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tv   Bloomberg Markets Middle East  Bloomberg  December 5, 2016 11:00pm-12:01am EST

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debt, the economy has only contracted last quarter. >> netanyahu looks forward to meeting the new american president to a new his results on iran's nuclear deal. >> asia-pacific stocks extend the italy rally driven by mining iand consumers. >> and the gold standard for islamic states are opening up a new market. >> it's 8:00 a.m. across the
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emirates. angie: it is just past noon, welcome to bloomberg markets middle east. today it is a reversal of yesterday. there was a concern about the fallout over italy but when markets will help this morning here in asia, they are just following this global rally, a relief rally, you could say. yousef: it is a relief rally. some of these moves are simply remarkable. i put up this chart which shows you some of the volatility. this is what you can pull out on your bloomberg, and we have also added what happened with the trunk win in november. two lines, euro-dollar one week implied volatility, the vix. you can see the spike ahead of the announcement of the u.s. election, then look what happens in the run-up to the italian referendum and how it abates. bloomberg strategists making it
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clear there is little reason for the implied volatility. the markets want to focus on extension of qe in the eurozone, and the other one will be the decision from the fed. you are looking at later on in the curve, with the french election in april of 2017. what are you looking at, angie? angie: we are looking at exactly that. ecb decision on thursday, whether or not they are going to take in what italy's decision is going to mean for stimulus, and the fed doing the counterbalance effect next week. let's do a quick check of the markets right now because this really frilly is extending across the region. mumbai just came online 20 minutes from now -- a sorry, 20 minutes ago. right now it is gaining along with hang seng and the topix index.
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the broadest of the indexes in japan climbing as the yen maintained monday's losses. east, wen the middle are two hours away from the opening of the emirates markets. that happens at 10:00 a.m. local time. let's get you a run through some of what has happened yesterday. what you are looking at is due by and abu dhabi. that italian referendum gloom still feeding into it. pmi figures give us a good indication as to where the economy stands. financials in dubai driving a lot of those gains, utilities and telcos bucking the trend in saudi stocks. let's check in on the first word headlines with ross. : the parliamentary grilling of some of the biggest corporate names has taken a break for lunch. and others have been questioned about the influence peddling scandal around the president. admittedchairman
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buying a horde worth more than $850 million, but he denied wanting favors in return. south korea is claiming the north may have had to spur the command. it says the military units intranet server has been contaminated with malware. an unidentified official says military documents have been compromised. pyongyang sold blamed for robbing passwords. the italian prime minister matteo renzi has been asked to put his resignation on hold until parliament has approved a new budget. he says he will step down after voters overwhelmingly rejected his referendum on constitutional reform. the president has no asked him to stay on temporarily with the budget potentially going before the senate as early as friday. asset fell
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to $78.5 billion, according to bloomberg estimates. it shrunk 73% from april, 2013 under its former manager bill gross. the total return bond fund is now more than $79 billion in assets. global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg. angie: the reserve bank of australia did as expected when it left the cash rate unchanged at a record low of 1.5%. let's get over to paul allen in sydney, where the decision was completely unsurprising. statementnything in a to suggest that 2017 might be a different story? paul: well, a particularly. the rva did have some interesting thoughts on growth. it said in a statement that the
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decision to keep the cash rate on hold was consistent with sustainable growth, but also that there is some slowing in growth rate likely. tomorrow, we will have a gdp read for the quarter, expected to show a contraction of .1%. earlier today, we have the balance of payments current account out, and that showed a .2% drag. perhaps growth will become the issue of 2017. the rest of the statement really did read like a laundry list of challenges that the us trillion economy is facing. the outlook for inflation remains weak. the rba has since indicated that they may be willing to tolerate it. they also noted that the labor market is next, and that there is concern about the number of part-time jobs and casual as asian of the workforce. the bank noted the housing markets, which are weak in parts
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of the country but very strong in areas like sydney. obviously a cut to the cash rate. but overall, those apprise at all, the australian dollar did need a move -- didn't need a move. rba seesaul, the inflation remaining low for quite some time. they seemed reluctant to ease any further, given the points you made. what is the chance of the government coming out with some extra stimulus? that has sort of been a bleak reference the rba has in making, but there are limits to monetary policy, which is about as explicit as a central bank will get in telling a government that it is time you look at stimulus. the government of the day in australia is more concerned with what repair, -- with budget repair and protecting its credit rating. australia is on negative watch.
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one senior economist has been suggesting that the loss of the aaa rating might be a blessing in disguise, liberating the government, and allowing them to embark on infrastructure spending. we will get an update on that later this month, december 19. the treasure will give us a budget update, and if it is starting to blowout, that could be the catalyst for the ratings. they will be interesting to see if there are any changes in policy. yousef: paul allen, are men on the ground live from sydney. latest on the markets. jp has the details. jp: the mood we are seeing on the market is one of the bounceback after yesterday's selloff across all of asia. right now we are seeing the gains, and the feeling that
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perhaps the selloff was overdone. stocks from tokyo to thailand really rebounding, staying as the sort loser, who won the sore spot. look at thehen you different asian markets, it is an again that between taiwan and korea, but overall, a big sigh of relief from these different markets. if you want to look at how the different sectors are doing at the moment in the asia-pacific region -- let me grab this -- you can seal tentative energy is going up, oil and gas showed a little bit of a pullback earlier, but you can see the big pie of green across most of the major sectors. finally, i don't want to set you guys up without a look at the currencies -- you are seeing a
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little bit of pullback, the australian dollar not really ot ofng a lon movement. you,re's a story for interesting. iran will be other top of the agenda when the prime minister meets donald trump. benjamin then yahoo!'s opposition to the nuclear deal may gain traction with trump as his key. we're joined on the set -- great to have you. just when weion, thought that the tides were relaxing. >> the question that we have right now is what can netanyahu do? does he have the power to scuttle the deal? the question is, located, because it was a multilateral deal. the u.s. in itself doesn't have the power to put an end to this deal.
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however, when he can do is try to influence u.s. policy. election, with a congress led by the republican party, obviously we have now more of the republican party power, and we know generally that they have been more hawkish toward iran. aeir view is that iran is rogue state and needs to have pressure on it. so like an happen is that for additional sanctions to be applied through congress, additional restrictions, that would reach a level that would undo any benefit that it may have gained from the deal. yousef: the benefits they have gained -- i pulled up the opec function, which beautifully lays out how much they are producing in terms of crude oil -- what kind of reaction can we expect from iran, if that tension continues to build? >> slowly have seen so far is
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the president who started from the beginning of his term with the policy of engagement with the last, and that is how the nuclear deal came about. he really championed this policy of more engagement. however, with those signs in the --te house, there is really first of all, he has changed his tone is a matter of caution, and he has called on the u.s. to stand by the commitment. and obviously, if that continues, and there is a more hawkish stance, rouhani will be under pressure from home to react. angie: how does the u.s. stand to benefit from the iran deal? >> well, that's interesting, because iran is not averse to buying u.s. goods, despite the
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history of animosity. one of the first big deals we saw go through after the sanctions were lifted in january ofs year was a big order over 100 boeing planes. we are talking about a deal that is basically finalized, valued as much as tony $5 billion. -- as much as $25 billion. that can create jobs in the u.s., but that deal is also in jeopardy, because a few weeks ago we had a vote in the u.s. illgress in favor of a b that would stop the leasing or selling of planes to iran. if that deal doesn't go through, that will have an impact on both countries. angie: it was highly controversial politically, in the u.s. let's see how it shakes out. thank you. you can stay up to date on all of it and all the other major
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market moving news with the top live blog on the terminal. pliv. later in the show, saudi arabia trying to block a proposed payment. we will ask what it means for the companys'debt troubles. yousef: plus, from five years of pain, the insightful commodity bulls. all the details up next. you are looking at wti trading at $51.26, a similar picture for a lot of the others. this is bloomberg. ♪
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yousef: welcome back to bloomberg markets middle east, live on bloomberg tv and radio. pain, after five years of
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relief finally in sight for theodity bulls, because bloomberg commodity indexes set for its first annual gain since 2010. to our asia over commodities managing editor, standing by for us. what's behind the resurgence and commodities? it's sometime said about commodities that the best cure for low prices is low prices, and that is alluding to the cyclical nature of the market. that is all we are seeing now. prices fall, producers cut back on investment, more spending on production. supply tightens demand increases, and they read bank. after five years of declines we see the producer response from energy to metals, and this is
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leading to a rebalancing of the market. floor undering a prices and we are seeing the rebound in oil, and metals across the commodities. issef: what's fascinating when you pull up one of the key functions, the commodity overview, year-to-date returns -- the amount of games we have seen are almost unprecedented in some cases. which of these commodities have stood out? >> that's right. the biggest gainer on the index is zinc, up 72% so far this year. that is part of a broader resurgence in industrial metals. you have had the producer response but you have also have signs of demand picking up in china, the world's biggest commodity user, and china said it is going to spend billions on infrastructure, speculating that
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there will be demand increased. oil had the highest and 60 months yesterday, down a bit today, but it shot up after that shock opec decision last week with other producers outside the group joining in the production cuts. yousef: we will leave it there. our asia commodities managing editor in singapore. let's cross over and stay with this story -- ecb holds its last fall as a decision of the year on thursday with the italian referendum sure to be on the agenda. next week we are looking ahead with the rates rise with some meat on the bones in these big events. crystal rule is the chief economist at the abu dhabi investment authority -- great to have you. with the italian referendum out of the way, we talked about the volatility -- your topline thoughts on this rise of populism and has taken over the
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u.s. and is now still very strong in europe? usi think it will be with for a while and what concerns me is the economic consequences. it's interesting what we see emerging now in the u.s., the first ideas of what the president will be doing and how it is perceived by the markets. there is at least for the moment some optimism. my best guess is that governments will do what governments usually try to do, to go for fiscal stimulus, which will put pressure on the fiscal system. it happens in a situation which can be called as for the environment. the rate increases seem to follow. well enough in the situation is multiplier tends to be small, very private and very fast. as you look at the yield curve
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-- yousef: we have seen some very interesting moves and treasuries. how is fiscal stimulus playing into the fed? how do you expect the fed to move beyond december, as a lot of the central banks try at least to normalize monetary policy? about,hat stimulus comes and if market expectations have -- what iserm growth interesting also is the difference between the fed and the ecb. the question about whether we have longer-term divergence of monetary policy, with rates in the u.s. ticking up. and how would that divergence of economic policy, which has prided itself that long-term industries -- how was i going to be collected? it will make life more interesting for people like us. yousef: all that thought.
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we will continue that conversation. still plenty to come on the program. we will dig deeper into the commodities story and see where the road goes for oil producers. is the opec deal going to hold? stay tuned. this is bloomberg. ♪
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yousef: welcome back. the chief economist head of research at the abu dhabi investment authority is still with us. oilre we get more into the price story, i want to get your closing thoughts on central banks. this chart lays it out on what's been happening with the balance sheets. ecb balance sheet -- we put one of the boj up there as well, and the fed going up and up.
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the ecb has the second-highest balance sheet on the gdp ratio of some of the major central banks. looking ahead to the counseling meeting, how do you expect mario draghi to navigate these waters? he has oil prices and political populism to deal with. how do you make a decision with that? >> in the way they always do, you get the government together, you look at your mandate in the numbers. it's not there point to make political decisions about populism. banks ast that central try to signalell a consensus and they will carry on. the interesting part comes with the data change, may be as a result of politics like in the pass in theu get a u.s. which looks different from the path of your on interest rates -- of europe on interest rates. diversions are
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sustainable and the longer-term, and then you come to issues like inflation differentials and you get a whole different ballgame. in the short-term, we are quite happy to stick with the consensus. of thewhat do you think u.s. -- at the end of the day, you still have people saying that the fed is not going to be able to keep up with inflation, nor expected inflation, as a result of trump fiscal policy. they already indicated that the way to increase will be very, very slow and miniscule. >> that's the communications which have been given to the market so far, but what we also the seen recently is that term structure of interest rates have changed, and longer 10 terms are taking up higher.
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that clearly prices and expectations about growth in the u.s., which may not materialize given what i said initially. the speed of the short duration of fiscal multipliers. in that case, we could see an inflationary impact and of course the data set would have changed it would have to react. angie: quickly, toys 17 -- what is on the risk horizon? >> 2017 the risk horizon? i think a lot of the elections in europe will have a potential -- i think the biggest economic risk is probably disappointed expectations about economic policy and performance in the u.s. this is not only about what a fiscal stimulus is, this is also about the potential for protectionism, both as far as the free movement of trade and the companies --
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angie: all right, we are going to leave it there. running out of time.
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angie: 12:30 in hong kong. i'm rosalind chin in these are the first word headlines from around the world. japan's lower house of parliament has just approved a bill to legalize casinos, the closest the country has ever come to pass a controversial a deflation. a poll last week that 57% support continuing a ban on casino gaming. one pachinko equipment maker more than doubled since june. japan's cash machine has also rallied. asian stocks have joined a global relief rally as investors switch their focus back to the outlook for u.s. monetary policy following the topeka of i -- following the
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defeat of italy's constitutional referendum. the euro was near its strongest since mid-november after an initial slump following the italian premier's resignation. oil is on the highest close in 16 months as opec prepares to meet independent producers to implement agreed curves on supply. 14 non-cartel members, including mexico and on, have been invited to saturday's talks in vienna. u.s. stockpiles are split for a third week, according to official data. australia's central bank kept interest rates unchanged amid a global commodity upswing, using the impact of slower growth at home. the government says they have left the cash flows at 1.5%, as forecast by economists. they have already battled with record debt. the median estimate of economists is for a cut in the third quarter. global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries.
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i'm rosalind chin. this is bloomberg. si financial group has rejected a proposed payment freeze by a construction firm, effectively blocking negotiations between the company and lenders over $3.5 billion of debt. our finance reporter is here -- why have they rejected the request? >> good morning. samba is taking the view that the best way for it to get repaid is to pursue oger through the courts rather than trying to join up into a wide restructuring amongst a large group of lenders. there's not a very good president as the why the group restructuring is working, and samba in 2008 when another large family group in saudi arabia
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buckled under the strains of the financial crisis, that took a view that the best way to get repaid was to try to see the asset as quickly as it could, take its money, and walk away. samba seems to be pursuing this strategy as well with oger. angie: where does that leave oger, trying to sort out its debt problems? >> well, it is going to face a real issue now. the only real way it has to get repaid is negotiating with the government. this issue has arisen because oger hazard working on government related project, but the government has not been paying, as a result of the oil slump. is trying to negotiate to get the money coming through, but from what we are hearing, it is not going to happen so it is really struggling. they don't have a lot of options left. the bank could start pursuing
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their own actions against the company, and then it is going to create a real mess of legal claims against the company. yousef: one way to resolve some of the debt problems is by getting rid of some of your assets. we understand they are looking to sell a stake in arab bank, and some telcos? >> that's right. the issue that they will have trying to pursue this strategy is that most of these assets are quite highly levered on their own. if you sell the stake then all you manage to do with the proceeds is set all the debt associated that. that will help settle the debt on the turkish telecom business, but it still leaves a huge problem with 13 billion rail issues in saudi arabia for the construction unit, which is really where the heart of the problems lie. unless the government starts paying, that problem is going to remain unresolved, and the
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construction business doesn't have many assets to sell to settle this debt. yousef: always great having you on the set, always for that extra context. let's stay with the story. joining us now from london, the head of research -- great to have you. this latest move to block the proposal by saudi oger, given their size, this must come as quite a shock. >> actually, it was scripted. they announced it two months ago, that it was published they were going to go against oger. nowproblem is that until the problem is not solved. start to payt will -- if you look at the government reserve, shrinking by more than 14 billion between september and many contractors
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announced they will receive a portion of the debt that the problem is not solved. they will have to sell some assets, even in turkey. situation ise we have been contacting some banks and are estimating there are about six banks that have an issue with them. yousef: that hasn't dampened sentiment although clearly we have seen a remarkable recovery in saudi stocks, given where we were over the summer. the pessimism -- it's now one of the best performers in the world. where do saudi stocks go from here? theell, for a start, government has to start paying that contractors, and if you look to the deposit between banks it has actually improved. it used to be 80% and has been
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reduced. the loans were increased. it could reach about 87%. pricecond reason is oil improving lately, which pushed the market back. now we are estimating at the end of the year, we are waiting for and we are estimating the deficit is being drawn lower than what was estimated. angie: what is the ripple effect, not only for the market for saudi arabia but for the industry itself? >> you mean banking industry? no, thate fact that -- saudi arabia's overall economy -- this is one of the underlying
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factors at the end of the day. this is necessary for this kind of liquidity to move around and make sure the economy is stable. what kind of ripple effect are we going to see as a result? well, the government since last year had to revise the project and priority. the price of oil was too low, and they would make the government free some project. we're estimating, if oil prices improve, that those $20 billion canceled projects could come back again in 2017, which will revive the economy and inject more cash. angie: what is the social impact as well? therehat i understand,
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are a lot of people stranded in those labor there are a lot of people stranded in those labor camps as a result of this falling through. >> well, till now, it has been improving. the cash has helped so many we hearors, and now -- they receive a portion of the rights. i just pulled up this function that shows viewers how some of these evaluations have fared. we talked about the remarkable recovery of saudi stocks, and you can see what that has done to valuations. that puts it in context of some of the other markets. what are you looking for in the saudi budget? what is going to be genetically different that people can trade on? >> its the narrowing of the deficit. estimation was almost 312. the more the government can inject budgets, inject projects -- that is what the market is
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waiting, for the government to pick up, to revive, to create more jobs. there is some pressure in the employment rate has increased to 12.1%. the inflation has decreased to 3% and that shows consumption lowering. government that the has to revive with more projects. yousef: we will see what materializes. the head of research, joining us live from london. still to come, something definitely worth sticking around for -- gold is now an acceptable investment. we will discuss the implications of that landmark decision. bloomberg will this is bloomberg. ♪
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angie: welcome back.
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i'm angie lau in hong kong. yousef: i'm yousef gamal el-din in dubai. gold has become an acceptable investment in islamic finance for the first time, according to the institution's sharia compliant rules for trading. tracy alloway joins us live. we have it waiting for this for a long time. walking through the issues. morning.od issue is the complex way in which the islamic tradition treats gold as an asset class, and that has limited its development from what is an investable product. muslims are allowed to own gold jewelry and use gold coins, but there has been some scholarly debate about whether or not the metal qualifies as either a currency or commodity, which has made other types of investments somewhat more complicated. the aim of these rules is to
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create a unifying standard that will allow easier access for slightly more complicated investment products. for instance, we are arty seeing talk that the spd are gold trust, the biggest etf and physical owner of gold bullion, that it will qualify under these new rules. that is quite a change to a we have seen in the past. angie: how much is this expected to boost demand? tracy: i just gave you one big number -- $32 billion worth of assets. there are some others i could throw at you, for instance, $2 trillion worth of assets in the islamic finance business, 1.6 billion muslims around the world. you would think that this could be a significant source of a demand. that said, however, i haven't seen a lot of analysts getting excited about this news just yet. they could be that they are
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waiting to see how many financial supervisors aim at this growing investor base. one of the more interesting things i have heard is that they may be able to use gold as a way to meet requirements to hold high-quality liquid assets under new financial rules. that could be a significant source of demand, and i think it is worth reiterating that gold could use all the demand it can get. we have seen it fall about 10% since the end of october, thanks mostly to the end of the stronger u.s. dollar. angie: tracy alloway, live in abu dhabi. let's stay with commodities, where relief is finally in sight for commodity bulls. with us is our top forecaster, jason shanker, president and chief economist at prestige economics. he joins us from austin, texas. it is turning out to be a little
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party when it comes to commodities, but what is really underpinning all of this? >> i think it's two things. i think on the metal side, what has happened is that we have seen fundamental improvements in chinese manufacturing, pmi that comes out every month, and it has been significantly more possible in showing expansions after having been below 50 for quite some time. is maybe thats us manufacturing recession going on in china is over. on the oil side, it is all about opec. angie: all about opec. but it is boosting prices. what we have seen is that lower gas prices, lower oil prices, have actually shrunk supply. the with the shrinking of supply now boosting the price of oil, do you think we will see an
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inverse of what we are seeing in 2016 going into next year? >> well, i think there are a couple things around here. while we have seen what low prices and, in places like the united states, a mandate from banking regulators said, they have been mandated to pull back credit. what we also see is a seasonality for demand, very dependent on the summer driving season in the u.s., so we expect prices are likely to be bolstered once we get into those trading months, once we get past the nymex/wti contract. we see the demand for the u.s. driving season pulling prices up. then, i really think opec's announcement -- i was in vienna last week when they announced the production cut with non-opec members as well -- i think that has really helped support markets during a time of year when you typically
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see a reduction in demand from refineries. the election of donald trump has really put a fire under a lot of these commodities, speculative enthusiasm driving them to some highs we haven't seen before in recent history. give me a contrarian play, the, that might materialize. >> there are a couple things -- part of the reason you have seen these prices rising -- if you look at copper, that price was rising before the election. significantven by impertinence in the chinese manufacturing index. if we look at aluminum rising on trend all year long -- a lot of these metals have already been moved i think that for the election of donald trump, the implication is that there could be more inflation. what you are seeing is that some of the money is rolling out bonds.
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we see the back end of the yield curve rising quickly, and money going into equities, and into commodities, which had already been rising because of pertinence of chinese manufacturing. and you get a fundamental support raking through technical support and sending the price even higher. yousef: we saw a lot of excitement on the hope that we will see fiscal stimulus, infrastructure spending, $1 trillion coming from the trump administration. you talked about the rising yields, but how much infrastructure spending is needed to really make a dent in the global market as it stands with the supply and demand balance we're looking at? >> well, i think what is more important for a fiscal stimulus -- i think the expectation is you won't only get more spending, but they also expect tax cuts. the expectation from our client base is essentially that we are going to see donald trump cut
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taxes like a republican but do deficit spending like a democrat, which would really provide a lot of inflation. not just infrastructure demand and obviously infrastructure demand wouldn't justify a significant rise in aluminum prices, that doesn't make sense. what that really is, its concern about the inflation driving up the prices of real assets. at the same time, the manufacturing index, those have all shown expansion and deceleration in recent months, and that really is what is supporting it -- the global manufacturing demand coupled with concern about inflation for prices of real assets that are dollar-denominated. yousef: thanks. jason shanker. joining us live at quite a late hour. from social bank down to a nuclear crisis, we have the
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pessimist's guide to 2017. really? this early in the morning? stay tuned. this is bloomberg. ♪
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angie: welcome back. i'm angie lau in hong kong. yousef: five yousef gamal el-din in dubai. let's get a quick check of the business flash headlines, starting off in egypt, where they rose to their highest in the first time as money floated from global lenders. reserve reached $23 billion, up from $19 billion in october. cairo received the first installment of an imf loan last week, along with funding for international banks. the central bank governors says he wants $25 billion by year-end. angie: opec's chances of implementing curbs on oil production have been hit by
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three african members raising output last month. productions in the cartel as a whole rose to a record 34.2 million barrels per day in november, with angola leading the increase. in nigeria and libya also boosted output, not bound by the cuts as they recover from damage to their oil infrastructure. vetof: russia and china the security council resolution demanding a seven-day truce in aleppo to allow humanitarian access to besieged areas. antigovernment forces have held parts of the city since 2012, but defenses have buckled since russia's intervention. on sunday the syrian army ordered rebel fighters to leave the city or be wiped out. you think 2016 has been a bad year for various s reasons, brace yourself. we have compiled a pessimist's guy just 2017 -- pessimists guide to 2017. david tweed has the story for
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us. who or what? david: trump right,? he was at the heart of what happened in 2016 as well. these are the unexpected things that happen -- brexit came in, no one was expecting brexit. trump's chances of being elected were pretty slim, according to most of the people looking at it. obviously they miss what they should have been looking at. what we have tried to do is look at a whole lot of different things that could happen in 2017. it's not a prediction, it's tongue-in-cheek, but a lot of it looks pretty scary. i want to start by saying what could happen in the u.s. we talk about what could happen if there was a trade war between china and the u.s., we talk about that, because it is something that is a very realistic prospect. but let's consider what could happen in the united states. you could have a situation where trump becomes incredible popular
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in the first months of his presidency. he might pass a whole lot of stimulus measures. that could be useful. that could cause a surge. but at the same time, he might then repeal all of barack obama's legacy with some special orders. that could lead to social unrest on the streets. how would a trump president be expected to battle that? maybe he would battle that, and that is what the risk is. we could see curfews on american cities. maybe the national guard. these are the risks. that we have a big split going on in the domestic area. yousef: since you've got the crystal ball, what is missing from this list? david: well, i reckon one of the is thei would have added possibility of having a nuclear arms race in asia.
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trumps the idea that might allow japan or even saudi arabia to get nuclear weapons if it withdraws the nuclear umbrella, but i am also interested in look at happen in asia. you have this possibility that south korea also gets nuclear weapons, then you have japan and south korea. how would china react to that? iraq and china would try to beat up its nuclear arsenal. how would india, with the border dispute with china, react to china with more nuclear weapons? they would probably do the same thing. they would try to boost the nuclear arsenal. pakistan looking at india with more nuclear weapons? timeout think so. these are some of the things that could play out. these are the unintended consequences. our government reporter in hong kong. we are looking ahead at what the dow jones extends record highs, u.s. futures called higher.
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that's it for this edition of bloomberg markets middle east. angie: we will have all the top stories from around the world coming up. for now, bloomberg tech is next.
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angie: korean lawmakers are grilling some of the country's biggest countries as part of the scandal surrounding the president. the samsung vice chairman has admitted purchasing a horse for the daughter of the president's confidant. a bill has been approved to legalize casinos. the majority of the voters opposed the idea. it is the closest japan has ever come to approving casino gaming, but it still needs approval. rates at kept interest a record low with


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