Joining me on the panel today, gary b. Smith, christina partsinevelos, john layfield, and mr. Steve forbes. Sparking the sell off today, the two and tenyear treasury yield, their curve inverting for the first time today since 2007. I know its a lot of gobbley goock but this move has been a flashing red light ahead of almost all the last recessions for the past 50 years. Heres former Federal Reserve chair janet yellen in a fox business exclusive. Listen. Are we going into a recession so i think the answer is most likely no. I think that the u. S. Economy has enough strength to avoid that, but the odds have clearly risen, and they are higher than im frankly comfortable with. David steve forbes, do you agree . I think we should avoid a recession, david, but the key thing is not about inverted yield curves and stuff like that. Its about what happened on fox this morning, an interview with Peter Navarro who took a very very hardline, undid the good feelings yesterday that were back to the negotiating table, people fear this trade thing is going to drag out, hurting business investment. When you dont have investment, eventually you hurt the economy. If we do go on recession, this is entirely selfinflicted by not handling the trade war right. I agree with steve. I think this whole thing is selfsabotage. Ive thought this all along. I think this trade war is not thought out. I dont think we can define success or have a plan to get there. The inverted yield curve is very important. In 2005 it first inverted. It took about two years before you start to see the recession. We have full employment right now. We have wage growth. We have a very good economy, though, it is slowing. But i think this trade war could potentially tip this entire globe into a global recession. Its not going to be the main cause, but it is a global slowdown that were playing a highstakes game of poker here and i dont think were winning right now. You said the inversion curve is really important. Do you think maybe it is time for us to start putting less emphasis, less weight on it, given we have seen previous historical phillips curve for example doesnt really hold its value in todays world and given the president and how we cant predict anything that happens anymore, do we have to put as much weight on to it . I guess thats a question for whatever wants to answer it on the panel. I think we need to bring up too concerns outside of the United States. The fact that you had contraction in the fourth largest economy. That would be germany and then weakness in july for china. So these are things weighing on the market. The United States is huge, but its not it doesnt operate alone. Well, i will weigh in, kristina with my thoughts. The yield or the inversion curve or not, people say, my gosh, it is a signal that there is going to be a recession. Yes, there is a recession somewhere on the horizon, whether its the inverted yield curve or Something Else. A recession will happen. As to when, its anybodys guess at this point. It could be two, three years down the line. And someone will say, it was that inverted yield curve that flashed the warning. But, you know, to johns point, i will pick up on a couple things. Our economy is strong. I dont want to sound like a polly anna because the World Economy is weak. That being said, none of this forecasts if a recession will occur. I kind of discount, unlike steve and john, the tariffs. I would love no tariffs. Believe me, but is that going to cause our economy to come down . Weve had tariffs in place for a while, and the gdp continues to come along. I think whats going to cause, if anything, is if the democrats take control of the entire government, and then you see more of a socialist, everyone give the government money, and they spend it inefficiently. That will certainly cause a recession, but beyond that, maybe im a little less worried than the panel. David steve, i dont think you can discount whats happening over in europe. As kristina said, you have germany and the u. K. Now entering into what seems to be a move towards a recession because theyre not doing the right things. We did the right things here in the United States. We cut tax rates. We cut the cost of doing business by lowering regulations. Theyre not going in that direction, and it is costing them dearly. Well, they are not they are unwilling to make those kind of structural changes, david. You see the same thing playing out in a slower motion in japan, which has been sort of going along far quarter of a century now. Tariffs are a sales tax. They disrupt profit margins, supply chains. It is nice to say well you can move from china to vietnam or Something Else, but that takes time to do. That means a whole lot of new things have to be done. And we have uncertainty out there. Whats going to happen with china . Whats going to happen with nafta too in congress . Another big looming thing is tariffs on auto imports and auto parts imports. You put that on, germany is going to go over a cliff and were going to have a global problem. David it looks like it already has. Slight downturn, 2, 3 percent downturn, thats a different matter. Autos matter big for them. I agree with gary when hes talking about were the best economy to invest. Look at merging markets and what could happen with brexit, we dont know how that will end. Looking at the oil price, strait of hormuz, we dont know how that will end. David the hong kong rise. The hong kong rise, the trade war itself in china, india backing out of article 37 which pakistan says there cannot be a peaceful resolution to kashmir and also the province there. There are a lot of things right now in the world that we cant possibly handicap. America is by far the best place to invest. I want this trade war to end well. I just feel like were doing longterm structural damage to our country the longer this thing goes, and we dont know how that will play out. The it is a zero sum game were playing and i think it is stupid to do with the big economy. David we have increased Government Spending by 8 . Yes, tax revenues increased. One reason the deficit really the only reason the deficit is growing, not because of tax cuts. It is because of spending. If in fact we have a recession, tax revenue is going to go down bigtime. That means our deficit we think it is big now. It is going to be a lot bigger. That actually is a perfect joint point to what gary said. I wanted to highlight that. Its not black or white if you have democrats take over and spending is going to increase. To your point right now, weve seen spending increase incredibly high. David 8 . Thats a concern no matter what, regarding the markets and everything that we have been talking about thus far, i think the economy here is we know its starting to slow down, and i think we need to pay little more attention john brought it up very nicely as well. Go to go back to garys point, i think that was too black and white. David go ahead, gary. No, i was going to say about the Government Spending, look, you know one thing that we have seen is that its easy to get out of a recession or easier at least if the market is allowed to operate. Weve done our best at getting out of recessions when the government stepped back and allow it to take its place. When you have increased Government Spending, by definition, in every single case, it is less efficient. You talk about these programs like the green new deal, where you basically funnel billions if not trillions to the federal government, to then spend on crazy projects, thats very difficult to get out of recession, when the government is in charge of your money. Thats what i fear. I think thats the point that kristina and i agree on. David thanks for putting a darker line on our dark cloud, gary. Appreciate it. [laughter] david protests in hong kong flairing up again. Police in riot gear firing tear gas on a crowd. There are reports that china is moving troops to the hong kong border. We will have the very latest live from hong kong, coming next. Fun fact 1 in 4 of us millennials have debt we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. 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Police in riot gear in the streets in force after two days of violent clashes crippled the citys international airport. Susan lee is in hong kong with the very latest. Susan . More subdued day of protests in hong kong, and they were out of the hong kong airport, so the airport reopening for business after receiving a Court Injunction that pretty much bars protesters from entering the hong kong terminal and thats important for the Financial Capital like hong kong which receives around 1100 cargo and passenger flights each and every day, the eighth Busiest Airport in the world. We still had a few dozen protesters still camped out, still trying to relay their message to International Passengers that stepped off their planes. As for flights, they were able to take off and also arrive as well. The protesters did amass in the district at a more rural part in an area that was similar to the protests and where they were taking place on sunday evening. Now we did have tear gas being lobbed once again. This is after protesters according to reports, they were shining and directing their laser beams directly at hong kong police. We also have some disturbing satellite images that are being shared by the state department, and we did have President Trump tweeting yesterday that according to u. S. Intelligence sources, china might be amassing tanks and artillery near the hong kong border. The satellite images show and pretty much confirm that tweet, showing there are more tanks and more artillery being stocked at a soccer field. Thats something thats obviously the protesters are watching and of course the world as well. Back to you. David susan, thank you very much. In addition to President Trumps tweet, the u. S. State Department Also issuing a statement saying, quote, the United States is deeply concerned by reports of the chinese Paramilitary Movement along the hong kong border. We encourage china and all parties in hong kong to pursue a solution that respects hong kongs high degree of autonomy. Joining us now live from hong kong is former Editorial Page Editor of the asian wall street journal and currently Foreign Policy fellow of the independent womens forum. Claudia, thank you for joining us. You covered the Tiananmen Square massacre in 89. Is that where we are heading thats my great concern, david. They already have troops stationed here in hong kong, since the handover, 22 years ago. Why do they need more at the border . It doesnt look good. Thank you very much for being up so early to speak with us. I want to talk about the possibility of intervention and just within the past i think it was 48 hours on monday, the Chinese State media reporting that china is now saying that theres first signs of terrorism when it comes to hong kong. Whats the significance of using the word terrorist and terrorism when youre talking about the protesters . Well, theyre laying down the verbal markers for a pretext for some kind of forceful action. There was no terrorism going on. You know, there was a scuffle in which some people who shouldnt have attacked a guy who was from a chinese newspaper they thought was working undercover to spy on them, which people have been doing from china, but this has not been terrorism. Everything thats going on here tracks back to china and the chief executive in hong kong being absolutely unyielding on the completely reasonable and right demands of the protesters. China is calling it terrorism because thats what they also are telling us they are concerned about with brainwashing in internment camps. It is propaganda, a dangerous sign. Claudia, its gary smith. This strikes me as a civil war, and we may think that hong kong is right, some might think that china is right. We might side with, you know, i think, you know, President Trump by his tweet i guess kind of sides with hong kong, but this seems to me like as i said, an internal matter. As horrible as it might be, should the u. S. Have any role whatsoever, other than issuing our concern . Its not actually a strictly internal matter. Theres a treaty deposited at the United Nations between britain and china that sets up the terms for hong kong being handed back to china in 1997. It stipulated part of that is that hong kong will be treated separately for 50 years. There are already violations of that going on. But in a broader sense, and this is really important, i think, hong kong is a free society. It truly is. The people here qualify in every way richly to be highly competent selfgovernment. I mean they really understand the kids here who are demonstrating understand law, and that is, new york lawyers i run into. There is i think great importance to defending free people. It is very hard to create a truly functional free society. You dont let one go under. In that sense, thats where theyre calling stand with hong kong. I think its really important in every possible way, in every way within our power to say the demands here are for what they were promised under treaty, not internal, under treaty, and china should comply with those. Claudia, given the situation today, is there a way that china thinks these protests are just going to wind down on their own, try to isolate them, say theyre violent and more and more people peel away as they did five years ago at the so called umbrella protests . Is there a deadline of october 1st where xi, the president of china, dictator of china, has to have this thing resolved, he cant have this ferment going on on the 70th anniversary date. Working backwards there, theres speculation president xi hasnt actually commented on this, i dont think, so its speculation among those of us who watch this kind of thing that china we know that xhi we know that china wants to have a big celebration for the 70th anniversary of the peoples republic of china, which by the way has been responsible over 70 years for the suffering, death, misery, repression of an enormous part of the worlds population, but they want a big party. They probably do want it cleaned up, but thats speculation. And as far as their hope that it might wind down by attrition, i think thats been fading away because the more that they decline that China Remains absolutely unyielding, on the protesters asking for such reasonable things as completely withdraw the bill that triggered this whole set of protests. Are the protesters are the protesters still have wide popular support, or did they make a tactical support by going to the airport . I think that do. Yeah, if you talk to people on the street, or around these demonstrations, i think they do. The problem is that hong kong people actually value freedom. They really do. And they want that promise kept. They dont want to live under the orwellian surveillance state that is china today. Its been actually surprising, but yeah it is quite strong, the support. Claudia, thank you for joining us today. I agree with everything you are saying, but as a realist, it doesnt appear that the world is going to do anything. After Tiananmen Square which you were there the world did basically nothing. After a million, as you mentioned, have been put into detention camps, the world has ignored it. With kashmir, thats a treaty that india just over wrote. In georgia with putin, when he claimed the same thing, terrorism, genocide, he goes in there, the world almost does nothing. It seems to me that as a realist that people dont want a war over that, that china is going to go in and do whatever they want to do, and the world is going to do nothing about it and forget about it within two years. David very quickly, claude, go ahead. Wouldnt it be right though for anyone who can to speak up for what is right, even if its not going to happen, even if thats not how it will work out, isnt that the right thing . Think back to winston churchill, call the status as it is, if hong kong goes under to chinas system now, china will move right on and there will be a next. There will be taiwan, and at some point the troops that are amassing at the border here are going to be much closer to somebody elses home. Thats why speak up now. David claudia, i know you have been there before. You know how to deal with dangerous situations, but please take care of yourself. We wish you the very best. Thank you. David thank you very much. Good to see you. Two 2020 democrats at odds over a key election proposal. Are either one of them telling voters what they should hear . And as we go to a break, heres another look at the markets. Wow, what a bad day it was. Stocks suffering their worst day of the year. With the dow ending down, thats not a misprint, 800 points. Its the fourth largest point drop in history. Theres a company thats talked to even more real people than me jd power. 448,134 to be exact. They answered 410 questions in 8 categories about vehicle quality. And when they were done, chevy earned more j