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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 1: Tracy, you know, for years, I've always thought that if

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Speaker 1: you want to be like a smart sounding pundit at

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Speaker 1: the beginning of the year and someone ask you, like,

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Speaker 1: what risks are you thinking about right now, you like

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Speaker 1: stroke your chin and look off and you say, I'm

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Speaker 1: really worried about like geopolitical risk. And that's always like

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Speaker 1: a safe answer anytime any year. Like that always makes

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Speaker 1: you sound sophisticated.

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Speaker 2: Yes, unexpected geopolitical risks are an evergreen category of punditry.

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Speaker 3: This is true.

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Speaker 2: There is one specific risk within that category that I

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Speaker 2: feel like has come up every year for almost as

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Speaker 2: long as I can remember, and that is the risk

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Speaker 2: of something happening between China and Taiwan. And I have

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Speaker 2: a really embarrassing confession to make, Okay. I wrote my

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Speaker 2: dissertation on I wrote it in Beijing, and it must

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Speaker 2: have been in like two thousand and five or two

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Speaker 2: thousand and six, predicting that China would invade Taiwan before

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Speaker 2: the Beijing Olympics. I think that was like two thousand

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Speaker 2: and eight or something.

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Speaker 1: So when people talk about the risk of China invading

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Speaker 1: Taiwan or attempting to formally reunify, this is like twenty

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Speaker 1: years people have been talking about this and it keeps not.

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Speaker 2: Happening, Yes, and getting it wrong consistently for twenty years,

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Speaker 2: or at least I have.

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Speaker 1: But it does seem right like for whatever reason. And

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Speaker 1: we'll get into it that we are once again in

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Speaker 1: a wave of heightened concern. And you know, there are

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Speaker 1: two very active wars happening right now currently between Russia

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Speaker 1: and Ukraine, the Israel and Hamas war, and so the

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Speaker 1: idea of war, unexpected war is on people's minds. And

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Speaker 1: then we know that tension has been building in various

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Speaker 1: ways Taiwan. There was all of the angst over the

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Speaker 1: Nancy Pelosi trip a couple of years ago, for example,

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Speaker 1: and the heightened awareness that the world has on semiconductors

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Speaker 1: that are manufactured in Taiwan, and sort of a more

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Speaker 1: aggressive posture I believe from Xi Jinping and the military

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Speaker 1: of more aggressive war games and exercises. So many people

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Speaker 1: are concerned about some prospect of a hot conflict in

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Speaker 1: the next few years.

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Speaker 2: Yeah, you mentioned semiconductors and I feel like this is

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Speaker 2: really the key thing, which is in the past two

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Speaker 2: or well, I guess four years now, since the outbreak

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Speaker 2: of the global pandemic, we have had a sort of

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Speaker 2: crash course in the importance of the Taiwanese economy to

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Speaker 2: the broader world. And I feel like that's sort of

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Speaker 2: done a couple things. So one, it's made everyone a

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Speaker 2: lot more nervous about what could happen if that supply

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Speaker 2: chain gets disrupted again, although in a very different way.

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Speaker 2: And then secondly, maybe it's given a little bit of

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Speaker 2: ammunition to China to saber rattle on this issue even more. Right,

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Speaker 2: if it threatens something against Taiwan, the whole world now

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Speaker 2: knows what's at stake.

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Speaker 1: Yeah, that's absolutely right. So this is one of these

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Speaker 1: things that is you could feel it building more and

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Speaker 1: more people are talking about it. My understanding and what

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Speaker 1: I've seen is people say, oh, in DC, everyone is

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Speaker 1: like obsessed with this question. I don't feel like that's

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Speaker 1: as much the case in New York, but I do

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Speaker 1: get the impression that in DC talk of a war

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Speaker 1: is very high. And so I think, like, you know,

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Speaker 1: we have to do more on this, And I think

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Speaker 1: geopolitics in general, thinking back to some of our conversations

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Speaker 1: with Zultan et cetera about you know, the sort of

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Speaker 1: rearranging world, like, we need to dive into these questions

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Speaker 1: a little bit more.

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Speaker 4: Yeah.

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Speaker 2: Absolutely, And the other reason we need to do it

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Speaker 2: is Taiwan is holding an election. In fact, we are

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Speaker 2: recording this on January ninth. By the time this episode

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Speaker 2: comes out, the election will have been held and so

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Speaker 2: we'll know who the winning candidate is. But in the meantime, like,

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Speaker 2: there is clearly a big reason to discuss this.

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Speaker 5: Yeah.

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Speaker 1: Absolutely, Well, I'm very excited. We have two of our

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Speaker 1: colleagues here at Bloomberg that we've never had on the

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Speaker 1: podcast before, but they are the perfect guests to discuss

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Speaker 1: this because they've been doing a lot of work in

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Speaker 1: this area. We're going to be speaking with Jennifer Welch,

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Speaker 1: chief geoeconomics analyst at Bloomberg Economics, and Gerard De Pippo,

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Speaker 1: Senior geoeconomics analyst at Bloomberg Economics. They've both published a

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Speaker 1: lot of work on some of these questions related questions

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Speaker 1: wargaming the risk the economic stakes involved here, and so

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Speaker 1: we're going to start to go down our path of

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Speaker 1: understanding this tension better. So, Jennifer and Gerard, thank you

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Speaker 1: so much for coming on odd lots.

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Speaker 3: Thank you so much for having us.

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Speaker 4: Glad to be here.

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Speaker 1: I have a sort of very basic, I don't know,

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Speaker 1: maybe it's not basic zoom od question. You know, we

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Speaker 1: talked to like normal talk to economists who you know,

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Speaker 1: they have their recession forecast or forecast of soft landing, whatever,

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Speaker 1: and I sort of have some idea of how they

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Speaker 1: go about, you know, modeling different scenarios when it comes

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Speaker 1: to wargam and modeling the odds of a war or

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Speaker 1: modeling how a war might go if one were pursued.

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Speaker 1: What do you economics analysts, like, what is the toolkit

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Speaker 1: that you have to actually go about modeling the risks

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Speaker 1: and the outcomes of a war.

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Speaker 3: That's a great question, and let me dry it. I'll

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Speaker 3: start off, and then if you want to jump in

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Speaker 3: as well, so on the first part of your question

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Speaker 3: of how do we estimate the probability of war? To

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Speaker 3: be perfectly candid, this is definitely more art than science.

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Speaker 3: What we did in the case of our recent project

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Speaker 3: on Taiwan and the trajectory we might see in the

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Speaker 3: Taiwan Strait was take a look at sort of baseline conditions,

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Speaker 3: what are the sort of structures in place there that

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Speaker 3: lean towards stability or that lean towards increasing tensions and

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Speaker 3: even to the extreme of a crisis or conflict, And

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Speaker 3: we examined all those key variables and their trajectory and

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Speaker 3: what weight they might have to be candid. This is

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Speaker 3: an area of a lot of debate among people who

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Speaker 3: focus on the Taiwan Street. You know, to what extent

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Speaker 3: does Beijing wield the most agency over it versus Taiwan,

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Speaker 3: versus the United States, which has historically been a key

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Speaker 3: balancing power in the street. And then from there we

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Speaker 3: kind of developed our sense of probabilities. But again, this

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Speaker 3: is a really complex and dynamic geopolitical environment. The election

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Speaker 3: that Taiwan will be having in advance of this recording

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Speaker 3: is an example of how things can really shift at

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Speaker 3: quick notice depending on how events like that turn out.

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Speaker 3: But overall, we think our sense of what the risks

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Speaker 3: of crisis or conflict in the Strait are are meant

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Speaker 3: to be, you know, standing the test of time and

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Speaker 3: looking out over the next five years. And then in

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Speaker 3: terms of how we study what the outcome of a

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Speaker 3: war would be were one to happen. This is a

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Speaker 3: little bit more of a rigorous process, and there are

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Speaker 3: a lot of think tanks, a lot of internal government entities,

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Speaker 3: not just in the United States, but Japan, Taiwan, all

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Speaker 3: around the world that are increasingly looking at how a

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Speaker 3: crosstright conflict could play out, and it often is very

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Speaker 3: much focused on the military dynamics. That's historically the origin

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Speaker 3: of these war games is testing military tactics and battle

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Speaker 3: plans and playing out how different scenarios can produce different

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Speaker 3: outcomes depending on sort of what you go into the

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Speaker 3: battle with and how different conditions can change those outcomes.

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Speaker 3: So for that particular exercise, there's a lot of different

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Speaker 3: variations of war games related to Taiwan out there, and

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Speaker 3: a lot of them produce a variety of results. It

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Speaker 3: really depends on kind of the assumptions going into it on.

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Speaker 3: You know, for example, how does the worst start, is

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Speaker 3: there any warning of it, how prepared is Taiwan to

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Speaker 3: defend itself? Does the US get involved? But what all

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Speaker 3: of them point to is a war would be incredibly

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Speaker 3: costly at all sides. Most of the war games focus

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Speaker 3: on sort of the military and the humanitarian impact of that.

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Speaker 3: But we looked at also the economic impact, and what

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Speaker 3: we found is especially for China, Taiwan, and the United States,

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Speaker 3: but also the global economy, the toll would be quite

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Speaker 3: immense were the cross street tensions to erupt into a

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Speaker 3: broader conflict.

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Speaker 4: Maybe this is obvious, but I think it's worth pointing

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Speaker 4: out that we're dealing with something that is mostly beyond

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Speaker 4: the historical sample set. So normally, when you're trying to

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Speaker 4: model something, you think of what's happened before. You think

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Speaker 4: of like Tetlock's book Super Forecasters, where they talk about

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Speaker 4: outside in analysis, right, you look at what's happened before

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Speaker 4: they might be analogous and say, what are the chances

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Speaker 4: that would apply in this case. Of course, there are

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Speaker 4: many wars in history, including wars that are happening right now,

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Speaker 4: but there aren't that many that involve China, and there

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Speaker 4: are none that involve cross rate conflict. And there aren't

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Speaker 4: actually that many to involve a major essentially continental power

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Speaker 4: seizing an island power, right, And so it actually is

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Speaker 4: a quite limited sample set. And what we essentially do

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Speaker 4: with think of plausible outcomes and then kind of back

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Speaker 4: in relative probabilities at least compared to other outcomes, and

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Speaker 4: then say, okay, that tells you, sort of cumulatively, what

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Speaker 4: the odds are of these of these scenarios.

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Speaker 2: Can you tell us a little bit more about how

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Speaker 2: you choose which scenarios to focus on, because obviously you

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Speaker 2: can't you can't examine the entirety of possibilities when it

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Speaker 2: comes to, to Jared's point, like a relatively unknown and

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Speaker 2: unpredictable conflict. But there are clearly some scenarios that are

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Speaker 2: seen as more likely than others. And I remember when

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Speaker 2: I was working in Hong Kong, we did a big

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Speaker 2: piece on the news side of things about, you know,

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Speaker 2: this is what a war between China and Taiwan might

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Speaker 2: look like. And our source for that was we went

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Speaker 2: out and we spoke to geopolitical experts such as yourselves,

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Speaker 2: and we tried to get their sense of what the

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Speaker 2: most likely scenarios were. But when you guys are doing it,

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Speaker 2: who are you talking to, what are you looking at?

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Speaker 4: Part of it is a constraint on how you're trying

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Speaker 4: to answer the question. So in this case, we're trying

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Speaker 4: to model economically what these outcomes are. The range of

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Speaker 4: outcomes is more of a gradient. I mean, in a

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Speaker 4: technical sense, there could be thousands of outcomes, right, but

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Speaker 4: you can't actually model all of that. So what we

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Speaker 4: tried to do was decide what are the sort of

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Speaker 4: key outcomes that are more or less analogous within themselves

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Speaker 4: than try to model that. But I should also say

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Speaker 4: we're putting out other pieces on the terminal that are

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Speaker 4: actually more detailed and maybe more nuanced than you might

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Speaker 4: have seen on the sort of econometric side in the

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Speaker 4: big take.

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Speaker 3: No, I think this is exactly right to kind of

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Speaker 3: underscore the point on some of these scenarios have more

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Speaker 3: direct economic implications than others. So, for example, there's a

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Speaker 3: lot of different variations of what a major crisis industry

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Speaker 3: could look like short of a war. We chose to

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Speaker 3: model a blockade because that's the scenario, even though it's

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Speaker 3: one of the more unlikely ones for a lot of

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Speaker 3: reasons we can get into that would have more direct

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Speaker 3: implications for the global economy versus something like a seizure

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Speaker 3: of one of Taiwan's outlying islands, where it would be

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Speaker 3: incredibly escalatory and risky from a geopolitical perspective, but the

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Speaker 3: impact to markets and to the global economy directly might

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Speaker 3: be less so because it's not necessarily directly affecting trade.

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Speaker 3: But all that to say, you know, in terms of

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Speaker 3: what we looked at for the big take in the

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Speaker 3: overall exercise was looking across the spectrum of possibilities from

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Speaker 3: sort of best case scenario, by which we define that

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Speaker 3: as sort of an enduring or stable piece, to absolute

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Speaker 3: worst case scenario, by which we define that as an

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Speaker 3: all out conflict, including a conflict between the United States

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Speaker 3: and China, and then everything in between, the status quo

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Speaker 3: kind of being the base case, something slightly worse than that,

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Speaker 3: which we define as increased tensions, and there there's a

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Speaker 3: lot of variation and what specifically that could look like,

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Speaker 3: but the economic implications are probably not all that different

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Speaker 3: across those various inter scenarios, and then major crisis short

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Speaker 3: of a war. Again, a lot of different variation in there,

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Speaker 3: but the one that we think would have the most

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Speaker 3: impact on the global economy would be something like a

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Speaker 3: blocking that directly interrupts Tree.

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Speaker 2: So I should just say both Jared and Jenny have

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Speaker 2: mentioned a big take, which is basically a Bloomberg piece

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Speaker 2: based on the report that they did for Bloomberg Economics,

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Speaker 2: where they're estimating the exact or rough price tag of

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Speaker 2: some sort of military action between China and Taiwan. They're

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Speaker 2: estimating the price tag at about ten trillion dollars, which

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Speaker 2: would be equivalent to ten percent of global GDP, which

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Speaker 2: would be more more than the loss from Russia's invasion

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Speaker 2: of Ukraine, the COVID pandemic, and the global financial crisis.

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Speaker 2: So some pretty big numbers there. But Jenny, I'm curious

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Speaker 2: why you say that the blockade is in some respects

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Speaker 2: a less likely scenario here, because my impression was that

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Speaker 2: that was kind of becoming I don't want to say consensus,

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Speaker 2: but like it was certainly a realistic possibility of what

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Speaker 2: military action could look like.

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Speaker 3: No, that's right, and I think it still remains a

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Speaker 3: realistic possibility. I think though, changing military dynamics suggests that

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Speaker 3: it is probably one of the tactics that is likely

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Speaker 3: lower on Beijing's list of preferred options. And I say

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Speaker 3: that because a blockade is technically an act of war,

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Speaker 3: would be incredibly risky in terms of tipping into a conflict.

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Speaker 3: For example, if China were to put in place a

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Speaker 3: true military blockade of Taiwan and Taiwan we're trying to

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Speaker 3: challenge that Beijing would be forced to either use military

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Speaker 3: force to keep that blockade in place or to have

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Speaker 3: to remove it. So it has a really high chance

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Speaker 3: of tipping into a conflict, but at the same time,

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Speaker 3: it's not guaranteeing an outcome. Right. If Beijing was going

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Speaker 3: to risk war, it would seem to make more sense

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Speaker 3: to go for the all out amphibious invasion, which has

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Speaker 3: the chance of securing control over Taiwan, whereas a blockade

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Speaker 3: isn't likely to do that on its own. All that

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Speaker 3: being said, most of our understanding of what the Chinese

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Speaker 3: military strategy might be for Taiwan and in general how

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Speaker 3: amphibious campaigns are carried out, we think that a blockade

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Speaker 3: would be likely part of their campaign, part of a

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Speaker 3: multi step process. Were they to try and undertake an

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Speaker 3: amphibious invasion of Taiwan to try and keep enemy combatants

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Speaker 3: from leaving, to try and keep any third part from intervening,

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Speaker 3: it would be part of it, but to launch it

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Speaker 3: in advance would also give a lot of time in

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Speaker 3: warning and the tendency and more recent military campaigns has

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Speaker 3: been to try and take advantage of the element of surprise,

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Speaker 3: and you lose that with something like a blockade, which

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Speaker 3: is a very obvious demonstration of force. But all that

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Speaker 3: being said, it could still very much be a realistic possibility.

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Speaker 3: Particularly one of the things that we've talked about too

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Speaker 3: is it might not take the form of an overt

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Speaker 3: campaign or an overt blockade. It could take the form

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Speaker 3: of something that looks more like what we call lawfare

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Speaker 3: or legal warfare, enacting, for example, a customs regime where

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Speaker 3: you're trying to subject all craft that are coming in

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Speaker 3: and out of Taiwan to Chinese customs. But you'd still

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Speaker 3: need to enforce that in some way, shape or form,

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Speaker 3: So it still bears a pretty high risk of tipping

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Speaker 3: into something more connect.

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Speaker 1: I have a very i don't know, maybe rudimentary question.

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Speaker 1: So I'm looking at this wargame scenario that was conducted

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Speaker 1: by the Center for a New American Security and in

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Speaker 1: their report they have like this map that looks like

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Speaker 1: a big risk board and they even have dice, so

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Speaker 1: like it's like, let's say, is that really like a

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Speaker 1: part of these sort of geoeconomics analyst toolkit to actually

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Speaker 1: have these sort of dice games and maps because you

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Speaker 1: see them in movies and the general has that stick

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Speaker 1: if they push things around. But is that actually like

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Speaker 1: a real part of how this is done or is

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Speaker 1: that just an affect for the report?

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Speaker 4: The war gaming industry is skewed heavily towards actual military scenarios.

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Speaker 4: The actual economic war games are quite rare. I mean

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Speaker 4: that's growing in part because of Taiwan issue. I have

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Speaker 4: played in a number of these, including think tanks and

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Speaker 4: in US government. The economic side is typically less sophisticated

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Speaker 4: or treated as sort of just an effect or something

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Speaker 4: in the background. And I think when you're doing military

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Speaker 4: scenarios you can do things like saying, roll the dice.

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Speaker 4: If you're fighter jets, take out the other fund.

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Speaker 1: They really do that. So there is a serious military

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Speaker 1: analyst rolling the dice on a glorified risk board.

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Speaker 4: Yes, but it's much with economics. There are far more

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Speaker 4: actors involved. And it's not like national decision making is everything,

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Speaker 4: because how do you simulate quote the market right? Yeah,

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Speaker 4: and or supply chains for that matter. And so the

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Speaker 4: body of let's say, economic war gaming literature when it

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Speaker 4: comes to Taiwan is much much smaller than the military

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Speaker 4: wargaming literature.

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Speaker 2: Well, why don't you talk to us about the economic

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Speaker 2: modeling aspect of this, because it seems hard enough to

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Speaker 2: game out what military action could actually look like, but

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Speaker 2: then when you start trying to estimate the cost of

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Speaker 2: various types of action, that seems even more complicated. But

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Speaker 2: you've put a number on it, ten trillion dollars, So

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Speaker 2: how do you actually go about doing that?

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Speaker 4: Sure? So, first I want to give credit to our

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Speaker 4: outstanding modeling team in Europe, mostly as part of Bloomberg Economics.

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Speaker 4: They did most of the actual mathwork which Jenny and

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Speaker 4: I were doing was helping to define the scenarios and

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Speaker 4: then working with them to come up with essentially like

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Speaker 4: scenario inputs that will be relevant to those scenarios that

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Speaker 4: would have relevant economic outcomes. And so we already talked

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Speaker 4: about how we develop scenarios. When it comes to the

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Speaker 4: actual modeling, you know, it's essentially layering on three things.

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Speaker 4: The first is a sort of standard wto trade shock

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Speaker 4: model which people use for tariffs and other stuff like that.

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Speaker 4: We played with tariff rates in some ways to simulate

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Speaker 4: the effect of sanctions. These models don't really have a

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Speaker 4: sort of sdning the PBOC effect button in them, but

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Speaker 4: you can get some of the trade shocks in there.

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Speaker 4: There's also a financial model that is layered on top

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Speaker 4: of you play with things like the vics and you

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Speaker 4: can see how market uncertainty or capital and flows move

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Speaker 4: and what the economic outcome or effect is of that.

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Speaker 4: But actually, in this case, because we're dealing with Taiwan,

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Speaker 4: the most important factor in terms of the cumulative economic

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Speaker 4: impact was supply chain impacts. And I know you guys

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Speaker 4: have talked a lot about this on the show, the

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Speaker 4: importance of Taiwan, seeing particular for advance semiconductors. And what

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Speaker 4: we did with that was talk to various industry research

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Speaker 4: professional people, including at Bloomberg, who work on these things,

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Speaker 4: and using the OECD trade and value added data and

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Speaker 4: input output tables, so essentially estimate at the end of

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Speaker 4: the day, how much of certain sectors, and these are

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Speaker 4: generally high level sector, it's just how the data is presented,

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Speaker 4: how much of those would get knocked out if, for example,

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Speaker 4: the world did not have access at TSMC's chips. You

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Speaker 4: could debate how bad it would be, and in fact

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Speaker 4: we got a range of estimates. We took sort of

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Speaker 4: something in the middle that is like awful but not

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Speaker 4: completely apocalyptic. But I think if you look at the

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Speaker 4: bottom of the big take, there's a note explain this

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Speaker 4: that essentially we knocked out in the war scenarios something

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Speaker 4: like eighty five percent of global electronics production, so things

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Speaker 4: like smartphones and all that computer's laptops, and then something

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Speaker 4: like sixty two percent of global autos and transport. So

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Speaker 4: that's a massive shock, and it's actually doing a lot

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Speaker 4: of the work in terms of the simulation of economic impacts.

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Speaker 3: Yeah, and just to add to that, shout out to

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Speaker 3: you our Bloomberg Intelligence colleagues who helped us better understand

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Speaker 3: the role that these chips play in different industries. And

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Speaker 3: the point that Jarred noted on what we call the

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Speaker 3: golden screw problem of trying to determine you know, a

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Speaker 3: chip itself might not cost that much, but it's hard

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Speaker 3: sometimes to know for sure how essential it is to

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Speaker 3: a particular product. You know, for example, could the car

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Speaker 3: be made without that chip? Is there the possibility that

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Speaker 3: the manufacturer could substitute for something else, And as Yard noted,

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Speaker 3: we worked with our BI colleagues to kind of estimate

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Speaker 3: within that range of how essential these chips are. But

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Speaker 3: our rough estimate is that chips we know are really

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Speaker 3: important to high end products like smartphones and PCs, but

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Speaker 3: they also play a really critical role in other major

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Speaker 3: industries autos, home electronics, et cetera. And I think there's

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Speaker 3: a huge question of not just what happens if those

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Speaker 3: products can't get produced, but everything that relies on those products,

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Speaker 3: in particular in our more advanced service economies, what that

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Speaker 3: means going forward if you can't get new smartphones, if

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Speaker 3: you can't get new autos, and if you can't get

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Speaker 3: new PC. So I think this is an important figure,

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Speaker 3: the ten tillion dollar one and the impact that we're

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Speaker 3: estimating to advanced economies, But it is in some ways

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Speaker 3: the beginning of the conversation, because there's more work that

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Speaker 3: can be done to really refine those numbers and then

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Speaker 3: estimate the downstream impact.

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Speaker 1: I want to ask a question that actually takes this

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Speaker 1: step way back. And you know, as Tracy mentioned in

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Speaker 1: the intro, and I didn't know that you wrote a

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Speaker 1: thesis almost almost twenty years ago predicting an imminent.

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Speaker 2: Now I feel old, old and wrong, sorry, but why now?

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Speaker 1: Why are we this seems to go in waves of

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Speaker 1: people concerned, why do you like set the stage for

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Speaker 1: us of like, why are we at this point again

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Speaker 1: where people are seriously running these scenarios and doing the

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Speaker 1: math and talking about this and such a high level,

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Speaker 1: like what are the conditions that have got this like

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Speaker 1: so top of mind, particularly in DC for people who

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Speaker 1: think about these things.

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Speaker 3: So, I think the first thing I acknowledge is I

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Speaker 3: think Tracy was not far off and assessing back in

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Speaker 3: the two thousand to two thousand and eight period that

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Speaker 3: there was a high risk of a conflict at that

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Speaker 3: point in time. The reality is that risk ebbs and flows.

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Speaker 3: It's not a particularly necessary or I should not say,

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Speaker 3: it's not a particularly or essentially linear process, right. It

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Speaker 3: depends on the various factors at play. The two thousand

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Speaker 3: to two thousand and eight period was a period of

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Speaker 3: really heightened cross street tensions owing to an administration in

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Speaker 3: Taiwan that Beijing found to be incredibly problematic and very

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Speaker 3: close to crossing its red lines, and there were a

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Speaker 3: lot of periods of white knuckling over how, for example,

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Speaker 3: Beijing was going to respond to elections back in that

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Speaker 3: time period. What I think has evolved since then that

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Speaker 3: ads to the level of concern. Are a couple of

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Speaker 3: really important drivers of the cross street stability dynamic, and

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Speaker 3: the first one is really the military balance, not just

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Speaker 3: in this strait, but more broadly so. Since roughly two

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Speaker 3: thousand and five to the late twenty tens, China has

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Speaker 3: really eclipsed Taiwan militarily. There was a period of time

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Speaker 3: where Taiwan still had, even though a smaller force, a

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Speaker 3: much more advanced force, and that has really changed in

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Speaker 3: recent years with all of China's investments in its military modernization,

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Speaker 3: and we see that on a day to day basis

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Speaker 3: where China is just overwhelming Taiwanese forces with the amount

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Speaker 3: of military planes that's putting into Taiwan's nearby airspace. The

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Speaker 3: second piece of that dynamic, though, and arguably one of

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Speaker 3: the more impactful ones, is the changing military balance of

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Speaker 3: power between the United States and China. US now regards

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Speaker 3: China as its pacing challenge, as the military closest to

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Speaker 3: matching it, and that's particularly important closer to China, where

439
00:24:02,200 --> 00:24:05,600
Speaker 3: China has a lot of local advantages and obviously for

440
00:24:05,680 --> 00:24:08,919
Speaker 3: Taiwan being you know, just across the street, for China,

441
00:24:09,359 --> 00:24:11,840
Speaker 3: they're right sort of at the center of that. So

442
00:24:12,080 --> 00:24:15,960
Speaker 3: that's an incredibly important shift over the past twenty years

443
00:24:16,080 --> 00:24:18,520
Speaker 3: that I think Kitan's concerned. And then the third part

444
00:24:18,560 --> 00:24:22,720
Speaker 3: is the political dynamics at play Taiwan over the past

445
00:24:22,840 --> 00:24:28,520
Speaker 3: thirty years of becoming a more full fledged democracy. We've

446
00:24:28,520 --> 00:24:31,960
Speaker 3: seen that go in parallel with changing attitudes on the

447
00:24:32,000 --> 00:24:35,840
Speaker 3: island towards its relationship with China and its identity and

448
00:24:35,920 --> 00:24:40,040
Speaker 3: how that relates to that crosstraight relationship. And you look

449
00:24:40,040 --> 00:24:43,879
Speaker 3: at pulling today and the vast majority of Taiwanese identify

450
00:24:44,200 --> 00:24:49,280
Speaker 3: as Taiwanese, not as Chinese, not as Chinese, and Taiwanese Taiwanese.

451
00:24:49,640 --> 00:24:53,560
Speaker 3: And at the same time, support for unification, which was

452
00:24:53,600 --> 00:24:56,720
Speaker 3: never that high but was about twenty percent in the

453
00:24:56,800 --> 00:25:01,920
Speaker 3: nineteen nineties, has dropped to you know, below this year.

454
00:25:02,080 --> 00:25:05,639
Speaker 3: So it's it's an incredibly unpopular idea. The vast majority

455
00:25:05,640 --> 00:25:08,720
Speaker 3: of folks would just prefer the status quo, which is

456
00:25:09,000 --> 00:25:12,399
Speaker 3: de facto separation. And then simultaneous that you have on

457
00:25:13,359 --> 00:25:16,199
Speaker 3: China and the mainland, you know, a growing sense that

458
00:25:16,280 --> 00:25:19,480
Speaker 3: China is a rising power that creates both sort of

459
00:25:19,560 --> 00:25:22,040
Speaker 3: a need and an opportunity to make progress towards these

460
00:25:22,160 --> 00:25:26,440
Speaker 3: historic goals of territorial integrity and unification, which in their

461
00:25:26,520 --> 00:25:30,440
Speaker 3: minds is all leading up to this, you know, national

462
00:25:30,480 --> 00:25:33,960
Speaker 3: rejuvenation of China, and key to that is the idea

463
00:25:34,200 --> 00:25:38,639
Speaker 3: of finally bringing China back together. That's their vision for

464
00:25:38,760 --> 00:25:41,600
Speaker 3: what their end state should look like, and Taiwan is

465
00:25:41,800 --> 00:25:45,520
Speaker 3: one of the most important outstanding elements of that. So

466
00:25:45,720 --> 00:25:48,400
Speaker 3: there's really sort of these divergent forces at play where

467
00:25:48,440 --> 00:25:52,640
Speaker 3: Beijing is becoming much more focused on advancing progress towards

468
00:25:52,760 --> 00:25:56,960
Speaker 3: unification and more concerned about trends in Taiwan which are

469
00:25:57,600 --> 00:26:00,840
Speaker 3: taking the island towards the idea of a very different

470
00:26:01,160 --> 00:26:05,439
Speaker 3: sort of identity than it would share with in a

471
00:26:05,520 --> 00:26:08,359
Speaker 3: unification picture with China.

472
00:26:08,480 --> 00:26:10,720
Speaker 4: I think it's worth mentioning the economic dynamics, which I

473
00:26:10,760 --> 00:26:13,359
Speaker 4: actually think are secondary to the factors Jenny was mentioning.

474
00:26:13,400 --> 00:26:16,159
Speaker 4: But the economics does matter. I think what makes it

475
00:26:16,200 --> 00:26:18,440
Speaker 4: difficult though, is that it doesn't the direction in which

476
00:26:18,440 --> 00:26:20,679
Speaker 4: it matters is not necessarily clear. Right, So when the

477
00:26:20,800 --> 00:26:25,160
Speaker 4: US and China or the PRC itself established diplomatic relations

478
00:26:25,200 --> 00:26:29,240
Speaker 4: in nineteen seventy nine, Chinese GDP was one tenth of

479
00:26:29,320 --> 00:26:32,280
Speaker 4: USGDP right now, it's something like sixty six seventy percent,

480
00:26:32,320 --> 00:26:36,000
Speaker 4: depending on which exchange rates you're using. So you might think, okay,

481
00:26:36,080 --> 00:26:38,199
Speaker 4: so China is much more powerful now, which might make

482
00:26:38,240 --> 00:26:39,920
Speaker 4: it more aggressive, But on the other hand, it has

483
00:26:39,960 --> 00:26:42,639
Speaker 4: more to lose. It's much more integrated into the global economy.

484
00:26:43,080 --> 00:26:46,000
Speaker 4: It is worth keeping in mind, however, that Chinese policy

485
00:26:46,000 --> 00:26:49,439
Speaker 4: Sugi Being's policies very much focused on industrial policy and

486
00:26:49,440 --> 00:26:52,359
Speaker 4: self reliance. In particularly, they're worried about three things. The

487
00:26:52,440 --> 00:26:55,520
Speaker 4: reliance on foreign technologies, which include semiconductors, but it's not

488
00:26:55,560 --> 00:26:58,879
Speaker 4: limited to that, important commodities so things like oil and

489
00:26:58,920 --> 00:27:01,280
Speaker 4: food and other things. And finally, the reliance on the

490
00:27:01,359 --> 00:27:03,800
Speaker 4: US dollar for international finance. And all three of these

491
00:27:03,800 --> 00:27:07,680
Speaker 4: things are Beijing as efforts under way to address with vulnerabilities.

492
00:27:08,000 --> 00:27:10,199
Speaker 4: I'm not saying this is just about Taiwan, but they

493
00:27:10,200 --> 00:27:12,480
Speaker 4: do see themselves as being vulnerable, and there's definitely a

494
00:27:12,520 --> 00:27:15,840
Speaker 4: geopolitical rationale for why they're worried about those things. And

495
00:27:15,880 --> 00:27:20,000
Speaker 4: the more powerful and essentially insulated or robust, let's say

496
00:27:20,160 --> 00:27:23,560
Speaker 4: the Chinese economy and financial sector becomes, you might think

497
00:27:23,640 --> 00:27:26,520
Speaker 4: they might have more confidence or less restraint as that

498
00:27:26,600 --> 00:27:29,320
Speaker 4: single variable is concerned. And then of course there's the

499
00:27:29,320 --> 00:27:31,679
Speaker 4: issue of Taiwan semi conductors, which is kind of like

500
00:27:32,280 --> 00:27:34,399
Speaker 4: in some ways a gun pointing in both directions, right,

501
00:27:34,440 --> 00:27:37,639
Speaker 4: because yes, Taiwan makes most of the advanced semi conductors,

502
00:27:37,680 --> 00:27:41,159
Speaker 4: but those primarily are going into inputs throughout Asia, including China,

503
00:27:41,440 --> 00:27:43,800
Speaker 4: and so you could debate whether it's deterrence or not,

504
00:27:44,000 --> 00:27:46,240
Speaker 4: because it could also mean that that Beijing believes that

505
00:27:46,320 --> 00:27:50,320
Speaker 4: other economies, particularly non US advanced economies, are less likely

506
00:27:50,320 --> 00:27:53,240
Speaker 4: to intervene for those reasons. But it is part of

507
00:27:53,280 --> 00:27:53,879
Speaker 4: the conversation.

508
00:27:54,280 --> 00:27:56,840
Speaker 2: Actually, this reminds me of something I wanted to ask you,

509
00:27:56,920 --> 00:27:59,840
Speaker 2: which is, you know, it's hard enough to model these

510
00:28:00,080 --> 00:28:03,480
Speaker 2: types of economic scenarios because there are so many different

511
00:28:03,520 --> 00:28:06,360
Speaker 2: factors involved, but also one of the things that makes

512
00:28:06,400 --> 00:28:10,280
Speaker 2: it difficult is you're trying to model the response to

513
00:28:10,440 --> 00:28:14,119
Speaker 2: whatever is happening. And so I'm curious, when you're looking

514
00:28:14,200 --> 00:28:17,960
Speaker 2: at something like the cost ten trillion dollars or variations

515
00:28:18,000 --> 00:28:21,159
Speaker 2: of it, depending on you know, the exact nature of

516
00:28:21,200 --> 00:28:26,359
Speaker 2: the action, how much of that cost depends on or

517
00:28:26,520 --> 00:28:31,240
Speaker 2: is affected by either the wes's ability to ramp up

518
00:28:31,400 --> 00:28:36,560
Speaker 2: things like semiconductor manufacturing or China's ability to I guess,

519
00:28:36,800 --> 00:28:41,320
Speaker 2: offset a bunch of resources being diverted to war.

520
00:28:42,520 --> 00:28:45,960
Speaker 4: So we modeled one year shocks. We actually internally were

521
00:28:46,040 --> 00:28:48,760
Speaker 4: looking at and debating doing five year shocks. The five

522
00:28:48,840 --> 00:28:51,920
Speaker 4: year shocks, the confidence intervals get much much wider, and

523
00:28:51,960 --> 00:28:54,600
Speaker 4: it's because you have to make bigger assumptions as to whether,

524
00:28:55,040 --> 00:28:59,040
Speaker 4: for example, TSMC's production can move elsewhere, would private industry

525
00:28:59,040 --> 00:29:01,280
Speaker 4: have the resources and middle of the war, for example,

526
00:29:01,360 --> 00:29:03,680
Speaker 4: to get funding to say, open a fab or whatever

527
00:29:03,680 --> 00:29:06,520
Speaker 4: it's necessary. I think with a one year scenario, it's

528
00:29:06,600 --> 00:29:11,000
Speaker 4: it's it's still you know, speculative, but it's still difficult,

529
00:29:11,040 --> 00:29:14,080
Speaker 4: but it's still it's more plausible, which is that the

530
00:29:14,120 --> 00:29:17,600
Speaker 4: economy in some cases could rely more in existing inventories

531
00:29:17,600 --> 00:29:19,920
Speaker 4: of things. You would be more likely to see an

532
00:29:19,960 --> 00:29:23,160
Speaker 4: immediate shocked production safe for things like autos or electronics.

533
00:29:23,560 --> 00:29:26,080
Speaker 4: But if you're saying, okay, what about five years into this,

534
00:29:26,440 --> 00:29:28,600
Speaker 4: how much of that is back online? Then it gets

535
00:29:28,640 --> 00:29:31,400
Speaker 4: more speculative. But that is part of it. Another part

536
00:29:31,440 --> 00:29:33,360
Speaker 4: that I don't think we modeled directly is sort of

537
00:29:34,040 --> 00:29:38,080
Speaker 4: wartime fiscal impacts. So you could imagine particularly on the

538
00:29:38,160 --> 00:29:41,560
Speaker 4: Chinese side, a lot of expenditures going into you know,

539
00:29:41,640 --> 00:29:44,920
Speaker 4: wartime measures, defense, et cetera. On the other hand, if

540
00:29:44,960 --> 00:29:47,520
Speaker 4: you assume the conflict is let's say a few months

541
00:29:47,600 --> 00:29:50,680
Speaker 4: or six months, depending on what your parameters are, it's

542
00:29:50,720 --> 00:29:52,720
Speaker 4: probably not going to look like World War Two. It's

543
00:29:52,720 --> 00:29:56,200
Speaker 4: not going to be five years of ramping up and

544
00:29:56,240 --> 00:29:58,360
Speaker 4: coming back, in part because what we're talking about in

545
00:29:58,440 --> 00:30:01,840
Speaker 4: each stream case is from a US perspectively, it's mostly

546
00:30:01,880 --> 00:30:05,080
Speaker 4: a naval and air war, and the US defense industrial base,

547
00:30:05,120 --> 00:30:07,640
Speaker 4: at least in my view, doesn't really have the capacity

548
00:30:07,640 --> 00:30:09,800
Speaker 4: to replenish as force as quickly, so it's kind of

549
00:30:09,800 --> 00:30:12,800
Speaker 4: a one and done in a very powerful way. There

550
00:30:12,800 --> 00:30:15,040
Speaker 4: are others, i should say, in DC and think tank

551
00:30:15,120 --> 00:30:17,480
Speaker 4: land that talk about the potential for a long war.

552
00:30:17,960 --> 00:30:21,280
Speaker 4: I find that from a US perspective not all that credible.

553
00:30:38,160 --> 00:30:40,880
Speaker 1: Right now, we are in a period in which there

554
00:30:40,960 --> 00:30:46,000
Speaker 1: is a lot of talk about poor Chinese economic growth. Obviously,

555
00:30:46,160 --> 00:30:49,320
Speaker 1: as your model shows, and just for any common sense,

556
00:30:49,760 --> 00:30:52,560
Speaker 1: a war, how or any version of a war, would

557
00:30:52,560 --> 00:30:56,880
Speaker 1: be incredibly domestically costly at a time when already there's

558
00:30:57,200 --> 00:31:00,760
Speaker 1: concerns about growth and frustration with the Chinese economic model,

559
00:31:01,280 --> 00:31:06,200
Speaker 1: How does that play into Beijing's thinking or Hijinping's thinking

560
00:31:06,560 --> 00:31:10,160
Speaker 1: about doing something at some point, the state of the

561
00:31:10,200 --> 00:31:14,280
Speaker 1: domestic economy and the fact that any activity maybe you

562
00:31:14,320 --> 00:31:18,800
Speaker 1: would potentially reunify China and Taiwan, but would be extremely

563
00:31:19,120 --> 00:31:22,720
Speaker 1: disruptive to all of the factories in China that rely

564
00:31:22,840 --> 00:31:23,960
Speaker 1: on Taiwanese inputs.

565
00:31:24,960 --> 00:31:29,920
Speaker 4: The narrative that some people will propose is that over time,

566
00:31:30,560 --> 00:31:34,120
Speaker 4: if we assume the Chinese economy is weakening substantially, then

567
00:31:34,160 --> 00:31:36,560
Speaker 4: the Chinese leadership will be more inclined to sort of

568
00:31:36,560 --> 00:31:40,880
Speaker 4: pivot to nationalists concerns as a distraction. But it's worth

569
00:31:40,920 --> 00:31:43,160
Speaker 4: noting at least two things. One, I don't think they're

570
00:31:43,200 --> 00:31:45,480
Speaker 4: there yet. I don't think they think they're there yet, right.

571
00:31:45,560 --> 00:31:48,520
Speaker 4: I don't believe Xi Jinping is all that pessimistic about

572
00:31:48,600 --> 00:31:51,240
Speaker 4: Chinese economic growth. Is new Year's speech and other indicator

573
00:31:51,280 --> 00:31:54,160
Speaker 4: suggests that he's still fairly optimistic. You could debate whether

574
00:31:54,160 --> 00:31:56,200
Speaker 4: he ought to be, but I think that's basically right

575
00:31:56,240 --> 00:31:58,200
Speaker 4: in terms of his view. The second is that I

576
00:31:58,200 --> 00:32:01,640
Speaker 4: think we are both quite skeptic of the claim that

577
00:32:01,680 --> 00:32:05,000
Speaker 4: some people make that China might pursue a quote diversionary war,

578
00:32:05,440 --> 00:32:07,080
Speaker 4: and the reason for that is that this would not

579
00:32:07,120 --> 00:32:09,680
Speaker 4: be diversionary, it would be all encompassing, right, And so

580
00:32:10,080 --> 00:32:12,440
Speaker 4: do you really want to bet your house on a distraction?

581
00:32:12,520 --> 00:32:15,400
Speaker 4: And the answer is no. But in the longer run,

582
00:32:15,480 --> 00:32:19,560
Speaker 4: I think there is a credible argument that if the

583
00:32:19,640 --> 00:32:23,560
Speaker 4: Chinese economy is weakening, that the government might pivot to

584
00:32:23,600 --> 00:32:26,360
Speaker 4: other priorities. And in fact, we can observe they're already

585
00:32:26,360 --> 00:32:29,400
Speaker 4: pivoting to national security. Right. There's there's a greater emphasis

586
00:32:29,400 --> 00:32:32,440
Speaker 4: on national security and self sufficiency now in Chinese policy

587
00:32:32,560 --> 00:32:35,120
Speaker 4: than it was say five, certainly ten years ago, and

588
00:32:35,160 --> 00:32:37,720
Speaker 4: so over time it might be the case that it

589
00:32:37,960 --> 00:32:40,600
Speaker 4: changes their relative willingness, but at the end of the day,

590
00:32:40,760 --> 00:32:44,080
Speaker 4: they would know how cataclysmic this could possibly be. And

591
00:32:44,160 --> 00:32:46,440
Speaker 4: our general view, and Jenny might want added to this,

592
00:32:46,920 --> 00:32:49,640
Speaker 4: is that she think probably doesn't have a specific timeline

593
00:32:49,680 --> 00:32:51,800
Speaker 4: in terms of saying, on you know, twenty twenty eight

594
00:32:51,880 --> 00:32:54,280
Speaker 4: we go. It's more the timelines People talk about it

595
00:32:54,320 --> 00:32:56,720
Speaker 4: more about military readiness, which is not the same thing.

596
00:32:57,280 --> 00:33:00,080
Speaker 4: And ultimately, if I had to bet in which ness

597
00:33:00,080 --> 00:33:03,120
Speaker 4: we are if this ever does happen and be based

598
00:33:03,160 --> 00:33:06,320
Speaker 4: on perceived provocations, or crossing of red lines. It wouldn't

599
00:33:06,360 --> 00:33:09,160
Speaker 4: just be sort of a unilateral poof on the blue.

600
00:33:09,520 --> 00:33:11,240
Speaker 3: Yeah. And I think just to add on to that,

601
00:33:12,080 --> 00:33:16,240
Speaker 3: Beijing's stated preference is still for peaceful unification, and I

602
00:33:16,240 --> 00:33:20,840
Speaker 3: think there's reasons to believe that that's true. One I

603
00:33:20,880 --> 00:33:25,400
Speaker 3: think they assess, as Yard was indicating the military readiness issue,

604
00:33:25,720 --> 00:33:29,080
Speaker 3: they haven't reached that milestone yet. And in fact, some

605
00:33:29,120 --> 00:33:31,680
Speaker 3: of the reporting that our news colleagues have done on

606
00:33:32,200 --> 00:33:36,400
Speaker 3: recent purges of senior military leaders, I think reaffirms the

607
00:33:36,480 --> 00:33:40,000
Speaker 3: idea that there might still be concerns about corruption and

608
00:33:40,080 --> 00:33:43,200
Speaker 3: the impact that that could have on readiness and more broadly,

609
00:33:44,320 --> 00:33:47,239
Speaker 3: this would be an incredibly risky and difficult campaign for

610
00:33:47,320 --> 00:33:51,120
Speaker 3: any military to undertake, you know, particularly if there's a

611
00:33:51,200 --> 00:33:54,200
Speaker 3: risk of the United States getting involved. That's no small

612
00:33:54,240 --> 00:33:57,920
Speaker 3: gamble to make, and it's not one that Chinese leaders

613
00:33:57,920 --> 00:34:00,760
Speaker 3: would take lightly. I think to Gerard's point, it's more

614
00:34:00,920 --> 00:34:04,520
Speaker 3: question in their mind, I think of whether or not

615
00:34:04,560 --> 00:34:07,000
Speaker 3: their hand is forced if they would need to take

616
00:34:07,040 --> 00:34:12,200
Speaker 3: that action to prevent Taiwan's permanent separation, which to them

617
00:34:12,640 --> 00:34:16,600
Speaker 3: is it is hard to exaggerate the importance that that

618
00:34:16,680 --> 00:34:20,959
Speaker 3: plays in their calculus and the costs that they would

619
00:34:20,960 --> 00:34:24,440
Speaker 3: be willing to pay to prevent that from happening. I

620
00:34:24,480 --> 00:34:26,440
Speaker 3: think if we were in a world in which they

621
00:34:26,480 --> 00:34:30,319
Speaker 3: felt that that was necessary to take action, even if

622
00:34:30,360 --> 00:34:33,480
Speaker 3: they didn't think they were militarily ready for it, the

623
00:34:33,840 --> 00:34:38,319
Speaker 3: economic considerations would probably not be a driving factor in

624
00:34:38,360 --> 00:34:42,520
Speaker 3: their calculus. I think what would be the overarching priority

625
00:34:42,560 --> 00:34:45,360
Speaker 3: would be preventing that from happening at all costs and

626
00:34:45,480 --> 00:34:49,480
Speaker 3: at all risks. So it really depends on I think

627
00:34:49,520 --> 00:34:52,759
Speaker 3: their perspective of whether or not that's essential, and the

628
00:34:52,840 --> 00:34:56,320
Speaker 3: economic considerations I think are more secondary in that sense.

629
00:34:56,880 --> 00:35:01,239
Speaker 2: So the obvious parallel here would be Russia's invasion of

630
00:35:01,400 --> 00:35:04,040
Speaker 2: Ukraine in the sense that it was something that was,

631
00:35:04,160 --> 00:35:09,000
Speaker 2: you know, at once long discussed, but also very unexpected

632
00:35:09,200 --> 00:35:11,839
Speaker 2: at that particular moment in time, And of course there

633
00:35:11,840 --> 00:35:14,480
Speaker 2: had also been a discussion of why would Russia ever

634
00:35:14,600 --> 00:35:17,680
Speaker 2: do this given the economic costs involved and the risk

635
00:35:17,719 --> 00:35:21,359
Speaker 2: of sanctions and things like that. How has the experience

636
00:35:21,520 --> 00:35:26,719
Speaker 2: of Russia's invasion of Ukraine affected your thinking about Taiwan

637
00:35:26,880 --> 00:35:28,160
Speaker 2: and China if it has.

638
00:35:28,040 --> 00:35:30,719
Speaker 4: It all so, Genny, you can jump in terms of

639
00:35:30,719 --> 00:35:32,520
Speaker 4: the Chinese perspective. But I'll just say kind of a

640
00:35:32,560 --> 00:35:36,120
Speaker 4: more standback perspective based on some of the work I

641
00:35:36,200 --> 00:35:39,520
Speaker 4: was doing previously at CSIS the think tank. One observation

642
00:35:39,760 --> 00:35:43,919
Speaker 4: is that the internal estimates in Russia of how bad

643
00:35:43,960 --> 00:35:46,520
Speaker 4: it was going to be for their economy were actually

644
00:35:46,640 --> 00:35:49,319
Speaker 4: worse than things ended up being. In other words, it

645
00:35:49,400 --> 00:35:51,520
Speaker 4: wasn't the case that Putin was misled in terms of

646
00:35:51,560 --> 00:35:53,000
Speaker 4: the economic pain. He actually thought it was going to

647
00:35:53,080 --> 00:35:53,759
Speaker 4: be worse than it was.

648
00:35:53,920 --> 00:35:54,200
Speaker 5: Wow.

649
00:35:54,239 --> 00:35:56,360
Speaker 4: And yet he still went, so where was the delusion.

650
00:35:56,520 --> 00:35:59,239
Speaker 4: The delusion was on the military side. He thought that

651
00:35:59,520 --> 00:36:00,920
Speaker 4: they were going to roll in the Kiev in two

652
00:36:00,960 --> 00:36:03,319
Speaker 4: weeks or whatever, and then that they could present the

653
00:36:03,360 --> 00:36:05,439
Speaker 4: world with the beta complet and eventually they we could

654
00:36:05,560 --> 00:36:09,880
Speaker 4: dial back the economic sanctions or whatever. I actually think that,

655
00:36:09,960 --> 00:36:12,760
Speaker 4: you know, there are definitely, you know, government versus private

656
00:36:12,760 --> 00:36:15,120
Speaker 4: sector blind spots, but in general, I think a lot

657
00:36:15,120 --> 00:36:20,480
Speaker 4: of people, including investors, might underweight nationalist consideration considerations more

658
00:36:20,520 --> 00:36:24,400
Speaker 4: than they should. And even believing that the Russian economy

659
00:36:24,480 --> 00:36:26,440
Speaker 4: was going to take a massive shock, he still decided

660
00:36:26,480 --> 00:36:28,719
Speaker 4: to roll the dice. And that, to me is is

661
00:36:28,800 --> 00:36:30,960
Speaker 4: not necessarily indicative of what China would do she jimping

662
00:36:31,080 --> 00:36:33,239
Speaker 4: is not Putin. I think Putin is more of a

663
00:36:33,280 --> 00:36:36,400
Speaker 4: gambler in some ways, and probably is has A has

664
00:36:36,440 --> 00:36:39,720
Speaker 4: a less sophisticated apparatus beneath him. But it is telling

665
00:36:39,760 --> 00:36:41,080
Speaker 4: that that could still happen yea.

666
00:36:41,120 --> 00:36:43,400
Speaker 3: And I think, just to add on on Beijing's perspective,

667
00:36:43,480 --> 00:36:45,920
Speaker 3: I think it's a mixed bag. I think, you know,

668
00:36:46,000 --> 00:36:49,280
Speaker 3: on one hand, the fact that the war is approaching

669
00:36:49,320 --> 00:36:53,600
Speaker 3: it's to year anniversary, when from the outset it was

670
00:36:53,840 --> 00:36:58,400
Speaker 3: largely expected that Russia's massive army would be able to

671
00:36:58,600 --> 00:37:02,560
Speaker 3: pretty quickly overwhelm Ukrainian forces, especially with a surprise attack,

672
00:37:03,320 --> 00:37:06,719
Speaker 3: is probably a cautionary tale in terms of how much

673
00:37:06,719 --> 00:37:11,000
Speaker 3: more complicated invasions can be. And Russia's invasion again is

674
00:37:11,000 --> 00:37:13,320
Speaker 3: a land invasion, which is a very different sort of

675
00:37:13,400 --> 00:37:17,640
Speaker 3: operation than an amphibious one. In some ways, the hill

676
00:37:17,719 --> 00:37:20,160
Speaker 3: is much higher to climb with the latter, so I

677
00:37:20,160 --> 00:37:23,239
Speaker 3: think in that respect it's a cautionary tale. On the

678
00:37:23,280 --> 00:37:25,600
Speaker 3: other hand, the war is not yet over, and in

679
00:37:25,640 --> 00:37:28,279
Speaker 3: particularly in this moment in time, where there's a lot

680
00:37:28,320 --> 00:37:31,400
Speaker 3: of questions about whether Western support for Ukraine will be

681
00:37:31,480 --> 00:37:35,359
Speaker 3: sustained and what the end state of the war might

682
00:37:35,440 --> 00:37:41,080
Speaker 3: look like it's not entirely a case closed for Beijing

683
00:37:41,160 --> 00:37:44,520
Speaker 3: in terms of whether or not a conflict is something

684
00:37:44,520 --> 00:37:47,719
Speaker 3: that they can endure. As Gerrard noted, the conflict has

685
00:37:47,840 --> 00:37:51,080
Speaker 3: cost Russia less in terms of international sanctions in a

686
00:37:51,160 --> 00:37:56,640
Speaker 3: probrium than Moscow likely anticipated internally, and they are weathering

687
00:37:56,680 --> 00:37:59,640
Speaker 3: the storm probably better than expected, which might in some

688
00:37:59,680 --> 00:38:03,439
Speaker 3: way provide a little bit of confidence to Beijing, which

689
00:38:03,520 --> 00:38:07,879
Speaker 3: has in many ways more economic advantages than Russia does,

690
00:38:08,080 --> 00:38:11,640
Speaker 3: and might bet on the fact that Western countries might

691
00:38:11,680 --> 00:38:15,000
Speaker 3: be less willing to sanction China to the extent to

692
00:38:15,000 --> 00:38:16,400
Speaker 3: which they've sanctioned Russia.

693
00:38:16,920 --> 00:38:19,280
Speaker 1: And I just have one last quick question. We're running

694
00:38:19,280 --> 00:38:22,160
Speaker 1: out of time here, but what is the consensus on

695
00:38:22,719 --> 00:38:25,799
Speaker 1: what the US would do in some sort of some

696
00:38:26,000 --> 00:38:28,680
Speaker 1: version of an attack? You know, what's the policy? And

697
00:38:28,719 --> 00:38:31,480
Speaker 1: then like, you know, suppose the US didn't really do anything,

698
00:38:31,520 --> 00:38:34,920
Speaker 1: and you think about ramifications. Do you think about variations

699
00:38:34,920 --> 00:38:37,759
Speaker 1: where there's spillovers in which are other partners or other

700
00:38:37,840 --> 00:38:41,960
Speaker 1: friends in the region where we have military bases, I

701
00:38:41,960 --> 00:38:44,399
Speaker 1: don't know, freak out, get anxious, and that it's sort

702
00:38:44,400 --> 00:38:47,440
Speaker 1: of like dominoes in some way depending on the sort

703
00:38:47,480 --> 00:38:51,480
Speaker 1: of confidence that other countries have in the US security umbrella.

704
00:38:51,560 --> 00:38:53,640
Speaker 3: There's a lot of debate about what the United States

705
00:38:53,719 --> 00:38:57,000
Speaker 3: might do, and that's in part due to intentional US

706
00:38:57,040 --> 00:39:00,560
Speaker 3: policy to make that ambiguous we call it strategic ambiguity,

707
00:39:00,560 --> 00:39:02,600
Speaker 3: about whether or not the United States would actually come

708
00:39:02,600 --> 00:39:06,560
Speaker 3: to Taiwan's defense. If we look though at statements President

709
00:39:06,719 --> 00:39:11,759
Speaker 3: Biden has made about how he personally would act in

710
00:39:11,800 --> 00:39:15,680
Speaker 3: that situation, I think that's increased folks sense that the

711
00:39:15,719 --> 00:39:20,200
Speaker 3: United States would get involved in some way. From my perspective,

712
00:39:20,680 --> 00:39:24,759
Speaker 3: I think one Beijing probably has to assume from a

713
00:39:24,840 --> 00:39:27,839
Speaker 3: military planning perspective that they would be dealing with some

714
00:39:27,880 --> 00:39:30,239
Speaker 3: sort of US intervention because that is a risk that

715
00:39:30,280 --> 00:39:36,040
Speaker 3: they can't afford to not calculate, given how important and

716
00:39:36,080 --> 00:39:39,520
Speaker 3: critical it could be to the outcome. The second piece

717
00:39:39,640 --> 00:39:42,840
Speaker 3: is I think it really in large part might depend

718
00:39:43,080 --> 00:39:47,240
Speaker 3: again on variables like is there any warning before an attack,

719
00:39:47,560 --> 00:39:50,080
Speaker 3: what is the duration of the attack, Because it's not

720
00:39:50,200 --> 00:39:53,800
Speaker 3: just a question of intent, but also process in time

721
00:39:54,120 --> 00:39:58,120
Speaker 3: to marshal a reaction to it. You know, there there

722
00:39:58,239 --> 00:40:00,480
Speaker 3: is a process lead out in the Taiwan really Act

723
00:40:00,520 --> 00:40:04,120
Speaker 3: for the President to consult Congress before officially determining what

724
00:40:04,239 --> 00:40:07,400
Speaker 3: to do. And then there's also the tyranny of geography

725
00:40:07,480 --> 00:40:10,480
Speaker 3: when it turns to where US forces are located in

726
00:40:10,520 --> 00:40:13,120
Speaker 3: their ability to respond to a conflict that is so

727
00:40:13,239 --> 00:40:16,600
Speaker 3: close to China, And then to your question about the

728
00:40:16,719 --> 00:40:20,920
Speaker 3: role that other countries in the region might play in

729
00:40:21,000 --> 00:40:23,440
Speaker 3: terms of a conflict, again, I think that's going to

730
00:40:23,719 --> 00:40:27,040
Speaker 3: really depend quite a bit on what Washington does, but

731
00:40:27,239 --> 00:40:30,280
Speaker 3: also on what Beijing does. A lot of the wargames

732
00:40:30,320 --> 00:40:33,240
Speaker 3: that we have looked at have studied the possibility that Beijing,

733
00:40:33,360 --> 00:40:35,480
Speaker 3: in an effort to try and keep the US out

734
00:40:35,520 --> 00:40:39,280
Speaker 3: of the war, might preemptively strike US forces in the region,

735
00:40:39,640 --> 00:40:43,760
Speaker 3: including some of our bases, and that could inadvertently draw

736
00:40:44,320 --> 00:40:46,240
Speaker 3: not just the United States but some of the partners

737
00:40:46,239 --> 00:40:49,839
Speaker 3: that host those bases into a conflict. So a lot

738
00:40:49,880 --> 00:40:53,839
Speaker 3: of this is very much variables at play, and that's

739
00:40:53,880 --> 00:40:56,360
Speaker 3: why these wargames can be a really valuable way of

740
00:40:56,440 --> 00:41:00,080
Speaker 3: studying potential scenarios and their outcomes, because we might not

741
00:41:00,080 --> 00:41:02,319
Speaker 3: be able to predict the future, but we have at

742
00:41:02,400 --> 00:41:05,399
Speaker 3: least a good sense of what the key variables would

743
00:41:05,400 --> 00:41:08,440
Speaker 3: be and what the future could look like depending on

744
00:41:08,480 --> 00:41:09,839
Speaker 3: how those turn out.

745
00:41:10,080 --> 00:41:12,279
Speaker 4: I was going to add in terms of sanctions, So

746
00:41:12,360 --> 00:41:14,640
Speaker 4: this is something in DC that has talked about a

747
00:41:14,640 --> 00:41:16,799
Speaker 4: lot over the past two years, is would the US

748
00:41:16,880 --> 00:41:20,320
Speaker 4: sanctioned China in any degree like it has with Russia?

749
00:41:20,840 --> 00:41:25,120
Speaker 4: And my basic view is that in a conflict, the

750
00:41:25,200 --> 00:41:28,640
Speaker 4: US probably would. People will say, but isn't China so

751
00:41:28,719 --> 00:41:32,359
Speaker 4: much bigger therefore wouldn't be much more painful? Yes, But

752
00:41:32,640 --> 00:41:35,280
Speaker 4: the question there is our US force is directly involved.

753
00:41:35,320 --> 00:41:37,600
Speaker 4: If the US is an active naval and ara war

754
00:41:37,640 --> 00:41:40,520
Speaker 4: with China, I think that the political wherewithal would be there.

755
00:41:40,840 --> 00:41:42,800
Speaker 4: But maybe the more important point, at least in the

756
00:41:42,840 --> 00:41:45,960
Speaker 4: early days is I do not believe the US and

757
00:41:46,000 --> 00:41:51,560
Speaker 4: its allies will sort of preemptively use massive sanctions unless

758
00:41:51,560 --> 00:41:54,720
Speaker 4: they're very confident that a war is imminent and therefore

759
00:41:54,880 --> 00:41:56,799
Speaker 4: that you know, and Beijing would have already planned for that.

760
00:41:56,880 --> 00:41:58,880
Speaker 4: So I actually don't think of sanctions as being a

761
00:41:59,000 --> 00:42:01,440
Speaker 4: very useful media to turn, but in a conflict they

762
00:42:01,480 --> 00:42:03,960
Speaker 4: probably would be used very quickly.

763
00:42:04,080 --> 00:42:07,440
Speaker 2: We are recording this before the Taiwan elections, and by

764
00:42:07,480 --> 00:42:10,400
Speaker 2: the time this episode comes out, we should have a result.

765
00:42:10,719 --> 00:42:13,440
Speaker 2: What are you looking out for? What are the particular

766
00:42:13,640 --> 00:42:15,720
Speaker 2: points or developments that we should be watching.

767
00:42:16,239 --> 00:42:18,680
Speaker 3: I think the key thing on everyone's mind is going

768
00:42:18,760 --> 00:42:21,320
Speaker 3: to be, well, first of all, this is an incredibly

769
00:42:21,440 --> 00:42:26,160
Speaker 3: close race, and there's probably the closest race that we've

770
00:42:26,200 --> 00:42:30,520
Speaker 3: seen actually in several election cycles. So there's a lot

771
00:42:30,520 --> 00:42:33,080
Speaker 3: of questions about what the results on Saturday night are

772
00:42:33,120 --> 00:42:35,800
Speaker 3: going to be. That's obviously the front of folks minds.

773
00:42:35,840 --> 00:42:37,960
Speaker 3: And then I think the second immediate question after that

774
00:42:38,080 --> 00:42:40,919
Speaker 3: is how does Beijing react to it? And already we've

775
00:42:40,920 --> 00:42:45,440
Speaker 3: seen signals from China indicating that elements of their approach

776
00:42:45,480 --> 00:42:47,719
Speaker 3: to Taiwan are very much going to be shaped by

777
00:42:47,719 --> 00:42:50,839
Speaker 3: the election's outcome. There have been some senior officials kind

778
00:42:50,880 --> 00:42:54,440
Speaker 3: of warning and not so subtle terms that this is

779
00:42:54,520 --> 00:42:57,600
Speaker 3: kind of a key election for Taiwanese voters to think

780
00:42:57,640 --> 00:43:00,960
Speaker 3: hard about what choices that they want to make. And then,

781
00:43:01,280 --> 00:43:05,080
Speaker 3: in more specific terms, a lot of connections between China's

782
00:43:05,080 --> 00:43:09,560
Speaker 3: ongoing investigation to taiwan trade practices and measures coming out

783
00:43:09,560 --> 00:43:12,800
Speaker 3: of that that restrict Timanes sex sports that they've signaled

784
00:43:12,840 --> 00:43:15,320
Speaker 3: they'll continue to take in the wake of the election,

785
00:43:15,600 --> 00:43:19,040
Speaker 3: depending on the policies of the new government.

786
00:43:19,760 --> 00:43:23,160
Speaker 1: Jennifer Welchin, Gerard de Pippo. Thank you both so much

787
00:43:23,200 --> 00:43:26,520
Speaker 1: for coming on odd lots fascinating conversation on a topic

788
00:43:26,560 --> 00:43:29,239
Speaker 1: that I definitely think we will be doing more on

789
00:43:29,320 --> 00:43:30,360
Speaker 1: in the opportunity.

790
00:43:30,800 --> 00:43:40,880
Speaker 5: Thank you for having us, Thank you for having us.

791
00:43:46,000 --> 00:43:49,239
Speaker 1: Tracy, I thought that was really fascinating. Well, I'll just

792
00:43:49,239 --> 00:43:51,759
Speaker 1: say I found it really helpful because there is a

793
00:43:51,840 --> 00:43:55,839
Speaker 1: lot of noise about, you know, the risk of some

794
00:43:55,880 --> 00:43:59,640
Speaker 1: sort of invasion or attack or blockade, but actually sort

795
00:43:59,680 --> 00:44:02,080
Speaker 1: of hearing about well, why now, why is there so

796
00:44:02,160 --> 00:44:04,360
Speaker 1: much talk now on how do you even attempt to

797
00:44:04,360 --> 00:44:06,480
Speaker 1: sort of quantify these risks? I thought they were a

798
00:44:06,480 --> 00:44:08,239
Speaker 1: book great at explaining that.

799
00:44:08,520 --> 00:44:11,800
Speaker 2: I learned a lot. The point about Russia actually estimating

800
00:44:11,840 --> 00:44:14,319
Speaker 2: that the economic costs of invading Ukraine were going to

801
00:44:14,360 --> 00:44:16,399
Speaker 2: be higher than they turned out to be. I thought

802
00:44:16,440 --> 00:44:18,440
Speaker 2: that was really really interesting.

803
00:44:19,360 --> 00:44:23,560
Speaker 1: Absolutely, And in fact, Gerard made a really interesting comment

804
00:44:23,680 --> 00:44:28,560
Speaker 1: there that about investors sort of ignoring the nationalist impulse

805
00:44:28,760 --> 00:44:30,839
Speaker 1: right totally, and so this idea that everyone's like, well,

806
00:44:30,840 --> 00:44:32,799
Speaker 1: it wouldn't work. They'd lose a lot of money, they'd

807
00:44:32,800 --> 00:44:34,719
Speaker 1: lose a lot of jobs, they wouldn't be able to

808
00:44:34,719 --> 00:44:37,200
Speaker 1: sell as much oil. Therefore, it makes no sense, and

809
00:44:37,280 --> 00:44:40,879
Speaker 1: I get why, Like that's a classic investor thinking, right,

810
00:44:40,960 --> 00:44:43,080
Speaker 1: that it's like always going to come down to a

811
00:44:43,160 --> 00:44:47,160
Speaker 1: profit and laws, but the idea that no, like actually nationalism,

812
00:44:47,400 --> 00:44:50,640
Speaker 1: the nationalist impulse is a real factor in decision making

813
00:44:50,960 --> 00:44:53,560
Speaker 1: and it's not all sort of strict materialism.

814
00:44:53,760 --> 00:44:54,279
Speaker 5: I think is.

815
00:44:54,320 --> 00:44:57,960
Speaker 1: Probably a good thing in general for investors to appreciate

816
00:44:57,960 --> 00:44:59,759
Speaker 1: about both politics and geopolitics.

817
00:45:00,040 --> 00:45:02,960
Speaker 2: Of course, Like it just seems so obvious to me

818
00:45:03,120 --> 00:45:07,160
Speaker 2: that like, not everyone is ruled by pure economic considerations.

819
00:45:07,640 --> 00:45:09,480
Speaker 2: But on the other hand, there are plenty of them

820
00:45:09,520 --> 00:45:12,160
Speaker 2: at play in the China Taiwan situation. As that ten

821
00:45:12,280 --> 00:45:15,720
Speaker 2: trillion dollar prist tag actually indicates the other thing I learned.

822
00:45:16,080 --> 00:45:19,320
Speaker 2: I'm just looking at the big take that was published

823
00:45:19,400 --> 00:45:22,439
Speaker 2: based on this report. I didn't know that Bloomberg has

824
00:45:22,640 --> 00:45:25,880
Speaker 2: like a Taiwan stress index. I don't know if stress

825
00:45:25,920 --> 00:45:27,880
Speaker 2: is the right way of putting it, but basically to

826
00:45:28,000 --> 00:45:32,400
Speaker 2: see how intense the saber rattling is on this issue

827
00:45:32,400 --> 00:45:34,239
Speaker 2: at any particular moment, and.

828
00:45:34,239 --> 00:45:38,880
Speaker 1: It has it includes measures like exercises that flyovers into

829
00:45:38,960 --> 00:45:42,160
Speaker 1: Taiwanese airspace and stuff like that, so really interesting. Everyone

830
00:45:42,160 --> 00:45:45,520
Speaker 1: should go read that. It's on bloomberg dot Com the

831
00:45:45,600 --> 00:45:47,759
Speaker 1: results of their work. A war over Taiwan is a

832
00:45:47,840 --> 00:45:51,000
Speaker 1: ten trillion dollar risk to the global economy. It's one

833
00:45:51,040 --> 00:45:53,040
Speaker 1: of the cool things about working at Bloomberg is like

834
00:45:53,200 --> 00:45:55,279
Speaker 1: I'm always you know, I sort of pinch myself working

835
00:45:55,320 --> 00:45:58,839
Speaker 1: here because how many different experts and sophisticated people who

836
00:45:58,960 --> 00:46:01,680
Speaker 1: understand this stuff, the bottlers who work on these different

837
00:46:01,680 --> 00:46:05,040
Speaker 1: models went into this, so it's really quite a project,

838
00:46:05,239 --> 00:46:08,160
Speaker 1: I thought. The other interesting thing Gerard made the point

839
00:46:08,200 --> 00:46:10,759
Speaker 1: about a war, were it to happen, would not likely

840
00:46:10,800 --> 00:46:13,080
Speaker 1: be a diversionary war, and the idea, yeah, oh, it's

841
00:46:13,080 --> 00:46:15,560
Speaker 1: not gonna be one of these things where they would

842
00:46:15,560 --> 00:46:19,080
Speaker 1: do it because people morale has banned, the economy is bad,

843
00:46:19,120 --> 00:46:22,040
Speaker 1: so therefore we have to do something that actually it

844
00:46:22,040 --> 00:46:25,000
Speaker 1: would be such an all encompassing well be fair, that

845
00:46:25,040 --> 00:46:27,520
Speaker 1: it can't just be sort of yeah.

846
00:46:27,719 --> 00:46:31,279
Speaker 2: Also Jenny's point about the blockade, so I remember, you

847
00:46:31,320 --> 00:46:34,520
Speaker 2: know two I guess two years ago, now that was

848
00:46:34,640 --> 00:46:39,399
Speaker 2: sort of seen as the foremost possibility that China could

849
00:46:39,400 --> 00:46:42,760
Speaker 2: do something, but it wouldn't do an outright invasion because

850
00:46:42,800 --> 00:46:46,040
Speaker 2: that was so like risky and I guess would up

851
00:46:46,080 --> 00:46:49,400
Speaker 2: the stake. So much. But her point that maybe now

852
00:46:49,440 --> 00:46:52,759
Speaker 2: a blockade is basically seen as having like all the

853
00:46:52,880 --> 00:46:56,759
Speaker 2: downsides of outright military invasion in the sense that it

854
00:46:56,800 --> 00:47:01,440
Speaker 2: could bring Western allies into the conflict, but none of

855
00:47:01,480 --> 00:47:05,120
Speaker 2: the upside because it could be prolonged and you know,

856
00:47:05,280 --> 00:47:07,399
Speaker 2: drawn out, and maybe at this point it's better to

857
00:47:07,440 --> 00:47:10,600
Speaker 2: just do something quickly. That kind of shows how far

858
00:47:11,320 --> 00:47:13,439
Speaker 2: things are. Yeah, that kind of shows how much things

859
00:47:13,480 --> 00:47:15,840
Speaker 2: have changed just in a couple of years. And again

860
00:47:16,080 --> 00:47:18,440
Speaker 2: I suspect a lot of that comes from the Russia

861
00:47:18,600 --> 00:47:19,560
Speaker 2: Ukraine example.

862
00:47:20,280 --> 00:47:23,200
Speaker 1: I want to do more this year for sure on

863
00:47:24,080 --> 00:47:26,960
Speaker 1: the sort of a defense industrial base in the US

864
00:47:27,080 --> 00:47:30,040
Speaker 1: and China. And you know, you see these stories. Of course,

865
00:47:30,080 --> 00:47:32,880
Speaker 1: there was the recent Bloomberg report about how the corruption

866
00:47:33,239 --> 00:47:36,080
Speaker 1: in the Chinese military and these missiles that were fired

867
00:47:36,120 --> 00:47:39,720
Speaker 1: were actually filled with water and or not as advanced

868
00:47:39,760 --> 00:47:41,880
Speaker 1: as thought. But on the other hand, you know, we

869
00:47:41,960 --> 00:47:44,920
Speaker 1: certainly have in the US all kinds of issues with

870
00:47:45,000 --> 00:47:48,239
Speaker 1: our defense procurement and projects that get delayed forever and

871
00:47:48,320 --> 00:47:51,359
Speaker 1: overspending on certain things. So I think this is an

872
00:47:51,440 --> 00:47:54,520
Speaker 1: area of for sure more episodes to come.

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00:47:54,640 --> 00:47:57,440
Speaker 2: We should start wargaming, Joe. We need to get some dice,

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00:47:57,600 --> 00:47:58,480
Speaker 2: it started rolling back.

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00:47:58,600 --> 00:48:00,719
Speaker 1: I did not really realize that it was kind of

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00:48:00,760 --> 00:48:03,440
Speaker 1: like in the movies and they actually have these dice

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00:48:03,520 --> 00:48:06,759
Speaker 1: and maps and boats on a map. And yeah, it's

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00:48:07,080 --> 00:48:07,520
Speaker 1: we need to have.

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00:48:07,520 --> 00:48:09,560
Speaker 2: Like an Odd Thoughts headquarters where we have a bunch

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00:48:09,600 --> 00:48:11,480
Speaker 2: of maps. Oh yeah, let's do it with little like

881
00:48:11,600 --> 00:48:14,840
Speaker 2: figurines of various superpowers and we start moving them around

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00:48:14,880 --> 00:48:15,240
Speaker 2: the board.

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00:48:15,400 --> 00:48:17,400
Speaker 1: These are the games that you play with your friends

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00:48:17,480 --> 00:48:20,640
Speaker 1: right in your house in Connecticut, right, all these all

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00:48:20,640 --> 00:48:22,319
Speaker 1: these sort of gigantic board games.

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00:48:22,400 --> 00:48:24,240
Speaker 2: Right, sometimes we play board games.

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00:48:24,360 --> 00:48:25,000
Speaker 4: That's true.

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00:48:25,120 --> 00:48:25,839
Speaker 2: Shall we leave it there.

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00:48:25,880 --> 00:48:26,560
Speaker 1: Let's leave it there.

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00:48:26,680 --> 00:48:29,480
Speaker 2: This has been another episode of the Odd Loots podcast.

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00:48:29,560 --> 00:48:32,520
Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway.

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00:48:32,600 --> 00:48:35,320
Speaker 1: And I'm Joe Wisenthal. You can follow me at the Stalwart.

893
00:48:35,560 --> 00:48:39,520
Speaker 1: Follow Jennifer Welch, She's at that Jenny Welch. Gerard de Pippo,

894
00:48:39,680 --> 00:48:43,720
Speaker 1: he's at GDP nineteen eighty five. Follow our producers Carman

895
00:48:43,800 --> 00:48:47,640
Speaker 1: Rodriguez at Carman Arman, dash Ol Bennett at Dashbot and

896
00:48:47,719 --> 00:48:50,640
Speaker 1: kel Brooks at kel Brooks. Thank you to our producer

897
00:48:50,640 --> 00:48:53,080
Speaker 1: Moses on them for our Odd Lots content. Go to

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00:48:53,080 --> 00:48:56,319
Speaker 1: bloomberg dot com slash odd Lots, where we have transcripts,

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00:48:56,360 --> 00:48:58,200
Speaker 1: a blog and a newsletter. And if you want to

900
00:48:58,239 --> 00:49:00,720
Speaker 1: chat about this episode or any others with fellow listeners

901
00:49:00,719 --> 00:49:03,680
Speaker 1: twenty four to seven, go to discord dot gg slash

902
00:49:03,800 --> 00:49:06,080
Speaker 1: odd lots or one of the verticals. One of the

903
00:49:06,120 --> 00:49:09,400
Speaker 1: pages in there is a defense vertical, so go on

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00:49:09,480 --> 00:49:10,400
Speaker 1: there and the way in.

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00:49:10,920 --> 00:49:13,799
Speaker 2: And if you enjoy odd Lots, if you think that

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00:49:13,960 --> 00:49:18,040
Speaker 2: Joe really should expand his board game playing away from

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00:49:18,120 --> 00:49:21,080
Speaker 2: just chess, then please leave us a positive review on

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00:49:21,120 --> 00:49:23,560
Speaker 2: your favorite podcast platform. Thanks for listening.