>> HELLO, EVERYONE, AND WELCOME TO "AMANPOUR & CO. "

HERE'S WHAT'S COMING UP.

UKRAINE KEEPS UP ITS ATTACKS INSIDE RUSSIA WHILE IT STRUGGLES TO DEFEND AGAINST MISSILES FROM MOSCOW.

I'LL SPEAK TO EXPERT DARA MASSICOT, JUST BACK FROM KYIV.

> >> AND ISRAEL STRIKES GAZA AS QUESTIONS REMAIN OVER HAMAS' AGREEMENT TO GIVE UP ARMS.

JEREMY DIAMOND JOINS US WITH MORE FROM TEL AVIV.

> >> THEN SWEEPING CYBER ATTACKS HIT AMERICA'S WATER SYSTEMS.

WHY THE EVIDENCE SO FAR IS POINTING TO IRAN.

> >> PLUS ARE WE IN AN AI BUBBLE?

WALTER ISAACSON ASKS FINANCIAL JOURNALIST WILLIAM COHAN.

?

?

> >> "AMANPOUR & CO. "

IS MADE POSSIBLE BY -- THE ANDERSON FAMILY ENDOWMENT JIM ATTWOOD AND LESLIE WILLIAMS CANDACE KING WEIR THE SYLVIA A. AND SIMON B. POYTA PROGRAMING ENDOWMENT TO FIGHT ANTISEMITISM THE STRAUS FAMILY FOUNDATION THE PETER G. PETERSON AND JOAN GANZ COONEY FUND CHARLES ROSENBLUM MONIQUE SCHOEN WARSHAW KOO AND PATRICIA YUEN, COMMITTED TO BRIDGING CULTURAL DIFFERENCES IN OUR COMMUNITIES BARBARA HOPE ZUCKERBERG AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU.

THANK YOU.

>> YOU'RE WATCHING PBS.

AND SEVEN PEOPLE WERE KILLED INCLUDING THREE CHILDREN.

UKRAINE HAS NOT YET COMMENTED ON THE DEADLY EVENT.

KYIV HAS BEEN STEPPING UP ITS LONG- RANGE ATTACKS INSIDE RUSSIA.

OVER THE WEEKEND, IT ONCE AGAIN LAUNCHED DRONES AT A WAREHOUSE BELONGING TO WILDBERRIES, A COMPANY KNOWN AS THE RUSSIAN AMAZON.

MEANWHILE MOSCOW CONTINUES TO POUND KYIV WITH A MASSIVE MISSILE ATTACK OVER THE WEEKEND.

PRESIDENT ZELENSKYY SAID HIS COUNTRY MANAGED TO INTERCEPT ONLY ONE OF THE DOZENS OF MISSILES DUE TO A SHORTAGE OF PATRIOT INTERCEPTORS.

DARA MASSICOT IS A SENIOR FELLOW AND RUSSIA AND EURASIA PROGRAM AT THE ENDOWMENT FOR INTERNATIONAL PEACE.

SHE JUST RETURNED FROM A RESEARCH TRIP TO UKRAINE AND JOINS US NOW FROM WASHINGTON.

DARA, WELCOME BACK TO THE PROGRAM.

SO CURIOUS TO HEAR YOUR INSIGHTS FOLLOWING YOUR RECENT TRIP TO UKRAINE.

WE'LL GET TO THAT IN JUST A MOMENT.

WE'LL ALSO GET TO THAT IMAGE OF WHAT WE SAW APPEARS TO BE UKRAINIAN STRIKES AT A RUSSIAN BEACH THERE WHERE THERE ARE A NUMBER OF CASUALTIES.

I DO WANT TO BEGIN, THOUGH, WITH WHAT WE SAW OVER THE WEEKEND, BECAUSE THERE DOES APPEAR TO BE CONSISTENCY HERE WITH THESE ONGOING LONG-RANGE STRIKES, THE BALLISTIC MISSILES THAT RUSSIA KEEPS TARGETING TOWARDS KYIV, OTHER CIVILIAN POPULATED AREAS.

ONE OF THE 27 FROM PRESIDENT ZELENSKYY SAYS THAT THEY WERE INTERCEPTED.

AND IN PRESIDENT ZELENSKYY'S WORDS, HE SAYS THAT IS BECAUSE THERE ARE NO INTERCEPTORS FOR THE PATRIOTS.

FROM YOUR PERSPECTIVE, HOW DOES MOSCOW VIEW THIS PARTICULAR VULNERABILITY?

NOT WHAT'S HAPPENING ON THE BATTLEFIELD, BUT THIS AS IT RELATES TO AIR DEFENSE FOR UKRAINE.

>> WELL, THIS IS A VULNERABILITY THAT WE'VE BEEN WARNING ABOUT FOR SOME TIME AS GLOBAL PATRIOT INTERCEPTOR STOCKPILES HAVE BEEN ATREATING OVER TIME.

MOSCOW HAS UNFORTUNATELY OVER THE LAST FEW MONTHS STARTED USING MORE BALLISTIC MISSILES AND HYPERSONIC MISSILES AGAINST KYIV AND INDUSTRIAL TARGETS.

AT FIRST I THOUGHT THEY DIDN'T QUITE BELIEVE SOME OF THE STATEMENTS THAT WERE COMING OUT OF KYIV THAT THEY WERE RUNNING LOW ON INTERCEPTORS.

AND SO THEY DID SMALLER SCALE TEST SALVOS ESSENTIALLY.

AND NOW WE'RE SEEING THEM EXECUTE 30, 20 BALLISTIC MISSILES AGAINST KYIV AND ITS NEIGHBORHOODS EVERY NIGHT.

THIS PROBLEM DOESN'T HAVE A SOLUTION THAT INVOLVES ADDITIONAL PATRIOT STOCKS, AND I THINK IT'S TIME TO CONSIDER OTHER WAYS TO REDUCE RUSSIA'S LAUNCH CAPACITY.

>> SO, THEN, DO YOU EXPECT TO SEE RUSSIA TAKE ADVANTAGE OF THIS SHORTAGE FROM UKRAINE AND CONTINUE THESE TYPES OF LAUNCHES?

AND HOW MANY BALLISTIC MISSILES DOES RUSSIA REALLY HAVE?

DO WE KNOW, IN ITS ARSENAL?

>> YES.

SO ESTIMATES RANGE OF MONTHLY PRODUCTION FROM 50 TO 65 OR SO PER MONTH.

AND KYIV UNFORTUNATELY IS NOT RECEIVING THAT TYPE OF INTERCEPTOR IN RETURN.

AND THEY'VE BECOME VERY EFFICIENT OVER TIME AT HITTING RUSSIAN MISSILES, POTENTIALLY EVEN MORE EFFICIENT THAN THE UNITED STATES MILITARY IS IN SOME CASES.

BUT THE MATH IS JUST NOT FAVORABLE WHEN ONLY RELYING ON PATRIOT TO INTERCEPT WHAT RUSSIA IS INCREASINGLY GOING TO TURN TO.

>> AND UKRAINE, PRESIDENT ZELENSKYY HAS BEEN ADAMANT ABOUT ONE THING, AND THAT IS THE NEED FOR MORE MISSILE DEFENSE WEAPONRY FOR YEARS NOW.

AND HIS MOST RECENT VISIT AT THE WHITE HOUSE ONLY REINFORCED THAT.

I'M CURIOUS, THOUGH, TO GET YOUR THOUGHTS ON SORT OF BACKTRACKING THAT WE SAW FROM PRESIDENT TRUMP, REALLY SURPRISING MANY, PERHAPS EVEN HIS OWN DEFENSE COMPANIES HERE IN THE UNITED STATES WHEN HE SAID THAT THE UNITED STATES WOULD ALLOW UKRAINE TO HAVE THE RIGHTS TO MAKE THEIR OWN PATRIOTS.

AND HE SAID, QUOTE, WE'LL SHOW THEM HOW TO DO IT.

THEN ON FRIDAY, WHEN HE WAS ASKED ABOUT THAT, HE SAID, QUOTE, WE HAVE NOT AGREED TO THIS.

SO TAKE OUT THE POLITICS, BUT IS THERE REALLY ANY OTHER SUBSTITUTE FOR THE PACK-3s AT THIS POINT?

IS THERE SOMETHING THAT EUROPE COULD STEP IN AND HELP UKRAINE WITH?

>> WELL, I THINK WHAT WAS BEING DISCUSSED FOR UKRAINE IS THE PAC-2 WHICH WORKS, BUT SLIGHTLY LESS EFFICIENTLY.

THERE IS NO DIRECT SUBSTITUTE THAT THE UNITED STATES HAS TO PROVIDE FOR UKRAINE THAT CAN SUBSTITUTE FOR PATRIOT.

I THINK WHAT THEY'RE WORKING FOR IS THEIR OWN INDIGENOUS DEFENSE CAPACITY.

THAT'S STILL A WAYS OFF.

EUROPE I THINK COULD FILL A ROLE IN THE MARKET IN THE MARKET THAT IS NEEDING ADDITIONAL COMPETITORS TO COME INTO IT AT THIS POINT.

BUT NONE OF THESE THINGS I THINK ARE GOING TO BE AVAILABLE IN TIME FOR WHAT COULD PROVE TO BE A VERY DIFFICULT WINTER.

UKRAINE IS CONSIDERING OTHER OPTIONS TO TRY TO DEGRADE THIS CAPACITY OF RUSSIA'S, SUCH AS GOING AFTER THE LAUNCHERS THEMSELVES TO LIMIT THE NUMBER OF BALLISTIC MISSILES IN PARTICULAR THAT ARE COMING IN.

THE CRUISE MISSILES AND DRONES ARE MOSTLY HANDLED PRETTY EFFICIENTLY.

>> AND I BELIEVE IT'S RAYTHEON THAT IS THE U. S. DEFENSE COMPANY THAT HAS BEEN MAKING, THAT PRODUCES THESE PAC-2s AND PAC-3s.

IS THERE ANY SCENARIO WHERE THEY COULD ACTUALLY HELP PRO RIDE THE IP TO UKRAINE WITHOUT THE PRESIDENT'S FINANCIAL SIGNOFF?

>> I'M NOT SURE ABOUT THAT.

I THINK THAT THEY WOULD PROBABLY -- BECAUSE THAT IS SUCH A SENSITIVE TECHNOLOGY, AND THERE HAVE BEEN ISSUES IN OTHER PLACES OF THE GLOBE WHERE WE CAN'T DO THAT, I THINK THAT WOULD PROBABLY BE TOO TRICKY FOR THEM AT THIS POINT.

>> LET'S GET TO THE IMAGES THAT WE BEGAN THIS PROGRAM WITH, AND THAT IS WHAT APPEARS TO BE A UKRAINIAN STRIKE, THOUGH WE HAVEN'T HEARD ANY OFFICIAL ANNOUNCEMENT OR RESPONSE FROM UKRAINE AT A BLACK SEA BEACH RESORT THERE.

A NUMBER ARE REPORTED TO HAVE BEEN A NUMBER OF RUSSIANS ARE REPORTED TO HAVE BEEN INJURED AND KILLED.

YOU AND MICHAEL KAUFMAN, WHO IS ALSO A REGULAR ON THIS PROGRAM, ARGUED LAST MONTH THAT UKRAINE HAS NOW PUT RUSSIA ON THE BACK FOOT BECAUSE OF THESE TYPES OF LONGER-RANGE STRIKES INTO RUSSIAN TERRITORY, RUSSIAN CLAIM TERRITORY.

OVER THE WEEKEND, UKRAINE STRUCK A MAJOR OIL REFINERY, AN AIRFIELD HOUSING RUSSIAN STRATEGIC AVIATION.

AND AS WE NOTED, THE WAREHOUSE OF RUSSIA'S BIGGEST ONLINE RETAILER, THEIR VERSION OF AMAZON.

UKRAINE'S DEFENSE MINISTRY SAYS THAT THIS IS SOMETHING THEY'RE GOING TO CONTINUE TO DO, STRIKING SEVERAL LOGISTIC HUBS AS WELL IN CRIMEA THAT WE HAVE BEEN TALKING ABOUT NOW FOR MONTHS, THIS SORT OF CHOKEHOLD THAT UKRAINE HAS AMASSED AROUND THAT ILLEGALLY ANNEXED TERRITORY.

PRESIDENT ZELENSKYY SAID PREVIOUSLY THAT WE ARE QUITE LITERALLY BRINGING THE WAR BACK HOME TO RUSSIA.

IS THAT HOW VLADIMIR PUTIN IS FEELING IT?

AND DO YOU THINK HE INTERPRETS THIS AS PERHAPS AN OPPORTUNITY TO REALLY SETTLE THIS WAR IN EARNEST WHEN HE HAS THAT KIND OF PRESSURE ON HIM?

>> WELL, I THINK THERE IS TWO CAMPAIGNS GOING ON.

ONE IS THE UKRAINIAN MIDDLE STRIKE, WHICH IS COVERING ALL OF OCCUPIED UKRAINE UP TO THE RUSSIAN BORDER IN CRIMEA.

AND THAT CAMPAIGN HAS BEEN QUITE SUCCESSFUL.

IT HAS REALLY REDUCED RUSSIA'S ABILITY TO MOVE FREELY ALONG THE LAND CORRIDOR TO CRIMEA.

LOGISTICS ARE IMPACTED AND WILL INCREASINGLY BE IMPACTED.

WE DO SEE THAT RUSSIA IS MOVING TO DEVELOP COUNTER MEASURES TO THAT.

SO IT'S ON THEIR RADAR.

IT IS CAUSING PROBLEMS IN CRIMEA FOR ELECTRICITY, WATER, FUEL, FOOD.

SO THAT IS AN ISSUE I THINK THAT HAS HIS ATTENTION.

THE UKRAINIAN DEEP STRIKE INTO RUSSIA PROPER, THIS IS THE EXPLOSIONS WE'RE SEEING ON THE REFINERIES AND WILDBERRIES, IT IS A YOUNG CAMPAIGN.

IT HASN'T BEEN GOING ON FOR THAT LONG.

A LOT OF THOSE DRONES ARE INTERCEPTED, BUT SOME HAVE VERY SUCCESSFUL IMPACTS.

IT IS MAKING THE WAR VISIBLE AND PALPABLE FOR RUSSIAN CITIZENS, BUT AS FAR AS I CAN TELL ON THE FRONT LINE, THE KREMLIN BELIEVES THAT IT CAN STILL ACHIEVE ITS OBJECTIVES, AND IT IS VERY COMFORTABLE WITH SURGING FORCES, EVEN THOUGH THEY'RE EXPERIENCING REMARKABLE CASUALTY RATES RIGHT NOW, VERY HIGH RUSSIAN CASUALTY RATES.

THE OPERATIONS UNFORTUNATELY DO CONTINUE IN THE DONBAS.

>> YEAH, AND YOUR COLLEAGUES AT CARNEGIE, REPORT THAT RUSSIA IS LOSING SOME 30,000 MEN A MONTH, RECRUITING SOME 27,000, AND PREPARING FOR PERHAPS A QUIET MOBILIZATION BY ELECTRONIC DRAFT NOTICE IN THE WEEKS AND MONTHS TO COME.

CAN PUTIN ACTUALLY PULL THAT OFF THIS TIME AROUND?

THERE WAS A LOT OF REPORTING AND SPECULATION FOLLOWING THE OUTRAGE THAT BEGAN FOLLOWING THE INITIAL MOBILIZATION WHEN THIS WAR JUST STARTED?

HAS ANYTHING CHANGED INTERNALLY?

>> WELL, I THINK THERE IS A COUPLE OF DIFFERENT CONSIDERATIONS FOR HIM.

I DON'T THINK MOBILIZATION EVER OFFICIALLY ENDED.

THEY'VE JUST BEEN DOING IT IN A VERY QUIET WAY, GRABBING PEOPLE AND TAKING PEOPLE IN LOW NUMBERS SO THAT IT'S NOT NOTICED.

THEIR RECRUITING CAMPAIGN IS STILL MOSTLY GIVING THEM THE NUMBERS THAT THEY NEED.

SO I'M SEEING A FEW INDICATORS THAT THE KREMLIN IS ASKING THE MILITARY TO PREPARE SOME ASSESSMENTS.

HOW MUCH WOULD YOU NEED, WHAT WOULD IT TAKE TO GET ALL OF THESE UKRAINIAN TERRITORIES.

BUT THAT A DECISION HAS NOT YET BEEN MADE.

SO IT'S ON MY RADAR.

IT'S ON UKRAINE'S RADAR.

I THINK A VERY LARGE MOBILIZATION AT THIS POINT, LIKE WE SAW A FEW YEARS AGO IS NOT A REQUIREMENT.

THE RUSSIAN FRONT LINE DOESN'T HAVE ANY GAPING WOUNDS IN IT THAT IT CAN'T COMPENSATE FOR AT THIS TIME.

IT WOULD BE A KREMLIN CHOICE TO TRY TO TAKE MORE DECISIVE ACTION.

AND SO FAR I THINK EVERYONE IS HOLDING AND PREPARING FOR A DECISION THAT COME COME LATER THIS YEAR, BUT IT HASN'T BEEN DETERMINED AT THIS POINT THAT I CAN TELL.

>> AND THE MANPOWER ADVANTAGE THAT RUSSIA STILL HAS IN THIS WAR, THAT'S ULTIMATELY LED TO MORE AND MORE PRESSURE ON PRESIDENT ZELENSKYY, IN PART LEADING TO THE UPHEAVAL THAT WE SAW WITH REGARDS TO LEADERSHIP IN HIS DEFENSE OVER THE LAST FEW WEEKS WHERE HE FIRED HIS TOP GENERAL, FIRED HIS DEFENSE MINISTER.

THAT LED TO MASS PROTESTS ON THE STREETS, PROBABLY THE LARGEST WE'VE SEEN SINCE THE LARGER SCALE INVASION OF 2022.

TALK TO US ABOUT WHO DRAPATYI IS RIGHT NOW AS THE THIRD TOP COMMANDER OF THIS WAR, HOW HE DIFFERS FROM HIS PREDECESSORS, AND WHAT YOU LEARNED ABOUT HIM FROM YOUR MOST RECENT TRIP.

>> SO WE WERE THERE IN UKRAINE AND MOVING ALONG THE FRONT DURING A VERY DYNAMIC TIME IN THIS LEADERSHIP SHIFT.

I THINK WE ARRIVED THE DAY THAT FORMER MINISTER FEDOROV WAS RELIEVED.

RUMORS WERE SWIRLING ON WHETHER OR NOT GENERAL SYRSKYI WOULD REMAIN IN HIS JOB AND POTENTIALLY TAKE RETRIBUTION.

BUT THEN TOWARDS THE END OF OUR TIME THERE, IT WAS CLEAR THAT HE WAS GOING TO BE REPLACED IN HIS REPLACEMENTS WERE BEING INTERVIEWED.

MY UNDERSTANDING IS THAT THERE IS A SENSE OF RELIEF, THAT GENERAL DRAPATYI HAS THE JOB.

I'VE HAD THE FORTUNE TO MEET HIM BEFORE, AND I FIND HIM TO BE A VERY IMPRESSIVE BOTH IN TERMS OF HIS PREVIOUS BATTLEFIELD SUCCESSES.

HE HAS A GREAT REPUTATION AMONG THE SOLDIERS, AND MOST CRUCIALLY, I THINK HE HAS A VERY GOOD UNDERSTANDING AND HANDS-ON UNDERSTANDING OF THE ROLE OF NEW TECHNOLOGY IN WARFARE LIKE DRONES AND AI, BUT HOW YOU STILL NEED VERY CLASSICAL APPLICATIONS OF POWER LIKE INFANTRY AND ARTILLERY TO HOLD GROUND.

SO I THINK HE'S AN EXCELLENT CHOICE FOR THIS MOMENT FOR UKRAINE, AND I WISH HIM LUCK.

>> PART OF WHAT DOOMED SYRSKYI WAS NOT ONLY HOW HE AND MANY INTERPRETED HIM AS VIEWING TOO MANY OF THESE SOLDIERS AS EXPENDABLE.

AGAIN, THERE ARE A LOT OF ACCOLADES AND ACHIEVEMENTS THAT HE DESERVES AS WELL FOR HANDLING THIS WAR.

AND HE HAS MANY OF HIS SUPPORTERS.

BUT THOSE WHO WERE HOPING TO SEE THIS CHANGE RIGHT NOW POINT TO THAT.

THEY POINT TO ALLEGATIONS OF SCANDALS, TORTURE IN TRAINING CAMPS, DOZENS OF NONCOMBATANT DEATHS.

DOES ANY OF THAT CHANGE NOW?

CAN YOU ACTUALLY MAKE THOSE CHANGES MID WAR?

>> I THINK SO.

AND I THINK IT'S IMPORTANT TO TALK ABOUT THE CULTURAL SHIFT THAT'S ONGOING WITHIN THE UKRAINIAN MILITARY AS THEY TRY TO AND ARE LARGELY SUCCEEDING I THINK IN MY OPINION, MOVING AWAY FROM THAT RUSSIAN PAST AND THAT RUSSIAN COMMAND STYLE THAT IS OFTEN KNOWN FOR ITS DRACONIAN CONTROL.

SYRSKYI, OF COURSE HAD MACHINE OPERATIONAL SUCCESSES.

HE'S HAD A LONG MILITARY CAREER THAT HE CAN BE PROUD OF.

BUT THERE WAS A SENSE THAT HE WAS MORE IN THAT OLD SCHOOL TYPE OF MOD MODEL, AND DRAPATYI WORKS AT A DIFFERENT MODEL OF TRUST UP AND DOWN THE COMMAND CHANGE, MISSION COMMAND, AND INCREASED EMPATHY.

AND IT'S REALLY HAVING A POSITIVE EFFECT ON TRUST.

IT'S HELPING REDUCE AWOL UNDER HIS COMMAND IN PARTICULAR.

I THINK THERE IS A CULTURAL SHIFT GOING ON IN THE UKRAINIAN MILITARY, AND I THINK HE IS ON THE SIDE OF MOVING TOWARDS A DISTINCTLY UKRAINIAN MODEL.

>> WHAT SURPRISED MANY WAS THIS SORT OF OWN GOAL THAT HAS BEEN PLACED ON THE BLAME FOR PRESIDENT ZELENSKYY FOR NOT FORESEEING ALL OF THIS BUILDUP OVER TIME WITHIN LEADERSHIP IN THE MILITARY.

THAT WHEN THE WIND SEEMED TO BE AT UKRAINE'S BACK AND THE WORLD, INCLUDING PRESIDENT TRUMP HAD BEEN NOTICING IT, THAT HE WAS NOT ON TOP OF THE SCANDALS THAT WERE BREWING AND THE TENSION WITHIN HIS OWN RANKS.

YOU WERE JUST THERE IN UKRAINE.

HE IS SOMEONE WHO TYPICALLY HAS A PULSE ON EVERYTHING INVOLVED IN THE COUNTRY.

WHAT DID HE MISS OUT ON HERE?

AND IS THAT A SIGN OF PERHAPS WANING SUPPORT FOR HIS OWN LEADERSHIP AT HOME?

>> I THINK THE OWN GOAL IS EXACTLY RIGHT WITH THIS ONE.

THIS WAS A HEAD-SCRATCHER FOR ME, BEING THERE AS AN OUTSIDER.

I THINK IT WAS A HEAD-SCRATCHER FOR MANY.

MR.

FEDOROV WAS MAKING HEADWAY IN MANY DIFFERENT AREAS, IMPROVING PROCUREMENT, DEVELOPING RELATIONSHIPS, EVEN ENHANCING RELATIONSHIPS, FOR EXAMPLE, WITH ELON MUSK.

SO IT WAS JUST A VERY CURIOUS TIMING THAT IT CAME TO THE HEAD RIGHT NOW.

AND THEN WITHIN A FEW WEEKS, PRESIDENT ZELENSKYY WAS IN WASHINGTON ASKING FOR SUPPORT FOR STARLINK EXTENSION OVER RUSSIA.

THE TIMING WAS NOT ADVANTAGEOUS, AND TO ME AS AN OUTSIDER, IT SEEMS TO ME IT CAUGHT THE AUTHORITIES BY SURPRISE THAT SO MANY PEOPLE CAME OUT TO THE STREETS INITIALLY IN DEFENSE OF MINISTER FEDOROV.

BUT THEN OVER THE TIME OVER THE COURSE OF THAT WEEK, THE PROTESTS ALMOST TURNED INTO MORE OF AN ANTI-SYRSKYI TYPE OF PROTEST.

I DO THINK THE AUTHORITIES WERE CAUGHT OFF GUARD.

THEY THOUGHT THEY UNDERSTOOD A SITUATION, AND THEN THE PEOPLE IN UKRAINE WEIGHED IN ON THAT.

AND SO IT'S A TRICKY MOMENT FOR ZELENSKYY.

FEDOROV WANTS TO RETURN TO HIS OLD POSITION.

POLITICALLY, I DON'T THINK ZELENSKYY WILL BE ABLE TO RETURN HIM, BUT STRANGER THINGS HAVE HAPPENED.

BUT RIGHT NOW I THINK THE ACTING DEFENSE MINISTER AND GENERAL DRAPATYI WILL BE ABLE TO DO A GOOD JOB UNTIL THIS POLITICAL MATTER IS SORTED IN KYIV.

>> HOW IMPORTANT IS THE DECISION FROM ELON MUSK ON WHETHER OR NOT TO HONOR THAT REQUEST ABOUT OFFERING CONTINUED USE OF STARLINK?

>> WELL, WHAT IT WOULD DO, IT WOULD GIVE A LITTLE BIT MORE ACCURACY AND SPECIFICITY TO UKRAINIAN DRONES AND OTHER MISSILES THAT ARE GOING INTO RUSSIA.

SO INSTEAD OF ESSENTIALLY PREPROGRAMING THINGS, THEY WOULD HAVE A LITTLE BIT MORE CONTROL ABOUT WHERE THEY'RE LANDING.

IN MY VIEW, I THINK THE BIGGEST HELP FOR UKRAINIAN TO SURVIVE THIS WINTER IS REDUCING THE NUMBER OF MISSILES THAT RUSSIA CAN LAUNCH, SPECIFICALLY THE BALLISTIC MISSILES.

I'M SPECULATING, BUT THAT WAS PROBABLY WHAT WAS UNDERNEATH THE REQUEST.

>> YEAH, AND THE NEED FOR MORE INTERCEPTORS AS SOON AS POSSIBLE.

DARA MASSICOT, REALLY APPRECIATE YOUR ANALYSIS.

THANK YOU.

>> THANK YOU.

> >> AND NOW ISRAEL STRUCK GAZA OVER THE WEEKEND, CAUSING THE HIGHLY DEATH TOLL IN WEEKS.

THIS COMES AS PRESIDENT TRUMP CONTINUES TO PUSH A BREAKTHROUGH IN THE IMPLEMENTATION OF LAST YEAR'S CEASEFIRE AGREEMENT.

ON THURSDAY, TRUMP SAID HAMAS MILITANTS GRID TO DISARM.

BUT MANY QUESTIONS REMAIN.

LET'S GO TO JEREMY DIAMOND IN 12.

SO JEREMY, HAMAS SAYS IT AGREES TO THE ROAD MAP THAT WAS LAID OUT ON FRIDAY, BUT WON'T IMPLEMENT A SINGLE STEP UNTIL ISRAEL WITHDRAWS.

IT IS MAINTAINING ITS HEAVY WEAPONRY UNTIL THERE IS ANY GUARANTEE OR PATH FORWARD TO A PALESTINIAN STATE.

ISRAELI GOVERNMENT SAYS THEY WILL NEVER ACCEPT THAT.

IS THERE ANY VERSION OF A DEAL, OF THIS DEAL RIGHT NOW THAT BOTH SIDES SEEM OPEN TO AGREEING TO?

>> WELL, I THINK ONE OF THE IMPORTANT THINGS TO KEEP IN MIND HERE IS THAT A LOT OF THE STEPS THAT THE BOARD OF PEACE THAT THE UNITED STATES AND HAMAS ARE ASKING ISRAEL TO TAKE AT THIS VERY MOMENT IN ORDER TO ALLOW THE REST OF THIS PLAN TO MOVE FORWARD ARE STEPS THAT ISRAEL ACTUALLY GRID TO AS PART OF THE OCTOBER CEASEFIRE AGREEMENTS.

AND THAT HAS BEEN WHY IN ALL THESE STATEMENTS, WHETHER IT'S FROM THE HIGH REPRESENTATIVE FOR GAZA FOR THE BOARD OF PEACE, FROM U. S. OFFICIALS ON BACKGROUND CALLS WITH REPORTERS, THEY ARE ALL TALKING ABOUT ISRAEL COMING IN TO COMPLIANCE WITH THE SHARM EL SHEIKH PROTOCOL.

THAT'S WHERE THAT OCTOBER PROTOCOL WAS SIGNED.

PRESIDENT TRUMP VISITED WITH MUCH FANFARE WHEN THAT CEASEFIRE AGREEMENT WAS REACHED.

AND ONE OF THE KEY THINGS IN THAT CEASEFIRE AGREEMENT IS THE NOTION OF CEASING FIRE.

AND OVER THE COURSE OF THE LAST NEARLY TEN MONTHS SINCE THIS AGREEMENT CAME INTO EFFECT, WE'VE SEEN NEARLY DAILY ISRAELI STRIKES IN GAZA.

THE ISRAELI MILITARY SOMETIMES SAYS IT IS THWARTING IMMINENT THREATS TOWARDS ITS TROOPS OR TOWARDS ISRAELI CIVILIANS.

SOMETIMES IT SAYS IT IS GOING AFTER TERRORISTS WHO CARRIED OUT THE OCTOBER 7th ATTACK IN ISRAEL.

BUT THE BOTTOM LINE IS THAT AT THIS MOMENT, WHAT WE SAW OVER THE WEEKEND WAS AN INCREASE ACTUALLY IN ISRAELI STRIKES.

AND THAT'S WHY WE SAW TODAY THE HIGH REPRESENTATIVE FOR GAZA MEETING WITH THE ISRAELI PRIME MINISTER AND URGING HIM TO STOP THOSE STRIKES, TO COME BACK INTO COMPLIANCE WITH THAT OCTOBER CEASEFIRE AGREEMENT AND TO TRY AND FIND A PATH FORWARD FOR THIS DEAL TO ACTUALLY BE IMPLEMENTED, ONE THAT WOULD LEAD TO THE STEPS OF HAMAS HANDING OVER ITS WEAPONS.

BUT, AGAIN, THAT'S ANOTHER LAYER OF COMPLICATION, BECAUSE THE REACTION WE'VE SEEN IN ISRAEL REALLY ACROSS THE POLITICAL SPECTRUM IS A SENSE THAT THIS DEAL DOESN'T GO FAR ENOUGH TOWARDS DISARMING HAMAS, IN PART BECAUSE YOU'RE TALKING ABOUT HAMAS STORING MANY OF THESE WEAPONS UNDER A NEW PALESTINIAN TRANSITIONAL AUTHORITY WITH THE SUPERVISION OF THIS INTERNATIONAL SECURITY FORCE AND THE BOARD OF PEACE.

BUT MANY IN ISRAEL ARE SAYING IT DOESN'T GO FAR ENOUGH.

>> AND WHO WAS ACTUALLY STEPPING UP TO BE PART OF THIS INTERNATIONAL SECURITY FORCE.

THERE ARE NOT MANY COUNTRIES THAT HAVE COME OUT AND GUARANTEED THAT THEY WOULD BE PART OF THIS.

AND MANY OF THEM SAID THEY WON'T DO IT UNTIL HAMAS IS DISARMED.

THEY WILL NOT BE THE ONES THAT WILL BE COMING IN TO DISARM HAMAS.

NEVERTHELESS, THAT WAS VIEWED AS PERHAPS A ROAD TO SOME SORT OF AGREEMENT, AND THAT'S WHY THERE WAS OPTIMISM ON FRIDAY ABOUT THIS.

ALSO, OVER THE WEEKEND, THERE APPEARED TO BE SOME OPTIMISM AND ANOTHER WHIPLASH FROM PRESIDENT TRUMP WHEN HE SEEMED TO BE JUST MOMENTS, HOURS AWAY FROM PERHAPS CONDUCTING WHAT HE HIMSELF DESCRIBED AS THE LARGEST ATTACKS SINCE WORLD WAR II AGAINST IRAN, ONLY THEN TO BACKTRACK AND SAY THAT AFTER BEING CONSULTED BY A NUMBER OF GULF COUNTRIES, THAT IT DID APPEAR THAT IRAN WAS READY TO COME BACK TO THE NEGOTIATING TABLE.

IRAN IS SPEAKING A DIFFERENT VERSION RIGHT NOW, SAYING THERE ARE NO NEGOTIATIONS HAPPENING.

PRESIDENT TRUMP IS CALLING THEM DUPLICITOUS.

JEREMY, WHAT IS GOING ON?

>> WHAT'S GOING ON IS A REPEAT OF WHAT WE'VE SEEN SEVERAL TIMES BEFORE ALREADY OVER THE COURSE OF THE START AND STOP NEGOTIATIONS.

WE HAVE SEEN REPEATEDLY TIMES WHEN PRESIDENT TRUMP HAS THREATENED MASSIVE STRIKES ON IRAN ONLY TO ULTIMATELY CALL OFF THOSE PLANS AT THE LAST MINUTE BECAUSE OF SOME PURPORTED MOVEMENTS ON THE DIPLOMATIC TRACK.

AND THEN WHAT WE LATER FIND OUT IS THAT THAT MOVEMENT ON THE DIPLOMATIC TRACK SIMPLY WASN'T ACTUALLY IN THE OFFING.

INSTEAD, WHAT SEEMS TO HAVE HAPPENED IS THAT THE SAUDIS IN THIS CASE AND OTHER GULF ALLIES CONVINCED PRESIDENT TRUMP TO WALK BACK, MAYBE OFFERING HIM THE PROMISE OF SOME MOVEMENT ON THE DIPLOMATIC TRACK, AND THEN TODAY ONCE AGAIN PRESIDENT TRUMP IS NOW COMPLAINING ABOUT THE DUPE POLICETY OF THE IRANIANS SAYING THAT HE HAD RECEIVED ASSURANCES ABOUT PROGRESS HERE, AND THAT NOW THE IRANIANS ARE BACKTRACKING.

SO THERE ARE DIFFERENT VERSIONS OF REALITY HERE IN WHICH THE PRESIDENT AND EVERYBODY ELSE SEEMS TO BE OPERATING.

AND THE RESULT OF THAT IS THAT WE ARE STUCK, IT SEEMS, IN THIS CYCLE OF THREATS TO CARRY OUT BIG STRIKES, OF DIPLOMATIC OFFRAMPS THAT NEVER ACTUALLY MATERIALIZE.

AND IT'S VERY DIFFICULT TO SEE HOW A PATH IS ACTUALLY FOUND OUT OF THIS REPETITIOUS CYCLE.

FOR THE TIME BEING, THE PAKISTANIS ARE SAYING THEY ARE ONCE AGAIN REACHING OUT TO IRANIAN OFFICIALS, TRYING TO GET THEM TO COME TO PAKISTAN FOR A NEW ROUND OF NEGOTIATIONS.

WE WILL SEE WHETHER OR NOT THAT IS FRUITFUL.

BUT FOR THE TIME BEING, THESE TWO SIDES STILL SEEM VERY MUCH JUST AS DEADLOCKED AS LAST WEEK, AND JUST BECAUSE I'M HERE IN ISRAEL, IT'S ALSO IMPORTANT TO NOTE THAT IT SEEMS LIKE THE ISRAELIS WERE ALSO PREPARING TO JOIN IN ON THESE LATEST STRIKES.

AND THERE HAVE BEEN SOME COMPLAINTS IN THE ISRAELI MEDIA OVER THE LAST COUPLE DAYS ABOUT THE FACT THAT THIS IS NOT THE FIRST TIME THIS HAS HAPPENED, AND THAT IT'S IMPACTING ISRAELI MILITARY READINESS TO RAMP UP PREPARATIONS FOR A BIG ATTACK LIKE THIS, ONLY TO HAVE THOSE PLANS CALLED OFF BY THE PRESIDENT OF THE UNITED STATES AT THE LAST MOMENT.

>> YEAH.

AND ALL THE WHILE THE STRAIT OF HORMUZ DOES NOT REMAIN OPEN FOR FREE TRAFFIC, AS IT HAD PRIOR TO FEBRUARY 28th.

JEREMY DIAMOND IN TEL AVIV FOR US, THANK YOU.

> >> WELL, STATE AND FEDERAL OFFICIALS IN THE UNITED STATES SUSPECT THAT IRAN MAY BE BEHIND MULTIPLE CYBER ATTACKS ON WATER SYSTEMS.

AT LEAST SEVEN STATES HAVE BEEN IMPACTED SO FAR.

PRESIDENT TRUMP, FOR HIS PART, CAST DOUBT ON IRANIAN INVOLVEMENT AND BLAMED OFFICIALS IN ONE OF THE IMPACTED STATES, MINNESOTA FOR THE CYBER ATTACKS THERE.

SO FAR WATER SUPPLIES REMAIN SAFE AFTER AUTOMATED OPERATIONS WERE SWITCH TODMAN YUL MODE.

BUT CONCERNS REMAIN HIGH.

FOR MORE ON THIS, LET'S BRING IN CHRIS KREBS, WHO SERVED AS DIRECTOR OF THE U. S. CYBERSECURITY AND INFRASTRUCTURE SECURITY AGENCY UNTIL 2020.

CHRIS, IT'S BEEN A WHILE.

WELCOME BACK TO THE PROGRAM.

GOOD TO SEE YOU.

>> THANK YOU.

>> SO HERE WE HAVE THE PRESIDENT SAYING HE DOES NOT THINK THAT IRAN WAS BEHIND THESE ATTACKS.

HE SPECIFICALLY LAID BLAME ON OFFICIALS IN MINNESOTA, THOUGH THAT WE KNOW THIS TARGETED SEVEN STATES, NOT JUST MINNESOTA.

HE SAID, QUOTE, I DON'T THINK THERE WAS AN IRANIAN CYBER ATTACK.

YOU RAN THE AGENCY THAT OVERSEES THIS TYPE OF OPERATION.

WHAT HAPPENS WHEN THE PRESIDENT CONTRADICTS OR EVEN QUESTIONS ONGOING INVESTIGATIONS CONDUCTED BY HIS OWN INTELLIGENCE AGENCIES?

>> IT CREATES SOME COMPLICATIONS FOR SURE.

AND TO BE CLEAR, ALL THE EVIDENCE SUGGESTS THAT THIS IS IRAN.

IT'S ENTIRELY CONSISTENT WITH PRIOR ATTACKS THE IRANIANS HAVE LAUNCHED.

IN 2023, THEY HIT A WATER FACILITY IN PENNSYLVANIA.

IN 2020, THEY CONDUCTED OPERATIONS AGAINST ISRAELI WATER FACILITIES.

AND EVEN GOING BACK TO 2013, WHERE THEY WENT AFTER A DAM IN UPSTATE NEW YORK.

SO IT'S ENTIRELY WITHIN THEIR RANGE OF CAPABILITIES.

IT FITS THEIR FACT PATTERN.

MY UNDERSTANDING IS THE INTELLIGENCE COMMUNITY IS FAIRLY CERTAIN THAT THIS IS IRAN.

AND THAT IS WHAT THEY'RE PRIVATELY BRIEFING TO STATE AND LOCAL ELECTION OFFICIALS.

AGAIN, NOT A SURPRISE.

IN FACT, FBI AND OTHERS RELEASED A REPORT IN APRIL OF THIS YEAR THAT SUGGESTED THAT IRAN WAS GOING TO CONDUCT AND WAS IN FACT CONDUCTING OPERATIONS LIKE THIS.

BUT TO YOUR LARGER POINT, IT CREATES SOME CONFIDENCE CHALLENGES IN THE INTELLIGENCE COMMUNITY.

BUT, YOU KNOW, AT THE SAME TIME, I DO BELIEVE THAT THERE IS AN ULTERIOR MOTIVE HERE PERHAPS FOR THE PRESIDENT AS WELL AND THAT HE IS CREATING OR PRESERVING RATHER HIS OWN DECISION SPACE AS HE'S NEGOTIATING, IF THAT'S THE RIGHT TERM, WITH IRAN.

IF HE SAYS THIS IS IRAN, THEN HE HAS A MUCH NARROWER SET OF OPTIONS.

IN FACT, HE HAS POLITICAL ACCOUNTABILITY AND MILITARY ACCOUNTABILITY TO GO AFTER THE IRANIANS TO MAKE THEM PAY FOR IT.

>> SO THAT'S QUITE AN INTERESTING CHARGE.

SO IF THAT IS THE CASE, WHO ULTIMATELY BENEFITS FROM THAT VAGUENESS?

>> WELL, RIGHT NOW I THINK THE IRANIANS HAVE ESTABLISHED THAT THEY HAVE AN EFFECTIVE OPERATION IN PLACE.

WHAT ARE THEY DOING?

THEY'RE CONDUCTING A VERY LOW-COST, LOW RISK TO THEM OPERATION THAT IS VERY NOISY, HIGHLY VISIBLE IN THE UNITED STATES, AND REMINDING THE AMERICAN PEOPLE THAT THIS IS NOT JUST A WAR OVER THERE.

IT'S NOT JUST IN THE STRAIT OF HORMUZ.

IT'S NOT JUST IN THE DESERT.

IN FACT, THE IRANIANS CAN REACH OUT AND TOUCH AMERICAN CITIZENS IN THEIR HOMES WHEN THEY TRY TO TURN THE TAP ON, AND THERE MAY BE A BOIL WATER ADVISORY.

THEY MAY LOSE SERVICE BRIEFLY.

SO THE IRANIANS HAVE SOME LEVERAGE HERE.

AND I THINK IT'S UP TO THE AMERICAN LEADERSHIP TO BOTH REMIND MUNICIPAL UTILITIES, WHAT BEST PRACTICES ARE, AND THAT'S TAKING THESE SYSTEMS THAT THE IRANIANS VERY EASILY HACKED, I'LL SAY, TAKE THEM OFFLINE, UPDATE PASS WORDS.

BUT ALSO GO AFTER THE HACKERS FOR IRAN AND THEIR MINISTRY OF INFORMATION AND INTELLIGENCE.

GO AFTER THEM.

HOLD THEM ACCOUNTABLE.

AND MAKE SURE THAT THEY CAN'T KEEP DOING IT.

BECAUSE IN THE MEANTIME, THEY'RE GOING KEEP DOING IT.

>> YOU SAID THAT THEY WERE ABLE TO DO THIS QUITE EASILY.

I KNOW THAT THERE HAS BEEN WAR GAMING GOING ON FOR THIS TYPE OF SCENARIO FOR YEARS.

YOU OVERSAW SOMETHING SIMILAR TO THIS AS WELL AND HAVE PREPARED FOR IT.

WHY WAS IT THEN SO EASY FOR IRAN, IF IT IS IRAN TO ACCOMPLISH?

>> OKAY, WE'LL KEEP USING THE CAVEAT.

BUT YES, IT'S PRETTY CLEAR IT'S IRAN.

NONETHELESS, REMEMBER, IN THE UNITED STATES, WE'RE TALKING ABOUT 50,000-PLUS COMMUNITY WATER SYSTEMS.

AND MANY OF THEM SERVE COMMUNITIES OF FEWER THAN 3,000 PEOPLE.

SO IN SOME CASES, THESE ARE RURAL OR NOT PARTICULARLY DEVELOPED COMMUNITIES.

AND THEY ARE IN SOME CASES RATE-LIMITED.

THEY CANNOT CHARGE HIGH RATES.

BUT THEN AGAIN, WHY WOULD THEY?

THEY'RE PROVIDING A CRITICAL SERVICE TO THEIR CITIZENS.

AND TECHNOLOGY IS SOMETHING THAT REQUIRES A SPECIFIC SKILL SET TO DEPLOY, CONFIGURE, AND MANAGE ON A REGULAR BASIS IN A SECURE WAY.

AND SO THERE IS SOME COMPETING TENSIONS HERE, GETTING THAT SERVICE TO THE CITIZENS, BUT DOING IT IN A WAY THAT'S EFFICIENT AND THAT'S COST- EFFECTIVE.

AND SOMETIMES CYBER SECURITY, SOMETIMES ADEQUATELY DEPLOYING THESE THINGS DOESN'T --DOESN'T REALLY COME IN THE COST-EFFECTIVE BUCKET.

SO WE DO NEED TO WORK ON THAT.

I THINK WITH THE FEDERAL GRANT PROGRAMS OUT TO THESE COMMUNITIES.

BUT THE BASICS HERE WERE THAT THESE SYSTEMS WERE DEPLOYED IN A WAY THAT HAD THESE TECHNOLOGIES, THESE COMPONENTS CALLED PROGRAMMABLE LOGIC CONTROLLERS AND IT'S JUST A LITTLE DEVICE THAT CAN TURN A VALVE ON AND OFF, AS AN EXAMPLE.

THEY'RE CONNECTED TO THE INTERNET BECAUSE THEY'RE EASY TO ACCESS.

SO YOU WANT TO BE ABLE TO REMOTE INTO THESE FACILITY, CHECK ON THE STATUS, MAYBE MAKE SOME ADJUSTMENTS FROM A REMOTE POSITION, AND THAT CONTRIBUTES TO MAKING THINGS A LITTLE MORE EFFICIENT, LOWERING THE COST.

BUT SOMETIMES THEY'RE DEPLOYED AND CONFIGURED IN A WAY THAT USES THE DEFAULT PASSWORD, OR KEEPS THE DEFAULT PASSWORD IN PLACE.

AND AS LONG AS YOU CAN IDENTIFY WHAT THE BRAND AND MOD OF THAT DEVICE IS VIA THE INTERNET, AND YOU HAVE THE MANUAL WITH THE DEFAULT PASSWORD, THEN BANG, YOU'RE IN.

SO THAT'S ALL THE IRANIANS DID HERE.

THEY SCANNED.

THEY TESTED IT.

IT WORKED.

THEY LOCKED 'EM UP.

THAT'S THE ATTACK.

IT'S NOT COMPLICATED.

IT'S NOT HIGH-COST.

VERY LOW RISK.

THEY'RE SITTING THERE IN IRAN PROBABLY SMILING.

>> WELL, SO, TO ANSWER THE QUESTION OF WHY IN 2026 IS A SMALL U. S. TOWN FACING FOREIGN INTELLIGENCE SERVICES ALONE, LEE ZELDIN SAID, QUOTE, THERE IS A LOT OF INDIVIDUAL RESPONSIBILITY ON LOCAL WATER SYSTEMS TO PROTECT THEMSELVES.

HERE'S A MORE OF WHAT HE SAID.

>> CYBER SECURITY IS SOMETHING -- IT'S NOT A NEW ISSUE.

IT'S BEEN OUT THERE FOR A LONG TIME.

AND THERE IS A LOT OF INDIVIDUAL RESPONSIBILITY, RESPONSIBILITY IN THE PART OF COMPANIES, OF LOCAL WATER SYSTEMS AND INFRASTRUCTURE, OF LOCAL MUNICIPALITIES AND STATE GOVERNMENTS.

THIS IS SOMETHING THAT IT'S NOT JUST FOUGHT THROUGH OUR NATIONAL MILITARY OR OUR NATIONAL INTELLIGENCE NETWORK.

>> AND IN RESPONSIBLE THE MAYOR OF A SMALL TOWN IN MINNESOTA SAYS THAT UPGRADES ARE JUST UNAFFORDABLE FOR HIS COMMUNITY.

IS THAT A SUFFICIENT ANSWER?

>> IT'S CERTAINLY PART OF THE SOLUTION.

BUT TO KIND OF GIVE YOU THE INVERSE OF WHAT ADMINISTRATOR ZELDIN WAS SAYING, AT THE SAME TIME YOU HAVE A GEOPOLITICAL CONFLICT THAT HAS MUNICIPAL LEVEL IMPACTS.

IT'S WHY ARE WE AS NATIONAL LEADERSHIP LEAVING IT UP TO A SMALL COMMUNITY IN MINNESOTA, MICHIGAN, OR WHEREVER ELSE THE FULL RESPONSIBILITY OF DEFENDING AGAINST IRANIAN ATTACKERS.

NOW, I DO THINK THERE IS MORE THAT WE COULD DO, AGAIN, AT THE STATE LEVEL, THE LOCAL LEVEL TO IMPROVE THE SECURITY OF THESE FACILITIES.

BUT THE FEDS HAVE TO BE INVOLVED, PARTICULARLY IF YOU'RE POKING, KICKING THE HORNET'S NEST OVER, THERE YOU'VE GOT TO EXPECT BLOWBACK.

WE'VE EXPECTED THAT FOR YEARS THAT WHEN YOU RAISE THE TEMPERATURE IN THE GULF, THE IRANIANS ARE GOING TO TRY TO HIT US HERE.

SO WE NEED TO BE DOING MORE.

AND WE'RE NOT.

WE'RE ACTUALLY STEPPING BACK AT THE FEDERAL LEVEL ON CYBER SECURITY, THE AGENCY THAT I USED TO RUN, WE'VE CUT HEAD COUNT, PERSONNEL COUNTS BY SOMEWHERE ALONG THE LINES OF 36%.

THE BUDGET HAS BEEN SLASHED.

THE AUTHORITIES ENABLING SOCIETY TO SHARE INFORMATION IS ON LIFE SUPPORT.

SO WE'VE GOT TO DO MORE ON THE FEDERAL SIDE TO GIVE THE FOLKS ON THE FRONT LINES THAT MAY BE CASH-STRAPPED, GIVE THEM SOME ADVANTAGE.

IT'S NOT GOING TO BE THE SILVER BULLET HERE.

BUT, AGAIN, THIS IS A COMMUNITY FIGHT.

IT'S ONE OF THOSE ALL OF NATION EFFORTS, AND WE'RE JUST NOT DOING ENOUGH RIGHT NOW.

>> AND IT'S IMPORTANT TO NOTE THERE IS NO PERMANENT SAYS THE DIRECTOR SINCE JANUARY OF 2025 AT THIS POINT.

>> RIGHT.

>> IN RESPONSE TO THOSE CUTS, THE ADMINISTRATION IS NOWING OUT THE SOME 600 NEW HIRES, AND HOUSE REPUBLICANS ARE BOOSTING THE BUDGET.

PART OF WHAT'S DRIVING THIS IS AI.

AND CONCERNS ABOUT THAT TECHNOLOGY.

SO, A, DO YOU VIEW THIS AS A WIN FOR CISA TO FINALLY BE GETTING MORE EMPLOYEES, ALTHOUGH THEY'RE OFFICIALLY LEADERLESS.

AND WHAT ROLE DOES AI HAVE HERE IN TERMS OF WHAT CONCERNS WE SHOULD BE LOOKING TOWARDS GOING FORWARD?

>> LOOK, THIS IS A RECAPITALIZATION.

THIS IS NOT A BOOST TO THE TOP LINE.

THIS IS GETTING CISA BACK CLOSER TO WHERE IT WAS IN JANUARY OF 2025.

SO WE SHOULD ACTUALLY BE WELL BEYOND THOSE NUMBERS RIGHT NOW EXACTLY FOR THE REASON YOU JUST MENTIONED, THE FACT THAT WE DO HAVE CYBER THREATS THAT ARE INCREASING AS A RESULT OF AI.

WHAT AI IS DOING, OPEN WEIGHT MODELS THAT ARE COMING OUT OF CHINA AND ELSEWHERE ARE GOING INTO THE HANDS OF CYBER CRIMINALS THAT HAVE BEEN RELIANT UPON HUMAN- POWERED ATTACKS FOR YEARS.

AND MANY OF THEM, IT'S ENGLISH AS A SECOND AT BEST LANGUAGE, AND A LOT OF THE TELLS IN THE FISHING EMAILS AND THE TEXT MESSAGES YOU MIGHT GET, YOU'LL NOTICE THAT THERE ARE GRAMMATICAL ERRORS, THERE IS SYNTAX ERRORS, THINGS LIKE THAT.

AI FIXES THAT.

SO WHAT WE'VE GOT TO DO IS PUT PEOPLE IN A POSITION TO UNDERSTAND THE THREAT, GET INFORMATION INTO THE HANDS OF THE AMERICAN PEOPLE AND WHAT THEY CAN DO TO DEFEND THEMSELVES.

BUT ALSO MOST IMPORTANTLY, WORK WITH OUR CRITICAL INFRASTRUCTURE PROVIDERS.

THE VENDORS THAT ARE MAKING THE AI TOOLS, AND MAKE SURE THAT THEY'RE FULLY AWARE AND THEY'VE GOT THE RIGHT MECHANISMS, THE RIGHT SAFETY GUARDRAILS AND GUIDELINES IN PLACE SO THIS DOESN'T BECOME A MORE CHAOTIC ENVIRONMENT THAN IT ALREADY IS AND NO DOUBT WILL BE.

>> SO WHILE WATER SYSTEMS ARE UNDER ATTACK AND AI HACKING LOOMS, AND IT IS ONLY GOING TO CONTINUE, LIKELY IN THE YEARS TO COME, WHAT LESSONS ARE OUR ADVERSARIES LEARNING IN 2026 GIVEN THAT THE PRESIDENT OF THE UNITED STATES STILL SEEMS SO FIXATED ON THE ELECTION THAT YOU YOURSELF SAID WAS THE SAFEST AND MOST SECURE IN U. S. HISTORY FOR 2020, AND THE FACT THAT YOU WERE FIRED OVER THAT.

I KNOW THIS IS VERY PERSONAL FOR YOU, BUT JUST FROM A SECURITY STANDPOINT, WHAT LESSONS DOES THAT LEAVE OUR ADVOCACIES TO TAKE AWAY FROM THIS?

>> EVERY ASPECT OF OUR SOCIETY IS SUSCEPTIBLE TO A CYBER CAMPAIGN OF SOME KIND.

WHETHER IT'S TRULY DISRUPTIVE LIKE WHAT WE'RE SEEING WITH THE WATER FACILITIES IN MINNESOTA, OR IT'S FOR MORE ESPIONAGE PURPOSES.

JUST LAST WEEK, MICROSOFT AND RELYIAQUEST, ANOTHER CYBER SECURITY COMPANY RELEASED A REPORT ABOUT THE RUSSIAN INTELLIGENCE SERVICE, THE SVR THAT IS RESPONSIBLE FOR IS THE SOLAR WINDS CAMPAIGN ABOUT SIX YEARS AGO.

THEY REPORT THAT THE RUSSIANS ARE BACK AT IT, AND THEY'VE COMPROMISED HOTEL WIFI NETWORKS, CONFERENCE CENTER WIFI NETWORKS, AND THEY'RE PUTTING INFO STEELERS ON DEVICES AND THEY'RE STEALING INFORMATION.

SO, LOOK, THIS IS -- CYBER IS --IT'S THE BALL GAME NOW.

EVERY CONFLICT FOR THE REST OF OUR LIVES WILL BEGIN WITH SOME KIND OF CYBER- ENABLED CAMPAIGN.

ESPIONAGE CAMPAIGNS WILL ONLY PROLIFERATE.

THEY WILL BE FURTHER EMPOWERED, SPED UP, THE SCALE, THE SCOPE OF THESE THINGS ARE GOING TO BE ONLY GOING FORWARD AGAIN BECAUSE OF AI.

SO WE HAVE TO BE THINKING MUCH MORE DEEPLY AS A NATION STRATEGICALLY ABOUT THE INVESTMENTS WE'RE MAKING IN CYBER DEFENSE, THE INVESTMENTS WE'RE MAKING IN SOFTWARE DEVELOPMENT.

MAKE SURE IT'S SECURE BY DESIGN AND BY DEFAULT.

BUT THE LEADERSHIP LEVELS, YOU CAN'T CUT YOUR BEST ASSETS AND YOUR AGENCIES.

>> RIGHT.

>> THE FBI AND THE INTELLIGENCE COMMUNITY AS WELL.

WE'VE GOT GET RIGHT BACK TO PUTTING THOSE PEOPLE INTO A POSITION WHERE SEIBER IS A PRIORITY.

>> CHRIS KREBS, GREAT TO HAVE YOU ON.

THANK YOU SO MUCH FOR THAT IMPORTANT ANALYSIS.

>> THANKS.

> >> ARTIFICIAL INTELLIGENCE CONTINUES TO DEVELOPMENT NATE WALL STREET, FROM CONCERNS OF WHETHER BIG TECH SPENDING SPREES WILL PAY OFF TO HOW A NEW RELIANCE ON AI IN THE WORKPLACE WILL AFFECT THE JOB MARKET.

QUESTIONS REMAIN AROUND WHETHER AI IS GOING TO TAKE AWAY JOB OPPORTUNITIES OR CREATE NEW ONES.

FINANCIAL JOURNALIST WILLIAM COHAN SAYS THAT IT MAY STILL BE TOO EARLY TO TELL.

HE JOINS WALTER ISAACSON TO DISCUSS.

>> THANK YOU, BIANNA, AND WILLIAM COHAN.

WELCOME BACK TO THE SHOW.

>> THANK YOU, WALTER.

NICE TO BE HERE.

>> ONE OF THE BIG QUESTIONS OF OUR TIMES IS WHETHER AI IS GOING TO KILL JOBS.

THE AI APOCALYPSE IS COMING.

IT'S BEEN FOUR YEARS SINCE THE LLMs WERE FIRST RELEASED.

AND EVERYBODY SAID IT WAS GOING TO DESTROY.

AND I KEPT THINKING WELL, TECHNOLOGY ALWAYS ADDS JOBS FASTER THAN IT KILLS JOBS.

THE LATEST JOBS NUMBERS SEEM PRETTY GOOD.

UNEMPLOYMENT HASN'T GONE UP MUCH.

57,000 JOBS IN JUNE.

WHAT'S REALLY HAPPENING WITH AI AND JOBS?

>> THERE IS A VERY BIG DEBATE GOING ON, FRANKLY, ABOUT WHETHER OR NOT IT WILL ELIMINATE JOBS OR CREATE NEW ONES.

I THINK YOU'RE RIGHT AGAIN THAT EACH SORT OF TECHNOLOGICAL INNOVATION THAT HAS OCCURRED IN PRETTY MUCH ALL OF HUMAN HISTORY HAS RESULTED IN SOME JOBS BEING LOST, BUT EVEN MORE JOBS BEING CREATED.

I WAS RECENTLY IN ANTWERP AT THE PRINTING PRESS MUSEUM, AND THAT SUPPOSEDLY WAS GOING TO RUIN A LOT OF JOBS, THE PRINTING PRESS.

AND THE NEXT THING YOU KNOW, IT CREATED A LOT OF JOBS.

IT MAY BE A LITTLE TOO EARLY IN THE AI GAME TO KNOW WHETHER --BECAUSE ADOPTION IS HAPPENING, BUT NOT ACROSS ENTERPRISES QUITE AS QUICKLY AS YOU WOULD ASSUME.

AND THEREFORE, JOBS HAVEN'T BEEN ELIMINATED AS MUCH AS MIGHT HAPPEN, OR NEW ONES CREATED.

I THINK PEOPLE ARE STILL TRYING TO FIGURE OUT IN ENTERPRISES HOW TO USE AI AND INCORPORATE IT INTO THEIR DAILY WORK LIVES AS OPPOSED TO, OH, WELL, NOW WE'VE DONE THIS SO QUICKLY WE DON'T NEED PEOPLE ANYMORE.

I DON'T THINK WE'RE QUITE THERE YET.

>> ONE OF THE THINGS I'VE NOTICED FROM MY STUDENTS I TEACH AT TULANE AND OTHER YOUNG PEOPLE IS THAT ONE PLACE IT HAS AFFECTED IS ENTRY-LEVEL WHITE COLLAR JOBS, THE ABILITY OF YOUNG PEOPLE TO GET JOBS.

IS THAT REFLECTED IN THE NUMBERS?

>> WELL, I DON'T KNOW IF IT'S REFLECTED IN THE NUMBERS YET.

I THINK LIKE SAY FOR US IN WALL STREET AND LAW FIRMS ARE STILL GOING GREAT GUNS.

THEY ARE STILL HIRING PLENTY OF PEOPLE.

AND YET I'M WELL AWARE OF AI FIRMS THAT CATER DIRECTLY TO WALL STREET FIRMS.

HOW CAN WE DO WHAT THE JUNIOR PEOPLE IN WALL STREET FIRMS, IT USED TO TAKE THEM A WEEK TO DO BY HAND OR WITH COMPUTERS, IMPLEMENTING NUMBERS INTO SPREADSHEETS, HOW CAN WE DO THAT MORE QUICKLY?

AND THE NEXT THING YOU KNOW, IT TURNS OUT THAT CAN BE DONE MORE QUICKLY.

IT CAN TAKE HOURS INSTEAD OF DAYS.

AND THEN THE QUESTION IS WHAT DO YOU DO?

YOU NEED TO CHECK THOSE NUMBERS, BECAUSE GUESS WHAT?

AI MAKES MISTAKES.

SO YOU ALWAYS HAVE TO CHECK YOUR WORK, WALTER.

NOW YOU HAVE TO CHECK AI'S WORK, IF YOU'RE DOING IT THAT WAY.

AND THEN THAT POTENTIALLY COULD LEAVE MORE TIME FOR SOME OF THE NUANCES AND SUBTLETIES OF SOME OF THESE PROFESSIONAL SERVICES, BUSINESSES LIKE LEARNING HOW TO GIVE GOOD ADVICE, LEARNING WHAT, YOU KNOW, LEGAL NICETIES THAT CLIENTS NEED TO HEAR OR THE SUBTLETIES OF GIVING GOOD ADVICE.

THAT TAKES A LONG TIME.

THOSE ARE APPRENTICESHIP BUSINESSES.

BUT TO GET TO THAT POINT, TO BECOME LIKE THE FELIX ROATAN OF INVESTMENT BANKING AGAIN, YOU HAVE TO MASTER THE BASICS OF SPREADSHEETS AND FINANCIAL ANALYSIS AND VALUATION WORK THAT MAYBE AI WILL HELP YOU DO MORE QUICKLY AND LET YOU GET TO THE NEXT LEVEL, WHICH IS WHERE ALL THE QUOTE, UNQUOTE VALUE IS ADDED AND THE BIG FEES ARE MADE.

>> ARE WE IN AN AI BUBBLE?

>> WELL, WHAT WE'RE IN IS AN AI VALUATION BUBBLE.

AND WE'RE INNER A CAPITAL EXPENDITURE BUBBLE.

SO THERE IS WAY TOO MUCH MONEY BEING INVESTED IN AI AND AI-RELATED THINGS, WHETHER IT'S CHIPS OR DATA CENTERS.

AND SO AT WAY TOO HIGH VALUATIONS.

AGAIN, JUST LOOK AT SPACEX AS ONE EXAMPLE.

IT WAS A $3 TRILLION COMPANY.

THREE WEEKS LATER IT'S A $1.

5 TRILLION COMPANY.

SO IT WAS OVERPRICED BY 100% FOR A LITTLE WHILE THERE.

AND I'M SURE PRIVATELY OPENAI AND ANTHROPIC AND SOME OF THESE OTHERS ARE ALSO OVERVALUED.

THE COMBINATION OF THOSE TWO THINGS IS NOT GOING TO BE GREAT FOR INVESTORS IN THE LONG RUN.

NOW, DO WE NEED THE INFRASTRUCTURE OF AI?

DO WE NEED THE DATA CENTERS PERHAPS?

WHAT ARE THE EFFECTS -- WE OPENED THIS CONVERSATION BY WONDERING ABOUT THE EFFECTS ON THE JOB, THE EMPLOYMENT MARKETS AND THE JOB MARKET AND WHAT JOBS WILL BE CREATED, WHAT JOBS WILL BE LOST.

I THINK AGAIN, WE'RE TOO EARLY TO KNOW THE EFFECTS OF THAT.

BUT, YOU KNOW, WE PROBABLY DO NEED THE INFRASTRUCTURE.

IT REMINDS ME, WALTER, OF THE TELL COM BUILD-OUT FOR THE INTERNET IN THE LATE '90s AND EARLY 2000s.

PRETTY MUCH EVERY COMPANY THAT WENT PUBLIC AND RAISED CAPITAL AND SPENT THAT MONEY ON BUILDING OUT THE INFRASTRUCTURE TO BUILD THE INTERNET WENT BANKRUPT, AND INVESTORS LOST A TON OF MONEY.

BUT WE NEED THE INFRASTRUCTURE.

IT'S IN THE GROUND.

WE STILL USE IT TODAY, AND WE'RE GLAD TO VISIT.

SO THERE PROBABLY WILL BE A SHAKEOUT IN VALUATIONS, AND MONEY WILL PROBABLY BE LOST, JUST AS IT WAS IN SPACEX, UNFORTUNATELY.

BUT THE INFRASTRUCTURE, THE TECHNOLOGY, THE ADVANCEMENTS, THE WAY PEOPLE ARE USING IT ALL WILL END UP BEING PRETTY VALUABLE AND WE'LL TAKE IT FOR GRANTED AS ESSENTIAL, JUST LIKE I THINK WE DO TODAY WITH THE INTERNET, THAT PEOPLE --IT DIDN'T EVEN EXIST MUCH BEFORE 1996.

SO, YOU KNOW, TECHNOLOGY HAS TO ADVANCE.

IT HAS TO BE DONE IN A SAFE WAY, HOPEFULLY THAT DOESN'T HURT PEOPLE AND DOESN'T LOSE TOO MANY JOBS, CREATES MORE JOBS THAN ARE LOST.

BUT THERE IS NO QUESTION THAT INVESTORS ARE GOING TO LOSE THEIR SHIRTS TO SOME EXTENT BECAUSE THE VALUATIONS ARE JUST COMPLETELY OUT OF CONTROL AND TOO MUCH CAPITAL IS GOING TOWARDS IT BECAUSE OF THOSE HIGH VALUATIONS.

>> THERE HAS BEEN A WHOLE LOT OF TARIFFS SLAPPED ON.

IT'S ALMOST HARD FOR ME TO KEEP UP WITH IT.

BUT THE PAST COUPLE OF WEEKS, MAJOR TARIFFS.

WHY HASN'T THERE BEEN MORE INFLATION, OR DO YOU THINK THAT'S COMING?

>> WELL, I THINK THERE IS PERSISTENT INFLATION.

YOU KNOW, WITH THE OIL PRICES RISING, THE PRICE OF GASOLINE AT THE PUMP, TARIFFS ARE A TAX ON AMERICAN CONSUMERS, DESPITE WHAT PRESIDENT TRUMP MAY SAY DIFFERENTLY.

IT LITERALLY IS CAUSING US TO PAY MORE FOR GOODS AND SERVICES.

AND SO I THINK INFLATION IS PERSISTENTLY HIGHER.

AND THAT'S WHY I THINK THREE FED GOVERNORS AT THE MEETING THIS PAST WEEK SAID THAT THEY WANTED TO RAISE INTEREST RATES.

AND IT WAS 9-3 VOTE, WHICH IS VERY UNUSUAL, FRANKLY.

USUALLY THERE'S SOME UNANIMITY ON THIS.

AND THIS IS ALL HAPPENING AT THE TIME WHEN, OF COURSE, PRESIDENT TRUMP CHOSE KEVIN WARSH TO BE THE NEW FED CHIEF BECAUSE HE WANTS RATES TO BE LOWER.

THAT DOESN'T SEEM TO BE HAPPENING ON THE BOND DISSENTERS THIS PAST WEEK, I SAY RATES ARE GOING HIGHER, AND WALL STREET IS PREDICTING THERE WILL BE ONE SHORT- TERM INTEREST RATE HIKE BEFORE THE END OF THE YEAR.

>> WELL, AS YOU MENTION, KEVIN WARSH, THE NEW FED CHAIR, WAS PRETTY MUCH PUT THERE BECAUSE TRUMP WANTS INTEREST RATES TO GO DOWN, AND NOW IT DIDN'T HAPPEN.

IS THERE A SILVER LINING IN SOME OF THIS IS THAT THE FED HAS SHOWN IT IS INDEPENDENT?

>> WE, OF COURSE, MUST HAVE AN INDEPENDENT FED.

AND, YOU KNOW, SO FAR, I DON'T KNOW --I THINK THE FACT THAT YOU NEED THEIR 12 VOTERS TO RAISE OR TO CHANGE THE DIRECTION OF INTEREST RATES, AND I ASSUME IT HAS TO BE A MAJORITY TO DO SOMETHING, THE FACT THAT, YOU KNOW, THERE IS THREE WHO ARE HOLDING THE LINE AND SAYING THAT RATES SHOULD BE INCREASED TO TRY TO COMBAT INFLATION TO ME IS A VERY HEALTHY SIGN, A SIGN OF AN INDEPENDENT FED, AND MORE IMPORTANTLY, A SIGN THAT INTEREST RATES ARE GOING TO GO UP.

TO COMBAT INFLATION, BECAUSE, OF COURSE, THAT'S ONE OF THE TWO MAIN REQUIREMENTS OF THE FED TO TRY TO CONTROL IS INFLATION IN THAT 2% TARGET RATE.

>> SOME PEOPLE HAVE CALLED THIS 2026 IS GOING TO BE A YEAR OF THE IPO.

AND WE ALREADY SAW THE SPACEX ONE COME ABOUT.

I THINK YOU USED THE TECHNICAL TERM FOR THE SPACEX IPO.

YOU CALLED IT PURE BONKERS.

WHAT DID YOU MEAN BY THAT?

>> WELL, YOU HAVE TO LOOK AT IT FROM A DIFFERENT PERSPECTIVES.

FROM THE COMPANIES' PERSPECTIVES, FROM ELON MUSK'S PERSPECTIVE, IT WAS, YOU KNOW, A BONANZA.

IT WASN'T BONKERS AT ALL.

IT RAISED $86 BILLION, THE MOST EVER RAISED IN EQUITY FOR A SINGLE IPO, AND IT WAS GREAT FOR THE WALL STREET UNDERWRITERS, THE 23 OF THEM WHO SPLIT $550 MILLION IN FEES, LITERALLY HALF A BILLION DOLLARS INCLUDING GOLDMAN SACHS AND MORGAN STANLEY WHO EACH GOT PAID $111 MILLION WHICH HAS TO BE ONE OF THE LARGEST FEES EVERY PAID ON WALL STREET.

AND SO FROM THE COMPANY'S PERSPECTIVE, THE UNDERWRITERS' PERSPECTIVE, ALL GREAT.

FROM THEIR FRIENDS WHO ARE INSTITUTIONAL INVESTORS WHO GOT THEIR HANDS ON THAT STOCK AT $135 A SHARE WHEN IT WAS PRICED AND WATCHED IT GO TO $225 A SHARE AFTER FOUR DAYS, THEY PROBABLY GOT OUT, THEY PROBABLY MADE MONEY.

WHO GOT LEFT HOLDING THE BAG?

THE SAME PEOPLE THAT ALWAYS GET LEFT HOLDING THE BAG IN THESE WALL STREET IPOs THAT ARE OVERHYPED, RETAIL INVESTORS WHO FINALLY PROBABLY GOT IN AT CLOSE TO 225 OR AT THE TOP, NEAR 225 OR AT 225.

AND NOW THE STOCK IS AT 115.

SO WHO'S SUFFERING THOSE LOSS?

NOT THE UNDERWRITERS.

NOT THE COMPANY.

NOT THE INSTITUTIONAL INVESTORS, BUT IT'S THE PEOPLE LIKE YOU AND ME WHO BOUGHT THE SPACEX IPO, BOUGHT IN ALL THE HYPE, AND NOW WE'RE HOLDING IT AT $115 A SHARE, HALF OF WHAT IT WAS WHEN THEY BOUGHT IT.

OUCH!

>> IN A RECENT COLUMN, YOU TALKED ABOUT ALL THIS, AND YOU SAID THE IPO PROCESS IS DESIGNED TO ENRICH WALL STREET BANKERS.

HOW COME?

AND HOW CAN THAT CONTINUE TO SURVIVE?

SHOULDN'T THAT SYSTEM BE DISRUPTED?

>> THERE HAVE BEEN PEOPLE WHO HAVE TRIED TO DISRUPT THIS FOR YEARS, WALTER, BUT WALL STREET'S A CARTEL, AND THEY LIKE IT JUST THE WAY IT IS.

THEY ARE THE ULTIMATE INTERSTITIAL MEN.

THEY ARE THERE BETWEEN THE COMPANIES AND THE INVESTORS, AND THEY DESIGNED THE IPO PROCESS.

THEY WRITE THE PROSPECTUSES, ALTHOUGH AI MIGHT BE HELPING.

AND THEY FIGURE OUT WHERE THE DEMAND IS, AND THEY PRICE THE IPOs.

SO THEY ARE DEFENDING THEIR TURF, AND THEY LOVE IT.

WHY NOT?

THEY'RE MAKING -- >> EXPLAIN HOW THEY GET ALL THAT MONEY OUT OF AN IPO.

>> WELL, THEY ARE THE INTERSTITIAL MEN, OKAY.

SO THEY DEAL WITH THE COMPANY.

THEY WRITE THE PROSPECTUS WITH THE IAIL.

THEY SHUFFLE THE PROCESS THROUGH A ROAD SHOW.

AND ON THE OTHER SIDE, THEY'VE GOT SALESMEN WHO ARE TALKING TO INSTITUTIONAL INVESTORS TO FIND OUT HOW MANY SHARES THEY WANT, AT WHAT PRICE.

AND THEY --THEN IT GOES INTO THIS BLACK BOX THAT NO ONE CAN EVER SEE.

AND THE NEXT THING, LO AND BEHOLD, SPACEX WILL BE PRICED AT $135 A SHARE.

WELL, THE REASON IT'S PROBABLY PRICED AT $135 A SHARE INSTEAD OF, SAY, $200 A SHARE IS SO THOSE INSTITUTIONAL INVESTORS WHO ARE BIG CLIENTS OF GOLDMAN SACHS AND MORGAN STANLEY AND THE OTHER BIG UNDERWRITERS CAN GET THAT FIRST- DAY POP.

AND IT DID.

THE STOCK WENT FROM 135 TO 150 BEFORE THE FIRST TRADE.

AND THEN CLOSE TO 200 AT THE END OF THAT FIRST DAY.

SO WHO BENEFITS FROM THAT?

THE PEOPLE WHO THEY CAN GIVE THAT STOCK TO AT $135 A SHARE WHILE IT RIDES UP DURING THAT FIRST DAY POP.

AND THAT'S BY DESIGN.

THAT'S NOT AN ACCIDENT.

THAT'S NOT COINCIDENCE.

THAT'S BASICALLY HOW THE IPOs ARE DESIGNED TO PERFORM.

BUT THAT DOESN'T REALLY DO ANYTHING EXCEPT FOR THE UNDERWRITERS AND THE INSTITUTIONAL INVESTORS WHO ARE THEIR BIG CLIENTS.

SO THAT'S WHO BENEFITS FROM IPOs.

YES, COMPANIES GET TO OFTEN RAISE THE MONEY THEY WANT.

BUT ACTUALLY, THEY PROBABLY COULD HAVE SOLD THE STOCK AT A HIGHER PRICE HAD THEY PRICED THAT STOCK NOT AT $135 A SHARE.

AND OF COURSE RETAIL INVESTORS WHO CAN'T GET IT AT $135 A SHARE AND HAVE TO WAIT UNTIL IT STARTS TRADING, AND THEN BUY IT AT $200 ARE NOW HOLDING ON TO SOMETHING WORTH $215.

SO THAT IS A BROKEN SYSTEM.

THERE ARE PEOPLE LIKE BILL HAMBRICK AT HAMBRICK AND QUIST BEFORE IT WAS SOLD, AND NOW HE HAS HIS OWN FIRM WHO TOOK GOOGLE PUBLIC AND DO AN AUCTION IPO WHICH IS BASICALLY A DUTCH AUCTION ALLOWING THE INVESTORS TO SET THE PRICE, THE MARKET TO SET THE PRICE, AND NOT THE UNDERWRITERS.

>> WAY, THAT DUTCH AUCTION SEEMED REALLY GOOD AT THE TIME.

A LOT OF PEOPLE WERE DOING IT.

IT SEEMED TO MAKE THE SYSTEM MORE FAIR.

HOW COME IT WENT OUT OF FASHION?

>> WELL, THERE WERE ABOUT 25 OF THEM WITH GOOGLE BY FAR BEING THE MOST SUCCESSFUL.

YOU BOUGHT GOOGLE AT THE IPO, YOU HELD ON TO IT, IT'S NOW CALLED ALPHABET, PROBABLY GOT 23,000% RETURN.

BUT THE BIG UNDERWRITERS DON'T LIKE THAT, WALTER.

IT'S LIKE A DIRECT HIT ON THEIR POCKETBOOKS, THEIR INSTITUTIONAL CLIENTS' POCKETBOOKS, BECAUSE THE INSTITUTIONAL INVESTORS DON'T GET THE BIG POP.

THE UNDERWRITERS DON'T GET THE BIG FEES.

SO YOU'RE BUCKING AGAINST A CARTEL, YOU KNOW.

WHY DO WE STILL PULL OIL OUT OF THE GROUND?

BECAUSE THERE ARE OIL COMPANIES THAT MAKE A LOT OF MONEY FOR DOING IT.

WELL, WALL STREET IS A CARTEL TOO.

AND THEY GET A HUGE, $555 MILLION FOR TAKING VIRTUALLY NO RISK.

THERE WAS NO RISK THAT THEY WERE GOING TO BUY THESE SHARES IN THE SPACEX IPO AND THEN LOSE MONEY WHEN THEY RESOLD THEM.

THEY WERE SOLD INSTANTLY TO INSTITUTIONAL INVESTORS WHO RODE IT UP UNTIL THEY SOLD.

SO THIS IS A SYSTEM THAT IS PRETTY MUCH TRIED AND TRUE.

IT'S BEEN AROUND FOR A LONG TIME, AND THE UNDERWRITERS LIKE IT THAT WAY, AND THEY'RE GOING GOING TO CHANGE IT.

>> PRESIDENT TRUMP'S SOCIAL MEDIA GROUP, TRUTH SOCIAL, AND OTHERS, HAS COME OUT WITH A PLAN THAT THEY'RE GOING TO CHARGE CERTAIN BUSINESSES $100,000 PER MONTH IN ORDER TO GET EARLY ACCESS TO TRUMP'S POSTINGS.

AND IT SEEMS TO BE PART OF A SORT OF TRANSACTIONAL ALMOST PAY FOR PLAY TYPE MENTALITY.

WHAT DO YOU MAKE OF THAT?

DO YOU ANY THAT THAT HURTS THE AMERICAN ECONOMY IN THE LONG RUN, THIS TYPE OF TRANSACTIONAL AND SOME WOULD SAY ALMOST, WELL, SELF-DEALING?

>> YEAH, I FIND THIS EXTREMELY DISAPPOINTING.

IF THERE WAS A REAL S. E. C. AND REAL S. E. C. ENFORCEMENT, THIS THING WOULD HAVE BEEN KILLED IN THE CRADLE.

BECAUSE THIS IS EXTREMELY OFFENSIVE.

IT'S --IT'S --I'M NOT A LAWYER, BUT IT STRIKES ME AS DOWNRIGHT CRIMINAL THAT THE PRESIDENT OF THE UNITED STATES WOULD BE SELLING EARLY FOR $100,000 SUBSCRIPTION TO INVESTORS WHO WANT EARLY ACCESS TO HIS INFORMATION, WHICH BY THE WAY A LOT OF PEOPLE HAVE BEEN TELLING ME, NOT THAT HE'S BEEN CHARGING FOR IT, BUT PEOPLE HAVE BEEN TRADING ON THIS -- HIS MUSINGS EARLY, PEOPLE AROUND HIM, WHO HAVE ACCESS TO WHAT HE IS THINKING AND WHAT HE IS GOING TO WRITE AS SOME OF THOSE TRADES HAVE BEEN SHOWING UP IN THE FUTURES PITS, BECAUSE I GET EMAILS ALL THE TIME FROM PEOPLE TELLING ME ABOUT THESE TRADES THAT ARE GOING ON THEY CAN'T BELIEVE THAT ARE MAKING PEOPLE A LOT OF MONEY.

AND THIS IS SORT OF MAKING, YOU KNOW, DE FACTO WHAT WAS ALREADY DU JOUR THAT PEOPLE ARE TRADING ON THIS INFORMATION ANY WAY SOMEHOW, AND I GUESS NOW TRUMP'S DECIDED HE WANTS TO GET PAID FOR IT.

WE CAN ONLY HOPE, WALTER, THAT TRADERS WILL BE AS DISGUSTED BY THIS AS I AM AND WON'T DO IT OR THAT THAT THEY WILL PAY FOR IT AND THEY'LL LOSE MONEY MAKING THESE TRADES BECAUSE, OF COURSE, YOU CAN NEVER BE SURE WHICH WAY THINGS WILL GO, AND THEREFORE IT WILL BE A PRODUCT THAT WILL DIE ON THE VINE.

>> WILLIAM COHAN, THANK YOU SO MUCH FOR JOINING US AGAIN.

>> THANK YOU, WALTER.

> >> AND FINALLY, A MESSAGE OF LOVE IN THE FACE OF HATE.

OVER THE WEEKEND, THE GERMAN CITY OF HAMBURG HELD ITS ANNUAL PRIDE PARADE.

BUT WITH THE CELEBRATIONS CAME AN EXTRA LEVEL OF SECURITY.

IT TOOK PLACE JUST ONE WEEK AFTER TRAGEDY UNFOLDED IN BERLIN WHERE AN EXTREMIST ATTACK LEFT ONE WOMAN DEAD AND DOZENS INJURED DURING THE CITY'S PRIDE PARTY.

IN THE FACE OF IT ALL, 300,000 PEOPLE CAME TOGETHER TO UNIT AS A COMMUNITY, ALL UNONE MOTTO, QUEER AND SOLIDARITY TAKE A STAND FOR A FUTURE WITHOUT FEAR.

AND THAT'S IT FOR OUR PROGRAM TONIGHT.

IF YOU WANT TO FIND OUT WHAT'S COMING UP ON THE SHOW EACH NIGHT, SIGN UP FOR OUR NEWSLETTER AT PBS.

ORG/AMANPOUR.

THANK YOU FOR JOINING US ON PBS.

JOIN US AGAIN TOMORROW NIGHT.

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