WEBVTT - Markets Weigh Middle East Risks 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.160 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:46.919 the Bloomberg Terminal, and the Bloomberg Business app right now 0:00:46.920 --> 0:00:47.400 on market. 0:00:47.479 --> 0:00:49.360 Sarah Hunt joins us this morning. 0:00:49.680 --> 0:00:51.879 I was looking at the operating income of the banks 0:00:51.960 --> 0:00:56.280 with Golden Sechs coming out, and they just their profit 0:00:56.360 --> 0:01:01.080 growth is there, but it's not techlike. Are they profitable 0:01:01.160 --> 0:01:04.360 and are they a growing profitable entity the big banks 0:01:05.040 --> 0:01:05.680 or are they not? 0:01:06.280 --> 0:01:08.360 Well, the big banks are just getting bigger, right, so 0:01:08.520 --> 0:01:10.800 to the extent that the regional banks are suffering because 0:01:10.800 --> 0:01:13.440 the bigger banks are getting bigger. There is growth, there 0:01:13.560 --> 0:01:15.600 is it tech like growth. No, But if you see 0:01:15.680 --> 0:01:17.880 if you start to see some other areas pick up, 0:01:17.920 --> 0:01:20.600 like capital markets, which has essentially been more abound for 0:01:20.600 --> 0:01:23.360 the next for the last couple of years. They're pointing 0:01:23.400 --> 0:01:26.120 to some opening in some of those areas. I think 0:01:26.120 --> 0:01:28.240 the bigger banks continue to get bigger, and I think 0:01:28.240 --> 0:01:29.920 in that sense there's growth, but no, it's not going 0:01:29.959 --> 0:01:31.679 to be a hockey stick like some of the tech sacs. 0:01:32.200 --> 0:01:34.800 So, sir, I mean, we're getting into the meat of 0:01:35.000 --> 0:01:36.559 earnings here this week. 0:01:36.600 --> 0:01:36.800 Here. 0:01:37.000 --> 0:01:40.240 What are you looking for for this earning cycle from 0:01:40.240 --> 0:01:41.520 some of the leading players. 0:01:42.040 --> 0:01:44.600 It's a combination of what the first quarter looked like 0:01:44.640 --> 0:01:46.680 and what their expectations are for the rest of the year. 0:01:46.720 --> 0:01:49.040 Because I think that given where the valuations are in 0:01:49.080 --> 0:01:51.440 the equity markets and all the geopolitical tensions that we're 0:01:51.440 --> 0:01:54.400 talking about, you're at some fairly lofty valuation levels. 0:01:54.400 --> 0:01:55.120 So you need to. 0:01:55.040 --> 0:01:57.760 See some real earnings come through here, and to the 0:01:57.800 --> 0:02:00.720 extent that people are already expecting or to be better, 0:02:00.960 --> 0:02:03.200 they need to not just be better, but the going 0:02:03.240 --> 0:02:05.080 forward has to look pretty good as well. 0:02:05.320 --> 0:02:08.120 So I mean, it's interesting you talk about evaluation here. 0:02:08.120 --> 0:02:11.280 We've had this big, big move for equity prices off 0:02:11.320 --> 0:02:14.440 those October lows, up twenty five percent plus for the 0:02:14.480 --> 0:02:17.280 SMP five hundred. I don't think we've seen necessarily that 0:02:17.360 --> 0:02:20.079 type of earnings expansion as well. So where are we 0:02:20.240 --> 0:02:21.560 in terms of valuation here? 0:02:22.320 --> 0:02:24.560 We're on the higher end, right so to the extent 0:02:24.600 --> 0:02:27.160 that some of the technology stocks have got the hockey 0:02:27.200 --> 0:02:30.000 stick growth that is supporting multiples because people are expecting 0:02:30.160 --> 0:02:32.400 the earnings to grow into those multiples. So the multiples 0:02:32.400 --> 0:02:34.360 will come down because the earnings are coming up. But 0:02:34.400 --> 0:02:36.160 I think if you look at the market as a whole, 0:02:36.480 --> 0:02:38.760 we're on that higher end on the multiple side, and 0:02:38.800 --> 0:02:40.880 that's it's been a real multiple expansion more than an 0:02:40.880 --> 0:02:43.080 earnings catch up. And if the earnings don't end actually 0:02:43.160 --> 0:02:45.680 end up coming through, I think you have some vulnerability there. 0:02:45.720 --> 0:02:47.960 So what do you do if you're in the game, 0:02:48.200 --> 0:02:50.160 you know there's a lot I often talk about people 0:02:50.160 --> 0:02:51.920 that have missed this school market. Let's say I'm in 0:02:51.960 --> 0:02:54.959 it and there's like stage two, stage three. 0:02:54.880 --> 0:02:58.560 The whatever. How do you treat cash right now? 0:02:58.639 --> 0:03:01.360 I mean, if you're trying to be an adult and 0:03:01.400 --> 0:03:04.840 you're running at five percent cash or eight percent cash, 0:03:05.040 --> 0:03:06.760 do you want to build that or do you want 0:03:06.800 --> 0:03:08.480 to put money to work right now? 0:03:08.960 --> 0:03:11.200 It's a combination of things. I think there's nothing wrong 0:03:11.240 --> 0:03:14.040 with having something like a five percent cash position somewhere 0:03:14.040 --> 0:03:16.079 in between. That the higher up you go, the more 0:03:16.120 --> 0:03:19.240 you become at risk of not just not really managing money. 0:03:19.240 --> 0:03:21.640 If you're supposed to be an equity manager, right you 0:03:21.680 --> 0:03:23.480 want to be looking at what's going on. I think 0:03:23.480 --> 0:03:25.200 the market has broadened out. I think that there's some 0:03:25.240 --> 0:03:27.200 opportunities in some of the spaces. I mean, I've talked 0:03:27.240 --> 0:03:30.200 about energy for ages, but certainly what's going on right now. 0:03:30.240 --> 0:03:33.519 You've got some longer term better prospects for the energy group, 0:03:33.560 --> 0:03:37.040 which is unfortunate because the geopolitical situation. But that combined 0:03:37.080 --> 0:03:39.240 with the energy transition story, means that you're seeing some 0:03:39.280 --> 0:03:40.360 of h oil prices. 0:03:40.360 --> 0:03:43.320 Three month T bill five point three eight percent, one 0:03:43.400 --> 0:03:47.200 year tea bill shockingly lower five point one five time. 0:03:47.400 --> 0:03:49.240 I mean, it's like ninety day money. 0:03:49.240 --> 0:03:51.880 You're all set there in your triple all large cash 0:03:52.160 --> 0:03:53.520 fund here, So what do you want. 0:03:53.400 --> 0:03:53.760 To go through? 0:03:54.280 --> 0:03:56.480 I learned this weekend we just did the end a 0:03:56.560 --> 0:03:58.680 quarter review. I had a two and twenty payout. 0:03:58.880 --> 0:03:59.160 Nice. 0:03:59.240 --> 0:04:02.760 Great, we gross up thirteen point five percent. 0:04:03.000 --> 0:04:03.240 Nice. 0:04:03.320 --> 0:04:04.720 There's some fees involved. 0:04:04.360 --> 0:04:07.280 There's everybody's got to get paid, just got to be paid. 0:04:07.280 --> 0:04:09.920 You know, we got two and twenty Sarah, So what 0:04:09.960 --> 0:04:10.480 do we do here? 0:04:10.560 --> 0:04:14.240 I mean again, technology has been the leader in this 0:04:14.360 --> 0:04:18.400 market since I can't remember when, and is that still. 0:04:18.240 --> 0:04:18.840 The case here? 0:04:18.880 --> 0:04:21.760 Does technology need to drive this market? 0:04:21.920 --> 0:04:24.599 This is the question of the week, folks. Sweety just 0:04:24.720 --> 0:04:27.040 asked this is this is everything? 0:04:27.240 --> 0:04:28.919 I think the answer is yes. I mean if you 0:04:29.120 --> 0:04:31.520 just look at where the growth is, it's on technology. 0:04:31.560 --> 0:04:34.240 So do you need other things to do well as well? 0:04:34.320 --> 0:04:34.920 Yes you do. 0:04:35.200 --> 0:04:36.280 But if you really. 0:04:36.040 --> 0:04:37.960 Saw a problem with technology, that's going to be a 0:04:37.960 --> 0:04:39.680 problem for the entire market. I think it does need 0:04:39.720 --> 0:04:40.320 to keep that leader. 0:04:40.400 --> 0:04:41.680 So are you a buyer? 0:04:41.680 --> 0:04:44.599 And this whole AI stuff, Tom and I are still 0:04:44.600 --> 0:04:46.080 trying to figure out what AI means. 0:04:47.160 --> 0:04:49.559 When you went down to Duke this weekend, O got smart? 0:04:49.680 --> 0:04:50.520 I got smart? 0:04:51.080 --> 0:04:53.479 Well, you look at all the areas that are going 0:04:53.520 --> 0:04:55.720 to be impacted by it. There's a huge spend going 0:04:55.760 --> 0:04:57.599 on right now because of it. And the question is 0:04:57.600 --> 0:04:59.600 how is that going to make us profitable? Because the 0:04:59.640 --> 0:05:02.000 real with AI is can I get my margins up 0:05:02.000 --> 0:05:04.080 by using it in some way? And the questions are 0:05:04.120 --> 0:05:07.039 sort of like AI question mark, I'm going to make 0:05:07.080 --> 0:05:09.919 more money. That question mark is coming through. For some 0:05:09.960 --> 0:05:12.200 of the players like Microsoft and some of the cloud players, 0:05:12.240 --> 0:05:14.279 it's going to be a question going forward how you 0:05:14.279 --> 0:05:15.279 actually monitor. 0:05:15.680 --> 0:05:19.040 Microsoft as you were going, I get thirty seconds Microsoft 0:05:19.120 --> 0:05:23.160 pre COVID fifty two bill excuse me, thirty eight billion. 0:05:23.279 --> 0:05:26.839 Thirty eight billion free cash flow. Oh, it's almost a 0:05:27.000 --> 0:05:31.360 double the arch question of Paul's great question, Can this 0:05:31.480 --> 0:05:32.799 juggernaut be sustained? 0:05:32.839 --> 0:05:35.159 You're saying yes, Well, I'm saying that they need to 0:05:35.160 --> 0:05:37.360 continue to show growth and if they show growth and 0:05:37.400 --> 0:05:39.520 the juggernaut will be sustained. If the growth slows down, 0:05:39.560 --> 0:05:41.680 that's going to be a big question mark. How the 0:05:41.720 --> 0:05:43.160 rest of the market reacts as well. 0:05:43.200 --> 0:05:45.600 Absolutely, Sarah, thanks for getting a start of this week. 0:05:45.640 --> 0:05:50.600 Sarah hunt with us greatly, greatly appreciate that. With Alpine 0:05:50.640 --> 0:06:05.200 Wood's Capital investors, I thought of Ian Bremer four or 0:06:05.240 --> 0:06:09.400 five six times this weekend, because you need to describe 0:06:09.600 --> 0:06:15.000 our G zero certitude, our comfort, our lack of warfare 0:06:15.040 --> 0:06:17.800 on the soil of the United States and the other 0:06:17.920 --> 0:06:21.520 G seven nations with what's going on out there. He 0:06:21.720 --> 0:06:25.239 codified the phrase G zero and we're honored that doctor 0:06:25.279 --> 0:06:29.560 Bremer could join us this morning. What does the G 0:06:29.760 --> 0:06:34.760 seven do here? Of the Kissingerian diplomacy, Ian, you got 0:06:34.760 --> 0:06:39.080 to show up and be diplomatic. If you can't talk 0:06:39.120 --> 0:06:42.880 to the other side, how to should the G seven respond? 0:06:44.400 --> 0:06:49.160 They're showing as much support as they can for the 0:06:49.160 --> 0:06:55.320 defense of Israel, and that is both intended to show 0:06:55.480 --> 0:06:59.360 Israel that they are not isolated in the global stage 0:06:59.440 --> 0:07:02.800 despite the war in Gaza and all of the opposition 0:07:03.120 --> 0:07:06.480 to that war over the past months. But the Iranian 0:07:06.560 --> 0:07:12.200 strikes in a sense are the higher priority for the 0:07:12.240 --> 0:07:16.080 G seven, but that they don't want to see. They 0:07:16.160 --> 0:07:20.520 really resist the potential for Israel to engage in strikes 0:07:20.560 --> 0:07:25.119 against Iran that could precipitate a direct war. And right now, 0:07:25.160 --> 0:07:30.080 I would argue, you've got Benny Gans largely sympathetic to 0:07:30.120 --> 0:07:32.320 that message, someone that would like to be the next 0:07:32.320 --> 0:07:35.760 Prime Minister of Israel, and he has a vote on 0:07:35.800 --> 0:07:40.320 that war cabinet. And you've got Benjamin Yahoo, who is 0:07:40.600 --> 0:07:43.360 fighting for his political life and is not sympathetic to 0:07:43.400 --> 0:07:46.040 that argument. Gants is saying, this is the time that 0:07:46.080 --> 0:07:49.960 you should strengthen alliances with countries like the US in 0:07:50.040 --> 0:07:52.960 Germany and on Yahoo is saying this is the time 0:07:53.000 --> 0:07:55.800 we've got to hit the Iranians back directly and hard, 0:07:56.160 --> 0:07:59.000 even if that means a more isolated and a more 0:07:59.200 --> 0:08:03.880 unilateral Israel. That is the nature of the debate inside 0:08:03.960 --> 0:08:04.480 Israel right now. 0:08:04.600 --> 0:08:06.240 And what's so important here, folks. You know you see 0:08:06.280 --> 0:08:08.520 in Bremer and he's doing this media that meydia he's 0:08:08.560 --> 0:08:10.680 writing this book, and what you don't see is the 0:08:10.760 --> 0:08:15.320 granularism of his daily Eurasia note. And part of that 0:08:15.400 --> 0:08:19.960 Ian is about the structure of the Iranian government and 0:08:20.040 --> 0:08:24.239 a theocracy. Who's calling the shots in Iran right now? 0:08:24.520 --> 0:08:27.080 Do they have a legitimate government or is it a 0:08:27.120 --> 0:08:30.640 theocracy that staggers back to nineteen seventy nine. 0:08:31.320 --> 0:08:35.440 Look, you know that they don't have a legitimate government 0:08:35.480 --> 0:08:38.400 in the sense that the people don't have a voice, 0:08:38.440 --> 0:08:40.439 They don't have the ability to vote for them or 0:08:40.520 --> 0:08:44.040 vote them out. And indeed, there have been a lot 0:08:44.080 --> 0:08:48.000 of people, myself included, that have both believed and hoped 0:08:48.520 --> 0:08:52.360 that people power would be more successful in rising up 0:08:52.360 --> 0:08:56.720 against this brutal theocratic regime. But it is in place, 0:08:57.320 --> 0:09:02.400 it is stable, it is calling the sh internationally and domestically, 0:09:02.920 --> 0:09:07.079 and it does not want a war with the United States, 0:09:07.679 --> 0:09:09.880 and so I look, I think the important thing I've 0:09:09.880 --> 0:09:12.560 been seeing on the media over the weekend, please you 0:09:12.600 --> 0:09:16.640 know how extraordinary it was that the Israelis were able 0:09:16.720 --> 0:09:21.079 to defend so well against three hundred Iranian missiles and 0:09:21.200 --> 0:09:24.679 drones that they knocked down ninety nine percent of them 0:09:24.720 --> 0:09:27.280 and there were not any depths, there were not any 0:09:27.440 --> 0:09:31.959 significant injuries. And that's a great story. But let us 0:09:32.080 --> 0:09:36.640 remember that the Iranians gave a heads up as to 0:09:36.800 --> 0:09:41.720 the nature and the timing of the attack to the Iraqis. 0:09:41.800 --> 0:09:42.680 Why did they do that? 0:09:44.360 --> 0:09:47.640 Why did they do that flying over Iraq and Jordan? 0:09:48.160 --> 0:09:50.319 Why does the Iranians give it away? 0:09:50.520 --> 0:09:51.680 It's like pretend war. 0:09:52.520 --> 0:09:55.000 Well, yeah, because I think they were trying to accomplish 0:09:55.040 --> 0:09:57.400 two things that are hard to do. At the same time, 0:09:57.840 --> 0:10:01.600 they were trying to show a maximum display of force 0:10:01.800 --> 0:10:06.320 in responding to the Israeli strikes on Damascus that killed 0:10:06.360 --> 0:10:11.040 a high level Iranian military official, and they were trying 0:10:11.080 --> 0:10:16.320 to minimize the likelihood that their show of force led 0:10:16.360 --> 0:10:19.800 to further attacks and brought them into a war they 0:10:19.920 --> 0:10:23.240 want to fight. So those two goals that they have 0:10:23.720 --> 0:10:27.560 are not exactly fully in alignment tom Right. And so 0:10:28.000 --> 0:10:33.720 what they did was they tipped their cards. They showed 0:10:33.800 --> 0:10:38.520 their hand through the Turks and the Iraqis to the Americans. 0:10:38.520 --> 0:10:41.200 So the United States had the ability to send the 0:10:41.280 --> 0:10:47.920 Sentcom commander to Israel to coordinate a response, to get 0:10:48.160 --> 0:10:52.520 your vessels and your aircraft in place in advance, to 0:10:52.600 --> 0:10:56.400 let the Israelis know what was going to happen, to 0:10:56.559 --> 0:10:59.839 tell the Israelis privately and publicly that there was I 0:11:00.360 --> 0:11:04.480 Clad's support for Israeli defense. In other words, give the 0:11:04.640 --> 0:11:09.200 Israelis a bear hug, help defend them as best you can, 0:11:09.559 --> 0:11:14.600 but also help constrain them, and constrain specifically the Prime 0:11:14.640 --> 0:11:18.960 Minister in making it hard for him to engage in 0:11:19.120 --> 0:11:24.160 full throated military response following this Iranian attack. That's exactly 0:11:24.559 --> 0:11:27.800 what the Iranians were hoping to accomplish. By the way, 0:11:28.120 --> 0:11:31.840 it was also following the US playbook. In the one 0:11:31.920 --> 0:11:37.120 week following the Iranian proxy attacks that killed three American 0:11:37.200 --> 0:11:42.120 servicemen and women in Jordan, the Americans did the same thing. 0:11:42.520 --> 0:11:45.959 And so I'm sure that the Iranians figured because it's 0:11:46.000 --> 0:11:49.120 a dangerous thing for them to do, it worked for America. 0:11:49.160 --> 0:11:50.800 The US is going to get it if we do 0:11:50.880 --> 0:11:52.480 the same thing in response, and. 0:11:52.720 --> 0:11:55.040 We're six months into this conflict here, I think I 0:11:55.080 --> 0:11:57.560 speak for a lot of folks when I say we 0:11:57.760 --> 0:12:00.760 just have no idea how Israel get out of this 0:12:00.920 --> 0:12:04.480 situation today versus day one. How do you think this 0:12:04.520 --> 0:12:05.920 plays out going forward? 0:12:07.280 --> 0:12:09.720 I think most people are focused on Iran right now 0:12:09.760 --> 0:12:13.360 and less on Gaza. That will of course change back 0:12:13.760 --> 0:12:19.080 given the nature of the horrible civilian casualties, the famine 0:12:19.080 --> 0:12:22.400 that's going on, and the rest. But this does give 0:12:22.760 --> 0:12:26.280 the Israeli Prime Minister and his right wing government more 0:12:26.480 --> 0:12:28.400 of a lease on life. They're likely to be there 0:12:28.440 --> 0:12:31.320 for longer as opposed to forced out soon. That's a 0:12:31.360 --> 0:12:34.960 problem for Biden. There's less focus on Gaza, which means 0:12:34.960 --> 0:12:39.600 that not Yao's going to have a harder time being restrained. 0:12:40.240 --> 0:12:44.280 In terms of eventual ground assault on Rafa. I suspect 0:12:44.280 --> 0:12:47.880 it will be less dramatic, less overwhelming than he might 0:12:47.920 --> 0:12:50.640 have wanted to do before the US ultimatum, and there'll 0:12:50.679 --> 0:12:53.600 be more humanitarian aid coming in. But I think those 0:12:53.640 --> 0:12:57.040 attacks are still happening, especially because it's harder to now 0:12:57.120 --> 0:13:01.800 get the Hamas breakthrough on the initial hostage release in 0:13:01.840 --> 0:13:03.200 the six weeks, see and. 0:13:03.240 --> 0:13:03.760 Get some rest. 0:13:03.800 --> 0:13:06.040 You've been up all weekend. Ian Bremer there owning the 0:13:06.120 --> 0:13:10.680 high ground on our G zero realities. Doctor Bremer, of 0:13:10.679 --> 0:13:14.120 course with Eurasia Group looked to his top ten risks 0:13:14.120 --> 0:13:20.320 at the beginning of the year, my book of the 0:13:20.320 --> 0:13:23.080 summer with Chip Wars on our technology. 0:13:23.600 --> 0:13:25.160 So what we're going to do here is different. 0:13:25.240 --> 0:13:28.880 We have a former Supreme Commander of NATO, James Travitas, 0:13:28.920 --> 0:13:31.760 vetted at one point as a vice presidential candidate by 0:13:32.400 --> 0:13:35.920 one of the sides, and Erbral Stravitas joins us this morning, Ebro. 0:13:36.080 --> 0:13:38.800 I want to talk about one thing. I want to 0:13:38.840 --> 0:13:43.199 talk about Oury Burke destroyers. Now we had Spruance, one 0:13:43.200 --> 0:13:48.400 of my heroes. We had Spruance Destroyers and almost Zumwalt 0:13:48.440 --> 0:13:51.000 said we got to do something fancier. And now there's 0:13:51.040 --> 0:13:52.800 Zoomwalt destroyers. 0:13:52.200 --> 0:13:53.200 And all that. 0:13:53.880 --> 0:13:58.720 How do Ourley Burke destroyers defend themselves in the Eastern 0:13:58.760 --> 0:14:06.520 Mediterranean from oncoming drones? Their technology is world class, isn't it? 0:14:06.520 --> 0:14:09.600 It absolutely is. And by the way, I'm thrilled to 0:14:09.679 --> 0:14:13.960 talk about it. I commanded uss Berry and Arley burg 0:14:14.000 --> 0:14:17.400 class Destroyer second of the class. I commanded a squadron 0:14:18.200 --> 0:14:22.640 eight of these destroyers in combat. I commanded many of them. 0:14:22.840 --> 0:14:23.600 We're gonna focus. 0:14:23.600 --> 0:14:26.400 I'm gonna interrupt right now, folks, we're focusing on this 0:14:26.520 --> 0:14:29.200 today because of all the media bladder. I get it, 0:14:29.320 --> 0:14:31.560 I love it. I'm glad we're doing it in Bloomberg. 0:14:31.920 --> 0:14:35.320 This is the adult on your men and women at sea. 0:14:35.480 --> 0:14:39.520 Admiral continue on the Arlely Burke in the Berry. 0:14:39.960 --> 0:14:43.240 So the ships are about five hundred feet long, sixty 0:14:43.400 --> 0:14:47.760 six feet wide. But here's the punchline, Tom. They carry 0:14:47.800 --> 0:14:53.000 about ninety five anti air and land attack missiles. They 0:14:53.040 --> 0:14:57.520 have an unmatched capability to defend themselves. Three hundred and 0:14:57.560 --> 0:15:02.000 fifty sailors aboard two helicopters on most of the ships 0:15:02.000 --> 0:15:05.520 in the class, and they've been used most recently over 0:15:05.560 --> 0:15:08.560 the last forty eight hours in the Red Sea and 0:15:08.640 --> 0:15:13.760 the Eastern Mediterranean, knocking down the Iranian air attack and 0:15:13.840 --> 0:15:15.280 doing so quite effectively. 0:15:15.400 --> 0:15:17.520 Right, what's important here? You know, folks, we got an 0:15:17.560 --> 0:15:19.240 idea of a nineteen year old in the deck of 0:15:19.240 --> 0:15:21.960 an aircraft carrier. I think it's something we all understand 0:15:22.040 --> 0:15:25.240 from Vietnam. Ford Max Hastings grabs it beautifully in his 0:15:25.320 --> 0:15:28.840 book on Vietnam, at must vedis, do you have like 0:15:28.880 --> 0:15:32.840 a nineteen year old kid handling a Falance close in 0:15:32.960 --> 0:15:38.400 weapons system CIWS for point defense against drones from Iran? 0:15:39.680 --> 0:15:44.440 Absolutely, there'll be somebody maybe twenty twenty five at the most, 0:15:44.560 --> 0:15:47.840 sitting in the combat information center with his or her 0:15:48.000 --> 0:15:52.520 finger on the button for that sea whiz system as 0:15:52.600 --> 0:15:55.360 we call it. It's a gatling gun that fires uranium 0:15:55.400 --> 0:15:59.560 projectiles if any of the missiles get through the air. 0:15:59.680 --> 0:16:00.640 Defense is the. 0:16:00.600 --> 0:16:01.720 Longer range ones. 0:16:01.760 --> 0:16:04.480 We use those close in But the whole ship is 0:16:04.560 --> 0:16:07.200 manned by very young people. When I was captain of 0:16:07.240 --> 0:16:09.680 the ship, I was thirty seven years old. 0:16:09.720 --> 0:16:12.280 Wow, this folks is just so important. 0:16:12.440 --> 0:16:14.200 And I got to get one more question here because 0:16:14.200 --> 0:16:16.040 Paul's looking at me like when do I get to talk? 0:16:16.720 --> 0:16:19.920 And amasturvedis, just where are we in our navy development? 0:16:19.960 --> 0:16:22.240 We've got this whole thing that we stopped their shipbuilding. 0:16:22.640 --> 0:16:25.920 But I don't mean the gerald Ford and the enormous platform. 0:16:26.200 --> 0:16:29.200 How many more berries and Birks do we develop? 0:16:30.040 --> 0:16:34.280 We're going to be bringing out a new class USS 0:16:34.440 --> 0:16:39.000 constellation class frigate that's almost as big as these guided 0:16:39.040 --> 0:16:44.720 missile destroyers. First one is having her keel laid this week, 0:16:44.840 --> 0:16:47.640 as a matter of fact, So the follow on classes, 0:16:48.000 --> 0:16:50.840 frankly will be even better than these early burks, and 0:16:50.840 --> 0:16:52.000 they're pretty damn good. 0:16:52.800 --> 0:16:54.680 Admiral, It's been a busy week in that part of 0:16:54.680 --> 0:16:58.840 the world over there, with the Iranian response and shelling 0:16:59.000 --> 0:17:02.880 of Israel. Put into context of how about risk are 0:17:02.960 --> 0:17:05.320 our ships and our men and women in that part 0:17:05.320 --> 0:17:07.800 of the world, and how do we protect them better. 0:17:07.880 --> 0:17:14.920 Perhaps our sailors are on board the unmatched, most capable 0:17:14.960 --> 0:17:18.919 warships in the world. They can absolutely defend themselves in 0:17:18.960 --> 0:17:23.960 any scenario, but there's always a possibility of a missile 0:17:24.080 --> 0:17:28.280 slipping through, of a mistake being made in a radar 0:17:28.880 --> 0:17:33.720 bad intelligence as you're looking in the opposite direction. These 0:17:33.800 --> 0:17:37.199 kind of incidents can happen. So thus far none of 0:17:37.200 --> 0:17:41.040 our ships, our warships, have been struck by Iranian or 0:17:41.119 --> 0:17:47.680 hoothy ballistic missiles or drones. But the sailors there absolutely 0:17:47.760 --> 0:17:50.680 have to stand their toes to execute their mission, not 0:17:50.720 --> 0:17:53.919 only defending themselves but defending our allies in the region 0:17:54.080 --> 0:17:54.680 like Israel. 0:17:55.040 --> 0:17:58.040 Adamirre, what do you expect from Israel over the coming 0:17:58.400 --> 0:18:02.720 days and weeks. Here it just feels like we've kind 0:18:02.720 --> 0:18:06.240 of gotten into this stalemate type of situation in that 0:18:06.280 --> 0:18:06.879 part of the world. 0:18:08.119 --> 0:18:12.960 The Israelis have said they will respond to this three 0:18:13.080 --> 0:18:18.520 hundred and fifty drone ballistic missile cruise missile attack. Fortunately, 0:18:18.560 --> 0:18:22.680 the air defenses were discussing destroyed. It knocked down three 0:18:22.800 --> 0:18:28.920 hundred and fifty of them essentially, But Israel will respond. However, Paul, 0:18:29.040 --> 0:18:33.320 I don't think it'll be a massive jets whistling above 0:18:33.440 --> 0:18:38.080 Tehran kind of response. I think it'll include offensive cyber 0:18:38.680 --> 0:18:43.480 maritime operations, special operations. Don't look for a big escalation 0:18:43.640 --> 0:18:44.120 at this point. 0:18:44.280 --> 0:18:46.280 One more question the airon Roling's doing this because we 0:18:46.320 --> 0:18:48.359 want you to come back in the show. I noticed 0:18:48.359 --> 0:18:51.639 that the USS Barry was named two years ago the 0:18:51.760 --> 0:18:55.720 Navy's top Pacific fleet sub hunter. Bring that over to 0:18:55.720 --> 0:18:59.280 the Hormon Strait. How much risk do we have of 0:19:00.000 --> 0:19:04.240 it RAN? Without our technology like the USS Berry shutting 0:19:04.240 --> 0:19:05.879 down the Hormone Strait. 0:19:06.760 --> 0:19:10.000 RAN could shut it down Tom with mines putting minds 0:19:10.080 --> 0:19:13.560 in the water. That's why our mind sweepers are stationed 0:19:13.560 --> 0:19:17.960 over there. Our allies have mind sweeping capability and then finally, 0:19:18.000 --> 0:19:22.920 the Iranians also have diesel submarines quite quiet, quite capable, 0:19:23.240 --> 0:19:26.000 but a ship like uss Berry should be able to 0:19:26.040 --> 0:19:29.399 handle that threat as well. Watch the mind sweeping. That 0:19:29.440 --> 0:19:31.160 would be the way they would close the strait. 0:19:31.560 --> 0:19:36.280 Admiral, thank you so much this morning, Admiral Stravitis. Of 0:19:36.280 --> 0:19:39.439 course I can't say enough about twenty thirty four and 0:19:39.720 --> 0:19:43.240 just out moving on to the technology that we can't imagine. 0:19:43.480 --> 0:19:46.640 Elliet Ackerman and James Travitas twenty fifty four. 0:19:46.720 --> 0:20:00.359 It is my book of the summer. A day to 0:20:00.400 --> 0:20:02.720 look at the front pages around the world. Sue Decker 0:20:02.960 --> 0:20:06.800 x DLG the iconic of this. Sue Decker's on the 0:20:06.840 --> 0:20:10.520 board at Costco. She emailed, she did. 0:20:10.400 --> 0:20:13.639 Like a DM, like not an email, a DM on Twitter, 0:20:14.520 --> 0:20:18.120 Lisen that's like where you're talk inside to Lisa Matteo. 0:20:19.040 --> 0:20:21.680 Did you really spend five hundred dollars at Costco? 0:20:21.960 --> 0:20:26.760 Five hundred eighty dollars to be exact, missus. 0:20:26.520 --> 0:20:28.880 King's looking at your photo going, my god, we don't 0:20:28.880 --> 0:20:29.840 eat like that. They eat. 0:20:30.200 --> 0:20:33.080 It's my once a month kind of going there, and 0:20:33.119 --> 0:20:34.000 you got to stock up. 0:20:34.040 --> 0:20:36.200 I have the extra freezer, I have the extra freeze, 0:20:36.240 --> 0:20:36.439 you do. 0:20:38.200 --> 0:20:41.440 I put them in the garage where the beers. That's 0:20:41.440 --> 0:20:44.080 where the beer is, and I come over. 0:20:44.800 --> 0:20:47.679 It's healthy beer, it's gluten free beer. Sue Decker at 0:20:47.680 --> 0:20:48.720 Costco says, thank you. 0:20:48.760 --> 0:20:49.280 What do you got? 0:20:49.640 --> 0:20:52.440 Yeah, that was quite a time. So we talked about Netflix. 0:20:52.480 --> 0:20:53.280 That one was crazy. 0:20:53.280 --> 0:20:55.080 From the New York Times, I want to talk about 0:20:55.160 --> 0:20:56.960 We've been talking so much about squatters. 0:20:57.480 --> 0:20:59.600 This one stood out to me from business insider. 0:21:00.119 --> 0:21:05.000 Waters have taken over Gordon Ramsey's restaurant in London. Believe 0:21:05.040 --> 0:21:07.880 it or not, at least six people they're living there 0:21:07.920 --> 0:21:09.360 outside York and Albany. 0:21:09.440 --> 0:21:10.920 This is according to the BBC two. 0:21:11.320 --> 0:21:14.479 The restaurant was temporarily closed, so that's why this happened. 0:21:14.520 --> 0:21:17.400 And they're not sure when the squatters first showed up, 0:21:17.640 --> 0:21:21.200 but they're calling themselves the occupiers. They have a sign outside, 0:21:21.240 --> 0:21:24.640 they posted a sign, they locked themselves inside, they boarded 0:21:24.720 --> 0:21:28.760 up the windows. They're threatening legal action against anybody who 0:21:28.800 --> 0:21:32.320 tries to kick them out. Ramsey's called the authorities about 0:21:32.320 --> 0:21:34.280 the property, but so far they're still there. 0:21:34.520 --> 0:21:37.920 So this is a small mad Why New York Mayor 0:21:37.920 --> 0:21:41.960 Adams just focused on, you know, the rights of both 0:21:42.000 --> 0:21:43.080 sides of the transaction. 0:21:43.320 --> 0:21:44.399