WEBVTT - Yellen Warning on Debt Default; Disney Streams Lower

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<v Speaker 1>From the Bloomberg Interactive Burgers Studios. This is Bloomberg day

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<v Speaker 1>Break for Thursday, May eleventh.

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<v Speaker 2>Coming up today, Janet Yellen says a debt default could

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<v Speaker 2>impact national security.

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<v Speaker 1>Donald Trump orges Republicans to get spending cuts or push

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<v Speaker 1>the country into default.

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<v Speaker 2>The Biden administration warrants of difficulty at the border as

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<v Speaker 2>Title forty two winds.

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<v Speaker 1>And Disney shares slump as subscriber growth falls.

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<v Speaker 3>New York Manior Adams calls for more mental health services

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<v Speaker 3>after the chokehold death of a homeless man. Plus Democrat

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<v Speaker 3>Dane Feinstein was back on the Senate floor. I'm Michael Barr.

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<v Speaker 3>Or ahead, I'm.

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<v Speaker 4>John Stanstown Swards. The Knicks kept their season alive. They

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<v Speaker 4>beat the Heat and game five wins for the Mets

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<v Speaker 4>and Yankees.

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<v Speaker 5>That's all straight Ahead on Bloomberg day Break, the business

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<v Speaker 5>news you need to starn your day in just one

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<v Speaker 5>fifteen minute podcast each morning on Apples, Spotify, the Bloomberg Business.

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<v Speaker 6>Appen everywhere you get your podcasts.

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<v Speaker 2>Good morning, I'm Nathan Hager.

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<v Speaker 1>And I'm Karen Moscow. Here are the stories we're following today.

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<v Speaker 2>We begin with the debt ceiling stalemate. Treasury Secretary Janet

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<v Speaker 2>Yellen says failure to avoid a default would have devastating consequences.

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<v Speaker 7>In my assessment, and that if economists across the board,

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<v Speaker 7>a default on US obligations would produce an economic and

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<v Speaker 7>financial catastrophe. A default would threaten the gains that we've

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<v Speaker 7>worked so hard to make over the past few years

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<v Speaker 7>in our pandemic recovery, and it would spark a global

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<v Speaker 7>downturn that would set us back much further.

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<v Speaker 2>Speaking at the G seven in Japan, Yellen said a

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<v Speaker 2>default would also undermine Washington's ability to defend national security. Meanwhile,

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<v Speaker 2>President Biden says an agreement needs to be reached.

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<v Speaker 8>If we default on our debt, the whole world is

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<v Speaker 8>in trouble. This is a manufactured crisis. There's no question

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<v Speaker 8>about America's ability to pay its bills. Am strongest economy

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<v Speaker 8>in the world. We should be cutting spending the lower

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<v Speaker 8>in the depth, so without a needless crisis, in a

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<v Speaker 8>responsible way.

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<v Speaker 2>President Biden is scheduled to resume debt talks with House

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<v Speaker 2>Speaker Kevin McCarthy tomorrow. It's a subject we will address

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<v Speaker 2>in an exclusive interview with Janet Yellen. Tune in for

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<v Speaker 2>that conversation with the Treasury Secretary tomorrow morning. On Bloomberg Daybreak.

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<v Speaker 1>Meantime, Nathan Donald Trump is weighing in on debt ceiling talks.

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<v Speaker 1>The Republican presidential front runner is urging his party not

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<v Speaker 1>to give in.

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<v Speaker 9>I say to the Republicans out there, congressman, senators, if

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<v Speaker 9>they don't give you massive cuts, you're going to have

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<v Speaker 9>to do a default. And I don't believe they're going

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<v Speaker 9>to do a default because I think the Democrats will

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<v Speaker 9>absolutely cave.

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<v Speaker 1>Former President Trump made the comments at a town hall

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<v Speaker 1>event with CNN last night.

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<v Speaker 2>Well, the default deadline, Karen, isn't the only one we're following.

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<v Speaker 2>This morning. Hundreds of US troops are being deployed to

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<v Speaker 2>the US southern border, along with marshalls, immigration officials, and

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<v Speaker 2>the National Guard, as Title forty two restrictions come to

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<v Speaker 2>an end. Amy Morris has details from our Bloomberg ninety

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<v Speaker 2>nine one newsroom in Washington.

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<v Speaker 10>Title forty two allowed US officials to expel migrants who

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<v Speaker 10>crossed the southern border because of COVID restrictions, but the

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<v Speaker 10>COVID Health Emergency was allowed to expire, and so was

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<v Speaker 10>Title forty two. New immigration policies will be in effect

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<v Speaker 10>at the border, and the Biden administration is bracing for

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<v Speaker 10>a new wave of migrants. Homeland Security Secretary Alejandra Mayorcis

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<v Speaker 10>tells ABC difficult days lie ahead.

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<v Speaker 4>Make no mistake about it. It's going to be difficult

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<v Speaker 4>for a while, and that is indeed what we are experiencing.

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<v Speaker 10>The US has agreements with several countries to deny entry

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<v Speaker 10>and send migrants back to their country of origin. Regional

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<v Speaker 10>centers are also being set up to determine asylum status

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<v Speaker 10>before they even start their journey, and it will be

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<v Speaker 10>harder to claim asylum status in Washington. I Amy Morris

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<v Speaker 10>Bloomberg Daybreak.

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<v Speaker 1>All right, Amy, thanks well. Elsewhere in politics and New York,

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<v Speaker 1>Congressman George Santo sash Fleeta not guilty to a broad

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<v Speaker 1>range of fraud and money laundering charges the Long Island

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<v Speaker 1>or Allan is to find mounting pressure that he resigned.

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<v Speaker 11>I'm gonna fight my battle, I'm gonna deliver, I'm gonna

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<v Speaker 11>fight the witchard.

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<v Speaker 2>I'm going to take care of Clary my name, and

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<v Speaker 2>I look forward to doing that.

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<v Speaker 1>And Congressman Santos spoke outside a federal courthouse on Long

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<v Speaker 1>Island after posting a half million dollar bond. The thirteen

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<v Speaker 1>count indictment accuses Santos of using campaign donations for his

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<v Speaker 1>personal benefit, applying for jobless benefits while he was working

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<v Speaker 1>during the pandemic, and lying to the House of Representatives.

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<v Speaker 2>Let's turn the markets now, Karen. We're watching shares of

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<v Speaker 2>Disney this morning. They're down more than five percent. Profit

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<v Speaker 2>was in line with estimates, but the company's streaming service,

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<v Speaker 2>Disney Plus, lost subscribers for the second straight quarter. Geeta

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<v Speaker 2>Ronganathan covers Disney for Bloomberg Intelligence.

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<v Speaker 12>The subscriber loss is a little bit concerning. We do

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<v Speaker 12>know that they implemented a forty percent price hike on

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<v Speaker 12>their Disney Plus service towards the end of last year,

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<v Speaker 12>so it's going to be interesting to see whether it

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<v Speaker 12>was the churn that kind of cossed that subscriber loss.

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<v Speaker 2>Keita Ronganathan with Bloomberg Intelligence says paid subscriptions to this

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<v Speaker 2>d Plus fell below one hundred and fifty eight million,

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<v Speaker 2>analysts that expected just over one hundred and sixty three million.

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<v Speaker 1>Melana Economic Front today, Nathan, we will get our second

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<v Speaker 1>reading on inflation in as many days.

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<v Speaker 10>This time, it's day.

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<v Speaker 1>On April's producer prices, we get a preview from Bloomberg's

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<v Speaker 1>Michael McKee.

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<v Speaker 13>A rebound is forecast after producer prices unexpectedly fell in March.

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<v Speaker 13>The drop didn't lead to a fall in consumer prices,

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<v Speaker 13>which rose during April. The two series don't directly translate,

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<v Speaker 13>as processing, transportation, and other middleman costs affect what consumers pay.

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<v Speaker 13>That said, a small increase in wholesale prices in April

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<v Speaker 13>would still leave headline and core PPI inflation lower for

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<v Speaker 13>the year, a trend that would be a good sign

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<v Speaker 13>at least that the Fed is on the right track

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<v Speaker 13>and its efforts to bring down inflation, although today's report

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<v Speaker 13>likely will have no impact on their next policy decision

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<v Speaker 13>in June. Michael McKee Bloomberg Daybreak.

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<v Speaker 2>No Mike Thanks. In Europe, the Bank of England set

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<v Speaker 2>to raise interest rates by a quarter point today. The

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<v Speaker 2>move would take the UK's base ate to its highest

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<v Speaker 2>level since two thousand and eight. The Bloomberg UK correspondent

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<v Speaker 2>Lizzie Burden says, we are not expecting a unanimous decision

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<v Speaker 2>from the Central Bank, and.

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<v Speaker 14>We are expecting a quarter point height to four point

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<v Speaker 14>five percent, but there is going to be a vote

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<v Speaker 14>split on the committee. Economists reckon it'll be the same

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<v Speaker 14>as last time, seven to two, because you've got doves

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<v Speaker 14>like Silvana ten Rairo saying to be a hawk right

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<v Speaker 14>now is like being a fool in the shower.

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<v Speaker 2>Time out to take a look at some of the

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<v Speaker 2>other stories making news in New York and around the

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<v Speaker 2>world with Bloomberg's Michael By.

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<v Speaker 3>Good Morning, Michael, Good morning, Nathan. New York Mayor Eric

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<v Speaker 3>Adams is calling for more mental health services following the

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<v Speaker 3>chokehold death of a homeless man on a city subway train.

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<v Speaker 3>Authority s Jordan Neely had a history of mental illness

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<v Speaker 3>before he was choked to death allegedly by a Marine veteran.

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<v Speaker 3>Daniel Penny says Neely was acting aggressively in the subway car.

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<v Speaker 15>Mayor Adams Jordan Neely did not deserve to die, and

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<v Speaker 15>all of us must work together to do more for

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<v Speaker 15>brothers and sisters struggling with serious mental illness.

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<v Speaker 3>Mayor Adams says the circumstances surrounding Neely's death are still

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<v Speaker 3>being investigated. California Democratic Senator Dianne Feinstein appeared on the

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<v Speaker 3>Senate floor and voted on measures. The oldest serving US

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<v Speaker 3>senator returned to the Capitol in a wheelchair as she

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<v Speaker 3>continues to recover from shingles. Her absence has been a

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<v Speaker 3>problem for Democrats who need her votes on the Judiciary

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<v Speaker 3>Committee to confirm judicial nominees. Peru's government will allow the

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<v Speaker 3>extradition to the US of the prime suspect in the

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<v Speaker 3>unsolved two thousand and five disappearance of American student Natalie

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<v Speaker 3>Holloway to Aruba. Dutch citizen Jordan van der Slut wi

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<v Speaker 3>a faced trial for alleged extortion and wire fraud charges

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<v Speaker 3>stemming from the Holloway case. Van der Slute is currently

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<v Speaker 3>serving a twenty eight year sentence in Peru for the

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<v Speaker 3>murder of a young Peruvian woman. It is a growing

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<v Speaker 3>problem for hospitals namesationwide cyber attacks. Experts say the number

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<v Speaker 3>of attacks has doubled since twenty sixteen and is driving

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<v Speaker 3>up the cost of medical care. For twenty eight days,

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<v Speaker 3>the University of Vermont Medical Center was on the business

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<v Speaker 3>end of a ransomware attack in twenty twenty. Doctor Stephen Leffler,

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<v Speaker 3>president of UVM Medical Center.

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<v Speaker 16>We've had three years of COVID. This was much harder

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<v Speaker 16>by a factor of ten. There were people that were

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<v Speaker 16>scheduled for staging cancer operations, and we had to make

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<v Speaker 16>a decision should we do it? And we did them

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<v Speaker 16>when it was appropriate. Some we're able to delay.

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<v Speaker 3>Doctor Leffler says. Thirteen hundred hospital servers and five thousand

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<v Speaker 3>computers had to be wiped. A job so big, Vermont's

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<v Speaker 3>governor called in the National Guard. She played Bobby Spencer

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<v Speaker 3>on the longtime ABC soap General Hospital.

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<v Speaker 17>I have a younger.

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<v Speaker 10>I tossed a picture of Margaret Ritis all over you.

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<v Speaker 3>Jackie Zeman has died at age seventy. Global News twenty

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<v Speaker 3>four hours a day, powered by more than twenty seven

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<v Speaker 3>hundred journalist nailists in over one hundred and twenty countries.

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<v Speaker 3>I'm Michael Barr. This is Bloomberg ninth.

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<v Speaker 2>Thanks Michael. Time now for the Bloomberg Sports update with

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<v Speaker 2>John Stanshaller.

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<v Speaker 4>All right, Nathan long way to go to come back

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<v Speaker 4>and win the series, but the Knicks and their fans

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<v Speaker 4>did not want to see the season end on the

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<v Speaker 4>garden floor. In Game five didn't look great early they

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<v Speaker 4>heat went up by ten. Then a good Nick finish

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<v Speaker 4>the first half.

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<v Speaker 11>Seconds Randal pushing, crowd rising feats fire's the three knocks

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<v Speaker 11>it down with point six to go cash out. The

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<v Speaker 11>file drives the lay play up with the bust or dish,

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<v Speaker 11>and that's.

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<v Speaker 4>Gonna do it.

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<v Speaker 2>The first half of the.

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<v Speaker 11>Books ending with a randall three Knicks by three at

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<v Speaker 11>fifty to forty seven, took Game five.

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<v Speaker 3>On ESPN New York.

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<v Speaker 4>Knicks then had an eighteen to two run third quarter,

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<v Speaker 4>went up by nineteen. Sure enough, Miami rallied cut it

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<v Speaker 4>down to two. Nicks held on one thirteen, one oh

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<v Speaker 4>two Jalen Bruns and carried them, played all forty eight minutes,

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<v Speaker 4>scored thirty eight points, and the Knicks lived to play

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<v Speaker 4>another day Tomorrow night. Game six in Miami. Golden State

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<v Speaker 4>did the same same thing one Game five at home,

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<v Speaker 4>now needing two more Team six with the Lakers tomorrow

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<v Speaker 4>in LA Sixers and Nuggets own three two leagus pair

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<v Speaker 4>of Game six is tonight. The NBA has iired retired

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<v Speaker 4>legendary Duke coach Mike Skiesheski is a special advisor for operations.

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<v Speaker 4>The Heat not the only eight seed from South Florida

0:10:17.080 --> 0:10:19.120
<v Speaker 4>that was last night trying to advance to the conference final.

0:10:19.160 --> 0:10:22.280
<v Speaker 4>The Panthers had lost in April twenty third. Going for

0:10:22.280 --> 0:10:25.040
<v Speaker 4>a sweep, Toronto stayed alive, winning two to one. Edmonton

0:10:25.080 --> 0:10:28.920
<v Speaker 4>beat Vegas. The Devils faced elimination tonight, GEAM five at Carolina.

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<v Speaker 4>Justin Verlanders first win as a met two to one

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<v Speaker 4>at Cincinnati, the Yankees first series sweep, eleven three rout

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<v Speaker 4>of lowly open Tonight at the Stadium, the start of

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<v Speaker 4>a big four game series with Tampa Bay. The Giants

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<v Speaker 4>learned their game at Philadelphia. We'll be on Christmas and

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<v Speaker 4>the Jets will host Miami on Black Friday. John Stashow

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<v Speaker 4>at Bloomberg.

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<v Speaker 6>Sports Live from coast to coast, from New York to

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<v Speaker 6>San Francisco, Boston to Washington, d C. Nationwide on SiriusXM,

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<v Speaker 6>the Bloomberg Business app in Bloomberg dot Com. This is

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<v Speaker 6>Bloomberg Daybreak. Good morning, I'm Nathan Hager. The fight over

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<v Speaker 6>the debt ceiling in the US is now getting international attention.

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<v Speaker 6>Pressure is building on the White House in Congress to

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<v Speaker 6>come to an agreement. Treasury Secretary Janet Yellen is in Japan,

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<v Speaker 6>warning a default on US obligations would be unthinkable.

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<v Speaker 7>America should never default. It would be tremendously economically and

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<v Speaker 7>financially damaging.

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<v Speaker 2>Secretary Yellen spoke ahead of the G seven Finance minister

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<v Speaker 2>summit in Japan. Let's bring in Julie Norman once again

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<v Speaker 2>for more on the debt ceiling. FY Julie's co director

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<v Speaker 2>of the Center on US Politics at University College London.

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<v Speaker 2>Good morning, Julie. The Treasury Secretary is saying that if

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<v Speaker 2>the US does flirt with default, it would undermine America's

0:11:50.320 --> 0:11:55.679
<v Speaker 2>international standing effect national security. Does that add any further

0:11:55.760 --> 0:11:59.760
<v Speaker 2>pressure on lawmakers back in Washington?

0:12:00.679 --> 0:12:03.079
<v Speaker 17>Good morning, Nathan. I wish I could say that yes

0:12:03.160 --> 0:12:06.440
<v Speaker 17>it would, But honestly, you know, Yellen's statements, as important

0:12:06.480 --> 0:12:09.040
<v Speaker 17>as they are, are things that are hopefully well known

0:12:09.080 --> 0:12:12.120
<v Speaker 17>to everyone involved in this debate already, that the states

0:12:12.120 --> 0:12:15.120
<v Speaker 17>of this are extremely high, not only for the United States,

0:12:15.120 --> 0:12:19.160
<v Speaker 17>but indeed for the world's economy, for the US's sense

0:12:19.200 --> 0:12:21.840
<v Speaker 17>of leadership within that, and for global market. So I

0:12:21.840 --> 0:12:24.320
<v Speaker 17>don't think she's saying anything that's a surprise to anyone.

0:12:24.480 --> 0:12:26.800
<v Speaker 17>It is important that she is saying this at the

0:12:26.880 --> 0:12:29.280
<v Speaker 17>G seven, But what's really going to matter is what

0:12:29.400 --> 0:12:31.920
<v Speaker 17>is hashed out in Washington, and unfortunately we're still not

0:12:31.960 --> 0:12:33.280
<v Speaker 17>seeing much more movement there.

0:12:33.800 --> 0:12:37.000
<v Speaker 2>Are you surprised that the Treasury Secretary is not in

0:12:37.200 --> 0:12:40.280
<v Speaker 2>Washington right now when we are about three weeks from

0:12:40.480 --> 0:12:42.640
<v Speaker 2>the x state that she set.

0:12:43.360 --> 0:12:45.760
<v Speaker 17>Well, I mean the Jisuban Finance meeting I think is

0:12:45.800 --> 0:12:49.000
<v Speaker 17>important as well, and you know it's it's again a

0:12:49.040 --> 0:12:52.600
<v Speaker 17>place where US leadership on economic issues is central, and

0:12:52.640 --> 0:12:54.319
<v Speaker 17>so it's important for her to be there, I think

0:12:54.400 --> 0:12:57.880
<v Speaker 17>as well. And look, Yellen, I think was sounding the

0:12:57.880 --> 0:13:00.400
<v Speaker 17>alarmed bell was about this, you know, months and day advance.

0:13:00.480 --> 0:13:03.920
<v Speaker 17>She has been a very vocal advocate for trying to

0:13:03.960 --> 0:13:06.600
<v Speaker 17>get this worked out from the very beginning. So whether

0:13:06.679 --> 0:13:09.440
<v Speaker 17>she's making comments you know, from Asia or in the

0:13:09.520 --> 0:13:11.080
<v Speaker 17>US right now, I don't think it's going to make

0:13:11.160 --> 0:13:13.840
<v Speaker 17>or break the issue. But the important thing is that

0:13:13.880 --> 0:13:16.280
<v Speaker 17>she's weighing in and she has been doing that consistently.

0:13:16.679 --> 0:13:19.120
<v Speaker 2>And now we're hearing former President Donald Trump way in

0:13:19.160 --> 0:13:22.439
<v Speaker 2>as well the CNN town hall last night saying Republicans

0:13:22.440 --> 0:13:25.600
<v Speaker 2>should go for default if they don't get deep spending cuts.

0:13:25.600 --> 0:13:27.280
<v Speaker 2>What does that add to this.

0:13:27.240 --> 0:13:30.640
<v Speaker 17>Julie, Yeah, Well, unfortunately, I think it does give a

0:13:30.720 --> 0:13:35.200
<v Speaker 17>bit more cover to representatives in the House who want

0:13:35.240 --> 0:13:37.720
<v Speaker 17>to just double down on this. It makes it a

0:13:37.720 --> 0:13:40.920
<v Speaker 17>bit harder, I think for McCarthy to, even if he

0:13:41.000 --> 0:13:43.800
<v Speaker 17>was able to negotiate some kind of agreement with Biden,

0:13:43.840 --> 0:13:46.160
<v Speaker 17>which is very very far down the road, the idea

0:13:46.200 --> 0:13:48.520
<v Speaker 17>that he could get everyone in his caucus on board.

0:13:48.520 --> 0:13:50.760
<v Speaker 17>With Trump saying things like this, it just makes it

0:13:50.800 --> 0:13:53.960
<v Speaker 17>that much harder. So I do think it muddies things

0:13:53.960 --> 0:13:56.800
<v Speaker 17>even further when Trump is weighing in, and you know,

0:13:56.840 --> 0:13:59.440
<v Speaker 17>it rallies base members who may not have been following

0:13:59.440 --> 0:14:02.480
<v Speaker 17>this issue before. But when Trump starts saying things, people

0:14:02.480 --> 0:14:05.520
<v Speaker 17>often pay attention and start pressuring that way.

0:14:05.960 --> 0:14:08.800
<v Speaker 2>Does it get the attention of the people that we're

0:14:08.840 --> 0:14:12.240
<v Speaker 2>told are negotiating behind the scenes at the staff level

0:14:12.320 --> 0:14:15.359
<v Speaker 2>to try to come to some kind of middle ground.

0:14:16.480 --> 0:14:18.560
<v Speaker 17>To a point, honestly, I think those who are at

0:14:18.600 --> 0:14:21.360
<v Speaker 17>the staff level actually do want to get some kind

0:14:21.360 --> 0:14:23.280
<v Speaker 17>of deal through. They are very aware of what the

0:14:23.320 --> 0:14:26.680
<v Speaker 17>stakes are, and I do think the four congressional leaders

0:14:26.680 --> 0:14:28.960
<v Speaker 17>and Biden who are meeting are all very well aware,

0:14:29.000 --> 0:14:31.920
<v Speaker 17>but they're all very well aware of the politics around them. Also,

0:14:32.240 --> 0:14:35.400
<v Speaker 17>I think Biden has learned and perhaps overlearned the lessons

0:14:35.440 --> 0:14:38.840
<v Speaker 17>from the twenty eleven negotiations and is a bit wary

0:14:39.000 --> 0:14:43.520
<v Speaker 17>of negotiating with House seeker who just doesn't think has

0:14:43.600 --> 0:14:46.160
<v Speaker 17>the leverage to push through any kind of negotiated settlement.

0:14:46.200 --> 0:14:48.280
<v Speaker 17>They don't want to eat big spending cuts like the

0:14:48.280 --> 0:14:51.200
<v Speaker 17>Obama administration did. But at the same time, I think

0:14:51.240 --> 0:14:54.280
<v Speaker 17>Biden has also taking political hit by looking like he's

0:14:54.280 --> 0:14:57.160
<v Speaker 17>not negotiating good faith or being willing to have even

0:14:57.160 --> 0:14:58.320
<v Speaker 17>a bipartisan conversation.

0:14:59.000 --> 0:15:01.360
<v Speaker 2>And this all sets u us up for the second

0:15:01.480 --> 0:15:04.400
<v Speaker 2>round of talks coming up tomorrow. Do you think there's

0:15:04.480 --> 0:15:07.320
<v Speaker 2>going to be any further progress to come out of

0:15:07.360 --> 0:15:10.200
<v Speaker 2>the latest discussions? So you got about a minute left here.

0:15:10.760 --> 0:15:12.640
<v Speaker 17>Yeah, I wish I could say yes, My sense of

0:15:12.680 --> 0:15:14.320
<v Speaker 17>this is still going to be a little bit more

0:15:14.400 --> 0:15:16.680
<v Speaker 17>drawn out than that. I think the most we can

0:15:16.720 --> 0:15:20.400
<v Speaker 17>hope for is some kind of mini agreements with that

0:15:20.440 --> 0:15:23.880
<v Speaker 17>would allow for an extension for more extended negotiations to

0:15:24.000 --> 0:15:26.440
<v Speaker 17>go on. What I think we see Biden and Democrats

0:15:26.560 --> 0:15:28.800
<v Speaker 17>doing now is trying to see if they can get

0:15:28.840 --> 0:15:31.840
<v Speaker 17>some modern Republicans in the House would maybe vote along

0:15:31.880 --> 0:15:33.640
<v Speaker 17>with a Democrat bill that would be more of a

0:15:33.680 --> 0:15:36.160
<v Speaker 17>clean lift, and they seem to still want to see

0:15:36.160 --> 0:15:38.800
<v Speaker 17>where they can get there before they make too many concessions.

0:15:38.840 --> 0:15:41.480
<v Speaker 17>So again important is always that they're meeting the sense

0:15:41.520 --> 0:15:44.080
<v Speaker 17>of a breakthrough. I don't see it happening tomorrow, but

0:15:44.360 --> 0:15:46.080
<v Speaker 17>we'll see what they say.

0:15:47.000 --> 0:15:49.920
<v Speaker 2>This is Bloomberg day Break Today, your morning brief on

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