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Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene

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Speaker 1: Jay Ley. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. John

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Speaker 1: Norman with US so I shall introduced him formally JP Morgan,

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Speaker 1: head of Effets and International Right Strategy. Let's talk about

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Speaker 1: these markets, John, A vicious breakdown in sentiment, and I'm

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Speaker 1: trying to understand what's behind it. What's behind it? It's

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Speaker 1: a few things. It's, uh, the macroeconomic data continuing to

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Speaker 1: remain weak globally, even though they're not so weak in

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Speaker 1: the US. It's the messaging from the feed that they

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Speaker 1: could be moving to restrictive over the next year. And

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Speaker 1: it's the very near term focus on on Q three

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Speaker 1: earnings and and this guidance the corporates are giving about

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Speaker 1: the impact of tariffs. So it's it's just kind of

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Speaker 1: a very unfavorable confluence of events right now. You use

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Speaker 1: the word globally. Um, that's been the story through so

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Speaker 1: far and for much of the year. US equities, US markets,

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Speaker 1: US risk really hold up against that that's changed over

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Speaker 1: the last couple of months. Why it's changed, I think

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Speaker 1: because the earnings guidance is becoming more negative, and so

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Speaker 1: because markets are always going to respond to to catalysts,

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Speaker 1: you're you're finally getting something a little more concrete to

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Speaker 1: pull down earnings expectations in the US. I don't think

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Speaker 1: this is the definitive turning point lower in in US

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Speaker 1: equities because I think what we're adjusting to is a

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Speaker 1: much more normal earnings environment of nineteen, where earnings growth

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Speaker 1: might be nine percent in stead of we've seen this year.

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Speaker 1: And if you have nine or ten percent earnings growth,

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Speaker 1: if you have UH interest rates which are kind of

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Speaker 1: at neutralish levels, I still think the path for equities

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Speaker 1: over the next three, six, twelve months is higher. But

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Speaker 1: the handwritings on the wall from the FED, you know,

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Speaker 1: the cycle doesn't have a whole lot of longevity left

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Speaker 1: to It's maybe got another one year of good growth

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Speaker 1: and then a much more challenging year of in late nineteen.

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Speaker 1: When do investors really starts to price in that much

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Speaker 1: more challenging growth story of late well, I think when

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Speaker 1: you look cross asset, the messages that investors have been

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Speaker 1: doing this progressively all year, So you're right that it's

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Speaker 1: US equities that have been the standout, our performer. But

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Speaker 1: this is really the only asset class globally outside of

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Speaker 1: maybe US HI yield, which has given you positive returns.

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Speaker 1: So non US equities are down, whether you're looking at

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Speaker 1: d M equities or EM equities. Credit in the US

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Speaker 1: and Europe is down if you're focusing on on high grades.

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Speaker 1: So I think there's been this progressive skittishness that's getting

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Speaker 1: discounted across markets. It's a bit overdone to me, but

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Speaker 1: I think there is a message there. People are quite nervous.

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Speaker 1: So Morgan Stanley and Mike Wilson, the ce IO over there,

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Speaker 1: has talked a lot about this rolling is this other bank?

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Speaker 1: Is this other bank ran by a man called Mr Gorman?

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Speaker 1: But we don't have to talk about that right now.

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Speaker 1: The rolling bear market that they've used to sort of

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Speaker 1: characterize and frame these markets, is that something that resonates

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Speaker 1: with you. Then it resonates as a simple description of

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Speaker 1: the price action. It doesn't resonate with me as the

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Speaker 1: proper way to invest over the next six to twelve months,

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Speaker 1: because to me, the idea that every market should be underperforming.

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Speaker 1: Cash except for US equities is something you should really

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Speaker 1: only see if you think you're going into a recession

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Speaker 1: in the next twelve months. So I think there is

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Speaker 1: actually scope for that that wrecking ball to kind of

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Speaker 1: roll backwards a bit and give you some more positive

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Speaker 1: returns on some non US equity markets. Most of that

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Speaker 1: will be in particular e M s. It could be

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Speaker 1: done some d MS later, So I think the pessimism

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Speaker 1: is is basically over. Donna John, you write a very

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Speaker 1: sophisticated research note for the less sophisticated like me. I'm

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Speaker 1: in the double leverage all cash fund, But what is

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Speaker 1: the allocation of stock, bond and equity. If you're on

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Speaker 1: the efficient frontier, how efficiency is your efficiency right now?

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Speaker 1: I think the allocation needs to be modestly overweight d

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Speaker 1: M stocks versus d M bonds. I still think the

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Speaker 1: scope for positive returns exist in a particular sector. It's

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Speaker 1: too early towards the end of the business cycle to

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Speaker 1: be this defensive. I think there are pockets of opportunity

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Speaker 1: in certain emerging markets, mainly Latin America, over the next

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Speaker 1: three months or or six months. So you know, if

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Speaker 1: if you if you look at that kind of a ray,

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Speaker 1: there's not a lot to choose from, but I think

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Speaker 1: it's the broadest set than what you know returns over

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Speaker 1: the past year have delivered. John and I hear interview

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Speaker 1: after interview that all pros across all asset classes are

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Speaker 1: watching high yield bonds is an indicator of where we're heading,

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Speaker 1: and they're confident when they see that performance, that resiliency

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Speaker 1: of the price of high yeld bonds. Do you share

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Speaker 1: that idea, But I think that's too narrow a market

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Speaker 1: depend one's cyclical view on. I think if you really

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Speaker 1: want to get the message for what's going on cyclically,

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Speaker 1: you should look at credit more broadly. And that's been

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Speaker 1: worsening all year. Whether you look at price DOWNE yield up,

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Speaker 1: price down ye the spreads wider. I mean that that

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Speaker 1: tells you something about a slow erosion in in economic fundamentals.

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Speaker 1: It's not the kind of thing that gives you a

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Speaker 1: crash in equities this year. That's sustainable, but it is

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Speaker 1: kind of a reminder that we're laid in the business cycle.

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Speaker 1: John Norman, Late in the business cycle does not necessarily

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Speaker 1: mean peak markets. Is that essentially what you're trying to

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Speaker 1: communicate this morning exactly because there's a difference between um

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Speaker 1: peak in return momentum and peak in prices, and markets

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Speaker 1: are clearly peaking in price, and I think that's overdone.

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Speaker 1: What they should be uh delivering is just much more

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Speaker 1: moderate gains on on equities and to a lesser extent

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Speaker 1: than some bits of credit. Like yell, I just want

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Speaker 1: to get stuck into the intraday price action. I don't

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Speaker 1: think you can read into any given day to sort

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Speaker 1: of extrapolate out what may or may not happen in

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Speaker 1: the future. But it's kind of interesting this morning, John,

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Speaker 1: that you have equities in the United States really soft,

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Speaker 1: and Europe holding up, and not just holding up with stocks,

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Speaker 1: but holding up cross asset. Italian bonds are rallying, buttons

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Speaker 1: aren't really doing anything at all, and European equities are

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Speaker 1: wrapping quite a significant way against the backdrop what US

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Speaker 1: is really unto performing. What do you make of that

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Speaker 1: this morning? Uh? To me, it says that there's just

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Speaker 1: already a decent amount of pessimism baked into Europe because

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Speaker 1: you look at the macro data that came out of

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Speaker 1: Europe today, these disappointing p m eyes. Normally that should

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Speaker 1: have implied um wider spreads, much weaker equities and and

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Speaker 1: a much weaker currency. All you're getting is the weaker currency.

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Speaker 1: So I think it just reflects differences in positioning where

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Speaker 1: people have risk. It is more in the US right now.

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Speaker 1: John Norman, thank you so much. With JP Morgan usually

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Speaker 1: in London, visiting today in New York at our Interactive

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Speaker 1: Broker Studios, which is a good thing. George Friedman of

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Speaker 1: Geopolitical Futures and without question one of our great students

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Speaker 1: of the Saudi US alliance. How broken is the alliance

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Speaker 1: this morning, George, I don't think very. I think you know,

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Speaker 1: it's interesting to see how little has happened asside from

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Speaker 1: the rhetoric, but we have a basic interest with the Saudis.

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Speaker 1: We have the Iranians spreading out over the Middle East

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Speaker 1: in Iraq and Syria and leathern Yemen. A coalition is

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Speaker 1: formed between really Israel, Saudi Arabia, the United Emirates to

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Speaker 1: block it. If we were to break with Saudi Arabia,

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Speaker 1: uh that that coalition would be gone and we would

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Speaker 1: have a very hard time containing the Iranians. So the

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Speaker 1: last thing we want is to have this turn into

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Speaker 1: a kind of breakdown in our strategy. So everybody is talking,

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Speaker 1: everybody is saying things it is appropriate that they do so,

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Speaker 1: but actions are not being taken. Within the word action

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Speaker 1: is the action. Domestically, we all read our Robert Lacy

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Speaker 1: years ago the history of the Saud family, and you know,

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Speaker 1: I can go back inside it as amateurly as anyone

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Speaker 1: out there. This isn't the movie Lawrence of Arabia. This

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Speaker 1: is a reality. What's the reality for the royal family?

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Speaker 1: And would you expect the crown prince to be shown

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Speaker 1: the generational door? Well, remember the Western media was lauding

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Speaker 1: him over six weeks ago. Yeah, liberalization of women, driving

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Speaker 1: of his you know, really ambitious plans or transforming Saudi

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Speaker 1: Arabia from a producing country alone. Uh, he was the hero. Uh.

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Speaker 1: He had enemies in Saudi Arabia. He had people who

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Speaker 1: were appalled at his liberalization. He had within the royal family,

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Speaker 1: people who did not want to see this transformation, didn't

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Speaker 1: trust him, who saw him as a thirty year old kid,

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Speaker 1: he had no grounding. So he's got serious enemies inside

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Speaker 1: of Saudi Arabia. And the interesting thing is that this killing,

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Speaker 1: which appears to be about you know, liberals in the

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Speaker 1: West appalled at what kind of regime this is actually

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Speaker 1: plays out by strengthening the conservatives inside of Saudi Arabia potentially,

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Speaker 1: But to this point, Um, you know, he's had a

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Speaker 1: weird photo op with the son of the person was killed,

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Speaker 1: and we've seen inside the Kingdom him pulling button. He

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Speaker 1: seems not to lost power. George, what is your knowledge

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Speaker 1: or experience of being at the King Fodd Air Force

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Speaker 1: Base and the mom Uh Saudi Arabia are the Eskin

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Speaker 1: Village Air Force Base in within Riod, as well the

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Speaker 1: any number of US facilities there, the King Khalead Air

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Speaker 1: Base and Commas Mushayat, Saudi Arabia. These are operational and

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Speaker 1: running air bases for whom, well the Saudis use him

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Speaker 1: for their The United States Air Force and contractors are

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Speaker 1: supporting that Air force Uh. And to be clear, and

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Speaker 1: to be clear, George, they can't do their air force

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Speaker 1: without our contractors right pretty much. So they've gotten better

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Speaker 1: over the past years, but they still can't sustain them.

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Speaker 1: And we want them to have an operational air force.

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Speaker 1: We don't want to be carried on missions and Yemen

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Speaker 1: for example. So you know there's a symbiotic relationship not

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Speaker 1: only between the United States and Saudi Arabia, but a

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Speaker 1: very important one would between Israel and Saudi Arabia. By

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Speaker 1: reports to Saudis have purchased and a rarely air defense

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Speaker 1: system called Iron Dome to protect themselves. Well, tell us

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Speaker 1: about iron Dorm. I mean, you know I've covered it

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Speaker 1: here live the missile attacks and what appears to be

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Speaker 1: genuine fear of the people of Riod Iron Dorm. Dome

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Speaker 1: protects them from what missiles from Yemen. It would protect

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Speaker 1: them from a class of fairly low of flying missiles

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Speaker 1: that could devastate their cities. Uh, the missiles out of Gaza,

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Speaker 1: we're knocked down by Iron Dome. Potentially attack from his

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Speaker 1: Bullah and Lebanon would be well. Attacks from Yemen, but

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Speaker 1: more important attacks from Iran on Saudi Arabia would be

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Speaker 1: dealt with by this. Remember, the real game in the

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Speaker 1: region is um Iran. Iran is expanding and George George

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Speaker 1: Freeman with his folks geopolitical futures thrilled to have them,

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Speaker 1: particularly dovetailing off in Stephen Cook the other day with

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Speaker 1: the author of false Dawn. Okay, great, everybody agrees Iran

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Speaker 1: is the first order condition here, except none of the

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Speaker 1: newspaper articles. Mr. Arid, Juan speech and the rest discusses it.

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Speaker 1: We're looking at the Shoggy murder as a distinct and

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Speaker 1: discreet thing. Do you bring those two events together. I

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Speaker 1: don't understand the murder it makes. First of all, Kashogi,

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Speaker 1: who is he? Yes, he is a liberal writing for

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Speaker 1: the Washington Post. He was also the nephew of add

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Speaker 1: Non Koshogi, a major armed dealer in the region. He

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Speaker 1: worked for Turkey al Phis solid one Point, who is

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Speaker 1: the head of Saudi intelligence. He had interviewed Assan bin

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Speaker 1: Laden on various ecasions, which was a different ticket to get,

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Speaker 1: difficult ticket to get. Uh So, he certainly had close

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Speaker 1: ties into the conservative wing of the party. He was

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Speaker 1: an enemy of k of the Prince. He was opposed

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Speaker 1: to him. But in the West we always assume that

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Speaker 1: anyone who opposes a repressive regime wants a liberal regime.

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Speaker 1: They might just want another repressive regime. In this case,

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Speaker 1: he appears to have changed. He appears to have transformed

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Speaker 1: his views. I'll accept that it's genuine, But why would

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Speaker 1: you send fifteen people to kill him. I mean normally

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Speaker 1: want to be subtled in these things. It's if you know,

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Speaker 1: Salomon decided he liberally wanted to test Saud East to

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Speaker 1: know that something was coming on. As they came through

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Speaker 1: Istanbul Airport, it was hard to miss them and the airport.

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Speaker 1: It just makes no sense. George, I've got to apologize.

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Speaker 1: Anthony from Sparta emails in and says the pronunciation of

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Speaker 1: the Saudi Air Force base I butchered commies move shaite, Anthony,

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Speaker 1: thank you so much for that clarity, as I mispronounced

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Speaker 1: an important air basis for Saudi Arabia in the United States,

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Speaker 1: George Freeman, in the time that we've got left, what

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Speaker 1: should be the response of the president, what should be

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Speaker 1: the response, particularly of someone considered a lame duck Secretary

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Speaker 1: of Defense General Madison. Well, they've given the response, which

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Speaker 1: is they're shocked and appalled, and they're not going to

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Speaker 1: change anything in our relationship. That's pretty much what Urduuana

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Speaker 1: said to He's horrified, he's shocked. He's going to bring

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Speaker 1: the individuals to justice, but he said, think about breaking

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Speaker 1: relations with Saudi Arabia or anything else. So what happened.

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Speaker 1: Here is a really shocking murder. It's hard to understand

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Speaker 1: the murder. Uh. And no one is going to change

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Speaker 1: their basic identivities because they're over writing things. One final question,

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Speaker 1: do you have an understanding of who the replacement would

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Speaker 1: be for the crown prince? Is there an air apparent

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Speaker 1: to be the second position of the Remember, the king

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Speaker 1: has to be replaced. Uh. And replacing the king has

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Speaker 1: happened in the past, has happened by assassination over the

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Speaker 1: past half century century. UM. It is not a clean process.

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Speaker 1: The king is the king, So to replace King Solomon's

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Speaker 1: father would be a wrenching event inside of Saudi Arabia.

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Speaker 1: It would lead to unknown instability at a time when

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Speaker 1: most of the region and the United States really don't

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Speaker 1: want instability there. George, Thank you so much, George Freeman,

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Speaker 1: with a terrific briefing, Founder Chairman Geopolitical Futures. We continue,

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Speaker 1: Pim Fox and Tom Kenyan with us. Diane Swak of

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Speaker 1: Grant Thorn and Diane are wonderful to speak to you.

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Speaker 1: I guess there'll be another day of a president going

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Speaker 1: after the head of the Central Bank. At some point.

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Speaker 1: This reaches somewhat of a critical mass. Are we near there?

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Speaker 1: I hope we're not. UM. I think we're not there yet.

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Speaker 1: What worries me is that UM some people have debated

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Speaker 1: whether or not it's worse when an administration goes after

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Speaker 1: a central banker from within the administration or publicly. Well,

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Speaker 1: we know historically that when they've actually succeeded to do it,

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Speaker 1: it has been through public means. Actually, the Nixon administration

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Speaker 1: threatened Arthur Burns by planting a false story in the

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Speaker 1: newspaper that don got him to acqui us and Ease

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Speaker 1: to pour the two elections, which contributed to stagflation. So

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Speaker 1: we do know that it can have an impact. That's

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Speaker 1: not something we wanted to have. UM. Certainly, we've already

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Speaker 1: seen Vulker's remarks about how the Reagan administration was pressuring

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Speaker 1: him on interest rates at a time he wasn't going

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Speaker 1: to raise interest rates anyway, so it worked to his advantage.

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Speaker 1: I think what's important is that we don't get too

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Speaker 1: much perception that the administration could influence indust rates. That's

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Speaker 1: where the critical issue is is because much of the

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Speaker 1: Fed's power is actually in the perception of its independence,

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Speaker 1: not um its actual actions. There's as much perception as

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Speaker 1: reality of rate hikes that affects of FED and I

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Speaker 1: think that's very important. Diane Swank, why is anybody's surprised,

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Speaker 1: particularly coming from President Donald Trump. I wouldn't imagine people

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Speaker 1: are surprised, And hopefully that means that you know, much

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Speaker 1: like other things that we hear noise out there from

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Speaker 1: an administration, we often discount it when it comes to

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Speaker 1: financial markets as that we hope happens. But the reality

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Speaker 1: is that we know that actions can become policy. UM.

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Speaker 1: In the trade war we are in the trade war

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Speaker 1: with China that doesn't seem to be going away. Hopefully

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Speaker 1: we will see the meeting with she and the President

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Speaker 1: going more productively and back off and get China to

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Speaker 1: acquiesce in some of the things we like them to

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Speaker 1: do without going to a full blown trade war in January.

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Speaker 1: But these are things you know. Unfortunately, it's not clear

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Speaker 1: when things the noise should be a paid attention to

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Speaker 1: and when it shouldn't be. UM. We know that the

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Speaker 1: president can't fire the Federal Reserve chairman, and the Federal

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Speaker 1: Reserve has a long history of being independent. It's also

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Speaker 1: important to remind people that this rate Hikeney cycle started

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Speaker 1: in December. Off, it goes back to the Obama era

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Speaker 1: that the economy was already firming enough for the FED

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Speaker 1: to raise rates. And I think it's really important for

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Speaker 1: certainly your audience knows this already, but it's important to

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Speaker 1: remember that the FEDS raising rates as an affirmation of

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Speaker 1: the economy strength, not as a means to kill the economy.

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Speaker 1: So is there some political move on the part of

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Speaker 1: the president ahead of the midterm elections? Well, you know,

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Speaker 1: I mean, who knows. I mean, I can't judge that. Um,

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Speaker 1: it probably is. This is all all people in politics

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Speaker 1: are political by definition, I would assume. I think the

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Speaker 1: more important issue to focus on is what is decided

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Speaker 1: likely to do. Um, the set is going to react

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Speaker 1: to the data, and this bet is going to raise

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Speaker 1: rates again in December. I think very likely. I put

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Speaker 1: a ninety eight percent chance on that occurring, barring some

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Speaker 1: major collapse in finishing markets between now and none. Dan,

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Speaker 1: thank you so much, too short of notice today, and

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Speaker 1: we greatly thank Diane Swark for her commitment to our

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Speaker 1: FED coverage as well. Pim Fox and Tom Keenan on politics.

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Speaker 1: Now we go to Craig Gordon, in charge of all

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Speaker 1: of our political coverage in Washington. To say the least,

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Speaker 1: he is so discerning. He understands the distinctions between Ben's

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Speaker 1: chili bowl up on you Street versus the for that

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Speaker 1: it is at Reagan International Airport where I dine before

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Speaker 1: a ship out on the Gulf Stream. Craig, wonderful to

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Speaker 1: have you with us this morning. Right now. Measure force

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Speaker 1: the tone of the nationalists you're covering versus the corrupt,

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Speaker 1: power hungry globalists. You're covering language of the president who's

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Speaker 1: got the upper hand. Uh here, this few number of

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Speaker 1: days before the election, I still think I'd be rather

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Speaker 1: be playing the Democrats hand than um, the Donald Trump's hand.

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Speaker 1: I think there's a lot of energy out there, uh

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Speaker 1: in in out on the hustings. As they say. A

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Speaker 1: lot of Democrats are pretty upset about how that Kevin

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Speaker 1: I hearing went down, pretty upset with the way Trump

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Speaker 1: talks and acts. And I think that they have a

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Speaker 1: lot of energy behind him, and also they also have

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Speaker 1: the mathematics behind him. They only want to three seats

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Speaker 1: to take the House, so that's actually not such a

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Speaker 1: high health of client. Since forty some odd Republicans have

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Speaker 1: actually retired, so those are open seats and obviously easier

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Speaker 1: to win. So Democrats still seem to have the upper hand.

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Speaker 1: There is the politics of the North the day. But

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Speaker 1: I of course it is not the politics of the moment,

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Speaker 1: is it about? It is about suspicious packages and our

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Speaker 1: political leaders Washington, Creig Gordon has too much memory of

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Speaker 1: this just within the Beltway, don't they. Yeah, no, absolutely,

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Speaker 1: and we all know that very you know, senior political

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Speaker 1: officials mail gets screened, and I think today we learned

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Speaker 1: why because in this case, a suspicious package is thought

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Speaker 1: to be potentially explosive devices were found in mail headed

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Speaker 1: to Hillary Clinton in Westchester County, where of course she

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Speaker 1: has a home with book Clinton, and then to Barack Obama.

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Speaker 1: We believe that one was here was headed to his

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Speaker 1: perhaps his home or his office here in Washington. So, um,

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Speaker 1: you know this is not just political rhetoric now, this

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Speaker 1: is this is scary stuff and in this case is

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Speaker 1: he could service stop these packages. This of course comes

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Speaker 1: just a day after a package was found at the

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Speaker 1: home of George Soros, also opened Westchester there. So um, look,

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Speaker 1: this is where the political rhetoric that gets heated turns

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Speaker 1: into something a little more sinister um and obviously pretty

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Speaker 1: alarming for any of us who cover these folks every day. Well,

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Speaker 1: just for a little bit more detail here, the Secret

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Speaker 1: Services the packages were immediately identified during routine mail screening procedures.

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Speaker 1: They were identified as potential explosive devices and were appropriately

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Speaker 1: handed handled as such. One of them was a device

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Speaker 1: addressed to Hillary Clinton, while another addressed to former President Obama.

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Speaker 1: They were intercepted by Secret Service personnel in Washington, d C.

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Speaker 1: The agency and the statement said that the U. S.

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Speaker 1: Secret Service has intercepted two suspicious suspicious packages addressed to

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Speaker 1: Secret Service protectees and the Newcastle Police Department assisting the

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Speaker 1: FBI and Secret Service, as well as Westchester County Police

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Speaker 1: Craig Gordon. Does this mean that there are going to

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Speaker 1: be increased security in place for the midterm elections and

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Speaker 1: for campaigning. I mean, you know, security round the president

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Speaker 1: already quite high. It's hard to imagine this doesn't cause

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Speaker 1: the Secret Service to a like a little bit more

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Speaker 1: on some of its procedures. You know, I'm not sure

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Speaker 1: individual House candidates out there again in the in the

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Speaker 1: four and thirty five seats that are have a lot

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Speaker 1: of the Secret Service protection. IM sure they have sort

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Speaker 1: of private security. But look, anytime something like this happens,

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Speaker 1: people tighten up a little bit and they gets they

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Speaker 1: have to think a lot harder about how they're doing this.

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Speaker 1: And I mean, we already know the political environment is

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Speaker 1: is quite toxic. There's a lot of very rough language

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Speaker 1: on both sides being thrown around. Sometimes again it takes

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Speaker 1: us a more sinister turn in the way it did

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Speaker 1: with these packages, presumably, UM, but I think I think

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Speaker 1: people are already on alert, and I think believe would

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Speaker 1: be more so after this news today. Greg Gordon, thank

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Speaker 1: you so much and short notice as we follow the

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Speaker 1: story these suspicious packages, uh, and some of our political leaders,

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Speaker 1: John Lieber joins us on text policy with p WC.

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Speaker 1: Is all John, wonderful to have you with us, with

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Speaker 1: maybe a more pull called till today then policy, uh,

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Speaker 1: killed Craig Gordon. They're talking about, well, you know, the

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Speaker 1: Democrats may still get it done in the House, although

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Speaker 1: I'd say that's emotion is swinging around right now. Even

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Speaker 1: if the Republicans were to win, would it be a

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Speaker 1: new gridlock in Washington? You know, it's hard to doing

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Speaker 1: any kind of legislation these days. Um, you've got a

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Speaker 1: sixty boat threshold and the Senate, which means anything you

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Speaker 1: do have to be bipartisan. And there's not a lot

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Speaker 1: of bipartisan uh Kumbaya moments happening that right now. So

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Speaker 1: it's really hard to do anything at all. And so

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Speaker 1: who knows even a Republicans get hold the House. Um,

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Speaker 1: you may see not a lot of happening in the

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Speaker 1: next two years. Well, just can you explain why? I mean,

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Speaker 1: this is not like we're talking about thousands of people, right,

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Speaker 1: I mean, you've got a hundred Senators, you've got the

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Speaker 1: congressmen and women, and you have the executive branch. Why

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Speaker 1: is it so difficult to get under a thousand people

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Speaker 1: to agree on things that milly of Americans seem to

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Speaker 1: agree on. Well, you know it's not just the you know,

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Speaker 1: foreign and dirty five members of the House. How do

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Speaker 1: member of the Senate. You've got each one of them

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Speaker 1: representing very diverse constituencies, and you know, to win an

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Speaker 1: election these yeah, but they're wait wait wait, wait but

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Speaker 1: there but their their constituencies aren't that diverse. Just because

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Speaker 1: of what you said that we've got this huge polarization

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Speaker 1: that they're each just representing very single minded supporters. Right.

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Speaker 1: So the question is who's coming out to vote? And

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Speaker 1: if you look at who's coming out to vote in

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Speaker 1: recent elections, it's the base that's winning the election. It's

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Speaker 1: not the middle of the road independent voter who's coming

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Speaker 1: out he's persuaded by your arguments. It's people who you're

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Speaker 1: there to fight for them, and they want to beat

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Speaker 1: the other side. And that's what the senators and the

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Speaker 1: members are responding to, and that's why it compromises so hard,

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Speaker 1: John Leever, and particularly with your experience with Senator McConnell.

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Speaker 1: Frank Newport of Gallop was riveting yesterday about the quiet

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Speaker 1: little thing nobody talks about, which is this will be

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Speaker 1: a success if thirty six or thirties seven or thirty

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Speaker 1: eight percent of eligible voters vote. It's stunning the lack

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Speaker 1: of turnout in mid terms, isn't it. Yeah? I mean,

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Speaker 1: I think if you had a broader turnout, if people

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Speaker 1: were more informed, you might get a different result. But

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Speaker 1: this is the system we have. You know, you can't.

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Speaker 1: We don't have mandatory voting in this country and we

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Speaker 1: probably never will. Um. You know, people who have lives,

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Speaker 1: they're not paying attention to the elections the way we are.

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Speaker 1: You know, I think it's hard to people to feel

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Speaker 1: informed about what's actually going on in Washington and get

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Speaker 1: all the information they need. And because of that, I

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Speaker 1: think that, you know, it turns people off from voting,

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Speaker 1: and the people who do vote to the ones who

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Speaker 1: are most exercised about a very narrow set of issues.

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Speaker 1: And you see, you know, that's an incentive the politicians

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Speaker 1: are responding to. Do you see the possibility of the

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Speaker 1: Senate becoming a Democrat majority or do you contend that

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Speaker 1: what the polls indicate currently that it will remain in

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Speaker 1: the Republican control. You know, I think it's possible. I

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Speaker 1: think the fact that you've got racist like Tennessee pulling away,

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Speaker 1: you've got the Democrats are suspending so many seats right

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Speaker 1: now that it just would be unlikely. They'd have to

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Speaker 1: have almost a pitch, a perfect game basically in order

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Speaker 1: to make that happen, and not just you know, you

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Speaker 1: can't rely on that. That's called that's called doing a

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Speaker 1: red sox just in case exactly, you know, you can't

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Speaker 1: count on that. John Lieber, thank you so much, greatly

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Speaker 1: appreciate it. This morning, just really wonderful perspective. Thanks for

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Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to

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Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

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Speaker 1: I'm on Twitter at Tom Keane before the podcast. You

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Speaker 1: can always catch us worldwide. I'm Bloomberg Radio