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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller.

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Speaker 2: Every business day we bring you interviews from CEOs, market pros,

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Speaker 2: and Bloomberg experts, along with essential market moven news.

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Speaker 1: I'm the Bloomberg Markets Podcast on Apple Podcasts or wherever

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Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.

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Speaker 3: Check in with her. Next, I guess Mick Molroy.

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Speaker 1: He's a co founder of the Lobo Institute, former paramilitary

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Speaker 1: operations officer at the CIA, and former US Marine Infantry

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Speaker 1: officer for sixteen years, so we thank him for his service.

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Speaker 3: Mick, it is bad.

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Speaker 1: In the Middle East, and it looks like it's gonna

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Speaker 1: get worse. What do you believe Israel should do at

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Speaker 1: this point?

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Speaker 4: You know, I think I heard that every day when

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Speaker 4: I came into my office when I was responsible for

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Speaker 4: the Middle Least, and it's not always that bad.

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Speaker 5: But you're right.

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Speaker 6: I agree with you.

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Speaker 4: It is bad right now in two ways. Obviously, Israel

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Speaker 4: has to go and destroy the enemy that attack them

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Speaker 4: on October seven, but the people of the Gods of

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Speaker 4: the Palestinian also need to be allowed basic necessities such

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Speaker 4: as food, water and medicine, and it looks like that

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Speaker 4: is two things that we're going to do everything we can.

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Speaker 4: We'd be in the United States to make happen. Very

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Speaker 4: difficult in a situation like this, but necessary, and I

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Speaker 4: think we're going to do it.

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Speaker 2: I wonder about the actual tools and technology that modern

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Speaker 2: armies use because we see so much reporting about Hamas

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Speaker 2: having this underground tunnel network, which sounds terrifying, but of

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Speaker 2: course there were such underground tunnel networks in previous wars,

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Speaker 2: you know, decades and decades ago. So do we have

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Speaker 2: ordinance that can reach deep underground and destroy a network

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Speaker 2: of tunnels?

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Speaker 4: So yes, The problem is when those tunnels are under buildings,

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Speaker 4: there is ordinance that has the ability. It's time delayed

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Speaker 4: so it penetrates into the ground before it detonates and

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Speaker 4: then causes this concussion that can collapse tunnels. Now, if

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Speaker 4: there are some of the tunnels in Gaza are up

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Speaker 4: to two hundred feet underground, it won't work for them.

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Speaker 4: And then on top of that, so subterranean fighting to

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Speaker 4: your point of your question, yes, we've been doing that

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Speaker 4: for a while. But the complicated factor in here is

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Speaker 4: normally you could just use combat engineers, seal them up,

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Speaker 4: explode ordinance above them, collapse them. But now we have

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Speaker 4: up to two hundred and twenty plus hostages that might

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Speaker 4: be in those tunnels, and you can't do any of

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Speaker 4: those tactics that we've done in the past or that

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Speaker 4: has been done in the past. When it comes to

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Speaker 4: subterranean warfare, you have to go mile by mile, and

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Speaker 4: there's over three hundred miles to try to recover these

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Speaker 4: hostages at the same time you're fighting the enemy.

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Speaker 2: This brings up another interesting point, and it's like, I

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Speaker 2: guess a moral battle that any army is going to

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Speaker 2: have internally, At what point do you say, we do

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Speaker 2: not negotiate with terrorists and we're going to move ahead

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Speaker 2: with our main aim, which is destroyed hamas you know. Essentially,

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Speaker 2: I mean, is it even possible to say we will

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Speaker 2: sacrifice these hostages in order to achieve our goal.

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Speaker 4: So it is possible to do that, I don't think

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Speaker 4: it should be done or will be done. Ultimately, militaries

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Speaker 4: are there to protect their civilians, just like our military

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Speaker 4: is to protect the United States and everybody in it. So,

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Speaker 4: although it makes it much more complicated and quite frankly,

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Speaker 4: it brings a lot more risk to the force to

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Speaker 4: try to recover hostages. That's that's part of what we do,

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Speaker 4: and I think they will focus on doing both. It

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Speaker 4: would have been much better.

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Speaker 2: I mean, the problem is obviously in order to you know,

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Speaker 2: in order to try and get those two hundred and

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Speaker 2: twenty hostages back, you could risk losing exponentially more soldiers.

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Speaker 4: That's you could you will risk losing more soldiers. Yes,

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Speaker 4: there's no easy decision here, but every time you send

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Speaker 4: in a hostage rescue force, you are risking the force

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Speaker 4: to rescue in most cases one individual and it's a

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Speaker 4: mission failure if the hostage taker just turns and shoots

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Speaker 4: a person at the last second. But you're still risking

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Speaker 4: the entire force in the process, and sometimes they use

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Speaker 4: it as a way to lure end forces to attack them.

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Speaker 4: That happens all not all the time, but certainly in

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Speaker 4: most hostage rescue situations here it could happen up to

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Speaker 4: two hundred and twenty times. So because they could be separated,

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Speaker 4: they're not going to be in the same place, and

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Speaker 4: it's going to be extraordinarily difficult, and it's something that

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Speaker 4: the IDF is grasping right now, I think and hopefully,

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Speaker 4: and I think we do have members of JASOK and

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Speaker 4: the CIA on the ground helping them, but they have

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Speaker 4: very effective special operations and this is just a very

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Speaker 4: complicated military problem.

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Speaker 3: Mick.

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Speaker 1: What do you believe at this time is the risk

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Speaker 1: of this becoming a more regional conflict? You know, whether

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Speaker 1: Siri or lebanonwear are we in that regard?

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Speaker 4: So listening to I thought it was high, and then

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Speaker 4: listening to the Iranian statements yesterday, I think it's higher.

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Speaker 4: So that is one of the reasons why I think

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Speaker 4: the United States has been so proactive at moving now

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Speaker 4: a second aircraft carry strike group to the eastern Mediterranean,

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Speaker 4: something that's unprecedented. Now there's a the twenty six MEW,

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Speaker 4: the Marine Expeditionary Unit is being retasked there, and I

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Speaker 4: think you're going to see more and more resources coming

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Speaker 4: to the region because I believe, we think Iran wants

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Speaker 4: this to expand let's hope it doesn't. Let's hope the

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Speaker 4: United States doesn't have to get involved, but it looks

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Speaker 4: like it's heading that way, and Iran can easily make

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Speaker 4: this go from a one front war if you will,

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Speaker 4: to a three to four front war. And if they

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Speaker 4: get involved directly, then this is going to be a

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Speaker 4: regional war.

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Speaker 7: So where did the other countries align?

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Speaker 2: If the US is drawn in to a broader regional conflict,

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Speaker 2: what happens?

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Speaker 7: What do the Saudis do? You know? What are the Turks?

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Speaker 4: Do?

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Speaker 7: They're in NATO? Are they are they on our side

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Speaker 7: against Iran?

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Speaker 4: So when it turns into a war against Iran, if

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Speaker 4: that's what happens a little bit, let's hope it does not.

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Speaker 4: That would not be good for anybody the region or

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Speaker 4: the United States, and certainly not Iran. Then the Saudis

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Speaker 4: and all these Gulf states who do have some political

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Speaker 4: ties and sympathies, certainly to the Palestinians, it could shift

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Speaker 4: quite a bit because they are no friends of the Iranians.

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Speaker 4: In fact, most of the Iranian efforts have been targeted

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Speaker 4: toward them. If you think about the Huthis and Yemen

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Speaker 4: toward Saudi Arabia and the uae I. Don't think they'll

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Speaker 4: become actively involved, but certainly that'll change the calculus for them.

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Speaker 4: If this becomes a Israel, Iran and US conflict that

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Speaker 4: goes well beyond Gaza. That said, it is not going

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Speaker 4: to be in anybody's interests. This is going to be

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Speaker 4: very destabilizing, its ruin economies, and it could be very

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Speaker 4: substantial if you think about it. There's several nuclear powered

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Speaker 4: countries that would be involved in that, and Iran is

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Speaker 4: on the precipice of getting their own nuclear weapon, and

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Speaker 4: I don't know what that status is now out of

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Speaker 4: the government, but it could be very close and that's

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Speaker 4: something they could be racing toward right now.

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Speaker 1: McK prime Minister net Yale, who had an interesting weekend

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Speaker 1: over social media seemingly putting the blame on the intelligence

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Speaker 1: apparatus of Israel for the October seventh attack, how do

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Speaker 1: you put all of that into context with what the

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Speaker 1: military is trying to achieve here.

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Speaker 4: So I believe in the old adage, you know the

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Speaker 4: buck stops here concept. You know, you're a charge, you're

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Speaker 4: in charge for everything that happens or fails to happen.

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Speaker 4: It was obviously an intelligence failure, but more than that,

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Speaker 4: it was a security failure because even if you did

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Speaker 4: not know that they were coming, the reaction times, quite

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Speaker 4: frankly from what I've seen, are unacceptable, especially in a

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Speaker 4: country the size of Israel and that's and that's that's

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Speaker 4: saying something. But it's also important to point out that

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Speaker 4: we had a pretty massive intelligence failure and I think

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Speaker 4: we have the best intelligence services in the world on

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Speaker 4: nine to eleven. So it's less about poking fingers and

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Speaker 4: more about you know, that needs to be addressed by Israel.

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Speaker 4: I know they know this, it's not the thing that

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Speaker 4: you know, it's a surprise to them. After that. I

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Speaker 4: think they will. They just don't have time to do

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Speaker 4: it now. It's going to have to be on their

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Speaker 4: to do list right after this. Uh, this current conflict

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Speaker 4: is over.

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Speaker 1: So Mick, just as observers here, should we set in

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Speaker 1: for a long grinding type of action here or is

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Speaker 1: there any scenario where there could be something quick, decisive,

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Speaker 1: measured in days not months.

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Speaker 4: So there could be, but I think that would require

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Speaker 4: the Israelis changing their objective. If they want to destroy

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Speaker 4: which is a military term, destroy Hamas, that makes them

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Speaker 4: essentially completely ineffective in carrying out their military although in

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Speaker 4: their case terroraced mission, unless they reconstitute themselves. If that

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Speaker 4: is still their objective, it's going to take months and

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Speaker 4: months to do that. In Gaza. If you look at

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Speaker 4: MOSL in twenty sixteen, it took nine months and there's

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Speaker 4: only nine thousand fighters. Gaza has forty thousand fighters. And

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Speaker 4: then if they want them to prevent them from reconstituting themselves,

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Speaker 4: they're going to have some kind of occupation. They can't

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Speaker 4: just leave and let it go because Aron will move

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Speaker 4: right in, pick up the pieces and start harming them

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Speaker 4: and all that immediately. So they're going to have to

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Speaker 4: be some kind of force. Maybe it's not Israelis. Maybe

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Speaker 4: there's an international force, peacekeeping force that can move in

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Speaker 4: to help with the rebuilding of the area and of

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Speaker 4: course humanitarian assistants, but also to ensure that Hamas does

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Speaker 4: not reconstitute itself. That's something that's actively being discussed. Much

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Speaker 4: easier said than done, that's something that I think should

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Speaker 4: be looked at all.

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Speaker 3: Right, Mick, thank you so much for joining us.

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Speaker 1: Really appreciate getting your perspective, your analysis. Mick mulroy, he's

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Speaker 1: a co founder of the Lobo Institute. Lots of experience

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Speaker 1: in that part of the world. Former Power Military operations

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Speaker 1: officer at CIA, former US Marine Infantry officer, senior fellow

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Speaker 1: at the Middle East Institute, So a lot of experience

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Speaker 1: in that part of the world and with those types

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Speaker 1: of geopolitical challenges.

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Speaker 5: You're listening to the Team ken'shur Live program Bloomberg Markets

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Speaker 5: weekdays at ten am Eastern on Bloomberg dot Com, the

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Speaker 5: demand wherever you get your podcasts.

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Speaker 1: All right, it looks like we are moving towards labor

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Speaker 1: piece in the auto industry. GM reach is tenant of

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Speaker 1: agreement today with UAW ending a six week strike. Let's

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Speaker 1: break it down with a Gabby Coppola, auto industry reporter

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Speaker 1: for Bloomberg News. Gabby, this seems like I guess the

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Speaker 1: last deal to get done here. Anything unusual in this

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Speaker 1: deal relative to what we saw from four to INSTALLANTUS.

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Speaker 8: Not yet.

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Speaker 9: We don't have enough details to say if there is big,

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Speaker 9: you know, differences, I don't. I mean, I think obviously

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Speaker 9: they followed the pattern and on wages, you know, twenty

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Speaker 9: five percent over four years and eight months, plus inflation

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Speaker 9: protection or inflation adjustments. I think that money for retirees

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Speaker 9: had been one of the big sticking points towards the

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Speaker 9: end for GM, and that's why you saw I THEK

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Speaker 9: UAW actually expanding their strike this weekend against GM before

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Speaker 9: it got done. But I think I think temps and

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Speaker 9: retiree you know, money for pensioneers and retirees with the

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Speaker 9: sticking points, and we don't We'll see what that extras

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Speaker 9: little strike did if that bug GM up to be

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Speaker 9: in the same place as Fordham, stillant.

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Speaker 2: Is or not right, because walk us through the differences

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Speaker 2: between these three auto manufacturers. They're all big, right, but

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Speaker 2: GM has a lot more I think retirees to consider.

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Speaker 2: GM has, for example, more temp workers than than Ford,

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Speaker 2: maybe a little fewer than Stillanis.

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Speaker 7: So there are differences between these three companies.

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Speaker 8: That's exactly right.

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Speaker 9: I mean, I think once Ford set the pattern on wages,

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Speaker 9: that was the pattern, you know, But then you get

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Speaker 9: into some of these other issues exactly what you mentioned.

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Speaker 9: JAM has much bigger pool of retirees than say Stilantis does,

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Speaker 9: but Stilantis, you know, has fewer plants in the US

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Speaker 9: than Ford and GM.

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Speaker 8: Ford has the most.

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Speaker 9: And the temp worker issue, that was an interesting one

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Speaker 9: because Ford has always kind of been the boy scout

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Speaker 9: here of the D three, like they always like to

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Speaker 9: brag that they have more American you know, workers and

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Speaker 9: you know, full time workers in their counterparts. And that's true.

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Speaker 9: So it was kind of less painful for them to

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Speaker 9: bring up the temps than it would have been for

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Speaker 9: a GM in Stilantis. So they were Yeah, I think

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Speaker 9: they're probably happy to see GM and Bland is getting

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Speaker 9: pushed to where they are in that.

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Speaker 2: Regard because Ford had what a GM has like ten

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Speaker 2: percent of its workers at any given time or temps

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Speaker 2: right right, so that a little more and Ford far fewer.

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Speaker 9: Ford was like around what we reported going to the

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Speaker 9: strike was Ford was around three percent. I think JAM

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Speaker 9: was around nine or ten percent, and Silantis was.

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Speaker 8: Like twelve percent. And I think one of the things

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Speaker 8: that really strikes.

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Speaker 9: Me mat just looking at this what the contract they got,

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Speaker 9: it is like complete.

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Speaker 8: They completely turned the tables.

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Speaker 9: You know, the companies were really used to going into

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Speaker 9: these things and squeezing the union.

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Speaker 8: Harder and harder.

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Speaker 9: Silantis wanted even more flexibility to use more temp workers.

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Speaker 9: They wanted to eliminate, you know, thousands of jobs. They

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Speaker 9: wanted to close this engine and complex in Trenton, Michigan,

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Speaker 9: Toledo Machining, and.

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Speaker 8: None of that happened.

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Speaker 9: I mean, they put it price Delanta's put a vehicle

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Speaker 9: back in Velvedere or Illinois. That was a huge deal

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Speaker 9: because that was a major issue for the UAW. That

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Speaker 9: was you know, thirteen hundred people got laid off the

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Speaker 9: spring when Silantis idled that plant, and it really did

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Speaker 9: not look like it was coming back. So I think

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Speaker 9: what really strikes me is just how much the union

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Speaker 9: really turned the tables on the companies. It went from

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Speaker 9: the union, you know, really getting pretty concessionary, you know,

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Speaker 9: modest wage increases, things like that, ever since the bankruptcy,

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Speaker 9: you know, ever since two thousand and seven, really even

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Speaker 9: before the bankruptcy when they started making cuts to kind

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Speaker 9: of help the automakers survive what was coming.

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Speaker 8: And this, I mean, this is what May said he

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Speaker 8: was going to do, and you know he did do it.

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Speaker 9: Like they really I'm not saying they got everything they wanted,

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Speaker 9: but they got a lot and they definitely be back

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Speaker 9: to aut of the confessions that companies were looking for.

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Speaker 1: So what what did turn the tables there, Gabby? Was

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Speaker 1: it just simply catching up and trying to get back

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Speaker 1: what they had conceided over the last twelve to fourteen years,

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Speaker 1: or is something fundamentally changed within that relationship.

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Speaker 8: I think it was a few different factors.

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Speaker 9: I mean, one, I think the automakers knew they needed

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Speaker 9: to pay more because of inflation, right, I mean I

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Speaker 9: always remind people of this that, you know, we saw

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Speaker 9: during the pandemic, the labor market's been very tight. Ever

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Speaker 9: since then, inflation has been really you know, the highest,

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Speaker 9: and you know interest rates are high. That was really

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Speaker 9: squeezing people. I mean, don't forget a temp worker. You

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Speaker 9: know it takes landing for instance. You know, they had

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Speaker 9: the biggest number of temp workers. Those people made fifteen

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Speaker 9: dollars and seventy eight cents an hour. And then you

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Speaker 9: think about all the inflation that happened over the past

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Speaker 9: couple of years, you know, the non union employers, the Amazon, Starbucks,

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Speaker 9: everybody was raising wages to respond to the tight labor

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Speaker 9: market and inflation. And the company, the car companies kind

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Speaker 9: of hadn't done that. They hadn't paid the bill, right,

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Speaker 9: the bill was coming. So I think for sure part

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Speaker 9: of it was like they legitimately knew they had to

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Speaker 9: pay more. I think part of it was, yes, you know,

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Speaker 9: after two thousand and eight, people really feel like they

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Speaker 9: deserved the mentality of the Union is that we gave

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Speaker 9: these concessions to you guys to get you through. They

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Speaker 9: weren't supposed to be permanent, right, And the car companies

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Speaker 9: were like, no, this is our new business model, this

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Speaker 9: is our new labor costs, this is our new operating.

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Speaker 2: The forget, by the way, Gabby is it is some

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Speaker 2: of this also, for example Stilantis. It's easier for them

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Speaker 2: to agree because, as you say, they don't really make

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Speaker 2: that much stuff in this country.

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Speaker 7: And if they're gonna if somehow.

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Speaker 2: Magically Dodge and Chrysler become brands where they're gonna produce

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Speaker 2: more cars.

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Speaker 7: I mean, that doesn't seem like it's gonna happen.

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Speaker 3: Now.

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Speaker 2: They'll make them in Canada, or they'll make them in Mexico.

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Speaker 2: I mean, this is essentially the Union sealing its fate

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Speaker 2: in terms of uh, not not going to add any

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Speaker 2: extra capacity in the US for a few years.

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Speaker 7: Are we well?

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Speaker 9: I think you know that is certainly a concern, I think,

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Speaker 9: and I've even heard that concern express from some people

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Speaker 9: in the labor movement, like, oh, I hope we didn't

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Speaker 9: do so much that we're now going to shield ourselves

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Speaker 9: from future investment. I'm not, you know, I am. I

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Speaker 9: am not going to rush to judgment. I'm gonna wait

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Speaker 9: and see what happens. I look forward to doing a

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Speaker 9: lot more reporting in the coming weeks, talking to people

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Speaker 9: on the executive side to say, wow, what are you.

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Speaker 8: Guys gonna do here?

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Speaker 1: You know?

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Speaker 8: But yeah, it's not It's true people want what flavor costs.

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Speaker 9: On the other hand, you've got the Inflation Reduction Act,

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Speaker 9: You've got all these incentives, you know. And I didn't mention,

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Speaker 9: but obviously I think the biggest thing was Sean Fain

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Speaker 9: and new leadership at the UAW.

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Speaker 8: This is very.

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Speaker 9: Different, more hard left, more you know, just really more radical,

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Speaker 9: more just more militant.

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Speaker 7: Well, and I wouldn't I wouldn't want to.

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Speaker 2: I wouldn't use the term unbribeable Gabby, because I would

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Speaker 2: want wouldn't want to make that allegation, you know. But

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Speaker 2: but past union leaders that are in prison, right, Yeah.

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Speaker 9: Absolutely, I mean I think that, you know, I would

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Speaker 9: say that some things that were great that the Sean

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Speaker 9: pain and the leadership did was they brought this level

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Speaker 9: of transparency to the union and to the process of negotiation.

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Speaker 9: I mean, Fain was on there every week doing these

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Speaker 9: Facebook live you know, updates speaking directly to the membership.

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Speaker 8: You know, in the past, this was something that happened behind.

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Speaker 9: Closed doors with a few group of men, you know,

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Speaker 9: and that would come out and be like here's the deal,

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Speaker 9: you know, and there was a lot of a lot

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Speaker 9: of mistrust between the leadership and the membership, especially once

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Speaker 9: the you know, corruption scandal started. So in some ways

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Speaker 9: you kind of had to have this like clean break

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Speaker 9: with the past and do things really different. And I

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Speaker 9: think that Spain just really won the trust of people,

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Speaker 9: and it feels like a much more democratic union and

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Speaker 9: honestly like a healthier union just from like an engagement standpoint.

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Speaker 9: And I think that gave them.

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Speaker 8: A lot of power.

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Speaker 9: You know. I don't think they could have gone on forever, right,

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Speaker 9: Like people were starting to hurt, especially people have been

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Speaker 9: on strike since September fifteenth, like at the g plant,

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Speaker 9: you know, the you know, stuff like truck Plant and

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Speaker 9: Michigan Ford.

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Speaker 8: You know, people were getting tired, right Sure.

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Speaker 1: Hey, Gabby, do you think d UAW takes these wins

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Speaker 1: and maybe it goes down south to some of these

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Speaker 1: non unionized plan that's definitely.

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Speaker 9: They're one hundred percent that's the plan. I mean last

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Speaker 9: night Sean Fain, when who was going over the Ford details,

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Speaker 9: he said, just going to be the big three. It's

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Speaker 9: going to be the Big four, five six, meaning they

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Speaker 9: have did the whole of these contracts. Was this is

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Speaker 9: our calling card to the non union plans?

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Speaker 7: Fascinating.

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Speaker 2: I wonder when we get more details, if we're going

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Speaker 2: to find out cool stuff like, uh, what cars is

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Speaker 2: Dodge going to build?

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Speaker 7: What cars?

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Speaker 2: I mean, is Chrysler only going to have the PACIFICA

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Speaker 2: or are we going to find out plans.

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Speaker 9: For the future Productler has shown a lot of Chrysler

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Speaker 9: is really trying to go beyond you know, the minivan. Well,

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Speaker 9: I mean, we'll see what the actual industrialization plan is.

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Speaker 9: But I mean they brought out a lot of really

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Speaker 9: sleek looking kind of crossovers kind of you know, I've

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Speaker 9: been a very kind of post hopefully like your more

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Speaker 9: affordable kind of stylish that would kind of appeel to,

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Speaker 9: I think to like younger people, you know, that kind

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Speaker 9: of you don't necessarily have kids twenties and thirties.

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Speaker 7: Crossfire after the crossfire was pretty cool at the TI time.

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Speaker 3: Yep, all right, all right, Gabby, thank you so much

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Speaker 3: for joining us.

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Speaker 1: Gabby Coppola, auto industry reporter for Bloomberg News and Journeys

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Speaker 1: on this gym reaching a tentative agreement with the UIW

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Speaker 1: ending a six week strike. So your dollge Challenger with

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Speaker 1: the scatpack was actually made in Canada, right, Yeah, whereas

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Speaker 1: my BMW was made in Tennessee.

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Speaker 3: That's right. So I bought an American all.

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Speaker 2: The BMW X cars, so all the SUVs are made

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Speaker 2: here in America, all right, So I bought Americans.

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Speaker 8: About that.

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Speaker 5: You're listening to the tape Cansur Live program Bloomberg Markets

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00:20:33,160 --> 00:20:36,560
Speaker 5: weekdays at ten am Eastern on Bloomberg Radio, the tune

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00:20:36,600 --> 00:20:39,560
Speaker 5: in app, Bloomberg dot Com, and the Bloomberg Business App.

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00:20:39,600 --> 00:20:42,399
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Speaker 5: flagship New York station. Just say Alexa play Bloomberg eleven thirty.

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Speaker 3: All right, let's get back to Israel.

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Speaker 1: We want to broaden our discussion out to kind of

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Speaker 1: a geopolitical discussion of that region of the world, and

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Speaker 1: we can do that with Ambassador Adam Early. He is

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Speaker 1: a principal at American Consultants. He was a former US

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Speaker 1: Ambassador to the Kingdom of Bahrain from two thousand and

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Speaker 1: seven to twenty eleven, so he knows that part of

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Speaker 1: the world. Ambassador, thanks so much for joining us here.

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Speaker 1: I guess there's a million ways to go here. It

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Speaker 1: seems like Israel is really ramping up its attacks in Gaza.

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Speaker 1: One of the concerns, obviously for you know, the United

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Speaker 1: States and others, is what is the risk right now?

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Speaker 1: Do you believe of this kind of regional conflict kind

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Speaker 1: of and focused on Gaza expanding into a more of

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Speaker 1: a regional conflict bringing in other players. Where are we

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Speaker 1: on that risk spectrum right now?

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Speaker 10: Well, it's already started. Frankly, over the last two weeks,

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Speaker 10: you've seen pretty constant exchange of fire between Hesbela in

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Speaker 10: the south of Lebanon and Israeli forces in the north

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Speaker 10: of Israel. It hasn't gotten as much attention as obviously

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Speaker 10: the hostilities in Gaza, but both sides have suffered dozens

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Speaker 10: of casualties in that on that front. And then States

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Speaker 10: has been attacked dozens of times in the last couple

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Speaker 10: of weeks in its forces in Iraq and Syria have

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Speaker 10: been attacked by drones and missiles.

440
00:22:12,160 --> 00:22:17,320
Speaker 6: Fired by groups controlled by Iran in those territories.

441
00:22:17,359 --> 00:22:20,720
Speaker 10: So you know, I would call it a not even

442
00:22:20,720 --> 00:22:23,840
Speaker 10: a boil, but a kind of simmering of the pot,

443
00:22:23,960 --> 00:22:26,000
Speaker 10: which we see as the heat rises.

444
00:22:26,040 --> 00:22:29,800
Speaker 6: The question is will it will it reach a high boil?

445
00:22:30,080 --> 00:22:34,199
Speaker 10: And frankly, that's what the Biden administration is spending a

446
00:22:34,240 --> 00:22:36,479
Speaker 10: lot of its time tending to.

447
00:22:37,640 --> 00:22:42,879
Speaker 2: I wonder first, I want to say that nothing justifies

448
00:22:44,040 --> 00:22:47,720
Speaker 2: the attacks that we saw on October seventh from Hamas

449
00:22:47,720 --> 00:22:51,080
Speaker 2: into Israel. And I don't want anyone to think that

450
00:22:51,200 --> 00:22:56,840
Speaker 2: I that I'm going there. But did this did this

451
00:22:56,960 --> 00:23:02,720
Speaker 2: whole tragedy evolve in a sense from the attempt of

452
00:23:02,800 --> 00:23:07,960
Speaker 2: the US to normalize relations between the Saudis and Israeli's

453
00:23:08,040 --> 00:23:10,800
Speaker 2: I only ask because I saw who's the New York

454
00:23:10,840 --> 00:23:13,760
Speaker 2: Times columnist that you loved pretty much, Tom Friedman, I think,

455
00:23:13,840 --> 00:23:16,280
Speaker 2: wrote a piece saying, you know, when when we saw

456
00:23:16,320 --> 00:23:20,280
Speaker 2: a picture of an Israeli like defense minister getting all

457
00:23:20,320 --> 00:23:25,320
Speaker 2: suited up to pray in Jetta, that it was sure

458
00:23:25,359 --> 00:23:27,920
Speaker 2: to outrage the Arabic world.

459
00:23:30,040 --> 00:23:37,720
Speaker 10: Well, the short answer, in my opinion is no. But

460
00:23:38,400 --> 00:23:43,600
Speaker 10: remember everything is connected, right. But the reason I'll explain

461
00:23:43,680 --> 00:23:46,680
Speaker 10: why I say no, But at the same time, there's

462
00:23:46,680 --> 00:23:53,040
Speaker 10: a connection. You know, this attack which involved thousands of

463
00:23:53,400 --> 00:24:03,920
Speaker 10: Palestinians invading Israel on by air, through paragliding, land and sea, right,

464
00:24:06,119 --> 00:24:11,480
Speaker 10: was and seizing pre determined targets, right, was a complex

465
00:24:11,560 --> 00:24:14,560
Speaker 10: operation that that book.

466
00:24:14,440 --> 00:24:16,120
Speaker 6: Israel totally by surprise.

467
00:24:16,680 --> 00:24:21,399
Speaker 10: Now, you don't do something like that without years of

468
00:24:21,520 --> 00:24:22,960
Speaker 10: careful planning and preparation.

469
00:24:23,320 --> 00:24:23,520
Speaker 4: Right.

470
00:24:24,359 --> 00:24:28,600
Speaker 10: Okay, So the rock Prochemont between Israel and Saudi Arabia,

471
00:24:28,760 --> 00:24:33,240
Speaker 10: it's only been the last couple of months, right, So clearly.

472
00:24:32,880 --> 00:24:36,040
Speaker 6: Hamas has been planning this for a while, right.

473
00:24:36,560 --> 00:24:42,360
Speaker 10: And and one cannot say that the.

474
00:24:40,920 --> 00:24:45,199
Speaker 6: Provocation or the what set this in motion was Israel

475
00:24:45,800 --> 00:24:50,439
Speaker 6: stauding normalization. However, however, and this is where the connection

476
00:24:50,520 --> 00:24:55,640
Speaker 6: comes in. Hamas uh Is.

477
00:24:54,760 --> 00:24:58,760
Speaker 10: Is competing for political power among the Palestinian and Arab

478
00:24:58,920 --> 00:25:03,000
Speaker 10: street let's say, so you know, they saw themselves as

479
00:25:03,440 --> 00:25:07,359
Speaker 10: maybe getting out maneuvered a little bit by Israel in

480
00:25:07,400 --> 00:25:10,960
Speaker 10: its rapprochemot with the Arab states like Bahrain, like Uae,

481
00:25:11,280 --> 00:25:14,760
Speaker 10: like Morocco, who were all signatories of the Abraham Accords,

482
00:25:15,000 --> 00:25:17,520
Speaker 10: which is where we were trying to bring Saudi Arabia.

483
00:25:17,600 --> 00:25:21,040
Speaker 10: So again it's not unconnected, But at the same time,

484
00:25:21,680 --> 00:25:23,160
Speaker 10: it's not Saudi related.

485
00:25:23,359 --> 00:25:27,000
Speaker 6: It is basically peace related.

486
00:25:27,240 --> 00:25:31,320
Speaker 10: In other words, Hamas, which is a military terrorist organization,

487
00:25:32,400 --> 00:25:36,720
Speaker 10: doesn't benefit from peace, right, they only benefit from continued conflict.

488
00:25:37,680 --> 00:25:40,080
Speaker 1: Adam or I want to get your thoughts here on

489
00:25:40,359 --> 00:25:44,200
Speaker 1: these hostages, because that is just a difficult, difficult situation

490
00:25:45,119 --> 00:25:49,000
Speaker 1: for Israel. What is the role that Qatar is playing

491
00:25:49,119 --> 00:25:53,200
Speaker 1: in this? And is there any scenario where this ends?

492
00:25:53,359 --> 00:26:01,120
Speaker 10: Well, you know, there's been a lot of how should

493
00:26:01,160 --> 00:26:05,040
Speaker 10: I put it, there's been a lot of esteem being

494
00:26:05,160 --> 00:26:09,080
Speaker 10: let off in the media and about Katar, And you know,

495
00:26:09,200 --> 00:26:11,480
Speaker 10: Katar is a country that I know very well, I've

496
00:26:11,480 --> 00:26:15,800
Speaker 10: worked in, and it's again, it's very complicated.

497
00:26:15,840 --> 00:26:19,080
Speaker 6: But here's the here's the bottom line. The bottom line

498
00:26:19,160 --> 00:26:25,040
Speaker 6: is that Cutter's relationships with Hamas have come about at

499
00:26:25,080 --> 00:26:28,320
Speaker 6: the request of and with the cooperation.

500
00:26:27,800 --> 00:26:31,480
Speaker 10: Of the United States and Israel over the last twenty

501
00:26:31,600 --> 00:26:37,080
Speaker 10: years fifteen twenty years. Why because Hamas is a terrorist organization,

502
00:26:37,520 --> 00:26:38,600
Speaker 10: we can't deal with them.

503
00:26:38,920 --> 00:26:41,520
Speaker 6: We need somebody who can, and we've.

504
00:26:41,400 --> 00:26:43,800
Speaker 10: Chosen we, meaning the United States in Israel, have chosen

505
00:26:43,800 --> 00:26:47,160
Speaker 10: Cutter as our preferred intermediary. So when people say Cutter

506
00:26:47,200 --> 00:26:52,280
Speaker 10: supports Hamas. That's really not fair because Cutter is kind

507
00:26:52,280 --> 00:26:55,239
Speaker 10: of doing us a favor in terms of being a

508
00:26:55,359 --> 00:26:59,959
Speaker 10: channel to Hamas to help stop hostilities, help release hostage,

509
00:27:00,000 --> 00:27:03,800
Speaker 10: which is, help get money and supplies to God to

510
00:27:04,000 --> 00:27:09,280
Speaker 10: Palestinian civilians. Now, what's different in the present conflict really

511
00:27:10,000 --> 00:27:13,080
Speaker 10: is that, you know, the United States and Israel has decided,

512
00:27:13,359 --> 00:27:17,520
Speaker 10: have decided right rightfully, So I believe, you know, no

513
00:27:17,600 --> 00:27:21,159
Speaker 10: more negotiations, no more business at all with Hamas.

514
00:27:21,480 --> 00:27:24,720
Speaker 6: That's over. We've gone from you know.

515
00:27:25,920 --> 00:27:32,879
Speaker 10: Tolerating an inconvenience to needing to eliminate a serious threat

516
00:27:33,400 --> 00:27:36,920
Speaker 10: that puts Kutar in a difficult position. What they're trying

517
00:27:36,960 --> 00:27:41,320
Speaker 10: to do, I think again, with US and Israeli cooperation

518
00:27:41,440 --> 00:27:44,119
Speaker 10: is negotiate the release of these hostages so that Israel

519
00:27:44,119 --> 00:27:47,200
Speaker 10: can then go in and flatten Hamas.

520
00:27:48,200 --> 00:27:50,120
Speaker 6: Will they succeed I doubt it.

521
00:27:50,359 --> 00:27:54,719
Speaker 10: Why because Hamas recognizes that the only thing standing between

522
00:27:54,800 --> 00:27:58,640
Speaker 10: it and the full force of Israeli military are two

523
00:27:58,760 --> 00:27:59,600
Speaker 10: hundred hostages.

524
00:28:01,640 --> 00:28:08,280
Speaker 2: So I wonder you know that's problematic in Gaza, and

525
00:28:08,359 --> 00:28:12,480
Speaker 2: then on the northern border with Lebanon, you've got Iran

526
00:28:12,560 --> 00:28:16,320
Speaker 2: lobbing missiles in via its proxy has Belah right, And

527
00:28:16,840 --> 00:28:19,520
Speaker 2: it looks like from the rhetoric. You know, Mick Malroy

528
00:28:19,600 --> 00:28:21,280
Speaker 2: just told us from the Lobo instuot he thinks Iran

529
00:28:21,320 --> 00:28:23,000
Speaker 2: wants this conflict to broaden out.

530
00:28:23,359 --> 00:28:24,560
Speaker 7: Is that inevitable as well?

531
00:28:26,960 --> 00:28:31,600
Speaker 10: I think that's a little simplistic that Iran wants this

532
00:28:31,720 --> 00:28:34,320
Speaker 10: conflict to broaden out? What does Iran want?

533
00:28:34,600 --> 00:28:35,720
Speaker 6: Iran wants two things.

534
00:28:35,760 --> 00:28:37,840
Speaker 10: It wants the United States out of the Middle East,

535
00:28:38,760 --> 00:28:43,800
Speaker 10: and it wants Israel to be eliminated, right at least

536
00:28:44,080 --> 00:28:46,320
Speaker 10: if you believe what the Iranian leaders have been saying

537
00:28:46,360 --> 00:28:50,719
Speaker 10: for the past forty years. So the question for Iran

538
00:28:50,920 --> 00:28:54,720
Speaker 10: is how to best achieve those objectives, right, is it

539
00:28:54,880 --> 00:29:01,160
Speaker 10: by launching a full scale war between Lebanon Throughsbaula and Israel,

540
00:29:01,520 --> 00:29:05,240
Speaker 10: which Israel, by the way, which if it happened, Israel

541
00:29:05,240 --> 00:29:09,200
Speaker 10: would by the way, destroy Beirute, I mean destroy it,

542
00:29:10,240 --> 00:29:10,880
Speaker 10: right yep?

543
00:29:13,440 --> 00:29:14,120
Speaker 5: Or does it?

544
00:29:14,400 --> 00:29:14,640
Speaker 8: You know?

545
00:29:14,760 --> 00:29:14,840
Speaker 11: So?

546
00:29:14,920 --> 00:29:18,280
Speaker 10: I think I think frankly, Iran is kind of figuring

547
00:29:18,360 --> 00:29:21,800
Speaker 10: its way, feeling its way through to see what's the

548
00:29:21,840 --> 00:29:25,640
Speaker 10: best use of its exact courses.

549
00:29:26,800 --> 00:29:29,880
Speaker 1: Us unfortunately, just leave it there because of time up

550
00:29:29,880 --> 00:29:32,640
Speaker 1: against the time Costramper really appreciate getting your time. Admiral

551
00:29:32,640 --> 00:29:36,640
Speaker 1: Adam Early, he's a principal at a Barrow American Consultants,

552
00:29:36,720 --> 00:29:39,480
Speaker 1: giving us his perspective on the developing situation in it.

553
00:29:40,560 --> 00:29:43,960
Speaker 5: You're listening to the Team Ken's Are Live program Bloomberg

554
00:29:44,040 --> 00:29:47,400
Speaker 5: Markets weekdays at ten am Eastern on Bloomberg dot Com,

555
00:29:47,480 --> 00:29:50,640
Speaker 5: the iHeartRadio app and the Bloomberg Business App, or listen

556
00:29:50,680 --> 00:29:52,840
Speaker 5: on demand wherever you get your podcasts.

557
00:29:55,560 --> 00:29:57,280
Speaker 3: All right, I am, I'm gonna be honest with the people.

558
00:29:57,280 --> 00:29:59,400
Speaker 1: I'm not looking forward to talking to our next guest

559
00:29:59,400 --> 00:30:02,600
Speaker 1: here because our guest wrote this. The last time the

560
00:30:02,640 --> 00:30:05,240
Speaker 1: Federal Reserve raised its benchmark interest rate and held it

561
00:30:05,280 --> 00:30:07,880
Speaker 1: there for a considerable period of time was in two

562
00:30:07,880 --> 00:30:10,920
Speaker 1: thousand and six. In two thousand and seven, that episode

563
00:30:10,960 --> 00:30:14,240
Speaker 1: and in calamity. This time maybe different, after all, with

564
00:30:14,280 --> 00:30:17,480
Speaker 1: the benefit of hindsight, policymakers can do better, but you

565
00:30:17,520 --> 00:30:20,479
Speaker 1: can't count on that outcome. Ed Harrison Joints says he's

566
00:30:20,480 --> 00:30:22,560
Speaker 1: a senior editor for Bloomberg News. He joints us here

567
00:30:22,560 --> 00:30:27,440
Speaker 1: in our Bloomberg Interactive Brokers studio. Ed Boy, I remember

568
00:30:27,480 --> 00:30:32,800
Speaker 1: that time period really well, and it was scary for everybody,

569
00:30:32,840 --> 00:30:35,400
Speaker 1: And I was a seasoned Wall Street veteran.

570
00:30:35,800 --> 00:30:37,160
Speaker 3: I didn't know what was gonna happen.

571
00:30:37,440 --> 00:30:40,480
Speaker 1: Talk to us about the parallels you see maybe from

572
00:30:40,480 --> 00:30:42,480
Speaker 1: today back to two thousand and six, two thousand and seven.

573
00:30:42,880 --> 00:30:45,280
Speaker 12: Yeah, a great set up there. I have to say

574
00:30:45,320 --> 00:30:48,400
Speaker 12: that I do remember it well in terms of the

575
00:30:48,440 --> 00:30:52,680
Speaker 12: housing bubble. But the thing that people don't really remember

576
00:30:53,160 --> 00:30:56,920
Speaker 12: as well in retrospect is that everything looked pretty good

577
00:30:56,960 --> 00:31:00,320
Speaker 12: by and large right up until the very end. Was

578
00:31:00,400 --> 00:31:04,800
Speaker 12: that holding interest rates at a high level over a

579
00:31:04,840 --> 00:31:09,600
Speaker 12: considerable period of time that ended up hurting the economy.

580
00:31:09,840 --> 00:31:13,200
Speaker 12: You know, BERNANKI, he raised the interest rates up to

581
00:31:13,240 --> 00:31:16,680
Speaker 12: a certain level and then they were They stayed there

582
00:31:17,480 --> 00:31:20,400
Speaker 12: for more than a year, and it was in that

583
00:31:20,480 --> 00:31:23,000
Speaker 12: period of time that things started to fall apart. And

584
00:31:23,080 --> 00:31:26,000
Speaker 12: so that's the thing to be worried about. We're not

585
00:31:26,080 --> 00:31:28,200
Speaker 12: in that period yet. We're still in the hiking period.

586
00:31:28,240 --> 00:31:31,400
Speaker 12: We're still getting to that level. But once we get

587
00:31:31,400 --> 00:31:34,520
Speaker 12: there and stay there, that's when we have to be worried.

588
00:31:34,640 --> 00:31:39,080
Speaker 2: Of course, it's not just rates that are interesting right now,

589
00:31:39,120 --> 00:31:43,400
Speaker 2: it's growth. Right five point four percent in Q three

590
00:31:43,640 --> 00:31:47,160
Speaker 2: was the Atlanta now GDP forecast. We saw a reading

591
00:31:47,160 --> 00:31:49,440
Speaker 2: the other day at four point nine percent, so just huge.

592
00:31:50,000 --> 00:31:53,800
Speaker 2: But how much of that is fueled by deficit spending?

593
00:31:54,280 --> 00:31:57,160
Speaker 2: And how is that different than our situation in two

594
00:31:57,240 --> 00:32:00,880
Speaker 2: thousand and six because we're running now two trillion deficit

595
00:32:01,640 --> 00:32:05,400
Speaker 2: and pushing out total government debt to over thirty three

596
00:32:05,440 --> 00:32:06,240
Speaker 2: trillion dollars.

597
00:32:06,640 --> 00:32:08,920
Speaker 12: Yeah, you know, I don't think that that number, that

598
00:32:09,040 --> 00:32:12,720
Speaker 12: two trillion number in the deficit from this past year

599
00:32:12,880 --> 00:32:15,800
Speaker 12: is sustainable for the longer period of time. And so

600
00:32:16,000 --> 00:32:20,560
Speaker 12: just from a pure growth trajectory perspective, it would suggest

601
00:32:20,720 --> 00:32:22,880
Speaker 12: that in twenty twenty four we're gonna come down from

602
00:32:22,880 --> 00:32:25,320
Speaker 12: those levels that you can't consume. The way that I

603
00:32:25,400 --> 00:32:27,440
Speaker 12: was putting it in the piece that I wrote that

604
00:32:27,480 --> 00:32:31,880
Speaker 12: you were flagging is that it's almost like the cash

605
00:32:31,880 --> 00:32:36,080
Speaker 12: out mortgages people had. They had that little extra bit

606
00:32:36,160 --> 00:32:39,720
Speaker 12: of money in their pockets as a result of the

607
00:32:39,760 --> 00:32:43,160
Speaker 12: appreciation and their home values. We have that little bit

608
00:32:43,280 --> 00:32:45,840
Speaker 12: extra of money in our pockets because of the transfer

609
00:32:46,000 --> 00:32:50,160
Speaker 12: from the deficits. But once that goes away, then I

610
00:32:50,200 --> 00:32:54,600
Speaker 12: think you will see people start to spend incrementally less

611
00:32:54,680 --> 00:32:57,120
Speaker 12: money than they were before, and so then that growth

612
00:32:57,200 --> 00:32:58,120
Speaker 12: number is gonna come.

613
00:32:57,960 --> 00:33:02,040
Speaker 1: Down, all right, any reason to believe our Federal Reserve

614
00:33:02,120 --> 00:33:05,600
Speaker 1: has learned its lesson, internalized the lesson back from the

615
00:33:05,600 --> 00:33:08,520
Speaker 1: Great Financial Crisis, and maybe how it acts going forward.

616
00:33:08,600 --> 00:33:11,280
Speaker 2: Meaning by the way, meaning what Paul, Because I sense

617
00:33:11,360 --> 00:33:14,000
Speaker 2: that you think the Fed needs to start cutting rates,

618
00:33:14,040 --> 00:33:15,240
Speaker 2: maybe in a preemptive thing.

619
00:33:15,280 --> 00:33:16,960
Speaker 1: I think that No, No, I think they need to

620
00:33:17,040 --> 00:33:19,560
Speaker 1: just hang for a little while. But yes, in twenty

621
00:33:19,600 --> 00:33:21,680
Speaker 1: twenty four. I do believe a rate cut at some

622
00:33:21,720 --> 00:33:24,400
Speaker 1: point next year. But do you think the Feds kind

623
00:33:24,440 --> 00:33:27,040
Speaker 1: of internalize what happened back in the day.

624
00:33:27,120 --> 00:33:29,280
Speaker 12: I think they have, like on multiple levels. I mean,

625
00:33:29,400 --> 00:33:31,760
Speaker 12: I'll give you three different points. One is, in terms

626
00:33:31,760 --> 00:33:35,320
Speaker 12: of eighteen nineteen, you know, when bad things happened in

627
00:33:35,560 --> 00:33:39,760
Speaker 12: the leverage loan and in the high yield market, that

628
00:33:39,800 --> 00:33:43,840
Speaker 12: you saw that the Fed stopped their rate hikes at

629
00:33:43,880 --> 00:33:47,080
Speaker 12: two point five percent. The second thing is the fact

630
00:33:47,120 --> 00:33:50,560
Speaker 12: that when we saw bad things happen in March with

631
00:33:51,360 --> 00:33:55,280
Speaker 12: Silicon Valley Bank, they came in there and they, you know,

632
00:33:56,040 --> 00:33:58,960
Speaker 12: in sort of almost a precise way, they created a

633
00:33:58,960 --> 00:34:02,880
Speaker 12: liquidity vision just for that specific part of the economy,

634
00:34:03,040 --> 00:34:06,040
Speaker 12: without like you know, flooding the entire economy with money.

635
00:34:06,320 --> 00:34:07,920
Speaker 12: And then the third thing I would say is is

636
00:34:07,920 --> 00:34:11,800
Speaker 12: that the FED is much more focused now on making

637
00:34:11,840 --> 00:34:15,239
Speaker 12: sure that the you know, the people who are the

638
00:34:15,360 --> 00:34:18,560
Speaker 12: last on the employment ladders I still have a chance

639
00:34:18,600 --> 00:34:20,840
Speaker 12: to get in there. They don't want to go to

640
00:34:20,920 --> 00:34:23,919
Speaker 12: the days where you know, people get hired and then

641
00:34:24,080 --> 00:34:26,920
Speaker 12: like you know, three months later they're the first to

642
00:34:26,960 --> 00:34:29,600
Speaker 12: be let go. They want the cycle to last, and

643
00:34:29,800 --> 00:34:31,160
Speaker 12: Jerome Palace talked about that.

644
00:34:31,440 --> 00:34:33,759
Speaker 2: So but I mean, if we're focused on growth, if

645
00:34:33,800 --> 00:34:38,200
Speaker 2: we're focused on unemployment, are we still watching what's going

646
00:34:38,200 --> 00:34:41,480
Speaker 2: on with inflation? Because that is the other part of

647
00:34:41,480 --> 00:34:44,720
Speaker 2: the dual mandate that they've been talking about for two years,

648
00:34:44,800 --> 00:34:46,960
Speaker 2: right and promising us that they're going to get it

649
00:34:47,000 --> 00:34:48,160
Speaker 2: back down to two percent.

650
00:34:48,600 --> 00:34:52,160
Speaker 7: We're still more than fifty percent above that. So do

651
00:34:52,239 --> 00:34:53,279
Speaker 7: they just give up on that?

652
00:34:53,760 --> 00:34:53,960
Speaker 6: No?

653
00:34:54,000 --> 00:34:56,239
Speaker 12: And you know, I think that's the tricky part, and

654
00:34:56,440 --> 00:34:59,279
Speaker 12: that's the scary part in the sense that really, if

655
00:34:59,280 --> 00:35:04,160
Speaker 12: we're three percent now on almost all levels, there's no way,

656
00:35:04,320 --> 00:35:07,319
Speaker 12: especially with unemployment where it is, you know, which is

657
00:35:07,400 --> 00:35:11,800
Speaker 12: below four percent, that they can do anything but hold.

658
00:35:11,960 --> 00:35:15,560
Speaker 12: There's no way they can cut with inflation at those levels.

659
00:35:15,840 --> 00:35:20,400
Speaker 12: So that almost guarantees a repeat of the hike and

660
00:35:20,560 --> 00:35:23,040
Speaker 12: hold for a long period of time that we saw

661
00:35:23,080 --> 00:35:26,200
Speaker 12: that caused so much pain fifteen years ago. So I

662
00:35:26,239 --> 00:35:29,160
Speaker 12: think that it's very unlikely that we're gonna get out

663
00:35:29,200 --> 00:35:32,960
Speaker 12: of this cycle without something breaking. The question is is

664
00:35:33,000 --> 00:35:35,120
Speaker 12: what is it gonna be and when it's gonna happen,

665
00:35:35,480 --> 00:35:38,360
Speaker 12: and what's their reaction gonna be once that does happen.

666
00:35:38,440 --> 00:35:41,600
Speaker 2: So if we get I mean, we say two trillion

667
00:35:41,680 --> 00:35:46,799
Speaker 2: dollar budget deficits are unsustainable, but who's gonna change that?

668
00:35:47,200 --> 00:35:47,399
Speaker 3: Right?

669
00:35:47,520 --> 00:35:51,239
Speaker 2: I mean, it doesn't look like we're gonna have a

670
00:35:51,320 --> 00:35:54,600
Speaker 2: much smaller deficit. I mean maybe if it's a trillion

671
00:35:54,680 --> 00:35:59,359
Speaker 2: dollars that's much smaller, but still too much. Right, Are

672
00:35:59,360 --> 00:36:01,520
Speaker 2: we gonna see the budget deficits continue to run at

673
00:36:01,560 --> 00:36:03,440
Speaker 2: this level? And if we don't, the FED has to

674
00:36:03,480 --> 00:36:06,160
Speaker 2: cut in order to pad the economy.

675
00:36:06,360 --> 00:36:08,319
Speaker 12: Well, you know, I would look at it in terms

676
00:36:08,360 --> 00:36:11,000
Speaker 12: of what I would call the monetary offset. You know,

677
00:36:11,040 --> 00:36:14,560
Speaker 12: we know from the past, when the fiscal policy is

678
00:36:14,600 --> 00:36:17,880
Speaker 12: pumping money in, the FED feels compelled to do something

679
00:36:17,880 --> 00:36:20,920
Speaker 12: about it. And so everyone's talking about rate cuts in

680
00:36:20,960 --> 00:36:25,440
Speaker 12: twenty twenty four. If we still have these deficits, adding spending,

681
00:36:25,719 --> 00:36:29,200
Speaker 12: keeping the GDP growth high, we could be talking about

682
00:36:29,239 --> 00:36:32,200
Speaker 12: rate hikes in twenty twenty four. I think that that

683
00:36:32,520 --> 00:36:36,600
Speaker 12: is a potential that we actually get another rate hike,

684
00:36:36,719 --> 00:36:40,000
Speaker 12: not in December, but in December and then again later,

685
00:36:40,480 --> 00:36:43,759
Speaker 12: or you know, even multiple rate hikes in twenty twenty four.

686
00:36:43,880 --> 00:36:46,080
Speaker 1: And I'm trying to refinance the mortgage. My man, I

687
00:36:46,120 --> 00:36:49,400
Speaker 1: need rates to come down a little bit, so work.

688
00:36:49,200 --> 00:36:50,840
Speaker 3: With me here. Labor market.

689
00:36:50,920 --> 00:36:53,840
Speaker 1: I tell you what, I haven't understood this labor market

690
00:36:53,840 --> 00:36:56,320
Speaker 1: really at all. I'm just so shocked that it remains

691
00:36:56,400 --> 00:36:59,080
Speaker 1: so robust here. And some people tell me it's the

692
00:36:59,120 --> 00:37:01,320
Speaker 1: hoarding of workers. I don't know what that means.

693
00:37:01,360 --> 00:37:03,799
Speaker 7: I don't know how that robust I think is a question.

694
00:37:03,840 --> 00:37:05,680
Speaker 3: A lot of people are starting to ask, yeah, what

695
00:37:05,719 --> 00:37:06,200
Speaker 3: are you thinking.

696
00:37:06,560 --> 00:37:09,120
Speaker 12: Yeah, I think that it is. It's bifurcated in the

697
00:37:09,200 --> 00:37:12,759
Speaker 12: sense that it isn't as robust as we think, right,

698
00:37:12,760 --> 00:37:15,800
Speaker 12: because when you look at continuing claims, they're very high,

699
00:37:15,880 --> 00:37:19,000
Speaker 12: and they remain high. But at the same time, when

700
00:37:19,080 --> 00:37:22,880
Speaker 12: you ask businesses, how do you feel, they're like, you know,

701
00:37:22,880 --> 00:37:25,439
Speaker 12: we're not getting enough workers. There aren't enough workers out there.

702
00:37:26,000 --> 00:37:27,960
Speaker 12: I think that there's people. When people talk about the

703
00:37:27,960 --> 00:37:32,239
Speaker 12: skills mismatch, it really is there. So the people who

704
00:37:32,280 --> 00:37:35,960
Speaker 12: are not getting employed are remaining on the unemployment rules

705
00:37:36,000 --> 00:37:39,279
Speaker 12: for considerably longer than we would like. But at the

706
00:37:39,320 --> 00:37:41,800
Speaker 12: same time, there's still that dearth. I think it's because

707
00:37:42,160 --> 00:37:44,759
Speaker 12: we're in the baby bust period. That's those people who

708
00:37:44,800 --> 00:37:49,399
Speaker 12: were born after sixty four coming into the prime. All

709
00:37:49,400 --> 00:37:52,000
Speaker 12: of the baby boomers are leaving, and that's leaving us,

710
00:37:52,440 --> 00:37:56,440
Speaker 12: you know, with a shortage of workers. And as a

711
00:37:56,520 --> 00:38:02,400
Speaker 12: result of that, it's putting upward pressure on on wage

712
00:38:02,440 --> 00:38:07,440
Speaker 12: games and that's helping bolster the economy in some ways.

713
00:38:08,560 --> 00:38:10,120
Speaker 3: I don't know, I'm still here.

714
00:38:10,280 --> 00:38:12,680
Speaker 1: You think the Fed's can make a mistake, and I

715
00:38:12,719 --> 00:38:14,759
Speaker 1: don't know what a mistake is raising I would think

716
00:38:14,760 --> 00:38:16,040
Speaker 1: it would be a mistake. But do you think the

717
00:38:16,040 --> 00:38:17,640
Speaker 1: FED makes a mistake because I'm not sure what's going

718
00:38:17,680 --> 00:38:19,440
Speaker 1: to break out there, like the housing market back in

719
00:38:19,440 --> 00:38:19,799
Speaker 1: the day.

720
00:38:19,960 --> 00:38:22,880
Speaker 12: Well, you know, the question is is it is it

721
00:38:22,920 --> 00:38:26,280
Speaker 12: a mistake for them to take the punch bowl away?

722
00:38:26,560 --> 00:38:28,520
Speaker 12: I mean, if you look at any chart of the

723
00:38:28,600 --> 00:38:31,239
Speaker 12: S and P five hundred over the last fifteen years,

724
00:38:31,239 --> 00:38:32,360
Speaker 12: it looks pretty astonishing.

725
00:38:32,560 --> 00:38:37,560
Speaker 2: Taking the punch bowl away in this sense would mean holding, right, No,

726
00:38:37,920 --> 00:38:40,839
Speaker 2: taking the punch bowl away would mean raising holding. Is

727
00:38:40,880 --> 00:38:43,279
Speaker 2: the punch bowl still there, which is crazy to think

728
00:38:43,280 --> 00:38:45,360
Speaker 2: about because they've gone up five hundred and fifty basis

729
00:38:45,360 --> 00:38:47,759
Speaker 2: points in less than two years. But at the same time,

730
00:38:47,840 --> 00:38:51,520
Speaker 2: the fiscal span is just like a machine, right yeah.

731
00:38:51,520 --> 00:38:54,640
Speaker 12: I mean you have these two forces going against one another,

732
00:38:54,680 --> 00:38:58,560
Speaker 12: and so they're thinking, Okay, once this machine starts to dwindle,

733
00:38:58,960 --> 00:39:03,680
Speaker 12: then we can we can sort of passively tighten. You know,

734
00:39:03,719 --> 00:39:05,919
Speaker 12: they haven't said those words exactly, but if.

735
00:39:05,800 --> 00:39:08,720
Speaker 2: You listen to lots pretty much said that right, right, Yeah,

736
00:39:09,000 --> 00:39:12,799
Speaker 2: we're passively tightening because real interest rates are going up.

737
00:39:13,000 --> 00:39:13,280
Speaker 3: Yeah.

738
00:39:13,400 --> 00:39:16,040
Speaker 12: And moreover, when you have all of this money being

739
00:39:16,080 --> 00:39:19,839
Speaker 12: pumped out in terms of deficit spending, that means that you,

740
00:39:19,920 --> 00:39:24,000
Speaker 12: as a result, need more higher rates to absorb all

741
00:39:24,040 --> 00:39:24,239
Speaker 12: of that.

742
00:39:24,280 --> 00:39:25,960
Speaker 3: All Right, that wasn't so bad.

743
00:39:26,120 --> 00:39:27,920
Speaker 1: Ed Harrison, thanks so much for joining us. Ed Harrison's

744
00:39:27,920 --> 00:39:29,680
Speaker 1: the senior editor Bloomberg News.

745
00:39:29,920 --> 00:39:33,560
Speaker 5: You're listening to the tape can'cher live program Bloomberg Markets

746
00:39:33,600 --> 00:39:37,000
Speaker 5: weekdays at ten am Eastern on Bloomberg Radio, the tune

747
00:39:37,040 --> 00:39:40,000
Speaker 5: in app Bloomberg Dot Com and the Bloomberg Business App.

748
00:39:40,040 --> 00:39:42,839
Speaker 5: You can also listen live on Amazon Alexa from our

749
00:39:42,880 --> 00:39:47,280
Speaker 5: flagship New York station Just Say Alexa playing Bloomberg eleven thirty.

750
00:39:48,320 --> 00:39:50,759
Speaker 1: Kaylee linestings and she's host a Bloomberg sound on and

751
00:39:50,920 --> 00:39:54,799
Speaker 1: Bloomberg's Crypto. And we also are joined today by Amy

752
00:39:54,880 --> 00:39:57,960
Speaker 1: Lee Copeland. She is a partner at Rouse and Copeland.

753
00:39:58,000 --> 00:40:00,600
Speaker 1: That's a law firm based in Georgia.

754
00:40:00,680 --> 00:40:03,200
Speaker 3: So we want to check out with both of these folks. Katie.

755
00:40:03,280 --> 00:40:06,880
Speaker 1: Let's start with you on the Republican front Lots of

756
00:40:06,960 --> 00:40:10,440
Speaker 1: movement there in the list of potential nominees here, Mike

757
00:40:10,480 --> 00:40:14,520
Speaker 1: Pence dropping out, Nicky Haley rising in the polls. What's

758
00:40:14,560 --> 00:40:15,959
Speaker 1: the feeling in DC these days?

759
00:40:16,960 --> 00:40:19,399
Speaker 13: Well, at least the field pole is narrowing. We've had

760
00:40:19,560 --> 00:40:22,600
Speaker 13: a number of candidates competing for the Republican nomination, and

761
00:40:22,680 --> 00:40:25,120
Speaker 13: slowly we've start to see them trickling out of the

762
00:40:25,200 --> 00:40:27,880
Speaker 13: race as it becomes abundantly clear that Donald Trump is

763
00:40:27,920 --> 00:40:30,160
Speaker 13: still far and away the front runner. That said, there

764
00:40:30,160 --> 00:40:32,600
Speaker 13: are some people on the upswing. Mike Pence is now out.

765
00:40:32,640 --> 00:40:35,560
Speaker 13: He has not actually endorsed any one of the remaining

766
00:40:35,600 --> 00:40:37,880
Speaker 13: candidates yet, so we'll see if he throws his support

767
00:40:38,239 --> 00:40:41,439
Speaker 13: behind someone else, of course's former boss. In Iowa, which

768
00:40:41,480 --> 00:40:44,200
Speaker 13: is really where a lot of these races are now focusing,

769
00:40:44,520 --> 00:40:48,040
Speaker 13: is still leading by dozens of points at forty three percent,

770
00:40:48,120 --> 00:40:51,879
Speaker 13: but Nicki Haley at sixteen percent, which now ties her

771
00:40:52,160 --> 00:40:55,360
Speaker 13: with Ron DeSantis. He actually has moved from nineteen percent

772
00:40:55,560 --> 00:40:58,280
Speaker 13: in Iowa and August down to sixteen, whereas she's jumped

773
00:40:58,280 --> 00:41:01,040
Speaker 13: from about six percent in the polls up to sixteen.

774
00:41:01,120 --> 00:41:04,239
Speaker 13: So she's really one that is ascendant right now exactly.

775
00:41:04,480 --> 00:41:07,120
Speaker 1: Well as it relates to former President Donald Trump, obviously,

776
00:41:07,239 --> 00:41:10,279
Speaker 1: one of the big big issues for his candidacy would

777
00:41:10,280 --> 00:41:13,319
Speaker 1: be his legal challenges, particularly well, there's one big one

778
00:41:13,320 --> 00:41:16,120
Speaker 1: down in Georgia. Amy Lee Copeland, thanks so much for

779
00:41:16,160 --> 00:41:19,040
Speaker 1: joining us. Talk to us about what's the lay of

780
00:41:19,040 --> 00:41:21,280
Speaker 1: the land down in Georgia these days for the former

781
00:41:21,320 --> 00:41:23,720
Speaker 1: president and he's illegal woes there.

782
00:41:25,520 --> 00:41:29,080
Speaker 14: Hey, good afternoon. Right now, nineteen defendants have been indicted

783
00:41:29,080 --> 00:41:32,359
Speaker 14: in this massive Georgia Rico indictment. Four people have entered

784
00:41:32,400 --> 00:41:36,000
Speaker 14: please of guilty, including three of Trump's legal advisors and

785
00:41:36,040 --> 00:41:40,200
Speaker 14: a bail bondsman's with connection to the Trump campaign. The

786
00:41:40,320 --> 00:41:43,160
Speaker 14: DA's office has approached six other defendants to try to

787
00:41:43,200 --> 00:41:46,480
Speaker 14: solicit please or to at least engage in plea negotiations,

788
00:41:46,480 --> 00:41:50,040
Speaker 14: without any success. And they have confirmed to CNN at

789
00:41:50,160 --> 00:41:53,960
Speaker 14: least that Trump and Giuliani and Eastman and Meadows have

790
00:41:54,080 --> 00:41:56,640
Speaker 14: not been offered pleased. So the case continues to go

791
00:41:56,719 --> 00:41:59,560
Speaker 14: along with the documentary evidence. And now the attorneys who

792
00:41:59,560 --> 00:42:02,600
Speaker 14: are pleading guilty and agreeing to testify truthfully er in

793
00:42:02,640 --> 00:42:05,960
Speaker 14: Jenna Elicu's case, cooperate fully against the former president.

794
00:42:06,960 --> 00:42:11,760
Speaker 2: So Amy Lee, what's the worst case scenario for Donald Trump?

795
00:42:13,440 --> 00:42:15,680
Speaker 14: Well, the worst case scenario is that he goes to

796
00:42:15,719 --> 00:42:19,200
Speaker 14: trial and gets convicted. There are documents that the DA

797
00:42:19,239 --> 00:42:22,000
Speaker 14: has encountered. Remember there was not just a grand jury

798
00:42:22,000 --> 00:42:24,560
Speaker 14: in this case, but a special purpose grand jury then

799
00:42:24,600 --> 00:42:28,280
Speaker 14: investigated for over a year. It hurt testimony from seventy

800
00:42:28,280 --> 00:42:32,480
Speaker 14: five witnesses, including election deniers, and this special purpose grand

801
00:42:32,520 --> 00:42:36,320
Speaker 14: jury issued recommendations that people being guided, and a regular

802
00:42:36,360 --> 00:42:39,640
Speaker 14: grand jury didn't indict. So the case is moving along.

803
00:42:40,040 --> 00:42:42,719
Speaker 14: It should go to trial probably after the January sixth

804
00:42:42,760 --> 00:42:46,000
Speaker 14: trial in DC, and that looks like it might be

805
00:42:46,040 --> 00:42:47,839
Speaker 14: even in summer of twenty twenty four.

806
00:42:48,880 --> 00:42:51,480
Speaker 2: I'm just wondering because you know, we have an election

807
00:42:51,560 --> 00:42:55,359
Speaker 2: denier now as Speaker of the House, and that after

808
00:42:55,520 --> 00:42:59,319
Speaker 2: January sixth, So and then if Donald Trump becomes the

809
00:42:59,400 --> 00:43:02,160
Speaker 2: US president, he would I guess, have the power to

810
00:43:02,200 --> 00:43:03,040
Speaker 2: pardon himself.

811
00:43:03,120 --> 00:43:07,560
Speaker 14: Right, So, not in Georgia. Not in Georgia, I see,

812
00:43:07,560 --> 00:43:10,440
Speaker 14: not for state interesting, not for stay condition.

813
00:43:10,560 --> 00:43:15,160
Speaker 7: Yeah, but it's not imaginable.

814
00:43:14,480 --> 00:43:17,879
Speaker 2: That he would be jailed in Georgia and elected US

815
00:43:18,000 --> 00:43:21,080
Speaker 2: president and not be you know, let out to go

816
00:43:21,120 --> 00:43:21,879
Speaker 2: to Washington, DC.

817
00:43:22,040 --> 00:43:22,200
Speaker 5: Right.

818
00:43:22,239 --> 00:43:25,719
Speaker 1: Well, no, I don't know, Kaylee. We kind of talk

819
00:43:25,800 --> 00:43:28,880
Speaker 1: about this, Kayley. But let's be honest. The polls are

820
00:43:28,920 --> 00:43:31,440
Speaker 1: telling you that his voters don't care. How does a

821
00:43:31,480 --> 00:43:34,600
Speaker 1: party kind of deal with all his legal challenges here.

822
00:43:35,320 --> 00:43:37,760
Speaker 13: Well, there's still contending with it, Paul. But to your point,

823
00:43:37,800 --> 00:43:41,320
Speaker 13: his base of support, that core base of Trump voters,

824
00:43:41,360 --> 00:43:44,000
Speaker 13: always Trump voters, don't seem to have been rattled at

825
00:43:44,000 --> 00:43:46,200
Speaker 13: all by each and every case that has brought against him,

826
00:43:46,200 --> 00:43:48,440
Speaker 13: both civil and criminal. In fact, it really only seems

827
00:43:48,719 --> 00:43:51,279
Speaker 13: to cement it as he kind of tries to frame

828
00:43:51,320 --> 00:43:53,880
Speaker 13: this as a narrative in which the Justice Department is

829
00:43:53,920 --> 00:43:56,359
Speaker 13: being weaponized against him. You look at the gag order

830
00:43:56,400 --> 00:43:58,480
Speaker 13: that was just reinstated here in Washington in the case

831
00:43:58,520 --> 00:44:02,120
Speaker 13: that Judge Chutkin is precise. That's the Jacksmith election interference

832
00:44:02,160 --> 00:44:04,360
Speaker 13: case that was brought here in Washington, d C. The

833
00:44:04,360 --> 00:44:07,960
Speaker 13: federal one that gag Orger reinstated as his team tries

834
00:44:08,000 --> 00:44:10,040
Speaker 13: to appeal it. And he said, that's another example of

835
00:44:10,080 --> 00:44:12,640
Speaker 13: the Biden administration being weaponized against him, even though this

836
00:44:12,800 --> 00:44:15,839
Speaker 13: is a separate branch of government that we're talking about here,

837
00:44:15,880 --> 00:44:20,040
Speaker 13: But it's that narrative that this persecution of a political

838
00:44:20,040 --> 00:44:23,319
Speaker 13: opponent is what Trump is experiencing right now, seems to

839
00:44:23,360 --> 00:44:26,200
Speaker 13: make those people who are supportive of him even more so.

840
00:44:26,360 --> 00:44:29,000
Speaker 13: And that's something that the other Republican contenders for the

841
00:44:29,040 --> 00:44:31,240
Speaker 13: nomination are having to wrestle with. How do you avoid

842
00:44:31,280 --> 00:44:33,839
Speaker 13: alienating that base of support while also trying to go

843
00:44:34,120 --> 00:44:36,400
Speaker 13: on the attack against a front runner. It's very difficult,

844
00:44:36,480 --> 00:44:37,880
Speaker 13: as we've seen proven time and again.

845
00:44:38,640 --> 00:44:42,200
Speaker 1: Amy, If President Trump were your client, what would you

846
00:44:42,239 --> 00:44:45,280
Speaker 1: advise him at this point? Is a plea deal even possible?

847
00:44:45,960 --> 00:44:46,200
Speaker 1: Is it?

848
00:44:46,360 --> 00:44:49,200
Speaker 3: Just what would you say to him?

849
00:44:50,680 --> 00:44:52,680
Speaker 14: Well, what I would say to him? And the advice

850
00:44:52,760 --> 00:44:55,200
Speaker 14: that he takes seems to be dramatically different if you

851
00:44:55,239 --> 00:44:59,200
Speaker 14: read about his other legal travails in the news right now,

852
00:44:59,280 --> 00:45:01,320
Speaker 14: I suspect that he is going to go to trial.

853
00:45:01,520 --> 00:45:04,239
Speaker 14: I cannot imagine that this former president would come forward

854
00:45:04,440 --> 00:45:06,839
Speaker 14: and enter a guilty plea or even seek a guilty plea.

855
00:45:06,920 --> 00:45:10,319
Speaker 14: And Steve Sadal, his attorney, has basically said as much

856
00:45:10,600 --> 00:45:14,760
Speaker 14: that the Trump position is that these witnesses are actually

857
00:45:14,800 --> 00:45:17,560
Speaker 14: going to help them and that it's not going to

858
00:45:17,680 --> 00:45:20,520
Speaker 14: be a problem for him. I fully anticipate that he

859
00:45:20,600 --> 00:45:23,160
Speaker 14: will go to trial. I suspect though, that they are

860
00:45:23,160 --> 00:45:26,240
Speaker 14: relying on a principle called jury nullification, that one person

861
00:45:26,320 --> 00:45:28,200
Speaker 14: is just going to hold out and say there's no

862
00:45:28,239 --> 00:45:31,120
Speaker 14: way we're going to convict the former president, which would

863
00:45:31,280 --> 00:45:33,640
Speaker 14: launched the case into a mistrial and the DA could

864
00:45:33,680 --> 00:45:34,440
Speaker 14: try it again or not.

865
00:45:35,760 --> 00:45:40,040
Speaker 2: It's fascinating and unprecedented, right, We've never dealt with anything

866
00:45:40,160 --> 00:45:45,040
Speaker 2: like this. What's the chances, Amy Lee, that this that

867
00:45:45,120 --> 00:45:47,600
Speaker 2: this ends up going to the Supreme Court.

868
00:45:49,239 --> 00:45:51,359
Speaker 14: Well, to get to the Supreme Court, it would first

869
00:45:51,400 --> 00:45:53,319
Speaker 14: have to go through the Georgia Court of Appeals, the

870
00:45:53,360 --> 00:45:56,080
Speaker 14: Georgia Supreme Court, and then the US Supreme Court can

871
00:45:56,120 --> 00:45:58,440
Speaker 14: only hear it is the Georgia Supreme Court. Yeah, yeah,

872
00:45:58,480 --> 00:45:59,400
Speaker 14: it could take a bath in it.

873
00:46:00,200 --> 00:46:04,759
Speaker 1: So Kaylee, what's the what's the feeling in Washington, d C?

874
00:46:04,880 --> 00:46:07,560
Speaker 1: The Republican National Committee. I mean, it just seems like

875
00:46:07,600 --> 00:46:13,400
Speaker 1: the Trump campaign, the Trump presence, the Trump positioning with

876
00:46:13,800 --> 00:46:17,080
Speaker 1: the voters is so strong that he is the presumptive

877
00:46:17,080 --> 00:46:17,600
Speaker 1: front runner.

878
00:46:17,600 --> 00:46:18,600
Speaker 3: Now, is that kind of the feeling?

879
00:46:19,680 --> 00:46:20,000
Speaker 7: It is?

880
00:46:20,239 --> 00:46:24,160
Speaker 13: It feels not necessarily like a solidified inevitability, but at

881
00:46:24,200 --> 00:46:26,880
Speaker 13: the moment, it seems highly likely that Trump would be

882
00:46:26,960 --> 00:46:31,319
Speaker 13: the Republican nominee barring something really unforeseen happening. That is

883
00:46:31,440 --> 00:46:33,239
Speaker 13: kind of the feeling. And then it becomes one of

884
00:46:33,280 --> 00:46:36,640
Speaker 13: general election politics, because just because the former president can

885
00:46:36,719 --> 00:46:39,680
Speaker 13: lead in the Republican primary and win primary elections, that

886
00:46:39,719 --> 00:46:43,640
Speaker 13: doesn't necessarily translate come or November twenty twenty four in

887
00:46:43,719 --> 00:46:46,120
Speaker 13: the general election. That said, we have started to see

888
00:46:46,160 --> 00:46:48,319
Speaker 13: the gap between Trump and Biden closing. I believe the

889
00:46:48,320 --> 00:46:50,680
Speaker 13: real kill of politics, average of polling, if it's a

890
00:46:50,719 --> 00:46:53,080
Speaker 13: Trump and Biden rematch in twenty twenty four, which by

891
00:46:53,120 --> 00:46:55,640
Speaker 13: the way, polling indicates voters do not want to happen.

892
00:46:55,880 --> 00:46:58,920
Speaker 13: But if that happens, they're effectively tied within the margin

893
00:46:58,960 --> 00:47:00,520
Speaker 13: of error, so it would be a very close one.

894
00:47:01,160 --> 00:47:01,440
Speaker 3: Amy.

895
00:47:01,600 --> 00:47:04,000
Speaker 1: As you look at all of the legal issues that

896
00:47:04,040 --> 00:47:07,680
Speaker 1: the former president Trump is dealing with, which ones would

897
00:47:07,760 --> 00:47:09,400
Speaker 1: present the most peril do you think.

898
00:47:10,560 --> 00:47:13,040
Speaker 14: Well, I think they all do. I think probably the

899
00:47:13,040 --> 00:47:15,520
Speaker 14: easiest one is for the government to prove is the

900
00:47:15,520 --> 00:47:18,480
Speaker 14: classified documents case. That seems like a real red light

901
00:47:18,520 --> 00:47:22,680
Speaker 14: green light sort of issue. Georgia's, though, cannot be underestimated

902
00:47:22,680 --> 00:47:24,960
Speaker 14: in the peril it poses to the former president. With

903
00:47:25,040 --> 00:47:28,360
Speaker 14: the attorney advisors who've already pleaded guilty, they have admitted

904
00:47:28,360 --> 00:47:31,720
Speaker 14: that some statements were false statements like the bals electors

905
00:47:31,760 --> 00:47:35,160
Speaker 14: were the duly certified and electors duly certified and elected

906
00:47:35,200 --> 00:47:38,600
Speaker 14: electors of the state of Georgia. Jenna Ellis's guilty plea

907
00:47:38,640 --> 00:47:41,000
Speaker 14: admits that it was false that dead people in Georgia

908
00:47:41,080 --> 00:47:43,760
Speaker 14: voted or that felons voted, and some of those claims

909
00:47:43,800 --> 00:47:46,279
Speaker 14: were the ones that mister Trump repeated in his call

910
00:47:46,360 --> 00:47:50,080
Speaker 14: to Secretary of State Brad Raffensberger to find seven and

911
00:47:50,080 --> 00:47:55,799
Speaker 14: eighty votes, even with other pleas. With Miss Powell's plea too,

912
00:47:56,239 --> 00:47:58,400
Speaker 14: with the voting machines that those were breached and the

913
00:47:58,520 --> 00:48:02,720
Speaker 14: voter data was taken, so everything presents a unique peril

914
00:48:02,800 --> 00:48:06,840
Speaker 14: to the former president. But I think probably the classified

915
00:48:06,880 --> 00:48:09,200
Speaker 14: documents would be the easiest for the government to prove,

916
00:48:09,280 --> 00:48:11,600
Speaker 14: followed shortly and closely by the Georgia case.

917
00:48:13,200 --> 00:48:16,279
Speaker 1: All right, Amily Copeland, thank you so much for joining us.

918
00:48:16,320 --> 00:48:20,280
Speaker 1: Emily Copeland. She's a partner at Rouse and Copeland in Georgia,

919
00:48:20,360 --> 00:48:22,680
Speaker 1: and she is all in the state of Georgia. Undergraduate

920
00:48:22,760 --> 00:48:25,200
Speaker 1: degree from the University of Georgia and then a law

921
00:48:25,280 --> 00:48:28,319
Speaker 1: degree from the University of Georgia as well. So all

922
00:48:28,360 --> 00:48:30,520
Speaker 1: in there on the Georgia and Kaylee Lines, host of

923
00:48:30,560 --> 00:48:33,400
Speaker 1: Bloomberg Sound On and Bloomberg's Crypto, just giving us a

924
00:48:33,440 --> 00:48:35,200
Speaker 1: little sense of the lay of the land. Boy, the

925
00:48:35,239 --> 00:48:38,520
Speaker 1: next twelve plus months are going to be absolutely crazy

926
00:48:38,560 --> 00:48:41,200
Speaker 1: from a political perspective. Not only do you have a

927
00:48:41,239 --> 00:48:45,480
Speaker 1: presidential election, but you've got one of the former president

928
00:48:45,520 --> 00:48:46,440
Speaker 1: who presumably.

929
00:48:46,480 --> 00:48:50,080
Speaker 5: You're listening to the tape Catcher live program Bloomberg Markets

930
00:48:50,120 --> 00:48:53,520
Speaker 5: weekdays at ten am Eastern on Bloomberg Radio, the tune

931
00:48:53,560 --> 00:48:56,520
Speaker 5: in app, Bloomberg dot Com, and the Bloomberg Business App.

932
00:48:56,560 --> 00:48:59,359
Speaker 5: You can also listen live on Amazon Alexa from our

933
00:48:59,400 --> 00:49:03,760
Speaker 5: flagship York station. Just say Alexa playing Bloomberg eleven thirty.

934
00:49:05,719 --> 00:49:07,680
Speaker 1: Let's stock Apple Computer Apple?

935
00:49:07,719 --> 00:49:09,239
Speaker 3: Why not? I mean, you know, it's not even called

936
00:49:09,280 --> 00:49:12,120
Speaker 3: Apple Computer more. Apple Inc. I guess is the new one.

937
00:49:12,200 --> 00:49:14,600
Speaker 1: But that's stock. Let's just refresh our memories here. Two

938
00:49:14,640 --> 00:49:18,160
Speaker 1: point sixty five trillion dollar market cap for Apple. The

939
00:49:18,160 --> 00:49:20,959
Speaker 1: stock's up thirty percent this year. It's up about seven

940
00:49:21,000 --> 00:49:24,680
Speaker 1: tenths today. They're goind have a product launch today. Kind

941
00:49:24,680 --> 00:49:27,359
Speaker 1: of unusual timing. It seems like to me maybe they'll

942
00:49:27,400 --> 00:49:30,080
Speaker 1: unveil some new Imax, MacBook pros, all that kind of stuff.

943
00:49:30,120 --> 00:49:31,640
Speaker 3: So let's break it down with Mark German.

944
00:49:31,680 --> 00:49:36,400
Speaker 1: He's a chief corresponding covering technology and Apple for Bloomberg News.

945
00:49:36,480 --> 00:49:38,799
Speaker 1: I have no idea where he is, but he's joining

946
00:49:38,880 --> 00:49:39,920
Speaker 1: us somewhere via zoom.

947
00:49:40,040 --> 00:49:41,640
Speaker 3: Hey, Mark, thanks so much for joining us here.

948
00:49:43,120 --> 00:49:46,080
Speaker 1: What are they calling this product launch tonight?

949
00:49:46,200 --> 00:49:47,120
Speaker 3: Something halloweenish?

950
00:49:47,200 --> 00:49:51,680
Speaker 11: I think maybe they should call it Apple Computer Inc. Again.

951
00:49:51,800 --> 00:49:51,960
Speaker 14: Right.

952
00:49:52,040 --> 00:49:53,960
Speaker 11: They changed the name to Apple Ink in two thousand

953
00:49:54,000 --> 00:49:56,680
Speaker 11: and seven when they started selling the iPhone and some

954
00:49:56,719 --> 00:49:58,759
Speaker 11: of the other mobile products. But today is all going

955
00:49:58,840 --> 00:50:01,640
Speaker 11: to be about computers. The answer your question, they're dubbing

956
00:50:01,640 --> 00:50:05,000
Speaker 11: the event tonight Scary Fast. Right, that's a flick at

957
00:50:05,120 --> 00:50:09,360
Speaker 11: Halloween right in the US and elsewhere Tuesday evening, October

958
00:50:09,400 --> 00:50:12,080
Speaker 11: thirty first. But they're also going to be holding their

959
00:50:12,120 --> 00:50:14,960
Speaker 11: keynote tonight on Monday evening, which is a first, a

960
00:50:15,080 --> 00:50:18,640
Speaker 11: nighttime event. Usually their keynotes would start about fifteen minutes

961
00:50:18,680 --> 00:50:20,880
Speaker 11: from now, but instead it's not going to start in

962
00:50:20,960 --> 00:50:24,280
Speaker 11: for several hours. Now. The scary Fast is a double

963
00:50:24,320 --> 00:50:27,359
Speaker 11: meaning because they're referring to their new chips and like

964
00:50:27,400 --> 00:50:29,759
Speaker 11: you said, these new processors will be going into the

965
00:50:29,880 --> 00:50:33,600
Speaker 11: MacBook Pro as well as the iMac, so.

966
00:50:33,800 --> 00:50:36,040
Speaker 1: Is you know, it's we don't really talk about the

967
00:50:36,120 --> 00:50:39,200
Speaker 1: computers as much as you know, the Imax and the

968
00:50:39,200 --> 00:50:41,480
Speaker 1: MacBook pros and that kind of stuff. It's all about

969
00:50:41,480 --> 00:50:43,840
Speaker 1: the phone and the wearables and all that kind of stuff.

970
00:50:44,040 --> 00:50:45,200
Speaker 3: Just refresh our memories.

971
00:50:45,719 --> 00:50:49,200
Speaker 1: What the you know, the computer part of their business

972
00:50:49,200 --> 00:50:51,360
Speaker 1: means to them.

973
00:50:51,440 --> 00:50:53,960
Speaker 11: Yeah, the computer part of the business means a lot

974
00:50:54,000 --> 00:50:57,479
Speaker 11: more than the revenue it generates. It generates between let's

975
00:50:57,520 --> 00:51:00,560
Speaker 11: say six and ten billion dollars a quarter, right, it

976
00:51:00,680 --> 00:51:04,000
Speaker 11: generates about ten to eleven percent of their annual revenue

977
00:51:04,160 --> 00:51:06,399
Speaker 11: each year. But it means so much more than that.

978
00:51:06,560 --> 00:51:10,480
Speaker 11: Their most vocal consumers are the ones who are Mac loyalists.

979
00:51:10,840 --> 00:51:13,479
Speaker 11: These are the people who tell their friends to buy

980
00:51:13,480 --> 00:51:16,880
Speaker 11: a Mac, to tell their friends to buy other Apple products,

981
00:51:16,880 --> 00:51:19,960
Speaker 11: to tell their friends to buy iPhones, right, to tell

982
00:51:19,960 --> 00:51:22,680
Speaker 11: their friends to buy iPads. Now, the other thing Apple's

983
00:51:22,680 --> 00:51:24,360
Speaker 11: trying to do is they're trying to get people to

984
00:51:24,440 --> 00:51:27,600
Speaker 11: buy multiple products, right, They're trying to get people to

985
00:51:27,640 --> 00:51:30,359
Speaker 11: buy not only a Mac, but buy an iPhone, buy

986
00:51:30,400 --> 00:51:33,360
Speaker 11: an iPad as well, and create that full ecosystem. And

987
00:51:33,400 --> 00:51:35,120
Speaker 11: in many ways, the Mac sits at the center of

988
00:51:35,120 --> 00:51:38,000
Speaker 11: the ecosystem. So it generates only about ten percent of revenue,

989
00:51:38,080 --> 00:51:39,919
Speaker 11: but it's so much more important than that.

990
00:51:40,719 --> 00:51:42,759
Speaker 1: Mark, talk to us about kind of the chips that

991
00:51:42,800 --> 00:51:45,239
Speaker 1: are going into these things these days. Where are they

992
00:51:45,280 --> 00:51:49,399
Speaker 1: getting their chips and where's Apple And I know there's

993
00:51:49,400 --> 00:51:51,920
Speaker 1: been talk time to time producing their own chips. Just

994
00:51:51,920 --> 00:51:53,320
Speaker 1: give us a kind of an update of what's happening

995
00:51:53,360 --> 00:51:54,680
Speaker 1: on the chip side of the business.

996
00:51:56,400 --> 00:51:58,520
Speaker 11: Yeah, So today they're geting introduced three new chips, the

997
00:51:59,239 --> 00:52:01,319
Speaker 11: M three pro and the threemacs, and these are their

998
00:52:01,320 --> 00:52:05,000
Speaker 11: next generation versions of their in house Mac processors. These

999
00:52:05,000 --> 00:52:09,040
Speaker 11: are chips designed and developed entirely by Apple using what's

1000
00:52:09,080 --> 00:52:13,440
Speaker 11: known as an instruction set or a core framework license

1001
00:52:13,480 --> 00:52:16,200
Speaker 11: from ARM. Right, We've been talking about ARM a lot lately,

1002
00:52:16,480 --> 00:52:20,120
Speaker 11: and they're actually manufactured in Taiwan by a company called TSMC,

1003
00:52:20,520 --> 00:52:22,640
Speaker 11: So these are in house designs. And to make it

1004
00:52:22,719 --> 00:52:25,360
Speaker 11: very clear, this is the same exact chip technology that

1005
00:52:25,400 --> 00:52:27,360
Speaker 11: they've been using in the iPhone and the iPad and

1006
00:52:27,360 --> 00:52:30,920
Speaker 11: the Apple Watch for many years now. And the benefits

1007
00:52:31,040 --> 00:52:35,440
Speaker 11: for a computer are tremendous battery life, speed, efficiency, the

1008
00:52:36,040 --> 00:52:39,600
Speaker 11: ability to sort of customize the processor and the software

1009
00:52:39,640 --> 00:52:42,760
Speaker 11: to work together to create a better user experience. Before

1010
00:52:42,800 --> 00:52:46,200
Speaker 11: this transition, they were using Intel, which meant Intel was

1011
00:52:46,360 --> 00:52:50,480
Speaker 11: developing and producing the hardware the components. Apple was producing

1012
00:52:50,520 --> 00:52:54,720
Speaker 11: the software, and so that necessitated a mix. Right, Apple

1013
00:52:54,760 --> 00:52:57,600
Speaker 11: is doing one thing, Intel's doing another thing, and sometimes

1014
00:52:57,680 --> 00:52:59,560
Speaker 11: the hardware and the software can integrate as well as

1015
00:52:59,560 --> 00:53:02,239
Speaker 11: it does today as it does today because they have

1016
00:53:02,360 --> 00:53:05,600
Speaker 11: one company now developing everything. So it's actually a pretty

1017
00:53:05,680 --> 00:53:08,640
Speaker 11: unique thing in the industry and that has led to

1018
00:53:08,680 --> 00:53:12,719
Speaker 11: big revenue jumps, usability as well as customer satisfaction on

1019
00:53:12,760 --> 00:53:13,840
Speaker 11: the company's computers.

1020
00:53:13,880 --> 00:53:14,200
Speaker 9: Lately.

1021
00:53:14,800 --> 00:53:18,320
Speaker 1: Mark Let's switch gears and talk about China. It's obviously

1022
00:53:18,360 --> 00:53:21,879
Speaker 1: such a huge part of the Apple investment story, both

1023
00:53:21,920 --> 00:53:25,200
Speaker 1: as a supply chain issue in terms of sourcing product

1024
00:53:25,400 --> 00:53:28,080
Speaker 1: as well as being an end market for its products.

1025
00:53:29,560 --> 00:53:32,120
Speaker 1: So arguably there aren't too many companies more exposed to

1026
00:53:32,320 --> 00:53:35,680
Speaker 1: China than Apple. What's the concern there on the demand side,

1027
00:53:35,680 --> 00:53:38,400
Speaker 1: on the customer sales side, it just feels like there

1028
00:53:38,480 --> 00:53:42,319
Speaker 1: might be a growth in nationalism within China that may

1029
00:53:42,360 --> 00:53:43,880
Speaker 1: affect Apple product sales.

1030
00:53:44,280 --> 00:53:45,560
Speaker 3: What do we know right now?

1031
00:53:47,280 --> 00:53:49,840
Speaker 11: We really won't know for sure until the very end

1032
00:53:49,920 --> 00:53:52,759
Speaker 11: of January or early February when Apple announces it's Q

1033
00:53:52,880 --> 00:53:55,480
Speaker 11: one results. That's going to be the first full quarter

1034
00:53:55,719 --> 00:53:59,399
Speaker 11: of iPhone fifteen sales, and really the first full quarter

1035
00:53:59,480 --> 00:54:01,640
Speaker 11: until we start to catch win that maybe there's an

1036
00:54:01,640 --> 00:54:06,120
Speaker 11: issue with Apple and China related to government bands, increased nationalism,

1037
00:54:06,120 --> 00:54:08,160
Speaker 11: and the new Huawei Mate phone, right, and so we

1038
00:54:08,239 --> 00:54:10,400
Speaker 11: really have to wait to know for sure. But the

1039
00:54:10,440 --> 00:54:13,960
Speaker 11: tea leads, we're reading the demand, we're seeing the anecdotal evidence,

1040
00:54:14,239 --> 00:54:16,480
Speaker 11: some of the reports, the research reports were seen from

1041
00:54:16,480 --> 00:54:18,640
Speaker 11: there is indicative that there may be a little bit

1042
00:54:18,680 --> 00:54:20,880
Speaker 11: of a slowdown in China. Now, if you were to

1043
00:54:20,880 --> 00:54:22,680
Speaker 11: look at Apple's website, if you were to look at

1044
00:54:22,719 --> 00:54:25,080
Speaker 11: the lines at the retail stores in China, You're not

1045
00:54:25,160 --> 00:54:28,000
Speaker 11: really going to see the full picture. Right, Those are

1046
00:54:28,320 --> 00:54:31,239
Speaker 11: going pretty positive evidence of good things happening there. But

1047
00:54:31,400 --> 00:54:33,520
Speaker 11: as you know, the majority of people don't buy their

1048
00:54:33,600 --> 00:54:36,680
Speaker 11: iPhones through Apple, they buy them through carrier stores and such, right,

1049
00:54:36,920 --> 00:54:38,400
Speaker 11: and so we really got to wait to see the

1050
00:54:38,440 --> 00:54:40,120
Speaker 11: full numbers to get the full picture. But if the

1051
00:54:40,200 --> 00:54:42,600
Speaker 11: latest reporting out of the region is to believe, there's

1052
00:54:42,640 --> 00:54:45,120
Speaker 11: a bit of a slow down there, which obviously, given

1053
00:54:45,160 --> 00:54:47,600
Speaker 11: that Greater China is about a fifth of Apple sales

1054
00:54:48,040 --> 00:54:51,080
Speaker 11: and is where the majority of products are produced, anything

1055
00:54:51,160 --> 00:54:53,480
Speaker 11: going on negatively in China is something that we and

1056
00:54:53,560 --> 00:54:55,960
Speaker 11: investors and analysts very much need to pay attention to,

1057
00:54:56,040 --> 00:54:58,200
Speaker 11: so our eyes are glued to that situation.

1058
00:54:58,440 --> 00:54:59,000
Speaker 3: How much of a.

1059
00:55:00,480 --> 00:55:04,280
Speaker 1: I guess is the Apple brand valued in China?

1060
00:55:06,000 --> 00:55:08,960
Speaker 11: Among Yeah, the Apple brand is extremely strong in China.

1061
00:55:09,040 --> 00:55:11,440
Speaker 11: It's known as a very applent brand. It's one of

1062
00:55:11,480 --> 00:55:13,360
Speaker 11: the top tier brands. You can put it in the

1063
00:55:13,360 --> 00:55:16,920
Speaker 11: same category of things like Chanelle and Louis Baton and

1064
00:55:17,320 --> 00:55:20,480
Speaker 11: YSL potentially right right up there with fashion brands and

1065
00:55:20,520 --> 00:55:23,000
Speaker 11: so in China, many people consider it a mix of

1066
00:55:23,000 --> 00:55:26,279
Speaker 11: technology and fashion. That's why the Apple Watch is so

1067
00:55:26,440 --> 00:55:29,280
Speaker 11: popular there. That's why the high priced Max are gaining

1068
00:55:29,280 --> 00:55:32,520
Speaker 11: in popularity there. That's why people in China are springing

1069
00:55:32,520 --> 00:55:35,879
Speaker 11: for the highest tier iPhones right these fifteen hundred dollars

1070
00:55:35,960 --> 00:55:40,440
Speaker 11: US equivalent plus devices. But clearly the brand is taking

1071
00:55:40,440 --> 00:55:42,799
Speaker 11: a little bit of It's on a little bit of

1072
00:55:42,800 --> 00:55:45,919
Speaker 11: shaky ground right now. I wouldn't call it a three

1073
00:55:45,960 --> 00:55:48,960
Speaker 11: alarmed fire, but it's something we're watching and once we

1074
00:55:49,040 --> 00:55:51,120
Speaker 11: get the numbers in the next few months, we'll really

1075
00:55:51,160 --> 00:55:52,799
Speaker 11: know how bad the situation is there.

1076
00:55:53,160 --> 00:55:54,839
Speaker 1: All right, Mark, thanks so much for joining us. Always

1077
00:55:54,840 --> 00:55:57,320
Speaker 1: appreciate getting a few minutes of your time. Mark German.

1078
00:55:57,360 --> 00:56:01,160
Speaker 1: He's the chief correspondent Technology and of course that means

1079
00:56:01,200 --> 00:56:03,560
Speaker 1: Apple for Bloomberg News. He is based out in our

1080
00:56:04,120 --> 00:56:07,279
Speaker 1: Los Angeles bureau, which is an awesome office there.

1081
00:56:09,680 --> 00:56:12,759
Speaker 2: Thanks for listening to the Bloomberg Markets podcasts. You can

1082
00:56:12,800 --> 00:56:16,600
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever

1083
00:56:16,680 --> 00:56:18,160
Speaker 2: podcast platform you prefer.

1084
00:56:18,520 --> 00:56:19,360
Speaker 7: I'm Matt Miller.

1085
00:56:19,600 --> 00:56:23,000
Speaker 2: I'm on Twitter at Matt Miller nineteen seventy three, and

1086
00:56:23,120 --> 00:56:23,640
Speaker 2: I'm fall.

1087
00:56:23,520 --> 00:56:26,480
Speaker 1: Sweeney I'm on Twitter at Ptsweeney Before the podcast. You

1088
00:56:26,520 --> 00:56:29,879
Speaker 1: can always catch us worldwide at Bloomberg Radio