Win would lead to a total meltdown especially when it comes to markets. Stuart talked about hong kong. Were watching it closely. Well have a run on the banks well talk about. A big weekend ahead in hong kong. Well look live where tensions stand right now. Lets get to trade, how governments are reacting to what is happening. The dow is up 275. Were ending week on up note. We have a few hours to go, still down overall for the week whether governments are aware well get to that in a moment. New stimulus could be helping stocks. Hillary vaughn starts us off at the white house. Hi, hillary. Reporter connell, President Trump says the september meeting with chinas trade delegation is still a go. He talked on wednesday with chinese trade officials. He is expecting a call soon with president xi. He said if china dares to retaliate against september first tariffs he thinks the u. S. Holds the ultimate retaliation or ultimate form of retaliation. I never said china was going to be easy but it is not tough. They want to make a deal. We just spoke to them yesterday. They want to make a deal. They want to make a deal. They have to make a deal. You know what, it would be wonderful to make a deal. I dont think were ready to make a deal. Reporter chinas announced changes to stimulate their economy by lowering real Interest Rates to make sure funds costs for Small Businesses drop by 1 this year. Jpmorgans chief Economist Says fresh september tariffs will test chinas ability to boost its economy but protect its businesses and workers from the impact of u. S. Taxes on chinese imports. Trump says dragging out trade talks really hurts china more than the u. S. No, i think the longer the trade war goes ons the weaker china gets, the stronger we get. Were taking in massive amounts of money, billions and billions of dollars, steve, as you know. I think longer it goes, stronger we get. I have a feeling it will be fairly short. I think it will be, chinas lost millions of jobs. Reporter they say they have been actively working with china to make sure they follow through on their promise to buy more u. S. Ag products and he also reiterated yesterday that he does want to put hong kong on the table to make sure china resolves that humanely before any trade deal is done. Connell . Connell short term that could be a real key. Hillary vaughn on the north lawn. Well take a Bigger Picture world view on all of this. If you see what is happening in the world, heard it from the president a moment ago, protectionism is gaining ground. Look at that there are questions out there what that does to economic growth, whether you agree or disagree with it. At the rally president as he often does got into this, hitting back what he calls globalism. Here he is. Globalism enriches globalism foreign count is at our expense. I love our country. Im the president of the United States of america. Im not the president of the world. As long as im president , america will never bow to a foreign nation like we were for some years. Connell crowd loves that obviously. Wall street journals chief economic commentator greg ip though joins us from washington, says this kind of decline in globalism, greg, or globalization, whatever you want to call it is that a real risk . Is that what people are looking at when we have all the recession talk this week . Connell, you look at around the world a lot of things are bothering markets, manifestations from a same phenomena. That cooperation make everybody richer. You heard what makes the rest of the world stronger makes us weaker, vice versa. The president and his advisor Peter Navarro were fairly clear this week they were trying to weaken china with their tariffs. They thought that would make the u. S. Stronger. In short term that is not taken well by the markets and so on. Stepping back a little bit, britain, taking a much harder line on leaving european union. Italy,salvini, want to be the sole prime minister. He is very conservative, antiimmigrant, antieu individual. Populism on the rise in argentina. For example, between our allies in japan, those countries are on the verge of a trade war alone over these ancient wounds. What im trying to say here, it is not just a trade war here or a tariff there. There is an overall rise in nationalism, retreat from globalization, which explains a lot of anxiety in the markets and the economy. Connell the thing you wrote, excellent piece about this the other day in the journal, you put it in Historical Context which doesnt necessarily say globalization was great and everything was working we should stay with it, but when we change, when we have big changes often times theyre followed by downturns. In your opening paragraph, this is really good, when assumptions how the world works are shattered, a global downturn is often the result. You talk about, in the 70s, we found out no more cheap oil. In 80s we figured out . Countries actually can default. In 08 we figured out mortgages and banks were not as safe as we thought they were. Yeah. Connell is this a transition period or are you defending, not that many people are, are you defending this global order, globalization . Im trying to step back whether globalization is good or bad. You said the word transition. That is exactly right. Were going from one state of the world where we assumed there would be lower and lower trade barriers between countries, more and more freedom of capital, movement of goods across the borders to a world no longer true. Whether you like brexit or not, whether its a good idea or not. We have to get used to the idea that britain will no longer be part of the european union. If you have large investments in supply chains, that there would be seamless, Movement Across the european British Border you have to reevaluate. That is painful process. Connell right. Again it may end up, it may not, even if it ends up okay, long term, to matter what you think in the short term like the trade argument. There is short term pain. That is your point, right . To use historical example. We can see it was foolish to think all american mortgages no matter how spotty were 100 safe. A stupid assumption. We should not allow our Financial System to be leveraged on assumption. We see that was a dumb idea, but transition when we went from when that was conventional wisdom to say, hey, no, that is not a good idea, that was very painful process. Connell oh, yeah. Im not for a moment saying what were facing now is anything like 2018 and 2009. A lot of leverage, propagate tore of amplifier of shocks is gone. That is not there. We have real Interest Rates around the world near zero and so for the. We do not have Central Banks by and large making matters worse but when you transition from old world, to a new world, there is a lot of friction a lot of breakage, a lot of anxiety, do not expect it to be smooth sailing. Connell as always, thank you, greg ip. Interesting what we heard out of germany now, according to report from the german media is open to more deficit spending amid recession fears. The talk germany is in recession or headed into recession. We have seen yelleds in the u. S. Come back up a little bit, up 1. 56 for what its worth. As larry glazer joins us. That is interesting, larry, germany is essentially saying we will spend a bunch of money i doesnt think they even had, to get money from people we may not be able to pay back because of negative Interest Rates. Its a crazy world. What do you make of it. If you look off in the horizon you hear footsteps of recession getting ever closer. Those footsteps may be in europe right now and certain countries or industries in the u. S. Affected by global trade. They are not here yet in the u. S. Economy as a whole. You have to take a global flavor to the bond market. Low yields proffer resistible to politicians for things like stimulus spending. In the u. S. , the election cycle is only trick we havent played is infrastructure. Europe is about to do it. Europe is six to 12 months ahead of us in the cycle as you mentioned with negative Interest Rates in germany. The u. S. In a populist world Nothing Better than putting people to work with infrastructure spending, low Interest Rates throughout the world will enable that. I think Small Businesses in the u. S. Have taken that cue, may have become more defensive in nature. Consumer in the u. S. Has not taken that clue. They have the ear pods in. Not hearing global footsteps of recession. Recognizing playing defense when you see what is happening in the bond market, see inverted yield curve is always a good idea, but playing defense doesnt mean playing dead for u. S. Investors. Connell you think finally after how many infrastructure weeks weve had in the United States well get some sort of a package done . Sure. Connell but that only means, kind of getting on germany a little bit for borrowing money they dont have, not paying it back. Sure. Connell were not quite where they are. We have positive Interest Rates, that is it still more debt and deficits here in the u. S. Which i guess everybody thinks is fine or . Sure. Well, i think one of the unfortunate aspects of having a low Interest Rate environment, it becomes very tempting for politicians to keep their hand in the kitty to continue to spend money they dont have. The problem it plagues future generations. What weve seen in europe, europe and japan are locked into a slow growth world where they cant get out of it. Connell we could end up there too, no . That is preview of the movie in the United States. Recognizing, these are the best of times in the United States. Were in the longest economic expansion in u. S. History. Yet were spending money we dont have like drunken sailors in washington there is no fiscal restraint. Learn from mistakes in europe, learn from mistakes in japan. Dont repeat the mistakes. As we all know, everything in the election cycle, everything is fair game. It sounds great in the short run, like eating your cupcake dessert before the steak. Connell what we heard from the spot of hillary vaughn, things are tough overseas. Assault of that, we in the United States are getting stronger. Thats right. Connell many people argue were not getting stronger, were not as bad as they are. Where do you kind of stand on i think that is really good point. Retirees in the United States are very low. Theyre penalized what is happening globally. Theyre absolutely right in that sense. Negative Interest Rates in germany. Get your arms around that in germany. Have negative Interest Rate. Who is right stock people or bond people, who is smarter, stock people or bond people. Like saying who is smarter, dogs or cats. They may be right. We need to learn from history, what is happening outside the u. S. What happens in the United States. Connell does are smarter than cats. Everybody knows that. Connell larry, have a good weekend. My pleasure. Connell larry glazer. These swings in the market you think this is worrisome now. President trump has a warning. Votes for democrats will make things much worse. Well talk about it. The bottom line, i know you like me. This room is a lovefest, i know that. But you have no choice but to vote for me because your 401 k s, down the tubes. Everything will be down the tubes. Imagine traveling hasslefree with your golf clubs. Now you can, with shipsticks. 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Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you preorder a new samsung note. Click, call or visit a store today. Connell a little politics for this market rally for you. Look at these numbers. Elizabeth warren in our new poll surging past Bernie Sanders. These fox numbers came out. How would the economy fare under aggressive proposals especially warren or sanders . You put up numbers, where joe biden is. David bernstein joins us, chris wilson is also with us today. David, ill start with you, the thing for warren is has been as fox poll shows a steady climb. People counted her out. She will never amount to anything. She comes out with all the plans. She is up three point, five points. Steadily, you know, really in second place. It looks like you can imagine a world right, biden versus warren at end of the democratic race, could you . Absolutely that would be fairly in keeping how a lot of primary fights shake out towards the end with more liberal and more moderate candidate. Elizabeth warren has been doing a really good job, look to talk to people on ground as they do, she built a Good Organization in iowa. That will matter a lot. Coming out of iowa, there will be only a couple spots, as chris knows well from experience with ted. And in this crowded field well start to see it narrow down real quickly. I think she has a really good shot. Bernie sanders has got to be sitting over there, i kind of field for him. He has been talking about the issues a really long time. Connell do you think he would ever drop out, not now or drop out, david, take my voters, elizabeth . Potentially, his support is imploding. He is not winning anything come next year. I think probably have to. You know, must be really frustrating for him to see all of his ideas being front and center, he is not one to carry them. Shows you how much timing matters in politics. Not 2016 anymore. Connell chris, before the last break, we played it, last night at the rally, President Trump said something along the lines, you may not love me out there, kind of has a story some guy he did business with he claims, they didnt really like each other, but the guy liked hits policies at the end of the day on economy, even if he hated him, he would still vote for him. It brings up a larger point, chris, take it first, then david. For democrats if they go too far to the left that type of person, especially, who is not a huge trump fan, but more moderate or likes his policies, that you know, it could be letting an opportunity slip by here. Is that how you see it . I think it is smart of the business because right now, the economy is the going to be the dominant issue going into 2020. If its a good economy, history tells us, all the academic model, shows us, models demonstrate a incumbent president is more likely to be reelected if you have a good economy. Connell can he win in economy slipping a little bit, not recession, going up against someone really far left. If he is going up against somebody far left isit provides a certain debrief balance. Look at race after race for president if youre moving into downward economy, it makes it far more difficult for an incumbent president to be reelected. The thing about the economy, attitudes lead it to some extent. Connell right. Consumer confidence index, you really get into a battle back and forth. Im old enough to remember 1992 when ever the Bush Campaign was critical of the National Media and democrats, felt like they conspired to some extent to convince the American Public was slipping. Turns out the economy was slipping. You see some of that now. Noticed the Democrat Party website, twitter account, tweeted out, statement about walmart laying off workers. I think that is sort of a dangerous impact. Because that become as selffulfilling prophecy. Connell allegation is trying to talk us into it, a slowdown. Thats right. Connell or recession. David i want to talk about the democrats a little bit in context of joe biden we havent mentioned yet. Reports out there, people around him are now encouraging him to cut back on his schedule. The idea is, according to the reports they want to limit the gaffs. Biden himself says im a gaffe machine. They think he too tired late in the day. I guess he will be 77 in november, right . So the idea, hey, lets limit these, they could hurt him on the trail. What is happening in your view, with joe biden . I always think advisors who try to rein in authenticity of candidates have a real problem. This is who joe biden is. People know it about joe biden. Yes, it may get him some trouble, by and large, as poll numbers reflect it hasnt really hurt him as lot of people would expected. Frankly as i thought earlier on in the race. Biden should be out there being who he is, one of the main assets in terms of selling himself, people find him authentic and find him refreshing. That, cut back on that would be i think the recipe to kill the campaign because that is what he has going. Connell that is what he has going. Always been like this, i guess. That is the argument, chris, nothing to do with age . He has been saying stuff like this for years, i dont know. He is and biden team is in a bind. They want to run a 2016 campaign and third term and party moved on. He has reduced from 23 National Media interviews to nine