5 things to start your day

White House downplays report on China investment limits, Saudi Arabia doesn't want war with Iran, and Boris Johnson has more problems.  Qualified denial Officials from the Trump administration issued a partial -- and qualified -- denial to the revelation that there have been discussions about imposing limits on U.S. investments in Chinese companies and financial markets. A statement emailed to Bloomberg over the weekend said there were no current plans to stop companies from the world's second-largest economy listing on American exchanges. The statement did not address nor rule out other possibilities. Authorities in Beijing, meanwhile, said they would continue to take measures to open the country's financial markets to foreign investment.  Total collapse Saudi Crown Prince Mohammed Bin Salman warned that a war between his country and Iran would lead to a "total collapse of the global economy." Tensions between the countries separated by the Persian Gulf have come close to boiling point in the wake of the attack on Saudi Aramco facilities that the international community are blaming on Iran, despite Tehran's denial of responsibility. Oil prices have almost completely retracted their spike following the attack, with the Saudi Prince issuing mollifying comments that a "political and peaceful solution is better than a military one." Sponsored Content by Masterworks Did you know art was the top luxury investment of the ultra-wealthy in 2018? It's no wonder 88% of wealth managers recommend investing in art as it's beaten the S&P by 180% since 2000. Masterworks is the platform for diversifying into high-end art. Start investing like the 1% and request your membership here.   Another fine mess In the United Kingdom, conference season is usually an excuse for members of the largest political parties to gather in order to celebrate how great they think they all are. That may not be the case today in Manchester, where the Conservative Party annual gathering is under way and its new leader is assailed by doubts over Brexit and his personal life. There were more signs of the damage uncertainty over the U.K.'s exit from the European Union is doing to the economy, with second-quarter GDP numbers this morning confirming that growth reversed as businesses unwound inventories built-up ahead of the original March leaving date. A Lloyds' survey showed British companies are losing faith in the prospects for the economy.  Markets mixed Overnight, the MSCI Asia Pacific Index slipped 0.3% while Japan's Topix index closed 1% lower. China's Shanghai Composite Index closed down 0.9% in its last trading session ahead of a week-long national holiday. In Europe, the Stoxx 600 Index was broadly unchanged at 5:45 a.m. Eastern Time with banks among the best-performing stocks. S&P 500 futures rose, the 10-year Treasury yield was at 1.696% and gold dropped.  Coming up… It's a fairly quiet day on the economic-data front, with Chicago PMI at 9:45 a.m. and Dallas Fed manufacturing outlook at 10:30 a.m. The World Trade Organisation will publish the amount of damages the U.S. has suffered due to EU support for Airbus SE, allowing the White House to place tariffs on the region's exports. The United Nations General Assembly ends in New York. While there are no Fed speakers today, European Central Bank Chief Economist Philip Lane is scheduled to address an event in Los Angeles.  What we've been reading This is what's caught our eye over the weekend. Odd Lots: How financial repression in China helped cause the trade war. Forever 21 files for bankruptcy, adding to retail apocalypse. Saudi Crown Prince says war with Iran could bring down global economy. Goldman gives another reason why IPOs may suffer: multi-class shares.  Spies and threats set stage for big Credit Suisse decision. Trump seeks treason inquiry into House impeachment leader. "It's basically an ICBM. That lands." And finally, here's what Joe's interested in this morning The new Odd Lots podcast is out, and I don't think I've had a conversation recently that felt more timely and informative. Tracy Alloway and I talked to Michael Pettis, a longtime China expert, about the connection between the country's domestic imbalances and the burgeoning trade war. As he's been writing about for a long time, the Chinese growth model was built on suppressing the income of households (via low interest rates, a weak social safety net and poor worker rights), while subsidizing businesses in various ways, including cheap loans. This drove an extraordinary investment-led growth boom that has helped workers significantly, but has benefited elites and the capitalist class even more. Now if Chinese households had more income, that would mean more middle-class buying power and likely more demand for U.S. goods, benefiting American workers. But so much Chinese wealth concentrated at the top results not in more demand for goods -- but rather more demand for dollar-denominated U.S. assets. This doesn't benefit American workers but does drive up the price of real estate and the dollar while encouraging loose credit. (See Bernanke's 2005 speech about the global savings glut.) All of that helps American bankers more than American workers. In other words, domestic policy decisions that drive Chinese inequality contribute to American inequality. This is the premise of Pettis' forthcoming book co-authored with Matt Klein titled Trade Wars Are Class Wars. The old pre-Trump U.S.-Sino relationship was excellent for the wealthy in both countries. Chinese business owners got cheap loans and other benefits. American business leaders have done great, thanks to the outbound flow of Chinese capital. Workers in both countries did less well, and now things are rupturing. Definitely check out the whole thing. It was one of those conversations where afterwards, I instantly felt like I understood the world better. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more. FOLLOW US SEND TO A FRIEND You received this message because you are subscribed to Bloomberg's Five Things newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022