Equities, Cannabis, Chips, And Geopolitics (Podcast)

some of the big echo data. It's gonna get a little sense of kind of how this market's performing, how it may discount some of this echo data we will get this week, most notably CPI Data as well's pp I as well. Cameron christ macro strategists for Bloomberg News and Gina Martin Adams, chief equity strategist for Bloomberg Intelligence. They both join us here. We're gonna round table this thing. I want to record this. Yeah, I think we do

that on a daily basis. Then we pot it as kids say, all right, Cameron, um, we got a lot of eco data here today. What are you going to be looking for? What do you think I guess more importantly, what do you think your federal Reserve is gonna be looking for? Well, obviously the CPI is the highlight of the of the week. Uh. Yeah, they made it pretty clear that they need to see more than one or two friendly prints to switch switch course. Um, but last

month wouldn't even get a friendly print. So uh, it would be the first step on a on the journey. Could be the sort of the beginning of the end of the cycle if we start to see some significant downside prints and cp I. But as this year has taught us, it is very, very costly to try to preempt that. So, Gina, what does an investor do here? I mean, Um, it seems like every data point out backs up the Fed actually doing what they say, which

is shocking to the markets. And then, um, it turns out when we get a drop in inflation, at least according to UM a bunch of research on the street, it's going to be horrible for earnings. Well, I think that remains to be seen for a start. UM, inflation

is usually a lagging indicator of growth. Inflation has been in a bizarre position this year relative to the past twenty years, so any forecasters that really have a strong sense of of what inflation is doing probably would would use a model that is not accurately going to forecast the reality over the next couple of quarters. I think that's the sort of the reality of the earning stream is that inflation has been a big pain point for earnings.

Revenues have been growing, but margins have been contracting amid the rising input cost pressure, even though companies have been able to pass on some price increases. So we might be somewhat surprised by the degree to which to drop an inflation can actually soothe some of those margin pressure margin pressures going forward. And frankly, that is not what's happened for the last twenty years. What's happened for the last twenty years is company earnings weakness does not come

about because inflation is too fast. It comes out about because we see a demand demand drop, right, And so I think that we've got this really mass confusion going on with respect to the earning stream. Um Also, a lot of the earning strength has come from energy. Specifically, energy is very tied not just to inflation, the inflation out but look, but what's happening with the input price, right,

and our oil prices actually falling. Now are input prices actually falling in the energy space is a big question mark for the outlook. So I would characterize the current outlook is sort of earnings confusion. Um that earnings confusion probably persists into the next quarter, but companies can do a lot to clear up that earning's confusion, and that's what we'll be looking for in the upcoming earning season. I mean, today, for example, UBS said forward profit will

drop fifty this year. That sounds less like confusion and just like a huge loss, right, Yeah, Well, I mean, look, we would be remiss not to note that what's been happening in the auto space has also been completely contrary to historical experience over a cycle. We can't get cars. Cars aren't coming into the United States. They're going to start coming into the United States at a point in time where interest rates are increasing. This is just completely

bizarre and a bizarre experience in the earning stream. So do you really want to take a forward example as indicative of what's going to happen for tech companies, healthcare companies, consumer companies at large. I mean, I think this is what I mean by inflation, By inflation and earnings confusion.

This is a very very difficult point to take any individual companies as a representative of what's going to happen for the market at large, and that's been the case for much of two all right, well, how about let's take Mike Wilson's point on you know, he says, when inflation comes down, um, the parts that are going to remain resilient our shelter, wages and some services, and then

goods will con any decelery. And that's not a constructive picture for the sp It's definitely not a constructive picture for the goods centric industries within the SNP five completely agree with that scenario. Did centric consumer companies generally indicative of what's going to happen at the market at large? Is my point of contention with that piece. Hey, Cameron, So, I mean, I guess the issue is do we have a risk material risk this week of being like really

negatively surprised the inflation comes in really hot? Of course, I mean I would say that any analysis is looking at the last twenty or thirty years of inflation what it means for earnings isn't particularly useful because this is a completely different inflation regime, um than than we've had, uh, you know, central bankers Allen Greenspan kind of defined price stability is that level of inflation that doesn't materially impact

the decisions of consumers and businesses in the economy. And that's more or less been the case, um from the late eighties, uh really through until last year. UM. So this is a very different scenario to what we've experienced in the nineties, uh and the naughties and and the teams on the one hand and on the other hand, referencing demand, I mean, the fact stated intention is to reduce demand, to break it in the supply um. I mean they haven't. They couldn't be any more clear on

what they're trying to accomplish. Is that in the Is that in the price of the stock market? I think that's that's really really debatable. Certainly it is not embedded in the level of earnings expectations. I think over the next over the next few years, and if you look at market valuations based on the on the present value of those future earnings expectations, the market is not cheap, all right. Camera great stuff camera christ Macro strategist, Bloomberg

News Gina Martin Adams, Bloomberg intelligence equity strategist. This is Bloomberg. Let's get over right now to Chris Beal's he's the CEO of weed Maps. It's nasdack listed. The ticker is m A p S. And to me this seems like a growth story. Chris. We just got you know, legal weed starting to sell around New York. Um, not entirely legally yet, but I guess people will use your app to find a place where they can uh safely and securely buy weed and um, you know, get reliable quality.

Is that is that the case? Yeah? Well, actually one step further, it's sort of what we provide is sort of like Amazon or door Dash for cannabis. So it let's retailers and brands showcase their products and enable online ordering, and then we have a bunch of software that helps them do delivery, post order follow ups, CRM, that sort of thing. But yeah, the idea is to take something that's traditionally been scary, hard to understand and make it easy to shop for consumer is online. So you know

how many states are you active in? Can you get delivery service? I mean, delivery service has been the only way to get weed in New York for like thirty years, but can you actually get legal delivery service now here? Yeah, so when in this varies from state to state. Some states only allow in store pick up that sort of thing, but in New York they will allow delivery. So you'll be able to order on weed maps, on the app on your phone, put stuff in a cart. You will

be able to or you are able to. You will be able to win adult use open So right now, it's just medical so you could right now just for medical shops if you have a medical card. But when adult use, these disposies that can sell you know, for basically recreational open up. You'll be able to get order on the phone and get delivery right to your door. Chris, are you active in states that have been open for recreational cannabis like Colorado for example, And if so, kind

of what's your experience been. Yeah, So, so we're ubiquitous. We're in all thirty seven states that have cannabis legalization. We're actually a fourteen year old company. Were started out in California, and we're we operate internationally and seven international jurisdictions at this point as well. So yeah, we're in Colorado. Interestingly enough, Colorado has very limited delivery. Despite what people might think, they're really kind of just rolling out pilots

for it um. But we see we operate in all these different states, and we see very big differences in how the businesses operate, and our software has to deal with the different rules and compliance regulations um. And then the way consumer shop varies a lot. I think New York will be very similar in terms of consumers shopping habits to California, which makes sense because New York has

been buying California cannabis for the last thirty years. So, I mean my experience is when I was a kid, you know what we You'd have a delivery guy come and meet you, come to your door, you'd get in his car, whatever. But now that these dispensries are opening up, it's too much fun to go there. Why would I want to get delivery? It's going to Empire is like going to the Dylan's candy store of weed? Um. Is that gonna wear off? Am I gonna get tired of

that and want to go for delivery later on? Well? So the thing is is avengeal for a lot of people when they become regular cannabis consumers. And look, we're seeing a lot of that people who are substituting cannabis for alcohol as a healthier alternative. You know what you want or you want to you don't want to go through the hassle and going to the dispensary and a dispensaries the lines can be long, and it can be

you know, a bit confusing. But the other big use case we're seeing in mature states, the average cannabis dispensary has over a thousands skews, and so we see a lot of people pulling out weed maps when they're in the store just to go through and understand what are all these different products? Because you know, to go from that that guy saying, hey, come get in my car, he only has what he can carry in his backpack to a dispensary, you got over a thousand different things.

And you look at segments like uh concentrates and all these new types of concentrates. Look at edibles, there's a huge growth in the beverage segment. How do you as a consumer makes sense of all of that? I mean, and a lot of times the dispensary doesn't even fully understand everything because the brand explosion is just in the early innings right now, and it's accelerating. By the way, do you have a team of people reviewing these products or do you rely on you know, written in reviews

from consumers. So what we do is we rely on written in reviews from verified purchasers. So people who have it's it's I have to be careful. I say this because Amazon, the Amazon review systems fallen under a lot

of I think rightful criticism. But what we do is we look at consumers who have purchased online through weed Maps, through the marketplace, and then say, give us feedback, give us reviews on things like how it clinically affected you, how was your store experience, how is the delivery experience,

and there's other things we can do. We do have a content and learning part of the site to learn about strains, to learn about new products, where we do have expert reviewers in common taters and we can pull some of that across. The other thing is um A lot of what we do is we have one of

the largest brand catalogs out there. So many times the brands will write, they'll provide the images, they'll provide the descriptions and more than that the ascribed clinical effects, and then we syndicate that through all the retailers who carry those branded products. Chris, As far as the stock, what is going on. You're trading for less than sales, you know, three times earnings right now, These are not numbers that

we typically see, even for companies that are distressed. Yeah, and on top of that, we've been profitable for essentially our entire history. Uh. We were effectively bootstrapped until we went public. Uh. You know, look, I think what you see it's it's frustrating to me. And I think it's one of those reminders of as a CEO, you have to control what you can control, which is us growing adoption of the marketplace and that. But I think partially

what you're seeing is a reflection of stigma. There's still a lot of institutional investors who won't invest in the sector, even for a NASDAQ listed UH technology and sillery provider like maps UH. And I think you know at the end of the day that the market is a factor of supply and demand, and on the demand side, Uh, there's just far too many funds who are reluctant to invest in the cannabis spector despite the fact that some people estimate that's going to be a hundred billion dollar

industry at the end of this decade UM. So you know, we're out there trying to educate people, make them understand that there's very deep modes around this business in terms of the regulatory requirements, the data science you have to do. You know, we're solving problems that Frankly, Go Puff and a bunch of other online market places haven't solved because we need to we Yeah, we can't touch the actual

cannabis product or do we ever want to. So, but we had President Biden recently kind of you know, say, you know he's gonna expunge federal marijuana convictions. I mean that had to be a step in the right direction. Yeah, it looks I think there's a lot of twists and turns to that because I think it is potentially less impactful than people think on the part in side, because there aren't a lot of federal prisoners who are under

federal custody for simple possession. A lot of its trafficking, or they'll attack on other charges to get a plea. But the promise to reschedule if they follow through on that could meaningfully change things. Um, you know, when we've tried to sponsor scientific research on cannabis, those researchers have in some cases gotten threats to have their National Science Foundation or in i H grants funding polled because they're

doing cannabis research. So the rescheduling would help there. But but the biggest thing that I think people are missing is it's a stigma reduction. When you look at why funds aren't investing in cannabis names, it's not because they can't. It's a stigma thing. When you look at why major credit card providers don't bank or don't provide credit for financial side, it's that all right. Chris great stuff, Chris

Bal's CEO of Weed Maps on the cannabis business. One talk technology, you here, and I'm gonna talk us China supply chain is But we found out the beginning of the pandemic that it is not good to be overreliant on one source of stuff. And like we saw it into technology space with chips and so woulgin Hoe, which by the way, is my favorite name on Wall Street. Wuginhoe is a senior technology analyst for Bloomberg Intelligence. He's got a research report out entitled Untangling US China tech

supply chain issues. He says it's difficult but doable. Wulgin, thanks so much for joining us here. Talk to us about kind of what we've learned over the last two and a half three years about that supply chain reliance on China and maybe how some of the technology companies are trying to untangle that right now. Thanks for having me on, Paul so Um. It's it's clear over the past couple of years that China is a main supplier not only for for chips, but more importantly electronics manufacturing.

If in our research support that I worked with our Asia UH Boomberg Tmt colleagues, is that roughly of all of the electronics manufacturing source of of China. And it kind of makes sense right over the years manufacturing shifted over from US and Mexico and it and moved over to China because of economies of scales, because what we are fair and focused on margin and trying to unentangle that is going to be uh quite a task. We also have Brendon Murray with us. Uh he is the

Bloomberg trades are out of Atlanta? Is that right in Lanta? Brendon. I'm in London. Oh in London, sorry, um, uh in London, Brendon, What do we know about um President Biden right now? And the rules on chip makers? Are the rules on

technological access by companies in China? Yeah, Well, what we know right now is that that pre President Biden is trying to make some of those decisions for uh, for for industry rather than uh, you know, basically to try to make it more difficult for for China to produce its chips and easier for Eric companies to get these semiconductors that you know, going just about you know, every household appliance that we buy. So that's that's the administration

stance right now. It's it's you know, some of it's borrowed from the Trump administration to uh, you know, try to sort of create our own industries here that you know, many of them migrated away. So so the tech supply chains you know, are definitely well embedded in China and elsewhere in Asia, but they can they can make some progress on them with government incentives and and uh and and penalties um, you know against Chinese producers. But what

is this? First of all, I thought you were I mistakenly thought you were in Atlanta because you used to write for the Atlanta Business Chronicle, So that was I guess a while back. But what does this mean for the chip industry in China? I mean, is this a huge blow? Um? You know, will it whither away or is it still going to be I mean, I assume

it's the main place that chips are made globally. Yeah, I mean, I think judging by the market reaction in China today to the news from the US on Friday through the weekend, you know, investors do expect it to be uh, you know, to to to you know, to to to cause some cause some problems for the Chinese producers. Hey, would you know I think you know, at some point during this pandemic, when this this issue, the supply chain issues relates to chips became you know, really prevalent, everybody

was just saying, well, just let's onshore this stuff. And there's been some announcements in the great state of Ohio, in the state of New York about maybe bringing some of these fabs onshore. Is that really a thing, Is that a solution or is that just more kind of rhetoric and politics? Well, UM. Well, the Biding administration is actually putting their money where the mouth is, right, the fifty two billion doll the Chips Act is supposed to help UM initiate an investment into UH some of these

facts and manufacture these UM advanced technology chips. Right, So, so they are trying to onshore some of that to to lessen the reliance. Now, now, you know, just just to pick it back on on Brandon's point that the one thing I will say is that they're trying to what the US is trying to do with some of the I guess renewed UM sanctions on China is to slow down the manufacture of advanced ships. Now, now the

one China doesn't really make many advanced ships. It's it's it's mostly Taiwan and and if anything, is UM the US trying to mitigate the reliance on UM on Taiwan on some of these advanced ships because of the geo politics. UM. These are two issues, well, the supply chain and chips are two issues that have become conflated and intertwined over

the crisis. But UM, we should keep them separate. I guess right, Brendan, Because you have a great, big story out in the Bloomberg today showing that we could see the supply chain returning to some sense of normalcy. And throughout the story you talk about the reduction in weight times that ships have outside of harbors. Yeah, we definitely need to make a distinction between tech supply chains and

normal supply chains. You know that they are they are inter linked to some extent, but but tech supply chains are very you know, very complex and and and difficult

to replicate in other countries. But but for other things, more basic sort of lower value goods or you know, textiles or things that don't require you know, lots of you know, complicated machinery or engineering can be can be produced and are being produced and have been shifting out of China for you know, many years, even before the pandemic and the US Trade Board with with with China, So so that shift has been ongoing and and and what we're seeing now is, uh, you know, if you

set the tech supply chain aside for a second, we're seeing the demand cooling around around Europe and the US in particular. So so we're seeing a lot of that congestion that we saw. You know that most of US is sort of transportation related as opposed to production related. So some of that is freeing up just because there's there's demand that's coming off. You know, the peak, the peak levels that it is seen over the past couple of years. All right, Brendan, great stuff, Really appreciate you.

You're taking a time. Brendan Murray Trades are for Bloomberg News based in London, and Bloomberg News is all over this global supply chain issue, as is Bloomberg Intelligence Investment Research Wujinho technology analysts for Bloomberg Intelligence. They have a big, big report out on the terminal bond market, closed equity market open. Who's in charge out there? I mean, somebody's got to get it together. Here, let's continue our discussion

of technology. It's time we're keep our focus on the chip business, um because a lot of industries penned upon the chip business. You didn't think so until we had this pandemic. Then you're like, oh yeah, chips are and everything. Men Deep Seeing, senior technology analyst for Bloomberg Intelligence joins us here in a Bloomberg Interactive broker studio and we

talked about chips. We always like to talk about the auto industry because Matt truck was stuck in somewhere in Mexico because you couldn't get enough chips for I don't know what, the electric windows not because of that, probably some other reasons. But Kevin Tyning, he's got all the answers when it comes to the auto business, senior automotive analysts with Bloomberg Intelligence. So, man, deep, I'm looking again the Philly Semiconductor Index, the socks. It's down again today,

the lowest since October. What's going on in the chip business? I thought we needed these things well. Of what happened last week was m D pre announced and they said their client segment revenue will be half of what they expected back in August, So not a lot of time had passed from their prior guidance, and within two months they come out and say it will be a billion dollars lower and most likely that will be the case for the fourth quarter as well, So not just one

billion lowerd for the year, but two billion. And so what that translates into is, you know, pieces shipments being down almost fifty sixty million, but PCs, I mean, who uses a PC anymore? What? What is this? Is it? Motorola? Is it a Nokia PC and come on, give me a break. Chips are used in electric vehicles and cellular telephones other than Nokia. Um, you know, they're used in a million other products besides personal computers. I'm not running DOSS.

I don't care about PCs. So well, these businesses are much more diversified now than they were five years back. And so m D does have a data center business, they have gaming business. Gaming is going down as well, so data center is what is holding off Fell. But guess what when everything is going down, the cloud guys, the hyper skillers are gonna say, okay, why are we spending thirty billion dollars on capex, you know, setting up these new servers when the overall demand is going down.

So eventually they'll pair back as well, and that's why you see such violence stock reaction. All right, Kevin Tynan, you've been whining, Matt's been winding, all the gearheads have been whining that they can't get their vehicles because there's not enough chips out there. What are the good folks

in Detroit telling you? Yeah, I mean, I'm more of the opinion and this is just my opinion that look, this is the the constrained output by the manufacturers is a little bit more orchestrated than people like to think. And it's not that there isn't a chip shortage. I just think that our at least our domestic manufacturers are managing it such that it's enabling them to move up market basically in every you know, vehicle architecture they can. So there's not a chip shortage. According to m D

there's not. They wish there was a chip shortage, right specific pockets there is. So for autos there is still a shortage. But for PCs, well, which one is is autos the pocket and PCs is like the whole enchilada, or is PCs a pocket? Autos is much smaller. Are you hearing from Detroit and from the other companies that they can in fact get the chips. Well, here's the thing, right, I can get the chips I need for the expensive vehicles that have all the margin for me, right, and

I can build those. But those darn things that you know I can sell for eighteen thousand dollars that I lose money on, I can't find enough chips for those. And then this is what you get is that you know, everybody talking about affordability and that automakers are missing out because they're going to have an affordability crisis. And I'm saying they're making the affordability crisis. This is exactly where

they want to be. They they want to be selling you sixty five tho dollar pickup trucks instead of eighteen thousand dollar small coops and sedans. So you know, the idea that that the automakers will produce more if there were more chips, I think is I think it's wrong. I think this is where they want production going to be relative to demand, keep it in balance. Where they don't want it to take a year to get your sixty pickup truck. They don't want you to wait two

years to get your Bronco. Right. But if but if you do have to wait and you're gonna pay over sticker, then we'll take that trade, I guess for a time being. But the bottom line is these are two different conversations.

I mean no offense to Eric, but man Deep and Kevin no I shouldn't necessarily be round table because Kevin is worried about at least automakers saying there aren't enough chips, and man Deep is talking about the company's he covers, saying like we're swimming in chips, as chips are in everything, and I didn't even care about a chip until now, Like I'm looking at looking under every hood, every nook and cranny, deceive there's a microchip hiding there. Man, deep

are they ever gonna is this? You know, in the great state of Ohio, in the state of New York they're talking about building fabs. Is that what you guys call them, Like the manufacturing plans for making these chips, is that it really going to be a thing that

can move the needle? It will and these require you know, planning, So by the time you know the Ohio fabs come online, there will be But at the same time, the good thing is, you know, at the geopolitical level, you see these tensions and you know the direction where things are aheaded.

So eventually you know there will be a point when the US based fabs will have a higher utilization, and you know you can do a lot more here because look, these are asset intensive businesses and you require the cap expense. So it's great that the government is involved now because companies can do it on their own. Kevin I just literally just twenty seconds here. Uh, is ubs right? Is Ford's profits going to get cut in half next year? Well? My so my question is where is this you know,

overproduction coming from. Is it because demand falls through the floor or because they think that automakers once there are chips, um, they're just gonna accidentally overproduce and it's gonna kill affordability and pricing and everything. And I'm saying that's just not how it's gonna work, all right. Kevin Tyne and good stuff. He covers the auto industry, which is basically a technology

industry with four wheels. I'm convinced. Uh. And then Man Deep saying he is a senior tech analyst covers all things technology for Bloomberg Intelligence. He was actually in studio today as he is most as gold star for for Man Deep. And thanks to Kevin Tyne. Time to go with geopolitics right here, we're gonna roundtable this series of stories. Dr Ariel Cohen, Senior Fellow at the Atlantic Council Eurisa Center, joins us as well as Roz Matheson. She covers Bloomberg News.

Executive editor for Internet International Government joins us here to talk about a whole host of geopolitical issues, and let's start with Ukraine because it seems to ratchet it up over the weekend and Dr ConA like to start there. Just give us your thoughts on kind of how you see the situation in Ukraine, maybe the events over the weekend, and maybe what's next to come. Okay, So on the eighth of October, one day after putting seventeenth birthday, there

was an explosion on the Kirsch Bridge. That's a bridge that connected Crimean peninsula with the mainland. Uh and um it disrupted the traffic on the bridge. Most of the traffic is repaired now it's a multi media bridge. It has UM cars, railroad, electricity and whatnot. Uh So it's a strategic supply line for the Russian military in the Crimea and in the south of Ukraine, in the Carson region.

After that UM, the Russian started bombarding Kiev, the capital of Ukraine, Kharkiv, the second largest city, and Viv, the third largest city, as well as other cities all over Ukraine, primarily taking out the energy infrastructure. So we have reports of electricity being shut down in the major Ukrainian cities. And I don't need to explain to our audience. How devastating it is for the civilians. Also a lot of these missile hits were against civilian targets. You know, That's

what I don't get. I don't understand why, you know, um, taking out the bridge to um To to block one place where Russian troops come into the theater makes sense. That's a strategic move. Why does Putin then turn around and attack civilians as if that bridge was somehow off limits. The bridge, of course is not off limits because the troops of fuel the AMMA are all going into the theater through that bridge. Um. But attacking civilians is the

last time I checked. It's a war cron and I think one of the responses that Biden administration and the Europeans need to do now is to start identifying who are the war criminals of this war. The Ukrainians are doing some of that work, of course, but I think this needs to be escalated because these people need to understand that as long as this war is continuing, they're piling up what may lead to their life uh sentences in the hade Ros I want to bring you in.

Roz Matheson, Executive editor for International Government of Bloomberg News you know, ros has been I guess, you know, always a concern in the back of folks mind that maybe President Putin will get so desperate that the nuclear option maybe on the table. What's the latest reporting there? Of course, that remains the concern, But he's been threatening that in

some shape or films since the war began. The question is how much is he's back against the war the war, and how much does the war continue to go against him on the ground, and therefore, what are his options

really to get any kind of result. I mean, what he's had some success in so far is sort of sowing a bit of disarray within EU more broadly over energy access going into winter, certainly cutting off energy supplies two countries um and as we can see within Ukraine itself as we're just hearing cutting off electricity supply with

some of his attacks today. And if you want to splinter Europe further and you want to really push them on the unity question with Ukraine, do you go so far as to use a nuclear weapon in Ukraine to sort of see what the response would be, And that maybe the question right now, there's no there's no sense that he's moving nuclear assets towards that, but certainly he's leaving that option open, and that's really putting us in

quite a dangerous phase. As you can see today from the extent of the missile attacks that have gone on across Ukraine. He's suffered numerous personal prestige blows. The bridge himself, that was something you drive a truck over when it was opened, after it was built, So for him it's personal. Dr Cohen, what's the likelihood of the Russians using nuclear weapons? Well,

this is UH sixty four billion dollar question. And I'm not talking about the Democratic Party fundraiser at which President Biden found it appropriate to discuss this dire and grave topic. I think the conversation about whether puts In is using tactical nukes or god forbid, it escalates to strategic nuclear exchange. We should could should not be done as a part of a fundraiser. It should be a serious conversation, probably

in a speech to the nation by the President. UM. I think the chances are all my contacts in Russia, outside of Russia in the US government are saying that the probability of this is growing. We started UH several months ago talking about I was talking about people corrected me and said, no, thirty now I think it's over. It's quite possible that Russia will use tactical nuclear weapons. And the big question is, of course, what's dex Are we going to respond, How are we going to respond?

How Natal allies are going to respond? And this these are the uncharted waters. This is more grave and more diet than the Cuban missile crisis, in which nuclear weapons were not used. And and and how do Russian allies respond? I mean Risal And let me ask you, um, how has the Russian relationship with China fair throughout this war? And you know, if we get there, they have to probably reas the Chinese probably have to reassess their their

support for Putin. We have to imagine that the Chinese president is not particularly happy that this is going on, or certainly that it's dragged on so long. Right as he goes into his own leadership moment in China next week where he wants to be reindorsed for a third term because he doesn't need this kind of mess occurring, does he particularly care about the war in Ukraine. That's up for debate. Um, certainly, Um. He has continued to

do business with Russia. As of other countries, including India for example, UM in trading. But China has been pretty careful not to step too much into the bounds of sanctions, even if they haven't signed up for them. They're being pretty careful. UM and he in some ways he and Russia do still need each other, um as sort of a bulwalk against against the West as we move into a really truly multipolar world. UM that there's vested interests there is he probably particularly happy with the way that

Vladimir Putin is conducting this. You would you would think not, and he's probably expressed that privately. Will he publicly criticized Russia if they test, if they do, if they do a nuclear weapon potentially, But there's still a relationship there, all right, So sobering discussion points there. Again, the odds of a new from Dr Cohen are much higher than I would have thought. Dr Ariel O and senior fellow Atlantic Council Eurasia Center and Ros Math is an executive

editor for International Government for Bloomberg News. With again some sobering assessments of the situation in Ukraine. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller. Put on fall Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio