WEBVTT - US Flights Cut as Shutdown Drags On; Musk's $1T Tesla Pay Package Approved

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>Good morning, I'm Nathan Hager and I'm Karen Moscow. Here

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<v Speaker 2>are the stories we're following today.

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<v Speaker 3>Karen, we begin with the latest on the government shutdown.

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<v Speaker 3>It is now having an impact in the air. This week,

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<v Speaker 3>the Transportation Department said it would cut ten percent of

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<v Speaker 3>flight capacity across forty major airports to ease the strain

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<v Speaker 3>on the travel system. As of this morning, about seven

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<v Speaker 3>hundred flights are already canceled at the four biggest airlines,

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<v Speaker 3>United American, Delta, and Southwest. Republican Senator Mike rown says

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<v Speaker 3>it doesn't have to be this way.

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<v Speaker 4>This is serious. It's one more step in the wrong

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<v Speaker 4>direction for us. The American people expect us to have

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<v Speaker 4>the aircraft run on time, they expect the trains to

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<v Speaker 4>run on time. They expect us to actually have government operating.

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<v Speaker 3>Republican Senator Mike Rounds appeared on Bloomberg's Balance of Power.

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<v Speaker 3>You can get the full conversation on the Bloomberg podcast

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<v Speaker 3>as channel on YouTube. The top democrat on the House

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<v Speaker 3>Transportation Committee, Rick Larson, is calling on the FA to

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<v Speaker 3>share its risk assessment to ensure the flight cuts aren't

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<v Speaker 3>politically motivated.

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<v Speaker 2>Well, another major story that we're following Nathan involves Elon Musk.

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<v Speaker 2>Tesla's shareholders have approved as one trillion dollar compensation package,

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<v Speaker 2>and again more from Bloomberg Transportation reporter Danny Lee.

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<v Speaker 5>This ultimately means that shareholders have given Elon Musk and

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<v Speaker 5>Tesla their full backing for Musk to do whatever he

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<v Speaker 5>needs to do to drive the company forward. And of

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<v Speaker 5>course we are seeing this transition of Tesla from just

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<v Speaker 5>an EV maker to one that Musk wants to take

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<v Speaker 5>it into robotics, to artificial intelligence and driverless a driverless future.

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<v Speaker 5>So there's a lot of stake here, and of course

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<v Speaker 5>for Musk, he doesn't automatically get this trillion dollars. He

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<v Speaker 5>has a series of very lofty goals and hurdles he

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<v Speaker 5>needs to pass financially in terms of evaluation of and

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<v Speaker 5>also operationally in delivering, for example, twenty million vehicles and

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<v Speaker 5>selling a million robots and driverless cars in order to

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<v Speaker 5>hit some of these extremely stretched goals.

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<v Speaker 2>And Bloomberg Transportation reporter Danny Lee says this is the

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<v Speaker 2>largest payout ever awarded to a corporate leader, and shares

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<v Speaker 2>of Tesla up about one percent this morning, and.

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<v Speaker 3>We're also watching shares of Nvidia this morning care and

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<v Speaker 3>they're up to tenths percent after yesterday's three point seven

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<v Speaker 3>percent sell off. This morning, in Vidia CEO Jensen Wang

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<v Speaker 3>says his company has no plans to ship its Blackwell

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<v Speaker 3>AI chips to China. Huang is in Taiwan this morning.

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<v Speaker 3>He says it's up to China when they would like

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<v Speaker 3>in Vidia products to go back to serve their market. Meanwhile,

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<v Speaker 3>The Information is reporting that the White House has told

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<v Speaker 3>others in the federal government it will not allow in

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<v Speaker 3>Nvidia to sell its latest scaled down AI chips to

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<v Speaker 3>China either.

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<v Speaker 2>Well, Nathan exports from China unexpectedly dropped in October for

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<v Speaker 2>the first time in eight months. They contracted by one

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<v Speaker 2>point one percent in October for a year earlier. Global

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<v Speaker 2>demand failed to offset a slump, and shipments to the

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<v Speaker 2>US begin. More from Bloomberg News Chief Asia correspondent Rosalind Madison.

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<v Speaker 6>Well, there's likely to be quite a lot of volatility

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<v Speaker 6>still going forward. I mean, we've had quite a bit

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<v Speaker 6>of front loading that went on which really propelled experts

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<v Speaker 6>from China through most of this year. Even though we

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<v Speaker 6>do have a truce in trade. We've got big questions

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<v Speaker 6>about whether Donald Trump's tariff stay at all. So for

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<v Speaker 6>a lot of companies and countries, still a fair bit

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<v Speaker 6>of uncertainty, including for China, about what the next six

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<v Speaker 6>months are going to look like.

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<v Speaker 2>And Bloomberg's and Ros Madison says shipments to all nations

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<v Speaker 2>except the US rose three point one percent. That was

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<v Speaker 2>not enough to compensate for the more than twenty five

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<v Speaker 2>percent decline to America.

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<v Speaker 3>Well Kry, the makers of blockbuster weight loss drugs, have

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<v Speaker 3>secured a big deal at the White House. Eli Lilly

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<v Speaker 3>and Nova Nordisk have agreed to slash the prices on

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<v Speaker 3>their popular zep Bound and Wagovi shots in exchange for

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<v Speaker 3>terror relief and wider access to medicare as. They're live

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<v Speaker 3>here on Bloomberg Radio. President Trump made the announcement in

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<v Speaker 3>the Oval Office.

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<v Speaker 7>For years, politicians have talked about making healthcare affordable, but

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<v Speaker 7>my administration is actually doing it. Americans deserve the best

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<v Speaker 7>healthcare in the world, and we're now getting the best

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<v Speaker 7>healthcare at the.

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<v Speaker 3>Lowest price and under the deal with President Trump. The

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<v Speaker 3>prices of with GOVI and zep bound under Medicare will

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<v Speaker 3>be two hundred and forty five dollars a month the

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<v Speaker 3>drugs currently listed more than one thousand. In return, Lillian

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<v Speaker 3>Novo get a three year grace period from upcoming tariffs

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<v Speaker 3>on pharmaceutical companies that don't manufacture in the US. We

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<v Speaker 3>spoke with Novia Nordisk's CEO, Mike Doustarr.

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<v Speaker 8>We are more.

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<v Speaker 9>American than many companies that were born in USA. And

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<v Speaker 9>the reason I say that is that long before many

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<v Speaker 9>American companies started to think of developing and producing their

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<v Speaker 9>raw ingredient in US, we were there doing that.

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<v Speaker 3>Novin Nordisks Mike Dustar, the Danish drugmaker, has pledged billions

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<v Speaker 3>in US investment in putting a four point one billion

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<v Speaker 3>dollar factory expansion that began last year in North Carolina.

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<v Speaker 2>Well, we turned to the markets now, Nathan, where futures

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<v Speaker 2>are higher. After another selloff on Wall Street, the S

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<v Speaker 2>and P five hundred has dropped more than one percent

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<v Speaker 2>twice this week as some of big taxs AI spending

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<v Speaker 2>as spook some investors. David Bianco, as chief investment officer

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<v Speaker 2>at DWS Group, the.

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<v Speaker 10>Valuations are very demanding, yet we understand why and we're

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<v Speaker 10>taking a constructive view on tech and communications and all that,

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<v Speaker 10>but our preferences are our financials, healthcare and electric utilities

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<v Speaker 10>because power is still a really important part of the

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<v Speaker 10>AI story.

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<v Speaker 2>DWS Group's David Bianco the S and P five hundred

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<v Speaker 2>is at fourteen percent so far this year, while the

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<v Speaker 2>Nasdaq is higher by nineteen percent.

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<v Speaker 3>In Europe, care and shares of the owner of British

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<v Speaker 3>Airways are flying lower. IAG says it's all important North

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<v Speaker 3>Atlantic route experienced some weakness in the third quarter and

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<v Speaker 3>that weighed on earnings that missed estimates. The results have

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<v Speaker 3>led the stock to drop the most since April. This morning,

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<v Speaker 3>IAG is down almost seven percent.

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<v Speaker 2>Nathan Comcast, owner of the European pay television service skyes

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<v Speaker 2>and talks to buy ITV's Media on Entertainment unit in

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<v Speaker 2>a deal that would dramatically shake up the UK broadcasting landscape.

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<v Speaker 2>The business to be acquired runs ITV's commercial free to

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<v Speaker 2>air TV channel operations in the UK, as well as

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<v Speaker 2>the ITVX streaming platform. If a deal goes ahead, it

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<v Speaker 2>would leave ITV with its Studios division, which produces shows

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<v Speaker 2>such as Britain's Got Talent and Love Island.

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<v Speaker 3>Well Karen, Apple's streaming service suffered an outage on the

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<v Speaker 3>premiere of its new series Pluribus. Users across the US

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<v Speaker 3>and Canada reported the service crashing from around ten thirty

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<v Speaker 3>Eastern last night, not long after the first two episodes

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<v Speaker 3>of the new drama were made available to stream. Apple

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<v Speaker 3>says the matter was resolved within about an hour and

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<v Speaker 3>a half.

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<v Speaker 2>Well, Nathan, what is the best city in the world

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<v Speaker 2>for the global elite? The answer there would be Dubai.

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<v Speaker 2>According to research by real estate Brooker Sevill's, which ranked

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<v Speaker 2>thirty global cities by their appeal to high net worth individuals,

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<v Speaker 2>Dubai was ranked as the most accommodating location for the

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<v Speaker 2>world's rich due to its tax advantages and strong family infrastructure.

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<v Speaker 2>New York, Singapore, Hong Kong, and Abu Dhabi round out

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<v Speaker 2>the top five. Time now for a look at some

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<v Speaker 2>of the other stories making news in New York and

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<v Speaker 2>around the world, and for that we're joined by Bloomberg's

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<v Speaker 2>Monica Ricks. Monica, Good morning, Good morning, Karen.

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<v Speaker 11>A federal judge has ordered the Trump administration to find

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<v Speaker 11>the money to fully fund snap benefits for November. The

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<v Speaker 11>Trump administration has agreed to pay partial benefits this month

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<v Speaker 11>when judges ruled that it had to use emergency funds,

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<v Speaker 11>but it's now appealing that ruling to pay one hundred percent.

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<v Speaker 11>The Supreme Court has temporarily revived the Trump administration policy

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<v Speaker 11>requiring new passports to reflect a person's sex on their

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<v Speaker 11>birth certificate. Bloomberg's Amy Morris has more from Washington.

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<v Speaker 8>A divided Supreme Court dealt a fresh blow to transgender rights,

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<v Speaker 8>temporarily requiring new passports to reflect the sex and the

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<v Speaker 8>holder's birth certificate. The court's majority wrote that displaying passport

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<v Speaker 8>holders sex at birth does not offend equal protection principles,

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<v Speaker 8>just as Katanji Brown Jackson dissented, writing that the decision

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<v Speaker 8>would force transgender Americans to make a difficult choice between

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<v Speaker 8>using the wrong gender on their passports and risking harassment

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<v Speaker 8>or avoiding activities that require a passport. The Supreme Court

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<v Speaker 8>decision will apply while litigation continues in this case in Washington.

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<v Speaker 8>Amy Morris Bloomberg Radio.

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<v Speaker 11>South Korea's military confirms North Korea has fired a short

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<v Speaker 11>range ballistic missile off its east coast. That launch follows

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<v Speaker 11>new US impost sanctions on some of North Korea's bankers,

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<v Speaker 11>which Pyongyang has condemned as proof of Washington's hostility. In Louisville, Kentucky,

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<v Speaker 11>a vigil was held last night to remember the thirteen

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<v Speaker 11>people killed in a UPS cargo plane crash this week.

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<v Speaker 11>Louisville Mayor Mike Greenberg call the scene horrific.

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<v Speaker 12>We saw the firefighters walking towards bodies that were still

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<v Speaker 12>on the ground with the stretchers.

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<v Speaker 8>It was too painful for me to watch. That was

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<v Speaker 8>the moment that I had to turn away.

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<v Speaker 11>Investigators still don't know what caused that crash, and Texas

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<v Speaker 11>Attorney General Ken Paxson has now asked the federal judge

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<v Speaker 11>for a restraining order against Tayland Hall to stop advertising that.

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<v Speaker 11>In consultation with the doctor tailand All's safe for pregnant

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<v Speaker 11>women and young children to use. The Trump administration has

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<v Speaker 11>claimed it can cause autism and other disorders. The drug

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<v Speaker 11>makers denied it. Global News twenty four hours a day

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<v Speaker 11>and whenever you want it with Bloomberg News Now, I'm

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<v Speaker 11>Monica Rix and this is Bloomberg Karen.

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<v Speaker 2>Thanks Monica. Time now for our Bloomberg Sports update, and

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<v Speaker 2>for that we bring in John stash Hour.

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<v Speaker 12>Thanks down a defensive battle, but again week Ken in

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<v Speaker 12>the NFL, ain't Denver. The Broncos didn't get a first

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<v Speaker 12>down for the first twenty four minutes. They didn't get

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<v Speaker 12>a touchdown till late second quarter. They added a field

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<v Speaker 12>goal late third, and they beat the Raiders ten to seven,

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<v Speaker 12>and Denver at eight and two as the best record

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<v Speaker 12>in the NFL, Broncos have won seven straight. They're five

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<v Speaker 12>and zero at home. Forty one year old Craig Stammen

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<v Speaker 12>named the new manager of the San Diego Padres, is

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<v Speaker 12>a former Padres relief pitcher. The Dodgers picked up the

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<v Speaker 12>ten million dollar option for Max Munsey. That's your Bloomberg

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<v Speaker 12>Sports update.

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<v Speaker 2>Stay with us more from Bloomberg day Break coming up

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<v Speaker 2>after this.

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<v Speaker 1>Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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<v Speaker 1>and around the world on Bloomberg dot Com and the

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<v Speaker 1>Bloomberg Business opp This is Bloomberg Daybreak.

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<v Speaker 8>Good morning. I'm Nathan Hager.

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<v Speaker 3>He's already the world's richest man, and if he plays

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<v Speaker 3>his cards right, he could be the world's first trillionaire.

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<v Speaker 3>Tesla shareholders have overwhelmingly approved a twelve figure pay package

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<v Speaker 3>for the electric vehicles CEO Elon Musk, But for our

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<v Speaker 3>convested CEO, Kathy Wood, it's not just about the evs.

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<v Speaker 7>We think robotaxis.

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<v Speaker 2>He had them at the starting gate as of June

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<v Speaker 2>and now they're rolling out and that AI project is

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<v Speaker 2>well underway.

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<v Speaker 3>That was our co invest CEO and Tesla investor Kathy

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<v Speaker 3>what ahead of the vote at Tesla's annual meeting and

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<v Speaker 3>joining us for more as Bloomberg News Global Autos editor

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<v Speaker 3>Craig Trudell. And Craig really is in a lot of

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<v Speaker 3>ways about the autonomous robotics vision more than the electric vehicles.

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<v Speaker 3>So do we have to start thinking about this company

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<v Speaker 3>is more than just an EV maker?

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<v Speaker 8>Good morning, Yeah, good morning.

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<v Speaker 13>I think that at least is the narrative Musk wants

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<v Speaker 13>out there, and this has been a trend for some

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<v Speaker 13>time where he's been talking more and more about his

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<v Speaker 13>humanoid robots as opposed to his cars. You know, I

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<v Speaker 13>think that the cynic would say that that would probably

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<v Speaker 13>be explained by the fact that the car business has

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<v Speaker 13>been slowing down Bertie dramatically for the company for some

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<v Speaker 13>time now. But you know, in addition to talking up

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<v Speaker 13>the prospects for robots last night. He also talked about

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<v Speaker 13>expanding production of Tesla's vehicles next year, including with the

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<v Speaker 13>cyber Cab, and interestingly, just last week we spoke with

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<v Speaker 13>the chair of the board, Robin Denholm, about the notion

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<v Speaker 13>that while the cyber Cab was designed without pedals or

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<v Speaker 13>a steering wheel, you know that the company has maybe

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<v Speaker 13>some flexibility and some willingness to in the event that

0:12:19.760 --> 0:12:22.080
<v Speaker 13>regulators say, you know what, we're just not ready for

0:12:22.120 --> 0:12:25.200
<v Speaker 13>you to put fully autonomous vehicles on the road. Yet

0:12:25.960 --> 0:12:28.840
<v Speaker 13>she told us that they would be willing to put

0:12:29.280 --> 0:12:32.000
<v Speaker 13>you know, steering wheel and pedals in those cars in

0:12:32.080 --> 0:12:33.120
<v Speaker 13>order to be able to sell them.

0:12:33.480 --> 0:12:36.040
<v Speaker 3>So Craig walk us through some of these benchmarks that

0:12:36.120 --> 0:12:37.920
<v Speaker 3>Elon Musk has to achieve in order to get to

0:12:37.920 --> 0:12:40.320
<v Speaker 3>that trillion dollar level. What's it going to take and

0:12:40.600 --> 0:12:43.520
<v Speaker 3>how high is the bar? Yeah, the bar is very

0:12:43.640 --> 0:12:47.360
<v Speaker 3>high to hit, you know, to get the full payout.

0:12:48.000 --> 0:12:50.720
<v Speaker 3>You know, the the market cap of the company today

0:12:50.760 --> 0:12:53.480
<v Speaker 3>is around one and a half trillion dollars. He would

0:12:53.520 --> 0:12:55.120
<v Speaker 3>need to take it to eight and a half trillion

0:12:55.200 --> 0:12:59.600
<v Speaker 3>to get the full you know slug of shares that

0:12:59.640 --> 0:13:02.960
<v Speaker 3>this pay package includes. But in addition, to that, he

0:13:03.040 --> 0:13:07.160
<v Speaker 3>needs to achieve a series of performance milestones that are

0:13:07.200 --> 0:13:10.880
<v Speaker 3>more operational. So you know, some are on the sort

0:13:10.880 --> 0:13:14.240
<v Speaker 3>of easier side in terms of, you know, twenty million

0:13:14.320 --> 0:13:17.360
<v Speaker 3>vehicles on the road. That sounds like a lot, but

0:13:17.400 --> 0:13:20.720
<v Speaker 3>it's cumulative, and this is a pay package that he's

0:13:20.760 --> 0:13:24.560
<v Speaker 3>eligible to receive over the next decade. The other sort

0:13:24.600 --> 0:13:28.080
<v Speaker 3>of you know, operational targets include adjusted EBIT dial the

0:13:28.080 --> 0:13:30.320
<v Speaker 3>way up to four hundred billion, and this is a

0:13:30.320 --> 0:13:32.440
<v Speaker 3>company that you know is on course for give or

0:13:32.440 --> 0:13:35.080
<v Speaker 3>take about thirteen billion and adjusted EBIT doll this year.

0:13:35.160 --> 0:13:37.680
<v Speaker 3>So we're talking many multiples of what the company is

0:13:37.720 --> 0:13:40.360
<v Speaker 3>earning here and now got about a minute left. Craig

0:13:40.720 --> 0:13:44.800
<v Speaker 3>Elon Musk has won past compensation fights. The company says

0:13:44.800 --> 0:13:47.720
<v Speaker 3>more than seventy five percent of votes cast went his way.

0:13:47.760 --> 0:13:49.520
<v Speaker 3>Should we be surprised by that margin?

0:13:50.360 --> 0:13:52.720
<v Speaker 13>I wasn't surprised. I think, you know, there were some

0:13:52.880 --> 0:13:56.280
<v Speaker 13>major institutional shareholders who have balked at these pay packages

0:13:56.280 --> 0:14:00.800
<v Speaker 13>in the past, but the retail shareholder base, for tests

0:14:00.600 --> 0:14:05.520
<v Speaker 13>is extremely, extremely loyal to Musk, and I think an

0:14:05.520 --> 0:14:08.120
<v Speaker 13>important little bit of context here too is that Musk

0:14:08.160 --> 0:14:12.240
<v Speaker 13>and his brother Kimball's shares counted toward that seventy five percent.

0:14:12.360 --> 0:14:15.520
<v Speaker 13>And so you know, when you consider the fairly substantial

0:14:16.120 --> 0:14:19.800
<v Speaker 13>stake that Musk already has, you know, the sort of

0:14:19.840 --> 0:14:23.640
<v Speaker 13>bar for him to clear fifty percent, you know, was

0:14:24.080 --> 0:14:27.520
<v Speaker 13>not necessarily all that high.

0:14:27.920 --> 0:14:31.360
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