Netanyahu Exclusive Interview; Trump's Lawyer Speaks Out

Good morning.

I'm Nathan Hager and I'm Amy Morris. Here are the stories we're following today.

We begin this morning with a political shift of sorts in Israel. Protests have raged across the country for months after a sweeping proposal to overhaul Israel's judicial system, But now Benjamin Natanyahu appears to be softening his stance. That's the news he gave us In an exclusive Bloomberg interview, Netanyahu says he will not pursue the entire overhaul as originally planned.

I'm still going to give it several months to try to get another consensus. What is it. It would probably be about the composition of the committee that elects judges. I don't think we should move from one extreme where we have perhaps the most activist judicial court on the planet, to get into a point where the legislature are can just knock out any decision that the court makes. There has to be a balance. That's what we're trying to restore.

Israeli Prime Minister Benjamin Natanyah, who also tells us he wants to deepen his country's economic and business times with Saudi Arabia. Stay tuned for more of that interview coming up shortly on Bloomberg day.

Break and Nathan.

Politics is also front and center here in the US, as Donald Trump's indictments weigh on the race for president. According to a new CBS News you go pull more than half of America and say the former president tried to stay in office through illegal means. Trump's lawyer John Laurel made the rounds on the Sunday political talk shows defending the former president. Here he is on ABC's This Week.

It's up to the government to prove these things. The defense has no obligation to prove anything. We put the government to its test. The government must prove beyond a reasonable doubt that President Trump had criminal intent.

Trump lawyer John Laurel was a guest on nearly all of the Sunday shows, which you can hear every week right here on Bloomberg Radio.

Well back on Wall Street Amy. Economic data are and focus again this week. The latest reading on consumer prices comes out Thursday that could help the Federal Reserve to sign its next move right now. FED Governor Michelle Bowman says more rate hikes may be needed, while Atlanta Fed President Rafael Bostik says the Central Bank may be done. At the same time, Bostic seas policy staying tighter for longer. I'm not expecting this to be a two month or three month period.

My outlook is that we'll still be in a restrictive territory.

Well.

In the twenty twenty four Atlanta Fed chief Rafael Bostik made those comments on a special edition of Bloomberg's Wall Street Week. Subscribe or download the show wherever you get your podcasts.

And we have earnings to tell you about this morning. Warren Buffett's Berkshire Hathaway beat results in its latest report Bloomberg's Denise Palegreenei as it tales.

Billionaire Warren Buffett's conglomerate is reporting second quarter operating profit that beat the average analyst estimate, thanks in part to strength and insurance units and also its acquisition of Alleghany. But Berkshire had to raise prices and cut advertising at Geico to make those numbers, and that could already be backfiring. Over the last twelve months, policies enforce fell by two point seven millions, suggesting a loss of market share. Denise Pellegrini Bloomberg Day Break.

Okay, Denise, thank you, and it's going to be another busy week for earnings, with results from nearly three dozen companies in the S and P five hundred expected. Bloomberg's Charlie Pellett joins us with that.

We've heard from roughly eighty percent of S and P five hundred companies, but there will be plenty more to come this week. Amid questions about current market valuations given the prospects for corporate earnings, Nattie lovell Is, senior US equity STRATEGISTICT ubs financial services.

Well looking for sort of mid single digit growth over the next twelve months, so we think that this market is probably cap as a result of the earn is outlook.

Among this week's most closely watched reports will be Walt Disney Ups, Lily Take two Entertainment, and Rivian Automotive in New York. Charlie Palette, Bloomberg Daybreak.

Thank you, Charlie.

Elsewhere in corporate news, trucking firm Yellow has officially filed for bankruptcy following years of financial woes for Yellow that were compounded by a labor force dispute. The shutdown leaves roughly thirty thousand employees jobless. It comes on the heels of accountroversial seven hundred million dollar pandemic relief loan that Yeller received three years ago. Congressional investigators concluded last year that the company was ineligible.

For the loan.

Overseas, Amy, it looks like Credit Sweez is making cuts in Asia. That's according to Reuters, which says the firm is laying off about eighty percent of its Hong Kong based investment banking staff. Hong Kong accounts for the biggest share of investment bankers in Asia for Credit Swise.

Although Big Tech has already reported earnings for this quarter, we still have some news out of Silicon Valley, Elon Musk resurrecting the idea of a cage fight with Mark Zuckerberg and promising to stream it live. Bloomberg's Ed Baxter with those details.

As the business competition grows with metas threads and Musk's X. Musk has posted that the fight will be streamed on X. So the question, which seem to be is Musk just social media trolling? Aganner as he heard more from Zuckerberg, who had earlier responded for us to let him know where and when Zuckerberg is a martial arts enthusiast whose participate paid this year and competition, and Musk says he has been lifting weights throughout the day in preparation. In

Thank you, Ed, and we are learning this morning that the timing of the alleged fight may be in flux. That's according to Elon Musk, who says he's getting an MRI on his neck and upper back and may need surgery before the fight can happen. And hot temperatures across the US were back and focused over the weekend. Triple digit temperatures in Texas, but pressure on the power grid

Michael, Good morning. Amy. Russia launched more than seventy missiles and drones at Ukraine in one of its biggest assaults in recent weeks. An escalation of force after two Russian ships were hit and damaged by drones in the Black Sea. Fi their Oleg Miroslav of the Transfiguration Cathedral, an Orthodox cathedral ravaged by a Russian missile last month, was asked about Russian President Vladimir Putin. Miroslav, speaking to a reporter through a translator.

Can Vladimir Putin be called a true Christian.

One?

Of course not.

I don't even have to think about it, because Christians don't kill others.

They help each other.

Ristiana Pamaga.

Should Vladimir Putin be forgiven?

And a voi show every person deserves to be forgiven, but the most important judgment comes from God.

Meanwhile, the footprint of President Vladimir Putin's war or Ukraine is growing fast after a weekend in which sea drones crippled a Russian naval vessel and oil tanker. The attacks put at risk Russia's commodity exports via the Black Sea, a route that accounts for most of the grain and fifteen to twenty percent of the oil that rushes sales daily on global markets. Significantly higher insurance and shipping costs are likely to follow from Moscow. A fire fighting tragedy

The first helicopter was able to land safely nearby. Unfortunately, the second helicopter crashed and tragically all three members perished, which included one CalFire Division Chief, one cal Fire Captain and one contract pilot.

Cawfire's David Fulcher. In Portugal, Pope frances Is wrapping up his five day trip there. The Pope was greeted by massive crowds, including the biggest one yesterday for World Youth Day in Lisbon. Roughly eight hundred thousand young Catholics gathered see Pope Francis at the one every three year festival. Global News twenty four hours a day, powered by more than twenty seven hundred journalist and analysts in over one hundred and twenty countries. How michaelbar this is Bloomberg Gaming.

All right, Thank you, Michael, Tom now for our Bloomberg Sports update. For that, we bring in John's dash hour.

Any by far the worst Women's World Cup for the United States barely made it out of group play and then its earliest exit ever, failing to even reach the quarterfinals. The US lost to swedeen scoreless. Played for two hours, the US had a three two lead and the penalty kicks and then lost five to four. Meghan Rappino missed hurt.

Oh, we played really well. I'm so happy for us that we went out like that, playing the way that we did, and you know, having a ton of joining the ball. I mean, this is like a sick joke for me personally. I'm just like, this is dark comedy.

I missed a.

Penalty pinot on Fox Sports after the game. She had not missed a PK playing for her country since two thousand eighteen. It was her final match playing for the US scene with Julie ERTs. Meanwhile, Leonel Messi two more goals. He has scored seven in his first four games playing for Miami and MLS. They trailed four to two and rallied to beat Dallas in penalty kicks. Windham Golf in Greensboro, Lucas Glover twenty under part one by two at the

From coast to coast, from New York to San Francisco, Boston to Washington, DC.

Nationwide on Syrias XAM, the Bloomberg Business app in Bloomberg.

This is Bloomberg Daybreak. Good morning.

I'm Nathan Hager. For month's protests have gripped Israel. The demonstrations have been targeted at a controversial judicial overhaul imposed by Prime Minister Benjamin Netanyahoo. He says israel system allows judges to play too big a role in government, and he's outlined plans to change how judges are selected. That did spark the largest anti government protest movement in Israel's history. Now in an exclusive interview with Bloomberg News, Prime Minister

Now. Well, I think that we've already done quite a bit. I have stopped the judicial legislation for three months, seeking consissants from the other side, unfortunately not getting it, then brought in a relatively minor part of the reform past it, and then said I'm still going to give it several months to try to get another consensus. What is it? It would probably be about the composition of the committee that elects judges.

With the selection of the judges, how they're selected.

Right, That's basically what's left. And because other things I think we should not legislate. I don't think we should move from one extreme where we have perhaps the most activist judicial court on the planet, to get into a point where the legislature arencit can just knock out any decision that the court makes. There has to be a balance.

That's what we're trying to restore supremis. When you look at the change in selection for the judges, how quickly could that come?

Well, if we get a compromise, it could come immediately. If we can't get a buy in from the opposition in the parliament, there's always a buy in from the public. What is the thing that the public accepts? And I'm giving it my best shot. I'm spending I wouldn't say twenty four hours a day on it, about twelve hours a day.

And if the public is not behind it, what do you do?

I think you should choose something. I think you should choose something that has broad acceptance, which looks like one which looks like something that I'd like to negotiate, not on not even on Bloomberg.

Okay, but give me a flavor of is it walking back some of some of the things that have been said by certain ministers around you?

Oh, ministers can say anything. I don't control words in our parliamentary system. I control deeds and that has to be understood. But since you know the European system, you know that unlike a presidential system, you don't control the you know what is said by members of.

Your cabinet, but you can ask them tone it down. Have you asked them to tone it down.

One hundred times and they're listening. I succeeded fifty times. Don't You can always succeed. You don't always succeed. But that's what's important to understand, is what is when the dust settles? Are we going to have Israel that is more, is stronger democratically or is it weaker democratically? Is it something where you're going to have the balance that you need between the will of the majority and the rights of the minority or individual rights. Has that been strengthened,

So there are a lot of questions, especially from investors, especially from businesses, because you always need a body that makes sure that anything that the government passes is legal, and there's maybe a perception problem. But this is weakened. So what is the message to business investors and to markets right now?

I don't think it's weakened. I think the ultimate actually I think the ultimate regulator of the democracies are not courts, but are the public choice. I think that's a fundamental misconception of how democracy's work.

We always need someone to overlook them.

But if you have a lowser government, then they're not re elected. That's the most important thing. The most important regulator is the political markets. But I don't think that

There's a perception problem, maybe, if that's what you think, But there's certainly a division in this country, with hundreds of thousands of people protesting and market participants worried about what happens next. What's your message to them?

When the dust set Israel will not only will remain a democracy, it will be even a stronger democracy. But more importantly, it will not in any way impair the enormous business and economic capabilities of Israel in the new technological age.

But Premister, when does this dust settle? So far, you haven't even been prepared to say that you will follow what the Supreme Court decides.

Now, we follow what the Supreme Court decides on. The Supreme Court so far has also followed the basic rule of not striking down basic laws, which they themselves dean are the basis of the Constitution. Both things have to be maintained.

So what would you tell markets and investors today that whatever they decide right there's something big that's going to be decided in the next couple of months, you will abide by that.

I hope that we don't get into a constitutional crisis. I think we won't. I think there's a way of reaching an equitable compromise, which is what I'm trying to do. Now. If I reveal to you everything that I'm trying to do, I won't be able to do it.

But the market wants to understand that there's nothing worse for the markets for investors to actually be in the Limbu where you're not sure exactly what will happen or how the government will react.

I'm absolutely sure that Israel will come out stable and successful and democratic, at least as democratic it my view, more democratic. I don't think we're going to tear the country apart. I don't think you're going to have civil war. I think right now what you're seeing is the natural conflict between opposing views that have not yet meshed, but they will mesh.

Do you support your central bank governor, who is very well respected internationally?

Sure, I appointed him.

Will you back him for another term? He has to decide, I think by next month.

Well, I haven't talked to him yet, but I will, but I've guarded I would say rigorously his independence and the independence of the Central Bank, and that will continue to be the policy. I will talk to him, but you wouldn't believe this, but he just not had the opportunity to discuss that.

But when you talk to him, will you ask him to stay on?

Possibly? I want to think about right now. I think he's been an exceptional Central Bank director, and I think that's a possibility that I'll have to talk to him about one.

Of your ministers I think called him a savage for raising interest rates.

Yeah, well, my ministers in our hectic parliamentary system could say anything, but it's a fact that we've never intervened with the independence of the Central Bank and we won't. In fact, I think I passed some laws or corrective additional laws that safeguarded the independence of the Central Bank. I do not want the government broaching in on what the central bank has to do.

So do you support the interest rate hikes?

I'd leave that decision to the central Bank. You know, I've had several central Bank directors because I've been in government a long time. I think in a few months I'll be probably more time in as Prime Minister than anybody in the western world for the last half century. So I've had a lot of central bank directors to talk to. I always talk to them in a padded room, absolutely sound proof that we could hurled at each other

But Prime Minister, it would be pretty powerful or a pretty powerful message to the markets, given the divisions and given the turmoil, if you were to ask to stay.

On, could be that's a consideration. I'll consider it.

But do you agree would that be a powerful message?

I think the powerful message is the independence of the Central Bank, and I think the choices that I've made in bringing in central bank directors, whether it was Stanley Fisher and after him the current Central Bank director, I think people see that we choose and choose well, and that will not and some others in between.

I don't want it, and that will not change.

No, it will.

You're overhauling the juiciary, but the central bank won't be.

I'm not overhauling the judiciary. I'm correcting the judiciary to where it was. I don't think we'll get there, but to where it was at Israel's first fifty years before the judicial imbalance was created, and I'm trying to bring it back modestly into line. This is described as the end of democracy. Why why is it described as the

No, but it's a check in balance. And this is what again, this is what investors are worried about, many of checks kind of So I was going to ask you, what's your message today for a business that wants to come here that's a little bit nervous about what they can do longer term?

There is no absence of checks in Israel. The courts have all the checks, but they have no balance. So if you're concerned that the court will not be able to intervene in certain decisions, they've got one hundred different checks on that. But one thing that we want to have is not to be able to have the court intervene on anything, on any matter without any reference to any statute or any law. That is not democracy.

It's my understanding. They've only done that a handful of times. But if you're an investor today, right, and you look at Israel that has to deal with Saudi, that has to deal with Iran, why are you falling on the sword about the judiciary.

Well, I'm not falling on the sword. I'm trying to correct it imbalance because people, because millions of Israelis vote timing again for governments who want to have certain government policies, okay, And the governments are elected and they want to enact their policies, and the Supreme Court often intervenes in ways that nullifies the will of the majority without any reference to a law. For example, I'll give you an example,

Arms, and premiers were fully aware. But were you upset by hundreds of thousands of people in the streets.

Well, there have been hundreds of thousands of the others. That's a reflection of democracy nobody describes. Nobody describes the other side. We had a quarter of a million people in the street the other day supporting the judicial reform. You didn't hear a word.

But prem Minister, you were the one that brought people together, right, that build bridges.

What's happened, Well, because a it didn't happen overnight. When I did the economic refirms that made Israel an economic juggernaut, a free market economy, technological economy, I had huge demonstrations. I had a five months national strike, three months and two months from the labor union I had when I tried to take the gas out of the seabed. I have the same people are organizing the strikes now saying this is the end of democracy, this will destroy our environment.

Again, there's so much nervousness right out there. When you speak to investors and you speak to the markets, give me a sense of what you would be able to do or to give to normalize relationship with Saudi Arabia.

Well, Saury Arabia, I think is one of the exceptional things that tells you why I'm very optimistic about Israel really one of two reasons, one of two main reasons. One is that, well, it's start with Saudi Arabia, but then I'll get with the other one. I think that

But do you have to give consents? So we understand Saudi Arabia, But what would you what would you give? Would you would you limit, for example, Jewish settlements in the West Bank.

Again, you have a good pension as a good journalist to try to eke out for me the my negotiation stance, and of course you're not going to succeed, but you could keep on trying. But do I think it's feasible to have that? And what do I think that political questions will block it? I doubt it. If there's political will, there will be a political way to achieve normalization and a formal peace between Israel and Saudi Arabia that has

And primary this is why I'm not trying to ink out negotiations. I'm trying to understand what you're willing to give because this is such an important partnership.

I'll tell you what I'm not willing to give. I'm not willing to give anything that will endanger israel security. That I will not do. But I think there's enough room to discuss possibilities. I don't think I think the Palestinian thing is brought in all the time. It was always brought in, and it's sort of a checkbox, you know, you have to check it to say that you're doing it. Is that what is being said in corridors? Is that

Okay, So if you look at, for example, giving the Palestinians their own state, is that something that you would is that a red line?

It won't be their own state. It will be an Iranian controlled state that will in an area that is about the width of the Washington Beltway. You take Israel and the Palestinian areas in Judas, Amaria, the West Bank together, it's a little more than the width of the Washington Beltway. You put a Palestinian state which will be controlled by Iran in half of that, or a in the middle of that. You won't have a Palestinian state, You'll have an Iranian terrs state.

And of course, so under no circumstances would you love that.

Now, what I said often is that the way that I would have a solution is two things about that. One that the Palestinians should have all the powers to govern themselves and none of the powers to threaten Israel. This means that in whatever final settlement, peace settlement we have with the Palestinians, Israel remains the over I would say Israel has the overriding security power in the entire area ours and theirs. Otherwise we collapse, they collapse.

You're going to Unga in New York. I believe the second week or third week of September. Will you meet with Donald Trump?

I don't know the first. You're the first, You're the first who suggested it. No, I haven't.

Are you expecting an invitation to the White House from President Biden?

Well, he said that we are good to be, so I'll leave it up to him.

What are you most excited for going to.

Aunga, Well, I've been there many years here. What am I most excited about the possibility of broadening the already historic Abraham Accords. I think this will be this will change history. I think it will not only end the Arab Israeli conflict, not the Palestinian Israeli conflict, but our conflict with ninety eight percent of the Arab world. It will also, I think, create a new piece between the Jewish state and the Muslim world.

Prime Minister, the countries of the Abraham Accords, some of them have been frustrated, right about some of the noise that's been coming out of your government. Will you meet with them to try and reassure them.

Well, we meet with them all the time, and we reassure them all the time. But I think I think some of them are habituated to the fact that noise is noise, and I think that's true of the market's too. There's a lot of noise in the market. But if you look at the fundamentals of issuel, if you look at the growth rate which is double the United States expected. Now you look at the deficit which is one point five at most percent compared to five point five percent

For a reach plastics longer term.

But that's my point that there's noise in the short term markets, there's clarity in the long term markets. I mean, now Amazon just invests seven billion in cloud services here, Why are they doing that? Because they know something I'm going to do and the thing that I'm going to do, and I like to bring it to your investors attention. A few years ago, ten years ago, I decided that Israel would be one of the ten cyber powers in the world, one of the five. We've become one of

What do you say to investors that worry that you've changed in terms of priorities?

Haven't? My priorities are peace, prosperity, and security. I think that they're all dependent on prosperity to have the ability to fund the defense needs that we have and to expand the peace. The prosperity is based on Israel's supreme technological prowess. We are you know, people rated a seventh on the AI on the AI list, you know why

Worried about the shorter term. But thank you so much for your time.

Oh bust, but remember this, here's a good one. This is recorded today. All right, now we should look at one year from now. That's pretty short term and we'll see. Was I right in telling you that Israel right now is undervalued? You should invest in Israel. Smart money is coming into his will now like these big firms, because they understand that we're going to a good place.

This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond.

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I'm Amy Morris.

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