Latest / Bloomberg Intelligence / Strike Shuts US Ports, Mideast Latest

Transcript

Strike Shuts US Ports, Mideast Latest · Bloomberg Intelligence

• 0:02
  Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
• 0:08
  Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 0:12
  Speaker 2: weekdays at ten am Eastern on Affocarplaying and Broun Auto
• 0:15
  Speaker 2: with the Bloomberg Business app. Listen on demand wherever you
• 0:18
  Speaker 2: get your podcasts, or watch us live on YouTube.
• 0:23
  Speaker 3: Jess Metton, she's sitting in for Alex Steel today. I'm
• 0:25
  Speaker 3: Paul Sweeney. We're live here on a Bloomberg Dinner at
• 0:27
  Speaker 3: the Broker Studio. We're streaming live on YouTube as well,
• 0:30
  Speaker 3: so you can check us out there Bloomberg you know,
• 0:33
  Speaker 3: go to the YouTube dot com search Bloomberg Live, Radio,
• 0:35
  Speaker 3: Bloomberg Podcast, any which way.
• 0:36
  Speaker 2: We'll get you.
• 0:37
  Speaker 3: There and we will have continuing coverage throughout the rest
• 0:40
  Speaker 3: of the morning on the escalating tensions in the Mid
• 0:43
  Speaker 3: East and the impact they're having on the markets. The
• 0:45
  Speaker 3: other major story obviously out there, is the day one
• 0:49
  Speaker 3: of the port strike here on the East Coast. I mean,
• 0:52
  Speaker 3: I was looking at some graphics on various TV networks
• 0:54
  Speaker 3: and it's pretty much all down the entire East Coast,
• 0:57
  Speaker 3: winding around our friends in Florida and all the way
• 1:00
  Speaker 3: to the Gulf Coast. We start thinking about you know,
• 1:02
  Speaker 3: that's a lot of territory there that does a lot
• 1:04
  Speaker 3: of shipping, So you really want to get some perspective
• 1:07
  Speaker 3: on that. You go to the folks on the left
• 1:09
  Speaker 3: side of this country, on the West coast, they had
• 1:11
  Speaker 3: their labor issues. A couple of years ago. A Mario
• 1:14
  Speaker 3: Kodero joins a CEO for the Port of Long Beach. Mario,
• 1:17
  Speaker 3: thanks so much for joining us here. What role do
• 1:20
  Speaker 3: you believe the West Coast ports your port in Long
• 1:23
  Speaker 3: Beach can have and maybe relieving some of the pressure
• 1:26
  Speaker 3: on shippers who can't unload or load their goods on
• 1:29
  Speaker 3: the East coast. How are you guys approaching that?
• 1:32
  Speaker 4: Well, thank you for the invitation. I mean, I think
• 1:34
  Speaker 4: when you talk about Long Beach, we're part of the
• 1:36
  Speaker 4: largest container gateway for the nation. So I think the
• 1:39
  Speaker 4: road that we play is a continued rod that we
• 1:43
  Speaker 4: move a great percentage of the nation's trade, and I
• 1:47
  Speaker 4: think we're in a very good position to handle whatever
• 1:50
  Speaker 4: search comes our way. And last, I'll make the point
• 1:53
  Speaker 4: that August we had a historic number of containers moving
• 1:55
  Speaker 4: through the Port of Long Beach. That number was nine
• 1:58
  Speaker 4: hundred and thirteen thousand plus content. That's a historical high
• 2:03
  Speaker 4: number for US, a record number, and when you add
• 2:06
  Speaker 4: the Port of la for August, we approximate about one
• 2:09
  Speaker 4: point nine million containers in this gateway the Sampeter Bay complex.
• 2:13
  Speaker 4: So our role here is to continue to move cargo
• 2:16
  Speaker 4: in an efficient manner. And again Port Labbach has a
• 2:20
  Speaker 4: tremendous capacity right now, in that words, good capacity around
• 2:23
  Speaker 4: seventy percent, so we are prepared to continue to move
• 2:27
  Speaker 4: that containerized cargo that comes our way.
• 2:29
  Speaker 5: I'm curious what kind of lessons did you end up
• 2:33
  Speaker 5: learning from the pandemic because we had so many supply
• 2:36
  Speaker 5: related issues with the chains there, and how could that
• 2:39
  Speaker 5: help you try to navigate this instance?
• 2:42
  Speaker 4: Great question, a lot of lessons learned. Number One, expanding
• 2:46
  Speaker 4: operation hours. I've been a big spokesperson for twenty four
• 2:49
  Speaker 4: to seven operations. Again, to qualify that or put that
• 2:52
  Speaker 4: in perspective, you know, we're not going to go twenty
• 2:56
  Speaker 4: four hours a day, seven days a week anytime soon,
• 2:59
  Speaker 4: but there's a frame of expansion of hours. So in
• 3:01
  Speaker 4: Long Beach we've done that. We've done staging areas, and
• 3:05
  Speaker 4: again this is going to be very beneficial for us
• 3:07
  Speaker 4: if in fact we need the stage containers outside the terminals,
• 3:10
  Speaker 4: and I think the lessons learned from COVID. Again, it's
• 3:13
  Speaker 4: a supply chain issue, so the warehouse that is the
• 3:16
  Speaker 4: end product here of the supply chain in this region.
• 3:18
  Speaker 4: They also are very collaborative with us and making sure
• 3:22
  Speaker 4: that inventory moves. So again, a lot of lessons learned
• 3:25
  Speaker 4: from COVID nineteen supply chain crisis. So we're applying those
• 3:28
  Speaker 4: lessons and hopefully, again as I just noted, we're moving
• 3:32
  Speaker 4: a record amount of cargo here at to Port Long
• 3:35
  Speaker 4: Beach without any congestion or bottlenecks whatsoever.
• 3:38
  Speaker 3: Hey, Mario, if I'm a shipper, I've got a ship
• 3:40
  Speaker 3: at sea in the Atlantic steaming towards New York or something,
• 3:43
  Speaker 3: and that's closed. Now what are the economics for me
• 3:47
  Speaker 3: to say, Oh, I'll go to the Panama Canal, go
• 3:50
  Speaker 3: through there, then I'll come up to your port in
• 3:51
  Speaker 3: Long Beach. Is that realistic? Is that a decision option?
• 3:56
  Speaker 4: Well, I mean that decision for shipper is based on economics,
• 4:01
  Speaker 4: So obviously if they're going to come to the West Coast,
• 4:04
  Speaker 4: I think that decision comes into play that for them,
• 4:07
  Speaker 4: it's a reduced cost. With regard to the option that
• 4:10
  Speaker 4: potentially could happen. But in that regard, yes, there's increased
• 4:13
  Speaker 4: transportation costs for sure, but I think again, I think
• 4:17
  Speaker 4: it's going to be a scenario which we'll be able
• 4:19
  Speaker 4: to manage that and move forward as we have in
• 4:22
  Speaker 4: previous instances. We talked about COVID nineteen. But again we
• 4:26
  Speaker 4: have a lot of lessons learned from COVID nineteen, and
• 4:29
  Speaker 4: one of them is we are prepared no matter where
• 4:31
  Speaker 4: the options are in terms of cargo flow, we're going
• 4:35
  Speaker 4: to be moving to cargo here.
• 4:37
  Speaker 5: What other ports along the West coast do you foresee
• 4:41
  Speaker 5: field cargo that ends up getting re routed?
• 4:45
  Speaker 4: I'm sorry I repeat that question.
• 4:47
  Speaker 5: So what other ports along the West coast do you
• 4:49
  Speaker 5: foresee other field cargo ended up getting rerouted at this point?
• 4:53
  Speaker 4: Well, Number one, poor Los Angeles. Again, they're part of
• 4:56
  Speaker 4: this gateway, the Port of Oakland in northern California, and
• 5:00
  Speaker 4: you also have the Port of Way NIMI. So there's
• 5:03
  Speaker 4: other ports in the West coast here and again if
• 5:05
  Speaker 4: you go to the northwest port of Seattle and Tacoma.
• 5:08
  Speaker 4: So I think the West Coast is in a very
• 5:10
  Speaker 4: good position to make sure that we not only receive
• 5:14
  Speaker 4: the car a little, but continue to move it inland
• 5:17
  Speaker 4: to the nation's midwest.
• 5:19
  Speaker 5: Maria.
• 5:19
  Speaker 3: One of the topics that I guess the long shoremen
• 5:23
  Speaker 3: and the shippers have is a wages of course, and
• 5:26
  Speaker 3: presumably that will work itself out. But the other one
• 5:28
  Speaker 3: is automation and what that means for jobs. How do
• 5:33
  Speaker 3: you guys talk to your long shorman about the need
• 5:36
  Speaker 3: for you guys to automate to remain competitive versus their
• 5:39
  Speaker 3: need to preserve jobs. What's that discussion like these days?
• 5:43
  Speaker 4: Well, I mean you mentioned an issue here. Automation robotics
• 5:46
  Speaker 4: has been a continued concern in all sectors of labor.
• 5:50
  Speaker 4: So for the portal lombies, I think the way we've
• 5:52
  Speaker 4: been able to navigate well with our labor partners is
• 5:56
  Speaker 4: anyone who's interested in better developing the terminals of the
• 6:00
  Speaker 4: poor long beach number one, you have to have a
• 6:03
  Speaker 4: meeting of the mines with the IOWU, so that collaborative
• 6:07
  Speaker 4: partnership and works well for us. So in that regard,
• 6:11
  Speaker 4: that's been our policy. Anybody who wants to expand or
• 6:14
  Speaker 4: develop their terminals, they have to go through the isow first,
• 6:17
  Speaker 4: and that mitigates any serious differences as we go down
• 6:20
  Speaker 4: the road. So for us, it's been a successful path.
• 6:23
  Speaker 4: But on the other hand, again keep in mind this
• 6:26
  Speaker 4: is an issue across the board in terms of workforce
• 6:29
  Speaker 4: in the nation, if not the global community.
• 6:32
  Speaker 5: Do you have a sense from retailers how they're potentially
• 6:35
  Speaker 5: making contingency plans as of.
• 6:37
  Speaker 4: Now, Well, I think what I can tell you is
• 6:42
  Speaker 4: I gave you these record numbers that we're moving here
• 6:44
  Speaker 4: at the Poor of Long Beach for August. That's almost
• 6:47
  Speaker 4: a thirty four percent increase year to year. So I
• 6:50
  Speaker 4: think the retailers in the shippers have already anticipated a
• 6:53
  Speaker 4: scenario that's occurring in the East Coast and they've already
• 6:57
  Speaker 4: made that decision to move their cargo to the West Coast.
• 7:00
  Speaker 4: And again, the August numbers for both these ports Los
• 7:02
  Speaker 4: Angeles and Long Beach here in the Sanpedo Bay complex
• 7:05
  Speaker 4: are historical numbers, so that basically answers the question that
• 7:10
  Speaker 4: I think they've already made those decisions, and I do
• 7:13
  Speaker 4: expect to have additional car a little bit. Have me
• 7:15
  Speaker 4: said all this, I want to make sure that again
• 7:17
  Speaker 4: from the poor lobbies, we encourage that the parties in
• 7:20
  Speaker 4: the East Coast moved to a resolution because any bottleneck
• 7:23
  Speaker 4: and the supply chain in the nation is not good.
• 7:26
  Speaker 4: So for my perspective, I think again, it's not about
• 7:30
  Speaker 4: additional cargo that we're going to get. It's about hopefully
• 7:33
  Speaker 4: these parties coming to a mutual resolution soon so that
• 7:36
  Speaker 4: we don't impact the nation's supply chain anywhere in the country.
• 7:41
  Speaker 3: Hey, Mary, thank you so much for joining us. Really
• 7:43
  Speaker 3: appreciate getting some of your time at MARYA. Cordero, he's
• 7:46
  Speaker 3: the CEO of the Port of Long Beach, giving us
• 7:49
  Speaker 3: a sense of kind of they're busy and presumably they
• 7:53
  Speaker 3: still have some capacity to take some shipments if somebody
• 7:55
  Speaker 3: want to divert them from the East coast to the
• 7:57
  Speaker 3: West coast. And the other thing we learned about talking
• 7:59
  Speaker 3: to Jean Soroka, who is his counterpart at the Port
• 8:02
  Speaker 3: of La is that those West coast ports, particular the
• 8:06
  Speaker 3: ones in the La area, they just got a great
• 8:08
  Speaker 3: view of China trade. They do contannerships could just keep
• 8:12
  Speaker 3: coming back and forth back and forth into that port
• 8:14
  Speaker 3: so you can get a good view.
• 8:17
  Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 8:21
  Speaker 2: weekdays at ten am Eastern on applecar Play and androyd
• 8:24
  Speaker 2: Otto with the Bloomberg Business App. You can also listen
• 8:27
  Speaker 2: live on Amazon Alexa from our flagship New York station
• 8:31
  Speaker 2: Just Say Alexa playing Bloomberg eleven thirty.
• 8:35
  Speaker 3: Tensions and Conflicts in the Middle East returned to Mick mulnoy.
• 8:38
  Speaker 3: He's a co founder of the Lobo Institute. That's just
• 8:41
  Speaker 3: the beginning. He's a former senior fellow at the Middle
• 8:43
  Speaker 3: East Institute, former Deputy Assistant Secretary of Defense for the
• 8:47
  Speaker 3: Middle East at the US Department of Defense. That was enough,
• 8:50
  Speaker 3: former Power Military Operations officer at CIA, and of course
• 8:53
  Speaker 3: a former US Marine Infantry officer. And for his service,
• 8:56
  Speaker 3: we say thank you very much, Mick for your service.
• 9:00
  Speaker 3: Make it looks like we're going to take another rung
• 9:03
  Speaker 3: up on the escalation ladder today. What do you make
• 9:05
  Speaker 3: of this news that the US is saying that it
• 9:07
  Speaker 3: ran as preparing to hit Israel with ballistic missiles.
• 9:12
  Speaker 1: Good to be with you, guys. I think this is expected.
• 9:15
  Speaker 1: Of course, they've been claiming they're going to retaliate ever
• 9:18
  Speaker 1: since we saw the assassination of the Hamas leader in Tehran. Then,
• 9:24
  Speaker 1: of course the assassination of the Hesbela leader in Beirut
• 9:28
  Speaker 1: and it was expected. Now the question is is it
• 9:30
  Speaker 1: going to be like April where we have the capacity
• 9:33
  Speaker 1: and we do have the capacity to essentially shoot down
• 9:36
  Speaker 1: all of the incoming drones and missiles, or is it
• 9:39
  Speaker 1: going to be more substantial or is it going to
• 9:41
  Speaker 1: be coordinated with Hesbelah and the Huthis so that it
• 9:44
  Speaker 1: can try to overwhelm the defenses of Israel and the
• 9:47
  Speaker 1: United States combined. That's the question We'll see soon because
• 9:51
  Speaker 1: it looks like it's eminent and it's going to take
• 9:52
  Speaker 1: some of these projectiles hours to get to Israel. So
• 9:57
  Speaker 1: we have to stand by and see how this goes.
• 10:00
  Speaker 5: To what extent does the United States rely on Israeli
• 10:03
  Speaker 5: intelligence streams and its assessment of those different regional threats.
• 10:09
  Speaker 1: So there's a back and forth when it comes to
• 10:11
  Speaker 1: the Israeli US intelligence cooperation. Oftentimes Israel has better intelligence
• 10:19
  Speaker 1: on the threats that are immediate to them. Of course,
• 10:21
  Speaker 1: the United States also has its independent intelligence and then
• 10:25
  Speaker 1: and when it comes to big regional intelligence, usually the US,
• 10:30
  Speaker 1: the CIA, and other organizations inside the intelligence community are
• 10:35
  Speaker 1: better and past the information to Israel. For example, the
• 10:39
  Speaker 1: IDEF spokesman said that the US had notified Israel that
• 10:44
  Speaker 1: Iran was preparing these cruise ballistic missiles and potentially drones
• 10:49
  Speaker 1: earlier this morning. So that shows the cooperation and the
• 10:52
  Speaker 1: sharing that goes on near constantly, Mick.
• 10:56
  Speaker 3: Immediately following the October attack on Israel prime mention Netnyan,
• 11:01
  Speaker 3: who said quite simply that the strategy, the goal of
• 11:04
  Speaker 3: Israel is to one eliminate Hamas and to get the
• 11:08
  Speaker 3: hostages back. That seems to have broadened out significantly. The
• 11:13
  Speaker 3: scope to now take in on Hesbela and going into Lebanon,
• 11:17
  Speaker 3: dealing with all in any adversaries. Is that, in fact true,
• 11:22
  Speaker 3: has his war aims broadened significantly?
• 11:27
  Speaker 1: Well, I do think it's broadened, but I would have
• 11:29
  Speaker 1: to say if somebody spends quite a bit of time
• 11:31
  Speaker 1: in Israel. The Israelis have been messaging directly that they
• 11:36
  Speaker 1: knew that this war in the north between Hesbelah would
• 11:39
  Speaker 1: have to happen if they were to get their six
• 11:42
  Speaker 1: hundred or excuse me, sixty thousand plus citizens back to
• 11:46
  Speaker 1: their homes in northern Israel. They were very clear about that,
• 11:50
  Speaker 1: and I think it's important to point out Hesblah has
• 11:53
  Speaker 1: been just hacking Israel since October eighth, there's been over
• 11:56
  Speaker 1: nine thousand missiles, rockets, drones, an say, tank weapons fired
• 12:01
  Speaker 1: into Israel. And this was inevitable if this was going
• 12:04
  Speaker 1: to continue, and I think they have shown that they
• 12:07
  Speaker 1: have very good capabilities in Lebanon. I don't think it's
• 12:10
  Speaker 1: in anybody's interest, including Israel, and it's certainly not Lebanon's,
• 12:14
  Speaker 1: but this to turn into a full scale ground invasion.
• 12:17
  Speaker 1: But from Israel's perspective, this was inevitable if Hezbolah was
• 12:21
  Speaker 1: going to continue to attack their northern settlements and essentially
• 12:25
  Speaker 1: put hat at least one third of their country off
• 12:27
  Speaker 1: limits to their own citizens.
• 12:29
  Speaker 5: Well, the conflicts between Israel and has blowed inevitably drawn
• 12:33
  Speaker 5: in Iran into the conflict. What does that mean for
• 12:36
  Speaker 5: the wider region in general?
• 12:38
  Speaker 1: Now, So that was the biggest concern of the United States.
• 12:43
  Speaker 1: That's why we've had so many military assets in the
• 12:46
  Speaker 1: region to try to deter a course, and to a
• 12:49
  Speaker 1: certain extent it has deterred Aron, I believe. And then
• 12:52
  Speaker 1: also to defend and we've seen how capable the US
• 12:56
  Speaker 1: was when it came to defending Israel, along with Israel
• 12:59
  Speaker 1: and other countries in the regions such as Jordan, which
• 13:02
  Speaker 1: defended Israel against the April thirteenth attack by Iron. But
• 13:06
  Speaker 1: this is what the biggest concern is for the United States,
• 13:09
  Speaker 1: that Iran would mount something that wasn't manageable, that wasn't
• 13:12
  Speaker 1: for show, that was or actually just got through and
• 13:16
  Speaker 1: caused substantial damage or loss of life in Israel, because
• 13:19
  Speaker 1: I think it's been clear that Israel will respond directly
• 13:23
  Speaker 1: to or on and they might take direct, meaningful strikes,
• 13:27
  Speaker 1: not like they did last time in Iran. In fact,
• 13:29
  Speaker 1: several of the IDF spokesperson have referenced their recent attack
• 13:34
  Speaker 1: on the WHO thi's in WHO data Yemen is further
• 13:37
  Speaker 1: away than from Israel than Iran's oil fields, specifically citing
• 13:42
  Speaker 1: Iran's oil field. So I think there's a lot of
• 13:44
  Speaker 1: messaging coming out of Israel right now that if Iran
• 13:48
  Speaker 1: is successful so not for show like many in it
• 13:51
  Speaker 1: believe April was, and actually causes damage to this could
• 13:55
  Speaker 1: escalate very quickly and have impacts that go beyond the
• 13:59
  Speaker 1: two cunt treason, certainly beyond the region.
• 14:02
  Speaker 4: Mick.
• 14:02
  Speaker 3: We've seen the US government repeatedly call for a restraint
• 14:05
  Speaker 3: on the part of Israel, yet Primeister Netanya, who has
• 14:08
  Speaker 3: effectively ignored those Please here, What is the current state
• 14:12
  Speaker 3: of the US Israeli relationship.
• 14:19
  Speaker 1: Well, I certainly think there is some tensions. I mean,
• 14:22
  Speaker 1: the US overall supports Israel defeating Hamas of course they
• 14:26
  Speaker 1: were the terrorist attack that attacked them on October seventh,
• 14:29
  Speaker 1: and Heswela, which is a US designated terrorist organization and
• 14:32
  Speaker 1: has been constantly attacking Israel. When it comes to the
• 14:35
  Speaker 1: relationship in Gaza, I think there's been differences of how
• 14:39
  Speaker 1: that was prosecuted, and now I think the US just
• 14:41
  Speaker 1: wants to see this get contained and have a cease
• 14:45
  Speaker 1: fire so that they can do everything that they would
• 14:47
  Speaker 1: like to see policy wise, which is in the conflict
• 14:50
  Speaker 1: in both Gaza and obviously not have one if you
• 14:53
  Speaker 1: will in Lebanon. But Israel has their own interests, they're
• 14:57
  Speaker 1: their own sovereign country, and they make their own decisions.
• 15:01
  Speaker 1: If they were asking me, I would suggest to the
• 15:04
  Speaker 1: White House that they take more of a behind the
• 15:06
  Speaker 1: scenes role and not have public disagreements with Israel. They
• 15:12
  Speaker 1: could certainly have private disagreements Israel when it comes to
• 15:15
  Speaker 1: this seaspar because in Lebanon specifically, because this is very
• 15:19
  Speaker 1: difficult for any country to tell another country that's been
• 15:22
  Speaker 1: attacked again nine thousand missiles in less than one year
• 15:26
  Speaker 1: not to do something that they know they would do,
• 15:29
  Speaker 1: So that makes this a bit different. And essentially the
• 15:33
  Speaker 1: Sea spire needs to come from Hesbela, who could simply
• 15:36
  Speaker 1: stop attacking Israel, agree not to continue, potentially move to
• 15:42
  Speaker 1: the Litati River, which is required by a UN resolution.
• 15:45
  Speaker 1: So most of the I think negotiations on this side
• 15:48
  Speaker 1: should be focused on Hesbela vice Israel, which both countries
• 15:52
  Speaker 1: I think, put in the same situation, would be doing
• 15:55
  Speaker 1: something similar to Israel right now.
• 15:57
  Speaker 3: All right, thank you so much. As always, really appreciate
• 16:00
  Speaker 3: getting some of your time and your perspective.
• 16:02
  Speaker 2: Mick mulroy.
• 16:03
  Speaker 3: He's a co founder of the Lobo Institute and really
• 16:05
  Speaker 3: one of our expert voices that we rely upon whenever
• 16:08
  Speaker 3: there's some of these geopolitical tensions, particularly in the Middle East,
• 16:12
  Speaker 3: where he has so much experience.
• 16:16
  Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 16:20
  Speaker 2: weekdays at ten am Eastern on Focar playing and broud
• 16:23
  Speaker 2: Otto with the Bloomberg Business app. Listen on demand wherever
• 16:26
  Speaker 2: you get your podcasts, or watch us live on YouTube.
• 16:31
  Speaker 3: Geopolitical story of the day movie markets is US is
• 16:34
  Speaker 3: saying that is a rands preparing to hit Israel with
• 16:37
  Speaker 3: ballistic missiles. We've been covering that story all day. We
• 16:40
  Speaker 3: will continue to do so. Jonathan Panakoff he joins us now.
• 16:43
  Speaker 3: He's a director of the Scowcroft Middle East Security Institute
• 16:46
  Speaker 3: at the Atlantic Council. He is based in Washington, DC. Jonathan,
• 16:51
  Speaker 3: thanks so much for joining us here. What do you
• 16:53
  Speaker 3: make of the last I guess forty eight hours in
• 16:56
  Speaker 3: the Middle East, with Israel having some troop and versions
• 17:00
  Speaker 3: into southern Lebanon, and now the news today that the
• 17:02
  Speaker 3: US says that Iran may be preparing to hit Israel
• 17:06
  Speaker 3: with the ballistic missiles. That's been quite the escalation in
• 17:08
  Speaker 3: the last forty eight hours.
• 17:09
  Speaker 1: What do you make of it?
• 17:11
  Speaker 6: Thanks for having me. It certainly has been the escalation.
• 17:14
  Speaker 6: I don't expect it to end anytime soon. I think
• 17:17
  Speaker 6: the Iran strike that is probably going to be coming
• 17:20
  Speaker 6: shortly here, it's going to look slightly different than April.
• 17:23
  Speaker 6: I think certainly it's still going to probably target first
• 17:26
  Speaker 6: military assets in israel intelligence headquarters.
• 17:30
  Speaker 5: Perhaps.
• 17:30
  Speaker 6: I don't think they're going to see their runnings go
• 17:32
  Speaker 6: after civilian infrastructure. But I do think the question is
• 17:36
  Speaker 6: going to be how does Israel respond, And I'm skeptical
• 17:39
  Speaker 6: that you will see the same response that you had
• 17:41
  Speaker 6: in April. And then that means that the chances for
• 17:44
  Speaker 6: increased escalation as we go up the escalatory ladder are
• 17:48
  Speaker 6: only going to go up. So this is going to
• 17:50
  Speaker 6: take a little bit of time to see where it resolves,
• 17:54
  Speaker 6: and of course at the end of it, you still
• 17:56
  Speaker 6: have what will be an ongoing war between Israel and Hezbolah.
• 18:01
  Speaker 5: Has the UN Security Council had a reaction yet to
• 18:04
  Speaker 5: the latest news on this.
• 18:07
  Speaker 6: The Secretary General did come out and say every effort
• 18:11
  Speaker 6: has to be made to try to prevent a full
• 18:14
  Speaker 6: scale war between Israel and Hezbola that could engulf the region.
• 18:17
  Speaker 6: But we haven't seen UN Security Council immediately this morning
• 18:20
  Speaker 6: meet my senses, you'll see them meet as soon as
• 18:23
  Speaker 6: Frankly Iran launchers and you start to see more kinetic
• 18:28
  Speaker 6: action being taken. But the reality is going to be
• 18:31
  Speaker 6: the impact of the UNSC is going to be, if anything,
• 18:34
  Speaker 6: very minimal.
• 18:36
  Speaker 3: Jonathan, I guess maybe with a little bit of hindsight,
• 18:38
  Speaker 3: we should not have been too surprised that we've had
• 18:40
  Speaker 3: this escalation here because you think about just last week
• 18:42
  Speaker 3: Prime mentioned that Yahoo at the United Nations here in
• 18:45
  Speaker 3: New York. Pretty defiant speech there is he boldened down
• 18:49
  Speaker 3: to do more than maybe what the initial aims were,
• 18:51
  Speaker 3: which is to get the hostages back and take out Hamas.
• 18:55
  Speaker 3: His aims much broader now.
• 18:58
  Speaker 6: They certainly are oka. I think Israel has been split
• 19:01
  Speaker 6: for quite a while. They were some at the beginning
• 19:03
  Speaker 6: of the war, including Yoev Galant, the Israeli Defense Minister,
• 19:07
  Speaker 6: who said, no, we can actually deal with Hamas at
• 19:10
  Speaker 6: a later time, we should go after Hezbala, and that
• 19:13
  Speaker 6: was in late October of twenty twenty three. That's not
• 19:17
  Speaker 6: the direction that Netanyahu chose to go. It's not the
• 19:19
  Speaker 6: direction most security officials chose to go. But it also
• 19:22
  Speaker 6: didn't resolve the fundamental challenge that you had. Hisbela beginning
• 19:26
  Speaker 6: October eighth, begin rocket attacks into northern Israel that has
• 19:31
  Speaker 6: displaced tens of thousands of Israeli citizens who Netanyahu has
• 19:36
  Speaker 6: now faced political pressure to return them home. It's now
• 19:39
  Speaker 6: been a year. The original promise was to restart at
• 19:42
  Speaker 6: the beginning of the school year, that didn't happen, and
• 19:45
  Speaker 6: so now I think the view is and we've seen
• 19:47
  Speaker 6: this in the last few months, Israel very methodically went
• 19:50
  Speaker 6: after Hezbala's command of control, its leadership. It took out
• 19:54
  Speaker 6: more Hebela leaders in the last two months than it
• 19:57
  Speaker 6: had in the last two decades, and so clearly there's
• 20:00
  Speaker 6: a concern that this is going to escalate, and it
• 20:02
  Speaker 6: probably will. But you're right, some of this has been
• 20:05
  Speaker 6: telegraphed in the last few months about the direction we
• 20:08
  Speaker 6: were heading.
• 20:09
  Speaker 5: What types of weapons could Iran use in an attack
• 20:12
  Speaker 5: and would they use all of their military capabilities for one?
• 20:16
  Speaker 6: Yeah, I think so. Look, Iran has a really large
• 20:19
  Speaker 6: inventory of ballistic missiles, of cruise missiles, of drones. You're
• 20:23
  Speaker 6: talking about dozens of different types with significant ranges. The
• 20:27
  Speaker 6: ballistic missiles, the time to get them from Iran to
• 20:31
  Speaker 6: Israel is about twelve minutes, give or take, so it's
• 20:35
  Speaker 6: really quick. The cruise missiles there is a little slower,
• 20:37
  Speaker 6: the drones much lower than that. But the reality is,
• 20:40
  Speaker 6: at the end of the day, Iran's number one concern
• 20:43
  Speaker 6: is always regime stability and regime security, and so the
• 20:48
  Speaker 6: odds that it's going to use the entirety of it's Arsenal,
• 20:50
  Speaker 6: I think is very very low, because if it does so,
• 20:54
  Speaker 6: then it's got nothing left to protect itself or even
• 20:57
  Speaker 6: to protect Kabala in another month or two, if there's
• 21:01
  Speaker 6: a need that, if follow looks like it's really suffering,
• 21:04
  Speaker 6: the question for Ron is going to be, how does
• 21:06
  Speaker 6: it respond in a meaningful way that can try to
• 21:09
  Speaker 6: create some increased deterrence against Israel without actually leading to
• 21:14
  Speaker 6: a full scale war that jeopardizes the stability of the
• 21:17
  Speaker 6: Iranian regime. And that's going to be a really hard
• 21:20
  Speaker 6: balance to me.
• 21:21
  Speaker 3: All Right, Jonathan, thank you so much for joining us.
• 21:23
  Speaker 3: Really appreciate it. Jonathan Panacoff, he's a director at the
• 21:26
  Speaker 3: Scowcroft Middle East Security Initiative at the Atlanta Council. Giving
• 21:30
  Speaker 3: us the latest on the geopolitical tensions rising there. In
• 21:33
  Speaker 3: the midist, you're listening.
• 21:35
  Speaker 2: To the Bloomberg Intelligence Podcast. Catch us live weekdays at
• 21:39
  Speaker 2: ten am Eastern on applecar Play and Android Otto with
• 21:42
  Speaker 2: the Bloomberg Business app. You can also listen live on
• 21:45
  Speaker 2: Amazon Alexa from our flagship New York station, Just Say
• 21:49
  Speaker 2: Alexa Play.
• 21:50
  Speaker 3: Bloomberg eleven thirty Economic data also coming out impacting these markets,
• 21:55
  Speaker 3: ice and manufacturings. John Tucker just reported came into forty
• 21:58
  Speaker 3: seven point two. They could say since it was forty
• 22:00
  Speaker 3: seven point five, so a little bit light but kind
• 22:02
  Speaker 3: of flat with last month. Let's break it down a
• 22:04
  Speaker 3: little bit. We can do that, Tim Fury, he's a
• 22:06
  Speaker 3: chair for the Institute for Supply Management's Manufacturing Business Survey Committee. Tim,
• 22:12
  Speaker 3: what do you make of the data we saw here
• 22:13
  Speaker 3: from the US manufacturers today?
• 22:16
  Speaker 7: Good morning, So we have a stable contraction compared to
• 22:20
  Speaker 7: the prior month at forty seven to two. Like you said, Paul,
• 22:24
  Speaker 7: it's a good report. I think on the demand side,
• 22:26
  Speaker 7: we're still looking for demand to surface. And of course
• 22:30
  Speaker 7: our panelists only had a little bit of the benefit
• 22:32
  Speaker 7: here of the federal rate reduction announced several weeks ago,
• 22:35
  Speaker 7: but it's not reflected really in our report. Just the
• 22:38
  Speaker 7: sentiment would be. On the output side, output was good,
• 22:41
  Speaker 7: our revenue and our production base was stable month a month,
• 22:44
  Speaker 7: which is excellent. Employment stepped down again. We could talk
• 22:46
  Speaker 7: a little bit more about that now. On the input side,
• 22:49
  Speaker 7: we returned to a normal minimal stress and the supplier
• 22:52
  Speaker 7: side and manufacturing inventories back and the level that you
• 22:55
  Speaker 7: would expect them to be. So we're kind of where
• 22:57
  Speaker 7: we thought we would be in a little bit about
• 22:59
  Speaker 7: forty sive. You know, we're still thinking that we're probably
• 23:02
  Speaker 7: going to stay below fifty before we get to the
• 23:04
  Speaker 7: beginning the next year. But yeah, so we'll talk a
• 23:07
  Speaker 7: little bit about employment and prices. So we've kind of
• 23:10
  Speaker 7: been preceding what's been happening on the jobs. Joelts CPI
• 23:13
  Speaker 7: and PPI in terms of direction. Our employment came down
• 23:16
  Speaker 7: again pretty strongly, but I think the fact that the
• 23:19
  Speaker 7: revenue maintained this level that we had back in August
• 23:23
  Speaker 7: indicates that we're just trying to make sure that we
• 23:25
  Speaker 7: have employment levels aligned properly with the latest demand for gasts. Now,
• 23:30
  Speaker 7: on the prices side, we came down to forty eight three.
• 23:33
  Speaker 7: We're easing a little bit. We've seen some softness on
• 23:36
  Speaker 7: steel and aluminum, more of the foundational commodities, and I
• 23:39
  Speaker 7: think that's probably a good omen for the CPIPPI PC
• 23:44
  Speaker 7: that comes out later on the month.
• 23:46
  Speaker 5: So Tim, we know that previously declining orders had been
• 23:50
  Speaker 5: that issue in a persistent retreat in the backlogs that
• 23:52
  Speaker 5: had remained kind of key headwinds here for production where
• 23:55
  Speaker 5: are new orders increasing versus decreasing, So.
• 24:00
  Speaker 7: Demand overall I think is still negative. This month, we
• 24:03
  Speaker 7: have very weak new export orders. The new order level
• 24:06
  Speaker 7: contracted again, but not quite as bad as it did
• 24:09
  Speaker 7: in the prior month. We contracted minimally, but we're still contracting.
• 24:13
  Speaker 7: Our backlog gained a little bit in terms of slowing
• 24:16
  Speaker 7: down its contraction, but it's still contracting fairly heavily, so
• 24:21
  Speaker 7: you know overall, and customer inventories came in about right,
• 24:24
  Speaker 7: which really isn't all that good for next month's activity,
• 24:27
  Speaker 7: So overall demand is still weak. Wouldn't expect with the
• 24:30
  Speaker 7: Fed announcing and interest rate reduction just a couple of
• 24:32
  Speaker 7: weeks ago that we would see an impact on the
• 24:35
  Speaker 7: demand side. I'm hoping to see additional investments start to
• 24:38
  Speaker 7: occur in the November timeframe. Maybe that will help as
• 24:41
  Speaker 7: we build up maybe manufacturing inventory to do better on
• 24:45
  Speaker 7: customer demand. But overall, I really don't see demand coming
• 24:48
  Speaker 7: back until we close the year and the election gets
• 24:50
  Speaker 7: behind us.
• 24:51
  Speaker 3: All right, Tim, thanks so much for joining us. Really
• 24:52
  Speaker 3: appreciate you breaking down this news here. Tim Fury, chairman
• 24:55
  Speaker 3: of the Manufacturing Business Survey. The firm is the Institute
• 24:58
  Speaker 3: for Supply Management breaking down some of those numbers came
• 25:00
  Speaker 3: in a little lighter than expected, but a little stable
• 25:03
  Speaker 3: relative to last period, still in a contraction mode.
• 25:07
  Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 25:11
  Speaker 2: weekdays at ten am Eastern on applecar Play and Android
• 25:15
  Speaker 2: Auto with the Bloomberg Business app. You can also listen
• 25:18
  Speaker 2: live on Amazon Alexa from our flagship New York station
• 25:21
  Speaker 2: Just Say Alexa playing Bloomberg eleven thirty.
• 25:25
  Speaker 3: All right, Boeing some news here, Maybe weighing to raise
• 25:30
  Speaker 3: at least ten billion dollars in stock because why, they
• 25:32
  Speaker 3: got a cash flow problem here and they're not delivering
• 25:35
  Speaker 3: as many planes as they need to. It's definitely a
• 25:37
  Speaker 3: challenge for them. So they did go to the bond market.
• 25:40
  Speaker 3: They're concerning going to the equity market. Lets see if
• 25:41
  Speaker 3: that's enough. George Ferguson, Senior Airspace Defense analys for Bloomberg
• 25:45
  Speaker 3: Intelligence Joints us George, again, this is something you've talked
• 25:48
  Speaker 3: to us about in the past, that the company may
• 25:50
  Speaker 3: need to go to the equity market and raise some equity.
• 25:53
  Speaker 3: It stocks down forty percent year to date, ideally not
• 25:55
  Speaker 3: a good time to raise money. At this valuation. But
• 25:58
  Speaker 3: what do you make of this?
• 26:00
  Speaker 8: Yeah, I mean, you know, I think the strike is
• 26:03
  Speaker 8: sort of dragged on enough and they have to be
• 26:06
  Speaker 8: concerned about having enough cash to continue to run the
• 26:08
  Speaker 8: business that they're ready to do whatever it takes right
• 26:12
  Speaker 8: to show up their position. I guess it kind of
• 26:14
  Speaker 8: gives me a sense that maybe they think the strike's
• 26:16
  Speaker 8: going to last longer than maybe even we anticipated originally,
• 26:20
  Speaker 8: and so you got to do it, you gotta do,
• 26:23
  Speaker 8: I guess.
• 26:24
  Speaker 5: And we do know that Boeing is on the cusp
• 26:26
  Speaker 5: of seeing its credit rating cut to junk. Here, what's
• 26:28
  Speaker 5: the likelihood that we could see this happening soon?
• 26:32
  Speaker 8: I mean, I think that again, if this strike drags on,
• 26:38
  Speaker 8: you know, you're starting to get to the point where
• 26:40
  Speaker 8: I think once you get past a month, where you're
• 26:43
  Speaker 8: probably doing more damage to the supply chain, and so
• 26:47
  Speaker 8: losing a month due to the strike, you know that
• 26:51
  Speaker 8: doesn't just going to take you a month to sort
• 26:53
  Speaker 8: of recapture where you were previously. I think losing a
• 26:56
  Speaker 8: month means you put the suppliers a much more strain.
• 26:59
  Speaker 8: Maybe it means it's six weeks, seven weeks worth of recovery,
• 27:02
  Speaker 8: So the further drags on, I think the more the
• 27:04
  Speaker 8: rating agencies have to think about when are they going
• 27:07
  Speaker 8: to really bance back to profitability and you know, and
• 27:11
  Speaker 8: generate some decent cash and they've got to keep sort
• 27:13
  Speaker 8: of pushing it out at a multiple the time the
• 27:15
  Speaker 8: strike has gone on. And so you know, that's what
• 27:18
  Speaker 8: I think the real challenge here, I think the I
• 27:21
  Speaker 8: think I'm not the credit analyst, but I think that
• 27:23
  Speaker 8: the credit agencies, if we drag on again past a month,
• 27:27
  Speaker 8: I think they have to really start to think about
• 27:30
  Speaker 8: whether they can hold Boeing in a band that frankly,
• 27:32
  Speaker 8: I think they weren't really in any ways. But the
• 27:35
  Speaker 8: credit agencies are trying to look through the cycle a
• 27:37
  Speaker 8: bit here.
• 27:38
  Speaker 3: The stock's actually up three and a half percent on
• 27:41
  Speaker 3: the news today, so maybe the investment great credit rating
• 27:44
  Speaker 3: is more important. That made me some delution here, George,
• 27:46
  Speaker 3: where are we in terms of these negotiations here in
• 27:49
  Speaker 3: week three? Any any movement there?
• 27:53
  Speaker 8: You know, not what we're hearing. You know, I think
• 27:55
  Speaker 8: you've heard the same as we did. That another offer
• 27:58
  Speaker 8: came out. It looked like I think it was about
• 28:00
  Speaker 8: thirty percent increase. Looks like the union wasn't very interested.
• 28:05
  Speaker 8: I think if you're Boeing right now, you know what
• 28:08
  Speaker 8: I understand is a lot of these union members got
• 28:10
  Speaker 8: one of their last paychecks either at the very end
• 28:13
  Speaker 8: of September bidding of October here, and so I think,
• 28:16
  Speaker 8: now what you're really trying to do is figure out
• 28:18
  Speaker 8: what the reserve, you know what, the you know what
• 28:22
  Speaker 8: the union really, how far they're willing to go right,
• 28:25
  Speaker 8: whether they they're as as girded as they say they
• 28:29
  Speaker 8: are to keep going into a world where they're just
• 28:32
  Speaker 8: not getting paychecks, right. And so maybe here we're in
• 28:35
  Speaker 8: a bit of a who knows it, you know, sort
• 28:40
  Speaker 8: of the chicken phase where Boeing says, look, we can
• 28:44
  Speaker 8: push this further, and let's see how long you can't
• 28:47
  Speaker 8: take a paycheck and see how how much the union
• 28:50
  Speaker 8: is saved up. And I think the challenge here really
• 28:52
  Speaker 8: is Boeing has to live with whether whatever cost structure
• 28:56
  Speaker 8: they ultimately agree to, right, and so as much as
• 28:59
  Speaker 8: they just want to get back and start building airplanes,
• 29:02
  Speaker 8: they also have to be very careful about what the
• 29:04
  Speaker 8: long term effects are on their financials. It's really challenging
• 29:07
  Speaker 8: right now for going in their financial position to have
• 29:10
  Speaker 8: to do this, but they've got to think about the
• 29:12
  Speaker 8: long term here, all.
• 29:13
  Speaker 3: Right, George, thanks very much. We appreciate it. George Ferguson's
• 29:15
  Speaker 3: senior Airspace, Defense and Airlines analys for Bloomberg Intelligence.
• 29:18
  Speaker 2: This is the Bloomberg Intelligence podcast, available on Apples, Spotify,
• 29:23
  Speaker 2: and anywhere else you get your podcasts. Listen live each weekday,
• 29:27
  Speaker 2: ten am to noon Eastern on Bloomberg dot com, the
• 29:30
  Speaker 2: iHeartRadio app tune In, and the Bloomberg Business app. You
• 29:33
  Speaker 2: can also watch us live every weekday on YouTube and
• 29:36
  Speaker 2: always on the Bloomberg terminal