1 00:00:02,480 --> 00:00:10,440 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:10,520 --> 00:00:13,720 Speaker 1: Daybreak Aisia podcast. I'm Doug Prisner. You can join Brian 3 00:00:13,800 --> 00:00:16,640 Speaker 1: Curtis and myself for the stories, making news and moving 4 00:00:16,680 --> 00:00:19,560 Speaker 1: markets in the Apec region. You can subscribe to the 5 00:00:19,600 --> 00:00:23,080 Speaker 1: show anywhere you get your podcast and always on Bloomberg Radio, 6 00:00:23,320 --> 00:00:27,400 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app Our guest 7 00:00:27,520 --> 00:00:32,360 Speaker 1: is Fleur Hassan chum outgoing Deputy Mayor of Jerusalem Or 8 00:00:32,400 --> 00:00:36,400 Speaker 1: she is also the current Special Envoy for the Foreign 9 00:00:36,440 --> 00:00:41,680 Speaker 1: Ministry of Jerusalem, and she has just flown from Jerusalem 10 00:00:41,920 --> 00:00:45,720 Speaker 1: landed in New York City just this morning. Flour, thank 11 00:00:45,760 --> 00:00:47,559 Speaker 1: you so much for making time to chat with us. 12 00:00:47,760 --> 00:00:51,960 Speaker 1: Before we get into the particulars about what's happening geopolitically, 13 00:00:52,440 --> 00:00:54,880 Speaker 1: can you tell me what your experience was like being 14 00:00:55,040 --> 00:00:58,840 Speaker 1: in Israel during the attack on Saturday. 15 00:00:59,640 --> 00:01:03,880 Speaker 2: So, in fact, I was in the airport about to 16 00:01:03,920 --> 00:01:06,720 Speaker 2: bord a flight to New York when we were told 17 00:01:07,319 --> 00:01:10,119 Speaker 2: that the airspace was going to close down at one 18 00:01:10,160 --> 00:01:12,640 Speaker 2: in the morning. Originally because they knew that Iran had 19 00:01:12,640 --> 00:01:16,240 Speaker 2: already sent out their missiles and so they calculated when 20 00:01:16,240 --> 00:01:18,559 Speaker 2: it was going to be landing, and then they moved 21 00:01:18,560 --> 00:01:20,840 Speaker 2: it forward to twelve thirty. So at one point I 22 00:01:20,840 --> 00:01:22,680 Speaker 2: actually didn't know if I was going to be able 23 00:01:22,720 --> 00:01:26,720 Speaker 2: to get on that flight, but thankfully we got out 24 00:01:26,800 --> 00:01:30,120 Speaker 2: just in time, and my family, my husband and children, 25 00:01:30,440 --> 00:01:33,600 Speaker 2: who remained in Jerusalem, spent the whole night in the shelter, 26 00:01:34,319 --> 00:01:38,720 Speaker 2: scared with terrible noise from the rockets and of course 27 00:01:38,959 --> 00:01:40,320 Speaker 2: from the anti rocket fire. 28 00:01:41,240 --> 00:01:44,200 Speaker 1: So we have an emergency meeting underway now at this 29 00:01:44,319 --> 00:01:48,560 Speaker 1: hour at the United Nations representatives from the UK, France, 30 00:01:48,560 --> 00:01:52,680 Speaker 1: Switzerland calling for some restraint. Do you have a sense 31 00:01:52,760 --> 00:01:56,680 Speaker 1: of what people in Israel are saying that they would 32 00:01:56,760 --> 00:01:59,360 Speaker 1: like the government to do under these circumstances. 33 00:02:00,960 --> 00:02:03,400 Speaker 2: So, first of all, the people of Israel are very traumatized, 34 00:02:03,480 --> 00:02:06,520 Speaker 2: not just from a very difficult night last night, whereby 35 00:02:06,640 --> 00:02:10,320 Speaker 2: miracle and of course the investment that the Israeli government 36 00:02:10,360 --> 00:02:14,040 Speaker 2: has put into anti missile fire, and also of course 37 00:02:14,080 --> 00:02:16,560 Speaker 2: the help of the Americans and the British, but we're 38 00:02:16,600 --> 00:02:19,120 Speaker 2: traumatized from October seventh. We're in the middle of a 39 00:02:19,240 --> 00:02:21,919 Speaker 2: very cruel war that has taken so many of our 40 00:02:21,960 --> 00:02:26,640 Speaker 2: people that have still got hostages in Gaza Hamas again 41 00:02:26,720 --> 00:02:30,919 Speaker 2: this morning, rejected another peace deal. Everything could stop in 42 00:02:31,000 --> 00:02:34,320 Speaker 2: Gaza in one hour if Haramas accepted the terms, the 43 00:02:34,440 --> 00:02:39,400 Speaker 2: very generous terms of the ceasefire deal. So Israel's already traumatized. 44 00:02:39,800 --> 00:02:45,640 Speaker 2: This is just an added, an added concern. And we 45 00:02:45,760 --> 00:02:48,880 Speaker 2: you know, I think it's interesting that the UN Security 46 00:02:48,960 --> 00:02:52,040 Speaker 2: Council is calling for restraint on Israel. Well, why didn't 47 00:02:52,040 --> 00:02:54,560 Speaker 2: anybody call for ISAMs re strength before they fired over 48 00:02:54,600 --> 00:02:59,760 Speaker 2: two hundred rockets overtook a sovereign country from their territory. 49 00:03:01,200 --> 00:03:03,320 Speaker 1: It's an interesting point you make, and I'm sure that 50 00:03:03,360 --> 00:03:06,280 Speaker 1: there were a lot of people that share that perspective. 51 00:03:06,360 --> 00:03:09,280 Speaker 1: But for the moment now, with the risk of escalation, 52 00:03:09,960 --> 00:03:11,720 Speaker 1: is there a moment that we just have to take 53 00:03:11,760 --> 00:03:14,959 Speaker 1: a kind of a breath, a pause and look for 54 00:03:15,680 --> 00:03:18,760 Speaker 1: some sort of resolution that is not about escalation. 55 00:03:20,720 --> 00:03:24,120 Speaker 2: Well, Israel has never acted impulsively. We did not act 56 00:03:24,160 --> 00:03:27,079 Speaker 2: impulsively after October seventh. It took us two and a 57 00:03:27,120 --> 00:03:29,680 Speaker 2: half weeks to plan what we were going to do 58 00:03:29,720 --> 00:03:33,600 Speaker 2: and go into Gaza. And we will not act impulsively now. 59 00:03:33,680 --> 00:03:36,520 Speaker 2: We will think about the threat. We will think about 60 00:03:36,560 --> 00:03:40,080 Speaker 2: it as threat still exists. Ultimately, all Israel wants is 61 00:03:40,120 --> 00:03:43,240 Speaker 2: to defend and protect its citizens. We took our eyes 62 00:03:43,280 --> 00:03:45,720 Speaker 2: off a ball one terrible day on October seventh, and 63 00:03:45,800 --> 00:03:46,520 Speaker 2: look what happened. 64 00:03:47,520 --> 00:03:50,720 Speaker 1: What type of support right now is there for the 65 00:03:50,760 --> 00:03:54,800 Speaker 1: policy of the current Prime minister in net Nyahou? I 66 00:03:54,840 --> 00:03:58,600 Speaker 1: mean among the population in Israel, is it sharply divided 67 00:03:58,960 --> 00:04:02,240 Speaker 1: populace or is there more kind of unity? From your 68 00:04:02,280 --> 00:04:02,600 Speaker 1: point of. 69 00:04:02,640 --> 00:04:07,040 Speaker 2: View, Well, we came into October seventh a very divided 70 00:04:07,080 --> 00:04:10,840 Speaker 2: country because of the constitutional reforms that Nataniajo and his 71 00:04:10,880 --> 00:04:14,840 Speaker 2: government wanted to push through. Some of the reforms were necessary, 72 00:04:14,840 --> 00:04:17,880 Speaker 2: but it was done in such an inept way that 73 00:04:18,240 --> 00:04:20,520 Speaker 2: it really divided the country, and of course the opposition 74 00:04:21,000 --> 00:04:24,480 Speaker 2: took the opportunity to politicize the situation, and so we 75 00:04:24,520 --> 00:04:26,760 Speaker 2: went into a We went into seventh of October a 76 00:04:26,839 --> 00:04:30,000 Speaker 2: very divided country. Since the seventh of October, we've seen 77 00:04:30,440 --> 00:04:34,520 Speaker 2: unprecedented unity. But again now you're beginning to see the cracks. 78 00:04:34,920 --> 00:04:37,279 Speaker 2: You have, of course, the hostage families that are pushing 79 00:04:37,279 --> 00:04:41,040 Speaker 2: for a deal. You have the opposition politicizing the fact 80 00:04:41,040 --> 00:04:42,800 Speaker 2: that there hasn't been a hostage deal, which I don't 81 00:04:42,800 --> 00:04:44,920 Speaker 2: think there's anything to do with the government more to 82 00:04:44,920 --> 00:04:49,240 Speaker 2: do with the intransigence of Ramas, and Nataniello has lost 83 00:04:49,400 --> 00:04:51,960 Speaker 2: a lot of support. There was a poll I think 84 00:04:52,040 --> 00:04:54,279 Speaker 2: last week that said only fifteen or twenty percent of 85 00:04:54,320 --> 00:04:57,960 Speaker 2: the population one into continue as prime minister. But I 86 00:04:58,080 --> 00:05:00,440 Speaker 2: actually believe it would be very damaging to have an 87 00:05:00,440 --> 00:05:02,640 Speaker 2: election in the middle of a war. I do believe 88 00:05:02,640 --> 00:05:04,680 Speaker 2: that the minute the war is over, we should have 89 00:05:04,680 --> 00:05:08,039 Speaker 2: an election. We shouldn't wait until the end of the administration, 90 00:05:08,120 --> 00:05:10,040 Speaker 2: which would be twenty twenty six. I think we should 91 00:05:10,040 --> 00:05:12,679 Speaker 2: have an election. People should be accountable for what happened 92 00:05:12,720 --> 00:05:16,040 Speaker 2: that horrible day. But at the moment people are calling 93 00:05:16,320 --> 00:05:18,599 Speaker 2: for his resignation. Now that that's not going to happen. 94 00:05:18,640 --> 00:05:20,760 Speaker 2: You don't change horses in the middle of a. 95 00:05:20,760 --> 00:05:21,400 Speaker 3: Race, flour. 96 00:05:21,560 --> 00:05:22,640 Speaker 2: You have to see this through. 97 00:05:23,400 --> 00:05:26,240 Speaker 1: You mentioned a moment ago, I'm sorry to interrupt. You 98 00:05:26,279 --> 00:05:29,760 Speaker 1: mentioned a moment ago that Hamas has rejected the latest 99 00:05:29,760 --> 00:05:32,679 Speaker 1: ceasefire proposal. We know that the US cutter in Egypt 100 00:05:32,960 --> 00:05:36,120 Speaker 1: are brokering the talks, and I'm trying to get your 101 00:05:36,160 --> 00:05:39,560 Speaker 1: sense of what this weekend attack might do to those conversations. 102 00:05:39,600 --> 00:05:42,760 Speaker 1: Do you expect it to kind of create greater urgency 103 00:05:42,800 --> 00:05:45,039 Speaker 1: and trying to seek a resolution or do you think 104 00:05:45,040 --> 00:05:48,239 Speaker 1: this is going to create a greater divide in trying 105 00:05:48,279 --> 00:05:49,440 Speaker 1: to find an agreement. 106 00:05:51,720 --> 00:05:54,680 Speaker 2: I actually think, I mean, nothing can be as bad 107 00:05:54,680 --> 00:05:56,960 Speaker 2: as the situation that we ever come up. So maybe 108 00:05:57,279 --> 00:06:01,240 Speaker 2: the fact that Israel could attack Iran, this could really 109 00:06:01,279 --> 00:06:04,680 Speaker 2: conflagate into a very horrible regional war and even a 110 00:06:04,720 --> 00:06:07,600 Speaker 2: world war. I wouldn't you know, if is Al didn't 111 00:06:07,640 --> 00:06:12,400 Speaker 2: have the anti missile fire defense system it has, we 112 00:06:12,480 --> 00:06:16,400 Speaker 2: would have had yesterday a genocide in Israel with a 113 00:06:16,480 --> 00:06:20,520 Speaker 2: three hundred plus missiles that were thrown, including ballistic missiles. 114 00:06:20,839 --> 00:06:22,480 Speaker 2: And so the fact that we have a strong defense 115 00:06:22,520 --> 00:06:26,680 Speaker 2: does not mean that Iran can attack Israel with impunity 116 00:06:26,680 --> 00:06:30,640 Speaker 2: and everybody sits. So I may maybe there's a chance 117 00:06:30,960 --> 00:06:34,120 Speaker 2: that with all of this mess there can be some 118 00:06:34,279 --> 00:06:38,920 Speaker 2: type of regional arrangement that includes the hostages being returned 119 00:06:39,400 --> 00:06:41,680 Speaker 2: and talk about guards of the day after the war, 120 00:06:41,760 --> 00:06:44,159 Speaker 2: the day after Kamas. It's all can no longer live 121 00:06:44,680 --> 00:06:47,680 Speaker 2: with a terrorist group such as Kamas threatening its people 122 00:06:47,680 --> 00:06:50,200 Speaker 2: on its border. And so the world understands that. I 123 00:06:50,279 --> 00:06:55,000 Speaker 2: certainly the moderate Arab countries understand that the Sunny countries 124 00:06:55,040 --> 00:06:58,000 Speaker 2: like the UAE in Saudi Arabia, they certainly understand who 125 00:06:58,320 --> 00:07:00,760 Speaker 2: Hamas are, the Muslim blah blahdah. They kicked them out 126 00:07:00,800 --> 00:07:03,400 Speaker 2: of their own countries. And so if the Western world 127 00:07:03,480 --> 00:07:06,240 Speaker 2: actually understands that Israel can no longer live with Hamas, 128 00:07:06,279 --> 00:07:09,520 Speaker 2: and we can start talking about how the Palestinian people 129 00:07:09,560 --> 00:07:12,600 Speaker 2: get a decent future for themselves, then maybe maybe there's 130 00:07:12,640 --> 00:07:14,240 Speaker 2: a chance that this could calm down. 131 00:07:14,720 --> 00:07:17,760 Speaker 1: So, from what I understand, Israel's war cabinet was in 132 00:07:17,840 --> 00:07:22,240 Speaker 1: session on Sunday trying to work out a possible response. 133 00:07:22,320 --> 00:07:26,200 Speaker 1: Can can you take me inside the political makeup of 134 00:07:26,280 --> 00:07:28,560 Speaker 1: the war cabinet and talk to me, give me a 135 00:07:28,600 --> 00:07:31,520 Speaker 1: little bit of insight into the dynamics and how they 136 00:07:31,560 --> 00:07:32,240 Speaker 1: are playing out. 137 00:07:33,840 --> 00:07:37,680 Speaker 2: Yes, so the war cabinet is actually comprised of what 138 00:07:37,720 --> 00:07:41,040 Speaker 2: we're calling a unity government. In other words, on the 139 00:07:41,080 --> 00:07:46,600 Speaker 2: seventh of October, after the terrible massacre happened, and it's 140 00:07:46,640 --> 00:07:49,040 Speaker 2: a now who call for a unity government, and two 141 00:07:49,080 --> 00:07:51,960 Speaker 2: of the leaders of the opposition joined him, And so 142 00:07:52,080 --> 00:07:55,480 Speaker 2: the security cabinet now consists of not just people on 143 00:07:55,480 --> 00:07:57,280 Speaker 2: the right, but people in the center and people on 144 00:07:57,320 --> 00:08:00,000 Speaker 2: the left, as well as of course the military leadership 145 00:08:00,680 --> 00:08:03,280 Speaker 2: and So what I would say is there are differing 146 00:08:03,400 --> 00:08:06,480 Speaker 2: opinions in the Walk cabinet, but everybody is either a general, 147 00:08:06,560 --> 00:08:09,400 Speaker 2: an ex chief of staff, or somebody very high up 148 00:08:09,520 --> 00:08:12,360 Speaker 2: in the current government. And there are rumors if he 149 00:08:12,440 --> 00:08:16,280 Speaker 2: is ready pressally talking about the fact that in fact 150 00:08:16,040 --> 00:08:20,760 Speaker 2: the center and left ex chiefs of staff wanted an 151 00:08:20,800 --> 00:08:25,080 Speaker 2: immediate reprisal and that the rest of the cabinets didn't. 152 00:08:25,760 --> 00:08:27,840 Speaker 2: Then I heard two hours later that it was the 153 00:08:27,840 --> 00:08:30,920 Speaker 2: other way around. So you never know because things get leaked, 154 00:08:30,960 --> 00:08:33,360 Speaker 2: and of course everything is off the record in the 155 00:08:33,400 --> 00:08:37,600 Speaker 2: War cabinet, but there are definitely divisions, and there are 156 00:08:37,679 --> 00:08:42,640 Speaker 2: people who want to attack Iran quickly and decisively, and 157 00:08:42,679 --> 00:08:45,760 Speaker 2: there are other people that want to calm the situation 158 00:08:45,960 --> 00:08:48,520 Speaker 2: down and see what will happen, and see how the 159 00:08:48,679 --> 00:08:52,480 Speaker 2: UN reacts, and see how the United States can get 160 00:08:52,520 --> 00:08:56,480 Speaker 2: more involved and try and guarantee our security, you know. 161 00:08:56,480 --> 00:08:59,319 Speaker 2: But ultimately, the way I see it is that Iran 162 00:08:59,640 --> 00:09:02,720 Speaker 2: has got away with so much for so long. They 163 00:09:02,840 --> 00:09:05,880 Speaker 2: are the biggest exporters of terrorism. They're working through their 164 00:09:05,920 --> 00:09:10,679 Speaker 2: proxies Juahamas, Husbola, the hotels who attack American assets as 165 00:09:10,679 --> 00:09:14,800 Speaker 2: you know we have, They've got groups in Iraq, they've 166 00:09:14,800 --> 00:09:18,079 Speaker 2: got groups in Afghanistan, and they've got Kata as their mouthpiece. 167 00:09:18,360 --> 00:09:23,720 Speaker 2: So Iran has never actually had the faith to attack 168 00:09:23,800 --> 00:09:26,559 Speaker 2: on their territory. It's always been too proxies. And now 169 00:09:26,960 --> 00:09:29,480 Speaker 2: you know the reckoning is coming right to them. The 170 00:09:29,559 --> 00:09:31,920 Speaker 2: question is what will they do with this? But I 171 00:09:31,960 --> 00:09:34,480 Speaker 2: think that ultimately the world who's going to have to 172 00:09:34,480 --> 00:09:37,280 Speaker 2: face Iran either now or in a few years, and 173 00:09:37,360 --> 00:09:39,120 Speaker 2: let's hope they don't get nuclear weapons. 174 00:09:39,280 --> 00:09:42,520 Speaker 1: Well leave it there. Fleur Hassan Home, the outgoing Deputy 175 00:09:42,520 --> 00:09:46,080 Speaker 1: Mayor of Jerusalem also current Special Envoy to the Foreign 176 00:09:46,160 --> 00:09:49,640 Speaker 1: Ministry of Jerusalem, joining here on DA break, Gasia. This 177 00:09:49,720 --> 00:09:58,840 Speaker 1: is Bloomberg. Let's take a closer look at what's happening 178 00:09:58,920 --> 00:10:02,280 Speaker 1: with respect to Iran's attack over the weekend on Israel. 179 00:10:02,360 --> 00:10:05,000 Speaker 1: Let's bring in Joe Matthew, co host of Balance of 180 00:10:05,080 --> 00:10:08,400 Speaker 1: Power on Bloomberg TV and Radio. Joe, you and I 181 00:10:08,440 --> 00:10:11,000 Speaker 1: were talking a short while ago about the risk of 182 00:10:11,120 --> 00:10:14,200 Speaker 1: retaliation on the part of Israel, And earlier this hour 183 00:10:14,240 --> 00:10:16,480 Speaker 1: I was speaking with a current Special Envoy for the 184 00:10:16,520 --> 00:10:21,280 Speaker 1: Foreign Ministry for Jerusalem and she was trying to give 185 00:10:21,320 --> 00:10:23,840 Speaker 1: me an understanding of what was going on within the 186 00:10:23,880 --> 00:10:26,120 Speaker 1: War Cabinet in Israel. They had a meeting over the 187 00:10:26,120 --> 00:10:28,120 Speaker 1: weekend and one of the things that struck me is 188 00:10:28,559 --> 00:10:32,040 Speaker 1: how mercurial this is. I mean, it's still very, very fluid. 189 00:10:32,080 --> 00:10:36,240 Speaker 1: I don't think anyone has a definite position. She talked 190 00:10:36,280 --> 00:10:38,679 Speaker 1: about the fact that there's a kind of a dynamic 191 00:10:38,760 --> 00:10:41,360 Speaker 1: happening within the war cabinet, and I don't think that 192 00:10:41,400 --> 00:10:44,680 Speaker 1: it's coalesced around a kind of a central point of view. 193 00:10:44,760 --> 00:10:47,959 Speaker 1: I mean, this is a remarkable time that Israel finds 194 00:10:48,000 --> 00:10:51,080 Speaker 1: itself in. Yes, there's warre in Gaza. We understand that 195 00:10:51,679 --> 00:10:56,520 Speaker 1: for the last six months it's been just this sense 196 00:10:56,520 --> 00:11:00,040 Speaker 1: of upheaval within Israel and now this, I mean, do 197 00:11:00,120 --> 00:11:02,120 Speaker 1: you think this is going to play out in the 198 00:11:02,160 --> 00:11:08,719 Speaker 1: psyche of the American population that finds itself gripped by 199 00:11:08,720 --> 00:11:11,360 Speaker 1: the story that we've been describing for the last six months. 200 00:11:11,920 --> 00:11:15,160 Speaker 4: Well, you're asking all the right questions here, Doug, and 201 00:11:15,200 --> 00:11:18,360 Speaker 4: it's really it's difficult to tell. There's going to be 202 00:11:18,480 --> 00:11:21,920 Speaker 4: an actual way to measure that, most likely this week 203 00:11:21,960 --> 00:11:25,400 Speaker 4: with a vote in the House of Representatives, and we're 204 00:11:25,400 --> 00:11:27,880 Speaker 4: not sure how that's going to go. We understand that 205 00:11:27,920 --> 00:11:30,600 Speaker 4: the President convene to call this afternoon the White House 206 00:11:30,640 --> 00:11:33,160 Speaker 4: just let us know this with the leaders of the 207 00:11:33,200 --> 00:11:36,560 Speaker 4: Senate in the House, Chuck Schumer, Mitch McConnell, Speaker Johnson, 208 00:11:37,120 --> 00:11:41,600 Speaker 4: and of course Minority Leader HAKM Jeffries to talk about 209 00:11:41,640 --> 00:11:45,839 Speaker 4: the urgent need to pass and the National Security supplemental 210 00:11:45,880 --> 00:11:49,040 Speaker 4: that has already cleared the Senate. It's unclear that that 211 00:11:49,120 --> 00:11:54,800 Speaker 4: will even happen because Speaker Johnson has a fractured Republican 212 00:11:54,880 --> 00:11:57,760 Speaker 4: conference that doesn't want to see this move in one 213 00:11:57,840 --> 00:12:00,280 Speaker 4: block and may not want to see Ukraine funding move 214 00:12:00,280 --> 00:12:01,920 Speaker 4: at all. One thing I will tell you, though, Doug 215 00:12:01,960 --> 00:12:05,160 Speaker 4: is Steve Scalise, the Majority leader, issued a statement earlier 216 00:12:05,200 --> 00:12:08,280 Speaker 4: today saying in light of Iran's attack, the House will 217 00:12:08,360 --> 00:12:12,600 Speaker 4: change its legislative schedule next week to consider legislation that, 218 00:12:12,720 --> 00:12:16,240 Speaker 4: as he puts it, supports our ally Israel. It makes 219 00:12:16,320 --> 00:12:20,720 Speaker 4: no mention of Ukraine. So this may depend on the 220 00:12:20,760 --> 00:12:23,760 Speaker 4: conversation Mike Johnson had with Donald Trump at mar A Lago. 221 00:12:24,240 --> 00:12:26,000 Speaker 4: His influence here is going to have a lot to 222 00:12:26,040 --> 00:12:28,880 Speaker 4: do with the outcome as the White House works overtime 223 00:12:28,960 --> 00:12:33,360 Speaker 4: to try to prevent Israel from retaliating against Iran. That 224 00:12:33,440 --> 00:12:37,000 Speaker 4: may be a fool's errand it's very difficult to tell 225 00:12:37,000 --> 00:12:39,000 Speaker 4: at this early hour, but if there is an over 226 00:12:39,000 --> 00:12:41,839 Speaker 4: the top response from Israel, it could make it more 227 00:12:41,840 --> 00:12:44,720 Speaker 4: difficult to pass funding here in the US because of 228 00:12:44,760 --> 00:12:46,720 Speaker 4: opposition from Progressive Democrats. 229 00:12:46,800 --> 00:12:50,000 Speaker 1: So alluded to these sharp divisions within the GOP, and 230 00:12:50,040 --> 00:12:52,319 Speaker 1: I'm wondering if there are other voices that we should 231 00:12:52,360 --> 00:12:55,520 Speaker 1: be You mentioned Steve Scalise, other voices that we should 232 00:12:55,520 --> 00:12:58,440 Speaker 1: be paying close attention to in the week ahead. 233 00:12:59,400 --> 00:13:02,720 Speaker 4: Well, it's going to be Mike Johnson more than anyone, 234 00:13:02,760 --> 00:13:05,160 Speaker 4: because people just don't know exactly what the speaker is 235 00:13:05,200 --> 00:13:07,240 Speaker 4: going to do here, and he has very little time 236 00:13:07,280 --> 00:13:10,760 Speaker 4: to make some decisions on this, as I mentioned, coming 237 00:13:10,800 --> 00:13:13,520 Speaker 4: off of his visit to mar A Lago with Donald Trump, 238 00:13:13,520 --> 00:13:17,720 Speaker 4: and they surely spoke about Ukraine funding while he was there, 239 00:13:17,880 --> 00:13:21,840 Speaker 4: not necessarily knowing the outcome of these attacks. But to 240 00:13:21,880 --> 00:13:25,040 Speaker 4: get back to where you started our conversation here and 241 00:13:25,600 --> 00:13:28,640 Speaker 4: what's taking place right now in Tel Aviv, for instance, 242 00:13:28,679 --> 00:13:32,200 Speaker 4: where the lack of casualties, the lack of damage has 243 00:13:32,280 --> 00:13:35,280 Speaker 4: really left them with a decision to make. Here is 244 00:13:35,600 --> 00:13:39,360 Speaker 4: REEL could limit its strike because of this but Benjamin Ettnyah, 245 00:13:39,400 --> 00:13:43,280 Speaker 4: who is under enormous pressure from the right inside his 246 00:13:43,360 --> 00:13:47,280 Speaker 4: government to do something. Just imagine, Doug, if we weren't 247 00:13:47,320 --> 00:13:50,880 Speaker 4: telling this remarkable story of ninety nine percent of these 248 00:13:51,000 --> 00:13:53,760 Speaker 4: rockets and missiles of being knocked out of the sky, 249 00:13:54,600 --> 00:13:57,679 Speaker 4: in that world, you could have hundreds of Israelis who 250 00:13:57,679 --> 00:14:02,240 Speaker 4: were killed. And the government does feel like there's a 251 00:14:02,360 --> 00:14:05,200 Speaker 4: need to say something about that, even as the White 252 00:14:05,240 --> 00:14:06,280 Speaker 4: House says take the win. 253 00:14:07,360 --> 00:14:09,200 Speaker 1: I was going to ask you about whether we know 254 00:14:09,559 --> 00:14:12,720 Speaker 1: anything about what has been happening in terms of communication 255 00:14:12,800 --> 00:14:16,440 Speaker 1: between the White House and Netan Yahoo's office. Do we 256 00:14:16,559 --> 00:14:21,360 Speaker 1: know that the President became concerned about an overreaction here 257 00:14:21,400 --> 00:14:23,840 Speaker 1: and maybe was forceful in saying you know, I know 258 00:14:23,920 --> 00:14:26,040 Speaker 1: that that was kind of the message that was delivered 259 00:14:26,360 --> 00:14:29,800 Speaker 1: after October seventh. You know, the Biden administration tried to 260 00:14:29,840 --> 00:14:33,320 Speaker 1: issue a very cautionary kind of guidance here. It was 261 00:14:33,360 --> 00:14:36,280 Speaker 1: the same thing happening over the weekend. Do you think, 262 00:14:36,760 --> 00:14:37,960 Speaker 1: well they spoke today. 263 00:14:38,120 --> 00:14:40,360 Speaker 4: You know, the New York Times has been reporting that 264 00:14:40,480 --> 00:14:44,440 Speaker 4: the President told Benjamin Netanyahoo that if he does strike 265 00:14:44,560 --> 00:14:48,920 Speaker 4: back against Iran, that the US will not back that move. 266 00:14:49,600 --> 00:14:51,560 Speaker 4: If you look at the readout from the White House, 267 00:14:52,280 --> 00:14:56,920 Speaker 4: he talks about speaking with Netanyahu to reaffirm America's ironclad 268 00:14:57,000 --> 00:14:59,680 Speaker 4: commitment to the security of Israel. So he's really kind 269 00:14:59,680 --> 00:15:03,200 Speaker 4: of damned on two sides here, and the White House 270 00:15:03,240 --> 00:15:06,000 Speaker 4: will be in an incredibly awkward position if Israel decides 271 00:15:06,040 --> 00:15:08,080 Speaker 4: to go hard on this. Look, you know, we've heard 272 00:15:08,120 --> 00:15:10,840 Speaker 4: conversations for the last twenty four hours now, and a 273 00:15:10,840 --> 00:15:13,960 Speaker 4: lot of them broke out on Sunday morning television where 274 00:15:14,000 --> 00:15:16,080 Speaker 4: a lot of Hawks had things to say about this. 275 00:15:16,240 --> 00:15:20,160 Speaker 4: John Bolton, which it should come as no surprise, said 276 00:15:20,200 --> 00:15:22,640 Speaker 4: that this is the opportunity that Israel has now to 277 00:15:22,760 --> 00:15:26,040 Speaker 4: destroy Iran's nuclear weapons program. That would be the extreme 278 00:15:26,680 --> 00:15:29,800 Speaker 4: response in this case, and it would likely provoke something more. 279 00:15:29,880 --> 00:15:32,600 Speaker 4: The idea of this being escalatory as opposed to a 280 00:15:32,680 --> 00:15:34,320 Speaker 4: standoff is what we're talking. 281 00:15:34,000 --> 00:15:36,960 Speaker 1: About, Joe. Before I let you go the notion of ceasefire, 282 00:15:37,000 --> 00:15:40,520 Speaker 1: I know that Hamas has rejected a proposal that was 283 00:15:40,560 --> 00:15:43,120 Speaker 1: put forward over the weekend. Do you think this gives 284 00:15:43,160 --> 00:15:45,720 Speaker 1: a greater urgency to try to try to find a 285 00:15:45,720 --> 00:15:47,000 Speaker 1: solution on that front as well? 286 00:15:47,600 --> 00:15:50,480 Speaker 4: Well, Look, I'd love to say yes, it's hard to tell. 287 00:15:50,520 --> 00:15:52,800 Speaker 4: We heard from John Kirby on this earlier today. The 288 00:15:52,840 --> 00:15:55,240 Speaker 4: White House is just asking Hamas to take the deal 289 00:15:55,360 --> 00:15:58,760 Speaker 4: knowing that you know, they've left Cairo. They're not at 290 00:15:58,760 --> 00:16:02,320 Speaker 4: the table right now. They may be continuing to share information, 291 00:16:03,480 --> 00:16:05,800 Speaker 4: but you know they're waiting for somebody to call them back, 292 00:16:05,840 --> 00:16:07,560 Speaker 4: and that's not a great situation to be in. 293 00:16:07,600 --> 00:16:07,760 Speaker 5: Doug. 294 00:16:07,840 --> 00:16:09,840 Speaker 4: There's a real worry right now by a lot of 295 00:16:09,880 --> 00:16:13,280 Speaker 4: the folks that we're talking to that the hostages Hamas 296 00:16:13,480 --> 00:16:17,440 Speaker 4: has been talking about and dealing with here, many of 297 00:16:17,480 --> 00:16:20,200 Speaker 4: them may not be alive or able to be identified. 298 00:16:20,480 --> 00:16:21,640 Speaker 4: That would be a game changer. 299 00:16:22,520 --> 00:16:24,800 Speaker 1: Joe, always a pleasure. Thanks for making time for us. 300 00:16:24,840 --> 00:16:27,360 Speaker 1: A Joe Matthew, co host of Balance of Power, which 301 00:16:27,360 --> 00:16:31,000 Speaker 1: you can hear on Bloomberg Radio and watch on Bloomberg TV. 302 00:16:37,280 --> 00:16:40,280 Speaker 1: Let's get to our guest. George Sibaloni is with us. 303 00:16:40,360 --> 00:16:44,240 Speaker 1: George is portfolio manager at Penn Mutual Asset Management. He 304 00:16:44,360 --> 00:16:47,560 Speaker 1: joins us from Philadelphia. Thanks for making time for us 305 00:16:47,560 --> 00:16:50,840 Speaker 1: on a Sunday night. George, we can talk about FED policy, 306 00:16:51,200 --> 00:16:54,320 Speaker 1: but I want to get your sense of how geopolitical 307 00:16:54,880 --> 00:16:57,560 Speaker 1: tension right now and these events that we've been talking about, 308 00:16:57,640 --> 00:17:01,280 Speaker 1: whether it's Israel, Gaza, Israel now and Iran the attack 309 00:17:01,360 --> 00:17:04,320 Speaker 1: over the weekend. How that's impacting your thinking when it 310 00:17:04,359 --> 00:17:07,040 Speaker 1: comes to how markets are behaving and how to put 311 00:17:07,080 --> 00:17:07,960 Speaker 1: capital to work. 312 00:17:08,720 --> 00:17:11,320 Speaker 5: Hey deal, great to be with you again, and yeah, 313 00:17:11,560 --> 00:17:14,159 Speaker 5: first of all, first and foremost prayers to everyone in 314 00:17:14,160 --> 00:17:14,760 Speaker 5: the Middle East. 315 00:17:14,800 --> 00:17:16,120 Speaker 3: Hopefully it does not escalate. 316 00:17:16,160 --> 00:17:19,800 Speaker 5: So Yeah, as a portfolio manager, you just mentioned geopolitical risk, 317 00:17:19,840 --> 00:17:21,480 Speaker 5: and that's one of the risks that we have to 318 00:17:21,520 --> 00:17:23,760 Speaker 5: be cognizant of. It's one that we don't think about 319 00:17:23,800 --> 00:17:26,840 Speaker 5: on a daily basis, but when it shows up, it's 320 00:17:26,840 --> 00:17:29,399 Speaker 5: important to know that in your portfolio you have some 321 00:17:30,240 --> 00:17:33,600 Speaker 5: margin of safety. And so I think if we're looking 322 00:17:33,600 --> 00:17:36,000 Speaker 5: at some areas in the market right now, obviously the 323 00:17:36,000 --> 00:17:38,439 Speaker 5: ones that are acting a little and I don't want 324 00:17:38,480 --> 00:17:40,600 Speaker 5: to say strangely, but gold, for example, has been up 325 00:17:40,640 --> 00:17:42,040 Speaker 5: a lot over this past year. 326 00:17:42,480 --> 00:17:43,360 Speaker 3: And while I. 327 00:17:43,280 --> 00:17:46,000 Speaker 5: Mean, you know, gold obviously would be a good hedge 328 00:17:46,119 --> 00:17:48,960 Speaker 5: right now, if you think about longer treasuries, which really 329 00:17:49,000 --> 00:17:51,400 Speaker 5: haven't done as well, that might be a pretty good 330 00:17:51,440 --> 00:17:54,320 Speaker 5: hedge too, for you know, at least for some margin 331 00:17:54,359 --> 00:17:54,840 Speaker 5: of safety. 332 00:17:54,960 --> 00:17:57,800 Speaker 1: Yeah, it's very interesting that you mentioned gold intra day 333 00:17:57,840 --> 00:18:01,280 Speaker 1: Friday we top twenty four hundred announce that was another 334 00:18:01,320 --> 00:18:03,600 Speaker 1: record high. We've settled back. I'm looking at a spot 335 00:18:03,680 --> 00:18:07,480 Speaker 1: price right now at around twenty three fifty seven. You 336 00:18:07,560 --> 00:18:10,640 Speaker 1: mentioned the bond market, and it's been very interesting to gauge. 337 00:18:10,800 --> 00:18:14,120 Speaker 1: You know what the bond market is trying to tell us, 338 00:18:14,160 --> 00:18:16,960 Speaker 1: and we know what the Fed has been saying. I 339 00:18:16,960 --> 00:18:19,320 Speaker 1: mean that they are less apt to kind of cut 340 00:18:19,400 --> 00:18:22,600 Speaker 1: interest rates. They want to really be confident that the 341 00:18:22,600 --> 00:18:27,520 Speaker 1: inflation demon has been slayed and that you know, the 342 00:18:27,560 --> 00:18:30,199 Speaker 1: issue has been put to rest. Are you seeing a 343 00:18:30,200 --> 00:18:33,280 Speaker 1: lot more volatility in the bond market between let's say 344 00:18:33,320 --> 00:18:35,520 Speaker 1: now in the end of the year, we. 345 00:18:35,440 --> 00:18:37,880 Speaker 5: Are doug in And it's amazing this skew that we're 346 00:18:37,920 --> 00:18:40,639 Speaker 5: starting to see in terms of the SMP. If you 347 00:18:40,640 --> 00:18:43,840 Speaker 5: think about where bottom back in last fall, it was 348 00:18:43,960 --> 00:18:46,600 Speaker 5: mainly because interest rates the ten year, for example, hit 349 00:18:46,680 --> 00:18:49,439 Speaker 5: five percent. The market does not like five percent on 350 00:18:49,480 --> 00:18:52,320 Speaker 5: the ten year. So as interest rates fell, the stock 351 00:18:52,359 --> 00:18:55,680 Speaker 5: market resumed its path higher and it was a very 352 00:18:55,720 --> 00:18:58,280 Speaker 5: strong rally. Now if you just look at from the 353 00:18:58,400 --> 00:19:01,800 Speaker 5: end of March to now, the SMP's down about three percent, 354 00:19:02,160 --> 00:19:05,520 Speaker 5: and so this this latest skew in terms of interest 355 00:19:05,560 --> 00:19:08,080 Speaker 5: rates going from four twenty to four point fifty. I 356 00:19:08,080 --> 00:19:10,439 Speaker 5: think we're at a very important point as to what 357 00:19:10,560 --> 00:19:14,240 Speaker 5: comes next. You mentioned the Fed. Obviously the market was 358 00:19:14,280 --> 00:19:16,479 Speaker 5: completely wrong in pricing in more than one hundred and 359 00:19:16,480 --> 00:19:19,239 Speaker 5: sixty basis points worth of cuts, and now we're at 360 00:19:19,240 --> 00:19:22,960 Speaker 5: around forty basis points, and we still are not certain 361 00:19:23,000 --> 00:19:25,520 Speaker 5: given the data that we are seeing, given the you know, 362 00:19:25,920 --> 00:19:28,479 Speaker 5: the up move in oil and gas for example, and 363 00:19:28,560 --> 00:19:31,600 Speaker 5: other items. Obviously we're not even sure if the Fed's 364 00:19:31,600 --> 00:19:33,360 Speaker 5: going to be able to cut it all this year now, 365 00:19:33,400 --> 00:19:34,399 Speaker 5: so there is some doubt. 366 00:19:34,720 --> 00:19:37,120 Speaker 1: So does growth hold up or are we talking about 367 00:19:37,160 --> 00:19:41,000 Speaker 1: a situation that may be best described as stagflation? Is 368 00:19:41,040 --> 00:19:42,200 Speaker 1: that a real risk? 369 00:19:42,680 --> 00:19:45,320 Speaker 5: And that's exactly the word that's That's one of the 370 00:19:45,320 --> 00:19:48,399 Speaker 5: things I've written down because now now that threat comes 371 00:19:48,440 --> 00:19:50,679 Speaker 5: into it and we haven't seen an environment like that 372 00:19:50,720 --> 00:19:53,480 Speaker 5: in a very, very long time. So going back to 373 00:19:53,520 --> 00:19:55,880 Speaker 5: your first question, you know, in terms of growth stocks, 374 00:19:56,000 --> 00:19:59,240 Speaker 5: the momentum factor has been a huge factor for what 375 00:19:59,359 --> 00:20:01,679 Speaker 5: has done well in the markets, and it's left almost 376 00:20:01,720 --> 00:20:04,680 Speaker 5: everything else in the dust. I like dividend guild stocks, 377 00:20:04,800 --> 00:20:08,359 Speaker 5: they've done relatively poorly. I love value stocks, they've done 378 00:20:08,359 --> 00:20:12,360 Speaker 5: relatively poorly, and the market just once momentum and growth. 379 00:20:12,560 --> 00:20:15,160 Speaker 5: And so now as we get up to this level 380 00:20:15,200 --> 00:20:17,480 Speaker 5: again in the interest rates of around four and a 381 00:20:17,560 --> 00:20:20,960 Speaker 5: half percent on the tenure, this next move up could 382 00:20:21,080 --> 00:20:23,160 Speaker 5: challenge those valuations for growth stocks. 383 00:20:23,240 --> 00:20:25,200 Speaker 1: So we had earnings from the big banks, a few 384 00:20:25,240 --> 00:20:28,480 Speaker 1: of them last Friday, JP Morgan among them better than 385 00:20:28,520 --> 00:20:31,119 Speaker 1: expected first quarter profit and revenue. But one of the 386 00:20:31,160 --> 00:20:34,320 Speaker 1: things that Jamie Diamond was pointing out is that higher 387 00:20:34,359 --> 00:20:36,640 Speaker 1: interest rates are forcing the banks to pay out more 388 00:20:37,119 --> 00:20:39,200 Speaker 1: more than they thought they would have to pay out 389 00:20:39,240 --> 00:20:43,440 Speaker 1: in customer deposits, and Diamond went on to say that 390 00:20:43,720 --> 00:20:46,119 Speaker 1: he cannot say whether or not the economy is going 391 00:20:46,160 --> 00:20:48,560 Speaker 1: to go into a recession, but the chance of bad 392 00:20:48,680 --> 00:20:53,400 Speaker 1: outcomes right now, in Diamond's view, is higher than people think. 393 00:20:53,440 --> 00:20:54,320 Speaker 1: Would you agree with that? 394 00:20:55,440 --> 00:20:58,120 Speaker 5: I would, And Diamond is such a gem and he's 395 00:20:58,160 --> 00:21:01,159 Speaker 5: so unique from you. Most CEOs just want to give 396 00:21:01,200 --> 00:21:04,399 Speaker 5: a rosy and optimistic point of view. Jamie's been a 397 00:21:04,400 --> 00:21:06,280 Speaker 5: little bit wrong, I'd say, over the past year, because 398 00:21:06,320 --> 00:21:09,400 Speaker 5: he has been. He's given the negative side too. None 399 00:21:09,440 --> 00:21:12,399 Speaker 5: of those have really manifested themselves yet. But yes, he 400 00:21:12,440 --> 00:21:15,919 Speaker 5: gives a more balanced view of what of the potential outcomes, 401 00:21:16,080 --> 00:21:18,639 Speaker 5: and I do think like that. I think most portfolio 402 00:21:18,640 --> 00:21:21,080 Speaker 5: managers think in terms of outcome, and we have to 403 00:21:21,119 --> 00:21:24,679 Speaker 5: weigh the possibility of positive and negative outcomes. And so 404 00:21:24,880 --> 00:21:27,440 Speaker 5: in this moment right now, yes, if you look at 405 00:21:27,440 --> 00:21:30,440 Speaker 5: for example, banks in particular, their net interest income has 406 00:21:30,480 --> 00:21:32,520 Speaker 5: been challenged and that's one of the reasons why all 407 00:21:32,560 --> 00:21:34,639 Speaker 5: the banks, just about all them that went down on 408 00:21:34,680 --> 00:21:37,480 Speaker 5: their earnings, which we're generally pretty good for the last 409 00:21:37,560 --> 00:21:39,240 Speaker 5: three months, but now how are they going to be 410 00:21:39,359 --> 00:21:40,760 Speaker 5: for the next few quarters? 411 00:21:40,760 --> 00:21:42,520 Speaker 3: And I think that's that's the question. Now. 412 00:21:42,840 --> 00:21:45,439 Speaker 1: So much of what we've seen lately in terms of 413 00:21:45,520 --> 00:21:47,840 Speaker 1: market gains has been in some way tied to this 414 00:21:48,200 --> 00:21:52,560 Speaker 1: artificial intelligence theme. Are you still a buyer of that? 415 00:21:53,000 --> 00:21:56,480 Speaker 5: So as a then yield in value investor, we don't 416 00:21:56,480 --> 00:21:59,439 Speaker 5: get a lot of easy ways to play that. 417 00:21:59,760 --> 00:21:59,960 Speaker 3: Now. 418 00:22:00,080 --> 00:22:02,040 Speaker 5: I will say, what is starting to creep up is 419 00:22:02,320 --> 00:22:04,680 Speaker 5: the energy demand is going to be so significant it 420 00:22:04,720 --> 00:22:08,159 Speaker 5: should benefit utilities which look pretty cheap here. So I 421 00:22:08,160 --> 00:22:10,679 Speaker 5: think that is one way where we could participate versus 422 00:22:10,680 --> 00:22:14,440 Speaker 5: the direct impact of buying microsoftware and Vidia for example, 423 00:22:14,440 --> 00:22:16,720 Speaker 5: which again are a little bit outside of our universe. 424 00:22:16,880 --> 00:22:20,040 Speaker 5: But yes, I think that trend obviously is a lot 425 00:22:20,080 --> 00:22:21,960 Speaker 5: of the growth is already priced in, so they're going 426 00:22:22,000 --> 00:22:23,639 Speaker 5: to have to continue to keep doing well. 427 00:22:23,760 --> 00:22:25,399 Speaker 3: But outside of that, again. 428 00:22:25,200 --> 00:22:27,479 Speaker 5: If you just look at energy or utilities in some 429 00:22:27,600 --> 00:22:30,959 Speaker 5: other areas that you wouldn't necessarily think of from an 430 00:22:30,960 --> 00:22:33,480 Speaker 5: AI standpoint, I do think there could be some benefit 431 00:22:33,480 --> 00:22:34,000 Speaker 5: there as well. 432 00:22:34,080 --> 00:22:36,639 Speaker 1: So I'm wondering whether or not the government's attempt to 433 00:22:36,680 --> 00:22:40,200 Speaker 1: stimulate the economy, whether through the Inflation Reduction Act we're 434 00:22:40,240 --> 00:22:43,119 Speaker 1: talking about some of the green initiatives, or maybe just 435 00:22:43,240 --> 00:22:46,760 Speaker 1: infrastructure as a pure play, roads and bridges. I mean, 436 00:22:46,840 --> 00:22:50,920 Speaker 1: let's think materials, let's think industrial shares. Do they represent 437 00:22:51,000 --> 00:22:52,480 Speaker 1: value in your thinking? 438 00:22:53,160 --> 00:22:53,880 Speaker 3: They really do. 439 00:22:53,920 --> 00:22:57,040 Speaker 5: And so one area that has not been discussed very 440 00:22:57,080 --> 00:23:02,080 Speaker 5: much has been commodities. Almost every really looks good. I mean, 441 00:23:02,440 --> 00:23:04,480 Speaker 5: they've kind of not gone up as much as the 442 00:23:04,600 --> 00:23:06,680 Speaker 5: S and P. But you know, we touched on gold, 443 00:23:06,720 --> 00:23:09,040 Speaker 5: for example, which is outside of your question, but gold 444 00:23:09,080 --> 00:23:11,600 Speaker 5: miners look really cheap, even relative to the price of gold. 445 00:23:11,880 --> 00:23:16,199 Speaker 5: Aluminum for example, looks pretty cheap. Copper prices are starting 446 00:23:16,200 --> 00:23:18,280 Speaker 5: to go up, and now those miners are starting to 447 00:23:18,320 --> 00:23:22,440 Speaker 5: do well, so yes, to your point, these underlying commodities, 448 00:23:22,600 --> 00:23:25,040 Speaker 5: you know, there's been some nice pocketive value there and 449 00:23:25,119 --> 00:23:27,320 Speaker 5: some of these stocks are just starting to look good again. 450 00:23:27,680 --> 00:23:29,919 Speaker 1: Are you fully invested right now or are you sitting on 451 00:23:29,960 --> 00:23:30,800 Speaker 1: a little bit of cash? 452 00:23:30,840 --> 00:23:33,679 Speaker 5: George, We always have a little bit of cash, I 453 00:23:33,680 --> 00:23:35,600 Speaker 5: would say for us, so we can go up to 454 00:23:35,640 --> 00:23:38,600 Speaker 5: twenty percent in cash, and we certainly don't have anywhere 455 00:23:38,640 --> 00:23:41,119 Speaker 5: near that level. We are closer to fully invested. We 456 00:23:41,119 --> 00:23:43,280 Speaker 5: have about three and a half percent in cash. I 457 00:23:43,320 --> 00:23:45,400 Speaker 5: will say, we do have a lot of so our 458 00:23:45,480 --> 00:23:47,640 Speaker 5: margin of safety is going to be our front end debt, 459 00:23:47,720 --> 00:23:49,879 Speaker 5: so we have a lot of short term bonds that 460 00:23:49,960 --> 00:23:52,520 Speaker 5: are issued by companies that have more cash than debt. 461 00:23:52,920 --> 00:23:55,520 Speaker 5: I do think good balance sheets, high quality balance sheets 462 00:23:55,600 --> 00:23:58,040 Speaker 5: is a great place to hide in an environment where 463 00:23:58,040 --> 00:23:59,160 Speaker 5: we see some volatility. 464 00:23:59,320 --> 00:24:01,399 Speaker 1: George will leave it there. Thanks for making time to 465 00:24:01,480 --> 00:24:05,240 Speaker 1: chat with us. George Sippoloni is portfolio manager at Pen 466 00:24:05,359 --> 00:24:08,639 Speaker 1: Mutual Asset Management. On the line from Philadelphia here on 467 00:24:08,720 --> 00:24:12,760 Speaker 1: Daybreak Asia. This has been the Bloomberg Daybreak Asia podcast, 468 00:24:12,880 --> 00:24:15,600 Speaker 1: bringing you the stories making news and moving markets in 469 00:24:15,600 --> 00:24:19,520 Speaker 1: the Asia Pacific. Visit the Bloomberg Podcast channel on YouTube. 470 00:24:19,560 --> 00:24:22,920 Speaker 1: To get more episodes of this and other shows from Bloomberg, 471 00:24:23,160 --> 00:24:27,080 Speaker 1: subscribe to the podcast on Apple, Spotify, or anywhere else 472 00:24:27,119 --> 00:24:30,320 Speaker 1: you listen, and always on Bloomberg Radio, the Bloomberg Terminal, 473 00:24:30,520 --> 00:24:31,880 Speaker 1: and the Bloomberg Business app.