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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Blueberg Daybaqut podcast. Good morning, It's Monday,

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Speaker 2: the twelfth of January. I'm Caroline Hepket in London.

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Speaker 3: And I'm Stephen Caroline Brussels. Coming up today, Jerome Powell

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Speaker 3: vows to stand firm as the Federal Reserve is served

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Speaker 3: with subpoenas threatening criminal charges.

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Speaker 2: IRN edges closer to a revolution as reports suggests hundreds

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Speaker 2: of protesters have been killed.

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Speaker 3: Plus a tech transferred tussle. Why the EU and China's

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Speaker 3: feud over chips is close to a breaking point.

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Speaker 4: Let's start with the roundup of our top stories.

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Speaker 3: The Federal Reserve has been served with grand jury subpoenas

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Speaker 3: from the US Justice Department. FED Chair Jerome Powell says

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Speaker 3: the court orders threatened criminal charges related to his testimony

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Speaker 3: about the renovation of the Central Banks headquarters. In a

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Speaker 3: forceful video statement, Powell said the League move was designed

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Speaker 3: to exert pressure on the FED to lower interest rates.

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Speaker 5: No one, certainly not the Chair of the Federal Reserve,

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Speaker 5: is above the law. But this unprecedented action should be

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Speaker 5: seen in the broader context of the administration's threats and

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Speaker 5: ongoing pressure. This new threat is not about my testimony

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Speaker 5: last June or about the renovation of the Federal Reserve buildings.

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Speaker 5: It is not about Congress's oversight rule. The Fed, through

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Speaker 5: testimony and other public disclosures, made every effort to keep

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Speaker 5: Congress informed about the renovation project.

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Speaker 6: Those are pretexts.

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Speaker 5: The threat of criminal charges is a consequence of the

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Speaker 5: Federal Reserve setting interest rates based on our best assessment

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Speaker 5: of what will serve the public, rather than following the

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Speaker 5: preferences of the President.

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Speaker 3: Fad change your own power went on to say that

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Speaker 3: the legal action sets the stage for a battle over

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Speaker 3: whether monetary policy will be based on economic data or

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Speaker 3: directed by political pressure or intimidation. In a brief interview

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Speaker 3: with NBC News on Sunday, President Trump denied knowledge of

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Speaker 3: the US Justice Department's investigation into the Central Bank. The

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Speaker 3: President said he believes that power has quote not very

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Speaker 3: good at the FED, and he's not very good at

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Speaker 3: building buildings.

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Speaker 2: Activists say that more than five hundred people have died

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Speaker 2: so far in the latest waves of protests in Iran.

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Speaker 2: With three weeks of demonstrations, the regime in Tehran is

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Speaker 2: confronting the most serious challenge to its authority in years.

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Speaker 2: The US based Human Rights Activists News Agency says that

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Speaker 2: it's tracking protests in one hundred and eighty six cities

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Speaker 2: across Iran, with an estimated ten thousand people already imprisoned.

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Speaker 2: President Trump says that he is closely monitoring the protests

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Speaker 2: and considering potential military options.

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Speaker 6: We're looking at it very seriously.

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Speaker 1: The military is looking at it, and we're looking at

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Speaker 1: some very strong options.

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Speaker 2: President Trump added that the regime's leaders had reached out

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Speaker 2: for negotiations on Saturday, while Iran's parliamentary speaker, Mohammad Bager

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Speaker 2: Khalibaf has this warning for the US if it chooses

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Speaker 2: to strike the country.

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Speaker 7: Given your explicit admissions regarding your intention to carry out

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Speaker 7: military aggression against Iran within the framework of legitimate self defense,

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Speaker 7: we do not consider ourselves limited to reacting only after

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Speaker 7: an attack occurs, and we will act based on concrete

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Speaker 7: indications of threat.

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Speaker 2: The words of Iran's parliamentary speaker there spoken by a translator.

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Speaker 2: Communications in Iran remain largely cut off, which has made

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Speaker 2: it difficult to track the full scope of the protest movement,

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Speaker 2: and President Trump says that he now plans to speak

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Speaker 2: to Elon Musk about activating his Starlink service to help

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Speaker 2: restore internet access in Iran.

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Speaker 3: Bloomberg has learned that a group of European countries, including

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Speaker 3: Germany in the UK, is discussing plans for a military

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Speaker 3: presence in Greenland to show the US President they're serious

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Speaker 3: about our security. But on Sunday night, the US President

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Speaker 3: insisted that ownership was the key issue.

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Speaker 1: Look, if we don't take Greenland Russia, what China will

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Speaker 1: And I'm not letting that happen. If we don't take

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Speaker 1: Greenland Russia, what China will take Greenland? And I am

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Speaker 1: not gonna let that happen. Yeah, sure, I'd rather loved

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Speaker 1: about it. Make a deal with them, it's easier. But

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Speaker 1: one way or the other, we're going to have Greenland.

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Speaker 4: US President.

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Speaker 3: Out of that, NATO countries need America more than it

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Speaker 3: needs them.

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Speaker 4: For now, Denmark is.

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Speaker 3: Still helping a diplomatic trip to Washington this week can

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Speaker 3: cam Trump. Rasmus Yolov, who chairs the Danish Parliament's Defense committee,

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Speaker 3: says the American plans don't work for Greenlanders.

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Speaker 6: They do not want to become Americans. They are not

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Speaker 6: for sale.

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Speaker 8: So it doesn't matter what priced Americans will put on

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Speaker 8: the table.

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Speaker 6: We just can't agree to that.

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Speaker 8: We can just hand over fifty seven thousand Danish citizens

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Speaker 8: to the Americans.

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Speaker 3: Yarlav out of the door is for more military bases

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Speaker 3: and always has been standoff as likely to come up

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Speaker 3: when EU and US officials meet in Washington for G

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Speaker 3: seven talks later this week.

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Speaker 2: Indonesia and Malaysia have become the first countries to restrict

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Speaker 2: access to Elon Musk's Grocai over its generation of sexual content.

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Speaker 2: In a statement issued on Saturday, Indonesia's Communications and Digital

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Speaker 2: Affairs Ministry said Grok is being banned temporarily to protect

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Speaker 2: the population from quote fake pornographic content. Meanwhile, Malaysia's Internet

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Speaker 2: regulator said it's limiting access to groc until effective safeguards

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Speaker 2: are implemented. The move comes as Musk's Xai, which owns Grog,

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Speaker 2: decided on Friday to restrict the image generation feature to

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Speaker 2: paid subscribers on the ex social media platform after the

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Speaker 2: Ai tool was used to generate undressed images of women

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Speaker 2: and children.

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Speaker 3: UK employers caught back hiring again last month, and another

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Speaker 3: sign of a sharply weakening jobs market. Data from a

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Speaker 3: Recruitment and Deployment Confederation survey shows a jump in job

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Speaker 3: seekers in December, largely driven by redundancies. Bloomberg Exchange Wilcock

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Speaker 3: has more.

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Speaker 9: Evidence suggests employers are cutting back on hiring. The RIC

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Speaker 9: and KPMG survey adds to the pile of evidence of

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Speaker 9: a shakedown in the labor market, and employment is near

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Speaker 9: a five year high, with many pointing to higher taxes

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Speaker 9: making businesses start firing. Normally, redundancies drop around Christmas, so

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Speaker 9: the sharp move in the other direction is likely to

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Speaker 9: worry Bank of England policymakers in London. James Wilcock, Bloomberg Radio.

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Speaker 2: Now, those are some of our top stories for you

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Speaker 2: this morning. Let's get to the markets. So concerns about

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Speaker 2: FED independence, the FED showdown with the Justice Department. It

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Speaker 2: sees reaction in the gold markets, although there are many drivers.

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Speaker 2: Gold up two percent after that story, up currently one

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Speaker 2: point four percent. The Swiss frank also strength, and the

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Speaker 2: US dollar weekend and US stop futures this morning are low.

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Speaker 4: Announce that future is.

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Speaker 2: Dropping eight tenths s and P five hundred Emily futures

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Speaker 2: down half of one percent. Yours socks fifty futures are

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Speaker 2: also in the red. No Cashiist treasuries trading because Japan

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Speaker 2: is closed for a holiday right now. Brent is the

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Speaker 2: other major story to think about today. Brent food prices

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Speaker 2: at sixty three dollars fifty, the barrel up two tenths,

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Speaker 2: but we saw a six percent gain for Brent over

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Speaker 2: Thursday and Friday. Later this week we get USCPI and

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Speaker 2: Wall Street Bank earning, so big risk events for markets.

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Speaker 3: In a moment, we'll bring you more on the growing

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Speaker 3: hostilities between the Federal Reserve and the White House, as

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Speaker 3: well as the latest from around plus why we're talking

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Speaker 3: about a breaking point in Europe's chips standoff with China.

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Speaker 3: There was another story that we've been reading this morning,

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Speaker 3: a book review from our colleagues at Bloomberg Weekend. The

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Speaker 3: debates an eternal question about playing games. Is it winning

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Speaker 3: that matters or is it just taking part? This is

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Speaker 3: from the Flaphi professor see Thai Nuien. The central thesis

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Speaker 3: from his book is the games wake us up to

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Speaker 3: a life of play, but metrics slow us down into

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Speaker 3: what he describes as grueling optimization. Have you felt gruelingly optimized?

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Speaker 3: While playing games, Caroline, No, look, I was in Drafts.

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Speaker 3: Have you ever been there in London?

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Speaker 2: It's a fantastic restaurant bar where you get to play

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Speaker 2: board games. You know.

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Speaker 4: I love to play lots of.

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Speaker 2: Different kinds of games.

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Speaker 4: I would say, yeah, moderation.

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Speaker 2: Of course, it's great to win, and everyone wants to win,

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Speaker 2: but taking part is really important because that's the only

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Speaker 2: way you can learn to win.

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Speaker 4: I would argue this.

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Speaker 3: Sort of speaks to my strong aversion to aggressive competition

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Speaker 3: and one of the reasons that I that I shy

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Speaker 3: away from so many of sort of you know games

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Speaker 3: and strategy because it is fun to take part, but

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Speaker 3: I really really dislike it when people have become aggressively competitive.

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Speaker 3: And perhaps this is the book that I need to

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Speaker 3: read to understand why this is all provoked as a

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Speaker 3: strong reaction to me. And we'll put a link to

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Speaker 3: the vice in our podcast our notes.

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Speaker 2: Okay, let's bring you more now on the news of

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Speaker 2: the Federal Reserve has been served grand jury subpoenas which

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Speaker 2: could lead to criminal charges related to building renovation work.

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Speaker 2: FED chairg your Own Poal has said this is a

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Speaker 2: pretext and constitutes threats and ongoing pressure against the Central

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Speaker 2: Bank's independence. Bloomberg opinion columnist Daniel Moss joins us now

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Speaker 2: for more. Daniel, good morning. How serious a threat is

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Speaker 2: this to the FED and its independence?

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Speaker 10: We've been talking about threats to FED independence from President

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Speaker 10: Trump going back to the early years of his first term.

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Speaker 10: It was correctly considered unprecedented that the then president publicly

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Speaker 10: mused firing Trump. The abuse was public, it was scathing.

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Speaker 10: Remember he's called it numskull a who couldn't put and

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Speaker 10: all of these pejorative terms. What's interesting and startling about

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Speaker 10: this development is the FED is now pushing back. One

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Speaker 10: gets the sense that Powell was waiting for the moment

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Speaker 10: when he was on very very strong ground. He said

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Speaker 10: they received the subpoenas Friday. Video is timed to go

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Speaker 10: out Sunday evening. Now the Fed is fighting back. The

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Speaker 10: real mystery here is why are President Trump's advisors and

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Speaker 10: supporters and prosecutors appointed by him doing this?

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Speaker 6: Now?

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Speaker 10: The Fed has lowered rates based on the economy last year.

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Speaker 10: Famous dot plot projects a couple more cuts this year.

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Speaker 10: Trump is poised to announce Powell's successor as FED chair,

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Speaker 10: So why do this now? It seems so unnecessary unless

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Speaker 10: this is aimed at persuading Powell to leave when his

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Speaker 10: term as chair is up. His term as a FED

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Speaker 10: governor isn't up for another few years.

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Speaker 3: When we're thinking about where this could go from here,

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Speaker 3: the Publican Senator Tom Teller says that he won't confirm

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Speaker 3: any fat appointee while this is ongoing. Does it present

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Speaker 3: a wider problem than for the FADS functioning.

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Speaker 10: In and of itself. No, The Board of Governors has

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Speaker 10: seven people on it right now. All those positions are filled.

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Speaker 10: Strictly speaking, there's not another vacancy until Powell chooses to leave,

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Speaker 10: or Stephen Mirron chooses to leave, or in the event

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Speaker 10: he is successful, Trump is successful in pushing Lisa Cook

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Speaker 10: off the board, so it won't get in the way

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Speaker 10: of functioning. And in the past, as long as they've

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Speaker 10: been able to have a quorum, meetings can go ahead.

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Speaker 10: I would also say this, Tom Tillos has found some

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Speaker 10: courage to stand up to the president. It is also

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Speaker 10: true he is not running for reelection this year. According

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Speaker 10: to some reporting, at the start of his administration, he'd

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Speaker 10: led people to believe that he would vote against Pete

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Speaker 10: hag Seth for the Defense Secretary. In the end, he

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Speaker 10: gave hag Seth his vote. So it's the right noise

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Speaker 10: from Senator Tillos. Let's see what.

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Speaker 2: Happens okay in terms of the market reaction, which is

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Speaker 2: surely pretty vital. The dollar has weakened, the gold and

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Speaker 2: goal prices have spiked haigh on the news. Is it

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Speaker 2: going to be a major issue for markets?

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Speaker 10: Great question. It is unclear now. On the face of it,

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Speaker 10: you would think it would be. While markets, on the

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Speaker 10: face of it putting a negative spin on this, it

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Speaker 10: is also true that the moves don't indicate anticipation an apocalypse.

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Speaker 10: It is also true it's now just after two point

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Speaker 10: fifteen in Singapore, three point fifteen in Tokyo, Japan is

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Speaker 10: closed for a public holiday today. That may also be

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Speaker 10: constraining volumes. And you know, there's so much else around.

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Speaker 10: We're still dealing with the backwash of Venezuela. We've got

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Speaker 10: new threats against Greenland, people digesting the jobs report from

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Speaker 10: last Friday, We've got Iran. It's hard to see what

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Speaker 10: is focusing minds in the market the most. But right

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Speaker 10: now on this issue, there's nothing in the pricing at

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Speaker 10: the time we're speaking to suggest a FED independence related meltdown,

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Speaker 10: now that may come, there's just no sign of it

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Speaker 10: right now.

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Speaker 3: Okay, Daniel mass Boomberg, Copenning columnist, thank you very much

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Speaker 3: for joining us to help us understand this latest development

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Speaker 3: after that forceful response from the fad cherry Jerome Pale,

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Speaker 3: and we heard some of what he had to say

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Speaker 3: in that video a little bit earlier in the program.

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Speaker 3: Continuing to watch the market reactions at as we say,

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Speaker 3: the dollar has weakened on the back of that, currently

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Speaker 3: down a tenth of one percent. But it will be

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Speaker 3: interesting to see as the trading day develops how investors

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Speaker 3: will be able to parse the details of both the

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Speaker 3: fact that the subpoenas have been issued and how exactly

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Speaker 3: the Federal Reserves response will calibrate that on what it

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Speaker 3: means for the Central Bank and its independence going forward.

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Speaker 3: But a reminder, as Daniel tells us there, that the

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Speaker 3: challenge over FED independence has been a recurring theme under

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Speaker 3: this presidency, so something to think about as we are

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Speaker 3: moving through the trading day.

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Speaker 6: Now.

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Speaker 2: More than five hundred people are now reported to have

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Speaker 2: been killed in the protests in Iran. Human rights activists

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Speaker 2: say that more than ten thousand people have been imprisoned

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Speaker 2: during the demonstrations, which are emerging as one of the

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Speaker 2: most serious challenges to the regime in Tehran in years.

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Speaker 2: Our Middle East Managing editor Paul Wallace joins us Now

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Speaker 2: with more detail. Paul, what do we know about the

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Speaker 2: situation in Iran today?

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Speaker 6: Hey, Caroline.

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Speaker 8: It is certainly escalated in the last few days. Thursday

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Speaker 8: was the start of really big protests and if they

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Speaker 8: haven't got bigger since then, they certainly don't look as

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Speaker 8: if they've dwindled it. Also, throughout the weekend we saw

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Speaker 8: what looks like tens of thousands of Iranians going onto

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Speaker 8: the streets in cities across the country, from Tehran to

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Speaker 8: just about all the other big, big towns and cities.

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Speaker 8: Some people are saying, it's hundreds of thousands of people

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Speaker 8: that are demonstrating, and it does look as if this

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Speaker 8: is the biggest challenge to that the Islamic Republic has

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Speaker 8: faced from street protests for a long time and possibly since,

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Speaker 8: you know, since its birth in nineteen seventy nine with

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Speaker 8: the Iranian Revolution.

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Speaker 6: It looks that serious.

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Speaker 8: No one is saying, you know that the government is

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Speaker 8: on the brink of an overthrow just yet or something,

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Speaker 8: but this certainly officials are certainly struggling to know how

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Speaker 8: to quell these demonstrations.

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Speaker 3: What sort of breaking point could we be looking for, Paul,

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Speaker 3: as we manage those developments continuing there?

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Speaker 8: Well, I think a big thing would obviously be any

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Speaker 8: kind of foreign military action from the US and or Israel.

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Speaker 8: Within around itself, people are closely watching for anything like

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Speaker 8: a mass shooting or mass killing of protesters by the

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Speaker 8: authorities there. You are essentially getting quite a belligerent tone

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Speaker 8: from most of the high ranking or highest ranking Iranian officials.

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Speaker 8: The president must Possession is trying to sound somewhat conciliatory.

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Speaker 8: He is a moderate by the standards of the people

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Speaker 8: at at the top of the Ranian hierarchy, and he's

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Speaker 8: talked about protesters coming together with the government to.

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Speaker 6: Resolve their differences.

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Speaker 8: But it's unlikely many pro us As are going to

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Speaker 8: believe what he says, partly because he is far from

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Speaker 8: being the most powerful person there, the supreme leader who

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Speaker 8: who is that?

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Speaker 6: Al Hamone?

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Speaker 8: He has been sounding pretty aggressive, as has the IRGC,

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Speaker 8: which is the most important of the security forces in

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Speaker 8: the country. They're signaling that, if anything, they're prepared to

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Speaker 8: crack down even harder on.

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Speaker 6: People who are taking to the streets.

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Speaker 8: And the internet blockage still exists, is still in place,

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Speaker 8: that's been in place since since late Thursday, has has

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Speaker 8: a sort of blockage or telecommunication network, So it's very

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Speaker 8: hard to get information out of the country. But certainly

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Speaker 8: what footage is getting out, what information is getting out,

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Speaker 8: shows that it is still extremely rested across the country

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Speaker 8: and it doesn't look like these.

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Speaker 6: You know, these protests are going to end anytime soon.

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Speaker 2: Yeah, indeed, some user generated content being seen on large.

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Speaker 2: In terms of Donald Trump and the US role reaction,

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Speaker 2: President Trump saying that they're looking at some very strong options.

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Speaker 4: What could happen next there?

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Speaker 6: This is a big question.

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Speaker 8: And if anything, Trump is now talking even more frequently

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Speaker 8: about military action in Iran, And if you look at

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Speaker 8: what he's done recently with Venezuela, just this month, with

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Speaker 8: the US, with the capture of Nicholas Madora by US forces,

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Speaker 8: and what Trump is saying about Greenland, it does seem

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Speaker 8: as if the White House is on a bit of

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Speaker 8: a high. It sees the Mydora operation as a great

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Speaker 8: tactical success. It also sees as a success. What do

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Speaker 8: you what it did last June in Iran when the

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Speaker 8: US bombed there any nuclear facilities during the twelve day

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Speaker 8: war between Iran and Israel. So I think there is

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Speaker 8: a high likelihood that Trump will try to do something

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Speaker 8: strikes on perhaps perhaps military assets in Iran or something

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Speaker 8: like that. Of course, there are some people saying that,

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Speaker 8: you know, beyond this being very, very complicated, if Trump

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Speaker 8: does go down that route, he could achieve the opposite

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Speaker 8: of what he's wanting to and actually embolden the government

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Speaker 8: and reduce the appeal of the protests. In June, during

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Speaker 8: the Israeli and US strikes on Iran, we saw a

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Speaker 8: surgeon nationalism nationalism there, which is something that the government

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Speaker 8: was able to exploit quite quite well, at least in

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Speaker 8: the short term. So, yes, Trump is clearly thinking about

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Speaker 8: military action in Iran. But what he might do, the

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Speaker 8: range of options, it would be complicated, and there's no

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Speaker 8: guarantee that he would actually help the protesters.

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Speaker 6: If he went for that option.

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Speaker 3: Okay, Paul thinks some much for joining us. Paul was there,

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Speaker 3: I'm at least managing editor. Stay with us. More from

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Speaker 3: Bloomberg Daybreak Europe. Coming up after this, I want to.

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Speaker 2: Talk about a very important story here in Europe, an

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Speaker 2: effort by Europe to stand up to China and to

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Speaker 2: retain local technology, which is approaching a breaking point. A

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Speaker 2: court hearing in the Netherlands on Wednesday will be crucial

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Speaker 2: for the chip maker net Sperior, which was rested away,

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Speaker 2: if you remember, from its Chinese owner's wing Tech, by

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Speaker 2: a decision in October. Amsterdam reporter Sarah Jacob joins us

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Speaker 2: now for more on this. Sarah, good morning. Why do

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Speaker 2: we say that the feud is reaching this breaking point?

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Speaker 11: The crisis at an Experia first started in September with

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Speaker 11: the Dutch government intervening to block key decisions at the

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Speaker 11: Netherlands space trip maker. Soon after that an Amstam court

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Speaker 11: or the Journey's on a wintech's ownership rates to be

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Speaker 11: placed in a trust or the allegations that the form

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Speaker 11: was improperly you know, moving or transferring technology from Europe

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Speaker 11: to China. It then also suspended wing Tech's founder as

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Speaker 11: an Experience CEO, and then on you know, allegations that

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Speaker 11: he was divoting resources to affiliated companies and hobbling district maker.

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Speaker 11: These are claims that win Tech hasned over the coast. Months,

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Speaker 11: we've seen the Chinese government step into restrict exports from

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Speaker 11: Experience facilities in China. That's threatened to disrupt auto production.

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Speaker 11: And although that spart has somewhat easy and deliveries well

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Speaker 11: out to resume, this internal corporate feud within Experia which

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Speaker 11: is sort of continued in recent months, so the nexperious

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Speaker 11: global headquarters has stopped sending wafers to China, and then

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Speaker 11: the local unit there is incoperating with global management. So

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Speaker 11: what we're now seeing is that Experior China has been

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Speaker 11: looking at alternative sources of wafers for the Dutch parent.

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Speaker 11: Its means that they're expanding our production sites to have

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Speaker 11: an advocate sty tunique customer demand. We recently spoke to

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Speaker 11: wig Tech chairwoman Ruby.

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Speaker 12: Yang Yang, and she told us that Experior China has

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Speaker 12: actively carried out what it calls production self rescue, which

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Speaker 12: is which includes procuring me first from elsewhere and you know,

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Speaker 12: looking at procurements in China. So the Experience headquarters is

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Speaker 12: going ahead with expansion plans at sites in Malaysia and Philippines,

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Speaker 12: and we're told they aim to add tens of billions

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Speaker 12: of units to annual capacity. We're also hearing that some

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Speaker 12: big customers such as Robert the auto supplier autopart supplier sorry,

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Speaker 12: has been shuttling way first from the experience facilities in

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Speaker 12: Europe to China. So you know, we're clearly seeing how

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Speaker 12: the shrift is infecting companies operations.

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Speaker 3: So what should we expect then, Sarah, from this week's

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Speaker 3: court court hearing.

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Speaker 13: Court hearing on Wednesday will determine whether there's a quick

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Speaker 13: resolution or this this legal fuss on between the two

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Speaker 13: will be wrong drawn out. The quote in October has

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Speaker 13: suspent the CEO and it replaced most of the shares

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Speaker 13: of the company and administration. On Wednesday, it could order

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Speaker 13: an investigation to the chip maker if it sees reasons

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Speaker 13: to doubt how an experier is managed. On the flip side,

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Speaker 13: the measures taken against link TeX's ownership of the Experior

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Speaker 13: and Expander could be dropped if the courte ops against

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Speaker 13: a probe. So the hearing will certainly had implications the

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Speaker 13: expreier's future, and we also it will hand implications for

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Speaker 13: you know, the auto supply chain and jipolitical ties between

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Speaker 13: the two countries.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Street and beyond.

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Speaker 2: Look for us on your podcast feed every morning, on Apple, Spotify,

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Speaker 2: and anywhere else you get your podcasts.

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Speaker 3: You can also listen live each morning on London Dab Radio,

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Speaker 3: the Bloomberg Business app, and Bloomberg dot Com.

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Speaker 2: Our flagship New York station, is also available on your

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Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

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Speaker 4: I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carol. Join us again tomorrow morning for all

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Speaker 3: the news you need to start your day right here

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Speaker 3: on Bloomberg Daybreak Europe