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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg

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Speaker 1: DABA Acurate podcast, available every morning on Apples, Spotify or

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Speaker 1: wherever you listen. It's Tuesday, the twenty sixth of March

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Speaker 1: in London and Caroline Hepka coming up today. Exclusive reporting

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Speaker 1: from Bloomberg uncovers evidence that Elon Musk's Starlink terminals are

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Speaker 1: falling into the wrong hands. Traders bet that the Bank

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Speaker 1: of England will start cutting interest rates before its appeers

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Speaker 1: as inflationary risks ease and Bailey goes dubvish plus. Donald

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Speaker 1: Trump's wealth has risen by four billion dollars and it

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Speaker 1: happened on the same day his business empire was supposed

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Speaker 1: to be in peril like never before. We have the details.

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

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Speaker 1: Bloomberg News investigation is uncovered multiple examples of Starlink terminals

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Speaker 1: being traded and activated illegally in the likes of Russia, Yemen,

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Speaker 1: and Venezuela. Our exclusive reporting has found that these satellite

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Speaker 1: links are being activated in territories where the US company

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Speaker 1: has no agreement to operate. Bloomberg's senior editor, Alan Crawford

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Speaker 1: has been tracing the sales of Starlink terminals.

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Speaker 2: There are many countries around the world where there's no

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Speaker 2: licensing agreement between the government and Starlink, and the trouble

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Speaker 2: is that people are turning to the black market to

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Speaker 2: obtain Starlink devices in away.

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Speaker 1: The work of Alan Crawford and colleagues or across Bloomberg

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Speaker 1: has raised questions about the company's control of a system

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Speaker 1: with clear national security dimensions. SpaceX has not responded to

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Speaker 1: Bloomberg's requests for comment on the investigation. Now, trade is

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Speaker 1: are betting that the Bank of England could beat its

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Speaker 1: European and US peers to interest rate cuts. Money markets

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Speaker 1: have raised wages on easing at its next monetary policy decision,

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Speaker 1: putting the probability of cut in the UK at twenty percent.

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Speaker 1: Bloomberg's James Orcock has more.

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Speaker 3: Britain was supposed to be lagging behind in the rate

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Speaker 3: cut in race, but these words from Bank of England

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Speaker 3: Governor Andrew Bailey as made markets reevaluates.

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Speaker 4: Yeah, we don't have to actually get inflation all the

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Speaker 4: way back to target sustainably to cut rights, for instance.

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Speaker 4: What we have to do is be convinced that it

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Speaker 4: is going to go there. We should act ahead of

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Speaker 4: time in that sense, because we have to be forward looking.

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Speaker 3: He also told the FT rate cuts were in play

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Speaker 3: at future meetings. That shift in tone has markets repositioning

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Speaker 3: the odds of a quarter point rate cuts in May

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Speaker 3: and now double that of the FED or the ECB.

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Speaker 3: It's a big shift, with the BOE having overtaken the

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Speaker 3: other two during the course of this year. In London,

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Speaker 3: James Orcock Bloomberg Radio.

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Speaker 1: The US and UK are accusing state backed Chinese hackers

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Speaker 1: of cyber attacks spanning years and stealing the data of

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Speaker 1: some forty million British voters. American officials charged seven Chinese

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Speaker 1: nationals with attacks on politicians and companies that Washington and

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Speaker 1: allies have linked to present Sijingping's government. Former UK National

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Speaker 1: security advisor Mark Lyle Grant says that formerly accusing China

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Speaker 1: is an important step.

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Speaker 5: The fact they're now calling out China rather than saying

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Speaker 5: we don't know where it's from, or just raising it

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Speaker 5: with the Chinese ambassador privately, I think is a sign

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Speaker 5: of a greater willingness to use intelligence to prevent hostile

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Speaker 5: activity against the UK.

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Speaker 1: So Mark Laya Grant speaking there. Both the US and

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Speaker 1: UK have announced sanctions against two Chinese individuals and a

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Speaker 1: firm in wu Han. China Prime Minister Vishisunak says that

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Speaker 1: the attacks present an epoch defining challenge. Boeing's CEO of

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Speaker 1: four years, Dave Calhoun, is stepping down. According to those

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Speaker 1: familiar with the matter, his departure was spurred by the

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Speaker 1: CEO at the manufacturer's three largest US customers pressuring board

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Speaker 1: members to control its safety crisis. Bloomberg's Guy Johnson says

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Speaker 1: Calhoun's successor will face a number of challenges.

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Speaker 6: The real question now is who could ultimately replace him.

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Speaker 6: He will be there until the end of the year,

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Speaker 6: in some ways as a lame duck CEO. The name

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Speaker 6: that is being floated Larry Culp from GE. But our

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Speaker 6: understanding is that maybe Larry Culp doesn't want the job.

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Speaker 6: Why would he want such a tricky job at such

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Speaker 6: a tricky time, particularly after he has just fixed GE

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Speaker 6: and put it back into a much better place.

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Speaker 1: That was Bloomberg Anca Guy Johnson Berring chairman Larry Kellner

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Speaker 1: will not stand for re election, and Stan Deal, who

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Speaker 1: heads the company's commercial airplane division, is departing immediately Now.

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Speaker 1: Adam Newman has reportedly made an offer to buy the

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Speaker 1: bankrupt company we Work More from Bloomberg's Doug Krisner.

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Speaker 7: Newman as We Work's former CEO. He's also a company

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Speaker 7: co found Five years ago. Newman was ousted by the board,

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Speaker 7: and he's been trying to regain control ever since. The

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Speaker 7: Wall Street Journal says Newman recently submitted an offer to

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Speaker 7: buy the company for more than five hundred million dollars.

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Speaker 7: It wasn't immediately clear how Newman would finance the acquisition.

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Speaker 7: The journal says Newman's lawyer sent a letter to Wei

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Speaker 7: Works Advisors last month saying he was joining with Dan

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Speaker 7: Loebe's hedge fund, Third Point and other investors in exploring

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Speaker 7: a bid. I'm Doug Prisner, Bloomberg Radio.

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Speaker 1: Monday was also a big day for Donald Trump. His

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Speaker 1: fortune hit a record six and a half billion US dollars,

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Speaker 1: and a bond payment of more than five hundred billion

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Speaker 1: dollars was cut by more than half. The former president's

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Speaker 1: social media company, Trump Media and Technology Group, wrapped up

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Speaker 1: to twenty nine month long merger process, so that increased

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Speaker 1: Trump's net worth by more than four billion dollars, adding

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Speaker 1: Trump to the ranks of Bloomberg's Billionaires Index for the

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Speaker 1: very first time. At the same time, a state appeals

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Speaker 1: gave him a lifeline. He was facing a deadline to

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Speaker 1: post a bond of more than five hundred million dollars

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Speaker 1: in a New York fraud lawsuit. The court slashed the

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Speaker 1: sum to one hundred and seventy five million dollars and

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Speaker 1: amount that Trump said he'll cover. The net resulted that

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Speaker 1: for the first time ever, Donald Trump has joined the

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Speaker 1: ranks of the world's wealthiest five hundred people on Bloomberg's

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Speaker 1: Billionaires Index. So those are some of our top stories

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Speaker 1: then for you this morning. Now in a moment, we're

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Speaker 1: going to bring you more on the misuse of Elon

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Speaker 1: Musk's Starlink delivering broadband internet to countries that have no

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Speaker 1: agreement to operate it. But first I saw this on

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Speaker 1: the Bloomberg terminal, And of course I'm always interested in property.

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Speaker 1: Property in London may have become more affordable in the

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Speaker 1: past five years, but homes in England are still eye

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Speaker 1: wateringly expensive if you compare them to earnings, which Bloomberg's

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Speaker 1: Tom Reas and Andrew Atkinson have done for us. I've

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Speaker 1: been looking at the OERNS data and they have found

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Speaker 1: that London homes still costs all almost twelve times earnings.

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Speaker 1: London may have been the worst performing region in England

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Speaker 1: for house prices in twenty twenty three, but it still

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Speaker 1: doesn't stop it being immensely difficult. Kensington and Chelsea in

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Speaker 1: West London have the least affordable homes. The median price

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Speaker 1: paid for home in just that little neighborhood thirty four

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Speaker 1: times average annual earnings. So that story on London property

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Speaker 1: on the Bloomberg terminal for you this morning. Now let's

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Speaker 1: get more on Bloomberg's exclusive reporting that to smuggled kits

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Speaker 1: from Elon Musk's Starlink are falling into the wrong hands.

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Speaker 1: These satellite links are being activated in territories where the

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Speaker 1: company has no agreement to operate, places like Russia, Yemen

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Speaker 1: and Venezuela. It is the subject of today's Big Take.

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Speaker 1: Joining me now to discuss it is our global business

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Speaker 1: reporter Bruce Einhorn. Bruce, good morning. I suppose the first

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Speaker 1: question is how are these unapproved groups and countries actually

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Speaker 1: getting hold of these units.

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Speaker 8: Starlink has over about fifty five hundred I think even

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Speaker 8: more satellites circling the Earth. If you get a dish

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Speaker 8: which you can buy in some location where perhaps it

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Speaker 8: is available, then you can get your dish back into

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Speaker 8: your country where it's not authorized, you can access the signal.

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Speaker 8: There are some countries in the world, the UK, other

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Speaker 8: countries in Europe, the United States, Japan where starlink has

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Speaker 8: a license, But there are many other places in Africa

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Speaker 8: and Asia, Latin America, where Middle East, where the governments

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Speaker 8: have not authorized this, so technically it is illegal to

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Speaker 8: use starlink in those places.

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Speaker 1: Yeah, okay, I mean that these countries, some of them

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Speaker 1: at least have in common the fact that they're at war.

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Speaker 1: How big an issue is this whole idea of using

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Speaker 1: these kits illegally, of smuggling these kits and why do

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Speaker 1: they want the units so much these places?

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Speaker 8: Well, it is very good system. So the appeal of

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Speaker 8: starlink is that you're independent of the cellular network, you're

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Speaker 8: independent of the landline. You can access the Internet via

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Speaker 8: these lower orbit satellites and have high speed access to

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Speaker 8: the Internet, and so it is something that appeals to

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Speaker 8: people in all sorts of places, whether it's in a

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Speaker 8: war zone, say in occupied Ukraine, where the Ukrainian government

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Speaker 8: has said that Russians have been using it, something that

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Speaker 8: Starlink says is not something they've authorized at all, or

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Speaker 8: in other places like Yemen, like Sudan where the infrastructure

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Speaker 8: is just not very good and so suddenly if you've

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Speaker 8: got a starlink terminal, you're independent of that.

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Speaker 1: Yeah, absolutely, your head and shoulders above everybody else. But

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Speaker 1: surely they can be tracked. Can't they just be turned

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Speaker 1: off remotely?

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Speaker 8: That is a question of just what is the ability

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Speaker 8: of SpaceX to turn these off? And SpaceX has said that,

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Speaker 8: uh that for instance, if there's use by Russian forces

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Speaker 8: that that is not something that they authorize, SpaceX has

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Speaker 8: taken action.

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Speaker 4: Uh.

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Speaker 8: In some cases, The question is just how much are

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Speaker 8: they aware of what's going on, because it is something

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Speaker 8: that keeping an eye on all the the unauthorized use

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Speaker 8: is a high task.

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Speaker 7: Yeah.

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Speaker 1: Absolutely so. Then how are starlink and elon Musk responding?

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Speaker 1: Have they responded to these findings this report?

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Speaker 6: We are.

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Speaker 8: They did respond in earlier this year when there were

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Speaker 8: the reports out of out of Ukraine about Russian use.

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Speaker 8: Elon Musk and SpaceX did come and then saying that

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Speaker 8: this is not something that they approve of as far

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Speaker 8: as use of it in places like uh yeah, in Sudan,

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Speaker 8: or even in places like South Africa must birthplace where

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Speaker 8: the government has not authorized it, but yet there is

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Speaker 8: a thriving black market. It's unclear what the company's position

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Speaker 8: is on whether they're obliged to do anything more.

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Speaker 7: Yeah.

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Speaker 1: Absolutely, Bruce, Thank you so much for being with us

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Speaker 1: and for your reporting. Bruce Einhorn's peace, along with his colleagues,

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Speaker 1: is on the Blouemig terminal this morning. Elon Musk's Starling

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Speaker 1: terminals are falling into the wrong hands. The effectiveness is

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Speaker 1: a communication tool makes the satellite internet service a target

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Speaker 1: for a growing trade on the black market. Really fascinating, Bruce.

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Speaker 1: Thanks for being with us, and I know that you'll

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Speaker 1: keep us up to date with any response that we

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Speaker 1: do get, perhaps from Starlink or from Elon Musk or

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Speaker 1: any of the others that we've reported about. Right I's sot.

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Speaker 1: My attention then also to the UK and trade is

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Speaker 1: betting on the Bank of England could be the first

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Speaker 1: major central bank to cut interest rates this year. That's

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Speaker 1: a big shift, isn't it from many a few months

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Speaker 1: ago where mates in the UK were expected to stay

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Speaker 1: high for longer than in the US and in Europe.

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Speaker 1: Garfield Reynolds, our lead for our Asia Markets live coverage,

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Speaker 1: joins us now. Garfield, very good morning to you, thanks

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Speaker 1: for being on radio. Is this more to do than

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Speaker 1: with the weakness of the UK economy than with the

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Speaker 1: Bank of England managing to beat back inflation?

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Speaker 9: Well, I mean there's a bit of both, and certainly

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Speaker 9: one of the paths to taming inflation is to hurt

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Speaker 9: the economy. That's, for example, the attitude taken by New

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Speaker 9: Zealand's central bank governor, who's been quite happy to see

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Speaker 9: a recession, well at least willing to see a recession

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Speaker 9: in order to try and tame inflation. So you know,

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Speaker 9: the Gooe is looking at the potential to cut rates

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Speaker 9: sooner than a lot of people, possibly you're including inside

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Speaker 9: the bank. After all, it was only the last meeting

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Speaker 9: when we had a couple of the Hawks stop voting

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Speaker 9: for rate hikes. So it has been a rapid evolution,

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Speaker 9: and that's because inflation in the UK k has continued

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Speaker 9: to slow down in a way that it hasn't quite

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Speaker 9: done especially in the US, so they don't face as

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Speaker 9: many concerns about lingering inflation.

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Speaker 1: Yeah, although the banking has been concerned about the second

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Speaker 1: round effects, are these now being seen as less of

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Speaker 1: an issue by traders? I mean, why are trade is

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Speaker 1: sort of shifting now?

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Speaker 9: Well, I think because one of the big things was

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Speaker 9: the words we had from Governor Bailey earlier in the

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Speaker 9: program when he was talking about how we don't need

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Speaker 9: to get back to the target before we actually cut

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Speaker 9: rates if we have confident we're going to get there.

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Speaker 9: So that's more open to rate cuts than Chairman Powell

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Speaker 9: has sounded, even than Christine Legarde has sounded, And in particular,

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Speaker 9: I was looking Bloomberg Economics and others have been saying

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Speaker 9: they expect the UK inflation rate to be back at

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Speaker 9: or under the target by about June, and then before

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Speaker 9: that was when they were thinking that rate cuts would come.

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Speaker 9: But if you say you think that inflation will be

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Speaker 9: where it needs to be by June or roundabout or

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Speaker 9: maybe very early in the second half, and Governor Bailey

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Speaker 9: is saying we could cut before we get there, well

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Speaker 9: then you know that does bring in the odds for

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Speaker 9: a May cut, even which would definitely be before anybody

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Speaker 9: else looks likely moving.

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Speaker 1: Okay, speaking of which I mean the Fed is June

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Speaker 1: still the base case. I mean, Friday is going to

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Speaker 1: be awkward. We get both a PC but also jo

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Speaker 1: and Powell is speaking on Friday even though markets are closed.

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Speaker 9: Yeah, the market's being closed, you know, could make for

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Speaker 9: an exciting open to next week once we get going.

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Speaker 9: But it's also the data has been jumping around a bit,

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Speaker 9: you know, in the US, but the Fed has been

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Speaker 9: emphasizing that they still see the path to softer inflation intact,

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Speaker 9: and in particular to some extent, I think they've proved themselves,

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Speaker 9: perhaps against too much of a reaction by the latest

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Speaker 9: dot plots. They stuck with seventy five basis points for

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Speaker 9: this year. They kept their inflation forecasts recently contained, but

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Speaker 9: they also lifted their growth forecasts, So they're kind of

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Speaker 9: forecasting a Goldilock's outcome of okay inflation, okay growth, even

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Speaker 9: if they cut interest rates three times this year. With

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Speaker 9: that being the case, you need to see some pretty

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Speaker 9: extraordinary shifts in the data, and you need to see

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Speaker 9: more than just two or three data points. You probably

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Speaker 9: need to see four or five. So with that again,

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Speaker 9: people are girding themselves for this could be really rock markets.

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Speaker 9: The FED has done their absolute best to set things

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Speaker 9: up so that markets cannot be rocked.

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