1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,840 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,040 Speaker 1: or watch us live on YouTube. 6 00:00:27,360 --> 00:00:30,000 Speaker 2: Joining us down in studio Lindza pegx. She was stiffel, 7 00:00:30,440 --> 00:00:33,159 Speaker 2: she was My comments of the year. Just brave, Brave, 8 00:00:33,320 --> 00:00:37,800 Speaker 2: Brave Interviews twelve and eighteen months ago. Let's get brave 9 00:00:37,840 --> 00:00:40,680 Speaker 2: here on PPI coming up in a moment. What's the 10 00:00:40,840 --> 00:00:44,279 Speaker 2: character of our inflation? Is it an immovable feast up 11 00:00:44,360 --> 00:00:48,600 Speaker 2: or down? Or is just a leadenness a resiliency to 12 00:00:48,680 --> 00:00:50,320 Speaker 2: where we are in price change? 13 00:00:50,479 --> 00:00:53,760 Speaker 3: I think right now inflation is experiencing some sort of 14 00:00:53,920 --> 00:00:57,640 Speaker 3: a floor support. But around that floor we are going 15 00:00:57,680 --> 00:01:00,000 Speaker 3: to continue to see movement. Any movement to the down 16 00:01:00,200 --> 00:01:04,120 Speaker 3: side simply solidifies the Fed's growing concerns about the employment 17 00:01:04,160 --> 00:01:07,880 Speaker 3: side of the equation, and really any upside risk, at 18 00:01:07,959 --> 00:01:12,560 Speaker 3: least from a minimal standpoint, is going to maybe keep 19 00:01:12,600 --> 00:01:15,960 Speaker 3: the FED still focused on acazing, but limit the amount 20 00:01:16,000 --> 00:01:17,640 Speaker 3: of using For two of. 21 00:01:17,600 --> 00:01:21,319 Speaker 2: Our listeners across the nation right now on YouTube on 22 00:01:21,480 --> 00:01:25,120 Speaker 2: radio are saying she's nuts. They're looking at their day 23 00:01:25,160 --> 00:01:29,800 Speaker 2: to day living and it screams inflation. Are we going 24 00:01:29,880 --> 00:01:32,240 Speaker 2: to see that in four minutes? Are we going to 25 00:01:32,280 --> 00:01:33,080 Speaker 2: see that tomorrow? 26 00:01:33,160 --> 00:01:36,520 Speaker 3: As CPI, we've been seeing that for years, inflation is 27 00:01:36,600 --> 00:01:40,240 Speaker 3: well above that two percent target. We're nowhere near getting 28 00:01:40,319 --> 00:01:43,600 Speaker 3: back to that, and yet the Fed seemingly is abandoning 29 00:01:44,000 --> 00:01:48,680 Speaker 3: their concern about inflation now shifting very furiously their focus 30 00:01:48,720 --> 00:01:52,240 Speaker 3: on the employment data. I think if the Fed had 31 00:01:52,320 --> 00:01:55,360 Speaker 3: stayed true to their mandate early on, we would be 32 00:01:55,440 --> 00:01:58,680 Speaker 3: in a much better position from a broader economic standpoint. 33 00:01:59,040 --> 00:02:01,520 Speaker 3: They stopped short of where they needed to raise rates 34 00:02:01,640 --> 00:02:04,240 Speaker 3: back in the day. They've been slow playing it, and 35 00:02:04,280 --> 00:02:06,800 Speaker 3: now we're still contending with this easing that we saw 36 00:02:06,840 --> 00:02:11,240 Speaker 3: at the end of last year, exacerbating this underlying embeddedness 37 00:02:11,280 --> 00:02:13,240 Speaker 3: of inflation in the economy. 38 00:02:13,400 --> 00:02:16,560 Speaker 4: So what do you attribute that an inability to balance 39 00:02:16,600 --> 00:02:20,280 Speaker 4: both at once over focusing on the inflation side of 40 00:02:20,320 --> 00:02:22,600 Speaker 4: the mandate, and what does that tell us about the 41 00:02:22,600 --> 00:02:24,880 Speaker 4: path forward here? You mentioned kind of the risks going 42 00:02:24,919 --> 00:02:27,720 Speaker 4: forward when it comes to the labor market. What confidence 43 00:02:27,720 --> 00:02:30,120 Speaker 4: should we have in the Fed's capacity to again balance 44 00:02:30,160 --> 00:02:31,959 Speaker 4: both of these things going forward, as the labor market 45 00:02:32,000 --> 00:02:34,360 Speaker 4: becomes something that it seems understandably is going to attract 46 00:02:34,400 --> 00:02:35,200 Speaker 4: much more of their attention. 47 00:02:35,400 --> 00:02:36,040 Speaker 5: Well, it's a. 48 00:02:35,960 --> 00:02:37,679 Speaker 3: Delicate balance, So I don't want to say this is 49 00:02:37,720 --> 00:02:39,840 Speaker 3: an easy job by any means. I think they're doing 50 00:02:39,880 --> 00:02:42,080 Speaker 3: the best that they can. But I do think that 51 00:02:42,120 --> 00:02:45,359 Speaker 3: the fed's focus should be and should have been, more 52 00:02:45,400 --> 00:02:49,239 Speaker 3: fervently on inflation. And now at this point that window 53 00:02:49,280 --> 00:02:53,800 Speaker 3: of opportunity is closing because the economy is losing some momentum, 54 00:02:53,840 --> 00:02:57,320 Speaker 3: the labor market is losing some momentum, and the focus 55 00:02:57,360 --> 00:03:01,240 Speaker 3: now is shifting, and that's going to I think retard 56 00:03:01,560 --> 00:03:05,840 Speaker 3: or in some cases maybe even completely outright remove the fedsibility. 57 00:03:05,960 --> 00:03:08,480 Speaker 2: Can we can we go NERD report? 58 00:03:08,600 --> 00:03:08,799 Speaker 6: Yeah? 59 00:03:09,880 --> 00:03:16,160 Speaker 2: On a Slavsky Hicksian income substitution effect. I'm screaming that 60 00:03:16,240 --> 00:03:19,639 Speaker 2: what we're seeing is a massive income effect of all 61 00:03:19,680 --> 00:03:23,120 Speaker 2: of American economics right now, which will be a decline 62 00:03:23,320 --> 00:03:26,480 Speaker 2: in our purchasing power. Do we see that now? 63 00:03:26,800 --> 00:03:27,440 Speaker 5: Absolutely? 64 00:03:27,720 --> 00:03:31,760 Speaker 3: Remember the consumption data that we're seeing, while still somewhat positive, 65 00:03:31,840 --> 00:03:34,960 Speaker 3: somewhat stable, is not cost adjusted. So when we talk 66 00:03:35,000 --> 00:03:38,560 Speaker 3: about a four percent retail sales number, we're not adjusting 67 00:03:38,640 --> 00:03:41,960 Speaker 3: for buying twelve apples for one dollar or one apple 68 00:03:42,000 --> 00:03:45,080 Speaker 3: for twelve dollars. Consumers are still out in the marketplace. 69 00:03:45,120 --> 00:03:48,200 Speaker 3: They're still spending. There's still the backbone to the US economy, 70 00:03:48,640 --> 00:03:51,720 Speaker 3: but we're getting there less for our money. Absolutely, we're 71 00:03:51,760 --> 00:03:53,160 Speaker 3: taking home Lis just. 72 00:03:53,120 --> 00:03:55,560 Speaker 2: Brilliant doctor pigs with us. 73 00:03:55,920 --> 00:03:58,760 Speaker 5: You were at n y U, Right at Northwestern Northwestern? 74 00:03:58,760 --> 00:04:01,240 Speaker 2: Excuse me started with an N. I could remember which 75 00:04:01,240 --> 00:04:06,480 Speaker 2: a Northwestern football New York University ball? Right, Okay, I 76 00:04:06,520 --> 00:04:10,520 Speaker 2: got a disinflationary report this morning. If I get the 77 00:04:10,560 --> 00:04:16,279 Speaker 2: same view tomorrow with CPI, doesn't it scream fifty beeps 78 00:04:16,440 --> 00:04:18,000 Speaker 2: and check a lot of boxes. 79 00:04:18,480 --> 00:04:21,159 Speaker 3: I don't think it screams fifty basis points. I think 80 00:04:21,200 --> 00:04:25,480 Speaker 3: it screams the Fed can cut policy by twenty five 81 00:04:25,520 --> 00:04:28,520 Speaker 3: basis points. But remember, we're still talking about an elevated 82 00:04:28,520 --> 00:04:33,560 Speaker 3: inflationary environment. One report getting US closer to two percent 83 00:04:34,080 --> 00:04:36,440 Speaker 3: does not remove the thread of inflation, and I would 84 00:04:36,520 --> 00:04:39,039 Speaker 3: argue that the risk of inflation still remains to the 85 00:04:39,120 --> 00:04:41,200 Speaker 3: upside if we look out to the end of the 86 00:04:41,279 --> 00:04:44,640 Speaker 3: year and the growth profiles higher than expecting. Right, consumers 87 00:04:44,680 --> 00:04:48,160 Speaker 3: pick up spending in that key holiday spending season, businesses 88 00:04:48,200 --> 00:04:51,359 Speaker 3: start passing along terarf related costs more than they have 89 00:04:51,960 --> 00:04:54,360 Speaker 3: over the past couple of months. We're going to see 90 00:04:54,360 --> 00:04:56,719 Speaker 3: inflation pick up and that's going to remove the Fed's 91 00:04:56,720 --> 00:04:58,520 Speaker 3: ability to cut race Northwestern. 92 00:04:58,560 --> 00:05:00,840 Speaker 2: You've got the magic of Robert Gordon in others. I mean, 93 00:05:00,880 --> 00:05:03,880 Speaker 2: there's a huge historical bent there. Have we seen this 94 00:05:04,080 --> 00:05:06,400 Speaker 2: before or is this original charactory? 95 00:05:06,880 --> 00:05:10,360 Speaker 3: I think this is a new type of market. We've 96 00:05:10,440 --> 00:05:14,000 Speaker 3: never seen this environment post COVID with a forty percent 97 00:05:14,080 --> 00:05:16,880 Speaker 3: explosion in the money supply, with this type of change 98 00:05:16,920 --> 00:05:20,039 Speaker 3: in fiscal policy coming down the pipeline. This is a 99 00:05:20,080 --> 00:05:22,479 Speaker 3: new type of market that is trying to absorb these 100 00:05:22,600 --> 00:05:25,640 Speaker 3: massive inflationary pressures that have been in place for a 101 00:05:25,720 --> 00:05:28,600 Speaker 3: number of reasons over a number of years, and the 102 00:05:28,640 --> 00:05:33,520 Speaker 3: Fed continues to seem tolerant of above target inflation. 103 00:05:33,720 --> 00:05:36,560 Speaker 2: David, the revisions come out and they too show a 104 00:05:36,640 --> 00:05:40,080 Speaker 2: modest disinflation as well. That'll put a little fire on this. 105 00:05:40,720 --> 00:05:44,160 Speaker 4: We're hearing the Interactive Broker's studio. You're in Chicago. What's 106 00:05:44,200 --> 00:05:46,599 Speaker 4: the reaction to this? On Sathless Salle Street in Chicago, 107 00:05:46,640 --> 00:05:48,560 Speaker 4: Austin gools Be telling us last week he wanted to 108 00:05:48,560 --> 00:05:50,719 Speaker 4: see these numbers. These numbers were going to be important 109 00:05:50,720 --> 00:05:53,719 Speaker 4: for him as he makes his way to Washington next week. 110 00:05:53,760 --> 00:05:56,200 Speaker 4: How does this do you think change his sense of 111 00:05:56,240 --> 00:05:57,479 Speaker 4: the calculus here going forward? 112 00:05:57,560 --> 00:05:58,800 Speaker 3: Well, I think the Fed is going to look at 113 00:05:58,839 --> 00:06:02,000 Speaker 3: these figures and say there's it's not a material upside 114 00:06:02,160 --> 00:06:05,640 Speaker 3: risk to inflation, at least not this month. And given 115 00:06:05,720 --> 00:06:08,680 Speaker 3: the material decline in the labor market data that we've 116 00:06:08,720 --> 00:06:11,760 Speaker 3: seen as of late, the three month average right round 117 00:06:11,920 --> 00:06:15,320 Speaker 3: thirty thousand jobs per month, that's going to be enough 118 00:06:15,360 --> 00:06:18,280 Speaker 3: to justify a rate cut next week. I don't think 119 00:06:18,320 --> 00:06:21,279 Speaker 3: it's enough to justify fifty basis points, but twenty five 120 00:06:21,360 --> 00:06:24,640 Speaker 3: basis points, with possibly a couple descents in favor of 121 00:06:24,680 --> 00:06:27,599 Speaker 3: a larger cut. But going forward, it's going to continue 122 00:06:27,600 --> 00:06:30,440 Speaker 3: to depend on the evolution of the employment data and 123 00:06:30,640 --> 00:06:33,599 Speaker 3: the inflation side of the equation, which has far from 124 00:06:33,720 --> 00:06:35,239 Speaker 3: been satisfied at this point. 125 00:06:35,400 --> 00:06:40,640 Speaker 2: You are celebrating with your time off a new issuance 126 00:06:40,680 --> 00:06:44,760 Speaker 2: of offspring as well, and there's a whole affinity here 127 00:06:44,880 --> 00:06:47,760 Speaker 2: to Julie Andrews and the sound of music. Are there 128 00:06:47,800 --> 00:06:50,400 Speaker 2: going to be seven Lindsay's I mean, are we heading 129 00:06:50,520 --> 00:06:51,560 Speaker 2: for seven. 130 00:06:51,400 --> 00:06:53,360 Speaker 5: K three is where we're going to cap it. 131 00:06:53,440 --> 00:06:56,120 Speaker 4: I think that's the case. Just to lead a governess 132 00:06:56,160 --> 00:06:57,159 Speaker 4: and a lot more. 133 00:06:57,040 --> 00:07:01,280 Speaker 2: Help Julie Andrews to show up, but either careful. 134 00:07:00,960 --> 00:07:04,920 Speaker 3: Of those of Childcares is going on things. 135 00:07:05,279 --> 00:07:08,600 Speaker 5: That's a real no no, it's it's doubled. 136 00:07:09,680 --> 00:07:14,320 Speaker 2: To congratulations from all of us within Lindsay Jason really 137 00:07:14,360 --> 00:07:18,440 Speaker 2: really appreciated. Doctor pigs is with Steve Wall Stay with us. 138 00:07:18,440 --> 00:07:21,680 Speaker 2: More from Bloomberg Surveillance coming up after this. 139 00:07:28,920 --> 00:07:32,520 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 140 00:07:32,560 --> 00:07:35,720 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 141 00:07:35,800 --> 00:07:39,480 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 142 00:07:39,640 --> 00:07:41,080 Speaker 1: watch us live on YouTube. 143 00:07:41,480 --> 00:07:45,120 Speaker 2: Nick Ackerman joins us, now starting his career in the 144 00:07:45,160 --> 00:07:49,360 Speaker 2: depth of Watergate, but far more than that, working in 145 00:07:49,600 --> 00:07:53,080 Speaker 2: corporate law in fraud. We are honored he could be 146 00:07:53,120 --> 00:07:56,120 Speaker 2: with us today. David Girl, why don't you bring in 147 00:07:56,160 --> 00:07:57,640 Speaker 2: the esteem mister Ackerman? 148 00:07:57,840 --> 00:08:00,440 Speaker 4: Well, Nick, great to speak with you, and I took 149 00:08:00,480 --> 00:08:01,880 Speaker 4: your council quite a bit over the course of the 150 00:08:01,920 --> 00:08:04,520 Speaker 4: first Trump administration on all matter of legal issues when 151 00:08:04,560 --> 00:08:06,280 Speaker 4: I was at another network. It's great to speak with 152 00:08:06,320 --> 00:08:10,000 Speaker 4: you once again. You're another year. Let's secret, it's about traitor. 153 00:08:11,440 --> 00:08:16,360 Speaker 4: All of this on two words for cause. Help us 154 00:08:16,400 --> 00:08:18,640 Speaker 4: understand here the case that Lisa Cook and her attorney, 155 00:08:18,680 --> 00:08:21,000 Speaker 4: Aviy Lowell are trying to make here, and the difficulty 156 00:08:21,040 --> 00:08:22,840 Speaker 4: of proving that as we get to the appeal stage 157 00:08:22,840 --> 00:08:24,920 Speaker 4: of this, maybe all the way up to the Supreme Court. 158 00:08:26,000 --> 00:08:30,160 Speaker 7: Well, it's not that difficult. Actually, for cause on the 159 00:08:30,280 --> 00:08:33,560 Speaker 7: judge in the District Court interpreted that to me, and 160 00:08:33,640 --> 00:08:36,920 Speaker 7: it has to be something some kind of malfeasance during 161 00:08:36,960 --> 00:08:40,520 Speaker 7: the time that Lisa Cook was actually serving on the 162 00:08:40,520 --> 00:08:44,559 Speaker 7: Federal Reserve Board. She went through the legislative history, looked 163 00:08:44,600 --> 00:08:48,840 Speaker 7: at the what was intended in the Amendment to the 164 00:08:48,880 --> 00:08:52,720 Speaker 7: Federal Reserve Act back in nineteen thirty five. I looked 165 00:08:52,720 --> 00:08:55,520 Speaker 7: at the fact that what Congress was concerned about was 166 00:08:55,600 --> 00:08:59,360 Speaker 7: malfeasance in office. So as a matter of law, she 167 00:08:59,559 --> 00:09:03,040 Speaker 7: found that four cause can only relate to the time 168 00:09:03,120 --> 00:09:08,079 Speaker 7: period that Lisa Cook was in office, and this all 169 00:09:08,440 --> 00:09:12,920 Speaker 7: allegedly occurred prior to her appointment as a Federal Reserve 170 00:09:13,000 --> 00:09:13,680 Speaker 7: Board member. 171 00:09:14,160 --> 00:09:16,840 Speaker 4: Nick, you know, well, there are many of these agencies 172 00:09:16,880 --> 00:09:20,079 Speaker 4: that have some degree of independence from the administration or 173 00:09:20,120 --> 00:09:23,079 Speaker 4: from Congress in Washington. The Supreme Court is should a 174 00:09:23,120 --> 00:09:25,400 Speaker 4: decision a few months back in which it noted that 175 00:09:25,440 --> 00:09:28,880 Speaker 4: the fens independence is a unique one and a special one. 176 00:09:29,280 --> 00:09:32,080 Speaker 4: How is that going to shape what happens here going forward? 177 00:09:32,240 --> 00:09:33,679 Speaker 4: If this does in fact make its way to the 178 00:09:33,720 --> 00:09:36,600 Speaker 4: Supreme Court, how will that color the decision that those 179 00:09:36,679 --> 00:09:37,640 Speaker 4: nine justices made. 180 00:09:38,480 --> 00:09:41,560 Speaker 7: Oh, I think that's the bottom line. The fact that 181 00:09:41,600 --> 00:09:43,800 Speaker 7: the Supreme Court, I think it was in Wilcox has 182 00:09:43,840 --> 00:09:48,040 Speaker 7: already said that it was essentially dicta in another decision, 183 00:09:48,480 --> 00:09:51,600 Speaker 7: but I think everyone agrees, and the District Court opinion 184 00:09:51,880 --> 00:09:56,800 Speaker 7: made a very strong case for the notion that Congress's 185 00:09:56,880 --> 00:10:00,920 Speaker 7: intention in creating the Federal Reserve Board, well over one 186 00:10:00,960 --> 00:10:04,720 Speaker 7: hundred years ago at this point, was done in order 187 00:10:04,760 --> 00:10:09,000 Speaker 7: to keep it independent from the ongoing politics of the nation. 188 00:10:09,200 --> 00:10:11,680 Speaker 7: The fact that the person is appointed to a fourteen 189 00:10:11,760 --> 00:10:15,760 Speaker 7: year term, the fact that it was only a person 190 00:10:15,800 --> 00:10:21,520 Speaker 7: could only be removed for cause that really, I think 191 00:10:21,640 --> 00:10:24,200 Speaker 7: is going to color this straight up through. 192 00:10:24,800 --> 00:10:27,520 Speaker 2: Nick I had a hockey injury during Watergate, and I 193 00:10:27,600 --> 00:10:30,880 Speaker 2: was flat on my back that summer where we leisurely 194 00:10:30,960 --> 00:10:34,800 Speaker 2: went through meetings in Sammervan and Howard Baker and all 195 00:10:34,840 --> 00:10:37,400 Speaker 2: the rest of it. Those days are gone. Now we 196 00:10:37,440 --> 00:10:39,439 Speaker 2: want to be at the Supreme Court in three and 197 00:10:39,520 --> 00:10:43,400 Speaker 2: a half days. Nick Ackerman, how has our law changed 198 00:10:43,800 --> 00:10:47,120 Speaker 2: because we're so damn in a rush? 199 00:10:47,200 --> 00:10:50,120 Speaker 7: Well, I think it's the Supreme Court with their docket this. 200 00:10:50,480 --> 00:10:56,560 Speaker 7: I mean they decide things on stays very rapidly without 201 00:10:56,559 --> 00:11:00,199 Speaker 7: full briefing. I mean it just is not right. Get 202 00:11:00,240 --> 00:11:03,400 Speaker 7: the Watergate thing with the repeal on the tapes went 203 00:11:03,520 --> 00:11:06,920 Speaker 7: very quickly. The whole thing occurred within a seven month period, 204 00:11:07,200 --> 00:11:10,480 Speaker 7: which in terms of normal litigation was really fast. But 205 00:11:10,600 --> 00:11:14,080 Speaker 7: today people are running up to the Supreme Court immediately. 206 00:11:14,120 --> 00:11:17,640 Speaker 7: In the shadow docket that the Supreme Court has fostered 207 00:11:18,280 --> 00:11:22,920 Speaker 7: allows for instant opinions without really a good opinion, not 208 00:11:23,040 --> 00:11:24,760 Speaker 7: a substantial. 209 00:11:24,240 --> 00:11:27,880 Speaker 2: How does the Chief Justice defend the institution and the 210 00:11:27,920 --> 00:11:31,560 Speaker 2: remainder of the Roberts term, the Roberts era. 211 00:11:32,840 --> 00:11:35,520 Speaker 7: I think it's very difficult because when you're not actually 212 00:11:35,559 --> 00:11:40,560 Speaker 7: writing full opinions, explaining your reasoning, giving both sides an 213 00:11:40,559 --> 00:11:43,280 Speaker 7: opportunity to put in a full briefing. There's a reason 214 00:11:43,320 --> 00:11:46,080 Speaker 7: for all of that. It's so that these issues, which 215 00:11:46,120 --> 00:11:50,559 Speaker 7: are very important can be decided in a normal course 216 00:11:50,880 --> 00:11:55,120 Speaker 7: where everybody has a chance to actually put best foot forward. 217 00:11:55,520 --> 00:11:57,480 Speaker 2: One final question. I got to get this in Michael 218 00:11:57,480 --> 00:11:59,640 Speaker 2: Barr's Waiting for the News with mister Ackerman. This is 219 00:11:59,640 --> 00:12:05,360 Speaker 2: too how political our appeals courts because so and so 220 00:12:05,480 --> 00:12:07,479 Speaker 2: appointed this judge or that judge. 221 00:12:08,960 --> 00:12:11,520 Speaker 7: I think they come down to being very political in 222 00:12:11,559 --> 00:12:14,200 Speaker 7: the sense that this was not something that we looked 223 00:12:14,240 --> 00:12:19,640 Speaker 7: at back during the days of Watergate. There are judges 224 00:12:19,679 --> 00:12:23,240 Speaker 7: that are appointed specifically because they wrote particular articles on 225 00:12:23,280 --> 00:12:26,840 Speaker 7: an issue that appeals to the president. I think they're 226 00:12:26,880 --> 00:12:30,000 Speaker 7: much more political than they were, and certainly the Supreme 227 00:12:30,040 --> 00:12:32,320 Speaker 7: Court comes across now. 228 00:12:32,320 --> 00:12:35,000 Speaker 2: As David said at the beginning of this conversation, we're 229 00:12:35,040 --> 00:12:37,840 Speaker 2: just thrilled in hunted you could be with us. Nick Eckerman, 230 00:12:38,000 --> 00:12:41,200 Speaker 2: thank you so much for giving us needed perspective here 231 00:12:41,600 --> 00:12:45,680 Speaker 2: among amidst this legal moment. I should say, stay with us. 232 00:12:45,880 --> 00:12:49,160 Speaker 2: More from Bloomberg Surveillance coming up after this. 233 00:12:56,360 --> 00:12:59,920 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 234 00:13:00,080 --> 00:13:03,559 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Apple, 235 00:13:03,600 --> 00:13:06,960 Speaker 1: Karplay and Android Otto with the Bloomberg Business app, or 236 00:13:07,080 --> 00:13:08,160 Speaker 1: watch us live on. 237 00:13:08,120 --> 00:13:11,480 Speaker 2: YouTube the late Vince Ferrell, who I abdored. He was 238 00:13:11,520 --> 00:13:14,360 Speaker 2: on Wall Street Week with lu Lu Kaiser. Vince Ferrell 239 00:13:14,360 --> 00:13:17,480 Speaker 2: and I used to be in tears laughing about how 240 00:13:17,520 --> 00:13:21,520 Speaker 2: many kids we were still paying their iPhones for. Here 241 00:13:21,559 --> 00:13:25,240 Speaker 2: to brief us this morning, tone down with a new 242 00:13:25,240 --> 00:13:27,960 Speaker 2: Pittsburgh Pirates cap is Dan Ives. For those of you 243 00:13:28,040 --> 00:13:31,040 Speaker 2: on radio, you're lucky. What's the p on your hat? 244 00:13:31,120 --> 00:13:34,520 Speaker 8: It's Arnold Palmer had from arn Palmer torn him big, 245 00:13:34,559 --> 00:13:35,640 Speaker 8: big arma Palmer fan. 246 00:13:35,760 --> 00:13:37,800 Speaker 2: Let's get this out of the way. You signed as 247 00:13:37,840 --> 00:13:41,880 Speaker 2: a chairman of a crypto thing this week. Explain what 248 00:13:41,920 --> 00:13:43,680 Speaker 2: the game is you're doing there? Yep. 249 00:13:44,080 --> 00:13:46,760 Speaker 8: So you know we announced that I'm gonna be chairman 250 00:13:46,840 --> 00:13:50,160 Speaker 8: of EKO and a KO. You know is you know 251 00:13:50,400 --> 00:13:52,800 Speaker 8: when you think about Sam Alman in the build out 252 00:13:52,840 --> 00:13:56,560 Speaker 8: of World, what Dave essentially done is it's really gonna 253 00:13:56,600 --> 00:14:02,120 Speaker 8: be the infrastructure authentic keys for AI in the future. 254 00:14:02,640 --> 00:14:04,719 Speaker 8: And you know, I was a huge believer in this. 255 00:14:04,920 --> 00:14:06,640 Speaker 8: You know, I'm not taking this on just for any 256 00:14:06,679 --> 00:14:08,640 Speaker 8: crypto equity in This. 257 00:14:10,800 --> 00:14:13,439 Speaker 2: Is a rasearch channelist. This is a sidecard deal. 258 00:14:13,679 --> 00:14:17,079 Speaker 8: Yeah, this is this is a total separate initiative. Uh, 259 00:14:17,200 --> 00:14:20,120 Speaker 8: you know, total separate from my web bush. But but 260 00:14:20,440 --> 00:14:24,360 Speaker 8: Tom factors really into my view of the AI revolution. 261 00:14:24,520 --> 00:14:26,160 Speaker 8: I'm doing this because I think this is going to 262 00:14:26,200 --> 00:14:29,680 Speaker 8: be the fact of standard for really you're going to. 263 00:14:29,680 --> 00:14:32,360 Speaker 2: Take a minority interest in perplexity. If they called you, 264 00:14:33,400 --> 00:14:33,920 Speaker 2: we need. 265 00:14:34,520 --> 00:14:36,760 Speaker 6: As long as it comes through Keen. 266 00:14:39,920 --> 00:14:42,880 Speaker 4: Earlier this week was a corrugated packaging company. 267 00:14:43,360 --> 00:14:47,360 Speaker 8: It basically is a treasury vehicle for world Coin in 268 00:14:47,440 --> 00:14:49,840 Speaker 8: terms of what we've done, and that's why I think. 269 00:14:49,840 --> 00:14:52,240 Speaker 8: You know, receptions obviously been great. You know, we raised 270 00:14:52,240 --> 00:14:56,400 Speaker 8: capital and closed that this morning. Okay, it was super 271 00:14:56,400 --> 00:14:59,800 Speaker 8: exciting to just put another you want to talk. 272 00:14:59,720 --> 00:15:02,320 Speaker 4: Now this appears, which is like Worldcoin, it's a means 273 00:15:02,320 --> 00:15:05,400 Speaker 4: of authentication. You have your iris scane to know that 274 00:15:05,440 --> 00:15:06,720 Speaker 4: you're the person that you say you are. 275 00:15:06,880 --> 00:15:09,400 Speaker 2: Glad you know, well, okay, that's enough so that there's 276 00:15:09,400 --> 00:15:12,880 Speaker 2: a stor involved to bring the orb for community next time. 277 00:15:13,560 --> 00:15:17,120 Speaker 2: What did mag five learn from the Oracle pop last night? 278 00:15:17,760 --> 00:15:21,080 Speaker 8: This AI party, it's ten pm going to four am. 279 00:15:21,120 --> 00:15:24,440 Speaker 8: I mean, the point is the infrastructure was that's gonna 280 00:15:24,440 --> 00:15:26,920 Speaker 8: be historic quarter when you look at work and it 281 00:15:27,000 --> 00:15:30,120 Speaker 8: shows the type of cap backs we're seeing and the 282 00:15:30,240 --> 00:15:31,560 Speaker 8: use cases are exploding. 283 00:15:32,600 --> 00:15:34,800 Speaker 6: We've talked about so much here in the Change My Life. 284 00:15:35,000 --> 00:15:36,480 Speaker 2: I mean as simple as that. 285 00:15:36,720 --> 00:15:41,480 Speaker 8: Look and the reality is anyone that thinks hype not real. 286 00:15:42,000 --> 00:15:45,480 Speaker 8: That oracle number is a validation. That's a drop the 287 00:15:45,640 --> 00:15:50,520 Speaker 8: mic from Saffra and Ellison. That shows to me what's 288 00:15:50,560 --> 00:15:52,440 Speaker 8: going to happen the rest attack and it ze Brahmin. 289 00:15:52,560 --> 00:15:54,440 Speaker 2: Did we have a drop the mic moment with mister 290 00:15:54,480 --> 00:15:57,640 Speaker 2: Cook yesterday? I tuned in for twelve seconds. It's so manipulated. 291 00:15:57,920 --> 00:16:00,440 Speaker 2: I can't watch it. You and had Ludlow saw were 292 00:16:00,480 --> 00:16:01,920 Speaker 2: your thumbs up, like Gene Mounster. 293 00:16:02,400 --> 00:16:06,000 Speaker 8: Look, it's a thumbs up relative to I think expectations. 294 00:16:06,080 --> 00:16:08,480 Speaker 8: Our view here is that the elf in the room 295 00:16:08,520 --> 00:16:10,040 Speaker 8: continues to be as we talk about AI. 296 00:16:10,200 --> 00:16:13,680 Speaker 6: But I do believe with the DOJ Google situation now you. 297 00:16:13,600 --> 00:16:15,840 Speaker 8: Know in the rearview mirror, they will double down then 298 00:16:15,880 --> 00:16:18,800 Speaker 8: and that's going to be ultimately their AI partnership. But 299 00:16:19,200 --> 00:16:22,080 Speaker 8: in terms of the actual iPhone, look, three hundred million 300 00:16:22,120 --> 00:16:24,440 Speaker 8: plus have an upgrade four plus years. The point is 301 00:16:24,480 --> 00:16:27,400 Speaker 8: this is going to be includes John Tucker, including talker. 302 00:16:27,640 --> 00:16:30,200 Speaker 8: So if you think about on a scale one to 303 00:16:30,280 --> 00:16:33,120 Speaker 8: ten from an upgrade cycle. Super cycle being a ten, 304 00:16:33,480 --> 00:16:35,400 Speaker 8: it's probably going to be about an eight point five. 305 00:16:35,720 --> 00:16:37,600 Speaker 8: But what I tell you is the street right now 306 00:16:37,840 --> 00:16:41,360 Speaker 8: numbers are conservative. New York City cab driver or uber 307 00:16:41,440 --> 00:16:44,160 Speaker 8: is still barished on Apple, and I think that to 308 00:16:44,320 --> 00:16:47,480 Speaker 8: me sets it up well as well as you add 309 00:16:47,520 --> 00:16:50,400 Speaker 8: AI and they actually make a big move there. You 310 00:16:50,440 --> 00:16:52,440 Speaker 8: tell about another you know, one hundred dollars per share 311 00:16:52,560 --> 00:16:52,960 Speaker 8: to the stock. 312 00:16:53,040 --> 00:16:55,160 Speaker 4: What does Apple have to do when it comes to AI? 313 00:16:55,280 --> 00:16:57,440 Speaker 4: So I look at Meta for instance, and they pay 314 00:16:57,480 --> 00:16:58,840 Speaker 4: a lot of money. They're hiring a lot of big 315 00:16:58,920 --> 00:17:00,120 Speaker 4: name people. And I think if you look at the 316 00:17:00,160 --> 00:17:02,240 Speaker 4: history of Apple that had a bad luck of bringing 317 00:17:02,240 --> 00:17:06,600 Speaker 4: in outside talent, particularly the executive level, to mix things up, 318 00:17:06,760 --> 00:17:08,800 Speaker 4: to change things around, are they able to do that? 319 00:17:08,800 --> 00:17:10,000 Speaker 4: What do they have to do to kind of re 320 00:17:10,119 --> 00:17:12,639 Speaker 4: establish themselves here at the vanguard of AI. 321 00:17:12,760 --> 00:17:14,920 Speaker 8: Look, there's a better chance of me playing in Beth 322 00:17:15,000 --> 00:17:20,159 Speaker 8: Page Ryder Cup in September then AI innovation happening from Apple, 323 00:17:20,200 --> 00:17:22,240 Speaker 8: and I think that's the issue that they got to 324 00:17:22,280 --> 00:17:23,040 Speaker 8: go outside. 325 00:17:23,480 --> 00:17:24,160 Speaker 6: It has to be good. 326 00:17:24,200 --> 00:17:25,280 Speaker 4: You're a way to make that work. 327 00:17:25,359 --> 00:17:28,880 Speaker 2: Danae with Wedbush with us this morning. David Gerntin can 328 00:17:28,920 --> 00:17:31,560 Speaker 2: good Morning across the nation and the way you listen 329 00:17:31,640 --> 00:17:34,040 Speaker 2: to us on radio good Morning nineties to nine FM 330 00:17:34,400 --> 00:17:37,919 Speaker 2: in Boston, on YouTube and your home at your office. 331 00:17:37,960 --> 00:17:41,280 Speaker 2: Floored by the sign up, Thank you so much, Bloomberg 332 00:17:41,320 --> 00:17:45,200 Speaker 2: podcast Go out to YouTube and subscribe it Bloomberg Podcasts. 333 00:17:45,480 --> 00:17:48,080 Speaker 2: Thank you for your attention to our new dan ives 334 00:17:48,200 --> 00:17:51,159 Speaker 2: like digital. Maybe I should start wearing bright pink. What 335 00:17:51,200 --> 00:17:51,879 Speaker 2: do you think, David? 336 00:17:51,960 --> 00:17:52,480 Speaker 4: I could see that. 337 00:17:52,520 --> 00:17:56,080 Speaker 6: Why don't you continue with mister? I've talked about the 338 00:17:56,200 --> 00:17:58,520 Speaker 6: pink both for I know what. 339 00:17:58,640 --> 00:18:00,400 Speaker 4: The hoodie beneath the jacket would be a good look 340 00:18:00,400 --> 00:18:00,520 Speaker 4: for you. 341 00:18:00,640 --> 00:18:03,080 Speaker 8: I think when I thought Dan I have's clothing, we 342 00:18:03,119 --> 00:18:06,280 Speaker 8: could add potentially a bow tie and it would be called. 343 00:18:07,080 --> 00:18:09,399 Speaker 2: Everything is like two X. You know, it's like for 344 00:18:09,480 --> 00:18:12,240 Speaker 2: little people. What's the name of the company. 345 00:18:12,359 --> 00:18:14,560 Speaker 6: It's snow milk. My cost snow milk. 346 00:18:14,600 --> 00:18:17,080 Speaker 2: They got to make like adult sizes like we we 347 00:18:17,119 --> 00:18:17,879 Speaker 2: have X six X. 348 00:18:18,320 --> 00:18:20,000 Speaker 8: I think we go down the route with a keen 349 00:18:20,080 --> 00:18:22,560 Speaker 8: bow tie. I have been I'm actually advocate. 350 00:18:22,960 --> 00:18:24,280 Speaker 2: Very good David jump in. 351 00:18:24,400 --> 00:18:26,560 Speaker 4: Can I go back to Oracle? I diverted over to 352 00:18:26,560 --> 00:18:29,000 Speaker 4: to appled love to go back to Oracle, what should 353 00:18:29,040 --> 00:18:30,960 Speaker 4: make How quickly they were able to make this this pivot, 354 00:18:31,000 --> 00:18:33,040 Speaker 4: What does it say about sort of the future direction 355 00:18:33,119 --> 00:18:36,800 Speaker 4: of Oracle moving into cloud computing as rapidly as it did, 356 00:18:36,920 --> 00:18:38,520 Speaker 4: as successfully as it did. Certainly when you look at 357 00:18:38,520 --> 00:18:39,080 Speaker 4: the numbers. 358 00:18:38,880 --> 00:18:41,640 Speaker 8: Of guess who's watching course, so you see what they did, 359 00:18:41,800 --> 00:18:45,920 Speaker 8: it's Benioff, it's Adobee, it's software where right now they're 360 00:18:45,920 --> 00:18:47,000 Speaker 8: not the cool kids table. 361 00:18:47,040 --> 00:18:48,560 Speaker 6: I mean, what Oracle has been able to. 362 00:18:48,480 --> 00:18:53,080 Speaker 8: Do because of the stack right it's it's been transformational. 363 00:18:53,400 --> 00:18:56,360 Speaker 8: And I think that more is where we're seeing. Everyone 364 00:18:56,480 --> 00:18:59,040 Speaker 8: wants that. That two to three trillion of cap backs, 365 00:18:59,600 --> 00:19:00,480 Speaker 8: everyone wants it. 366 00:19:00,680 --> 00:19:04,040 Speaker 2: Doug Cass emails in Okay, he's beside himself about the 367 00:19:04,119 --> 00:19:07,360 Speaker 2: Yankees defense. They're averaging like three years a game. I mean, 368 00:19:07,760 --> 00:19:11,040 Speaker 2: it's said Aaron Judge should be at first base, Dan ives. 369 00:19:11,080 --> 00:19:16,119 Speaker 2: Dougcass has a question for you, the backlog dynamics versus 370 00:19:16,160 --> 00:19:19,760 Speaker 2: the accounting on the statements. Is this an accounting issue 371 00:19:19,760 --> 00:19:22,879 Speaker 2: to come not only for Oracle but for other mags 372 00:19:23,000 --> 00:19:27,679 Speaker 2: seven and then there's so much future business that needs 373 00:19:27,720 --> 00:19:30,760 Speaker 2: to adjust in the accounting statement. Is that a risk? 374 00:19:31,359 --> 00:19:34,159 Speaker 6: And I hope Doug's doing well. It's a good question. 375 00:19:34,640 --> 00:19:37,600 Speaker 8: I think there's definitely some normalization that's going to have 376 00:19:37,640 --> 00:19:39,760 Speaker 8: to happen there over the coming quarters. So you got 377 00:19:39,760 --> 00:19:43,119 Speaker 8: to normalize it, you know, from a backlog perspective in 378 00:19:43,200 --> 00:19:46,359 Speaker 8: terms of arr Look, I think the reality is is 379 00:19:46,400 --> 00:19:49,920 Speaker 8: that over the coming quarters, that's where like look for Oracle, 380 00:19:49,960 --> 00:19:51,639 Speaker 8: if you got if you're the amount of stock that 381 00:19:51,680 --> 00:19:53,720 Speaker 8: could go to three P fifty four hundred. You got 382 00:19:53,720 --> 00:19:57,280 Speaker 8: to continue to show this because you as the normalization 383 00:19:57,520 --> 00:20:00,359 Speaker 8: starts to happen, the comps ultimately start taking place. 384 00:20:00,720 --> 00:20:02,360 Speaker 6: You need to continue to see that growth. 385 00:20:02,960 --> 00:20:07,120 Speaker 2: You mentioned Google and uh Gemini, what are they waiting for? 386 00:20:07,640 --> 00:20:10,200 Speaker 8: They were waiting they were waiting for DOJ I mean 387 00:20:10,280 --> 00:20:14,040 Speaker 8: that and now the candleight dinner could happen between soon 388 00:20:14,160 --> 00:20:18,200 Speaker 8: Dar and Cook. And I believe that is Look because 389 00:20:18,280 --> 00:20:21,240 Speaker 8: I truly and we've talked about, if the dog went 390 00:20:21,480 --> 00:20:24,560 Speaker 8: negative toward an Apple Google, then they have no choice 391 00:20:24,560 --> 00:20:26,760 Speaker 8: called perplexity on the red phone and they have to 392 00:20:26,800 --> 00:20:30,200 Speaker 8: do that deal. But now I think they double down. 393 00:20:30,240 --> 00:20:31,200 Speaker 6: The joy they're. 394 00:20:31,040 --> 00:20:33,240 Speaker 2: Waiting for is it literally like just Egos, they have 395 00:20:33,280 --> 00:20:34,320 Speaker 2: to wait a little bit of time. 396 00:20:34,359 --> 00:20:36,119 Speaker 8: I think you wait a little time look. And we 397 00:20:36,160 --> 00:20:39,639 Speaker 8: also know in Cooper Tino there is a part of 398 00:20:39,680 --> 00:20:42,000 Speaker 8: it that runs like a motor vehicle in New Jersey, 399 00:20:42,080 --> 00:20:44,720 Speaker 8: and that's been some of the issue in terms of 400 00:20:44,720 --> 00:20:47,400 Speaker 8: some of the bureaucracy that they're trying to get rid 401 00:20:47,400 --> 00:20:48,680 Speaker 8: of in terms of the red tape. 402 00:20:49,320 --> 00:20:52,919 Speaker 4: Going back to the Oracle numbers, So say sundors tuning 403 00:20:52,960 --> 00:20:57,160 Speaker 4: in to watch Romain and numbers yesterday, or Andy stole 404 00:20:57,240 --> 00:21:00,240 Speaker 4: it up in that Seattle What do they make those 405 00:21:00,240 --> 00:21:02,159 Speaker 4: Oracle numbers? How much are they worried about the progress 406 00:21:02,200 --> 00:21:02,879 Speaker 4: that Oracles made here? 407 00:21:02,880 --> 00:21:05,640 Speaker 8: And how do they I think they actually love seeing 408 00:21:05,720 --> 00:21:08,320 Speaker 8: those numbers because they view it. And that's why, like 409 00:21:08,400 --> 00:21:10,879 Speaker 8: what you see with Google's gc B, it's it's a 410 00:21:10,920 --> 00:21:14,760 Speaker 8: barometer that shows where that's coming. That's why Nadella, he's 411 00:21:14,760 --> 00:21:18,520 Speaker 8: sitting there with the Mimosa right now watching those numbers. 412 00:21:18,640 --> 00:21:20,520 Speaker 2: I mean, and I do you want to mention Oracles 413 00:21:20,520 --> 00:21:23,440 Speaker 2: put their support by in Bloomberg Surveillance. We thank Oracle 414 00:21:23,480 --> 00:21:26,119 Speaker 2: for their support each and every day. What's your single 415 00:21:26,160 --> 00:21:26,600 Speaker 2: best buy? 416 00:21:27,359 --> 00:21:29,520 Speaker 8: I mean to me, single best buy here continues to 417 00:21:29,600 --> 00:21:33,119 Speaker 8: be Microsoft just because of my view of because of 418 00:21:33,280 --> 00:21:37,879 Speaker 8: where the hyperscalers are it's in their backyard. Stock actually 419 00:21:37,880 --> 00:21:40,240 Speaker 8: sold off a little postcord and I think that's one 420 00:21:40,440 --> 00:21:42,280 Speaker 8: they will ultimately join in video. 421 00:21:42,440 --> 00:21:43,639 Speaker 6: What's eventually gonna be there. 422 00:21:43,520 --> 00:21:46,080 Speaker 2: Twenty this year and you say way more. 423 00:21:46,280 --> 00:21:49,040 Speaker 8: Just to we've talked about it's just to beginn We 424 00:21:49,080 --> 00:21:52,639 Speaker 8: are in the second inning of the AI Revolution, going night, 425 00:21:52,840 --> 00:21:55,440 Speaker 8: and we've talked about the party start at nine pms. 426 00:21:55,480 --> 00:21:57,119 Speaker 6: Now ten pm goes to four am. 427 00:21:57,440 --> 00:22:00,320 Speaker 8: On the dance for is Noadella Jensen, pound On tear 428 00:22:00,440 --> 00:22:02,520 Speaker 8: carp and others people. 429 00:22:02,600 --> 00:22:04,760 Speaker 2: The guy who says a romantic life. Let's make it 430 00:22:04,760 --> 00:22:07,280 Speaker 2: clear you just got off the romantic red eye. 431 00:22:07,320 --> 00:22:09,800 Speaker 8: I just got off them, Carol and Tim. Right, Yeah, 432 00:22:09,840 --> 00:22:12,639 Speaker 8: I was there rocking to and actually I went. I 433 00:22:12,680 --> 00:22:18,000 Speaker 8: went from Australia to Huntington Beach to now here with you. 434 00:22:17,920 --> 00:22:21,240 Speaker 4: Guys appreciate that Lafe flat beds as you were talking 435 00:22:21,240 --> 00:22:21,760 Speaker 4: about yesterday. 436 00:22:21,920 --> 00:22:25,119 Speaker 2: But he's a little guy. It's like it's a little guy. No, No, 437 00:22:25,200 --> 00:22:28,400 Speaker 2: the Lafe flat bed works. There's no late flat bed 438 00:22:28,520 --> 00:22:28,760 Speaker 2: for me. 439 00:22:29,000 --> 00:22:30,760 Speaker 8: Yeah, but the problem is that's why you're the one 440 00:22:30,840 --> 00:22:33,080 Speaker 8: that does like the special cabin and emerates. 441 00:22:33,359 --> 00:22:34,040 Speaker 6: So the play. 442 00:22:37,000 --> 00:22:42,520 Speaker 8: The Keen cabin and the whole King shower in the Disclosure. 443 00:22:42,000 --> 00:22:45,600 Speaker 2: Law Premiere Air France. But which ray It's like a 444 00:22:45,680 --> 00:22:46,680 Speaker 2: huge cabin. 445 00:22:46,560 --> 00:22:48,680 Speaker 6: Of course, but you set a higher standard. 446 00:22:48,920 --> 00:22:51,480 Speaker 2: It does. I don't know. I don't know. Some tennis 447 00:22:51,560 --> 00:22:52,800 Speaker 2: player was sitting next to me. 448 00:22:52,880 --> 00:22:58,840 Speaker 6: It's actually it's actually Keyn's whorld. We all pay rent. Jos. 449 00:22:59,080 --> 00:22:59,640 Speaker 6: Thank you for. 450 00:22:59,640 --> 00:23:02,720 Speaker 2: Exploding on whatever your new business transaction is. I still 451 00:23:02,760 --> 00:23:03,359 Speaker 2: don't keet Well. 452 00:23:04,119 --> 00:23:07,200 Speaker 8: Deorb's coming to you soon and I'll bring it next time. Okay, Dan, 453 00:23:07,280 --> 00:23:11,520 Speaker 8: I think that's really small. We'll bring the orban next time. 454 00:23:11,600 --> 00:23:13,119 Speaker 8: Team will get skinned, Dani. 455 00:23:13,280 --> 00:23:15,000 Speaker 2: Thank you so much. I'm gonna sell the show. Dan 456 00:23:15,040 --> 00:23:19,119 Speaker 2: Hights web Bush Securities. Stay with us. More from Bloomberg 457 00:23:19,200 --> 00:23:21,280 Speaker 2: Surveillance coming up after this. 458 00:23:28,520 --> 00:23:32,080 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 459 00:23:32,160 --> 00:23:35,320 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 460 00:23:35,400 --> 00:23:39,040 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 461 00:23:39,200 --> 00:23:40,640 Speaker 1: watch us live on YouTube. 462 00:23:40,680 --> 00:23:43,119 Speaker 2: I'm gonna set this up right now. There was a 463 00:23:43,160 --> 00:23:46,479 Speaker 2: missile attack and Cutter, and my biggest problem with Cutter 464 00:23:46,920 --> 00:23:49,120 Speaker 2: is we really don't know much about it. It's directly 465 00:23:49,240 --> 00:23:52,399 Speaker 2: west of Dubai, sort of in between the Dubai and 466 00:23:52,480 --> 00:23:55,280 Speaker 2: Riod it's his hunk of lands stuck out into the 467 00:23:55,280 --> 00:23:59,360 Speaker 2: Persian Gulf, and David it's mostly expats. It's mostly it's 468 00:23:59,400 --> 00:24:01,720 Speaker 2: such a place used to be in an economy rapt 469 00:24:01,840 --> 00:24:04,959 Speaker 2: on gas and oil that it's not that many Katari's 470 00:24:05,560 --> 00:24:08,520 Speaker 2: and a lot of X pass and about other than that. 471 00:24:09,000 --> 00:24:11,280 Speaker 2: Our knowledge base is they run an airline where you 472 00:24:11,320 --> 00:24:15,240 Speaker 2: see those genormous planes landed on big Jet TVA the Heathrow. 473 00:24:15,720 --> 00:24:16,440 Speaker 2: That's a knowledge. 474 00:24:16,680 --> 00:24:18,639 Speaker 4: And then we get to the broad strokes description of 475 00:24:18,720 --> 00:24:23,640 Speaker 4: the huge, huge news yesterday, huge news Israel in strikes 476 00:24:23,680 --> 00:24:26,600 Speaker 4: trying to take out leadership of hamas in in doa 477 00:24:26,680 --> 00:24:30,560 Speaker 4: and certainly unprecedented and really raising a lot of concern 478 00:24:30,600 --> 00:24:32,080 Speaker 4: throughout the region around the world. We of the President 479 00:24:32,080 --> 00:24:34,600 Speaker 4: of United States saying he was not happy with how 480 00:24:34,640 --> 00:24:37,400 Speaker 4: this had all unfolded. The US apparently was tipped off 481 00:24:37,400 --> 00:24:41,000 Speaker 4: to the attack happening, but very soon before before it did, 482 00:24:41,080 --> 00:24:43,920 Speaker 4: wasn't consulted before all of that. I want to bring 483 00:24:43,920 --> 00:24:46,920 Speaker 4: it down, Leslie Polton Gusman. It foundered Energy Vista also 484 00:24:47,000 --> 00:24:49,640 Speaker 4: a senior non resident felt the Center for Strategic International 485 00:24:49,680 --> 00:24:51,600 Speaker 4: Studies talk more about this and the effects that it's 486 00:24:51,640 --> 00:24:55,240 Speaker 4: having on the region. This comes on the heels of this, 487 00:24:55,240 --> 00:24:59,560 Speaker 4: this OPEC announcement boosting outflows of oil. What does all 488 00:24:59,600 --> 00:25:01,280 Speaker 4: of this mean for the energy market? We have been 489 00:25:01,320 --> 00:25:03,600 Speaker 4: through this conflict now for more than seven hundred days, 490 00:25:03,840 --> 00:25:07,000 Speaker 4: going back to October seventh, and there's been concern all 491 00:25:07,000 --> 00:25:08,639 Speaker 4: the way that this could have a profound impact on 492 00:25:08,840 --> 00:25:11,720 Speaker 4: the energy market. So far it really hasn't. Does this 493 00:25:11,760 --> 00:25:14,760 Speaker 4: stand to change that calculus or the way the energy 494 00:25:14,800 --> 00:25:16,000 Speaker 4: market looks in any way? 495 00:25:16,680 --> 00:25:18,080 Speaker 5: Well, thanks for having me back. 496 00:25:18,840 --> 00:25:22,679 Speaker 9: I think it was most likely an orchestrated attack, and 497 00:25:22,720 --> 00:25:25,560 Speaker 9: as a result, we're not likely to have short term 498 00:25:25,600 --> 00:25:30,040 Speaker 9: market implication, especially for catoric gas and energy and pricing globally, 499 00:25:30,080 --> 00:25:35,600 Speaker 9: because Katar remains one of the world's largest energy exporter. However, 500 00:25:35,760 --> 00:25:39,520 Speaker 9: it's going to have implications for its long term expansion plans. 501 00:25:40,080 --> 00:25:41,880 Speaker 5: Katar is expanding. 502 00:25:41,560 --> 00:25:45,840 Speaker 9: Massively its export capacity in the coming years and has 503 00:25:45,920 --> 00:25:50,560 Speaker 9: not marketed all of it, and this underscores is vulnerability 504 00:25:51,280 --> 00:25:56,000 Speaker 9: because of its location and because of the vulnerability of 505 00:25:56,040 --> 00:25:59,920 Speaker 9: its shipping routes that we've seen over the past two years. 506 00:26:00,040 --> 00:26:00,880 Speaker 5: Since the wars in. 507 00:26:00,840 --> 00:26:04,919 Speaker 9: The Middle Easts have you know, surged from in different 508 00:26:04,920 --> 00:26:05,920 Speaker 9: neighborhood countries. 509 00:26:06,480 --> 00:26:07,600 Speaker 5: We've seen also in Iran. 510 00:26:08,480 --> 00:26:13,760 Speaker 9: Iran attacking Katar in June also an orchestrated attack. So 511 00:26:13,800 --> 00:26:19,600 Speaker 9: I think it really puts in plain sight Qatar's reliabilities. 512 00:26:20,080 --> 00:26:22,239 Speaker 4: Tom laying out again in broad strokes sort of what 513 00:26:22,320 --> 00:26:26,159 Speaker 4: goes on in cutter and let me dig into that 514 00:26:26,200 --> 00:26:27,800 Speaker 4: a bit more. We had the present Nighted States going 515 00:26:27,800 --> 00:26:29,919 Speaker 4: there on this big trip and really playing up the 516 00:26:29,920 --> 00:26:32,440 Speaker 4: fact that it's a source of investment and a place 517 00:26:32,440 --> 00:26:34,240 Speaker 4: that he's really seized on is an important ally, and 518 00:26:34,240 --> 00:26:36,159 Speaker 4: the region of course has the largest military base in 519 00:26:36,280 --> 00:26:38,439 Speaker 4: the US military base in the Middle East as well. 520 00:26:39,040 --> 00:26:42,600 Speaker 4: How do you see that the geopolitics unfolding here kind 521 00:26:42,600 --> 00:26:44,720 Speaker 4: of is playing this huge role here in trying to 522 00:26:44,760 --> 00:26:48,400 Speaker 4: negotiate some sort of solution to that conflict in Gaza. 523 00:26:49,160 --> 00:26:51,360 Speaker 4: They're upset, the US as upset. What does it mean 524 00:26:51,440 --> 00:26:53,359 Speaker 4: just for the broader geopolitical relationships here. 525 00:26:54,040 --> 00:26:58,000 Speaker 9: I think Katar has a very ambiguous geopolitical standing. On 526 00:26:58,000 --> 00:27:01,879 Speaker 9: one hand, it hosts US military base and on the 527 00:27:01,920 --> 00:27:07,280 Speaker 9: other hand, it keeps strong ties with Western enemies such 528 00:27:07,320 --> 00:27:13,960 Speaker 9: as Iran. Ramas, the Husi, the Muslim Brotherhood, and it's 529 00:27:13,960 --> 00:27:15,720 Speaker 9: financing in Europe for example. 530 00:27:17,040 --> 00:27:18,000 Speaker 5: I think what we've. 531 00:27:17,840 --> 00:27:21,440 Speaker 9: Seen right now is Israel really coming out with its 532 00:27:21,560 --> 00:27:29,880 Speaker 9: new military defense strategy since October seven, preemptively deterring any 533 00:27:30,040 --> 00:27:34,520 Speaker 9: threats and trying to accomplish its war goals before the 534 00:27:34,600 --> 00:27:38,320 Speaker 9: markup of the two years anniversary, I mean side anniversary 535 00:27:38,359 --> 00:27:39,120 Speaker 9: of October seven. 536 00:27:39,560 --> 00:27:41,920 Speaker 2: Let me ask the dumb American question, because I am 537 00:27:41,960 --> 00:27:45,199 Speaker 2: the dumb American. Are they on our side? When you 538 00:27:45,240 --> 00:27:48,600 Speaker 2: look at Bahring Cutter Kuwait, you look at shores of 539 00:27:48,640 --> 00:27:52,120 Speaker 2: the Persian Gulf, are those guys are they on our side? 540 00:27:52,280 --> 00:27:53,480 Speaker 5: I think that's the best question. 541 00:27:53,840 --> 00:27:57,760 Speaker 9: And okay, yes, and I'm so happy you asked this 542 00:27:57,880 --> 00:28:01,199 Speaker 9: question because I think eventually there is going to be 543 00:28:01,240 --> 00:28:05,080 Speaker 9: more scrutiny on Katar and they will need to pick 544 00:28:05,080 --> 00:28:09,800 Speaker 9: a side because this ambiguity geopolitically serves them as any 545 00:28:10,480 --> 00:28:16,399 Speaker 9: middle small power. But you know, it's it cannot last 546 00:28:16,520 --> 00:28:19,679 Speaker 9: because there is this rivalry between China and the US 547 00:28:20,119 --> 00:28:24,240 Speaker 9: because there is too much at stake and the economics, 548 00:28:24,320 --> 00:28:27,600 Speaker 9: you know, side of things. So it's definitely a critical 549 00:28:27,680 --> 00:28:29,360 Speaker 9: question for the coming United. 550 00:28:29,160 --> 00:28:32,720 Speaker 2: Airb memorates and complexities of the five tribes. Have Dubai 551 00:28:32,880 --> 00:28:35,720 Speaker 2: have Abu Dhabi? Have they picked a side? 552 00:28:36,280 --> 00:28:39,000 Speaker 9: Not necessarily, But if you look at the Yemen Civil War, 553 00:28:39,080 --> 00:28:42,520 Speaker 9: for example, Katar was definitely not on the southeast side, 554 00:28:42,560 --> 00:28:45,480 Speaker 9: but was on the housy side. And right now you 555 00:28:45,520 --> 00:28:48,480 Speaker 9: have many threats that are coming on the way to 556 00:28:48,520 --> 00:28:51,520 Speaker 9: the US right and Katar is not on the right side. 557 00:28:52,080 --> 00:28:55,400 Speaker 2: Distinction, Folks, Kura knew all that. What she just said 558 00:28:55,600 --> 00:28:58,960 Speaker 2: to me, it's Greek. I'm like, really, continue, David. 559 00:28:59,560 --> 00:29:01,840 Speaker 4: You know we we were talking earlier this week Ian 560 00:29:01,840 --> 00:29:03,840 Speaker 4: Bremer view Ratio Group send out a note talking about 561 00:29:03,840 --> 00:29:06,760 Speaker 4: this kind of reconfiguration of geopolitical alliances, and for so 562 00:29:06,840 --> 00:29:09,560 Speaker 4: long he was talking about g zero and the dissolution 563 00:29:09,680 --> 00:29:14,800 Speaker 4: of kind of alliance of world leaders. Help us understand 564 00:29:14,800 --> 00:29:17,440 Speaker 4: what you saw as you watched the proceedings unfolded in 565 00:29:17,480 --> 00:29:19,440 Speaker 4: Beijing a few days ago. So you had President she 566 00:29:19,560 --> 00:29:22,480 Speaker 4: there with Kim Jong und and you had you had 567 00:29:22,520 --> 00:29:25,960 Speaker 4: a Preme Minister Modi there, Vladimir Putin there as well. 568 00:29:26,120 --> 00:29:28,080 Speaker 4: What is all of that signal to you, particularly from 569 00:29:28,080 --> 00:29:29,760 Speaker 4: the vantage that you have of looking at this through 570 00:29:29,760 --> 00:29:30,320 Speaker 4: the prism of. 571 00:29:30,640 --> 00:29:35,000 Speaker 9: Energy time will tell us if it's a strategic bluff 572 00:29:35,640 --> 00:29:39,680 Speaker 9: or a real deepening of the Joe economic alliance between 573 00:29:39,680 --> 00:29:43,239 Speaker 9: Beijing and Moscow. I think it reminded me some of 574 00:29:43,280 --> 00:29:50,240 Speaker 9: the Cold War statements, you know, preemptive statements, not much detail. 575 00:29:50,480 --> 00:29:52,719 Speaker 9: You know, they haven't agreed on pricing, but they are 576 00:29:52,760 --> 00:29:56,600 Speaker 9: here to come as a splash on the media on 577 00:29:56,640 --> 00:30:00,200 Speaker 9: this you know, international stage and show that they this 578 00:30:00,280 --> 00:30:01,600 Speaker 9: kind of corporation going on. 579 00:30:02,360 --> 00:30:04,760 Speaker 2: Thank you for coming in. I learned a lot that 580 00:30:05,360 --> 00:30:07,080 Speaker 2: you know that was really good. 581 00:30:07,640 --> 00:30:08,000 Speaker 4: Agreed. 582 00:30:08,160 --> 00:30:09,560 Speaker 2: I don't know how you do it. How do you 583 00:30:09,680 --> 00:30:14,600 Speaker 2: know that cutter supported as you do too. You did 584 00:30:14,600 --> 00:30:17,640 Speaker 2: a big take on at some point, Leslie. Thank you, 585 00:30:17,680 --> 00:30:20,200 Speaker 2: thank you, Thank you. Leslie. Paltic Guzman with us with 586 00:30:20,400 --> 00:30:22,160 Speaker 2: Energy Vista as well. 587 00:30:22,520 --> 00:30:27,320 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 588 00:30:27,440 --> 00:30:31,760 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 589 00:30:31,880 --> 00:30:35,080 Speaker 1: seven to ten am Easter and on Bloomberg dot com, 590 00:30:35,240 --> 00:30:39,080 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 591 00:30:39,360 --> 00:30:42,480 Speaker 1: You can also watch us live every weekday on YouTube 592 00:30:42,760 --> 00:30:44,800 Speaker 1: and always on the Bloomberg terminal