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

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Speaker 2: This is the Bloomberg dbic cure At podcast. Good morning,

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Speaker 2: It's Wednesday, the twenty fifth of February. I'm Caroline Hepkitt

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Speaker 2: in London and.

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Speaker 3: I'm Stephen Caroline Brussels. Coming up today, Bigger, Better, richer

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Speaker 3: and stronger. US President Donald Trump delivers a defiant State

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Speaker 3: of the Union address as his approval ratings slide.

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Speaker 2: Heavyweight investors and institutions issue stark warnings over private credits trajectory.

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Speaker 3: Plus being shown the door. Why Spain's broken housing market

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Speaker 3: is pitting owners against squatters.

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Speaker 2: Let's start with the roundup of our top stories.

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Speaker 3: The US President Donald Trump has made a strident defense

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Speaker 3: of his economic record at the State of the Union.

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Speaker 3: In a record one hour and forty seven minute address,

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Speaker 3: The President said inflation was plummeting and the economy was strong.

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Speaker 3: The President used the speech to draw stark contrast between

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Speaker 3: his administration and that of his predecessor, as well as

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Speaker 3: overstating the inflation rate that he inherited. Trump repeatedly blamed

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Speaker 3: opponents and the establishment for his political troubles. The US

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Speaker 3: president also attacks the Supreme Court's decision to strike down

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Speaker 3: his global tariffs, as half of the justices who ruled

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Speaker 3: against him sat in the audience watching.

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Speaker 4: Just four days ago an unfortunate ruling from the United

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Speaker 4: States Supreme Court. It just came down and came down

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Speaker 4: very unfortunate ruling. But the good news is that almost

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Speaker 4: all countries and corporations want to keep the deal that

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Speaker 4: they already made, right Scott, knowing that the legal power

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Speaker 4: that I, as president have to make a new deal

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Speaker 4: could be far worse for them.

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Speaker 3: President Trump's failed threat comes after both the EU and

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Speaker 3: India paused their US trade deals following the Supreme Court's decision.

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Speaker 3: Trump also suggested his new tarffs would not require approval

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Speaker 3: from congres that's despite the newly enacted ten percent and

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Speaker 3: potentially up to fifteen percent global levy having a one

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Speaker 3: hundred and fifty day limit before congressional approval is required

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Speaker 3: to keep it in place.

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Speaker 2: President Trump also used his address to claim that Iran

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Speaker 2: is working to reconstitute its nuclear program. The accusation comes

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Speaker 2: after a US military strike in June last year that

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Speaker 2: the President had previously said resulted in the obliteration of

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Speaker 2: Iran's key nuclear sites. The US is now a master

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Speaker 2: military force in the Middle East not seen since the

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Speaker 2: two thousand and three Iraq invasion. As speculation grows that

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Speaker 2: President Trump is preparing for a fresh round of strikes

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Speaker 2: in the coming days, he also issued this confrontational warning

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Speaker 2: to the regime in Tehran.

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Speaker 4: They were warned to make no future attempts to rebuild

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Speaker 4: their weapons program, in a particular nuclear weapons. Yet they

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Speaker 4: continue starting it all over. We wiped it out, and

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Speaker 4: they want to start all over again, and at this

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Speaker 4: moment again pursuing their senature ambitions. We are in negotiations

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Speaker 4: where them they want to make a deal, but we

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Speaker 4: haven't heard those secret words. We will never have a nuclear.

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Speaker 2: Weapon, President Trump. Well, Iron has long argued that its

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Speaker 2: nuclear program is for peaceful purposes. Trump's comments now set

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Speaker 2: the stage for high stakes meeting in Geneva on Thursday

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Speaker 2: between representatives on the US and Iranian officials, which is

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Speaker 2: aimed at securing a nuclear deal.

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Speaker 3: HSBC is reported better than expected earnings for twenty twenty five.

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Speaker 3: The lender posted pre tax profit of twenty nine point

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Speaker 3: nine billion dollars for the year. That's is HSBC's market

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Speaker 3: value top two hundred and seventy billion for the first time.

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Speaker 3: CEO Jorge L. Hadri says the bank will continue to evolve.

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Speaker 5: We are transforming with precision, with discipline, and we're doing

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Speaker 5: it at pace, and we expect to be able to

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Speaker 5: conclude a number of the actions we set out to

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Speaker 5: do earlier than initially planned.

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Speaker 3: PC Jargel Hedri there speaking to Bloomberg this morning. His

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Speaker 3: radical restructuring has won praise from investors and driven the

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Speaker 3: bank's shares up almost ninety percent since he took the helm.

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Speaker 3: It means the bonus pool at Europe's largest bank is

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Speaker 3: up ten percent to three point nine three billion dollars,

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Speaker 3: the highest in at least a decade.

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Speaker 2: A growing number of industry voices are displaying caution when

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Speaker 2: it comes to private credit. Money manager Danny Moses, featured

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Speaker 2: in The Big Short, says that the private markets push

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Speaker 2: into retail products is reminiscent of the years before the

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Speaker 2: global financial crisis. Strates at ubs about their forecast for

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Speaker 2: defaults in the sector to fifteen percent. That's two percentage

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Speaker 2: points more than a forecast less than a month ago.

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Speaker 2: The bank's head of public and private credit strategy, Matthew Mish,

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Speaker 2: says technology and technological progress could also present a challenge

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Speaker 2: for the industry.

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Speaker 4: We are more.

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Speaker 6: Concerned with AI disruption and the impact on the loan

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Speaker 6: market in the near to medium term than we are

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Speaker 6: on O supply from the hyperscalers and potential for supply

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Speaker 6: indigestion that in my view, is a medium to longer

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Speaker 6: term concern or no concern at all to be tended.

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Speaker 2: Ubs is Matthew Mish, speaking there to Bloomberg yesterday. His

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Speaker 2: remarks come as activist investor Boaz Weinstein also warned of

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Speaker 2: a deeper crack in private credit funds. Fears surrounding the

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Speaker 2: sector I've been building in recent days after the asset

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Speaker 2: manager Blue Owl Capital blocked investors for making withdrawls from

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Speaker 2: one of its private credit funds, raising anxiety about the

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Speaker 2: loans issued by direct lenders.

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Speaker 3: Europeing Commissioned President ur Slovanderlyn says that EU will deliver

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Speaker 3: on its ninety billion euro aid for Ukraine one way

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Speaker 3: or another, that E has been repeatedly blocked by Hungary

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Speaker 3: from passing an aid package and further sanctions on Russia.

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Speaker 3: Speaking in Kiev, marking four years of the start of

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Speaker 3: Russia's full scale invasion vonderlyin stress that Ukraine would receive

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Speaker 3: the funding.

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Speaker 7: The loan was agreed by twenty seven heads of state

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Speaker 7: and government. They have given their word. This word cannot

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Speaker 7: be broken. So we will deliver them on the lawn

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Speaker 7: one way or the other. It me be very clear.

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Speaker 7: We have different options and we will use them.

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Speaker 3: Yourping Commission. President's words come as Ukraine is said to

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Speaker 3: run out of funding in a matter of weeks. Peace

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Speaker 3: talkers Russia have also stoled, with both sides seemingly prepared

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Speaker 3: for a long war of attrition.

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Speaker 2: Lawyers acting for Peter Mandelssohn say that his arrest was

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Speaker 2: prompted by a suggestion that he was about to flee

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Speaker 2: the country. The former UK ambassador to Washington is under

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Speaker 2: investigation for his links to convicted sex offender Jeffrey Epstein.

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Speaker 2: He denies any wrongdoing and has been released on bail.

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Speaker 2: Foreign Secretary Evett Cooper says it's an unwelcome distraction.

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Speaker 1: Some of what has been so deeply frustrating about all

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Speaker 1: of this is that really at the heart of all

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Speaker 1: of this should be victims of Epstein.

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Speaker 7: That really should.

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Speaker 3: Be the focus.

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Speaker 2: Cooper's government has come under far for choosing Mandelson as

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Speaker 2: its top diploma out to the United States. Poling puts

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Speaker 2: Prime Minister Keir Starmer as the most unpopular UK leader

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Speaker 2: in modern times, ahead of key local and regional elections.

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Speaker 2: So those are our top stories then for you this morning.

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Speaker 2: Looking at the markets, so we had something of a

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Speaker 2: relief rally. It would seem ai strains maybe easing. Wall

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Speaker 2: Street rallied on Tuesday. European stocks also ended the day

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Speaker 2: up two tenths of one percent, and this morning you

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Speaker 2: see the MSCIAS Pacific Index up by one and a

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Speaker 2: half percent. South Korea has now surged past France in

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Speaker 2: terms of its stock market valuation. I thought that was notable.

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Speaker 2: Bloomberg Doonnard Spot indexes down two tenths of one percent.

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Speaker 2: Treasuries edging lower this morning. Ten year treasury yields up

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Speaker 2: one and a half basis points at four spot zero four.

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Speaker 2: Gold and silver gaining gold this morning up eight tenths

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Speaker 2: of one percent, and bitcoin also gaining so again risk

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Speaker 2: on there so by one and a half percent for

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Speaker 2: bitcoin this morning.

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Speaker 3: In a moment, we will bring you more on President

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Speaker 3: Trump's State of the Union dress and what it means

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Speaker 3: for the rest of the World plus how squatters are

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Speaker 3: being pitted against owners in Spain's housing crisis. But another

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Speaker 3: story that caught our eye this morning on how a

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Speaker 3: number of Donald Trump's ambassadors in Europe are getting themselves

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Speaker 3: into trouble with some undiplomatic comments and actions. Our reporters

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Speaker 3: in Brussels, Warsaw and Paris have been writing about this now.

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Speaker 3: We spoke to Bill White, the US ambassador to Belgium,

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Speaker 3: a couple of weeks ago. He's an art supporter of

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Speaker 3: President Trump, not shy about it. He's gotten himself into

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Speaker 3: trouble in Belgium after accusing the country of anti semitism

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Speaker 3: over a legal investigation into Jewish ritual circumcision in the

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Speaker 3: city of Antwerp and whether it was being The investigations

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Speaker 3: over whether it was being done without proper medical supervision.

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Speaker 3: The ambassador was summoned by Belgian's Foreign Ministery, who accused

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Speaker 3: him of peddling dangerous disinformation that under minds the real

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Speaker 3: fight against hatred in France. Meanwhile, the ambassador also summoned

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Speaker 3: by the foreign ministry and didn't turn up, which prompted

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Speaker 3: the French Foreign Ministry to cut off his access to

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Speaker 3: all government officials. It's a new diplomatic playbook that seemed

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Speaker 3: to be employed by some of Donald Trump's appointees, which

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Speaker 3: don't seem to be doing much to help the US

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Speaker 3: president's reputation abroad.

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Speaker 2: No, and I think it's quite interesting. It's interesting also

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Speaker 2: to sort of gather what the US is doing in

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Speaker 2: Europe in all of these different countries where you know,

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Speaker 2: whether there are ambassadors or at least the evidence in

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Speaker 2: a number of countries. I mean, if anything, I think

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Speaker 2: it may be also fueling the concern about social media

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Speaker 2: in Europe, which is another really big clash point ficile

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Speaker 2: line between the EU and the US, because, for example,

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Speaker 2: the French Foreign Minister Gean Noel Bajor was saying that

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Speaker 2: the government must bring to heal these social networks, take

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Speaker 2: back control over our public space because they say that,

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Speaker 2: you know, Trump's appointees are using this particular tool in

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Speaker 2: such a big way to kind of make their points

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Speaker 2: in Europe. Yeah.

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Speaker 3: Well, we link to that story in our podcast show notes.

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Speaker 3: But let's bring you more now. On the State of

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Speaker 3: the Union speech in the US, Donald Trump defended his

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Speaker 3: record despite his approval rating sliding and opinion polls. We've

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Speaker 3: got our Washington Deputy Bureau Chief Laura Davison with us

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Speaker 3: for more on this. Laura, good to talk to you.

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Speaker 3: So a record one hour and forty seven minutes in

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Speaker 3: this address, will it have helped to turn around public

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Speaker 3: opinion about Trump's presidency.

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Speaker 8: There's not a lot in this speech that would really

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Speaker 8: help Trump. But he also didn't hurt himself either. This

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Speaker 8: speech really was a rehash, mostly backward looking, you know,

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Speaker 8: him touting you know, his first year successes, you know,

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Speaker 8: looking at tax cuts. He talked a lot about, you know,

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Speaker 8: all the foreign policy things he's been involved in between

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Speaker 8: the Board of Peace and Gaza Israel, but he didn't

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Speaker 8: really have any ideas for the future. There was only

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Speaker 8: you know, one sort of small idea dealing with retirement

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Speaker 8: accounts that he brought up, but didn't have any big,

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Speaker 8: weeping plans. That does not give Republicans a lot to

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Speaker 8: run on going into the midterms. You know, we talked

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Speaker 8: to Republican allies and members of the party going into

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Speaker 8: the speech, and they were hoping to have a message

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Speaker 8: that they could really seize on sell the voters if

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Speaker 8: this is why you should keep Republicans in Congress, you know,

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Speaker 8: majorities in both chambers as well as the White House.

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Speaker 2: They did not get that tonight. Yeah, one person described it.

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Speaker 2: I saw as a pet rally. There was lots of patriotism.

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Speaker 2: It was very bombastic. You know, there were the gold

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Speaker 2: medal winners from the Olympics that were brought in at

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Speaker 2: one point. You know, it was there was a lot

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Speaker 2: of kind of noise and excitement about it. But as

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Speaker 2: you say, what did we actually learn in terms of policy,

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Speaker 2: and in particular what we want to understand is trade policy.

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Speaker 2: Given the Supreme Court decision last week.

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Speaker 8: Yes, Trump did mention tariffs and neither this of the

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Speaker 8: Cour of Horus is just in front of several of

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Speaker 8: the Supreme Court justices who attended the speech in person,

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Speaker 8: including a handful who were sort of Republican appointed judges

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Speaker 8: who voted against him, is his tariffs. He said, look,

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Speaker 8: I'm going to continue this. You know, he you know

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Speaker 8: Trump has held this you for a long time. That

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Speaker 8: he reiterated that, you know, tariffs are a good negotiating

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Speaker 8: tool that they bring in revenue to the US and

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Speaker 8: not necessarily that they hurt US businesses and consumers. He said, look,

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Speaker 8: you know what I'll have to do maybe more complex

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Speaker 8: than I was doing previously, but said, you know, perhaps

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Speaker 8: that'll be better going forward. It was interesting, he noted,

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Speaker 8: you know, in the room, you know, this is a

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Speaker 8: speech to Congress. He said, look, Congress, I'm not going

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Speaker 8: to rely on your approval to move forward. So this

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Speaker 8: means that he's going to have to look at all

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Speaker 8: these various pockets of the law that does give him

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Speaker 8: the ability to levy tariffs, but it takes more time.

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Speaker 8: He has to show more justification, and you know, it's

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Speaker 8: likely that Congress, if he asked them to approve these tariffs,

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Speaker 8: Congress would not do it. So he's going to have

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Speaker 8: to do this go at alone approach.

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Speaker 3: What about the other key foreign policy issues that we're

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Speaker 3: watching for developments on Iran or the war in Ukraine.

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Speaker 8: Yeah, he mentioned the war in Ukraine, but really did

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Speaker 8: not have a lot of substantive things to stay there,

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Speaker 8: you know, other than noting that there's you know, mass

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Speaker 8: casualties on both sides and the killing continues on Iran.

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Speaker 8: He had a little bit more of an appointed message there.

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Speaker 8: He said, you know that he hopes that diplomacy can

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Speaker 8: work out, noting that there are talks here just in

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Speaker 8: a couple of days, but acknowledged that, you know, he

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Speaker 8: would never allow Iran to get a nuclear weapon, and

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Speaker 8: he was not afraid to have the US military intervene.

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Speaker 8: He you know, mentioned that he claimed that Iran is

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Speaker 8: working on missiles that could reach the US, and you know,

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Speaker 8: kind of seemed to be building a case there that

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Speaker 8: if he needed to use the military, he could point

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Speaker 8: back to some of these comments from tonight.

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Speaker 2: Hmm, okay, very interesting. Thank you so much, Lea for

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Speaker 2: being with us. That is our Washington Deputy Bureau Chief

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Speaker 2: Laura Davison there thinking about the State of the Union

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Speaker 2: address when President Trump stay with us. More from Bloomberg

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Speaker 2: Daybacube coming up after this.

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Speaker 3: In Spain and escalating housing crisis has seen tens of

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Speaker 3: thousands of homes occupied by squatters. Some of those properties

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Speaker 3: are now even being listed for sale as the government

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Speaker 3: prepares to decide on extending protect actions for vulnerable tenants.

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Speaker 3: Our reporter, I know are going, actually joins us now

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Speaker 3: from Madrid for more. I know, good morning, great to

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Speaker 3: talk to you. How big is this problem then of

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Speaker 3: people squatting in homes in Spain and why has it

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Speaker 3: gotten so bad?

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Speaker 9: Well, in terms of scale, it still represents a small

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Speaker 9: percentage nationwide, but in some cities, mainly capital Madrid, Barcelona,

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Speaker 9: it's becoming increasingly highly visible and it's becoming a social

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Speaker 9: and political problem. For the most part, we're not talking

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Speaker 9: of the classic squatter breaking into an empty property. It's

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Speaker 9: more what we call in Kyoko bus so tenants who

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Speaker 9: stop paying rent that remain in the home. And the

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Speaker 9: problem behind it is that regious rents have become unaffordable.

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Speaker 9: For many rental households have to pay close to forty

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Speaker 9: five percent of their income and housing, but in cities

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Speaker 9: like Madrid and Barcelona, which are rent amongst the highest

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Speaker 9: in Europe, in this friend's burnt people have to pay

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Speaker 9: around seventy four percent of salaries some housing costs. So

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Speaker 9: just tennants just don't have anywhere to turn to because

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Speaker 9: social housing is really just really low. The percentage of

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Speaker 9: social housing in Spain is amongst the lowest in Western Europe,

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Speaker 9: just two percent of total stock. Yeah, that's been one file.

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Speaker 2: Yeah, I mean that's an extraordinary sum, isn't it for

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Speaker 2: renters to have to pay? What does it also mean

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Speaker 2: though for owners of those properties? And this surely sets

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Speaker 2: up a quite significant clash.

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Speaker 9: Yeah, so it's really like divided the market. So for owners,

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Speaker 9: especially small landlords, the consequences can be really severe because

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Speaker 9: the properties are occupied, but recovering them is just it

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Speaker 9: takes a long time. The process is really slow. It

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Speaker 9: can take months and not years in courts. But during

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Speaker 9: that time they still have to pay the mortgage taxes,

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Speaker 9: community pies, but they don't receive the rent. So this

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Speaker 9: has really pushed people to put the property in the

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Speaker 9: market at really huge discounts, even like forty percent discounts.

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Speaker 9: So it's just really like polarized and tenants.

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Speaker 3: Yeah, it's an extraordinary development that people would be forced

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Speaker 3: to sell while this problem is ongoing as well. I mean,

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Speaker 3: how does this fit into the broader housing crisis in Spain?

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Speaker 3: And talk to us about what the government is doing

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Speaker 3: about this.

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Speaker 9: The housing crisis has switched a boiling point. The government

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Speaker 9: introduced temporary protections during the pandemic and the energy crisis,

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Speaker 9: which we tend to protect tenants. It's called the Social

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Speaker 9: Shield and including suspensions of evictions for households that declare

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Speaker 9: themselves economically vulnerable. Actually, now tomorrow this is going to

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Speaker 9: go up for both again. For an extension of another year.

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Speaker 9: But while this was designed to prevent social exclusion and

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Speaker 9: the government's trying to balance both sides, owners just argue

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Speaker 9: that the social burden has shifted to them. So, yeah,

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Speaker 9: it's just a visual cycle in the supply side, because

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Speaker 9: other owners that will probably put their property in the

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Speaker 9: market for rent just sort of throw and just they

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Speaker 9: see the risk of this loophole of people maybe squatting,

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Speaker 9: and you know, it's just tied into the supply and

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Speaker 9: there's lesson less properties in the market to rent.

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

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