WEBVTT - Disastrous Scenario If Turkey Exited NATO: Stavridis 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:34.080 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. President 0:00:34.120 --> 0:00:38.320 Trump tweeting this morning that he hopes that John Brennan 0:00:38.840 --> 0:00:41.680 uh in President Trump's awards the worst CI director in 0:00:41.680 --> 0:00:44.320 our country's history, brings a lawsuit. It will be then 0:00:44.400 --> 0:00:47.239 be very easy to get all of his records, texts, emails, 0:00:47.240 --> 0:00:49.720 and documents to show not only the poor job he did, 0:00:50.000 --> 0:00:52.960 but how he was involved with the mother rigged witch hunt. 0:00:53.320 --> 0:00:56.400 He won't sue. He went on further to talk about 0:00:56.440 --> 0:00:59.480 how everybody wants their security clearance and why it's important 0:00:59.480 --> 0:01:02.600 to strip certain people of it. Joining us now, I'm 0:01:02.680 --> 0:01:05.440 very pleased to say, is Admiral James Staffriti's a Bloomberg 0:01:05.440 --> 0:01:09.600 opinion columnist, also a retired U S. Navy admiral and 0:01:09.600 --> 0:01:13.200 former military commando of NATO. He is the author of 0:01:13.360 --> 0:01:17.039 Sea Power, The History and Geopolitics of the world's oceans, 0:01:17.040 --> 0:01:19.199 and he also is one of more than one hundred 0:01:19.200 --> 0:01:22.080 and seventy five former State Department and Penticot officials who 0:01:22.080 --> 0:01:24.240 have added their names to a statement signed by national 0:01:24.240 --> 0:01:28.360 security officials criticizing President Trump's decision to provoke security clearance 0:01:28.360 --> 0:01:31.880 to a number of people, including John Brennan, Admiral. Thank 0:01:31.880 --> 0:01:34.679 you so much for joining us. What a pleasure, Lisa, 0:01:35.080 --> 0:01:38.440 I would love to just start with, how important is 0:01:38.480 --> 0:01:42.120 it to the nation, aside from just a personal issue, uh, 0:01:42.160 --> 0:01:47.640 that there are these attacks on former intelligence officers and 0:01:47.800 --> 0:01:50.880 a revocation of their security clearance. I think it's a 0:01:51.000 --> 0:01:55.040 mistake from really a very pragmatic point of view, Lisa, 0:01:55.160 --> 0:01:58.640 as follows um, when you have an important job, I 0:01:58.760 --> 0:02:01.240 was the Supreme ali Ander of NATO. I had three 0:02:01.240 --> 0:02:06.400 million troops working for ME, Afghanistan, Libya, the Balkan Syria Piracy. 0:02:06.480 --> 0:02:09.080 When you have that kind of job, you need help, 0:02:09.200 --> 0:02:11.560 you need advice. And I was able to pick up 0:02:11.600 --> 0:02:15.960 the phone and call former Supreme Allied commanders, going all 0:02:16.000 --> 0:02:18.680 the way back to General West Clark and get good 0:02:18.720 --> 0:02:23.320 advice from them because they still had security clearances. That's 0:02:23.360 --> 0:02:28.480 the idea of this. So if we strip away security clearances. UM, 0:02:28.560 --> 0:02:31.960 it'll chill the ability of people in big important jobs 0:02:32.000 --> 0:02:35.720 to reach to their predecessors. And I think that's a 0:02:35.760 --> 0:02:38.840 real mistake. Leaving aside the politics of this, which are 0:02:38.880 --> 0:02:41.840 not very good. In addition to that very pragmatic point, 0:02:42.000 --> 0:02:47.040 what's morale like? What is morale like? I think morale 0:02:47.440 --> 0:02:52.000 is concerned would be the way I would use the term. 0:02:52.000 --> 0:02:57.600 From top to bottom. The national security, UH, establishment is 0:02:57.680 --> 0:03:02.520 concerned about more than any seeing the erratic nature of policy. 0:03:02.639 --> 0:03:04.840 You know, there are some things that President Trump is 0:03:04.880 --> 0:03:08.680 doing that makes sense, going after the Islamic State, negotiating 0:03:08.760 --> 0:03:13.280 with Kim Jung not unleashing fire and fury um, but 0:03:13.360 --> 0:03:16.440 there are other things that we disagree with. It's that 0:03:17.080 --> 0:03:20.080 um up and down, back and forth, the whipsaw effect 0:03:20.080 --> 0:03:22.840 of policy. And I think this feeds into that sense. 0:03:22.919 --> 0:03:27.440 And Lisa, it's how it's viewed from overseas audit concern 0:03:27.560 --> 0:03:31.040 US Admiral Sturdi is uh. We just are getting word 0:03:31.280 --> 0:03:36.600 that Turkey is launching a World Trade Organization dispute against 0:03:36.640 --> 0:03:41.720 the US regarding the still and aluminum tariffs. I'm just wondering. 0:03:41.760 --> 0:03:44.040 I'd love to get your thoughts on Turkey as the 0:03:44.200 --> 0:03:49.200 former military commando of NATO and Uh, your thoughts on 0:03:49.480 --> 0:03:52.120 the idea of Turkey leaving NATO are becoming less allied 0:03:52.680 --> 0:03:55.160 with the United States going forward? What do you think 0:03:55.160 --> 0:03:59.320 about that? Yeah, three key points, Lisa. First, Turkey has 0:03:59.400 --> 0:04:02.680 historically been a very strong member of the Alliance and 0:04:02.720 --> 0:04:06.360 a very strong partner to the United States and to 0:04:06.520 --> 0:04:09.360 the other twenty seven nations of the Alliance. And I 0:04:09.800 --> 0:04:13.480 say that very practically having seen Turkish troops, Turkish sailors, 0:04:13.520 --> 0:04:18.200 Turkish airmen fighting alongside NATO troops in Afghanistan, Libya, the 0:04:18.240 --> 0:04:22.800 Balkans on countervirusy missions. They're very capable, um point to. 0:04:23.600 --> 0:04:26.840 Under President Urduwan, they are drifting away from the Alliance, 0:04:26.920 --> 0:04:29.159 and that ought to concern us very deeply. And that 0:04:29.200 --> 0:04:32.279 gets us to point three, which is the drift is 0:04:32.440 --> 0:04:36.400 getting closer and closer to Russia. We see a Turkey 0:04:36.480 --> 0:04:40.400 buying advanced air defense systems from Russia. We see a 0:04:40.480 --> 0:04:44.760 lot of collaboration between President Urduan and President Putin that 0:04:44.880 --> 0:04:48.160 ought to really concern us UM in terms of this 0:04:48.279 --> 0:04:53.159 particular dispute which kind of centers around UH, a preacher 0:04:53.360 --> 0:04:58.560 who has been unjustly incarcerated in Turkey. President Trump is 0:04:58.560 --> 0:05:01.240 correct to go after the Turk high and hard about that, 0:05:01.680 --> 0:05:03.360 but we ought to be doing that in a way 0:05:03.360 --> 0:05:08.320 that recognizes the fundamental importance of Turkey to the Alliance. UM. 0:05:08.360 --> 0:05:10.359 I think we can get our way through this. The 0:05:10.520 --> 0:05:13.679 number one prescription is let's get an ambassador in Turkey. 0:05:13.720 --> 0:05:16.680 We don't have one there yet. We need to land 0:05:16.720 --> 0:05:19.720 this one diplomatically. Well, Admiral, I want to I want 0:05:19.720 --> 0:05:21.400 to go a little bit further with that. Let's say 0:05:21.440 --> 0:05:26.480 Russia does become much closer with Turkey. What's the potential 0:05:26.560 --> 0:05:29.719 consequence of that in the worst case scenario from your 0:05:29.800 --> 0:05:33.279 vantage point, Yeah, I think worst case, and it's probably 0:05:33.279 --> 0:05:37.840 approaching a ten to possibility, would be Turkey leaving the 0:05:37.920 --> 0:05:41.400 NATO Alliance. Again, I don't predict that. Let's say it's 0:05:41.440 --> 0:05:45.640 an they stay in. But I'm shocked I'm saying these 0:05:45.680 --> 0:05:49.719 words publicly. It's very concerning that we are at this past. 0:05:50.080 --> 0:05:53.320 At the end of the day, I think the geopolitical 0:05:53.760 --> 0:05:57.960 balance will tip in favor of Turkey remaining in the 0:05:58.000 --> 0:06:01.479 Alliance because of the economics, Russia really doesn't have that 0:06:01.600 --> 0:06:04.760 much to offer Turkey. UM. I am hopeful that President 0:06:04.920 --> 0:06:07.560 Urdwan will realize that in the time to come in 0:06:07.560 --> 0:06:11.039 the geopolitics will outweigh the emotion of the moment. Admiral 0:06:11.160 --> 0:06:12.960 just in about a minute. Why would it be bad 0:06:12.960 --> 0:06:16.600 at Turkey LEFTNATO? UH? First of all, their capability they 0:06:16.640 --> 0:06:19.440 have the second largest army in the Alliance after the 0:06:19.520 --> 0:06:23.560 United States UH. Secondly, their geopolitical position they sit right 0:06:23.640 --> 0:06:27.360 on the border with the most troubled region. And thirdly 0:06:27.440 --> 0:06:31.400 the symbology. We've never had a nation leave NATO. To 0:06:31.480 --> 0:06:34.039 have a big, important one like Turkey be the first 0:06:34.040 --> 0:06:37.760 would be disastrous for the Alliance. Admiral James Taffritis, thank 0:06:37.760 --> 0:06:39.640 you so much for being with me. I wish we 0:06:39.720 --> 0:06:42.560 had another hour to hear your your thoughts, because you 0:06:42.680 --> 0:06:45.799 come with such a rich perspective of what's going on 0:06:45.880 --> 0:06:48.920 both internationally as well as domestically. Admiral James Tefriti is 0:06:49.040 --> 0:06:53.039 Bloomberg Opinion calumnist, retired U S. Navy Admiral and former 0:06:53.160 --> 0:06:58.080 military commando of NATO. He also is the author of 0:06:58.120 --> 0:07:01.840 the recent book See Power, The History and Geopolitics of 0:07:02.000 --> 0:07:06.440 the World's Oceans, shutting light on a really important point, 0:07:06.480 --> 0:07:10.760 which is the strategic importance of oceans and how that 0:07:10.800 --> 0:07:30.080 could be changing. Well, semiconductor shares have been really taking 0:07:30.160 --> 0:07:32.200 a blow on the head again and again in the 0:07:32.240 --> 0:07:34.400 past few sessions, and we can see that again today 0:07:34.720 --> 0:07:38.480 in video shares leading the way down nearly two declines 0:07:38.520 --> 0:07:41.560 following nearly five percent decline on Friday. The question is 0:07:41.640 --> 0:07:44.600 why and is it justified? Is this just a bitcoin 0:07:44.760 --> 0:07:47.280 freak out or is this something deeper? And I'm so 0:07:47.360 --> 0:07:49.280 happy that we have David Garretty here with us. He's 0:07:49.320 --> 0:07:53.040 chief executive of g v A Research based in Brooke. Actually, no, 0:07:53.200 --> 0:07:54.760 he moved. He moved to Manhattan and he is here 0:07:54.760 --> 0:07:57.760 in our eleven three oh studios UH in New York 0:07:57.840 --> 0:08:01.640 City right now. David, what do you think is the 0:08:01.680 --> 0:08:04.240 significance of the recent declines that we've seen in the 0:08:04.400 --> 0:08:08.040 semin conductor companies. Well, I think when you look at 0:08:08.040 --> 0:08:10.640 the global economy and you look at the important sectors 0:08:10.680 --> 0:08:12.920 of a technology, is certainly become more important as a 0:08:12.960 --> 0:08:16.400 sector over time. Much as people have talked about the 0:08:16.480 --> 0:08:20.760 decrease or decline in copper prices since early June by 0:08:20.760 --> 0:08:26.280 about as being indicative of an industrial economy slowdown, we 0:08:26.400 --> 0:08:28.840 take the view that when you look at semiconductors, there's 0:08:28.880 --> 0:08:33.760 a technology sector related slowdown which certainly is being affected 0:08:33.920 --> 0:08:37.800 by the deceleration and the economy in China because of 0:08:37.840 --> 0:08:40.439 the expected impact around some of these tariffs that we've 0:08:40.480 --> 0:08:44.880 been seeing. And so from that standpoint, um, you know, 0:08:45.400 --> 0:08:48.800 we tend to look at semiconductors as being an economically 0:08:48.880 --> 0:08:53.920 sensitive commodity category, albeit of a highly finished kind. So 0:08:54.000 --> 0:08:56.680 are you are you saying that the weakness that we've 0:08:56.720 --> 0:09:01.440 seen of late suggests or points to either a slowdown 0:09:01.440 --> 0:09:06.040 in tech consumption broadly or you know, specifically a slowdown 0:09:06.160 --> 0:09:09.160 in the broader Chinese economy. We would see as being 0:09:09.200 --> 0:09:12.480 a slowdown clearly of tech consumption and would argue that 0:09:12.520 --> 0:09:14.960 perhaps in this case, this is a slowdown in tech 0:09:15.000 --> 0:09:19.840 consumptions being more specifically perhaps in the greater China markets 0:09:19.960 --> 0:09:22.760 or those markets that would be affected by tariffs. There 0:09:22.800 --> 0:09:25.040 may be some spillover depending upon how the tariffs have 0:09:25.120 --> 0:09:29.960 unfolded other geographic areas outside of China. Because clearly what 0:09:30.040 --> 0:09:33.079 the current US administration has been doing has been basically 0:09:33.120 --> 0:09:37.400 going after any and all global trading partners with tariffs 0:09:37.400 --> 0:09:41.160 being imposed. All of this has created economic uncertainty. All 0:09:41.240 --> 0:09:44.839 this arguably is serving to suppress consumption or demand. Really 0:09:44.880 --> 0:09:47.560 interesting and sort of raises a lot of questions about 0:09:47.600 --> 0:09:52.040 the smartphone supercycle as well as car production, I mean, 0:09:52.080 --> 0:09:54.160 all the things that chips are in. Really it raises 0:09:54.200 --> 0:09:56.320 some questions for and definitely as an area to watch. 0:09:56.480 --> 0:09:58.760 But since we're in China, let's talk about Google going 0:09:58.760 --> 0:10:01.199 to China. They made it decision in two thousand and 0:10:01.240 --> 0:10:04.000 ten not to have their search engine in that country 0:10:04.040 --> 0:10:05.800 because of some of the sanctions and the things that 0:10:05.840 --> 0:10:08.240 they would have to follow, the protocol they'd have to 0:10:08.280 --> 0:10:12.600 follow with censorship. Now they're rethinking that decision. What gives 0:10:12.920 --> 0:10:15.480 what a difference? Eight years makes? What a difference that 0:10:15.760 --> 0:10:20.200 the rise of Baidu and other sort of China national 0:10:20.360 --> 0:10:24.720 tech champions has had upon Google And the fact that 0:10:24.800 --> 0:10:26.840 there seems to have been the decision made internally with 0:10:26.880 --> 0:10:29.720 Google that while the mantra might have been starting off 0:10:29.800 --> 0:10:33.199 to do no evil, well, everything has a price. And 0:10:33.440 --> 0:10:36.000 the fact is, at the end of the day, Google's 0:10:36.000 --> 0:10:40.240 business model is based upon tracking users and so gathering data. 0:10:40.600 --> 0:10:43.840 And when it comes to looking at uh state sponsored 0:10:43.880 --> 0:10:48.800 surveillance of populations, you know, Google is essentially saying, well, chucks, 0:10:48.960 --> 0:10:52.160 this is something that we're doing in effect for ourselves already. 0:10:52.559 --> 0:10:55.080 So you know, to the extent that perhaps this is 0:10:55.120 --> 0:10:57.840 something that might be applicable in the case of meeting 0:10:57.880 --> 0:11:01.079 the demands of a client such as the Chinese eight um, 0:11:01.120 --> 0:11:04.120 it may not necessarily be all that wide a gap 0:11:04.240 --> 0:11:08.800 to bridge. In other words, they're okay with certain censorships 0:11:08.840 --> 0:11:10.760 that they weren't okay with in two thousand and ten 0:11:11.200 --> 0:11:13.680 because the business opportunity is too great for them to ignore. 0:11:14.400 --> 0:11:16.960 There is that, and there's also the fact that Google says, 0:11:17.000 --> 0:11:18.800 we're already in a position to be able to track 0:11:19.000 --> 0:11:23.600 individuals online activities and behaviors. And if what the client 0:11:23.679 --> 0:11:26.520 wants to do is to, you know, put some filters 0:11:26.559 --> 0:11:28.880 on this client being the Chinese cover client being the 0:11:28.960 --> 0:11:32.440 Chinese government in this case, because there's significant Chinese ownership, 0:11:32.559 --> 0:11:36.760 Chinese government ownership in the Chinese Internet, and from the 0:11:36.800 --> 0:11:40.320 standpoint that the client wishes to put these filters in place, well, 0:11:40.360 --> 0:11:42.840 you know who's Google to say no. I mean, certainly 0:11:42.920 --> 0:11:45.920 this falls in part and parcel in some respects with 0:11:46.040 --> 0:11:48.200 kind of the debate that's been going on within social 0:11:48.200 --> 0:11:52.040 media is that you know what really constitutes speech and 0:11:52.120 --> 0:11:54.480 you know, should we be in the business of arbitrating 0:11:54.800 --> 0:11:57.839 what speech is or is not to be so talking 0:11:57.880 --> 0:12:00.719 about tracking clients. We were talking when you came in 0:12:00.800 --> 0:12:04.760 today about Netflix and how they're sort of this conundrum 0:12:04.840 --> 0:12:07.800 facing a number of social media companies and others in 0:12:07.840 --> 0:12:11.280 the tech world, including Netflix, of how much to crack 0:12:11.360 --> 0:12:16.360 down on fuzzy numbers about users and subscribers versus how 0:12:16.440 --> 0:12:19.880 much to monetize, Uh, you know what you have and Netflix, 0:12:19.920 --> 0:12:22.560 you were saying, has a lot of subscribers who share 0:12:22.559 --> 0:12:26.120 their passwords with other people, meaning that if Netflix were 0:12:26.160 --> 0:12:27.760 to crack down, they could get a lot more revenues. 0:12:27.800 --> 0:12:29.840 So why wouldn't they You lay at the issue right, 0:12:29.840 --> 0:12:32.200 I mean, the estimates are that you know, Netflix has 0:12:32.320 --> 0:12:35.600 lost revenue from account sharing is something in the order 0:12:35.640 --> 0:12:39.080 of about five million dollars a year. So this for 0:12:39.120 --> 0:12:41.560 a company like Netflix, given their losses, you know, it 0:12:41.559 --> 0:12:46.320 could be a substantial benefit from financial performance perspective. Looking 0:12:46.400 --> 0:12:49.640 at this problem from a demographic perspective, we see that 0:12:50.480 --> 0:12:53.840 users who are baby boomers in terms of that demographic cohort, 0:12:54.240 --> 0:12:57.480 according to recent surveys, you might share thirteen of them 0:12:57.600 --> 0:13:03.079 might share account information. But when you get to younger demographics, 0:13:03.080 --> 0:13:06.960 say under twenty one, that number actually goes with up 0:13:06.960 --> 0:13:10.160 to forty two. The problem is is that as the 0:13:10.280 --> 0:13:14.120 baby boomers age out, you're left with a user base 0:13:14.400 --> 0:13:17.880 who has an expectation that content is going to be free. 0:13:18.280 --> 0:13:21.760 The question here is this might represent something of a 0:13:21.840 --> 0:13:24.400 threat in terms of the business models of these companies 0:13:25.120 --> 0:13:28.400 unless they can do something to promote better consumer behavior 0:13:28.440 --> 0:13:32.199 around paying for the content that's being consumed. So what's 0:13:32.240 --> 0:13:34.600 the argument on the other side for why Netflix would 0:13:34.600 --> 0:13:37.640 want to reduce their numbers in the short term in 0:13:37.720 --> 0:13:42.559 order to do what get more advertising? When debate have that, Yeah, no, 0:13:42.600 --> 0:13:46.679 I mean the issue is if Netflix wishes to maintain 0:13:46.840 --> 0:13:50.800 a model that does not necessarily rely upon advertising, then 0:13:51.040 --> 0:13:54.280 you need to have in place a far more stringent regime, 0:13:54.320 --> 0:13:57.079 if you will, from the standpoint of making sure that 0:13:57.120 --> 0:14:01.120 you know account information and is not being shared, and 0:14:01.160 --> 0:14:03.880 that you're actually being able to realize the revenue per 0:14:04.000 --> 0:14:06.240 user uh that you should be doing out of the 0:14:06.280 --> 0:14:09.920 subscription model. And that's where um and we have literally 0:14:09.920 --> 0:14:12.040 like twenty seconds left, but we were talking earlier about 0:14:12.040 --> 0:14:14.760 help blockchain is sort of going to play a role 0:14:14.800 --> 0:14:16.800 eventually in this if they can tract better. Yeah, but 0:14:16.840 --> 0:14:19.960 there will be an available use of apply private blockchains 0:14:20.240 --> 0:14:23.320 to do a better job in terms of tying consumers 0:14:23.600 --> 0:14:27.440 and content consumption. So from the standpoint of sharing, uh, 0:14:27.640 --> 0:14:30.560 look for decentralized technology to be used to try to 0:14:30.600 --> 0:14:33.720 address this problem. David Garrity always a pleasure. Thank you 0:14:33.720 --> 0:14:36.040 so much for coming in today. Thank you. David Garritty 0:14:36.200 --> 0:14:38.720 is a chief executive of g v A Research talking 0:14:38.800 --> 0:14:55.120 all things tech. Also, I'll be us move forward to 0:14:55.240 --> 0:14:58.480 Damien sass Our, fixed income strategist with Bloomberg Intelligence. He 0:14:58.560 --> 0:15:02.640 brings us intelligence as always on the developing world, with 0:15:03.040 --> 0:15:07.000 decades of experience in this area. Damien, it is all 0:15:07.000 --> 0:15:11.920 about Venezuela this morning. What are they doing to valuation 0:15:11.960 --> 0:15:14.480 in the Bolivar? What's the purpose? I mean, are they 0:15:14.520 --> 0:15:18.400 basically just trying to uh absolutely remove this instrument from 0:15:18.440 --> 0:15:21.360 being relevant any way, shape or form. Yes, they are. 0:15:22.120 --> 0:15:25.160 I mean this conjures images of the Black Friday that 0:15:25.240 --> 0:15:27.800 kind of led to the rise of Hugo chabas Um. 0:15:27.840 --> 0:15:30.720 It's when Camping's the former president, value the boulevard by 0:15:30.720 --> 0:15:33.720 something on the order of and there was riding in 0:15:33.720 --> 0:15:35.880 the streets, and there was bloodshed and and here we are. 0:15:35.920 --> 0:15:38.240 But look, I mean what's really interesting is over the 0:15:38.240 --> 0:15:42.680 weekend we saw MAURICEO McCree, the President of Argentina, together 0:15:42.760 --> 0:15:45.520 with Chili, Paraguay and Columbia come out and say that 0:15:45.560 --> 0:15:49.160 they might actually be taking um Maduro to the I 0:15:49.240 --> 0:15:51.640 c C, to the Hague UM. And I think that's 0:15:51.720 --> 0:15:54.360 kind of interesting because it's really the first evidence we're 0:15:54.400 --> 0:15:58.320 seeing that it's not a unilateral US you know, uh, 0:15:58.880 --> 0:16:01.320 focused measure to kind of get you know, Venezuela to 0:16:01.360 --> 0:16:04.000 buckle and the Madure regime to buckle. It's really now 0:16:04.400 --> 0:16:07.640 brought extending beyond just the US into Latin America. And 0:16:07.640 --> 0:16:09.680 that's the first evidence of it. And just to be clear, 0:16:10.040 --> 0:16:13.560 what they were saying is that the Madure administration has 0:16:14.600 --> 0:16:17.080 committed crimes against humanity and they're trying to get the 0:16:17.080 --> 0:16:21.360 Hague to come in and rule on that. What would 0:16:21.400 --> 0:16:25.160 that do to the Madure administration? Would that potentially cause 0:16:25.280 --> 0:16:27.440 some sort of ignite, some sort of regime change or 0:16:27.480 --> 0:16:29.640 is it sort of a cosmetic you know, we all 0:16:29.680 --> 0:16:32.400 hate you now, right? So the whispers there that Maduro's 0:16:32.400 --> 0:16:35.200 in power because the military protects him and because the 0:16:35.280 --> 0:16:37.640 generals and party. I mean, you know, part of his 0:16:37.680 --> 0:16:40.440 regime at the top lieutenants, top generals, they're all kind 0:16:40.440 --> 0:16:42.200 of you know, they've got his back, so to speak. 0:16:42.240 --> 0:16:44.560 And you know, by you know, if you take in 0:16:44.560 --> 0:16:48.480 conjunction evaluation of the Bolivar last week, the removal of 0:16:48.480 --> 0:16:50.240 some of the fuel subsidies, and some of the other 0:16:50.240 --> 0:16:53.400 measures that they're taking. I linking their currency to the petro, 0:16:53.520 --> 0:16:57.520 which is a cryptocurrency that's linked to Venezuela crude oil 0:16:57.560 --> 0:17:02.640 exports that has been entirely discredited. Yes, yes, absolutely absolutely, 0:17:02.760 --> 0:17:04.040 and the fact that it's now the link went on 0:17:04.040 --> 0:17:07.639 what six point one billion dollars of bonds with US 0:17:07.680 --> 0:17:09.840 dollar credits. I mean, it all kind of paints are 0:17:09.880 --> 0:17:12.760 really a really kind of unnerving picture, one that kind 0:17:12.760 --> 0:17:15.119 of you know, I think they're trying to get you know, 0:17:15.840 --> 0:17:18.600 it shows that they're very vulnerable. Venezuela is very vulnerable 0:17:19.000 --> 0:17:21.040 and um and they've got some real issues ahead of them, 0:17:21.080 --> 0:17:22.760 and hopefully the i c C can iron this out 0:17:22.760 --> 0:17:24.760 and sort of add some pressure and get and get 0:17:24.760 --> 0:17:27.640 a regime change. One thing that I find interesting both 0:17:27.680 --> 0:17:30.800 about what we're seeing in Venezuela as well as Turkey 0:17:31.040 --> 0:17:33.840 is where the international help is coming from. I mean, 0:17:34.040 --> 0:17:38.400 Turkey obviously has seen a dramatic devaluation of their currency 0:17:38.400 --> 0:17:40.639 of the lira, which is continuing today. It's losing value 0:17:40.640 --> 0:17:44.760 against the dollar. Um interesting that Russia and China have 0:17:44.840 --> 0:17:47.840 emerged as lenders to both of these nations at some 0:17:47.920 --> 0:17:49.479 point or other. And I'm wondering, I don't know if 0:17:49.520 --> 0:17:51.720 China has actually stepped at this point to Turkey, but 0:17:51.800 --> 0:17:55.040 certainly China's been a big lender to Venezuela. What is 0:17:55.160 --> 0:17:58.159 this sort of I don't know, demonstrating as far as 0:17:58.160 --> 0:18:01.520 a sea change, a shift in China and Turkey and 0:18:01.600 --> 0:18:04.320 Russia lending to developing market. Yeah, you're going down a 0:18:04.320 --> 0:18:06.359 path that a lot of people are not whispering behind 0:18:06.359 --> 0:18:10.240 closed doors. The fact that, you know, the US dollar 0:18:10.320 --> 0:18:13.240 strength has always been sort of the acts that kind 0:18:13.280 --> 0:18:15.159 of you know, slits the throat, so to speak, of 0:18:15.160 --> 0:18:18.800 emerging market assets and so diversifying your currency exposure. You know, 0:18:18.800 --> 0:18:21.840 we all talk about the broad trade weighted real US dollar, 0:18:21.920 --> 0:18:23.919 which is basically a basket of currencies and how they 0:18:23.960 --> 0:18:26.080 perform a relative to the dollar, and how that's done. 0:18:26.520 --> 0:18:28.520 And I think what we're seeing here is you know, 0:18:28.600 --> 0:18:30.760 China and Russia trying to step in and be that 0:18:30.840 --> 0:18:33.199 lender of last resort to some of these, uh, some 0:18:33.240 --> 0:18:35.560 of these economies that really need assistance, you know, and 0:18:35.560 --> 0:18:37.639 and that that whose currencies have really declined and the 0:18:37.760 --> 0:18:41.000 valued relative to the dollar. Whether or not um you know, 0:18:41.119 --> 0:18:44.240 that's acceptable to the countries themselves and they're populous, whether 0:18:44.359 --> 0:18:47.720 or not, you know, that doesn't force us to now 0:18:47.840 --> 0:18:50.240 put China and Russia in the same bucket as them, 0:18:50.359 --> 0:18:52.760 which obviously we started to do. Right We have sanctions 0:18:52.760 --> 0:18:56.000 against Russia, we are putting tariffs against China, so maybe 0:18:56.040 --> 0:18:57.639 they feel, you know, what, what more do we have 0:18:57.720 --> 0:18:59.320 to lose? But I think in China's case, this is 0:18:59.320 --> 0:19:01.480 really quite interest thing because trying has been lending to 0:19:01.880 --> 0:19:05.280 you know, emerging economies for for some time now, and 0:19:05.359 --> 0:19:08.040 you know, maybe they're kind of trying to get the 0:19:08.320 --> 0:19:10.959 you know, the renminbi out there and into the reserves 0:19:11.080 --> 0:19:13.639 of a lot of these countries and that might you know, 0:19:13.760 --> 0:19:15.760 kind of save them in the long run and allowed 0:19:15.840 --> 0:19:18.720 them to issue more debt to reach their own GDP 0:19:18.800 --> 0:19:21.760 growth targets, which are being scaled back as we speak. 0:19:21.800 --> 0:19:23.440 So we'll see how it all kind of shakes loose. 0:19:23.480 --> 0:19:25.320 I think it's just you know, quite interesting. You know, 0:19:25.760 --> 0:19:27.280 if you look at just what happened over the weekend, 0:19:27.320 --> 0:19:29.880 you look at Venezuela, you look at Turkey, I mean, um, 0:19:29.920 --> 0:19:31.520 you know, and you look at the squeeze which is 0:19:31.520 --> 0:19:34.080 now turned into a dollars shortage. It's just going to 0:19:34.160 --> 0:19:36.679 be really painful for a lot of creditors. Damian Sasa 0:19:36.760 --> 0:19:39.320 are always wonderful to hear from you. Damian Sasso is 0:19:39.359 --> 0:19:43.600 fixing up strategist focusing on developing markets for Bloomberg Intelligence. 0:19:43.920 --> 0:19:47.080 Certainly an important thing to watch. Where are some of 0:19:47.119 --> 0:19:50.280 these developing markets that are certain they're currently in a 0:19:50.320 --> 0:19:54.240 crisis situation where they getting their money. This is something 0:19:54.280 --> 0:20:10.600 we will continue to watch. The plunge in bitcoin this 0:20:10.720 --> 0:20:13.720 year has been precipitous. It's hard to overstate it. It's 0:20:13.720 --> 0:20:17.240 sort of the year at more than thirteen thousand dollars 0:20:17.440 --> 0:20:21.439 per bitcoin now trading six thousand, four hundred and forty 0:20:21.680 --> 0:20:25.240 six dollars. The question is what does this due to 0:20:25.320 --> 0:20:28.840 investments in blockchain, which has been traditionally thought of as 0:20:29.040 --> 0:20:33.399 the mainstay and sort of the value behind this asset. 0:20:33.480 --> 0:20:35.720 Joining us now are really happy to say, is Ron Quaranta, 0:20:36.000 --> 0:20:39.080 chairman of the Wall Street Blockchain Alliance, and Ron, I'm wondering, 0:20:39.400 --> 0:20:41.960 do you watch the price action in bitcoin and ether 0:20:42.040 --> 0:20:44.320 which is actually plunged more we do, and thanks for 0:20:44.359 --> 0:20:46.119 having me, Lisa, It's good to see you again. UM. 0:20:46.160 --> 0:20:48.879 Really focusing on the price action that we see. We 0:20:48.960 --> 0:20:51.280 have a Cryptoasset to working Group and we have this 0:20:51.320 --> 0:20:54.479 conversation fairly regularly within the wus B a UM. We 0:20:54.560 --> 0:20:57.480 try to separate what's the speculative fervor around some of 0:20:57.520 --> 0:20:59.800 the price action that we're seeing. In any particular day, 0:20:59.800 --> 0:21:03.679 you see ten to price moves UM. Certainly from the 0:21:03.800 --> 0:21:06.040 peaks we're seeing, we've seen quite a bit of decline 0:21:06.040 --> 0:21:08.639 in prices. UM. We suspect that's a bit of froth 0:21:08.880 --> 0:21:11.920 coming out of the market. There are some fundamental technical 0:21:12.200 --> 0:21:14.159 things that we look at as well. So for example, 0:21:14.240 --> 0:21:15.959 some of those I c o s that were funded 0:21:15.960 --> 0:21:18.359 with ether, as they become more cash trapped and they 0:21:18.400 --> 0:21:21.840 unload that Ether, that clearly puts downward pressure on prices, 0:21:21.880 --> 0:21:24.280 but none of that changes the dynamic of what we're 0:21:24.280 --> 0:21:28.560 seeing at the evolution of leveraging blockchain technology across global 0:21:28.600 --> 0:21:32.600 financial markets. UH and things like supply chain for example. Alright, 0:21:32.680 --> 0:21:36.440 so you're still seeing investments made by big Wall Street 0:21:36.480 --> 0:21:39.720 firms and beyond in blockchain. There's no sort of knock 0:21:39.760 --> 0:21:42.520 on effective from this, Yeah, I mean, I think the 0:21:42.600 --> 0:21:45.840 knock on effect really is indicative of the challenges that 0:21:45.880 --> 0:21:49.480 the industry is having involving evolving given institutional interests. So 0:21:49.520 --> 0:21:52.199 for example, I think there's JP Morgan and Bank of 0:21:52.240 --> 0:21:56.000 America recently invested, sorry Goldman is actually invested in a 0:21:56.040 --> 0:21:58.119 company called a sony Um. I think it was reported 0:21:58.119 --> 0:22:00.560 by Bloombergner was really focusing on building the nancial markets, 0:22:00.600 --> 0:22:06.440 infrastructure and tools associated with engaging cryptocurrencies and crypto assets. Well, 0:22:06.600 --> 0:22:09.280 I guess that one. Uh right now, I'm looking at 0:22:09.280 --> 0:22:11.639 in Videos shares there down one and a half percent, 0:22:12.119 --> 0:22:15.280 down nearly five percent on Friday. Uh. And in Video 0:22:15.359 --> 0:22:18.679 reported earnings, the big question mark was that they said 0:22:19.040 --> 0:22:23.040 that their sales were down when it came to people 0:22:23.040 --> 0:22:26.239 who are looking to mine cryptocurrencies, and that have been 0:22:26.240 --> 0:22:29.440 a big driver of certain sales in a small segment, 0:22:29.560 --> 0:22:32.400 and that was weighed down. And I guess I'm trying 0:22:32.440 --> 0:22:35.719 to understand, especially at a time when blockchain investments haven't 0:22:35.720 --> 0:22:37.960 borne fruit for a lot of places the way they've 0:22:37.960 --> 0:22:41.520 been looking for. Um, do you view this as sort 0:22:41.560 --> 0:22:44.159 of the decline of of seeing blockchain is sort of 0:22:44.160 --> 0:22:45.919 the holy grail? Or do you think that this is 0:22:45.960 --> 0:22:48.920