Trump Fires Attorney General Pam Bondi

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0:33President Trump fires Attorney General Pam Bondi, the second Cabinet secretary, let go in recent weeks. Plus, Blue Owl, the poster child for private credit, is the latest fund to have investors try to pull billions. I've been covering this industry really since it started, and I have never seen anything even close to this. It's blood in the streets right now for these funds. And watch out, Bloomberg. OpenAI is getting into the news business. It's Thursday, April 2nd. I'm Alex Oseleff for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:16Pam Bondi is out as attorney general. It's an end to her year-long tenure atop the Justice Department, marked by what President Trump views as her mismanagement of the Jeffrey Epstein scandal. I touched base with WSJ reporter Ryan Barber, who joined me from a courtyard at the Justice Department. Pam Bondi's ouster capped a very much rocky year spent as attorney general under a cloud of frustration from the White House and the broader Trump administration. In replacing Bondi, at least in the near term, the Justice Department leadership pivots to the current deputy attorney general, Todd Blanche, who, like Bondi, is a former lawyer for Trump.

1:51And in many ways, he really owns a lot of what Bondi's tenure meant. So it does invite the question of, is Trump ultimately going to look for someone who he believes will be more aggressive, will be more responsive to his view of the Justice Department as really being an arm of his White House? In a statement, Bondi said she would work over the next month to transition the attorney general's office to Blanche. In other news from the Trump administration, the U.S. will impose tariffs of up to 100 % on branded pharmaceuticals. A senior administration official said the levy will apply to patented imported pharmaceuticals from companies that haven't committed to invest in the U.S.

2:31and haven't entered into most favored nation agreements to match their U.S. prices to the lowest they can charge in other developed countries. But the full 100 % tariff may apply to only a few drug makers or none at all. Countries or companies that strike deals with the Trump administration or commit to build manufacturing facilities in the U.S. can receive lower levies. Blue Owl is the latest private credit firm to tighten its redemption rules. Investors asked to withdraw 22 percent of their money from its$36 billion fund and 41 percent from a separate technology-focused fund. WSJ credit reporter Matt Wertz.

3:09I've been covering this industry really since it started around 15, 20 years ago. And I have never seen anything even close to this. Blackstone and Aries and Apollo and all these other fund managers reported these very high numbers of shareholders withdrawing. And the fear just built and built. Blue Owl, they're kind of the poster child for private credit. And they were the last of these funds to report the withdrawals. And I don't think this means anything terrible today for the shareholders that are left in the fund. And the reason is that this fund and most of the other funds that are like it have plenty of cash and can borrow plenty more to pay out shareholders at 5%.

3:52The problem is what happens if this happens for four quarters or six quarters or eight quarters? If that happens, we might see a pain point where these funds have to start selling the loans that they hold, their investments, to pay out shareholders, and that could lead to losses. The industry's troubles are unfolding just as private credit is making its biggest pitch yet to work its way into everyday retirement accounts. This is a real wake-up call for that initiative. Honestly, it's kind of embarrassing. They're trying to go to Washington and say, hey, this is a great product and you should put it in 401ks.

4:28And at the same time, it's very clear that the investors in the funds that they've already created really have very little understanding of what it is they're buying and what the risks are.

4:46In Iran, the bombing continues. A senior U.S. official said the U.S. military has struck the B-1 bridge, which links Tehran to neighboring Karaj. The attack was part of a larger U.S. effort to sever military resupply routes. Meanwhile, Israel faced four rounds of Iranian missile strikes overnight, while Saudi Arabia intercepted a ballistic missile and five drones. And explosions were heard across the United Arab Emirates. Asian leaders issued grave public assessments of the war's economic ripple effects. Some nations, including the Philippines, are striking deals with Iran to allow their vessels through the Strait of Hormuz.

5:21Tehran's ability to control the Strait is Iran's biggest piece of leverage against the U.S., its Gulf neighbors, and the global economy. For more, I'm joined now by the journal's chief foreign affairs correspondent, Yaroslav Trofimov. Yaroslav, what does Iran want the new status quo to be in the Strait of Hormuz? Iran really wants to be in charge of this crucial waterway. It's a waterway through which about one-fifth of the world's oil comes through. And really, Iran is pushing through legislation about allowing it to collect money from every ship passing through, but also to choose which nations are allowed and not allowed to transit through the strait.

5:57That's a kind of leverage that Iran wants to use to, for example, obtain sanctions relief from the European nations, from Japan and from others. Does it actually have the legal authority to fully control the strait? Not at all. It's an international waterway. It's not a canal. It's not a man-made feature. And actually, Iran only controls one side of it, the northern side. But what Iran has done by attacking every ship that is passing through this or attempting to pass through this waterway without its permission, it's forced the few vessels that are authorized to go through to pass through two Iranian islands to be inspected in Iranian territorial waters, then come out.

6:33President Trump has sent mixed signals about his intentions regarding the strait. What would happen if the U.S. ends its involvement in the conflict with the strait still in Iran's control? That would really put Iran in a position of a regional hegemon of a nation that basically has a chokehold on the trade of the Gulf states, on the supplies of oil and gas to much of the world, and really transform Iran's regional position. And obviously, Iran's neighbors, but also Europeans and Asians and the consumers of Iranian oil and gas are looking at us and saying, well, you know, you broke it. You must fix it.

7:08And obviously, you know, the Gulf states have been preparing for this sort of scenario. And that's why Saudi Arabia built a pipeline. And it's using this pipeline very much right now to export it in some of the oil. The United Arab Emirates have done the same. They're managing to export a large part of the oil that way. That was WSJ Chief Foreign Affairs Correspondent Yaroslav Trofimov. Thanks, Yaroslav. Thank you. Coming up, why OpenAI just bought a tech podcast and Starbucks says tip your barista. Those stories and more after the break.

7:45WSJ's take on the week gives you a leg up on the world of money and investing. We cut through the noise and dive into markets, the economy and finance. I'm Telus Demos. And I'm Miriam Gottfried. We break down the big trades, speak with the key players. And find out what's important for investors in the week ahead. Subscribe to WSJ's Take on the Week wherever you listen to podcasts.

8:13Welcome back to What's News. I'm Imani Moise, host of What's News in markets. Stocks ended the day pretty much where they started. as investors digested mixed signals about the war in Iran. President Trump's hawkish remarks last night initially sent stocks tumbling, but major indexes largely rebounded by the afternoon. The Nasdaq and S &P 500 both finished less than a fifth of a percent higher, while the Dow Jones industrial average fell 0.13%. U.S. oil futures had their best day in six years, gaining more than$11 a barrel to close at above$111 a barrel. That's the biggest one-day gain since April 2020, when prices were climbing back after the COVID crash.

8:57In corporate news today, Starbucks is expanding tipping for baristas. The coffee chain said that adding tip prompts on mobile orders, among other performance incentives, could boost barista pay by up to 8%. It's an attempt by the company to improve service and morale. Starbucks is in the midst of negotiating its first ever collective bargaining contract with a union that represents roughly 600 of its 10 ,000 stores in the U.S. Open AI is getting into the news business. The company behind ChatGPT says it acquired the popular tech podcast TBPN. The media startup aims to compete with Bloomberg and CNBC in by-the-minute analysis of tech news.

9:37So far, it's landed high-profile interviews with CEOs from companies like Microsoft and Meta. The terms of the deal weren't disclosed. And Tesla delivered more than 350 ,000 vehicles in the first quarter. That's up 6 % from a year ago. Its fellow EV maker Rivian reported a 30 % increase in deliveries to over 10 ,000 vehicles.

10:05Despite the bright spots for Tesla and Rivian Imani just mentioned, broader EV sales in the U.S. aren't rising. Big U.S. automakers have scrapped some of their plans for electric vehicles. As a result, dozens of EV parts factories across the country are sitting empty or barely used. Sharon Turlip, who covers the auto industry for the journal, says it all amounts to an EV rust belt. Sharon, in your story, you focus on a company called Magna International, the biggest North American auto parts supplier. It had a contract with General Motors. What did that contract entail and what happened to it?

10:38Sure. This was a really big contract. It was something that both companies were very proud of at the time to build these massive containers that hold the batteries that power big electric pickup trucks made by GM. And these batteries are more than a ton. These are really big. But GM predicted that by now it would be making some hundreds and thousands of these trucks a year. And now they're selling less than a thousand a month. So things have really slowed down. They've laid off most of the workers. There's a couple hundred that remain. So the plant's there. There are people working, but it's largely empty.

11:18Right. You visited the Magna factory in St. Clair, Michigan recently. What was it like? Have the plant's problems affected the town around the factory too? It's interesting because in that town, there are a lot of manufacturers that haven't been able to find enough workers. So we didn't go there and find your typical, you know, kind of downtrodden, rust belt town. People can't find work. A lot of these workers who have been laid off are working again. But this is a huge plant for the area that it's in. The community gave a lot of tax breaks. They built a lot of infrastructure. So it's this kind of big, empty space that people in the community are eager to see filled and up and running fully.

11:59And how is Magna approaching this vacant space? Magna, for context, it's a massive company. They have some 300 plants. So it's not as if this plant is going to, you know, imperil the existence of Magna. But any factory that's not full and not at capacity and particularly as empty as this plant is, is a drag. And the tooling, the way the line's set up, everything in the factory is set up to build this part. And so Magna's trying to find someone else, find a new contract to come in, saying it'll take, you know, a year and a half, maybe even two years to get this plant filled up again. How common are the troubles confronting Magna?

12:39How many empty parts factories are there, you know, around the region or the country, really, because of this EV scale back? The scale is pretty massive. So General Motors and Ford have EV plants and battery plants that, if they're operating at all, are operating on skeleton crews, maybe just a single shift. And then you have the suppliers. So there's suppliers all over Michigan, Kentucky, that are in the same boat as Magna. But then you have the smaller suppliers that might not survive and might shut down. Maybe a plant or a facility, you know, think of something in an industrial park where they maybe only employed 100 people.

13:18And so there's really a lot of fallout. And, you know, Magna has its hands full, but it's also a very big company, so it's able to handle it. A lot of smaller players can't. That was WSJ reporter Sharon Turlip. And that's what's news for this Thursday afternoon. Today's show is produced by Imani Moise and Alexis Green with supervising producer Pierre Bien-Ame. I'm Alex Osula for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

14:15Transcription by CastingWords And I'm Miriam Gottfried. We break down the big trades and speak with the key players. I'm very focused on making sure that we can get inflation back to target. Let us help you start your week. With WSJ's take on the week, subscribe wherever you listen to podcasts.