WEBVTT - Relief Rally Stalls as Energy Concerns Linger 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.840 --> 0:00:30.360 Joining us in the last forty eight hours the Great 0:00:30.400 --> 0:00:34.520 Bullmarket Pinata Edward. You heard Denny Chiness. How are your 0:00:34.640 --> 0:00:38.440 Denny research? How the last forty eight hours been? When 0:00:38.520 --> 0:00:43.840 I believe you just shifted probabilities? Absolutely have your roaring thesis? 0:00:43.880 --> 0:00:44.680 Well has it been? 0:00:44.800 --> 0:00:46.840 I got to be a bit of a realist, given 0:00:46.920 --> 0:00:51.440 what is going on. I'm still sticking with sixty percent 0:00:51.560 --> 0:00:56.800 for what I call the Roaring twenty twenties. However, I 0:00:56.840 --> 0:00:59.600 had given twenty percent to a melt up because things 0:00:59.760 --> 0:01:02.480 kind of I've had that potential. Still it's not a 0:01:02.680 --> 0:01:06.520 high probability, and twenty percent to melt down or recession 0:01:07.080 --> 0:01:10.600 kind of a bucket for everything that could go wrong. Well, now, 0:01:10.880 --> 0:01:13.600 just five percent for a melt up that's very unlikely, am, 0:01:14.200 --> 0:01:17.840 and thirty five percent for things going wrong, which they are. 0:01:18.160 --> 0:01:21.080 Amazon does a thirty seven to forty two billion dollar 0:01:21.160 --> 0:01:23.640 bond offering Damien tells me it's going to be six 0:01:23.720 --> 0:01:28.480 phone calls. Heath Terry brilliant over at City Group publishes 0:01:28.720 --> 0:01:35.360 and reaffirms ai viability in revenue, in profit, in getting 0:01:35.400 --> 0:01:37.200 things done. With all this, I agree with it. Kep 0:01:37.880 --> 0:01:43.080 X synthesize in as you mentioned, spreads have a move 0:01:43.280 --> 0:01:47.920 the bond market screaming stability. These other news items screen 0:01:48.200 --> 0:01:51.120 fold them into your roaring twenties theme. 0:01:51.600 --> 0:01:54.760 Well, I mean, we've we've done pretty well with a 0:01:54.880 --> 0:01:58.080 thesis so far. We've got a few more years here 0:01:58.440 --> 0:02:01.720 left in the decade. I think this will pass. 0:02:02.080 --> 0:02:04.400 You're short selling yourself, folks. 0:02:04.480 --> 0:02:08.560 It's the Yardeni and campooral low of October a few 0:02:08.639 --> 0:02:11.760 years ago, and in Ralph and comportant, Thank you, Niled 0:02:11.800 --> 0:02:14.320 it continued, thank you very much. 0:02:15.520 --> 0:02:18.440 So look, I think in the short term we clearly 0:02:18.440 --> 0:02:21.720 have an issue with the strait of our moves. It's 0:02:21.800 --> 0:02:26.040 it's it's hard to get optimistic here unless we see 0:02:26.040 --> 0:02:29.480 some tankers actually going through there without any incident. I 0:02:29.520 --> 0:02:32.400 know the President would sounds like he wants to declare 0:02:32.480 --> 0:02:36.400 victory here pretty shortly, but you know, I think I 0:02:36.440 --> 0:02:38.560 think our and lost the war. They just don't really 0:02:38.600 --> 0:02:41.440 know it, and they're not acting like it. The problem 0:02:41.480 --> 0:02:46.400 with this country is that it's a terrorist state with 0:02:46.520 --> 0:02:51.799 a terrorist organization that basically spreads terrorism around the world, 0:02:52.320 --> 0:02:55.200 and they're professional terrorists, and so it's very hard to 0:02:55.280 --> 0:02:59.000 kind of beat them just by blessing them with the bombs. 0:02:59.560 --> 0:03:01.720 And back in December, you correctly, I'm going to give 0:03:01.840 --> 0:03:04.840 Ed a softball here. He correctly called for an underway 0:03:04.840 --> 0:03:07.119 position in the Max seven and the baskets now down 0:03:07.120 --> 0:03:09.560 in six point three percent year to date. I'm curious, 0:03:09.639 --> 0:03:12.960 do you see further weakness in US textocs right here 0:03:13.040 --> 0:03:14.480 right now? Or is this a buying opportunity. 0:03:14.560 --> 0:03:18.760 Well, I think it's becoming very bifurcated. The companies that 0:03:19.240 --> 0:03:23.359 still have moats, the companies that you know are basically 0:03:23.400 --> 0:03:29.120 competing in still fairly stable marketplaces, I think are fine. 0:03:29.760 --> 0:03:32.919 The problem for the Magnificent Seven is that they used 0:03:32.919 --> 0:03:35.200 to be kind of like the Game of Thrones. You know, 0:03:35.200 --> 0:03:38.720 it was like seven independent kingdoms that had moats and 0:03:39.080 --> 0:03:42.000 didn't really bother each other. But ever since AI, they're 0:03:42.000 --> 0:03:45.320 competing like mad and it's you know, it's a AI 0:03:45.920 --> 0:03:46.520 arms race. 0:03:46.760 --> 0:03:49.200 We're ready continue with that, your denty doctor, your DENTNY 0:03:49.240 --> 0:03:52.400 of your Denny research, can't say enough about his research. 0:03:52.480 --> 0:03:57.080 It's going exceptionally value your Denny report that you get 0:03:57.240 --> 0:04:00.160 from him, literally on a daily basis. Damian says, are 0:04:00.200 --> 0:04:03.680 in time king with edit YARDNNY. We'll move forward here 0:04:03.720 --> 0:04:06.720 in a bit too further discussion of what we saw 0:04:07.080 --> 0:04:10.920 in the Secretary of Defense's press conference here a bit ago, 0:04:11.080 --> 0:04:14.160 but it is about the Martin markets. Here's the summary 0:04:14.640 --> 0:04:17.919 for those of you across this nation waking up. The 0:04:18.000 --> 0:04:21.640 Vicks was thirty five. That is painful. We've come in 0:04:21.720 --> 0:04:25.719 dramatically to a twenty four point five point seven with 0:04:25.839 --> 0:04:28.400 red and green on the screen, but a decidedly better 0:04:28.520 --> 0:04:31.760 tape today than what we witnessed in the last forty 0:04:31.800 --> 0:04:32.440 eight hours. 0:04:32.839 --> 0:04:36.800 With the market opening, Alexis christopherus. 0:04:36.000 --> 0:04:38.560 All right, thanks very much, Tom, and investors continuing to 0:04:38.600 --> 0:04:41.160 try to assess how long this war with Iran will 0:04:41.160 --> 0:04:44.200 go on and what its global impact will be, especially 0:04:44.480 --> 0:04:47.159 on the oil market. So we have a mixed start 0:04:47.200 --> 0:04:49.760 here to the morning. The S and P five hundred 0:04:49.880 --> 0:04:52.320 down three points at sixty seven to ninety three, Dow 0:04:52.400 --> 0:04:55.160 Jones Industrial Average down about twenty five points, but the 0:04:55.240 --> 0:04:58.120 Nasdaq and the green right now by about forty two points, 0:04:58.160 --> 0:05:01.560 so Russell two thousand is a just fractionally. We've got 0:05:01.560 --> 0:05:04.160 Brent crude at ninety one forty four, the barrel down 0:05:04.279 --> 0:05:07.880 seven and a half percent, WTI crewed down about to 0:05:07.960 --> 0:05:10.479 seven percent now to eighty eighth four the barrel, and 0:05:10.520 --> 0:05:13.440 the Bloomberg dollar spot indecks at eleven ninety seven eighty 0:05:13.480 --> 0:05:15.600 four spot gold by the way, bouncing back up one 0:05:15.640 --> 0:05:18.320 and a half percent at fifty two to fifteen the ounce, 0:05:18.480 --> 0:05:21.240 and Amazon returning to the bond market, selling the debt 0:05:21.240 --> 0:05:23.599 and as many as eleven tranches ranging from two to 0:05:23.680 --> 0:05:26.200 fifty years. It's the latest in a series of jumbo 0:05:26.240 --> 0:05:29.280 bond sales by hyperscalers as they gear up to invest 0:05:29.279 --> 0:05:32.640 in what else but AI. That's your Bloomberg opening bell report, 0:05:32.720 --> 0:05:33.680 Tom and Damien. 0:05:33.480 --> 0:05:35.720 Alexis, thank you so much again, Ready green in the screen, 0:05:35.800 --> 0:05:37.599 nas deck with a little bit of the bid twenty 0:05:37.600 --> 0:05:38.719 four point twenty five and. 0:05:38.760 --> 0:05:40.880 The viks ed you're denning with us. 0:05:40.920 --> 0:05:44.839 Always associated with Professor Tobin at Yale, but before that 0:05:45.000 --> 0:05:49.200 high above Cayugas Waters at Cornell University, as our prosad 0:05:49.800 --> 0:05:54.000 is one of the great optimists of International Economics. His 0:05:54.040 --> 0:05:57.520 new book out of Cornell is The Doom Loop on 0:05:57.560 --> 0:06:00.120 the Economic Order. He even gets Game of Thrones to 0:06:00.200 --> 0:06:04.479 the first chapters. It's serusely doing and economics you, more 0:06:04.520 --> 0:06:08.960 than anyone I know ed, pushes against the concept of 0:06:09.000 --> 0:06:11.760 a doom loop. What do you say to the people 0:06:12.400 --> 0:06:15.720 that feel the gloom feel the doom? 0:06:16.240 --> 0:06:20.000 Well, you know, there are a fair amount of perma 0:06:20.040 --> 0:06:21.960 bears out there, and a lot of people listen to 0:06:21.960 --> 0:06:25.560 the perma bears, and that perma bears very often sound 0:06:26.160 --> 0:06:30.360 very logical. The problem is they don't provide a balance. 0:06:30.920 --> 0:06:33.159 And perma bears will get you out at the top 0:06:33.200 --> 0:06:35.080 of the stock market, they'll get you out in the middle, 0:06:35.080 --> 0:06:37.599 they'll get you at the bottom at the bottom. You'll 0:06:37.640 --> 0:06:40.080 never be in the stock market if you'd have a 0:06:40.120 --> 0:06:43.719 pessimistic attitude. Also, politics sometimes gets in the way of 0:06:44.800 --> 0:06:47.760 clear and clear headed investing. The market tends to go 0:06:47.880 --> 0:06:50.240 up as long as earnings are going up, as long 0:06:50.279 --> 0:06:53.840 as the economy is doing well, and that's been the 0:06:53.880 --> 0:06:56.360 case for a long long time. So I have this 0:06:57.720 --> 0:07:01.920 view that corrections and bear market start buying opportunities rather 0:07:01.960 --> 0:07:02.960 than reasons to panic. 0:07:03.080 --> 0:07:05.640 Well, and you talk about the economy doing well in 0:07:05.680 --> 0:07:08.520 all seriousness, does economic did they even matter at this point? 0:07:08.560 --> 0:07:09.960 I mean, look at last week's payrolls. 0:07:10.000 --> 0:07:11.840 I mean, the market looks straight through that for like 0:07:11.920 --> 0:07:14.240 three seconds, and then tomorrow we're going to get a 0:07:14.240 --> 0:07:16.960 CPI print that, by definition, after the last week's events, 0:07:17.040 --> 0:07:18.160 is already stale. 0:07:18.280 --> 0:07:19.160 So you know, talk to. 0:07:19.200 --> 0:07:21.680 Us a little bit about the economic touch points that 0:07:21.720 --> 0:07:23.040 you're going to be most focused on here. 0:07:23.120 --> 0:07:26.280 Well, Look, I think that the economy still matters, because 0:07:26.320 --> 0:07:29.960 earning still matters. One of the I used to be 0:07:30.080 --> 0:07:33.000 just an economist and also a strategist, and being a 0:07:33.000 --> 0:07:35.640 strategist is a lot easier. All you got to do 0:07:36.080 --> 0:07:39.400 is forecast pe time Z, and that's very easy to do. 0:07:39.480 --> 0:07:42.560 Getting it right, of course, is the challenge, but it's 0:07:42.560 --> 0:07:46.040 still it's still those two variables, and the earnings outlook, 0:07:46.400 --> 0:07:49.760 I think remains quite strong because I think the economy 0:07:49.800 --> 0:07:50.760 will remain resilient. 0:07:51.080 --> 0:07:52.400 I mean, in. 0:07:51.920 --> 0:07:54.640 Twenty twenty two, we had an oil price shock and 0:07:54.680 --> 0:07:58.120 the economy made through it just fine. I think I 0:07:58.160 --> 0:08:01.320 think the data that the stock market is looking at 0:08:01.680 --> 0:08:03.720 is not just the employment numbers that they're looking at, 0:08:03.760 --> 0:08:06.960 the productivity numbers. And that's really the bullish story is 0:08:06.960 --> 0:08:09.600 that the productivity is making a huge comeback. 0:08:09.880 --> 0:08:12.360 And we began our conversation Tom mentioning that you had 0:08:12.600 --> 0:08:14.960 upped your probability from a market meltdown from twenty to 0:08:15.000 --> 0:08:17.440 thirty five percent for the balance of this year. You know, 0:08:17.840 --> 0:08:20.280 my question is this. You know, when I think of meltdown, 0:08:20.320 --> 0:08:22.000 I think of something on the order of a systemic 0:08:22.040 --> 0:08:24.280 liquidity shock. And this is a different sort of shock 0:08:24.320 --> 0:08:27.119 than we've witnessed, you know, in two thousand and another. 0:08:27.240 --> 0:08:30.120 You know, kind of what funding and financing metrics are 0:08:30.120 --> 0:08:31.840 you most focused on here? Like, what kind of a 0:08:31.880 --> 0:08:33.760 liquidity shock do you think can happen? 0:08:34.320 --> 0:08:37.720 Well, clearly, when you look at history, you find that 0:08:37.800 --> 0:08:41.080 more often than not, it's a shock in the credit 0:08:41.120 --> 0:08:44.000 system that causes problems for the stock market, and you 0:08:44.080 --> 0:08:46.840 get a financial crisis because of FED tight and something 0:08:47.760 --> 0:08:50.400 blows up and that becomes a credit crunch. It's credit 0:08:50.480 --> 0:08:53.800 crunch is the cause of recessions this time around. I 0:08:53.800 --> 0:08:56.760 think we have to recognize remember that the Fed's are 0:08:57.080 --> 0:08:59.600 awfully good at playing whack a mole in the credit markets. 0:09:00.120 --> 0:09:01.840 You know, as soon as something blows up, they move 0:09:01.880 --> 0:09:05.280 in pretty quickly. March at twenty twenty three, we had 0:09:05.320 --> 0:09:07.880 a banking crisis. There's only three banks that it was 0:09:07.920 --> 0:09:08.800 solved over the weekend. 0:09:09.120 --> 0:09:11.959 Yeah, I got fifteen ways to go here. But let 0:09:11.960 --> 0:09:14.640 me just go to the experience I mentioned earlier, this 0:09:14.760 --> 0:09:19.280 modest drawdown we had in nineteen eighty seven. In my memory, 0:09:19.320 --> 0:09:21.280 I don't have it in front of me, folks, is 0:09:21.360 --> 0:09:24.760 what a rebound from October twenty seventh to the end 0:09:24.760 --> 0:09:28.200 of the year December of nineteen eighty seven. I remember 0:09:28.200 --> 0:09:31.520 the sweat in August of nineteen ninety eight, and off 0:09:31.559 --> 0:09:33.920 we went to the race to the rage of nine. 0:09:34.559 --> 0:09:40.480 What's different now in tech versus the collapse of March 0:09:40.600 --> 0:09:43.360 of two thousand and one earnings. 0:09:44.160 --> 0:09:47.719 We had a lot of dot coms back then that 0:09:47.800 --> 0:09:50.920 they weren't making any money. We had a lot of 0:09:51.280 --> 0:09:54.720 telecom companies that were solar financing, so they're kind of 0:09:54.720 --> 0:10:00.880 creating their own magic. Until these companies, these seven started 0:10:00.880 --> 0:10:05.400 to kind of finance each other, we didn't really have 0:10:05.480 --> 0:10:09.560 that issue. But they're huge cast generators. I think their 0:10:10.679 --> 0:10:14.560 expenditures are going to prove to be very profitable, So 0:10:14.640 --> 0:10:17.520 I'm not particularly worried about the earning side of the 0:10:17.559 --> 0:10:18.200 text story. 0:10:18.400 --> 0:10:20.560 It's part of the show this morning, commercial free the 0:10:20.600 --> 0:10:26.120 conversation too important, ed your Donndnesfendari coming on here in 0:10:26.160 --> 0:10:29.160 a moment. Damien sas Are and Tom Kane with Alexis, 0:10:29.240 --> 0:10:33.240 Christopherus and Michael Barr across this nation on YouTube. What 0:10:33.400 --> 0:10:36.000 a couple of days on YouTube. Thank you so much. 0:10:35.760 --> 0:10:38.080 For this new digital distribution. 0:10:38.280 --> 0:10:42.480 I can't say enough about it. Subscribe at Bloomberg Podcasts 0:10:42.480 --> 0:10:44.760 for all that we do here in the New York 0:10:44.840 --> 0:10:48.400 Morning Damien Sasaur with ed your Denny. 0:10:48.360 --> 0:10:51.000 So and we talk about the Roaring twenties theme. We 0:10:51.040 --> 0:10:53.679 talk about, you know, the potential for market mail down 0:10:53.679 --> 0:10:56.840 and market meltop. Talk to me about your stagflationary nineteen 0:10:56.960 --> 0:11:03.120 seventies redux theme, red reducts, reducs, ducks, it's reduced. 0:11:04.480 --> 0:11:05.760 We call that reducts. 0:11:06.200 --> 0:11:08.680 I mean, I mean the stag fleationary. You know, you 0:11:08.679 --> 0:11:10.719 know that word's coming back. So tell to us a 0:11:10.720 --> 0:11:11.720 little bit about you're seeing there. 0:11:11.800 --> 0:11:13.719 Yeah, there is a certain amount of deja vous all 0:11:13.720 --> 0:11:17.480 over again. You know, every time we've had oil shocks 0:11:17.480 --> 0:11:21.640 in the past, we've typically gotten recessions and bear markets. 0:11:21.960 --> 0:11:26.520 The one near term exception was what happened in twenty 0:11:26.600 --> 0:11:28.920 twenty two. We got a bear market, but we didn't 0:11:28.920 --> 0:11:31.840 get a recession. I don't think we're going to get 0:11:31.840 --> 0:11:36.079 a recession this time. The recessionary expectations have gone up, 0:11:36.960 --> 0:11:41.360 but the US is much less energy intensive, and all 0:11:41.400 --> 0:11:44.079 by the way, we're an exporter, yeah, of oil and gas, 0:11:44.120 --> 0:11:46.679 which is a huge difference for what happened in the 0:11:46.760 --> 0:11:50.320 nineteen seventies. On the other hands, shutting the Strait of 0:11:50.640 --> 0:11:57.079 Hermus is a radically different historical development just hasn't happened before. 0:11:57.520 --> 0:12:03.800 And so my short term caution bearishness is totally predicated 0:12:03.840 --> 0:12:06.960 in this geopolitical development. I want to see some tankers 0:12:06.960 --> 0:12:09.000 get through the strait without giving a shout out. 0:12:09.080 --> 0:12:10.600 Well, I mean you just mentioned that, and that's where 0:12:10.640 --> 0:12:12.079 I was going to go. I mean, golf traffic is 0:12:12.120 --> 0:12:14.800 basically all or not right. I mean, there's nothing going through. 0:12:14.840 --> 0:12:16.360 And you know, and we just saw last week US 0:12:16.440 --> 0:12:19.440 Treasury Secretary and Scott Bess and basically slamming you know, 0:12:19.520 --> 0:12:22.640 JP Morgan for putting out research about maritime insurance and 0:12:22.640 --> 0:12:23.439 things of that nature. 0:12:23.440 --> 0:12:25.240 You know, how focused do you on some of those 0:12:25.280 --> 0:12:26.439 alternative data sets? 0:12:26.480 --> 0:12:28.120 You know, kind of trying to gauge out, you know, 0:12:28.120 --> 0:12:30.640 whether or not shipping you know, companies even want to 0:12:30.679 --> 0:12:33.000 you know, pass through the street of removes now, and 0:12:33.120 --> 0:12:34.400 it's funny to back it. 0:12:34.440 --> 0:12:36.000 I mean, who knows it's funny you ask that. 0:12:36.120 --> 0:12:39.080 One of the reasons I'm I'm very positive on AI 0:12:39.160 --> 0:12:41.040 is because we're using it all the time, and we've 0:12:41.080 --> 0:12:45.400 become real fans of Claude and so Claude is is 0:12:45.400 --> 0:12:48.840 in our staff now and we're toying around. We're just 0:12:48.880 --> 0:12:54.480 asking Claude to follow the shipping lanes in the Strait 0:12:54.600 --> 0:12:57.560 and there there's actually data, so but we only started 0:12:57.559 --> 0:13:02.000 doing it yesterday, so I do it. The other thing 0:13:02.040 --> 0:13:05.720 is I also want to see the data on drones. 0:13:05.880 --> 0:13:09.560 I mean, it's fine for the president, you know, to 0:13:09.600 --> 0:13:14.640 declare that we're almost there, almost mission accomplished, but that's 0:13:14.679 --> 0:13:17.439 not going to be the case unless the drones stopped 0:13:17.480 --> 0:13:21.760 flying into the neighbors, into the straits, into you know, 0:13:22.200 --> 0:13:23.200 aiming at our ships. 0:13:24.160 --> 0:13:26.720 And in March thirty one, I believe it's another end 0:13:26.720 --> 0:13:29.040 of the quarter if we can get there, and then 0:13:29.120 --> 0:13:31.760 into April and JP Morgan reporting and off we go 0:13:31.800 --> 0:13:35.079 to the Q one earning season. What does Edger Denny 0:13:35.200 --> 0:13:38.520 c with a broader sense of use of cash. 0:13:38.920 --> 0:13:42.880 Well, you know, right now, the earning story has been 0:13:42.920 --> 0:13:47.440 phenomenally strong, and that's really what's been driving the market. 0:13:47.480 --> 0:13:51.240 The valuation multiple, you know, got up to about twenty two. 0:13:51.440 --> 0:13:55.760 It's come down because of this pullback so far, which 0:13:55.800 --> 0:13:58.400 is it's not a correction yet, but I think it 0:13:58.440 --> 0:13:58.960 has that. 0:13:58.840 --> 0:14:01.240 Why are we this is too important? 0:14:01.760 --> 0:14:06.240 Since when are we hysterical about your Denny pullback that, 0:14:06.360 --> 0:14:09.640 as you state, is not a correction as we learned 0:14:09.640 --> 0:14:10.360 it in school. 0:14:10.840 --> 0:14:14.000 Well, you know, a pullback is a drop that isn't 0:14:14.000 --> 0:14:16.520 a correction. A correction is ten to twenty percent decline. 0:14:16.520 --> 0:14:19.200 A bear market is more than twenty percent. I happen 0:14:19.280 --> 0:14:23.200 to think that there is a thirty five percent the 0:14:23.240 --> 0:14:26.200 probability of things going badly, and that would lead to 0:14:26.240 --> 0:14:30.960 a correction of ten to fifteen percent. I'm actually amazed 0:14:31.320 --> 0:14:34.120 by the resilience of the economy, of the not just 0:14:34.160 --> 0:14:36.040 the economy, but the stock market. 0:14:36.120 --> 0:14:37.080 The stock market. 0:14:36.840 --> 0:14:40.720 Wants to believe that all will be well, very very shortly. 0:14:41.120 --> 0:14:44.400 We saw this amazing reversal also in the price of oil, 0:14:44.440 --> 0:14:47.480 as though you know, what were we thinking there's plenty 0:14:47.480 --> 0:14:49.200 of oil out there. Well, there is plenty of oil 0:14:49.200 --> 0:14:51.280 out there. We just got to get it, get to it. 0:14:51.640 --> 0:14:53.400 Damian quick one in here, quick one. 0:14:53.480 --> 0:14:55.240 Well, I mean ed what you sound It sounds like 0:14:55.280 --> 0:14:57.880 you're talking about just cleaner positions, right, And I mean, 0:14:57.880 --> 0:14:59.680 if this is really what this amounts to, where you 0:14:59.720 --> 0:15:01.800 basically we are giving a lot of you know, risky 0:15:01.880 --> 0:15:04.280 investors the opportunity to kind of you know, pair back 0:15:04.280 --> 0:15:07.360 their positions and clean them so to speak. Does that 0:15:07.400 --> 0:15:09.960 mean we might look for another leg higher into the 0:15:10.040 --> 0:15:11.760 you know, second half of this year. And can we 0:15:11.800 --> 0:15:12.720 really even see that? 0:15:12.840 --> 0:15:14.960 Well, I haven't given up on seventy seven hundred by 0:15:15.000 --> 0:15:18.240 the end of the year. I can so yeah, I'm 0:15:18.080 --> 0:15:21.400 I'm arguing that it's not necessarily going to be a 0:15:21.400 --> 0:15:23.840 few more days of the war, but it could be 0:15:23.920 --> 0:15:27.080 a few more weeks. And that again, I have this 0:15:27.880 --> 0:15:31.960 tendency to look at solofsa's buying opportunities rather than reasons 0:15:32.040 --> 0:15:32.440 to panic. 0:15:32.760 --> 0:15:35.240 Thank you for coming in my pleasure always. You can't 0:15:35.320 --> 0:15:39.360 say enough about it, folks. I enthusiastically support the work 0:15:39.440 --> 0:15:42.480 of doctor or Denny. We protect the copyright of all 0:15:42.520 --> 0:15:46.760 of our guests. Please don't call us to get his research, 0:15:47.280 --> 0:15:51.600 go to your Denny Research for his fabulous daily synthesis 0:15:51.640 --> 0:15:57.440 of economics. Stay with us more from Bloomberg's Surveillance coming 0:15:57.520 --> 0:15:58.520 up after this. 0:16:05.760 --> 0:16:09.360 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:16:09.400 --> 0:16:12.560 weekday afternoons from seven to ten am Eastern Listen on 0:16:12.680 --> 0:16:16.080 Apple Karplay and Android Otto with the Bloomberg Business app, 0:16:16.240 --> 0:16:18.080 or watch us live on YouTube. 0:16:18.400 --> 0:16:22.000 Part of what we do here is a conversation with 0:16:22.520 --> 0:16:26.320 interesting experts. Damian Sasaur in time King Now with Patrick 0:16:26.440 --> 0:16:31.760 Murphy and the title is Executive Director Geopolitical Advisory at 0:16:31.840 --> 0:16:36.600 Hillco Global. That barely describes his public service. After serving 0:16:36.600 --> 0:16:39.720 in the Army in Iraq with the eighth Congressional District 0:16:40.160 --> 0:16:42.600 in Pennsylvania, he was known to move the puck like 0:16:42.680 --> 0:16:46.440 Markau of the Philadelphia Flyers up the ice for King's 0:16:46.440 --> 0:16:51.360 College years ago. Has lectured at West Point, I should 0:16:51.360 --> 0:16:54.800 say taught at West Point and has a really legit 0:16:55.360 --> 0:16:58.360 army career, and of course was a former Undersecretary of 0:16:58.360 --> 0:17:01.240 the Army. Honor to have you this today, without question, 0:17:01.440 --> 0:17:04.280 our conversation of the day. As you look at the 0:17:04.320 --> 0:17:09.240 media portrayal of this one of our competitors called it 0:17:09.280 --> 0:17:12.280 a conflict. I went nuts because Vietnam was a conflict. 0:17:12.720 --> 0:17:16.320 This war as you look at the coverage, you sit 0:17:16.400 --> 0:17:18.919 there and you say, what are we getting wrong? What 0:17:19.040 --> 0:17:24.000 it informed Damien Sasawur, Alexis, Christophers and myself. What's the 0:17:24.080 --> 0:17:27.159 thing we're getting wrong about this war right now in 0:17:27.200 --> 0:17:28.000 our coverage? 0:17:29.240 --> 0:17:33.359 Well, the video doesn't match the audio, Tom Damian Alexis 0:17:33.400 --> 0:17:36.560 and that they could say, Hey, we decimated the Iranian navy. 0:17:36.720 --> 0:17:39.919 Fifty ships are now under the sea, but the strait 0:17:40.000 --> 0:17:43.120 is still a choke point. There are ships not going through. 0:17:43.600 --> 0:17:46.920 You look at seven countries have been counterattacked by Iran 0:17:47.760 --> 0:17:51.280 on sixty five percent of those attacks are an Abu 0:17:51.320 --> 0:17:55.639 Dhabi and Dubai. Yesterday it was an oil tanker that 0:17:55.760 --> 0:17:59.200 was hit. The day before it was the Dubai International Airport. 0:18:00.280 --> 0:18:04.719 They're hitting civilian targets. There are people dying in that region. 0:18:05.560 --> 0:18:08.760 And I hear about the resolve of not letting Iran 0:18:08.760 --> 0:18:10.679 get a nuclear weapon and we should never have let 0:18:10.720 --> 0:18:13.000 them have a nuclear weapon. But the reality of it 0:18:13.080 --> 0:18:16.040 is we had a nuclear deal done that we walked 0:18:16.040 --> 0:18:16.639 away from. 0:18:17.240 --> 0:18:20.000 How do we I shouldn't say how I'm editorialize and 0:18:20.040 --> 0:18:24.639 excuse me, folks. Is the White House listening to the Pentagon? 0:18:27.359 --> 0:18:30.959 Of course they're listening to them. And God gave us 0:18:31.000 --> 0:18:33.560 all two ears, two eyes, and only one mouth for 0:18:33.600 --> 0:18:38.960 a reason. But I think great generals like General Colin 0:18:39.000 --> 0:18:41.120 Powell is one of my role models who I get 0:18:41.119 --> 0:18:46.320 to know. We followed after Vietnam what's called the Powell doctrine, 0:18:46.320 --> 0:18:49.520 where you have a clear mission, you use overwhelming forced 0:18:49.520 --> 0:18:52.359 accomplishment mission, and you have a clear extra strategy. 0:18:52.560 --> 0:18:54.200 There is no extra strategy here. 0:18:54.600 --> 0:18:58.560 The mission is yet let's deestimate the Iranian ballstic missiles, etc. 0:18:58.920 --> 0:19:02.119 I get it, but you can't necessarily do that with 0:19:02.280 --> 0:19:04.760 just airpower. And they keep saying it's not gonna be 0:19:04.760 --> 0:19:08.120 a protractive war. Well, why was the eighty second airyone just. 0:19:08.040 --> 0:19:10.480 Put on alert? The light entre unit that I serve 0:19:10.520 --> 0:19:11.680 with an evasion in Iraq? 0:19:12.119 --> 0:19:15.159 Why is it that you know every military expert will 0:19:15.200 --> 0:19:17.920 say you can't win this thing by airpower. And again, 0:19:18.080 --> 0:19:19.520 my brother's in the Air Force. I have a lot 0:19:19.560 --> 0:19:23.399 of respect for airpower, but you can't win regime change 0:19:23.560 --> 0:19:26.080 or wars just by airpower alone. 0:19:26.280 --> 0:19:28.480 Well, Patrick, I love that you're focused on logistics, because 0:19:28.520 --> 0:19:30.600 when I'm driving up the Palsaden and State Parkway to 0:19:30.680 --> 0:19:32.840 visit you and my good friend John melconnup at West 0:19:32.840 --> 0:19:34.840 Point and we're sitting there gaming out what this really 0:19:34.840 --> 0:19:37.000 looks like. And we're talking about you know, golf traffic 0:19:37.000 --> 0:19:40.320 down one hundred percent since the conflint began and two hundred. 0:19:40.119 --> 0:19:41.520 Vessels effectively trapped there. 0:19:41.720 --> 0:19:44.640 You know, President Trump is talking about US Navy escorts, 0:19:44.640 --> 0:19:47.479 So logistically speaking, will that work? I mean, will that 0:19:47.520 --> 0:19:50.560 really get you know, firms who have suspended transit through 0:19:50.600 --> 0:19:52.800 the straight up ore moves to like like NYK and 0:19:52.800 --> 0:19:54.960 to two EOSK to start you know, shipping again. 0:19:55.040 --> 0:19:56.359 Is that is that? Is that gonna work? 0:19:56.800 --> 0:20:00.480 Yeah? I mean listen, we say it in kind of gotten. 0:20:00.560 --> 0:20:04.400 You know, was helping lead the army amateurs talk strategy, 0:20:04.880 --> 0:20:08.679 experts talk logistics, and the logistics there in that region 0:20:08.680 --> 0:20:12.120 in the Strait is there's about five to twelve six 0:20:12.200 --> 0:20:16.040 thousand minds underwater mines that Iran has that might be 0:20:16.080 --> 0:20:18.600 in that water right now, five thousand not not and 0:20:18.640 --> 0:20:22.160 again they may went out sea. And you know beside 0:20:22.200 --> 0:20:24.560 the you know, there are almost six thousand bustic missiles 0:20:24.560 --> 0:20:26.800 and there are ten thousand drones that they can you know, 0:20:27.520 --> 0:20:32.359 produce a month, so you know it's not And again, 0:20:32.440 --> 0:20:34.680 our military is the best military world I don't doubt that, 0:20:35.160 --> 0:20:38.359 but we should be humble in our greatness and not 0:20:38.480 --> 0:20:40.200 just in cert our young men and women in harms way. 0:20:40.240 --> 0:20:45.840 We just lost our seventh service member and another dignified transfer. 0:20:45.880 --> 0:20:48.560 I mean, I've been there at Doingver Air Force Base, Welcomar, 0:20:49.000 --> 0:20:52.159 you know, troops home that gave the ultimate sacrifice. It 0:20:52.240 --> 0:20:55.040 is heartbreaking for those families, and I'm glad the presidents, 0:20:55.119 --> 0:20:56.399 you know, I give him credit that he that he 0:20:56.440 --> 0:21:01.320 showed up. But you know, I can't help, but was 0:21:01.359 --> 0:21:03.600 this war necessary when we were at the one yard 0:21:03.640 --> 0:21:07.760 line with the piece deal in Geneva just a weekend prior, you. 0:21:07.680 --> 0:21:09.520 Know, Patrick, I just like to expand on that, you know, 0:21:09.640 --> 0:21:12.080 sticking with logistics here. Just last week we heard US 0:21:12.160 --> 0:21:16.639 Treasury Secretary Scott Besson slam JP Morgan chief commodity strategist 0:21:16.760 --> 0:21:20.440 Natasha kind of a for basically making irresponsible comments about 0:21:20.480 --> 0:21:23.840