Daring escape from japan chosn ghosn. I was a hostage. He is very keen to clear his name. Party on, elon. A milestone of its push into china. Huawei with another challenging year under u. S. Sanctions. We hope things dont get worse, but if they do, we have a plan b. Alan greenspan says the only way to curb deficits is to pull back benefits. We are trying to spend more than we have. Thats all ahead on bloomberg best. Hello and welcome. Im sebastian star lick, and this is bloomberg best, your weekly review of the most important Business News, analysis, and interviews. Lets start with a day by day look at the top headlines. We began with markets reeling from a geopolitical shock in iraq, an attack that killed one of irans top military officials. The fallout of a top Iranian Military commander is widening. Lawmakers in iraq have voted to expel american troops. Iran says it will no longer abide by the Nuclear Deal Reached with major powers in 2015. President trump also threatening iran with major retaliations if they do anything. Where are we right now . We are hearing reprisal talk on both sides. We are hearing from iraq, the parliament voted that they do not want u. S. Troops in iraq. This is the death the death, of course, for the nuclear accord. What happens in terms of any retaliation from iran . Oil hit 70 a barrel. Pets as the state Department Warns of heightened risk of missile attacks near military and energy to facilities Energy Facilities in saudi arabia. This will surely urge the iranians on to do something. Markets are simply saying that we dont know yet what the iranians will do. We dont know what in fact the u. S. President will do. Tweets are one thing. Actions are another. As we have learned in the past. Joe the resilience in the market we are seeing is pretty striking, i think. It looked like we were going to get some continuation of the selloff. Here we are not just going out green, but going out at the highest of the day. Markets are still complacent. Markets are reacting as you just described, as if this is a nonsequential longerterm problem. We can speculate all day long about what the geopolitical risks are, we know them, but how this will play out remains to be revealed. Tensions continue to climb between the u. S. And iran, after the killing of a general as the qassemeneral soleimani as the pentagon has employed additional troops to the middle east and the u. S. Has denied that it is exiting neighboring iraq. There is a three ship Amphibious Group that is moving into the persian gulf. It was in the mediterranean. There are also hundreds of thousands of iranians who are out in the streets, protesting and marking the end of the life of general qassem soleimani. The threat on iran is still operative. Their promises to retaliate are still operative. President trumps threat to sanction iraq if it kicks u. S. Forces out and doesnt reimburse the u. S. For the cost of the military actions there is still operative. The generals funeral is postponed after dozens of mourners were killed in a stampede. This, as iran gave notice that it was expecting retaliation. The head of the National Security council said, even if the weakest of these scenarios gains consensus, the implementation could be a historic nightmare for americans. The administration said this is an incredibly fluid situation. One that is ultimately up to around. If they continue to strike, the u. S. Would return in that action. Secretary of state mike pompeo speaking at a briefing earlier today at the state department was incredibly clear that the u. S. Would continue to strike and act in force, should tehran continue with expansionary foreign policy. That is developed as a nonstarter for President Trump and his administration. Iran watching what it calls revenge attacks for the killing of its top general with missile strikes on bases in iraq that house u. S. Troops. Not surprisingly, the news is jolting the markets. What do we know so far about irans actions . What does it show us . We know there was a series of rocket attacks on these two u. S. Iraqi bases. We know it came from iran, and they have claimed responsibility. The Islamic Revolutionary guard corps claimed responsibly quickly. The question for the u. S. Is u. S. On whether on what they do next is whether there has been loss of life. So far, the u. S. Reaction has been muted. President trump said all is well. Basically, saying, all is good. Meanwhile, we are looking at a response from the iranians where the foreign minister kind of signaled that there might be, actually, a deescalation. They already responded to the u. S. In a proportionate way. He wanted to show that this was in many ways consistent with international law. Equities rebounding after falling 2 overnight after a u. S. Official said there were no american casualties. Pres. Trump iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world. There is a pause for a diplomatic opening. Theres a pause in tentions. There is a pause in tensions. We are not talking about tensions going away. They are not going out more today than they were yesterday. Bonds are not falling from the sky. At this point, you take that is progress. Scarlett we continue to move higher even as we climb a wall of worry. Are people hedging in any way for possible pickups here . If you look at market pricing, it is as if everything that happened since friday morning never happened. Stocks hitting highs, oil giving back all their gains and then some. We see gold turning down a way. Turnaround as well. Investors seem to be very optimistic. They are not worried. Investors keeping a careful lie on boeing today after a deadly crash of a 737 jet outbound from iran to ukraine. The aircraft went down after takeoff, carrying 167 passengers. And, nine crew members. According to the authorities, everybody on board died. Questions have to be asked about whether or not this was actually brought down by possibly a bomb or missile or something else. The timing has led to huge speculation about the cause. About six hours after those missile strikes, speculation that it may have been tehrans own air Defense System that caused this. Also perhaps that a bomb might of been involved. Then, a few hours later, we have the iranian authorities come out to say, no, this appears to have been a technical issue. U. S. Officials see a missile strike is the likely cause of that plane crash in iran. Obviously, on the night this plane went down, for whatever reason, that was some of the most heavily watched airspace anywhere in the world, given the attack and the u. S. Technology to detect it. It would be an enormous coincidence if, on the night of a strike like that, a plane happened to go down for mechanical failure. All we know at this point is a lot of u. S. Officials think that a missile is a more likely explanation for what happened. We still dont know what happened here, but if it turns out to be some sort of mistaken attack or retaliation by iran, that would certainly put pressure on tehran. All the governments representing the people on board and others will certainly have some very serious questions for the iranian government. [bell chiming] given all that has happened this week, we still have the dow, the snp, and the nasdaq hitting record highs. Nothing really seems to be able to take the market down. Joe its genuinely impressive, and these are big moves. 0. 5 everyday. Pile them on, and you are already starting to have a pretty big year on our hands. The prime ministers of the u. K. , canada, and australia have said the ukraine passenger plane that crashed this week was probably brought down by an iranian missile. Irans government denies this. Aviation personnel and other personnel sit sidebyside, so it is impossible for such a thing to happen. Iran came out this morning, sticking to its story. It is not coming out with a definitive reason for why this crash happened. We have every government trying to step back from a conflict but at the same time, you have this argument brewing about just what happen to that airplane. We are a few seconds away from the jobs report for december. Economists are expected to add 150,000 jobs while unemployment stays steady, and wage growth holds that 3. 1 . The jobs report for december, 145,000 jobs created. Earnings, a bit of a worry. Up. 1 during the month of december. That leaves the game at 2. 9 . That is down from the 2018 3. 3 . My bottom line is that this does not in any way change any expectations about economic prospects or fed policy. We are now where we were before the employment report in terms of those expectations. The Unemployment Rate is 3. 5 . It remains at a 50 or 51 year low. That is a remarkable number with no inflation. I really think this is a strong report. The huge increase in the stock market, i have to believe, is a signal of improving confidence among consumers and businesses. I think it is pointing towards even faster growth in the next year. Still ahead, as we review the week on bloomberg best, tom keenes exclusive conversation with alan greenspan. Bill deadly has a prescription for what has been ailing the regional market. More of the weeks top headlines. China sends a signal to protesters with a choice of its new liaison to hong kong. The time of the last guy is over. That is the message they are sending out, stability, a stern, new approach. This is bloomberg best. Sebastian this is bloomberg best. Lets continue our global tour of the weeks top stories with more developments in the extraordinary journey of the worlds most famous fugitive. Carlos ghosn. You see emerging on ghosns escape from japan. Escape to lebanon. What new information to we have . Do we have . It was an interesting mix of simple execution and complex planning. He left his house by foot. He boarded public transport, a bullet train. It took him to osaka. Thats really where the more complex, elaborate part of the plan kicked in. There was a private jet waiting for him. He was put into a box that had holes drilled in the bottom and transported onto the plane. He had a pair of experts waiting for him. One was an exmilitary from the u. S. , another from lebanon. They knew a thing or two about getting people out of tricky situations. Really, an interesting mix of very simple and very complex executed together. Two weeks after becoming the worlds most famous fugitive, carlos ghosn spoke at a News Conference about the reason behind his escape from japan. This was, as i said, i was a hostage of the country that i have served for 17 years. Theescribed it decision to leave, as one of the hardest of his life. He underscored that hes keen to clear his name. Hes open to doing a trial in lebanon, brazil, or france. He is a citizen of all three countries. That is where he stands now. It will be interesting to see what follows. He had the meeting with lebanese prosecutors who want to speak to him about the interpole red notice out on him. Vonnie japans justice and minister held two briefings, extra narrowly unusual for the country. No matter what nationality you are from, you should respect the law of the country where you worked. Japan is in a box. There is no way they can settle or back down. Ghosn is an internationally respected executive. For him to unload the way he did on the japanese regulatory system, as well as the management he left in place at nissan, this is a very painful moment for them. The fact that there were these press conferences from the japanese had prosecutor is evidence of how painful this is and how necessary it is for them to counter everything he says. Beijing has named a party follower with no experience in hong kong as its new representative in the city, signaling its intention to restore law and order after seven months of social unrest. What sort of signal is beijings is beijing sending with this new appointment . I think they are saying it is the time, the time of the last guy is over. He allowed the chaos to continue for seven months. I think now they are sending a new message that there is a new set of marching orders in town. The new liaison chief came out and met with reporters briefly to give a statement and left. He was convinced that he would be able to help restore civility stability to the city. Thats the message they are sending out. Stability, a stern, new approach is what i think beijing is signaling. Joe gold surging. Bulionhitting hitting a six year as tensions in the middle east drive investors to seek haven assets. The yellow metal approaching 1600 an ounce. Goldman sachs says the commodity has more room to run. What is the logic . It is what we have seen played out in the markets on an entry day level today. Gold prices coming back a little bit. Oil prices come back more significantly. The reason is what goldman spelled out. This is a fearbased trade. In the meantime, we dont see much fundamental impact happening on. On the market. There is no risk to supply in the markets. Oil is less than a lucrative trade then gold is right now. Vonnie china, announcing the vice premier will travel to washington to sign a first fees of a deal with the United States. It would appear the events of the past couple of days have not deterred china from that january 15 date that we heard before for a signing ceremony. Absolutely. This is the first time weve heard the chinese confirmed that the vice premier will be coming to washington. The real theme, since this deal was announced in october, has been skepticism about exactly whats in the deal. Part of that has been fed by a lot of silence from the chinese side. Now we know. A delegation of senior officials, including the pboc governor, are coming over. They will be signing that next wednesday in the white house. We are told to expect a big crowd of Business Leaders and others, that there is a bit of a party that the white house wants to throw for this. Boris johnson and their ave set his rival h out her arrival redline for post brexit. Speaking in london, the Commission President says its not a level playing field. There cannot be full access to europe single market. How far apart are the two leaders . They are very far apart. Perhaps that is not a surprise. We had underlined in london. This meeting was seen as being constructive, the tone of it was polite. She had nice words to say to the united kingdom. But then, she was Crystal Clear on the thing that matters the most here, the trade deal. She said in a way thats very explicit, the trade deal Boris Johnson once is very vague and that it is simply not going to happen. Its impossible. There is no time to do this. The tension of the story has more to do with the timing than the actual content. They agree they want to trade deal, but they dont agree whether they can get this done in one year. Boris johnson is Crystal Clear, he doesnt want to ask for more time when it comes to a transition. Much of australia is bracing to get more record hot weather this weekend. This, as bushfires continue to burn out of control. After a couple days of slight reprieve, we are seeing the fighters worsen again. Dry, windy,g to be hot across the fire ground. Temperatures are expected to reach above 100 degrees fair in height in some places as well. This has fire authorities quite nervous along the fire front that stretches thousands of kilometers as fires will likely push more into dry land. At least 26 people have died, more than 2000 homes have been lost, millions of animals have perished. 28 million acres have been burnt. The scale of this is unprecedented. Vonnie the u. S. Is now putting sanctions on 17 mps in the steel industry. Senior iranian officials are to be sanctioned including the secretary of the Supreme National council. [indiscernible] kevin crippling sanctions just issued by the trump administration. Additional sanctions on anyone trading or owning sectors in the iranian economy. Construction, metals. Eight Senior Iranian officials. Mike pompeo saying this is part in quote to deny the regime the resources to continue to sponsor terrorism. You are watching bloomberg best. Im sebastian sonic. Bloombergs tom keenes sat down in washington for an exclusive authorization with alan greenspan. They discussed a range of economic issues, including the u. S. Welfare and so security Social Security systems. He insists that benefits reform is essential for the future. We are already turning a corner. Unless we now start to make major changes, then our costs and benefits, our productivity growth rate will slow down below where it is now, which is 1 a year. We are trying to spend more than we have. We made the decision that we would spend only what they had, but it took 500 interest rate. I want to talk about the underlying series at the moment. You dont talk about Monetary Policy per se. You have always been good about that, since you left as chairman of the fed, but i must ask a fiscal question, we have a heritage of a generation that generation of people that have told us that someday there will be trillion dollar deficits. They are upon us right now. What is the greenspan prescription to help our grandchildren, and indeed your greatgrandchildren with this conundrum . First is to address the source of the problem. The source of the problem is that we have a definedbenefit program for Social Security. In fact, for pretty much everything else. What we need to do is go to a defined contribution program. Which is that the 401k is all we have. That will put a damper on our major problem. If we can resolve that, we have a good shot at resolving other issues. Sebastian coming up on bloomberg best, more discussion of financial reform. The former new york fed president presents a plan for exclusivean conversation as well with hong kongs financial secretary. He believes he can reverse the citys economic downturn. And 2020, we will continue to spend boldly. Sebastian this is bloomberg. sebastian welcome back to bloomberg best. Im sebastian salek. The Global Implications of the conflict with iran was apparent in Financial Markets and beyond. Tom kadant and Francine Lacqua spoke with the president about what might play out after a u. S. Drone strike killed one of irans top military commanders. Wheres the strategy . This. O right in a there needs to be a recapitulation, a reinvi