WEBVTT - Asian Stocks Rise, US Hits Record on Iran Talks Hopes

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm Doug Krisner. Equity

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<v Speaker 2>markets in the Asia Pacific are trading higher following a

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<v Speaker 2>record setting session in the US where we had the

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<v Speaker 2>S and P five hundred and the Nasdaq one hundred

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<v Speaker 2>finishing at all time highs. Seems there is hope for

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<v Speaker 2>an extension of the ceasefire in the war with Iran.

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<v Speaker 2>That initial truce, by the way, will expire next week.

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<v Speaker 2>Mediators from both sides have been working tirelessly as tensions

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<v Speaker 2>over the Strait of Hormus seem to be intensifying. Now

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<v Speaker 2>we know the US is maintaining its naval blockade as

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<v Speaker 2>a way of cutting off Iranian shipments. Ten vessels have

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<v Speaker 2>been forced to turn around so far, and from the

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<v Speaker 2>other side, Tehran is keeping the straight closed to most

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<v Speaker 2>other traffic. Interestingly, crude oil prices ended the New York

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<v Speaker 2>session little changed. Joining me now for a look at

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<v Speaker 2>market action is Bloomberg's Paul Dobson. Paul as executive editor

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<v Speaker 2>for Asia Markets, and he joins from our studios in Singapore.

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<v Speaker 2>Thank you for making time. So much of what we've

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<v Speaker 2>been seeing appears to be headline driven optimism. Where are

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<v Speaker 2>the skeptics right now? I'm wondering if you get a

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<v Speaker 2>sense of maybe a little bit of complacency creeping in.

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<v Speaker 3>I think that you can't ignore the price action, Doug,

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<v Speaker 3>and so a lot of our commentators are still saying, well,

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<v Speaker 3>beware that physical crunch in the energy space, right you know,

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<v Speaker 3>people in the physical market are paying even higher rates

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<v Speaker 3>than you see in financial markets in order to actually

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<v Speaker 3>secure cargoes of oil at the locations where they need them.

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<v Speaker 3>But the market, you know, has moved on a little

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<v Speaker 3>bit from that. It's optimistic that at some point there

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<v Speaker 3>will be a deal between the US and around that

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<v Speaker 3>will allow energy to flow out of the straight of

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<v Speaker 3>Humis once again. They feel that this sort of maximum

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<v Speaker 3>pressure that's been being applied by the US will do

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<v Speaker 3>the trick, and are already pricing in a sort of

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<v Speaker 3>recovery as a result from that. And although crude prices

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<v Speaker 3>are higher now than they were at the start of

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<v Speaker 3>the war, they have suddenly come down a long way

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<v Speaker 3>from their peak, and that's allowing a lot of the

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<v Speaker 3>rest of the financial world to sort of reset and

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<v Speaker 3>get back to those levels that we were before the

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<v Speaker 3>outbreak of the war.

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<v Speaker 2>So we're seeing a little bit of weakness and oil

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<v Speaker 2>prices now in the Asian session, and our colleague Mark Cranfield,

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<v Speaker 2>the m Live strategist in Singapore, was pointing out that

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<v Speaker 2>the White House may be urging CEOs of American oil

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<v Speaker 2>and gas companies to boost drilling. That's according to a

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<v Speaker 2>report in Politico. Apparently the Energy Secretary and the Interior

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<v Speaker 2>Secretary intend to speak to these CEOs on a call Thursday.

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<v Speaker 2>Even if the US were to add to production, is

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<v Speaker 2>that going to make a difference where economies in Asia

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<v Speaker 2>are concerned.

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<v Speaker 3>It's hard to see that it could have an impact immediately.

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<v Speaker 3>The US is already exploding much a maximum capacity, I believe,

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<v Speaker 3>whatever energy products it can do, and the US itself

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<v Speaker 3>has got a pretty healthy supply situation at the moment,

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<v Speaker 3>So you know, it depends on what that export capacity

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<v Speaker 3>looks like. But nonetheless, if you're contributing more to production

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<v Speaker 3>kind of overall, then that is going to help the outlook. Remember,

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<v Speaker 3>we have been drawing on strategic reserves in various parts

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<v Speaker 3>of the world in order to ensure the security of

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<v Speaker 3>supply in recent weeks. You know, and I think that

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<v Speaker 3>that's probably part of the explanation in a way, Doug

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<v Speaker 3>for why the market has been able to weather the

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<v Speaker 3>storm to a certain extent is that it was very

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<v Speaker 3>obvious immediately what the risk of a closure of the

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<v Speaker 3>strait of horn Mows was, and so right from the

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<v Speaker 3>start there was emergency action taking place. In some emerging

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<v Speaker 3>market economies, they went to a four day week very quickly.

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<v Speaker 3>There was a lot of demand destruction, by which I

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<v Speaker 3>mean sort of energy or fuel switching from say gas

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<v Speaker 3>to coal or to other alternative feedstocks, and those withdrawals

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<v Speaker 3>from the strategic reserves went into effect pretty quickly. So

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<v Speaker 3>everybody kind of came into the situation with their eyes

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<v Speaker 3>open and maybe having that fore warning and also having

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<v Speaker 3>plentiful amounts of sort of floating storage, so oil already

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<v Speaker 3>on ships has enabled the walls of global sort of

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<v Speaker 3>energy markets so far to carry through what I would say,

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<v Speaker 3>you know, where there is that sort of like a

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<v Speaker 3>whiff of complacency would be if there isn't some sort

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<v Speaker 3>of resolution relatively quickly, then each day that we move

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<v Speaker 3>on with no supply coming out of the straight ofform news,

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<v Speaker 3>the situation does get tighter for global energy markets, and

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<v Speaker 3>it may be that some of the poorer countries in

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<v Speaker 3>particular will be the ones that would need to or

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<v Speaker 3>would would have to suffer as sort of supplies run scarce.

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<v Speaker 2>And to that point, there was an interesting piece on

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<v Speaker 2>the Bloomberg terminal quoting analyst at Goldman Sacks pointing out

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<v Speaker 2>that in terms of equity market relief rallies, we have

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<v Speaker 2>seen North Asia, em Europe has participated, Latin America as well,

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<v Speaker 2>and if you look at those heavy oil importing parts

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<v Speaker 2>of Asion and India, they seem to have lagged, and

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<v Speaker 2>I would imagine that you expect that differentiation to persist

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<v Speaker 2>for a while longer.

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<v Speaker 3>Right, that's right. So we have Indonesia, Philippines, India sort

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<v Speaker 3>of the laggards in Asian markets, and those are the

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<v Speaker 3>big importers in the sort of emerging market space. It's

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<v Speaker 3>been okay somehow for South Korea and Taiwan, even though

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<v Speaker 3>they are also big energy importers. You know, they have

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<v Speaker 3>more pricing power basically because the demand for the products

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<v Speaker 3>that's being made in those economies is so strong that

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<v Speaker 3>they can pay over the odds in terms of ensuring

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<v Speaker 3>that they receive the shipments and deliveries that they need,

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<v Speaker 3>and you know, I guess if you think about it,

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<v Speaker 3>like the tech side of equities markets has really been

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<v Speaker 3>in the vanguard here, but there are sort of signs

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<v Speaker 3>of froth in the speed of the rebound, sort of

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<v Speaker 3>you know, longer than ten day winning streak for the

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<v Speaker 3>NASDAC and we're at that stage where you know, you

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<v Speaker 3>have a sneaker company rebranding itself as an AI company

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<v Speaker 3>in the stock flying five hundred percent higher talking about

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<v Speaker 3>all birds, which that happened overnight, and so there, you know,

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<v Speaker 3>there are signs maybe I wouldn't say complacency, but a

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<v Speaker 3>little bit of frothiness or a little bit of everybody

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<v Speaker 3>trying to pile back in to the market at the

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<v Speaker 3>same time, and maybe that causes some disequilibrium and we'll

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<v Speaker 3>need a little bit of a calling off period at

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<v Speaker 3>some point.

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<v Speaker 2>I'm wondering whether a little bit of the price section

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<v Speaker 2>that we had in the States was tied to maybe

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<v Speaker 2>a short squeeze of sorts, because a lot of the

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<v Speaker 2>software issues that had been badly beaten seemed to bounce back,

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<v Speaker 2>and early yesterday, I think in Seoul it looked as

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<v Speaker 2>though the Cosby might finish at a record high that

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<v Speaker 2>didn't happen. Can you give me a little bit of

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<v Speaker 2>insight as to why that rally faded a bit?

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<v Speaker 4>Well?

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<v Speaker 3>I think that again, it is that sort of like

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<v Speaker 3>how far, how fast can you go kind of thing.

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<v Speaker 3>I think probably a lot of the retail traders that

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<v Speaker 3>timed it right would have been very happy with the

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<v Speaker 3>rally up towards those levels and see it as a

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<v Speaker 3>decent sort of take profit kind of place to be.

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<v Speaker 3>I do think that we've seen very encouraging sort of

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<v Speaker 3>figures from TSMC. Didn't have such beautiful numbers from ASML

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<v Speaker 3>in Europe, and that might have checked things a little

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<v Speaker 3>bit in the tech space. But it does feel like,

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<v Speaker 3>you know, the lakes of Samsung, Skhnix and TSMC still

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<v Speaker 3>have plenty of buyers behind them, plenty of momentum, so

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<v Speaker 3>long as the data center narrative, which actually seems to

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<v Speaker 3>have come back a little bit more robust, you know,

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<v Speaker 3>some of those fears that we had about the ability

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<v Speaker 3>to fund that build out and whether there would be demand.

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<v Speaker 3>It seems like during the war actually the AI story

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<v Speaker 3>is quietly, you know, kind of stabilized a little bit

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<v Speaker 3>as well, and so that may be drawing in more

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<v Speaker 3>enthusiastic buyers too.

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<v Speaker 2>So as the rally and crude oil kind of confronts

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<v Speaker 2>US with the dependency on hydrocarbons as a way of

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<v Speaker 2>creating energy. Essentially, we're looking for alternative means. Writers had

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<v Speaker 2>to report that China has held some initial talks with

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<v Speaker 2>providers of equipment that makes solar panels. Apparently Beijing is

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<v Speaker 2>considering limiting exports of some of the most advanced solar

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<v Speaker 2>panel technology to the US. Can you give me a

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<v Speaker 2>sense of what's happening here?

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<v Speaker 3>I mean, there's a little sense that before the Trump

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<v Speaker 3>she meeting both sides and just trying to set out

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<v Speaker 3>their store a little bit on where they are. China

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<v Speaker 3>obviously has a little bit and has shown a little

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<v Speaker 3>bit of its sort of power in the rare earth

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<v Speaker 3>material space. US has flexed its muscles in terms of

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<v Speaker 3>the AI and chip technology space as well, And as

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<v Speaker 3>we get closer to that meeting, maybe they're just sort

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<v Speaker 3>of showing each other what they have and what's on

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<v Speaker 3>offer and what could be you know, game for negotiation

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<v Speaker 3>and that kind of thing. It's interesting though, because China

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<v Speaker 3>is obviously the big exporder of solar panels by a

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<v Speaker 3>long way almost. It has too many of them, right,

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<v Speaker 3>and so they've been trying to curb production domestically so

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<v Speaker 3>to reduce a glut, and so withholding exports doesn't seem

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<v Speaker 3>like a really smart thing to do in that respect.

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<v Speaker 3>But also the US, you know, Trump, as we said earlier,

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<v Speaker 3>is pushing for more oil drilling. He's all in on

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<v Speaker 3>the fossil fuels trade. Isn't really you know the world's

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<v Speaker 3>biggest enthusiast for renewable energy in any case, So I

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<v Speaker 3>don't know that that would be the thing that would

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<v Speaker 3>really sort of rile him particularly. So, Yeah, it's an

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<v Speaker 3>interesting one. But I think that, you know, as we

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<v Speaker 3>do get closer to that meeting, assuming that it goes

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<v Speaker 3>ahead and that the Aram war is all sort of

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<v Speaker 3>over by then they're going to have a number of

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<v Speaker 3>interesting talking points on the trade side as well as

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<v Speaker 3>on the international sort of geopolitical security side too.

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<v Speaker 2>So imagine that it's not and China is still in

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<v Speaker 2>a situation where it's been cut off from a lot

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<v Speaker 2>of Iranian crude oil. How is that going to complicate this?

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<v Speaker 3>Mean? I think that China will be pretty pleased with

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<v Speaker 3>the way that it's come through things so far. It

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<v Speaker 3>had good storage and reserves of crude oil, It has

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<v Speaker 3>a lot of alternative energy sources as well, and its

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<v Speaker 3>markets and its currency have exhibited signs of strength. Its economy,

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<v Speaker 3>you know, has held up reasonably, albeit with reduced experts

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<v Speaker 3>in the most recent figures and still very poor sort

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<v Speaker 3>of domestic borrowing and credit flowing through the economy. I

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<v Speaker 3>think that it would get annoyed if it does start

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<v Speaker 3>to see shipments that are supposed to be headed in

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<v Speaker 3>its direction being curtailed. The ladies that we heard from

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<v Speaker 3>Trump is that he had a conversation with she and

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<v Speaker 3>that was sort of favorable in terms of the Iran

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<v Speaker 3>situation with support. But I think the China will probably

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<v Speaker 3>prefer for it to get done sorted and for everything

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<v Speaker 3>to return to more normal sort of flow situations soon

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<v Speaker 3>rather than later. But it's not just China. It's probably

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<v Speaker 3>know Europe could say the same thing to Trump quite easily,

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<v Speaker 3>you know, and all the other places around the world

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<v Speaker 3>that are suffering well. Destraight upon these is closed.

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<v Speaker 2>And in a very interesting way, higher oil prices has

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<v Speaker 2>been largely responsible for arresting this deflationary trend that's been

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<v Speaker 2>going on, particularly with wholesale level inflation in China.

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<v Speaker 3>Right, I think that this is going to be a

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<v Speaker 3>really interesting story to watch through the rest of the year.

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<v Speaker 3>So if you remember, Japan managed to snap out of

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<v Speaker 3>its deflationary cycle, not really because any of the domestic

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<v Speaker 3>stimulus measures that it did finally started working, but more

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<v Speaker 3>because of the impact of COVID on pricing and the

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<v Speaker 3>need for companies to start raising their prices and actually

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<v Speaker 3>that getting embraced by shareholders. And that's what we're starting

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<v Speaker 3>to see a little bit in China now, not just

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<v Speaker 3>sort of the energy related companies, but also we're seeing

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<v Speaker 3>things like Maltai, which you know, makes by liquor, raising

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<v Speaker 3>its prices and being embraced by stock investors for being

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<v Speaker 3>able to do that. So demonstrating that it has a

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<v Speaker 3>little bit of pricing power which we haven't really seen

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<v Speaker 3>from retailer is a great deal off flight. So if

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<v Speaker 3>that cements a little bit more that cycle and we

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<v Speaker 3>start to see it feeding into wage growth and it

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<v Speaker 3>gets the economy going again, then that would be a

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<v Speaker 3>really interesting development and kickstart and probably you know, welcome

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<v Speaker 3>by China. I think the economist would argue, well, you know,

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<v Speaker 3>but people can't really afford higher prices, so it's just

0:12:34.120 --> 0:12:37.319
<v Speaker 3>going to hurt demand even more in the economy. But maybe,

0:12:37.679 --> 0:12:39.719
<v Speaker 3>you know, as we saw with Japan, it starts some

0:12:39.760 --> 0:12:43.040
<v Speaker 3>sort of beneficial cycle that gets everything going again.

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<v Speaker 2>We'll keep our eye on that. Paul. Always a pleasure,

0:12:45.400 --> 0:12:48.360
<v Speaker 2>Thank you so very much. Bloomberg's. Paul Dobson is our

0:12:48.840 --> 0:12:52.440
<v Speaker 2>executive editor for Asia Markets, joining from Singapore here on

0:12:52.440 --> 0:13:04.440
<v Speaker 2>the Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.

0:13:04.480 --> 0:13:07.400
<v Speaker 2>I'm deg Krisner. So the US and Ron are considering

0:13:07.400 --> 0:13:10.400
<v Speaker 2>a two week extension of their ceasefire. Now we're told

0:13:10.400 --> 0:13:12.760
<v Speaker 2>the aim is to allow some more time to negotiate

0:13:12.800 --> 0:13:15.760
<v Speaker 2>an overall piece deal. You know, the initial truth in

0:13:15.800 --> 0:13:19.240
<v Speaker 2>that ceasefire expires next week. And that's where we begin

0:13:19.320 --> 0:13:22.959
<v Speaker 2>our conversation with Linda Robinson. Linda is a senior Fellow

0:13:23.200 --> 0:13:26.120
<v Speaker 2>at the Council on Foreign Relations and she spoke with

0:13:26.120 --> 0:13:28.760
<v Speaker 2>Bloomberg TV host Paul Allen and Cherry on.

0:13:29.280 --> 0:13:32.160
<v Speaker 5>Do you have any scenarios for how this plays out

0:13:32.320 --> 0:13:35.400
<v Speaker 5>as we're hearing reports of a possible extension to the ceasefile?

0:13:36.480 --> 0:13:38.560
<v Speaker 4>Yes, well, thank you, And the one bit of good

0:13:38.600 --> 0:13:42.560
<v Speaker 4>news is there is still a tenuous ceasefire and there

0:13:42.600 --> 0:13:46.080
<v Speaker 4>hasn't been a return to war. But I think the

0:13:46.200 --> 0:13:52.800
<v Speaker 4>situation is very uncertain. Obviously a ceasefire is needed if

0:13:52.880 --> 0:13:56.400
<v Speaker 4>a diplomatic resolution is going to come about, and it

0:13:56.440 --> 0:13:59.800
<v Speaker 4>will probably need to be a prolonged cease fire because

0:13:59.840 --> 0:14:02.440
<v Speaker 4>the parties are so far apart, and the hard work

0:14:02.440 --> 0:14:06.520
<v Speaker 4>of diplomacy is really to start to identify the areas

0:14:06.559 --> 0:14:10.120
<v Speaker 4>where you can move ahead and get some confidence building

0:14:10.280 --> 0:14:15.000
<v Speaker 4>through reaching some early partial agreements. What we've seen to date,

0:14:15.120 --> 0:14:19.080
<v Speaker 4>I think really is a lack of delving into the

0:14:19.160 --> 0:14:23.480
<v Speaker 4>complex details in the nuclear file, in the missile file,

0:14:23.560 --> 0:14:27.640
<v Speaker 4>in the proxy warfare file, and sweeping demands just aren't

0:14:27.720 --> 0:14:30.480
<v Speaker 4>going to get the job done. And meanwhile, with a

0:14:30.560 --> 0:14:33.400
<v Speaker 4>blockade in place, I think there are new risks, so

0:14:33.440 --> 0:14:38.600
<v Speaker 4>we have to look at potential complications and escalation as

0:14:38.880 --> 0:14:42.400
<v Speaker 4>a blockade if it does continue to be enforced.

0:14:44.360 --> 0:14:47.160
<v Speaker 5>Let's talk a little bit more about the one of

0:14:47.200 --> 0:14:50.960
<v Speaker 5>the key sticking points, which is of course around nuclear ambitions.

0:14:51.720 --> 0:14:55.640
<v Speaker 5>The a whereabouts of its uranium currently unknown. But do

0:14:55.680 --> 0:14:57.720
<v Speaker 5>you feel as if the events of the past few

0:14:57.760 --> 0:15:01.440
<v Speaker 5>weeks have really underscored around desire to have an ekally

0:15:01.480 --> 0:15:02.680
<v Speaker 5>a deterrent in the first place.

0:15:04.040 --> 0:15:07.600
<v Speaker 4>Well, I think you look at it from their point

0:15:07.600 --> 0:15:12.080
<v Speaker 4>of view, and they feel it's the ultimate safety guarantee

0:15:12.080 --> 0:15:14.480
<v Speaker 4>for them, and that's certainly why I think they've been

0:15:14.520 --> 0:15:18.400
<v Speaker 4>pursuing it for all of these years. But to get

0:15:18.440 --> 0:15:21.440
<v Speaker 4>them off of that track, there has to, I think

0:15:21.560 --> 0:15:26.680
<v Speaker 4>be some very hard bargaining to really understand what kind

0:15:26.760 --> 0:15:32.040
<v Speaker 4>of security guarantees, especially following some of the statements made

0:15:32.120 --> 0:15:35.960
<v Speaker 4>by the US President about wiping out their civilization. So

0:15:36.080 --> 0:15:38.440
<v Speaker 4>I think it's really time to calm down and get

0:15:38.480 --> 0:15:42.080
<v Speaker 4>to some of the brass tacks, which you mentioned the uranium.

0:15:42.120 --> 0:15:45.480
<v Speaker 4>Of course, there is an estimated nine hundred and seventy pounds,

0:15:45.640 --> 0:15:49.240
<v Speaker 4>Its locations are known, it's buried, but getting it out

0:15:49.280 --> 0:15:51.640
<v Speaker 4>will be very difficult. And now I do not believe

0:15:52.080 --> 0:15:58.080
<v Speaker 4>it's a militarily viable project without great risk and great casualties.

0:15:58.160 --> 0:16:00.720
<v Speaker 4>So I think really people need to understand that's going

0:16:00.760 --> 0:16:05.560
<v Speaker 4>to come about through a negotiated agreement and Iran having

0:16:06.120 --> 0:16:10.680
<v Speaker 4>by some reports, Iran was really prepared to start talking

0:16:10.720 --> 0:16:13.800
<v Speaker 4>about some of the specific details to get back to

0:16:14.480 --> 0:16:17.840
<v Speaker 4>assigned agreement, and I think that is where as they

0:16:17.840 --> 0:16:21.480
<v Speaker 4>said about Russia, trust but verify. There really need to

0:16:21.520 --> 0:16:26.400
<v Speaker 4>be very detailed talks by experts who understand the technicalities

0:16:26.640 --> 0:16:29.640
<v Speaker 4>and what's going to be required to have a verifiable agreement.

0:16:29.960 --> 0:16:31.880
<v Speaker 4>So this is a very long road and I think

0:16:32.200 --> 0:16:34.760
<v Speaker 4>a two week cease fire will not get you a deal.

0:16:35.520 --> 0:16:39.440
<v Speaker 4>You have to really plan on months of negotiations. And meanwhile,

0:16:39.760 --> 0:16:42.600
<v Speaker 4>the Straits should not be blocked, but they also a

0:16:42.720 --> 0:16:45.360
<v Speaker 4>nable blockade will be very difficult to enforce.

0:16:45.400 --> 0:16:49.400
<v Speaker 1>In my view, you follow the nucleation with Iran for

0:16:49.560 --> 0:16:51.720
<v Speaker 1>years now, when you look at the details of what

0:16:51.840 --> 0:16:55.280
<v Speaker 1>can potentially be agreed between all of these sides, in

0:16:55.320 --> 0:16:59.920
<v Speaker 1>what form could there be an agreement in which is

0:17:00.960 --> 0:17:05.600
<v Speaker 1>Washington hawks and Iran, with its amounts of security guarantees

0:17:06.040 --> 0:17:08.640
<v Speaker 1>can actually come to the table and agree on something.

0:17:10.000 --> 0:17:13.000
<v Speaker 4>Yes, well, I think that in the best of all

0:17:13.040 --> 0:17:16.280
<v Speaker 4>possible worlds, Iran has a right to nuclear energy and

0:17:16.320 --> 0:17:18.960
<v Speaker 4>there would be an agreement on that and how to

0:17:19.040 --> 0:17:25.000
<v Speaker 4>feel facilitated and security assurances that would obviate the need

0:17:25.119 --> 0:17:27.480
<v Speaker 4>for Iran to feel like it has to continue to

0:17:27.520 --> 0:17:31.080
<v Speaker 4>pursue a nuclear weapon. And I do understand there are

0:17:31.080 --> 0:17:35.280
<v Speaker 4>many people in Washington Israel and elsewhere. The simply don't

0:17:35.320 --> 0:17:43.080
<v Speaker 4>believe this Iranian government will accept that outcome that it

0:17:43.200 --> 0:17:45.840
<v Speaker 4>foregoes a nuclear weapon. But I think that is the

0:17:45.880 --> 0:17:50.680
<v Speaker 4>goal that was certainly the aspiration of the Obama Accord,

0:17:51.040 --> 0:17:55.080
<v Speaker 4>and by some accounts the talks in Oman were leading

0:17:55.119 --> 0:17:57.600
<v Speaker 4>in a direction of an accord. So I think it's

0:17:57.680 --> 0:18:02.160
<v Speaker 4>really important to get back to that table and try

0:18:02.200 --> 0:18:06.560
<v Speaker 4>to understand what Iran is going to accept, but also

0:18:06.680 --> 0:18:10.119
<v Speaker 4>some of their ten points I think the US and

0:18:10.200 --> 0:18:13.240
<v Speaker 4>others will not accept. But it's a bargaining position. The

0:18:13.280 --> 0:18:16.240
<v Speaker 4>point is to get into detailed negotiations.

0:18:16.800 --> 0:18:20.200
<v Speaker 1>So is the only way to get something on nuclear

0:18:20.359 --> 0:18:23.919
<v Speaker 1>that's agreeable to all regime change in Iran, something that

0:18:23.920 --> 0:18:27.040
<v Speaker 1>President Trump is vacillated on. Sometimes it's said that regime

0:18:27.119 --> 0:18:28.480
<v Speaker 1>change has already happened.

0:18:30.560 --> 0:18:34.159
<v Speaker 4>Yes, well, by some accounts, you have a harder line

0:18:34.960 --> 0:18:39.480
<v Speaker 4>regime in place now. But I think in my view,

0:18:39.560 --> 0:18:44.040
<v Speaker 4>this president came was elected really on a commitment not

0:18:44.160 --> 0:18:47.359
<v Speaker 4>to be in the regime change business. And as I

0:18:47.440 --> 0:18:51.840
<v Speaker 4>said in a previous article, the unpredictability of what you'll

0:18:51.880 --> 0:18:55.919
<v Speaker 4>get if you go for that could be anarchy or

0:18:56.000 --> 0:18:59.760
<v Speaker 4>an even more intractable government I think the point now

0:18:59.880 --> 0:19:03.240
<v Speaker 4>is to try to find a way to provide a

0:19:03.280 --> 0:19:07.600
<v Speaker 4>path to security for both sides, and to resume and

0:19:07.680 --> 0:19:12.080
<v Speaker 4>stop really the hemorrhaging of the economic costs globally for

0:19:12.200 --> 0:19:15.399
<v Speaker 4>the region and for the US itself. Even if it

0:19:15.480 --> 0:19:19.880
<v Speaker 4>says it's not dependent on energy from the region, plastics

0:19:19.880 --> 0:19:24.000
<v Speaker 4>and many other products derivatives are very much part of

0:19:24.080 --> 0:19:27.800
<v Speaker 4>the US economy. And I think that we're also courting

0:19:28.240 --> 0:19:32.360
<v Speaker 4>some very high military risk if we get engaged in shipboarding.

0:19:32.400 --> 0:19:36.760
<v Speaker 4>I was involved as a reporter in the shipboarding exercise

0:19:36.800 --> 0:19:40.320
<v Speaker 4>at the beginning of Operation Iraqi feed Freedom with the

0:19:40.400 --> 0:19:44.800
<v Speaker 4>US Navy Seals and the Polish Groum their special forces,

0:19:45.160 --> 0:19:48.680
<v Speaker 4>and they were boarding ships and clearing them in the

0:19:48.720 --> 0:19:55.880
<v Speaker 4>Alpha and the Upper Gulf. This is very dangerous, and

0:19:56.119 --> 0:19:58.600
<v Speaker 4>you don't know who's on board, if they're armed, if

0:19:58.600 --> 0:20:01.639
<v Speaker 4>they're going to resist. And as far as the US

0:20:01.720 --> 0:20:04.600
<v Speaker 4>starting to shoot boats out of the water, as the

0:20:04.640 --> 0:20:09.080
<v Speaker 4>President threatened, as was done in the Caribbean, that's going

0:20:09.119 --> 0:20:12.640
<v Speaker 4>to get a lot of countries very exercised, very quickly.

0:20:12.720 --> 0:20:16.200
<v Speaker 4>So he has a diplomatic crisis and a political crisis

0:20:16.480 --> 0:20:18.520
<v Speaker 4>if he goes back to the military track.

0:20:18.720 --> 0:20:21.159
<v Speaker 2>That was Linda Robinson, Senior Fellow at the Council on

0:20:21.240 --> 0:20:25.000
<v Speaker 2>Foreign Relations, speaking with Bloomberg TV host Paul Allen and

0:20:25.080 --> 0:20:28.400
<v Speaker 2>Cherry On bringing you their conversation here on the Daybreak

0:20:28.440 --> 0:20:34.280
<v Speaker 2>Asia Podcast. Thanks for listening to today's episode of the

0:20:34.280 --> 0:20:38.439
<v Speaker 2>Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at

0:20:38.440 --> 0:20:42.920
<v Speaker 2>the story shaping markets, finance, and geopolitics in the Asia Pacific.

0:20:43.160 --> 0:20:46.480
<v Speaker 2>You can find us on Apple, Spotify, the Bloomberg Podcast

0:20:46.520 --> 0:20:49.880
<v Speaker 2>YouTube channel, or anywhere else you listen. Join us again

0:20:49.920 --> 0:20:53.200
<v Speaker 2>tomorrow for insight on the market moves from Hong Kong

0:20:53.359 --> 0:20:57.760
<v Speaker 2>to Singapore and Australia. I'm Doug Chrisner, and this is

0:20:57.760 --> 0:20:58.320
<v Speaker 2>Bloomberg

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<v Speaker 4>Four