WEBVTT - Boeing 737 Max Groundings Fallout; Risk of Government Shutdown Eases

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Nathan Hager and I'm Karen Moscow. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 3>We begin with the latest developments involving Boeing after disaster

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<v Speaker 3>was narrowly averted on an Alaska Airlines flight on Friday.

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<v Speaker 3>Boring stock right now is down more than eight percent,

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<v Speaker 3>and we get more from Bloomberg's John Tucker, John and Nathan.

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<v Speaker 4>The airlines around the globe have been grounding Boeing seven

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<v Speaker 4>thirty seven Max nine half to a fuselage section on

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<v Speaker 4>a brand new Alaska Airlines jet blew out during a

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<v Speaker 4>flight on Friday. This is a door panel that can

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<v Speaker 4>be sealed or used for access, depending on the configuration.

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<v Speaker 4>Only luck prevented a more disastrous outcome. The National Transportation

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<v Speaker 4>Safety Board cheer Jennifer Homandi says Alaska Airlines pilots did

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<v Speaker 4>report pressurization warning lights on three earlier flights of the

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<v Speaker 4>two month old plane in question.

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<v Speaker 5>The auto pressurization fail light that did illuminate in three

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<v Speaker 5>previous flights, one on December seventh, one on January third,

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<v Speaker 5>and one on January fourth.

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<v Speaker 4>A schoolteacher in Portland found the missing fuselage door plug

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<v Speaker 4>in his backyard. The door plug that blew out was

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<v Speaker 4>next to seats twenty six A and twenty six P,

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<v Speaker 4>and just by chance, there was nobody sitting there. The

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<v Speaker 4>plane did carry one hundred and seventy one passengers, a

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<v Speaker 4>valuable data usually collected by the so called black box

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<v Speaker 4>that was a raised Boeing suppliers. Spirit Aerosystems Holdings was

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<v Speaker 4>the company that installed the planel on the nearly new jet.

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<v Speaker 4>John Tucker Bloomberg Radio, all.

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<v Speaker 2>Right, John, thank you well be now when to turn

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<v Speaker 2>to the latest developments in the Middle East. Secretary of

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<v Speaker 2>State Anthony Blincoln is in the region for a fourth

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<v Speaker 2>time since the Israeli Hamas war broke out. Lincoln is

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<v Speaker 2>warning the war could quote easily become a wider conflict.

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<v Speaker 2>He spoke during a news conference in Doha.

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<v Speaker 6>This is a conflict that could easily a tastasize, causing

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<v Speaker 6>even more insecurity, more suffering and.

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<v Speaker 2>Secretary of State blank And met with Jordan's Kingdomdullah on Sunday,

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<v Speaker 2>a day after stops in Turkey and Greece.

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<v Speaker 3>Well back here in the US here, and the risk

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<v Speaker 3>of a government shutdown on January twentieth has eased somewhat

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<v Speaker 3>with word of a deal on spending caps. Bloomberg's Amy

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<v Speaker 3>Morris has details from Washington.

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<v Speaker 7>Senate Majority Leader Chuck Schumer and House Speaker Mike Johnson

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<v Speaker 7>negotiated the bipartisan deal, which caps spending at one point

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<v Speaker 7>five to nine trillion dollars. Republicans have agreed to a

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<v Speaker 7>set of budget moves to spare immediate cuts to domestic

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<v Speaker 7>agency budgets. The deal does not include an agreement to

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<v Speaker 7>block all conservative policy writers, so there still may be

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<v Speaker 7>debates over defunding investigations into former President Trump, and while

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<v Speaker 7>that might cause an impass later, for now, lawmakers have

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<v Speaker 7>the framework they need to avoid a government shut down

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<v Speaker 7>this month. The next deadline is February second. In Washington,

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<v Speaker 7>Amy Morris, Bloomberg Radio.

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<v Speaker 2>All right, Amy, thank you now. The latest on the

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<v Speaker 2>health of Lloyd Austin. Bloomberg News has learned the Pentagon's

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<v Speaker 2>failure to notify prison and in bid and that his

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<v Speaker 2>Defense secretary had been hospitalized for four days, was the

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<v Speaker 2>result of a series of errors. They include confusion over

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<v Speaker 2>Austin's wishes and his chief of staff, Falling Hill from

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<v Speaker 2>a Republican Congressoman list. Cheney is looking for answers.

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<v Speaker 8>I think they've got some very serious explaining to do.

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<v Speaker 8>I think that there's a real difference between public transparency

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<v Speaker 8>and you know, alerting the commander in chief to the

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<v Speaker 8>fact that Secretary of Defense is in the hospital. Apparently

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<v Speaker 8>the deputy Secretary was on vacation in Puerto Rico. I

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<v Speaker 8>think it's inexplicable. We need to know more about exactly

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<v Speaker 8>what happened there. But that's not the way the Pentagon

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<v Speaker 8>ought to be conducting business.

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<v Speaker 2>And that's former Congressome and liszt Cheney. On Saturday, Secretary

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<v Speaker 2>Austin apologized for failing to inform the public for days,

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<v Speaker 2>while saying he's on the mend and expects to return

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<v Speaker 2>to the Pentagon soon.

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<v Speaker 3>Let's turn to Wall Street now, Karen Bank earnings and

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<v Speaker 3>the possible Bitcoin ETF will be front and center this week.

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<v Speaker 3>More from Bloomberg's Charlie Pellett.

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<v Speaker 9>Friday, we hear from JP Morgan, Chase, City Group, Bank

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<v Speaker 9>of America, Anne Wells Fargo. Early earnings reports come amid

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<v Speaker 9>questions about the path of inflation and FED interest rate POTLESE.

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<v Speaker 9>Cameron Dawson is chief investment officer at New Edge Wealth.

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<v Speaker 10>The thing that's the biggest challenge for US for earning

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<v Speaker 10>sestaments in twenty four is the expectation that topline growth

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<v Speaker 10>will re accelerate in a year where nominal growth because

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<v Speaker 10>of inflation is expected to decelerate.

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<v Speaker 9>Also this week, the Securities and Exchange Commission will decide

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<v Speaker 9>whether to approve an exchange traded fund tied directly to

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<v Speaker 9>the world's largest cryptocurrency in New York, Charlie Bloomberg.

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<v Speaker 11>Radio, All right, Charlie. Thanks.

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<v Speaker 2>In company news, Bloomberg News has learned MRK is in

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<v Speaker 2>advanced talks to acquire cancer drugmaker Harpoon Therapeutics. The price

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<v Speaker 2>tag about seven hundred million dollars. San Francisco based Harpoon

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<v Speaker 2>is developing drugs that harness the body's immune system to

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<v Speaker 2>fight cancer. Shares of Harpoon are up about one hundred

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<v Speaker 2>percent well.

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<v Speaker 3>Also, while following Apple Care, which has fallen almost six

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<v Speaker 3>percent to kick off the new year, Jeffries says Apple's

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<v Speaker 3>iPhone sales slump in China is deepening and the companies

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<v Speaker 3>likely to see volumes decline further this year. Apple saw

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<v Speaker 3>a double digit falled volumes in December. Jeffries forecast a

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<v Speaker 3>similar decline for twenty twenty four. Checking shares of Apple

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<v Speaker 3>right now they are a little changed to the downside.

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<v Speaker 2>And on the economic front, Nathan, inflation will be the

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<v Speaker 2>focus for our investors. Bloomberg's Any del Judaice has more.

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<v Speaker 12>The Labor Department issues the Consumer Price Index Thursday and

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<v Speaker 12>the Producer Price Index Friday, both covered December. Rising gasoline

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<v Speaker 12>prices could have an impact on the household data, says

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<v Speaker 12>Bloomberg Economics.

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<v Speaker 11>Looking further out, Bloomberg.

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<v Speaker 12>Economics 's US inflation continuing to run above the federal

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<v Speaker 12>reserves two percent target this year, even with all the

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<v Speaker 12>raid hikes. Vinny del Judice, Bloomberg Radio.

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<v Speaker 2>Nathan, thank you. It's time for a look at some

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<v Speaker 2>of the other stories making news around the world, and

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<v Speaker 2>for that we're joined by Bloomberg's Amy Morris, Sammy, Good morning.

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<v Speaker 7>Good morning, Karen. Ukraine suffered a second large scale Russian

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<v Speaker 7>missile barrage this year as temperatures dropped below freezing in

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<v Speaker 7>the latest escalation of aerial attacks. Now, this barrage killed

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<v Speaker 7>one woman and left at least thirty more people wounded.

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<v Speaker 7>After months of relatively few air strikes, Russia is ramping

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<v Speaker 7>up bombardment just before the new year, firing hundreds of

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<v Speaker 7>missiles at cities across Ukraine, including the capital. Meanwhile, Ukraine

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<v Speaker 7>has been targeting bases and occupied Crimea, with the Air

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<v Speaker 7>Force saying over the weekend that it destroyed our Russian

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<v Speaker 7>command post there. Meanwhile, President Joe Biden is set to

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<v Speaker 7>visit Charleston, South Carolina, today, including a stop at Mother

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<v Speaker 7>Emmanuel Ame Church, where back in twenty fifteen, nine church

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<v Speaker 7>goers were shot and killed by a self proclaimed white supremacist.

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<v Speaker 7>Charlotte City Councilman Malcolm Graham is the brother of one

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<v Speaker 7>of those victims. Cynthia Graham heard and tells ABC News

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<v Speaker 7>that when the President visits local black history points of interest,

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<v Speaker 7>he's sending us strong message of.

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<v Speaker 6>Visiting sites like the new Historic African American Museum, he

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<v Speaker 6>makes a point that history matters, that black history matters.

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<v Speaker 6>It just not just occurs in the month of February,

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<v Speaker 6>that black history is also American history.

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<v Speaker 7>Biden, meanwhile working to shore up support among black voters

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<v Speaker 7>and Nicki Haley's home state as the Republican governor of

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<v Speaker 7>former governor of South Carolina, is rising in the polls.

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<v Speaker 7>Texas Republican Congressman Tony Gonzalez reflected on the third anniversary

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<v Speaker 7>of the January sixth attack on the Capitol and stands

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<v Speaker 7>by his labeling of the mob as domestic terrorists, refusing

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<v Speaker 7>to accept former President trump statements made on the writers

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<v Speaker 7>describing them as heroes and hostages.

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<v Speaker 9>They're certainly not heroes.

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<v Speaker 13>You know.

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<v Speaker 9>They broke the law, and we have to obey our laws.

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<v Speaker 9>We are a nation of laws, and they have to

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<v Speaker 9>obey the laws.

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<v Speaker 7>Representative Gonzales tells ABC's This Week he does not support

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<v Speaker 7>Donald Trump's proposed plan to pardon those convicted for their

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<v Speaker 7>actions that day. Hospitals across the country are telling people

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<v Speaker 7>mask up flu and COVID nineteen cases are once again

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<v Speaker 7>on the rise. The viruses have actually been on the

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<v Speaker 7>incline for the past few weeks. Health officials are predicting

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<v Speaker 7>infections will increase even more throughout this month. Global news

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<v Speaker 7>twenty four hours a day and whenever you want it

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<v Speaker 7>with Bloomberg News.

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<v Speaker 13>Now.

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<v Speaker 7>I'm Amy Morris and this is Bloomberg Karen.

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<v Speaker 2>Hurry, Amy, thank you. We do bring you news throughout

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<v Speaker 2>the day here on Bloomberg Radio. But now you can

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<v Speaker 2>get the latest news on demand, and that means whenever

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<v Speaker 2>you want it. Subscribe to Bloomberg News Now to get

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<v Speaker 2>the latest headlines at the click of a button. Get

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<v Speaker 2>informed on your schedule. You can listen and subscribe to

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<v Speaker 2>Com plus Apple, Spotify, and anywhere else you get your podcasts.

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<v Speaker 2>Time now for the Bloomberg Sports Update, here's John stash

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<v Speaker 2>Hour John Karen.

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<v Speaker 13>The NFL regular season is over. The playoffs begin on

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<v Speaker 13>Saturday with a late afternoon game between the Cleveland Browns

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<v Speaker 13>and the Houston Texans. A team that won only eleven

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<v Speaker 13>games over the previous three seasons won ten this year,

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<v Speaker 13>and the Texans won the AFC South when Jacksonville lost

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<v Speaker 13>its game yesterday at Tennessee twenty eight to twenty. Saturday night,

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<v Speaker 13>it'll be Miami at Kansas City. The Dolphins blew a

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<v Speaker 13>lead in the AFC East and last night's lost to

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<v Speaker 13>Buffalo twenty one to fourteen cost the Dolphins the AFC East,

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<v Speaker 13>so they're a wildcard and they'll take on the Chiefs

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<v Speaker 13>Sunday at one Eastern Pittsburgh in Buffalo. Then it's Green

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<v Speaker 13>Bay at Dallas. The Packers gaining a wildcard spot with

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<v Speaker 13>a seventeen to nine win over Chicago. The Cowboys won

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<v Speaker 13>the NFC East. They blew out Washington yesterday thirty eight

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<v Speaker 13>to ten. Sunday night, it'll be the Rams in Detroit,

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<v Speaker 13>so Matthew Stafford will face his former team in the

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<v Speaker 13>wildcard weekend will conclude next Monday night. Slumping Philadelphia at

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<v Speaker 13>Tampa Bay, Eagles have been a train wreck down the

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<v Speaker 13>stretch of the season, losing five to the last six.

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<v Speaker 13>They were beaten by the Giants yesterday twenty seven to ten.

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<v Speaker 13>The Bucks won the NFC South with a nine to

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<v Speaker 13>nothing win over Carolina Atlanta Falcons of fired coach Arthur Smith.

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<v Speaker 13>Will the Patriots part ways with Bill Belichick after twenty

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<v Speaker 13>five years as coach there? We should find out soon.

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<v Speaker 13>Michigan and Washington played tonight in the Houston for the

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<v Speaker 13>National Championship, both teams fourteen and er. Although the Huskies

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<v Speaker 13>haven't won a game by more than ten points since September,

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<v Speaker 13>the Wolverines are the famous.

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<v Speaker 9>From coast to coast, from New York to San Francisco,

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<v Speaker 9>Boston to Washington, DC, nationwide on Syrias Exam.

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<v Speaker 11>The Bloomberg Business app in Bloomberg dot Com. This is

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<v Speaker 11>Bloomberg Daybreak.

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<v Speaker 3>Good morning. I'm Nathan Hager. Airlines around the world are

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<v Speaker 3>starting to ground their Boeing seven thirty seven Max nine

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<v Speaker 3>jets after part of the fuselage blew out on a

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<v Speaker 3>brand new model operated by Alaska Airlines last Friday. It

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<v Speaker 3>is another blow to Boeing's turnaround efforts after two deadly

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<v Speaker 3>seven thirty seven Max crashes nearly five years ago. From More,

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<v Speaker 3>we were joined by Bloomberg News. Aviations are Anthony Palazzo. Anthony,

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<v Speaker 3>what more do we know about why this mishap happened

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<v Speaker 3>and where the investigation stands?

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<v Speaker 11>Hi Nathan, thanks for having me.

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<v Speaker 14>Yeah, So, we had two developments late late yesterday. One

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<v Speaker 14>is that the investigators have found the door panel that

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<v Speaker 14>fell out of the plane.

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<v Speaker 11>This is a key piece of evidence.

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<v Speaker 14>And they're going to be looking very closely at the

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<v Speaker 14>condition of that panel to understand why it popped out

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<v Speaker 14>of the fuselage section. The panel was found in the

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<v Speaker 14>backyard of a Portland area school teacher.

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<v Speaker 3>So what could that panel tell us about how this happened?

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<v Speaker 14>Well, well, what they've what they've said so far is

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<v Speaker 14>that they've looked at they've looked at the tabs that

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<v Speaker 14>hold that panel in from the interier of the plane,

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<v Speaker 14>which was largely undamaged, and that they didn't find a

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<v Speaker 14>whole lot of They didn't find, you know, a problem there.

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<v Speaker 14>So they're gonna so they're going to need to keep

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<v Speaker 14>going to understand exactly how this came off. Those those

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<v Speaker 14>panels are screwed in with four bolts. They're not in use,

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<v Speaker 14>although they can be opened from the outside of the plane.

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<v Speaker 14>Those are essentially openings that are built for an emergency door.

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<v Speaker 14>But a lot of the a lot of the airlines

0:12:38.440 --> 0:12:43.400
<v Speaker 14>that use this aircraft, it's a stretched Boeing seven point

0:12:43.400 --> 0:12:47.480
<v Speaker 14>thirty seven Max Jet, a lot of the airlines don't

0:12:47.600 --> 0:12:51.160
<v Speaker 14>use those exit doors because they're not needed for the

0:12:51.200 --> 0:12:53.000
<v Speaker 14>seat configurations that they need.

0:12:53.320 --> 0:12:57.400
<v Speaker 3>So this is putting more scrutiny on the manufacturing process

0:12:57.640 --> 0:13:01.240
<v Speaker 3>at Boeing, particularly around the seven thirty seven Max. Is

0:13:01.280 --> 0:13:04.439
<v Speaker 3>there something particular about the Max nine that could have

0:13:04.520 --> 0:13:07.320
<v Speaker 3>caused a problem like this as opposed to the seven

0:13:07.400 --> 0:13:10.080
<v Speaker 3>thirty seven Maxes that were involved in those crashes that

0:13:10.120 --> 0:13:11.720
<v Speaker 3>we all remember just a few years ago.

0:13:13.440 --> 0:13:16.120
<v Speaker 14>Yes, well, the well, the the Max nine is a

0:13:16.400 --> 0:13:21.120
<v Speaker 14>stretched version of the of the core Boeing Max plane,

0:13:21.120 --> 0:13:24.040
<v Speaker 14>which is called the Max eight. So it's a it's

0:13:24.080 --> 0:13:27.440
<v Speaker 14>a bit longer, and it can seat more people. But

0:13:27.800 --> 0:13:32.720
<v Speaker 14>because it can seat more people in its in its

0:13:32.800 --> 0:13:40.800
<v Speaker 14>most densely packed configurations, it requires more additional safety exits.

0:13:41.080 --> 0:13:43.760
<v Speaker 11>So a lot of a lot of the low cost.

0:13:43.640 --> 0:13:46.560
<v Speaker 14>Carriers that would use that plane would would want to

0:13:46.559 --> 0:13:52.800
<v Speaker 14>put in more seats and therefore more more emergency exits

0:13:53.440 --> 0:13:54.520
<v Speaker 14>most carriers.

0:13:54.600 --> 0:13:57.640
<v Speaker 11>So now the Max eight does not have.

0:13:57.520 --> 0:14:02.480
<v Speaker 14>That that kind of a kind of configuration, doesn't have

0:14:02.559 --> 0:14:06.079
<v Speaker 14>those exits and doesn't need them. The way that Boeing

0:14:06.120 --> 0:14:09.920
<v Speaker 14>has done it is that they put in the essentially

0:14:10.040 --> 0:14:13.920
<v Speaker 14>modular cutouts into the frame so they can make all

0:14:13.960 --> 0:14:17.840
<v Speaker 14>the fuselages the same, and then when they finish the

0:14:17.880 --> 0:14:21.560
<v Speaker 14>aircraft they can decide, you know, with the customer whether

0:14:21.680 --> 0:14:26.800
<v Speaker 14>or not to install those doors or to install plugs.

0:14:26.160 --> 0:14:28.520
<v Speaker 11>In those holes. So now that's the difference.

0:14:28.760 --> 0:14:30.960
<v Speaker 3>Yeah, right, And now we have a couple of hundred

0:14:31.000 --> 0:14:34.080
<v Speaker 3>of these seven thirty seven Max nines getting taken out

0:14:34.080 --> 0:14:37.680
<v Speaker 3>of service, these low cost carriers including Alaska and United

0:14:38.040 --> 0:14:40.960
<v Speaker 3>grounding these jets. How big a blow potentially could this

0:14:41.200 --> 0:14:44.080
<v Speaker 3>be for Boeing When it's been trying to put a

0:14:44.120 --> 0:14:45.560
<v Speaker 3>turnaround plan into place.

0:14:46.920 --> 0:14:50.680
<v Speaker 11>Well, it's a real setback, you know.

0:14:50.800 --> 0:14:55.600
<v Speaker 14>The extent to how deep or how long term it

0:14:56.760 --> 0:14:59.920
<v Speaker 14>ends up being that's all yet to be determined.

0:15:00.280 --> 0:15:03.920
<v Speaker 11>But certainly investors are selling down the stock.

0:15:04.000 --> 0:15:07.520
<v Speaker 14>This morning we sell that shares go down about eight

0:15:07.520 --> 0:15:11.400
<v Speaker 14>point three percent in pre market trading. Their supplier is

0:15:11.520 --> 0:15:15.640
<v Speaker 14>Spirit Aero Systems, that is a former Boeing unit that

0:15:15.760 --> 0:15:19.320
<v Speaker 14>makes the fuselage and they they're down about sixteen percent.

0:15:21.160 --> 0:15:25.160
<v Speaker 14>I think there's been there's been a lot of there's

0:15:25.160 --> 0:15:28.840
<v Speaker 14>been a lot of speculation about the relationship between Boeing

0:15:29.000 --> 0:15:33.840
<v Speaker 14>and Spirit and how wise it was to separate the

0:15:33.880 --> 0:15:39.600
<v Speaker 14>two companies. You know, Spirit's been responsible for a couple

0:15:39.640 --> 0:15:43.280
<v Speaker 14>of the real supplier glitches that have held that production

0:15:43.400 --> 0:15:47.920
<v Speaker 14>at Boeing, and they've been weakened financially. Boeing had to

0:15:49.480 --> 0:15:53.600
<v Speaker 14>reduce some contracts with Spirit, they had to infuse some

0:15:53.680 --> 0:15:59.000
<v Speaker 14>money into it. So this may be something that that

0:15:59.200 --> 0:16:02.840
<v Speaker 14>Boeing recon suitors in the longer term.

0:16:02.880 --> 0:16:05.920
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