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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg DAYBAC podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Thursday, the fifteenth of

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Speaker 2: February in London. I'm Caroline Hepka.

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Speaker 3: And I'm Stephen Carroll. Coming up today, Israel quits cease

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Speaker 3: fire negotiations as fears grow about its new Gaza offensive.

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Speaker 2: Vladimir Putin says Joe Biden would be a better US

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Speaker 2: president for Russia.

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Speaker 3: Plus why a shortage of dollars is driving international companies

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Speaker 3: out of Africa's largest economy.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 3: Israel's Prime Minister Benjamin Ettania, who has broken off Gaza

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Speaker 3: ceasefire talks, calling Hamasa's demands delusional. The Iran backed group

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Speaker 3: wants the total withdrawal of Israeli troops from Gaza before

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Speaker 3: it releases hostages. It comes as key allies urge Israel

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Speaker 3: not to go ahead with the planned offensive and the

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Speaker 3: southern part of this trip with more than a million

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Speaker 3: Palestinians sheltering in Rafa. Canadian Prime Minister Justin Trudeau is

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Speaker 3: one of the leaders who's calling on Israel not to

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Speaker 3: go further.

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Speaker 4: The situation right now in Gaza and in the Middle

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Speaker 4: East in general is dire, and the extra pressures of

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Speaker 4: the threats to more action on RAFA has everyone deeply worried.

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Speaker 4: We need to see stabilization in the region peace and

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Speaker 4: we need to work on the two state solution. That

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Speaker 4: is the only way to ensure durable peace and safety.

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Speaker 3: Despite Trudeau's words, Natagnya, who had initially refused to send

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Speaker 3: an Israeli delegation to the talks at all, but eventually

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Speaker 3: agreed to do so following pressure from US President Joe Biden.

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Speaker 2: Vladimir Putin says that Joe Biden would be a more experienced,

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Speaker 2: predictable leader than Donald Trump. Here is the Russian president

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Speaker 2: speaking to state television about who would be the better

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Speaker 2: US president for Russia. We've added a translator.

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Speaker 5: Biden.

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Speaker 6: He is the more experienced person, He is predictable, he

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Speaker 6: is a politician.

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Speaker 5: Of the old formation.

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Speaker 6: Or we will work with any US leader with the

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Speaker 6: American people have confidence in.

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Speaker 2: Back in twenty sixteen, Putin publicly praised the other front runner,

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Speaker 2: Donald Trump. The former president is now campaigning to turn

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Speaker 2: military aid to Ukraine into a loan and scale back

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Speaker 2: America's NATO commitments.

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Speaker 4: One of the heads of the country set up and said,

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Speaker 4: does that mean that if we don't pay the bills

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Speaker 4: then you're not going to protect us. I said, that's

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Speaker 4: exactly what it means, exactly, I'm not going to protect you.

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Speaker 2: Trump's comments have rattled leaders in NATO. European defense companies

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Speaker 2: shares rose yesterday after the Military Alliance said that a

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Speaker 2: record eighteen out of the organization's thirty one members would

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Speaker 2: meet their goal of spending two percent on two percent

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Speaker 2: of GDP on defense.

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Speaker 3: Unexpectedly slipped into recession last year after GDP contracted an

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Speaker 3: annualized rate of zero point four percent in the fourth quarter.

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Speaker 3: The weaker than expected figures will complicate the Bank of

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Speaker 3: Japan's case for the first rate hike there since two

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Speaker 3: thousand and seven. Only one out of thirty four economists

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Speaker 3: surveyed by Bloomberg had expected a contraction in the quarter.

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Speaker 3: It also means that Germany now overtakes Japan to become

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Speaker 3: the world's third largest economy.

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Speaker 2: Andrew Bailey says that weaker than expected January inflation leaves

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Speaker 2: the Bank of England where it was in relation to inflation. However,

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Speaker 2: the central bank chief did also say that recent figures

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Speaker 2: were welcome.

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Speaker 5: The reason that we were expecting a small tickup and

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Speaker 5: inflation this month was because of these cycled annual base effects,

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Speaker 5: which are in the sort of arithmetic because they're basically

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Speaker 5: a sort of mitro image of what went on a

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Speaker 5: year ago, so they were there. I mean, nothing's changed

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Speaker 5: on this, they're in the arithmetic. So what it means

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Speaker 5: is that there were some more other things going on

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Speaker 5: which were putting more down downward pressure on it than

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Speaker 5: we expected, so that's good news.

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Speaker 2: Bailey added that January's positive data is offset by an

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Speaker 2: upside inflation surprise. In December, he told the House of

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Speaker 2: Lord's Economic Affairs Committee that caution is needed as services

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Speaker 2: inflation in the UK and pay growth are still too high.

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Speaker 3: Airbus has reported adjusted EBIT for the fourth quarter that

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Speaker 3: missed the average analyst estimate. The European aerospace giant is

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Speaker 3: also planning a one euro per share special dividend and

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Speaker 3: additional to the regular one euro eighty share did per

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Speaker 3: share dividend. The manufacturer, which has grappled with supply chain

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Speaker 3: challenges as it expects twenty twenty four deliveries of about

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Speaker 3: eight hundred planes versus an estimate of eight hundred and

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Speaker 3: twenty six.

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Speaker 2: And lastly, at least one person has been killed and

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Speaker 2: more than twenty others wounded after a shooting at a

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Speaker 2: parade in Kansas City celebrating the winners of the US

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Speaker 2: Super Bowl. Thousands of people were on the streets of

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Speaker 2: the city at the top time, and the injured included children.

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Speaker 2: Three people, including two who were armed, have been detained.

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Speaker 2: Quintin Lucas, the mayor of Kansas City, paid tribute to

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Speaker 2: the emergency services.

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Speaker 6: As I was leaving the scene, I saw members of

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Speaker 6: our Kansas City Fire Department administering aid to folks who

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Speaker 6: are seriously injured, without concern for the shootings and the

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Speaker 6: challenges that were near them. This is absolutely a tragedy

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Speaker 6: the likes of which we would have never expected in

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Speaker 6: Kansas City.

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Speaker 2: That was the Kansas City Mayor, Quintin Lucas. President Biden

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Speaker 2: has called for a ban on assault weapons following the shooting.

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Speaker 2: In a moment, we'll be discussing the big issues facing

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Speaker 2: NATO at their meeting today, plus why a shortage of

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Speaker 2: foreign currency is driving international companies out of Nigeria. But

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Speaker 2: another story has caught our eye this morning, and it's

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Speaker 2: all about Kathy Woods.

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Speaker 3: I remember opinion columist Julia Ronn has been writing about Would,

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Speaker 3: saying that her RKTF has topped a chart of wealth

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Speaker 3: destruction after wiping out more than fourteen billion dollars in

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Speaker 3: shareholder value in the past decade. But sheeley Ren writes

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Speaker 3: investors are largely sticking with her, and that is because

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Speaker 3: Kathy Wood is a good storyteller. Now, she did get

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Speaker 3: it right with her bet on Tasla in twenty eighteen.

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Speaker 3: She's tried to sell her reasoning for missing the rally

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Speaker 3: in Nvidia, for example, in between but even massive losses,

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Speaker 3: chelyy Ren writes can be turned into a positive spin.

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Speaker 3: At ARC, Kathy were talking about the tax advantages of

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Speaker 3: having that those losses on their books, So this is

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Speaker 3: something that she ran in this piece. Is writing about

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Speaker 3: having a good track record as any part of the

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Speaker 3: picture when investors are picking who to manage their money.

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Speaker 3: Past returns aren't an indication of future performance. So sometimes

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Speaker 3: a good fundraiser doesn't even need to be a great

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Speaker 3: asset manager. Chey Reren says, you can just be more interesting.

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Speaker 2: Yes, But that's the thing, isn't it. When you buy

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Speaker 2: into a star investor. I suppose you're buying into the

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Speaker 2: possibility that their hunch is going to deliver really outsized returns,

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Speaker 2: you know. So it's not sort of yeah, like buying

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Speaker 2: another track of fund I suppose. But look, it's a

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Speaker 2: really good piece and shitd he read right so beautifully

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Speaker 2: and interestingly, so have a read of it on the

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Speaker 2: Bloomberg terminal.

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Speaker 3: The Nature Defense Minister is a meeting in Brussels today

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Speaker 3: to discuss the security challenges facing the Alliance. This is

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Speaker 3: former US president and current Republican front runner Donald Trump,

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Speaker 3: has raised questions over transatlantic cooperation on defense. Our news

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Speaker 3: director for EMA, Rosla Mathison, joins US now for more.

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Speaker 3: Good morning to you, Raz and of course security challenge

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Speaker 3: is very much in focus today, but I wanted to

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Speaker 3: start with the events in the Middle East that we've

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Speaker 3: been following and Israel pulling out of these negotiations over

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Speaker 3: a cease fire. How significant is this?

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Speaker 1: Well, it's interesting to see the comment yesterday by the

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Speaker 1: Israeli official saying they no longer want to take part

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Speaker 1: in these meetings have been happening in Egypt. Of course

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Speaker 1: Egypt and had been working to facilitate the flow of

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Speaker 1: information between Israel and Hamas and trying to get both

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Speaker 1: sides towards a cease fire that could see the war

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Speaker 1: in Gaza come to a close. And Israel now says

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Speaker 1: it does not intend had to continue with those talks.

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Speaker 1: It says that Hamas is not negotiating in good faith.

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Speaker 1: But the big takeaway from that really is that the

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Speaker 1: Israeli Prime Minister Benjamin n who is determined to go

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Speaker 1: ahead at some point in the near future with a

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Speaker 1: full ground offensive into Rougher and of course that's that

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Speaker 1: very narrow part of the southern part of the Gaza

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Speaker 1: strip that borders Egypt, where there are estimates of over

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Speaker 1: a million people currently bunched up that he intends to

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Speaker 1: go when they're fairly soon either way, because these seas

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Speaker 1: by talks are now off the table.

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Speaker 2: This then on the latest when it comes to Israel.

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Speaker 2: But also we have and this will be in the

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Speaker 2: mind surely of NATO leaders too, because it's not just

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Speaker 2: the situation the Middleast that is so difficult intensive, but

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Speaker 2: also what's happening in Ukraine. You know, the boldness of

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Speaker 2: Vladimir Putin, as we mentioned, this morning's weighed in on

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Speaker 2: the US presidency, even the prospect of Trump returning, unsettling

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Speaker 2: NATO allies, and this big question can Europe defend itself?

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Speaker 1: Well, that's right, you can see all these threads are

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Speaker 1: coming into one at this meeting of NATO Defense Minister's

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Speaker 1: a lot of fundamental questions really for NATO to look at.

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Speaker 1: But again it's the unknown factor of who will be

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Speaker 1: president after the end of this year. Will it be

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Speaker 1: Donald Trump, who's threatened yet again to withdraw funding for NATO,

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Speaker 1: to pull the US out of the collective defense understandings

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Speaker 1: that really underpinned NATO for many decades, And will he

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Speaker 1: try and negotiate a quick deal as far as he

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Speaker 1: sees fit, at least to n Russia's war in Ukraine.

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Speaker 1: Those ends are hanging in the ether as the ministers meet.

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Speaker 1: But there's also the question, you know, of what blode

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Speaker 1: me putin himself once. Does he want to negotiate an

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Speaker 1: end to the war in Ukraine? Does he feel that

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Speaker 1: he's going to achieve his goals on the ground if

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Speaker 1: he continues with that conflict? Is he interested in coming

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Speaker 1: to the table and if so, when so. There's a

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Speaker 1: lot of things we don't know about all of that,

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Speaker 1: including the current intentions of the Russian president. Of course,

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Speaker 1: he's going into election fairly soon that he's widely expected

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Speaker 1: to win, so looking at another term at least for

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Speaker 1: Vladimir Putin. So will he be dealing with Donald Trump

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Speaker 1: or will he be dealing with Joe Biden.

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Speaker 3: One of the questions that Donald Trump ray's recently relevant

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Speaker 3: to NATO was around defense spending, and we learned that

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Speaker 3: now eighteen of the thirty one NATO members are spending

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Speaker 3: two percent of GDP on defense. How big an issue

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Speaker 3: is spending at this NATO.

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Speaker 1: Meeting, Well, we're seeing efforts to increase defense spending across

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Speaker 1: the board. Of course, for decades, NATO members didn't really

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Speaker 1: spend a lot on their defense in Europe. They just

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Speaker 1: didn't see it as a prior. They focused on other

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Speaker 1: areas of their economies, and so it was a pretty

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Speaker 1: hard start to pick up some of the spending after

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Speaker 1: Russia's invasions of Ukraine. But some countries have definitely done it.

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Speaker 1: There's been an increase in spending in indeftment in their

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Speaker 1: domestic defense business. They want to be able to produce

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Speaker 1: weapons at a much faster rate than previously. But as

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Speaker 1: you say, if eighteen out of thirty one a meeting

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Speaker 1: that goal, but plenty of others aren't, that really does

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Speaker 1: show that there's a long way to go, and certainly

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Speaker 1: that does open the way again to Donald Trump to

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Speaker 1: continue to attack NATO as a whole.

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Speaker 2: Well, so thank you so much for being with us

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Speaker 2: this morning. That is Bloomberg's news director for EMEA, Roslyn Matheson,

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Speaker 2: as Native defense ministers meet in Brussels later today.

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Speaker 3: Let's go to Nigeria next, where a sustained slump in

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Speaker 3: the value of the currencies among the factors driving global

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Speaker 3: businesses out of Africa's largest economy, and Nigeria Bureau Chief

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Speaker 3: Anthony I. Say Brown joins us now for more. Anthony,

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Speaker 3: good morning to you. Why is Nigeria having a dollar crisis?

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Speaker 7: Nigeria has had a number of policy misteps in the

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Speaker 7: last eight years and that has been compounded by low

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Speaker 7: oil production. And that's the main sport for Nigeria. Its

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Speaker 7: accounts for about eighty percent of foreign foreigners change income.

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Speaker 7: But the country has not been able to meet its

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Speaker 7: upper content in the last two years, So tollers have

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Speaker 7: backcoming and that has led to a scarcity which has

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Speaker 7: affected companies.

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Speaker 2: So then how has it affected individuals and companies?

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Speaker 7: Yeah, so for most individuals, if you were, most bands

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Speaker 7: have activated the use of nayrakas outside the country. That

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Speaker 7: basically means if you have to travel outside the country,

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Speaker 7: you need to source your own dollars. And then for companies,

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Speaker 7: most of them are able to pay for inputs because

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Speaker 7: they don't have the dollars. The central bank can give

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Speaker 7: them enough dollars to pay company pay there for their inputs.

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Speaker 7: And then also most significantly, they can pay for a

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Speaker 7: lot of their they can't pay repay foreign loans. They

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Speaker 7: can also repatriate profits and that has really impacted on them.

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Speaker 3: Why are the problems so severe that the companies are

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Speaker 3: actually choosing to leave the country. Then what sort of

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Speaker 3: scale are we talking about?

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Speaker 7: Yeah, the scale is heavy. As at early this year,

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Speaker 7: we're talking of backlog of dollars that they overdue payments

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Speaker 7: as high as ten billion dollars. So if you can

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Speaker 7: repay inputs, if as a company you can't pay for

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Speaker 7: your imputs and you can repatriate profits and you can't

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Speaker 7: what it called repay foreign loans. And then besides that,

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Speaker 7: because there's no enough dollars, the local currency has depreciated

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Speaker 7: so much, eroding local purchasing power. So even those that

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Speaker 7: you can the amount of goods you can produce locally,

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Speaker 7: you find it difficult to sell. So the macroeconomic environment

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Speaker 7: just became too difficult for most of them. The combination

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Speaker 7: of issues became just too difficult for them, and so

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Speaker 7: most of them decided to just repack their backs and leave.

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Speaker 2: So then what was the government doing to try to

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Speaker 2: resolve this issue?

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Speaker 7: Yeah, so we had the new president May last year

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Speaker 7: and it just basically abandoned a lot of these practices

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Speaker 7: that the previous government has introduced. We turned off a

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Speaker 7: lot of investors and that has sort of has he

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Speaker 7: has librarized the market foreigners changes trying to push for

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Speaker 7: a completely floating, floated currency now and that has attracted

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Speaker 7: a lot of interest from foreign investors. And so there's

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Speaker 7: hope that some of the foreign investors that turned off

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Speaker 7: were turned off Nigeria market Nigeria the Nigeria market to

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Speaker 7: start looking at the market again.

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Speaker 3: What is the expectation or is there an expectation that

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Speaker 3: the country is foreign exchange issues could be resolved soon.

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Speaker 7: Yes, there's there's there's some rising expectation, but then that

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Speaker 7: depends on but that expectation is based on the governments

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Speaker 7: remaining consistent on the current and the reforms which is

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Speaker 7: started May last year and which has gone on for

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Speaker 7: some time now, so which has intensified in the last

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Speaker 7: three weeks. So there's an expectation rising expectation that if

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Speaker 7: the government sticks to it, then the dollars cassidy people

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Speaker 7: will start bringing in dollars back into the country. The

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Speaker 7: Central Bank governors said two weeks no a week ago,

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Speaker 7: that's last week, that up to one billion dollars flown

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Speaker 7: has been brought back into the country in the last

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Speaker 7: one week or two weeks because of those reforms. So

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Speaker 7: there's hope that if they stick to the reforms and

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Speaker 7: not I don't succumb to prejudice to go back to

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Speaker 7: day on a total straties like festubsidies nayrapeg that's drove

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Speaker 7: their way investors, then possibly dollars we'll start coming into

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Speaker 7: the country again.

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