WEBVTT - US Readies Isolation Plan for Iran; Trump Tariffs on Drones

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>Good morning.

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<v Speaker 3>I'm Nathan Hager and I'm Karen Moscow. Here are the

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<v Speaker 3>stories we're following today. Karen, we begin with the latest

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<v Speaker 3>on the war with Iran. The US is preparing for

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<v Speaker 3>unprecedented economic isolation measures against Tehran. Treasury Secretary Scott Bessen

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<v Speaker 3>says it's part of the Trump administration's effort to squeeze

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<v Speaker 3>the regimes finances.

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<v Speaker 4>The kinectic war ended after several weeks and we went

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<v Speaker 4>from epic fury to economic fury, and at the President's orders,

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<v Speaker 4>we have raised the level even again and watched the

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<v Speaker 4>space for more announcements coming next week, because we are

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<v Speaker 4>going to apply measures like have never been seen in

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<v Speaker 4>the history of economic isolation on a country.

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<v Speaker 5>And Treasury secretaries got best and told Newsmax the economic

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<v Speaker 5>pressure will be part of a one to two punch

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<v Speaker 5>that includes the continued blockade of Iran sports. The Iranian

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<v Speaker 5>economy has taken a major hit, industrial capacity is damaged,

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<v Speaker 5>and crude oil exports have been severely curtailed by the blockade.

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<v Speaker 3>Well Oil rose Nathan after the US threatened to impose

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<v Speaker 3>the economic measures against their run and checking prices now,

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<v Speaker 3>Nimex Screwede oil is up one and a half percent

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<v Speaker 3>at eighty two dollars forty nine cents of barrel Brent

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<v Speaker 3>is at one percent at eighty seven dollars ninety two cents.

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<v Speaker 3>Francisco Blanche, head of Commodity research at Bank of America,

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<v Speaker 3>says dwindling inventories are a concern.

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<v Speaker 6>Last six months, right, we've had this massive negative supply

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<v Speaker 6>shocking oil and may people are surprised that it hasn't

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<v Speaker 6>created a collapse in economic activity. But part of the

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<v Speaker 6>reason is we have very high inventories. We've lost about

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<v Speaker 6>twelve to thirteen hundred million barrels of oil as a

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<v Speaker 6>result of Iran war. About two thirds of that gap

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<v Speaker 6>has been met by inventories, which means GDP rules has

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<v Speaker 6>only come down maybe thirty forty bases globally as opposed

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<v Speaker 6>to one two three percent, So we can play that

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<v Speaker 6>game for a little longer, but we're getting close to.

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<v Speaker 3>The end of the rope, and Bank of America is.

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<v Speaker 3>Francisco Blanche's comments come as Bloomberg reports supertankers are going

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<v Speaker 3>dark for longer to get oil through the strait of

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<v Speaker 3>forren moves and the bab Elmandeb straight doubling down on

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<v Speaker 3>tactics honed in the early days of the Around War.

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<v Speaker 5>It's staying with geopolitics, Karen. The Trump administration is downposing

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<v Speaker 5>tariffs of up to one hundred percent on imported drones

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<v Speaker 5>and drone components as it seeks to reduce reliance on

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<v Speaker 5>foreign suppliers. Smaller drones will face a twenty five percent duty,

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<v Speaker 5>while even lower rates will apply to some trading partners,

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<v Speaker 5>including the European Union, Japan, and the UK. The move

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<v Speaker 5>risks accelerating a decoupling with China. It is the world's

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<v Speaker 5>biggest drone maker, and US drone exports from China have

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<v Speaker 5>been cut in half in the first half of this year.

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<v Speaker 3>Well, let's turn to bonds now, Nathan. There was a

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<v Speaker 3>decent demand from buyers as the US sold thirty year

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<v Speaker 3>government dead yesterday, but the Treasury had to offer a

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<v Speaker 3>yield above five point two percent to sell twenty five

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<v Speaker 3>billion dollars of bonds. That's the highest rate since two

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<v Speaker 3>thousand and one. Bloomberg Intelligence is chief US interest rates

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<v Speaker 3>strategist Ira Jersey says years of elevated inflation and deficit

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<v Speaker 3>fueld spending add to the strain on government finances.

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<v Speaker 7>The US Treasury now is competing with other countries worldwide.

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<v Speaker 7>Whereas for the better part of two decades, we were

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<v Speaker 7>the highest yielding developed market liquid bomb market in the world.

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<v Speaker 7>That's just not the case anymore.

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<v Speaker 3>There is competition, and Ira Jersey with Bloomberg Intelligence says

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<v Speaker 3>concerns over paying down government debt will grow as debt

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<v Speaker 3>to GDP rises. The US spent close to one point

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<v Speaker 3>two trillion dollars on debt interest so far this fiscal year,

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<v Speaker 3>of fifteen percent from a year ago.

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<v Speaker 5>And Karen Global stocks are headed for a third straight

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<v Speaker 5>weekly gain. Amid optimism over the AI trade and cooling

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<v Speaker 5>inflation bowlstring bets. The FED won't have to raise interest rates,

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<v Speaker 5>but some officials are raising the alarm about sticky inflation.

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<v Speaker 5>Cleveland FED President Beth Hammick, one of the three dissenters

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<v Speaker 5>at last month's meeting, doesn't have confidence that recent signs

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<v Speaker 5>of an inflation slow down will continue.

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<v Speaker 8>We've gotten two recent reports on the inflation side that

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<v Speaker 8>are definitely better than the earlier five months that we've

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<v Speaker 8>had this year, and so it's welcome. I love to

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<v Speaker 8>see that those numbers are coming in lower. That's a

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<v Speaker 8>good thing, but I don't have confidence that we're going

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<v Speaker 8>to continue to see that, or that we're going to

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<v Speaker 8>see them low enough that it's going to bring us

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<v Speaker 8>back down to that two percent number.

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<v Speaker 5>And an event that the Dayton Area Chamber of Commerce,

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<v Speaker 5>Cleveland FED chief Beth Hammick reiterated her call to raise

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<v Speaker 5>rates now.

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<v Speaker 3>May then there's still a disagreement among FED officials. Richmond

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<v Speaker 3>FED President Tom Barkin argued to hold interest rates steady

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<v Speaker 3>due to signs that inflation is declining. Speaking in South

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<v Speaker 3>Carolina yesterday, Barkin said elevated inflation is coming from tariff

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<v Speaker 3>and war shocks, which should pass. He acknowledged the risk

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<v Speaker 3>that some price pressures could become embedded, forcing officials to

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<v Speaker 3>tighten policy.

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<v Speaker 5>In tech news this morning, Karen Sources tell Bloomberg that

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<v Speaker 5>open ai is on track to generate more than forty

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<v Speaker 5>billion dollars in annualized revenue that would roughly double its

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<v Speaker 5>run rate from the end of last year. Bloomberg Markets

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<v Speaker 5>editor Sam Unstead says the momentum strengthens open AI's case

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<v Speaker 5>for a future Wall Street debut, as competition with anthropic intensifies.

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<v Speaker 9>The thing to keep in mind with these two with

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<v Speaker 9>Open AI aanthropic as well, that pair of them are

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<v Speaker 9>kind of trading off at the moment and bolstering their

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<v Speaker 9>own strengths and bolstering up their plans for an IPO

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<v Speaker 9>later in the year for each company, and both IPOs

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<v Speaker 9>expected to be enormous steels. So as they come up

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<v Speaker 9>to that, I think you're likely to hear much more

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<v Speaker 9>of this of how strong these businesses are, how good

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<v Speaker 9>the revenue run rates, and then how good the outlooks

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<v Speaker 9>are as well.

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<v Speaker 5>And Bloomberg sam Unstead says Opening Eyes growth is being

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<v Speaker 5>driven by AI coding tools, subscriptions, and a small but

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<v Speaker 5>growing ad business.

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<v Speaker 3>Nathan Elon mus Steak and SpaceX is valued at nearly

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<v Speaker 3>nine hundred and seven billion dollars based on the company's

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<v Speaker 3>latest share price must Calendar forty eight point four percent

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<v Speaker 3>Steak and SpaceX as of June thirtieth, according to a

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<v Speaker 3>regulatory filing, but says some shares only vest on crazy

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<v Speaker 3>good outcomes. Despite owning less than a half of SpaceX's

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<v Speaker 3>economic equity, Musk retains more than eighty two percent of

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<v Speaker 3>the company's voting power and.

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<v Speaker 5>Karen reddits set to join the S and P five

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<v Speaker 5>hundred before this started trading on Tuesday. It's part of

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<v Speaker 5>an off cycle change. The social media site will replace

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<v Speaker 5>avalon Bay communities on the index. Right now, Reddit shares

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<v Speaker 5>are up twelve and a half percent pre market.

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<v Speaker 3>And legal news. Luigi Maggioni is expected to plead guilty

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<v Speaker 3>Nathan to resolve federal charges relating to the fatal shooting

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<v Speaker 3>of United Healthcare CEO Brian Thompson and begin more with

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<v Speaker 3>a Bloomberg Law host June Grosso.

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<v Speaker 10>Sources tell Bloomberg that prosecutors will recommend that Mangioni serve

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<v Speaker 10>life in prison. The plea would come at a hearing,

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<v Speaker 10>said after federal prosecutors and defense lawyers jointly requested one.

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<v Speaker 10>Court records did not identify the purpose of the hearing.

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<v Speaker 10>The twenty eight year old Mangioni is facing both federal

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<v Speaker 10>and New York state charges over the shooting of Thompson

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<v Speaker 10>in December of twenty twenty four outside of miss Town,

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<v Speaker 10>Manhattan Hotel. June Grosso Bloomberg Radio June thanks.

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<v Speaker 5>Los Angeles Dodgers owner Mark Walters offered to pledge his

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<v Speaker 5>stake in Goggenheim Partners as collateral to secure loans for

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<v Speaker 5>his TWG Global Holding company. The firm's been exploring deals

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<v Speaker 5>with investors to clean up loans on the insurer's balance

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<v Speaker 5>sheet that have drawn scrutiny from federal prosecutors.

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<v Speaker 2>Sources tell Bloomberg.

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<v Speaker 5>Proceeds from Walter's recent sale of the Los Angeles Lakers

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<v Speaker 5>will help accelerate twg's efforts to clean up that balance sheet.

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<v Speaker 3>And finally, Nathan, twenty twenty six is projected to become

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<v Speaker 3>the world's hottest year ever. That's according to the nonprofit

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<v Speaker 3>Berkeley Earth. An unusually powerful El Nino weather phase is

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<v Speaker 3>raising the odds that this year will surpass twenty twenty

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<v Speaker 3>four before twenty twenty seven sets a new high time.

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<v Speaker 3>Now for look at some of the other stories making

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<v Speaker 3>news in New York and around the world, and for

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<v Speaker 3>that we're joined by Bloomberg's John Tucker.

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<v Speaker 2>John, Good morning, Yeah, Good morning, Karen.

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<v Speaker 11>New York City's piet of tear tax is back on

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<v Speaker 11>for now. The story this morning from Bloomberg's Charlie Pellett, The.

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<v Speaker 12>Rollout of New York's pietaire tax can proceed after an

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<v Speaker 12>appeals Court in Brooklyn temporarily put a hold on a

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<v Speaker 12>Staten Island judge's order blocking the plan. The court stayed

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<v Speaker 12>the restraining order that was issued earlier in the week

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<v Speaker 12>in a lawsuit filed by a group of homeowners. The

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<v Speaker 12>tax was signed into law in May by Governor Hochel

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<v Speaker 12>and to targets single family homes worth five million dollars

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<v Speaker 12>or more and department's worth one million dollars or more.

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<v Speaker 12>In New York, Charlie Pellett Bloomberg Radio.

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<v Speaker 11>Defense Secretary Pete Hagsith is pushing back in reports for

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<v Speaker 11>The Military Times that outlines deteriorating conditions of where the

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<v Speaker 11>USS Abraham Lincoln completely misrepresented.

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<v Speaker 2>Listen, we make sure at every ship, every crew, every.

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<v Speaker 7>Captain has everything we can provide them at every single moment.

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<v Speaker 11>The Lincoln is deployed as part of combat operations in

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<v Speaker 11>the Mideast. The ship has been two hundred and fifty

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<v Speaker 11>days at sea. The report at ledges at least one

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<v Speaker 11>sailor attempted to go overboard. Set Democrats say they've heard

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<v Speaker 11>of safety concerns, water contamination, and shortage of basic supplies.

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<v Speaker 11>More storms heading the Midwest overnight in areas that have

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<v Speaker 11>already been hammered over the last couple of days. Thunderstorms

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<v Speaker 11>into this morning may create rainfall rates of up to

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<v Speaker 11>two inches per hour. Harvard University has one dismissal of

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<v Speaker 11>a federal lawsuit claiming it had turned a blonde blind

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<v Speaker 11>eye to anti Semitism and discrimination against Jews and Israelis.

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<v Speaker 11>US District Judge Richard Stearns ruled the Justice Department didn't

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<v Speaker 11>sustain its claims that Harvard violated a civil rights law.

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<v Speaker 11>At President of Trump plans to highlight his record on

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<v Speaker 11>crime and safety during a visit to New York today,

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<v Speaker 11>where he's going to release new FBI crime statistics. Trump

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<v Speaker 11>is visiting Nassau County's police academy. The visit aimed at

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<v Speaker 11>boosting Republican candidate Republican Bruce Blakeman. Global News twenty four

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<v Speaker 11>hours a day and whenever you wanted Bloomberg News. Now,

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<v Speaker 11>I'm John Tucker. This is Bloomberg.

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<v Speaker 3>Karen Nks John Time now for our Bloomberg Sports update,

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<v Speaker 3>and for that we bring in on Stash Hour.

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<v Speaker 2>Thanks Gary on baseball for the third time.

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<v Speaker 1>Hell Day Field the Dreams game in Dyersville, Iowa. Tribute

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<v Speaker 1>to the nineteen eighty nine movie and twenty six Hall

0:10:10.480 --> 0:10:14.000
<v Speaker 1>of Famers emerged from the cornfield before the game. The

0:10:14.000 --> 0:10:16.360
<v Speaker 1>Phillies then beat the Twins seven to one. Kyle Schwarber

0:10:16.600 --> 0:10:19.560
<v Speaker 1>hit two home runs. Anel Division leaders met in la

0:10:19.559 --> 0:10:21.319
<v Speaker 1>and Milwaukee with three runs of the night, thenning and

0:10:21.320 --> 0:10:23.920
<v Speaker 1>beat the Dodgers five to four, five way time for

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<v Speaker 1>the lead after the first round of the Saint Jude

0:10:25.679 --> 0:10:29.480
<v Speaker 1>Golf in Memphis includes Jordan's Sweet Scottie Scheffler trails by three.

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<v Speaker 2>That's your Bloomberg Sports Uptate.

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<v Speaker 3>Stay with us more from Bloomberg day Break coming up

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<v Speaker 3>after this.

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<v Speaker 5>Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

0:10:44.880 --> 0:10:47.960
<v Speaker 5>and around the world on Bloomberg dot Com and the

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<v Speaker 5>Bloomberg Business app.

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<v Speaker 2>This is Bloomberg Daybreak. Good morning, I'm Nathan Hager.

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<v Speaker 5>As the impass continues with a run over the strait

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<v Speaker 5>of hormones, the Trump Administration's leaning even further into economic

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<v Speaker 5>pressure to try to get terror to bend. Treasury Secretary

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<v Speaker 5>Scott Besson says, quote watch this space for even more announcements.

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<v Speaker 2>Next week will be.

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<v Speaker 4>A combination of economic isolation like the world has never

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<v Speaker 4>seen before and the continued blockade in the straight of

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<v Speaker 4>horror move.

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<v Speaker 5>That was Treasury Secretary Scott Besson in an interview on

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<v Speaker 5>Newsmax and joining us this morning from Dubai is the

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<v Speaker 5>head of Middle East coverage for Bloomberg News, Stuart Livingston Wallace, Stuart,

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<v Speaker 5>it's going to speak with you again this morning. I

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<v Speaker 5>know Secretary Besson didn't reveal his cards much in terms

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<v Speaker 5>of what that economic isolation could look like, but do

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<v Speaker 5>we have a sense of what the Trump administration could

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<v Speaker 5>be considering on top of what it's already imposed on Iran?

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<v Speaker 13>Good morning, Yeah, good morning, Nathan. I'm going to that

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<v Speaker 13>last bit is a very good point. This is a

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<v Speaker 13>country that's been under sanctions for forty plus years. It

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<v Speaker 13>is arguably well, it's certainly one of the most sanctioned

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<v Speaker 13>countries in the world. It was probably overtaken by Russia

0:11:54.240 --> 0:11:56.080
<v Speaker 13>a couple of years ago, but it's kind of up there.

0:11:56.640 --> 0:11:59.400
<v Speaker 13>So the remaining options, we think are probably something along

0:11:59.440 --> 0:12:03.720
<v Speaker 13>the lines of ado banking, cryptocurrencies, maybe even secondary sanctions,

0:12:03.800 --> 0:12:06.600
<v Speaker 13>that is the third parties they trade with Iran. But

0:12:06.640 --> 0:12:10.400
<v Speaker 13>the reality is is a dwindling number of countries that

0:12:10.440 --> 0:12:13.520
<v Speaker 13>are prepared to do that trade precisely because of the threat.

0:12:13.600 --> 0:12:16.400
<v Speaker 13>You know that they themselves will be damaged economically and sanctioned.

0:12:17.120 --> 0:12:20.120
<v Speaker 13>So it's clear that the intention here is to squeeze

0:12:20.160 --> 0:12:22.800
<v Speaker 13>Iran even further. But again, even on that point, it

0:12:22.880 --> 0:12:25.120
<v Speaker 13>has to be acknowledged that Iran's economy is in pretty

0:12:25.160 --> 0:12:27.840
<v Speaker 13>diastrates as it is. You know, you've basically got hyperinflation,

0:12:27.920 --> 0:12:31.000
<v Speaker 13>You've got rolling blackouts across the country because they can't

0:12:31.000 --> 0:12:34.200
<v Speaker 13>maintain the grid. Again, very difficult to get trade in

0:12:34.320 --> 0:12:36.240
<v Speaker 13>or out. But we also know that Iran's had a

0:12:36.280 --> 0:12:39.040
<v Speaker 13>lot of practice and is quite skilled at evading sanctions.

0:12:39.080 --> 0:12:40.960
<v Speaker 13>But it'd be interesting to see what comes next week,

0:12:41.000 --> 0:12:41.400
<v Speaker 13>for sure.

0:12:41.800 --> 0:12:45.320
<v Speaker 5>And to that point, the fact that Iran has managed

0:12:45.360 --> 0:12:47.800
<v Speaker 5>to weather so much of this pressure all this time,

0:12:47.880 --> 0:12:51.800
<v Speaker 5>we've heard from Iran's military that it's reorganizing its leadership

0:12:51.840 --> 0:12:55.760
<v Speaker 5>to be more agile and aggressive for potentially preparing for

0:12:56.160 --> 0:12:59.000
<v Speaker 5>protracted conflict in the Middle East. What does that say

0:12:59.040 --> 0:13:01.839
<v Speaker 5>about what Ron's thinking might be right now?

0:13:03.000 --> 0:13:04.840
<v Speaker 13>I mean, it does seem to be the same playbook.

0:13:04.880 --> 0:13:07.199
<v Speaker 13>I have to say that it's something surprising to sort

0:13:07.200 --> 0:13:09.600
<v Speaker 13>of hear that they're you know, changing their stance to

0:13:09.640 --> 0:13:12.640
<v Speaker 13>a more aggressive posture when you know, particularly for those

0:13:12.640 --> 0:13:14.000
<v Speaker 13>of us living in the Gulf. I mean, I think

0:13:14.040 --> 0:13:16.600
<v Speaker 13>the last several months have you know, could only be

0:13:16.679 --> 0:13:19.160
<v Speaker 13>characterized as quite aggressive in terms of the thousands of

0:13:19.200 --> 0:13:22.640
<v Speaker 13>missiles and drones that we fired, you know, across the Gulf.

0:13:23.120 --> 0:13:26.360
<v Speaker 13>Having said that, I mean, it's clear that their viewers

0:13:26.360 --> 0:13:29.440
<v Speaker 13>that they have gained unexpected leverage in a way that

0:13:29.480 --> 0:13:31.480
<v Speaker 13>I don't think even they were expecting. And I'm talking

0:13:31.520 --> 0:13:34.920
<v Speaker 13>specifically here about poor moons and buy and from that

0:13:35.000 --> 0:13:38.240
<v Speaker 13>obviously a stranglehold over energy flows and other commodities to

0:13:38.280 --> 0:13:41.520
<v Speaker 13>the global economy, and they're not willing to give that up.

0:13:42.000 --> 0:13:44.960
<v Speaker 13>So I think what we're seeing for the US administration is, yes,

0:13:44.960 --> 0:13:46.880
<v Speaker 13>you're going to have the pressure of the blockade, and

0:13:46.920 --> 0:13:49.960
<v Speaker 13>that is for sure curbing Yourn's ability to get its

0:13:49.960 --> 0:13:52.880
<v Speaker 13>own oil out, but at the same time continuing to

0:13:52.920 --> 0:13:56.560
<v Speaker 13>squeeze it economically, and between those two things, hopefully pushing

0:13:56.559 --> 0:13:59.760
<v Speaker 13>Iran into some sort of concession, particularly when it comes

0:13:59.800 --> 0:14:02.480
<v Speaker 13>to moves. But on that much wider raft of issues,

0:14:02.480 --> 0:14:05.480
<v Speaker 13>including nuclear proxies, missiless on it, it's a very very

0:14:05.520 --> 0:14:06.760
<v Speaker 13>hot list.

0:14:07.960 --> 0:14:10.920
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