatory practices. >> the lawsuit notes all 37 of the people arrested were black even though people of all races commonly sold drugs in the tenderlo

telco is said to have found manipulating hardware from supermicro in its network in august, fresh evidence of alleged chinese tampering. evidence was provided after a bloomberg businessweek report said chinese spies planted malicious chips in supermicro server motherboards. that the chips were implanted. the head of germany's industrial federation is warning that brexit without a deal would be a disaster for both britain and the european union. he says negotiators should focus on finding a compromise as soon as possible. a deal needs to be agreed within weeks if the european and british parliament's are going to have time to approve it before the split. >> europe must prevent a worst-case scenario, a separation of the united kingdom from the european union without clarification is still possible. situationworrying ahead of the possible summit. this would be a disaster if it happened on march 29. about winds gusting at 129 miles per hour in -- and what is described as a life-threatening sea surge. gulf oil production has been cut by 40%. hurricane florence hit north carolina last month, kil

bloomberg businessweek said the servers had been an filtrated from supermicro.s chips. laterrbus board will meet monday to name a new ceo. the head of commercial aircraft is to succeed the outgoing person, having long been seen as the heir apparent. he will leave in december and step down after the agm next april. this man held positions in the helicopter deficient before joining where he led r&d. a chinese -- this man is to -- e after a company he told the board he is not looking to extend his current appointment although it is not clear why he is leaving. thateparture follows news someone else is stepping down in the biggest overhaul in a decade. yvonne: to events we are watching. seems like the imf and world bank meeting in bali that is kicking off, rishaad will be there along with has. the royal bank imf, global growth forecast coming out tuesday. they talked about how we are seeing drizzles on the global economy but certainly synchronized growth seeing cracks. david: is the world worth saving? we will have a look at that. friday will be very busy across the

joel: this is not something that affects every company that has used supermicro before. in 2015, they had 900 customers. we are saying that according to our sources, almost 30 companies were impacted. that is a small fraction of the bigger number. but it does expose this vulnerability that can affect so many different industries in a place that no one has been looking before. the question becomes -- what can we do about this? as the story explains, there are not a lot of great commercial options for doing this. x-ray machines where you're looking for a chip the size of a grain of rice, most companies are not going to be able to do that. it turns to, is there a network solution. i imagine that bloomberg and other outlets will continue to monitor this story. carol: this comes at an interesting time. we are starting to talk about u.s.-china trade negotiations going to the next level, and i am curious about security and ip protection. joel: the trump administration has talked a lot will about china and the tariffs have been directed toward computers will and networking that

supermicro said we remain unaware of any such investigation. in the meantime, the chinese government is not directly addressing questions of manipulation issuing a statement reading in part "supply chain safety in cyberspace is an issue of common concern. china is also a victim." jordan, what is your response to these companies pushing back so hard? jordan: the story speaks for itself. the constellation of sources that we gathered from the story, again, it encompasses senior-level officials across the government and senior individuals inside both the named affected companies. i cannot speculate, that is not my position, on why they might deny these allegations but i want to clarify where i did speculate on the why the companies would deny this. i can say the sourcing is broad and robust. multiple levels of corroboration between individuals and companies and the government. the story included the companies denials in full. which is our typical policy for transparency purposes. emily: the extent of the data collected is unclear. steve, how diffic

but as a result if you look at supermicro the company itself that makes the computers, their share pricetails indeed of what that story is all about. you may not have heard of him yet, but byju raveendran is the founder of one of the world's most valuable educational technology start—ups. it's called byju's — and investors include the chan—zuckerberg initiative — a philanthropic outfit set up by the boss of facebook. sameer hashmi, has been speaking to the man behind the start up. it's the app that is taking india by storm. byju's provides lessons to schoolchildren as well as young adults preparing for university entrance exams. the app today has another 5 million users out of which wa nted another 5 million users out of which wanted a half are paid customers. it's the brainchild of this man man. it's the brainchild of this man man. it's very important that he goes on with this fun little change of how stu d e nts with this fun little change of how students learn so that they're ready for the future. reverse entry the reds are not the one who cannot read and write. they‘ re reds are not

lenovo says supermicro is not a supplier.pean tech at the we are just over 30 minutes away from the european equity market open. euro stoxx 50 futures pretty much flat. this is bloomberg. ♪ >> welcome to bloomberg markets, the european open. we are live from the city of london. i'm anna edwards. the cash trade is less than 30 minutes away. lenovo leads the selloff in asian tech shares following bloomberg's report on hacking. samsung beats. which team will drive european tech? yields on the 10 year have a

talk about supermicro. is a u.s.supermicro company which uses contractors in china.ors were the target. they outsourced stuff in 2014 and 2015, that is where the compromise the place. place. this is a unit that had never been reported on within the pla that specializes in this. david: armed forces? reporter: chinese military, this is a unit of spies, the ship we are talking about here -- the chip we are talking about, there is a lot going on in a motherboard. a lot of people have never seen these. as small as a grain of rice in some places, sometimes smaller. there are different versions of this attack that relied on a tiny chip being able to become a gateway into a network. alix: joel webber, thank you. a great story. we will be following that throughout the next hour. strategistglobal joining us with a take on the bond selloff and ramifications. selloff after the futures week yesterday, not dramatic considering yields are at highest level since 2011. 3.22% on the 10 year. dollar not benefiting as much from that climb. this is bloomberg. ♪ i'm all about my bed. this

given the chip hack of supermicro. the intellectual property of some of the social media technology companies which we have seen with facebook this maybe not positive as well as than that president had a go at the fed. that is not something you want to see as an investor in the u.s. markets. >> what does it mean for emerging markets if the u.s. is having this situation? the asian currencies are weaker for the most part but all of the other currencies are stronger versus the u.s. dollar. a emerging markets are beneficiary today because part of this selloff was a pullback in the dollar after the comments by trump regarding the fed. the key beneficiary of that would be some of our bigger emerging markets laggards in the last couple of months. that would be the rand, the lira, and with the dollar on the back foot and not necessarily anything new. that will amounts to a bit of a bounce today. the resthe fact that of the stock complex is not looking so great. >> we have seen a rotation out of growth and out of momentum and i

supermicro and amazon denied bad chips were planted. is warning brexit without a -- would be a disaster. negotiators should focus on finding a compromise as soon as possible. the deal needs to be agreed to within weeks if the parliaments are to have time to approve it before the split. >> europe must prevent a worst-case scenario. the separation of the united kingdom from the european union without an agreement on accident transition and clarification and the future relations is still possible. situation, arying few days ahead of the crucial eu summit. it would be a disaster if this happened on march 29. >> the new report says banks in hong kong are cutting property marketons as the housing weakens, and that threatens to trigger a downward spiral and prices. lower valuations mean less lending. new measures are aimed at countering the crisis in the city that is the least affordable in the world. hurricane michael is intensifying as it barrels toward florida with winds gusting toward 175 kilometers per hour. urgednts are being to seek she

telco is said to have found manipulator hardware from supermicro in its network in august. fresh evidence of alleged chinese tampering in key tech components bound for america. evidence was provided after a bloomberg businessweek report said malicious chips were planted in motherboards. deny that and amazon chips were implanted. the head of germany's industrial theration is warning that brexit deal would be a disaster for broke britain and the european union. should negotiations focus on finding a compromise as soon as possible. a deal needs to be agreed within a week if european and british parliaments would have time to approve it before the split. >> europe must prevent a worst-case scenario, separation of the united kingdom from the european union without an agreement on exit and transition and without clarification of the future relations is still possible. situation, arying few days ahead of the actual crucial summit. a new report says banks in hong kong are cutting property valuations as the housing market weakens and that threatens to trigger a downward spiral of pr

hard work, test hardware, supermicro is far from the only computer i.t.s its equipment in china. vonnie: jordan robertson, thank you for that. let's check in on the s&p 500. the index is lower by 8/10 of 1%. estee lauder and ralph lauren among companies dropping at least 4% in the s&p today. "balance of power" is next. ♪ ♪ david: from new york, i am david westin. welcome to "balance of power." china chipe on the pack that infiltrated u.s. andnesses, judge kavanaugh, the meeting of oil ministers. anna, let's go to you first and talk about judge kavanaugh. the senate is moving quickly on this. mitch mcconnell is determined to get this done by the end of the week. senators are looking at the report today. republicans say there are no corroborating evidence against judge kavanaugh. democrats are concerned that it was not a thorough investigation. it side has retreated to their different partisan quarters. we will

what i think is going on is, lots of companies who buy supermicro products are looking for those manipulationsr thatcts, and it is likely we are going to find that and see a different kind of response. vonnie: read the story on bloomberg. our thanks to michael o'rielly. right now, indices are flat on the day. this is bloomberg. ♪ comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. ♪ live from new york, i am vonnie quinn. guy: and i am guy johnson. this is "bloomberg markets." let's update everyone with the markets. in italy, we have seen asset prices coming under pressure. the banks are trading lower today on political noise coming out of brussels. more political noise coming out of milan and rom

the company that some of the servers, supermicro. >> u.s. authorities and major manufacturers discovered discoveredan if -- hardware manipulation. think of this as a permanent infection. every time the server boots up, it is shot to the heart of the system, creating a stealth backdoor into the system. we reported today that amazon and apple were to of as many as 30 companies that discovered these chips. the significance for u.s. officials was that this was a leap forward for china in terms of their ability to manipulate hardware bound for u.s. companies. the selloff in global bonds is setting off shockwaves into other industries. breaking through a 3.2%, the first time in seven years. the fed chair adding to the pressure after he said the central bank could boost benchmarks past the initial rate. has sparked a significant selloff around the world. how much do you think this is laid bare? >> there was follow-through after his comments. we saw a lot of movement yesterday, 10 basis points because of the strong economic data and we reached key t

so has supermicro, the company that assembled the servers. >> u.s. authorities and major american companies discovered hardware manipulations involving a major assembler of circuit boards. what that means is, think of this as a permanent infection of a motherboard. every time the server boots up, that malware is shot to the heart of the system, creating a stealth backdoor into any of the protective systems. we reported today that amazon and apple were two of as many as 30 companies that discovered these chips. the significance for u.s. officials was that this was a leap forward for china in terms of china's ability to manipulate hardware bound for u.s. companies. caroline: the selloff in global bonds is sending shockwaves into other asset classes. breaking through a 3.2% for the first time in seven years. meanwhile, the fed chair adding to the pressure after he said the central bank could boost benchmarks past the all-important neutral rate. this has sparked a significant selloff around the world. how much do you think this is laid bare? >> there was

nearly 7,000 supermicro servers are in apple's network. that before the company discovered the added chips. joining us tonight a man who is very in tune with the economic issues in every hemisphere. congressman louie gohmert. a member of the house judiciary committee. the republican study committee, the house freedom caucus. congressman, it's great as always to see you. the pence china speech, i happen to think is extraordinarily important. and for most americans it seems to me revelatory. what do you think? >> i think you are exactly right. it's been amazing to me to hear some of the pseudo-media, the alt-left media. sometimes people call it the "main stream." it's alt-left. they have been demeaning vice president pence for a good speech, an important speech. and sending message to the chinese. and don't forget, lou, that it's not only the trade but it's also what vice president was pointing out. it was the chinese that we know is -- i thought it would be the blockbuster report after i questioned peter strozk about it. but they hacked hil

cnet no time past or present have we ever found any other issues relating to modify hardware in supermicros in any elemental or amazon distance. the company at the center of this has also said that this reporting is not true. they said they have not been contacted by any government agency and are not aware of any investigation. so all of this adding to questions surrounding mr. porter. elizabeth: heckuva story. thank you for covering. appreciate it. look at these aerial photos showing a u.s. navy ship within seconds of collating in the south china sea after china had challenged the u.s. vessel. in his worst the u.s. to perform a radical maneuver to avoid a crash. u.s. navy now proposing not in the pacific in november and the south china sea is one of the busiest and most militarized shipping groups in the world. vice president michael pence firing off a strong criticism of china and portraying china as the foremost threat to the u.s. >> china is meddling in america's democracy. as president trump said last week, we have in his words found that china has been attempting to interfere in our