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Speaker 1: Good morning. It's Tuesday, the sixteenth of January in London.

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Speaker 1: This is the Bloomberg Debut You at podcast. I'm Caroline Hepcare.

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Speaker 2: And I'm Stephen Carroll. Coming up today, Iowa delivers a

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Speaker 2: resounding win for Donald Trump in his bid for the

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Speaker 2: US Republican presidential nomination.

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Speaker 1: America and the UK warn commercial vessels to avoid the

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Speaker 1: Red Sea as a merchant ship is hit with a

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Speaker 1: ballistic missile.

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Speaker 2: And a two hundred billion pound avalanche. We have a

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Speaker 2: special report on the British pension funds gearing up to

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Speaker 2: flood the market with private assets.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 2: Donald Trump has cruised to victory in the Iowa Republican

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Speaker 2: presidential caucus, with Ron De Santis finishing a distant second

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Speaker 2: and Nikki Hayley third. Ohio entrepreneur Viv Gramaswami ended his

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Speaker 2: presidential bid after a disappointing showing. Republican political consultant Rick

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Speaker 2: Davis explains how the nomination race could now unfold for

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Speaker 2: Donald Trump.

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Speaker 3: If Trump does run the table and gets both Iowa

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Speaker 3: New Hampshire a really unusual thing, then he's got four

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Speaker 3: weeks to consolidate his hold on South Carolina. And we've

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Speaker 3: seen early polling. The campaign hasn't gotten to South Carolina yet,

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Speaker 3: so it's not reflective of a real campaign. But right

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Speaker 3: now he's twenty points ahead of Nikki Haley, who calls

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Speaker 3: it home. So and then after that, the really next

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Speaker 3: big thing is Super Tuesday, so he could actually walk

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Speaker 3: in the Super Tuesday basically unchallenged at that point.

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Speaker 2: Bloomberg Politics contributor and partner at Stone Course Capital, Rick

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Speaker 2: Davis speaking there, Allies and adversaries around the world are

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Speaker 2: closely watching the twenty twenty four US presidential race, in

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Speaker 2: which Trump and Biden are offering starkly different visions for

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Speaker 2: America's global role. At December morning, consultant Bloomberg News poll

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Speaker 2: showed Trump leading Biden in the seven swing states that

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Speaker 2: will likely decide the outcome of the election.

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Speaker 1: Who The militants have attacked a US owned container ship

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Speaker 1: in the Red Sea. The vessel was hit by ballistic

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Speaker 1: missile but avoided significant damage or injuries to its crew.

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Speaker 1: The attack follows a warning from the US and UK

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Speaker 1: to merchant ships to avoid the area until further notice.

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Speaker 1: The EU Economy Commissioner Paolo Gentiloni sees the potential for

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Speaker 1: global economic fallout from the crisis.

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Speaker 4: What is happening in the Red Sea is not for

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Speaker 4: the moment apparently creating consequences on energy prices and inflation.

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Speaker 4: But we think that it should be monitored very closely

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Speaker 4: because these consequences could materialize in the coming weeks.

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Speaker 1: Palo Gentiloni. There the latest attack in the Red Sea

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Speaker 1: comes after American and British forces bombed the hu Thies

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Speaker 1: in an effort to deter them from disrupting global shipping.

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Speaker 2: Prime Minister Rachisinak defended those joint air strikes in Parliament.

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Speaker 2: He told MPs that who these aggression was the biggest

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Speaker 2: attack on the Royal Navy for decades.

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Speaker 5: I stress that this action was taken in self defense.

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Speaker 5: It was limited, not esclatory. It was a necessary and

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Speaker 5: proportionate response to a direct threat to UK vessels and

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Speaker 5: therefore to the UK itself.

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Speaker 2: Which he's seen a kada that he hopes the air

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Speaker 2: strikes would de escalate the conflict. However, the world's largest

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Speaker 2: shipping association BIMKOS, warning disruption in the area could last

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Speaker 2: for some time. The number of ships passing through the

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Speaker 2: southern red season's Friday has fallen by more than half

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Speaker 2: compared to the corresponding period a month earlier.

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Speaker 1: Iran has launched missile strikes against targets in northern Iraq

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Speaker 1: and Syria. Bloomberg's Dan Schwartzmann has the details.

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Speaker 6: Four people were killed and six others wounded in an

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Speaker 6: Iranian missile attack in the northern Iraqi city of Erbil.

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Speaker 6: The Iranian Revolutionary Guard Corps has taken responsibility for the strike.

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Speaker 6: The state run Islamic Republic News agency says the Revolutionary

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Speaker 6: Guard launched ballistic missiles on the quote espionage basis of

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Speaker 6: anti Iranian terrorist groups in Iraq and Syria. In a statement,

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Speaker 6: the IRGC says the strike was in response to recent

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Speaker 6: targeted killings in the country. No American or coalition forces

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Speaker 6: stationed in Iraq and Syria were injured in the missile strikes.

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Speaker 6: The US also shot down three drones near Arabil Airport.

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Speaker 6: Dan Schwartzman Bloomberg Radio.

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Speaker 2: UK inflation will drop to one point five percent in May,

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Speaker 2: according to a forecast from IG. The Bank's view is

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Speaker 2: that easing pressure from food and energy bills could pave

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Speaker 2: the way for the Bank of England to cut interest

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Speaker 2: rates sooner. Bim Murk James Wilcock has more.

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Speaker 7: The consensus view among economists has inflation falling to two

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Speaker 7: point one percent in mid twenty twenty five. IG's James

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Speaker 7: Smith thinks it will hit one point five percent in

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Speaker 7: just four months. He predicts falls and price rises in

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Speaker 7: nearly every major component and gas prices will bring the

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Speaker 7: Bank of England under target by May. If correct, the

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Speaker 7: data could be a booster if Ysunak, who has stated

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Speaker 7: political capital on bringing in under control in London. James

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Speaker 7: Wilcock Bloomberg Radio.

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Speaker 1: Apple will remove the blood oxygen feature on its smart

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Speaker 1: watches to avoid a US ban if an appeal fails.

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Speaker 1: The International Trade Commission ruled in October that Apple's devices

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Speaker 1: violate the patents of medical equipment maker Massimo. Bloomberg's Mark

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Speaker 1: German says that Apple's challenge against that decision will be

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Speaker 1: crucial in giving the company more time to find a solution.

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Speaker 8: Well, if it's not immediate removal, Apple's going to have

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Speaker 8: about a year to figure out a solution, and I

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Speaker 8: would bet heavily that with a year's time, Apple would

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Speaker 8: be able to retain the feature on the watch indefinitely

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Speaker 8: and rework it to not have to violate Arsenal's patents.

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Speaker 8: In fact, I've been told that they're working on this

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Speaker 8: software fix that changes some of the underlying algorithms from

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Speaker 8: the wording inside the blood oxygen saturation up to get

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Speaker 8: that to happen. But for that's a matter at all.

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Speaker 8: It's really important for Apple that they win tomorrow.

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Speaker 1: They win that appeal, Bloomberg's chief correspondent Mark German. There,

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Speaker 1: Apple has increasingly used health and safety features to market

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Speaker 1: it smart watches, helping to turn the line into a

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Speaker 1: seventeen billion dollar business.

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Speaker 2: For the tech chant, Elon Musk says he's uncomfortable growing

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Speaker 2: Tesla's AI capacity without a larger share of voting control.

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Speaker 2: The automaker is currently investing more than a billion dollars

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Speaker 2: into its Dojo supercomputer project and working to develop humanoid robots. However,

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Speaker 2: in a post on his social platform x Elon, Musk

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Speaker 2: said that without twenty five percent of voting control, he'd

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Speaker 2: prefer to develop products independently. According to data compiled by Bloomberg,

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Speaker 2: Musk currently owns more than twelve percent of the company,

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Speaker 2: but in a moment, we'll tell you why British pension

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Speaker 2: funds are gearing up to flood the market with assets sales.

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Speaker 2: But one of the things that caught my eye from

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Speaker 2: the coverage of Davos this morning, and it's one of

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Speaker 2: the things that I like about Davos because it does

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Speaker 2: get you a chance to get an insight into some

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Speaker 2: of the workplace trends that are happening. And there's conversation

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Speaker 2: that the chair of PwC in the UK has been

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Speaker 2: having about how the rise of AI actually means that

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Speaker 2: more junior staff should spend more time in the office.

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Speaker 2: His logic is is that a lot of the tasks

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Speaker 2: that treat people used to get trained up on are

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Speaker 2: now being taken over by the technology, which means face

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Speaker 2: to FaceTime is even more important. He says it could

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Speaker 2: actually to help people accelerate them up the career ladder

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Speaker 2: if they're spending more time in the office, meeting people,

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Speaker 2: interacting with people. And he says that you need to

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Speaker 2: be in the office for to five days a week

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Speaker 2: if you want to succeed in your career, which I'm

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Speaker 2: quite sure plenty of people would disagree with.

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Speaker 1: Yeah, okay, but very interesting advice, perhaps for younger people

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Speaker 1: in the office that you need that FaceTime, that learning time,

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Speaker 1: I mean interesting. If you get paid more sooner in

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Speaker 1: your career, that's the office.

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Speaker 6: Here's the crux of it.

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Speaker 2: Yeah, people might be interested and if they get that

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Speaker 2: sort of motivation, let's get more to know. Now though,

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Speaker 2: on the US political story this morning, Donald Trumps one

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Speaker 2: the first Republican Party caucus of the campaign in Iowa.

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Speaker 2: Our executive editor for US Government, Michael Sheppard, joins us

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Speaker 2: now from Iowa for more. Michael, great to have you

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Speaker 2: with us on the program. So the polls are predicted

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Speaker 2: Donald Trump would win big. He did. Were there any

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Speaker 2: surprises in his votes?

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Speaker 9: Well, Steven, I thank you for having me. Our team

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Speaker 9: is still hard at work parsing the results and figuring

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Speaker 9: out what's going to come next. As for surprises, look,

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Speaker 9: results in any election are always a surprise, as polls

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Speaker 9: can sometimes get it wrong ahead of time, and in

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Speaker 9: tonight's caucuses, it was unclear beforehand just how much support

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Speaker 9: Donald Trump would get. Iowa voters are famously independent minded,

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Speaker 9: but he did end up with fifty one percent of

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Speaker 9: votes from caucus goers, and that's even more than the

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Speaker 9: support that was projected in the final poll of a

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Speaker 9: local authoritative local newspaper taken days before tonight's caucuses.

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Speaker 1: Okay, so that for Donald Trump. What about Rohon de Santis,

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Speaker 1: who came in second, What does it mean for his campaign?

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Speaker 1: And indeed for Nicky Hayley.

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Speaker 9: Well, let's start with Ron DeSantis. And that's a good question, Caroline.

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Speaker 9: I'm glad you asked that about him, because for Ron DeSantis,

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Speaker 9: this isdication of his all out bet on Iowa, he

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Speaker 9: really banked on trying to win the Hawkeye state. He

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Speaker 9: spent so much time in the months ahead of the caucases.

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Speaker 9: He visited all ninety nine counties in the state, crisscrossing,

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Speaker 9: visiting so many different voters. He set up an extensive

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Speaker 9: ground operation. He brought in allies from Florida by the

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Speaker 9: bus load and planeload to go door to door days

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Speaker 9: before the caucuses in freezing cold temperatures. So it showed

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Speaker 9: some motivation and actually had some effect. Now for Nikki Haley, look,

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Speaker 9: the last thing she needed heading into New Hampshire, where

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Speaker 9: she has bet big as a stepping stone to her

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Speaker 9: home state of South Carolina. The last thing she needed

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Speaker 9: was a third place finish. She had hoped to do

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Speaker 9: well enough to Iowa to really use it as a

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Speaker 9: launching pad into New Hampshire and then South Carolina. But

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Speaker 9: it didn't work out exactly as she had hoped, and

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Speaker 9: that last poll I just mentioned taking days before the vote,

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Speaker 9: actually shown her finishing ahead of Dessantos.

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Speaker 2: Here and they field already narrowing after this caucus Vivia

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Speaker 2: Gramaswami dropping out of the race. What went wrong for

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Speaker 2: his campaign?

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Speaker 9: Well, you know, Vivek Ramaswami never really caught fire with

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Speaker 9: more than just the segment that he really appealed to

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Speaker 9: the very independent minded and even more libertarian voters, and

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Speaker 9: in places like Iowa and South Carolina, it was hard

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Speaker 9: for him to fit in. His message just didn't take hold,

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Speaker 9: and he in essence sort of acknowledged that during his

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Speaker 9: speech he said in the campaign, his speech tonight and

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Speaker 9: endorsing Trump, he said, in tonight's race, there are two

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Speaker 9: America First candidates. Now there's only one with me leaving,

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Speaker 9: and that of course is pointing to Donald Trump. So

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Speaker 9: he was signaling that many of the positions that he

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Speaker 9: was espousing were already ones that were reflected by Trump,

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Speaker 9: and he has now thrown his support for the former president.

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Speaker 1: Okay, just lastly and briefly then, the key things to

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Speaker 1: watch out for next as we move towards the New

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Speaker 1: Hampshire primary that takes place next week.

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Speaker 9: Well, this is really crucial for the DeSantis campaign to

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Speaker 9: make the most of New Hampshire, where they haven't invested

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Speaker 9: nearly as much time as Nicky Haley has. She is

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Speaker 9: the endorsement of the governor there, who's been campaigning very

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Speaker 9: aggressively in the Granite State for her. She also enters

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Speaker 9: that state DeSantis does too, facing a very different electorate.

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Speaker 9: It's not nearly as conservative as Iowa, so we could

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Speaker 9: see a different result that could pivot and actually leave

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Speaker 9: Nicky Haley ahead of Ron DeSantis but behind Trump. But

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Speaker 9: we'll have to see there. Trump is seeking to turn

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Speaker 9: his absolute majority win tonight into something that will allow

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Speaker 9: him to pivot sooner to this general election matchup with

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Speaker 9: Joe Biden.

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Speaker 2: And Okay, thanks heating up on that front as well.

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Speaker 2: Our executive editor for US Government, Michael Shepherd, Great to

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Speaker 2: have you with us from Iowa this morning as we

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Speaker 2: pass the results of that first Republican caucus.

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Speaker 1: Now, let's send our attention to the UK because British

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Speaker 1: pension funds, which were at the heart of the guilt

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Speaker 1: market crisis some sixteen months ago, are now going up

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Speaker 1: to flood the market with billions of pounds of private

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Speaker 1: assets joining us now for more is Bloomberg's asset management

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Speaker 1: reporter it Luki at Giftopulu and Lookia, welcome back to

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Speaker 1: Bloomberg Radio with this really interesting story. Why are these

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Speaker 1: funds selling these assets now?

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Speaker 10: Well, these are defined pension fund define benefittion funds which

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Speaker 10: guarantee directories are set amount every month for their entire retirements.

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Speaker 10: Because interest rates are higher now, the richest date where

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Speaker 10: they can guarantee the tensions of current and future rectories

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Speaker 10: for the rest of their lives. And when they get

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Speaker 10: to the stage they can make a deal manage surer,

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Speaker 10: pass on the risk to insurer. The insurer writes the

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Speaker 10: checks from now on and they can get this stuff

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Speaker 10: of the of the books of the employer for whom

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Speaker 10: the scheme is managed. So, because interest rates are higher now,

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Speaker 10: they're in a position where we can get a deal

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Speaker 10: with an insurer, and many of them are wanting to

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Speaker 10: jump on this opportunity and take the risk of the

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Speaker 10: company's balance.

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Speaker 2: It so what's the scale of this sale. Then, lookie,

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Speaker 2: how much are we talking about in private assets?

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Speaker 10: Well, you know, define PEDIFID schemes are about one managed

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Speaker 10: one point four trillion in total. One trillion of them

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Speaker 10: is closed, which means that when they reach that a

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Speaker 10: good funding level they can make a deal with an

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Speaker 10: insurer and about fourteen to twenty percent of that is

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Speaker 10: in private assets, so it could be as much as

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Speaker 10: two hundred billion that would come into the market over

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Speaker 10: the next few years. That was originally expected to have

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Speaker 10: an over two decades, but because interest rates have shot down,

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Speaker 10: the time period strong and many of them are even

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Speaker 10: ready now to do this deal. But the insurers want

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Speaker 10: a very liquid portfolio with no liquid assets on it,

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Speaker 10: so they would have need to have cash, government bonds,

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Speaker 10: corporate credit, that type of portfolio, and this is why

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Speaker 10: they want to get rid of the private assets to

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Speaker 10: get the portfolio ready to make a deal with an insurer.

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Speaker 1: Hmmm, that's interesting. So is it also part of then,

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Speaker 1: of a wider trend in terms of defined benefit pension

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Speaker 1: funds in the UK?

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Speaker 10: It is because again of the higher interest rates and

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Speaker 10: many of them being in a position to say, you know,

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Speaker 10: we can do this, we can ensure the pensions, we

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Speaker 10: can pass there is insured, the insurance responsible for this

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Speaker 10: from now on. Many of the companies, but for whom

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Speaker 10: the schemes are managed, they're just saying, okay, let's just

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Speaker 10: do it, let's do it fast while interest rates are

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Speaker 10: high and we have a good funding position. So they're

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Speaker 10: rush to do it. And it's a massive trans of assets,

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Speaker 10: not just the private assets, but you know, the entire

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Speaker 10: portfolios are shifting from about five thousand defined benefit invention

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Speaker 10: fads to Angel nine insurance. It's a massive it's a

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Speaker 10: massive change of hands, you know, of a certain amount

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Speaker 10: of assets. So these will define quite a few things

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Speaker 10: in the market.

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