WEBVTT - Erdogan Wants His Power Entrenched, Rahman Says 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 0:00:14.000 --> 0:00:17.599 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.560 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.640 --> 0:00:34.080 Bloomberg dot Com, and of course on the Bloomberg lots 0:00:34.080 --> 0:00:36.280 to talk about here. We're gonna stay on the markets. 0:00:36.280 --> 0:00:38.600 But miss roman joins now from your Raisier group and 0:00:39.040 --> 0:00:41.680 uh we gave us great perspective earlier in this uh 0:00:42.000 --> 0:00:44.880 Monday morning, and we'll do it again, Miss Ramen. Over 0:00:44.920 --> 0:00:48.800 the weekend there was a headline that basically said, the 0:00:48.920 --> 0:00:52.599 United States has a big old air force base in Turkey, 0:00:53.120 --> 0:00:55.520 and Turkey is not happy with our big old air 0:00:55.560 --> 0:00:58.960 force base in Turkey, and that's creating a lot of tension. 0:00:59.520 --> 0:01:03.880 Give us briefing right now and that real visceral thing 0:01:04.040 --> 0:01:08.440 for Arijuan and Trump, which is a huge US presence 0:01:08.800 --> 0:01:13.039 in southern Turkey. Thanks for having me, Tom, Yeah, I 0:01:13.040 --> 0:01:17.960 think look that the context here is a quickly deteriorating 0:01:18.080 --> 0:01:23.760 relationship between Turkey and the US where absolutely everything is 0:01:23.840 --> 0:01:28.080 in play, from air bases to US sanctions on how Bank, 0:01:28.640 --> 0:01:33.640 to corporation in Syria, to US funding of Turkey's current account. 0:01:33.680 --> 0:01:37.679 I mean, the relationship is really on the precipice, and 0:01:37.720 --> 0:01:41.040 I think that's why we still assume some degree of 0:01:41.160 --> 0:01:43.679 rationality on the side of Rod And I do think 0:01:44.000 --> 0:01:48.440 he will signal a commitment this week to release the pastor, 0:01:48.800 --> 0:01:51.240 as well as some decisive action by the Central Bank, 0:01:51.240 --> 0:01:55.240 because otherwise he's looking at much much more difficult choices 0:01:55.640 --> 0:01:59.640 that could undermine his political mega project back home. Which 0:02:00.080 --> 0:02:02.680 what underpins your confidence that that will happen, both in 0:02:02.760 --> 0:02:05.720 terms of the relations of the pastor and the actual 0:02:05.840 --> 0:02:09.200 move to do what's needed domestically higher interest rates, perhaps 0:02:09.200 --> 0:02:11.480 tied the fiscal policy. What gives you confidence that's about 0:02:11.520 --> 0:02:15.200 to happen. It's it's really looking at the alternative. So 0:02:15.360 --> 0:02:19.440 what's what's the counter factual? If Dan does not allow 0:02:19.520 --> 0:02:22.720 the central Bank to move decisively this week, if this 0:02:22.880 --> 0:02:26.040 row with the US is not de escalated, Essentially he's 0:02:26.040 --> 0:02:29.560 looking at two options capital controls, which for a country 0:02:29.680 --> 0:02:35.000 as dependent on foreign exchange as Turkeys, would be absolutely disastrous, 0:02:35.000 --> 0:02:38.520 a massive blow to investor confidence, far more than we've 0:02:38.560 --> 0:02:40.920 seen over the course of the last few weeks. Or indeed, 0:02:40.919 --> 0:02:43.280 and I'm a stand by agreement because he will need 0:02:43.360 --> 0:02:46.760 external funding for the current account, and of course that 0:02:46.800 --> 0:02:51.080 would come with conditions and constraints that would undermine a 0:02:51.200 --> 0:02:55.200 large part of Rodan's political narrative. Remember, he has made 0:02:55.200 --> 0:02:58.359 political hay of the fact he was the leader who 0:02:58.480 --> 0:03:02.680 kicked the I M s our and return full sovereignty 0:03:02.680 --> 0:03:05.640 to Turkey. So to now have to accept an I 0:03:05.800 --> 0:03:07.799 m F program with all of the conditions that that 0:03:07.880 --> 0:03:10.320 would impose on him, I think would be a massive 0:03:10.400 --> 0:03:12.959 humiliation for him, and I just I find those two 0:03:12.960 --> 0:03:17.280 options so unpalatable for him that although we moved by 0:03:17.280 --> 0:03:20.560 the Central Bank would be difficult, it's far easier than 0:03:20.600 --> 0:03:24.320 the alternative. I'm just wondering, though, whether he has no choice, 0:03:24.320 --> 0:03:28.160 whether he's been completely overtaken by events now and something 0:03:28.200 --> 0:03:30.400 that might have worked a week two weeks ago, we'll 0:03:30.480 --> 0:03:33.280 just no longer work. That the highest short term interest 0:03:33.360 --> 0:03:35.880 rates and time of fiscal policy won't regain confidence to 0:03:35.960 --> 0:03:39.920 this market, and they'll have to institute the emergency measures 0:03:40.000 --> 0:03:43.360 that you just pointed out, Mitch Well, I I think 0:03:43.560 --> 0:03:47.040 there is a precedent for the dynamic that we're currently seeing. 0:03:47.080 --> 0:03:49.200 Back in May, I think you could see a very 0:03:49.280 --> 0:03:52.080 decisive rate hike by the central Bank, let's say five 0:03:52.400 --> 0:03:55.840 d to thousand basis points, five to tentage points, that 0:03:56.120 --> 0:03:58.360 kind of number, and then every one would say, look, 0:03:58.400 --> 0:03:59.760 you know, this is not what I support. But the 0:03:59.800 --> 0:04:02.480 sun Traw Bank is independent. I think that would stop 0:04:02.600 --> 0:04:05.200 the immediate bleeding. And then you're right. We would need 0:04:05.280 --> 0:04:08.760 to see alba Iraq being able to demonstrate he's a 0:04:08.760 --> 0:04:12.240 positive influence on Araduan by coming forward with a much 0:04:12.320 --> 0:04:15.560 broader and comprehensive strategy of economic reform that includes the 0:04:15.880 --> 0:04:18.719 consolidation is one of his legs. Now, is that likely? 0:04:19.080 --> 0:04:22.440 I think highly, highly questionable. But again the alternatives I 0:04:22.440 --> 0:04:26.120 think are so impalatable, both economically and politically. I think 0:04:26.120 --> 0:04:28.560 we are going to see some fairly decisive action this 0:04:28.600 --> 0:04:31.640 week in our time. Fox for a Monday dumb question 0:04:31.680 --> 0:04:34.960 of the Day, I'll ask it, But the midge, what 0:04:35.120 --> 0:04:38.200 does Mr arad One want? I mean, I understand he's 0:04:38.200 --> 0:04:40.880 pushing back against the US first set of reasons, and 0:04:41.240 --> 0:04:44.320 there's a traditional German Turkish relationship. I get all that, 0:04:44.800 --> 0:04:49.880 But what's it really want with allies and non allies? 0:04:51.600 --> 0:04:55.360 I think Tom Ultimately, we we've seen it crystallized on 0:04:55.400 --> 0:04:58.080 the back of the presidential election. I think he wants 0:04:58.160 --> 0:05:02.440 to ultimately institution analize and entrench his power and those 0:05:02.720 --> 0:05:06.800 around him. And anything that could potentially complicate or undermine 0:05:07.520 --> 0:05:10.960 the institutionalization of power, I think he will. He will 0:05:11.000 --> 0:05:14.880 be a threat. He has his presidential system in place, 0:05:15.240 --> 0:05:19.159 he has his preferred successes now all around the cabinet table, 0:05:19.520 --> 0:05:23.760 and ultimately wants, I think, to to move that mega 0:05:23.839 --> 0:05:29.279 political project of his forward. Now being dependent on foreign capital, 0:05:29.320 --> 0:05:32.680 having to raise interest rates, having to be dictated to 0:05:32.800 --> 0:05:36.360 eventually by external actors of the markets, I think undermines 0:05:36.600 --> 0:05:39.960 that that that mega project that he is that he 0:05:40.000 --> 0:05:45.080 is so desperately seeking to implement. Does Germany? Does Germany 0:05:45.120 --> 0:05:46.760 come in the next couple of days, I mean, just 0:05:46.760 --> 0:05:49.080 want to final question, Madge if we could. I mean, 0:05:49.120 --> 0:05:52.719 Germany has an historic and unique relationship with the people 0:05:52.800 --> 0:05:56.920 of Turkey. Does chance or miracle coming unilaterally and try 0:05:56.960 --> 0:06:01.280 to fix this in terms of the politics. So there's 0:06:01.320 --> 0:06:04.280 definitely something to this. There is a state visit between 0:06:04.279 --> 0:06:06.760 Aridoan and Merkel at the end of September, and I 0:06:06.760 --> 0:06:09.600 think that will be used as a vehicle to try 0:06:09.640 --> 0:06:13.359 and pass diplomatic messages onto the Turks around what the 0:06:13.400 --> 0:06:16.600 Germans think Turkey needs to do. I think, like the US, 0:06:16.680 --> 0:06:19.240 they think the plan the government's presented does not fit 0:06:19.279 --> 0:06:22.880 for purpose. It's largely cosmetic. That a structural crisis was 0:06:23.040 --> 0:06:26.040 likely returning the economy because of all of the rule 0:06:26.080 --> 0:06:29.000 of law violations and the undermining of investor confidence we've 0:06:29.040 --> 0:06:31.160 seen over the last two years. So I think there 0:06:31.160 --> 0:06:33.520 will be that there is a context for Germany to 0:06:33.520 --> 0:06:36.200 try and influence actions in Turkey. And of course that's 0:06:36.200 --> 0:06:39.440 a big concern in Germany at least because they're implementing 0:06:39.440 --> 0:06:42.080 an agreement that is stemming the flow of migrants into Germany, 0:06:42.080 --> 0:06:45.000 which is you know, in fifteen was massively important for 0:06:45.040 --> 0:06:48.000 angler Merkell survival. So the Europeans are watching this closely. 0:06:48.240 --> 0:06:50.600 Miss thank you so much for Raman with the international 0:06:50.640 --> 0:06:54.640 relations update that overlays and the finance that economics and 0:06:54.680 --> 0:07:12.160 the investment. We're looking. What John and I try to 0:07:12.200 --> 0:07:16.360 do in the modern media is we always cite everything, 0:07:16.520 --> 0:07:19.600 and what you don't see is we and our great 0:07:19.680 --> 0:07:27.760 team are scrambling to separate out from like legitimate news organizations. John, 0:07:27.840 --> 0:07:30.720 we just walked through that twenty minutes ago. With the 0:07:30.800 --> 0:07:34.240 market moving tweet. Yeah, fact is the tweet moved the market. 0:07:34.280 --> 0:07:36.200 The tweet did move the market to some extent. We 0:07:36.240 --> 0:07:38.640 saw some Turkish lera come in, we saw euro dollar 0:07:38.920 --> 0:07:41.560 flat on the session, and we saw US futures past 0:07:41.640 --> 0:07:43.880 some of the early losses. It was a tweet essentially 0:07:43.920 --> 0:07:48.880 communicating on Twitter, which has now been completely unconfirmed. Um 0:07:48.880 --> 0:07:52.280 the US Anchor Embassy official speaking to Reuters saying they 0:07:52.320 --> 0:07:56.280 haven't issued a statement regarding the US pastor Brunson. This 0:07:56.320 --> 0:07:58.800 is from Ruyters, This is from anchor. This is the 0:07:58.800 --> 0:08:01.160 reporting coming from Roy. So is this after a tweet 0:08:01.160 --> 0:08:05.440 suggested that the pastor Andrew Branson, who was facing espionage 0:08:05.440 --> 0:08:09.280 and terrorism allegations related to that fail and ultimately is 0:08:09.320 --> 0:08:11.640 that the epicenter of the spat between the US and Turkey. 0:08:11.800 --> 0:08:13.800 There was a tweet suggesting he would be released. And 0:08:13.800 --> 0:08:16.680 now we are seeing, according to Routers Reuters that the 0:08:16.720 --> 0:08:19.960 Anchor Embassy is saying, nah, we haven't said anything about it. 0:08:20.240 --> 0:08:22.920 And to show you the market reaction, we have to 0:08:22.960 --> 0:08:26.200 live with. Lower numbers are stronger Lira. We weren't from 0:08:26.240 --> 0:08:30.480 about seven o two exploded down to six point six zero, 0:08:30.560 --> 0:08:33.400 six point five zero, and now we've come about eight 0:08:33.600 --> 0:08:36.960 five back to six point man, this is the danger 0:08:37.000 --> 0:08:40.400 of getting unverified news on Twitter. It moves markets. People 0:08:40.480 --> 0:08:43.520 make stuff up. It's unconfirmed reports, and we're seeing it again. 0:08:43.600 --> 0:08:46.560 I don't want to speculate about the why that that 0:08:46.640 --> 0:08:50.080 tweet came out. I'm just going do you know what 0:08:50.120 --> 0:08:52.520 we did learn from that tweet? Though? That the market 0:08:52.600 --> 0:08:55.280 is assigning great importance to the to the poster and 0:08:55.360 --> 0:08:59.360 his release. Um, yeah, yeah, there's there's yes. I think 0:08:59.400 --> 0:09:03.520 that's true. I want to bring Georget Boll, a b 0:09:03.720 --> 0:09:07.360 n am Ro Bank currency and commodity strategist joining us now, Georget, 0:09:07.400 --> 0:09:08.920 great to have you with us on the program. I 0:09:08.920 --> 0:09:10.960 would have thought the more important piece of this puzzle 0:09:11.360 --> 0:09:13.840 was getting a real domestic response higher rates kind of 0:09:13.840 --> 0:09:17.920 fiscal policy. But off the back of an unconfirmed turning 0:09:17.920 --> 0:09:21.199 out to be false tweet that the pastor would be released, 0:09:21.200 --> 0:09:23.800 we saw a sizeable market move. Is it that important 0:09:23.840 --> 0:09:27.079 the US side of this story, Georget, Yeah, yeah, that's right. 0:09:27.960 --> 0:09:29.920 The thing is just that if you look at this 0:09:30.000 --> 0:09:33.600 kind of volatility in the market, marketers relatively thin and 0:09:33.640 --> 0:09:34.960 not a lot of people want to be in the 0:09:35.000 --> 0:09:37.800 Turkeys clear in the current environment on the other hand, 0:09:38.240 --> 0:09:40.439 you know they are also afraid to be caught on 0:09:40.480 --> 0:09:43.640 the wrong side of the market. If you get like, yeah, 0:09:43.720 --> 0:09:47.240 now I had an exponential weakening off the lira. Um 0:09:47.480 --> 0:09:51.319 if you now get an kind of communication that may 0:09:51.320 --> 0:09:54.199 be despat between the US and Turkey, may be cooling 0:09:54.200 --> 0:09:57.719 down or into calming or on the other hand, if 0:09:57.760 --> 0:10:01.040 you were to get an announcement with sounds a bit credible, 0:10:01.120 --> 0:10:03.800 could be a combination of interest rate higher or anything else, 0:10:04.320 --> 0:10:06.840 then you can also see a quite recovery of the 0:10:06.920 --> 0:10:10.800 lira because people say, okay, we were negative, let's skal 0:10:10.800 --> 0:10:13.920 a little bit back. So this is quite a dangerous market. 0:10:14.000 --> 0:10:17.079 And yeah, you get volatility like this because the factor 0:10:17.240 --> 0:10:19.720 is barely a market Georgia, what is your call on end? 0:10:19.760 --> 0:10:23.560 If that's the global proxy, deepest market, stronger yen fear 0:10:23.559 --> 0:10:26.560 in the market one tense sixty. Clearly we're seeing that 0:10:26.840 --> 0:10:28.680 his A, B and EMMO. Do you have a call 0:10:28.760 --> 0:10:30.720 on end and if you have to change it in 0:10:30.800 --> 0:10:34.960 the last two trading days, Yes, we have a call 0:10:35.040 --> 0:10:37.080 on end and we have not changed in the last 0:10:37.080 --> 0:10:41.000 two trading days for the end of the third quarters, 0:10:41.000 --> 0:10:42.760 at the end of September, any end of the year, 0:10:42.800 --> 0:10:45.319 we have one ten in dollar yen. You know, the 0:10:45.559 --> 0:10:48.120 nervousness you see currently in the market is more visible 0:10:48.160 --> 0:10:51.560 in Urian because there is some kind of nervousness about 0:10:51.600 --> 0:10:55.800 the Euro as well. We don't completely share that nervousness, 0:10:55.840 --> 0:10:58.720 but it is something you see in market. So Urian 0:10:58.920 --> 0:11:01.959 is the one which is more slid down for the day. 0:11:02.000 --> 0:11:06.360 And there's also something we yeah, in terms of possible 0:11:06.440 --> 0:11:10.040 quantation risk reflected in market jury and it's more than 0:11:10.120 --> 0:11:12.840 one to watch than Dolian as well as yours with 0:11:12.880 --> 0:11:18.800 at amoment which is making a low again. So so overall, yeah, 0:11:18.800 --> 0:11:22.720 on quotation, I would look at Urine and euroswizz gold 0:11:22.840 --> 0:11:26.400 is less for good indicator at the moment um. And 0:11:26.440 --> 0:11:30.000 then yeah, Dolly and you have effect two currencies which 0:11:30.000 --> 0:11:32.880 are the most liquid in which all both qualify for 0:11:32.960 --> 0:11:34.959 a safe haven which are the dollar in the end, 0:11:35.320 --> 0:11:38.400 So there the the the effect is not that visible. 0:11:38.559 --> 0:11:40.520 Some big calls coming in on euro dollar this morning 0:11:40.520 --> 0:11:42.720 on this program, John Jet, we caught up with Kitchukes 0:11:42.720 --> 0:11:45.960 of Socken about thirty minutes ago looking for euro dollar 0:11:46.160 --> 0:11:49.120 to strike one ten um. What's your call on you're 0:11:49.160 --> 0:11:50.679 a dollar now and has it changed in the last 0:11:50.760 --> 0:11:54.240 couple of weeks and why no. We have, in fact, 0:11:54.280 --> 0:11:57.679 for for quite some time already want ten um And 0:11:57.880 --> 0:12:01.079 it was a bit yeah questioning because one fifteen was 0:12:01.160 --> 0:12:04.679 a quite crucial level. And then because of the nervousness 0:12:04.720 --> 0:12:08.439 about Turkey and possible spill over to Europe, Yeah, it 0:12:08.559 --> 0:12:11.920 becomes more likely to effects one then and that for 0:12:12.040 --> 0:12:15.560 us would be the lowest points because I see towards 0:12:15.600 --> 0:12:17.880 the end of the year and next year you're straightening 0:12:18.040 --> 0:12:20.920 or recovering again, because you also expect that the dollar 0:12:20.960 --> 0:12:23.920 will pick around those levels. So so we have one 0:12:23.960 --> 0:12:26.520 tim poo the end of September. George Broll, thank you 0:12:26.559 --> 0:12:28.720 so much for joining us across all of our Bloomberg 0:12:28.760 --> 0:12:31.760 platforms of the A, B and AM world timely to 0:12:31.800 --> 0:12:46.800 say this is the right guy to talk to, Stephen Gandell. 0:12:47.640 --> 0:12:52.040 It's made a career of being testy and asking the 0:12:52.160 --> 0:12:56.960 right questions. There's different kinds of journalists, phim and then 0:12:56.960 --> 0:13:00.800 there's journalists that come from the Washington Universe city of St. 0:13:00.880 --> 0:13:06.280 Louis and they make people squirrel. Then let's go. So 0:13:06.320 --> 0:13:10.120 this is a squirm back away streets of Wall Street 0:13:10.160 --> 0:13:17.679 and watching the bubble pop. Yeah, well the bubbles for 0:13:17.880 --> 0:13:21.640 Mr Musk. Tell me. That tell me the squirm factor 0:13:22.760 --> 0:13:27.360 of Mr Musk now secured financing and yet the deals 0:13:27.400 --> 0:13:31.560 going forward. Right, So I think the squirming factors a 0:13:31.600 --> 0:13:34.360 lot on the board, right, because they seemed clear from 0:13:34.360 --> 0:13:37.439 the statement the next day that they were kind of uh, 0:13:37.480 --> 0:13:39.320 you know, in the dark. Maybe they had a conversation, 0:13:39.360 --> 0:13:41.240 but they did no way knew this tweet was coming 0:13:41.600 --> 0:13:45.360 from Wall Street right there. Squirming. And and now if 0:13:45.720 --> 0:13:49.600 possibly the Sawdies or someone was going to uh you know, 0:13:49.720 --> 0:13:52.240 had secured funding for this deal, right, was going to 0:13:52.360 --> 0:13:55.800 fund it. The fact that now Musk is under investigation 0:13:55.840 --> 0:14:00.439 by the SEC, it's gonna make anyone really scorm me. 0:14:00.520 --> 0:14:03.800 I mean, that's the scormiest person right now. Whoever, if 0:14:03.800 --> 0:14:06.000 there was someone who was going to fund this deal, 0:14:06.720 --> 0:14:08.920 why why? I mean if they're already in with with 0:14:09.040 --> 0:14:13.480 Elon Musk. This is not the first time that Elon 0:14:13.559 --> 0:14:18.440 Musk has done something that has upset the status quo 0:14:18.480 --> 0:14:20.600 and the way the companies are either rush, but this 0:14:20.680 --> 0:14:23.560 is the first time that's put him himself in jeopardy 0:14:23.840 --> 0:14:27.600 as as the CEO, because the SEC could based on 0:14:27.640 --> 0:14:30.640 this and it's it's potentially market madulation. They could bar 0:14:30.760 --> 0:14:33.680 him from being an officer, and he this company is 0:14:33.720 --> 0:14:37.600 so entwined with him, right, You're not just investors. Let 0:14:37.600 --> 0:14:39.520 me just push back on that, because that is something 0:14:39.520 --> 0:14:42.760 that is true. Whether he did this tweet for four 0:14:43.520 --> 0:14:48.600 dollars go private transaction or not. Every investor had already 0:14:48.640 --> 0:14:52.680 bet the farm on Elon Musk running the company. Correct. Yes, 0:14:52.800 --> 0:14:54.480 but when you make a deal with Elon must to 0:14:54.480 --> 0:14:57.680 take his company private, you take the biggest risk right 0:14:57.720 --> 0:14:59.720 away in this stuff, which is that he says something 0:15:00.000 --> 0:15:02.640 stupid that moves the stock. Right. If you're thinking, Okay, 0:15:02.680 --> 0:15:04.120 I'm gonna do a deal with him, I'm gonna get 0:15:04.160 --> 0:15:07.040 him private, I'm gonna remove this risk. Now the risk 0:15:07.120 --> 0:15:09.560 is even biggo, it's even bigger the elephant in the 0:15:09.640 --> 0:15:12.040 room for me. What you're gonna write for for Bloomberg Opinion, 0:15:12.080 --> 0:15:15.720 Steven get dealt with this is. Musk has notified Tesla 0:15:15.800 --> 0:15:20.800 board August two on wanting to privatize. But that could 0:15:20.800 --> 0:15:23.960 have been like August two at nine pm versus reruns 0:15:23.960 --> 0:15:27.440 of Azie and Harriet. I mean, we don't know if 0:15:27.480 --> 0:15:30.840 he even got out in front on this tweet and 0:15:30.920 --> 0:15:33.200 told the board. I mean, we don't know, do we. 0:15:33.800 --> 0:15:36.400 You know, boards have a lot of discussions. Uh So 0:15:36.480 --> 0:15:39.760 he had discussion with um soft Bank, which didn't you know, 0:15:39.960 --> 0:15:43.440 go very far. So people have these kind of discussions, right, 0:15:43.480 --> 0:15:45.480 and he can kind of use that for cover, But 0:15:45.560 --> 0:15:48.680 it does not sound like they had the type of 0:15:49.320 --> 0:15:52.880 discussions that usually have before you make a tweet like 0:15:52.920 --> 0:15:56.640 this or before you uh make something public. And there 0:15:56.680 --> 0:15:58.920 was no press release, there was no filing with the 0:15:59.040 --> 0:16:01.840 Securities in Exchange commissioned, there was nothing. There's a lot 0:16:01.920 --> 0:16:04.880 of potential conflicts of here. Any reasonable board would have 0:16:04.880 --> 0:16:08.160 a special non conflicted you know, panel or group to 0:16:08.200 --> 0:16:10.240 investigate this. Okay, but that they're just drawing up the 0:16:10.240 --> 0:16:14.120 special group now agreed. But I go back to the 0:16:14.160 --> 0:16:19.160 original point, which is that Tesla is a company run 0:16:19.240 --> 0:16:24.040 by a gentleman who doesn't use any rule book, right, 0:16:24.320 --> 0:16:27.240 And you do that, I agree, But you it wasn't 0:16:27.280 --> 0:16:30.680 necessarily run by someone who's under investigation by the SEC 0:16:30.840 --> 0:16:34.760 who could be removed, right, And so I don't know 0:16:34.760 --> 0:16:36.760 how you put seventy billion dollars in the company that way. 0:16:36.800 --> 0:16:38.280 And I'm not saying the SEC and that really goes 0:16:38.280 --> 0:16:40.600 after him and he can say we had these discussions 0:16:40.640 --> 0:16:45.720 and funding secured. Was was a loose term, and you know, 0:16:46.120 --> 0:16:48.880 it's it's been well established that CEOs can use Twitter. 0:16:49.240 --> 0:16:51.560 So I'm not sure the ses after him. But at 0:16:51.560 --> 0:16:53.640 the very least, the biggest risk of this deal is 0:16:53.680 --> 0:16:56.680 now the fact that he's he's created this sec investigation. 0:16:56.920 --> 0:16:59.120 I'll go with that. But is it the biggest risk 0:16:59.680 --> 0:17:02.960 media is it's somebody lost report at one point seven 0:17:03.040 --> 0:17:05.800 billion because he didn't want to use the rule book 0:17:06.280 --> 0:17:10.360 that this bar at General Motors would have to use, 0:17:11.640 --> 0:17:15.640 meaning that so got killed, right, and so there's lawsuits coming. 0:17:15.640 --> 0:17:18.800 It's that you're saying that to me, it's almost I'm 0:17:18.800 --> 0:17:22.200 not saying it's a bigger risk. But it's a huge distraction, 0:17:22.320 --> 0:17:25.480 isn't it. It's a it's a huge distraction because it 0:17:25.560 --> 0:17:29.399 puts Musk at legal risk. I think you know, the 0:17:29.760 --> 0:17:31.840 money they if if they get fine, I mean they'll 0:17:31.840 --> 0:17:33.920 have to they'll have to have some class action lawsuits 0:17:33.960 --> 0:17:37.159 and they'll be It's it's a big distraction. But I 0:17:37.200 --> 0:17:38.800 think the bigger issue for the deal is that it 0:17:38.800 --> 0:17:41.639 puts Muske at risk. But you know, I mean, the 0:17:41.680 --> 0:17:43.760 bigger issue could because it's it's kind of a dumb 0:17:43.840 --> 0:17:48.040 transaction too. I mean, there are we're relatively good public company. 0:17:48.160 --> 0:17:51.000 I can't assure you that it's a good stock, but 0:17:51.040 --> 0:17:52.720 I think it's a better public company than is a 0:17:52.760 --> 0:17:55.679 private company because stock pairs are paying what hundred and 0:17:55.680 --> 0:17:59.080 forty times two years out earnings. If you're James Murdoch, 0:17:59.520 --> 0:18:02.000 you're on the board, you've been there for less than 0:18:02.040 --> 0:18:06.800 two years. What kinds of conversations are you're having with 0:18:06.880 --> 0:18:11.959 your own counsel or maybe you don't have counsel. UM, 0:18:12.000 --> 0:18:16.200 I think you're I don't I don't know what legal 0:18:16.280 --> 0:18:20.320 risk he has other than UM. I mean, I think 0:18:20.359 --> 0:18:22.440 he's on the board because I would guess that he's 0:18:22.480 --> 0:18:24.199 on the board because he sees this as the future, 0:18:24.680 --> 0:18:27.560 and I would think that he'd be on the board 0:18:28.320 --> 0:18:31.119 UM and and sees Musk as a visionary. So I 0:18:31.560 --> 0:18:34.399 don't know if I think it's probably he's probably like 0:18:34.440 --> 0:18:37.200 a lot of the Tesla shareholders who are just you know, 0:18:37.880 --> 0:18:40.439 they they believe in this vision. Thanks very much for 0:18:40.520 --> 0:18:58.960 being with us, Stephen Gandel Bloomberg opinion on Tesla. There 0:18:58.960 --> 0:19:03.520 has been any number of topics in this really interesting August. 0:19:03.720 --> 0:19:07.159 We could start with Turkey. We could end with the 0:19:07.200 --> 0:19:11.760 politics of the nation, but one of them has been Tesla, 0:19:12.920 --> 0:19:16.760 and a Bloomberg survey carefully done show that to seven 0:19:16.840 --> 0:19:20.920 five of the people talking about Tesla PIM have never 0:19:21.000 --> 0:19:24.760 been into Tesla, and that would include me. Should we 0:19:24.760 --> 0:19:30.040 talk to someone who actually has a Tesla owner Tesla driver? 0:19:30.960 --> 0:19:33.240 And I gotta say, I did test drive at Tesla 0:19:33.720 --> 0:19:37.800 and I was completely bowled over. It was an amazing experience. 0:19:37.920 --> 0:19:40.399 It's like the center of gravity has shifted, and the 0:19:40.440 --> 0:19:43.400 stock has done done so poorly forty two point five 0:19:43.440 --> 0:19:46.720 percent per year from inception, and it's down a little 0:19:46.720 --> 0:19:50.280 bit from two thousand seven. Matthew Winkler with US emeritus 0:19:50.359 --> 0:19:53.360 editor in chief of Bloomberg News and Tesla owner. When 0:19:53.359 --> 0:19:56.800 you hear the Tesla gloom and Doom crew, as a 0:19:56.880 --> 0:20:01.480 car guy, which you are, how do you respond on So, 0:20:01.520 --> 0:20:04.200 first of all, thank you very much for that. I'm 0:20:04.240 --> 0:20:07.199 not a car guy. Um. You know, before I had 0:20:07.240 --> 0:20:11.720 a Tesla, I had a thirteen year old Toyota Avalon 0:20:11.840 --> 0:20:14.439 and that was solely because it has a great back seat. 0:20:14.480 --> 0:20:17.199 And when I tested my Tesla, the one that I 0:20:17.200 --> 0:20:19.720 have now, which I bought in two thousand fourteen, it 0:20:19.800 --> 0:20:21.640 was because of its back seat. They are all kinds 0:20:21.640 --> 0:20:24.959 of other things. Of course they come with it. But 0:20:24.960 --> 0:20:29.040 but the answer to your question is, uh, you shouldn't ask, 0:20:29.200 --> 0:20:33.120 actually me, Um, you should ask the people actually own 0:20:33.200 --> 0:20:37.639 the shares of Tesla, who, according to data compiled by Bloomberg, 0:20:37.680 --> 0:20:41.600 which all of our users can access, shows um a 0:20:41.680 --> 0:20:45.960 greater loyalty and commitment to Tesla than is seen in 0:20:46.119 --> 0:20:49.960 any other automaker, which is astounding to me. In other words, 0:20:50.600 --> 0:20:52.840 the people with the most at stake, who are the 0:20:52.920 --> 0:20:57.720 investors who are following Tesla and following Tesla's experience with 0:20:58.640 --> 0:21:00.800 its owners and I'll get to that in a second, 0:21:01.760 --> 0:21:04.919 have made Tesla the most lucrative, as you said. But 0:21:05.160 --> 0:21:09.080 also here's the here's the real surprise. The least volatile 0:21:09.760 --> 0:21:15.159 UM share among automakers major competitors. Why is that. Partly 0:21:15.200 --> 0:21:18.280 it's because of the sales growth of Tesla, which is 0:21:19.119 --> 0:21:23.600 an exponential multiple of the sales growth of other carmakers. 0:21:23.640 --> 0:21:25.600 And you could say, okay, they're starting from a very 0:21:25.640 --> 0:21:30.000 low base, but that is also in the context of 0:21:30.160 --> 0:21:33.160 at some point, so many more of us, a multiple 0:21:33.400 --> 0:21:35.600 of us, are going to be driving electric vehicle. So 0:21:35.680 --> 0:21:39.560 Tesla is the only carmaker that is fully committed to 0:21:39.640 --> 0:21:42.080 doing that. And then finally, if you just went to 0:21:42.119 --> 0:21:46.360 Consumer Reports, which everybody can do, and see what do 0:21:46.520 --> 0:21:50.679 the people like me think about Tesla. You know, the 0:21:50.760 --> 0:21:55.400 Models is the highest rated car in the world according 0:21:55.400 --> 0:21:59.080 to Consumer Reports, and the Model three, which is meant 0:21:59.119 --> 0:22:02.480 to be a vehicle for everybody, every man, every woman, 0:22:03.200 --> 0:22:06.239 has the highest owner satisfaction. So you didn't do this 0:22:06.400 --> 0:22:09.800 just because you wanted your kids to think you were cool. Actually, 0:22:10.080 --> 0:22:12.720 one of the appeals of the Tesla was that I 0:22:12.760 --> 0:22:16.679 could put two grandchildren there. You go in the in 0:22:16.720 --> 0:22:21.560 the back seat and they've got and they've got you 0:22:21.600 --> 0:22:24.920 know this whatever five point seat belt system, so it's 0:22:24.960 --> 0:22:27.840 totally safe, and that was cool. It was really cool 0:22:27.840 --> 0:22:32.280 that I could do that. Well, okay, I'm just gonna 0:22:32.320 --> 0:22:34.480 throw some some issues at you and you can tell 0:22:34.520 --> 0:22:38.120 me what you think. A hundred years ago, the vehicles 0:22:38.160 --> 0:22:40.840 on the road in the United States were electric that 0:22:40.880 --> 0:22:43.679 didn't work out. There was a lot of money spent, 0:22:43.880 --> 0:22:47.240 a lot of cheering, a lot of people lost money. 0:22:47.400 --> 0:22:50.760 In addition, if you go on forums online and you 0:22:51.359 --> 0:22:55.920 read what Tesla owners say about getting very minor parts 0:22:56.600 --> 0:23:00.479 in order to fix their cars that have been minor 0:23:00.760 --> 0:23:06.720 fender benders. People wait two three months at a certain point, 0:23:06.760 --> 0:23:09.400 do you think that patients is exhausted after they've spent 0:23:09.440 --> 0:23:13.720 a hundred thousand dollars for an automobile? Um? Well, according 0:23:13.720 --> 0:23:17.720 to the data, apparently not, because, uh, the sales growth 0:23:18.280 --> 0:23:23.879 continues unabated. So nobody is perfect, obviously, but putting that 0:23:23.960 --> 0:23:26.960 in context, the sales growth is unabated. To your question 0:23:27.000 --> 0:23:31.240 about electric vehicles, way back when, you know, it was 0:23:31.359 --> 0:23:37.320 Edison himself, Thomas Edison who thought, uh, that was the future. Ironically, 0:23:38.320 --> 0:23:43.679 it was Thomas Edison who dismissed Nicola Tesla is at 0:23:43.760 --> 0:23:47.720 one point colleague rival you could say, uh, and his 0:23:47.880 --> 0:23:53.960 invention of the alternating uh current motor um as impractical. 0:23:54.160 --> 0:23:57.200 And of course we all we all embrace a C today. 0:23:57.280 --> 0:24:01.520 So I would say Nicola Tesla, who um, you know, 0:24:01.640 --> 0:24:04.920