in downtown washington, i am kevin cirilli. shery: and from bloomberg world headquarters in your, i am shery ahn. welcome to "balance of power" or the world of politics meets the world of business. we look at the path forward for the fed. former new york president bill dudley calls president trump's trade china manufactured disaster in the making in a bloomberg opinion piece, saying what if the fed's accommodation encourages the fed to increase the trade war further. officials could state specifically the federal will with us is -- bloombergs international economic policy correspondent michael mckee. we understand where the former fed president is coming from, because the fed is facing a dilemma. one at this put the fed close to the realm of politics? michael: absolutely, which is

why they will not do it. bill dudley has an understandable position. most of the people in jackson hole are muted. the world economy is going to a slump and the u.s. may be slowing down as well because of the president straight all of these. the fed is not going to get involved in the politics of making trait decisions. jay powell on saturday -- on friday said setting trade policy is the business of congress and the administration, not the fed. our assignment is to use monetary policy to foster our statutory goals, which are maximum employment and stable prices. kevin: despite all of the political snafus around the central bank, confidence declined less than forecast. we are getting new numbers that would suggest consumers are not feeling the recession fears as much as we anticipated. michael: certainly not as much as wall street. what may have happened is

companies stopped up a lot ahead of the tariffs imposed and we see that in the inventory numbers. as though start to work down, prices may rise. if the president imposes sanctions on the last $300 billion, that hits consumer products, which had been off the president's list in a bid to try to hold down the political blowback. if consumers start having to pay more for things made in china, they will probably change their minds and we will see consumer confidence fall. consumer spending is 75% of the economy, 70% to 75%. once it gets to the consumer, you have a problem in the economy. shery: do your point about the fed mandate, bill dudley pushes back on that. he says the goal of monetary policy is to achieve the best economic outcome. he says the fed should consider how concision -- how decisions will affect the political outcome in 2020. that is going pretty far.

no wonder we are getting pushback. michael: he is basically telling the fed they should take a political position. the fed has avoided that over the years. the farthest they have gone is to say we could use fiscal stimulus to the economy in slow periods. they do not say what kind. they say that is up to congress. the one time that happened was alan greenspan saying maybe we should have a tax cut in 2001, a stance he ended up regretting. kevin: thanks to bloombergs michael mckee for breaking that down. now for the latest on where trade talks stand. let'we miss you in washington, . what is the latest on the trade front? sarah: the latest we are reporting is a question left unanswered over the weekend at the g7. how is china reacting to trump's back-and-forth on whether he is taking a softer tone to a trade deal or he is intent on hitting

china harder? what we are hearing from our sources in beijing is china does not trust anymore, so it will be hard for them to cut a deal, both politically and as they prepare for their economy to go it alone a bit more. there is an idea sitting in that it will be hard for china to get a deal with trump before the 2020 election. the economy is slowing and so they need to start coming up plans to make sure they are bolstering their economy and preparing for a protracted trade war. shery: very difficult for officials around xi jinping to plans to makeconvince him to sf trump could break it. we are still expecting the talks to occur in september. we have any idea where we stand? sarah: both sides last told us they are moving ahead with talks for early september. chinese officials were supposed to come here and resume negotiations a few weeks ago. we had the american officials in

china. it is increasingly unlikely those talks will take place. we have not heard a date for them. we know the lower level deputies are speaking, but it is hard to imagine chinese officials coming here. what will they possibly talk about? september 1 the tariffs are supposed to increase on chinese good. seeing the 10% tariffs on $100 million of additional chinese goods. the side seam further apart than ever. interesting if they are meeting to get a copy of the agenda because there is no way to predict what they could talk about this point that could possibly get them closer. is their incentive on president xi's side and president trump side to go into the talks and say let's get a mini deal and save face? a type of situation that would ease the applicable tensions in both countries? the hardestrah:

part of getting a mini deal is that china's number one demand is tariffs put in place by the trump administration be it is hard to imagine the tariffs staying put even in the current situation, let alone going away altogether. even politically from china, xi jinping does not have the same political demands as trump, but there are a lot of hard-liners in the party that are getting tired of the trump administration taking to china to task, treating them like a lesser cousin. it would be hard for president xi jinping to settle for anything less than a rollback of the tariffs, which they have asked for and the trump administration does not seem close to promising that. shery: sarah mcgregor in los angeles, thank you so much for the latest on u.s.-china trade. we now go to emma chandra in london. italy is having trouble forming

a government. we saw days of frenzy negotiation. we know where president trump stands. he tweeted about his support for conti. emma: that is absolutely right. we are looking at these new talks between the five-star movement and the democratic party, once a longtime rival. two days of talks as they try to form a new government, a new coalition government. the previous coalition between the five-star and d-league broke down. this new coalition is to try to form a government to prevent general elections that could see the league leaders party emerged as the largest party. the sticking point does seem to be over the position of the current prime minister conte. he is an independent. five-star wants him to remain as prime minister. the democratic party say this is more to do with the ambitions of

the leader of the five-star movement. we saw the tweet from president trump. he has come out and endorsed conte as prime minister, saying he is highly respected, he represented italy well at the g7 , he gets on well with the usa and he wants to see him remain as prime minister. our colleagues in italy saying there's a lot of talk about this in italian media, saying this kind of thing has never happened before, the u.s. president weighing in on coalition talks between the italian parties. kevin: that is such an interesting point. if you look at how president trump has played as an asset to benjamin netanyahu, as an asset to boris johnson, what would a conte election mean for president trump's influence in the region? to seet is interesting

how this will play out within italian politics. conte will still be an independent and has basically let a populist government, the coalition between the five-star andy lee. league.and the that has broken down. this is now coalition tops between the five-star and the democratic party, a much more left-leaning already how that will play with those talks with president trump endorsing conte is hard to tell. both sides the five-star and the democratic party saying the talks are ongoing. they hope to form a coalition. they have until tomorrow. the president has said he wants to hear from themnot he can appa new prime minister or appoint a new government. kevin: now let's get a check on the markets. here is kailey leinz. kailey: keeping it interesting in the u.s.. an up day has turned into a down one.

all averages down about .25% or more. this is a quick reversal from what we saw earlier. the intraday chart of s&p 500 futures. when we opened we were up about .7% and we have quickly fallen. now down about .4% on a futures basis. this as traders and investors prove sensitive to every headline, whether we are getting a softer tone on trade or lingering concern with global growth. what is leading equities lower is the financials. the biggest under performer on our sector basis, down as a group by .5%. j.p. morgan and bank of america and citigroup 1.5% or more. thanks being put under pressure because yields are falling yet again. the 10 year down six basis points, falling to the 1.5% level. that is causing financials to be one of the worst performers. let's take a look at monthly charts of u.s. yields.

this is the monthly move for yields. yields have fallen 50 basis points over the course of the month of august. that is the biggest monthly drop earlyld since back in 2015. early 2015. a big move in bonds and that seems to be the story. kevin: thanks. for more on all of this and in particular how trade is impacting the 2020 presidential campaign cycle, be sure to tune into bloomberg radio sound on which i host right here on bloomberg, 99.1 fm. you can also find it on itunes, i heart, and a host of other platforms. check that out for sure. this is bloomberg. ♪

kevin: this is "balance of

power" on bloomberg television. shery: we turned out a mark crumpton for first word news. mark: iran has all but ruled out tops between their president and president trump. rihanna says he is not interest -- the president says he is not interested in a photo op with president trump. it says if the u.s. wants negotiations it must live sanctions. iran's foreign minister's is a meeting between the two is unimaginable. president trump signaled he could meet with the iranian president and perhaps ease restriction. turkey says russia has begun delivering more components of its has 400 missile defense system despite strong objections from the united states. washington says the system is incompatible with nato and poses a threat to the u.s. that have 35 fighter jet program. it has threatened sanctions against on kara. -- against ankara.

the brazilian president says brazil will only accept an offer of international aid to fight forest fires if you menu micron retracts forest -- if emmanuel macron retracts comments he finds offensive. bolsonaro says micron called him a liar. -- says emmanuel macron called him a liar. and herlori loughlin fashion designer husband are expected in boston federal court today. at issue is whether the couple can continue using a law firm that recently represented the university of southern california. the couple is accused of paying $500,000 in a sweeping college admissions bribery scam that involved rigging college admissions stamps and bribing coaches at elite universities, including usc. 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 mark crumpton.

this is bloomberg. welcome the director for the federal budget at the heritage foundation. thank you for being here. i was looking at the consumer confidence numbers before we came on air. i was struck to see that the expectations were that consumer confidence would dip significantly, and it not to best much. >> economic fundamentals are still strong in the united states. workers have an abundance of job opportunities available. why wanted consumers be upbeat? tariffs,en you look at not just on big businesses but also small businesses, as farmers, this is giving jitters to average americans but also folks around the world. we are seeing most of that uncertainty play out in the business world. consumers have not grasped how

significant these tariffs are. it is the one dark cloud on our horizon that the president could do a lot about. it is time to end this trade war. shery: the president has suggested helping those people with payroll tax cuts, indexing capital gains. let's start with indexing capital gains. the tax foundation found that over the next decade, these measures would only at the gdp of 0.11%. wages will increase slightly. full-time jobs will be added but that would be a negative for federal revenue at $178 billion taken away from the state coffers. with this help in spurring the investment of the country -- that the country seems to need? capital gainsng to inflation would be good for

long-term productivity. cutting payroll taxes would be a revenue downer. we do not have a problem with employment, we have a problem with uncertainty primarily driven by the trade war and high government spending and debt. the best thing the president can do is fix those issues at the root. that means stopping this trade war, removing tariffs, and providing some certainty that the federal government will reduce its spending and debt, working together with congress to produce a budget that puts us on a path to balanced or to a point where the debt is not growing much faster than the economy. --ry: we heard from new york former new york president bill dudley saying the fed should not encourage president trump's trade war. what is the risk of the u.s. ending up like europe or japan who have kept piling up debt to their economies? romina: the united states is in a different situation because

the dollar looks strong. u.s. debt is in high demand. that is not a situation we can melt for long. now is the time to cut back on federal spending. the president can also work with congress to provide certainty on the tax side. if we spend too much, there is the question of whether the tax cuts will be extended. some of those expire. cutting spending, reducing the debt, providing uncertainty on the trade side and the tax side, those are the best remedies the president and congress could approach and that will allow for strong growth going forward. kevin: which republicans are carrying that water. it seems like more spending and more spending. romina: that is contributing to the uncertainty we are seeing in the market. how long can this go on? that is what a lot of investors are asking themselves. that, together with the trade war, is what is driving the issues we are seeing right now, including the inverted yield curve. kevin: play the long game with

me. who in the republican party is bellowing cries of concerns with too much spending? i've been in the halls of congress every day and i cannot find one lawmaker doing that. romina: they are not doing that. we are seeing a lack because the population constituents are starting to wake up and care more. found deficits were becoming a major concern for the populace. it is time for politicians to pay attention and raise that issue. right now congress is not doing much of anything. they do have a chance in september when they will have to pass spending bills. that is the time to take that as an opportunity providing certainty going forward by reducing spending and not spending to the limit that was agreed upon in the bipartisan budget act. shery: some people reporting the tax cuts say this would help keep the u.s. economy from unnecessarily slowing down and give a helping hand when it

comes to the negotiating leverage the president would have against china. with this help? romina: i do not think a payroll tax cut will be helpful. we have unemployment below 4%. the reason you do a payroll tax cut or a tax holiday is to spur hiring. we do not need to spur hiring. we might need to be concerned about a labor shortage. the job market is strong. why would we addressed it in an area of the problem does not rest? if all you have is a hammer, everything looks like a nail. thank you to romina boccia from the heritage foundation for breaking down all that for us. shery: still ahead, phillip morris and altria shares are on a wild ride. the cigarette giants are in talks to combine again. we are seeing downside pressure for u.s. stops with the s&p 500 down .3%.

we have utilities and real estate gaining ground. financials and energy are pulling the index down. the dow is losing 82 points and we have the 2-10 inverting further, and we are now seeing it the most inverted since may of 2007. this is bloomberg. ♪

kevin: this is "balance of power" on bloomberg television. i'm kevin cirilli in washington. shery: and i am shery ahn in new york. phillip morris and altria are both under pressure after the company is confirmed there in talks for an all stock merger. we have seen these stocks on a wild ride in the session and also they are trying to merge after they broke up about a decade ago. kailey: they are getting back together. this reversal is interesting. you saw altria up 10%. that has come back down because

of the ratio they are discussing. phillip morris getting a 58% stake and out tria only 42%. .e can pop into the terminal as you mentioned, these companies had split up and this is look their performance. phillip morris has been outperforming. analysts have long said both of these companies would do better they were brought together again and analysts like the idea of this merger even though both stocks are down, in part because it is more geographic diversification. altria gets the more exposure outside the u.s., but as we know smoking rates are falling drastically, especially compared to the rest of the world. for phillip morris, that is why the stock is lower, because it is giving more u.s. exposure. altria has been making more strategic investment.

jewel, very popular e-cigarettes. phillip morris has a heated secret product and those are popular alternatives they have shifted to. kevin: is this also about cannabis? courtney: it is. altria also has estate in krona, canadian cannabis company. there's a lot of geographic opportunity. shery: kailey leinz, thank you so much for the latest on our stock of the hour. coming up, president trump shifts his tone but not his tactics on china. how long can the president keep the trade war going before there a political price to pay? chan oftalk with lanee the hoover institution, next. this is bloomberg. ♪

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there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. is "balance of power" on bloomberg television. lanheewe welcome

chen. chen. i want to stick with u.s. china trade talks. there has been a dizzying amount of news on that particular front. how to the chinese view all of this. i know you talk with a lot of chinese businesses. >> i think the challenge for the chinese was the unpredictability. they believe winning out trump they follow our politics and i think they figured out that this election will be a crapshoot. they will do their best to wait things out. dothe meantime, they will their best to do with the fluctuations while keeping their eye on the ball. when i see these headlines with the hong kong protest, he is facing some pressure of his own. lanhee: he is facing pressure, the economy is not good in china.

the biggest challenge that president xi has is an internal one. obviously there are political factors there. if you talk about political sensitivity, ours is much more political than his is. he know president trump has an election to worry about next year. the factors aligning here in the u.s. are probably more acute than those happening in china. shery: the president continues to have the support of his base, has given the farmers about $28 billion of subsidies. are you starting to see any cracks? lanhee: i think the challenge for the president is the policy, the tariff policy continues to be one that will affect consumers. the congressional budget office recently estimated there was a modest impact on consumers in the u.s. impact is likely to increase if continue and escalate. certainly with respect to the farm constituencies in iowa, a critical state for the president

haven, there, the tariffs had a more significant impact. the president will face some pressure from those constituencies and others impacted by the application of tariffs. shery: if you work yourself back to get yourself some sort of agreement with china, i wonder how important december 15, when the final rounds of tariffs are supposed to be implemented, will be a moment where he could present de-escalation? the questionuld, is whether the president chooses to deescalate now are getting into 2020, thinking the economy will need a boost. certainly up for question, but no question the president will try to find some sort of resolution because politically it will be important. kevin: we have this monmouth university poll coming out yesterday, a lot of folks talking about it, in terms of

what it means for the lower tier candidates. bernie sanders and elizabeth warren weeds the top of the pole . more of a three-way race. i look at sanders and warren, they are advocating for tariffs. lanhee: you are right, it's a question of process. these guys are on the same page in terms of saying we have to be harder on china, we like tariffs , but they are not saying go,ffs is the wrong way to being tough on china is the wrong way to go. if you combine sanders and warren, that is just 40%. that shows you where the energy in the democratic party is, the far-left candidates. if they consolidate around one, i think biden will be in trouble. kevin: i know that you work for mitt romney but i'm asking you to put on your democratic consulting cap. what does joe biden need to do? startedi think he has

with an ad out today on health care, personalizing his support for obamacare. this will be a critical issue in this primary. if he can draw differentiations and say these other guys want to tear down obamacare, look at what together as democrats, that will be a powerful and compelling argument. that is where i would go if i were him, issues, health care in particular, and making a personal appeal. shery: what will you be watching in the next democratic debate in houston? tohee: we are likely going be down to 10 candidates, maybe a few more than there are some qualifications here or there -- this qualifications here or there in the next week. i want to see if the progressive candidates begin to go after each other. so far it's been relatively groomed by on the far left. the question is if they begin to tear each other up to be that individual to go up against

biden and that more modern view in the democratic party. are these progressives going to go after each other? the other issue is how biden fares. be able to continue talking about electability, about the guy that can be trump going forward, and will not be the essence of his argument? that argument at the end of the day relies on polls, and the minute that you get a bad poll, that doesn't work anymore. shery: we know historically presidents have not been reelected overseeing a recession. we see one coming with the yield curve inversion. most analysts are saying a recession is perhaps 18 months away. will the president be able to ride this through or will he be cutting it close? lanhee: the key question is not the state of the economy at the point of the election, it is leading into it. a rough sixdent has months before next november, it

will be a challenge for him to win reelection. the question is, the timing of the recession will be critical, as well as the severity with the slope that we enter the other recession. those are key questions that we will look at politically to see how trump fares. lanhee chen, thank you so much for joining us to break that all down. shery: the devastating fires in personal.mazon turns the brazilian president and french president emmanuel macron square off over insults and aid. this is bloomberg. ♪

kevin: this is "balance of power" on bloomberg television. i'm kevin cirilli in washington. shery: i'm shery ahn in new york. brazil says no thanks to the south american country -- the south american country will reject the aid package for the fires devastating the amazon rainforest. the funds pledged at the g7 have spared a public rift between jair bolsonaro and french president emmanuel macron. chief of staff rebuff the funds also taking aim at macron, saying we are

thankful but maybe those resources would be more relevant to reinforce europe. avoid as unable to preventable fire in a church that is a world heritage site. for his part, bolsonaro has said that he would take the money if macron apologized. let's welcome in eric farnsworth. anknow there has been ongoing feud between the leaders on social media. bolsonaro making a sarcastic comment, mocking the french first lady's appearance. is this really spilling over into real issues that both countries should focus on? eric: thank you for having me back. this is an unfortunate circumstance that the feud has become personal. that does not lend itself to a positive resolution to what is a very serious issue, fires in the amazon. deforestation is not something that just started overnight, and

it is not unique to brazil. some of the surrounding countries have issues as well. it has been an issue that even before he was elected, president bolsonaro suggested he would open up more development in the amazon for agricultural interest, for business, as a way to build the economy. brazil is, he says the owner of the amazon, and so how dare people tell them how they should use it. there is an historic sensitivity here, and a lot of this is playing into it. president bolsonaro sending the military to fight those buyers. how much would have this funding helped? eric: at the margins. these are massive fires, it will take a lot more than $100 million to bring them under control. mostis something that people who have not been to the amazon simply cannot visualize how massive this part of the world really is, how large some of the fires are.

some of the techniques, some of the funding certainly could help at the margins. at this point, everything, every health is good. shery: we are hearing reports emmanuel macron is also considering opposing the trade deal between the european union and mercosur. this is collateral damage of that feud going on between iszil and france, but there more to the story than the forest fires. the negotiations between mercker sir and the european union has been going on for over 20 years, finally came to resolution earlier this summer. france and ireland as well two recalcitrant countries because they didn't want the competition from brazilian and argentine agricultural interests. excuse,ay this is an but it ties into the reluctance perhaps already that france has exhibited toward this trade agreement.

it will not be helpful in the context of trying to get a confirm implementation. shery: in the meantime, president trump backing jair bolsonaro, tweeting, i have gotten to know president bolsonaro in our dealings with brazil. he is working hard on the amazon fires and in all respect, doing a great job. he and his country had the full and complete support of the usa. we know that they have had a friend the relationship. how much progress have we seen since their last summit when it comes to their business relations? eric: the united states and brazil under presidents trump and bolsonaro have clearly tried to get closer, change the dynamic, change the political circumstances that existed with the previous presidents of brazil. this has been a political decision of both governments to try to get closer. the pragmatic impact of that to

this point has not been terribly noticeable in terms of policies or changes in specifics. it's been more of a tone. but look, you hear a lot about the discussion of the possibility of trade agreements, enhanced economic relationships, so clearly this into that as well. to the extent president trump, by supporting president bolsonaro, can build that bilateral relationship, and take a dig at some of the europeans, he probably sees it as a twofer in terms of clinically for him. shery: let's talk about argentina. we are seeing imf officials there. does this give you a case of deja vu of what we saw two decades ago? eric: [laughter] i know it is giving investors a case of deja vu. this is something that all of us hoped we would never have to see again in any emerging market. the results of the primary

elections earlier this month in argentina clearly were bracing effect on investors. the imf has over $50 billion in loans that they have to figure out now how to get repaid. the formal presidential elections have not occurred yet, those are in october. based on the anticipated results, you are going to have some changes perhaps in argentina, and that will definitely affect the interests of the economic community. shery: can investors have some encouragement, or are there any signs that could be encouraging for investors in the markets when they take a look at alberto fernandez? to the extent that people are following his rhetoric, his anticipated programs, it has that been as sharp as perhaps people might have anticipated.

in other words, he has not trade,d open economies, threaten to walk away from trading agreements, that sort of thing. there could be a silver lining their perhaps. we have to wait and see. rhetoric is one thing. realities in terms of policies implemented is quite another. i remember i was in bolivia and that debt crisis hurt everyone. every south american country was in pain. i wonder how this will exacerbate the conditions in venezuela because that issue continues, refugees are going down across the countries in the americas. nicolas maduro now saying they've been holding secret meetings with u.s. counterparts for months, but this has been disputed. where are we when it comes to venezuela's position? eric: in terms of the transition from venezuela to argentina, if you have a change in government,

you'll have a different argentine position on venezuela, which will begin to break down the international consensus on venezuela. where are we on venezuela? essentially in stasis after the uprising at the end of april and may. a lot of people thought maybe that was the end of the maduro regime. there has been a lot of discussion about what next? has amped upates sanctions, to be sure, but there are discussions ongoing both in barbados between the opposition and interim government of juan guaido, as well as the maduro regime. it has no lead to anything, a lot of skepticism around those discussions. apparently the u.s. has also been having discussions with senior leaders of the venezuelan regime with the purpose of getting mr. madero to leave voluntarily. the basis of the discussions appear to be that there would be guarantees given to some of the

senior officials for amnesty and the ability to be a part of a transition government. so they are looking for off say, for people to say, we don't want to support mr. madura anymore, but we will be taken care of, so we are willing to work for transition. shery: eric farnsworth, thank you for joining us. kevin: fascinating conversation. that stock iran policy. with us now is bill faries. do president trump and president rouhani have any incentive to meet? for sure.ome level iran has been hammered by the u.s. economic sanctions, wants to be able to sell oil again. trump loves to be a dealmaker. after meeting kim jong-un, this would be one of the biggest deals he could make. that said, both of them are political leaders and they have constituencies that are definitely opposed to any kind of detente. shery: does this mean the talks

will continue with the european side trying to keep the iran nuclear deal alive without the u.s.? i think the iranians and president rouhani and the foreign ministers are going to press the europeans to find a way for iran to get economic benefits from staying in the deal. said, i think that effort has largely been at a standstill for months now, the europeans have not figured out a way to get around your sanctions. iran could either sit and hold its breath and hope it democrat comes in in 2020 20 that is more willing to work with them, or they will have to find a way to broker a deal where they and the trump administration sits down and find a workaround. likelypresident trump heads to the yuan general assembly in september in a few weeks, but republicans are already criticizing emmanuel macron for saying that he would like to see this meeting happen. how will the republican pressure placed upon president trump

impact the prospects of there being a deal with rouhani? bill: the yuan general assembly next month is a great opportunity. it is a forum where these kinds ofwhat political advisers say. president trump is the wildcard here. if he decides he wants to make it happen, he can. the iranians need to have some sort of a concrete deal on the table. they do not want a photo op. countriesall of these like iran, china -- we have heard from chinese sources that they cannot trust president trump anymore. is this the same sort of narrative coming from all of those countries that are planning to negotiate with the u.s., that they cannot trust any agreement that they have with the united states and president trump? bill: it is certainly something you hear from the iranians. is u.s.-iran relationship one in particular where there is a lot of distrust on both sides.

the iranians will argue they had a deal, the u.s. toward up, so the ball is in the court of the u.s. to come with something. everyone is concerned about what degree the president is consistent. is that last deal, income or will he change his mind? that is something countries have to sort through, and have to do so in the context of what is now a presidential election. kevin: thank you to build fairies. more "balance of power" next. this is bloomberg. ♪

kevin: this is "balance of power" on bloomberg television. i'm kevin cirilli in washington. shery: i'm shery ahn in new york. johnson and johnson has been held liable for fueling the opioid crisis in the state of oklahoma. in a landmark decision, the judge ordered the pharmaceutical million.o pay $572

while the penalty was less than expected, the ruling has opened the door to other cases. joining us now is riley griffin. the state wanted more than $17 billion. compared to that, it is not a big deal, but it is the president. riley: absolutely. keep in mind, johnson and johnson is the first major company to go to trial facing some of these opiod suits. other companies, purdue pharma, teva, settle beforehand. that is why this decision is such a landmark decision. the public nuisance theory has that been used in similar cases before and will set precedent in that thousands of cases moving forward. kevin: addiction is much more than a public nuisance. i've been glued to your coverage on this particular issue but i have to be candid. is anybody going to go to jail because of this, or are these companies too big to jail? riley: there are federal suits at large, the attorney general

coming at it, and the ultimate question will be will department of justice pursue this in a criminal matter. right now we are focusing on johnson and johnson at the state level and the attorney general, their suit. shery: why is the nuisance very so effective here? the onuscause it takes away from doctors and really puts it on manufacturers, distributors, pharmacy benefit managers, for fueling the crisis. it tells you to look away from the prescription process and look at the industry itself. kevin: are any other companies at risk now for -- as a result of this president? riley: absolutely. johnson and johnson is in a different case. it is so diversified and large, they areendo, teva -- some of the manufacturer is exposure at a more potent level. shery: thank you for that

coverage on the oklahoma opioid trial. toing up, we are speaking myron brilliant to talk about trade and the health of the economy. sign up for the balance of power newsletter to get the latest on global politics in your inbox every day. also check out the terminal as well. take a look at the markets, we are seeing the dow lose 150 points. the kleins art celebrating with the s&p 500 down half a percent. we continue to see financials and energy leading the declines. alsoield curve, 2/10 greatly inverted, the most since may 2007. this is bloomberg. ♪ ♪

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designed to save you money. save up to $400 a year on your wireless bill. plus get $250 back when you buy an eligible phone. click, call or visit a store today. mark: i'm mark crumpton with bloomberg first word news. the british government sees an opportunity to restart brexit negotiations with the european union after prime minister boris

johnson met last week with french president emmanuel macron and german chancellor angela merkel. one british officials said the two leaders appeared to relax their language on the brexit withdrawal agreement, especially involving the irish border. in italy, talks between longtime rivals to form a new government are close to collapsing. that could lead to early elections. the populist five-star movement says it will resume talks with the democratic party unless prime minister giuseppe conti is allowed to keep the job. the democrats say the real problem is five-star's leader must be both deputy mayor and interior minister. the main u.s. backed syrian kurdish militia has begun with strong its fighters near -- border aser part of a deal for a so-called safe zone in syria. turkey sees the fighters as terrorists. american troops are stationed in northeast syria along with the kurdish forces and have thought