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Speaker 1: Good morning. It's Friday, the twenty ninth of December in London.

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Speaker 1: This is the Bloomberg Daybreak Europe podcast. I'm Stephen Carroll.

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Speaker 1: Coming up today, Maine becomes the second US date to

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Speaker 1: try to bar Donald Trump from its Republican primary ballot.

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Speaker 1: A new survey shows UK householder more worried about their

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Speaker 1: financial security heading into twenty twenty four despite slowing inflation.

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Speaker 1: Plus on the last trading day of the year, we'll

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Speaker 1: look at what Wall Street's biggest names got wrong in

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Speaker 1: their market predictions for twenty twenty three. Let's start with

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Speaker 1: a roundup of our top stories. The top election official

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Speaker 1: in the state of Maine has ruled that Donald Trump

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Speaker 1: cannot run in the state's Republican primary. In her decision,

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Speaker 1: Secretary of State and Democrat Shennabellos cited the former president's

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Speaker 1: efforts to overturn the twenty twenty election. She added that

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Speaker 1: Trump could appeal her decision, which comes just weeks before

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Speaker 1: the first Republican primary in Iowa. The former president plans

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Speaker 1: to file a legal objection in state court. He's faced

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Speaker 1: dozens of lawsuits across the US claiming he's ineligible for

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Speaker 1: another term under a legal provision which states that a

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Speaker 1: person who took an oath to support the constitution and

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Speaker 1: then engaged in quote insurrection is ineligible to hold office.

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Speaker 1: Half of the container ships which regularly use the Suez

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Speaker 1: Canal are avoiding the route after the recent string of

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Speaker 1: attacks by Huthi militants in the Red Sea. Data compiled

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Speaker 1: by Flexport shows two hundred and ninety nine container ships

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Speaker 1: have either changed course or planned to, accounting for eighteen

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Speaker 1: percent of global trade. Mercury Resources CEO Anton Posner specializes

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Speaker 1: in supply chains. He says many major firms want to

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Speaker 1: know more about the US response to the attacks.

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Speaker 2: So at this point it's a lot of weight in

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Speaker 2: sea in what's happening with the international coalition. We're seeing,

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Speaker 2: of course, increased freed increased insurance, a lot of uncertainty

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Speaker 2: and mixed signals from from owners, container lines and from

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Speaker 2: governments on what's happening to baslee mitigate the risk and

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Speaker 2: the threats that are out there for nesium in the

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Speaker 2: art groups.

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Speaker 1: Posner added that some containers are putting off decisions until

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Speaker 1: the new year while attacks continue. The US military says

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Speaker 1: it's speaking with shipping companies to ease their concerns. Ukraine's

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Speaker 1: Prime minister has sounded the alarm over the country's finances

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Speaker 1: as international aid dwindles. Dennis Schimal has asked for an

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Speaker 1: emergency meeting with international donors as Key fears running out

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Speaker 1: of money in the new year. Roughly one hundred and

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Speaker 1: ten billion dollars is held up in political wrangling by

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Speaker 1: the United States and the European Union. The chip maker

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Speaker 1: in Vidia is selling a downgraded version of its gaming

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Speaker 1: chip to Chinese consumers. The version for the Chinese market

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Speaker 1: has about ten percent fewer processing cores than what the

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Speaker 1: chip giant sells in other countries. This comes after the

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Speaker 1: US government has tightened restrictions on what the company can

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Speaker 1: market there. Bloomberg's Ian King says, so far commercial backlash

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Speaker 1: is limited.

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Speaker 3: How much of a general impact is going to make

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Speaker 3: Probably not a huge amount. I mean, how many people

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Speaker 3: can afford two thousand dollars for a card. The volumes

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Speaker 3: of the market is as much lower tier than that.

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Speaker 3: But really what matters is what happens in the AI

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Speaker 3: accelerator market. In Videos said it's going to have new

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Speaker 3: chips for that business for China to meet these new rules.

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Speaker 3: We don't know when that's coming or if, indeed if

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Speaker 3: that will actually come, and that will have a much

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Speaker 3: more concrete impact on revenue.

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Speaker 1: Bloomberg z and King reporting the divide sets up a

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Speaker 1: future geopolitical issue for Nvidia, which is by far the

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Speaker 1: best performing semiconductor stock in twenty twenty three and the

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Speaker 1: industry's first company with the market value of one trillion dollars.

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Speaker 1: UK consumers are more worried about their financial security heading

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Speaker 1: into the new year. New survey shows that slowing inflation

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Speaker 1: isn't enough to encourage spending as households make an effort

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Speaker 1: to cut back. Bloombergs t Bio has the details.

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Speaker 4: Inflation may have more than halved in twenty twenty three,

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Speaker 4: but that doesn't mean households are feeling better about the economy.

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Speaker 4: A KPMG survey has found four in ten UK consumers

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Speaker 4: say that in a worse financial position than the end

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Speaker 4: of last year. The findings add to fears the British

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Speaker 4: economy will stagnate or even shrink as people cut back

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Speaker 4: on spending. Add to that a warning from the Trade

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Speaker 4: Union Congress that unsecured debt excluding student loans, is set

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Speaker 4: to rise by eleven percent next year. These factors setting

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Speaker 4: a gloomy economic scene as the UK moves into an

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Speaker 4: election year in London. To add a bio Bloomberg.

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Speaker 1: Radio, the heirest the Laril Cosmetics Empire has become the

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Speaker 1: first woman to amass a one hundred billion dollar fortune,

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Speaker 1: Passwha's Bettencorn Myyers reached the milestone on Thursday, when her

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Speaker 1: wealth jumped to one hundred point one billion dollars according

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Speaker 1: to the Bloomberg Billionaire's Index. The increased came as shares

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Speaker 1: and Laril rose to a record high, with the stock

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Speaker 1: set for its best year since nineteen ninety eight. Bettencore

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Speaker 1: Meyers inherited the stake in the beauty products empire from

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Speaker 1: her mother in twenty seventeen. Well, in a moment, we'll

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Speaker 1: be discussing how the market bets from some of Wall

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Speaker 1: Street's biggest names in twenty twenty three didn't go as planned.

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Speaker 1: But another Bloomberg article that caught my eye this morning

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Speaker 1: of some Ore colleague Howard chiwai Wan from Bloomberg Opinion

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Speaker 1: about the dangers of being angry Apartment being a very

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Speaker 1: amusing read about Howard's experiences of being hungry It's also

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Speaker 1: a good reminder that, with January in mind, the effects

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Speaker 1: that hunger can have on your mood and how you

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Speaker 1: behave at work. Now, that could be because perhaps you're

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Speaker 1: cutting back on how much you're eating after an indulgent

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Speaker 1: Christmas season, or perhaps that you're just too busy to eat.

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Speaker 1: Howard's message in general is let's resolve to be aware

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Speaker 1: of the conditions that contribute to hanger and take ourselves

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Speaker 1: and others out of the path of what he describes

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Speaker 1: as irrational rage. It's perhaps a suitable note to end

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Speaker 1: the year on. You can read the full piece on

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Speaker 1: the terminal or on bloomberg dot com. Well, let's get

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Speaker 1: more the political story out of the US. The top

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Speaker 1: election official and Maine has barred Donald Trump from the

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Speaker 1: state's Republican primary. Bloomberg's John Harney joins us from Washington

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Speaker 1: with the latest. John, great to have you with us.

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Speaker 1: What has Maine Secretary of State decided and why?

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Speaker 5: Well she was responding, she writes in her decision to

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Speaker 5: challenges from Maine voters, and she decided that Donald Trump

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Speaker 5: could not be on the Republican primary ballot because he

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Speaker 5: had engaged in insurrection because of his efforts to overturn

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Speaker 5: the twenty twenty election results, and particularly his actions on

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Speaker 5: January sixth, twenty twenty one, when, of course, his supporters

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Speaker 5: assaulted or assaulted the capital as electoral vote for being countered.

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Speaker 5: And she points out that she did not take this

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Speaker 5: decision lightly, but that you know, no, no secretary of

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Speaker 5: State in Maine had ever before deprived a candidate a

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Speaker 5: ballot access. But and I'm quoting here, no presidential candidates

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Speaker 5: ever before engaged in insurrection under the fourteenth Amendment of

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Speaker 5: the Constitution.

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Speaker 1: What has been the reaction from the Trump campaign.

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Speaker 5: Well, it was, it was, it was quite swift after

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Speaker 5: the after Ms. Bellows had issued her ruling, and it

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Speaker 5: immediately accused her. She is she is a Democrat, and

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Speaker 5: she ran for the United States Senate against Susan unsuccessfully

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Speaker 5: against Susan Collins back in twenty twenty, couple of years ago. They,

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Speaker 5: you know, the campaign said that this was politically motivated,

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Speaker 5: this decision and an attempt to fix the twenty twenty

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Speaker 5: four election, and also referred to efforts to keep Trump

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Speaker 5: off the ballot in other states.

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Speaker 1: This cup comes after, as you mentioned, a similar decision

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Speaker 1: in Colorado earlier this month, Donald Trump though back on

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Speaker 1: the ballot there. What's happened?

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Speaker 4: Well, he.

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Speaker 5: He was that, I mean he that was a court ruling,

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Speaker 5: the state Supreme Court in Colorado that he could not

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Speaker 5: be on the ballot. He was ever, he was ever

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Speaker 5: officially to take it off. But that case has now

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Speaker 5: been put off because the europe the Colorado Republican Party

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Speaker 5: has has petitioned the United States Supreme Court, which will

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Speaker 5: almost certainly have to decide this as it's you know,

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Speaker 5: as these cases and challenges keep arising in many in

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Speaker 5: many states throughout the country, even as the first votes,

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Speaker 5: as you pointed out, are about to be about the

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Speaker 5: first votes of the twenty twenty four primary primary season

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Speaker 5: are about to take place in the Iowa caucuses in

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Speaker 5: the middle of January.

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Speaker 1: What's the big picture effect of these legal challenges? Of course,

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Speaker 1: as you say, there are appeals underway. What does it

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Speaker 1: mean for Donald Trump's prospects for an election that's now

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Speaker 1: less than a year away.

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Speaker 5: Well, it's one more it's one more factor of one

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Speaker 5: more bit of uncertainty as as he tries to as

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Speaker 5: he makes his comeback or attempt to come back to

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Speaker 5: win the publican nomination and then the White House next November.

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Speaker 5: He faces several criminal faces, criminal trials in the year

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Speaker 5: that may well take place in the year ahead, and

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Speaker 5: possible convictions.

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Speaker 3: Uh.

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Speaker 5: There's also there's also civil cases, most notably in New

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Speaker 5: York when which that might that might severely curtail his business,

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Speaker 5: you know, his you know, his Trump Organization's business, the source,

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Speaker 5: the source of the family of fortune. And at the

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Speaker 5: same time, you know, none of these, none of these

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Speaker 5: uh setbacks seemed to or which you think would be setbacks,

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Speaker 5: seem to have harmed him, at least uh in the

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Speaker 5: minds of many of the Republican voters. And they and

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Speaker 5: they have not helped his Republican rivals or President Joe Biden,

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Speaker 5: of course, is running on the Democratic ticket.

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Speaker 1: Yeah, certainly, and that's going to be one of the

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Speaker 1: factors that we'll be watching as we watch the legal

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Speaker 1: processes continuing to play out both in Maine and in Colorado.

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Speaker 1: John Harney in Washington, thank you so much for joining

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Speaker 1: us with the latest on that story. That's Bloomberg.

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Speaker 5: John Harney there, Well.

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Speaker 1: It is the final trading day of the year for markets,

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Speaker 1: and today's Bloomberg Big Take report is looking at what

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Speaker 1: Wall Street's biggest names had been expecting to see this

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Speaker 1: year and how those calls held up during the year.

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Speaker 1: The consensus view formed around three things, mainly sell US stocks,

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Speaker 1: by treasuries, and by Chinese stocks. To talk us through

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Speaker 1: how that went, we're joined by our senior global equity

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Speaker 1: markets reporter, jan Patrick Barner JP. Great to have you

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Speaker 1: with us. First of all, what formed the basis of

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Speaker 1: these calls a year ago?

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Speaker 6: Good morning, Well, I mean at the core was the

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Speaker 6: idea that the US Federal Reserve would drive the US

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Speaker 6: economy into a recession, and that of course would have

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Speaker 6: the ripple effects to stocks and bonds, meaning that everybody

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Speaker 6: expected US stocks will lead a decline in global markets

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Speaker 6: and that the Fed will then have to cut raids,

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Speaker 6: and hence it would be a good idea to be

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Speaker 6: long bond was at the core of the prediction. As

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Speaker 6: we now all know, didn't go that way. But it

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Speaker 6: was very hard to make the call at the beginning

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Speaker 6: of the year given everything that happened before, mainly with

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Speaker 6: the pandemic and all the effects it had on the

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Speaker 6: economy and the consumer. So I wouldn't go too hard

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Speaker 6: on those being wrong. For this year, because it really

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Speaker 6: was a tough call to make.

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Speaker 1: Of course, regular lester just know that the reality of

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Speaker 1: the year's training didn't match the expectations from those big

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Speaker 1: Wall Street calls to talk us through what happened first

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Speaker 1: of all to US stocks and bonds. Why didn't that

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Speaker 1: pan out as had perhaps been expected.

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Speaker 6: Yeah, it was very surprising. I mean, there were early

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Speaker 6: signs in January February that the economy would help, economy

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Speaker 6: would held up better than expected. I guess everybody was

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Speaker 6: very surprised that the consumer was still very strong. Those

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Speaker 6: savings that piled up during the pandemic like helped a

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Speaker 6: lot with that. So that goes back to the idea

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Speaker 6: that I said, it's hard to make a prediction when

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Speaker 6: you have those kinds of mechanics that you really can't

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Speaker 6: you can't really predict what's goning on. And so the

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Speaker 6: the the corporate earnings front also looked looked very healthy.

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Speaker 6: Corporates were able to take those higher inflations from from

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Speaker 6: producing stuff and forward this to the to the consumer,

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Speaker 6: So that helped a lot with with the earnings. I mean,

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Speaker 6: we saw Ernie's contraction, of course, but the top line

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Speaker 6: held up well the margins still looked healthy. So all

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Speaker 6: that of course helped the two pile stocks up and

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Speaker 6: then you added them let's say the not one of effects,

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Speaker 6: but like these these special circumstances, mainly the frenzy about

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Speaker 6: artificial intelligence that propelled all those megacaps to new highs,

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Speaker 6: which of course then has big effects on on the

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Speaker 6: broader indices. And then the obesity trade was a was

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Speaker 6: a big one. So those like one of trades or

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Speaker 6: one one of themes like also helped the market a lot.

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Speaker 6: Nobody saw that coming and that pushed stocks to two

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Speaker 6: levels we haven't seen.

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Speaker 1: What about the China question then, because that was one

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Speaker 1: that's quite a lot of these analysts got wrong.

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Speaker 6: Yeah, definitely, And it's kind of an interesting story because

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Speaker 6: there was the notion of a reopening trade in China,

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Speaker 6: and I would say that if you look at European stocks,

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Speaker 6: this notion held up pretty well throughout the year, because

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Speaker 6: if you look at the Germany stocks, for example, who

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Speaker 6: is like highly skewed towards China is training at an

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Speaker 6: all time high right now. So it works for Europe.

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Speaker 6: It didn't work so well for the Chinese stocks itself.

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Speaker 6: A thing like the Hunsanng is downe like mine is

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Speaker 6: fourteen percent or something like this year because the economy

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Speaker 6: still struggled and the government had to push out measure

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Speaker 6: after measure to keep the couple the economy some kind

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Speaker 6: of a float. So it's interesting that domestically the market

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Speaker 6: is still like having a very bearish and very doomish

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Speaker 6: view on China, while you have the outside view from

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Speaker 6: everybody who is like importing into China is rather sangin

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Speaker 6: about it. So it's an interesting two false story.

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Speaker 4: This year, tabe.

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Speaker 1: Does it matter that these calls didn't work out?

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Speaker 4: Does it?

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Speaker 1: Is it going to change if people look at the

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Speaker 1: calls people are making for next year?

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Speaker 6: Well, I guess it's a good lesson that even like

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Speaker 6: the most brightest and smartest people on Wall Street can

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Speaker 6: be wrong from time to time. Again, it was a

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Speaker 6: very hard prediction to make with the pandemic and everythings

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Speaker 6: that were satelliting around it to get everything into place

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Speaker 6: and make this call. So I would say, like, if

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Speaker 6: it's just about this year, we can be very forgiven

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Speaker 6: that those people were wrong. What I didn't really understand,

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Speaker 6: and that was the more shocking part to me, is

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Speaker 6: like when there were signs in let's say January February,

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Speaker 6: and especially after the banking crisis was resolved in March,

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Speaker 6: it looked all very good. The economic indicators looked good,

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Speaker 6: the earnings look good, and I was very surprised that

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Speaker 6: those big strategies didn't revert it their calls and said like, okay,

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Speaker 6: we were wrong. This looks better. We have to tone

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Speaker 6: down our bear review. And they held to it like

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Speaker 6: very long, almost until until summer, until the then folded

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Speaker 6: their hands. So I would blend them for that for sure.

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