← Bloomberg Businessweek
Loading summary
Transcript99 lines
- [00:00]
LifeMD Narrator
They told us to expect change. They warned us about the transition, but honestly, they forgot the best part. This is the chapter where we finally focus on us. LifeMD delivers expert menopause and midlife care right from your home. From hormone health to holistic wellness, LifeMD helps you feel your best for the best years of your life. LifeMD it's just getting good. Visit LifeMD.com
- [00:30]
Chase for Business Narrator
being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from banking to payments to credit cards, all in one place with Chase's digital tools. Plus access online resources designed to help your business thrive. Learn more@chase.com business chase for business make more of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JP Morgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.
- [01:06]
IBM AI Narrator
The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced cost by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM
- [01:38]
Bloomberg Host
Bloomberg Audio
- [01:39]
Chase for Business Narrator
Studios Podcasts Radio News this is Bloomberg
- [01:46]
Bloomberg Businessweek Daily Announcer
businessweek Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg businessweek Daily Podcast with Carol Massar and Tim Stanweck on Bloomberg Radio.
- [02:08]
Bloomberg Host
Let's head to the North Lawn of the White House, try to get an understanding of the plan. The consensus Is there any timeline, any end to this war? With us? Is of course, Bloomberg News Washington and White House correspondent Jeff Mason. Jeff, good to be checking in with you. You know, here we are getting ready to enter our fourth week when it comes to the war in Iran. Is the president looking for an off ramp? Like what is kind of our way forward here? Do we have any clear idea?
- [02:35]
Jeff Mason
Well, I heard the questions that you were just mentioning that you were going to ask, and the truth is a lot of those questions are questions that only the president knows the answers to. Is he looking for an off ramp? Possibly. Has he given mixed messages about that? Absolutely. He has said that he thinks that the US Is ahead of schedule with its operation. He has said before that, he thinks that the war could end soon. But then, of course, the United States continues to attack and continues to be in a position really to continue this war for some time. And the reports from the Wall Street Journal and some other media organizations about troops being sent to the region would only underscore that.
- [03:15]
Carol Massar
What about, what do we know about those troops? Again, the Wall Street Journal reporting that the U.S. is sending more Marines and warships to the Middle East. Does that indicate that the operation changes in some way? It moves from. From strikes, from air to perhaps a different type of operation.
- [03:30]
Jeff Mason
What I would say is you shouldn't. One shouldn't necessarily assume that forces being sent or additional forces being sent to the Middle east equates with boots on the ground. Boots on the ground, I think most people would assume means actual soldiers, actual American troops in Iran or on Kharg island, for example. And that is not the same as reinforcing the multitude of bases and troops slash forces that are already in the region. So I don't have the answer about what the President is eventually planning on doing. I did, however, have an opportunity to ask him about this yesterday in the Oval Office. And when I asked if he was planning to put boots on the ground or send more forces to the region, he said no. So, again, mixed signals, but I don't think you can necessarily conclude from the reporting that we've seen by some of our colleagues that that means boots on the ground is what is coming next.
- [04:25]
Bloomberg Host
Yeah. You know, when it comes to, Jeff, mixed signals, I think about the Director of National Intelligence, Tulsi Gabbard, who was up there before a Senate committee answering questions about Iran and national intelligence leading up to the President his decision to take the action against Iran, contradictory statements by her and whether or not Iran was really a threat. I don't know if it really matters at this point point, because we're in a war. But I guess what I'm wondering is, you know, we have another story out on the Bloomberg about the president losing control of this war. Is he like, is he in control to find an off ramp? Is there negotiating going on that, you know, keeps the US still in some kind of control of this situation, or is it kind of gone beyond that?
- [05:15]
Jeff Mason
Well, I mean, we're getting a little bit into semantics there. What does it mean to be in control? Certainly the President, United States is in control of what the US Forces do, and he's calling the shots about what happens next. And he gets to make the decision about an off ramp and whether or not he's looking for one or whether he wants to stick around for a little bit longer in terms of is he losing control broadly of the ramifications of the decision that he made to go to launch the strike, these strikes against Iran? I mean, maybe if you look at the oil prices, which of course we've been talking about, a lot of it doesn't seem like the White House was expecting that ramification. It doesn't seem like they were ready for the impact on the Strait of Hormuz. That said, the president also addressed that in the Oval Office yesterday and indicated he thought that oil prices would go even higher. But listen, we all know in the world of politics that spin is part of the gig. And I think it's probably fair to assume that there was a little bit of spin involved in that.
- [06:14]
Carol Massar
Hey, Jeff, before we let you go, that the politics of this, especially ahead of the midterms, in just a few short months, you're at the White House, you're in Washington, Republican lawmakers who may be up for reelection or maybe in vulnerable areas, to what extent do these higher prices do a move of focus from affordability, which is, we know, a very important issue for voters going into these midterms, to what extent does that possibly hurt Republicans in the midterms?
- [06:42]
Jeff Mason
Oh, I mean, it could hurt them in a mace in a massive way. I mean, you're absolutely right to mention affordability. That was the buzzword three or four weeks ago before this war started. That was exactly what the White House wanted President Trump to be focusing on, as he was at that time beginning, or was supposed to be beginning, a regular set of stops across the United States to talk about his economic agenda. You're not seeing him do that right now because he's running a war. And the affordability message will be a much harder one for this White House to get behind because of the prices that you're talking about, energy prices, the prices at the pump, that's something that hits people in the pocketbook right away every day. And I think to your broader question, will that hurt Republicans in November? It really depends on how long this war lasts, and it depends on how quickly oil prices recover once the war concludes. And we just don't know the answers to those questions. But we certainly know that that's something that they're thinking about here and within the Republican Party.
- [07:42]
Bloomberg Host
Is there anything just before we go. Sorry, I'm going to add a question. 40 seconds here, Jeff, what are we talking about? As we are focused so much on the war? I know we always ask this because we know we have a president who often can move us around in terms of what we focus on.
- [07:57]
David Wu
The weave.
- [07:57]
Bloomberg Host
The weave. So I'm just wondering what, what aren't we watching that's also going on in Washington right now or at the White House?
- [08:04]
Jeff Mason
Well, the Department of Homeland Security is still closed. I mean, there's still a partial government shutdown here. Immigration policy has been shifted a little bit out of the headlines because of this war. But the, the impact of that on airports, on tsa, and also just the continued ramifications of the killings of two US Citizens this year. I mean, that wasn't last year. Those are still big stories that are getting less attention because of this conflict.
- [08:29]
Bloomberg Host
All right, well, great as always, to check in with you, Jeff Mason, of course, there on the north lawn of the White House. He's Bloomberg News Washington and White House correspondent.
- [08:38]
Carol Massar
Stay with us. More from Bloomberg businessweek Daily coming up after this.
- [08:45]
LifeMD Narrator
They told us to expect change. They warned us about the transition. But honestly, they forgot the best part. This is the chapter where we finally focus on us. LifeMD delivers expert menopause and midlife care right from your home. From hormone health to holistic wellness, LifeMD helps you feel your best for the best years of your life. LifeMD it's just getting good. Visit lifemd.com goodlife the thing about AI
- [09:16]
IBM AI Narrator
for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM.
- [09:45]
Dr. Guy Winch
For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In season three of the Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of the Visibility Gap, a podcast presented by Cigna Healthcare.
- [10:16]
Bloomberg Businessweek Daily Announcer
You're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [10:30]
Bloomberg Host
Hey, we're going to stay on the US war in Iran and really what it may mean if President Trump loses control of the war, we asked Jeff about it, but it's also top line headline of a story that's on the Bloomberg Terminal.
- [10:41]
Carol Massar
Trump reportedly considering options to escalate US Pressure on Iran, including deploying troops or striking oil infrastructure, which would be highly escalatory moves with steep political risks. Bloomberg Economics senior geoeconomics analyst for Asia Pacific Adam Farah joins us from our Washington, D.C. bureau. What does it mean to you and the team for the president to potentially be losing control? How do you use that word?
- [11:03]
Adam Farah
So I think this all flows directly from this question of what the actual objectives are for the war and how the president sees success. You know, when we look out right now at the war in the current situation, it's unclear how the United States and the president can declare victory without laying out for the American people what it is he sought to achieve. We've seen varying forms of him laying that out, whether it be from detailing, blowing up and destroying the ballistic missile force and the Navy, which you know, we've seen a lot of effort to do and it sounds like has been rather successful, but then also looking for the Iranian regime to capitulate endor fall directly. And with that question looming over all of this, we have now a shifting narrative. If we think back just just a couple of days or a week, the Iran seemed to be fully on their back foot, lashing out, but having suffered a massive hit from the US And Israel. But here, after a further increases in oil prices and clarity that the United States cannot quickly reopen the strait, it seems to be shifting significantly. And the statements from Iran's leader today seem to imply that they certainly seem to see it that way. And so that raises questions as to how the President can move forward here and whether he still feels it's possible to declare victory in the short term or he has to escalate with the hope of forcing the Iranians to de escalate, which has not been successful so far.
- [12:22]
Bloomberg Host
Two very different options. I mean, does one say to you that if he continues to move forward, which it seems seems to be the case at this point, although we're talking about boots on the ground and whether or not that will happen ultimately. But does that to you then say, or you and the team, that potentially the president is losing control of this war if he continues to move forward?
- [12:42]
Adam Farah
So I think the problem we're seeing here is again, not about the President, as we just heard before, losing control of the actions that are happening, but really the unanticipated or in some cases very anticipated consequences of the War continuing. The longer this goes, the greater the impact on the global, global economy and the greater the impact on U.S. forces. Right on that front, we had a U.S. aircraft that was apparently hit by Iranian fire make an emergency landing yesterday. Things like that are going to increase and keep happening. Accidents will happen and the Iranians will get lucky. And that raises the political end, the cost of lives in this conflict. And in the economic side, we're seeing it day to day. The rise in oil prices are putting pressure on everything around the globe, with inflation being the key word right now, that's starting heavily to impact economies in East Asia and Asia writ large that are most reliant on the Strait of Hormuz, but that will spread to the United States as well, impacting what is already seen as an affordability crisis. So I think those are the factors that are, that stand to kind of increase without movement towards de escalation in the short term.
- [13:47]
Carol Massar
You know, Adam, I'm glad you brought up other countries here because as Carol often reminds us, what happens there is not a vacuum. And we have to look at Iran. We have to not just look at Iran in the Middle east, but we have to look at China, we have to look at Russia, we have to look at Ukraine. And we got a headline earlier today about how the Kremlin would potentially stop sharing intel with Iran if the US Cut off aid to Ukraine. What are you watching in that region and sort of the dynamics that, that Putin is playing with with regard to Iran?
- [14:21]
Adam Farah
Yeah, the offer from the Kremlin certainly seemed too cute by half. Right. This effort to try and equate the two wars together and highlight that its support of Iran is no different than the US Support of Ukraine. And there's no doubt that Moscow is likely relishing in that moment. And as you said, though, there is, there are clear consequences of this war already and, and what happens if it continues on other conflicts or potential conflicts in Ukraine? The biggest clear problem is this question of US Hardware and particularly interceptor missiles and how many may be available to provide to Ukraine so they can continue to defend their cities and their territory writ large from the onslaught of Russian ballistic missiles and drones. And when we look to the Indo Pacific, you know, every day the United States is using exquisite weaponry that would be needed in a conflict if something were to occur in the South China Sea or over Taiwan with China. And there's no doubt that Beijing has taken note of that. And you know, as you've heard from countless experts, the timeline to produce and rearm for the United States is not a question of weeks or months, but likely years. And that will change how the United States can conduct its operations anywhere in the world, but particularly in the Indo Pacific.
- [15:33]
Carol Massar
And that Putin headline offers to help to stop sharing intel with Iran. That came from Politico. And Politico also reported that the U.S. carol rejected the Putin offer for Iran, Ukraine, quid pro quo.
- [15:45]
Bloomberg Host
Yeah, you know, there's just, you know, it's like this giant chessboard. And I just think about risk. Yeah. But I feel like I need more than just two people playing because it just feels like there's so many pieces. And this is what you guys do. Adam, you think about the geoeconomic implications of all of this. I, you know, you guys, we do, we keep thinking about what all of this is doing to the global economy. And it does feel like we're going to be a different world going forward. I can't tell whether that's a better world and more collaborative or are we going to be more divided after this. How are you guys continuing to report that out and think about it?
- [16:22]
Adam Farah
So we're certainly trying to keep our eyes outside of the region and, you know, for example, focusing on the things that are happening that are still very consequential for the global economy and for the United States, like Prime Minister Takayuchi of Japan's visit yesterday to the White House. You know, that visit was originally all about China. It was all about framing Japan's interests and keeping, as Japan has hoped, the United States in line as it negotiates with Beijing in what was supposed to be a meeting just a couple of days from now, but has now been delayed between President Trump and President Xi. But even there, we saw the direct impacts of the war. We saw pressure on her and Japan to live up to the president's expectations. But also this move, move now for Japan to buy more oil from the United States and decrease its reliance on the Middle east, given this type of conflict. And I think we're going to see lots of changes spiraling out from the war, some anticipated and some not.
- [17:13]
Bloomberg Host
All right, so glad we could check in with you once again. Adam Fair. He's Bloomberg Economics Senior Geo Economics Analyst for Asia Pacific.
- [17:21]
Bloomberg Businessweek Daily Announcer
This is the Bloomberg Businessweek Daily Podcast. Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business Apple. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130.
- [17:40]
Carol Massar
I want to bring in David Wu. He's bank of America's former head of global interest Rates, currencies and emerging market fixed income and economic research. Now he's the founder of the macro intelligence firm David Wu Unbound. He's the co author of a new book, Merry Go Round Broke Down, a novel of guilt, greed and globalization. He joins us from Jerusalem. To David, first, you are a relatively new citizen of Israel. You told us that last time you were on the program when you were here in New York. You got your citizenship there. You're on, on the ground in Jerusalem. What is it like in Israel right now?
- [18:12]
David Wu
I would say, you know what, Tim, I think the last 24 hours has been probably crazier than the previous couple of weeks because after NYTI I was speech yesterday, you know, we've seen massive literally like, you know, missile attack by the hour. So I think I must have been in a shelter at least five or six times today. And you know, I think, you know, things are okay, but you know, I'm tired just going in and out of the shelter.
- [18:39]
Carol Massar
Well, I look, I mean we're thinking of everybody who's affected by this and all the wars everywhere right now. And the questions we have are, are really about the escalation or potential escalation here. And the recent reports that we've gotten from CBS that the US Is making preparations for potential ground troops in Iran, the White House has pushed back on that. But, but I'm curious how, and we're going to talk about the macro environment, but how would that change the war in your view?
- [19:08]
David Wu
Changes everything. But by the way, that's been my central scenario for the past week. In fact, you know, I mean, my advice to my clients has to be sell stocks and buy oil on the view that actually the troops on the ground is actually not only inevitable, but it's probably the only options left. I think what we need to realize that at this point, you know, Trump, it's very difficult for Trump to tackle without getting ahead. You know, I think, you know, it's always, you know, clear in the hindsight. But I think, you know, at this point I would argue that the only way he can actually regain the momentum is by essentially taking over the Strait of Hormuz. This is why an amphibious assault on the Iranian coastline around Bander Abbas really probably is the only option left, by the way, for Rivers Worth. Over the last 24 hours, a lot of Israeli commentators have been saying the same because in a way, you know, you know, and you could argue that this especially given the fact, as you probably know, the US has been getting no response from the IRGC when it comes to reopening the Strait of Hormuz. In fact, actually the IRGC's the last, actually the response to the US request for, you know, cease fire negotiation was that we will only talk once you drop all sanctions on Iran. So I think from that point of view, I think Iran feels like is in a pretty strong position. So it is actually trying to force Trump to pay through his nose. And this is why I think at this point now, I don't think anything has been decided yet. I think that's correct. I think the Marines, I think the second deployment of the Marines probably will take another week for them to actually get into the region, which means that over the next week we will probably see heavy bombardment of the entire coastline. Okay. And then we've seen them using the US and Israel using bunker buster bombs in the last 48 hours to soften the firepower of the Iranians in order to prepare the ground for the Marines. But I do think that by next weekend, if, you know, I mean, assuming situation hasn't changed, I think that's when probably we are going to have to see deployment of, of ground troops, especially with respect to a potential amphibious assault on the first one.
- [21:17]
Bloomberg Host
David?
- [21:17]
Carol Massar
I guess, wow.
- [21:18]
Bloomberg Host
I guess what we all are thinking and I guess because we're hoping this ends sooner rather than later, but I mean, what's the world like afterwards? What's the region like afterward? What's the US Relationship like afterward?
- [21:31]
Carol Massar
What is afterward?
- [21:32]
Bloomberg Host
Well, yeah, I think that's, I think that's the question to ask. And, you know, I'm going to bring it home to what we are so often about. Yes, there's loss of human lives and we need to keep that front and center. But I mean, I also do think about, you know, what's our relationship, what does it mean for financial markets? What does it mean for global growth? Like, how does this kind of, what's your investing thesis off of all of that?
- [21:56]
David Wu
I think, you know, there's a sort of a short term versus long term. I mean, to be honest, I've been incredibly surprised by the resilience of the US Stock market because everybody, everybody I talk to, even among clients of mine and some of the smartest and biggest best investors in the world, you know, I think a lot of people simply are simply assuming that Trump's going to Taco. And I've been saying for a while now, Taco is simply no longer an option. And the main reason why I think the Taco thesis is not a viable thesis is that what most People don't understand is that this war really is the first proxy war between the United States and guess what, China. Let me tell you this, the only reason why.
- [22:37]
Carol Massar
Explain that. Explain that.
- [22:39]
David Wu
So let me explain that, okay? I mean, you know, Iran has done pretty well, I would argue over the last three weeks against, you know, the combined military might of the US And Israel. I mean, I don't have to tell you just yesterday, you know, US as Lincoln has repositioned further away from Iran following missile attacks. Okay, I have to tell you early in the week you have USS Whatever Gerald, for you know, mysteriously having caught fire now is on its way to Greece. I don't to tell you that even the Wall Street Journal reported, you know, earlier this week that, you know, Iranians destroy or at least damage five US Refueling planes in Saudi Arabia. You might have heard about the destruction of US advanced radars in the region by Iranian drones. Now how do you think that was even possible? To me, this is the clearest evidence that Iran has obviously access to not only Chinese intelligence, but the most transformational aspect of Iran, Iran's fighting capabilities in this war compared to last June was the fact that they have migrated from civilian GPS system to the now the Chinese satellite navigation system. And that has basically improved the accuracy of their drones and missiles as well as making it more difficult for them to be jam. This has been the decisive difference. This is the reason why, you know, you probably heard yesterday naf35 almost taken down by Iranians. So what I'm saying.
- [24:06]
Bloomberg Host
So are you saying that the US is essentially at war with China?
- [24:11]
David Wu
I think, let's put. There's no doubt that China does not want to see a regime change in Iran. Now I don't think China will send troops into Iran, but there is no doubt both China and Russia will want to see this regime stay on. I mean, you know, because for many reasons, because not least of all, what we need to understand is that Iran is a strategic hub for China in the entire, you know, Belt and Road initiative. By the way, I don't know if you know, but you know, the China Iran railroad which has been under construction for the last 10 years, which runs 10,000 kilometers long, is almost fully operational. Once it becomes actually fully operational, guess what, the land bridge that China has been trying to build directly the Middle east onto Africa will be actually a done thing. You don't think there's no connection between that and the US decision to go after Iran? I mean, I think China. Let me put it this way. I think until very recently The Chinese attitude towards Iran was actually very mixed. China was hesitant to provide Iran with a strategic backstop. It was not until after Trump's unilateral action against Venezuela that has forced China to reassess, you know, essentially the risk of staying on the sideline. So I think only the last two months we've seen the Chinese really stepping up. You know, again, a lot of it is speculation on my part. But let me tell you this. I think we know a lot about what the Chinese have been involved in in Iran. And I have no doubt Iran, it's been able to actually continue until this part only because of the help that they're getting from the Chinese.
- [25:49]
Carol Massar
So, David, I want to bring it back to the markets here and what you are recommending to, to your clients, your subscribers. You mentioned Bio Oil. I don't know if it's too late for that at this point, but how are you looking at the duration of this conflict, how long oil prices stay high and, and what investors do during that time?
- [26:09]
David Wu
I think, you know, listen, I think the oil trade has, you know, I mean, listen, I started buying oil 60. So from that point of view, like, you know, this has been a while.
- [26:17]
Carol Massar
You selling it now?
- [26:20]
David Wu
If I'm selling now, I could see, listen, I think, you know, let's be honest, right? The reason why the market until now has been hesitant to really price in a prolonged conflict is because, you know, most Americans believe that, oh, well, because of the midterm election, Trump hasn't got the guts. And then, you know, that, you know, he hasn't got the staying power. But what I think people need to realize is that because this is the first proxy conflict between us and China, Trump is not going to go into the history book as the first president to actually accept a defeat in the first conflict with China. This is why he's not throwing the towel. And this is why, in a way, this is why he has to go in to Iran. And I think every American, including all the retail buy on dip investors, understand as soon as the first marine lands on the beach of basically Iran, then it will become impossible for the US to disengage. And everybody understands that. You're looking at an Iraqi situation very bearish on the stock market.
- [27:18]
Bloomberg Host
David, I guess I would say, as we definitely have had folks here who think it was long overdue before we get into this being a proxy war with China, but that it's long overdue, that the US do something with Iran. Iran has been an enemy for decades. Similarly, even when Trump first term then President Biden, Trump back in the White House. But even President Biden continued some of the pushback on China and initiatives that was started by President Trump in his first term. So some say the pushback is warranted. What again is our world after this, though, is China put in its place, is US Reduced in terms of its place? Like tell me how you are thinking about it for those who are thinking about global economy that has been so connected and what it means for the investment world.
- [28:12]
David Wu
Right. I would argue that obviously, much as writing on the outcome of this war in the if the regime in Iran survives, okay, in other words, if US And Israel decide not to go ahead and finish the job that they started, I would argue that's very bearish for the US Dollar. I think it's very bearish for the US Assets in general. Because if that would if that was what happens, I think you will see, you know, a cementing of ties between China and Iran. You will see all the Gulf regions starting to orbit in China's essentially diplomatic circles. China will then go ahead and replace the US as the security guarantee of the Middle East. Okay. I think you will see a lot of the Gulf countries, they start to sell dollars and buy R and B. Instead of buying U.S. defense products, they might start buying Chinese, basically defense products and so on, so forth. I think this is also the reason why the stakes because China's involvement here, the States are extraordinary, extraordinarily high. You know. So I would say that there is no doubt, I mean, this is what is going on here in, in a way, I think Trump understands that the US has to win this because if it doesn't, this is going to be a huge, hugely negative thing for the U.S. i think down the road, I think a lot of, a lot of certainly because the Middle east just think about this right now already Iran has demonstrated it can actually stop the oil basically traffic at will.
- [29:37]
Bloomberg Host
Right.
- [29:38]
David Wu
You know, if the US Were to not leave the regime in place, then, you know, essentially you're turning over the control of the entire 20% of the world's oil over to Iran. And that will make it very, very, very difficult to deal with in the future.
- [29:54]
Bloomberg Host
All right. Well, a lot to certainly think about on this pretty heavy Friday. David, thank you so much. David Wu, founder of the Macro Intelligence firm. David Wu, Unbound, co author of the new book Merry Go Round, Broke down, joining us from Israel.
- [30:09]
Carol Massar
Stay with us. More from Bloomberg businessweek Daily coming up after this.
- [30:16]
IBM AI Narrator
The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM for many
- [30:47]
Dr. Guy Winch
men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In season three of the Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of the Visibility Gap, a podcast presented by Cigna Healthcare.
- [31:17]
Chase for Business Narrator
Everyone has been there. Your team's feedback is scattered across emails, chats and sticky notes. It's a mess, but PDF spaces in Adobe Acrobat gives you one collaborative workspace to streamline every file and comment. So if you need six departments to finally agree on a proposal, do that with Acrobat. Need to turn a mountain of feedback into one plan of action. Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page. Do that, do that, do that with Acrobat. Learn more@adobe.com do that with Acrobat.
- [31:54]
Bloomberg Businessweek Daily Announcer
You're listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [32:08]
Bloomberg Host
Kalsha temporarily barred by a judge from offering its prediction market conditions contracts in Nevada after state regulators said the company did not have a gaming license. The state court judge ruling in Carson City signing a temporary restraining order blocking Kalsheet event contracts for sports, election and entertainment is according to a copy of the order provided by the Nevada Gaming Control Board. The judge meantime setting a hearing. Tim in the case for April 3rd.
- [32:34]
Carol Massar
Well, it's not the only bit of news. The MLB has entered a new agreement with polymarket and the federal regulator that oversees prediction markets. Also yesterday Kalshee raised more than $1 billion at a valuation $22 billion in a new financing round. And speaking of Kalshi criminal charges just this week, Carol amping up growing state resistance to the company.
- [32:53]
Bloomberg Host
I'm just going to mention just because stocks did take a leg down and I know this is off our live blog. We're waiting for some more confirmation, but our live blog even saying that CBS is citing multiple sources on US Preparations in Iran and that is that the US Making preparations for potential ground troops in Iran. So this is something we kicked off the hour with, but because we did see stocks take a leg down, I just wanted to bring that to everybody's attention.
- [33:15]
Carol Massar
Okay, let's get back to prediction markets and bring in Ian.
- [33:18]
Bloomberg Host
He said it was busy.
- [33:19]
Carol Massar
He's a partner at Sidley Austin. He's a former director of enforcement at the cftc. It's the Commodities Futures Trading Commission. That was from early or from 2023 to early 2025. He joins us here in the studio.
- [33:31]
David Wu
Welcome.
- [33:31]
Carol Massar
It's good to have you on the program. The, the, it's happening so quickly when it comes to interest in prediction markets. I just want to get your response on this news from, from Nevada because it does seem like state after state is going after that these companies and this company. And maybe it has to do with gambling revenues, maybe it has to do with other lobbyists. I don't know. Can the states actually bar this company from doing business in different states?
- [34:00]
Jeff Mason
Well, the.
- [34:00]
Ian McGinley
What happened today in Nevada is called a temporary restraining order. So they can, but usually for a small period of time and then they have to have a hearing, a full hearing before a judge where they'll then decide if that's a permanent ban. We've seen other states take very similar steps. What usually happens is there's then some litigation in federal court. This is a state court judge. And whether it then goes back to state court or the federal judge handles it, it really depends. But other states have done similar things.
- [34:31]
Bloomberg Host
Things, you know, I can't tell Ian if we're putting the cart before the horse here. In other words, it feels like crypto, where things kind of moved ahead and we haven't kind of put in place this, the safety infrastructure, the regulatory infrastructure. And I look at valuations growing. I mean, is everything getting ahead of itself? Do we need at this point, regulators to set some things up here?
- [34:53]
Ian McGinley
Well, so there's a few things going on. And like you said, there is a lot going on. Right. On the one hand, you have legal regulatory developments. On the other hand, you have just the businesses growing tremendously. Sponsorships.
- [35:05]
Bloomberg Host
MLB is pretty serious.
- [35:06]
Ian McGinley
I mean, that is a huge, huge endorsement of the type of trading. But I think there's a few things. There is regulation. You know, there was insider trade. Yeah. And I think, you know, that's something that people need to realize. And when there are talks about insider trading and things like that, that is Prohibited, always has been. There's a little bit of nuance to it, but the CFTC recently this week put out something called a notice of proposed rulemaking. Basically said we want comments from the public, whether you are the states, businesses, sports leagues. And we're going to consider that because we are considering regulation. So we don't know the form of that regulation. It's not come out yet, of course, but it certainly suggests that the CFTC is considering regulation and that there will be some more regulation and potentially some contracts that are not listed.
- [35:59]
Bloomberg Host
So. But should the world then slow down a little bit until we understand all of this or no?
- [36:04]
Ian McGinley
Well, we'll see what the courts say. I think that's where we'll see a real kind of scope of where things should go. You are allowed to self certify your contracts. That is a regulatory regime the CFTC has. Now the CFTC can step in and stop that and so we'll see if that happens. But right now where the kind of guardrails are coming from is existing CFTC law and then court decisions. You mentioned there was a criminal case that came down this past week. And these are just my personal views on it, not those of my firm or any clients. But you know, that was noteworthy. And it's the first criminal case in the space. Right. Whether or not it relates to a temporary restraining order, which is a civil matter. Probably not, but we'll see. But you know, that criminal case is interesting though because it does not mention, it doesn't charge any individuals. It is all misdemeanors, all the, and any, any accusation, of course should be taken seriously. But felonies are the more serious charge, not, not misdemeanors. And if you look at the charging instrument, you know, we were talking a little bit about it. It just lays out that there were trades in, you know, on, on a certain platform. It doesn't, you know, when I was a federal prosecutor, you have a choice when you release a charging document. You can do something called like a speaking indictment or a speaking instrument where you lay out kind of all the facts and what, you know, based on this. They, they did not do that.
- [37:39]
Carol Massar
What, what's a potential outcome here when it comes to the way that courts rule on this? And I think a lot of people agree that this, this goes right to the Supreme Court either this year or next year. Is there a chance the Supreme Court comes out and says, okay, prediction markets can operate in the United States, but they can't include sports predictions, for example, they can include other Things, but can't include sports predictions. Like what would a case. I don't know. I'm just theoretically, what would a case potentially look like or a decision potentially look like from the Supreme Court that would clarify this for us, for users, for these companies?
- [38:14]
Ian McGinley
Well, so the Supreme Court really answers narrow questions. That's one thing to think about. We saw this in the tariff decision and there was a dissent that I think spelled this out where the Supreme Court will weigh in on the most narrow issue that it's presented with. So you could see the issue here is preemption. So whether federal law or state law applies. But it's very rare that the Supreme Court or any other court takes the next step and says, well now here's how it should be regulated, or here are the particular. That's where the agency comes in.
- [38:43]
Carol Massar
So there's a, so there's a chance. So the question would be whether or not the CFTC is the regulator versus the states or the regulators.
- [38:50]
Ian McGinley
That I think is going to be the main question. Now, there may be some nuance in there as to what is the definition of something that's a sort of swap, what can be traded.
- [38:57]
Carol Massar
Why does the CFTC regulate these prediction markets, but states regulate FanDuel and DraftKings?
- [39:04]
Ian McGinley
Well, the difference, I think the argument is the difference in the structure of how they're, you know, and at a very basic level, right, you are betting against the House. And when you think of traditional. Right. A traditional gaming and gambling in these models and prediction markets, you have counterparties, right. Some that are institutional liquidity providers now in it's becoming a lot more like
- [39:24]
Bloomberg Host
a stock market on that point. I mean, one of the things that keeps coming up, and it certainly did in the panel that you did down in Florida about this idea of whether or not prediction markets are gambling. It came up over and over. And you did speak exclusively with the Kalsheek co founder Tarek Mansour. Let's listen to what he had to say.
- [39:43]
Tarek Mansour
There's always been a battle of whether financial derivatives are gambling. Grain futures were called gambling in the 1800s. And there was a Supreme Court decision that said even though there is speculation these products have financial structures, the financial markets and thus are going to fall under financial market jurisdiction. So I always say this, you know, whether something feels and looks like gambling doesn't necessarily make it gambling. Speculation exists in all financial markets. If we're going to take a line that speculation is gambling, then the stock market with retail participation is gambling, then buying options for retail or zero Data exposure buy options is gambling, then retail buying, crypto is gambling.
- [40:22]
Bloomberg Host
So that of course is Kalsi Co founder Tarek Mansour. We're talking with the Ian McGinley, partner of Sidley Austin, former Director of Enforcement at the cftc. So does he have a good point or is there a distinction between what happens on prediction markets versus what happens in financial markets, whether it's derivatives or, you know, you name it.
- [40:39]
Ian McGinley
Well, I think the point from, from a lawyer standpoint is the Commodity Exchange act doesn't define gambling. That's kind of why. And that's what the CFTC implements, that's its statute. And so that's where we've seen a lot of courts come in and try to distill the concept down. Now there's a concept in federal law, CFTC law, that talks about gaming, but it also doesn't define it. And so that's why I think you see regulators. Now when I was at the CFTC, there was an effort to further define gaming and it looked at, you know, is it a game of, for example, a game of skill or a game of chance? And so I think that's where you'll see regulators go. But the reason why, you know, and you mentioned all the courts and the different decisions. You have district courts, you have appellate courts and you have the Supreme Court. There have been different decisions on a district court level. I mean, you guys know lawyers, you can't get lawyers to agree on anything, right? So now, now we're at three lawyer, well said courts, right, that are now dealing with it and we'll see how they come out. And then, you know, I agree, I think likely we see it in the Supreme Court because I don't know that all those courts are going to look at it exactly the same way.
- [41:58]
Carol Massar
You were formerly Director of Enforcement at the cftc. And I think one thing that's notable to people is the way the CFTC has come out as essentially been a loud cheerleader, a proponent of these platforms under Mike Selig. I'm wondering your view on that, like why do you think the CFTC is in this position to sort of not necessarily promote them, but to come out on X after the Arizona decision and say essentially this is an overstep.
- [42:28]
Ian McGinley
Well, some of it is jurisdictional agencies, you know, typically defend their jurisdiction. But I read it a little bit more nuanced where I think the cftc, my read of what they are saying is, yes, this is our jurisdiction, but you know, there need to be guardrails at the same time. They put out a notice for proposed rulemaking. They put out an advisory. That advisory was essentially, as I read it, a notice to the exchanges to say when you register as an exchange for the cftc, you have to make representations. You have to say, these contracts are not susceptible to manipulation. We have adequate surveillance. And I read the CFTC putting out that advisory saying, hey everyone, you're on fair notice. Yeah, you have a job as a registrant to police yourselves. But if you don't fulfill that, we're here.
- [43:19]
Bloomberg Host
Same deal for prediction markets that they have to do this.
- [43:22]
Ian McGinley
Oh, they do, yeah. Yeah, they do have that obligation.
- [43:25]
Bloomberg Host
Great stuff. Ian McGinley, partner at Sidley Austin, former director of Enforcement at the CFTC this
- [43:30]
Bloomberg Businessweek Daily Announcer
is the Bloomberg Business Week Daily podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm Eastern on bloomberg.com, the iHeartRadio app TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.
- [44:00]
Chase for Business Narrator
If you follow markets, you know the value of long term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day a fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned. It's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions. Their approach is grounded in experience, follow through and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built and is ready to help you move forward. The Cincinnati insurance companies let them make your bad day better. Find an independent agent@cin fin.com from coast
- [45:02]
Carol Massar
to coast, Unlock adventure at Red Lion Hotels by Sonesta, where restful sleep, friendly service and trusted local knowledge are part of every stay. Red lion makes it easy to feel welcomed, comfortable and connected wherever the road takes you. Whether you're traveling for business or pleasure, you can spend less and make more of every trip. When you sign up for Sinesta Travel Pass, you'll get their best rates instantly. Go to sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass. Here today, roam tomorrow. Join now@sonesta.com terms and conditions apply.
- [45:35]
Dr. Guy Winch
These days it seems like AI agents are just about everywhere you turn, every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI Agents identities, giving you a single layer of control, a single standard of trust. So whether an AI Agent supports a single user or your entire enterprise, with Okta, you'll turn risk into opportunity. Secure every agent. Secure any agent. Okta secures AI.