Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller.
Speaker 2: Every business day we bring you interviews from CEOs, market pros,
Speaker 2: and Bloomberg experts, along with essential market moven news.
Speaker 1: I'm the Bloomberg Markets Podcast on Apple Podcasts or wherever
Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.
Speaker 3: Check in with her. Next, I guess Mick Molroy.
Speaker 1: He's a co founder of the Lobo Institute, former paramilitary
Speaker 1: operations officer at the CIA, and former US Marine Infantry
Speaker 1: officer for sixteen years, so we thank him for his service.
Speaker 3: Mick, it is bad.
Speaker 1: In the Middle East, and it looks like it's gonna
Speaker 1: get worse. What do you believe Israel should do at
Speaker 1: this point?
Speaker 4: You know, I think I heard that every day when
Speaker 4: I came into my office when I was responsible for
Speaker 4: the Middle Least, and it's not always that bad.
Speaker 5: But you're right.
Speaker 6: I agree with you.
Speaker 4: It is bad right now in two ways. Obviously, Israel
Speaker 4: has to go and destroy the enemy that attack them
Speaker 4: on October seven, but the people of the Gods of
Speaker 4: the Palestinian also need to be allowed basic necessities such
Speaker 4: as food, water and medicine, and it looks like that
Speaker 4: is two things that we're going to do everything we can.
Speaker 4: We'd be in the United States to make happen. Very
Speaker 4: difficult in a situation like this, but necessary, and I
Speaker 4: think we're going to do it.
Speaker 2: I wonder about the actual tools and technology that modern
Speaker 2: armies use because we see so much reporting about Hamas
Speaker 2: having this underground tunnel network, which sounds terrifying, but of
Speaker 2: course there were such underground tunnel networks in previous wars,
Speaker 2: you know, decades and decades ago. So do we have
Speaker 2: ordinance that can reach deep underground and destroy a network
Speaker 2: of tunnels?
Speaker 4: So yes, The problem is when those tunnels are under buildings,
Speaker 4: there is ordinance that has the ability. It's time delayed
Speaker 4: so it penetrates into the ground before it detonates and
Speaker 4: then causes this concussion that can collapse tunnels. Now, if
Speaker 4: there are some of the tunnels in Gaza are up
Speaker 4: to two hundred feet underground, it won't work for them.
Speaker 4: And then on top of that, so subterranean fighting to
Speaker 4: your point of your question, yes, we've been doing that
Speaker 4: for a while. But the complicated factor in here is
Speaker 4: normally you could just use combat engineers, seal them up,
Speaker 4: explode ordinance above them, collapse them. But now we have
Speaker 4: up to two hundred and twenty plus hostages that might
Speaker 4: be in those tunnels, and you can't do any of
Speaker 4: those tactics that we've done in the past or that
Speaker 4: has been done in the past. When it comes to
Speaker 4: subterranean warfare, you have to go mile by mile, and
Speaker 4: there's over three hundred miles to try to recover these
Speaker 4: hostages at the same time you're fighting the enemy.
Speaker 2: This brings up another interesting point, and it's like, I
Speaker 2: guess a moral battle that any army is going to
Speaker 2: have internally, At what point do you say, we do
Speaker 2: not negotiate with terrorists and we're going to move ahead
Speaker 2: with our main aim, which is destroyed hamas you know. Essentially,
Speaker 2: I mean, is it even possible to say we will
Speaker 2: sacrifice these hostages in order to achieve our goal.
Speaker 4: So it is possible to do that, I don't think
Speaker 4: it should be done or will be done. Ultimately, militaries
Speaker 4: are there to protect their civilians, just like our military
Speaker 4: is to protect the United States and everybody in it. So,
Speaker 4: although it makes it much more complicated and quite frankly,
Speaker 4: it brings a lot more risk to the force to
Speaker 4: try to recover hostages. That's that's part of what we do,
Speaker 4: and I think they will focus on doing both. It
Speaker 4: would have been much better.
Speaker 2: I mean, the problem is obviously in order to you know,
Speaker 2: in order to try and get those two hundred and
Speaker 2: twenty hostages back, you could risk losing exponentially more soldiers.
Speaker 4: That's you could you will risk losing more soldiers. Yes,
Speaker 4: there's no easy decision here, but every time you send
Speaker 4: in a hostage rescue force, you are risking the force
Speaker 4: to rescue in most cases one individual and it's a
Speaker 4: mission failure if the hostage taker just turns and shoots
Speaker 4: a person at the last second. But you're still risking
Speaker 4: the entire force in the process, and sometimes they use
Speaker 4: it as a way to lure end forces to attack them.
Speaker 4: That happens all not all the time, but certainly in
Speaker 4: most hostage rescue situations here it could happen up to
Speaker 4: two hundred and twenty times. So because they could be separated,
Speaker 4: they're not going to be in the same place, and
Speaker 4: it's going to be extraordinarily difficult, and it's something that
Speaker 4: the IDF is grasping right now, I think and hopefully,
Speaker 4: and I think we do have members of JASOK and
Speaker 4: the CIA on the ground helping them, but they have
Speaker 4: very effective special operations and this is just a very
Speaker 4: complicated military problem.
Speaker 3: Mick.
Speaker 1: What do you believe at this time is the risk
Speaker 1: of this becoming a more regional conflict? You know, whether
Speaker 1: Siri or lebanonwear are we in that regard?
Speaker 4: So listening to I thought it was high, and then
Speaker 4: listening to the Iranian statements yesterday, I think it's higher.
Speaker 4: So that is one of the reasons why I think
Speaker 4: the United States has been so proactive at moving now
Speaker 4: a second aircraft carry strike group to the eastern Mediterranean,
Speaker 4: something that's unprecedented. Now there's a the twenty six MEW,
Speaker 4: the Marine Expeditionary Unit is being retasked there, and I
Speaker 4: think you're going to see more and more resources coming
Speaker 4: to the region because I believe, we think Iran wants
Speaker 4: this to expand let's hope it doesn't. Let's hope the
Speaker 4: United States doesn't have to get involved, but it looks
Speaker 4: like it's heading that way, and Iran can easily make
Speaker 4: this go from a one front war if you will,
Speaker 4: to a three to four front war. And if they
Speaker 4: get involved directly, then this is going to be a
Speaker 4: regional war.
Speaker 7: So where did the other countries align?
Speaker 2: If the US is drawn in to a broader regional conflict,
Speaker 2: what happens?
Speaker 7: What do the Saudis do? You know? What are the Turks?
Speaker 4: Do?
Speaker 7: They're in NATO? Are they are they on our side
Speaker 7: against Iran?
Speaker 4: So when it turns into a war against Iran, if
Speaker 4: that's what happens a little bit, let's hope it does not.
Speaker 4: That would not be good for anybody the region or
Speaker 4: the United States, and certainly not Iran. Then the Saudis
Speaker 4: and all these Gulf states who do have some political
Speaker 4: ties and sympathies, certainly to the Palestinians, it could shift
Speaker 4: quite a bit because they are no friends of the Iranians.
Speaker 4: In fact, most of the Iranian efforts have been targeted
Speaker 4: toward them. If you think about the Huthis and Yemen
Speaker 4: toward Saudi Arabia and the uae I. Don't think they'll
Speaker 4: become actively involved, but certainly that'll change the calculus for them.
Speaker 4: If this becomes a Israel, Iran and US conflict that
Speaker 4: goes well beyond Gaza. That said, it is not going
Speaker 4: to be in anybody's interests. This is going to be
Speaker 4: very destabilizing, its ruin economies, and it could be very
Speaker 4: substantial if you think about it. There's several nuclear powered
Speaker 4: countries that would be involved in that, and Iran is
Speaker 4: on the precipice of getting their own nuclear weapon, and
Speaker 4: I don't know what that status is now out of
Speaker 4: the government, but it could be very close and that's
Speaker 4: something they could be racing toward right now.
Speaker 1: McK prime Minister net Yale, who had an interesting weekend
Speaker 1: over social media seemingly putting the blame on the intelligence
Speaker 1: apparatus of Israel for the October seventh attack, how do
Speaker 1: you put all of that into context with what the
Speaker 1: military is trying to achieve here.
Speaker 4: So I believe in the old adage, you know the
Speaker 4: buck stops here concept. You know, you're a charge, you're
Speaker 4: in charge for everything that happens or fails to happen.
Speaker 4: It was obviously an intelligence failure, but more than that,
Speaker 4: it was a security failure because even if you did
Speaker 4: not know that they were coming, the reaction times, quite
Speaker 4: frankly from what I've seen, are unacceptable, especially in a
Speaker 4: country the size of Israel and that's and that's that's
Speaker 4: saying something. But it's also important to point out that
Speaker 4: we had a pretty massive intelligence failure and I think
Speaker 4: we have the best intelligence services in the world on
Speaker 4: nine to eleven. So it's less about poking fingers and
Speaker 4: more about you know, that needs to be addressed by Israel.
Speaker 4: I know they know this, it's not the thing that
Speaker 4: you know, it's a surprise to them. After that. I
Speaker 4: think they will. They just don't have time to do
Speaker 4: it now. It's going to have to be on their
Speaker 4: to do list right after this. Uh, this current conflict
Speaker 4: is over.
Speaker 1: So Mick, just as observers here, should we set in
Speaker 1: for a long grinding type of action here or is
Speaker 1: there any scenario where there could be something quick, decisive,
Speaker 1: measured in days not months.
Speaker 4: So there could be, but I think that would require
Speaker 4: the Israelis changing their objective. If they want to destroy
Speaker 4: which is a military term, destroy Hamas, that makes them
Speaker 4: essentially completely ineffective in carrying out their military although in
Speaker 4: their case terroraced mission, unless they reconstitute themselves. If that
Speaker 4: is still their objective, it's going to take months and
Speaker 4: months to do that. In Gaza. If you look at
Speaker 4: MOSL in twenty sixteen, it took nine months and there's
Speaker 4: only nine thousand fighters. Gaza has forty thousand fighters. And
Speaker 4: then if they want them to prevent them from reconstituting themselves,
Speaker 4: they're going to have some kind of occupation. They can't
Speaker 4: just leave and let it go because Aron will move
Speaker 4: right in, pick up the pieces and start harming them
Speaker 4: and all that immediately. So they're going to have to
Speaker 4: be some kind of force. Maybe it's not Israelis. Maybe
Speaker 4: there's an international force, peacekeeping force that can move in
Speaker 4: to help with the rebuilding of the area and of
Speaker 4: course humanitarian assistants, but also to ensure that Hamas does
Speaker 4: not reconstitute itself. That's something that's actively being discussed. Much
Speaker 4: easier said than done, that's something that I think should
Speaker 4: be looked at all.
Speaker 3: Right, Mick, thank you so much for joining us.
Speaker 1: Really appreciate getting your perspective, your analysis. Mick mulroy, he's
Speaker 1: a co founder of the Lobo Institute. Lots of experience
Speaker 1: in that part of the world. Former Power Military operations
Speaker 1: officer at CIA, former US Marine Infantry officer, senior fellow
Speaker 1: at the Middle East Institute, So a lot of experience
Speaker 1: in that part of the world and with those types
Speaker 1: of geopolitical challenges.
Speaker 5: You're listening to the Team ken'shur Live program Bloomberg Markets
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Speaker 1: All right, it looks like we are moving towards labor
Speaker 1: piece in the auto industry. GM reach is tenant of
Speaker 1: agreement today with UAW ending a six week strike. Let's
Speaker 1: break it down with a Gabby Coppola, auto industry reporter
Speaker 1: for Bloomberg News. Gabby, this seems like I guess the
Speaker 1: last deal to get done here. Anything unusual in this
Speaker 1: deal relative to what we saw from four to INSTALLANTUS.
Speaker 8: Not yet.
Speaker 9: We don't have enough details to say if there is big,
Speaker 9: you know, differences, I don't. I mean, I think obviously
Speaker 9: they followed the pattern and on wages, you know, twenty
Speaker 9: five percent over four years and eight months, plus inflation
Speaker 9: protection or inflation adjustments. I think that money for retirees
Speaker 9: had been one of the big sticking points towards the
Speaker 9: end for GM, and that's why you saw I THEK
Speaker 9: UAW actually expanding their strike this weekend against GM before
Speaker 9: it got done. But I think I think temps and
Speaker 9: retiree you know, money for pensioneers and retirees with the
Speaker 9: sticking points, and we don't We'll see what that extras
Speaker 9: little strike did if that bug GM up to be
Speaker 9: in the same place as Fordham, stillant.
Speaker 2: Is or not right, because walk us through the differences
Speaker 2: between these three auto manufacturers. They're all big, right, but
Speaker 2: GM has a lot more I think retirees to consider.
Speaker 2: GM has, for example, more temp workers than than Ford,
Speaker 2: maybe a little fewer than Stillanis.
Speaker 7: So there are differences between these three companies.
Speaker 8: That's exactly right.
Speaker 9: I mean, I think once Ford set the pattern on wages,
Speaker 9: that was the pattern, you know, But then you get
Speaker 9: into some of these other issues exactly what you mentioned.
Speaker 9: JAM has much bigger pool of retirees than say Stilantis does,
Speaker 9: but Stilantis, you know, has fewer plants in the US
Speaker 9: than Ford and GM.
Speaker 8: Ford has the most.
Speaker 9: And the temp worker issue, that was an interesting one
Speaker 9: because Ford has always kind of been the boy scout
Speaker 9: here of the D three, like they always like to
Speaker 9: brag that they have more American you know, workers and
Speaker 9: you know, full time workers in their counterparts. And that's true.
Speaker 9: So it was kind of less painful for them to
Speaker 9: bring up the temps than it would have been for
Speaker 9: a GM in Stilantis. So they were Yeah, I think
Speaker 9: they're probably happy to see GM and Bland is getting
Speaker 9: pushed to where they are in that.
Speaker 2: Regard because Ford had what a GM has like ten
Speaker 2: percent of its workers at any given time or temps
Speaker 2: right right, so that a little more and Ford far fewer.
Speaker 9: Ford was like around what we reported going to the
Speaker 9: strike was Ford was around three percent. I think JAM
Speaker 9: was around nine or ten percent, and Silantis was.
Speaker 8: Like twelve percent. And I think one of the things
Speaker 8: that really strikes.
Speaker 9: Me mat just looking at this what the contract they got,
Speaker 9: it is like complete.
Speaker 8: They completely turned the tables.
Speaker 9: You know, the companies were really used to going into
Speaker 9: these things and squeezing the union.
Speaker 8: Harder and harder.
Speaker 9: Silantis wanted even more flexibility to use more temp workers.
Speaker 9: They wanted to eliminate, you know, thousands of jobs. They
Speaker 9: wanted to close this engine and complex in Trenton, Michigan,
Speaker 9: Toledo Machining, and.
Speaker 8: None of that happened.
Speaker 9: I mean, they put it price Delanta's put a vehicle
Speaker 9: back in Velvedere or Illinois. That was a huge deal
Speaker 9: because that was a major issue for the UAW. That
Speaker 9: was you know, thirteen hundred people got laid off the
Speaker 9: spring when Silantis idled that plant, and it really did
Speaker 9: not look like it was coming back. So I think
Speaker 9: what really strikes me is just how much the union
Speaker 9: really turned the tables on the companies. It went from
Speaker 9: the union, you know, really getting pretty concessionary, you know,
Speaker 9: modest wage increases, things like that, ever since the bankruptcy,
Speaker 9: you know, ever since two thousand and seven, really even
Speaker 9: before the bankruptcy when they started making cuts to kind
Speaker 9: of help the automakers survive what was coming.
Speaker 8: And this, I mean, this is what May said he
Speaker 8: was going to do, and you know he did do it.
Speaker 9: Like they really I'm not saying they got everything they wanted,
Speaker 9: but they got a lot and they definitely be back
Speaker 9: to aut of the confessions that companies were looking for.
Speaker 1: So what what did turn the tables there, Gabby? Was
Speaker 1: it just simply catching up and trying to get back
Speaker 1: what they had conceided over the last twelve to fourteen years,
Speaker 1: or is something fundamentally changed within that relationship.
Speaker 8: I think it was a few different factors.
Speaker 9: I mean, one, I think the automakers knew they needed
Speaker 9: to pay more because of inflation, right, I mean I
Speaker 9: always remind people of this that, you know, we saw
Speaker 9: during the pandemic, the labor market's been very tight. Ever
Speaker 9: since then, inflation has been really you know, the highest,
Speaker 9: and you know interest rates are high. That was really
Speaker 9: squeezing people. I mean, don't forget a temp worker. You
Speaker 9: know it takes landing for instance. You know, they had
Speaker 9: the biggest number of temp workers. Those people made fifteen
Speaker 9: dollars and seventy eight cents an hour. And then you
Speaker 9: think about all the inflation that happened over the past
Speaker 9: couple of years, you know, the non union employers, the Amazon, Starbucks,
Speaker 9: everybody was raising wages to respond to the tight labor
Speaker 9: market and inflation. And the company, the car companies kind
Speaker 9: of hadn't done that. They hadn't paid the bill, right,
Speaker 9: the bill was coming. So I think for sure part
Speaker 9: of it was like they legitimately knew they had to
Speaker 9: pay more. I think part of it was, yes, you know,
Speaker 9: after two thousand and eight, people really feel like they
Speaker 9: deserved the mentality of the Union is that we gave
Speaker 9: these concessions to you guys to get you through. They
Speaker 9: weren't supposed to be permanent, right, And the car companies
Speaker 9: were like, no, this is our new business model, this
Speaker 9: is our new labor costs, this is our new operating.
Speaker 2: The forget, by the way, Gabby is it is some
Speaker 2: of this also, for example Stilantis. It's easier for them
Speaker 2: to agree because, as you say, they don't really make
Speaker 2: that much stuff in this country.
Speaker 7: And if they're gonna if somehow.
Speaker 2: Magically Dodge and Chrysler become brands where they're gonna produce
Speaker 2: more cars.
Speaker 7: I mean, that doesn't seem like it's gonna happen.
Speaker 3: Now.
Speaker 2: They'll make them in Canada, or they'll make them in Mexico.
Speaker 2: I mean, this is essentially the Union sealing its fate
Speaker 2: in terms of uh, not not going to add any
Speaker 2: extra capacity in the US for a few years.
Speaker 7: Are we well?
Speaker 9: I think you know that is certainly a concern, I think,
Speaker 9: and I've even heard that concern express from some people
Speaker 9: in the labor movement, like, oh, I hope we didn't
Speaker 9: do so much that we're now going to shield ourselves
Speaker 9: from future investment. I'm not, you know, I am. I
Speaker 9: am not going to rush to judgment. I'm gonna wait
Speaker 9: and see what happens. I look forward to doing a
Speaker 9: lot more reporting in the coming weeks, talking to people
Speaker 9: on the executive side to say, wow, what are you.
Speaker 8: Guys gonna do here?
Speaker 1: You know?
Speaker 8: But yeah, it's not It's true people want what flavor costs.
Speaker 9: On the other hand, you've got the Inflation Reduction Act,
Speaker 9: You've got all these incentives, you know. And I didn't mention,
Speaker 9: but obviously I think the biggest thing was Sean Fain
Speaker 9: and new leadership at the UAW.
Speaker 8: This is very.
Speaker 9: Different, more hard left, more you know, just really more radical,
Speaker 9: more just more militant.
Speaker 7: Well, and I wouldn't I wouldn't want to.
Speaker 2: I wouldn't use the term unbribeable Gabby, because I would
Speaker 2: want wouldn't want to make that allegation, you know. But
Speaker 2: but past union leaders that are in prison, right, Yeah.
Speaker 9: Absolutely, I mean I think that, you know, I would
Speaker 9: say that some things that were great that the Sean
Speaker 9: pain and the leadership did was they brought this level
Speaker 9: of transparency to the union and to the process of negotiation.
Speaker 9: I mean, Fain was on there every week doing these
Speaker 9: Facebook live you know, updates speaking directly to the membership.
Speaker 8: You know, in the past, this was something that happened behind.
Speaker 9: Closed doors with a few group of men, you know,
Speaker 9: and that would come out and be like here's the deal,
Speaker 9: you know, and there was a lot of a lot
Speaker 9: of mistrust between the leadership and the membership, especially once
Speaker 9: the you know, corruption scandal started. So in some ways
Speaker 9: you kind of had to have this like clean break
Speaker 9: with the past and do things really different. And I
Speaker 9: think that Spain just really won the trust of people,
Speaker 9: and it feels like a much more democratic union and
Speaker 9: honestly like a healthier union just from like an engagement standpoint.
Speaker 9: And I think that gave them.
Speaker 8: A lot of power.
Speaker 9: You know. I don't think they could have gone on forever, right,
Speaker 9: Like people were starting to hurt, especially people have been
Speaker 9: on strike since September fifteenth, like at the g plant,
Speaker 9: you know, the you know, stuff like truck Plant and
Speaker 9: Michigan Ford.
Speaker 8: You know, people were getting tired, right Sure.
Speaker 1: Hey, Gabby, do you think d UAW takes these wins
Speaker 1: and maybe it goes down south to some of these
Speaker 1: non unionized plan that's definitely.
Speaker 9: They're one hundred percent that's the plan. I mean last
Speaker 9: night Sean Fain, when who was going over the Ford details,
Speaker 9: he said, just going to be the big three. It's
Speaker 9: going to be the Big four, five six, meaning they
Speaker 9: have did the whole of these contracts. Was this is
Speaker 9: our calling card to the non union plans?
Speaker 7: Fascinating.
Speaker 2: I wonder when we get more details, if we're going
Speaker 2: to find out cool stuff like, uh, what cars is
Speaker 2: Dodge going to build?
Speaker 7: What cars?
Speaker 2: I mean, is Chrysler only going to have the PACIFICA
Speaker 2: or are we going to find out plans.
Speaker 9: For the future Productler has shown a lot of Chrysler
Speaker 9: is really trying to go beyond you know, the minivan. Well,
Speaker 9: I mean, we'll see what the actual industrialization plan is.
Speaker 9: But I mean they brought out a lot of really
Speaker 9: sleek looking kind of crossovers kind of you know, I've
Speaker 9: been a very kind of post hopefully like your more
Speaker 9: affordable kind of stylish that would kind of appeel to,
Speaker 9: I think to like younger people, you know, that kind
Speaker 9: of you don't necessarily have kids twenties and thirties.
Speaker 7: Crossfire after the crossfire was pretty cool at the TI time.
Speaker 3: Yep, all right, all right, Gabby, thank you so much
Speaker 3: for joining us.
Speaker 1: Gabby Coppola, auto industry reporter for Bloomberg News and Journeys
Speaker 1: on this gym reaching a tentative agreement with the UIW
Speaker 1: ending a six week strike. So your dollge Challenger with
Speaker 1: the scatpack was actually made in Canada, right, Yeah, whereas
Speaker 1: my BMW was made in Tennessee.
Speaker 3: That's right. So I bought an American all.
Speaker 2: The BMW X cars, so all the SUVs are made
Speaker 2: here in America, all right, So I bought Americans.
Speaker 8: About that.
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Speaker 3: All right, let's get back to Israel.
Speaker 1: We want to broaden our discussion out to kind of
Speaker 1: a geopolitical discussion of that region of the world, and
Speaker 1: we can do that with Ambassador Adam Early. He is
Speaker 1: a principal at American Consultants. He was a former US
Speaker 1: Ambassador to the Kingdom of Bahrain from two thousand and
Speaker 1: seven to twenty eleven, so he knows that part of
Speaker 1: the world. Ambassador, thanks so much for joining us here.
Speaker 1: I guess there's a million ways to go here. It
Speaker 1: seems like Israel is really ramping up its attacks in Gaza.
Speaker 1: One of the concerns, obviously for you know, the United
Speaker 1: States and others, is what is the risk right now?
Speaker 1: Do you believe of this kind of regional conflict kind
Speaker 1: of and focused on Gaza expanding into a more of
Speaker 1: a regional conflict bringing in other players. Where are we
Speaker 1: on that risk spectrum right now?
Speaker 10: Well, it's already started. Frankly, over the last two weeks,
Speaker 10: you've seen pretty constant exchange of fire between Hesbela in
Speaker 10: the south of Lebanon and Israeli forces in the north
Speaker 10: of Israel. It hasn't gotten as much attention as obviously
Speaker 10: the hostilities in Gaza, but both sides have suffered dozens
Speaker 10: of casualties in that on that front. And then States
Speaker 10: has been attacked dozens of times in the last couple
Speaker 10: of weeks in its forces in Iraq and Syria have
Speaker 10: been attacked by drones and missiles.
Speaker 6: Fired by groups controlled by Iran in those territories.
Speaker 10: So you know, I would call it a not even
Speaker 10: a boil, but a kind of simmering of the pot,
Speaker 10: which we see as the heat rises.
Speaker 6: The question is will it will it reach a high boil?
Speaker 10: And frankly, that's what the Biden administration is spending a
Speaker 10: lot of its time tending to.
Speaker 2: I wonder first, I want to say that nothing justifies
Speaker 2: the attacks that we saw on October seventh from Hamas
Speaker 2: into Israel. And I don't want anyone to think that
Speaker 2: I that I'm going there. But did this did this
Speaker 2: whole tragedy evolve in a sense from the attempt of
Speaker 2: the US to normalize relations between the Saudis and Israeli's
Speaker 2: I only ask because I saw who's the New York
Speaker 2: Times columnist that you loved pretty much, Tom Friedman, I think,
Speaker 2: wrote a piece saying, you know, when when we saw
Speaker 2: a picture of an Israeli like defense minister getting all
Speaker 2: suited up to pray in Jetta, that it was sure
Speaker 2: to outrage the Arabic world.
Speaker 10: Well, the short answer, in my opinion is no. But
Speaker 10: remember everything is connected, right. But the reason I'll explain
Speaker 10: why I say no, But at the same time, there's
Speaker 10: a connection. You know, this attack which involved thousands of
Speaker 10: Palestinians invading Israel on by air, through paragliding, land and sea, right,
Speaker 10: was and seizing pre determined targets, right, was a complex
Speaker 10: operation that that book.
Speaker 6: Israel totally by surprise.
Speaker 10: Now, you don't do something like that without years of
Speaker 10: careful planning and preparation.
Speaker 4: Right.
Speaker 10: Okay, So the rock Prochemont between Israel and Saudi Arabia,
Speaker 10: it's only been the last couple of months, right, So clearly.
Speaker 6: Hamas has been planning this for a while, right.
Speaker 10: And and one cannot say that the.
Speaker 6: Provocation or the what set this in motion was Israel
Speaker 6: stauding normalization. However, however, and this is where the connection
Speaker 6: comes in. Hamas uh Is.
Speaker 10: Is competing for political power among the Palestinian and Arab
Speaker 10: street let's say, so you know, they saw themselves as
Speaker 10: maybe getting out maneuvered a little bit by Israel in
Speaker 10: its rapprochemot with the Arab states like Bahrain, like Uae,
Speaker 10: like Morocco, who were all signatories of the Abraham Accords,
Speaker 10: which is where we were trying to bring Saudi Arabia.
Speaker 10: So again it's not unconnected, But at the same time,
Speaker 10: it's not Saudi related.
Speaker 6: It is basically peace related.
Speaker 10: In other words, Hamas, which is a military terrorist organization,
Speaker 10: doesn't benefit from peace, right, they only benefit from continued conflict.
Speaker 1: Adam or I want to get your thoughts here on
Speaker 1: these hostages, because that is just a difficult, difficult situation
Speaker 1: for Israel. What is the role that Qatar is playing
Speaker 1: in this? And is there any scenario where this ends?
Speaker 10: Well, you know, there's been a lot of how should
Speaker 10: I put it, there's been a lot of esteem being
Speaker 10: let off in the media and about Katar, And you know,
Speaker 10: Katar is a country that I know very well, I've
Speaker 10: worked in, and it's again, it's very complicated.
Speaker 6: But here's the here's the bottom line. The bottom line
Speaker 6: is that Cutter's relationships with Hamas have come about at
Speaker 6: the request of and with the cooperation.
Speaker 10: Of the United States and Israel over the last twenty
Speaker 10: years fifteen twenty years. Why because Hamas is a terrorist organization,
Speaker 10: we can't deal with them.
Speaker 6: We need somebody who can, and we've.
Speaker 10: Chosen we, meaning the United States in Israel, have chosen
Speaker 10: Cutter as our preferred intermediary. So when people say Cutter
Speaker 10: supports Hamas. That's really not fair because Cutter is kind
Speaker 10: of doing us a favor in terms of being a
Speaker 10: channel to Hamas to help stop hostilities, help release hostage,
Speaker 10: which is, help get money and supplies to God to
Speaker 10: Palestinian civilians. Now, what's different in the present conflict really
Speaker 10: is that, you know, the United States and Israel has decided,
Speaker 10: have decided right rightfully, So I believe, you know, no
Speaker 10: more negotiations, no more business at all with Hamas.
Speaker 6: That's over. We've gone from you know.
Speaker 10: Tolerating an inconvenience to needing to eliminate a serious threat
Speaker 10: that puts Kutar in a difficult position. What they're trying
Speaker 10: to do, I think again, with US and Israeli cooperation
Speaker 10: is negotiate the release of these hostages so that Israel
Speaker 10: can then go in and flatten Hamas.
Speaker 6: Will they succeed I doubt it.
Speaker 10: Why because Hamas recognizes that the only thing standing between
Speaker 10: it and the full force of Israeli military are two
Speaker 10: hundred hostages.
Speaker 2: So I wonder you know that's problematic in Gaza, and
Speaker 2: then on the northern border with Lebanon, you've got Iran
Speaker 2: lobbing missiles in via its proxy has Belah right, And
Speaker 2: it looks like from the rhetoric. You know, Mick Malroy
Speaker 2: just told us from the Lobo instuot he thinks Iran
Speaker 2: wants this conflict to broaden out.
Speaker 7: Is that inevitable as well?
Speaker 10: I think that's a little simplistic that Iran wants this
Speaker 10: conflict to broaden out? What does Iran want?
Speaker 6: Iran wants two things.
Speaker 10: It wants the United States out of the Middle East,
Speaker 10: and it wants Israel to be eliminated, right at least
Speaker 10: if you believe what the Iranian leaders have been saying
Speaker 10: for the past forty years. So the question for Iran
Speaker 10: is how to best achieve those objectives, right, is it
Speaker 10: by launching a full scale war between Lebanon Throughsbaula and Israel,
Speaker 10: which Israel, by the way, which if it happened, Israel
Speaker 10: would by the way, destroy Beirute, I mean destroy it,
Speaker 10: right yep?
Speaker 5: Or does it?
Speaker 8: You know?
Speaker 11: So?
Speaker 10: I think I think frankly, Iran is kind of figuring
Speaker 10: its way, feeling its way through to see what's the
Speaker 10: best use of its exact courses.
Speaker 1: Us unfortunately, just leave it there because of time up
Speaker 1: against the time Costramper really appreciate getting your time. Admiral
Speaker 1: Adam Early, he's a principal at a Barrow American Consultants,
Speaker 1: giving us his perspective on the developing situation in it.
Speaker 5: You're listening to the Team Ken's Are Live program Bloomberg
Speaker 5: Markets weekdays at ten am Eastern on Bloomberg dot Com,
Speaker 5: the iHeartRadio app and the Bloomberg Business App, or listen
Speaker 5: on demand wherever you get your podcasts.
Speaker 3: All right, I am, I'm gonna be honest with the people.
Speaker 1: I'm not looking forward to talking to our next guest
Speaker 1: here because our guest wrote this. The last time the
Speaker 1: Federal Reserve raised its benchmark interest rate and held it
Speaker 1: there for a considerable period of time was in two
Speaker 1: thousand and six. In two thousand and seven, that episode
Speaker 1: and in calamity. This time maybe different, after all, with
Speaker 1: the benefit of hindsight, policymakers can do better, but you
Speaker 1: can't count on that outcome. Ed Harrison Joints says he's
Speaker 1: a senior editor for Bloomberg News. He joints us here
Speaker 1: in our Bloomberg Interactive Brokers studio. Ed Boy, I remember
Speaker 1: that time period really well, and it was scary for everybody,
Speaker 1: And I was a seasoned Wall Street veteran.
Speaker 3: I didn't know what was gonna happen.
Speaker 1: Talk to us about the parallels you see maybe from
Speaker 1: today back to two thousand and six, two thousand and seven.
Speaker 12: Yeah, a great set up there. I have to say
Speaker 12: that I do remember it well in terms of the
Speaker 12: housing bubble. But the thing that people don't really remember
Speaker 12: as well in retrospect is that everything looked pretty good
Speaker 12: by and large right up until the very end. Was
Speaker 12: that holding interest rates at a high level over a
Speaker 12: considerable period of time that ended up hurting the economy.
Speaker 12: You know, BERNANKI, he raised the interest rates up to
Speaker 12: a certain level and then they were They stayed there
Speaker 12: for more than a year, and it was in that
Speaker 12: period of time that things started to fall apart. And
Speaker 12: so that's the thing to be worried about. We're not
Speaker 12: in that period yet. We're still in the hiking period.
Speaker 12: We're still getting to that level. But once we get
Speaker 12: there and stay there, that's when we have to be worried.
Speaker 2: Of course, it's not just rates that are interesting right now,
Speaker 2: it's growth. Right five point four percent in Q three
Speaker 2: was the Atlanta now GDP forecast. We saw a reading
Speaker 2: the other day at four point nine percent, so just huge.
Speaker 2: But how much of that is fueled by deficit spending?
Speaker 2: And how is that different than our situation in two
Speaker 2: thousand and six because we're running now two trillion deficit
Speaker 2: and pushing out total government debt to over thirty three
Speaker 2: trillion dollars.
Speaker 12: Yeah, you know, I don't think that that number, that
Speaker 12: two trillion number in the deficit from this past year
Speaker 12: is sustainable for the longer period of time. And so
Speaker 12: just from a pure growth trajectory perspective, it would suggest
Speaker 12: that in twenty twenty four we're gonna come down from
Speaker 12: those levels that you can't consume. The way that I
Speaker 12: was putting it in the piece that I wrote that
Speaker 12: you were flagging is that it's almost like the cash
Speaker 12: out mortgages people had. They had that little extra bit
Speaker 12: of money in their pockets as a result of the
Speaker 12: appreciation and their home values. We have that little bit
Speaker 12: extra of money in our pockets because of the transfer
Speaker 12: from the deficits. But once that goes away, then I
Speaker 12: think you will see people start to spend incrementally less
Speaker 12: money than they were before, and so then that growth
Speaker 12: number is gonna come.
Speaker 1: Down, all right, any reason to believe our Federal Reserve
Speaker 1: has learned its lesson, internalized the lesson back from the
Speaker 1: Great Financial Crisis, and maybe how it acts going forward.
Speaker 2: Meaning by the way, meaning what Paul, Because I sense
Speaker 2: that you think the Fed needs to start cutting rates,
Speaker 2: maybe in a preemptive thing.
Speaker 1: I think that No, No, I think they need to
Speaker 1: just hang for a little while. But yes, in twenty
Speaker 1: twenty four. I do believe a rate cut at some
Speaker 1: point next year. But do you think the Feds kind
Speaker 1: of internalize what happened back in the day.
Speaker 12: I think they have, like on multiple levels. I mean,
Speaker 12: I'll give you three different points. One is, in terms
Speaker 12: of eighteen nineteen, you know, when bad things happened in
Speaker 12: the leverage loan and in the high yield market, that
Speaker 12: you saw that the Fed stopped their rate hikes at
Speaker 12: two point five percent. The second thing is the fact
Speaker 12: that when we saw bad things happen in March with
Speaker 12: Silicon Valley Bank, they came in there and they, you know,
Speaker 12: in sort of almost a precise way, they created a
Speaker 12: liquidity vision just for that specific part of the economy,
Speaker 12: without like you know, flooding the entire economy with money.
Speaker 12: And then the third thing I would say is is
Speaker 12: that the FED is much more focused now on making
Speaker 12: sure that the you know, the people who are the
Speaker 12: last on the employment ladders I still have a chance
Speaker 12: to get in there. They don't want to go to
Speaker 12: the days where you know, people get hired and then
Speaker 12: like you know, three months later they're the first to
Speaker 12: be let go. They want the cycle to last, and
Speaker 12: Jerome Palace talked about that.
Speaker 2: So but I mean, if we're focused on growth, if
Speaker 2: we're focused on unemployment, are we still watching what's going
Speaker 2: on with inflation? Because that is the other part of
Speaker 2: the dual mandate that they've been talking about for two years,
Speaker 2: right and promising us that they're going to get it
Speaker 2: back down to two percent.
Speaker 7: We're still more than fifty percent above that. So do
Speaker 7: they just give up on that?
Speaker 6: No?
Speaker 12: And you know, I think that's the tricky part, and
Speaker 12: that's the scary part in the sense that really, if
Speaker 12: we're three percent now on almost all levels, there's no way,
Speaker 12: especially with unemployment where it is, you know, which is
Speaker 12: below four percent, that they can do anything but hold.
Speaker 12: There's no way they can cut with inflation at those levels.
Speaker 12: So that almost guarantees a repeat of the hike and
Speaker 12: hold for a long period of time that we saw
Speaker 12: that caused so much pain fifteen years ago. So I
Speaker 12: think that it's very unlikely that we're gonna get out
Speaker 12: of this cycle without something breaking. The question is is
Speaker 12: what is it gonna be and when it's gonna happen,
Speaker 12: and what's their reaction gonna be once that does happen.
Speaker 2: So if we get I mean, we say two trillion
Speaker 2: dollar budget deficits are unsustainable, but who's gonna change that?
Speaker 3: Right?
Speaker 2: I mean, it doesn't look like we're gonna have a
Speaker 2: much smaller deficit. I mean maybe if it's a trillion
Speaker 2: dollars that's much smaller, but still too much. Right, Are
Speaker 2: we gonna see the budget deficits continue to run at
Speaker 2: this level? And if we don't, the FED has to
Speaker 2: cut in order to pad the economy.
Speaker 12: Well, you know, I would look at it in terms
Speaker 12: of what I would call the monetary offset. You know,
Speaker 12: we know from the past, when the fiscal policy is
Speaker 12: pumping money in, the FED feels compelled to do something
Speaker 12: about it. And so everyone's talking about rate cuts in
Speaker 12: twenty twenty four. If we still have these deficits, adding spending,
Speaker 12: keeping the GDP growth high, we could be talking about
Speaker 12: rate hikes in twenty twenty four. I think that that
Speaker 12: is a potential that we actually get another rate hike,
Speaker 12: not in December, but in December and then again later,
Speaker 12: or you know, even multiple rate hikes in twenty twenty four.
Speaker 1: And I'm trying to refinance the mortgage. My man, I
Speaker 1: need rates to come down a little bit, so work.
Speaker 3: With me here. Labor market.
Speaker 1: I tell you what, I haven't understood this labor market
Speaker 1: really at all. I'm just so shocked that it remains
Speaker 1: so robust here. And some people tell me it's the
Speaker 1: hoarding of workers. I don't know what that means.
Speaker 7: I don't know how that robust I think is a question.
Speaker 3: A lot of people are starting to ask, yeah, what
Speaker 3: are you thinking.
Speaker 12: Yeah, I think that it is. It's bifurcated in the
Speaker 12: sense that it isn't as robust as we think, right,
Speaker 12: because when you look at continuing claims, they're very high,
Speaker 12: and they remain high. But at the same time, when
Speaker 12: you ask businesses, how do you feel, they're like, you know,
Speaker 12: we're not getting enough workers. There aren't enough workers out there.
Speaker 12: I think that there's people. When people talk about the
Speaker 12: skills mismatch, it really is there. So the people who
Speaker 12: are not getting employed are remaining on the unemployment rules
Speaker 12: for considerably longer than we would like. But at the
Speaker 12: same time, there's still that dearth. I think it's because
Speaker 12: we're in the baby bust period. That's those people who
Speaker 12: were born after sixty four coming into the prime. All
Speaker 12: of the baby boomers are leaving, and that's leaving us,
Speaker 12: you know, with a shortage of workers. And as a
Speaker 12: result of that, it's putting upward pressure on on wage
Speaker 12: games and that's helping bolster the economy in some ways.
Speaker 3: I don't know, I'm still here.
Speaker 1: You think the Fed's can make a mistake, and I
Speaker 1: don't know what a mistake is raising I would think
Speaker 1: it would be a mistake. But do you think the
Speaker 1: FED makes a mistake because I'm not sure what's going
Speaker 1: to break out there, like the housing market back in
Speaker 1: the day.
Speaker 12: Well, you know, the question is is it is it
Speaker 12: a mistake for them to take the punch bowl away?
Speaker 12: I mean, if you look at any chart of the
Speaker 12: S and P five hundred over the last fifteen years,
Speaker 12: it looks pretty astonishing.
Speaker 2: Taking the punch bowl away in this sense would mean holding, right, No,
Speaker 2: taking the punch bowl away would mean raising holding. Is
Speaker 2: the punch bowl still there, which is crazy to think
Speaker 2: about because they've gone up five hundred and fifty basis
Speaker 2: points in less than two years. But at the same time,
Speaker 2: the fiscal span is just like a machine, right yeah.
Speaker 12: I mean you have these two forces going against one another,
Speaker 12: and so they're thinking, Okay, once this machine starts to dwindle,
Speaker 12: then we can we can sort of passively tighten. You know,
Speaker 12: they haven't said those words exactly, but if.
Speaker 2: You listen to lots pretty much said that right, right, Yeah,
Speaker 2: we're passively tightening because real interest rates are going up.
Speaker 3: Yeah.
Speaker 12: And moreover, when you have all of this money being
Speaker 12: pumped out in terms of deficit spending, that means that you,
Speaker 12: as a result, need more higher rates to absorb all
Speaker 12: of that.
Speaker 3: All Right, that wasn't so bad.
Speaker 1: Ed Harrison, thanks so much for joining us. Ed Harrison's
Speaker 1: the senior editor Bloomberg News.
Speaker 5: You're listening to the tape can'cher live program Bloomberg Markets
Speaker 5: weekdays at ten am Eastern on Bloomberg Radio, the tune
Speaker 5: in app Bloomberg Dot Com and the Bloomberg Business App.
Speaker 5: You can also listen live on Amazon Alexa from our
Speaker 5: flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
Speaker 1: Kaylee linestings and she's host a Bloomberg sound on and
Speaker 1: Bloomberg's Crypto. And we also are joined today by Amy
Speaker 1: Lee Copeland. She is a partner at Rouse and Copeland.
Speaker 1: That's a law firm based in Georgia.
Speaker 3: So we want to check out with both of these folks. Katie.
Speaker 1: Let's start with you on the Republican front Lots of
Speaker 1: movement there in the list of potential nominees here, Mike
Speaker 1: Pence dropping out, Nicky Haley rising in the polls. What's
Speaker 1: the feeling in DC these days?
Speaker 13: Well, at least the field pole is narrowing. We've had
Speaker 13: a number of candidates competing for the Republican nomination, and
Speaker 13: slowly we've start to see them trickling out of the
Speaker 13: race as it becomes abundantly clear that Donald Trump is
Speaker 13: still far and away the front runner. That said, there
Speaker 13: are some people on the upswing. Mike Pence is now out.
Speaker 13: He has not actually endorsed any one of the remaining
Speaker 13: candidates yet, so we'll see if he throws his support
Speaker 13: behind someone else, of course's former boss. In Iowa, which
Speaker 13: is really where a lot of these races are now focusing,
Speaker 13: is still leading by dozens of points at forty three percent,
Speaker 13: but Nicki Haley at sixteen percent, which now ties her
Speaker 13: with Ron DeSantis. He actually has moved from nineteen percent
Speaker 13: in Iowa and August down to sixteen, whereas she's jumped
Speaker 13: from about six percent in the polls up to sixteen.
Speaker 13: So she's really one that is ascendant right now exactly.
Speaker 1: Well as it relates to former President Donald Trump, obviously,
Speaker 1: one of the big big issues for his candidacy would
Speaker 1: be his legal challenges, particularly well, there's one big one
Speaker 1: down in Georgia. Amy Lee Copeland, thanks so much for
Speaker 1: joining us. Talk to us about what's the lay of
Speaker 1: the land down in Georgia these days for the former
Speaker 1: president and he's illegal woes there.
Speaker 14: Hey, good afternoon. Right now, nineteen defendants have been indicted
Speaker 14: in this massive Georgia Rico indictment. Four people have entered
Speaker 14: please of guilty, including three of Trump's legal advisors and
Speaker 14: a bail bondsman's with connection to the Trump campaign. The
Speaker 14: DA's office has approached six other defendants to try to
Speaker 14: solicit please or to at least engage in plea negotiations,
Speaker 14: without any success. And they have confirmed to CNN at
Speaker 14: least that Trump and Giuliani and Eastman and Meadows have
Speaker 14: not been offered pleased. So the case continues to go
Speaker 14: along with the documentary evidence. And now the attorneys who
Speaker 14: are pleading guilty and agreeing to testify truthfully er in
Speaker 14: Jenna Elicu's case, cooperate fully against the former president.
Speaker 2: So Amy Lee, what's the worst case scenario for Donald Trump?
Speaker 14: Well, the worst case scenario is that he goes to
Speaker 14: trial and gets convicted. There are documents that the DA
Speaker 14: has encountered. Remember there was not just a grand jury
Speaker 14: in this case, but a special purpose grand jury then
Speaker 14: investigated for over a year. It hurt testimony from seventy
Speaker 14: five witnesses, including election deniers, and this special purpose grand
Speaker 14: jury issued recommendations that people being guided, and a regular
Speaker 14: grand jury didn't indict. So the case is moving along.
Speaker 14: It should go to trial probably after the January sixth
Speaker 14: trial in DC, and that looks like it might be
Speaker 14: even in summer of twenty twenty four.
Speaker 2: I'm just wondering because you know, we have an election
Speaker 2: denier now as Speaker of the House, and that after
Speaker 2: January sixth, So and then if Donald Trump becomes the
Speaker 2: US president, he would I guess, have the power to
Speaker 2: pardon himself.
Speaker 14: Right, So, not in Georgia. Not in Georgia, I see,
Speaker 14: not for state interesting, not for stay condition.
Speaker 7: Yeah, but it's not imaginable.
Speaker 2: That he would be jailed in Georgia and elected US
Speaker 2: president and not be you know, let out to go
Speaker 2: to Washington, DC.
Speaker 5: Right.
Speaker 1: Well, no, I don't know, Kaylee. We kind of talk
Speaker 1: about this, Kayley. But let's be honest. The polls are
Speaker 1: telling you that his voters don't care. How does a
Speaker 1: party kind of deal with all his legal challenges here.
Speaker 13: Well, there's still contending with it, Paul. But to your point,
Speaker 13: his base of support, that core base of Trump voters,
Speaker 13: always Trump voters, don't seem to have been rattled at
Speaker 13: all by each and every case that has brought against him,
Speaker 13: both civil and criminal. In fact, it really only seems
Speaker 13: to cement it as he kind of tries to frame
Speaker 13: this as a narrative in which the Justice Department is
Speaker 13: being weaponized against him. You look at the gag order
Speaker 13: that was just reinstated here in Washington in the case
Speaker 13: that Judge Chutkin is precise. That's the Jacksmith election interference
Speaker 13: case that was brought here in Washington, d C. The
Speaker 13: federal one that gag Orger reinstated as his team tries
Speaker 13: to appeal it. And he said, that's another example of
Speaker 13: the Biden administration being weaponized against him, even though this
Speaker 13: is a separate branch of government that we're talking about here,
Speaker 13: But it's that narrative that this persecution of a political
Speaker 13: opponent is what Trump is experiencing right now, seems to
Speaker 13: make those people who are supportive of him even more so.
Speaker 13: And that's something that the other Republican contenders for the
Speaker 13: nomination are having to wrestle with. How do you avoid
Speaker 13: alienating that base of support while also trying to go
Speaker 13: on the attack against a front runner. It's very difficult,
Speaker 13: as we've seen proven time and again.
Speaker 1: Amy, If President Trump were your client, what would you
Speaker 1: advise him at this point? Is a plea deal even possible?
Speaker 1: Is it?
Speaker 3: Just what would you say to him?
Speaker 14: Well, what I would say to him? And the advice
Speaker 14: that he takes seems to be dramatically different if you
Speaker 14: read about his other legal travails in the news right now,
Speaker 14: I suspect that he is going to go to trial.
Speaker 14: I cannot imagine that this former president would come forward
Speaker 14: and enter a guilty plea or even seek a guilty plea.
Speaker 14: And Steve Sadal, his attorney, has basically said as much
Speaker 14: that the Trump position is that these witnesses are actually
Speaker 14: going to help them and that it's not going to
Speaker 14: be a problem for him. I fully anticipate that he
Speaker 14: will go to trial. I suspect though, that they are
Speaker 14: relying on a principle called jury nullification, that one person
Speaker 14: is just going to hold out and say there's no
Speaker 14: way we're going to convict the former president, which would
Speaker 14: launched the case into a mistrial and the DA could
Speaker 14: try it again or not.
Speaker 2: It's fascinating and unprecedented, right, We've never dealt with anything
Speaker 2: like this. What's the chances, Amy Lee, that this that
Speaker 2: this ends up going to the Supreme Court.
Speaker 14: Well, to get to the Supreme Court, it would first
Speaker 14: have to go through the Georgia Court of Appeals, the
Speaker 14: Georgia Supreme Court, and then the US Supreme Court can
Speaker 14: only hear it is the Georgia Supreme Court. Yeah, yeah,
Speaker 14: it could take a bath in it.
Speaker 1: So Kaylee, what's the what's the feeling in Washington, d C?
Speaker 1: The Republican National Committee. I mean, it just seems like
Speaker 1: the Trump campaign, the Trump presence, the Trump positioning with
Speaker 1: the voters is so strong that he is the presumptive
Speaker 1: front runner.
Speaker 3: Now, is that kind of the feeling?
Speaker 7: It is?
Speaker 13: It feels not necessarily like a solidified inevitability, but at
Speaker 13: the moment, it seems highly likely that Trump would be
Speaker 13: the Republican nominee barring something really unforeseen happening. That is
Speaker 13: kind of the feeling. And then it becomes one of
Speaker 13: general election politics, because just because the former president can
Speaker 13: lead in the Republican primary and win primary elections, that
Speaker 13: doesn't necessarily translate come or November twenty twenty four in
Speaker 13: the general election. That said, we have started to see
Speaker 13: the gap between Trump and Biden closing. I believe the
Speaker 13: real kill of politics, average of polling, if it's a
Speaker 13: Trump and Biden rematch in twenty twenty four, which by
Speaker 13: the way, polling indicates voters do not want to happen.
Speaker 13: But if that happens, they're effectively tied within the margin
Speaker 13: of error, so it would be a very close one.
Speaker 3: Amy.
Speaker 1: As you look at all of the legal issues that
Speaker 1: the former president Trump is dealing with, which ones would
Speaker 1: present the most peril do you think.
Speaker 14: Well, I think they all do. I think probably the
Speaker 14: easiest one is for the government to prove is the
Speaker 14: classified documents case. That seems like a real red light
Speaker 14: green light sort of issue. Georgia's, though, cannot be underestimated
Speaker 14: in the peril it poses to the former president. With
Speaker 14: the attorney advisors who've already pleaded guilty, they have admitted
Speaker 14: that some statements were false statements like the bals electors
Speaker 14: were the duly certified and electors duly certified and elected
Speaker 14: electors of the state of Georgia. Jenna Ellis's guilty plea
Speaker 14: admits that it was false that dead people in Georgia
Speaker 14: voted or that felons voted, and some of those claims
Speaker 14: were the ones that mister Trump repeated in his call
Speaker 14: to Secretary of State Brad Raffensberger to find seven and
Speaker 14: eighty votes, even with other pleas. With Miss Powell's plea too,
Speaker 14: with the voting machines that those were breached and the
Speaker 14: voter data was taken, so everything presents a unique peril
Speaker 14: to the former president. But I think probably the classified
Speaker 14: documents would be the easiest for the government to prove,
Speaker 14: followed shortly and closely by the Georgia case.
Speaker 1: All right, Amily Copeland, thank you so much for joining us.
Speaker 1: Emily Copeland. She's a partner at Rouse and Copeland in Georgia,
Speaker 1: and she is all in the state of Georgia. Undergraduate
Speaker 1: degree from the University of Georgia and then a law
Speaker 1: degree from the University of Georgia as well. So all
Speaker 1: in there on the Georgia and Kaylee Lines, host of
Speaker 1: Bloomberg Sound On and Bloomberg's Crypto, just giving us a
Speaker 1: little sense of the lay of the land. Boy, the
Speaker 1: next twelve plus months are going to be absolutely crazy
Speaker 1: from a political perspective. Not only do you have a
Speaker 1: presidential election, but you've got one of the former president
Speaker 1: who presumably.
Speaker 5: You're listening to the tape Catcher live program Bloomberg Markets
Speaker 5: weekdays at ten am Eastern on Bloomberg Radio, the tune
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Speaker 5: You can also listen live on Amazon Alexa from our
Speaker 5: flagship York station. Just say Alexa playing Bloomberg eleven thirty.
Speaker 1: Let's stock Apple Computer Apple?
Speaker 3: Why not? I mean, you know, it's not even called
Speaker 3: Apple Computer more. Apple Inc. I guess is the new one.
Speaker 1: But that's stock. Let's just refresh our memories here. Two
Speaker 1: point sixty five trillion dollar market cap for Apple. The
Speaker 1: stock's up thirty percent this year. It's up about seven
Speaker 1: tenths today. They're goind have a product launch today. Kind
Speaker 1: of unusual timing. It seems like to me maybe they'll
Speaker 1: unveil some new Imax, MacBook pros, all that kind of stuff.
Speaker 3: So let's break it down with Mark German.
Speaker 1: He's a chief corresponding covering technology and Apple for Bloomberg News.
Speaker 1: I have no idea where he is, but he's joining
Speaker 1: us somewhere via zoom.
Speaker 3: Hey, Mark, thanks so much for joining us here.
Speaker 1: What are they calling this product launch tonight?
Speaker 3: Something halloweenish?
Speaker 11: I think maybe they should call it Apple Computer Inc. Again.
Speaker 14: Right.
Speaker 11: They changed the name to Apple Ink in two thousand
Speaker 11: and seven when they started selling the iPhone and some
Speaker 11: of the other mobile products. But today is all going
Speaker 11: to be about computers. The answer your question, they're dubbing
Speaker 11: the event tonight Scary Fast. Right, that's a flick at
Speaker 11: Halloween right in the US and elsewhere Tuesday evening, October
Speaker 11: thirty first. But they're also going to be holding their
Speaker 11: keynote tonight on Monday evening, which is a first, a
Speaker 11: nighttime event. Usually their keynotes would start about fifteen minutes
Speaker 11: from now, but instead it's not going to start in
Speaker 11: for several hours. Now. The scary Fast is a double
Speaker 11: meaning because they're referring to their new chips and like
Speaker 11: you said, these new processors will be going into the
Speaker 11: MacBook Pro as well as the iMac, so.
Speaker 1: Is you know, it's we don't really talk about the
Speaker 1: computers as much as you know, the Imax and the
Speaker 1: MacBook pros and that kind of stuff. It's all about
Speaker 1: the phone and the wearables and all that kind of stuff.
Speaker 3: Just refresh our memories.
Speaker 1: What the you know, the computer part of their business
Speaker 1: means to them.
Speaker 11: Yeah, the computer part of the business means a lot
Speaker 11: more than the revenue it generates. It generates between let's
Speaker 11: say six and ten billion dollars a quarter, right, it
Speaker 11: generates about ten to eleven percent of their annual revenue
Speaker 11: each year. But it means so much more than that.
Speaker 11: Their most vocal consumers are the ones who are Mac loyalists.
Speaker 11: These are the people who tell their friends to buy
Speaker 11: a Mac, to tell their friends to buy other Apple products,
Speaker 11: to tell their friends to buy iPhones, right, to tell
Speaker 11: their friends to buy iPads. Now, the other thing Apple's
Speaker 11: trying to do is they're trying to get people to
Speaker 11: buy multiple products, right, They're trying to get people to
Speaker 11: buy not only a Mac, but buy an iPhone, buy
Speaker 11: an iPad as well, and create that full ecosystem. And
Speaker 11: in many ways, the Mac sits at the center of
Speaker 11: the ecosystem. So it generates only about ten percent of revenue,
Speaker 11: but it's so much more important than that.
Speaker 1: Mark, talk to us about kind of the chips that
Speaker 1: are going into these things these days. Where are they
Speaker 1: getting their chips and where's Apple And I know there's
Speaker 1: been talk time to time producing their own chips. Just
Speaker 1: give us a kind of an update of what's happening
Speaker 1: on the chip side of the business.
Speaker 11: Yeah, So today they're geting introduced three new chips, the
Speaker 11: M three pro and the threemacs, and these are their
Speaker 11: next generation versions of their in house Mac processors. These
Speaker 11: are chips designed and developed entirely by Apple using what's
Speaker 11: known as an instruction set or a core framework license
Speaker 11: from ARM. Right, We've been talking about ARM a lot lately,
Speaker 11: and they're actually manufactured in Taiwan by a company called TSMC,
Speaker 11: So these are in house designs. And to make it
Speaker 11: very clear, this is the same exact chip technology that
Speaker 11: they've been using in the iPhone and the iPad and
Speaker 11: the Apple Watch for many years now. And the benefits
Speaker 11: for a computer are tremendous battery life, speed, efficiency, the
Speaker 11: ability to sort of customize the processor and the software
Speaker 11: to work together to create a better user experience. Before
Speaker 11: this transition, they were using Intel, which meant Intel was
Speaker 11: developing and producing the hardware the components. Apple was producing
Speaker 11: the software, and so that necessitated a mix. Right, Apple
Speaker 11: is doing one thing, Intel's doing another thing, and sometimes
Speaker 11: the hardware and the software can integrate as well as
Speaker 11: it does today as it does today because they have
Speaker 11: one company now developing everything. So it's actually a pretty
Speaker 11: unique thing in the industry and that has led to
Speaker 11: big revenue jumps, usability as well as customer satisfaction on
Speaker 11: the company's computers.
Speaker 9: Lately.
Speaker 1: Mark Let's switch gears and talk about China. It's obviously
Speaker 1: such a huge part of the Apple investment story, both
Speaker 1: as a supply chain issue in terms of sourcing product
Speaker 1: as well as being an end market for its products.
Speaker 1: So arguably there aren't too many companies more exposed to
Speaker 1: China than Apple. What's the concern there on the demand side,
Speaker 1: on the customer sales side, it just feels like there
Speaker 1: might be a growth in nationalism within China that may
Speaker 1: affect Apple product sales.
Speaker 3: What do we know right now?
Speaker 11: We really won't know for sure until the very end
Speaker 11: of January or early February when Apple announces it's Q
Speaker 11: one results. That's going to be the first full quarter
Speaker 11: of iPhone fifteen sales, and really the first full quarter
Speaker 11: until we start to catch win that maybe there's an
Speaker 11: issue with Apple and China related to government bands, increased nationalism,
Speaker 11: and the new Huawei Mate phone, right, and so we
Speaker 11: really have to wait to know for sure. But the
Speaker 11: tea leads, we're reading the demand, we're seeing the anecdotal evidence,
Speaker 11: some of the reports, the research reports were seen from
Speaker 11: there is indicative that there may be a little bit
Speaker 11: of a slowdown in China. Now, if you were to
Speaker 11: look at Apple's website, if you were to look at
Speaker 11: the lines at the retail stores in China, You're not
Speaker 11: really going to see the full picture. Right, Those are
Speaker 11: going pretty positive evidence of good things happening there. But
Speaker 11: as you know, the majority of people don't buy their
Speaker 11: iPhones through Apple, they buy them through carrier stores and such, right,
Speaker 11: and so we really got to wait to see the
Speaker 11: full numbers to get the full picture. But if the
Speaker 11: latest reporting out of the region is to believe, there's
Speaker 11: a bit of a slow down there, which obviously, given
Speaker 11: that Greater China is about a fifth of Apple sales
Speaker 11: and is where the majority of products are produced, anything
Speaker 11: going on negatively in China is something that we and
Speaker 11: investors and analysts very much need to pay attention to,
Speaker 11: so our eyes are glued to that situation.
Speaker 3: How much of a.
Speaker 1: I guess is the Apple brand valued in China?
Speaker 11: Among Yeah, the Apple brand is extremely strong in China.
Speaker 11: It's known as a very applent brand. It's one of
Speaker 11: the top tier brands. You can put it in the
Speaker 11: same category of things like Chanelle and Louis Baton and
Speaker 11: YSL potentially right right up there with fashion brands and
Speaker 11: so in China, many people consider it a mix of
Speaker 11: technology and fashion. That's why the Apple Watch is so
Speaker 11: popular there. That's why the high priced Max are gaining
Speaker 11: in popularity there. That's why people in China are springing
Speaker 11: for the highest tier iPhones right these fifteen hundred dollars
Speaker 11: US equivalent plus devices. But clearly the brand is taking
Speaker 11: a little bit of It's on a little bit of
Speaker 11: shaky ground right now. I wouldn't call it a three
Speaker 11: alarmed fire, but it's something we're watching and once we
Speaker 11: get the numbers in the next few months, we'll really
Speaker 11: know how bad the situation is there.
Speaker 1: All right, Mark, thanks so much for joining us. Always
Speaker 1: appreciate getting a few minutes of your time. Mark German.
Speaker 1: He's the chief correspondent Technology and of course that means
Speaker 1: Apple for Bloomberg News. He is based out in our
Speaker 1: Los Angeles bureau, which is an awesome office there.
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