WEBVTT - Trump Says He’ll Fire BLS Head After Weak Jobs Data 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.920 --> 0:00:13.240 This is Bloomberg Business Week, Daily reporting from the magazine 0:00:13.240 --> 0:00:17.840 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.880 --> 0:00:22.760 and trends shaping today's complex economy. Plus global business finance 0:00:22.800 --> 0:00:26.520 and tech news as it happens. The Bloomberg Business Weekdaily 0:00:26.640 --> 0:00:31.720 Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio 0:00:32.400 --> 0:00:33.240 Pivotal Week. 0:00:33.440 --> 0:00:36.479 That was mag seven earnings, a FED meeting, tar off deadline, 0:00:36.479 --> 0:00:38.880 lots of economic data, you know, all this, a jobs 0:00:38.880 --> 0:00:43.479 report this morning, President Trump. I'm not happy with the 0:00:43.560 --> 0:00:47.600 labor report. We've got a FED governor right that's leaving 0:00:47.640 --> 0:00:50.320 a FED official. There's a lot. So let's get to 0:00:50.360 --> 0:00:52.120 our roundup of the week. We've got a great roundtable. 0:00:52.200 --> 0:00:54.840 Eric Wiener is Bloomberg New Senior Editor Equities America's, along 0:00:54.880 --> 0:00:58.120 with Bloomberg News Economics Editor Molly Smith, both here in 0:00:58.160 --> 0:01:01.320 our Bloomberg Interactive Brokers Studio. We're not going to talk 0:01:01.320 --> 0:01:03.200 about Rolex watches. We're not going to talk about the 0:01:03.200 --> 0:01:06.920 great state of New Jersey, Jersey though sure it is 0:01:06.959 --> 0:01:10.959 a great stake going there this weekend for it. Love it, Molly, 0:01:10.959 --> 0:01:14.160 I want to begin with you you continue to digest everything. 0:01:14.160 --> 0:01:16.600 We've had Mike McKee back in studio a total of 0:01:16.600 --> 0:01:19.319 three times because of everything that just kept happening and happening. 0:01:19.680 --> 0:01:21.640 Where to begin, what's front and center as you look 0:01:21.640 --> 0:01:22.240 at the week. 0:01:22.080 --> 0:01:24.960 That was, Oh boy, I guess it's really more of 0:01:25.000 --> 0:01:27.200 the day that was for me at this moment. So 0:01:27.440 --> 0:01:30.279 really starting out with the jobs report this morning, weaker 0:01:30.319 --> 0:01:33.000 than expected for July, but really the eye catching figure 0:01:33.120 --> 0:01:36.440 was that downward revision to May and June, biggest since 0:01:36.640 --> 0:01:39.760 biggest two month revision, sorry, since the pandemic got a 0:01:39.800 --> 0:01:42.440 lot of people's attention. Spoke to issues that we've laid 0:01:42.480 --> 0:01:45.840 out in a separate piece with seasonal adjustment issues as 0:01:45.840 --> 0:01:48.200 well as what's been a broader issue of just declining 0:01:48.400 --> 0:01:51.400 response rates to surveys. That makes you know, the initial 0:01:51.480 --> 0:01:54.320 rate that BLS collects from firms that can change a 0:01:54.320 --> 0:01:57.320 lot as they collect more sample in the subsequent months 0:01:57.320 --> 0:01:59.720 when they survey these firms and more of them respond. 0:02:00.440 --> 0:02:02.920 And then of course we get the big bombshell that 0:02:03.360 --> 0:02:07.360 he is going to fire the head of BLS, Erica mcintarford. 0:02:07.640 --> 0:02:10.680 This is a Biden era appointee, but really key to 0:02:10.720 --> 0:02:14.079 keep in mind here that BLS is very much an independent, 0:02:14.200 --> 0:02:17.040 non partisan institution, and anybody would tell you that that 0:02:17.240 --> 0:02:20.280 is why there's statistics as well as the really the 0:02:20.280 --> 0:02:22.919 breadth of US statistics as a whole are so good 0:02:22.960 --> 0:02:25.120 it is because they are non partisan and they don't 0:02:25.120 --> 0:02:26.360 have political influence. 0:02:26.440 --> 0:02:28.840 So this really is just like a. 0:02:28.800 --> 0:02:31.679 Huge announcement that you know of assuming that he does 0:02:31.720 --> 0:02:35.400 follow through with it, that it really could undermine a 0:02:35.440 --> 0:02:37.600 lot of public and market trust in the data. 0:02:37.639 --> 0:02:40.000 Well, the President piling on with a post at three 0:02:40.120 --> 0:02:43.160 forty five saying, quote, in my opinion, today's jobs jobs 0:02:43.240 --> 0:02:45.680 numbers were rigged, that's all in caps, in order to 0:02:45.720 --> 0:02:49.519 make the Republicans and me look bad. He said that 0:02:50.080 --> 0:02:52.079 Jerome too late, Powell is no better. But the good 0:02:52.080 --> 0:02:57.840 news is our country is doing great. Mollie, you just 0:02:57.880 --> 0:03:00.480 told us it's a non partisan organization. I feel foolish 0:03:00.480 --> 0:03:03.280 even asking the question, but just respond to the President's 0:03:03.280 --> 0:03:06.720 accusation that the numbers were rigged he presented without evidence. 0:03:06.919 --> 0:03:11.000 Yeah, that's definitely not how revisions work. Actually, we got 0:03:11.000 --> 0:03:14.160 a comment from BLS saying that revisions are needed in 0:03:14.240 --> 0:03:16.960 order to paint a more accurate picture of the job's 0:03:17.040 --> 0:03:19.280 data and this is just a normal part of data 0:03:19.320 --> 0:03:22.639 collection efforts. And if anything, this is being hampered now 0:03:22.720 --> 0:03:25.800 more by the fact that Trump has slashed budgets for 0:03:25.919 --> 0:03:28.639 a lot of these statistical agencies and cut their staffing, 0:03:29.040 --> 0:03:31.359 or a lot of the staffing rather has left through 0:03:31.360 --> 0:03:35.240 deferred resignations and other opportunities to leave. That the data 0:03:35.360 --> 0:03:39.000 collection efforts have been severely hampered. So this was not 0:03:39.120 --> 0:03:42.560 an issue of rigging numbers. That definitely is not what's 0:03:42.600 --> 0:03:44.720 at play here. And people on both sides of the 0:03:44.760 --> 0:03:47.240 aisle will tell you that that this is like a 0:03:47.360 --> 0:03:51.080 really gosh how to say that the data integrity is 0:03:51.120 --> 0:03:53.440 just so paramount to this institution and it's there to 0:03:53.480 --> 0:03:54.480 serve a public good. 0:03:54.600 --> 0:03:57.600 Well, it's paramount to the market trade and how everyone 0:03:57.680 --> 0:03:59.960 global investors look at the US markets. Eric, come on 0:04:00.120 --> 0:04:01.880 in on that, because I do think about what Molly 0:04:01.960 --> 0:04:05.640 said that if he is excuse me, this individual is fired. 0:04:06.080 --> 0:04:08.880 You know what that means in terms of undermining US 0:04:08.960 --> 0:04:09.920 financial markets. 0:04:10.160 --> 0:04:13.000 Oh, all the traders are talking about this specifically. 0:04:13.360 --> 0:04:16.720 I mean if you look at to Molly's point, if 0:04:16.760 --> 0:04:19.400 you look at data from the US where the gold 0:04:19.440 --> 0:04:24.359 standard we have the broadest variety. We have the most 0:04:24.400 --> 0:04:28.479 accurate reports, and it's been that way for a while. 0:04:29.120 --> 0:04:32.120 The struggle that there was a great story. Actually, the 0:04:32.400 --> 0:04:37.200 struggle that BLS has had getting responses speaks to what's 0:04:37.200 --> 0:04:40.200 going on in the markets right now with companies not 0:04:40.240 --> 0:04:43.719 wanting to give that data up. But the full faith 0:04:43.880 --> 0:04:48.400 and trust of what traders do is based upon us 0:04:48.480 --> 0:04:52.760 not inserting our political beliefs into what's going on in 0:04:52.760 --> 0:04:56.040 the economy and just really showing people all these different 0:04:56.080 --> 0:04:59.040 facets and then you, as a trader, can make up 0:04:59.040 --> 0:05:02.760 your mind. If things st you know, being manipulated, or 0:05:02.839 --> 0:05:06.600 you start sensing that they're being manipulated, that becomes scary 0:05:06.600 --> 0:05:07.159 as a trader. 0:05:07.560 --> 0:05:10.280 Eric, do you think that that could serve as some 0:05:10.320 --> 0:05:16.800 sort of guardrail against firing or making politicizing this organization, 0:05:16.960 --> 0:05:20.680 the same way that the bond market sort of served 0:05:20.680 --> 0:05:24.440 as a guardrail with post the so called Liberation Day, 0:05:24.440 --> 0:05:26.480 when the President referred to the bond market getting a 0:05:26.480 --> 0:05:28.360 little bit quote yippie. 0:05:28.080 --> 0:05:33.400 Well, what's interesting about this specific complaint is that he 0:05:33.520 --> 0:05:36.280 actually needs bad jobs data to. 0:05:36.600 --> 0:05:38.000 Get the rate cut that he wants. 0:05:38.760 --> 0:05:42.800 So, like the priest play hasn't checked out the warp 0:05:42.839 --> 0:05:44.040 function on the bloemob work. 0:05:44.240 --> 0:05:47.599 So yeah, so yesterday was forty percent chance of a 0:05:47.680 --> 0:05:48.120 rate cut. 0:05:48.160 --> 0:05:50.599 Now it's over eighty. It's like eighty six, I think. 0:05:51.000 --> 0:05:54.680 So basically everybody is now pricing in off of that, 0:05:55.560 --> 0:05:58.400 off of that job's report. Everybody's pricing in a rape 0:05:58.440 --> 0:06:02.679 cut in September. So it actually works in his direction. 0:06:02.880 --> 0:06:06.080 So I mean in terms of what we're hearing about, 0:06:06.680 --> 0:06:09.520 what how people will position off of this, it's so 0:06:09.680 --> 0:06:14.320 incoherent that you really don't know the question becomes. 0:06:14.560 --> 0:06:16.560 And it's this way with the FED too, because the 0:06:16.560 --> 0:06:18.679 FED is a board, so we act. 0:06:18.800 --> 0:06:22.960 He's acting like Powell tells the Fed like in some 0:06:23.000 --> 0:06:24.880 sort of mafia, you know, the way that you know 0:06:25.000 --> 0:06:28.160 Gott he controlled the Gambinos, he tells them what to do. 0:06:28.200 --> 0:06:29.479 It doesn't work that way. 0:06:29.920 --> 0:06:32.640 So there's sort of a lot of hope that just 0:06:32.839 --> 0:06:37.440 in general, there's just too much noise and not enough 0:06:37.560 --> 0:06:41.240 action or not action really that's going to happen. 0:06:41.720 --> 0:06:44.240 But there's fear that. 0:06:45.680 --> 0:06:48.640 He will start trying to influence, he will start actually 0:06:49.040 --> 0:06:52.440 influencing the numbers, and if that shows up, then people 0:06:52.480 --> 0:06:53.200 start questioning. 0:06:53.400 --> 0:06:56.159 And similarly to what Eric just said, there. It's a 0:06:56.160 --> 0:06:58.560 bit of a similar dynamic at BLS two. Right, It's 0:06:58.600 --> 0:07:02.600 not that Eric and Tarfer is the sole discretion over 0:07:02.680 --> 0:07:03.000 what the. 0:07:03.000 --> 0:07:04.400 Jobs data says every month. 0:07:04.600 --> 0:07:07.960 This is an institution of roughly two thousand people globally 0:07:08.080 --> 0:07:11.160 at BLS sorry and the US not globally. 0:07:10.920 --> 0:07:12.720 Who compile all these reports. 0:07:13.080 --> 0:07:16.400 And I mean, she certainly signs off on them, but 0:07:16.520 --> 0:07:19.440 like she is not at all, Like I honestly would 0:07:19.520 --> 0:07:22.400 question what role she in particular has in the data 0:07:22.440 --> 0:07:26.520 collection itself, which happens much beneath her level. But something 0:07:26.560 --> 0:07:29.239 else that is really interesting about this too. When Eric's 0:07:29.240 --> 0:07:32.640 talking about how reports like this help Trump's chances to 0:07:32.680 --> 0:07:35.080 get the rate cut that he wants, so have all 0:07:35.120 --> 0:07:38.560 the other reports from BLS on inflation, the very reports 0:07:38.600 --> 0:07:41.280 that he's been saying are so great. So it's really 0:07:41.320 --> 0:07:44.960 interesting then that the initial report initial tweets sorry that 0:07:45.040 --> 0:07:48.400 he said that he just found out that mcintarfur's a 0:07:48.440 --> 0:07:51.000 Biden era and point, I mean, well, first of all, 0:07:51.000 --> 0:07:52.679 she's been there for like a year and a half, 0:07:52.760 --> 0:07:55.760 and also she's been the one overseeing these great inflation 0:07:55.880 --> 0:07:57.520 reports that he's been touting. 0:07:57.320 --> 0:07:59.080 And not being political, But I asked this question to 0:07:59.120 --> 0:08:01.640 Mike mcgeeo. I said, when we got the numbers for 0:08:01.680 --> 0:08:04.320 the prior month, I know they've been revised downward, but 0:08:04.320 --> 0:08:06.640 when they initially came out, it's not like we heard 0:08:06.640 --> 0:08:10.240 from the White House saying, wait, we questioned this number. 0:08:10.440 --> 0:08:13.840 So it's just something we're trying to be smart about. Molly, 0:08:13.920 --> 0:08:15.200 I want to ask you one more time and just 0:08:15.280 --> 0:08:18.040 kind of wrap up here thirty seconds. The US economy, 0:08:18.120 --> 0:08:21.600 though we are seeing weakness, but we still have some 0:08:21.680 --> 0:08:22.560 inflation signs. 0:08:22.800 --> 0:08:23.640 Yeah, I mean I think. 0:08:24.160 --> 0:08:26.520 I mean, if we're just looking at the jobs report today, 0:08:26.560 --> 0:08:28.680 I think for a lot of the takeaway was for 0:08:28.760 --> 0:08:31.320 economists was that this really helped square up some of 0:08:31.360 --> 0:08:33.760 the weakness that we saw in the GDP report, about 0:08:33.760 --> 0:08:37.640 this underlying demand gage being so weak, consumer spending softening, 0:08:37.800 --> 0:08:40.480 We get netwild why because we saw the job growth 0:08:40.520 --> 0:08:43.040 has been weaker for longer than we previously thought. 0:08:43.160 --> 0:08:45.280 I want to save thirty seconds for eric last thoughts 0:08:45.280 --> 0:08:46.840 on the markets and kind of as we get ready 0:08:46.840 --> 0:08:48.560 for another trading week next week. 0:08:49.240 --> 0:08:52.440 Yeah, I mean, right now, it's how long does it 0:08:52.480 --> 0:08:56.119 take this stuff to filter through? If you look at Tariff's, 0:08:56.160 --> 0:08:58.920 you know, the window was six months the earliest. 0:08:58.960 --> 0:08:59.960 We're not even there yet. 0:09:00.559 --> 0:09:03.920 So my question is what, yeah, what the numbers are 0:09:03.920 --> 0:09:07.920 going to show because data now matters FED speak. 0:09:07.720 --> 0:09:09.360 Though, we're going to get start getting here in a 0:09:09.360 --> 0:09:10.280 lot well. 0:09:10.360 --> 0:09:13.679 I mean also the umpshell news that FED Governor Adriana 0:09:13.720 --> 0:09:15.920 Kugler who's stepped down, which I'm sure is another part 0:09:15.920 --> 0:09:17.800 of the program today. 0:09:18.240 --> 0:09:22.040 I told you Mike, Mike McKee was like a boomerang. 0:09:22.160 --> 0:09:25.079 He just came back and forth. Mollie Smith. Our thanks 0:09:25.120 --> 0:09:26.720 to you, and of course our thanks to Eric Wiener 0:09:26.720 --> 0:09:28.599 as well. Guys, have a great, great weekend. This is 0:09:28.600 --> 0:09:29.840 Bloomberg Business Weekdaily. 0:09:30.240 --> 0:09:34.240 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:09:34.280 --> 0:09:37.760 live weekday afternoons from two to five pm Eastern. Listen 0:09:37.760 --> 0:09:41.360 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:09:41.480 --> 0:09:43.840 or watch US live on YouTube. 0:09:44.320 --> 0:09:44.640 Well. 0:09:44.720 --> 0:09:47.120 As Carol mentioned, President Trump said the US is moving 0:09:47.120 --> 0:09:50.120 too nuclear submarines to respond to what he called quote 0:09:50.240 --> 0:09:54.720 highly provocative statements from former Russian president Dmitri Medvedev. Trump 0:09:54.760 --> 0:09:58.480 didn't immediately provide details on what instigated his move, though 0:09:58.760 --> 0:10:01.199 his post Friday was the the latest in a public 0:10:01.240 --> 0:10:04.959 exchange of heated rhetoric with the former Russian president who 0:10:04.960 --> 0:10:08.680 currently serves as Russia's deputy chairman of the Security Council. 0:10:08.679 --> 0:10:11.520 We've got with us Wayne Sanders. He's Bloomberg Intelligence senior 0:10:11.600 --> 0:10:17.200 defense analyst. He joins us from Maryland. Wayne's situations such 0:10:17.200 --> 0:10:22.080 as this where we publicly hear about a declaration of 0:10:22.160 --> 0:10:26.800 these machines of war moving into a different position, How 0:10:26.840 --> 0:10:30.240 seriously do you take that in the context of escalating 0:10:30.280 --> 0:10:31.240 conflict with Russia. 0:10:31.679 --> 0:10:33.600 Yeah, I would say that I'm more concerned about the 0:10:33.600 --> 0:10:36.400 fact that President Trump actually said it out loud as 0:10:36.440 --> 0:10:39.920 probably the bigger piece of it. We have the Virginia 0:10:39.960 --> 0:10:43.520 class submarines. We've got Los Angeles class submarines, both which 0:10:43.559 --> 0:10:48.360 are these attack submarine types. Then we have the nuclear submarines, 0:10:48.360 --> 0:10:51.800 the ICBM types, the ballistic missile submarines as they're known right. 0:10:52.200 --> 0:10:54.680 We have a lot of these, and we have twenty 0:10:54.679 --> 0:10:57.360 four Virginia class. We have almost fifty of the attack. 0:10:57.760 --> 0:11:02.120 We've got fourteen that are the ballistic missile submarines, and 0:11:02.320 --> 0:11:05.120 a lot of them are always operationally deployed and they 0:11:05.120 --> 0:11:09.679 are there to provide force projection for military power across 0:11:10.000 --> 0:11:12.360 for the United states around the world, right, So these 0:11:12.400 --> 0:11:15.000 things are out there most of the time. Anyway, when 0:11:15.040 --> 0:11:17.160 you think about a carrier strike group, they normally come 0:11:17.200 --> 0:11:19.920 with a nuclear powered submarine as part of the complement 0:11:20.280 --> 0:11:24.560 whenever the president decides to move one of those carrier 0:11:24.600 --> 0:11:27.200 strike groups anywhere. So the fact that he's talking about 0:11:27.240 --> 0:11:29.760 where he's parking it, I think is the key indicator here. 0:11:29.840 --> 0:11:33.200 Is saying, hey, look, I've got these capabilities. I have 0:11:33.280 --> 0:11:37.480 these nuclear powered submarines that you can't find, and I'm 0:11:37.520 --> 0:11:39.880 just telling you about where they're going to be. But 0:11:39.920 --> 0:11:42.080 at the end of the day, our technology is so 0:11:42.240 --> 0:11:45.160 good from a stealth perspective, and others were ten years 0:11:45.160 --> 0:11:49.080 ahead of China and Russia at a minimum from that perspective. 0:11:49.120 --> 0:11:51.440 So I think we're actually doing pretty well. But he's 0:11:52.040 --> 0:11:53.240 making his statement clear. 0:11:53.640 --> 0:11:58.040 So you would argue that if this were like, what 0:11:58.080 --> 0:11:59.760 would be the difference in your view, if he had 0:11:59.800 --> 0:12:02.480 kept this a secret, had done this in a way 0:12:02.480 --> 0:12:07.679 that wouldn't actually communicate to the world about this repositioning, 0:12:08.559 --> 0:12:12.200 would that actually mean that the tensions are more heightened 0:12:12.240 --> 0:12:14.680 than they would be if he's publicly saying this. Since 0:12:14.720 --> 0:12:16.720 he's publicly saying this, can we read into this in 0:12:16.720 --> 0:12:19.480 a way that's like, Okay, we shouldn't take it as seriously. 0:12:20.000 --> 0:12:22.520 Yeah, I mean, you know, we've talked previously in terms 0:12:22.600 --> 0:12:26.840 of there's diplomatic information, military and economic levers of power 0:12:26.880 --> 0:12:28.959 that you can use in the military side of the house, 0:12:29.040 --> 0:12:31.480 and how you play a lot of those pieces. The 0:12:31.520 --> 0:12:34.240 fact that he's talking about it is probably a good 0:12:34.280 --> 0:12:37.400 time from that perspective, because if you look at even 0:12:37.440 --> 0:12:41.760 Operation Midnight Hammer in the Iran strike, you know, nobody 0:12:41.760 --> 0:12:43.840 talked about the fact that there was an Ohio class 0:12:43.880 --> 0:12:46.400 ballistic or not the blistic missile one, but they have 0:12:46.880 --> 0:12:50.120 four that are strike ones that fire thirty tomahawks. Right. 0:12:50.320 --> 0:12:52.200 That's part wasn't talked about a whole lot because everybody 0:12:52.200 --> 0:12:54.720 focused on the B two spirit in the in the 0:12:54.880 --> 0:12:57.559 massive or in his penetrator. But that was a key 0:12:57.600 --> 0:12:59.800 portion of it, and it was one that wasn't just discussed. 0:13:00.040 --> 0:13:00.720 He didn't talk. 0:13:00.600 --> 0:13:03.439 About, Hey, I have this capability parked off of your 0:13:03.880 --> 0:13:05.760 off of your your shore, off of your coast. 0:13:05.960 --> 0:13:06.920 The way that he is right. 0:13:06.840 --> 0:13:11.000 Now, how do you read this? I can't make sense 0:13:11.080 --> 0:13:15.240 of the relationship between President Trump and President Putin. I 0:13:15.280 --> 0:13:18.640 don't know, friends, not friends back and forth sanctions, that's 0:13:18.640 --> 0:13:20.520 still a threat. I'm just trying to understand it. 0:13:21.240 --> 0:13:23.200 No, I think I think the key is from the 0:13:23.280 --> 0:13:26.080 public view is making sure one of the best things 0:13:26.120 --> 0:13:29.440 that he can do is use his information platform to 0:13:29.480 --> 0:13:32.720 be able to make his his intentions clear. And part 0:13:32.720 --> 0:13:35.440 of those intentions is I'm not I'm not happy with 0:13:35.480 --> 0:13:38.480 what Midyette did and and I'm going to make sure 0:13:38.520 --> 0:13:42.120 that everybody knows about it. I don't believe that from 0:13:42.200 --> 0:13:45.920 the perspective of where where these are actually located? Right, 0:13:46.040 --> 0:13:50.320 Like I said, these things are constantly operationally deployed anyway, 0:13:50.559 --> 0:13:52.480 So the fact that he said it, as long as 0:13:52.480 --> 0:13:54.959 he's not giving a latitude and longitude to where those 0:13:55.000 --> 0:13:58.480 locations are, you know, I think that I think Putin 0:13:58.559 --> 0:14:01.320 knows right now that most of the time there's probably 0:14:01.400 --> 0:14:04.440 some type of capability that is somewhere near strike this. 0:14:04.480 --> 0:14:04.880 Since of it. 0:14:05.000 --> 0:14:07.600 Anyway, the fact is he's just mainly talking. 0:14:07.400 --> 0:14:07.880 About it now. 0:14:08.000 --> 0:14:11.920 And is it significant that he didn't necessarily mention Putin 0:14:12.000 --> 0:14:15.280 in this right somebody else that he's kind of ticked 0:14:15.280 --> 0:14:17.240 off at, And so is that the way of kind 0:14:17.240 --> 0:14:19.200 of keeping it safe and being like, hey, it wasn't 0:14:19.240 --> 0:14:21.480 about you. It was about this other dude that's you know, 0:14:22.000 --> 0:14:26.280 Russian like. Is that kind of the justification or the 0:14:26.840 --> 0:14:29.240 or gave President Trump the ability to do that? 0:14:31.040 --> 0:14:32.080 I would say yes, right. 0:14:32.280 --> 0:14:34.920 I think if you're looking at the difference between escalation 0:14:35.040 --> 0:14:39.000 of force and de escalation of force with a clear 0:14:39.240 --> 0:14:42.240 deterrence strategic deterrence message, this is a way to be 0:14:42.280 --> 0:14:44.120 able to do that. And like you said, I think 0:14:44.120 --> 0:14:45.920 that that gives him a little bit of an out 0:14:46.720 --> 0:14:49.080 if Putin were to say anything to come back and 0:14:49.080 --> 0:14:52.280 go no, no, no. I was responding to Medgettev because Putin, 0:14:52.320 --> 0:14:56.480 I think, clearly knows that there is operational capability around 0:14:56.480 --> 0:14:58.000 the world that we constantly use. 0:14:58.120 --> 0:15:01.120 Do you think he gave Putin again? Speculation? But I'm 0:15:01.160 --> 0:15:02.480 going to go there? When do you think it gay? 0:15:02.520 --> 0:15:03.640 President Putina heads up? 0:15:04.600 --> 0:15:07.040 I honestly don't know, because I don't know the inner 0:15:07.040 --> 0:15:10.920 workings between Medyeedev and In Putin. I think that understanding 0:15:10.920 --> 0:15:14.400 better the relationship between those two and how easy it 0:15:14.400 --> 0:15:16.680 would be for President Trump to be able to say, 0:15:16.720 --> 0:15:19.200 I'm going to throw this out there at Medeta, but 0:15:19.240 --> 0:15:22.320 it's not about you, or if these two were partnered together. 0:15:22.920 --> 0:15:25.200 I'm going to read from the post that the President 0:15:25.240 --> 0:15:28.440 made on true Social quote based on the highly provocative 0:15:28.440 --> 0:15:32.160 statements of the former President of Russia, Dimitri Medviedev, who 0:15:32.200 --> 0:15:35.080 says the deputy Chairman of the Security Council, who's now 0:15:35.120 --> 0:15:37.280 the Deputy Chairman of the Security Council of the Russian Federation, 0:15:37.360 --> 0:15:40.320 I've ordered two nuclear submarines to be positioned in the 0:15:40.400 --> 0:15:44.320 appropriate regions just in case these foolish and inflammatory statements 0:15:44.320 --> 0:15:47.160 are more than just that. When we start out the 0:15:47.160 --> 0:15:50.200 conversation with you explaining the way that these submarines are 0:15:50.400 --> 0:15:53.840 part of carrier strike groups, does it mean that they 0:15:53.840 --> 0:15:56.840 always travel together, they're always near one another. Does it 0:15:56.880 --> 0:16:00.720 mean the entire strike group is being repositioned, or can 0:16:00.760 --> 0:16:05.280 these nuclear subs go without other naval vessels. 0:16:05.280 --> 0:16:08.240 They're able to go. They're able to go without it normally. 0:16:08.240 --> 0:16:10.000 What I was saying is that if you are going 0:16:10.040 --> 0:16:12.920 to put an aircraft carrier somewhere as part of a 0:16:12.960 --> 0:16:16.400 defensive measure, and it's part of the entire strike group 0:16:16.440 --> 0:16:20.240 packages you're talking about, you normally have your destroyers, your frigates, 0:16:20.600 --> 0:16:23.320 have your nuclear powered submarine that we go along with 0:16:23.320 --> 0:16:24.160 an aircraft carrier. 0:16:24.160 --> 0:16:27.240 So when you hear somebody say I'm deploying the US. 0:16:27.120 --> 0:16:29.800 Is gerald Ford and it's going to a specific location, 0:16:30.440 --> 0:16:32.760 normally you can assume that this is the rest of 0:16:32.800 --> 0:16:35.000 the compliment that's going to go there to not only 0:16:35.040 --> 0:16:37.880 protect the aircraft carrier in the aircraft that are on it, 0:16:38.400 --> 0:16:41.280 but the submarines can be free flowing that are separate 0:16:41.320 --> 0:16:44.960 from that, because obviously with twenty four Virginia Class, twenty 0:16:44.960 --> 0:16:48.720 four Los Angeles Class, and fourteen of these Ohio Class 0:16:48.800 --> 0:16:51.560 ballistic missile submarines, we have a lot more submarines than 0:16:51.560 --> 0:16:52.640 we do carrier strike groups. 0:16:53.120 --> 0:16:55.680 Okay, Wayne Sanders got to leave it there. Bloomberg Intelligence 0:16:55.720 --> 0:16:59.320 senior defense analyst. He's a career military officer, ultimately was 0:16:59.320 --> 0:17:02.600 a colonel in the US Army. Now at Bloomberg Intelligence. 0:17:02.640 --> 0:17:04.879 We appreciate him joining us this afternoon. 0:17:06.119 --> 0:17:09.960 This is the Bloomberg Business Week Daily Podcast. Listen live 0:17:10.040 --> 0:17:12.959 each weekday starting at two pm Eastern on Apple car 0:17:13.040 --> 0:17:16.040 Play and Android Auto with the Bloomberg Business app. You 0:17:16.040 --> 0:17:19.240 can also listen live on Amazon Alexa from our flagship 0:17:19.280 --> 0:17:22.879 New York station, Just Say Alexa played Bloomberg eleven thirty 0:17:24.280 --> 0:17:24.840 All right, folks. 0:17:24.920 --> 0:17:27.920 Let's get now to certainly something that the equity markets 0:17:27.920 --> 0:17:31.000 have been focusing on, excuse me, all week, and that 0:17:31.080 --> 0:17:33.159 has to do with MAG seven earnings. Right now, I'm 0:17:33.200 --> 0:17:36.640 looking at Apple shares. They're down about two point one 0:17:36.800 --> 0:17:37.720 percent higher. 0:17:37.720 --> 0:17:39.399 Earlier in the session too, they were. 0:17:39.440 --> 0:17:41.639 They actually showed some gains. That wasn't the case for 0:17:41.720 --> 0:17:44.359 Amazon today It's been down as much as nine percent 0:17:44.440 --> 0:17:47.240 right now, down about eight point six percent. Both reported 0:17:47.680 --> 0:17:50.600 after the closed last night. Apple posting its fastest quarterly 0:17:50.640 --> 0:17:53.960 revenue growth in more than three years, and yet Amazon 0:17:54.000 --> 0:17:57.440 projecting weaker than expected operating income and trailing the sales 0:17:57.440 --> 0:18:00.000 growth as some of its cloud rivals. So we definitely 0:18:00.080 --> 0:18:02.640 are seeing some impact. It's all against the mag seven 0:18:02.680 --> 0:18:04.640 that we've heard over the last two weeks or so. 0:18:04.840 --> 0:18:05.720 Great to have back with us. 0:18:05.800 --> 0:18:08.760 Laura Martin, senior analyst over at Aninaman company who's coverage 0:18:08.760 --> 0:18:11.800 of the media, entertainment, and internet spaces are a must read. 0:18:12.240 --> 0:18:14.520 She joins us from Los Angeles. Laura, I want to 0:18:14.560 --> 0:18:17.320 start with Apple and the pull forward or whatever we 0:18:17.359 --> 0:18:19.359 saw with the huge beat when it came to that 0:18:19.480 --> 0:18:22.280 iPhone number, and typically a time when people are not 0:18:22.400 --> 0:18:24.359 buying iPhones. How do you explain it? Was it all 0:18:24.400 --> 0:18:26.880 about pulling forward of demand to avoid tariffs? 0:18:28.040 --> 0:18:30.240 It is really that, I mean, that's what the market's 0:18:30.280 --> 0:18:33.240 telling you today. Apple admitted that one hundred one thousand 0:18:33.320 --> 0:18:36.600 basis points, so one percent of their revenue growth, which 0:18:36.640 --> 0:18:39.800 was ten percent, well above average, was from pull forward, 0:18:39.840 --> 0:18:42.000 And the market's telling you they think that number was 0:18:42.040 --> 0:18:44.960 like five, you know, four half of the gain basically, 0:18:45.640 --> 0:18:48.800 which and they also Apple also said they had eight 0:18:48.840 --> 0:18:53.040 hundred million dollars of costs from tariffs in that second 0:18:53.359 --> 0:18:55.480 that recorder they just reported, and it's going to go 0:18:55.560 --> 0:18:59.280 up to one point one billion visibly in the September quarter. 0:18:59.400 --> 0:19:00.960 But I think the mark is telling you they think 0:19:00.960 --> 0:19:03.200 that could be higher in the September quarter. 0:19:03.280 --> 0:19:05.600 Oh so, does does this mean that we'll see fewer 0:19:05.640 --> 0:19:11.320 iPhones bought in the first fiscal quarter Apple? But Apple's 0:19:11.359 --> 0:19:14.359 December quarter, which typically is its biggest quarter, as a 0:19:14.400 --> 0:19:17.640 result of the pull forward that we saw in this quarter. 0:19:18.320 --> 0:19:19.760 I think it's worse, it's faster. 0:19:19.920 --> 0:19:23.080 So the June quarter over delivered because they pulled forward 0:19:23.160 --> 0:19:24.639 demand from the September quarter. 0:19:24.680 --> 0:19:26.679 Those are all old iPhones, okay. 0:19:26.760 --> 0:19:29.080 And then in late September you typically get the new 0:19:29.200 --> 0:19:32.320 iPhone and then you start this new annual cycle of 0:19:32.320 --> 0:19:34.439 the new iPhone. And one of the things they said 0:19:34.600 --> 0:19:37.720 that's turning the stock today is that Siri and Apple 0:19:37.760 --> 0:19:41.200 Intelligence will only be integrated next year, by which they're 0:19:41.200 --> 0:19:44.719 probably talking calendar year, which means the earliest we'll see 0:19:44.880 --> 0:19:48.399 you generative AI features drive an upgrade cycle for the 0:19:48.440 --> 0:19:51.359 iPhone would be not September of twenty five, it'd be 0:19:51.400 --> 0:19:54.320 September of twenty six. So then that tells you, so 0:19:54.400 --> 0:19:57.320