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Speaker 1: comes to Ukraine, Russia, the US, UH and NATO allies,
Speaker 1: Charlie of course mentioning the u S un failing sanctions
Speaker 1: and North Stream to pipeline. That's the latest round of
Speaker 1: sanctions from President by the EU has called an emergency
Speaker 1: in person some of the blocks leaders that is to
Speaker 1: happen to tomorrow and then we've often seen a lot
Speaker 1: of analysis about what we got from the President of
Speaker 1: the United States yesterday about sanctions, how they didn't seem
Speaker 1: to do much. So let's get the latest on the situation.
Speaker 1: What you need to know. Jody Schneider is political news
Speaker 1: director from Bloomberg TV and Radio. She joins us in
Speaker 1: our Interactor Broker studio in New York City. We keep saying, Jody,
Speaker 1: it's fluid. What do we Uh? The President just in
Speaker 1: veiling right another round of sanctions. Talked to us about
Speaker 1: the significance of that. Yeah, so we're expected to see
Speaker 1: this expanded package, maybe as soon as today. We're hearing
Speaker 1: this from people familiar with the matter. They haven't been
Speaker 1: done yet. They have not yet be done, but but
Speaker 1: we're we expect we're seeing them, and UH Bloomberg News
Speaker 1: colleagues are reporting this, according to people familiar with the matter, UH,
Speaker 1: and the penalties would hit additional Russian elites that are
Speaker 1: close to Vladimir Putin, as well as UH the builder
Speaker 1: of the North Stream to pipeline. This would be on
Speaker 1: top of the sanctions that were announced yesterday that the
Speaker 1: President UH announced in his remarks at the White House,
Speaker 1: which some said we're measured, others said we're a little
Speaker 1: too modest. And he's getting some criticism in Congress, mostly
Speaker 1: from Republicans, UH say, why have we not gone far enough?
Speaker 1: The President yesterday in those remarks said that the beginning
Speaker 1: of the invasion was occurring, and yet he wasn't hitting hard. Uh.
Speaker 1: So there this this is what's uh you know taking place. Now.
Speaker 1: The White House says that they're going to continue to
Speaker 1: roll out sanctions. Uh if the uh with what if
Speaker 1: Putin as Putin, I guess uh would escalate uh the
Speaker 1: incursion into Ukraine. So we're watching all that. Uh, we're
Speaker 1: also watching what's happening with the EU and uh their
Speaker 1: uh NATO allies and what they do with sanctions. I'm
Speaker 1: really glad you mentioned the EU allies because we've kind
Speaker 1: of very closely been here before a couple of times
Speaker 1: historically CRIMEA two eight in Georgia, very similar concepts. How
Speaker 1: much further can these sanctions actually hit Russia? Are they
Speaker 1: still effective given we've gone almost ten years where Russia
Speaker 1: has been trying to dedolarize and trying to kind of
Speaker 1: bolster or cushion I should say, the impact, Are they
Speaker 1: still going to be effective? Well, that's right, that's and
Speaker 1: that's a key question. And all this, I mean, I
Speaker 1: think there's two questions there. One is does Vladimir Putin
Speaker 1: care um? You know, is this is this a deterrent effect.
Speaker 1: Has this you know, been a deterrent effect at all?
Speaker 1: That doesn't really seem that it has. Now maybe it
Speaker 1: will deter you know, a dramatic escalation. But the other
Speaker 1: one is a should point out do they work overall?
Speaker 1: And they haven't really seemed to work so far in
Speaker 1: the sphere you're talking about, but uh, you know these
Speaker 1: and and of course they could dramatically escalate if they
Speaker 1: went against big Russian banks, which has been threatened. That's
Speaker 1: a different situation. And if they went to the nuclear option,
Speaker 1: as as they discussed of you know, doing the swift
Speaker 1: um currency um uh sanctions, that would be a whole
Speaker 1: other matter. No one thinks that Joe Biden wants to
Speaker 1: go there. And then there's a chess game involved if
Speaker 1: you give up too much with the sanctions, because you
Speaker 1: don't really have anything else. He's made it clear that
Speaker 1: there will not be American troops on the ground, uh,
Speaker 1: you know in Red Craine. Uh, So you have to
Speaker 1: hold back a little bit because what, you know, what
Speaker 1: currency do you have if you use everything now? So
Speaker 1: it's a waiting game with the White House and everyone's
Speaker 1: watching and you know, waiting to see what Vladimir Putin
Speaker 1: does next? Is there a tipping point do you think
Speaker 1: for President Putin In terms of something that does slow
Speaker 1: him down significantly? Because you look at his speeches and
Speaker 1: what he has said. He feels this territory was it
Speaker 1: was right part of the former Soviet Union, feels like
Speaker 1: this belongs to Russia, and so a lot of nationalism
Speaker 1: right coming from him. So is there something that is
Speaker 1: seen by the experts as there is a tipping point
Speaker 1: that will slow him down? Or does do most expect
Speaker 1: that he's going to go all the way? Yeah? And
Speaker 1: that and that's another set of key questions in this. Uh.
Speaker 1: He has made it very clear that what he wants,
Speaker 1: that what he kept saying, uh could be something you know,
Speaker 1: the West get out of jail free card here would
Speaker 1: be to promise never to allow Ukraine to become part
Speaker 1: of NATO, which of course is not something that the
Speaker 1: US or its allies in Europe are willing to do. Uh.
Speaker 1: So it's unclear what else might satisfy. I mean, there's
Speaker 1: been some thinking that that's what these these diplomatic efforts
Speaker 1: with Anthony B. Lincoln and and you know the other
Speaker 1: his counterparts among the European nations have been in recent
Speaker 1: weeks and months that to try to come up with
Speaker 1: something that could satisfy Putin, but they haven't been able
Speaker 1: to seem to come up with anything. One good question,
Speaker 1: how political is this becoming in the United States, because
Speaker 1: we've even seen division among the Republicans. But I just
Speaker 1: wonder about this lack of support congressional support for President
Speaker 1: binding in this Yeah, and this of course, you know,
Speaker 1: it's a midterm election year, and the whole thinking is,
Speaker 1: you know, foreign policy doesn't really matter in those elections,
Speaker 1: but there's a big you know, there there's one big
Speaker 1: caveat this year that could make it matter in the
Speaker 1: price of gasoline. And if if this really disrupts oil
Speaker 1: markets and gas prices, which have been going up because
Speaker 1: of you know, the inflationary pressures, they go up further.
Speaker 1: This could be really difficult, as Jimmy Carter saw, as
Speaker 1: others saw when inflation tied to uh international tensions went higher,
Speaker 1: and that could really hurt the Democrats in power. What
Speaker 1: are you watching thirty seconds final thoughts, Well, we're watching
Speaker 1: Putin's moves and and also another thing we're watching is China.
Speaker 1: China's responsor is very interesting because while Putin and she
Speaker 1: spoke at the Olympics and they had those meetings, we
Speaker 1: haven't heard a lot from China in recent days, very
Speaker 1: very modest console comments in state on media. So I'm
Speaker 1: watching them. They've been uping regulatory oversight of their executives
Speaker 1: and businesses. But I agree it's a really important aspect
Speaker 1: of this that we need to keep an eye on. Jodie,
Speaker 1: thank you so much. I know it's busy. Jody Schneider.
Speaker 1: She's political news director for Bloomberg TV and Radio. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes.
Speaker 1: Tim Stinovic on Bloomberg Radio. Listening to Bloomberg Business Week,
Speaker 1: Carol Master along with Creedy gooptin now as we watch
Speaker 1: the situation over in Ukraine, there's one other fund to
Speaker 1: keep an eye on, and that is the cyber attacks
Speaker 1: intended to create chaos and undermine the Ukrainian government. That
Speaker 1: story from Jeff Stone, cybersecurity editor Bloomberg News. He joins,
Speaker 1: creating myself here in our Bloomberg Interactive Broker studio. How
Speaker 1: are you well, It's good to have you here. You
Speaker 1: are busy anything in all things Ukraine right now, Um,
Speaker 1: what's going on here? Uh? It changes by the day,
Speaker 1: right you alluded to this, But we have seen a
Speaker 1: number of attacks, um, that are intended to create chaos,
Speaker 1: create confusion, create difficulty for Ukrainian government websites trying to
Speaker 1: stand online. Um, and it's really tough for banks to
Speaker 1: stay online. What does difficulty mean? They're overwhelmed with inauthentic
Speaker 1: traffic that appears to be coming from within Russian borders,
Speaker 1: and that traffic does what knocks the websites offline. So
Speaker 1: if you're trying to access your bank, you can't gather
Speaker 1: your transaction details, for instance, you can't access information from
Speaker 1: the Ministry of Foreign Affairs for instance. That would freak
Speaker 1: me out. Yeah, that sounds scary. How much further can
Speaker 1: it really go? It's hard to say. Um, we haven't
Speaker 1: been in a situation before where, um, a traditional warfare situation,
Speaker 1: troops on the ground, if you will, is combined with
Speaker 1: this kind of stuff that we've seen evolve in cyberspace
Speaker 1: over the past five or ten years. Um, it can
Speaker 1: get worse, Jeff. It does feel like Russia is just
Speaker 1: chipping away at Ukraine on so many different fronts to
Speaker 1: really kind of undermine the citizens there. That's true. I
Speaker 1: think that's part of the strategy. We're speaking with folks
Speaker 1: in Ukraine who who say essentially that the goal here
Speaker 1: is to exhaust us, it is to intimidate us, it
Speaker 1: is to wear us down. Well, I guess my question
Speaker 1: here now is if you do have that kind of
Speaker 1: exhausting wearing it down idea, Um, can't they go the
Speaker 1: other way as well? Can't cyber attacks happen on Russia
Speaker 1: as well? As this a a means of warfare if
Speaker 1: you're not seeing those physical troops on the ground, it
Speaker 1: absolutely is. Um. We know that the Russian government is
Speaker 1: particularly advanced and sophisticated with this kind of stuff, but
Speaker 1: we have seen attacks against them, not from Ukraine as
Speaker 1: of yet that we know of, but we've seen cases
Speaker 1: in the past, certainly from the U S. U S
Speaker 1: intelligence has affected UM Russian government activity in in cyberspace
Speaker 1: prior to the last election. Well, this is kind of
Speaker 1: interesting right as we are watching what some would say
Speaker 1: are two week sanctions opposed by the U S. That
Speaker 1: you do wonder write what's going on behind the scenes
Speaker 1: in terms of cyber warfare, right which is something that
Speaker 1: doesn't always get talked about, at least initially. But you
Speaker 1: do wonder what are you hearing stuff on that front.
Speaker 1: In terms of the U S specifically in NATO allies.
Speaker 1: We haven't heard anything about that yet. I would be
Speaker 1: surprised if it's If it's not happening. They certainly have
Speaker 1: the capability to uh take Russian banks offline for instances
Speaker 1: we've seen in Ukraine and affect uh you know, they
Speaker 1: can they can certainly get any emails and things like that.
Speaker 1: We haven't seen anything indicating that that's happening yet. But
Speaker 1: as a harder story, so how do you protect yourself
Speaker 1: against the sabama Ukrainian citizen hypothetically, what what do you
Speaker 1: do to to to prevent yourself? I think that that candidly,
Speaker 1: you're your concerns if you're Ukrainian citizen right now, are
Speaker 1: not in the cyberspace. I think that you want to
Speaker 1: probably take out cash and make sure that you can
Speaker 1: access your information, have it handy. UM. But a lot
Speaker 1: of this stuff is UM kind of a tip for
Speaker 1: tat in in terms of the geopolitics, we know that
Speaker 1: the Ukrainian government, for instance, is trying to UM ease
Speaker 1: some of this burden so that it's not a thought
Speaker 1: for people yet. It's just I would say, it's fascinating
Speaker 1: that you've mentioned that you kind of have to look
Speaker 1: at your cash right now, because anecdotally, I mean I
Speaker 1: have friends who are German or live in Europe and
Speaker 1: have families in Ukraine, and anecdotally they said, well, everyone's
Speaker 1: pulling their money out of their bank accounts. They're spending
Speaker 1: it on real estate in Western Europe. And this is
Speaker 1: what the President of Ukraine was talking about, right He
Speaker 1: was saying to President Biden, actually say tamp down the rhetoric,
Speaker 1: because you're seeing capital flows exit Ukraine at a pace
Speaker 1: that you just haven't seen. And I thought, my little
Speaker 1: market mind market hat on, I was like, oh, they're
Speaker 1: talking about financial markets. That's not what they're talking about
Speaker 1: the time, about people's savings. It's wild. If you can say,
Speaker 1: if I can say one more thing, they also, um,
Speaker 1: we also are trying to keep this as grounded as
Speaker 1: possible as you alluded to the President saying, because fears
Speaker 1: or over emphasizing this kind of rushing capability in cyberspace
Speaker 1: plays into the Kremlin's hands. Um, you don't want to
Speaker 1: create that panic that you that you kind of alluded to. No,
Speaker 1: it's really smart right to be levelheaded about this. But
Speaker 1: at the same time, this is our current world in
Speaker 1: terms of warfare. We've talked about this right over the
Speaker 1: last really decade or so, if not more, that this
Speaker 1: is this is how how it is often played or
Speaker 1: will be increasingly played. Right, Well, you're gonna be busy, Jeff,
Speaker 1: Thanks for getting up to speak, because this is another
Speaker 1: side of the story that we just wanted to bring
Speaker 1: to our audience. Jeff Stone, the cybersecurity editor Bloomberg News.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, this
Speaker 1: is our most read story on the Bloomberg today and
Speaker 1: it has sat there all day. Uh, it's another one
Speaker 1: by our street, not urajon, and I guess I don't know.
Speaker 1: Can we call it a clawback? We'll see what he
Speaker 1: has to say. Goldman is actually wants your bonus back.
Speaker 1: So here with who the firm is targeting Istory. He
Speaker 1: is financial port rep Blomberg News in Bloomberg Interactive Brokers Studio.
Speaker 1: Is it a clawback. Is it the ultimate clos back?
Speaker 1: It definitely is the threat of a claw back. What
Speaker 1: they're really doing right now is taking steps to confiscate
Speaker 1: pay for from a couple of their departed executives who
Speaker 1: when who left to start this banking started backed by Walmart.
Speaker 1: It's a small startup. It would be somewhat similar to
Speaker 1: Goldman Zone consumer banking aspirations, which took group five or
Speaker 1: six years ago, and these two executives were key to that.
Speaker 1: But what Goodman is doing here, which is what is
Speaker 1: rare and unprecedented about that, is they're going after paid
Speaker 1: that has already vested and been text. We've heard a
Speaker 1: lot of instances where deferred pay gets taken away. You
Speaker 1: go from Goldman to JP Morgan, Goldman to Morgan standing
Speaker 1: you don't have a chance of keeping your deferred faith.
Speaker 1: That's always you don't have it yet, right, you don't
Speaker 1: have it yet. In this case they have it. I
Speaker 1: mean we also cite example in the story where even
Speaker 1: the deferred pay is getting pulled from people who are
Speaker 1: moving to clients and by side films that would typically
Speaker 1: not be treated that way. But even if you're willing
Speaker 1: to set that aside, for a second and just count
Speaker 1: that as as an aggressive tone of the dial. What
Speaker 1: they're doing with the vested compensation, compensation that's already been
Speaker 1: delivered to them, that really stands out, and that to
Speaker 1: me and a lot of the people have spoken with,
Speaker 1: is really the prime example perhaps of Goldman and its
Speaker 1: CEO sending a message, making it loud and clear to stuff.
Speaker 1: We're still at the bank and thinking about jumping ship.
Speaker 1: It might be very costly to do so. Well, what's
Speaker 1: interesting to me, And you say this in your story,
Speaker 1: you say that this is something that normally happens when
Speaker 1: it's kind of it's used for punishments, reserved for cases
Speaker 1: of misconduct, not necessarily new jobs. And we saw this before,
Speaker 1: not necessarily at JP or at Goldman. Excuse me, but
Speaker 1: we saw this. You also quote this in your story
Speaker 1: an infamous incident with Andrea or cell I remember that story.
Speaker 1: Moving over to I want to say Banco santand their right, Yeah,
Speaker 1: the Spanish bank over from UBS. So this has happened before.
Speaker 1: It's almost like it's been in the making, except that's
Speaker 1: a little different. That's one level less aggressive because under
Speaker 1: your child, who was running investment banking at ubs at
Speaker 1: the time moving to Banco Santander Spanish retail lender. What
Speaker 1: blew up that contract was the fact that is deferred
Speaker 1: pay was taken away. In this case, they're not only
Speaker 1: to go with a deferred pay, but they're also going
Speaker 1: off to pay that has been delivered. That is what
Speaker 1: makes it a little mind boggling. Well, this is interesting
Speaker 1: because it also speaks to you when it's vested, right,
Speaker 1: these are executives who put in their time right and
Speaker 1: delivered uncertain things. Right. Can we assume that and then
Speaker 1: we're awarded absolutely? I mean the performance bonuses what all
Speaker 1: these large Wall Street films thrive on, and it's awarded
Speaker 1: at the end of the year. It is supposed to
Speaker 1: be a pay for performance culture invests over three years
Speaker 1: and you're restricted from selling it for five years. But
Speaker 1: those are all steps put in place to make sure
Speaker 1: no one's making a quick buck so that the stocks
Speaker 1: going up in the short term and then you cash
Speaker 1: out in the stock banks, which is why these measures
Speaker 1: in place. But you're using some of those restrictions to
Speaker 1: now find a back door into clowing back that pay. Sure,
Speaker 1: it sounds like comments getting incredibly aggressive with a lot
Speaker 1: of stuff. What's going on here? It's the broader backdrop.
Speaker 1: We have been speaking about the lost for the last
Speaker 1: two years, through the pandemic, really about this intense battle
Speaker 1: for talent. What have all the major firms done in
Speaker 1: a period of record revenues and profits we saw for
Speaker 1: when it came to the one pay cycle, all of them,
Speaker 1: all of them increased their compensation, They boosted pay bonuses
Speaker 1: were raining down in and the bonuses were going up
Speaker 1: to a level that you hadn't scenes in the financial
Speaker 1: crisis in some places, to a new record. That is
Speaker 1: one side of how you deal with the talent war.
Speaker 1: The other, uglier side, I guess, is also trying to
Speaker 1: send a message to those who are leaving that there
Speaker 1: is only one top dog in town and you don't
Speaker 1: to get on the wrong side. Well, what's interesting to
Speaker 1: me is that this also follows, like you said, this,
Speaker 1: this conversation has been increasing for a while, right, and
Speaker 1: it's also eating into their bottom line. So you kind
Speaker 1: of understand in a way why they're making this decision.
Speaker 1: It's it's getting very costly. Yes, and no, I would say,
Speaker 1: because remember the film that coined the phrase, or at
Speaker 1: least made the phrase popular long term greedy. That is
Speaker 1: Goldman Sax It's former leader, Gus Levy in the nineties
Speaker 1: when he was leading of the film, you know, till
Speaker 1: his dying day, he was the CEO of Goldman Sex.
Speaker 1: He ran that place, and that is when this whole
Speaker 1: idea of you have to be long term greedy to crout.
Speaker 1: And over the last fifty sixty years that has been
Speaker 1: a film that's been closely associated with Goldman Sex. So
Speaker 1: the question is some of these measures which are likely
Speaker 1: to irk clients, and we point out a couple of
Speaker 1: instances in the story where it has irked clients or
Speaker 1: has led to some awkward conversations. Does that eat into
Speaker 1: this long term greedy ethos. Any time of record capital markets,
Speaker 1: record do making activity, massive trading activity, you may not
Speaker 1: necessarily see it in the numbers. And the Goldman Sax
Speaker 1: brand has been built over a hundred and fifty years.
Speaker 1: Nothing's going to shake the foundation of two or three
Speaker 1: five clients are upset, but you have to wonder what
Speaker 1: long term impact it does have if the trend continues,
Speaker 1: and really is that the best way to boost loyalty
Speaker 1: and association with the film. Well, and I do think
Speaker 1: bottom line. It is about the bottom line, right, Goldman
Speaker 1: concerned about, you know, preserving the revenues, the relationships, right,
Speaker 1: because when some of these big topper runers and deal
Speaker 1: makers go, that certainly impacts them. Yes, but they've also
Speaker 1: done a fabulous job over several decades of cultivating what
Speaker 1: is the corporate world's most powerful alumni network. When these
Speaker 1: successful rainmakers leave two hundred West Street Goldman's headquarters in
Speaker 1: New York and take up a lucrative second career, they
Speaker 1: will come back to Goldman for advice, deals, trades, that
Speaker 1: connective ishsh that is really a connective issue for a
Speaker 1: lifetime of shared riches. Yeah, and you always feel like
Speaker 1: almost really really good at that. Um, We're gonna watch
Speaker 1: and see if other Wall Street firms follow Street Fantastic
Speaker 1: story Street a financial report at Bloomberg News. It is
Speaker 1: our most read story on the Bloomberg Today. Thanks for
Speaker 1: listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
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