war. david: what can opec do about it? i will put a chart that illustrates what you've been saying. outlook is down, normally that would drive prices up, but now prices coming down. that points out it is the main issue. opec cannot do much about that, can they? kevin: -- helen: absolutely not. saudi arabia has been leading the cuts opec and its allies agreed in terms if the amount they can take off the market. saudi arabia has voluntarily cut much more than a pledge to do. the fact that crude prices in london are around $60 a barrel, well believe the level most opec producers need to balance their budget, there is not a huge amount more they can do. as you mentioned before, prices are reacting to what has been going on in terms of expectations of global economic growth and the slumping equities we have seen recently. this week in particular we've seen a lot of volatile -- a couple of days ago there was a 5% drops in crude prices on both sides of the atlantic. both brent and wti. as you can see, the facts that opec and its allies have been coming together and agree to cut has not had a huge impact on shoring up prices. david: helen, thank you very much. great reporting from london. let's get a kevin cirilli at the white house. we keep hearing from president trump about trade. he will go to war if he wants to. kevin: president trump providing the continued mixed messages with regards to where the u.s.-china trade talks stands. he says he would like to meet with president xi jinping and china would like to get a deal, but that he is willing to continue to move this into the longer-term should the need the. he ultimately said delaying have those $300 million in additional tariffs would help the american consumer. he is facing pressure not just from the left but republicans as well to get to a resolution with china. david: he is talking about the meeting with president xi. are they going to meet in september? kevin: the chinese delegation has said they are still expecting to come in september. seeminglyent also raising the issue of hong kong protest. that potentially signaling he believes there could be some type of leverage point against president xi as domestically president xi tries to do with the hong kong protest. david: a strong response from the chinese when there was the linkage by the president to hong kong. they do not like that one bit. what about the house behind you? are they concerned whether they can put the genie back in the bottle of trade? it may be affecting economies. kevin: exactly. there is speculation among the chattering class around the presence reelection campaign, especially among market jitters over the debate that is held in wall street over another recession. democrats trying to send a new type of messaging, saying it was the obama recovery and the trump recession. you are starting to hear new political battle lines being drawn about the storm clouds brewing over the global economy. david: the trump recession. i heard it here first. kevin cirilli reporting from the white house. now let's find out what is going on in the markets today. here is abigail doolittle. we are ending on an up note. major averages all higher 1% or more. off the highs, but the gains we've seen on the day, the second day of a rebound rally from wednesday's big selloff. it is the best day since tuesday. the gains of tuesday were greater. monday was a down day. investors concerned about all of the macro factors setting stocks higher and lower. today for a third week in a row we are down, but we are looking at these gains and that is especially true for stock outperformance, up more than 2%. let's take a look at big movers for the stocks. 5.7% after they put up a much better fiscal second-quarter than expected. them --t both taught both top and bottom line estimates. investors encouraged by that. the stock is still closer to its 52-week low then highs. expectations have been pretty low. helping other company that upgraded.intel investors seemed to like that, sending those shares higher. we are looking at losses in the month of august. we are down three weeks in a row. before we look those losses, i would like to make the point the s&p 500 is still up 50% on the year. -- 15% on the year. ahead of the big volatility in may we were looking up weeks, that is when the s&p 500 created most of his days. four down weeks in a row, and then into june and july higher after the fed meeting. volatility now down three weeks in a row. emerging markets down four weeks in a row. that is further out other is continuing telling you there could be more pressure on stocks. in the green for stocks. seeing haven assets verse lower. this is something we've not seen in quite some time. the 30 year yield higher. the transportation index is up 2%. that is one of the leading index , or used to be considered a leading index. the transportation index outperforming and then gold futures -- not a lot of beer today as investors -- not a lot of beer today -- not a lot of fear today. david: the 30 year over two. can you believe we are excited about that? ahead, the bond market is worried about trouble. what did that mean for trump's reelection campaign? we asked local panel. this -- we asked our political panel. this is bloomberg. ♪ david: this is "balance of power" on bloomberg television. we turn out to first word news. , the democratic congresswoman barth by israel because of her support the boycott, said she does not plan to accept the country's new offer to let her visit her grandmother in the west bank. the michigan lawmaker said on twitter, "silencing me and tweeting -- and treating me like a criminal is not what she wants for me. it is like killing a piece of me." israel said it would allow the visit after refusing admission to elon omar of minnesota. -- plans to sell f-16 fighters to taiwan. it is a move to escalate high tensions with china. u.s. officials and congressional had say the administration not formally notified lawmakers of the sale. the f-16 deal would behind the controversial because china fiercely opposes sales to taiwan , which it regards as a renegade province. the russian pilot who managed to smoothly land his disabled plane in a cornfield says and quick landing was his only chance to keep his passengers say. he spoke to reporters in russia. he landed his plane so gently that just one of the 233 people on board was hospitalized. people across russia hailed the pilot as a hero and the kremlin says he and his crew will be given high awards. 36 migrants and a family member were evacuated from the spanish rescue ship near the southern italian island. 134 others remain stuck on the boat and italy's political battle over migration rages on. ship rescued 147 migrants in the mediterranean the nearly does go weeks ago. the ship has been stuck in the mediterranean due to a ban imposed by italian deputy prime minister salivini. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. is bloomberg. david? david: president trump took his reelection campaign to the granite state yesterday, even as his main claim of success, the economy, was coming in doubt, with record moves in the bond market. despite the rough week for toldts, president trump supporters it would only get worse if they did not vote for him, because anyone else would send the economy into a downward spiral. pres. trump: if i would not have won the election, these markets when it crashed. -- would have crashed. int will happen even more so 2020. you have no choice but to vote for me because your for a one k is down the tubes -- your 401(k) is down the tubes, everything else is down the tubes. whether you love me or hate me, you have to vote for me. we welcome our panel christine hah, former communication for the blue dogs. former spokeswoman for the republican party in california. that does not sound like a confident president of the united states that the economy will be ok. jen: it is interesting that the language of the white house has shifted in the last two or three days. they have stopped using the word economy is much and now they are focused on jobs and the american worker. that is because that is still donald trump's sweet spot. unemployment still rests at about 3.7%. those numbers are phenomenal. if you talk to folks on wall street, which you do, they will tell you they expected that there would be recessionary fears. my sources say that through october of this year and march of 2020, which still gives president trump time to pull the nose up. the president is right about one thing. can you imagine an economy that is under the tutelage of one of these twentysomething democratic presidential candidates who are touting socialism. david: not all of the democratic candidates are touting socialism, to be fair. some are. raisevery one of them their hands were illegal immigration, free health care, and medicare for all. david: kristin, let's bring you in on the democratic side. there is a report that just broke that the president had not a very planned conference call with the head of jpmorgan, jamie dimon and also brian moynihan of bank of america on wednesday. they were down to meet with treasury -- with secretary treasury mnuchin. i just talked to brian moynihan and asked if they were talking to president trump, he just said all of our teams are talking all the time. is this giving democrats some heart that the economy may not be on the president tsai in november -- the presidents side in november of 2020. >> i would not say heart. nobody wants the economy to be bad. i will go back and say the fact that all the democrats are socialists, i know that is a talking point, it is not the fact of the matter. in the midterms, the majority of the men and women who won and took back the seats and gave the democrats the majority were not socialist. they were very much for the middle. your question about the president talking to business leaders, it is interesting, because i've been talking to not just the heads of midsize businesses, but as a business minded democrat, large employers, and the one thing they're concerned about his uncertainty. uncertainty creates chaos and they cannot create plans for the future. that is what the president is doing for his trade policies. when he is a rally thing you have no choice other than to vote for me at the economy will plummet and everything will be in chaos if a democrat is elected is political rhetoric that we need to rise above. there are a lot of reasons markets can go through the convulsions they have had this week. most people think trade was contributed. the back-and-forth between president trump and the foreign minister in beijing. i can so a chart. the new york fed has more than a 30% there will be a recession next 12 months. every time since 1967, that has predicted a recession. it must beginning you some cause for concern. jen: yes, and as i said i do believe we could be in the recession. david: you think we will come out just before the election? jen: i do. i think there is one trump card, if you pardon the pun. back in the days of george h. w. bush, he did not have the tools president trump has, which is going directly to the american people. if you watch the rally in new hampshire, he was giving an economic lesson to his supporters and the american people on how some of these trade battles work. if he can continue to do that, to speak directly to people and explain why things are happening the way they are -- we've talked to business owners who said we are willing to take a short-term hit for a longer-term gain for , andext couple of decades i think president trump is in it for the long game. trump may orent may not be having difficulties with the economy. on there any candidates democratic side with a clear economic message though be an alternative to what president trump has proposed? kristen: i think we need a clear economic message. health care has taken over the debate. medicare for all is definitely not the way to go. there are a lot of people, and i will not say who should or should not get out, but i think vice president biden has more polite to stand on where he can bring more for jobs message to the american people. i agree that trump is doing a good thing by talking about the economy. when you're running for reelection or the presidency, you have to bring the message home to the american people. you have to talk about what does that mean for you? what is a good economy mean for you? it means jobs. if we will break through and be president trump in november, we will have to have a stronger jobs message. jen: there was a recent poll to that point for npr and pbs newshour that said more than 50% of americans approve overwhelmingly of the economy. two thirds of americans felt that personally, economically, they were doing very well and better than that happened last 10 to 20 years. as long as that number remain steady, think president trump will be ok. david: as long as. those are important words. finally, kristin, you applaud john hickenlooper's decision to get out and you think beto o'rourke is making the right decision? kristen: i do as far as john hickenlooper. he is popular in colorado and has done a great job. i think he has a good shot at beating senator garner in november. i applaud is getting out of the race. i hope you will run for the senate in 2020. david: finally, is president trump making the progress you should be making. when you are fighting against 22 people is an easier contest then when you get down to one. jen: i think he needs fresh talking points. i think holding rally after rally and holding the same rhetoric over and over again, the tv networks. covering it if there is nothing new. terms of economic incentives, last year we had the tax cuts, i think president trump's team needs to look at what they can do later this year and into 2020. that will give him the wind in his sales. david: when the cable news networks pullback from donald trump, that will be a real sign of change in this country. thanks to kristen hawn and jen kerns. 700 square to buy miles of arctic island? president trump is talking about buying greenland, but denmark may have something to say about that. that is next and this is bloomberg. ♪ david: you are watching "balance of power." i am david westin. the united states could be getting a lot bigger. president trump has expressed interest in buying greenland from denmark. the report comes as the president prepares for his first formal visit to denmark to attend a state dinner hosted by the queen of denmark. we welcome bill faries. normally we might not be asking about greenland. we are asking you because there is a geopolitical national security issue here. .ill: sure if the trump administration could pull off this purchase, it would give the u.s. much closer access to the arctic circle, to the sea routes that are opening up as the climate changes, to a huge wealth of mineral resources. that is all reflected in the fact that the u.s. has twice previously tried to buy greenland. it is not clear at this point it is on the market or could be for sale. david: the danish have been very wary of our presence. at the same time, we are not the only people interested in the arctic circle. russia has a lot of interest there as well. bill: russia does, china does as well. ahead of an arctic council meeting, china declares it considers itself to be a near arctic power. no one had heard that phrase before. china has about 900 miles away from the arctic circle. there's a lot of geopolitical interest in access to these trade routes that are expected to open up. the mineral resources that lie below some of the ice caps and on the seafloor, and a lot of nations that want to have a seat at the table once these things start getting discussed. there has been a debate in the u.s. for years about building up the fleet of icebreakers operated by the u.s. coast guard. this year, the pentagon and homeland security department announced an $800 million contract for the design of new icebreakers. there's a lot going on this front. we're expecting some type of arctic council meeting to take place later this year. the u.s. will be an active participant. david: one final thought on hong kong, a long way from greenland. we have had all of these demonstrations. reports there are more planned for the weekend. also reports the chinese may be massing forces on the border. how big of an issue is that? bill: the chinese have been promoting the idea that they have military forces just across from hong kong. trying tootesters are organize another big weekend of demonstrations. we will have to see how that plays out. this would be the first big weekend of protests after what we saw at the hong kong airport this week. some of the violence there against people is everyone watching to see if the violence has dissipated some of the support for the protest movement or if it keeps going strong. david: if it happens, probably not at the airport, because they got an injunction that seems to hold. bill: right. this would be more toward the central business district. president trump has been encouraging the chinese to take a more humane approach to dealing with this and has called for xi jinping to meet with protest leaders. nothing like that is expected, but there'll be a lot of interest in whether these things continue. david: i'm not sure president xi appreciate the advice, but he got it nonetheless. of next, part of my exclusive interview with bank of america chairman and ceo brian moynihan. his views on fed policy, trade, and hong kong. live from new york, this is bloomberg. ♪ when you rest on a leesa hybrid mattress, bedtime is no longer simply the time you go to sleep. it's time to switch off and catch up. enjoy me time, and we time. 40 winks or 8 hours solid. the leesa hybrid mattress combines two technologies to give you deeper rest and rejuvenation. 1,000 pocket springs provide edge to edge support, responsiveness and comfort, while premium foams relieve pressure. keep you comfortably cool and limit motion transfer. leesa's hybrid mattress is not only recommended by experts, experts choose to sleep on it too. try it yourself in any west elm store. or order online and we'll ship it to your door so you can try it risk free. the leesa hybrid is american made. built to last. and, because everyone needs a place to rest, we donate tens of thousands of mattresses to those in need. experience the leesa hybrid mattress. right now, it's on sale. order today. go to leesa.com. david: this is "balance of power" on bloomberg television. i'm david westin. for bloomberg first word news, we go to ritika gupta. >> bloomberg has learned president trump will meet with top national security advisers today to talk about a peace agreement with the taliban. u.s. televangelists have been regularly taking place in qatar, although afghan authorities have been large light in the process. the taliban has also refused to hold talks with the authorities until it reaches a binding agreement with the trump administration that withdrawing forces. india is promising the situation in disputed kashmir is being reviewed daily and some security restrictions will be removed soon. an official says landline phone service will be resumed this evening. restrictions had been in place for 12 days. the government imposed a lockdown to avoid a violent reaction to its decision to downgrade kashmir's autonomy. north korea has fired to them your unidentified projectiles off of the east coast, according to south korea's defense ministry. the launch comes one day after liberation day, a holiday mark by both koreas to celebrate independence from japanese colonial rule. congo's ebola outbreak is showing no signs of slowing down. the epidemic has bred to a new province in congo with two cases including one death. more than 1800 people have died the latest on bricks began. health workers have struggled to contain the struggle of -- outbreak of ebola. many in congo do not trust doctors and other medics. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. david: at the end of a week and -- i sat down with brian monahan and asked him what he would advise jay powell on his next move. brian: they are thinking about this in the growth until of the 1990's when there was a need to go in and make financial conditions under more accommodative to help the longest in history growth period. if you see things slow down, uncertainty of trade, europe slowing down, they dropped the rate 25 basis points with the view they have to push the united states forward. if the united states is going to carry this, they have make sure we don't go backwards. if you look at what he is doing, that is what he is saying. in his press conference and statements, they don't see anything that we don't see, which is the economy is fine, the consumer is fine. everybody is worried about whether the confidence will break or there will be issues. so they are trying to put insurance cuts under. they should continue to watch data and make choices. people are over reading the negative side of what they see and that has been whipsawed back and forth. this recovery continues, this is the longest recovery ever. keeping it going in the size of economy takes some help. david: what you are seeing with your clients, your vision on the economy, it does not sound like an emergency 50 basis point cut is in the cards. brian: i don't see what he sees. whatever you project for the the fedting, one of governors told me, everybody things we're on this path but we are really climbing a mountain one handhold at a time. what willdon't know be true when they go to the next meeting, will there be a serious change in the trade situation, europe's outlook? ,t is outside of the u.s. danger zones, that is causing the concern. inside the united states, up,ation has been picking unemployment is low. "normal fed back to funds curve" so by bringing it down, they can bring some support to the economy. david: we have a meeting coming up in september. given what you said about the weakening of the european economy, do you expect major stimulus coming out of the ecb? brian: they say they will do something, so i assume they are. before, what the bond market is telling you is two things. there is not a lot of good news coming out of the trade situation, china will go on a lot longer. it is not clear that there will not be a hard brexit, which could be more disruptive than people thought. it is not clear europe is slowing down because they are more exposed to china and u.s. u.s.n the the second thing the bond market is telling you is the flight to quality is extreme. if you think about 96% of the yield available in the united states. at the end of the day you have a dollar invest. you have a chance to get that dollar, get back that dollar loss 1.5% for 10 years, which would you do? that flight to quality is huge. it is both of those factors driving it. the ecb has to get their economy back on track. david: what does this mean for bank of america, merrill lynch? you have said, you are a basic bank that loans money, takes deposits. interest-rate really affect your business. what does this mean for your net interest margin, top and bottom line, as we continue to see rates go down? brian: i have been ceo coming up on 10 years. for six of my years, the interest rate environment was -- the worst estimates for the forward curve -- people said it would go back to 25 basis points -- that was life. they started raising rates. a straightforward way to think about it, our net interest margin percent, the difference between our acid yields in liability yields. in 15, 2 .2%. we could go back to where you have the yield come down, the assets and liabilities, largely because of the non-interest-bearing accounts hit the zero floor. had $600 billion of non-interest-bearing checking belowts that cannot go zero in the environment. that puts a floor on your ability to take your liabilities down. since that time, we had $75 billion. we have more raw material running through that percentage. like 30f that, it is times as much capital a return over the next 12 months as we did in 15. we have 30 billion of buybacks coming, 6, 7 billion in dividends coming back. back then we were buying 5 billion in common, paying a nickel, $.75. the circumstances are much different in terms of the underlying thing. as long as we don't go into recession, and we don't see that. are there offset that also benefit you from lower rates? you mentioned mortgage activity. refinancing mortgage. are there offset that also benefit you from lower rates? brian: if you look at one of the interesting things, if people believe we would be in recession, spread would be blowing out. year to date, the high yield issuance, high-grade issuance is strong, stronger than last year. high yield bonds are higher. they are not blowing out. if people think things are bad, 2008, when the7, high yield index out to a thousand points. now it's a question of what will happen. it's very constructive for people financing. there is a great debate because whate low rate structure, is going to happen when the bonds mature in a higher rate environment? they have a window to get out now and you will see restructure. the m&a activity is decently strong. securitization, we take their mortgages, package them, give them to market. when we see in trading, investment bank activity, they have done a good job. the business is plugging along. you are seeing less capital spending, less borrowing. our loans are growing but you are seeing less activity of people waiting a month do something, six months to do something. david: you are a international bank. geopolitics affect you necessarily. is the china trade dispute affecting your business? thingsthere are four that would help the world although geopolitically. one would be to get the u.s. budget deal done. 18hutdown in the context of was off of the euphoria around tax reform, stronger growth projections. if you have that now, it would be a different environment, so it would be more like 11, a very ugly environment. the second question was really the usmca. we have to get a trade deal done between these three major trading partners to provide stability to trade around the world and also show that countries can agree on trade. right now, nobody is getting any deal done on trade. number three, we have october, brexit. we have to get through that without a major blowup. we all worry about that. it is not clear how it will happen, has not been clear for a couple of years. fourth is the china situation. i believe this is the hardest one to solve. when you go around the world and talk to businesses, they believe this situation between china and the rest of the world has to be fairer, intellectual property has to be taken care of across the board. but these are difficult issues. that is why it will take longer. if we are going to depend on china being the solution here, it could not get worse, and that could be fine, and it could bounce around a little bit, but it is a tough negotiation compared to the other ones, which i think we could get through. david: have we added a fifth in recent days, including bank of america, hong kong? is there a threat to hong kong as a financial center? brian: i don't think it is outside. it is a serious situation but it is a geopolitical situation. our teams are going to work every day, we watch out or them. they meet at 6:00 every morning. it is not a pleasant operating structure. david: are you cutting back on your footprint? brian: no. we have a great group of people, our thoughts are with them because it is a tough environment, but we have had different things happen in the markets. at the end of the day, who wants to get up every morning and say do i go to work today, am i going to make it there? my believe is that situation will solve itself. that is not a financial center risk right now. david: that was my interview with brian moynihan. beijing and washington continue to go back and forth over trade, and the markets respond, even if they are not sure what they are responding to. we speak to former secretary of commerce carlos gutierrez. this is bloomberg. ♪ david: you're watching "balance of power." i'm david westin. president trump says he is confident china wanted to radio but that he is ready to get much tougher with china if it tries to retaliate for new tariffs going into effect two weeks from now. we welcome carlos gutierrez, albright stonebridge group chair . he comes to us from washington for today's conversation in chief. thank you for being with us. president trump says he wants to make progress, is there any realistic prospect we will get anything close to a resolution before the election in 2020? carlos: i don't see it in the highest likelihood is that china is playing a long game here, waiting for the elections. see -- thet conditions would be right for the president to make a deal, if the economy were to really take a hit, and he had no choice, then i suppose he would have to come up with a reason why it was a great deal and we got it done. but that is the big trick here, what comes first. does the economy start getting electionso we hit the and we still have a strong economy, and the president can get reelected? is exactlyade war the kind of thing that can hurt our economy. from: what we hear economists, experts on wall street, part of the problem we see this week with a lot of tumult in the bond markets, people are uncertain about the trade issue specifically. as former secretary of commerce, are we headed for real problems or is this a matter of sentiment? carlos: i think this is pretty much what we will be seeing for the next 5, 10 years. this is a real change. it is fashionable to say the world is changing. this time, the world is changing. that of the institutions govern trade, a lot of the behaviors among countries, all of that has fallen away because the u.s. has always been the leader, we were the ones who started breaking the rules. this will not go away in the short term. markets,eresting, the they hear one little piece of good news. for example, the two leaders spoke on the phone, and the markets go back up 500%. they are too anxious. i don't think there is enough understanding about the scale of this trade war and how much it can actually impact both economies, the u.s. economy, the world economy. i agree. people see it as something temporary that will go away. i hate to say it, but it is not such. david: let's talk about one particular part of the economy that you know well, you ran cap long's, and the farmers are getting hit, because we are losing a lot of agricultural business. what affect is this having on the farmers and how long politically can president trump afford to keep this up? carlos: that is a big question. suppose, as close to the election in 2020 as possible, but farmers are hurting. inventories are high, their prices are low. as soon as we put the tariffs on, the most recent tariffs that we had threatened to put on september 1, the 10%, the chinese immediately said no more hases, no farm product. they know that that is our achilles heel. morewe say buy agricultural products, they say take the sanctions off of huawei . we cannot do that now, so they will not buy. it is now one of the negotiating pieces, and they know that is where it hurts the most, because that is the president's constituency. david: we saw an example today announcing their earnings underestimates, and said beyond the year it will be bad, we have to look at a strategic review. you and i both know that means cutting costs and people. i am putting up a chart that shows the deere stock price follows crop prices. at some point, will this become relevant in their election campaign for president trump? carlos: no question it will. if the election were held today, he could say, we are growing. but every quarter that goes by it will get more difficult. there is no question that the farming. here will be but we need to step back and consider what is happening to u.s. companies. they are caught in the middle of these tariffs, their costs are going up. in some cases, they are being retaliated against. they have nothing to do with it. they are just caught in the middle. our gdp is generated by private sector companies, and we are hurting those private sector companies. it does not show up immediately because you don't get there at one, we wille by see if your earnings, we will see it in the stock market. we have made a mess of this. in the end, the question is, did we get anything out of this? did we get any concessions from china? subjectinally, another that you been outspoken about, immigration policy. the president has said i will give you growth and jobs and also protect your border. what do you make of the president's policy on our southern border with mexico? carlos: those three things that you mentioned are disconnected. they are not part of a holistic strategy. if we want to grow the economy, we need a flow of immigrants. our working age population is not growing with nativeborn americans only. so it is an economic issue. we know there are 7 million jobs that are vacant. we need everything from phd's to farmers. and we know the president would like to cut legal immigration. that is a big issue, a big issue for the long-term. it will not hurt us next quarter, but it will make a big difference 5, 10 years down the road, and shame on us. we are the economy that grew thanks to immigrants, and we are the ones shutting it off. it doesn't make sense. you combine that with the trade war. those two things are going to bring down the economy. david: thank you so much, mr. secretary. that is albright stonebridge group chair carlos gutierrez coming to us from washington. general electric in the crosshairs again after allegations that its finances are not what they appear to be. it is our stock of the hour. that is next. this is bloomberg. ♪ david: this is "balance of power" on bloomberg television. i'm david westin. time now for the stock of the hour. shares of ge are bouncing back from the largest fall in a decade. yesterday selloff was bird on my allegations of accounting fraud which the ceo larry culp has called market manipulation. abigail doolittle has more. abigail: it is almost like a movie. real life is often stranger than fiction. probably something on netflix. to back up on the fraud charges, which came from someone who has credibility, because he was the missile blower on madoff ahead of that scandal. he says there is accounting fraud. he says there is $38 million of funds they may have to pay, has broken into three buckets. with billion having do insurance reserves. if they had to cover it, they have the cash. the other piece is $10.5 billion of a non-cash charge on new accounting rules. then there is $9 billion on baker hughes. once their state goes below 50%, they will have to pay that. billion,about $18.5 unclear whether they will have to pay it. the other pieces are non-cash. a lot of people are saying, including larry culp, that this is market manipulation, is not true. david: he does admit that he is being paid by a hedge fund that he never identified. how are analysts reacting? abigail: i spent some time on the phone with nick at william blair. he is a huge bull on the stock. he says it is not clear what is happening, but if you have it $18.5 billion in those insurance reserves, they have the money. the other pieces are non-cash. he makes the point that you are saying, around the hedge funds, that he shopped this report around. on this huged but short position, and then he went public. it seems the motivations here are perhaps to make the stock go down. david: money to be made, how shocking. thanks so much, abigail doolittle. sign up for the balance of power newsletter at bloomberg.com. coming up, a very special edition of "real yield" with tom keene. you can bet he will be talking about the inverted yield curve. this is bloomberg. ♪ tom: from new york city for our viewers worldwide, i'm tom keene. bloomberg "real yield" starts right now. coming up, the yield curve inverts, december its, and historically or fixed income on fears of global slowdown. bond yields price to perfection on germany and surging negative yielding debt. finally, credit markets enjoy real volatility. high yield at their widest since january.

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