1 00:00:00,840 --> 00:00:04,000 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:05,240 Speaker 1: my co host Matt Miller. 3 00:00:05,640 --> 00:00:09,720 Speaker 2: Every business day we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:13,640 Speaker 2: and Bloomberg experts, along with essential market moving news. 5 00:00:14,160 --> 00:00:17,279 Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 6 00:00:17,400 --> 00:00:20,520 Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast. 7 00:00:20,920 --> 00:00:23,000 Speaker 1: Right now, we want to get to the ground in 8 00:00:23,360 --> 00:00:29,200 Speaker 1: Tel Aviv. We're joined by Galit Alstein. She is the 9 00:00:29,240 --> 00:00:34,400 Speaker 1: economic and government reporter with Bloomberg News based in Tel Aviv. Galit, 10 00:00:34,440 --> 00:00:35,800 Speaker 1: thanks so much for joining us. I know this is 11 00:00:35,760 --> 00:00:39,879 Speaker 1: an incredibly difficult time for everyone in that part of 12 00:00:39,960 --> 00:00:42,040 Speaker 1: the world. What can you tell us about the latest 13 00:00:42,040 --> 00:00:43,479 Speaker 1: reporting on the ground. 14 00:00:45,440 --> 00:00:50,440 Speaker 3: So basically we're looking at a couple of things here 15 00:00:50,880 --> 00:00:53,519 Speaker 3: on the southern front of Israel, which is in the 16 00:00:53,520 --> 00:00:58,160 Speaker 3: Gaza vicinity. Until this morning at least, there were still 17 00:00:58,200 --> 00:01:03,800 Speaker 3: infiltrations of AMAS militant attackers who went to managed to 18 00:01:03,840 --> 00:01:06,240 Speaker 3: come through the fence. This was on a much lower 19 00:01:06,240 --> 00:01:09,880 Speaker 3: scale than it obviously was on Saturday when they came by, 20 00:01:10,520 --> 00:01:13,399 Speaker 3: as it turns out, by the hundreds. By the way, 21 00:01:13,440 --> 00:01:19,280 Speaker 3: the ideas is talking about one thousand hamas attackers who 22 00:01:19,319 --> 00:01:22,360 Speaker 3: came who broke the fence and just went into Israel 23 00:01:22,400 --> 00:01:25,440 Speaker 3: on Saturday morning. So what I started saying is that 24 00:01:25,600 --> 00:01:30,000 Speaker 3: until this morning, we were still seeing infiltrations on a 25 00:01:30,080 --> 00:01:33,800 Speaker 3: much smaller scale, and there were still combat arenas in 26 00:01:33,840 --> 00:01:37,240 Speaker 3: the south of Israel, with defense forces trying to get 27 00:01:37,280 --> 00:01:41,839 Speaker 3: hold of Israelis, Israeli communities and settlements in the south 28 00:01:41,880 --> 00:01:45,559 Speaker 3: of Israel and trying to sort of, you know, clean 29 00:01:45,640 --> 00:01:50,360 Speaker 3: them of potential you know, attackers there and at the 30 00:01:50,400 --> 00:01:53,720 Speaker 3: same time trying to evacuate a lot of the not 31 00:01:53,840 --> 00:01:57,400 Speaker 3: a lot of actually most of the settlements, Israeli settlements 32 00:01:57,400 --> 00:02:01,360 Speaker 3: and communities were just by the Gaza fence, about twenty 33 00:02:01,400 --> 00:02:03,160 Speaker 3: four of them, I think, and I think that so 34 00:02:03,280 --> 00:02:06,920 Speaker 3: far fifteen have been evacuated and they're still working on 35 00:02:06,960 --> 00:02:10,560 Speaker 3: the rest. So that is what is going on on 36 00:02:10,600 --> 00:02:15,000 Speaker 3: the south of Israel later on today, and that is 37 00:02:15,080 --> 00:02:21,200 Speaker 3: basically under control at this time. In the North of Israel, 38 00:02:21,400 --> 00:02:25,880 Speaker 3: it has been relatively quiet until this afternoon. It is 39 00:02:25,919 --> 00:02:30,960 Speaker 3: still not not a very bad situation there, but we 40 00:02:31,040 --> 00:02:35,079 Speaker 3: have seen a bit of mortar fire fired from Lebanon, 41 00:02:35,240 --> 00:02:38,040 Speaker 3: and there were also there was also a very minor 42 00:02:38,200 --> 00:02:42,639 Speaker 3: infiltration and the idea DS. I'm just I'm looking at 43 00:02:42,639 --> 00:02:45,680 Speaker 3: my phone to be exact, and what they said. They 44 00:02:45,720 --> 00:02:48,880 Speaker 3: did put out a message about a couple of hours 45 00:02:48,919 --> 00:02:51,639 Speaker 3: ago that they had killed a number of armed suspects 46 00:02:51,680 --> 00:02:56,760 Speaker 3: that infiltrated into Israel from Lebanese territory. Isbela has denied 47 00:02:57,320 --> 00:03:00,920 Speaker 3: connection with this, which is important because you know, everyone 48 00:03:01,000 --> 00:03:04,120 Speaker 3: is also now looking at Frizabella to see if they 49 00:03:04,120 --> 00:03:07,920 Speaker 3: will join the attacks on Israel to form like a 50 00:03:08,000 --> 00:03:10,320 Speaker 3: sort of multifront arena. 51 00:03:11,080 --> 00:03:13,400 Speaker 2: Can I ask Matt Miller here in New York and 52 00:03:13,480 --> 00:03:16,840 Speaker 2: really appreciate you joining us, and I understand how difficult 53 00:03:16,880 --> 00:03:18,560 Speaker 2: it must be to report on this right now, But 54 00:03:19,480 --> 00:03:24,120 Speaker 2: what do we know about Israel's plans to go into Gaza? 55 00:03:24,360 --> 00:03:29,960 Speaker 2: And how are you know, uh, you know, civilians in 56 00:03:30,080 --> 00:03:32,440 Speaker 2: Gaza going to get out because of course they've got 57 00:03:32,440 --> 00:03:37,800 Speaker 2: borders on all sides and the ocean and the med 58 00:03:38,920 --> 00:03:41,880 Speaker 2: so it seems like they're stuck. How can they get 59 00:03:41,920 --> 00:03:44,480 Speaker 2: out if Israel's going to sweep in militarily. 60 00:03:45,520 --> 00:03:48,320 Speaker 3: Yeah, so this is a very good question because you know, Matt, 61 00:03:48,400 --> 00:03:52,720 Speaker 3: we've been hearing idea for officials who have been briefing 62 00:03:53,280 --> 00:03:58,720 Speaker 3: journalists about twice or more than that every day, and 63 00:03:58,880 --> 00:04:01,720 Speaker 3: just this morning of the idea of spokes on people 64 00:04:02,200 --> 00:04:06,440 Speaker 3: told us some journalists that they will be evacuating Gaza 65 00:04:06,840 --> 00:04:11,720 Speaker 3: when asked if Israel will actually be evacuating Gaza, because 66 00:04:11,800 --> 00:04:14,840 Speaker 3: Israel does not you know, does not control Gaza at 67 00:04:14,840 --> 00:04:18,360 Speaker 3: this time, so he said no, but we will recommend 68 00:04:18,440 --> 00:04:21,520 Speaker 3: they evacuate, you know, on their own. And this is 69 00:04:21,560 --> 00:04:24,839 Speaker 3: a very good question that has not been answered answered 70 00:04:24,880 --> 00:04:28,520 Speaker 3: yet and this is definitely something to keep pushing the 71 00:04:28,640 --> 00:04:32,240 Speaker 3: ideas to give answers on because the answer to that 72 00:04:32,440 --> 00:04:35,160 Speaker 3: is not clear. Although the idea is saying we will 73 00:04:35,520 --> 00:04:38,840 Speaker 3: want people to evacuate, we do not know how. We 74 00:04:39,240 --> 00:04:42,520 Speaker 3: do know that at this time the Gaza Strip has 75 00:04:42,560 --> 00:04:47,760 Speaker 3: been cut off from electricity of supply, water supply, fuel supply, 76 00:04:48,400 --> 00:04:52,960 Speaker 3: and other supplies as well because all passages have been 77 00:04:53,240 --> 00:04:56,120 Speaker 3: shut down. One of the main passages, by the way, 78 00:04:56,240 --> 00:05:00,160 Speaker 3: the Arrest passage, was one of the breach points through 79 00:05:00,160 --> 00:05:03,560 Speaker 3: which the attackers came through on Saturday, and Idea of 80 00:05:03,640 --> 00:05:06,880 Speaker 3: officials have been telling us on record, we're not in 81 00:05:06,920 --> 00:05:09,919 Speaker 3: a hurry, you know, to rebuild this passage because this 82 00:05:10,000 --> 00:05:11,039 Speaker 3: is what it was used for. 83 00:05:11,880 --> 00:05:15,200 Speaker 1: So what do we know about the hostages and maybe 84 00:05:15,240 --> 00:05:17,360 Speaker 1: any plans to get them back? 85 00:05:18,880 --> 00:05:22,799 Speaker 3: Yeah, So so you know, obviously, you know, all sides 86 00:05:22,800 --> 00:05:25,760 Speaker 3: are keeping their cards very very very close to their 87 00:05:25,839 --> 00:05:30,560 Speaker 3: chests at this point. There have been various reports today 88 00:05:31,680 --> 00:05:37,000 Speaker 3: about about some sort of negotiations going on, mainly negotiations 89 00:05:37,040 --> 00:05:41,360 Speaker 3: to free women and children who were taken hostage into 90 00:05:41,400 --> 00:05:46,200 Speaker 3: Gaza in turn for for women prisoners of Hamas that 91 00:05:46,240 --> 00:05:50,960 Speaker 3: are being held in Israel. An official Israeli source, high 92 00:05:51,040 --> 00:05:54,000 Speaker 3: ranking official Israeli source who asked not to be named, 93 00:05:54,320 --> 00:05:59,159 Speaker 3: but he had he has denied that explicitly, and I 94 00:05:59,200 --> 00:06:02,200 Speaker 3: think that Hama, although to be frank, I'm not sure 95 00:06:02,240 --> 00:06:05,039 Speaker 3: who in Hamas have also just over the past hour 96 00:06:05,120 --> 00:06:07,880 Speaker 3: deny that there's any negotiations going on. So it's nothing 97 00:06:08,000 --> 00:06:11,680 Speaker 3: very firm, you know, that is going on at this stage. 98 00:06:12,360 --> 00:06:14,520 Speaker 1: All right, Glit, thank you so much for joining us. 99 00:06:14,560 --> 00:06:16,760 Speaker 1: We know it's very very difficult time and we appreciate 100 00:06:16,800 --> 00:06:19,520 Speaker 1: getting some of your time in your reporting. Galitz Altstein 101 00:06:19,800 --> 00:06:23,800 Speaker 1: israel economy and government reporter with Bloomberg News based in 102 00:06:24,240 --> 00:06:26,360 Speaker 1: Tel Aviv. So we will continue to bring you the 103 00:06:26,400 --> 00:06:28,640 Speaker 1: latest reporting on this situation. 104 00:06:29,920 --> 00:06:33,320 Speaker 4: You're listening to the team can's our live program Bloomberg 105 00:06:33,360 --> 00:06:35,719 Speaker 4: Markets weekdays at ten am Eastern. 106 00:06:35,400 --> 00:06:38,479 Speaker 5: On Bloomberg dot Com, the iHeartRadio. 107 00:06:37,760 --> 00:06:40,520 Speaker 4: App and the Bloomberg Business App, or listen on demand 108 00:06:40,560 --> 00:06:42,120 Speaker 4: wherever you get your podcasts. 109 00:06:44,120 --> 00:06:47,480 Speaker 1: You want to continue to follow the story in Israel, 110 00:06:47,560 --> 00:06:51,960 Speaker 1: the war there with Hamas militants. Roz Mathieson joins us. 111 00:06:52,000 --> 00:06:55,640 Speaker 1: She's the news director for e m e A Europe, 112 00:06:55,680 --> 00:06:59,080 Speaker 1: Middle East and Africa for Bloomberg News based in I 113 00:06:59,120 --> 00:07:01,800 Speaker 1: think London. Roz, thanks so much for joining us. I 114 00:07:01,800 --> 00:07:04,200 Speaker 1: know it's a busy, busy time here. I guess one 115 00:07:04,240 --> 00:07:06,520 Speaker 1: of the questions over here that a lot of folks 116 00:07:06,520 --> 00:07:08,080 Speaker 1: are asking, I'm sure it's the same there is just 117 00:07:08,760 --> 00:07:12,280 Speaker 1: how did this happen? What happened to the vaunted intelligence 118 00:07:12,360 --> 00:07:14,880 Speaker 1: of not only Israel but everybody else in that part 119 00:07:14,880 --> 00:07:16,720 Speaker 1: of the world, including the US and the West. 120 00:07:17,880 --> 00:07:20,440 Speaker 6: Well, that is the ultimate question, and it may take 121 00:07:20,520 --> 00:07:23,800 Speaker 6: weeks or even months until we understand some of that, because, 122 00:07:23,800 --> 00:07:25,680 Speaker 6: as you can say, this seems to have been an 123 00:07:25,760 --> 00:07:30,440 Speaker 6: absolute surprise very early on Saturday morning that this kind 124 00:07:30,480 --> 00:07:35,800 Speaker 6: of infiltration could happen into Israel itself and Israeli intelligence 125 00:07:35,880 --> 00:07:39,520 Speaker 6: is famed for its ability, They're known for it. They 126 00:07:39,520 --> 00:07:43,160 Speaker 6: share their intel with their key allies, including the US, 127 00:07:43,200 --> 00:07:46,240 Speaker 6: and so what went wrong here? Because this operation by 128 00:07:46,280 --> 00:07:49,200 Speaker 6: Hamas must have been months in the planning. It was 129 00:07:49,320 --> 00:07:52,560 Speaker 6: very intricate, it was very detailed, it was very carefully 130 00:07:53,040 --> 00:07:55,280 Speaker 6: carried out. How is it that no one in the 131 00:07:55,320 --> 00:07:59,440 Speaker 6: Israeli intelligence community got wind of this? And so obviously, 132 00:08:00,040 --> 00:08:02,360 Speaker 6: you know, lots of questions now that are going on 133 00:08:02,480 --> 00:08:04,640 Speaker 6: to the Defense Force in all of that, and they're 134 00:08:04,680 --> 00:08:06,800 Speaker 6: saying it's going to take the weeks, if not months 135 00:08:07,000 --> 00:08:09,640 Speaker 6: to try and understand where the failures were in this, 136 00:08:09,880 --> 00:08:13,440 Speaker 6: but obviously very much caught by surprise, and you can see, 137 00:08:13,480 --> 00:08:16,600 Speaker 6: you know that the perhaps of recriminations that may come 138 00:08:17,000 --> 00:08:19,800 Speaker 6: from that down the track, including for the Prime Minister 139 00:08:19,920 --> 00:08:24,040 Speaker 6: Benjamin Netanyahu right now the country very much rallying behind 140 00:08:24,120 --> 00:08:27,240 Speaker 6: him in this moment, but there are also questions already 141 00:08:27,240 --> 00:08:30,160 Speaker 6: coming about the failure here of the government to have 142 00:08:30,200 --> 00:08:30,840 Speaker 6: known about this. 143 00:08:31,680 --> 00:08:34,640 Speaker 2: So Ras, as far as we know now, you had 144 00:08:34,679 --> 00:08:41,160 Speaker 2: this multi point breach of the Israeli border, right the 145 00:08:41,240 --> 00:08:47,760 Speaker 2: attacks and also hostage taking. Did the did the I 146 00:08:47,800 --> 00:08:54,920 Speaker 2: guess attackers then pull back into Gaza and other sort 147 00:08:54,960 --> 00:08:58,360 Speaker 2: of cross border areas, and does it look like they're 148 00:08:58,400 --> 00:09:02,520 Speaker 2: trying to draw Israeli forces into those areas well. 149 00:09:02,559 --> 00:09:04,400 Speaker 6: In fact, if anything, they seem to have been trying 150 00:09:04,400 --> 00:09:07,360 Speaker 6: to push further into some Jewish communities that are in 151 00:09:07,400 --> 00:09:10,360 Speaker 6: that area that's very close to the Gaza Strip and 152 00:09:10,400 --> 00:09:12,960 Speaker 6: in the south of Israel, and trying to push on 153 00:09:13,040 --> 00:09:16,240 Speaker 6: into communities and towns. And some of that is about 154 00:09:16,280 --> 00:09:19,760 Speaker 6: attacking Israeli military posts in the area. Some of it 155 00:09:19,840 --> 00:09:23,440 Speaker 6: has been unfortunate, attacking civilians in the area, and in 156 00:09:23,480 --> 00:09:27,160 Speaker 6: some cases, you say, taking those civilians back into the 157 00:09:27,200 --> 00:09:29,920 Speaker 6: Gaza Strip for whatever reason. Is that to use them 158 00:09:29,960 --> 00:09:33,840 Speaker 6: as hostages for whatever purposes, but certainly drawing some of 159 00:09:33,880 --> 00:09:37,160 Speaker 6: them back into the Gaza area. So it's about sort 160 00:09:37,160 --> 00:09:39,200 Speaker 6: of just sending the message to Israel, you know what, 161 00:09:39,200 --> 00:09:41,440 Speaker 6: you're not safe inside your own border. 162 00:09:41,520 --> 00:09:43,240 Speaker 7: We can come for you, and we will. 163 00:09:43,520 --> 00:09:47,320 Speaker 6: But it's also about sort of using hostages for sort 164 00:09:47,320 --> 00:09:49,840 Speaker 6: of further purposes as this conflict goes on. I mean, 165 00:09:49,880 --> 00:09:52,480 Speaker 6: there are real pressions about whether this now leads to 166 00:09:52,520 --> 00:09:57,360 Speaker 6: a full scale ground invasion by Israel of Palestine territories, 167 00:09:57,400 --> 00:10:01,240 Speaker 6: including the Gaza Strip. So the purpose of those hostages. Well, 168 00:10:01,320 --> 00:10:02,320 Speaker 6: one can only guess at that. 169 00:10:02,720 --> 00:10:07,480 Speaker 2: Do we know anything about personnel numbers, how many the 170 00:10:07,520 --> 00:10:12,239 Speaker 2: attackers had, and do we know anything about you know, equipment. 171 00:10:12,760 --> 00:10:16,880 Speaker 2: I imagine they weren't coming in tanks, just shoulder launch 172 00:10:17,000 --> 00:10:20,640 Speaker 2: rockets and you know, in machine guns or what do 173 00:10:20,679 --> 00:10:21,880 Speaker 2: we know about that sort of thing? 174 00:10:23,040 --> 00:10:23,240 Speaker 8: Well? 175 00:10:23,280 --> 00:10:26,920 Speaker 6: Interesting, it was a fairly sophisticated operation. In Hamas has 176 00:10:26,960 --> 00:10:32,480 Speaker 6: been fighting in some measure for decades against Israel, and 177 00:10:32,520 --> 00:10:36,199 Speaker 6: they're supported. They've been supported over the years financially and 178 00:10:36,240 --> 00:10:38,000 Speaker 6: in other ways by Iran. 179 00:10:38,040 --> 00:10:40,240 Speaker 7: Of course, there are questions about how much around may or. 180 00:10:40,240 --> 00:10:43,280 Speaker 6: May not have been involved in this particular episode that 181 00:10:43,320 --> 00:10:46,199 Speaker 6: we're seeing now, but these are sort of been carrying 182 00:10:46,240 --> 00:10:49,120 Speaker 6: out guerrilla warfare of some of some extent, you know, 183 00:10:49,400 --> 00:10:52,560 Speaker 6: for years, so they're very highly trained. There are apparently 184 00:10:52,600 --> 00:10:56,239 Speaker 6: systems of tunnels they may have used. They use mechanized 185 00:10:56,280 --> 00:11:01,600 Speaker 6: parachutes to literally parachute themselves into into Israeli territory. And 186 00:11:01,679 --> 00:11:05,480 Speaker 6: quite an organized, coordinated operation. So this is not just 187 00:11:05,520 --> 00:11:08,320 Speaker 6: sort of random groups roaming around it. It is quite 188 00:11:08,400 --> 00:11:09,760 Speaker 6: organized and sophisticated. 189 00:11:10,679 --> 00:11:13,959 Speaker 1: So as we've seen video coverage of you know, it 190 00:11:14,000 --> 00:11:20,320 Speaker 1: seems like tanks massing on personnel carriers massing on Israeli side. 191 00:11:20,960 --> 00:11:22,560 Speaker 1: The reports this morning of a call up of three 192 00:11:22,640 --> 00:11:28,240 Speaker 1: hundred thousand reserves. Is it the expectation that Israel at 193 00:11:28,240 --> 00:11:30,240 Speaker 1: some point in the near future will make a full 194 00:11:30,280 --> 00:11:33,480 Speaker 1: scale invasion of that part of Gaza. 195 00:11:34,640 --> 00:11:37,240 Speaker 6: It's certainly seen as probable. I mean, this is a 196 00:11:37,320 --> 00:11:41,400 Speaker 6: severe attack on Israel. The high number of civilian casualties 197 00:11:41,840 --> 00:11:46,720 Speaker 6: that we've seen it will compel the government to act. 198 00:11:46,760 --> 00:11:49,040 Speaker 7: In the past, they've retaliated in different ways. 199 00:11:49,080 --> 00:11:52,959 Speaker 6: Maybe they've struck through sort of rocket fire back into 200 00:11:52,960 --> 00:11:56,280 Speaker 6: the Gaza strip. We're seeing that already. If they blame Iran, 201 00:11:56,400 --> 00:11:59,760 Speaker 6: they tend to hit Araand's proxies elsewhere in the area. 202 00:11:59,840 --> 00:12:02,360 Speaker 6: This goes beyond what we've seen in a very long 203 00:12:02,440 --> 00:12:06,000 Speaker 6: time in terms of the level of the attack on Israel, 204 00:12:06,040 --> 00:12:10,319 Speaker 6: which will probably lead to a much bigger scale retaliation. 205 00:12:10,440 --> 00:12:12,880 Speaker 6: And that's why the idea of a full scale ground 206 00:12:12,920 --> 00:12:15,520 Speaker 6: war now really is on the table. I mean, the 207 00:12:15,559 --> 00:12:18,360 Speaker 6: Israeli government's talking me about months of campaign here in 208 00:12:18,400 --> 00:12:21,200 Speaker 6: military campaign. This is not going to be over in 209 00:12:21,280 --> 00:12:23,720 Speaker 6: the next couple of days. They really are going to 210 00:12:23,760 --> 00:12:26,280 Speaker 6: turn the screws on Gaza. They're turning the water off, 211 00:12:26,320 --> 00:12:28,800 Speaker 6: they're turning the power off. They're going to make life 212 00:12:28,800 --> 00:12:32,200 Speaker 6: for people living in Gaza extremely miserable. So we really 213 00:12:32,240 --> 00:12:34,880 Speaker 6: are looking at the prospect of a full scale ground 214 00:12:34,960 --> 00:12:36,120 Speaker 6: war now in the Middle East. 215 00:12:36,400 --> 00:12:40,200 Speaker 2: I mean, given the size of the attack and the 216 00:12:40,320 --> 00:12:45,240 Speaker 2: support that Iran has historically provided to Hamas and has Belah, 217 00:12:45,679 --> 00:12:51,440 Speaker 2: it seems difficult to imagine the Iranians didn't know, even 218 00:12:51,480 --> 00:12:55,280 Speaker 2: if you maybe say they weren't involved in the actual planning, 219 00:12:55,280 --> 00:12:57,200 Speaker 2: which the Wall Street Journal has reported that they were 220 00:12:58,440 --> 00:13:02,720 Speaker 2: courting unidentified members of Comas and Hezbollah. What does this 221 00:13:02,840 --> 00:13:06,400 Speaker 2: mean for Israel I mean in terms of markets rise? 222 00:13:06,440 --> 00:13:08,080 Speaker 2: And they hate to bring it back to that, but 223 00:13:08,760 --> 00:13:12,440 Speaker 2: you know, we've looked at oil coming up roughly four 224 00:13:12,800 --> 00:13:17,040 Speaker 2: to five percent. If we get solid evidence that Iran 225 00:13:17,160 --> 00:13:21,680 Speaker 2: is behind this, does that push the price higher? Are 226 00:13:21,679 --> 00:13:23,840 Speaker 2: there are those flows completely cut off? 227 00:13:25,120 --> 00:13:27,560 Speaker 6: Well, that becomes a real question right now. What you're seeing, 228 00:13:27,600 --> 00:13:30,480 Speaker 6: obviously is a reaction in financial markets around. 229 00:13:30,160 --> 00:13:32,720 Speaker 7: The world, be it riskier assets and also oil. 230 00:13:33,360 --> 00:13:35,719 Speaker 6: And that's sort of a knee joke response to the 231 00:13:36,160 --> 00:13:38,160 Speaker 6: extent of the conflict so far. 232 00:13:38,559 --> 00:13:40,480 Speaker 7: But if you get contagion. 233 00:13:39,920 --> 00:13:42,960 Speaker 6: Which means you're pulling in other plays in the Middle East, 234 00:13:43,000 --> 00:13:44,199 Speaker 6: particularly around and. 235 00:13:44,320 --> 00:13:47,320 Speaker 7: If all supply is affected, because right. 236 00:13:47,200 --> 00:13:50,360 Speaker 6: Now where we are, there's no disruption to all supply, 237 00:13:50,480 --> 00:13:53,240 Speaker 6: and so the price move is simply a reaction a 238 00:13:53,320 --> 00:13:55,800 Speaker 6: question so risk being priced into the market. But if 239 00:13:55,840 --> 00:13:58,640 Speaker 6: you get to the point that supply is really disrupted 240 00:13:58,679 --> 00:14:01,560 Speaker 6: through the straits there, I mean Iran has been pumping 241 00:14:01,600 --> 00:14:03,839 Speaker 6: oil again with the US that of turning a slight 242 00:14:04,400 --> 00:14:06,400 Speaker 6: blind eye to that, then you're going to get real 243 00:14:06,440 --> 00:14:09,640 Speaker 6: ishoes about around supply, and that feeds not just into 244 00:14:10,000 --> 00:14:13,520 Speaker 6: the all MICA but also into broader questions around global inflation, 245 00:14:14,320 --> 00:14:17,560 Speaker 6: the problems for interest rates around the world, higher for 246 00:14:17,640 --> 00:14:21,040 Speaker 6: longer for interest rates, so there are real possible contagion 247 00:14:21,080 --> 00:14:23,640 Speaker 6: effects for markets here in the longer term. And that's 248 00:14:23,640 --> 00:14:26,479 Speaker 6: what people are really watching is does this stay contained 249 00:14:26,520 --> 00:14:28,920 Speaker 6: where it is or does it draw in a run 250 00:14:29,000 --> 00:14:31,680 Speaker 6: and suddenly you've got a much broader regional coldlip that's 251 00:14:31,720 --> 00:14:33,760 Speaker 6: really affecting things like all supply. 252 00:14:34,200 --> 00:14:36,560 Speaker 1: Ris to the effect that Israel does in fact amount 253 00:14:36,680 --> 00:14:40,240 Speaker 1: some type of invasion. Is there any census the timing 254 00:14:40,280 --> 00:14:42,000 Speaker 1: Is this in a matter of days or is the 255 00:14:42,080 --> 00:14:44,040 Speaker 1: weeks I just don't how long it takes for them 256 00:14:44,080 --> 00:14:46,240 Speaker 1: to get mobilized. It seems like Israel would probably be 257 00:14:46,280 --> 00:14:48,640 Speaker 1: on a high level alert at all times anyway, But 258 00:14:48,720 --> 00:14:49,720 Speaker 1: do we any sense of timing. 259 00:14:51,160 --> 00:14:53,840 Speaker 6: It's very unclear and much might depend on how things 260 00:14:53,880 --> 00:14:56,720 Speaker 6: go in terms of any push by Israel into the 261 00:14:56,800 --> 00:15:00,720 Speaker 6: Gaza strip, whether Israel takes the initiative and stuff striking 262 00:15:00,800 --> 00:15:04,160 Speaker 6: targets inside Iran. I mean, they also may opt if 263 00:15:04,160 --> 00:15:06,920 Speaker 6: they do want to do something against Iran, to hit 264 00:15:06,920 --> 00:15:10,120 Speaker 6: one of Iran's proxies in the region, which they've done before. 265 00:15:10,160 --> 00:15:11,920 Speaker 7: There'll be a high level of caution about. 266 00:15:11,720 --> 00:15:14,640 Speaker 6: Taking that step with Iran, as I said, because that 267 00:15:14,720 --> 00:15:19,359 Speaker 6: just like escalates significantly the tension in the whole region. 268 00:15:19,120 --> 00:15:20,640 Speaker 7: And the US and other players. 269 00:15:20,800 --> 00:15:24,360 Speaker 6: You know, allies of Israel are being very very cautious 270 00:15:24,360 --> 00:15:27,880 Speaker 6: about that and urging Israel to be careful and walk 271 00:15:27,920 --> 00:15:29,040 Speaker 6: the steps on this. 272 00:15:29,320 --> 00:15:31,920 Speaker 7: No one really seems to be agitating. 273 00:15:31,280 --> 00:15:35,040 Speaker 6: For an immediate strike on Iran, and certainly Iran doesn't 274 00:15:35,040 --> 00:15:39,840 Speaker 6: seem to be showing an inclination to directly attack Israel. 275 00:15:39,440 --> 00:15:41,520 Speaker 7: And so that's possibly some way off. 276 00:15:41,560 --> 00:15:43,840 Speaker 6: We first probably need to see how things play out 277 00:15:44,120 --> 00:15:46,320 Speaker 6: in the Gaza strip, but certainly it does remain to 278 00:15:46,400 --> 00:15:49,120 Speaker 6: keep question in the minds of many people is where 279 00:15:49,160 --> 00:15:51,160 Speaker 6: does this begin and where is it? Where on Earth 280 00:15:51,200 --> 00:15:52,000 Speaker 6: is it going to end? 281 00:15:52,320 --> 00:15:56,840 Speaker 2: Just to wrap our heads around this geographically raz does 282 00:15:56,880 --> 00:15:59,320 Speaker 2: it look like most of the attackers came out of 283 00:15:59,360 --> 00:16:04,800 Speaker 2: Gaza and missiles coming out of Lebanon at the West 284 00:16:04,800 --> 00:16:08,080 Speaker 2: Bank and Jerusalem seem problem free at the at the moment. 285 00:16:09,280 --> 00:16:12,160 Speaker 6: Well, certainly the attacks of mostly come out of Gaza, 286 00:16:12,160 --> 00:16:15,960 Speaker 6: but we are seeing some skirmishes involving Hesblah, which is 287 00:16:16,000 --> 00:16:19,680 Speaker 6: obviously from the Lebanon side of things, and we've seen 288 00:16:19,720 --> 00:16:22,240 Speaker 6: some rockets fired by Hesbealah into Israel. 289 00:16:22,280 --> 00:16:24,320 Speaker 7: We've seen Israel files and rockets back. 290 00:16:24,600 --> 00:16:27,360 Speaker 6: We're now seeing reports that a handful of people May 291 00:16:27,840 --> 00:16:31,040 Speaker 6: Palestines may have attempted. It's across from the Lebanon side 292 00:16:31,680 --> 00:16:35,200 Speaker 6: into Israel and we're seeing retaliation going on there. So 293 00:16:35,400 --> 00:16:38,080 Speaker 6: it is happening on both ends, but it's mostly concentrated 294 00:16:38,120 --> 00:16:38,720 Speaker 6: in the South. 295 00:16:39,680 --> 00:16:41,760 Speaker 1: Hi Ros, thanks so much for joining us. Roz Mathison, 296 00:16:42,160 --> 00:16:44,520 Speaker 1: news director for Bloomberg News over in London. 297 00:16:44,880 --> 00:16:48,000 Speaker 4: You're listening to the Teeth Cats Are Live program Bloomberg 298 00:16:48,040 --> 00:16:51,640 Speaker 4: Markets Weekdays at ten am Eastern on Bloomberg Radio, the 299 00:16:51,720 --> 00:16:53,680 Speaker 4: tune in app, Bloomberg dot Com, and. 300 00:16:53,640 --> 00:16:54,920 Speaker 5: The Bloomberg Business App. 301 00:16:54,960 --> 00:16:57,800 Speaker 4: You can also listen live on Amazon Alexa from our 302 00:16:57,800 --> 00:17:02,440 Speaker 4: flagship New York station, Jose. Let's playing Bloomberg eleven thirty. 303 00:17:04,280 --> 00:17:05,720 Speaker 1: Right now, when we're going to get back to the 304 00:17:05,840 --> 00:17:09,199 Speaker 1: story at hand, the conflict in Israel, and we're going 305 00:17:09,240 --> 00:17:11,800 Speaker 1: to do that today with doctor Ariel Cohen, Senior fellow 306 00:17:12,080 --> 00:17:15,679 Speaker 1: at the Atlantic Council Eurasia Center, also a member of 307 00:17:15,800 --> 00:17:20,200 Speaker 1: the Council Foreign Relations, someone who's steeped in all things 308 00:17:20,200 --> 00:17:24,280 Speaker 1: geopolitical issues on that type that part of the world. 309 00:17:24,400 --> 00:17:26,720 Speaker 1: Doctor Cohen, Thanks for joining us here. We'd love to 310 00:17:26,800 --> 00:17:29,080 Speaker 1: just we've had a full I guess, twenty four hours 311 00:17:29,119 --> 00:17:30,800 Speaker 1: to kind of figure out what's going at forty eight 312 00:17:30,800 --> 00:17:32,960 Speaker 1: hours to figure out what's going on there. What's your 313 00:17:33,280 --> 00:17:36,800 Speaker 1: I guess initial take, maybe informed take is what we've 314 00:17:36,840 --> 00:17:38,600 Speaker 1: witnessed since Saturday morning. 315 00:17:40,160 --> 00:17:44,240 Speaker 9: First of all, we witnessed an attack on Israeli civilians 316 00:17:44,440 --> 00:17:48,760 Speaker 9: that we did not see that level of death since 317 00:17:48,760 --> 00:17:52,520 Speaker 9: the Holocaust. Probably in the end of the day it's 318 00:17:52,560 --> 00:17:55,160 Speaker 9: going to be eight hundred and nine hundred people killed 319 00:17:55,160 --> 00:18:02,440 Speaker 9: in one day, rape, taking people hostage and prisoner, including 320 00:18:02,720 --> 00:18:05,480 Speaker 9: little children, murdering. 321 00:18:06,600 --> 00:18:08,400 Speaker 10: Parents in front of the. 322 00:18:08,400 --> 00:18:15,920 Speaker 9: Children, put posting rape on social media, desecration of corpses, etc. 323 00:18:16,680 --> 00:18:22,600 Speaker 10: These are horrifying pictures on the Israeli front. 324 00:18:23,520 --> 00:18:29,040 Speaker 9: This is the largest Israeli failure since the Yom Kipur War, 325 00:18:29,359 --> 00:18:36,640 Speaker 9: the October War of nineteen seventy three. The Israeli intelligence, 326 00:18:37,720 --> 00:18:43,399 Speaker 9: the shin Bed, the Security Service, the Mossad, the external intelligence, 327 00:18:43,440 --> 00:18:47,040 Speaker 9: and the military intelligence failed to understand what was right 328 00:18:47,080 --> 00:18:50,680 Speaker 9: in front of them. I was reading newspapers with reports 329 00:18:50,760 --> 00:18:54,240 Speaker 9: of the meetings of all these organizations with the Iranians 330 00:18:55,400 --> 00:18:59,080 Speaker 9: Islamic Revolutionary Guard Corps in Beirut and asking a question 331 00:18:59,400 --> 00:19:01,720 Speaker 9: that the Israeli leaders should have asked, what's. 332 00:19:01,520 --> 00:19:04,080 Speaker 10: Going on here? Why the meeting? 333 00:19:04,600 --> 00:19:08,200 Speaker 9: They were meeting weekly or bi weekly in Beirut. They 334 00:19:08,240 --> 00:19:13,440 Speaker 9: also are connecting through Turkey, which gave shelter to senior 335 00:19:13,560 --> 00:19:19,000 Speaker 9: Kamas operators. And then the question that I am focused 336 00:19:19,040 --> 00:19:23,000 Speaker 9: on now is whether he's Balah they fully owned subsidiary 337 00:19:23,320 --> 00:19:28,600 Speaker 9: of Iranian Revolutionary Guard Corps. The leader of his Bala 338 00:19:29,000 --> 00:19:33,520 Speaker 9: Sheek Nasa has a title of representative of the Supreme 339 00:19:33,600 --> 00:19:36,960 Speaker 9: Leader of Iran in Lebanon, Are they entering the frame? 340 00:19:37,520 --> 00:19:42,359 Speaker 9: If they do, this is a very very serious threat 341 00:19:42,400 --> 00:19:48,400 Speaker 9: to Israeli existence because his Bala reportedly has between one 342 00:19:48,520 --> 00:19:53,320 Speaker 9: hundred and two hundred thousand rockets, whereas Kamas was shooting 343 00:19:53,400 --> 00:19:57,280 Speaker 9: into Israel at a rate of two thousand rockets in 344 00:19:57,359 --> 00:20:02,719 Speaker 9: twenty minutes. A thousand rockets, what is it a two 345 00:20:02,840 --> 00:20:08,160 Speaker 9: hundred rockets a minute that the Israeli iron dome system, 346 00:20:08,680 --> 00:20:11,440 Speaker 9: one of the most advanced of the world, was overwhelmed. 347 00:20:12,320 --> 00:20:17,240 Speaker 9: Now we may have higher rates of bigger rockets hitting 348 00:20:17,600 --> 00:20:19,280 Speaker 9: strategic places. 349 00:20:18,880 --> 00:20:23,760 Speaker 10: Like the refinery in Haifa and turning Israeli cities. 350 00:20:24,920 --> 00:20:27,960 Speaker 9: Where my relatives live all over the country where I 351 00:20:28,080 --> 00:20:32,040 Speaker 9: used to live myself, turning that into a fiery inferno. 352 00:20:32,400 --> 00:20:36,160 Speaker 10: In that case, Israeli leaders, including. 353 00:20:35,760 --> 00:20:39,200 Speaker 9: The head of the Mossada, David Barnea, about two weeks ago, 354 00:20:39,640 --> 00:20:44,480 Speaker 9: said that they will have the top leadership of around 355 00:20:44,480 --> 00:20:49,840 Speaker 9: responsible in Tehran and news flash, Israeli airplanes do not 356 00:20:50,040 --> 00:20:55,240 Speaker 9: have the range to hit Iran without help from the 357 00:20:55,359 --> 00:21:00,880 Speaker 9: Arab allies or Arab friends, and if such health will 358 00:21:00,920 --> 00:21:06,200 Speaker 9: not be forthcoming, Israel may use its rockets, whether land 359 00:21:06,240 --> 00:21:13,280 Speaker 9: based rockets or rockets, missiles on its submarines, two Hiterranean targets, 360 00:21:13,320 --> 00:21:17,160 Speaker 9: including Tehran and including the oil terminal in. 361 00:21:17,480 --> 00:21:21,560 Speaker 1: Barbas, Doctor con what do you expect Israel to do 362 00:21:21,720 --> 00:21:24,000 Speaker 1: in response? And when do you expect them to do that? 363 00:21:25,040 --> 00:21:26,080 Speaker 10: They're doing it now. 364 00:21:27,800 --> 00:21:34,440 Speaker 9: Israel mobilized three hundred thousand of the reserves, that's two 365 00:21:34,480 --> 00:21:37,040 Speaker 9: thirds of the reserves are mobilized already. 366 00:21:37,920 --> 00:21:41,120 Speaker 10: The moralist high. I am monitoring. 367 00:21:42,280 --> 00:21:47,760 Speaker 9: What's up feeds of apartment buildings and relatives and sources, 368 00:21:48,359 --> 00:21:52,320 Speaker 9: and the morales high. The leadership is trying to figure 369 00:21:52,359 --> 00:21:55,159 Speaker 9: out what to do, maybe not as fast as we 370 00:21:55,200 --> 00:21:59,679 Speaker 9: would like. For example, when Tamas was running over the 371 00:21:59,760 --> 00:22:03,840 Speaker 9: villa and towns in southern Israel and people were stuck 372 00:22:04,240 --> 00:22:07,960 Speaker 9: under fire, it took sometimes eight to ten hours for 373 00:22:08,080 --> 00:22:09,639 Speaker 9: security forces to arrive. 374 00:22:10,200 --> 00:22:12,200 Speaker 10: Now, of course, the response is going to be. 375 00:22:12,600 --> 00:22:16,760 Speaker 9: Faster, and I'm sure that the Israeli air force and 376 00:22:16,840 --> 00:22:21,760 Speaker 9: missile forces are getting ready if Habala is involved. 377 00:22:21,840 --> 00:22:24,960 Speaker 10: And right now these very minutes. 378 00:22:25,000 --> 00:22:29,800 Speaker 9: We see reports about exchanges of fire along the Lebanese border, 379 00:22:30,320 --> 00:22:35,200 Speaker 9: and yesterday Tamas was shooting missiles into the Cheba farm 380 00:22:35,720 --> 00:22:39,720 Speaker 9: area that they claim not the Lebanese government but Chrisbala 381 00:22:39,840 --> 00:22:44,560 Speaker 9: is claiming a little piece of territory between Israel, Syria 382 00:22:44,600 --> 00:22:52,960 Speaker 9: and Lebanon. If that escalates, all bets are off. The 383 00:22:52,960 --> 00:22:56,560 Speaker 9: Bandara bas oil terminal of Iran is in the range 384 00:22:56,560 --> 00:23:00,840 Speaker 9: of Israeli missiles, the oil prices may jump and the 385 00:23:01,000 --> 00:23:06,800 Speaker 9: US support. Now we see the carrier battle group moving 386 00:23:06,800 --> 00:23:10,879 Speaker 9: to eastern Mediterranean in a clear signal to Iran that 387 00:23:10,960 --> 00:23:14,480 Speaker 9: if they Activatebella, we may see for the first time 388 00:23:14,840 --> 00:23:19,240 Speaker 9: a joint Israeli American operation against Iranian targets in the 389 00:23:19,280 --> 00:23:19,760 Speaker 9: Middle East. 390 00:23:20,119 --> 00:23:21,040 Speaker 10: So I guess. 391 00:23:22,960 --> 00:23:28,600 Speaker 2: Israeli defense forces would sweep through Gaza and secure the 392 00:23:28,640 --> 00:23:31,040 Speaker 2: border with the West Bank while they then move north, 393 00:23:31,560 --> 00:23:34,800 Speaker 2: pushing into Lebanon. Is that the idea Militarily. 394 00:23:35,760 --> 00:23:43,480 Speaker 9: If Hiszbala opens, Israelis will need to destroy whatever known 395 00:23:43,560 --> 00:23:45,840 Speaker 9: targets are. The problem in Lebanon is that there are 396 00:23:45,840 --> 00:23:48,760 Speaker 9: a lot of tunnels. They need to secure the West Bank, 397 00:23:48,880 --> 00:23:53,760 Speaker 9: not just the line between Israel and the West Bank. 398 00:23:53,840 --> 00:23:56,360 Speaker 10: This is not recognized international border. 399 00:23:56,640 --> 00:24:00,880 Speaker 9: Israel occupies parts of the west Bank, but any kind 400 00:24:00,920 --> 00:24:04,040 Speaker 9: of terrorist activity out of the West Bank should in 401 00:24:04,080 --> 00:24:08,320 Speaker 9: missiles killing civilians will require a response, and this is 402 00:24:08,359 --> 00:24:11,479 Speaker 9: a big challenge for small country like Israel, a country 403 00:24:11,480 --> 00:24:14,760 Speaker 9: is size of New Jersey with population about nine point 404 00:24:14,840 --> 00:24:17,800 Speaker 9: two million people. That you have an active front in 405 00:24:17,880 --> 00:24:21,720 Speaker 9: the south in Gaza where a thousand people got killed, 406 00:24:22,480 --> 00:24:27,320 Speaker 9: You have a very unstable West Bank where Kamas is 407 00:24:27,359 --> 00:24:33,000 Speaker 9: competing with Palestinian authority for power, and you have Hisbala 408 00:24:33,119 --> 00:24:37,240 Speaker 9: with fifty thousand fighters and hundreds of thousands of rockets. 409 00:24:37,400 --> 00:24:38,560 Speaker 10: This is a huge challenge for. 410 00:24:38,600 --> 00:24:43,880 Speaker 1: Israel, all right, So, doctor Cohen, here is there any 411 00:24:44,040 --> 00:24:48,320 Speaker 1: appetite for some type of I don't know less lethal 412 00:24:48,400 --> 00:24:50,840 Speaker 1: type of solution here? Is there any room for that? 413 00:24:50,960 --> 00:24:53,320 Speaker 1: Is there any psyche for that in Israel at the moment? 414 00:24:55,000 --> 00:24:58,480 Speaker 10: No. In terms of Gaza, absolutely not. 415 00:24:59,480 --> 00:25:04,080 Speaker 9: When you see, say, sweep through the Gaza strip, which 416 00:25:04,119 --> 00:25:07,600 Speaker 9: is not big, it's I think nine by fourteen miles, 417 00:25:08,640 --> 00:25:09,960 Speaker 9: a lot of it heavily built. 418 00:25:10,880 --> 00:25:13,240 Speaker 10: The problem is the Israelis are not. 419 00:25:14,760 --> 00:25:19,320 Speaker 9: Happy to kill civilians, but Hamas deliberately puts its military 420 00:25:20,640 --> 00:25:25,320 Speaker 9: targets inside mosques, inside schools and hospitals, and there's no 421 00:25:25,480 --> 00:25:29,880 Speaker 9: choice under international law. If the military targets are within 422 00:25:29,920 --> 00:25:35,159 Speaker 9: civilian population, you are allowed under the international law to 423 00:25:35,280 --> 00:25:38,440 Speaker 9: hit the military targets Israelis, for example. 424 00:25:38,080 --> 00:25:39,840 Speaker 10: Do what they call knock on the roof. 425 00:25:39,920 --> 00:25:44,800 Speaker 9: They warn the citizens to leave buildings, and sometimes they 426 00:25:44,840 --> 00:25:47,359 Speaker 9: manage and sometimes Kamas prevents them from leaving. 427 00:25:47,800 --> 00:25:51,240 Speaker 10: So Gaza is going to be softened as. 428 00:25:51,160 --> 00:25:55,440 Speaker 9: A target by the air force and artillery before they 429 00:25:55,440 --> 00:26:01,080 Speaker 9: move in, so sweep, yes, maybe within a week, not immediately, 430 00:26:01,160 --> 00:26:05,200 Speaker 9: because they do not want to lose their boys and girls. Understandably, 431 00:26:05,440 --> 00:26:08,639 Speaker 9: we did the same in Iraq. Okay, you don't go 432 00:26:08,800 --> 00:26:13,840 Speaker 9: in before the targets is suffered. And Withibala, if they 433 00:26:13,880 --> 00:26:19,320 Speaker 9: really enter the war, they will be bombed and shelled 434 00:26:19,520 --> 00:26:22,320 Speaker 9: before the land operation begins. 435 00:26:22,800 --> 00:26:25,360 Speaker 2: Is there, doctor Cohne, Is there any way to evacuate 436 00:26:25,760 --> 00:26:30,399 Speaker 2: civilians from Gaza at all? Because they have border on 437 00:26:30,520 --> 00:26:32,600 Speaker 2: all three sides and the Mediterranean on the other. 438 00:26:33,840 --> 00:26:38,600 Speaker 9: Absolutely, and here the United States, Saudi Arabia and others 439 00:26:38,720 --> 00:26:44,040 Speaker 9: can do a lot of favor to the civilian population 440 00:26:44,160 --> 00:26:44,600 Speaker 9: and Goza. 441 00:26:44,760 --> 00:26:45,040 Speaker 8: Well. 442 00:26:45,080 --> 00:26:48,879 Speaker 9: First of all, when you say civilians, I would probably 443 00:26:49,359 --> 00:26:53,399 Speaker 9: focus on women and children first and foremost, because a 444 00:26:53,400 --> 00:26:58,359 Speaker 9: lot of able bodied men are pressed into membership in 445 00:26:58,400 --> 00:27:04,879 Speaker 9: Hamas and Islamic JIP and civilians can go into two directions. 446 00:27:04,960 --> 00:27:12,720 Speaker 9: One open spaces fields, fields and desert land in Gaza 447 00:27:13,000 --> 00:27:16,040 Speaker 9: and stay there with tents, or. 448 00:27:16,920 --> 00:27:20,359 Speaker 10: Go to the Egyptian border and convince it. 449 00:27:20,760 --> 00:27:24,439 Speaker 9: The international community should convince the Egyptians to let the 450 00:27:24,560 --> 00:27:30,119 Speaker 9: civilians enter and accommodate the civilians. 451 00:27:29,800 --> 00:27:31,600 Speaker 10: Because we do not want. 452 00:27:32,920 --> 00:27:38,159 Speaker 9: Any civilian casualtism on eva side Israel or Gaza to 453 00:27:38,240 --> 00:27:42,960 Speaker 9: be hurt. And then those who remain and fight, their 454 00:27:43,000 --> 00:27:46,400 Speaker 9: blood is on them. In terms of Lebanon, same thing. 455 00:27:46,760 --> 00:27:51,199 Speaker 9: Lebanon is much bigger than Gaza. The civilians should exit 456 00:27:51,520 --> 00:27:54,200 Speaker 9: the sous in case the balloon goes up. 457 00:27:54,119 --> 00:27:54,679 Speaker 11: On the south. 458 00:27:54,880 --> 00:27:57,320 Speaker 1: Okay, doctor Cohen, thank you so much for joining us. 459 00:27:57,680 --> 00:28:00,680 Speaker 1: I appreciate your thoughts in your analysis, Doctor Eryl. He's 460 00:28:00,720 --> 00:28:04,680 Speaker 1: the senior fellow at the Atlanta Council Eurasia Center, also 461 00:28:04,960 --> 00:28:08,040 Speaker 1: a former member of the Council Foreign Relations, one of 462 00:28:08,040 --> 00:28:11,240 Speaker 1: the leading voices. Their intentions obviously running extraordinarily high. The 463 00:28:11,280 --> 00:28:15,000 Speaker 1: next several days, I guess we'll show a lot show 464 00:28:15,040 --> 00:28:18,760 Speaker 1: the world where this thing may develop over the coming days, weeks, 465 00:28:18,960 --> 00:28:20,800 Speaker 1: and months, and we'll certainly have the full reporting. 466 00:28:21,800 --> 00:28:25,640 Speaker 4: You're listening to the Team ken'shur Live program Bloomberg Markets 467 00:28:25,680 --> 00:28:28,760 Speaker 4: weekdays at ten am Eastern on Bloomberg dot Com, the 468 00:28:28,840 --> 00:28:32,000 Speaker 4: iHeartRadio app and the Bloomberg Business App, or listen on 469 00:28:32,040 --> 00:28:34,200 Speaker 4: demand wherever you get your podcasts. 470 00:28:35,880 --> 00:28:38,560 Speaker 1: Matt Miller, Paul Sweeney live here in our Bloomberg Interactive 471 00:28:38,560 --> 00:28:41,400 Speaker 1: Brokers studio, streaming as well on YouTube. So check us 472 00:28:41,400 --> 00:28:43,880 Speaker 1: out over there. Let's bring in our good friend Mike mcglohan. 473 00:28:43,920 --> 00:28:46,960 Speaker 1: He's the senior macro strategist for Bloomberg Intelligence. He's based 474 00:28:47,000 --> 00:28:50,760 Speaker 1: down in our Miami office. And Mike, we see oil 475 00:28:50,800 --> 00:28:53,960 Speaker 1: surging here, no surprise, WTI up over four percent. We're 476 00:28:53,960 --> 00:28:57,400 Speaker 1: now about eighty six dollars a barrel here. Historically, you've 477 00:28:57,440 --> 00:28:59,640 Speaker 1: got a ton of experience in this mic. When you see, 478 00:29:00,120 --> 00:29:03,760 Speaker 1: you know, geopolitical conflicts breakout, particularly in the Middle East. 479 00:29:04,040 --> 00:29:06,840 Speaker 1: How do traders in the oil pits, how do they 480 00:29:06,880 --> 00:29:08,760 Speaker 1: kind of parse this stuff out? 481 00:29:09,600 --> 00:29:13,000 Speaker 12: The quote my son's or adults like yours, they would teach 482 00:29:13,040 --> 00:29:16,080 Speaker 12: me the worm meh, the word meth. From what you'd 483 00:29:16,080 --> 00:29:18,320 Speaker 12: see in crude oil today of four percent, it's kind 484 00:29:18,360 --> 00:29:20,200 Speaker 12: of a normal day for crude oil. I'm not saying 485 00:29:20,240 --> 00:29:24,360 Speaker 12: what happened with the how messiresrail conflict isn't normal, but 486 00:29:24,400 --> 00:29:27,160 Speaker 12: it's it's indicative of what's happening in crude oil. Cruel 487 00:29:27,200 --> 00:29:29,600 Speaker 12: peak at the end of September around ninety five oh 488 00:29:29,640 --> 00:29:32,040 Speaker 12: three so far, that's the high for the year. I 489 00:29:32,080 --> 00:29:35,520 Speaker 12: think it's the market's retesting that, but it's also showing 490 00:29:35,520 --> 00:29:39,040 Speaker 12: the resilience of manage money net positions are just starting 491 00:29:39,080 --> 00:29:40,400 Speaker 12: to roll over their way too long. 492 00:29:40,400 --> 00:29:41,680 Speaker 8: It looks like it's probably peaked. 493 00:29:41,960 --> 00:29:46,240 Speaker 12: It's showing the more significant tilt globally towards this event 494 00:29:46,400 --> 00:29:49,960 Speaker 12: might accelerate that tilt towards recession. And one thing also 495 00:29:50,000 --> 00:29:51,720 Speaker 12: you're seeing what it's doing is you look at the 496 00:29:51,760 --> 00:29:55,240 Speaker 12: front the back month futures. In terms of Fed Fund futures, 497 00:29:55,520 --> 00:29:57,680 Speaker 12: I mean Fed Fund future is just for October of 498 00:29:57,920 --> 00:30:01,120 Speaker 12: next year, down fifteen basis points. That implies that to you, 499 00:30:01,240 --> 00:30:02,880 Speaker 12: not yield when we see it open up tonight will 500 00:30:02,920 --> 00:30:05,160 Speaker 12: be down ten or so basis points. So to me, 501 00:30:05,240 --> 00:30:07,400 Speaker 12: this might mark the peak that I've been looking for 502 00:30:07,440 --> 00:30:11,240 Speaker 12: in crude oil and for bond yields, and to sustain 503 00:30:11,400 --> 00:30:14,960 Speaker 12: higher prices, you need a major cutback and supply maybe 504 00:30:15,000 --> 00:30:16,920 Speaker 12: from Iran, but there are only a million barrels a day. 505 00:30:16,960 --> 00:30:20,400 Speaker 12: To put that in context, the excess of supply over 506 00:30:20,480 --> 00:30:23,479 Speaker 12: demand in the US and Canada is six million barrel's 507 00:30:23,560 --> 00:30:24,040 Speaker 12: day about. 508 00:30:24,520 --> 00:30:29,320 Speaker 2: I just don't understand why we don't rally to far 509 00:30:29,400 --> 00:30:34,400 Speaker 2: higher prices. I mean, my last week we saw barrels 510 00:30:34,520 --> 00:30:38,520 Speaker 2: of WTI trade for ninety five dollars. That was well 511 00:30:38,800 --> 00:30:43,960 Speaker 2: September twenty eighth, Right, If you liked it at ninety five, 512 00:30:44,600 --> 00:30:50,360 Speaker 2: then it's now, you know, trading at eighty six while 513 00:30:51,040 --> 00:30:55,640 Speaker 2: we're looking at the worst geopolitical eruption in Israel in 514 00:30:55,720 --> 00:30:59,720 Speaker 2: fifty years. Why why wouldn't you back up the truck 515 00:30:59,720 --> 00:31:00,480 Speaker 2: at this. 516 00:31:00,240 --> 00:31:02,960 Speaker 8: Level it was already backed up. That's a key point. 517 00:31:02,960 --> 00:31:06,160 Speaker 12: And member man positions of hedge funds, they were the 518 00:31:06,200 --> 00:31:10,600 Speaker 12: most long at that period since November of last year, 519 00:31:10,600 --> 00:31:13,480 Speaker 12: when CRUILL peaked around ninety three, now peaked around ninety five. 520 00:31:13,760 --> 00:31:17,320 Speaker 12: But it's also that macro economic bent match, and it's 521 00:31:17,360 --> 00:31:20,680 Speaker 12: that tilt towards recession. Remember it's this is a major 522 00:31:20,720 --> 00:31:22,760 Speaker 12: difference when we were young in the seventies and we 523 00:31:22,760 --> 00:31:24,840 Speaker 12: had these kind of issues. The US is a net 524 00:31:24,880 --> 00:31:28,120 Speaker 12: exporter and a massive surplus kicking in. 525 00:31:28,320 --> 00:31:30,800 Speaker 8: So also remember what happened two two thousand and eight. 526 00:31:30,840 --> 00:31:33,320 Speaker 12: CRUIL peaked at one forty seven dollars a barrel, and 527 00:31:33,360 --> 00:31:35,480 Speaker 12: it was a lot of that was positions. It wasn't 528 00:31:35,520 --> 00:31:38,920 Speaker 12: really a strong fundamental reason. And when that tilts down, 529 00:31:39,000 --> 00:31:40,880 Speaker 12: which it is or in the middle of that, then 530 00:31:40,920 --> 00:31:44,040 Speaker 12: you have the major repercussions of going towards recession. And 531 00:31:44,080 --> 00:31:46,800 Speaker 12: I think that's the case. Is so to me, that 532 00:31:46,880 --> 00:31:49,760 Speaker 12: peak at ninety five was probably synonymous with bond yields 533 00:31:49,760 --> 00:31:50,840 Speaker 12: peaking around five percent. 534 00:31:51,080 --> 00:31:54,600 Speaker 2: Just a little history lesson right of what happened during 535 00:31:54,600 --> 00:31:57,160 Speaker 2: the yam Kapur War, because well, I was born like 536 00:31:57,160 --> 00:31:59,800 Speaker 2: a month later in nineteen seventy three, but I remember 537 00:32:00,640 --> 00:32:02,800 Speaker 2: distinctly a few years later on my aunt, who had 538 00:32:02,800 --> 00:32:06,320 Speaker 2: had a Mustang, got a little Honda Accord because you 539 00:32:06,360 --> 00:32:11,800 Speaker 2: know exactly the oil, the oil what was it like 540 00:32:11,840 --> 00:32:14,520 Speaker 2: in the oil embargo as it was referred to, sort 541 00:32:14,520 --> 00:32:17,320 Speaker 2: of started with with that war, right. 542 00:32:18,000 --> 00:32:20,400 Speaker 12: Yeah, so air oil bargues I love going back to 543 00:32:20,480 --> 00:32:23,160 Speaker 12: nineteen seventy three seventy four, that's the first time crudell 544 00:32:23,680 --> 00:32:27,320 Speaker 12: kind of really got to near twenty and that started 545 00:32:27,360 --> 00:32:30,240 Speaker 12: a trend in crudell being the worst performing commodity a 546 00:32:30,360 --> 00:32:32,800 Speaker 12: bar none even compare it to copper and soybeans and 547 00:32:32,800 --> 00:32:33,560 Speaker 12: broad commodities. 548 00:32:33,840 --> 00:32:36,560 Speaker 8: I love publishing on this. It just doesn't go up. 549 00:32:36,640 --> 00:32:37,280 Speaker 8: It does and it. 550 00:32:37,440 --> 00:32:39,760 Speaker 12: Spikes, it makes it go down. It's its own worst 551 00:32:39,840 --> 00:32:42,080 Speaker 12: enemy versus things like copper. At least it made a 552 00:32:42,080 --> 00:32:44,120 Speaker 12: new high last year. It's backed up. And if you 553 00:32:44,160 --> 00:32:46,600 Speaker 12: compare it to soybeans, which I published this morning, soybeans 554 00:32:46,720 --> 00:32:49,440 Speaker 12: way outperformed Crudel over time. So that to me is 555 00:32:49,480 --> 00:32:52,440 Speaker 12: one that's changed the world and for people like me 556 00:32:52,520 --> 00:32:54,680 Speaker 12: in the seventies. When I was pumping gas in nineteen 557 00:32:54,720 --> 00:32:57,040 Speaker 12: seventy nine, we had a price in half gallons because 558 00:32:57,040 --> 00:32:59,360 Speaker 12: it went over a dollar a gallon. The world's changed 559 00:32:59,360 --> 00:33:01,640 Speaker 12: and that's what's really happened, and that's happening now and 560 00:33:01,640 --> 00:33:04,440 Speaker 12: it's showing up every day in this commodity that is 561 00:33:04,560 --> 00:33:06,720 Speaker 12: right now. The same price is first traded in two 562 00:33:06,720 --> 00:33:10,120 Speaker 12: thousand and seven. And that's why I like to look 563 00:33:10,160 --> 00:33:12,560 Speaker 12: at it as if we were a month ago when 564 00:33:12,560 --> 00:33:13,120 Speaker 12: this happened. 565 00:33:13,120 --> 00:33:14,440 Speaker 8: That was Kruel's an upswing. 566 00:33:14,480 --> 00:33:16,840 Speaker 12: It might have pumped up ten dollars, but sorready started 567 00:33:16,880 --> 00:33:20,160 Speaker 12: tilting back down for the global recession, which most people 568 00:33:20,200 --> 00:33:22,880 Speaker 12: know that's coming, particularly if you look at leading indicators 569 00:33:22,880 --> 00:33:26,840 Speaker 12: and economics, and after this conflict will trigger that Cruel 570 00:33:26,880 --> 00:33:29,520 Speaker 12: will probably go to forty dollars bills. I've been saying 571 00:33:29,520 --> 00:33:32,440 Speaker 12: that for a long time. I've been early, I've been wrong. 572 00:33:32,520 --> 00:33:34,880 Speaker 12: But now that I see what's happening, it's its own 573 00:33:34,880 --> 00:33:37,800 Speaker 12: worst enemies. It's spiking again. And you see what's happening. 574 00:33:38,200 --> 00:33:40,360 Speaker 12: The stock market goes down. And if this tilts a 575 00:33:40,440 --> 00:33:42,920 Speaker 12: normal correction in the stock market, that's the number one 576 00:33:42,920 --> 00:33:45,520 Speaker 12: pressure for Crudel the last few years. Every time stock 577 00:33:45,520 --> 00:33:48,080 Speaker 12: market drops twenty percent and it Fed saves it, Crueil 578 00:33:48,160 --> 00:33:49,080 Speaker 12: drops forty percent. 579 00:33:49,240 --> 00:33:50,640 Speaker 8: But this time will the FED save it? 580 00:33:51,120 --> 00:33:53,280 Speaker 1: So, Mike, you know, I, as Matt mentioned, you know, 581 00:33:53,320 --> 00:33:55,520 Speaker 1: oil peak just you know, back in the late September. 582 00:33:55,520 --> 00:33:57,560 Speaker 1: But since then it's it's been coming back. When we 583 00:33:57,560 --> 00:33:59,920 Speaker 1: were down, you know, obviously down in the low eighties 584 00:34:00,120 --> 00:34:03,120 Speaker 1: for the weekend news here, and was that as you're 585 00:34:03,120 --> 00:34:05,760 Speaker 1: suggesting kind of pricing in a recession. 586 00:34:06,640 --> 00:34:07,920 Speaker 8: Oh, sure, it's starting a tilt there. 587 00:34:07,960 --> 00:34:11,840 Speaker 12: So the low for the year w WTR Crudell sixty 588 00:34:11,920 --> 00:34:14,440 Speaker 12: three dollars and sixty four cents. Now, if you had 589 00:34:14,440 --> 00:34:16,719 Speaker 12: told anybody that a year ago, they would have said no, 590 00:34:16,760 --> 00:34:18,160 Speaker 12: you couidding even be one in front of that, A 591 00:34:18,239 --> 00:34:20,399 Speaker 12: one handle might know. So I have to point out 592 00:34:20,400 --> 00:34:22,120 Speaker 12: there's a few things I did get right, and that 593 00:34:22,200 --> 00:34:23,640 Speaker 12: is you never want to buy it when it spikes 594 00:34:23,640 --> 00:34:26,080 Speaker 12: at that velocity. And every single time we spike it 595 00:34:26,120 --> 00:34:29,400 Speaker 12: a symemal velocity of last year, you always have a recession. 596 00:34:29,440 --> 00:34:32,480 Speaker 12: Now we're still a FED tightening. So yes, it's bounced 597 00:34:32,480 --> 00:34:35,920 Speaker 12: from the low. Was low was eighty one dollars and 598 00:34:35,960 --> 00:34:37,959 Speaker 12: fifty cents. But the average price for this year, about 599 00:34:38,040 --> 00:34:40,720 Speaker 12: seventy seven dollars, is the same as about two thousand 600 00:34:40,760 --> 00:34:42,839 Speaker 12: and six. At least gold has made a new high. 601 00:34:42,840 --> 00:34:45,080 Speaker 12: So I look at this way. Crudeau might have peaked 602 00:34:45,120 --> 00:34:47,560 Speaker 12: around ninety five. It looks like gold might be putting 603 00:34:47,600 --> 00:34:49,920 Speaker 12: the bottom around eighteen hundred. Remember, we'll see what's happening 604 00:34:49,920 --> 00:34:52,799 Speaker 12: with this conflict. It's making the world realize. Okay, Well, 605 00:34:52,840 --> 00:34:55,120 Speaker 12: the dollar is the best place to be, particularly with 606 00:34:55,160 --> 00:34:58,000 Speaker 12: the high yields. And if you get a recession, Crudel 607 00:34:58,120 --> 00:35:00,439 Speaker 12: almost always gets cheap. It almost has to get cheap 608 00:35:00,480 --> 00:35:02,960 Speaker 12: to reset itself. That's what's been missing so far this year. 609 00:35:03,680 --> 00:35:07,200 Speaker 1: So in a geopolitical in a world where we've got Ukraine, 610 00:35:07,280 --> 00:35:09,400 Speaker 1: the Middle East. Is there anything else on the commodity 611 00:35:09,480 --> 00:35:13,240 Speaker 1: infrastructure that you're suggest people either get long or short. 612 00:35:14,280 --> 00:35:16,680 Speaker 8: Well, the best foreign commodity this year is orange juice. 613 00:35:17,719 --> 00:35:23,120 Speaker 12: It's one twentieth the amount of trading as wheat, and 614 00:35:23,120 --> 00:35:25,319 Speaker 12: that's just more of an inventory thing. But the key 615 00:35:25,360 --> 00:35:27,799 Speaker 12: thing I look at overall looking forward is let's look 616 00:35:27,800 --> 00:35:31,440 Speaker 12: at historically, the best performing commodity almost all of history 617 00:35:31,520 --> 00:35:34,480 Speaker 12: is gold. And except in demand pull periods when you 618 00:35:34,480 --> 00:35:37,560 Speaker 12: pull up things like gold and copper, but particular in recessions, 619 00:35:37,800 --> 00:35:39,560 Speaker 12: gold is the best performer. And I think it's just 620 00:35:39,600 --> 00:35:41,120 Speaker 12: a matter of time it kicks in and does what 621 00:35:41,160 --> 00:35:43,960 Speaker 12: it almost has does. Remember remember thinking about gold, you 622 00:35:44,000 --> 00:35:46,360 Speaker 12: can store it on your body. It's cheap, it's not expensive. 623 00:35:46,640 --> 00:35:49,640 Speaker 12: Crudles a toxic chemical, it's very expensive to store. That 624 00:35:49,680 --> 00:35:52,719 Speaker 12: will show up over time. So if you invested interested 625 00:35:52,760 --> 00:35:55,840 Speaker 12: in energy crudel, it's better to invest in the equities. 626 00:35:56,000 --> 00:35:58,280 Speaker 12: Yet if you invest it, and you can still invest 627 00:35:58,280 --> 00:36:00,239 Speaker 12: in physical gold and ETF and I think I think 628 00:36:00,280 --> 00:36:01,680 Speaker 12: that's still gonna be one of the best form of 629 00:36:01,719 --> 00:36:04,000 Speaker 12: commodities this year. Now this year it's app only about 630 00:36:04,000 --> 00:36:06,200 Speaker 12: two percent. It was up almost ten and I think 631 00:36:06,200 --> 00:36:08,279 Speaker 12: it's just came back to good support, and if we 632 00:36:08,320 --> 00:36:10,319 Speaker 12: get toward the recession, I think it's gonna kind of 633 00:36:10,320 --> 00:36:12,480 Speaker 12: meet at the same price as wherever they meet with 634 00:36:12,520 --> 00:36:13,560 Speaker 12: the S and P five hundred. 635 00:36:13,600 --> 00:36:15,480 Speaker 2: By the way, you rather have the ETF than just 636 00:36:15,800 --> 00:36:19,840 Speaker 2: actually buying gold bars like a New Jersey senator and 637 00:36:19,880 --> 00:36:20,879 Speaker 2: putting them under your bed. 638 00:36:21,440 --> 00:36:26,239 Speaker 12: Yeah, I've enjoyed beating the gold space and if that 639 00:36:26,400 --> 00:36:28,400 Speaker 12: was me, it'd probably be lost or stolen. I know 640 00:36:28,440 --> 00:36:31,520 Speaker 12: my grandmother who was born in Germany during the war, 641 00:36:31,640 --> 00:36:35,840 Speaker 12: they still store some gold in their in their underwear drawer, 642 00:36:36,560 --> 00:36:39,160 Speaker 12: like okay, but I mean there's always it's diversity. The 643 00:36:39,160 --> 00:36:41,640 Speaker 12: thing about ETFs is you can buy, hold and store 644 00:36:41,680 --> 00:36:44,200 Speaker 12: that metal for virtually nothing. Compared to history, it was 645 00:36:44,320 --> 00:36:46,759 Speaker 12: very difficult to do and you still have to pay 646 00:36:46,760 --> 00:36:48,439 Speaker 12: for the storage and you have the risk. 647 00:36:48,719 --> 00:36:49,160 Speaker 8: ETFs. 648 00:36:49,239 --> 00:36:50,920 Speaker 12: I'm not saying they're risk free, but there's so much 649 00:36:50,920 --> 00:36:53,400 Speaker 12: easier to get exposure. And the key thing that's really 650 00:36:53,440 --> 00:36:55,279 Speaker 12: push for gold this year is that high interest rate 651 00:36:55,360 --> 00:36:57,759 Speaker 12: you can be you know, the the output for the 652 00:36:57,800 --> 00:36:59,920 Speaker 12: two you know that giant sucking sound of being up 653 00:37:00,120 --> 00:37:02,960 Speaker 12: up of about five percent might have peaked with the 654 00:37:03,000 --> 00:37:06,240 Speaker 12: FED potentially pivoting at some point, and that means gold 655 00:37:06,239 --> 00:37:08,520 Speaker 12: will gains a little bit of accolades because it's that 656 00:37:09,440 --> 00:37:12,000 Speaker 12: it doesn't earn interest, and it's that that the man 657 00:37:12,160 --> 00:37:14,319 Speaker 12: pulling else to the stock market. If the stock marker's peak, 658 00:37:14,400 --> 00:37:16,120 Speaker 12: gold should be one of the best performed. 659 00:37:15,800 --> 00:37:18,560 Speaker 2: It sounds like bitcoin, only not nearly as good, right, 660 00:37:18,600 --> 00:37:21,200 Speaker 2: because well, you can keep bitcoin on your person too, 661 00:37:21,200 --> 00:37:22,120 Speaker 2: and a lot more of it. 662 00:37:22,920 --> 00:37:24,000 Speaker 8: Big difference with bitcoin. 663 00:37:24,040 --> 00:37:27,560 Speaker 12: It's the best performing asset in history, and it's volatility's 664 00:37:27,560 --> 00:37:29,160 Speaker 12: about two to three times a gold and Matt, we 665 00:37:29,160 --> 00:37:31,279 Speaker 12: all know what happens in recessions when people hit the 666 00:37:31,320 --> 00:37:34,439 Speaker 12: bit and things. You sell your winners and you sell 667 00:37:34,440 --> 00:37:36,399 Speaker 12: the high volatility assets first. And that's what I'm still 668 00:37:36,400 --> 00:37:38,600 Speaker 12: worried about bitcoin. And if we have a normal recession, 669 00:37:38,800 --> 00:37:40,920 Speaker 12: Bitcoin's going to go down with risk assets. At some 670 00:37:41,000 --> 00:37:42,920 Speaker 12: point we might get to another bridge and lack more 671 00:37:42,960 --> 00:37:45,279 Speaker 12: like gold and long bunds. But today you see what's 672 00:37:45,320 --> 00:37:49,040 Speaker 12: happening on compared to compared to Monday of Friday, it's 673 00:37:49,040 --> 00:37:51,440 Speaker 12: down about two percent. Ethereum is down about four percent, 674 00:37:52,000 --> 00:37:54,239 Speaker 12: and I expect that to continue if we have a 675 00:37:54,239 --> 00:37:55,080 Speaker 12: normal recession. 676 00:37:55,400 --> 00:37:57,360 Speaker 1: All right, Mike, thanks so much for joining us. As always, 677 00:37:57,360 --> 00:38:00,920 Speaker 1: Mike mcloanh directing to the point on his call. There, 678 00:38:01,040 --> 00:38:05,640 Speaker 1: Mike McLoone, senior macro strategist, Bloomberg Intelligence from our Miami 679 00:38:05,800 --> 00:38:07,080 Speaker 1: Beach office. 680 00:38:07,400 --> 00:38:11,040 Speaker 4: You're listening to the tape cansur live program Bloomberg Markets 681 00:38:11,080 --> 00:38:14,479 Speaker 4: weekdays at ten am Eastern on Bloomberg Radio, the tune 682 00:38:14,520 --> 00:38:16,399 Speaker 4: in app, Bloomberg dot Com, and the. 683 00:38:16,280 --> 00:38:17,479 Speaker 5: Bloomberg Business App. 684 00:38:17,520 --> 00:38:20,319 Speaker 4: You can also listen live on Amazon Alexa from our 685 00:38:20,360 --> 00:38:25,440 Speaker 4: flagship New York station. Just say Alexa playing Bloomberg eleven thirty. 686 00:38:26,080 --> 00:38:29,080 Speaker 1: I'll tell you what. Whenever there is a major geopolitical 687 00:38:29,160 --> 00:38:32,160 Speaker 1: issue anywhere in the globe, one of the first people 688 00:38:32,800 --> 00:38:35,040 Speaker 1: we go to is Jack Divine. He's a president and 689 00:38:35,080 --> 00:38:35,920 Speaker 1: founding partner of the. 690 00:38:36,000 --> 00:38:36,560 Speaker 5: Arc And Group. 691 00:38:37,400 --> 00:38:40,320 Speaker 1: He is a thirty two year veteran of the Central 692 00:38:40,320 --> 00:38:43,920 Speaker 1: Intelligence Agency. He has been stationed all over the world. 693 00:38:44,000 --> 00:38:46,640 Speaker 1: He's a publisher of the book Good Hunting and American 694 00:38:46,680 --> 00:38:51,560 Speaker 1: Spymaster Story, which I highly recommend was excellent read. Jack. Here, 695 00:38:51,600 --> 00:38:54,240 Speaker 1: we are back in the Middle East again with more 696 00:38:54,280 --> 00:38:59,279 Speaker 1: conflict here. Let me just start with the intelligence area here. 697 00:38:59,480 --> 00:39:04,360 Speaker 1: What happened been that the vaunted Israeli intelligence, the American 698 00:39:04,400 --> 00:39:06,680 Speaker 1: intelligence did not pick this up. 699 00:39:07,480 --> 00:39:10,320 Speaker 11: Well, I think everybody scratching their head. I think everyone 700 00:39:10,400 --> 00:39:14,920 Speaker 11: recognizes it for a failure. When you look at israel 701 00:39:15,040 --> 00:39:17,400 Speaker 11: I mean, I've worked closely with them over the years. 702 00:39:17,480 --> 00:39:21,120 Speaker 11: They're very talented, they were at the cutting edge of technology. 703 00:39:22,000 --> 00:39:25,399 Speaker 11: They know their target right, they know the threat, They've 704 00:39:25,440 --> 00:39:28,160 Speaker 11: applied a lot of the fine technology. So we have 705 00:39:28,280 --> 00:39:33,880 Speaker 11: to ask ourselves today how did Hamas get past that? 706 00:39:34,520 --> 00:39:39,160 Speaker 11: And then the second area is the human sources. And 707 00:39:39,520 --> 00:39:44,440 Speaker 11: again I think many of us probably were relying on 708 00:39:44,760 --> 00:39:48,040 Speaker 11: the Israelis to have Hamas covered in a way that 709 00:39:48,600 --> 00:39:51,640 Speaker 11: somehow it would have been an early warning. It's the 710 00:39:51,760 --> 00:39:58,279 Speaker 11: early warning that you miss. Parts of intelligence are not unusual, 711 00:39:58,640 --> 00:40:01,279 Speaker 11: but they miss that early warning something pretty good like this. 712 00:40:01,480 --> 00:40:04,879 Speaker 11: There has to be an examination of conscience by all 713 00:40:04,920 --> 00:40:07,839 Speaker 11: intelligence service that asks or do we have the right 714 00:40:07,880 --> 00:40:10,680 Speaker 11: balance between technology and human and are we applying the 715 00:40:10,719 --> 00:40:13,640 Speaker 11: right way? And what countermatters are we dealing with. So 716 00:40:14,400 --> 00:40:18,720 Speaker 11: I think it's a tragic situation and an intelligence failure 717 00:40:18,920 --> 00:40:23,360 Speaker 11: that lawrance after action, very careful analysis. 718 00:40:23,520 --> 00:40:27,120 Speaker 2: What do you think Hamas? And maybe if it's working 719 00:40:27,160 --> 00:40:31,080 Speaker 2: with HASBLA or others. What's ultimately their goal here, because 720 00:40:31,200 --> 00:40:35,800 Speaker 2: now they've broken through borders at multiple points in Israel 721 00:40:36,120 --> 00:40:41,280 Speaker 2: and carried out horrific terrorist attacks. 722 00:40:42,120 --> 00:40:42,600 Speaker 8: Was that it? 723 00:40:43,120 --> 00:40:46,719 Speaker 2: Or do you think there's there's there's more to come. 724 00:40:47,080 --> 00:40:50,520 Speaker 2: Are they trying to bait you know, Israel into Gaza, 725 00:40:51,320 --> 00:40:54,960 Speaker 2: Are they trying to blow up this conflict even further? 726 00:40:55,160 --> 00:40:57,120 Speaker 2: Or do you think that was you know, this was 727 00:40:57,160 --> 00:40:58,440 Speaker 2: the plan and it was accomplished. 728 00:40:59,239 --> 00:41:03,600 Speaker 11: I think there's a lot of complex geopolitical issues behind it. 729 00:41:04,719 --> 00:41:08,279 Speaker 11: Whether the organizers of it took all of them into 730 00:41:08,320 --> 00:41:12,799 Speaker 11: consideration and played a great chess game remains to be seen. 731 00:41:12,880 --> 00:41:16,279 Speaker 11: I'm allowing that it's possible. What I think what we're 732 00:41:16,280 --> 00:41:20,160 Speaker 11: seeing is what there was. Other words, they decided that 733 00:41:20,280 --> 00:41:24,359 Speaker 11: at a certain point they were going to attack. This 734 00:41:24,400 --> 00:41:27,920 Speaker 11: has been long in coming. I think they needed it 735 00:41:27,960 --> 00:41:32,880 Speaker 11: to sustain themselves and to push back. The thing that 736 00:41:33,000 --> 00:41:36,880 Speaker 11: is stunning about it is that this is totally different 737 00:41:36,960 --> 00:41:40,880 Speaker 11: in the level of sophistication and coordination, and I believe 738 00:41:40,880 --> 00:41:43,080 Speaker 11: they had help. I mean, it's hard for me today. 739 00:41:43,440 --> 00:41:46,919 Speaker 11: I may be proven wrong, but this looks like help 740 00:41:46,960 --> 00:41:51,520 Speaker 11: from people that have done complicated operations, and specifically the Iranians. 741 00:41:52,160 --> 00:41:55,520 Speaker 11: So the Iranians have one set of things at play, 742 00:41:56,280 --> 00:41:59,239 Speaker 11: you know, Mas has some the Russians were right in 743 00:42:00,160 --> 00:42:04,360 Speaker 11: approving it, and they have things to play. There's the 744 00:42:04,440 --> 00:42:09,879 Speaker 11: Sauti Israeli prospects of the peace agreement, establishing relationships, if 745 00:42:09,880 --> 00:42:12,920 Speaker 11: you will. So there's a lot of play. But I 746 00:42:12,920 --> 00:42:17,200 Speaker 11: think Hamask just wanted to have a successful operation. This 747 00:42:17,400 --> 00:42:21,560 Speaker 11: may exceed their expectations, but I think they weren't. They 748 00:42:21,560 --> 00:42:24,040 Speaker 11: weren't doing it on the fly. They executed their plan 749 00:42:24,239 --> 00:42:27,680 Speaker 11: and I think we saw it after that. I think 750 00:42:27,719 --> 00:42:30,759 Speaker 11: it's the Israelis that have the game. They will they 751 00:42:30,800 --> 00:42:34,040 Speaker 11: will decide how this plays out. I mean, him all 752 00:42:34,080 --> 00:42:36,719 Speaker 11: women forced that they could flatten the country if they 753 00:42:36,760 --> 00:42:39,080 Speaker 11: wanted to, So they have to calibrate it. But I 754 00:42:39,120 --> 00:42:42,799 Speaker 11: think that Hamas can come back with new tricks. I 755 00:42:42,840 --> 00:42:46,120 Speaker 11: think they pretty well run the course. Can his ballage 756 00:42:46,160 --> 00:42:48,560 Speaker 11: jump in? Can there be problems in the West Bank? 757 00:42:49,200 --> 00:42:51,799 Speaker 11: All that remains to be seen. But I don't think 758 00:42:51,800 --> 00:42:55,080 Speaker 11: it's any in anyone's handbook. This part they're playing. I 759 00:42:55,120 --> 00:42:57,080 Speaker 11: think they're planning day by day. 760 00:42:57,920 --> 00:43:00,440 Speaker 1: Jack, you bring up some bigger issues as it relates 761 00:43:00,480 --> 00:43:05,719 Speaker 1: to Iran, maybe even Russia. You know, I guess that 762 00:43:05,800 --> 00:43:09,160 Speaker 1: the issue is that ties in with Ukraine. I mean, 763 00:43:10,200 --> 00:43:13,040 Speaker 1: what role do you think the United States should play 764 00:43:13,080 --> 00:43:16,399 Speaker 1: in the coming days and weeks now. 765 00:43:16,760 --> 00:43:19,279 Speaker 11: I've been talking about it for some time. I think 766 00:43:19,320 --> 00:43:23,800 Speaker 11: there's a grand struggle that is taking place in front 767 00:43:23,800 --> 00:43:27,160 Speaker 11: of us in terms of the balance of power. On 768 00:43:27,200 --> 00:43:30,239 Speaker 11: the one side, you have the democratic forces and its allies, 769 00:43:30,320 --> 00:43:33,040 Speaker 11: and the other you have the non democratic forces on 770 00:43:33,120 --> 00:43:35,920 Speaker 11: the other There is a big game that's being played 771 00:43:36,000 --> 00:43:40,319 Speaker 11: well beyond Ukraine. Ukraine was clearly the first manifestation of it, 772 00:43:40,840 --> 00:43:45,600 Speaker 11: but you have Russia, China, Iran, North Korea. But now 773 00:43:45,640 --> 00:43:48,920 Speaker 11: they're extending it and trying to spread spread the faith 774 00:43:49,000 --> 00:43:51,759 Speaker 11: of the Gospel if you like the other countries. If 775 00:43:51,760 --> 00:43:54,319 Speaker 11: you look at Latin America, there's turmoil there in terms 776 00:43:54,360 --> 00:44:01,319 Speaker 11: of elections, and in Africa, tremendous turmoil. It's very reminiscent. 777 00:44:01,360 --> 00:44:03,360 Speaker 11: I hate to say it because, well, you're a Cold warrior, 778 00:44:03,840 --> 00:44:07,040 Speaker 11: but it's so reminiscent of the international dimension of the 779 00:44:07,040 --> 00:44:11,400 Speaker 11: Cold War, where the West and its allies were fighting 780 00:44:11,440 --> 00:44:14,040 Speaker 11: them and counterpunching everywhere. Every once there to be a 781 00:44:14,080 --> 00:44:16,600 Speaker 11: hot war so I think we're looking at it, and 782 00:44:16,640 --> 00:44:19,359 Speaker 11: we have to look at a bigger scale. This is 783 00:44:19,400 --> 00:44:24,359 Speaker 11: not just a fight between Hamas and Israel. There is 784 00:44:24,920 --> 00:44:29,759 Speaker 11: this like Ukraine is going to alder the geopolitical dynamic 785 00:44:30,520 --> 00:44:33,600 Speaker 11: of the balance of power, and now we're in the 786 00:44:33,640 --> 00:44:39,160 Speaker 11: big time where things can get misunderstood, misconstrued and we 787 00:44:39,280 --> 00:44:42,640 Speaker 11: end up expanding hot wars. 788 00:44:43,000 --> 00:44:47,360 Speaker 2: Are you concerned about the impact the impact of this, 789 00:44:47,480 --> 00:44:49,920 Speaker 2: I don't know if if you're saying this is kind 790 00:44:49,920 --> 00:44:54,200 Speaker 2: of an axis of evil here the Russians, the Chinese, 791 00:44:54,320 --> 00:44:57,520 Speaker 2: the Iranians, and North Korea, but certainly a lot of 792 00:44:57,560 --> 00:45:02,440 Speaker 2: those countries have been aim for misinformation. And US elections 793 00:45:02,440 --> 00:45:08,120 Speaker 2: were approaching one and you know, you've got a radical 794 00:45:08,160 --> 00:45:12,040 Speaker 2: contingent in Congress that seems to, if not support Putin, 795 00:45:12,120 --> 00:45:14,640 Speaker 2: at least be opposed to Ukrainian aid. Are are you 796 00:45:14,680 --> 00:45:18,920 Speaker 2: worried that they've sort of infected the US Congress. 797 00:45:19,600 --> 00:45:26,600 Speaker 11: We're in a new age where artificial intelligence disinformation is 798 00:45:26,680 --> 00:45:29,840 Speaker 11: part of the realm, as part of the big game, 799 00:45:29,920 --> 00:45:32,759 Speaker 11: if you will, and the Russians have been using them 800 00:45:32,800 --> 00:45:35,839 Speaker 11: for some time. I think there was a general slowness 801 00:45:35,880 --> 00:45:41,520 Speaker 11: in recognizing the breadth of it. Including involvement in our elections, 802 00:45:41,560 --> 00:45:45,520 Speaker 11: which was I was more upset about the fact that 803 00:45:45,560 --> 00:45:49,440 Speaker 11: they were involved in not that they were collecting information, 804 00:45:49,600 --> 00:45:52,480 Speaker 11: but that they were playing in internal US affairs. Is 805 00:45:52,520 --> 00:45:55,719 Speaker 11: really quite unprecedented. I mean, there's a little dabbling here 806 00:45:55,760 --> 00:45:57,680 Speaker 11: and here in history, and the same is true on 807 00:45:57,719 --> 00:46:00,520 Speaker 11: our site. We do not meddle inside their country. This dynamics, 808 00:46:00,600 --> 00:46:03,600 Speaker 11: so this information and I would just bring it to 809 00:46:03,640 --> 00:46:08,080 Speaker 11: the moment. This information is very much part of the 810 00:46:08,120 --> 00:46:11,759 Speaker 11: Hamas if you like, and its allies propaganda. The propaganda 811 00:46:11,840 --> 00:46:16,360 Speaker 11: is out there mobilizing their friends, and it's dynamic. I 812 00:46:16,440 --> 00:46:19,520 Speaker 11: also should have put a footnote the cyber attacks at 813 00:46:19,560 --> 00:46:24,000 Speaker 11: the very beginning of the Hamas attack are very impressive. 814 00:46:24,480 --> 00:46:27,080 Speaker 11: So you're looking at that new dimension of war, just 815 00:46:27,120 --> 00:46:30,640 Speaker 11: like you're looking at new dimensions of war in Ukraine. 816 00:46:31,520 --> 00:46:36,760 Speaker 11: This experience will not only be lessons learned for intelligence officers, 817 00:46:36,760 --> 00:46:41,080 Speaker 11: but it's also going to be lessons like lessons learned 818 00:46:41,120 --> 00:46:44,640 Speaker 11: on war fighting and how we are going to deal 819 00:46:44,719 --> 00:46:48,920 Speaker 11: with this, and it won't be just in the Middle East. 820 00:46:49,040 --> 00:46:54,040 Speaker 11: So I think hold on to your seat. 821 00:46:53,239 --> 00:46:56,840 Speaker 1: Jack, thirty seconds left. What do you think is Israel 822 00:46:56,920 --> 00:46:59,040 Speaker 1: does next? How do you think they react. 823 00:47:02,000 --> 00:47:06,040 Speaker 11: I think they have no choice but to use an 824 00:47:06,040 --> 00:47:10,800 Speaker 11: iron hand, and with that will come, you know, repercussions. 825 00:47:11,440 --> 00:47:18,040 Speaker 11: I don't see how it's possible feasible that had a 826 00:47:18,040 --> 00:47:22,480 Speaker 11: soft landing negotiators. I think it's nonsense to suggests that 827 00:47:22,520 --> 00:47:25,520 Speaker 11: at this point, when you look at the savagery of it, 828 00:47:26,320 --> 00:47:29,759 Speaker 11: How of the Israelis that have suffered so much in history, 829 00:47:30,640 --> 00:47:34,320 Speaker 11: how does the government stay in power and not set 830 00:47:34,360 --> 00:47:38,400 Speaker 11: this right? So I think the repercussions are going to 831 00:47:38,480 --> 00:47:43,880 Speaker 11: be very hard. I take that word everybody better. It'll 832 00:47:43,920 --> 00:47:49,040 Speaker 11: be hard landing with long term implication. Getting back to 833 00:47:49,080 --> 00:47:49,600 Speaker 11: the peace DAGs. 834 00:47:49,880 --> 00:47:51,960 Speaker 1: Actually, Jack, I'm sorry, I just got to leave it 835 00:47:52,000 --> 00:47:55,240 Speaker 1: there just because of time, But thanks as always, Jack Divine, President, 836 00:47:55,320 --> 00:47:56,919 Speaker 1: founding partner of the ARC and Group. 837 00:47:57,280 --> 00:47:58,479 Speaker 5: You're listening to the tape. 838 00:47:58,680 --> 00:48:02,480 Speaker 4: Catch a live Programloomberg Markets weekdays at ten am Eastern 839 00:48:02,719 --> 00:48:06,200 Speaker 4: on Bloomberg Radio, the tune in app, Bloomberg dot Com. 840 00:48:05,920 --> 00:48:07,359 Speaker 5: And the Bloomberg Business app. 841 00:48:07,400 --> 00:48:10,200 Speaker 4: You can also listen live on Amazon Alexa from our 842 00:48:10,200 --> 00:48:15,240 Speaker 4: flagship New York station. Just say Alexa, play Bloomberg eleven thirty. 843 00:48:15,680 --> 00:48:17,200 Speaker 1: Let's go to our next guest right here to get 844 00:48:17,200 --> 00:48:19,279 Speaker 1: a sense of kind of a broader view of these 845 00:48:19,320 --> 00:48:22,080 Speaker 1: markets here in the context of what is just another 846 00:48:22,160 --> 00:48:25,640 Speaker 1: piece in the wall here in terms of geopolitical issues. 847 00:48:25,800 --> 00:48:28,840 Speaker 1: Quincy Crosby joins us. She is the chief of Global 848 00:48:28,840 --> 00:48:33,759 Speaker 1: Strategist for LPL Financial. Quincy, thanks so much for joining 849 00:48:33,840 --> 00:48:37,200 Speaker 1: us here. Based upon your experience when you wake up 850 00:48:37,239 --> 00:48:39,880 Speaker 1: to find an event like this, what's happening in Israel 851 00:48:40,000 --> 00:48:43,360 Speaker 1: or what's happening in Ukraine and other parts of the world, 852 00:48:43,719 --> 00:48:47,120 Speaker 1: in your experience, how do you kind of view markets 853 00:48:47,120 --> 00:48:49,840 Speaker 1: in this how do you view positioning? Is it let's 854 00:48:49,960 --> 00:48:53,080 Speaker 1: just kind of not you know, make quick changes, or 855 00:48:53,120 --> 00:48:54,480 Speaker 1: how do you typically react? 856 00:48:55,840 --> 00:48:59,719 Speaker 13: Well, you know, very often the first response in a 857 00:48:59,760 --> 00:49:04,320 Speaker 13: mar is sell first, ask questions later. We didn't see 858 00:49:04,360 --> 00:49:07,360 Speaker 13: that in this market. It's actually been maybe because it 859 00:49:07,400 --> 00:49:10,640 Speaker 13: was the weekend, the market had time to assimilate what 860 00:49:10,840 --> 00:49:13,520 Speaker 13: was going on. But you don't want to do anything 861 00:49:13,640 --> 00:49:18,480 Speaker 13: drastic because there's still uncertainty hovering over the market. Now 862 00:49:18,520 --> 00:49:22,000 Speaker 13: you would want to go into treasuries, obviously gold. You 863 00:49:22,040 --> 00:49:25,560 Speaker 13: see that the treasure market will open, and you want 864 00:49:25,640 --> 00:49:29,359 Speaker 13: to see the stocks that you want to buy may 865 00:49:29,760 --> 00:49:32,520 Speaker 13: wind up being even more attractive than even in this 866 00:49:33,040 --> 00:49:36,200 Speaker 13: death by a thousand cuts that we've had in the 867 00:49:36,239 --> 00:49:39,840 Speaker 13: market over the last number of sessions. So again you 868 00:49:39,840 --> 00:49:42,239 Speaker 13: don't want to be but I will say this, we're 869 00:49:42,280 --> 00:49:47,680 Speaker 13: paying attention to energy, crude oil is hyper hyper alert 870 00:49:48,320 --> 00:49:51,799 Speaker 13: to any rumor, any chatter of whether or not this 871 00:49:52,320 --> 00:49:56,320 Speaker 13: conflict will expand into the deeper Middle East and or 872 00:49:56,400 --> 00:50:01,320 Speaker 13: producing region. And also defense stocks. There is no doubt 873 00:50:01,360 --> 00:50:05,560 Speaker 13: about it that we need more defense spending, and I 874 00:50:05,560 --> 00:50:08,000 Speaker 13: think it's going to happen because of this in Ukraine. 875 00:50:08,120 --> 00:50:12,120 Speaker 2: Obviously you have to imagine it will expand given what 876 00:50:12,160 --> 00:50:18,280 Speaker 2: we've heard from Netan Yahoo and also given his position there. 877 00:50:19,040 --> 00:50:21,240 Speaker 2: I wonder what you think about treasuries now. The market 878 00:50:21,280 --> 00:50:24,280 Speaker 2: is closed today for the bond market is closed today 879 00:50:24,320 --> 00:50:28,120 Speaker 2: for Columbus Day. But we have yields hovering at very 880 00:50:28,280 --> 00:50:31,719 Speaker 2: high levels. So for example, the ten year right now 881 00:50:31,760 --> 00:50:36,360 Speaker 2: at four eighty, the twenty year at five sixteen, five seventeen, 882 00:50:36,800 --> 00:50:40,840 Speaker 2: and the thirty year at almost five percent. You know, 883 00:50:40,920 --> 00:50:43,640 Speaker 2: typically this is a place at Quincy where you see 884 00:50:43,640 --> 00:50:48,440 Speaker 2: investors go for safe haven and right now would be 885 00:50:48,520 --> 00:50:50,759 Speaker 2: a time when they would use that, do they? 886 00:50:51,120 --> 00:50:51,279 Speaker 5: You know? 887 00:50:51,320 --> 00:50:54,520 Speaker 2: When the market opens, buy up these treasuries and force 888 00:50:54,560 --> 00:50:55,520 Speaker 2: those yields back down. 889 00:50:56,800 --> 00:50:57,920 Speaker 3: I think you'll probably see that. 890 00:50:58,000 --> 00:50:58,719 Speaker 13: It won't just be. 891 00:51:00,280 --> 00:51:00,760 Speaker 7: Investors. 892 00:51:00,800 --> 00:51:04,640 Speaker 13: I think it's going to be global if the situation 893 00:51:04,840 --> 00:51:08,200 Speaker 13: remains the same, or certainly if it looks as if 894 00:51:08,520 --> 00:51:13,399 Speaker 13: there's going to be an escalation in terms of what 895 00:51:13,560 --> 00:51:15,680 Speaker 13: Israel intends to do. 896 00:51:17,239 --> 00:51:19,680 Speaker 1: So Quincy. I mean, I guess one of the questions 897 00:51:19,680 --> 00:51:22,560 Speaker 1: here for in investors is is this kind of the 898 00:51:22,600 --> 00:51:24,480 Speaker 1: new normal? I guess, I mean, do I need to 899 00:51:24,520 --> 00:51:29,520 Speaker 1: have my portfolio structure in such a way that, you know, 900 00:51:29,840 --> 00:51:32,839 Speaker 1: it just seems to be more and more uncertainly out there. 901 00:51:32,840 --> 00:51:36,040 Speaker 1: From a geald political perspective, do you view it that way? 902 00:51:36,600 --> 00:51:39,160 Speaker 1: Or is this kind of we shouldn't go that far? 903 00:51:39,200 --> 00:51:42,439 Speaker 13: I guess I don't think we should go that far. 904 00:51:42,520 --> 00:51:46,240 Speaker 13: I mean, let me say that if the European Union, 905 00:51:46,360 --> 00:51:52,160 Speaker 13: the US, China for example, can contain this event to 906 00:51:52,600 --> 00:51:57,800 Speaker 13: just the region, it will be it will be significant 907 00:51:58,120 --> 00:52:03,000 Speaker 13: for the concept of g A political cooperation. Nobody wants 908 00:52:03,040 --> 00:52:08,560 Speaker 13: to see this expand maybe has blocked does Humasque, but overall, uh, 909 00:52:08,640 --> 00:52:12,960 Speaker 13: there's a broad consensus that this can't go beyond these borders. 910 00:52:13,120 --> 00:52:16,719 Speaker 13: So that would be good that would be positive. But overall, 911 00:52:17,400 --> 00:52:20,120 Speaker 13: you know, we have to look in Washington as to 912 00:52:20,200 --> 00:52:24,520 Speaker 13: whether or not Washington can come together come up with 913 00:52:24,600 --> 00:52:29,719 Speaker 13: a concrete package for defense, not just for the Israeli 914 00:52:29,840 --> 00:52:34,080 Speaker 13: side and Ukraine, but for the United States. We're short 915 00:52:34,360 --> 00:52:39,600 Speaker 13: in terms of defense spending. It's down, and we don't 916 00:52:39,640 --> 00:52:42,319 Speaker 13: have the stock calls that we need. It must be done. 917 00:52:42,360 --> 00:52:45,720 Speaker 13: Maybe this will be the impetus for it. There's nothing 918 00:52:45,800 --> 00:52:49,120 Speaker 13: better than strength. There's nothing better than a government that 919 00:52:49,480 --> 00:52:53,720 Speaker 13: is intact that actually helps prevent this kind of event. 920 00:52:55,280 --> 00:52:57,799 Speaker 1: So it would help a Speaker of the House maybe 921 00:52:57,880 --> 00:52:58,359 Speaker 1: the first step. 922 00:52:59,719 --> 00:53:01,480 Speaker 2: Paul pointing out that we don't even have a Speaker 923 00:53:01,480 --> 00:53:03,400 Speaker 2: of the House here. And part of the problem was 924 00:53:04,280 --> 00:53:09,320 Speaker 2: obviously that the far right didn't want to fund any 925 00:53:09,400 --> 00:53:12,840 Speaker 2: more support for Ukraine. And you have to wonder, I 926 00:53:12,840 --> 00:53:15,799 Speaker 2: guess Israel is a different story, especially for the far right. 927 00:53:15,920 --> 00:53:19,480 Speaker 2: But does the political situation in the US concern you 928 00:53:19,520 --> 00:53:20,960 Speaker 2: at all? Quincy? 929 00:53:22,120 --> 00:53:22,279 Speaker 8: Oh? 930 00:53:22,360 --> 00:53:23,040 Speaker 7: Yes it does. 931 00:53:24,200 --> 00:53:28,240 Speaker 13: Again, if I were, let's say, you know, I wanted 932 00:53:28,239 --> 00:53:33,000 Speaker 13: to do something militarily overseas, this would be a good 933 00:53:33,040 --> 00:53:36,520 Speaker 13: time because just the way Hamas looked at what was 934 00:53:36,560 --> 00:53:39,640 Speaker 13: going on in Israel and the strikes and so on. 935 00:53:40,320 --> 00:53:44,719 Speaker 13: It's always a good time when a government seems as 936 00:53:44,719 --> 00:53:50,640 Speaker 13: though it is not integrated properly. And you're right about 937 00:53:50,680 --> 00:53:55,960 Speaker 13: the conservative element in terms of spending more defense for Israel. 938 00:53:56,440 --> 00:54:00,800 Speaker 13: Very strong evangelical Christian base that is very pro Israel 939 00:54:00,840 --> 00:54:04,279 Speaker 13: and has been historically all right. 940 00:54:04,280 --> 00:54:09,640 Speaker 1: So Quincy, let's step back. Earnings are starting off in ernest. 941 00:54:09,760 --> 00:54:12,680 Speaker 1: Later this week, we'll get the banks here. What are 942 00:54:12,680 --> 00:54:14,920 Speaker 1: you looking for in this earnings cycle? 943 00:54:16,320 --> 00:54:19,719 Speaker 13: This is crucial and I'm glad that we start officially 944 00:54:19,800 --> 00:54:22,719 Speaker 13: with the banks, especially JP Morgan. I want to hear 945 00:54:22,800 --> 00:54:28,440 Speaker 13: what they have to say about the consumer credit card delinquencies, 946 00:54:28,560 --> 00:54:32,480 Speaker 13: late payments, whether and who's being affected the most. I 947 00:54:32,480 --> 00:54:35,080 Speaker 13: think we know that it is lower wage journals, but 948 00:54:35,120 --> 00:54:38,280 Speaker 13: we want to hear from them rather than this conjecture, 949 00:54:38,440 --> 00:54:41,239 Speaker 13: than the headlines that we see every day. They will 950 00:54:41,239 --> 00:54:43,239 Speaker 13: have a good handle on it. Also, they're going to 951 00:54:43,280 --> 00:54:46,480 Speaker 13: tell us about loan growth from their customers, from their 952 00:54:47,520 --> 00:54:51,520 Speaker 13: client base overall, not just credit cards, and the guidance 953 00:54:51,600 --> 00:54:54,480 Speaker 13: that the companies have. This is crucial because one of 954 00:54:54,520 --> 00:54:58,399 Speaker 13: the things that is concerning and has been for some time, 955 00:54:58,440 --> 00:55:02,280 Speaker 13: but it's been holding up, is margin compression, because if 956 00:55:02,400 --> 00:55:06,719 Speaker 13: we see margin compression deepening, and we don't think it's 957 00:55:06,760 --> 00:55:08,640 Speaker 13: going to be, but if we do, they're going to 958 00:55:08,719 --> 00:55:11,560 Speaker 13: have to cut costs and that is going to affect 959 00:55:11,560 --> 00:55:14,399 Speaker 13: the labor market, which is actually held up as we 960 00:55:14,440 --> 00:55:20,319 Speaker 13: know and indicates resilience. But any sense that companies need 961 00:55:20,400 --> 00:55:23,080 Speaker 13: to cut costs in order to get that bottom line, 962 00:55:23,160 --> 00:55:25,040 Speaker 13: it is going to hit the labor market, which will 963 00:55:25,080 --> 00:55:28,360 Speaker 13: hit the consumers. And then that leads you to the 964 00:55:28,480 --> 00:55:34,000 Speaker 13: worry over a darker landing as opposed to a softer landing. 965 00:55:34,320 --> 00:55:36,960 Speaker 13: We don't expect it, but we're watching for. 966 00:55:37,080 --> 00:55:39,640 Speaker 1: It absolutely, all right, Quincy, thank you so much for 967 00:55:39,719 --> 00:55:42,960 Speaker 1: joining us. I always appreciate getting your perspective. Quincy Crosby. 968 00:55:43,520 --> 00:55:48,279 Speaker 1: She is the chief Global strategist at LPL Financial. Again, 969 00:55:48,400 --> 00:55:52,960 Speaker 1: geopolitical risks front and center here. Central bank policy also 970 00:55:53,000 --> 00:55:56,239 Speaker 1: a big issue for these markets. And then starting really 971 00:55:56,280 --> 00:55:58,520 Speaker 1: later this week, particularly on Friday, with the big banks, 972 00:55:58,960 --> 00:56:01,120 Speaker 1: we're going to start getting into the earning season. 973 00:56:02,960 --> 00:56:06,040 Speaker 2: Thanks for listening to the Bloomberg Markets podcasts. You can 974 00:56:06,080 --> 00:56:09,880 Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever 975 00:56:09,960 --> 00:56:13,680 Speaker 2: podcast platform you prefer. I'm Matt Miller I'm on Twitter 976 00:56:13,880 --> 00:56:16,360 Speaker 2: at Matt Miller nineteen seventy three. 977 00:56:16,239 --> 00:56:18,640 Speaker 1: And I'm Faull Sweeney. I'm on Twitter at pt Sweeney. 978 00:56:18,760 --> 00:56:21,400 Speaker 1: Before the podcast, you can always catch us worldwide at 979 00:56:21,440 --> 00:56:24,160 Speaker 1: Bloomberg Radio