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- [00:01]
David Gura
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- [01:40]
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Bloomberg Audio Studios Podcasts Radio News welcome to the Bloomberg this Weekend podcast with David Gura, Christina Raffini and Lisa Mateo.
- [01:55]
Christina Raffini
Thanks for joining us for today's selection of convers.
- [01:59]
David Gura
You can listen to our favorite discussions right here on the podcast, but also make sure to join us live every Saturday and Sunday morning starting at 7am Eastern.
- [02:06]
Jomana Qaddour
We're on Bloomberg Television Radio and the Bloomberg Business app, bringing you unique takes and in depth interviews on news, politics, lifestyle and culture.
- [02:19]
David Gura
Gonna go back to Iran now to the Middle east. That main story we had President Trump having a phone interview with NBC News exclusively, talking about the war where it stands and where he sees it headed. And he said, quote, Iran want wants to make a deal and I don't want to make it because the terms are not good enough yet.
- [02:34]
Christina Raffini
Christina all right, joining us now to discuss all this are Bloomberg's host of Horizon Middle east and Africa, Jomana Versace, the AP's international correspondent Philip Crother, who is live near the Strait of Hormuz and Bloomberg's Washington's deputy bureau chief, Laura Davidson, who is actually in Tokyo. Thank you all so much for joining us. Philip, I want to start with you because there were some pretty dramatic images overnight of smoke rising from a port that I believe is somewhat near you. Can you I mean, Iran had said that they believe some of these incoming missiles were fired from the uae. Was this retribution for that? What is Iran said and how has the UAE responded?
- [03:12]
Philip Crowther
Yeah, this appears to have been retribution. This is the Al Fujairah oil facility. It's just a few kilometers south from where we are here. About 24 hours ago, there were two huge black plumes of smoke coming from there. This from two separate apparent drone attacks. Now, these weren't drones that necessarily hit the plant directly, but that might have been shot down. It's called an interception. And that fragments thereof might have hit the oil facility led to a stop of at least some of the operations there. They appear to be back up and running now. But yes, a retaliation, it certainly was. And what Iran has been saying and has been clearly singling out the United Arab Emirates, where I am now right here, is that they're saying that US Attacks on specifically Harg island, where of course, Iran processes a very large percentage of its oil at its terminal, that that was attacked by the United States from the United Arab Emirates from air bases or even from ports. So the reaction from Iran was to say that everybody should evacuate three big ports in the United Arab Emirates, and that includes the one we just mentioned. Al Fujairah also includes the biggest port in the whole of the Middle East. And there was a threat that there were going to be further attacks on those ports, again because Iran says they were used to stage US Attacks on Iran. Iran is saying this without any proof and indeed the US Military hasn't even deemed it worthy of, of a response. Now, there haven't been any from the point of view of Iran, we should say, successful attacks on those ports. There might have been some interceptions over the last 24 hours or so, but there have been no direct hits, no fragments of drones or missiles have hit any facilities or anything in the United Arab Emirates over the last 24 hours. And that in fact, goes for most Gulf countries. There have been mass attacks of drones on Bahrain, for example, on Saudi Arabia as well. But the air defenses of most of these Gulf countries have been working well and increasingly well as this conflict continues.
- [05:28]
David Gura
Jomana, I want to turn to you and go back to that comment from the president to NBC News just about the state of play in this war and where it might be headed, lingering on that line that Iran wants to make a deal, but the president doesn't think the terms are good enough yet. What is your sense of what the president is hoping for once in terms of a deal and how far apart these two sides are at this juncture in the war?
- [05:51]
Jomana Qaddour
Well, it's also interesting to observe the evolution of his thinking. It was a couple of days prior, I think he was calling for once again the unconditional surrender of the Iranian regime. But now he seems to be open once again to establishing a deal with them of some sorts. In that interview with NBC, he declined to give a lot of commentary on exactly what the conditions would be, but maintained, and this is, you know, a stance that the US has maintained even before the war kicked off, that Iran should never have the ability to develop a nuclear weapon. Now, from Iran's perspective, we've had a couple of notable figures from the regime speak out. We've had the Iranian foreign minister make some remarks in addition to President Peterskin putting up a post a couple of days ago where they suggested their conditions to come to the negotiating table with the US Would include, number one, full recognition of Iran's, quote, legitimate rights, without giving a lot of information what exactly that means. Number two, reparations for damages caused. And then number three, and this is probably the most important element, guarantees that a war like this will never happen again. So they are staking their own terms to go back to the negotiating table. Of course, their economy is massive, massively buckling under the strain even before this war kicked off. And now there's the real threat of civilian infrastructure being targeted as well. Kharg island, obviously a key lifeblood for them. But I would say from the perspective of the Iranians, we always said from the beginning this was a fight for their existence. It's an existential fight for them. And the fact that the US Are now saying, or no longer talking about regime change, but are saying, okay, we're ready to cut a deal, in their eyes, actually is a victory, and they have sustained a lot of blows. Maybe they're losing militarily, but if they come out of this the other side, still intact and still effectively leading the country, then they will deem that to be a victory. So I think, you know, there's still a lot of daylight between the two sides. And from the Iranian perspective, they will continue to inflict as many blows as they can, as much economic cost on these Gulf countries and on the global economy in order to somehow bring the US as well closer to what they're asking for.
- [07:59]
Christina Raffini
Laura, I want to go to you now over in Tokyo because the backdrop of all of this conflict is, of course, what it's doing to the world energy markets, what it's doing to global economies. And at the same time, you have this Trump Xi summit coming up and there's a couple of things going on. There's US China talks about to happen or happening right now in Paris and then you are in Japan for this. There's economic secretaries there as well. David just wrote down the name of the summit and I've already forgotten it. So can you please remind me the name of the Tokyo summit and then just kind of set the stage for us what's going on and where these two big countries are going to go in the backdrop of all this happening in the Middle East.
- [08:35]
David Gura
It's not an easy name.
- [08:36]
Christina Raffini
It's on there somewhere. This is where we'll set it straight. But yeah, this is a summit. It's largely between the US and Japan, but there's also about 18 countries who are also participating with high level economic and energy officials from the region to talk basically about critical mineral, minerals and energy. You know, that of course, was important even before Iran. Now with the backdrop of oil prices spiking, this has really added a lot of urgency and intensity to these discussions. Of course, the deals that have been struck, you know, so far this weekend have been relatively modest in scale. You know, these are a longer term arrangements. These are memorandum memorandums of understanding, things that won't really do anything to address the current situation at hand, but really set the stage for this visit. The prime Minister of Japan, Takechi, is headed to the White House on Thursday. She has been quite critical of the US Stance in Iran, has questioned the legality of these strikes and said she plans to have a very frank and stern conversation with Trump. So this is, you know, kind of we're seeing a lot of posturing from allies in the Indo Pacific region, looking to get in the good graces of the Trump administration with some of these deals, but looking to take a stronger, firmer stance when it comes to geopolitics. Our control room tells us it is the Indo Pacific Energy Security ministerial and business forum. I feel less bad for not having at the top of my tongue.
- [09:49]
David Gura
Rolls right off the tongue. And we have Lee Zeldin, the EPA administrator, joining us from those talks here in a few minutes time, I should say. But of course, nothing is shaping the conversation about global energy more than the strait that we see behind Philip Crowther. And Philip, I'll go back to you and again, reference that interview that was on NBC News or NBC News conducted with President Trump via telephone. He said we're going to be sweeping the strait very strongly and we believe we'll be joined by other countries who are somewhat impeded and in some cases impeded from getting the oil. I. I'm looking at that line. We believe, as he invokes China and France and Japan and South Korea and other countries. This is a war that largely has been prosecuted by the US And Israel, just the two of them. Now we have a president talking about the need for allies to reopen or get traffic flowing in that strait. Once again, your sense of the willingness of other countries to do that. And I know yesterday we had a conversation just about how little traffic you were able to observe in the strait behind you. Has anything notionally changed here over the last 24 hours?
- [10:47]
Philip Crowther
First of all, it hasn't. There has not been any increasing traffic here because there is no deal. And it is still very much deemed too dangerous for any container ships, one of which we see behind us, but of course, more crucially for the world economic markets for oil tankers and those carrying liquefied natural gas to pass from the Persian Gulf through the Strait of Hormuz to, well, essentially where I am here, out into the wider world and bringing those commodities to the international market. Now back to what you mentioned, though. You know, this has happened before in the Middle east, that the United States has more or less unilaterally gone to war and then in the aftermath is asking for help, essentially. And in this case, what President Trump is doing, he's maybe enticing other countries to get involved in what would boil down to an international coalition of warships to protect these ships going in and out of the Strait of Hormuz. Is he enticing them? Is he provoking them into joining him? Is he just basically saying this is a fait accompli, you need to now be part of this because it's your ships that are not getting through. And it is true, of course, these are countries and companies that are very much affected by a U. S. Israeli war on Iran. And China is number one there because such a huge percentage of the oil that passes through the Strait of Hormuz goes to China. So in his post last night by President Trump on his social network on Truth Social, he was naming countries specifically, not innocently, you know, there was a reason for this. France, the United Kingdom, of course, that's understandable These are Western allies, but also Japan, South Korea and specifically China. He wants them to be part of, well, essentially a bit of an armada that would be led by the United States to protect these ships and get the traffic flowing through the Strait of Hormuz. Again, this is a lot easier said than done. While these Iranian threats to hit any ship that tries to go through that is in any way affiliated or allied with the United States, States and Israel or its allies while those threats continue. Well, you have to presume that there could be Iranian attacks on warships as well.
- [13:02]
Christina Raffini
Jomana, speaking of Israel, there's a report that's popped up in Semaphore that is exclusive, saying that Israel has informed the US this week that it's running critically low on ballistic missile interceptors as the conflict with Iran rages on. Israel has reportedly entered the current war already low on interceptors that were fired during last summer's conflict with Iran. Now this conflict compliments reporting from Bloomberg that UAE and Qatar were also running low on those interceptors. I do need to say both those countries have pushed back vociferously on that reporting. But I'm wondering if you have any sense of the veracity of these reports, if this is something countries in the region are worried about. I mean, it would make sense at this point, but what are they telling you?
- [13:42]
Jomana Qaddour
I think, you know, let's just go back to the starting point of all of this, which is the asymmetry of the military warfare here. I think. I don't think there's a question that the US And Israel have military dominance. And in fact, if you go back to some of the comments that Central Command have said, they've said that they managed to eliminate around 60 to 70% of missile launchers in Iran, around 60 to 70% of their missile stockpiles. But at the same time, I think most of the region was taken aback at the sheer intensity and frequency of the strikes that came through from Iran onto these Gulf states and indeed onto Israel itself. I mean, just to give you the example of the UAE, they said that they have engaged in over 1,600 drones and 300 missiles launched by Iran since the war began. And this was over two weeks ago. Now, as our colleague reporter was just saying, the interception rate for these projectiles is very high. It's between something like 92 to 95%, whether it's drone drones or missiles. But there is a mismatch in cost and this is something that Iran recognizes they're capable of manufacturing these low cost drones in a huge amount. They're estimated to be sitting on around 50,000 of these drones and they are costly to take down. And so the longer this war goes on for, the more there are going to be questions about how long these air defenses systems can hold up for. I should, I should say, however, that these Gulf states maintain that the air defense systems continue to have very high interception rates and they are doing what they can to beef them up.
- [15:16]
Christina Raffini
Okay, thank you, Jim and Versace, our Mideast anchor. We've also like to thank Philip Kohler, AP International correspondent standing out on that water for us, and Laura Davidson, of course, Washington deputy bureau chief, joining us from Tokyo.
- [15:29]
David Gura
Stay with us for more on Bloomberg this weekend, right after this. Hello. Hello. I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them Pick areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30% more productive today with the goal of being 70% more productive. Yeah. Wow. So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit IBM.com smarttalks.
- [16:54]
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- [17:26]
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David Gura
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- [18:34]
Christina Raffini
All right, so right now President Trump's National Energy Dominance Council is hosting an energy security forum in Tokyo. This was a conference that was planned before America struck Iran and is happening amid global economic turmoil.
- [18:46]
David Gura
Joining us now from Tokyo is the EPA Administrator Lee Zeldin on this Saturday. Great to have you with us. We're going to talk about the substance of the conversations you've been having here in just a moment, but I wanted to ask you first, remembering as I do you as a congressman, you as a fellow New Yorker, you've talked an awful lot about the need for there to be endgames in military conflict and you've brought that up in the context of your military service as well. Talking about Iraq and Afghanistan, as we look at this war entering the third week, I'm curious what you see that endgame as and if it's clear enough to you as somebody again who served in the military.
- [19:19]
Lee Zeldin
Well, obviously my role serving as administrator of the Environmental Protection Agency is a bit different than serving in Congress on the House Foreign Affairs Committee. I have the utmost faith and trust in President Trump and his national security and for foreign policy team. They have been conducting many successful strikes to achieve strategic objectives, taking out top high value targets throughout Iran. Consistently, that progress has resulted in all sorts of people who have been responsible for many attacks that have not just adversely impacted US Interests in that region, but have killed and maimed US Service members. As a now retired member of the United States army, speaking from that perspective, just too many fellow soldiers have been targeted by IRGC and Iranian leadership over the course of my adult life since first going into the military in 2003. So seeing that justice brought to bear on behalf of all those United States service members, veterans, those families, that that is long overdue justice for many of these Iranian quote unquote leaders who are no longer alive.
- [20:42]
Christina Raffini
I do want to ask you about the summit that you're competing in, especially, you know, oil prices are up 40%. Americans already feel like they're being squeezed. And I know that you're there partially to pitch to Asian countries because I heard you on some of our, our other network friends why America would be a good resource for them for energy, why they should get our energy from us. But my question to you is many of those same nations, including Vietnam, Thailand and others, are feeling pressure from the constantly changing US Tariff landscape, and they feel like the president is using that as a tool and changes depending on what he wants from foreign policy. So why should Asian nations trust the US As a consistent and dependable source of energy in the future?
- [21:26]
Lee Zeldin
Well, one of the points is that you see these Asian, these Asian countries that have relied so heavily on the Middle east for their crude oil and the time that it takes and the reliance on a route that in many respects a terrorist regime has been able to find frequently disrupt or at the very least threaten to disrupt over the course of years and decades. Now they start looking east to the United States, where we have been unleashing energy dominance here at home with new projects that are now on the horizon. President Trump has been advocating strongly for a new liquid LNG facility, a pipeline that would run alongside the Trans Alaska Pipeline in Alaska. Crude oil in Alaska has the ability to have a lot more oil pass through it. And that route for 60 years with Japan, for example, has been able to deliver that crude oil to, to Asia,
- [22:30]
Christina Raffini
to Japan, sir, if uninterrupted.
- [22:32]
Lee Zeldin
How are you with freedom of navigation?
- [22:34]
Christina Raffini
Of course, I'm sorry for, but if I may, are you not getting any pushback that even if you make some of these deals and President Trump becomes displeased with these countries, he could claw back that energy.
- [22:47]
Lee Zeldin
Well, what we just witnessed over the course of the last 48 hours is that many countries in the Indo Pacific are gravitating towards the United States. We, we had over $50 billion worth of deals with US companies. The, the, all the dialogue that has taken place place has been with an understanding that by entering into new deals with the United States, it allows them to reduce their reliance, which was so heavily concentrated in the Middle East. And on top of it, it takes just a fraction of time to get that energy supply to Japan and these other countries compared to, you know, 28 days to get it from the Middle east, to take eight days to get there from Alaska. So that is another dynamic, but just a lot of very robust, energetic, motivated conversation and engagement from the ministers of energy of all of these countries trying to cut deals with the United States.
- [23:50]
David Gura
Mr. Minstrel, actually cutting Deals you might have heard Christina say at the top here. This is, of course, a summit that was scheduled before the war began. And I'm curious, given what has happened here, how much that situation is kind of coloring the conversations that you're having with allies and companies at the summit over the course of this weekend.
- [24:11]
Lee Zeldin
One of the topics that were discussed, one of the pillars of this weekend, is about the supply chain. And for Indo Pacific countries, they are, I think, far more motivated. They were talking quite frequently about wanting to diversify their supply chain, that they want to start looking elsewhere because they were relying too heavily on the Middle Eastern region for their supply chain. So diversifying how they provide energy to their people. Some countries are further along in talking about about nuclear, others relying more on lng, others talking about coal. It really ran the gamut. And depending on which country we were sitting in for a bilateral or for meetings amongst all the energy ministers, diversification of the supply chain was not just a pillar going into this weekend, but something that was frequently talked about throughout.
- [25:12]
Christina Raffini
I have a couple of nuclear questions, but I do want to start with when we look at the possible consequences of a regime falling in Iran, one of the concerns we've been hearing from nuclear experts and security experts is how to secure and possibly transport out that enriched uranium in that country. Is there a plan to do it? Does it involve American boots on the ground and what can you tell us about what's going to happen there?
- [25:38]
Lee Zeldin
Yeah, that's a question that I, as administrative epa, would not want to answer on behalf of the President, the White House, the Department of War, Department of State or Department of Energy, the transport of uranium out of Iran. And the other aspects of your question are questions that I, as EPA administrator wouldn't be appropriate to be the one answering great questions, but I wouldn't be, fair enough, the right person for the administration to answer that.
- [26:10]
Christina Raffini
Fair enough.
- [26:10]
David Gura
Let me ask you something kind of complimentary to the strikes on Iran, and that is we've seen the administration open up those pipelines off the coast of California once again. And there are a lot of Californians who remember that oil spill back in 2015, that Refugio Oil spill, are worried about the integrity of those pipelines. And I wonder what your message is to them as we hear from the governor of that state and others saying, look, this is something that shouldn't be happening right now in light of the fact that there are 100 gallons of barrels of oil that were spilled as a result of that back in 2015.
- [26:42]
Lee Zeldin
Well, I mean, it's always important to remember lessons learned of the past to be leaning into new technology to make sure that with new projects for extraction, for processing anywhere in America, that in the partnerships and, and in the request for permits and as this investment goes forward, that we are learning the lessons of the past and that we're doing it as safely as possible. I often talk about how I strongly believe that in the United States we tap into our own energy supplies so much safer than so many other countries elsewhere around the world. And that runs across the gamut on all different kinds of, of ways that energy is extracted. So, yeah, to your question, which is a, which is a great one, it's important that when these projects, when these permits are moving forward, that we're doing it as responsibly as possible.
- [27:41]
Christina Raffini
I also want to ask you, as you talk about US Energy dominance, obviously the president and a lot of people have said the US should look more into nuclear. One of the things your agency, Department of Energy, have done is change some of the regulations for trying to build nuclear plants, nuclear reactors. That's had mixed results because it's trying to bring these plants online faster and solve this issue. But some of the criticism is it's taking away some of the safety concerns, including things like firearms trainings and emergency drills, which critics are saying could make these plants more vulnerable to theft of nuclear power. What is your response to that, and do you have any concerns with lessening regulations around nuclear reactors?
- [28:21]
Lee Zeldin
At no point since I was sworn in as administrator 14 months ago with any nuclear project that I've seen anywhere inside the United States have I seen anything but the highest level of competency brought to bear with very incredible staffers, many career staffers here at EPA doing our due diligence. Trump's speed is about operating quickly. The way that we have implemented that directive from the president is one that I can very confidently say with eyes on many different nuclear projects across this country, that they're being done extraordinarily competently. And quite frankly, the people, the companies that are making the, the big investment, they have every motivation to protect that investment. And I would say that a lot of these companies are breaking ground on projects with goals of breaking ground on many more projects. So it's almost a proof of concept when, you know, Oklo in Idaho Falls, Idaho, is breaking ground, which they have recently done. They want to build many more. I can think of their project in Oak Ridge, as in Tennessee, as well as other states. Right now. There are a lot of retrofits, a lot of small modular reactors. There are a lot of nuclear projects. Yes, the permitting is going much faster under President Trump, but due diligence and competency has been all over from the government standpoint as well as from the investor standpoint.
- [29:57]
David Gura
Mr. Ministry, thank you very much. That's Lee Zeldin joining us from Tokyo, where the sun is setting as it rises here in New York. He's there for that inaugural Independence Pacific Energy Security Ministerial and Business Forum. Great to get his perspective.
- [30:07]
Christina Raffini
I appreciate him staying up late. It's 8:30. I'm not sure if he's coming from or going to dinner, but we appreciate your time, sir. Stay with us for more on Bloomberg this weekend, right after this.
- [30:22]
David Gura
Hello. Hello, I'm Malcolm Gladwell, host of the podcast smart talks with IBM. I recently sat down with IBM's chairman and CEO Arvind Krishna and I asked him how can companies use AI to its fullest potential to create smarter business? My one advice to them Pick areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30% more productive today with the goal of being 70% more productive.
- [31:10]
Public Advertiser
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- [31:11]
David Gura
So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit IBM.com smarttalks.
- [31:40]
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- [32:12]
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David Gura
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David Gura
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- [33:34]
David Gura
I mentioned that interview that President Trump did with NBC News and coming out of that he said we quote, totally demolished Kharg island, that island off the coast of Iran, so important to that country's oil industry. But we may hit it a few more times just for fun. He continued in that interview and talked about the prospects of there being a deal between the US And Iran, saying that Iran has offered one, but it's not acceptable to the US Side. We're going to talk about all of this with two congressmen. First, Adam Smith, the ranking member of the Armed Services Committee, Mike Lawler, is going to join us after that conversation with Representative Smith. He's on the Foreign Affairs Committee. Congressman Smith, great to have you with us, of course, representing the 9th district in the state of Washington. I want to start with that comment that I just read, that comment that the President made to NBC News saying that on the heels of hitting Carg island, he might do it a few more times just for fun. And I wonder how that resonates with you as you think about what the end game is here and what you've learned from the administration about how they intend to prosecute this war to its conclusion.
- [34:30]
Adam Smith
Well, certainly the cavalier, non serious way in which President Trump, Secretary Hegseth and others have talked about this war. We had Secretary Hegseth talking about no quarter, which is basically a military term for no survivors, kill everybody. I think that attitude has really undermined our ability to build support and move forward. It's far from the largest problem with this war. I mean, the largest problem is what's the plan? What's the strategy? What are we trying to accomplish? What's the path to achieving it? And how do we deal with the costs that are mounting by the day? Certainly in terms of deaths, but the economic impact you referenced globally, what's the path here? I know we want to degrade Iran's capability militarily, but how much? And then the real goal at the start of this seemed to be to fundamentally change Iran's calculus, to make them less hostile to us, to Israel and to the region. And there seems to be no progress on that aspect of the plan. So this war is continuing. The cost is incredibly high. The president doesn't seem to have a plan. Meanwhile, they want to apparently try to convince America that this is some kind of fun video game that we. That we're just playing, even as people are dying all across the region and the global economy is suffering from this. So, yeah, I wish they were a little more serious in the way they explained such an incredibly important action that they are taking.
- [35:56]
David Gura
Congressman, I want to get to what you know about the mission and the administration's sense of that mission. We saw the news that the administration plans to send the 31st Marine Expeditionary Unit to the region to add to the number of service personnel who are there in the Middle East. Do you have a clear understanding of what those Marines are going to do? And as you watch that unfold, what does it tell you about the direction of this conflict?
- [36:17]
Adam Smith
Yeah, I have a clear understanding of what the options are. Look, we've been talking about this for a long time. There is no doubt that Iran is a major problem in the region, in the world, a threat to us, a threat to Israel. They support a variety of different violent extremist terrorist groups. How do you deal with that threat? So the Armed Services Committee for years now, has been looking at options. I mean, what can you do? What's militarily on the table? And there's always been two big problems with the military option. One, the collateral damage. You hit Iran, it spreads. And that certainly happened. It spread as far as anyone would have feared. Second problem is, can you really degrade them militarily to such a degree that it makes that cost worth the effort? And what we learned is really not because the Iranian regime is dug in. They are very, very solid. Even as their leaders have been killed, they have a succession plan. There's 90 million people in Iran. They have a military. They did not appear inclined to simply collapse. So the conclusion was the military option wouldn't accomplish those objectives, would blow up the region, cause all manner of collateral damage and escalation, and wouldn't ultimately accomplish the objective. Trump decided to walk into that and to think that, A, we can degrade their military capability to such a degree that it makes it worth it, but if they can just rebuild it, I mean, that's the main problem with that. And then second, he seemed to just sort of cross his fingers and say, well, gosh, if we hit them hard enough, they'll either collapse or they will simply be broken enough to do what we want. But there was never a clear path between all of this bombing and all of this destruction and getting to that change in behavior by Iran. That's the problem, and that's what we're experiencing right now. And I'd be interested to hear anyone who supports this war tell me what that path is at this point to fundamentally breaking and changing the regime. I don't see it.
- [38:14]
Christina Raffini
Do you think that goal is accomplishable without putting boots on the ground? One of the experts we spoke to this week said there are two ways to go about this. You know, you can do a long bombing campaign, but that doesn't give you as much input and impetus into what's actually happening on the ground and could take longer. Or you can send in troops, but then again, you could get mired in another forever war.
- [38:34]
Adam Smith
Yeah, sorry. Thank you. I didn't directly answer the most important part of that previous question. And so we've done this bombing campaign, and you want to try to do it on the cheap, and that's what a bombing campaign is. Now, we've seen even the bombing campaign spreads, escalates and causes violence across the region. But now you're up against that reality of, okay, you haven't achieved the objective. What about ground troops? And the problem with ground troops, again, is you're going to need a lot to dislodge this regime. There are talk about, you know, more tactical efforts, smaller numbers of troops, and this is what the Marines could do. One possibility is, you see, seize Kharge island to try to cut off that economic lifeline for Iran. But could you seize it? Could you hold it? There's considerable questions about that. Maybe a small group of special forces can help spark a revolt within Iran. But again, there's no clear path to that.
- [39:26]
Christina Raffini
But would you support that? Would you support US Troops going in in a limited capacity like that?
- [39:31]
Adam Smith
Heavens, no. No. Sorry, I do not, because I don't think it would be effective. And I think it, again, would be an escalation. It would cost more lives, and I don't think you'd be able to dislodge regime. And that's the problem. And let me be clear. If I woke up tomorrow and this Iranian regime was gone, we had an Iran that was working for the Iranian people and stopped all of the terrible stuff they were doing, I would be very, very happy. But the problem is there's no direct path to doing that. And the cost of what Donald Trump has done without thinking that through, without having a plan to actually achieve the objective. So now you can't achieve the objective, and you've caused an enormous amount of casualties, disruption, and escalation, not just in Iran, but across the region and across the world. So that's the problem I have with this approach.
- [40:18]
David Gura
I want to ask you about the path forward here for lawmakers like yourself who oppose this military action. So we saw that vote on the War Powers Resolution fail in both houses last week. How do you pick up the pieces from that? What does opposition to this war look like going forward, both in the House and the. The Senate, as you see it?
- [40:34]
Adam Smith
Certainly we need to speak out against it for those who are against the war. Give them a voice, give them an argument for why to do it. But I think from a practical standpoint, my goal is to stop the war because I think it's bad. It's bad policy, it's escalation, it's incredibly costly. It's devastating. To Arikon, we've seen gas prices go up 50 cents to a dollar. It's going to cause the affordability crisis to only get worse in this country. And I think the most sensible path to. To that is try to encourage the Trump administration and the supporters of this war to, however implausibly, be able to declare victory and stop. Okay, try to begin to rebuild pieces that I think is a plausible argument for the Trump administration. And then you hear Trump saying, let's bomb them for fun. You hear Hegseth saying no quarter. You hear Trump saying, they're willing to negotiate, but I'm not really in the mood all the time. All of that is deep cause for concern. But the plan is, okay, declare victory and stop if that can stop the war. That I'm more than willing to make that argument.
- [41:35]
Christina Raffini
Do you have any kind of read on the condition of the new leader of Iran? Because we have this statement from Iran's foreign minister saying Mushaba Khamenei is in good health and fully managing the situation, but we. We still haven't seen him. What is your perspective and what are you hearing about whether he is, in fact, even a player at this point?
- [41:56]
Adam Smith
I have no idea. Nobody knows. All right, so there is no answer to that question. I think the thing is, let's not get too excited about what the answer is to that one way or the other, even if he is, as some host told me the other day, he's in a coma and he's missing a limb. How he knows that, I have no idea. But let's say that the guy's completely incapacitated. He dies in a limit week. The statement that was put out was put out. If it wasn't put out by him, it was put out by the Iranian regime. It was put out by the people who are in charge of Iran. So the belligerence in that statement, the complete lack of any sort of acquiescence, as Trump had hoped, shows that whether this guy's alive or not, the people who are running Iran are no closer to having a reasonable government there than they were at the start of this war, arguing arguably, they're further away and even more dugout.
- [42:45]
David Gura
Last question I have is just about money. And before this war began, you had a Pentagon asking for an extremely large budget, one and a half trillion dollars, which I think will astonish a lot of people, I imagine some of your constituents as well. Is this administration going to get that from Congress? What's your assessment of the appetite to increase the defense budget to that size and scale?
- [43:07]
Adam Smith
Yeah, that's a 50% increase in the defense budget. And by the way, that doesn't include the supplemental that they're talking about asking for to help cover the cost of this war, which is going to be in the tens of billions of dollars. No, that's not realistic. And look, we have a $38 trillion debt, and it's very frustrating to me that everyone talks about that. And then, oh, my gosh, the Republicans, when they came riding into majority in Congress and President Trump got elected, this was a major issue. And then they voted for the reconciliation bill to act, add $4 trillion to the debt by massively cutting taxes. You're going to massively cut taxes, and then you're going to start a war and ask for a 50% increase in the defense budget? I mean, I don't think we need to do that, even if we hadn't cut those taxes. But, my God, how do you stand up in front of the American people and say, we need a $1.5 trillion defense budget. We had to go to this war and spend these $10 billion, but we're not going to pay for it. We're going to cut taxes, we're going to drive the debt through the ceiling I, you know, I'm as a little bit speechless in terms of how do you justify that from any sort of economic standpoint. I wouldn't have cut the taxes and I wouldn't be going to war and massively increasing the defense budget. But to try to do both is just insane in my view.
- [44:23]
David Gura
Gentlemen, from the 9th congressional district in Washington, Congressman Adam Smith, the ranking member of the Armed Services Committee. Thank you very much for your time on this Sunday. Appreciate it.
- [44:29]
Christina Raffini
Thank you so much. We want to go now to the other side of the aisle and the other side of the country and talk to Congressman Mike Lawler, a Republican from the great state of New York, and he serves on the Foreign Affairs Committee. Congressman, thank you so much for joining us this morning. First of all, I think you were listening when your Democratic colleague said he wishes they, meaning this administration, were a little more serious about all this. Do you agree or disagree with that? And I just want to give you a chance to react to anything else you heard your colleagues say.
- [44:56]
Public Advertiser
Well, I wish my Democratic colleagues were more serious about this. I mean, the fact is, 53 of them voted last week not to declare Iran the greatest state sponsor of terrorism. So I think my colleague should be a little more focused on, frankly, the unseriousness of his own party. And frankly, nothing he said was actually of substance in that interview that I just listened to. The fact is that everybody acknowledges, other than the 53 Democrats that voted no, that Iran is the greatest state sponsor of terror. They have been the greatest impediment to peace and stability in the Middle east and in the region. We see with their belligerent response to this conflict, where they are striking civilian sites in Arab states neighboring them, that Iran is the real threat here. And ultimately, after months of negotiation in which Iran refused to cede any ground with respect to its ballistic missiles program and its financing of terrorism, President Trump made a decision that every president said that they would, that they would ensure that Iran never got a nuclear weapon. And between last summer's strikes and the decision to take military action here, President Trump is ensuring that Iran cannot have a nuclear weapon. That is paramount. And all of my Democratic colleagues, including Adam Smith, just said, oh, I hope it works out. I hope we get regime change. I hope, I hope, I hope. Well, hope is not a strategy. And you actually have to be willing to take action. And that is the fundamental problem. And why Barack Obama's attempts at this and Joe Biden's attempts at this have failed so miserably. Because hope is not a strategy. You actually have to be willing to take military action if you are going to impede their ability to use a nuclear weapon. The problem here was very simple. Iran was mass producing ballistic missiles at such a rate that if we did not intervene, if we did not stop it, they would have been able to develop a nuclear bomb and utilize it in short time frame.
- [47:14]
Christina Raffini
But Congressman, I haven't seen any evidence that shows that that breakout time was closer or more urgent this week, this month than it was last summer when the administration went after those nuclear sites. Do you have any information that those decimated nuclear sites, according to this administration, were all of a sudden a bigger threat? Yeah.
- [47:33]
Public Advertiser
Okay. We have, we have had classified briefs and I'm not going to get into the specifics of the classified briefs, but the fact is that the administration and President Trump took decisive action last summer, striking three nuclear facilities. As everybody understands, Iran has enriched uranium that they are currently storing and they were mass producing ballistic missiles at an alarming rate that would actually protect their ability to develop that bomb. Had we waited, had we allowed this to continue in perpetuity, it would have been almost impossible for us to take the necessary steps to prevent them from getting a nuclear weapon.
- [48:13]
David Gura
Congressman.
- [48:13]
Public Advertiser
So there is, there was a decision that was made and I support what the President decided in this moment to end the threat of a nuclear Iran. And for many of my colleagues on the Democratic side, the problem with them is they're inconsistent on everything. Adam Smith was in support of efforts in Libya to remove Muammar Gaddafi. Adam Smith was supportive of Barack Obama's seven month bombing of Libya. Didn't say boo about it. So the problem is many of my Democratic colleagues care more about the fact that Donald Trump is President and it's Donald Trump making these decisions than they do preventing Iran from getting a nuclear weapon. And that's the fundamental problem.
- [48:55]
David Gura
Congress, you said just a moment ago that hope is not a strategy. I'm going to quote from something that the President said to NBC News yesterday. Quote, hopefully China, France, Japan, South Korea and the UK and others that are affected by this artificial official constraint will send ships to the area so that the Hormuz Strait will no longer be a threat by a nation that has been totally decapitated therein. It does seem like hope is the strategy for the President as we look at this traffic. Explain how it's.
- [49:20]
Public Advertiser
Anyhow, President. Yeah, the President is in touch with these nations. Remember, China is the greatest purchaser of Iranian petroleum.
- [49:28]
David Gura
And yet where are they? The strait remains closed and we see
- [49:31]
Public Advertiser
energy coming to A Standish. If you'd like me to finish, let me actually speak. Thanks. So the fact is, China is the greatest purchaser of Iranian petroleum. They're the ones that benefit most from the strait of Hormuz being open. So, yeah, it's in China's interest, it's in some of our European allies interests for the strait of Hormuz to be open. Remember, we don't get oil from Iran. We have crippling sanctions on Iranian petroleum. Iran's illicit oil trade is what has funded terrorism around the globe, and we have been cracking down on that. Last year, last congress, I passed the ship act alongside secretary Rubio when he was in the senate to crack down on the illicit oil trade. Obviously, we want the strait of Hormuz to be open. That is why the president has taken aggressive action against Iran's naval fleet, obliterating it, as well as going after their military capacity and capability on kharg island. So we are taking necessary measures to push back against the Iranian regime and their efforts to block the strait of Hormuz. But it is also incumbent on some of our allies and adversaries, many of whom benefit from trade coming through the strait of Hormuz, to engage. And I think the president is not only engaged in that conversation, but he's making the point that it is in their best interest as well to engage on this matter.
- [51:02]
Christina Raffini
Congressman, I want to ask you about the cost of this conflict. Not just the financial cost, but also the human toll there. There has been a lot of loss of life, including American soldiers. And one of them, I believe, is from your district. There's an nypd officer from. Who died in Kuwait supporting this operation. What are you hearing from your constituents? Have you spoken to this family? And. And are people concerned that as this goes on, even if they support the president, even if they support the objectives, they may not be willing to commit more American lives to this operation.
- [51:32]
Public Advertiser
Well, anytime we have military engagement, the loss of life is tragic. The loss of our men and women in our armed forces is tragic. And our heart breaks for their families. I have spoken to his widow, and we will certainly be doing everything in our power to support the family. There is a gofundme that has already raised well over a hundred thousand dollars to support this family, including $100,000 donation by bill ackman. And I thank him for that in support of this family. But this is obviously always a very difficult time. Anytime you have, you know, the loss of our soldiers. We saw the refueling, you know, airplane the other day go down and six soldiers lost in that. It's tragic. And certainly that is something that the military does everything in their power to guard against and prevent the loss of life. But this is certainly a conflict in which we are trying to stop evil. We are trying to prevent a nuclear weapon from being used in the Middle east or around the globe and cause mass casualty. You see how Iran has responded belligerently, striking civilian targets in neighboring Arab states. They launched hundreds of ballistic missiles at Israel last year and the year before. The fact is this regime needs to be defeated. And President Trump and our armed forces are making a necessary, difficult but necessary decision to take out the threat.
- [53:21]
David Gura
Congressman, I want to ask you lastly, you sit on the Foreign Affairs Committee, as we mentioned, but you're on the Financial Services Committee as well. And we had this news on Friday that a judge had struck down what the U.S. attorney in D.C. hoped to do, which is to issue subpoenas, get information from Fed Chair Jerome Powell and from the Federal Reserve as well, vis a vis his chairmanship. We heard from Thom Tillis, the senator from North Carolina, who's threatened to withhold Fed nominations as a result of that investigation, that he continues to do so. In light of what's happened here, do you, do you think it's in our interest, in the country's interest for these investigations to continue if it does involve holding up the nomination of Kevin Warsh to be the next Fed chair?
- [53:56]
Public Advertiser
Look, I'd like to see Kevin Warsh confirmed expeditiously. I think it's imperative that he come in as chairman. Jerome Powell will still be on the Fed board, but from my vantage point, I don't think this is the best use of time and resources. I've said that previously. Should there be an investigation into how, you know, the rebuilding of the Federal Reserve building went billions of dollars over budget? Sure. And they should get to the bottom of that and have a full understanding of that. But I don't think that at this moment requires a criminal investigation of Chairman Powell. And I think, frankly, we need to move forward with a new Fed chair.
- [54:45]
Christina Raffini
Congressman Mike Lawler, thank you so much for joining us. A mutual friend tells me you're a big Oscar fan. So I hope you get a chance to relax and watch that tonight. Maybe we can have you back and talk about your picks and whether you're you got them or not.
- [54:57]
David Gura
Stay with us for more on Bloomberg
- [54:59]
Jomana Qaddour
this weekend, right after this.
- [55:05]
David Gura
Hello.
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David Gura
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David Gura
Wow. So we are not asking our clients to be the first experiment on it. We say you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit IBM.com smarttalks.
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David Gura
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- [58:07]
Christina Raffini
Welcome back to Bloomberg this weekend. I'm Christina Raffini here with David Gura. This Sunday is not only Oscar Sunday, it is also Selection Sunday. That's right it is a big deal for college basketball fans.
- [58:18]
David Gura
Say it like you mean it with conviction.
- [58:19]
Christina Raffini
You know how good I am at the sports ball, but I. I do like. I do like a bracket. I'm not gonna lie. I know nothing about them. But this is fun. This is fun for all.
- [58:27]
David Gura
March Madness kicking off this week. Tonight, we're gonna find out which teams have made it to the big dance. And here to help us figure out who those teams are likely to be so you can put them in your bracket. I don't know how you select your team based on mascots.
- [58:39]
Christina Raffini
Based on mascots, color schemes, although you know what? Sometimes that works as well as people have actual.
- [58:44]
David Gura
That's true. He's the host of our Business of Sports podcast. Vanessa Perdomo joins us, who is nodding along with me. She was nodding. She might have a more sophisticated calculus than you when it comes to picking her team, as. We'll get into that in just a minute. Vanessa, great to have you with us. Let me ask you, first of all, just sort of what, what colors this season's NCAA tournament, We see a lot of ads for sports betting. For instance, it does feel like we've kind of entered a new terrain or iteration of March Madness with the advent and legalization of. Of sports betting.
- [59:11]
Vanessa Perdomo
I mean, it's absolutely one of the biggest, you know, things of the year. One of the biggest betting events on the calendar. It's actually bet on more than the super bowl. Considering the amount of games that March Madness has. There's, you know, projection of $3 billion. Over $3 billion will be bet on this year's March Madness. And that only includes sports books. Not even considering prediction markets, which is now one of the biggest things that people are really getting into this year
- [59:40]
Christina Raffini
is that taking some of the fun away from this. I mean, my introduction to March Madness is like a college pool, a bunch of cash. You talking to people you never talk to in your office. It was like, adorable. And it's sketchiness. I don't know. The fact that it's been commodified. Are people still. I mean, obviously $3.3 billion. People are still enjoying it, but is it. Has it changed the vibe of March Madness to something a little bit more serious?
- [60:03]
Vanessa Perdomo
I don't think so. I think, you know, it's almost exactly what we want, what they want, and what we've already been doing with filling out your bracket. Like you were saying before, I mean, people. People just throw random things in there. So it's the same thing with the betting on. On the game. You're hoping that Cinderella story, that, that 11 seed is going to come through and, and make it to the Elite Eight or the Final Four. And I think really what it's doing is giving people exactly what they were already writing down their brackets, but it's giving them an opportunity to, to actually make money on it. And it's just really the same exact thing. Just now. They're making money on it. And the sportsbooks are very happy as well.
- [60:45]
David Gura
I want to get your counsel on who we should be looking to for maybe some of those Cinderella stories. So yesterday I was having a beverage of my choice and watching the Vanderbilt Florida game. Very exciting. Vanderbilt won that unexpectedly. So we've had these conference tournaments happening. Who are you looking at? Who stands perhaps to surprise all of us here as we look ahead to March Madness?
- [61:04]
Vanessa Perdomo
You know, I went to Duquesne University, so I'm a big fan of the 18, 10 and 10. Actually, you know, they're one of the conferences that actually usually kind of get in there and they have about three or four seeds, so I'm a little bit of a homer in that way. But if you are filling out your brackets, if you are looking to place a bet, usually those 11 seeds that we'll see today in Selection Sunday, who those will be. But usually those 11 seeds, those 12 seeds are the ones you want to put your money on.
- [61:32]
Christina Raffini
Obviously, lots of money, lots of interest.
- [61:34]
David Gura
Yes.
- [61:35]
Christina Raffini
But I have been informed because I am new to Bloomberg. There's something called Bloomberg's Bracket for a Cause. This is the 11th year, and the website goes live this week. Explain what this is and why we do it and how much money is raised.
- [61:48]
Vanessa Perdomo
Yes. So Bloomberg Bracket for Cause is something that's been going on for over 10 years. CEOs, investors, hedge fund managers, they all come together. They pledge $20,000 for exactly what we're talking about. They're filling out their brackets, and they're also just raising money for charity, which is amazing. Whitney Wolf heard, actually the founder of Bumble has won the last two years in a row, and she, you know, she's raising money for Baby 2 Baby, I think, which is a organization that helps child poverty. And I've written the story and I've talked to some of the investors, and they actually have a little bit more of a, of a hedge than, you know, me and you filling out our brackets because they see it as a investment. They see it as looking at, you know, those little things that they look to in the market. They're doing that exact Same thing when they're filling out their college brackets.
- [62:38]
Christina Raffini
Vanessa, how could someone possibly have more like, interest in analytics and filling out brackets than me? As we've already established, as I choose by cute Magnus mascots and color choices, but. All right, I'll give you that one.
- [62:50]
David Gura
On that note, my last question, kind of looking at the zeitgeist, looking at this moment, I've heard from a few friends that they're going to rely on AI to help pick their brackets this year. And I'm thinking, like, maybe that's going to be a phenomenon here as well. Yeah, I mean, like, that could tell you a good deal, I imagine just about, like, past. Not that past performance is a guarantee of future success, but. Are you hearing that as well, Vanessa? Like, is that a thing as well? People using AI to kind of figure out what they're going to put in their brackets.
- [63:12]
Vanessa Perdomo
It's absolutely something that people. A tool that people use. And it's. It's helpful, obviously, like, you know, coaches use it sometimes to try and figure out what their game plan is going to be. But at the same time, I think I knows just as much as everyone else does in terms of March Madness. I mean, they call it that for a reason. You know, Cinderella stories happen every year, but the reality is, you know, number one, seeds tend to. Tend to win.
- [63:37]
David Gura
We haven't talked about the women's bracket yet. UConn seemingly unstoppable. Yet again, we talk about the success of brackets for a cause. And it's winter year after year. UConn winter year after year here and looking like they're in a very strong position going into the women's March Madness as well.
- [63:52]
Vanessa Perdomo
It's an amazing story for UConn. I mean, you know, they won last year with Paige Beckers, and she finally got her ring. And now easy for trying to do the same thing as she goes in her last year before she goes to the wnba. They're undefeated. They're looking extremely strong. But I also wouldn't put it past UCLA is another team that I would really look at, with Lauren Betts also doing the same thing in one of her last years before she goes to the wnba.
- [64:18]
David Gura
Vanessa, great to talk to you. Vanessa Perdoma, the host of the Business of Sports podcast here at Bloomberg News, reports in the business of sports as well. Good luck, Christina.
- [64:24]
Christina Raffini
Thank you so much.
- [64:25]
Public Advertiser
I'm gonna.
- [64:25]
Christina Raffini
Vanessa, I'm gonna send you my bracket. You can, like, give me thumbs up and thumbs down. Yeah, you can mark it up, please. I gotta beat David. Please help me.
- [64:33]
David Gura
We'll see. We shall see.
- [64:37]
Christina Raffini
Thanks for joining us on today's Bloomberg this Weekend podcast. Don't forget to tune in live for the show every Saturday and Sunday morning starting at 7am Eastern.
- [64:45]
David Gura
We're on Bloomberg Television Radio and the Bloomberg Business App, bringing you unique takes and in depth interviews on news, politics, lifestyle and culture.
- [65:00]
Adobe Acrobat Advertiser
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 this podcast
- [66:02]
Public Advertiser
is brought to you by wise the smarter way to manage your money internationally if you're getting a headache from juggling different currencies and different bank accounts in different countries, there's a better way to receive money in the currency you need without the slow transfer times or hidden fees. Meet Wise, the savvy way to handle your money internationally. Hold balances in up to 40 currencies with the mid market exchange rate on every conversion. Whether you're receiving payments from tenants abroad,
- [66:25]
David Gura
earning as a digital nomad, or converting
- [66:28]
Public Advertiser
dividends from your international investments, the Wise Multi Currency account is Be Smart. Get Wise, download the Wise app today or visit wise.com Terms and Conditions apply.
- [66:43]
David Gura
With Voli from iShares, you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours. Visit www.ishares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC.