I was a hostage. He is very keen to clear his name. Party on, elon. Tesla celebrates a milestone of its push into china. Huawei braces for another challenging year under u. S. Sanctions. We hope restrictions do not get worse, but if they do we have a plan b. Sebastian Alan Greenspan says the only way to curb deficits is to pull back benefits. We are trying to spend more than we have. Sebastian thats all straight ahead on bloomberg best. Sebastian hello and welcome. Im Sebastian Salek and this is bloomberg best, your weekly review of the most important Business News analysis and interviews. Lets start with a day by day look at the top headlines. The week began with markets reeling from a geopolitical shock, an attack that killed one of irans top military officials. The fallout of a top Iranian Military commander is widening. Lawmakers in iraq have voted to expel american troops. Iran says it will no longer abide by the Nuclear Deal Reached with major powers in 2015. President trump threatening iran with major retaliations if they do anything. Where are we right now . We are hearing reprisal talk on both sides. We are hearing from a rock. The parliament voted that they do not want u. S. Troops in iraq. This is the death knell for the nuclear accord. What happens in terms of any retaliation from iran . Oil hit 70 a barrel. The state Department Warns of heightened risk of missile attacks near military bases and Energy Facilities in saudi arabia. This will surely urge the iranians on to do something. Markets are simply saying that we dont know yet what the iranians will do. The day after, we dont know what in fact the u. S. President will do. Tweets are one thing. Actions are another. As we have learned in the past. The resilience in the market we are seeing is pretty striking, i think. It looked this morning like we were going to get some continuation of the selloff. Here we are going out at the highest of the day. Markets are still complacent. Markets are reacting as you just described, as if this is a nonsequential longerterm problem. We can speculate about what the geopolitical risks are. We know them. How this will play out remains to be revealed. Tensions continued to climb between the u. S. And iran after the killing of a general as the pentagon has deployed additional troops to the middle east and the u. S. Has denied that it is exiting neighboring iraq. There is a three ship Amphibious Group that is moving into the persian gulf. It was in the mediterranean. There were hundreds of thousands of iranians who are out in the streets, protesting and marking the end of the life of soleimani. The threat on iran is still operative. Their promises to retaliate are still operative. President trumps threat to sanction iraq is still operative. The generals funeral is postponed after dozens of mourners were killed in a stampede as iran gave notice that it was expecting retaliation. The head of the National Security council said, even if the weakest of these scenarios gains consensus, the implementation could be a historic nightmare for americans. The administration has said this is an incredibly fluid situation. It is one that is ultimately up to around. If they continue to strike, the u. S. Would return in that action. Mike pompeo speaking at a briefing earlier today at the state department was incredibly clear that the u. S. Would continue to strike and act in force should tehran continue its expansionary foreign policy. That has developed as a nonstarter for President Trump and his administration. Iran launching revenge attacks for the killing of its top general with missile strikes on bases in iraq that house u. S. Troops. The news is jolting the markets. What do we know so far about irans actions . What does it show us . There was a series of rocket attacks on these two u. S. Iraqi bases. They came from iran. They have claimed responsibility. The Islamic Revolutionary guard corps claimed responsibly quickly. The question for the u. S. Is whether there has been loss of life. So far, the u. S. Reaction has been muted. President trump said all is well. Basically, saying, all is good. We are looking at a response from the iranians where the foreign minister kind of signaled that there might actually be a deescalation. They already responded to the u. S. In a proportionate way. He wanted to show that this was in many ways consistent with international law. Equities rebounding after falling 2 overnight after a u. S. Official said there were no american casualties. Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world. There is a pause for a diplomatic opening. Theres a pause in tensions. We are not talking about tensions going away. They are not going out more today than they were yesterday. Bombs are not falling from the sky. At this point, you take that as progress. We continue to move higher even as we climb a wall of worry. Our people hedging in any way for possible pickups here . Market pricing is as if everything that happened since friday morning never happened. Stocks hitting highs, oil giving back all their gains and then some. We see gold turning down a way. Investors seem to be very optimistic. They are not worried. Investors keeping a careful eye on boeing today after a deadly crash of a 737 jet outbound from iran to ukraine. The aircraft went down after takeoff carrying 167 passengers. According to the authorities, everybody onboard died. Questions have to be asked about whether or not this was actually brought down by possibly a bomb or missile or something else. The timing has led to huge speculation about the cause. Six hours after those missile strikes, speculation that it may have been tehrans own air Defense System that caused this. Also, perhaps, that a bomb might have been involved. A few hours later, we have the iranian authorities come out to say, no, this appears to have been a technical issue. U. S. Officials see a missile strike is the likely cause of that plane crash in iran. On the night that this plane went down for whatever reason, that was some of the most heavily watched airspace anywhere in the world given the attack and the u. S. Technology to detect it. It would be an enormous coincidence if on the night of a strike like that, a plane happened to go down for a mechanical failure. All we know is that a lot of u. S. Officials think that a missile is a more likely explanation for what happened. We dont know what happened here. If it does turn out to be some sort of mistaken attack or retaliation by iran, that would certainly put pressure on tehran. All the governments representing the people on board and others will certainly have some very serious questions for the iranian government. Given all that has happened this week, we still have the dow, the s p, and the nasdaq hitting record highs. Nothing really seems to be able to take the market down. It is genuinely impressive. These are big moves. 0. 5 everyday. You are starting to have a pretty big year on our hands. The Prime Ministers of the u. K. , canada, and australia have said the ukrainian consider planeainian passenger that crashed this week was probably brought down by an iranian missile. Irans government denies this. Are Civil Aviation personnel sit sidebyside. It is impossible for such a thing to happen. Iran cannot this morning, sticking to its story. It is not coming out with a definitive reason for why this crash happened. We have every government trying to step back from a conflict but at the same time, you have this argument brewing about just what happened to that airplane. We are a few seconds away from the jobs report for december. It is expected to add 160,000 jobs while unemployment stays steady. Wage growth holds at 3. 1 . The jobs report for december, 145,000 jobs created that created earnings, a bit of a worry. Up 1 10 during the month of december. That leaves the game at 2. 9 . That is down from the 2018 3. 3 . My bottom line is that this does not in any way change any expectations about economic prospects or fed policy. We are now where we were before the employment report in terms of those expectations. The Unemployment Rate is 3. 5 . It remains at a 51year low. That is a remarkable number with no inflation. I really think this is a strong report. The huge increase in the stock market, i have to believe, is a signal of improving confidence among consumers and businesses. I think it is pointing towards even faster growth in the next year. Sebastian still ahead as we review the week on bloomberg best, an exclusive conversation with Alan Greenspan. Bill dudley has a prescription for what has been ailing the regional market. More of the weeks top headlines. China sends a signal to protesters with a choice of its new liaison to hong kong. That is the message they are sending out. Stability, a stern new approach. Sebastian this is bloomberg. Sebastian this is bloomberg best. Lets continue our global tour of the weeks top stories with more developments in the extraordinary journey of the worlds most famous fugitive. Former of nissan, former head of nissan, carlos ghosn. His movielike escape to lebanon. What new information to we have . It was an interesting mix of simple execution and complex planning. Simple and the sense that, he left his house by foot. He boarded public transport, a bullet train. It took him to osaka. Thats really where the more complex, elaborate part of the plan kicked in. There was a private jet waiting for him. He was put into a box that had holes drilled in the bottom and transported onto the plane. He had a pair of experts waiting for him. One was exmilitary from the u. S. Another from lebanon. They knew a thing or two about getting people out of tricky situations. Really, an interesting mix of very simple and very complex executed together. Two weeks after becoming the worlds most famous fugitive, carlos ghosn spoke at a News Conference about the reason behind his escape from japan. I said i was a hostage of a country that i have served for 17 years. He described the decision to leave as one of the hardest of his life. He underscored that hes keen to clear his name. Hes open to doing a trial in lebanon, brazil, or france. He is a citizen of all three countries. That is where he stands now. It will be interesting to see what follows. He had a meeting with lebanese prosecutors about that interval red notice out on him. Japans Justice Minister held two briefings, extraordinarily unusual for the country. No matter what nationality you are from, you should respect the law of the country where you work. Japan is in a box. There is no way they can settle or back down. Ghosn is an internationally respected executive. For him to unload the way he did on the japanese regulatory system as well as the management he left in place at nissan, this is a very painful moment for them. The fact that there were these press conferences from the japanese head prosecutor is evidence of how painful this is and how necessary it is for them to counter everything he says. Beijing has named a party follower with no experience in hong kong as its new representative. Signaling its intention to restore law and order after seven months of social unrest. What sort of signal is beijings sending with this new appointment . I think they are saying it is the time of the last guy is over. He allowed the chaos to continue for seven months. They are sending a message that there is a new set of marching orders in town. The new liaison chief came out and met with reporters, briefly gave a statement and left. He was convinced that he would be able to help restore civility to the city. Thats the message they are sending out. Stability, a stern new approach. Gold surging. Bouyon hitting a six year as tensions in the middle east drive investors to seek haven assets. The yellow metal approaching 1600 an ounce. Goldman sachs says the commodity has more room to run. What is the logic . It is what we have seen played out in the markets on an intraday level today. Gold prices coming back a little bit. Oil prices come back more significantly. The reason is what goldman spelled out. This is a fearbased trade. In the meantime, we dont see much fundamental impact happening on gold markets. There is no risk to supply in the markets. Oil is less of a lucrative than gold right now. China announcing the vice premier will travel to washington to sign a first phase of a deal with the United States. The events of the past couple of days have not deterred china from that january 15 date that we heard before for a signing ceremony. Absolutely. This is the first time weve heard the chinese confirm that the vice premier will be coming to washington. The real theme since the deal was announced in october has been skepticism about exactly whats in the deal. Part of that has been said by a lot of silence from the chinese side. Now we know. A delegation of senior officials including the pboc governor are coming over. They will be signing that next wednesday in the white house. We are told to expect a big crowd of Business Leaders and others. Theres a bit of a party that the white house wants to throw for this. Boris johnson has set out their rival redline for post brexit deal. Speaking in london, the Commission President says its not a level playing field. There cannot be full access to europe single market. The Prime Minister insists that the future partnership must not how far apart are the two leaders . They are very far apart. Perhaps that is not a surprise. I have to say, this meeting was described as being constructive. The tone of it was very polite. She had nice words to say to the united kingdom. She was Crystal Clear on the thing that matters the most. The trade deal. She says the trade deal that Boris Johnson wants is simply not going to happen. Its impossible. There is no time to do this. The tension of the story has more to do with the timing than the actual content. They dont agree whether they can get this done in one year. Boris johnson is Crystal Clear. He doesnt want to ask for more time when it comes to a transition. Much of australia is bracing to get more record hot weather this weekend. Bushfires continue to burn out of control. After a couple of days or death of reprieve, we are seeing the fighters worsen again. It is dry, windy, hot. Temperatures are expected to reach above 100 degrees in some places as well. This has fire authorities quite nervous along the fire front that stretches thousands of kilometers as fires will likely push more into dry land. 26 people have died. More than 2000 homes have been lost. Millions of animals have perished. 28 million acres have been burnt. The scale of this is unprecedented. The u. S. Is now putting sanctions on 17 entities in the steel industry. Senior iranian officials are to be sanctioned including the secretary of the Supreme National council. Crippling sanctions just issued by the trump administration. Additional sanctions on anyone trading or owning sectors in the iranian economy. Construction, metals. Eight Senior Iranian officials. Mike pompeo saying this is part of denying the regime the resources to continue to sponsor terrorism. We had an exclusive conversation with Alan Greenspan. He insists that benefits reform is essential for the economic future. Already at a turning point. We now start to make major changes. Our productivity growth rate will slowdown. Below where it is now. We are trying to spend more than we have. Britain made the decision that they would spend only what they have. Went to talk about the underlying theories of the moment. I must ask a fiscal question. A generation has told us there will someday be trillion dollar deficits. They are upon us right now. What is the greenspan prescription to help our grandchildren and your great grandchildren with this conundrum . First is to address the source of the problem. We have a defined benefit program for social security. What we need to doubt do is go to a defined contribution program. There are major problems. , we have resolve those a good shot after resolving other issues. Coming up, more discussion of financial reform. A plan to overhaul the repo toolkit. Plus, a conversation with hong kongs financial secretary. We will continue to spend boldly. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Sebastian welcome back to bloomberg best. Im Sebastian Salek. This week, the Global Implications of the u. S. Conflict with iran was apparent in Financial Markets and beyond. On monday, tom keene and Francine Lacqua spoke with the founder of eurasia group, ian bremmer, about what might play out after a u. S. Drone strike killed one of irans top military commanders. Tom wheres the strategy . You go right in this. There needs to be a recapitulation, a reinvigoration, of an american strategy on the broader middle east. Is it out there somewhere . Oh, no. But i do think there is more of a pivot from the middle east. I do believe that tom can we afford to leave the middle east . Ian we can afford to leave more than our allies, including in europe and in the middle east. I mean, when the saudis were hit by iran, they were so stunned that the United States didnt do anything to back them up, they started negotiating with the iranians directly. That was the interesting takeaway, that iran ended up in slightly stronger geopolitical position, even if there economy takes a major hit from the u. S. The middle east is clearly going to be a more unstable place going forward. How much of that is going to affect the global marketplace is likely to be reduced. Why . Because the u. S.