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

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Speaker 2: This is the Bloomberg Day BAK podcast. Good morning, It's Monday,

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Speaker 2: the second of February. I'm Caroline Hipket in London.

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Speaker 1: And I'm Stephen Carolin Brussels. Coming up today. Scrutiny grows

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Speaker 1: over Jeffrey Epstein's ties to Mandelson, Lutnik, and a host

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Speaker 1: of other powerful business and political figures.

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Speaker 2: Gold and Silver continue to plunge amid intense selling pressure.

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Speaker 1: Plus seeking to stay in the driving seat. Wymercedes is

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Speaker 1: doubling down on luxury cars to help pay for its

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Speaker 1: shift to electric vehicles.

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

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Speaker 1: The fallout is growing following Friday's release of around three

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Speaker 1: million pages of material related to the convicted sex offender

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Speaker 1: Jeffrey Epstein. Britain's former ambassador to the United States, Peter Mandelson,

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Speaker 1: has resigned his Labor Party membership over his links to

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Speaker 1: the disgraced financier. Mandelson says that he took the decision

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Speaker 1: to avoid further embarrassment after documents reveals that payments totaling

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Speaker 1: seventy five thousand pounds were made by Epstein to him

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Speaker 1: and his partner in two thousand and three. The documents

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Speaker 1: also show that in two thousand and nine Mandalton attempted

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Speaker 1: to prevent the UK from introducing attacks on bankers bonuses

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Speaker 1: following a request from Epstein. Mandleson, who remains a peer

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Speaker 1: in the House of Lords, says he believes the allegations

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Speaker 1: of financial payments to him by Epstein are false and

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Speaker 1: need investigating by him.

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Speaker 2: Among the material our images appearing to show former British

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Speaker 2: Prince Andrew mount Matten Windsor kneeling over a woman. UK

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Speaker 2: Cabinet Minister Steve Reed says that the former Prince should

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Speaker 2: now testify before the US Congress about his relationship with

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Speaker 2: Jeffrey Epstein.

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Speaker 3: The principle here is very very clear if Andrew Mountbatten

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Speaker 3: Windsor clearly has insight on what was going on, and

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Speaker 3: he should testify because the victims deserve a knee him

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Speaker 3: and anybody else who may have witnessed things to do that.

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Speaker 2: Steve Reid was speaking as UK Prime Minister Kirstarmer also

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Speaker 2: called on Prince Andrew to testify. The growing pressure comes

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Speaker 2: as the wider document release reveals fresh insights into the

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Speaker 2: rich and well connected figures who circulated in the orbit

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Speaker 2: of the late disgraced financier. The documents show that some individuals,

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Speaker 2: including US Commerce Secretary Howard Lutnik and former Microsoft executive

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Speaker 2: Stephen Sinowski, maintained contact with Epstein for longer than they

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Speaker 2: had previously claimed. Lutnik told The New York Times on

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Speaker 2: Friday that he quote spent zero time with Epstein, but

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Speaker 2: declined to comment on the documents. Representatives from Andrewson Horowitz

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Speaker 2: did not respond to a request for comments.

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Speaker 1: The price of gold is falling further after its biggest

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Speaker 1: plunge in a decade, reversing a record breaking rally that

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Speaker 1: appeared to have run too far, too fast. The spark

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Speaker 1: price is slumped by as much as seven point nine

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Speaker 1: percent today, while silver is also plunged by as much

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Speaker 1: as fourteen percent in a volatile session. The sell off

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Speaker 1: was sparked on Friday after US President Donald Trump announced

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Speaker 1: he would name nominate Kevin worsh to leave the Federal Reserve.

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Speaker 1: That sent the dollar higher and undercut sentiment among investors

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Speaker 1: who'd bet on Trump's willingness to let the currency weaken.

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Speaker 1: Precious metals have risen to an old time highs as

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Speaker 1: investors piled into gold and silver on renewed concerns about

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Speaker 1: geopolitical turmoil, currency debasement, and the federal reserves.

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Speaker 2: Independence par Minister Kiss Starmer says that he still wants

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Speaker 2: the UK to join the European Union's one hundred and

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Speaker 2: fifty billion euro defense fund after negotiations last year ended

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Speaker 2: in failure. He told reporters over the weekend that it

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Speaker 2: quote makes good sense for Europe in the widest sense

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Speaker 2: of the word, to work more closely together as the

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Speaker 2: continent looks to counter Russian aggression. Starmer's remarks came ahead

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Speaker 2: of a series of meetings which we've senior UK and

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Speaker 2: EU officials in London this week. If a deal is reached,

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Speaker 2: British defense firms would be able to bid for contracts

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Speaker 2: funded by safe the Security Action for Europe program.

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Speaker 1: Iran supreme leader has warned of a regional war as

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Speaker 1: President Trump threatens military action. The news comes after weeks

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Speaker 1: of escalating tensions over Tehran's deadly crackdown on civilian protests.

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Speaker 1: In a broadcast on state television yesterday, Iyatala al Kamane

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Speaker 1: said the Iranian people will strike back forcefully against anyone

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Speaker 1: who wants to attack or cause harm. Speaking to reporters

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Speaker 1: in Florida over the weekend, the US president said his

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Speaker 1: forces are ready to act.

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Speaker 4: We have the biggest rosbefleships in the world over there

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Speaker 4: very close a couple of days, and hopefully we will

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Speaker 4: make a deal.

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Speaker 1: We don't make a deal, then we'll find out whether

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Speaker 1: or not he was rad President Trump also said he's

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Speaker 1: hopeful that Iran and the US will reach a deal.

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Speaker 1: Oil prices have plunged, however, after Trump disclosed talks between

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Speaker 1: Washington and Iran, and geopolitical risk premiums faded.

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Speaker 2: British engine maker Rolls Royce has halted its plans to

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Speaker 2: put a nuclear reactor on the Moon by the end

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Speaker 2: of the decade. The Telegraph reports of the UK government

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Speaker 2: back program. Is it a standstill due to a lack

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Speaker 2: of potential partners blouemokes freddie Fulston has more.

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Speaker 5: Could nuclear power be used to support a Moon base

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Speaker 5: for astronauts backed by millions in government funding? Rolls Royce

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Speaker 5: had been looking to answer that question. However, the UK

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Speaker 5: firms said that for now, at least, there are no

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Speaker 5: current contracts in place to progress the project. By contrast,

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Speaker 5: NASA in the US is accelerating plans to develop nuclear

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Speaker 5: power on the moon in London, Freddie Fulston Bloomberg Radio, and.

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Speaker 2: Those are our top stories for you this morning. Looking

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Speaker 2: at the markets, we have a major sell off for

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Speaker 2: some of the asset classes that did so well in January.

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Speaker 2: Gold at the moment slumping seven point three percent. Silver

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Speaker 2: is also declining very strongly. The Bloomberg Dollar Spot indexes

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Speaker 2: up by two tenths of one percent. This after the

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Speaker 2: announcement of Kevin Walsh as President Trump's picked to lead

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Speaker 2: the FED, Richard clarid Over at PIMCO saying that Wsh

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Speaker 2: brings intriguing ideas and ways to change and potentially improve

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Speaker 2: how the FED operates. In terms of other risk, sentiment worsening,

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Speaker 2: Bitcoin briefly sliding below a seventy five thousand dollars, currently

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Speaker 2: with just above that level this as we've also seen

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Speaker 2: the concerns around tech names. Nasdaq stock futures are currently

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Speaker 2: down one point seven percent. US stocks fifty future is

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Speaker 2: also slumping one percent right now.

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Speaker 1: In a moment, more on what we learned from the

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Speaker 1: release of the latest Jeffrey Epstein files, Plus we'll discuss

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Speaker 1: Mercedes strategy of doubling down on its luxury cars. What's

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Speaker 1: another story that caught her eye this morning. I'm using

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Speaker 1: AI to write social media posts. Laura Kelly has been

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Speaker 1: writing about how users on LinkedIn are now policing posts

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Speaker 1: on the networking site for their use of AI. This

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Speaker 1: is the creeping saminess that you'll have seen emerging in

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Speaker 1: some of those posts now, as if LinkedIn wasn't bland

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Speaker 1: enough already. And I say that as somebody uses the

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Speaker 1: platform regularly. But some of the quirks that have become

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Speaker 1: hallmarks of AI writing the m dash, the Oxford commas.

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Speaker 1: Some say, I don't know why people care so much

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Speaker 1: with the Oxford comma. But anyway, big words, repetition of ideas,

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Speaker 1: the not just X but y formulation, certain kinds of syntax,

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Speaker 1: using emojis apparently as all red flags. I mean, I'm

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Speaker 1: guilty of all of this, So I don't know how

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Speaker 1: closely I'm aligned to AI on this as well. So

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Speaker 1: users on LinkedIn, Caroline are not happy, and they're telling

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Speaker 1: people about it loudly.

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Speaker 2: I find that really funny. Look I get it. I mean,

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Speaker 2: AI is kind of challenging everyone's idea of what it

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Speaker 2: is is to be creative, to be a human being,

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Speaker 2: to write creatively. I think it's a weird process, will

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Speaker 2: probably adapt. People do seem to begin to realize that

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Speaker 2: actually outsourcing your intelligence, your creativity to AI maybe leaves

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Speaker 2: something to be desired. I don't know. People want human connection?

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Speaker 2: Do they want it on LinkedIn or I'm not sure?

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Speaker 1: But anyway, well, there's also the question of where does

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Speaker 1: AI end and we begin? Are we now aping some

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Speaker 1: of the formulations of AI because they've become so common

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Speaker 1: on these websites as well. It's a fascinating story. We'll

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Speaker 1: put a link to us in our podcast show notes.

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Speaker 2: Okay, let's bring you more now on the latest revelations

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Speaker 2: from the Epstein files released by the US Department of Justice.

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Speaker 2: Our reported to to Adebio is here with more. Look.

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Speaker 2: The quantity of documents, of photographs and videos releases absolutely enormous,

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Speaker 2: and many media outlets have spent the last couple of

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Speaker 2: days focusing on this frankly around the world. It shows

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Speaker 2: there's new links to prominent investors, political figures, and lawyers

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Speaker 2: and so many others. What does it show? What do

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Speaker 2: you highlight? Teva?

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Speaker 6: Oh, exactly, Caroline, There is a lot of information in

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Speaker 6: this latest release. It's more than two thousand videos and

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Speaker 6: some one hundred and eighty thousand images. But I think

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Speaker 6: one of the main takeaways from me is that it

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Speaker 6: really sheds light on the full extent of Epstein's network

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Speaker 6: and also just how close some of those relationships were.

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Speaker 6: I mean, the emails feature things like nicknames, gifts, advice

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Speaker 6: that suggests quite deeply personal ties. There are some big

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Speaker 6: names really from sort of every walk of life, so

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Speaker 6: we're talking about finance business, the likes of Elon Musk,

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Speaker 6: who has said that he repeatedly denied invitations from Epstein,

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Speaker 6: that he pushed very hard for these files to be released.

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Speaker 6: A politics A Commerce secretary Howard Lutnik is also mentioned.

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Speaker 6: He said that he spent zero time with Epstein. But

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Speaker 6: perhaps one of the most striking relations from these files

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Speaker 6: is an insight into how Epstein viewed himself and his operations.

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Speaker 6: There's a really interesting clip which has been released as

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Speaker 6: part of this information dump, and it's an interview where

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Speaker 6: he's speaking about some of the money that he earned

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Speaker 6: and saying that his money isn't dirty, but emphasizing his

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Speaker 6: role as a philanthropist. Here's a clip of him speaking about.

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Speaker 4: That the money I gave to help try to eradicate

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Speaker 4: polio in Pakistan and India. Instead of asking me whether

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Speaker 4: that money should be given to these children for vaccines,

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Speaker 4: I think you might want to ask their mothers.

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Speaker 6: So that was Jeffrey Epstein speaking there, and I think

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Speaker 6: it perhaps tells us something about what the disgraced financier

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Speaker 6: had thought of himself. We should mention that there is

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Speaker 6: a sum reference to President Trump in these documents. It

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Speaker 6: includes correspondence containing a list of unverified tips with accusations

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Speaker 6: about the President as long as well as other notable figures.

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Speaker 6: But when asked about these claims, of Justice Department has

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Speaker 6: said that they are untrue and sensationalist. But for many

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Speaker 6: implicated in these materials, there isn't an explicit indication of wrongdoing,

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Speaker 6: but certainly there could be reputational damage and that's what

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Speaker 6: I think we'll see many mentioned struggle to fight against

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Speaker 6: in the coming weeks.

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Speaker 1: And in the UK, of course, there's been two particular

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Speaker 1: figures who've stood out in these latest documents as well,

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Speaker 1: Peter Mandleson and Andrew mcbatten Windsor.

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Speaker 6: Yes, these are kind of two characters that have been

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Speaker 6: really central to this story from a UK perspective. Peter Mandlson,

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Speaker 6: the former UK ambassador to the US, he did have

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Speaker 6: to resign from that position due to revelations about his

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Speaker 6: ties to Epstein. He's now gone a step further and

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Speaker 6: resigned from the Labor Party to avoid causing further embarrassment,

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Speaker 6: as he puts it, and the main question to water

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Speaker 6: Mandalson at the moment is over the payments. Alleged payments

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Speaker 6: totaling seventy five thousand pounds made to him and his

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Speaker 6: partner by Epstein in two thousand and three, but also

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Speaker 6: attempts to stop the UK from introducing attacks on bankers'

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Speaker 6: bonuses in two thousand and nine, allegedly after a request

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Speaker 6: from Epstein. In response, he has said that he believes

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Speaker 6: these allegations to be folds and that he has no

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Speaker 6: record or recollection of the payments. In the case of

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Speaker 6: Andrew mount Batten Windsor, formerly a prince, of course, that

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Speaker 6: title taken away again over his links to Epstein. Prime

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Speaker 6: Minister Kirs Starmer over the weekend, suggesting that he should

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Speaker 6: testify before a Congressional committee over his dealings with Epstein.

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Speaker 6: Is something he's been asked to do in November by Democrats,

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Speaker 6: but Starmer is saying now that anyone with information should

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Speaker 6: come forward when he was asked about Andrew's involvement. So

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Speaker 6: it does seem that assessing all of those implicated in

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Speaker 6: this latest release, perhaps Mandelssohn and mount Batton ways have

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Speaker 6: suffered as some of the most tangible consequences from their

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Speaker 6: links so far.

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Speaker 2: Yeah, And in terms of the consequences then of this

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Speaker 2: for Epstein's victims, because, as you say, a lot of

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Speaker 2: this shows the depth of ties, but maybe not legal ramifications.

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Speaker 2: There certainly aren't a lot of legal consequences that might

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Speaker 2: flow from this, or even accusations on the basis of this.

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Speaker 2: So what are the consequences for Epstein's victims.

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Speaker 6: Well, that's right, Caroline, I think the full extent of

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Speaker 6: the consequences for victims, perhaps the Act to be seen

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Speaker 6: should mention that it is still unclear if all of

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Speaker 6: the claims in these emails can be substantiated. There are

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Speaker 6: still questions over the validity of the material involved in

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Speaker 6: these releases, and many implicated have denied wrongdoing, but it

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Speaker 6: remains to be seen what happened in terms of this case,

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Speaker 6: this is said to be the last release of material

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Speaker 6: relating to links with Epstein that we'll see, so over

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Speaker 6: the next few weeks and months, perhaps we'll see further

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Speaker 6: fallout from the results of these releases.

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Speaker 1: Okay, toe you out to buy our reporter, thank you

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Speaker 1: very much for joining us this morning. Stay with us.

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Speaker 1: More from Bloomberg Daybreak Europe coming up after this Now.

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Speaker 1: Mercedes is revamping its S class luxury vehicles and an

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Speaker 1: effort to boost returns which will help fund the car

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Speaker 1: maker's shift to electric vehicles. But the bet is now

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Speaker 1: looking increasingly shaky. Our German automotive reporter Will Wilks joins

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Speaker 1: us now for more. Will, good morning. Why is the

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Speaker 1: S class then so important to mercedes strategy?

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Speaker 7: The S class is Mercedes technology flagship, and it's a

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Speaker 7: car and its derivatives, its sister vehicles bring in a

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Speaker 7: huge amount of it's and earnings for Mercedes. So on

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Speaker 7: the volume cars, the smaller cars that Mercedes tells lots of,

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Speaker 7: they don't make so much money. It really depends on

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Speaker 7: these big and important cars. And it's also the vehicle

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Speaker 7: that's supposed to be the company's flags up in China,

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Speaker 7: and just this whole idea of Mercedes being a luxury

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Speaker 7: car maker, one with high earnings is based around this

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Speaker 7: vehicle and it's siblings.

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Speaker 2: Okay, what's gone wrong then with that plan?

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Speaker 7: Well, what's gone wrong is the particularly in China, which

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Speaker 7: is the company's the S class's biggest market and Mercedes'

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Speaker 7: most profitable market. Chinese car makers that everyone kind of

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Speaker 7: thinks perhaps of them making lower costs vehicles, have actually

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Speaker 7: decided to attack this highly profitable space. And there is

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Speaker 7: a car called the micstro S eight hundred which is

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Speaker 7: manufactured by Huawei and another company called jac and this

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Speaker 7: is really eating into Mercedes market shared there, which really

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Speaker 7: kind of flags a broader problem with German premium cars.

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Speaker 7: They were for years and years sold themselves on having

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Speaker 7: all these great features and being more advanced in luxury

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Speaker 7: and engineering, and Chinese companies have just poured huge effort

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Speaker 7: into R and D and now they're coming up with

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Speaker 7: cars that can match these cars on features for Chinese

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Speaker 7: buyers have a bit of a made in China appeal

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Speaker 7: to but the prices are quite a lot lower, and

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Speaker 7: this is starting to eat into the markets, the product

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Speaker 7: markets for Porsche, for Mercedes. Benz for BMW, and it's

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Speaker 7: a real major problem for these German companies have become

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Speaker 7: incredibly dependent on.

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Speaker 1: China, and in terms of the operations from Mercedes in

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Speaker 1: Germany as well, there have been some additional constraints that

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Speaker 1: have been placed on perhaps cost cutting efforts by the

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Speaker 1: CEO in recent years.

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Speaker 7: Yeah, as is normal in Germany, the unions have a

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Speaker 7: lot of power and representation on decision making boards. So

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Speaker 7: the Mercedes CEO olaclaneous when he started, agreed a deal

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Speaker 7: with the unions to not make any job cuts in production,

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Speaker 7: no compulsory redundancyason in production until twenty thirty five, which

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Speaker 7: has the advantage that you have kind of peace with

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Speaker 7: your labor unions, but then has the disadvantage that he

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Speaker 7: now has this he's having to compete against companies which

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Speaker 7: are bringing high quality products at much lower prices. But

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Speaker 7: you're very constrained on what you can do on costs,

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Speaker 7: which again makes a vehicle like the S class extremely

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Speaker 7: important because you can't get away from your high cost space.

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Speaker 7: You have to have a super successful premium product. But

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Speaker 7: then when other people are trying to when other companies

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Speaker 7: like wowwe are bringing down the prices of luxury cars.

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Speaker 7: Then you have a double headache.

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Speaker 2: Okay, double headache. But these change course, I mean, are

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Speaker 2: they going to stick to the strategy.

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Speaker 7: They might not have a choice because I think they

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Speaker 7: will stick to the strategy. Like I said, they've got

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Speaker 7: this cost space that they can't get away from. Do

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Speaker 7: you really want to bring down prices and compete with lower,

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Speaker 7: lower price car makers. I think what they might have

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Speaker 7: to do is they will have to make adjustments, and

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Speaker 7: it's kind of like driving through the fog. You just

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Speaker 7: have to look kind of way going and be prepared

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Speaker 7: to make adjustments quite quickly. But it's going to be

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Speaker 7: very difficult, and I think tariffs don't help. Worsening geopolitical

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Speaker 7: tensions don't help either. What Mercedes really really doesn't need

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Speaker 7: would be a global downturn because of one of these

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Speaker 7: there's a geopolitical incident. I think in that case, the

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Speaker 7: problems might become even more acute.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 2: I'm Caroline Hepka and.

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