1 00:00:02,440 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:08,240 --> 00:00:12,120 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 3 00:00:12,200 --> 00:00:15,560 Speaker 2: weekdays at ten am Eastern on Affocarplaying and Broun Auto 4 00:00:15,640 --> 00:00:18,560 Speaker 2: with the Bloomberg Business app. Listen on demand wherever you 5 00:00:18,640 --> 00:00:22,360 Speaker 2: get your podcasts, or watch us live on YouTube. 6 00:00:23,520 --> 00:00:25,880 Speaker 3: Jess Metton, she's sitting in for Alex Steel today. I'm 7 00:00:25,880 --> 00:00:27,720 Speaker 3: Paul Sweeney. We're live here on a Bloomberg Dinner at 8 00:00:27,720 --> 00:00:30,120 Speaker 3: the Broker Studio. We're streaming live on YouTube as well, 9 00:00:30,160 --> 00:00:32,879 Speaker 3: so you can check us out there Bloomberg you know, 10 00:00:33,000 --> 00:00:35,360 Speaker 3: go to the YouTube dot com search Bloomberg Live, Radio, 11 00:00:35,360 --> 00:00:36,760 Speaker 3: Bloomberg Podcast, any which way. 12 00:00:36,760 --> 00:00:37,479 Speaker 2: We'll get you. 13 00:00:37,440 --> 00:00:40,080 Speaker 3: There and we will have continuing coverage throughout the rest 14 00:00:40,159 --> 00:00:43,640 Speaker 3: of the morning on the escalating tensions in the Mid 15 00:00:43,640 --> 00:00:45,800 Speaker 3: East and the impact they're having on the markets. The 16 00:00:45,840 --> 00:00:49,240 Speaker 3: other major story obviously out there, is the day one 17 00:00:49,560 --> 00:00:52,120 Speaker 3: of the port strike here on the East Coast. I mean, 18 00:00:52,120 --> 00:00:54,240 Speaker 3: I was looking at some graphics on various TV networks 19 00:00:54,240 --> 00:00:57,160 Speaker 3: and it's pretty much all down the entire East Coast, 20 00:00:57,280 --> 00:00:59,800 Speaker 3: winding around our friends in Florida and all the way 21 00:01:00,120 --> 00:01:02,800 Speaker 3: to the Gulf Coast. We start thinking about you know, 22 00:01:02,880 --> 00:01:04,880 Speaker 3: that's a lot of territory there that does a lot 23 00:01:04,880 --> 00:01:07,640 Speaker 3: of shipping, So you really want to get some perspective 24 00:01:07,680 --> 00:01:09,920 Speaker 3: on that. You go to the folks on the left 25 00:01:09,959 --> 00:01:11,959 Speaker 3: side of this country, on the West coast, they had 26 00:01:11,959 --> 00:01:14,119 Speaker 3: their labor issues. A couple of years ago. A Mario 27 00:01:14,160 --> 00:01:17,600 Speaker 3: Kodero joins a CEO for the Port of Long Beach. Mario, 28 00:01:17,680 --> 00:01:20,320 Speaker 3: thanks so much for joining us here. What role do 29 00:01:20,400 --> 00:01:23,080 Speaker 3: you believe the West Coast ports your port in Long 30 00:01:23,120 --> 00:01:26,000 Speaker 3: Beach can have and maybe relieving some of the pressure 31 00:01:26,360 --> 00:01:29,280 Speaker 3: on shippers who can't unload or load their goods on 32 00:01:29,319 --> 00:01:31,160 Speaker 3: the East coast. How are you guys approaching that? 33 00:01:32,360 --> 00:01:34,640 Speaker 4: Well, thank you for the invitation. I mean, I think 34 00:01:34,640 --> 00:01:36,480 Speaker 4: when you talk about Long Beach, we're part of the 35 00:01:36,640 --> 00:01:39,080 Speaker 4: largest container gateway for the nation. So I think the 36 00:01:39,200 --> 00:01:43,320 Speaker 4: road that we play is a continued rod that we 37 00:01:43,400 --> 00:01:47,240 Speaker 4: move a great percentage of the nation's trade, and I 38 00:01:47,280 --> 00:01:50,120 Speaker 4: think we're in a very good position to handle whatever 39 00:01:50,160 --> 00:01:52,960 Speaker 4: search comes our way. And last, I'll make the point 40 00:01:53,000 --> 00:01:55,880 Speaker 4: that August we had a historic number of containers moving 41 00:01:55,880 --> 00:01:58,160 Speaker 4: through the Port of Long Beach. That number was nine 42 00:01:58,200 --> 00:02:03,480 Speaker 4: hundred and thirteen thousand plus content. That's a historical high 43 00:02:03,600 --> 00:02:06,120 Speaker 4: number for US, a record number, and when you add 44 00:02:06,120 --> 00:02:09,560 Speaker 4: the Port of la for August, we approximate about one 45 00:02:09,639 --> 00:02:13,440 Speaker 4: point nine million containers in this gateway the Sampeter Bay complex. 46 00:02:13,480 --> 00:02:16,079 Speaker 4: So our role here is to continue to move cargo 47 00:02:16,120 --> 00:02:19,959 Speaker 4: in an efficient manner. And again Port Labbach has a 48 00:02:20,000 --> 00:02:23,520 Speaker 4: tremendous capacity right now, in that words, good capacity around 49 00:02:23,560 --> 00:02:27,079 Speaker 4: seventy percent, so we are prepared to continue to move 50 00:02:27,080 --> 00:02:28,880 Speaker 4: that containerized cargo that comes our way. 51 00:02:29,480 --> 00:02:33,160 Speaker 5: I'm curious what kind of lessons did you end up 52 00:02:33,240 --> 00:02:35,920 Speaker 5: learning from the pandemic because we had so many supply 53 00:02:36,400 --> 00:02:38,960 Speaker 5: related issues with the chains there, and how could that 54 00:02:39,000 --> 00:02:41,079 Speaker 5: help you try to navigate this instance? 55 00:02:42,160 --> 00:02:46,160 Speaker 4: Great question, a lot of lessons learned. Number One, expanding 56 00:02:46,200 --> 00:02:48,960 Speaker 4: operation hours. I've been a big spokesperson for twenty four 57 00:02:49,000 --> 00:02:52,240 Speaker 4: to seven operations. Again, to qualify that or put that 58 00:02:52,320 --> 00:02:56,079 Speaker 4: in perspective, you know, we're not going to go twenty 59 00:02:56,120 --> 00:02:59,000 Speaker 4: four hours a day, seven days a week anytime soon, 60 00:02:59,080 --> 00:03:01,880 Speaker 4: but there's a frame of expansion of hours. So in 61 00:03:01,960 --> 00:03:05,160 Speaker 4: Long Beach we've done that. We've done staging areas, and 62 00:03:05,360 --> 00:03:07,480 Speaker 4: again this is going to be very beneficial for us 63 00:03:07,480 --> 00:03:10,480 Speaker 4: if in fact we need the stage containers outside the terminals, 64 00:03:10,639 --> 00:03:13,079 Speaker 4: and I think the lessons learned from COVID. Again, it's 65 00:03:13,080 --> 00:03:16,400 Speaker 4: a supply chain issue, so the warehouse that is the 66 00:03:16,520 --> 00:03:18,560 Speaker 4: end product here of the supply chain in this region. 67 00:03:18,880 --> 00:03:21,959 Speaker 4: They also are very collaborative with us and making sure 68 00:03:22,000 --> 00:03:25,079 Speaker 4: that inventory moves. So again, a lot of lessons learned 69 00:03:25,080 --> 00:03:28,600 Speaker 4: from COVID nineteen supply chain crisis. So we're applying those 70 00:03:28,680 --> 00:03:32,680 Speaker 4: lessons and hopefully, again as I just noted, we're moving 71 00:03:32,720 --> 00:03:35,040 Speaker 4: a record amount of cargo here at to Port Long 72 00:03:35,040 --> 00:03:37,800 Speaker 4: Beach without any congestion or bottlenecks whatsoever. 73 00:03:38,360 --> 00:03:40,600 Speaker 3: Hey, Mario, if I'm a shipper, I've got a ship 74 00:03:40,600 --> 00:03:43,440 Speaker 3: at sea in the Atlantic steaming towards New York or something, 75 00:03:43,480 --> 00:03:47,040 Speaker 3: and that's closed. Now what are the economics for me 76 00:03:47,320 --> 00:03:50,000 Speaker 3: to say, Oh, I'll go to the Panama Canal, go 77 00:03:50,040 --> 00:03:51,640 Speaker 3: through there, then I'll come up to your port in 78 00:03:51,680 --> 00:03:55,360 Speaker 3: Long Beach. Is that realistic? Is that a decision option? 79 00:03:56,960 --> 00:04:01,560 Speaker 4: Well, I mean that decision for shipper is based on economics, 80 00:04:01,600 --> 00:04:04,000 Speaker 4: So obviously if they're going to come to the West Coast, 81 00:04:04,320 --> 00:04:07,200 Speaker 4: I think that decision comes into play that for them, 82 00:04:07,560 --> 00:04:10,080 Speaker 4: it's a reduced cost. With regard to the option that 83 00:04:10,120 --> 00:04:13,920 Speaker 4: potentially could happen. But in that regard, yes, there's increased 84 00:04:13,960 --> 00:04:16,960 Speaker 4: transportation costs for sure, but I think again, I think 85 00:04:17,000 --> 00:04:19,480 Speaker 4: it's going to be a scenario which we'll be able 86 00:04:19,560 --> 00:04:22,159 Speaker 4: to manage that and move forward as we have in 87 00:04:22,279 --> 00:04:26,599 Speaker 4: previous instances. We talked about COVID nineteen. But again we 88 00:04:26,680 --> 00:04:29,160 Speaker 4: have a lot of lessons learned from COVID nineteen, and 89 00:04:29,360 --> 00:04:31,920 Speaker 4: one of them is we are prepared no matter where 90 00:04:31,960 --> 00:04:35,880 Speaker 4: the options are in terms of cargo flow, we're going 91 00:04:35,960 --> 00:04:37,159 Speaker 4: to be moving to cargo here. 92 00:04:37,720 --> 00:04:41,000 Speaker 5: What other ports along the West coast do you foresee 93 00:04:41,000 --> 00:04:43,680 Speaker 5: field cargo that ends up getting re routed? 94 00:04:45,920 --> 00:04:47,200 Speaker 4: I'm sorry I repeat that question. 95 00:04:47,480 --> 00:04:49,719 Speaker 5: So what other ports along the West coast do you 96 00:04:49,760 --> 00:04:53,640 Speaker 5: foresee other field cargo ended up getting rerouted at this point? 97 00:04:53,880 --> 00:04:56,640 Speaker 4: Well, Number one, poor Los Angeles. Again, they're part of 98 00:04:56,720 --> 00:05:00,320 Speaker 4: this gateway, the Port of Oakland in northern California, and 99 00:05:00,360 --> 00:05:02,520 Speaker 4: you also have the Port of Way NIMI. So there's 100 00:05:03,200 --> 00:05:05,360 Speaker 4: other ports in the West coast here and again if 101 00:05:05,400 --> 00:05:07,880 Speaker 4: you go to the northwest port of Seattle and Tacoma. 102 00:05:08,360 --> 00:05:10,440 Speaker 4: So I think the West Coast is in a very 103 00:05:10,480 --> 00:05:14,800 Speaker 4: good position to make sure that we not only receive 104 00:05:14,880 --> 00:05:16,760 Speaker 4: the car a little, but continue to move it inland 105 00:05:17,120 --> 00:05:18,359 Speaker 4: to the nation's midwest. 106 00:05:19,120 --> 00:05:19,400 Speaker 5: Maria. 107 00:05:19,480 --> 00:05:23,560 Speaker 3: One of the topics that I guess the long shoremen 108 00:05:23,800 --> 00:05:26,200 Speaker 3: and the shippers have is a wages of course, and 109 00:05:26,440 --> 00:05:28,480 Speaker 3: presumably that will work itself out. But the other one 110 00:05:28,520 --> 00:05:33,159 Speaker 3: is automation and what that means for jobs. How do 111 00:05:33,200 --> 00:05:36,240 Speaker 3: you guys talk to your long shorman about the need 112 00:05:36,279 --> 00:05:39,640 Speaker 3: for you guys to automate to remain competitive versus their 113 00:05:39,720 --> 00:05:42,280 Speaker 3: need to preserve jobs. What's that discussion like these days? 114 00:05:43,360 --> 00:05:46,720 Speaker 4: Well, I mean you mentioned an issue here. Automation robotics 115 00:05:46,760 --> 00:05:50,560 Speaker 4: has been a continued concern in all sectors of labor. 116 00:05:50,880 --> 00:05:52,640 Speaker 4: So for the portal lombies, I think the way we've 117 00:05:52,680 --> 00:05:56,600 Speaker 4: been able to navigate well with our labor partners is 118 00:05:56,920 --> 00:06:00,680 Speaker 4: anyone who's interested in better developing the terminals of the 119 00:06:00,680 --> 00:06:03,359 Speaker 4: poor long beach number one, you have to have a 120 00:06:03,440 --> 00:06:07,200 Speaker 4: meeting of the mines with the IOWU, so that collaborative 121 00:06:07,200 --> 00:06:11,359 Speaker 4: partnership and works well for us. So in that regard, 122 00:06:11,400 --> 00:06:14,200 Speaker 4: that's been our policy. Anybody who wants to expand or 123 00:06:14,279 --> 00:06:17,080 Speaker 4: develop their terminals, they have to go through the isow first, 124 00:06:17,360 --> 00:06:20,720 Speaker 4: and that mitigates any serious differences as we go down 125 00:06:20,720 --> 00:06:23,599 Speaker 4: the road. So for us, it's been a successful path. 126 00:06:23,880 --> 00:06:26,200 Speaker 4: But on the other hand, again keep in mind this 127 00:06:26,240 --> 00:06:29,080 Speaker 4: is an issue across the board in terms of workforce 128 00:06:29,720 --> 00:06:32,360 Speaker 4: in the nation, if not the global community. 129 00:06:32,640 --> 00:06:35,479 Speaker 5: Do you have a sense from retailers how they're potentially 130 00:06:35,520 --> 00:06:37,560 Speaker 5: making contingency plans as of. 131 00:06:37,560 --> 00:06:41,880 Speaker 4: Now, Well, I think what I can tell you is 132 00:06:42,640 --> 00:06:44,840 Speaker 4: I gave you these record numbers that we're moving here 133 00:06:44,880 --> 00:06:47,800 Speaker 4: at the Poor of Long Beach for August. That's almost 134 00:06:47,880 --> 00:06:50,159 Speaker 4: a thirty four percent increase year to year. So I 135 00:06:50,200 --> 00:06:53,719 Speaker 4: think the retailers in the shippers have already anticipated a 136 00:06:53,839 --> 00:06:56,760 Speaker 4: scenario that's occurring in the East Coast and they've already 137 00:06:57,279 --> 00:06:59,960 Speaker 4: made that decision to move their cargo to the West Coast. 138 00:07:00,120 --> 00:07:02,880 Speaker 4: And again, the August numbers for both these ports Los 139 00:07:02,880 --> 00:07:05,800 Speaker 4: Angeles and Long Beach here in the Sanpedo Bay complex 140 00:07:05,960 --> 00:07:10,400 Speaker 4: are historical numbers, so that basically answers the question that 141 00:07:10,440 --> 00:07:13,080 Speaker 4: I think they've already made those decisions, and I do 142 00:07:13,160 --> 00:07:15,400 Speaker 4: expect to have additional car a little bit. Have me 143 00:07:15,440 --> 00:07:17,920 Speaker 4: said all this, I want to make sure that again 144 00:07:17,960 --> 00:07:20,480 Speaker 4: from the poor lobbies, we encourage that the parties in 145 00:07:20,520 --> 00:07:23,680 Speaker 4: the East Coast moved to a resolution because any bottleneck 146 00:07:23,720 --> 00:07:26,680 Speaker 4: and the supply chain in the nation is not good. 147 00:07:26,880 --> 00:07:30,560 Speaker 4: So for my perspective, I think again, it's not about 148 00:07:30,720 --> 00:07:33,440 Speaker 4: additional cargo that we're going to get. It's about hopefully 149 00:07:33,480 --> 00:07:36,720 Speaker 4: these parties coming to a mutual resolution soon so that 150 00:07:36,760 --> 00:07:41,400 Speaker 4: we don't impact the nation's supply chain anywhere in the country. 151 00:07:41,800 --> 00:07:43,480 Speaker 3: Hey, Mary, thank you so much for joining us. Really 152 00:07:43,480 --> 00:07:46,560 Speaker 3: appreciate getting some of your time at MARYA. Cordero, he's 153 00:07:46,600 --> 00:07:49,640 Speaker 3: the CEO of the Port of Long Beach, giving us 154 00:07:49,640 --> 00:07:53,280 Speaker 3: a sense of kind of they're busy and presumably they 155 00:07:53,280 --> 00:07:55,600 Speaker 3: still have some capacity to take some shipments if somebody 156 00:07:55,600 --> 00:07:57,800 Speaker 3: want to divert them from the East coast to the 157 00:07:57,800 --> 00:07:59,760 Speaker 3: West coast. And the other thing we learned about talking 158 00:07:59,800 --> 00:08:02,080 Speaker 3: to Jean Soroka, who is his counterpart at the Port 159 00:08:02,080 --> 00:08:06,280 Speaker 3: of La is that those West coast ports, particular the 160 00:08:06,280 --> 00:08:08,720 Speaker 3: ones in the La area, they just got a great 161 00:08:08,800 --> 00:08:12,280 Speaker 3: view of China trade. They do contannerships could just keep 162 00:08:12,320 --> 00:08:14,640 Speaker 3: coming back and forth back and forth into that port 163 00:08:14,880 --> 00:08:16,760 Speaker 3: so you can get a good view. 164 00:08:17,400 --> 00:08:21,280 Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live 165 00:08:21,360 --> 00:08:24,880 Speaker 2: weekdays at ten am Eastern on applecar Play and androyd 166 00:08:24,880 --> 00:08:27,679 Speaker 2: Otto with the Bloomberg Business App. You can also listen 167 00:08:27,800 --> 00:08:30,880 Speaker 2: live on Amazon Alexa from our flagship New York station 168 00:08:31,240 --> 00:08:35,000 Speaker 2: Just Say Alexa playing Bloomberg eleven thirty. 169 00:08:35,880 --> 00:08:38,440 Speaker 3: Tensions and Conflicts in the Middle East returned to Mick mulnoy. 170 00:08:38,480 --> 00:08:41,000 Speaker 3: He's a co founder of the Lobo Institute. That's just 171 00:08:41,080 --> 00:08:43,600 Speaker 3: the beginning. He's a former senior fellow at the Middle 172 00:08:43,640 --> 00:08:47,040 Speaker 3: East Institute, former Deputy Assistant Secretary of Defense for the 173 00:08:47,040 --> 00:08:49,920 Speaker 3: Middle East at the US Department of Defense. That was enough, 174 00:08:50,320 --> 00:08:53,720 Speaker 3: former Power Military Operations officer at CIA, and of course 175 00:08:53,800 --> 00:08:56,840 Speaker 3: a former US Marine Infantry officer. And for his service, 176 00:08:56,880 --> 00:08:59,720 Speaker 3: we say thank you very much, Mick for your service. 177 00:09:00,120 --> 00:09:02,880 Speaker 3: Make it looks like we're going to take another rung 178 00:09:03,120 --> 00:09:05,760 Speaker 3: up on the escalation ladder today. What do you make 179 00:09:05,800 --> 00:09:07,480 Speaker 3: of this news that the US is saying that it 180 00:09:07,559 --> 00:09:12,959 Speaker 3: ran as preparing to hit Israel with ballistic missiles. 181 00:09:12,960 --> 00:09:15,440 Speaker 1: Good to be with you, guys. I think this is expected. 182 00:09:15,480 --> 00:09:18,040 Speaker 1: Of course, they've been claiming they're going to retaliate ever 183 00:09:18,080 --> 00:09:24,080 Speaker 1: since we saw the assassination of the Hamas leader in Tehran. Then, 184 00:09:24,120 --> 00:09:28,000 Speaker 1: of course the assassination of the Hesbela leader in Beirut 185 00:09:28,120 --> 00:09:30,760 Speaker 1: and it was expected. Now the question is is it 186 00:09:30,800 --> 00:09:33,479 Speaker 1: going to be like April where we have the capacity 187 00:09:33,480 --> 00:09:36,320 Speaker 1: and we do have the capacity to essentially shoot down 188 00:09:36,400 --> 00:09:39,160 Speaker 1: all of the incoming drones and missiles, or is it 189 00:09:39,200 --> 00:09:41,000 Speaker 1: going to be more substantial or is it going to 190 00:09:41,000 --> 00:09:44,480 Speaker 1: be coordinated with Hesbelah and the Huthis so that it 191 00:09:44,520 --> 00:09:47,800 Speaker 1: can try to overwhelm the defenses of Israel and the 192 00:09:47,880 --> 00:09:51,000 Speaker 1: United States combined. That's the question We'll see soon because 193 00:09:51,000 --> 00:09:52,880 Speaker 1: it looks like it's eminent and it's going to take 194 00:09:52,920 --> 00:09:57,199 Speaker 1: some of these projectiles hours to get to Israel. So 195 00:09:57,480 --> 00:09:59,720 Speaker 1: we have to stand by and see how this goes. 196 00:10:00,200 --> 00:10:03,160 Speaker 5: To what extent does the United States rely on Israeli 197 00:10:03,240 --> 00:10:07,040 Speaker 5: intelligence streams and its assessment of those different regional threats. 198 00:10:09,320 --> 00:10:11,880 Speaker 1: So there's a back and forth when it comes to 199 00:10:11,920 --> 00:10:19,120 Speaker 1: the Israeli US intelligence cooperation. Oftentimes Israel has better intelligence 200 00:10:19,320 --> 00:10:21,480 Speaker 1: on the threats that are immediate to them. Of course, 201 00:10:21,520 --> 00:10:25,520 Speaker 1: the United States also has its independent intelligence and then 202 00:10:25,679 --> 00:10:30,560 Speaker 1: and when it comes to big regional intelligence, usually the US, 203 00:10:30,600 --> 00:10:35,199 Speaker 1: the CIA, and other organizations inside the intelligence community are 204 00:10:35,240 --> 00:10:39,000 Speaker 1: better and past the information to Israel. For example, the 205 00:10:39,040 --> 00:10:43,560 Speaker 1: IDEF spokesman said that the US had notified Israel that 206 00:10:44,160 --> 00:10:48,480 Speaker 1: Iran was preparing these cruise ballistic missiles and potentially drones 207 00:10:49,040 --> 00:10:52,760 Speaker 1: earlier this morning. So that shows the cooperation and the 208 00:10:52,800 --> 00:10:56,200 Speaker 1: sharing that goes on near constantly, Mick. 209 00:10:56,679 --> 00:11:01,120 Speaker 3: Immediately following the October attack on Israel prime mention Netnyan, 210 00:11:01,160 --> 00:11:04,080 Speaker 3: who said quite simply that the strategy, the goal of 211 00:11:04,200 --> 00:11:08,120 Speaker 3: Israel is to one eliminate Hamas and to get the 212 00:11:08,240 --> 00:11:12,920 Speaker 3: hostages back. That seems to have broadened out significantly. The 213 00:11:13,000 --> 00:11:17,439 Speaker 3: scope to now take in on Hesbela and going into Lebanon, 214 00:11:17,840 --> 00:11:22,040 Speaker 3: dealing with all in any adversaries. Is that, in fact true, 215 00:11:22,120 --> 00:11:24,800 Speaker 3: has his war aims broadened significantly? 216 00:11:27,360 --> 00:11:29,240 Speaker 1: Well, I do think it's broadened, but I would have 217 00:11:29,320 --> 00:11:31,240 Speaker 1: to say if somebody spends quite a bit of time 218 00:11:31,640 --> 00:11:36,160 Speaker 1: in Israel. The Israelis have been messaging directly that they 219 00:11:36,360 --> 00:11:39,760 Speaker 1: knew that this war in the north between Hesbelah would 220 00:11:39,760 --> 00:11:42,680 Speaker 1: have to happen if they were to get their six 221 00:11:42,800 --> 00:11:46,800 Speaker 1: hundred or excuse me, sixty thousand plus citizens back to 222 00:11:46,840 --> 00:11:50,000 Speaker 1: their homes in northern Israel. They were very clear about that, 223 00:11:50,360 --> 00:11:53,520 Speaker 1: and I think it's important to point out Hesblah has 224 00:11:53,559 --> 00:11:56,600 Speaker 1: been just hacking Israel since October eighth, there's been over 225 00:11:56,720 --> 00:12:01,199 Speaker 1: nine thousand missiles, rockets, drones, an say, tank weapons fired 226 00:12:01,200 --> 00:12:04,560 Speaker 1: into Israel. And this was inevitable if this was going 227 00:12:04,640 --> 00:12:07,400 Speaker 1: to continue, and I think they have shown that they 228 00:12:07,400 --> 00:12:10,600 Speaker 1: have very good capabilities in Lebanon. I don't think it's 229 00:12:10,600 --> 00:12:14,160 Speaker 1: in anybody's interest, including Israel, and it's certainly not Lebanon's, 230 00:12:14,160 --> 00:12:16,920 Speaker 1: but this to turn into a full scale ground invasion. 231 00:12:17,240 --> 00:12:21,079 Speaker 1: But from Israel's perspective, this was inevitable if Hezbolah was 232 00:12:21,120 --> 00:12:24,520 Speaker 1: going to continue to attack their northern settlements and essentially 233 00:12:25,520 --> 00:12:27,720 Speaker 1: put hat at least one third of their country off 234 00:12:27,760 --> 00:12:29,319 Speaker 1: limits to their own citizens. 235 00:12:29,880 --> 00:12:33,559 Speaker 5: Well, the conflicts between Israel and has blowed inevitably drawn 236 00:12:33,640 --> 00:12:36,360 Speaker 5: in Iran into the conflict. What does that mean for 237 00:12:36,520 --> 00:12:38,680 Speaker 5: the wider region in general? 238 00:12:38,760 --> 00:12:43,760 Speaker 1: Now, So that was the biggest concern of the United States. 239 00:12:43,800 --> 00:12:46,440 Speaker 1: That's why we've had so many military assets in the 240 00:12:46,440 --> 00:12:49,079 Speaker 1: region to try to deter a course, and to a 241 00:12:49,120 --> 00:12:52,480 Speaker 1: certain extent it has deterred Aron, I believe. And then 242 00:12:52,679 --> 00:12:56,319 Speaker 1: also to defend and we've seen how capable the US 243 00:12:56,559 --> 00:12:59,160 Speaker 1: was when it came to defending Israel, along with Israel 244 00:12:59,440 --> 00:13:02,200 Speaker 1: and other countries in the regions such as Jordan, which 245 00:13:02,240 --> 00:13:06,840 Speaker 1: defended Israel against the April thirteenth attack by Iron. But 246 00:13:06,920 --> 00:13:09,240 Speaker 1: this is what the biggest concern is for the United States, 247 00:13:09,240 --> 00:13:12,959 Speaker 1: that Iran would mount something that wasn't manageable, that wasn't 248 00:13:12,960 --> 00:13:15,920 Speaker 1: for show, that was or actually just got through and 249 00:13:16,000 --> 00:13:19,640 Speaker 1: caused substantial damage or loss of life in Israel, because 250 00:13:19,679 --> 00:13:23,080 Speaker 1: I think it's been clear that Israel will respond directly 251 00:13:23,800 --> 00:13:27,440 Speaker 1: to or on and they might take direct, meaningful strikes, 252 00:13:27,440 --> 00:13:29,760 Speaker 1: not like they did last time in Iran. In fact, 253 00:13:29,960 --> 00:13:33,560 Speaker 1: several of the IDF spokesperson have referenced their recent attack 254 00:13:34,040 --> 00:13:37,000 Speaker 1: on the WHO thi's in WHO data Yemen is further 255 00:13:37,080 --> 00:13:42,480 Speaker 1: away than from Israel than Iran's oil fields, specifically citing 256 00:13:42,600 --> 00:13:44,600 Speaker 1: Iran's oil field. So I think there's a lot of 257 00:13:44,679 --> 00:13:48,080 Speaker 1: messaging coming out of Israel right now that if Iran 258 00:13:48,200 --> 00:13:51,360 Speaker 1: is successful so not for show like many in it 259 00:13:51,880 --> 00:13:55,120 Speaker 1: believe April was, and actually causes damage to this could 260 00:13:55,160 --> 00:13:59,520 Speaker 1: escalate very quickly and have impacts that go beyond the 261 00:13:59,559 --> 00:14:01,440 Speaker 1: two cunt treason, certainly beyond the region. 262 00:14:02,280 --> 00:14:02,480 Speaker 4: Mick. 263 00:14:02,520 --> 00:14:05,760 Speaker 3: We've seen the US government repeatedly call for a restraint 264 00:14:05,840 --> 00:14:08,439 Speaker 3: on the part of Israel, yet Primeister Netanya, who has 265 00:14:08,520 --> 00:14:12,800 Speaker 3: effectively ignored those Please here, What is the current state 266 00:14:12,880 --> 00:14:17,120 Speaker 3: of the US Israeli relationship. 267 00:14:19,360 --> 00:14:21,920 Speaker 1: Well, I certainly think there is some tensions. I mean, 268 00:14:22,120 --> 00:14:26,560 Speaker 1: the US overall supports Israel defeating Hamas of course they 269 00:14:26,560 --> 00:14:28,880 Speaker 1: were the terrorist attack that attacked them on October seventh, 270 00:14:29,040 --> 00:14:32,200 Speaker 1: and Heswela, which is a US designated terrorist organization and 271 00:14:32,280 --> 00:14:35,560 Speaker 1: has been constantly attacking Israel. When it comes to the 272 00:14:35,600 --> 00:14:39,040 Speaker 1: relationship in Gaza, I think there's been differences of how 273 00:14:39,040 --> 00:14:41,640 Speaker 1: that was prosecuted, and now I think the US just 274 00:14:41,720 --> 00:14:45,320 Speaker 1: wants to see this get contained and have a cease 275 00:14:45,320 --> 00:14:47,560 Speaker 1: fire so that they can do everything that they would 276 00:14:47,640 --> 00:14:50,320 Speaker 1: like to see policy wise, which is in the conflict 277 00:14:50,560 --> 00:14:53,880 Speaker 1: in both Gaza and obviously not have one if you 278 00:14:53,920 --> 00:14:57,480 Speaker 1: will in Lebanon. But Israel has their own interests, they're 279 00:14:57,520 --> 00:15:01,360 Speaker 1: their own sovereign country, and they make their own decisions. 280 00:15:01,560 --> 00:15:03,960 Speaker 1: If they were asking me, I would suggest to the 281 00:15:04,000 --> 00:15:06,880 Speaker 1: White House that they take more of a behind the 282 00:15:06,920 --> 00:15:11,960 Speaker 1: scenes role and not have public disagreements with Israel. They 283 00:15:12,000 --> 00:15:15,480 Speaker 1: could certainly have private disagreements Israel when it comes to 284 00:15:15,520 --> 00:15:19,560 Speaker 1: this seaspar because in Lebanon specifically, because this is very 285 00:15:19,560 --> 00:15:22,640 Speaker 1: difficult for any country to tell another country that's been 286 00:15:22,680 --> 00:15:26,320 Speaker 1: attacked again nine thousand missiles in less than one year 287 00:15:26,960 --> 00:15:29,160 Speaker 1: not to do something that they know they would do, 288 00:15:29,800 --> 00:15:33,640 Speaker 1: So that makes this a bit different. And essentially the 289 00:15:33,640 --> 00:15:36,560 Speaker 1: Sea spire needs to come from Hesbela, who could simply 290 00:15:36,840 --> 00:15:42,040 Speaker 1: stop attacking Israel, agree not to continue, potentially move to 291 00:15:42,080 --> 00:15:44,800 Speaker 1: the Litati River, which is required by a UN resolution. 292 00:15:45,280 --> 00:15:48,880 Speaker 1: So most of the I think negotiations on this side 293 00:15:48,880 --> 00:15:52,760 Speaker 1: should be focused on Hesbela vice Israel, which both countries 294 00:15:52,800 --> 00:15:55,520 Speaker 1: I think, put in the same situation, would be doing 295 00:15:55,560 --> 00:15:57,120 Speaker 1: something similar to Israel right now. 296 00:15:57,960 --> 00:16:00,360 Speaker 3: All right, thank you so much. As always, really appreciate 297 00:16:00,400 --> 00:16:02,240 Speaker 3: getting some of your time and your perspective. 298 00:16:02,280 --> 00:16:02,920 Speaker 2: Mick mulroy. 299 00:16:03,360 --> 00:16:05,320 Speaker 3: He's a co founder of the Lobo Institute and really 300 00:16:05,320 --> 00:16:08,360 Speaker 3: one of our expert voices that we rely upon whenever 301 00:16:08,400 --> 00:16:12,120 Speaker 3: there's some of these geopolitical tensions, particularly in the Middle East, 302 00:16:12,160 --> 00:16:14,800 Speaker 3: where he has so much experience. 303 00:16:16,080 --> 00:16:20,000 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 304 00:16:20,080 --> 00:16:23,160 Speaker 2: weekdays at ten am Eastern on Focar playing and broud 305 00:16:23,160 --> 00:16:26,280 Speaker 2: Otto with the Bloomberg Business app. Listen on demand wherever 306 00:16:26,320 --> 00:16:30,160 Speaker 2: you get your podcasts, or watch us live on YouTube. 307 00:16:31,120 --> 00:16:34,840 Speaker 3: Geopolitical story of the day movie markets is US is 308 00:16:34,840 --> 00:16:37,760 Speaker 3: saying that is a rands preparing to hit Israel with 309 00:16:37,840 --> 00:16:40,520 Speaker 3: ballistic missiles. We've been covering that story all day. We 310 00:16:40,520 --> 00:16:43,200 Speaker 3: will continue to do so. Jonathan Panakoff he joins us now. 311 00:16:43,200 --> 00:16:46,680 Speaker 3: He's a director of the Scowcroft Middle East Security Institute 312 00:16:46,680 --> 00:16:51,200 Speaker 3: at the Atlantic Council. He is based in Washington, DC. Jonathan, 313 00:16:51,240 --> 00:16:53,600 Speaker 3: thanks so much for joining us here. What do you 314 00:16:53,640 --> 00:16:56,680 Speaker 3: make of the last I guess forty eight hours in 315 00:16:56,720 --> 00:17:00,400 Speaker 3: the Middle East, with Israel having some troop and versions 316 00:17:00,480 --> 00:17:02,720 Speaker 3: into southern Lebanon, and now the news today that the 317 00:17:02,760 --> 00:17:06,200 Speaker 3: US says that Iran may be preparing to hit Israel 318 00:17:06,200 --> 00:17:08,600 Speaker 3: with the ballistic missiles. That's been quite the escalation in 319 00:17:08,600 --> 00:17:09,520 Speaker 3: the last forty eight hours. 320 00:17:09,560 --> 00:17:10,159 Speaker 1: What do you make of it? 321 00:17:11,400 --> 00:17:13,879 Speaker 6: Thanks for having me. It certainly has been the escalation. 322 00:17:14,359 --> 00:17:17,040 Speaker 6: I don't expect it to end anytime soon. I think 323 00:17:17,119 --> 00:17:20,199 Speaker 6: the Iran strike that is probably going to be coming 324 00:17:20,240 --> 00:17:23,320 Speaker 6: shortly here, it's going to look slightly different than April. 325 00:17:23,520 --> 00:17:26,440 Speaker 6: I think certainly it's still going to probably target first 326 00:17:26,640 --> 00:17:30,120 Speaker 6: military assets in israel intelligence headquarters. 327 00:17:30,119 --> 00:17:30,600 Speaker 5: Perhaps. 328 00:17:30,880 --> 00:17:32,679 Speaker 6: I don't think they're going to see their runnings go 329 00:17:32,720 --> 00:17:36,800 Speaker 6: after civilian infrastructure. But I do think the question is 330 00:17:36,840 --> 00:17:39,159 Speaker 6: going to be how does Israel respond, And I'm skeptical 331 00:17:39,240 --> 00:17:41,840 Speaker 6: that you will see the same response that you had 332 00:17:41,880 --> 00:17:44,520 Speaker 6: in April. And then that means that the chances for 333 00:17:44,760 --> 00:17:48,560 Speaker 6: increased escalation as we go up the escalatory ladder are 334 00:17:48,640 --> 00:17:50,520 Speaker 6: only going to go up. So this is going to 335 00:17:50,560 --> 00:17:53,959 Speaker 6: take a little bit of time to see where it resolves, 336 00:17:54,160 --> 00:17:56,879 Speaker 6: and of course at the end of it, you still 337 00:17:56,920 --> 00:18:01,200 Speaker 6: have what will be an ongoing war between Israel and Hezbolah. 338 00:18:01,880 --> 00:18:04,879 Speaker 5: Has the UN Security Council had a reaction yet to 339 00:18:04,920 --> 00:18:06,040 Speaker 5: the latest news on this. 340 00:18:07,800 --> 00:18:11,119 Speaker 6: The Secretary General did come out and say every effort 341 00:18:11,119 --> 00:18:14,160 Speaker 6: has to be made to try to prevent a full 342 00:18:14,200 --> 00:18:17,439 Speaker 6: scale war between Israel and Hezbola that could engulf the region. 343 00:18:17,440 --> 00:18:20,480 Speaker 6: But we haven't seen UN Security Council immediately this morning 344 00:18:20,640 --> 00:18:23,720 Speaker 6: meet my senses, you'll see them meet as soon as 345 00:18:23,760 --> 00:18:28,080 Speaker 6: Frankly Iran launchers and you start to see more kinetic 346 00:18:28,160 --> 00:18:31,119 Speaker 6: action being taken. But the reality is going to be 347 00:18:31,320 --> 00:18:34,560 Speaker 6: the impact of the UNSC is going to be, if anything, 348 00:18:34,920 --> 00:18:35,560 Speaker 6: very minimal. 349 00:18:36,520 --> 00:18:38,720 Speaker 3: Jonathan, I guess maybe with a little bit of hindsight, 350 00:18:38,760 --> 00:18:40,320 Speaker 3: we should not have been too surprised that we've had 351 00:18:40,320 --> 00:18:42,560 Speaker 3: this escalation here because you think about just last week 352 00:18:42,880 --> 00:18:45,480 Speaker 3: Prime mentioned that Yahoo at the United Nations here in 353 00:18:45,480 --> 00:18:49,360 Speaker 3: New York. Pretty defiant speech there is he boldened down 354 00:18:49,440 --> 00:18:51,840 Speaker 3: to do more than maybe what the initial aims were, 355 00:18:51,880 --> 00:18:55,160 Speaker 3: which is to get the hostages back and take out Hamas. 356 00:18:55,760 --> 00:18:57,040 Speaker 3: His aims much broader now. 357 00:18:58,440 --> 00:19:01,399 Speaker 6: They certainly are oka. I think Israel has been split 358 00:19:01,480 --> 00:19:03,840 Speaker 6: for quite a while. They were some at the beginning 359 00:19:03,880 --> 00:19:07,000 Speaker 6: of the war, including Yoev Galant, the Israeli Defense Minister, 360 00:19:07,160 --> 00:19:10,479 Speaker 6: who said, no, we can actually deal with Hamas at 361 00:19:10,480 --> 00:19:13,280 Speaker 6: a later time, we should go after Hezbala, and that 362 00:19:13,440 --> 00:19:17,199 Speaker 6: was in late October of twenty twenty three. That's not 363 00:19:17,400 --> 00:19:19,760 Speaker 6: the direction that Netanyahu chose to go. It's not the 364 00:19:19,760 --> 00:19:22,680 Speaker 6: direction most security officials chose to go. But it also 365 00:19:22,800 --> 00:19:26,919 Speaker 6: didn't resolve the fundamental challenge that you had. Hisbela beginning 366 00:19:26,960 --> 00:19:31,160 Speaker 6: October eighth, begin rocket attacks into northern Israel that has 367 00:19:31,160 --> 00:19:36,000 Speaker 6: displaced tens of thousands of Israeli citizens who Netanyahu has 368 00:19:36,040 --> 00:19:39,400 Speaker 6: now faced political pressure to return them home. It's now 369 00:19:39,440 --> 00:19:42,159 Speaker 6: been a year. The original promise was to restart at 370 00:19:42,160 --> 00:19:45,040 Speaker 6: the beginning of the school year, that didn't happen, and 371 00:19:45,080 --> 00:19:47,080 Speaker 6: so now I think the view is and we've seen 372 00:19:47,119 --> 00:19:50,120 Speaker 6: this in the last few months, Israel very methodically went 373 00:19:50,160 --> 00:19:54,200 Speaker 6: after Hezbala's command of control, its leadership. It took out 374 00:19:54,600 --> 00:19:56,960 Speaker 6: more Hebela leaders in the last two months than it 375 00:19:57,000 --> 00:20:00,440 Speaker 6: had in the last two decades, and so clearly there's 376 00:20:00,440 --> 00:20:02,720 Speaker 6: a concern that this is going to escalate, and it 377 00:20:02,800 --> 00:20:05,800 Speaker 6: probably will. But you're right, some of this has been 378 00:20:05,800 --> 00:20:08,359 Speaker 6: telegraphed in the last few months about the direction we 379 00:20:08,400 --> 00:20:08,919 Speaker 6: were heading. 380 00:20:09,600 --> 00:20:12,159 Speaker 5: What types of weapons could Iran use in an attack 381 00:20:12,240 --> 00:20:15,359 Speaker 5: and would they use all of their military capabilities for one? 382 00:20:16,680 --> 00:20:19,800 Speaker 6: Yeah, I think so. Look, Iran has a really large 383 00:20:19,840 --> 00:20:23,760 Speaker 6: inventory of ballistic missiles, of cruise missiles, of drones. You're 384 00:20:23,800 --> 00:20:27,679 Speaker 6: talking about dozens of different types with significant ranges. The 385 00:20:27,720 --> 00:20:31,440 Speaker 6: ballistic missiles, the time to get them from Iran to 386 00:20:31,680 --> 00:20:35,320 Speaker 6: Israel is about twelve minutes, give or take, so it's 387 00:20:35,359 --> 00:20:37,680 Speaker 6: really quick. The cruise missiles there is a little slower, 388 00:20:37,720 --> 00:20:40,840 Speaker 6: the drones much lower than that. But the reality is, 389 00:20:40,840 --> 00:20:43,720 Speaker 6: at the end of the day, Iran's number one concern 390 00:20:43,920 --> 00:20:48,200 Speaker 6: is always regime stability and regime security, and so the 391 00:20:48,200 --> 00:20:50,639 Speaker 6: odds that it's going to use the entirety of it's Arsenal, 392 00:20:50,760 --> 00:20:54,119 Speaker 6: I think is very very low, because if it does so, 393 00:20:54,440 --> 00:20:57,600 Speaker 6: then it's got nothing left to protect itself or even 394 00:20:57,640 --> 00:21:01,640 Speaker 6: to protect Kabala in another month or two, if there's 395 00:21:01,680 --> 00:21:04,240 Speaker 6: a need that, if follow looks like it's really suffering, 396 00:21:04,640 --> 00:21:06,760 Speaker 6: the question for Ron is going to be, how does 397 00:21:06,800 --> 00:21:09,560 Speaker 6: it respond in a meaningful way that can try to 398 00:21:09,640 --> 00:21:14,000 Speaker 6: create some increased deterrence against Israel without actually leading to 399 00:21:14,040 --> 00:21:17,320 Speaker 6: a full scale war that jeopardizes the stability of the 400 00:21:17,320 --> 00:21:20,440 Speaker 6: Iranian regime. And that's going to be a really hard 401 00:21:20,520 --> 00:21:21,200 Speaker 6: balance to me. 402 00:21:21,800 --> 00:21:23,520 Speaker 3: All Right, Jonathan, thank you so much for joining us. 403 00:21:23,520 --> 00:21:26,760 Speaker 3: Really appreciate it. Jonathan Panacoff, he's a director at the 404 00:21:26,760 --> 00:21:30,640 Speaker 3: Scowcroft Middle East Security Initiative at the Atlanta Council. Giving 405 00:21:30,680 --> 00:21:33,159 Speaker 3: us the latest on the geopolitical tensions rising there. In 406 00:21:33,160 --> 00:21:36,000 Speaker 3: the midist, you're listening. 407 00:21:35,640 --> 00:21:39,600 Speaker 2: To the Bloomberg Intelligence Podcast. Catch us live weekdays at 408 00:21:39,600 --> 00:21:42,919 Speaker 2: ten am Eastern on applecar Play and Android Otto with 409 00:21:42,960 --> 00:21:45,840 Speaker 2: the Bloomberg Business app. You can also listen live on 410 00:21:45,920 --> 00:21:49,160 Speaker 2: Amazon Alexa from our flagship New York station, Just Say 411 00:21:49,240 --> 00:21:50,160 Speaker 2: Alexa Play. 412 00:21:50,280 --> 00:21:55,399 Speaker 3: Bloomberg eleven thirty Economic data also coming out impacting these markets, 413 00:21:55,440 --> 00:21:58,399 Speaker 3: ice and manufacturings. John Tucker just reported came into forty 414 00:21:58,400 --> 00:22:00,640 Speaker 3: seven point two. They could say since it was forty 415 00:22:00,640 --> 00:22:02,280 Speaker 3: seven point five, so a little bit light but kind 416 00:22:02,280 --> 00:22:04,560 Speaker 3: of flat with last month. Let's break it down a 417 00:22:04,600 --> 00:22:06,200 Speaker 3: little bit. We can do that, Tim Fury, he's a 418 00:22:06,320 --> 00:22:12,080 Speaker 3: chair for the Institute for Supply Management's Manufacturing Business Survey Committee. Tim, 419 00:22:12,119 --> 00:22:13,840 Speaker 3: what do you make of the data we saw here 420 00:22:13,840 --> 00:22:16,359 Speaker 3: from the US manufacturers today? 421 00:22:16,480 --> 00:22:20,240 Speaker 7: Good morning, So we have a stable contraction compared to 422 00:22:20,240 --> 00:22:22,440 Speaker 7: the prior month at forty seven to two. Like you said, Paul, 423 00:22:24,240 --> 00:22:26,719 Speaker 7: it's a good report. I think on the demand side, 424 00:22:26,800 --> 00:22:29,800 Speaker 7: we're still looking for demand to surface. And of course 425 00:22:30,119 --> 00:22:32,160 Speaker 7: our panelists only had a little bit of the benefit 426 00:22:32,160 --> 00:22:35,600 Speaker 7: here of the federal rate reduction announced several weeks ago, 427 00:22:35,640 --> 00:22:38,119 Speaker 7: but it's not reflected really in our report. Just the 428 00:22:38,160 --> 00:22:41,200 Speaker 7: sentiment would be. On the output side, output was good, 429 00:22:41,240 --> 00:22:44,560 Speaker 7: our revenue and our production base was stable month a month, 430 00:22:44,560 --> 00:22:46,919 Speaker 7: which is excellent. Employment stepped down again. We could talk 431 00:22:46,920 --> 00:22:49,400 Speaker 7: a little bit more about that now. On the input side, 432 00:22:49,440 --> 00:22:52,680 Speaker 7: we returned to a normal minimal stress and the supplier 433 00:22:52,720 --> 00:22:54,960 Speaker 7: side and manufacturing inventories back and the level that you 434 00:22:55,000 --> 00:22:57,480 Speaker 7: would expect them to be. So we're kind of where 435 00:22:57,520 --> 00:22:59,600 Speaker 7: we thought we would be in a little bit about 436 00:22:59,600 --> 00:23:02,040 Speaker 7: forty sive. You know, we're still thinking that we're probably 437 00:23:02,080 --> 00:23:04,480 Speaker 7: going to stay below fifty before we get to the 438 00:23:04,480 --> 00:23:07,359 Speaker 7: beginning the next year. But yeah, so we'll talk a 439 00:23:07,400 --> 00:23:10,440 Speaker 7: little bit about employment and prices. So we've kind of 440 00:23:10,440 --> 00:23:13,560 Speaker 7: been preceding what's been happening on the jobs. Joelts CPI 441 00:23:13,600 --> 00:23:16,960 Speaker 7: and PPI in terms of direction. Our employment came down 442 00:23:16,960 --> 00:23:19,600 Speaker 7: again pretty strongly, but I think the fact that the 443 00:23:19,640 --> 00:23:23,040 Speaker 7: revenue maintained this level that we had back in August 444 00:23:23,119 --> 00:23:25,280 Speaker 7: indicates that we're just trying to make sure that we 445 00:23:25,320 --> 00:23:29,959 Speaker 7: have employment levels aligned properly with the latest demand for gasts. Now, 446 00:23:30,000 --> 00:23:33,160 Speaker 7: on the prices side, we came down to forty eight three. 447 00:23:33,320 --> 00:23:35,919 Speaker 7: We're easing a little bit. We've seen some softness on 448 00:23:36,040 --> 00:23:39,760 Speaker 7: steel and aluminum, more of the foundational commodities, and I 449 00:23:39,800 --> 00:23:43,880 Speaker 7: think that's probably a good omen for the CPIPPI PC 450 00:23:44,200 --> 00:23:45,600 Speaker 7: that comes out later on the month. 451 00:23:46,280 --> 00:23:50,000 Speaker 5: So Tim, we know that previously declining orders had been 452 00:23:50,000 --> 00:23:52,399 Speaker 5: that issue in a persistent retreat in the backlogs that 453 00:23:52,480 --> 00:23:55,760 Speaker 5: had remained kind of key headwinds here for production where 454 00:23:55,840 --> 00:23:59,800 Speaker 5: are new orders increasing versus decreasing, So. 455 00:24:00,640 --> 00:24:03,439 Speaker 7: Demand overall I think is still negative. This month, we 456 00:24:03,480 --> 00:24:06,480 Speaker 7: have very weak new export orders. The new order level 457 00:24:06,520 --> 00:24:09,320 Speaker 7: contracted again, but not quite as bad as it did 458 00:24:09,320 --> 00:24:13,359 Speaker 7: in the prior month. We contracted minimally, but we're still contracting. 459 00:24:13,720 --> 00:24:16,199 Speaker 7: Our backlog gained a little bit in terms of slowing 460 00:24:16,240 --> 00:24:20,800 Speaker 7: down its contraction, but it's still contracting fairly heavily, so 461 00:24:21,240 --> 00:24:24,040 Speaker 7: you know overall, and customer inventories came in about right, 462 00:24:24,080 --> 00:24:26,960 Speaker 7: which really isn't all that good for next month's activity, 463 00:24:27,320 --> 00:24:30,080 Speaker 7: So overall demand is still weak. Wouldn't expect with the 464 00:24:30,480 --> 00:24:32,639 Speaker 7: Fed announcing and interest rate reduction just a couple of 465 00:24:32,680 --> 00:24:35,280 Speaker 7: weeks ago that we would see an impact on the 466 00:24:35,320 --> 00:24:38,520 Speaker 7: demand side. I'm hoping to see additional investments start to 467 00:24:38,520 --> 00:24:41,399 Speaker 7: occur in the November timeframe. Maybe that will help as 468 00:24:41,440 --> 00:24:44,960 Speaker 7: we build up maybe manufacturing inventory to do better on 469 00:24:45,000 --> 00:24:48,560 Speaker 7: customer demand. But overall, I really don't see demand coming 470 00:24:48,600 --> 00:24:50,440 Speaker 7: back until we close the year and the election gets 471 00:24:50,440 --> 00:24:50,919 Speaker 7: behind us. 472 00:24:51,040 --> 00:24:52,560 Speaker 3: All right, Tim, thanks so much for joining us. Really 473 00:24:52,600 --> 00:24:55,240 Speaker 3: appreciate you breaking down this news here. Tim Fury, chairman 474 00:24:55,400 --> 00:24:58,240 Speaker 3: of the Manufacturing Business Survey. The firm is the Institute 475 00:24:58,280 --> 00:25:00,879 Speaker 3: for Supply Management breaking down some of those numbers came 476 00:25:00,920 --> 00:25:03,439 Speaker 3: in a little lighter than expected, but a little stable 477 00:25:03,440 --> 00:25:07,440 Speaker 3: relative to last period, still in a contraction mode. 478 00:25:07,920 --> 00:25:11,800 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 479 00:25:11,880 --> 00:25:15,400 Speaker 2: weekdays at ten am Eastern on applecar Play and Android 480 00:25:15,440 --> 00:25:18,200 Speaker 2: Auto with the Bloomberg Business app. You can also listen 481 00:25:18,320 --> 00:25:21,440 Speaker 2: live on Amazon Alexa from our flagship New York station 482 00:25:21,800 --> 00:25:25,520 Speaker 2: Just Say Alexa playing Bloomberg eleven thirty. 483 00:25:25,920 --> 00:25:30,080 Speaker 3: All right, Boeing some news here, Maybe weighing to raise 484 00:25:30,080 --> 00:25:32,399 Speaker 3: at least ten billion dollars in stock because why, they 485 00:25:32,440 --> 00:25:35,360 Speaker 3: got a cash flow problem here and they're not delivering 486 00:25:35,400 --> 00:25:37,879 Speaker 3: as many planes as they need to. It's definitely a 487 00:25:37,960 --> 00:25:40,040 Speaker 3: challenge for them. So they did go to the bond market. 488 00:25:40,080 --> 00:25:41,800 Speaker 3: They're concerning going to the equity market. Lets see if 489 00:25:41,800 --> 00:25:45,200 Speaker 3: that's enough. George Ferguson, Senior Airspace Defense analys for Bloomberg 490 00:25:45,200 --> 00:25:48,760 Speaker 3: Intelligence Joints us George, again, this is something you've talked 491 00:25:48,800 --> 00:25:50,720 Speaker 3: to us about in the past, that the company may 492 00:25:50,840 --> 00:25:53,439 Speaker 3: need to go to the equity market and raise some equity. 493 00:25:53,440 --> 00:25:55,760 Speaker 3: It stocks down forty percent year to date, ideally not 494 00:25:55,800 --> 00:25:57,960 Speaker 3: a good time to raise money. At this valuation. But 495 00:25:58,280 --> 00:25:59,000 Speaker 3: what do you make of this? 496 00:26:00,400 --> 00:26:03,280 Speaker 8: Yeah, I mean, you know, I think the strike is 497 00:26:03,359 --> 00:26:06,480 Speaker 8: sort of dragged on enough and they have to be 498 00:26:06,560 --> 00:26:08,840 Speaker 8: concerned about having enough cash to continue to run the 499 00:26:08,840 --> 00:26:12,080 Speaker 8: business that they're ready to do whatever it takes right 500 00:26:12,119 --> 00:26:14,280 Speaker 8: to show up their position. I guess it kind of 501 00:26:14,320 --> 00:26:16,159 Speaker 8: gives me a sense that maybe they think the strike's 502 00:26:16,200 --> 00:26:20,320 Speaker 8: going to last longer than maybe even we anticipated originally, 503 00:26:20,320 --> 00:26:22,919 Speaker 8: and so you got to do it, you gotta do, 504 00:26:23,000 --> 00:26:23,520 Speaker 8: I guess. 505 00:26:24,000 --> 00:26:26,160 Speaker 5: And we do know that Boeing is on the cusp 506 00:26:26,200 --> 00:26:28,920 Speaker 5: of seeing its credit rating cut to junk. Here, what's 507 00:26:28,920 --> 00:26:31,000 Speaker 5: the likelihood that we could see this happening soon? 508 00:26:32,720 --> 00:26:37,040 Speaker 8: I mean, I think that again, if this strike drags on, 509 00:26:38,000 --> 00:26:40,080 Speaker 8: you know, you're starting to get to the point where 510 00:26:40,960 --> 00:26:43,680 Speaker 8: I think once you get past a month, where you're 511 00:26:43,960 --> 00:26:47,280 Speaker 8: probably doing more damage to the supply chain, and so 512 00:26:47,640 --> 00:26:51,399 Speaker 8: losing a month due to the strike, you know that 513 00:26:51,760 --> 00:26:53,480 Speaker 8: doesn't just going to take you a month to sort 514 00:26:53,480 --> 00:26:56,439 Speaker 8: of recapture where you were previously. I think losing a 515 00:26:56,440 --> 00:26:58,639 Speaker 8: month means you put the suppliers a much more strain. 516 00:26:59,160 --> 00:27:02,240 Speaker 8: Maybe it means it's six weeks, seven weeks worth of recovery, 517 00:27:02,520 --> 00:27:04,760 Speaker 8: So the further drags on, I think the more the 518 00:27:04,800 --> 00:27:07,719 Speaker 8: rating agencies have to think about when are they going 519 00:27:07,760 --> 00:27:11,280 Speaker 8: to really bance back to profitability and you know, and 520 00:27:11,359 --> 00:27:13,440 Speaker 8: generate some decent cash and they've got to keep sort 521 00:27:13,440 --> 00:27:15,720 Speaker 8: of pushing it out at a multiple the time the 522 00:27:15,760 --> 00:27:18,879 Speaker 8: strike has gone on. And so you know, that's what 523 00:27:18,960 --> 00:27:21,520 Speaker 8: I think the real challenge here, I think the I 524 00:27:21,560 --> 00:27:23,760 Speaker 8: think I'm not the credit analyst, but I think that 525 00:27:23,800 --> 00:27:27,560 Speaker 8: the credit agencies, if we drag on again past a month, 526 00:27:27,920 --> 00:27:29,639 Speaker 8: I think they have to really start to think about 527 00:27:30,560 --> 00:27:32,560 Speaker 8: whether they can hold Boeing in a band that frankly, 528 00:27:32,600 --> 00:27:35,520 Speaker 8: I think they weren't really in any ways. But the 529 00:27:35,560 --> 00:27:37,520 Speaker 8: credit agencies are trying to look through the cycle a 530 00:27:37,560 --> 00:27:37,960 Speaker 8: bit here. 531 00:27:38,880 --> 00:27:41,399 Speaker 3: The stock's actually up three and a half percent on 532 00:27:41,600 --> 00:27:44,200 Speaker 3: the news today, so maybe the investment great credit rating 533 00:27:44,240 --> 00:27:46,719 Speaker 3: is more important. That made me some delution here, George, 534 00:27:46,720 --> 00:27:48,879 Speaker 3: where are we in terms of these negotiations here in 535 00:27:49,160 --> 00:27:52,080 Speaker 3: week three? Any any movement there? 536 00:27:53,320 --> 00:27:55,760 Speaker 8: You know, not what we're hearing. You know, I think 537 00:27:55,800 --> 00:27:58,200 Speaker 8: you've heard the same as we did. That another offer 538 00:27:58,240 --> 00:27:59,920 Speaker 8: came out. It looked like I think it was about 539 00:28:00,080 --> 00:28:05,120 Speaker 8: thirty percent increase. Looks like the union wasn't very interested. 540 00:28:05,240 --> 00:28:08,080 Speaker 8: I think if you're Boeing right now, you know what 541 00:28:08,119 --> 00:28:10,200 Speaker 8: I understand is a lot of these union members got 542 00:28:10,359 --> 00:28:13,000 Speaker 8: one of their last paychecks either at the very end 543 00:28:13,000 --> 00:28:16,440 Speaker 8: of September bidding of October here, and so I think, 544 00:28:16,440 --> 00:28:18,400 Speaker 8: now what you're really trying to do is figure out 545 00:28:18,480 --> 00:28:22,879 Speaker 8: what the reserve, you know what, the you know what 546 00:28:22,920 --> 00:28:25,080 Speaker 8: the union really, how far they're willing to go right, 547 00:28:25,119 --> 00:28:29,800 Speaker 8: whether they they're as as girded as they say they 548 00:28:29,800 --> 00:28:32,280 Speaker 8: are to keep going into a world where they're just 549 00:28:32,320 --> 00:28:35,840 Speaker 8: not getting paychecks, right. And so maybe here we're in 550 00:28:35,880 --> 00:28:40,040 Speaker 8: a bit of a who knows it, you know, sort 551 00:28:40,040 --> 00:28:44,320 Speaker 8: of the chicken phase where Boeing says, look, we can 552 00:28:44,360 --> 00:28:47,360 Speaker 8: push this further, and let's see how long you can't 553 00:28:47,360 --> 00:28:50,120 Speaker 8: take a paycheck and see how how much the union 554 00:28:50,160 --> 00:28:52,040 Speaker 8: is saved up. And I think the challenge here really 555 00:28:52,080 --> 00:28:55,560 Speaker 8: is Boeing has to live with whether whatever cost structure 556 00:28:56,080 --> 00:28:59,280 Speaker 8: they ultimately agree to, right, and so as much as 557 00:28:59,320 --> 00:29:01,600 Speaker 8: they just want to get back and start building airplanes, 558 00:29:02,000 --> 00:29:03,960 Speaker 8: they also have to be very careful about what the 559 00:29:04,000 --> 00:29:07,600 Speaker 8: long term effects are on their financials. It's really challenging 560 00:29:07,680 --> 00:29:10,320 Speaker 8: right now for going in their financial position to have 561 00:29:10,400 --> 00:29:12,120 Speaker 8: to do this, but they've got to think about the 562 00:29:12,120 --> 00:29:13,160 Speaker 8: long term here, all. 563 00:29:13,080 --> 00:29:15,600 Speaker 3: Right, George, thanks very much. We appreciate it. George Ferguson's 564 00:29:15,600 --> 00:29:18,240 Speaker 3: senior Airspace, Defense and Airlines analys for Bloomberg Intelligence. 565 00:29:18,480 --> 00:29:23,000 Speaker 2: This is the Bloomberg Intelligence podcast, available on Apples, Spotify, 566 00:29:23,200 --> 00:29:26,840 Speaker 2: and anywhere else you get your podcasts. 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