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Speaker 1: Good morning. I'm Abe Morris and I'm Karen Moscow. Here

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Speaker 1: are the stories we're following today.

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Speaker 2: Financial turmoil in Asia has been the focus all week long.

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Speaker 2: Against that backdrop, we have a high profile meeting with

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Speaker 2: Asian leaders at Camp David. Today, President Biden meets the

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Speaker 2: heads of state from Japan and South Korea for a

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Speaker 2: summit on global tensions. Bloomberg Daybreak Asia anchor Ed Bexter

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Speaker 2: has that story.

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Speaker 3: It is the Camp David Trilateral Summit, President Joe Biden

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Speaker 3: hosting Prime Minister Fumio Kushia and President yunsuk Yuole Brigadier

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Speaker 3: General Patrick Ryder speaking for the White House as very

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Speaker 3: important event.

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Speaker 4: What we expect to see to be significant outcomes that

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Speaker 4: will cement our trilateral cooperation going forward. The deliverables that

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Speaker 4: you'll see coming out of that will take that relationship

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Speaker 4: to a new level.

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Speaker 3: North Korea was a centerpiece of yesterday's UN Security Council

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Speaker 3: meeting regarding human rights. I'm at Baxter Bloomberg Daybreak.

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Speaker 1: All right, and thanks, And we have a politic we'll

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Speaker 1: note this morning involving in Donald Trump. The former president

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Speaker 1: has canceled a news conference plan for Monday, he had

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Speaker 1: wanted to use the event to promote unfounded claims that

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Speaker 1: the twenty twenty election was stolen. Trump says his lawyers

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Speaker 1: urged him not to do so. Instead, the former president

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Speaker 1: says he will make his case in legal filings.

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Speaker 2: Moving overseas now, two China economic concerns in that country

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Speaker 2: are still weighing on markets. China's state owned property developers

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Speaker 2: this morning warning of widespread losses. Eighteen out of thirty

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Speaker 2: eight builders listed in Hong Kong and China reported preliminary

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Speaker 2: losses in the first half, and this morning, China's Evergrand

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Speaker 2: Group filed for Chapter fifteen bankruptcy protection in New York.

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Speaker 2: Dan Moss is a Bloomberg opinion columnist based in Singapore.

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Speaker 5: We know the property sector is in trouble. If we're

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Speaker 5: getting some quantifiable numbers from these private sector filings, then

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Speaker 5: that's good because in otherwise China is closing off access

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Speaker 5: to economic data. You'll recall early this Weekday said they

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Speaker 5: would suspend publication of youth unemployment data. Just so happens

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Speaker 5: that that data showed most recently a very high level

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Speaker 5: of youth unemployment. Would they have suspended it if it

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Speaker 5: was showing a very low level.

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Speaker 2: Bloomberg opinion columnist Dan Moss says China's flattering or faltering,

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Speaker 2: rather faltering economic growth and housing crisis are fueling concerns

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Speaker 2: of contagion.

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Speaker 1: And in the week of those concerns, Amy, China's central

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Speaker 1: Bank is stepping of support for the yuan. The PBOC

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Speaker 1: said it's daily reference rate for the currency at the

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Speaker 1: strongest level ever. That's compared to estimates in a Bloomberg survey.

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Speaker 1: We're also told Chinese authorities or telling state banks to

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Speaker 1: ramp up intervention in the currency market.

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Speaker 2: Staying in Asia now, we got fresh inflation data from

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Speaker 2: Japan over night and for the first time in thirty years,

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Speaker 2: price growth in services hit two percent in July. The

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Speaker 2: acceleration is a long awaited development for the Bank of

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Speaker 2: Japan as it looks for sustainable inflation before normalizing policy.

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Speaker 1: Also happening in Japan today amy visit from the world's

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Speaker 1: richest man, Elon Musk is in the country for his

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Speaker 1: first known visit in nine years. The CEO of Teslas

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Speaker 1: SpaceX and X formerly Twitter, arrived yesterday. It's his second

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Speaker 1: trip to Asia this year. He was in China earlier,

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Speaker 1: where he met with government officials and visited Tesla's Shanghai factory.

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Speaker 2: And we have company news back here in the US,

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Speaker 2: Goldman Sachs appears to be under pressure from the Federal Reserve.

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Speaker 2: That's according to sources who say the regulatory scrutiny has

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Speaker 2: Goldman going on a hiring spree. Bloomberg's Doug Krisner has

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Speaker 2: those details.

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Speaker 6: We're told Goldman is enlisting several hundred new staffers to

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Speaker 6: help address concerns from US banking regulators, although it's unclear

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Speaker 6: what deficiencies the pharma seeking to address. Last year, Goldman's

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Speaker 6: effort to build out a new consumer bank was said

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Speaker 6: to have set off questions from the FED, but the

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Speaker 6: plan has largely been abandoned. Some managers blamed the failure

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Speaker 6: for inviting regulatory attention, but to be fair, regulators routinely

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Speaker 6: question large financial firms. Goldman executives privately described pressure from

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Speaker 6: the FED over the past year.

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Speaker 7: In New York.

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Speaker 6: I'm Doug Krisner, Bloomberg Daybreak.

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Speaker 1: All right, Doug, thanks. Severe weather also in focus this morning.

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Speaker 1: We're seeing a powerful hurricane headed toward the southwestern US,

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Speaker 1: and torrential rain could hit starting as soon as today,

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Speaker 1: Bloomberg meteorologist Rob Carolyn has the latest on the storm

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Speaker 1: that's building in the Pacific Ocean.

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Speaker 8: Rob, Karen and Amy. Hurricane Hillary continues to intensify off

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Speaker 8: the southwestern side of Baja California. The system is going

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Speaker 8: to be moving northward along the western coast of Baja California.

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Speaker 8: It will continue to intensify over the next twenty four hours,

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Speaker 8: then as it gets over cooler water, it will weaken.

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Speaker 8: Each track is going to bring gusty winds and some

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Speaker 8: extremely heavy rain to portions of the southwestern California. Many

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Speaker 8: areas in California as far north as Utah are under

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Speaker 8: flesh flood watches and these will persist into the weekend.

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Speaker 8: It looks like the rain continues to spread northward through

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Speaker 8: the West early next week. I'm Rob Carolyn, Bloomberg daybreak, All.

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Speaker 9: Right, Rob, thank you.

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Speaker 2: Elsewhere in the South, we are seeing more spikes in

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Speaker 2: Texas power prices. Spottalick tricity prices sarched six thousand percent

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Speaker 2: as the state grid faces some of the tightest conditions

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Speaker 2: so far this summer. Real time prices on the grid

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Speaker 2: jumped to nearly five thousand dollars in megawatt hour, up

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Speaker 2: from roughly seventy five dollars the day before. The Electric

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Speaker 2: Reliability Council of Texas or ERCOT, is currently asking consumers

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Speaker 2: to cut usage. If reserves stay narrow, it could trigger

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Speaker 2: a so called Level one emergency that allows ARKOTT to

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Speaker 2: call on more backup supplies.

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Speaker 8: Thank you, Karen.

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Speaker 2: Time now for a look at some of the other

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Speaker 2: stories making news in New York and around the world.

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Speaker 2: For that were joined by Bloomberg's Michael bar Good morning, Michael.

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Speaker 7: Good morning. Amy, the head of the Mali Emergency Management

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Speaker 7: Agency has resigned after facing criticism for not activating disaster

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Speaker 7: sirens during last week's deadly wildfires that killed at least

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Speaker 7: one hundred eleven people. The County of Maui announced that

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Speaker 7: Herman and Daya cited unspecified health reasons for leaving his

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Speaker 7: post on Wednesday, and day I defended the decision not

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Speaker 7: to sound sirens, saying officials were afraid it would have

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Speaker 7: prompted people to flee toward the mountains or inland, or

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Speaker 7: into the flames. Meanwhile, FEMA spokesman John mills and Malvey

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Speaker 7: says that the agency is taking a very somber and

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Speaker 7: respectful approach to the tragedy.

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Speaker 10: One of our Urban Search and Rescue Task Force leaders

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Speaker 10: said this was the worst disaster he's ever seen, and

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Speaker 10: that's coming from someone and the team that was involved

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Speaker 10: in nine to eleven.

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Speaker 7: Mills also said that FEMA is coordinating federal support with

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Speaker 7: the state and is in no way taking over. The

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Speaker 7: Justice Department is seeking thirty three years in prison for

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Speaker 7: Enrique Tarrio, the former Proud Boys leader convicted of seditious

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Speaker 7: conspiracy in the January sixth attack on the US Capitol.

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Speaker 7: Tario and three lieutenants were convicted by a Washington jury

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Speaker 7: in May of conspiring to block the transfer of presidential

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Speaker 7: power in the twenty twenty election. A Mississippi judge has

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Speaker 7: cited police errors in declaring a mis trial for two

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Speaker 7: white men accused of chasing and shooting at a black

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Speaker 7: FedEx employee who was making a delivery. Brandon Case and

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Speaker 7: his father, Gregory Case, are charged with attempted first degree murder, conspiracy,

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Speaker 7: and shooting into the vehicle driven by de Monterio Gibson.

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Speaker 7: In January of twenty twenty two, Judge David Strong said

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Speaker 7: he made the decision because of errors by a Brook

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Speaker 7: Haven Police Department detective Parents are being urged to put

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Speaker 7: childhood vaccinations on their back to school checklist. New York

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Speaker 7: City Health Commissioner doctor Ashun Vassen says that he has

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Speaker 7: focused on disease prevention among asylum seekers children entering schools.

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Speaker 11: We're screening everyone and offering vaccination to everyone. The Department

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Speaker 11: of Homeland Security and the CDC are offering COVID are

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Speaker 11: giving COVID vaccinations at the southern border in New York.

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Speaker 7: All childhood of vaccines, including shots from measles, polio, and

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Speaker 7: chicken pot are required by state law. Global News twenty

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Speaker 7: four hours a day, powered by more than the twenty

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Speaker 7: seven hundred journalist and analysts over one hundred twenty countries.

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Speaker 7: Him Michael Barr, this is Bloomberg Gaming.

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Speaker 2: All right, Thank you, Michael. It's five ten on Wall

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Speaker 2: Street time now for our Bloomberg Sports update, and for

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Speaker 2: that we bring in John's Dash Hour.

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Speaker 9: Thanks Amy. A year ago, the Yankees finished in first place.

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Speaker 7: The Red Sox.

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Speaker 9: Finished last, twenty one games behind. Different story. Now Yanks

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Speaker 9: are in the cellar, three games behind Boston. The two

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Speaker 9: arch rivals start a weekend series at the stadium Yanks,

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Speaker 9: losers of their last five. They're under five hundred and

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Speaker 9: they list their starting pitcher tonight as undecided. Mets at

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Speaker 9: Jose Kintona on the Mount in Saint Louis, he got

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Speaker 9: his first win as a Met four to two over

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Speaker 9: the Cardinals, who liked the Mets a playoff team a

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Speaker 9: year ago, but having a very rough twenty twenty three

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Speaker 9: Dodgers playoff team every year. Last night, they got a

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Speaker 9: home run from Austin Barnes, eighth in in his first

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Speaker 9: form of the season. They topped Milwaukee won the nupping.

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Speaker 9: The Dodgers have won eleven games in a row. Preseason

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Speaker 9: football in Philadelphia, Eagles fans booed their new backup quarterback

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Speaker 9: Marcus Mariota, who struggled in the game with Cleveland that

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Speaker 9: ended with the unusual final score of eighteen to eighteen.

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Speaker 9: Two games at MetLife this weekend Giants and Panthers Tonight,

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Speaker 9: Daniel Jones might play. If he doesn't, Giants coach Brian

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Speaker 9: Dabole says he definitely will next week against the Jets,

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Speaker 9: who will again not play. Aaron Rodgers tomorrow against Tampa

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Speaker 9: Bay Rodgers as a new teammate that earned running back

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Speaker 9: Dalvin Cook who used to go against Rogers twice a

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Speaker 9: year while with Minnesota being.

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Speaker 12: On the other side of that for the last six years.

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Speaker 12: You know, I couldn't be another side no more. So

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Speaker 12: it was it like ben I got the chance to

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Speaker 12: go join them and you know they'll help him win

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Speaker 12: win again. You know that was that was a big

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Speaker 12: thing to come come out here.

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Speaker 9: Another running back, the Bengals, Joe Mixon found not guilty

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Speaker 9: in a road rage case. Eating back to January, BMW

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Speaker 9: Golf Damn Day outside Chicago co leaders after the opening round,

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Speaker 9: Rory McElroy and the recent British Open champ Brian Harmer

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Speaker 9: in built.

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Speaker 7: Shot sixty five.

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Speaker 9: John Stashower Bloomberg Sports.

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Speaker 13: From coast to coast, from New York to San Francisco,

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Speaker 13: Boston to Washington, DC, nationwide on sirisxam, the Bloomberg Business

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Speaker 13: app in Bloomberg dot Com.

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Speaker 7: This is Bloomberg Daybreak.

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Speaker 3: Thank good Friday morning.

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Speaker 2: I'm Amy mor As. We continue to follow the economic

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Speaker 2: developments in China as state owned property developers are warning

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Speaker 2: of widespread losses, the PBOC stepping up at support for

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Speaker 2: the yuon. We are joined now by Bloomberg macro strategist

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Speaker 2: Mark Kudmore, who's going to sort it all out for us. Mark,

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Speaker 2: Thanks for taking the time. What is the risk or

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Speaker 2: is there a risk of contagion?

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Speaker 14: Good morning, Amy. Absolutely there is some risk of contagent,

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Speaker 14: but very important to understand exactly what mess that contagion

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Speaker 14: is going to come. So the economic impact of China's

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Speaker 14: deceleration is really important for the rest of the world.

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Speaker 14: We've got to remember it is the world's largest trading

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Speaker 14: partner that is not the US, so that is really

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Speaker 14: important for the growth story in many other countries. However,

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Speaker 14: the financial market impact is much less. Not only are

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Speaker 14: Chinese financial markets already been trading a structurally broken story

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Speaker 14: for some time, but foreign money foreign participation is extremely

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Speaker 14: low already. People who wanted to get out of the

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Speaker 14: China story have long got out over the last couple

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Speaker 14: of years, and so therefore the direct transmission from financial

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Speaker 14: market pain isn't as direct. So it'll continge way and

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Speaker 14: sentiment because the economic story, but that's more of a

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Speaker 14: slow moving one and harder to interpret, rather than we're

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Speaker 14: going to get sudden capitulation losses in other markets because

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Speaker 14: of China's equity selling off.

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Speaker 2: But it seems like there's some aggression here from the

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Speaker 2: PBOC stepping into support the currency wild cutting interest rates

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Speaker 2: that well, I know what I think, But what would

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Speaker 2: you make of those latest moves?

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Speaker 14: Actually? Look, I know it sounds very counterintuitive to both

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Speaker 14: be kind of easing monetary policy on the right side

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Speaker 14: and yet be defending the currency when you think that

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Speaker 14: a lower currency is what the country needs. However, it

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Speaker 14: does kind of make sense because while they want a

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Speaker 14: weaker uan, it's all about managing the pace of that.

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Speaker 14: What they cannot afford in a market where there are

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Speaker 14: no animal spirits left, where the dissentiment from both companies

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Speaker 14: spending and consumers is completely broken, is they can't afford

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Speaker 14: a panic of capital oute flows like they had seven

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Speaker 14: or eight years ago when they let kind of yuan

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Speaker 14: deppreciate too quickly. So therefore they want to manage it.

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Speaker 14: And actually, what's been really interesting is over the last

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Speaker 14: few weeks the yuan has been one of the world's

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Speaker 14: stronger currencies because it's during a massive dollar squeeze higher

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Speaker 14: and because the PBOC has managed it against the dollar.

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Speaker 14: In fact, the yuan has out before many other currencies.

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Speaker 14: So if you see the yuan against the Sea FET's basket,

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Speaker 14: for example, it has generally gone higher for most last

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Speaker 14: week's actually gone quite sharply higher for last week's until

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Speaker 14: the last couple of days where it fell back you

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Speaker 14: get a bit again. So what they'll probably do is

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Speaker 14: that when the dollar turns softer again, they just won't

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Speaker 14: let the uan appreciate as great rate. So actually what

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Speaker 14: you see if the yuan depreciates on a trade weighted

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Speaker 14: basis much more when the dollar is falling, even though

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Speaker 14: you don't see that in the dollar, you on exchange rate.

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Speaker 2: Let's just focus then, specifically on shine and not so

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Speaker 2: much contagion. But are they at risk of losing their

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Speaker 2: standing as one of the strongest GDPs in the world,

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Speaker 2: I mean, are they Are they slipping?

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Speaker 14: No, they're not, none of us. I mean it's the

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Speaker 14: world's second largest economy and it's going to say the

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Speaker 14: world's secd largest economy for a long time to come.

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Speaker 14: And they're so far clearly ahead of the other opposition.

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Speaker 14: And we've got to remember that. You know, even though

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Speaker 14: they're going to disappoint on growth this year, we're talking

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Speaker 14: about growth of like maybe four to four and a

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Speaker 14: half percent. It's growth that most developed markets would dream about,

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Speaker 14: you know. Any In fact, while people are talking about

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Speaker 14: the official level being down to just below five percent,

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Speaker 14: even the unofficial levels that people think might be actually lower,

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Speaker 14: you know, three and a half four percent. Again, they'll

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Speaker 14: actually be closing the gap on the US on an

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Speaker 14: economic basis over the coming years. The difference is that

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Speaker 14: the currency evaluation has changed in that so China's share

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Speaker 14: of global GDP webs the US did shrink last year,

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Speaker 14: but that was much more due to the currency impact

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Speaker 14: because we're in a stronger dollar environment. However, most of

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Speaker 14: the world SAMs to the consensus that we've now had

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Speaker 14: a strong dollar for many of years, and we've seem

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Speaker 14: to be at the start of a new longer term

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Speaker 14: dollar down wave, and that will probably actually help China

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Speaker 14: regain share. So no, China's place the second largest economy

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Speaker 14: is not in the threat at all now.

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Speaker 2: Investors are clearly focused on what's going on with China

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Speaker 2: and the economic situation there. I'm curious is that where

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Speaker 2: we should be focusing What are you focusing on?

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Speaker 14: Yeah, look, it's a good question. Look, I think the

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Speaker 14: China story is massive and I'm based in Singapore and

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Speaker 14: I'm based in the region, and so we can't get

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Speaker 14: beyond it every day. But I do still think that

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Speaker 14: the bigger story and the thing that's trading off this month,

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Speaker 14: we've got to remember that there's been a couple of

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Speaker 14: dynamics this month, and one is the higher yield story

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Speaker 14: that's into the stronger dollar story and the China you know, negativity,

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Speaker 14: and they're the things we kind of come in day

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Speaker 14: after day in August. But in fact, Chinese markets aren't

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Speaker 14: doing any worse than most global markets over this month.

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Speaker 13: Right.

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Speaker 14: We're generally seeing equities elsewhere so oft from particular in

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Speaker 14: the US, and that is much more about the US

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Speaker 14: yield story. And the backdrop here is that I think

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Speaker 14: people are coming to the terms of the fact that hey,

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Speaker 14: maybe the inflation story isn't kind of one as easily,

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Speaker 14: and maybe that yes, we've we've we've contain inflation to

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Speaker 14: some extent, but at a way too high level, that

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Speaker 14: the labor markets toil still too strong, inflation is going

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Speaker 14: to prove too sticky, and that there we are starting

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Speaker 14: to kind of come around to the idea that we

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Speaker 14: might really be in a new higher rates world so,

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Speaker 14: and I think that's an interesting backdrop, especially with Jackson

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Speaker 14: Hole next week. I am personally very much in the

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Speaker 14: camp that we have not seen the peak in the yields.

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Speaker 14: Like I've been long term kind of bond bear, and

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Speaker 14: I remain a long term structural bond bear, even despite

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Speaker 14: the yield rise we've seen over the last couple of years.

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Speaker 14: What I will say is in the very short term,

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Speaker 14: I kind of think we're already priced for relatively hawkers

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Speaker 14: Jackson Hole. So I'm less excited in the short term

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Speaker 14: dynamics of bond selling off much further from here in

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Speaker 14: the short term, but I do think structurally yields are

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Speaker 14: going higher.

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