WEBVTT - Warner Bros. Plans to Reject Paramount Offer Next Week 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:08.680 --> 0:00:13.080 This is Bloomberg business Weekdaily reporting from the magazine that 0:00:13.160 --> 0:00:17.639 helps global leaders stay ahead with insight on the people, companies, 0:00:17.680 --> 0:00:22.560 and trends shaping today's complex economy. Plus global business finance 0:00:22.600 --> 0:00:26.279 and tech news as it happens. The Bloomberg Business Weekdaily 0:00:26.400 --> 0:00:31.480 Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.080 --> 0:00:33.760 Hey, folks, you want to get back to that breaking 0:00:33.840 --> 0:00:37.400 news story involving Warner Brothers Discovery planning to reject a 0:00:37.400 --> 0:00:40.280 takeover bit from Paramount Skuydance after the company amended the 0:00:40.360 --> 0:00:44.040 terms of its offer. This breaking news story by our 0:00:44.040 --> 0:00:47.400 own Lucas Shaw, Lucas's Bloomberg News Managing editor of Media 0:00:47.440 --> 0:00:50.440 and Entertainment, also the writer of the screen Time newsletter. 0:00:50.479 --> 0:00:54.400 He joins us from I Believe the West Coast. I'm Lucas. 0:00:54.720 --> 0:00:57.480 The back and forth continues. Give us an update here. 0:00:58.800 --> 0:01:01.760 Yeah, so, so those who who haven't been paying extra 0:01:01.760 --> 0:01:04.960 close attention, Paramount has now made seven or eight bids 0:01:05.600 --> 0:01:09.680 for Warner Brothers Discovery. This was the latest sinciment public 0:01:09.800 --> 0:01:13.000 with its offer a couple of weeks ago. The main 0:01:13.040 --> 0:01:15.840 difference with this bid was that it kind of addressed 0:01:15.840 --> 0:01:18.959 concerns about whether Larry Allison, who along with his son 0:01:19.040 --> 0:01:22.640 David controls Paramount, was fully backstopping the bid, which he is, 0:01:23.440 --> 0:01:25.920 but Warner Brothers says it is still not enough. They 0:01:25.959 --> 0:01:28.640 haven't made a final decision. The board will meet next week. 0:01:28.760 --> 0:01:31.000 They'll likely be a filing next week when they make 0:01:31.080 --> 0:01:34.399 that decision. But Paramount hasn't really increased its offer in 0:01:34.440 --> 0:01:36.440 a few weeks. It keeps amending it by sort of 0:01:36.480 --> 0:01:39.000 tweaking things around the margins, and I think the Warner 0:01:39.000 --> 0:01:40.959 Brothers board is waiting to see if Paramount wants to 0:01:40.959 --> 0:01:43.200 offer more money because they still feel like they're deal 0:01:43.240 --> 0:01:44.119 with Netflix is better. 0:01:44.560 --> 0:01:46.920 Yeah, so Lucas, why not just say that then? 0:01:46.959 --> 0:01:49.440 Why not just say this is not valuing the company 0:01:49.520 --> 0:01:51.320 highly enough and give us more money? Why add the 0:01:51.320 --> 0:01:53.760 part that they're not really sure about the financing? And 0:01:53.960 --> 0:01:57.080 it seems like that's a little bit aggressive to you know, 0:01:57.200 --> 0:01:59.720 a group of bidders that were already panting on potentially 0:02:00.040 --> 0:02:01.280 launching a lawsuit over this. 0:02:02.280 --> 0:02:02.480 Yeah. 0:02:02.480 --> 0:02:07.040 I mean, they've I think tried to enumerate a number 0:02:07.720 --> 0:02:11.520 of concerns about the Paramount bids so that it gives 0:02:11.520 --> 0:02:15.880 them cover given the threat of lawsuits, and that Paramount 0:02:15.880 --> 0:02:18.120 has been on kind of this public campaign, right They've 0:02:18.120 --> 0:02:20.799 had one of their big shareholders, Jerry Carnally, went on 0:02:20.840 --> 0:02:24.160 a very popular podcast and talked about why he thought 0:02:24.160 --> 0:02:26.440 that the Warner Brothers board was making the wrong decision. 0:02:26.639 --> 0:02:29.400 They have appealed directly to shareholders, They've threatened lawsuits. So 0:02:29.440 --> 0:02:33.680 Warner Brothers has created a pretty substantive paper trail laying 0:02:33.680 --> 0:02:37.200 out many concerns to explain it. It gives them, It gives 0:02:37.240 --> 0:02:40.720 Paramount more to do. They don't understand why. I think 0:02:40.720 --> 0:02:43.240 Paramount's not just saying we'll match. We'll kind of agree 0:02:43.280 --> 0:02:45.840 to everything Netflix has agreed to and here's even more money. 0:02:45.840 --> 0:02:48.160 That seems to be where Warner Brothers is at right now. 0:02:48.240 --> 0:02:50.160 I mean, do we have any indication Lucas of what 0:02:50.200 --> 0:02:52.280 really Warner Brothers wants and what they think. Is it 0:02:52.360 --> 0:02:54.840 just coming down to money or is it actually who 0:02:54.919 --> 0:02:55.480 is the buyer? 0:02:56.440 --> 0:02:58.720 Money's the biggest thing they know. 0:02:58.760 --> 0:03:02.400 The Paramount offer and the Netflix offer are fairly comparable. 0:03:02.480 --> 0:03:04.600 A lot of it depends on how much of value 0:03:04.600 --> 0:03:06.760 you assigned to the cable networks at Warner Brothers zones 0:03:06.800 --> 0:03:10.959 that's you know, CNN, TNT, among many others. Warner Brothers 0:03:11.000 --> 0:03:14.360 thinks they're worth more than Paramount, hence the disagreement. I 0:03:14.400 --> 0:03:17.040 think there's some concerns about Paramount as a buyer because look, 0:03:17.080 --> 0:03:19.520 Paramount is a very small company, right. If they didn't 0:03:19.560 --> 0:03:22.440 have the Allison's behind them, this would not be a 0:03:22.480 --> 0:03:26.120 deal that it could contemplate. But it does have one 0:03:26.160 --> 0:03:31.280 of the wealthiest families in the world behind them, and 0:03:31.320 --> 0:03:33.320 that helps get the deal done. But what does that mean, 0:03:33.440 --> 0:03:35.960 or I guess I should say, what does Paramount look. 0:03:35.840 --> 0:03:36.800 Like At the end of it? 0:03:36.800 --> 0:03:38.760 It is still a company sitting on a bunch of 0:03:39.120 --> 0:03:43.080 kind of troubled cable networks and some studio and some 0:03:43.080 --> 0:03:45.080 streaming services that are kind of in the third tier. 0:03:45.360 --> 0:03:45.760 Netflix. 0:03:45.760 --> 0:03:47.720 You know you're getting You're getting the most valuable company 0:03:47.720 --> 0:03:50.520 in the entertainment business, some one that's been run very well, 0:03:50.560 --> 0:03:52.720 and so I think they feel good about that deal. 0:03:53.680 --> 0:03:57.400 There are also some concerns about the limitations that Paramount 0:03:57.400 --> 0:04:01.080 would place on Warner Brothers in the interim period if 0:04:01.080 --> 0:04:02.960 they were to do that deal. Limitations around what they 0:04:02.960 --> 0:04:04.920 could do with their debt. We saw this play out 0:04:04.920 --> 0:04:07.040 actually with the Allison's in Paramount where they kind of 0:04:07.080 --> 0:04:09.880 got in some fights with the leadership at Paramount, including 0:04:10.160 --> 0:04:11.560 and also with the creators. 0:04:11.160 --> 0:04:12.840 Of South Park over what they should do. 0:04:14.040 --> 0:04:16.400 It's up to a third party, I guess, to decide 0:04:16.440 --> 0:04:18.120 if a lot of these are window dressing and it's 0:04:18.160 --> 0:04:20.240 really just all about the money, I would assume that, 0:04:20.560 --> 0:04:21.880 you know, at the end of the day, most of 0:04:21.880 --> 0:04:23.680 these deals are about who offers us the most money. 0:04:23.720 --> 0:04:26.680 If Paramount came and offered thirty three dollars share, thirty 0:04:26.680 --> 0:04:28.800 four dollars to share, thirty five dollars share, that get 0:04:28.800 --> 0:04:29.480 the deal done. 0:04:29.600 --> 0:04:32.840 I was just going to say, it feels like, you know, 0:04:32.880 --> 0:04:34.839 they want to go with Netflix, and they just will 0:04:34.839 --> 0:04:37.240 go with Netflix. But I guess if Paramount there's a 0:04:37.240 --> 0:04:39.320 price for everything, right, Paramount will be able to do 0:04:39.360 --> 0:04:43.360 this deal if it meets a certain price goal. But 0:04:44.160 --> 0:04:46.880 where will the biding stop. Because Netflix could probably raise 0:04:46.880 --> 0:04:47.240 some more. 0:04:47.160 --> 0:04:47.760 Money too for this. 0:04:48.720 --> 0:04:48.840 Well. 0:04:48.880 --> 0:04:52.320 I think that's one of the kind of concerns or 0:04:52.680 --> 0:04:55.080 things that Paramount is trying to work through. Right, If 0:04:55.080 --> 0:04:57.680 they are going to come back and offer more money, 0:04:58.160 --> 0:04:59.599 how do they do that in a way where they 0:04:59.640 --> 0:05:02.000 don't just end up in another bidding war that they lose. 0:05:02.560 --> 0:05:05.880 I think they felt like they long felt like they 0:05:05.880 --> 0:05:08.640 were the favorite to win this. They were surprised by 0:05:08.640 --> 0:05:11.640 how aggressively Netflix came after it. They certainly share your 0:05:11.640 --> 0:05:15.320 belief that the Warner Brothers board just prefers the Netflix offer. 0:05:16.440 --> 0:05:18.240 And so if you're a paramount and you come back 0:05:18.279 --> 0:05:19.960 and you only increase your bid by two or three 0:05:20.000 --> 0:05:23.200 dollars a share, that's something that Netflix could probably match 0:05:23.560 --> 0:05:25.560 if you have to increase. If you increase it by 0:05:25.560 --> 0:05:29.400 even more, some of those Netflix shareholders might balk and say, 0:05:29.440 --> 0:05:31.240 why are we doing this? Because you've already seen the 0:05:31.240 --> 0:05:33.320 share price of Netflix go down over the last few 0:05:33.360 --> 0:05:35.760 weeks as investors are worried about how much they're doing 0:05:35.760 --> 0:05:37.799 this deal and what this deal means for the company. 0:05:38.080 --> 0:05:40.200 We thought it would carry over into twenty twenty six, 0:05:40.240 --> 0:05:42.960 and it looks like it will all right. Lucas good stuff. 0:05:42.960 --> 0:05:45.880 As always really appreciated that. Lucas Shaw, he's managing editor 0:05:45.920 --> 0:05:48.800 Media and Entertainment here at Bloomberg News and also writer 0:05:48.839 --> 0:05:51.479 of the screen Time newsletter, really the keeper of the 0:05:51.520 --> 0:05:55.000 screen Time universe. Joining us there from Los Angeles. 0:05:55.279 --> 0:05:56.040 Stay with us. 0:05:56.120 --> 0:05:59.120 More from Bloomberg Business Week Daily coming up after this. 0:06:02.760 --> 0:06:06.760 You're listening to the Bloomberg Business Weekdaily podcast. Catch US 0:06:06.839 --> 0:06:10.279 Live weekday afternoons from two to five pm Eastern. Listen 0:06:10.320 --> 0:06:13.080 on Apple CarPlay and the Android Auto with the Bloomberg 0:06:13.120 --> 0:06:16.400 Business app, or watch US Live on YouTube. 0:06:17.279 --> 0:06:19.719 Staying on the markets, now, on the minutes that just 0:06:19.720 --> 0:06:20.040 came out. 0:06:20.080 --> 0:06:21.800 Obviously, Ross Mayfield joins us. 0:06:21.800 --> 0:06:26.160 He's investment strategist and Baird Private Wealth Management. Ross, obviously 0:06:26.279 --> 0:06:28.160 you haven't had a chance to parse the minutes. But 0:06:28.320 --> 0:06:30.039 is there anything from what you heard in the last 0:06:30.080 --> 0:06:32.000 few minutes that would concern you or that would give 0:06:32.000 --> 0:06:34.480 you any more clarity about the path ahead for the Fed? 0:06:35.160 --> 0:06:37.599 No, there's a lot to parse. I think a couple 0:06:37.680 --> 0:06:43.440 key takeaways. The division is obviously not unprecedented, but fairly 0:06:43.800 --> 0:06:47.360 unprecedented for the last decade plus, and I don't think 0:06:47.360 --> 0:06:51.000 that replacing Fetcher pal is going to alleviate that. So 0:06:51.520 --> 0:06:54.040 I think at some point in twenty twenty six we'll 0:06:54.040 --> 0:06:55.640 start to see pressures at the long end of the 0:06:55.640 --> 0:06:58.919 curve again. Even in this bull market, the equity market 0:06:58.920 --> 0:07:01.480 has responded. When you've ten year yields press up towards 0:07:01.560 --> 0:07:03.359 five percent. I don't know if we'll get there or not, 0:07:03.880 --> 0:07:06.560 but I do think that at some point the bond 0:07:06.600 --> 0:07:09.200 market will start to worry again about the politicization of 0:07:09.200 --> 0:07:11.680 the FED and what that might mean for rates. You know, 0:07:11.760 --> 0:07:14.080 the other key thing I think is, you know, the FED, 0:07:14.120 --> 0:07:18.880 by cutting in December, gives them room to not cut 0:07:18.880 --> 0:07:21.840 in January and then get to March, when we will 0:07:21.880 --> 0:07:24.000 have several more months of clean data. We'll kind of 0:07:24.200 --> 0:07:28.040 get to work through all of the shutdown idiosyncrasies and 0:07:28.080 --> 0:07:29.680 get a better picture of things as they. 0:07:29.520 --> 0:07:30.760 Move towards neutral. 0:07:31.120 --> 0:07:33.040 Of course, all assuming that we don't have another government 0:07:33.240 --> 0:07:34.240 that's going to say before then. 0:07:34.440 --> 0:07:36.440 We hope, right we don't know what's going to happen 0:07:36.480 --> 0:07:38.160 at the end of January, but hopefully there won't be 0:07:38.160 --> 0:07:41.280 a repeat. So ross would you be more concerned right 0:07:41.280 --> 0:07:44.520 now about inflation coming down the pike, particularly with the 0:07:44.640 --> 0:07:49.600 one big beautiful bill taking effect, or the labor market, 0:07:49.640 --> 0:07:53.680 which at least so far doesn't appear to be materially weakening, 0:07:53.760 --> 0:07:55.680 but there are some signs and there are very definitely 0:07:55.680 --> 0:07:57.880 people out there that are very concerned about it. 0:07:58.480 --> 0:08:00.840 I'm far more concerned about the late I think the 0:08:00.840 --> 0:08:03.440 FED is doing the right thing by kind of resuming 0:08:03.720 --> 0:08:05.920 cutting mode to at least get to neutral, if not 0:08:05.960 --> 0:08:07.760 go a little bit below it. In twenty twenty six, 0:08:08.400 --> 0:08:12.000 the uptick in the unemployment rate, some of the jolts 0:08:12.000 --> 0:08:13.680 and some of the survey data that we've seen is 0:08:13.720 --> 0:08:16.600 quite concerning. And then on the flip side, yes, inflation 0:08:16.840 --> 0:08:20.240 is sticky above two percent, but we really have never 0:08:20.320 --> 0:08:22.840 had inflation kind of just hover around two percent for 0:08:23.160 --> 0:08:25.560 a long period of time or even a medium period 0:08:25.560 --> 0:08:28.200 of time. You've got rents coming down, you've got energy 0:08:28.640 --> 0:08:31.840 costs under control. There might be some upside pressure from tariffs, 0:08:31.880 --> 0:08:34.560 but I do think that the major concern about tariffs 0:08:34.640 --> 0:08:37.240 is a bit overblown, or that's what the data would 0:08:37.240 --> 0:08:39.520 say at this point, so much more concerned about the 0:08:39.559 --> 0:08:41.360 labor market. And so I do think that the FED 0:08:41.440 --> 0:08:45.040 is directionally right to be cutting, though I understand most 0:08:45.080 --> 0:08:47.319 of the members see it as a very close call. 0:08:47.559 --> 0:08:49.160 Hey, you know, Ross, I just want to get into 0:08:49.240 --> 0:08:52.280 you have done some work, you guys, and put out 0:08:52.280 --> 0:08:54.840 a note and you talk about eight themes heading into 0:08:54.880 --> 0:09:00.360 the new year, everything from data center electricity consumption to 0:09:01.040 --> 0:09:04.440 ROI return on investment. Out of all of the AI spend, 0:09:04.840 --> 0:09:07.560 You look at what's going on in tariffs, you talk about, 0:09:07.679 --> 0:09:10.000 you know, kind of references back to the dot com bubble, 0:09:10.480 --> 0:09:12.680 and you also talk about fitzcher J. Powell. So I'm 0:09:12.679 --> 0:09:14.960 just curious. We can't go through all eight of them, 0:09:15.000 --> 0:09:16.840 but give us one or two that you think have 0:09:17.000 --> 0:09:18.880 to be top of mind in the new year. 0:09:20.160 --> 0:09:21.840 Yeah, so I'll give too quickly. 0:09:21.880 --> 0:09:23.839 I think the biggest thing next year, as we talk 0:09:23.880 --> 0:09:27.120 about inflation and in a midterm year, is going to 0:09:27.160 --> 0:09:29.760 be data centers and the price of electricity. This has 0:09:29.760 --> 0:09:31.800 already been kind of a burbling theme, but I think 0:09:31.800 --> 0:09:33.240 it'll come to a head next year. 0:09:33.520 --> 0:09:36.640 I think we'll see to the extent that it's possible. 0:09:36.280 --> 0:09:40.760 Government intervention in regulating or getting energy prices under control, 0:09:40.960 --> 0:09:42.920 especially in a midterm year when we know that inflation 0:09:43.000 --> 0:09:44.880 has been such a hot button political issue. 0:09:44.960 --> 0:09:45.640 Hotie, I did that. 0:09:45.720 --> 0:09:48.360 Do you expect the president to say, Hey, everybody stop 0:09:48.480 --> 0:09:51.400 doing the AI spend, which is a major initiative for 0:09:51.480 --> 0:09:52.200 their administration. 0:09:52.280 --> 0:09:53.000 How do we do that? 0:09:54.000 --> 0:09:56.559 I think the administration, at least in the near term, 0:09:56.600 --> 0:09:59.840 will lean on deregulation to kind of get some costs 0:09:59.840 --> 0:10:03.320 in control that's been a theme in more traditional fossil 0:10:03.360 --> 0:10:04.840 fuel energy sector as well. 0:10:05.080 --> 0:10:06.480 But obviously the. 0:10:06.440 --> 0:10:09.920 Administration can't risk losing the AI race to adversaries like China, 0:10:09.960 --> 0:10:12.520 so you can't stop. But I do think that they're 0:10:12.559 --> 0:10:15.640 going to be very hyper sensitive to electricity inflation when 0:10:15.679 --> 0:10:18.880 they won an election in twenty twenty two or I'm 0:10:18.880 --> 0:10:22.959 sorry on twenty twenty four on the back of you know, inflation, affordability, 0:10:23.000 --> 0:10:25.440 cost of living that has people sew up in arms. 0:10:25.840 --> 0:10:28.240 The other point I would just make is I think 0:10:28.280 --> 0:10:32.400 that the concerns about a bubble, while they make sense 0:10:32.440 --> 0:10:34.200 to me, I think we are so far from a 0:10:34.200 --> 0:10:37.480 bubble at this point, especially the dot com corolarry. You know, 0:10:37.520 --> 0:10:40.200 we're in a nice bowl market. The market is roughly 0:10:40.240 --> 0:10:43.400 doubled off the October twenty twenty two lows, but if you, 0:10:43.400 --> 0:10:45.760 you know, overlay it with what the market did in 0:10:45.800 --> 0:10:49.319 the late nineties, I mean, the market went up eightfold 0:10:49.800 --> 0:10:53.200 into the two thousand top. I don't think that the 0:10:53.240 --> 0:10:55.840 sentiment is bubbly. I don't think that the price action 0:10:55.920 --> 0:10:58.120 is bubbly, and I think that the fundamentals of the 0:10:58.200 --> 0:11:00.960 underlying companies show that this is just a ball market 0:11:01.040 --> 0:11:02.959 driven by profits and not a bubble. 0:11:03.120 --> 0:11:06.280 Well, that will be very good news to a lot 0:11:06.320 --> 0:11:07.480 of people out there that are investors. 0:11:07.559 --> 0:11:10.360 What about the metals, is there a bubble? There are 0:11:10.360 --> 0:11:12.439 we in bubble territory for any of them, gold, silver, 0:11:12.520 --> 0:11:13.400 or any of them? 0:11:14.320 --> 0:11:16.160 To me, gold was you know, we were talking about 0:11:16.200 --> 0:11:17.920 an AI bubble at a time when the real bubble 0:11:17.920 --> 0:11:19.680 and markets was in gold. 0:11:20.040 --> 0:11:21.640 Now it's deflated a bit. 0:11:21.720 --> 0:11:24.200 You know, we had the parabolic price move into the fall, 0:11:24.480 --> 0:11:26.920 a bit of consolidation here, and you tend to see that, 0:11:27.720 --> 0:11:29.320 you know, whether it's in gold or other assets, you 0:11:29.320 --> 0:11:32.280 have a parabolic price move goes vertical, you need a 0:11:32.320 --> 0:11:32.720 period to. 0:11:32.720 --> 0:11:34.480 Consolidate, to reset sentiments. 0:11:34.520 --> 0:11:37.160 So I think, you know, over the intermediate term, you know, 0:11:37.320 --> 0:11:40.679 bullishness on metals and using it as a diversification part 0:11:40.720 --> 0:11:42.800 of a portfolio makes a lot of sense. But I 0:11:42.840 --> 0:11:45.760 don't know that we resume that uptrend maybe until the 0:11:45.800 --> 0:11:47.959 middle of twenty twenty six. I think there's some sentiment 0:11:48.000 --> 0:11:50.240 that has to be reset and price action that has 0:11:50.280 --> 0:11:52.920 to be consolidated. But it certainly had a lot more 0:11:52.960 --> 0:11:55.839 signs of a bubble over the summer than we're seeing 0:11:55.840 --> 0:11:56.880 in ass socks right now. 0:11:57.040 --> 0:12:01.120 Still have today, So there's a bubble. 0:12:01.200 --> 0:12:01.800 I'll take that. 0:12:02.080 --> 0:12:05.840 It's crazy, right, all right, good stuff, so appreciate it. 0:12:05.880 --> 0:12:08.760 Thanks so much for joining us. Ross Mayfield investment strategist 0:12:08.760 --> 0:12:10.600 over at bear To Private Wealth Management. 0:12:11.960 --> 0:12:15.840 This is the Bloomberg Business Week Daily Podcast. Listen live 0:12:15.920 --> 0:12:19.520 each weekday starting at two pm Eastern on Applecarplay and 0:12:19.520 --> 0:12:22.360 Android Auto with the Bloomberg Business App. You can also 0:12:22.520 --> 0:12:25.839 listen live on Amazon Alexa from our flagship New York station, 0:12:26.160 --> 0:12:28.760 Just Say Alexa played Bloomberg eleven thirty. 0:12:29.360 --> 0:12:31.679 All right, everybody, we're back on Bloomberg Markets. Carol Masser 0:12:31.720 --> 0:12:34.199 along with Bonnie Quinn live here at Bloomberg Headquarters. There 0:12:34.280 --> 0:12:37.520 is a lot going on geopolitically, was this past year, 0:12:37.559 --> 0:12:40.080 will be probably again in twenty twenty six. Here's just 0:12:40.080 --> 0:12:42.360 a few of our stories that have crossed the Bloomberg 0:12:42.440 --> 0:12:46.360 On this Tuesday, the United Arab airmitz Emirates excuse me 0:12:46.400 --> 0:12:49.320 said it well, withdraw forces from Yemen following a flare 0:12:49.360 --> 0:12:53.480 up intensions with Gulf ally Saudi Arabia over military operations 0:12:53.520 --> 0:12:56.520 in the conflict hit country. You've got u Essentral Command 0:12:56.520 --> 0:12:58.920 coming out saying US forces and partners killed or captured 0:12:59.000 --> 0:13:02.680 nearly twenty five is state operatives following large scale air 0:13:02.679 --> 0:13:06.400 strikes across Syria earlier this month, and then also European 0:13:06.520 --> 0:13:09.440 leaders held a call to talk about Ukraine after Russia 0:13:09.480 --> 0:13:13.040 said it would revise its negotiating position, claiming Ukrainian drones 0:13:13.080 --> 0:13:16.040 targeted a residence of President Vladimir Putin. There's a lot 0:13:16.080 --> 0:13:18.600 going on, so good to have back with us. Ed Price. 0:13:18.640 --> 0:13:22.400 He's senior Fellow non Resident at NYU. Former British trade official, 0:13:22.440 --> 0:13:24.680 he has advised members of the European and British parliaments. 0:13:24.679 --> 0:13:27.560 He also teaches jiu jitsu in New York, which I 0:13:27.559 --> 0:13:28.120 had no idea. 0:13:28.280 --> 0:13:29.199 I did not know that either. 0:13:32.640 --> 0:13:35.959 Yeah, I'm going to be useful in trade, seriously useful 0:13:36.000 --> 0:13:36.800 in your trade talks. 0:13:36.800 --> 0:13:39.600 Now it would have been yes, if you're allowed to wrestle. 0:13:39.280 --> 0:13:41.199 But there, I don't know. 0:13:41.280 --> 0:13:43.840 We've seen that in some I feel like Parliament's overseas, 0:13:43.840 --> 0:13:45.480 maybe in Asia. Hey how are you? 0:13:45.600 --> 0:13:46.720 I'm good, thank you very well. 0:13:46.840 --> 0:13:49.800 How are you doing okay? Like it's amazing that we 0:13:49.840 --> 0:13:51.760 are here in December. It was a year that felt 0:13:51.800 --> 0:13:53.719 like we had weeks that would never end and a 0:13:53.760 --> 0:13:55.559 year that would never end. And yet here we are. 0:13:56.559 --> 0:13:58.720 How's the world doing right now? And what are the 0:13:59.160 --> 0:14:00.760 what are the parts of the world that you're watching 0:14:00.800 --> 0:14:03.640 most closely? What are the leaders that you were watching 0:14:03.720 --> 0:14:05.160 or who are well? 0:14:05.240 --> 0:14:08.880 I mean, I'm always watching President Donald Trump. He lives 0:14:08.880 --> 0:14:10.880 in my head rent free, and I think that's probably 0:14:10.920 --> 0:14:13.959 true a lot of people. And then of course Putin 0:14:14.559 --> 0:14:17.720 I'm watching Putin Zelenski and that nexus. It's interesting that 0:14:17.760 --> 0:14:20.880 I'm not really watching Shijinpin at the moment, which. 0:14:20.680 --> 0:14:21.440 I know should you be. 0:14:21.560 --> 0:14:23.960 I mean, we saw those exercises the last two days. 0:14:24.000 --> 0:14:26.280 It's really popping off again if you like. I mean, 0:14:26.360 --> 0:14:28.680 is he just prodding the Japanese and the US or 0:14:28.760 --> 0:14:31.360 is he actually working on a plan? 0:14:31.920 --> 0:14:33.360 Well, I think he's biding his time. 0:14:33.680 --> 0:14:36.960 And someone like me who is always very excitable about 0:14:36.960 --> 0:14:39.680 the downside, and I could list all the times I've 0:14:39.680 --> 0:14:43.840 got that run. I'm always watching China for its potential 0:14:43.840 --> 0:14:47.040 invasion of Taiwan, and it does seem this year and 0:14:47.120 --> 0:14:49.680 in the last few years that that doesn't seem as 0:14:49.720 --> 0:14:51.920 imminent as you'd think. Now, you're right to point out 0:14:51.920 --> 0:14:56.320 that there's visual data and there's military data that would 0:14:56.320 --> 0:14:59.280 suggest otherwise. But I think that's probably part of the strategy, 0:14:59.280 --> 0:15:03.040 as you suggest, to ratchet up the pressure and remind 0:15:03.240 --> 0:15:06.920 Japan and remind the United States that China has this 0:15:07.800 --> 0:15:11.440 new foundability. It doesn't necessarily mean that if it deploys 0:15:11.440 --> 0:15:14.640 its forces, it will employ them. So my conclusion after 0:15:14.640 --> 0:15:16.360 a while is that I've probably been a bit hysterical 0:15:16.440 --> 0:15:17.920 about the China Taiwan issue. 0:15:17.960 --> 0:15:19.480 Well, no, but there is a deadline on it, right, 0:15:19.520 --> 0:15:21.880 I mean, she's being once that's done at the back 0:15:22.000 --> 0:15:23.240 end of a ten year plan. 0:15:23.720 --> 0:15:25.360 But yeah, continued Carl, No. 0:15:25.240 --> 0:15:29.400 No, no, you continue, Well, I mean again, it's for me. 0:15:29.520 --> 0:15:31.840 I thought for a few years that it was imminent. 0:15:31.880 --> 0:15:33.120 I mean, I've said this before. 0:15:33.840 --> 0:15:36.760 The reason I think it isn't is that China understands 0:15:36.800 --> 0:15:38.840 that you can't just float a force over the one 0:15:38.920 --> 0:15:41.240 hundred and twenty miles to the west coast of Taiwan 0:15:41.280 --> 0:15:42.000 without also. 0:15:41.800 --> 0:15:45.160 Confronting the Americans. So it's harder than they think. 0:15:45.160 --> 0:15:50.360 I think, who do you think fears President Trump? Who 0:15:50.400 --> 0:15:53.720 do you really think considers he and the United States 0:15:53.720 --> 0:15:54.360 still an ally? 0:15:55.440 --> 0:15:58.840 Well on the first one, who fears him? Vulnerable members 0:15:58.880 --> 0:16:02.200 of our labor market, possibly Spanish speaking people who are 0:16:02.200 --> 0:16:04.400 here in good faith, working hard to create the GDP 0:16:04.520 --> 0:16:07.760 that we need to confront China or Russia. That's a 0:16:07.760 --> 0:16:10.880 bad thing if your labor market is shrinking and afraid 0:16:10.920 --> 0:16:13.920 in the geopolitical confrontation. And the second part of your 0:16:13.960 --> 0:16:16.160 question is I think who respects him? 0:16:16.360 --> 0:16:16.680 Yes? 0:16:17.120 --> 0:16:19.960 Well, I mean, I mean I'm exhaling. I don't know 0:16:20.040 --> 0:16:21.360 that he's respected. 0:16:21.000 --> 0:16:24.200 Because you listen, we talk about your relationships that you've had, 0:16:24.240 --> 0:16:26.760 certainly in the UK and with European officials. I'm assuming 0:16:26.800 --> 0:16:29.400 you still have confidence and folks that you talk to. 0:16:29.720 --> 0:16:32.800 I mean, do they fear him, do they respect him? 0:16:33.000 --> 0:16:35.840 Do they consider him? Certainly members of NATO still an ally. 0:16:36.600 --> 0:16:37.680 Well, I can't speak for NATO. 0:16:37.760 --> 0:16:40.040 I mean I was in the economic side of government, 0:16:40.560 --> 0:16:43.840 but yes, rendering them anonymous. Friends of mine who are 0:16:43.880 --> 0:16:46.680 still serving in various parts of the world do not 0:16:46.800 --> 0:16:50.360 respect President Donald Trump. And they don't respect him for 0:16:50.400 --> 0:16:53.360 one reason, which is that, whereas Nixon presented a very 0:16:53.400 --> 0:16:57.800 effective mad madman routine, Donald Trump doesn't actually stick to 0:16:57.840 --> 0:17:00.080 his guns. And if you go through his record, I 0:17:00.080 --> 0:17:02.200 mean I was talking in the green room about Liberation Day. 0:17:02.720 --> 0:17:05.840 Every single time he's said thus far, and no further 0:17:06.080 --> 0:17:06.880 or this will happen. 0:17:06.960 --> 0:17:08.439 You know, if X happens, why will happen? 0:17:08.560 --> 0:17:10.720 It hasn't really, So I think that people have now 0:17:10.800 --> 0:17:13.480 sort of realized that there's no incentive with him to 0:17:13.840 --> 0:17:16.440 do as he asks necessarily because he doesn't follow through. 0:17:16.560 --> 0:17:18.439 Well, so is it just is it so that the 0:17:18.440 --> 0:17:21.560 bark is worse than the bike ultimately for President Trump? 0:17:21.600 --> 0:17:24.359 I mean yeah, right at times, Van, we've certainly felt 0:17:24.359 --> 0:17:27.840 the bite Liberation Day in markets, investors struck Iran. 0:17:28.160 --> 0:17:30.520 Yeah, he's struck Iran. But I mean I've put it 0:17:30.560 --> 0:17:31.240 like this before. 0:17:31.640 --> 0:17:35.960 Seddy Roosevelt famously said, speaks softly and carry a big stick. Yeah, 0:17:36.119 --> 0:17:38.760 And it seems that President Trump, with as much respect 0:17:38.800 --> 0:17:42.480 as I can muster, speaks incoherently and sort of occasionally 0:17:42.520 --> 0:17:45.879 carries a stick. And you can't infer, as a rival 0:17:45.920 --> 0:17:48.800 power or an adversary or even an ally, exactly what 0:17:48.840 --> 0:17:50.720 his behaviors are going to be, right. 0:17:50.800 --> 0:17:54.800 But that's what makes it so terrifying, especially if you're 0:17:54.800 --> 0:17:59.640 of Venezuela and you know there's so many warships, carriers 0:18:00.000 --> 0:18:03.679 and troops basically stationed off your coast. What's going to 0:18:03.680 --> 0:18:04.680 happen with Venezuela. Ed. 0:18:05.560 --> 0:18:08.320 Whatever we do, we are damaging our power. Whatever we 0:18:08.440 --> 0:18:11.119 do in showing hard power in the way that we 0:18:11.160 --> 0:18:14.280 are and moving away from soft power, we are reducing 0:18:14.320 --> 0:18:17.800 the overall power of the United States. That's because the 0:18:17.960 --> 0:18:20.119 hard power of the United States is in part based 0:18:20.119 --> 0:18:22.359 on our soft power. People like us, they trust us, 0:18:22.359 --> 0:18:25.120 they lend us money, and we definance a military. So 0:18:25.280 --> 0:18:27.120