Senator Lindsey Graham Dies; US Strikes Iran

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Listen to Here's the Thing on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Bloomberg Audio Studios. Podcasts. Radio. News. Welcome to the Bloomberg This Weekend Podcast with David Gura, Christina Ruffini, and Lisa Mateo. Thanks for joining us for today's selection of conversations from the show. You can listen to our favorite discussions right here on the podcast. Also make sure to join us live every Saturday and Sunday morning starting at 7 a.m. Eastern. 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. We're going to start with some breaking news this morning. Senator Lindsey Graham died last night from what his office says was a, quote, brief and sudden illness. He was 71 years old. The senior senator from South Carolina was one of President Trump's closest congressional allies and had just returned from a trip to Ukraine. There he met with President Zelensky on Friday. On Saturday night, emergency personnel responded to a call for cardiac arrest at Graham's home in Washington. That's according to NBC News, which obtained police scanner audio. President Trump leading the tributes, posting this overnight, quote senator lindsey graham one of the greatest people and senators i've ever known is dead he was always working and was a true american patriot lindsey will be greatly missed details and arrangements to follow so sad joining us now is blimber congressional reporter eric wasson and eric i want to start with this dynamic that was really kind of characteristic of of lindsey graham at a time of great isolationism in the republican party uh... he was an avowed interventionalist traveling around the world as christina just mentioned most recently in in ukraine His passion was that. And I wonder if you could talk a bit about the role that he played in the U.S. Senate over his four terms in the Senate. Yeah, first of all, I just want to say I'm shocked by this news. He was a very nice person in the hallway, very personable and friendly. And I'm very surprised and saddened by it. He was an interventionist, much in the mold of Mitch McConnell and the late John McCain, a breed of Republican that seems to be phasing out in the America First era. He just announced a Russia sanctions bill that he's going to try to push in the Senate on Friday after a meeting with Vladimir Zelensky in Ukraine. Very much an interventionist, very much a war hawk. You know, he was very much in favor of the bombing of Iran, of trying to replace the regime there. Just a very assertive foreign policy voice that's going to leave that faction of the party without a very, very clear champion right now in the debates to come. Someone also a senior appropriator, someone who, you know, fought to increase the military budget, as well as, you know, leading one of the leaders on the massive Republican tax cuts that that went through. So, you know, this is going to lead an opening in the Senate. I'm hearing from a source that Joe Wilson, the representative, senior representative on the House side, is very much interested in running for this seat. It'll be a special primary and could be appointed by Governor McMaster in the coming days. You know, it's hard to see who else from the delegation could really unite the group. Nancy Mace and Ralph Norman are two other Republicans that are prominent in the delegation. They ran against each other for governor. So, you know, it's very much a developing story. But this is this is someone one of the biggest personalities, biggest characters in the Senate. And he's going to be going to be missed by his colleagues. And Joe Wilson, for those who are not familiar with him, I remember I wrote a piece back in 2009. He was the gentleman who shouted out, you lie during Obama's joint address to Congress, which at the time was controversial for heated political rhetoric, how the ball has moved in that time. But I first met Lindsey Graham. And his son is likely to be the next governor. Alan Wilson won the GP prime. So it's the potential rise of the Wilson dynasty. Be something to watch there. I mean, we were talking before we came on the air. I first met Senator Graham in 2016 when he was endorsing Jeb Bush for president and fighting very strongly against a candidate he didn't believe in. And that was Donald Trump. I have pulled some quotes from him this morning in that era saying that Trump was reckless and he says things that don't make sense. Can you talk a little bit about Graham's political evolution and his evolving friendship with President Trump? Trump is quoted as saying he's one of his best friends. How did we get there? you know it's been up and down their relationship certainly graham early on i remember being at a big gala dinner in washington where he was on c-spam where he made fun of president trump uh you know then he became a backer and then after the january 6 riots he was very critical even saying he's done with the president i'm very upset with the way that that was handled this is the january 6 riot of protesting biden's victory that resulted the beating up of cops And then Graham went back into the fold. I think Graham always wanted to be in the mix, wanted to be influential. And he felt, you know, it was his duty, especially given the views he had on Israel, strong supporter of Israel, Iran, and the rest of the foreign policy portfolio to be influential and be close to the president. So I think, you know, and he continued to push that even until his last dying breaths here, you know, pushing this Russia sanctions bill that had been stalled for years, but saying that it was going to move forward on Friday to sort of try to force Vladimir Putin to make a peace in Ukraine. Eric, last question here. Christina asking about that friendship, the evolution of that friendship. He was also a very useful person for President Trump to have in the U.S. Senate. He chaired the Judiciary Committee for many years and really worked quite ardently to enact what President Trump wanted to see. A lot more judges confirmed by that committee. Talk a bit about that, if you would, just the way that he executed the policy vision of this president. Oh, I know. I think he was chairman during the Brett Kavanaugh hearings, very much defending Kavanaugh came under attacks. for his behavior as a teenager, you know, and that really set him up to be an ally again of President Trump. So I think he's always, you know, he's a traditional conservative in many, many ways, you know, having fought for the tax cuts, even though he once was a deficit hawk and these tax cuts cost $4 trillion, he quickly got behind them and made them happen, you know, by adjusting the way that they are accounted for. So, you know, he was obviously someone who always fought to be at the center of everything. And I would say someone who actually believed in the free media. He was someone who talked to reporters who believed, you know, that we're not the enemies of the people. And I did appreciate that. All right, Eric Wasson, thank you so much for joining us. I know it was an early phone call from us, but it was quite a surprise overnight. Lindsey Graham, the senator from South Carolina, dead at 71. Thank you so much. More breaking news overnight. The U.S. military hit 140 targets in Iran. New video released by CENTCOM showing dramatic explosions, saying it struck missile and drone sites, naval assets, ammunition storage facilities, and more. It's coming after, it says, the Iranian Navy attacked a merchant ship passing through the Strait of Hormuz. The Islamic Revolutionary Guards are fighting back this morning, saying they've targeted American assets across the Middle East. Abir Abu Omar is a Bloomberg Middle East correspondent. She's joining us now from Dubai. And Shannon Kingston is ABC News State Department reporter. She is joining us from Washington. Abir, I want to start with you. Do we have any kind of idea of what was hit overnight? I was seeing reports as we were coming in this morning of possibly the death of a child in Qatar, also strikes in Oman and elsewhere, maybe Jordan throughout the region. What is the damage report as everyone's waking up today? Yeah, good morning, guys. So we're hearing of these explosions happening across the Middle East and these tit-for-tat attacks continue to happen. Now, they started at the beginning of this week or the past week, should I say, when Iran targeted a Qatar flagged ship in the Strait of Hormuz. And then the U.S. went on to attack Iran military targets there for two straight days. Now, it seemed to have calmed down throughout the end of last week, at least, especially after President Trump came out during the NATO summit and said that as far as he's concerned, the ceasefire is over. But then we heard some caveats from the people around him, but also from the Middle Eastern part of the world, where we heard the talks are set to continue despite that very strong escalation in the rhetoric. But then over the weekend, and especially today, this Cyprus-flagged ship was hit by Iran. We're hearing just at the top of your show, I was just following the news. We're seeing headlines across the Bloomberg terminal saying that Amman, which works alongside Iran to sort of monitor the Strait of Hormuz, said that it rescued 23 crew members of the GFS galaxy after the incident. This is the Cyprus-flagged ship. And so the U.S., as David had mentioned, targeted 140 targets across Iran. Most of those military targets earlier in the week, it had targeted bridges. Some dozen people or so were killed in Iran. Some 78 people were injured. And just this morning, we're hearing these sirens across the Middle East in the UAE, in Qatar, Kuwait and Bahrain. Christina, as you've mentioned as well, Qatar saying that three people were injured, including a child. And so we're seeing this escalation in the rhetoric quite a bit this morning. It's still unclear if we're going to see a return to diplomacy, a return to those technical talks that were taking place up until a couple of weeks ago in Doha. But it seems that the situation is slightly a little bit more complicated, especially with P-Texas saying that Iran will pay, and this is a quote from him, will pay for the damage that it had ensued on the Strait of Ramuz. Iran, on its own, saying that the Strait of Ramuz is shut and that no ships can make movement. So we're back to, I don't want to say square one because we're not seeing a kinetic sort of warfare similar to what we've seen in March. But we're going back to a place that we didn't think we would be at after that MOU was signed just three, three and a half weeks ago. Shen, let me pick up on that point about these talks, the technical talks that were supposed to be underway this weekend. We know the Iranian foreign minister traveled to Amman. Seems unclear if there were any U.S. representatives who were there as well. What is your sense of the status of those looking at the backdrop to all of this, the wide geography that Abir just mentioned a moment ago that's been hit overnight? What grounds for optimism are there here that these technical talks are going to continue as we look at the end of that 60-day period not too far off? Well, David, one of the reasons that the events in the last 12 hours or so have been so headspinning is that there was at least a brief moment yesterday where it seemed like diplomacy had a chance at least to win the day. We did see those high level talks between mediating powers and an Iranian delegation of negotiators. The U.S. was not directly involved, but they were closely monitoring the play by play from afar. and sources say that during that high-level meeting, the Omanis laid out a plan to fully open both lanes of the Strait of Hormuz and that Iranians indicated that maybe this was something that could work for them. But they said they had to go back to their country first to talk to the highest levels of leadership and see if they could get buy-in. Well, it wasn't long after that delegation landed back in Iran that we did see the IRGC Navy come out and say that it was fully closing the strait and that it had hit that commercial vessel in the waterway, hitting another commercial ship yet again. So that was a very clear answer and very far away from what the Trump administration was hoping to accomplish. But we have seen through the conflict that U.S. officials have said that there are these more moderate factions within the Iranian government now that are willing to listen that they can negotiate with But what the events overnight prove is that so long as that there are these hardliners within the Iranian government and so long as those hardliners are willing and able to pull the trigger on military action, on maximalist stances, that those are going to be the voices that are much louder at the end of the day. And there was some reporting from our colleagues at CBS yesterday that Iran had possibly said we shouldn't have done those strikes. That was a bit of one of those factions you mentioned kind of getting out over ahead of where we wanted to be operationally. Shannon, I want to follow up with you as well, because I'm wondering if we've heard any more about these U.S. installations throughout the region and if it's changed the force posture of any of the embassies. I know some of the embassies there have been on authorized departure, ordered departure for months now. Friends in the embassy in Israel have not been able to leave that embassy for months and months. I'm wondering if you've seen any of those alerts go out or warnings to citizens in the region. What is the status of diplomats and what are the warnings for Americans who might be in harm's way? That's a great question. And we have seen that the security posture at embassies, many on ordered or authorized departure, largely hasn't changed. The one difference at the embassy in Kuwait, that was the only one where operations were fully suspended during the hottest days of the conflict. That was recently reopened. Secretary of State Marco Rubio, he took a trip there, attended the flag raising himself. But there is no question that this in-person diplomacy has been degraded somewhat because the U.S. diplomats just can't have the same position that they did have before this conflict. That was one of the reasons that Secretary Rubio did travel to the region. He wanted to meet with Gulf allies. He wanted to assure them that their security was of the utmost importance to the Trump administration. Now, officials do say that that was a successful mission, but clearly these widespread strikes by Iran overnight, even though they are largely expected when we see incidents like this, it's clear that from the Gulf allies, Gulf partners, they're saying this really can't be the new normal. It's been bad enough, but if it continues unchecked, there are going to be some very real consequences for their economies. Abir, I want to pick up on that and just go back to what you mentioned a moment ago, all of the places that have been hit overnight. So we're looking at an air base in Jordan, attacks on Qatar, Kuwait, communications array, radar installation, Bahrain as well. Shannon mentioned a moment ago just sort of the way that these Gulf allies are watching all of this unfold. And I'm curious sort of among them, is there much coalescing in terms of encouraging these talks to continue, stressing the importance there being some resolution to this? Again, we're kind of focused on this binary between the U.S. and Iran, yes, with the help of Pakistan and with other nations kind of trying to force those conversations to take place. Are we seeing a wider movement to kind of convey the seriousness of this and kind of push for some resolution here? Yeah, David, look, Qatar is one of them, right? Qatar is one of or has emerged as one of the key mediators over the past few weeks or so to try to bring a resolution to this. But even Qatar today was attacked. And again, we mentioned the three people injured in Qatar. And so it does seem like there is some kind of, you know, lack of communication within Iran's own leadership. For example, we've seen, we haven't seen at all Mushtaba Khamenei, who is the Korean Supreme Leader, but we've seen a post of him on X saying that Iran must seek revenge for the killing of his late father, whose funeral was taking place last week, where the suspended talks were happening because of that mass mourning. But when it comes to GCC nations, yes, behind the scenes, what we've reported on multiple times is that they're really pushing for an end to this war and a reopening of the Strait of Hormuz, simply because for the time being, it is still the waterway where the majority of their crude exports go through. Now, again, we've reported that Saudi Arabia, the UAE, have been doubling down on other routes to try to get their shipments across. But realistically, that's going to take a year to 18 months to start working. And then for Qatar's LNG shipments, we reported when the MOU was signed that Qatar will start ramping up production of its LNG shipments. And then just last week, we reported that actually we're going to pause that because of the skirmishes that we're seeing across the Strait of Hormuz. But when it comes to officials from the GCC, we heard last week from Anwar Gargash. He is a senior advisor to the UAE's president, essentially calling Iran a rogue player, saying that these skirmishes that are happening in the Strait of Hormuz just prove that it doesn't want an end to the war. And just now we're hearing from Saudi officials saying that what is happening in the Strait of Hormuz and Iran's actions in the Strait of Hormuz also prove that it really doesn't want an end to the war. So the question here really is, what does Iran want and how can we arrive at those concessions that they agreed on with the United States? It does feel for the time being that the nuclear component of that MOU, that 14 concession MOU, David, that we've reported on, it does feel like the nuclear component is taking a backseat. It does feel like the Strait of Hormuz is front and center. And those attacks that are happening there are everyone's concern at the time being. Well, that's true. I mean, we've talked about how it's such an easier trigger for them to pull and it has almost an instantaneous reaction from the world. whereas the nuclear threat is just it's more amorphous and it's it's not it's not impacting your day-to-day prices and not at the moment shannon before we let you go i do want to ask you about senator lindsey graham uh who we found out overnight has passed away because i know we've traveled together on state department trips and it's always so funny to me that lindsey graham is one of those people that world leaders have met almost as often as the u.s president right he seems to always be everywhere and almost the de facto secretary of state can you talk about the role Graham played internationally and kind of what his standing was in these countries, especially countries that are closely allied with the U.S. when it comes to military cooperation. That's right. And many world leaders have met with him more times than they have the sitting president of the United States. You don't have to go back very far. In fact, it was just this last week that Senator Graham traveled to Ukraine. He made that long, arduous, sometimes dangerous journey to go to Kiev and meet with President Zelensky, sat down with him face-to-face for his 10th wartime visit to Ukraine. He has, of course, been a major supporter of that country throughout its war with Russia and has been pushing for harsher sanctions against Russia to try to bolster Ukraine. He said just before he died that finally a Trump administration agreement had been reached with a bipartisan group of senators to push forward his package of sanctions and that they were looking forward to doing that in the coming weeks. It's very likely that we'll see those sanctions, that new package, push forward in his honor, because that is something that he would want his legacy to reflect. All right. Shannon Kingston joining us from ABC News, and our colleague Abir Abou-Omar is joining us from Dubai. Thank you both so much. Thank you both. Stay with us for more on Bloomberg This Weekend, right after this. in a world that never stands still we're there to help you act with conviction at hsbc we connect the people ideas and capital to unlock growth backing your ambitions at every stage so when you're planning for the next generation strengthening your portfolio or expanding into new markets we're there bringing over 160 years of experience to help you move forward hsbc opening up a world of opportunity Hi, it's Alec Baldwin. This season on my podcast, here's the thing I'm speaking with more artists, policymakers, and performers, like composer Mark Shaman. Once you've established that you have the talent, it's about the hang. It's the pleasure of hanging out with the people that you're with. You know, Rob and I was always a great hang. 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Joining us now is former U.S. Ambassador to NATO, former U.S. Special Representative for Ukraine negotiations, Kurt Volker. Ambassador Volker, great to have you with us. And I want to start with Lindsey Graham and just give you the opportunity to talk about the relationship that you had with him over the years. I know that the work you were doing with NATO, with Ukraine, these were issues that Senator Graham cared deeply about. And I'm wondering how you're processing the news of his death on this Sunday morning. Well, thank you very much. It's really shocking to hear. You know, he was just so vibrant, such a big figure. I've known him really since the 90s when I worked one year as a detail in Senator John McCain's office. And I met him then. I traveled with him many times, including the Munich Security Conference as part of the U.S. delegation there. And then on Ukraine, Senator Graham called me very early on after Russia's full-scale invasion, wanted to talk to me about what was happening, and then invited me to brief the Senate Republican Conference to talk about what was happening in Ukraine. So he really played a major and very direct role, and it's really shocking and saddening to hear the news of his passing. I do want to ask you, given your background as former U.S. Ambassador to NATO, about this Ankara summit we just had. Everyone was given a gun by the president at the end, and yet no one shot each other. It seemed to have been pretty amicable. What is your take out of that summit? We use this word very sparingly on this show, but the vibe seemed pretty positive considering how worried folks were going into it. Do you think there was a bit of a sea change? Just give us your outlook. Yeah, well, first off, I agree. I think it was a very positive summit and very good for President Erdogan, who was hosting, but also very good for President Trump and for NATO. And we can just tick off all the things that happened or didn't happen. President Trump came out of the meeting and said we had a great deal of unity. I don't think he's ever talked about the word unity with respect to NATO before. We had a lot of NATO unity, a lot of love in that room, he said. We had statements about freedom of navigation and support for the United States on Iran, something that I think President Trump wanted to hear. We had that meeting with President Zelensky, also very positive. You had the president making an announcement that we're going to allow Ukraine to use Patriot missiles or to build Patriot missiles under a license in Ukraine. That's a very big step, very important, very good for Ukraine, very tough messaging for Putin in that respect. You had the decisions on continued increases in defense spending by European allies, something President Trump has been pushing for. Some of that is going into defense industry development in Europe, which they desperately need. So all around, this was a very positive meeting and a very strong message to Vladimir Putin. What do you attribute that to? So for many NATO summits, the peculiarity of these summits is they happen every year they're pretty short uh... but at the most recent ones the president is really hammered on this funding issue he did that at this one but it seems like perhaps he's moved on from that i think also what uh... congress mike mccall told us yesterday from kiev but when we spoke to him on the program the president trump likes a winner and the fact that kind of the the the way that this uh... war is being waged in ukraine how it's changed how ukraine is kind of has the upper hand now uh... may have had president trump come around to this i'm curious how you see it what why you think the rhetoric why the president's position seems to change as much as it has Right. Well, with respect to NATO, I would not say that President Trump has moved on from pushing allies on defense betting. He's going to do that every time somebody pushes his NATO button. He's going to say Europe has to do more. That's just a given. And I think he's happy because they are doing more. So he's getting what he wanted, but he's going to keep pushing them as well. So that's one part. The other is the war against Iran didn't come out, at least not yet, the way that President Trump wanted. And I think you only want a certain number of problems at a time. So I think he wants to stabilize the war against Iran keep oil and gas prices down You don need a problem with NATO at the same time So that a part of it And also he didn want to do anything to embarrass President Erdogan who was hosting the summit So for a number of reasons this was going to be a good NATO summit It turned out to be a very good one. Now, with respect to President Zelensky, I think that's part of it. He does respect a winner. Remember a year and a half ago when President Zelensky was in the Oval Office and President Trump said, you don't have any cards. Well, that is not true. It wasn't true then, but it's certainly visibly not true now. President Zelensky has an advantage over Russia when it comes to drones, counter drones, electronic warfare, defense technology and innovation, logistics, many things that he is doing that Putin is not able to do. And by bringing the long-range strikes into Russia and hitting Russia's source of money, which is the oil and gas industry, and their ability to refine, to provide fuel, both for the Russian people, but also for the military. This is having a real impact on the finances and the military of Russia. So it is changing the dynamic there. And I think President Zelensky himself also has learned a lot about how to deal with President Trump. In that meeting again a year and a half ago, it seemed like he was trying to argue and convince President Trump and J.D. Vance that he's right. That's not something that you want to do and not something you certainly don't want to do on camera and disagree in public with President Trump. This time, it was clear that he was disciplined. He didn't want to talk too much in public. They were going to have their private meeting. He wanted it to be a positive tone. He joked a little bit. That's the right way to handle things. And possibly due to some coaching by some NATO allies, including Mark Ruta, who got some flack from a reporter asking how he maintains his self-respect by this, you know, appeasement policy. But to your point, it does seem to be working. I want to ask you about those cards that Ukraine now feels it has. There's a very interesting video this week of a multimillion dollar Russian tank abandoned by its crew, hatches left open, and a $150 Ukrainian drone flying in and destroying it. When you look at the asymmetric cost of this warfare, I'm wondering how long that's sustainable for Russia. And the other part of this is, of course, the hits on the oil refineries and the gas lines in Moscow, because Russia has been able to insulate itself pretty well from the impact of those sanctions and being kicked off SWIFT, possibly better than people expected. Is this really where we're going to start to see an impact on the economy? Yes, you're absolutely right. So those are the factors. And you put it the right way. It's how long can Russia do this? It is not sustainable. You can't lose more people on the battlefield field, then you can recruit. You can't spend more money than you have. At some point, this is going to have to stop. What Ukraine is doing is trying to accelerate the timeline and say, we've got to get Russia to the point of decision where they say, okay, we have to stop this. Russia is not there. Putin is not there. Putin really wants to continue the war. He really wants to subjugate Ukraine to Russia. He's going to keep fighting. He He probably wants to have another shot at the winter. Remember last winter, they tried to shut off Ukraine's electricity. They probably want to do that again and see if they can bring Ukraine down. It's not going to work. I think Ukraine's in a stronger position this winter than last winter. But Putin may want to try that. The idea is shortening the timeline. And this is why measures, steps, decisions such as letting Ukraine produce its own Patriot missiles, such as the European Union, giving them a 90 billion euro loan for defense. Those things are signals to Putin that the future is going to be worse, not better for Russia. Ambassador, we have about a minute left. I just want to ask about the counsel you'd give the president on engagement with President Putin. In the run-up to this summit, he had an 85-minute phone call with Vladimir Putin. Would you counsel more engagement, less, or how do you see this kind of ending, if in a diplomatic space? Right. Well, President Trump talks to Vladimir Putin. You know, that's a choice. He thinks it's important to have a channel of dialogue. I think he has begun to realize that Putin lies to him all the time, that Putin says one thing about the battlefield. It's not true. He says he wants peace, but then he goes and kills Ukrainian civilians. So he says he wants to negotiate, but then you try to create a negotiation and he won't meet with Zelensky and he won't give up anything. He just wants even more in the negotiation that he has on the ground. So I think President Trump has gotten very frustrated with Putin for really not playing it straight. All right, Ambassador Kurt Volker, thank you so much for joining us. We appreciate your insight on this Sunday. Stay with us for more on Bloomberg this weekend, right after this. Hi, it's Alec Baldwin. This season on my podcast, here's the thing I'm speaking with more artists, policymakers and performers like composer Mark Shaman. Once you've established that you have the talent, it's about the hang. It's the pleasure of hanging out with the people that you're with. You know, Rob and I was always a great hang. We would sit in kibitz for hours and then eventually get around to the music. That's what I mostly think of when I think of him, the time together laughing. Lawyer Robbie Kaplan. The great gift of being a lawyer is the ability to actually change things in our society in a way that very few people can. You can really make a difference to causes in the United States if you bring the right case at the right time. Marriage equality. Yeah, Windsor's the perfect example. Director Morgan Neville. Film school teaches you all the wrong things about making documentary. What do you want to say? Documentary's all about your ear. What do you hear? I feel like my job is listening really, really hard. Listen to Here's the Thing on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Get the latest news from around the world delivered to you in an instant. Subscribe to Bloomberg News Now and get news when you want it on your schedule. These are short audio reports on the day's top stories that you can listen to in just a few minutes. Make Bloomberg News Now your trusted source for the latest global headlines with context. It's available 24 hours a day, anytime you need it, right on your smartphone or smart speakers. Subscribe to Bloomberg News Now today on Apple Podcasts, Spotify, or anywhere you listen. I feel like this is an inside joke to which I'm not referring, which I'm not ready yet. All right. All right. All right. And lettered in the week for more for the more sedentary among us later in the week. Netflix is going to kick off tech earnings. The streaming platform is struggling with slowing growth and increasingly fragmented industry. Joining us now are Bloomberg Intelligence Senior Analyst for U.S. Banks, Herman Chan and the editor of Investopedia, Caleb Silver. All right. Mike Mayo, known weightlifter, hobbyist. So it's the fact that he's skipping the gym. It's a big deal. It indicates how big this is. Herman is the second swole list on Wall Street. I'll take that. Yes, please. Thank you very much. This just devolves so quickly. I'm going to Barry's after this. I'm going to take a nap. All right. But you go work out. Do we always get these all at once? And I was reading some analysis from Bloomberg, which I do now, a breed bank analysis, saying that it's expected to be good but not amazing. Why is that? Right. So banks typically try to stagger their earnings. But for some reason, this earnings calendar, there's five in one day. And Bank of America and J.P. Morgan have competing earnings call times at the same time on Tuesday. So, yeah, it's great for us bank analysts trying to listen to two earnings calls at the same time. But we're expecting really strong results overall for the banking sector this quarter. Banks have really shrugged off some of these geoeconomic issues and the K-shaped economy that we continue to hear about. there's really strong earnings power, both on the trading side, the investment banking side, and on the lending side, your typical bread and butter commercial lending is really strong. So about 20% year-over-year gross. So yeah, we're looking for really good results overall. Okay, let me ask you just about the role that SpaceX is going to play in all of this. So for so many weeks, we were focused on SpaceX's debut on Wall Street. You know that Goldman and Morgan were kind of running that IPO, but I don't think that there was a major firm on Wall Street that wasn't involved somehow. Is that going to be manifest in these results as we see them? Yeah, everyone has a piece of it, and that's just some of the activity that went on that's going to help their bottom lines. The M&A activity, just the trading activity, which has been pretty robust among institutions, that's going to be good for banks too. I think what we want to hear is how healthy is the consumer? Bank of America, Citi will give us a pretty good window on that, Wells, as well, but also the net interest margins. We know where interest rates are. We know where they're probably going to be for the next few months. What does that mean for bank profitability, and overall, what is the health of businesses and borrowers? Herman, what are some of the concerns folks have with these larger banks? I was reading this morning that investors want assurances they can kind of keep this momentum going in light of AI valuations, higher gas prices. And also, we had this big kerfuffle about private credit. Did that not turn? Are we not worried about that anymore? I spent so much time learning about private credit. Was that all for naught? It's something that's still lingering on the sidelines. And so it's something that it's a big growth driver. I mentioned the commercial lending growth. The private credit side of things is driving a lot of that. That being said, banks gave really heavy assurances in the prior earnings season that they're very comfortable with their exposure to private credits. They've underwritten it very conservatively. And it would take a lot of decline in the overall market. market, and you would be more concerned about the overall economy rather than their private credit exposure. So we have that going on. The other risk that we're looking at is really on the deposit side, given the fact that there's expected so much robust lending, that deposit competition has really intensified. So their funding costs would presumably increase, given the fact that we're not really expecting any more interest rate cuts over the back half of this year. That really contrasts the expectation heading into 2026, where there was two rate cuts baked in. So there's an evolving interest rate backdrop that could affect banks' net interest margins going forward. We want to get into Netflix, but before we do that, I have a question for each of you. I'd love for each of you to answer, and that is we get to hear from these bank executives over a speakerphone on Tuesday and Wednesday, yes, with Morgan. But Caleb, what do you take away from that? I mean, what are you listening for when you hear these executives talk? Do you appreciate kind of their vantage, their perspective on geopolitics broadly? Do you want to hear more granular information about the banks? What do you want to hear from these executives on Tuesday? Yeah, some CEOs are more candid than others. Jamie Dimon among them. Notoriously candid. And he will tell you exactly what he thinks and exactly how the bank sees things. I heard him at the Reagan Economic Forum a few weeks ago, super candid, but also saying America needs to be strong defensively. We also need to make sure we are taking care of our people. So he cares about both of those things. There's also rumblings about the succession plan at J.P. Morgan. I don't think we're going to hear anything about that this week. He's still got some time in the seat. So he's a little bit more candid. But again, we want to know how strong are their customers, how robust is the lending going to be, as Herman mentioned, but also how strong is the U.S. economy, especially when it comes to consumers and their spending? Herman, how about you? What are you listening for? Yeah, so that's right. Jamie Dimon's always been sort of the spokesperson for the industry. We'd love to hear more about the evolving backdrop, given the fact that we still have geopolitical tensions, where the economy is going forward, and then the succession issue. Mary Ann Lake recently stepped away from the bank, and there's two new co-presidents. And then really the eyes are on Troy Vorbaugh, who is going to lead the consumer operations going forward. Is he viewed as the heir apparent in Jamie Dimon's minds? I'm sure a lot of analysts will probe that thought. Just to interject quickly here, I mean, this is like the longest running parlor game on Wall Street right now. When is Jamie Dimon going to step down? And does this latest move give you any indication of how much closer we are to that point? I mean, he is often asked about this Jamie Dimon, and he is very quick to demure and say how much he loves his job. Right. I would assume that we'll have more of that same refrain where he's going to say he's in it for the next foreseeable future. That being said, succession planning is something that the board and the bank takes very seriously. And I think the two co-presidents really speaks to that. All right, Caleb, I do want to get to Netflix. It's usually the start of tech earning seasons. How is Netflix doing? Because as a consumer, I feel like they're having a bit of an identity crisis, right? When I think of like really prestige streaming, I don't think of them. When I think of like the CSI audience that my parents watch, I don't really think of them either. I don't really know what their brand is. And I wonder if that's part of the problem is they're struggling to maintain consumers, to stop churn and to come out where investors want them to be. Yeah, things have been anything but chill with Netflix and its investors. Well done. The stock is down 20 year to date down 40 over the past year Not magnificent by any means anymore but it is changing the way it runs its programming It got some challenges in that it got competition but it also now has introduced that advertising platform. How much is that growing? They're expecting some $3 billion from that. That costs about, I think, $8 or $9 if you want the ad tier program. They're able to raise prices. They have that pricing elasticity. They're able to raise prices pretty much $1 every year and not much churn, probably the lowest among the streamers. and now they're introducing a lot of short-form programming. They're no longer really just a streamer. They are a global media platform, and they're trying to compete with YouTube. But do you feel like they have enough of a strategy, or do you feel like they're just throwing things at the wall at this point? Well, over the last couple of weeks, we've learned more about that strategy. They've started short-form programming. They started a bunch of deals with very popular podcasters. The Bill Simmons Ringer Universe is in there as well. Hot Ones is there as well. They signed some chefs to do some short-form content. So they want to make sure they are not losing viewers who want that shorter form snackable content. And they're still building their library. They have a big slate coming out, including Narnia coming out later this year and a bunch of other big ticket movies. So they're trying to be everything, spending a lot of money doing it. I want to ask you about their strategy toward acquisitions. So it wasn't long ago they were making a go for Warner Brothers Discovery. Of course, that fell apart. We now see the spin-off of NBCUniversal and Comcast. I mean, they didn't make a play for Roku. I mean, how do you see their interest in expanding the business through mergers and acquisitions, if at all? I mean, once that deal fell through, I think there was some relief among shareholders, among many shareholders. What did it say to you about their kind of longer-term trajectory? Well, the good news is that Netflix executives give long video interviews every earnings report. So I listened to it again last night from the last quarter. They said it didn't work out, but they learned a lot about M&A and how disciplined they want to be and what matters to them when it comes to making big investments. They have a lot of cash on hand right now, and they need to do something beyond adding these creatives and adding this short-form programming. I wouldn't be surprised to see an acquisition in the second half of this year or early next year because investors want to see really what's next beyond short YouTube clips and adding podcasting to the platform. Herman, to bring it back where we started, when we get these earnings reports, we usually get a macro look. When you go through them, when we get big bank day and none of us are working out and we're all on these calls, and by we, I definitely mean you guys. What are you going to be looking for? Anything specific that we should be watching for that I can steal later in the weekend to make it sound like I'm smart? Right. So a lot of it's going to be what they say about the economy, right? Heading into this quarter, there's a lot of enthusiasm into the earnings. But one of the pieces of that enthusiasm is that the credit quality performance of the banks will be very stable. How that really shapes up going forward, a lot of the analysts will probe about that, given the fact that there is still a lot of risk. energy prices are still high. You've had companies talk about consumers pulling back in certain areas of discretionary spending because of the high energy prices. How does that flow through into the banks in terms of customers and consumers paying back their credit cards and their mortgage? So we'll be looking forward to that. Last question to you, Herman, picking up on what Caleb was saying a moment ago. We were talking about prospect for mergers and acquisitions. We've had the SpaceX IPO. SK Hynix had its listing on NASDAQ on Friday. Both of those are seen as kind of litmuses for how the market would be for offerings. Right. What's your sense of the verdict on that? I mean, there are a lot of companies here waiting in the pipeline. Yeah, I think that's one of the areas of enthusiasm for the banks in particular, where banks are playing the AI and infrastructure side of things through their equity offerings, through their capital markets, businesses, and debt underwriting, and bonds, and securitizations, CMBS. So these data center financing that needs to happen and the capex that needs to be spent to build out the data centers, the banks are playing that by helping these companies with raising money. So the AI theme is a big part of the capital market story. And we'd expect more commentary on that in the second quarter as well. Before we thank you, we need to get a shot of Caleb's socks. I was going to do the same thing, actually. For our radio listeners, Caleb wearing socks with Bloomberg Terminals on them, accompanying his vans, which is a classy, very stylish combination. You can't teach this kind of looking. You can't get these socks. No, and Gurra has great sneakers, too. I'm always telling him to wear sneakers on the show. Well, I'm going to covet these socks from here on out and find which closet they're hidden here and pull them out. We don't want you to feel left out because you guys are both great. Herman Chan, he's our senior analyst for U.S. Banks and Caleb Silver from Investopedia. Thank you guys so much. Great to see both of you here. Stay with us for more on Bloomberg This Weekend, right after this. get around to the music. That's what I mostly think of when I think of him, the time together laughing. Lawyer Robbie Kaplan. The great gift of being a lawyer is the ability to actually change things in our society in a way that very few people can. I mean, you can really make a difference to causes in the United States if you bring the right case at the right time. Marriage equality. Yeah, Windsor's the perfect example. Director Morgan Neville. Film school teaches you all the wrong things about making documentary. What do you want to say? Documentary is all about your ear. What do you hear? I feel like my job is listening really, really hard. Listen to Here's the Thing on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Join us for Bloomberg Power Players on September 10th in New York. Set against the backdrop of the U.S. Open Tennis Championships, Bloomberg convenes the leaders shaping the future of sports business. From athletes and team owners to commissioners and investors, hear the market-moving conversations driving the multi-trillion dollar sports economy. Register now at BloombergLive.com slash Power Players Radio. That's BloombergLive.com slash Power Players Radio. Welcome back to Bloomberg This Weekend. And I'm Christina Ruffini alongside David Gurra. Around the world, numerous wars and conflicts are destroying the day-to-day lives of many civilians. And one blog has gone to try to unite what pulls us all together in these hard times. What is that for us? Well, it's food. Food Under Fire is a blog dedicated to the proposition that amazing food can be found on the road, even in the farthest-flung, craziest corners of the world. We sat down with the creator of Food Under Fire. That's Erin Lyle to ask her how she came up with this idea for a blog. Well, I've been long obsessed with food, obviously. And I moved to London 12 years ago for CBS and started covering conflicts once I moved here. And one of the first conflicts I went to was in Ukraine. It was 2014 and the revolution was happening in the Maidan. and what was amazing about it was it was it was freezing outside all these people were out there kitted out and colanders on their head and mattresses as sort of shields and there were little old ladies wandering around the square pushing around carts of hot soup handing out hard-boiled eggs dishing out big bowls of grains and I was going oh my god like this is how you feed a revolution and it's as fascinating as the actual revolution that we're watching here so I started this food blog because I just think I think people generally find it fascinating how we feed ourselves, how we bring ourselves comfort, how we survive in areas that are under siege, that are difficult to live in. And so I started about 12 years ago. And now every time I travel, I try to find a very specific moment to blog about that will sort of shed a bit of light on something we don't actually get to cover as we're telling news stories. So we've been talking about Ukraine, give us a favorite moment or meal that you've had elsewhere in the world. Elsewhere in the world, I mean, I've had some amazing experiences in Gaza back in sort of 2014, 2019, before this current conflict, where we got invited into people's homes and all the women cooked for days, you know, giant platters of meat and rice. And they took us to their watermelon farm and we cut open a fresh watermelon and we ate it with sort of those big tins of salty white cheese that you'll find in kind of Arabic markets and some mint and some fresh bread. And, you know, you sit in these environments, having this shared experience with people and just go, oh, wow, you know, like life is happening all around. It's not just war all the time. It's not just destruction there. You know, people are sharing themselves, sharing their love. And I've been lucky enough to sort of stumble into those kinds of experiences in most of the places we go. Do you find that some of the poorest, most destitute places, they are the most generous with what they do have to offer? I'm always surprised by when you go to really wealthy countries, that's not the case. And when you go to places where you think people are just surviving day to day, they're almost always the first ones to invite you into their homes. Yeah, I mean, the Anglo-Saxon world is probably the worst at this kind of hospitality. But the Middle East, Ukraine will go to these places where people have lost so much. And it doesn't even have to be war. It could be a natural disaster. It could be Haiti. And and suddenly they're cooking everything they have. They're inviting you to sit at the table and they're giving they're giving everything they have, even if it's not a lot. And it's I mean, it's such a privilege to get to experience those kind of moments. And when I was in Ukraine, when the city of Kherson was liberated from Russian occupation and we were trying to get into the city, we we got as far as the city city limits and then they wouldn't let us in. and it was too far to drive back. So I just stopped this old man in the street and said, you know, is there a guest house in this village that we can stay at? And he said, well, you're staying at my house, obviously. We have food, we have blankets, and we have lady wine for you. What is lady wine? I mean, I'm sold at wine, but what is lady wine? And he's like, well, it's slightly softer for the ladies. So it's, you know, not too hard for you. I said, Great. So we went to their house and this this little old couple cooked everything they had in their kitchen, like giant bowls of pasta, canned, marinated tomatoes and peppers, a big bowl of pickled cabbage, a little toast with pork fat on them and sliced sausage and more pickles and then giant jugs of homemade lady wine and vodka and mail wine, I guess. And it was just, it was such an experience because, you know, also for them to be able to host people after, you know, six months of occupation, to be able to unload the trauma that they had lived through and have this captive audience sharing the moment with them and sharing the joy. And I mean, it was one of the highlights of my life, not to mention my work. you know you've been doing this for more than a decade and i'm curious what you've learned about your readers who's coming to you what kind of interactions have you had with folks who are reading your updates and your dispatches on your blog uh i get uh readers from all over the world mostly uh america uk because i write in english but uh i think people really connect to these stories in a way that they don't connect to sort of a television package about what's going on in a war zone because they can they can put themselves in it. You know, there's a real empathy driver there when you're reading about what it's like in someone's home or even how soldiers are living on the front line. You know, they're living in a trench, but in that trench, they've got a makeshift kitchen. They've got soup on the stove. They're ladling out grains. And you can like really imagine what it's like to be in the situation. So so I do get a lot of feedback where people just go, wow. And also this in the same vein, as you just said, people are continually impressed with the the generosity and hospitality that we stumble into around the world. It's, it's beautiful. 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 7 a.m. Eastern. 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. Hey, it's Alec Baldwin. This season on my podcast, Here's the Thing, I talked to composer Mark Shaman. It's about the hang. It's the pleasure of hanging out with the people that you're with. You know, Rob and I was always a great hang. And director Morgan Neville. Film school teaches you all the wrong things about making documentary. What do you want to say? Documentary is all about your ear. What do you hear? I feel like my job is listening really, really hard. Listen to Here's the Thing on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Follow the money in the world of sports every week on the Bloomberg Business of Sports podcast. Hello, I'm Randall Williams. Join Michael Barr, Vanessa Perdomo-Maglione, and me as we take you inside the deals, decisions, and innovations that power this multi-billion dollar industry. Plus, we'll speak with executives, athletes, and visionaries that are transforming sports across the globe. Subscribe to the Bloomberg Business of Sports podcast on Apple, Spotify, or anywhere you listen. you