Situation is what President Trump sought to do. He saw a positive Market Reaction from a geopolitical standpoint. The president calling on the international community, on nato , on russia, on china to work with United States to further isolate iran. Lastly, the president taking aim at the jcpoa, which he said in a terms was paid for with missile strikes within the last 24 hours. The iranians paid for that with the cash they received from negotiating with the obama administration. That was clearly a political undertone and will clearly be dissected by the 2020 president ial contenders. David the important point is no u. S. Lives were lost. It looks like they are deescalating. There have to be political ramifications for the president and for the people who would like to take his job. Who might this benefit in iowa . Kevin in terms of where this goes and who it benefits, you have seen joe biden date in on the issue of the jcpoa and the Public Comments in the last several days has called for the u. S. To get back in that deal. What President Trump did was say he wants to negotiate a new deal, one not as flawed as the jcpoa. He wants to work with nato allies in order to get that deal done. The state department is sending over top officials next week to europe to begin those conversations. Clearly, this becomes a new type of deal the president wants to negotiate. Will see how that comes out. Many thanks to Kevin Cirilli at the white house. Rafael. Urn to therese a big meeting between Boris Johnson and the head of european commission. What do we know . Se urszula line has come to london. Termsoke in conciliatory about a new u. K. european partnership. She understood comments, values, and experience. The bottom line was a simple one. If you want the best deal, you need more time and more greater alignment on the issues Boris Johnson says the u. K. Wants to diverge on. Everything from taxation to standards for goods. This is where the main point of difference is between the u. K. And the European Union as they headed to trade talks. David a lot of people are saying the Prime Minister cannot have it both ways he cannot meet the deadline at the end of the year and get everything he wants. If he has to give up one, do we have any indication which he is willing to give up . Therese he has been clear he is sticking to the deadline. He says voters expect this to be done. Is being urged to start trade talks with the u. S. As a way to nudge things on the european side. He is also a pragmatist. There is some indication that when push comes to shove he may actually try to seek an extension. There are two issues to watch. One is timing. Went to the talks start. Johnson wants them to start on february 1, just after the u. K. Officially leaves the eu. The eu may be more inclined to drag things out, which would encourage or nudge the u. K. Into an extension. The other key question is sequencing. Which set of discussions goes first . If it is just on goods, what happens to services, what happens to the other issues, including data sharing that the u. K. Will want to have in these discussions . So much for you recording from london. Lets go to beirut. Carlos ghosn spent nearly two and a half hours talking about his japan and why he needed to flee the country. Here is a small taste. I did not escape justice. I fled in justice and persecution, political persecution. Joining us from bloomberg is our bloomberg daybreak middle east anchor. What do we take away from this News Conference . It is hard. You can definitely make the argument that youve not seen anything like this before. It was bizarre to watch and in many ways fits the wider pattern of the twists and turns of the story after the dramatic escape of carlos ghosn from japan. It was an emotional address. He underscored the trials and tribulations he faced in japan and his experience. He says it was a difficult decision to take to escape the ongoing litigation in tokyo, but he said he has no other choice. He spoke of hopelessness, of an inability to see his wife, of difficult conditions he had to deal with. His wife increasingly becoming a more important part of the bigger picture. He is out of japan, but he is very keen on clearing his name. He said he is open to a fair trial if he can get it. Any of the countries he is a citizen of, lebanon, brazil, france. Japanese are still applying pressure and saying there is no excuse to runaway the way he did. David what anyone thinks about the guilt or innocence, carlos ghosn has been through an ordeal, you can see it in his presentation. He is a very shrewd leader, he has a big team around him. Who is his audience . Who was he speaking to . Yousef he was speaking to a lot of people. One important audience will be all of the people that saw him as a very powerful leader in the auto industry. This was an effort to clear his name and also to send a message to the management of both renau lt and nissan that it wouldve been a lot easier to deal with this without trying to overthrow him. You look at the amount of losses both incumbents have to deal with since their departure, and there is no justification for that. You look at the nissan stock at lt10 year low and the renau stock at a seven year low. He underscores his Business Vision wouldve ensured success for most stockholders and general fans of both brands. David a lot of price paid in market cap. Thanks so much. Now it is the time where we get a check on how the markets have been responding. It is always funny to say that given what has happened. Joining us is Abigail Doolittle. Time, it isastern extraordinary what the market has done. Abigial you would not expect Iranian Missile attacks would bring about alltime highs, but that is what we have. We have the u. S. Major averages at alltime highs after President Trump iran seems to be backing down. Not goading them into further action, even saying we have shared interest of defeating isis. Oil, downt movers are more than 4 . David even gold. That is extraordinary. Abigail we have been on a 10 day winning streak for gold, now down 1 , its worst day in a month. It is interesting to see this huge reaction, more so than the reaction last friday on the u. S. Airstrike on iran that started all of this. David many thanks to Abigail Doolittle for that report on the market. We turn now to ritika gupta with bloomberg first word news. Heika President Trump says will impose new sanctions on iran after a missile attack on american bases in iraq earlier today. Speaking from the white house, the president said as long as he is in his office, iran will never be allowed to have a nuclear weapon. iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world. No american or iraqi lives were lost. Ritika trump said the additional economic sanctions on iran will remain in place until i ran becomes less hostile to the u. S. He also said he would ask nato to become more involved in the middle east. Mitch mcconnell said he will launch President Trumps impeachment trial on his terms. Mcconnell said therell be no haggling over procedure. He added the House Democrats turn is over. The trial is on abuse of power and obstruction of Congress Charges passed last month. It could begin as soon as this week if nancy pelosi sends the articles of impeachment to the senate. Cleanup is underway in puerto rico following a series of strong earthquakes. Officials say hundreds of people are staying in government shelters. Magnitude quake was 6. 4 and killed at least one person and injured nine others. Half a Million People are still without electricity. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am ritika gupta. This is bloomberg. David . David coming up, Michael Ohanlon of the Brookings Institution is here to lay out where things stand between United States and iran in the wake of the missile attacks last night. Ons is balance of power Bloomberg Television and radio. States willd immediately impose additional punishing economic sanctions on the iranian regime. These powerful sanctions will remain until iran changes its behavior. David that was President Trump speaking earlier at the white house after the Islamic Republic retaliated for the killing of its leading general last night. The response was last night. The question is whether the United States responding with sanctions will escalate or d escalate the conflict. We welcome Michael Ohanlon, senior fellow at the Brookings Institution. Thank you for joining us. Address the question. The question was how would we respond . If what we are doing is sanctions rather than going down the list of 52 targets, does that deescalate that conflict . Michael i am hopeful it would. I think that would be the right response. Sanctions come in many shapes and sizes and levels of severity. You could imagine a new sanctions regime being a complete cut off of some kind of economic interaction. We have already done that with iran ourselves. At this point sanctions amount to adding certain specific individuals to lists of asset freezes or travel bands. There may be one or two small areas of commerce where the United States still has some trade with iran we could shut down. For the most part the iranians do not depend on the american economy. We have already been trying to shut down their access to other trade,es companies and which are the real lifeblood of the regime. We could try harder to impose those secondary sanctions and punish our allies and friends around the world even more severely if and when they deal with iran, but i think there are limits to how far that process would go. My point is this is primarily symbolic and rhetorical. I do not think additional sanctions will be that significant. Therefore i am hopeful at least in the short term this is an opportunity for deescalation. In the longer term, the iranian economy still struggles because of the broader sanctions we have already applied before this week. That could lead iran to lash out again to change the calculus. David besides talking about further sanctions, the president addressed what he would call a new jcpoa. The united kingdom, germany, russia, china, should join with jointly. Tting pressure is there any prospect of the world coming together the way the president asked to get iran back to the bargaining table . Michael there is a prospect in theory but im not sure the Trump Administration can be the one to do it. They have lost credibility as a multilateral player on this issue. Gave a secretary pompeo speech two years ago when he outlined all of the things i ran we need to do to get back into our good graces and the list was exhaustive. While understandable at some level, i think completely unrealistic at another. To the extent the Trump Administration wants iran to pull back from all of its regional ambitions, wanted to give up all Nuclear Technology permanently, once it to change some of the nature of the internal regime and the weight governs itself, that was on mike paos the way it governs itself, that was all in mike pompeo speech, then there is no serious for the way negotiations could go. I do not believe the allies President Trump referred to are likely to join us in this new effort. David talking with Michael Ohanlon from the Brookings Institution. There were some people after the initial attack that said what the president was doing was trying to reinsert the torrents into the relationship with deterrent into the relationship with iran and others. He was willing to strike rather than let them increase their attacks. Is it possible the president is doing something more profound . Michael i do not like that phrase, reestablish deterrence, because it was a phrase people used in the summer to say we should hit a few surfacetoair missile sites for a drone to shoot down. Way ores it is a pretty an elegant way of saying you will strike back to show you are tough. In this case, there is the possibility we are saying someone like soleimani who has byled so Many Americans providing the weapons to groups that were instructed to shoot at us and our troops in iraq, very advanced improvised explosive , we will save you assassinate americans we consider you fair game. I think in the last 25 to 30 years there has been asymmetry in the u. S. Iran relationship where they have been taking aim in americans and we have not done the same to them. In the 1980s we did. We help Saddam Hussein in the iran health and the iraniraq war. That did lead to iranian deaths. Since that time we have not in the iranians have. There is a certain logic which is why i was not against the soleimani strike in the abstract. I think there are things we need to do better right now, like repairing relations with the Iraqi Government that President Trump is not doing. In broad terms, there is a legitimacy and a value to saying to someone like soleimani if you cause americans to die, you become a target. David did iran send a message to us and the world with those strikes which is to say we can fire a Ballistic Missile a fair distance and we can have some accuracy. It cannot be a coincidence there were no casualties. Michael i agree. I think iran is sending the message they need to retaliate and they will. Second, they do not want escalate, at least not right now. Third, they have the ability to make the missiles land where they want, and we have already known that. This means they could certainly strike certain facilities if they show wished if they so wished time. As much as they hate to lose soleimani, they are saying do not make this a habit. Maybe we have no choice or little choice but to take this hit. We are prepared to roll the dice and take further risks, maybe even of an escalating war with United States, if the pattern continues or if you come after iranians. You could interpret this as a message they do not want escalate right now, but they could escalate differently in the future if they feel we have put them in a corner. David thank you so much for joining us. That is Michael Ohanlon, senior fellow and director of research and Foreign Policy the Brookings Institution in washington. Now to breaking news in the world of wall street. Job cuts at a hedge fund. Hq arch capital is the fund run by cliff as must. 10 issing more than 5 to of its Global Workforce after assets fell last year. This friday, i will be hosting a new program, bloomberg wall street week will bring back an icon of business television. Well bring you the most important stories of the week, stories that affect wall street and the world with a regular panel. This week it will be Larry Summers and roger ferguson, ceo of tiaa talking about the events of the week. Our panel will be joint by the former under secretary of defense for policy to discuss the top story of the week, which is of course iran. Escalating tensions over there and what comes after the attack last night. That will come your way this friday at 6 00 eastern on Bloomberg Television and radio. Power onalance of Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. It is time for the stock of the hour. Lennar is one of the days best performer. Shares are up after the home peter beat the highest fourthquarter estimates. I am joined by bloombergs kailey leinz. Kailey it is good news for lennar. They beat on the top and bottom line. New orders were up 23 , came in over 13,000, far more than the street was looking for. You also had deliveries up 16 . That helped offset the fact that prices were down. That in some ways is not intentional but the result of to push moretegy into the entrylevel market attracting the millennial homebuyers that have been trying to focus on Affordable Homes to attract those. It is now 40 of their business driving the new orders and is weighing on prices. Is going to weigh on prices Going Forward into 2020. It will weigh on earnings. That is why we have seen the shares off the highs. David there may be larger factors as well as low mortgage rates. And they areobs getting increases in wages. Kailey those are huge factors into why we have seen housing do so well. We saw do well in 20. The sector ran up 50 in 2019. We are seeing that rally continue today. As you alluded to, the job market looking strong. People confident in their ability to get a job and you have three fed rate cuts. It is cheap tomorrow. All of those things are factors that are good for the Housing Market and good for the economy. David maybe that leads to a larger story with missile attacks in iraq and the markets went south fast.