UN Draws Line Linking Khashoggi Murder To Bezos Hack

significance of this story that came out earlier today. The United Nations experts now weighing in saying that Saudi Crown Prince Mohammed bin Salman was possibly involved in hacking the cell phone of Amazon dot Com CEO Jeff Bezos. And this was revealed after an Amazon investigation. This has to do with a What's App account that was infiltrated according to investigators back in ten Greg Farrell here to give us a little bit more clarity. He's an investigative reporter

for the Legal enforcement team here at Bloomberg News. Greg, can you just sort of set the stage of what actually is alleged to have happened here well from what we know, um, after Jeff Bezos you know, photos from his personal life that contributed to or you know allow you know a year ago came out. Um, they his team started going through like with a fine tooth comb, everything is like, clearly he had been hacked. Clearly stuff had been stolen from him, digital images, etcetera, from his

personal devices. So that started the process. In addition to that, federal prosecutors in New York started looking to see if there was any involvement by the National Enquirer UM with you know, uh, basically some you know, unlawful activity regarding this part of the investigation. UM went through you know, chapter in verse every interaction with what Pisos had and then um, you know, so there's there's a criminal investigation

in Manhattan. Here. Separately, at the United Nations, there are a group of people dedicated to you know, justice for extra judicial killings who been very focused on the murder of Jamal Kashagi in October. They got involved with this as well, and they're the ones who put out a

report today. And this is what the news reporting starting late last night indicated is that their findings based on the digital the forensic digital analysis of Bezos's phone indicated lots of evidence that at the time in May of after a benign what's app you know, transaction or what's app message from the Prince to Bezos, then suddenly afterwards there was this malignant, you know, coded file that got in something called Pegasus, which I don't understand god was,

was placed in Bezos's phone and started exfiltrating massive amounts of data, far far larger than the normal amounts of data that would normally come in and out of a phone. So Greg is there do we have any sense of what Jeff Bezos would like to see happen. I mean, it looks like obviously his security was breached, and it

was obviously had implication for him his personal life. But as he stated, what he wants to happen if in fact the Crown Prince is guilty of this or did do this, No, I think right now he's playing this carefully because there is a criminal investigation in New York into some of the conducts surrounding that. It's proceeded very slowly.

But I think he's smart enough and he's getting the right advice not to get in front of it and decide what he wants to do, but to let the you know, the most important thing the criminal investigation proceed is the u N investigation somehow implying a connection between the killing of Tamaka Shogi and the Jeff Bezos hack or the leak of his personal information. Is that part of it or it just was that. Yeah, they're making their drawing that line. They're not there's no proof that

this led to that. But you know that's what these people that the u WHEN are investigating. They're they're trying to get to the bottom of how and why in more details and hold those responsible for it the killing of kog So you know, it's this is another element to that whole storyline that the Saudi government has started denying completely and then denied in part and then found some people to find guilty um in a trial of sorts a closed trial in Saudi Arabia earlier this year.

And the u N people are staying on this and

what's Jeff Bezos connection to the Tamaka Shogi case. Just that Kau Shogi worked for the Washington Post, and so the Washington Post, most of the major newspapers and news media uh in this country have been very supportive of efforts to get to the bottom of this, but no one more than the Washington Post because he was one of them, greg Asor do we know whether the investigators are looking more broadly or are they just looking at Jeff Bezos or their other prominent people that could be

the targets of mbs IS or the Saudi government's hacking of phones. So two things they're one, we don't know what the prosecutors in Manhattan are doing. That seems pretty clear it's focused on the hack and the National Choir and whether or not the inquirer was culpable at all, and there's no evidence to suggest that there was. Separately, though,

that's a much bigger question. And you've hit a very important point now that we know with a high degree of confidence, but not absolute certainty, that something some part, even if it wasn't the Crown Prince himself, but somebody in Saudi Arabia was interested in hacking into a prominent,

wealthy Americans phone. This opens up the question, well, what other prominent American officials or figures with close ties to the government, um either the Trump administration or Congress, or in the business community who did a lot of dealings and had a you know, what they thought was a personal relationship or what's app relationship with the Crown Prince or other representatives of the Saudi ruler family. Has anybody

else been hacked and we just don't know yet. So that's that's the bigger issue here, is that, uh, you know, as the Saudi government been doing this to a wide variety of people and if so, whom right, very interesting, fascinating story that I think is just a development. Here Grege, investigative reporter for the Legal enforcement team at Bloomberg News, joining us here in our Bloomberg in active broker studio with that fascinating story of Jeff Bezos, the Washington Post,

the Crown Prince of Saudi Arabia, what's app hacking? Uh, so interesting story. So I think this is probably LEASA something that's gonna be developing over time. Oh, I don't think this is the last that were part of this. If the UN panel is coming back with the same conclusion as Jeff Bezos is uh. Private investigators markets are rallying slightly today on news that China is ramping up its efforts to contain the Corona virus that's killed at

least seventeen people and affect that hundreds. As the outbreak has spread beyond age of the question is what does it mean for global economics. We welcome Tom or Like he's a chief economist for Bloomberg Economics, joining us from the Bloomberg nine studio in Washington, d C. Tom, you

lived a long time in China. I wonder if you could give us a sense for kind of how this coronavirus compares to the stars UH virus from about seventeen years ago, because that's certainly had some rippling effects before the economy. So that's right, Paul. So if we go back to two thousand and three, in that Stars outbreak, UM, I think one of the critical factors was the slow pace of the government response. UM. There was a failure

to acknowledge the extent of the outbreak. UM, there was an inability to UM move policies quickly to contain it. And what that meant was that actually the economic impact, whilst brief, was pretty severe. We saw GDP growth for two percentage points from the first quarter of two thousand and thirty two thousand and three to the second quarter

of two thousand and three. The hope as we are here, we are in twenty twenty is that the kind of the bitter lesson which China learned back in two thousand and three is going to enable them to be more transpar aren't quicker, more effective as they respond to this emerging threat from the coronavirus. How do you game out of the potential economic impact of our pandemic? I mean,

it's basically not possible to do lisa UM. So here we are in the very early stages of this disease, and it's not clear how it's going to develop um and so the best we can do is think about the moving parts and try and think about some scenarios. An important factor in our view is the way the Chinese economy has evolved over the last sixteen seventeen years. Back in two thousand and three, the Stars outbreak had

the biggest impact on the services sector. It hit tourism, it hits shopping, it hit people going to the restaurant, going to the cinema and such like. But back in two thousand and three, the services share of China's economy was really quite small. Here we are in and one of the big success stories for China in the last two decades has been this economic transition they've managed to move away from industry. The services sector is named much

more important. More people eating at restaurants, more people going to visit their friends and relatives, more people going to the cinema. But guess what that means that if this coronavirus does expand does spread um, then potentially the economic

impact is going to be significantly larger. And interestingly, who who Dision, the editor of the Global Times, who's often thought of as sort of a mouthpiece for the for Beijing, came out and acknowledged that there would be an economic hit that people would be traveling lest buying a fewer items amid this holiday. Are you expecting perhaps a bigger economic impact than might otherwise be seen, just because it just is going to have that kind of dampening effect,

even though necessary it is contained. Yeah. I think you raise an important point, Lisa, and that is that the timing of this for China couldn't really be worse. We're about to hit Chinese New Year, and at Chinese New Year, what happens is literally hundreds of millions of people UM

go home. Many Chinese people are migrants. They work in cities which are different from the cities they were born in and Chinese New Year is the one point of the year where everyone puts down what they're doing, leaves the factory, leaves the office, gets on the train, gets on a bus, gets on an airplane, and goes to enjoy the Chinese New Year celebration with their family in the same way that people do it Thanksgiving or Christmas here in here, in the US and in the UK.

Um So the concern could be that even if this virus is contained, even if it doesn't spread, just the mere timing of it is going to have a larger impact on economic activity because people cancel those plans. Tom Moore like, thank you so much for being with us, Tom More like chief economists for Bloomberg Economics, joining us from our Washington d C studios. Really interestingly, coronavirus has been at least it appears to be somewhat more contained.

There seems to be more confidence that it won't necessarily spread rampantly, and that the Chinese government is being more transparent this time around than the last time seventeen years ago, in the stars epidemic was spreading much more than they had previous expected. But really interesting what Tom said, which is it hits services when there is a concern about an illness, and services account for a much bigger proportion of China's economy now, so it could potentially have a

significant economic hit even if it is contained. Yeah, and in interesting Tom mentioned the timing of it coming around the Chinese New Year, and how there's such a movement of people within the country and how that could actually unfortunately facilitate the spread of the disease. So that's something

I'm sure the Chinese officials are watching closely. And again, as you mentioned, there's actually been some calls from government by saying don't go home, don't travel, um, you know, And I think they're all just that's all predicated upon trying to limit the outbreak here. It's some housing data come out today. US existing home sales rise to their best pace since early two thousand eighteen, indicating once again that the consumer continues to power the U s economy along.

We are very happy to have our next guest, Doug Duncan, good friend of the show, Senior vice president chief economists for Fannie May usually based in Washington, d C. But we dragged him up here to New York City to the Bloomberg Interactor Broker Studio. So, Doug, and it seems like every time we chat with you, we have more I'm gonna say great, but certainly solid housing data. What do you make of the existing homesale data that came out today that's consistent with the forecast we think is

going to be a good year. The consumers well positioned. You've seen lower income groups see rising income growth relative to middle and upper income groups, and that's where the first time home buyers are in the millennial group, which are driving the demand for homes. They won't peak in terms of their household formation for another six years, So depending on what the economy does under that, we still

have a good run to go in housing. And we're still building two d and fifty thousand units less than demographics would suggest annually. Well, there's been a tension in the housing market that there are growing number of people who want starter homes and those starter homes are getting more and more expensive. How is that conundrum getting resolved

in order to keep these numbers going forward. Yeah, it's kind of a fight between the boomers and the millennials, if you will not that I'm trying to foment social discards please go ahead. But the boomers are doing what they said they're going to do. They're aging in place, and that's usually where the turnovercomes. That makes existing homes available to the first time buyer, and it's the move

up buyer who buys what the builders building. So this is a challenge for builders to make money building starter homes. That's not their traditional role. They're making progress our expectation as you see probably about a five percent growth this year in new home sales, which the square footage they're building has been falling for about three years, so they're

trying to move toward that entry level buyer. But still there's got to be turnover among the boomers in order to really come back to normal relationships in the housing turnover? What is that? What does that mean? I mean, really digget there exactly. Well, it means when the kids have moved out. While you may want to keep a bedroom or two in case they come home and bring the

grand kids, you probably don't need five bedrooms. Interesting, so are the regions of the country that are is it fairly consistent across the country we're seeing decent household formation in home sales, or the regions that are maybe worrying you to some degree. Well, we've been studying the issue of mobility, asking the question if housing is too expensive for entry level workers to be able to afford a house near where they work, will businesses start moving their

location to our housing is more affordable. And there is significant anecdotal evidence of that, and also starting to be some valid evidence of that in the data that businesses are relocating. Although in fairness, I have spoken anecdotally to some executives at companies that have tried to move away from New York to other places, in particular some southern cities,

and have struggled to find the talent. Uh, And I'm wondering, you know, does this sort of foretell further stability and say a New York City market or a San Francisco market, despite all of the threats that everyone's going to move away because it's just too expensive. Yeah, I think there's in some sense, instead of incremental additions to those already expensive and heavily populated metros, it's the incremental are going elsewhere.

One story, for example, is if you look at where Boise was ten years ago compared to where Boise is today, that's absolutely all outflow from higher cost areas, and Boise's hu's eight or and fifty thousand people in that metro. Now, uh, that's a poster child for that kind of migration. It's not gonna happen everywhere. Core businesses will still remain in New York City, but the additional if you can open another office somewhere else in that business, that's what you're

seeing some of the West Coast tech companies. They're moving a part of their business to Utah, Salt Lake or Torno, or to Phoenix or someplace where housing is more affordable. Doug, what's your overall economic outlook for in that camp. It's kind of kind of growth. We think the sustainable non inflationary growth rate for the economy is between two and two and a quarter, and we'll be in that range this year, a little bit slowden last year. Boeing will

have something to do with that. The the uh uh that that will be actually a number that will slow the headline numbers a little bit. How's the housing market in Fargomorehead, North Dakota. It's very well. It's a very affordable place, and if you have a child sent to a university, there's an excellent, Ya, North Dakota State University.

It's affordable and good quality and you're totally objective, right, I am totally absolutely as um and I say this actually I am going to be heading to North Dakota State University in April. April, not January. Yeah, although it's still joy pretty. Although it's still going to bed. Yeah, they're about two weeks in between winter and uh in summer, in which case it's nice. No, it's it's gonna be fun. I actually started my career at Fargo Noice Dakota, so

I'm going to as a reporter anyway. Thank you so much for being with us. Don Duncan, always wonderful having you here. Don Duncan, chief economist at Fanny May joining us with this better than expected data it again on the US housing market. The impeachment trial continues in Washington, d C. In the Senate, and there is a big question about four U. S. Senators Republicans who hold the key to whether or not the trial will involve witnesses

or not. Twitting us now to talk about the political consequences of the impeachment proceedings is when do you shill our professor of political science and public Policy at Brown University joining us from Providence, Rhode Island. Professor Schiller, thank you so much for being with us. I want to start with the significance of this decision on behalf of that handful of senators who really are the key to whether or not there will be witnesses in this in

this trial. Yeah, I mean, I think it's really crucial to understand the politics of it. So Miss McConnell wants to keep control of the United States Senate after election. He's got vulnerable senators, he's got vulnerable centers in Maine, Um, North Carolina, Arizona, and Colorado, among others. And he's just doing the math. And Susan Collins in particular is viewed to be quite vulnerable on this issue. And the question is if this is going to take it seriously? This

is impeachment. Did the president of uses power? We sort of know they're not going to vote to convict. We've got to get that idea. That's parts and loyalty, But should we all have a fair trial and a fair hearing of all the evidence. In fact, it could be that the evidence supports the idea that he shouldn't be convicted and Austin and removed from office, and that would help those four vulnerable senators. It's not clear to me that if you present the evidence or some witnesses, you're

definitely strengthening the House Democrats case on impeachment. So that's the puzzle, and the question is are you going to appear to be fair and open in states where you're really gonna be vying for those independents and suburban voters in so, Professor, assuming that I guess witnesses are not called and there is no conviction, what would be a win for the Democrats here. Well, I think you're already seeing part of the win, Paul, which is that the

speech is particularly last night. If you watch some of them, they got a little heated, they got a little fiery, uh. And the House Democrats are trying to use this opportunity, I think, to rile or you know, secure the Democratic Party base. As we know, there's a lot of conflict in the Democratic presidential nomination process. There's no clear front runner, nobody's madly in love with any of the choices, and that has to concern the Democrats in terms of turnout.

But if you can drive this from the House effort. In other words, the House, as in eighteen, did very well to take it back the Democrats. If you could drive that and really rile up the base based on impeachment, particularly constituencies within the base on impeachment, that becomes a political victory down the road for the Democrats, even if they don't get the conviction that they're seeking. Really, what about pushback? People say, look, the economy is doing really well.

What's your plan for that at a time when President Trump's policies have at least allowed it to keep going? Right, Lisa, this is exactly right. So it's a different audience. Right, You've got the independence who are probably going to vote for Trump at the economy stays good, even though they may not like him. The question is will to be Trump fatigue? Will Trump do something else that looks like this that just takes people over the edge and they

can't stand them anymore. That's a possibility, but that's a different base. The Democrats have to worry about turnout in their own base. What cost Hillary Clinton is a lot of factors, but partially lower turnout among African Americans and

defections among women in particular. We saw women go back to the Democrat Party in will they stick with the Democrat Party in so having people out there who are showcasing, particularly from these constituencies, that may be enough to get that energy level back up, sustaining the gains and not fall into the travel which was conflict and some dislike and apathy. Professor Shuler, is there any evidence that the impeachment proceedings have in fact been successful at energizing the

Democratic base? Not yet, But we haven't seen the turnout in the primaries yet because we haven't gotten there right. We've got the Iowa caucuses them, we have New Hampshire, we have Nevada, we have South Carolina. We have to see what that that primary turnout looks like. Yes, it's competitive, but turnout is also an indication of interest. People are still registering the same places and mostly voting in the same places they vote in eighteen. That's an advantage for

the Democrats to get out the door. If we see high primary turnout, that's gonna be evidence of engage Democratic Party. And that means that, you know, the Democrats can try to be hopeful about getting their base out. We know the Trump base will get out and so the question is do all Republicans get out the door, they tend to be more loyal, more unified, and they vote bigger numbers in presidential elections for their candidate that independent base.

But I think, you know, as people actually watch this, if they watch, which they can watch, you know, tape it or watch it live, but as they actually see the Senate go through this and realize how historic this is. You know, this could have reverb down the line six eight months. It all depends on Trump's behavior. If he triggers something else, people will say to the Republicans, why didn't you go after him harder? Why didn't you call

it witnesses, Why didn't you dig deeper? That's a gamble I think that McConnell and the Republican Party is taking by not doing that. Professor, what's the role of Chief Justice Roberts in this proceeding? Well? To keep the trains

running on time? I mean, he already admonished both sides, you know, in a very quiet way last night, but he he admolished them basically to say, listen, keep it civil, you know, and he quoted something from the early part of the twentieth century saying, look, you know, just keep it civil, keep it to the facts, and I think he's gonna have to make sure that rhetoric doesn't get too heated and that things stick to the facts of the case. How much he intervenes, we all have to see.

But that's his role. It's so interesting. The vice President doesn't have a role. Normally, the Vice President presides of the United States Senate, so even breaking a tie or ruling on emotion, this is all the Chief Justice. So it's a different Senate that we usually are typically um habituated to seeing. And he's gonna have to really run run the ship in a steady way. It has everything to do with the Senate, but also for the reputation of the Supreme Court itself. You know, I just uh

want to eliminate your background. I mean, you've been on the staff of Senator Patrick moynihan and Governor Mario Cuomo. You've been extensively involved in the democratic political engine um throughout the years, and I think that it's really important to find out what is the potential ramification for the Democrats that the Republicans energized their base based on the impeachment with with President Trump succeeding and convincing them that

it is a witch hunt. In his words, Yeah, I mean, I think you're You're absolutely right, And you know it's in my early pre academic life, I was very involved in Democrat politics and now it's been a long time, so I've been out of the loop, but observing from Afar and essentially what you can look at for the Republicans solidification of the loyalty of the Republican voter to

the Republican party across the board. That's what they're hoping to get out of this impeachment trial process, and I think they will get that, which is to say, don't go anywhere. We've got this guy under control. We're watching things, we're gonna protect him, we're gonna protect our party gains, and we're gonna do what you want us to do. And I think that's a clear, unified message that they

are sending now that they continue to send. The question is what the president does after this, and that's something they can't control, which is why I still think it's a bit of a gamble on their part, particularly in those vulnerable states that are going to be really contested. In very good Wendy Chiller, thanks so much. For joining us. Wendy is the professor of political science and public policy at Brown University, giving us her thoughts on the impeachment process.

Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa A. Bram Woods. I'm on Twitter at Lisa Bramwood's one before the podcast. You can always catch us worldwide on Bloomberg Radio.