WEBVTT - Markets Pricing in US Strikes on Iran

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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<v Speaker 2>We efforted Richard Haas yesterday we are unable to get him.

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<v Speaker 2>We have him today and we extend out here commercial

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<v Speaker 2>free for you. In a conversation with the President Emeritus,

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<v Speaker 2>the consun Foreign Relations and of course senior counselor. Was

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<v Speaker 2>someen of you partners with Paul Far.

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<v Speaker 3>More than that.

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<v Speaker 2>The single best clarity before the attack I put out

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<v Speaker 2>on Twitter in LinkedIn Ambassador Has's essay in the Financial Times.

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<v Speaker 2>It's forever ago.

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<v Speaker 3>Richard. It was three or four days ago.

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<v Speaker 2>You wrote a jewel of short clarity of what to do,

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<v Speaker 2>what to hope for. If you wrote that essay now,

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<v Speaker 2>how would you change it?

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<v Speaker 4>Well, good morning, Tom, and thank you. Look, the United

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<v Speaker 4>States faced difficult decisions in the aftermath of the Israeli actions.

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<v Speaker 4>We chose the path of acting in this case to

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<v Speaker 4>do an intense but idealistically or optimally narrow, military strike

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<v Speaker 4>against Iran. What's so interesting to me if I had

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<v Speaker 4>to say one thing at this point. If you think

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<v Speaker 4>about this crisis over the last ten or so days,

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<v Speaker 4>the first week was dominated by Israel, it deciding in

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<v Speaker 4>the aftermath of October seventh, the weakening of Iran's proxies,

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<v Speaker 4>it was going to act against the Iranian nuclear program

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<v Speaker 4>and more broadly against the Iranian political leadership. Then the

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<v Speaker 4>United States decided this was the moment to set back

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<v Speaker 4>the Iranian nuclear program. But now initiative has passed to

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<v Speaker 4>Iran for the first time in this crisis. It's the

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<v Speaker 4>Iranian leaders who control as much as anybody. How this

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<v Speaker 4>unfolds from this point on, And that's what's different. If

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<v Speaker 4>I were writing today, indeed I will be writing later today.

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<v Speaker 3>That's what's different.

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<v Speaker 4>For the first time since this phase of the crisis began,

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<v Speaker 4>decision making, if you will, is in the hands of

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<v Speaker 4>Iran more than Israel, more than the United States.

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<v Speaker 2>Investor has and I want to make clear here that

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<v Speaker 2>Richard Hass redefined the international relations debate with the invention

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<v Speaker 2>of the Internet. At the Council Unfeigned Relations John Bellinger

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<v Speaker 2>at CFR, Richard Has writes a blistering essay with his

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<v Speaker 2>legal expertise. Does President Trump have the authority to strike Iran?

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<v Speaker 2>From where you sit with all your work back to

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<v Speaker 2>Northern Ireland. Did the president have the ability to act

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<v Speaker 2>from the executive branch? Or did you need to use

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<v Speaker 2>a different process with Congress?

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<v Speaker 4>And the president had the authority like all of his

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<v Speaker 4>predecessors if you look at the history of a modern

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<v Speaker 4>American foreign policy initiative, and foreign policy has decidedly passed

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<v Speaker 4>to the executive I mean, Tom, what was it sixty

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<v Speaker 4>years ago Arthur Slessinger Junior wrote his essay and book

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<v Speaker 4>about the impurial presidency. This is nothing new. Congress virtually

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<v Speaker 4>never ever fulfills its constitutional obligation to declare war, and

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<v Speaker 4>we have used military force hundreds of times in the

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<v Speaker 4>absence of anything so formal. So I just flat out

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<v Speaker 4>disagree with that kind of a narrow legalist interpretation. That said,

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<v Speaker 4>if I had been advising President Trump, I would have said,

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<v Speaker 4>take a page out of the book of President Bush,

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<v Speaker 4>the father push forty one. Do things with the internationally

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<v Speaker 4>with building on the International Atomic Energy Agency skating report

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<v Speaker 4>of Iran, Do things with the Congress, do things with

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<v Speaker 4>the American public if you're going to use military force,

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<v Speaker 4>people should come to conclude that you tried to do

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<v Speaker 4>diplomacy and at the end of the day you reluctantly

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<v Speaker 4>had to use it. But also, by the way, would

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<v Speaker 4>have helped this president with his magabase. So I think

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<v Speaker 4>he should have gone about this differently. But did he

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<v Speaker 4>under American political tradition? Did he possess the authority to

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<v Speaker 4>do what he did?

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<v Speaker 3>Absolutely, Richard.

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<v Speaker 5>As the world awaits some type of response to moren

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<v Speaker 5>do we have any good information as to their capabilities

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<v Speaker 5>today from just their military capabilities into their leadership because

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<v Speaker 5>Israel has dealt a blow to their leadership, what should

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<v Speaker 5>we expect.

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<v Speaker 4>No, they're both good points. I actually think they're unlikely

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<v Speaker 4>to retaliate. My reading of the Iranians is they're focused

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<v Speaker 4>on regime survival. In some ways. This is the second

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<v Speaker 4>great difficult period crisis for Iran's leadership since their nineteen

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<v Speaker 4>seventy nine revolution, the first one being a decade later

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<v Speaker 4>during the Iran Or War. So my guess is they're

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<v Speaker 4>going to focus on regime consolidation. Down the road, they

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<v Speaker 4>may focus on reconstituting their nuclear program. We have no

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<v Speaker 4>idea how much of their nuclear program is intact, but

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<v Speaker 4>I think it is difficult for the Iranian leadership to act.

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<v Speaker 4>They're trying to stay off the net because they don't

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<v Speaker 4>want to give signals for Americans or Israelis to target them.

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<v Speaker 4>They obviously have lost control over the airspace of their

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<v Speaker 4>own country. Their proxies are much diminished, so I don't

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<v Speaker 4>think they have very good options. That said, they can

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<v Speaker 4>still lob missiles at the forty thousand American soldiers in

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<v Speaker 4>the region. They can play havoc with shipping. It doesn't

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<v Speaker 4>take a lot to drive insurance rates up. They can

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<v Speaker 4>do asymmetrical warfare using cyber or terrorism, so they actually

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<v Speaker 4>have lots of capability. You don't have to compete with

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<v Speaker 4>US be two stealth fighters in order to be militarily effective.

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<v Speaker 4>But I just think that the Iranians right now, their

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<v Speaker 4>priority in the short is not to retaliate against the

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<v Speaker 4>United States.

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<v Speaker 2>Richard Haus with US, we continue with Ambassador House Paul Sweene,

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<v Speaker 2>and I welcome all of you across the nation are

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<v Speaker 2>continuing that coverage. Here a difference this morning, the markets

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<v Speaker 2>are open. We will consider the markets across the arc

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<v Speaker 2>of the show. We thank Golder mount Avali from London

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<v Speaker 2>for being with us. Jumana Brasseti from Dubai, and we

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<v Speaker 2>continue here on YouTube and on all of our commute

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<v Speaker 2>our audio radio affiliates as well, and we say good morning.

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<v Speaker 3>Paul Richard.

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<v Speaker 5>For many observers, the American strike on the nuclear facilities

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<v Speaker 5>in around was a bold strike, a surprising strike. Does

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<v Speaker 5>that have an impact in other parts of the world.

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<v Speaker 5>I'm thinking about Ukraine and Russia, thinking about China. How

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<v Speaker 5>do you think those actors are viewing this?

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<v Speaker 4>It was surprising more in the tactical rather than strategic sense.

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<v Speaker 4>We've been talking for years that we weren't going to

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<v Speaker 4>let her On gain nuclear weapons or even get close

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<v Speaker 4>to them. What was surprising, for how tactically was when

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<v Speaker 4>the President talked about his two week last chance for

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<v Speaker 4>diplomacy to work that turned out to be a faint

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<v Speaker 4>or a ruse. I think it was surprising tactically, not strategically.

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<v Speaker 4>I think the rest of the world took note both

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<v Speaker 4>that the United States acted as well as how effectively

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<v Speaker 4>the US military looked. What was brought together was was

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<v Speaker 4>criite extraordinary. My guess is the Russians probably have liked

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<v Speaker 4>this crisis any time. They like when energy prices go up.

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<v Speaker 4>They like when the United States expends munitions in other

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<v Speaker 4>parts of the world. That means we don't have to

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<v Speaker 4>give to Ukraine. People aren't talking as much about Ukraine.

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<v Speaker 4>I thought it was quite interesting at the G seven

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<v Speaker 4>that Ukraine almost seemed to be something of an afterthought.

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<v Speaker 4>So the Russians have to like that. My guess isn't

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<v Speaker 4>The Chinese are probably concerned about on the opposite side

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<v Speaker 4>of the coin, as a massive energy importer. They don't

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<v Speaker 4>much like instability in the Middle East, but all of

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<v Speaker 4>them have to be happy. I would think that the

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<v Speaker 4>United States is once again involved in the Middle East.

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<v Speaker 4>That means we have less bandwidth, less ability to focus

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<v Speaker 4>on safety Stasia or Taiwan, or on helping Ukraine.

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<v Speaker 2>Richard Haass with us and folks, I can't say enough

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<v Speaker 2>about this. This is a book you can throw at

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<v Speaker 2>your smart alec kids, the college brats. They're home from

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<v Speaker 2>Oberlin and you throw this book at him, and you

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<v Speaker 2>won't hurt them because it's beautifully brief bill of obligations.

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<v Speaker 2>I can't say enough about Richard Haas's cry for citizenship

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<v Speaker 2>in America. I can't again, I can't say enough about it.

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<v Speaker 2>I'll put that out on Twitter and LinkedIn as well.

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<v Speaker 2>Part of our bill of obligations, Richard Haass is to

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<v Speaker 2>have a coherent foreign policy. We can go back to

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<v Speaker 2>clash of civilizations staggered a Zakaria in a post American world.

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<v Speaker 2>Robert Cappen coming up in a bit, maybe with a

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<v Speaker 2>Kissingerian realist theory. What's the host theory you observe at

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<v Speaker 2>the State Department right now?

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<v Speaker 4>Well, State Department Israel to observe. It's actually a sad

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<v Speaker 4>story over the last decade or two of the weakening

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<v Speaker 4>of an institution, the hollowing out of the Foreign Service,

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<v Speaker 4>more broadly, the hollowing out of our interest or capability

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<v Speaker 4>in terms of diplomacy, in terms of the whole mission

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<v Speaker 4>of the Agency for International Development, the whole promotion of

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<v Speaker 4>democracy and American values around the world. We have dramatically

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<v Speaker 4>weakened one of the principal instruments of American national security.

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<v Speaker 4>We've then compounded a top with the hollowing out of

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<v Speaker 4>the National Security Council. This is an administration, I would

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<v Speaker 4>argue that is in some ways it's put itself dangerously

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<v Speaker 4>dependent on a top down approach to foreign policy, where

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<v Speaker 4>the president does things and quite honestly, the rest of

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<v Speaker 4>the administration falls in behind. I don't see an awful

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<v Speaker 4>lot of ground up analysis, but I do worry about

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<v Speaker 4>what's been now more than what decade and a half

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<v Speaker 4>of the weakening of the diplomatic dimension instrument of American

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<v Speaker 4>foreign policy and national security Richard.

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<v Speaker 5>Some folks are even discussing, probably a small chance, but

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<v Speaker 5>still discussing regime change in a rent How do you

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<v Speaker 5>think about that topic?

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<v Speaker 3>A couple of ways.

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<v Speaker 4>One is I find regime change in the category of wish,

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<v Speaker 4>not a strategy. If Bibi Netsnahu, the Prime Minister of Israel,

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<v Speaker 4>or Donald Trump said to their generals, I want regime change,

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<v Speaker 4>they wouldn't know how to implement it. Regime change is

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<v Speaker 4>not something you can design an operation to bring about.

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<v Speaker 4>Colin Powell used to say, the military military instruments do

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<v Speaker 4>two things. They destroy and they kill. Regime change is

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<v Speaker 4>not is not on the menu. So that's one thing.

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<v Speaker 4>Second of all, you never know if you can bring

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<v Speaker 4>about You also never know what comes of it. You

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<v Speaker 4>know what would follow this regime? Is it necessarily something

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<v Speaker 4>that you want for all, you know, nuclear materials which

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<v Speaker 4>are clearly still existing around could get into the hands

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<v Speaker 4>of all sorts of groups that might be in the

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<v Speaker 4>Be careful what you wish for. So I take, I

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<v Speaker 4>take regime changes, unseerious foreign policy. If it comes about,

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<v Speaker 4>it's going to come from within Iran. It's not going

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<v Speaker 4>to come, if you will, from Israeli or American bayonets.

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<v Speaker 2>Do we underestimate, ambassador, has the military violence of the

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<v Speaker 2>theocracy in Iran? The news flow to me, Ambassador, with

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<v Speaker 2>the respect of my colleagues, is so simplistic. Iatola theocracy,

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<v Speaker 2>the people of Iran. What's in between them? And the

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<v Speaker 2>answer is a harsh dictatorship.

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<v Speaker 4>Right, You've got that, You've got all sorts of citizen

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<v Speaker 4>groups that are uh, listen to them, the so called basis,

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<v Speaker 4>you know, the the guys who used to come out

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<v Speaker 4>with the sticks and beat beat up on the Green

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<v Speaker 4>Movement protesters. And then you've got formal authorities, uh, the

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<v Speaker 4>military and and.

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<v Speaker 3>And so forth.

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<v Speaker 4>So this is this is a regime that has tools,

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<v Speaker 4>if you will, time of repression in addition to what

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<v Speaker 4>it can do as a more traditional marilitary In addition

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<v Speaker 4>to its its proxies. But this is a this is

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<v Speaker 4>a system, it's been in place now for more than

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<v Speaker 4>half a century, that has instruments of repression and coercion.

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<v Speaker 2>Paul, I remember exactly where I was in the shock

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<v Speaker 2>of the hostages. Are you ready a country road in Pittsfield, Vermont,

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<v Speaker 2>on a cold, cold November day, walking down the road,

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<v Speaker 2>trying not to slip in my two tone Tony Lahma

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<v Speaker 2>cowboy boots, and we were in shock. Is a nation

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<v Speaker 2>over the failed hostage event?

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<v Speaker 3>Yep?

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<v Speaker 5>Absolutely, Richard, give us the point of view of Israel here.

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<v Speaker 5>A lot of folks are saying this might be a

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<v Speaker 5>special time for Israel to kind of reset the Middle

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<v Speaker 5>East as it takes care of, you know, many of

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<v Speaker 5>what it perceives to be its enemies, including obviously a

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<v Speaker 5>Ran most recently, can Israel change its position in the

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<v Speaker 5>Middle East or the balance of power in the Middle East?

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<v Speaker 4>Well, I would argue Israel has much improved its strategic position,

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<v Speaker 4>mainly through the weakening of Iran's proxies as Bola first

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<v Speaker 4>and foremost Amas secondarily, then through regime change what we

0:13:14.200 --> 0:13:19.200
<v Speaker 4>saw in Syria. Israel has improved its position against Iran,

0:13:19.320 --> 0:13:23.640
<v Speaker 4>but hasn't resolved it. By that, I mean Iran remains

0:13:23.720 --> 0:13:27.480
<v Speaker 4>hostile to Israel has capabilities. And again we don't know

0:13:27.480 --> 0:13:31.720
<v Speaker 4>how much of their nuclear components survived. For all we know,

0:13:31.760 --> 0:13:34.480
<v Speaker 4>a lot of them were parked in undisclosed location. So

0:13:34.640 --> 0:13:37.240
<v Speaker 4>Israel is not out of the woods there. And even more,

0:13:37.320 --> 0:13:40.840
<v Speaker 4>Israel's not out of the woods dealing with Gaza or

0:13:40.840 --> 0:13:44.840
<v Speaker 4>with the three million Palestinians in the West Bank. And

0:13:44.880 --> 0:13:48.439
<v Speaker 4>I think that's still the biggest strategic question. So Israel

0:13:48.440 --> 0:13:51.600
<v Speaker 4>has the Iranian dimension and still has the Palestinian dimension

0:13:51.800 --> 0:13:52.280
<v Speaker 4>very much.

0:13:52.440 --> 0:13:55.000
<v Speaker 2>Richard has one final question Paul and I in our

0:13:55.040 --> 0:13:57.760
<v Speaker 2>broadcast yesterday, Paul, please help me.

0:13:58.320 --> 0:13:59.640
<v Speaker 3>I agree that we.

0:13:59.440 --> 0:14:03.839
<v Speaker 2>Were thunder struck by the acuity and concision of our

0:14:03.960 --> 0:14:07.720
<v Speaker 2>Chairman of the Joint chief of Staff. I was blown

0:14:07.760 --> 0:14:11.680
<v Speaker 2>away by his report. Richard Hass you're the grizzled veteran.

0:14:12.040 --> 0:14:14.439
<v Speaker 2>What did you think of the press conference of our

0:14:14.520 --> 0:14:17.160
<v Speaker 2>Chairman of the Joint chiefs of Staff.

0:14:18.160 --> 0:14:21.680
<v Speaker 4>Tom He was impressive. General Carilla, the head of Central Command,

0:14:21.760 --> 0:14:24.200
<v Speaker 4>is impressive. Let me just make a larger point. When

0:14:24.240 --> 0:14:27.720
<v Speaker 4>I look at American society, I think there's two great

0:14:27.840 --> 0:14:31.240
<v Speaker 4>pools of talent one is in the American military. The

0:14:31.280 --> 0:14:35.280
<v Speaker 4>professionalization there is awesome. And the other is something you guys,

0:14:35.480 --> 0:14:37.440
<v Speaker 4>you have all deal with all the time, which is

0:14:37.480 --> 0:14:40.920
<v Speaker 4>the best of American corporate leadership. These are people who

0:14:40.960 --> 0:14:43.880
<v Speaker 4>know how to run big operations and do it in

0:14:43.920 --> 0:14:48.000
<v Speaker 4>a really responsible, accountable way. So I'm not surprised when

0:14:48.040 --> 0:14:50.560
<v Speaker 4>I see great talent in the military rise to the top.

0:14:50.640 --> 0:14:54.120
<v Speaker 4>It is a meritocracy. These people are tested and they

0:14:54.120 --> 0:14:58.720
<v Speaker 4>are responsible for large numbers of lives. So I find

0:14:59.000 --> 0:15:03.360
<v Speaker 4>the post Vietnam American military is quite an extraordinary institution.

0:15:04.800 --> 0:15:06.840
<v Speaker 2>Richard Huss, thank you so much. Just send of you

0:15:06.920 --> 0:15:10.040
<v Speaker 2>partners and a course is definitive work. The Council on

0:15:10.120 --> 0:15:15.280
<v Speaker 2>Foreign Relations Ambassador House back decades to the diplomacy of

0:15:15.360 --> 0:15:17.520
<v Speaker 2>a Northern Ireland solution.

0:15:23.280 --> 0:15:26.840
<v Speaker 1>You're listening to the Bloomberg Surveillance podcast. Catch US Live

0:15:26.920 --> 0:15:30.120
<v Speaker 1>weekday afternoons from seven to ten am Eastern Listen on

0:15:30.160 --> 0:15:33.840
<v Speaker 1>Applecarplay and Android Otto with the Bloomberg Business app, or

0:15:34.000 --> 0:15:35.520
<v Speaker 1>watch US Live on YouTube.

0:15:35.600 --> 0:15:39.680
<v Speaker 2>There is an approach that each expert in international relations

0:15:40.200 --> 0:15:43.600
<v Speaker 2>and geopolitics takes. We had Richard Haass with this earlier.

0:15:43.640 --> 0:15:47.320
<v Speaker 2>Ambassador Hass looking at the fabric of American culture and

0:15:47.400 --> 0:15:52.960
<v Speaker 2>extending it out across his treatment of foreign policy, Robert D. Kaplan,

0:15:53.200 --> 0:15:57.520
<v Speaker 2>over a stretch of over twenty books, just simply speaks

0:15:58.040 --> 0:16:00.880
<v Speaker 2>of the map. If you're one of those believers in

0:16:01.000 --> 0:16:04.920
<v Speaker 2>get out the map and look at it, Kaplan is definitive.

0:16:05.320 --> 0:16:08.520
<v Speaker 2>His new tour de force is Wasteland a world in

0:16:08.640 --> 0:16:09.880
<v Speaker 2>permanent crisis.

0:16:10.120 --> 0:16:11.040
<v Speaker 3>This is coming off my.

0:16:11.000 --> 0:16:13.000
<v Speaker 2>Book of the year a few years ago, The Loom

0:16:13.400 --> 0:16:17.640
<v Speaker 2>of Time from Morocco to Persia. Robert Chaplin, thank you

0:16:17.720 --> 0:16:20.320
<v Speaker 2>so much for joining us. I'll cut to the chase.

0:16:20.640 --> 0:16:26.320
<v Speaker 2>You say, technology has permanently changed our map, our geography.

0:16:26.840 --> 0:16:29.840
<v Speaker 2>Is that true of this war with Israel and Iran?

0:16:31.360 --> 0:16:34.760
<v Speaker 6>Yes, it is to an extent, because Iran is a

0:16:34.840 --> 0:16:37.720
<v Speaker 6>long distance from Israel on the map.

0:16:38.280 --> 0:16:39.200
<v Speaker 3>But yet the.

0:16:39.280 --> 0:16:44.520
<v Speaker 6>Israelis and of course the Americans have condensed that distance

0:16:44.640 --> 0:16:49.400
<v Speaker 6>through technology. The America excuse me. The Americans sent B

0:16:49.520 --> 0:16:52.520
<v Speaker 6>two bombers all the way from the center of the

0:16:52.640 --> 0:16:57.080
<v Speaker 6>United States white Men Air Force based in Missouri to

0:16:57.200 --> 0:17:01.840
<v Speaker 6>bomb Iran, so that Iran is is close to America

0:17:02.920 --> 0:17:09.399
<v Speaker 6>in you know, in in operational terms, as you know,

0:17:10.680 --> 0:17:14.080
<v Speaker 6>as Kansas was to the Indian wars in the middle

0:17:14.160 --> 0:17:18.840
<v Speaker 6>of the nineteenth century. And let me just make one

0:17:18.880 --> 0:17:23.240
<v Speaker 6>thing very clear here. Yeah, people who are saying that

0:17:23.359 --> 0:17:28.320
<v Speaker 6>this could this could lead to another you know, forever

0:17:28.480 --> 0:17:34.680
<v Speaker 6>forever war, Middle East quagmire, they're making a mistake of category.

0:17:35.880 --> 0:17:41.680
<v Speaker 6>Iraq is in different was in a different category than Iran.

0:17:41.920 --> 0:17:46.560
<v Speaker 6>Iraq was in the category of Vietnam and Afghanistan and

0:17:46.800 --> 0:17:51.720
<v Speaker 6>Korea in the sense that it involved tens of thousands

0:17:51.800 --> 0:17:56.440
<v Speaker 6>of ground troops which got stuck literally in a quagmire.

0:17:57.000 --> 0:18:01.000
<v Speaker 6>Here we're dealing with just air and naval sets. The

0:18:01.040 --> 0:18:03.760
<v Speaker 6>war could go in a number of ways. There could

0:18:03.800 --> 0:18:07.560
<v Speaker 6>be blowback, but as long as we stick with air

0:18:07.640 --> 0:18:11.040
<v Speaker 6>and naval assets, there's not going to be a quagmire.

0:18:11.240 --> 0:18:15.080
<v Speaker 6>There's going to be something different. It may be something bad,

0:18:15.440 --> 0:18:19.480
<v Speaker 6>but it will simply exist in a category different from

0:18:19.520 --> 0:18:25.360
<v Speaker 6>those four forever wars Korea, Vietnam, Iraq, and Afghanistan.

0:18:26.160 --> 0:18:31.159
<v Speaker 5>Robert, what do you expect the response from Iran will be?

0:18:33.280 --> 0:18:37.520
<v Speaker 6>I think there will be a response. It may take

0:18:37.560 --> 0:18:39.919
<v Speaker 6>a few days or a few weeks. It may be

0:18:39.960 --> 0:18:43.480
<v Speaker 6>a terrorist attack in Europe. It may be an attack

0:18:43.600 --> 0:18:48.919
<v Speaker 6>by Shia, a pro Iranian Shia militia in Iraq on

0:18:49.200 --> 0:18:54.880
<v Speaker 6>US troops not too far away. There certainly will be blowback,

0:18:55.240 --> 0:18:58.520
<v Speaker 6>but it's going to take a few months at least

0:18:59.000 --> 0:19:04.159
<v Speaker 6>to really just whether this decision by President Trump to

0:19:05.840 --> 0:19:10.560
<v Speaker 6>bomb the Iranian nuclear facilities was a wise or an

0:19:10.640 --> 0:19:15.640
<v Speaker 6>unwise decision. It will unfold stages, and.

0:19:15.560 --> 0:19:18.120
<v Speaker 2>You're the loom of time, and folks, I can't say

0:19:18.200 --> 0:19:21.879
<v Speaker 2>enough about this is your single concise read on the

0:19:21.920 --> 0:19:26.080
<v Speaker 2>span from Morocco to the Eastern Arab world and over

0:19:26.160 --> 0:19:30.200
<v Speaker 2>to Persia. You talked there, Robert Kaplan, about the giant

0:19:30.240 --> 0:19:33.960
<v Speaker 2>of your academics, which is Clifford Gertz, and it's the

0:19:34.040 --> 0:19:39.040
<v Speaker 2>idea of culture described for our American audience today, the

0:19:39.080 --> 0:19:46.000
<v Speaker 2>Persian culture, the Persian culture extant since the theocracy of

0:19:46.080 --> 0:19:47.280
<v Speaker 2>nineteen seventy nine.

0:19:47.600 --> 0:19:54.280
<v Speaker 6>Yes, Persia. Iran is not the Arab world. It is

0:19:54.480 --> 0:19:58.600
<v Speaker 6>not Iraq, it is not Syria, it is not Libya.

0:19:59.600 --> 0:20:03.560
<v Speaker 6>Iran has been a nation state of sorts on the

0:20:03.600 --> 0:20:08.720
<v Speaker 6>Iranian plateau for thousands of years. Iran was the world's

0:20:08.800 --> 0:20:14.639
<v Speaker 6>first superpower and antiquity. You're dealing with a highly sophisticated,

0:20:15.160 --> 0:20:20.360
<v Speaker 6>highly evolved organ you know, culture and civilization where there

0:20:20.400 --> 0:20:24.920
<v Speaker 6>is not one center of political power, but multiple centers

0:20:25.280 --> 0:20:28.640
<v Speaker 6>of political power. Uh. You know, I've been to Iran

0:20:28.840 --> 0:20:32.600
<v Speaker 6>several times. It takes two hours in traffic to drive

0:20:32.680 --> 0:20:36.000
<v Speaker 6>from one end of Tehran to the other. Being in

0:20:36.119 --> 0:20:40.560
<v Speaker 6>Iran is like being in Egypt or India, and that

0:20:40.760 --> 0:20:46.760
<v Speaker 6>is it's overwhelming. You feel overwhelmed. So the so the

0:20:46.960 --> 0:20:50.840
<v Speaker 6>idea that you know that a singular attack on nuclear

0:20:50.920 --> 0:20:55.399
<v Speaker 6>facilities is going in a linear fashion to lead to

0:20:55.480 --> 0:21:00.560
<v Speaker 6>a regime change is far too simplistic. They're you know,

0:21:00.600 --> 0:21:05.120
<v Speaker 6>they're very very well likely could be a regime evolution,

0:21:05.440 --> 0:21:09.240
<v Speaker 6>as I call it, but it will involve many other factors,

0:21:09.320 --> 0:21:13.640
<v Speaker 6>and it will be internally driven. It won't be imposed

0:21:13.680 --> 0:21:14.800
<v Speaker 6>from the outside.

0:21:15.560 --> 0:21:18.960
<v Speaker 5>Robert, what do you think our the US strategy should

0:21:19.000 --> 0:21:22.639
<v Speaker 5>be towards Iran at this point? Again, the over the weekend,

0:21:22.640 --> 0:21:27.199
<v Speaker 5>a significant escalation and military action, it should be our

0:21:27.200 --> 0:21:28.640
<v Speaker 5>strategic view.

0:21:28.880 --> 0:21:32.920
<v Speaker 6>Well, at this point, we should try, as President Trump said,

0:21:33.000 --> 0:21:36.000
<v Speaker 6>to keep it a one off that we try as

0:21:36.040 --> 0:21:39.040
<v Speaker 6>hard as we can not to attack again, not to

0:21:39.200 --> 0:21:42.359
<v Speaker 6>respond again. You know, if they're just going to do

0:21:42.440 --> 0:21:47.920
<v Speaker 6>a desultory pin prick response like they did after President

0:21:47.960 --> 0:21:52.399
<v Speaker 6>Trump bordered the assassination of Kassamsuleimani, the head of the

0:21:52.440 --> 0:21:57.640
<v Speaker 6>El Kutz force, back in twenty twenty. In January twenty twenty,

0:21:57.720 --> 0:22:01.239
<v Speaker 6>I think it was there's no need to spawn, you know,

0:22:01.320 --> 0:22:05.439
<v Speaker 6>the policy now should be to lower the temperature, not

0:22:05.680 --> 0:22:09.960
<v Speaker 6>talk about changing a regime from the outside. Because the

0:22:10.080 --> 0:22:14.080
<v Speaker 6>damage has been done. It will take days or weeks

0:22:14.400 --> 0:22:18.840
<v Speaker 6>to more properly assess exactly how much damage was done.

0:22:19.359 --> 0:22:22.399
<v Speaker 6>But the idea that the Uranians are just going to

0:22:22.520 --> 0:22:28.320
<v Speaker 6>rebuild their nuclear facilities is very simplistic. They're never going

0:22:28.359 --> 0:22:32.679
<v Speaker 6>to rebuild it to the point that Fardeau or Natans was,

0:22:33.880 --> 0:22:36.399
<v Speaker 6>you know, way before they get to that point, the

0:22:36.520 --> 0:22:40.120
<v Speaker 6>Israelis will be able to attack them. So this attack

0:22:40.359 --> 0:22:43.720
<v Speaker 6>really did do substantial damage.

0:22:44.400 --> 0:22:47.879
<v Speaker 5>What do you expect Israel to do here? Because a

0:22:47.880 --> 0:22:49.920
<v Speaker 5>lot of folks are suggesting this is a unique time

0:22:50.080 --> 0:22:53.440
<v Speaker 5>for Israel here in terms of exerting and expending and

0:22:53.640 --> 0:22:57.920
<v Speaker 5>its role within the Middle East and add to its security.

0:22:58.000 --> 0:22:59.359
<v Speaker 5>Is this a unique time for Israel?

0:23:00.840 --> 0:23:05.040
<v Speaker 6>Yes, it is because you know, Benjamin Netanyahu, love em

0:23:05.119 --> 0:23:09.520
<v Speaker 6>or hate him, is a world historical figure. People may

0:23:09.600 --> 0:23:14.080
<v Speaker 6>forget Clinton, Obama and Biden and half of the European

0:23:14.200 --> 0:23:17.719
<v Speaker 6>prime ministers, you know, who will be forgotten in the

0:23:17.800 --> 0:23:21.040
<v Speaker 6>course of the decades. But decades from now, people will

0:23:21.080 --> 0:23:26.120
<v Speaker 6>be writing biographies about Netanyahu, you know, because he's been

0:23:26.200 --> 0:23:29.639
<v Speaker 6>in power so long, and the way he was able to,

0:23:29.920 --> 0:23:33.920
<v Speaker 6>you know, achieve tactical surprise in his attacks on Iran,

0:23:34.280 --> 0:23:38.359
<v Speaker 6>and then I'll use the word manipulate President Trump into

0:23:38.440 --> 0:23:43.359
<v Speaker 6>taking action on his own is is nothing short of extraordinary.

0:23:44.480 --> 0:23:47.640
<v Speaker 6>I think with these the smart thing for the Israelis

0:23:47.680 --> 0:23:50.800
<v Speaker 6>to do now, now that they got help from the US,

0:23:51.160 --> 0:23:54.439
<v Speaker 6>is to give the US something that is start the

0:23:54.560 --> 0:23:57.200
<v Speaker 6>process of withdrawing from Gaza.

0:23:58.440 --> 0:24:00.680
<v Speaker 2>Robert Kevin one final question, and one's going to run

0:24:00.680 --> 0:24:02.440
<v Speaker 2>on with the day. And again, folks, I can't say

0:24:02.520 --> 0:24:06.400
<v Speaker 2>enough about Wasteland. Robert Caplin's new effort in The Loom

0:24:06.440 --> 0:24:08.719
<v Speaker 2>of Time, my book of the year. You wrote a

0:24:08.760 --> 0:24:12.119
<v Speaker 2>monograph I'm going to call it The Tragic Mind, taking

0:24:12.200 --> 0:24:16.120
<v Speaker 2>us back to Greek mythology and how we need tragedy

0:24:16.160 --> 0:24:20.840
<v Speaker 2>to move forward. Does President Trump have a tragic mind

0:24:21.600 --> 0:24:24.760
<v Speaker 2>in there somewhere? Is there a philosophy of tragedy?

0:24:25.320 --> 0:24:28.119
<v Speaker 3>Is a foundation strength? Very hard?

0:24:28.440 --> 0:24:32.439
<v Speaker 6>Yeah, Tom, that's a very hard question to answer. Because

0:24:32.480 --> 0:24:35.919
<v Speaker 6>I don't sense it. I think he's too vain and

0:24:36.080 --> 0:24:40.520
<v Speaker 6>superficial to really have a deeply, a deeply developed sense

0:24:40.560 --> 0:24:44.240
<v Speaker 6>of tragedy. But I could be wrong. I could be

0:24:44.400 --> 0:24:48.560
<v Speaker 6>wrong on this because the person who really did have

0:24:48.640 --> 0:24:54.520
<v Speaker 6>a deeply evolved sense of tragedy was President George H. W. Bush,

0:24:54.640 --> 0:24:57.560
<v Speaker 6>who is very cautious and another. You know, the great

0:24:57.640 --> 0:25:01.120
<v Speaker 6>thing about his administration was not what happened, but all

0:25:01.200 --> 0:25:05.679
<v Speaker 6>the bad things that did not happen because of governance.

0:25:06.359 --> 0:25:08.720
<v Speaker 2>This has been wonderful, Robert Kaplam, thank you so much.

0:25:08.760 --> 0:25:13.280
<v Speaker 2>It's a muster read folks wasteland, a world in permanent crisis.

0:25:13.520 --> 0:25:17.399
<v Speaker 1>This is the Bloomberg Surveillance Podcast. Listen live each weekday

0:25:17.440 --> 0:25:20.439
<v Speaker 1>starting at seven am Eastern on Apple Corplay and Android

0:25:20.480 --> 0:25:23.520
<v Speaker 1>Auto with the Bloomberg Business App. You can also listen

0:25:23.600 --> 0:25:26.879
<v Speaker 1>live on Amazon Alexa from our flagship New York station,

0:25:27.400 --> 0:25:30.040
<v Speaker 1>Just say Alexa Play Bloomberg eleven thirty.

0:25:30.119 --> 0:25:34.920
<v Speaker 2>Lri Calvicina joins us for a quick discussion here this

0:25:35.040 --> 0:25:37.960
<v Speaker 2>morning with the RBC Capital Marcus Lorie. How did your

0:25:38.480 --> 0:25:41.840
<v Speaker 2>strategy change this weekend as you published for Monday?

0:25:42.320 --> 0:25:44.680
<v Speaker 3>How do you amend to a new war.

0:25:46.600 --> 0:25:48.720
<v Speaker 7>Hi Hi, Tom, So, thanks for having me. To be honest,

0:25:48.720 --> 0:25:51.160
<v Speaker 7>we didn't change anything. We had done a piece about

0:25:51.160 --> 0:25:53.600
<v Speaker 7>a week ago laying out our framework for how we

0:25:53.600 --> 0:25:56.879
<v Speaker 7>were thinking about rising tensions in the Middle East and escalations,

0:25:57.240 --> 0:25:59.960
<v Speaker 7>and I would say, you know, while while I got

0:26:00.160 --> 0:26:02.159
<v Speaker 7>more convinced that we needed to have some sort of

0:26:02.160 --> 0:26:04.639
<v Speaker 7>short term market draw down, which obviously we haven't gotten

0:26:04.680 --> 0:26:08.080
<v Speaker 7>so far yet, we really just continued to focus on

0:26:08.119 --> 0:26:10.280
<v Speaker 7>the things we've been focusing on, and I would say,

0:26:10.480 --> 0:26:12.600
<v Speaker 7>you know, maybe where our view is a little differentiated.

0:26:12.640 --> 0:26:16.960
<v Speaker 7>Everyone's debating the oil price supply disruption potential. We obviously

0:26:17.040 --> 0:26:20.240
<v Speaker 7>agree that's one big transmission mechanism to equities. We also

0:26:20.280 --> 0:26:21.560
<v Speaker 7>think that you have to look at it through the

0:26:21.640 --> 0:26:26.600
<v Speaker 7>lens of valuation. Heightened uncertainty on geopolitics typically suppresses pes

0:26:26.600 --> 0:26:28.520
<v Speaker 7>in the S and P. Five hundred. And also, we're

0:26:28.600 --> 0:26:30.919
<v Speaker 7>very concerned about sentiment. This has been a market that

0:26:30.960 --> 0:26:34.080
<v Speaker 7>has been melting up because of very very modest inflections

0:26:34.280 --> 0:26:37.320
<v Speaker 7>in various sentiment gauges, and we think that those sentiment

0:26:37.359 --> 0:26:39.280
<v Speaker 7>gauges could be at risk down the road from an

0:26:39.280 --> 0:26:40.080
<v Speaker 7>episode like this.

0:26:40.960 --> 0:26:44.760
<v Speaker 5>Laurie listening to the FED last week again, they don't

0:26:44.760 --> 0:26:47.200
<v Speaker 5>seem to be in any rush to cut rates here,

0:26:47.280 --> 0:26:51.960
<v Speaker 5>so that maybe puts even more pressure on corporate earnings here.

0:26:52.520 --> 0:26:54.760
<v Speaker 5>What is your sense of kind of where corporate earnings are?

0:26:54.920 --> 0:26:56.560
<v Speaker 5>Is there a risk to I don't know out of

0:26:56.600 --> 0:26:59.800
<v Speaker 5>the upside where the downside from here?

0:27:00.000 --> 0:27:01.880
<v Speaker 7>It's a great question, Paul, and I'll say our rates

0:27:01.880 --> 0:27:04.000
<v Speaker 7>team is still looking for September cuts, but they have

0:27:04.080 --> 0:27:06.280
<v Speaker 7>also highlighted the risk that perhaps the FED starts a

0:27:06.320 --> 0:27:09.120
<v Speaker 7>little bit later, and so we do think that could

0:27:09.200 --> 0:27:11.920
<v Speaker 7>potentially be a headwind for equities if you start to

0:27:11.920 --> 0:27:14.359
<v Speaker 7>see those cuts pushed out. I would say from an

0:27:14.359 --> 0:27:17.359
<v Speaker 7>earnings perspective, you know, we are sitting at two fifty

0:27:17.400 --> 0:27:19.800
<v Speaker 7>eight in our own twenty twenty five Sep. Five hundred

0:27:19.800 --> 0:27:22.359
<v Speaker 7>and forecast. It's a little bit below consensus. On a

0:27:22.359 --> 0:27:25.800
<v Speaker 7>bottom up basis, we think that's still the right number

0:27:25.840 --> 0:27:28.800
<v Speaker 7>for this moment in time. If we look at gauges

0:27:28.840 --> 0:27:31.560
<v Speaker 7>of earning sentiment, they've rebounded, but they're about as good

0:27:31.560 --> 0:27:33.440
<v Speaker 7>as they tend to get if you're not coming off

0:27:33.480 --> 0:27:35.679
<v Speaker 7>of an extreme low on a big crisis.

0:27:36.280 --> 0:27:37.720
<v Speaker 3>That's right where I wanted to go.

0:27:37.880 --> 0:27:41.119
<v Speaker 2>As we staggered towards July fifteenth, I mean, folks, with

0:27:41.280 --> 0:27:45.879
<v Speaker 2>all the distractions, I guess it's about earnings. LORI, where

0:27:45.960 --> 0:27:46.920
<v Speaker 2>is the street now?

0:27:47.040 --> 0:27:49.240
<v Speaker 3>Is the street still.

0:27:49.000 --> 0:27:51.840
<v Speaker 2>Overestimating earnings and then they pull them down?

0:27:52.320 --> 0:27:54.160
<v Speaker 3>Or we now as a consensus going the.

0:27:54.160 --> 0:27:58.080
<v Speaker 2>Other way where we're low balling like Lori Kelvisina and

0:27:58.119 --> 0:27:59.280
<v Speaker 2>we'll drag it up later.

0:27:59.400 --> 0:27:59.960
<v Speaker 3>Which is it?

0:28:01.840 --> 0:28:01.919
<v Speaker 4>So?

0:28:02.040 --> 0:28:04.320
<v Speaker 7>Look, I think we're in a discovery process, right and

0:28:04.359 --> 0:28:08.200
<v Speaker 7>I think that we've had these massive uncertainties from tariffs,

0:28:08.240 --> 0:28:10.159
<v Speaker 7>and we've listened to a bunch of companies that just

0:28:10.200 --> 0:28:13.000
<v Speaker 7>came out in the last reporting, Sayson saying, you know, Frankly,

0:28:13.040 --> 0:28:15.080
<v Speaker 7>I think they were in a state of shock, but saying, look,

0:28:15.119 --> 0:28:17.280
<v Speaker 7>you know, we can manage through this, we can mitigate.

0:28:17.320 --> 0:28:19.520
<v Speaker 7>We're going to pass things on through pricing and customers

0:28:19.560 --> 0:28:20.919
<v Speaker 7>are just going to eat it and there's not going

0:28:21.000 --> 0:28:23.040
<v Speaker 7>to be any erosion in demand at least that's what

0:28:23.080 --> 0:28:25.320
<v Speaker 7>you're hearing from more sort of the industrial side of

0:28:25.359 --> 0:28:27.639
<v Speaker 7>the economy. We're going to see if that's right. The

0:28:27.640 --> 0:28:31.320
<v Speaker 7>consumer companies having a much tougher time, you know, and

0:28:31.359 --> 0:28:34.000
<v Speaker 7>Frankly have sounded less optimistic, and we're going to see

0:28:34.000 --> 0:28:36.880
<v Speaker 7>how they're feeling as well. But you know, I think

0:28:36.880 --> 0:28:38.680
<v Speaker 7>there's still a little bit of downside risk to the

0:28:38.720 --> 0:28:41.840
<v Speaker 7>bottom of consensus numbers here and there, And you know

0:28:41.920 --> 0:28:44.400
<v Speaker 7>that contrasts with the numbers having you know, kind of

0:28:44.440 --> 0:28:47.200
<v Speaker 7>rebounded a bit in here, and so, you know, my

0:28:47.440 --> 0:28:49.400
<v Speaker 7>my concern is that we're going to see things go

0:28:49.480 --> 0:28:50.280
<v Speaker 7>the other way a bit.

0:28:50.520 --> 0:28:53.200
<v Speaker 2>Paul Discovery process, they were a great barbine.

0:28:55.240 --> 0:28:56.160
<v Speaker 3>They play blues like.

0:28:56.120 --> 0:28:59.800
<v Speaker 5>Nobody Lord to the extent that some level of terriffs

0:28:59.800 --> 0:29:03.320
<v Speaker 5>are year to stay. Does that suggest that the bigger

0:29:03.360 --> 0:29:05.680
<v Speaker 5>you are, the better you are on your income statement

0:29:05.800 --> 0:29:08.640
<v Speaker 5>to deal with that, that would suggest, you know, big

0:29:08.720 --> 0:29:11.040
<v Speaker 5>cap stable companies versus maybe smaller mid.

0:29:11.040 --> 0:29:14.600
<v Speaker 7>Camp Yeah, that's generally the rule of thumb we use,

0:29:14.680 --> 0:29:17.880
<v Speaker 7>Paul whenever there is something that poses a challenge to

0:29:17.960 --> 0:29:22.760
<v Speaker 7>corporate America to manage through. The smaller companies unfortunately don't

0:29:22.840 --> 0:29:25.280
<v Speaker 7>tend to manage through it quite as well. And that's

0:29:25.320 --> 0:29:27.840
<v Speaker 7>because they have less bargaining power, whether you're looking at

0:29:27.920 --> 0:29:30.680
<v Speaker 7>sort of their employees, whether you're looking at their suppliers.

0:29:31.400 --> 0:29:33.680
<v Speaker 7>And you know, it's interesting, Paul, I was, I can't

0:29:33.720 --> 0:29:35.680
<v Speaker 7>remember what survey this came out in last year. I

0:29:35.720 --> 0:29:37.720
<v Speaker 7>think it might have been the Duke's CFO survey. But

0:29:37.760 --> 0:29:39.920
<v Speaker 7>they did, you know, sort of a study on are

0:29:39.920 --> 0:29:42.760
<v Speaker 7>you using AI or not? Are you using automation tools?

0:29:43.080 --> 0:29:45.520
<v Speaker 7>And bigger This wasn't necessarily a big cap versus small cap,

0:29:45.520 --> 0:29:48.440
<v Speaker 7>but bigger companies were more likely to be using those

0:29:48.480 --> 0:29:51.000
<v Speaker 7>automation tools and to be using tools like AI to

0:29:51.120 --> 0:29:54.440
<v Speaker 7>enhance their efficiencies than smaller companies. And so you know,

0:29:54.560 --> 0:29:57.240
<v Speaker 7>even frankly, some of the tools that are being engaged

0:29:57.240 --> 0:29:59.440
<v Speaker 7>with are just different when you're looking from big cap

0:29:59.520 --> 0:30:01.120
<v Speaker 7>companies small cap companies.

0:30:01.240 --> 0:30:04.120
<v Speaker 2>Lurri Cavasena, thank us so much, RBC Capital Markets.

0:30:09.840 --> 0:30:13.760
<v Speaker 1>This is the Bloomberg Surveillance Podcast. Listen live each weekday

0:30:13.800 --> 0:30:16.840
<v Speaker 1>starting at seven am Eastern on Apple Coarclay, and Android

0:30:16.840 --> 0:30:19.840
<v Speaker 1>Auto with the Bloomberg Business app. You can also watch

0:30:19.920 --> 0:30:22.880
<v Speaker 1>us live every weekday on YouTube and always on the

0:30:22.880 --> 0:30:23.960
<v Speaker 1>Bloomberg terminal.

0:30:24.120 --> 0:30:27.280
<v Speaker 2>Now, the markets we really wanted to focus in here,

0:30:27.320 --> 0:30:30.080
<v Speaker 2>and they have in studio Paul Sank coming up on

0:30:30.240 --> 0:30:33.760
<v Speaker 2>oil world class and even better, Steven Englander with its

0:30:33.760 --> 0:30:37.320
<v Speaker 2>Sandra Charter Bank joining us at the studio. Now, folks,

0:30:37.480 --> 0:30:39.280
<v Speaker 2>this is going to be a window in the global

0:30:39.320 --> 0:30:41.480
<v Speaker 2>Wall Street where they don't just look at yen in

0:30:41.600 --> 0:30:45.320
<v Speaker 2>euro Steven Englander, you walked in and you said, cad yen,

0:30:46.080 --> 0:30:50.240
<v Speaker 2>which is the number of Japanese yen per Canadian dollar

0:30:50.840 --> 0:30:55.280
<v Speaker 2>since a pandemic. It's been massively strung Canada weekend.

0:30:55.400 --> 0:30:56.480
<v Speaker 3>And it's reversed.

0:30:57.080 --> 0:31:01.640
<v Speaker 2>How do you glean information from a study of Canada

0:31:01.720 --> 0:31:02.520
<v Speaker 2>versus Japan.

0:31:03.560 --> 0:31:07.840
<v Speaker 8>Well, you know, I'm thinking of it more short term

0:31:08.040 --> 0:31:11.400
<v Speaker 8>that you know, even though yen traditionally is a safe haven,

0:31:11.840 --> 0:31:15.160
<v Speaker 8>it's it's still low yielding, has the lowest drilled interest rates.

0:31:15.240 --> 0:31:20.080
<v Speaker 8>The politics are kind of a little bit soft, and

0:31:20.120 --> 0:31:24.200
<v Speaker 8>it's very exposed to higher oil prices, whereas some of the.

0:31:24.120 --> 0:31:27.200
<v Speaker 2>Weakness we're seeing today in dollar yen as well.

0:31:27.760 --> 0:31:32.240
<v Speaker 8>Yeah, and you know, and what you're seeing is is

0:31:32.280 --> 0:31:35.320
<v Speaker 8>that the end is actually one of the weakest currencies overnight.

0:31:35.960 --> 0:31:38.400
<v Speaker 8>Canada is holding in there because it does have oil.

0:31:39.320 --> 0:31:40.760
<v Speaker 8>You know, it's trade related.

0:31:40.800 --> 0:31:41.440
<v Speaker 3>It's not as.

0:31:41.280 --> 0:31:45.280
<v Speaker 8>Exposed to to July the ninth, and you start of say,

0:31:45.360 --> 0:31:48.120
<v Speaker 8>if things go south that you know, maybe cad is

0:31:48.280 --> 0:31:49.480
<v Speaker 8>continues to hang in there.

0:31:49.520 --> 0:31:51.120
<v Speaker 3>But you know, yeah, you bet at.

0:31:51.040 --> 0:31:55.160
<v Speaker 2>The standard charter bank is strong, loooning weaker.

0:31:55.400 --> 0:31:59.280
<v Speaker 8>Yeah, well, we don't bet, but it's certainly sort of

0:31:59.320 --> 0:32:03.239
<v Speaker 8>something that we sink, we we would think about if

0:32:03.240 --> 0:32:05.640
<v Speaker 8>you're asking us, you know how markets might trade.

0:32:05.880 --> 0:32:06.920
<v Speaker 2>Put me in my place there?

0:32:07.960 --> 0:32:09.280
<v Speaker 3>Why did you save the interview?

0:32:10.760 --> 0:32:11.280
<v Speaker 2>Steve Hall?

0:32:11.720 --> 0:32:16.200
<v Speaker 5>Has a world of rising tariffs impacted your view of

0:32:16.400 --> 0:32:18.280
<v Speaker 5>currencies here. We don't know where the tariffs are going

0:32:18.320 --> 0:32:20.960
<v Speaker 5>to shake out, but we do know that we got

0:32:21.000 --> 0:32:22.680
<v Speaker 5>to pay attention to these things for at least for

0:32:22.720 --> 0:32:24.600
<v Speaker 5>the next several years. How does that impact your view?

0:32:24.720 --> 0:32:27.080
<v Speaker 8>Well, it's made very complicated because there are three factors

0:32:27.120 --> 0:32:29.840
<v Speaker 8>that are involved. One is that they've increased the risk

0:32:29.880 --> 0:32:31.760
<v Speaker 8>premium on US assets a lot.

0:32:33.040 --> 0:32:34.960
<v Speaker 3>Part weaker dollar, yeah.

0:32:34.840 --> 0:32:38.600
<v Speaker 8>Partly because of you know, the expansion of the envelope

0:32:38.640 --> 0:32:42.000
<v Speaker 8>of tariffs beyond what anybody thought was reasonable, but also

0:32:42.040 --> 0:32:44.600
<v Speaker 8>the possibility that they can do everything else with the

0:32:44.640 --> 0:32:49.760
<v Speaker 8>same kind of broader envelope of policy options. Second thing

0:32:50.240 --> 0:32:54.080
<v Speaker 8>is it's risk off for the rest of the world.

0:32:54.120 --> 0:32:56.000
<v Speaker 8>You know, if you get tariffed up, that's no fun.

0:32:56.040 --> 0:32:57.360
<v Speaker 8>It's going to disrupt trade.

0:32:57.920 --> 0:32:59.240
<v Speaker 3>And the third thing.

0:32:59.120 --> 0:33:01.640
<v Speaker 8>Is that normally you would sort of say, look if

0:33:01.640 --> 0:33:04.280
<v Speaker 8>your if US tariffs on Europe go up, the euro

0:33:04.360 --> 0:33:07.200
<v Speaker 8>would fall, although that hasn't been the case yet because

0:33:07.240 --> 0:33:10.640
<v Speaker 8>the risk premium has dominated. How you weigh all those

0:33:10.760 --> 0:33:12.880
<v Speaker 8>three is very complicated.

0:33:13.680 --> 0:33:15.520
<v Speaker 2>I look, Steve Angloder in my book of the Summer

0:33:15.600 --> 0:33:20.600
<v Speaker 2>Ken Rogoff out of Harvard, our dollar year problem fabulous, fabulous,

0:33:20.640 --> 0:33:24.120
<v Speaker 2>look back at Rudy Donbush and the late Stan Fisher

0:33:24.560 --> 0:33:28.280
<v Speaker 2>and all in our dollar for the greater public listening

0:33:28.400 --> 0:33:31.160
<v Speaker 2>right now, should they have dollar worries?

0:33:32.320 --> 0:33:33.640
<v Speaker 3>Yeah? They should.

0:33:33.880 --> 0:33:37.760
<v Speaker 8>I think that the You know what makes America great,

0:33:38.800 --> 0:33:42.560
<v Speaker 8>I think is the ability to attract money from abroad

0:33:42.600 --> 0:33:44.920
<v Speaker 8>at low interest rates. That's been the history of the

0:33:45.000 --> 0:33:49.000
<v Speaker 8>last twenty or thirty years. Invested in new technologies, get

0:33:49.080 --> 0:33:51.600
<v Speaker 8>high rates of return and do very well of it.

0:33:51.800 --> 0:33:54.040
<v Speaker 8>You know, the US is like a big hedge fund.

0:33:54.120 --> 0:33:56.680
<v Speaker 2>Do you suggest that's bro I love that. Can we

0:33:56.760 --> 0:33:57.120
<v Speaker 2>steal that?

0:33:57.320 --> 0:33:57.520
<v Speaker 3>Yeah?

0:33:57.680 --> 0:34:00.360
<v Speaker 2>Lisa right, that the US is like a big edge

0:34:00.360 --> 0:34:04.040
<v Speaker 2>fun My book of the Year by Ruster Sherman. Rockefeller

0:34:04.120 --> 0:34:07.800
<v Speaker 2>now is basically a trease on capitalism in America. Steven

0:34:07.840 --> 0:34:12.160
<v Speaker 2>Anglicher the Standard Charter Bank with this on quote, the

0:34:12.280 --> 0:34:16.239
<v Speaker 2>US is like a hedge fund. Is this the financialization

0:34:16.600 --> 0:34:20.200
<v Speaker 2>of America? It's only giving gains.

0:34:19.800 --> 0:34:22.319
<v Speaker 3>To the elite, not necessarily.

0:34:22.360 --> 0:34:26.040
<v Speaker 8>I think everyone benefits, you know, from the development of

0:34:26.080 --> 0:34:28.800
<v Speaker 8>new technologies. I mean, even if you're poor, having a

0:34:29.600 --> 0:34:34.719
<v Speaker 8>cell phone with remarkable capabilities is a wonderful thing. But

0:34:34.880 --> 0:34:38.720
<v Speaker 8>I do think it's dependent on being able to borrow

0:34:38.800 --> 0:34:41.200
<v Speaker 8>cheaply as long as you're running a current account deficit,

0:34:41.280 --> 0:34:43.759
<v Speaker 8>and that's not going to go away, so, you know.

0:34:44.040 --> 0:34:46.440
<v Speaker 8>And my worry about the dollar is that some of

0:34:46.480 --> 0:34:50.520
<v Speaker 8>the policies that are being pursued and that are contemplated

0:34:51.120 --> 0:34:54.880
<v Speaker 8>may raise the cost of capital to the most dynamic

0:34:54.920 --> 0:34:57.440
<v Speaker 8>sector of the US and that would be a pity.

0:34:58.719 --> 0:35:00.680
<v Speaker 5>Speaking of the US dollar year date, we've seen it

0:35:00.719 --> 0:35:02.879
<v Speaker 5>down you know, eight to nine percent, having a little

0:35:02.880 --> 0:35:07.120
<v Speaker 5>bit of a bounce back today, maybe risk even how

0:35:07.200 --> 0:35:09.080
<v Speaker 5>much more downside do you think there could be? Because

0:35:09.120 --> 0:35:11.360
<v Speaker 5>I've been asking, I don't know anything about your world,

0:35:11.400 --> 0:35:14.360
<v Speaker 5>the currency business. So my stock question is are we

0:35:14.400 --> 0:35:15.879
<v Speaker 5>ever going to see a bear market in the dollar?

0:35:15.920 --> 0:35:17.840
<v Speaker 5>I've been asking that for six years. Are we starting

0:35:17.840 --> 0:35:19.360
<v Speaker 5>to see the beginning of one? Or is this just

0:35:19.440 --> 0:35:20.000
<v Speaker 5>a trade?

0:35:21.560 --> 0:35:25.319
<v Speaker 8>It could be if you think of say we have

0:35:25.840 --> 0:35:30.080
<v Speaker 8>you know, another session a year from now, and tax

0:35:30.160 --> 0:35:34.640
<v Speaker 8>build has passed, tariffs have been resolved, and the US

0:35:34.719 --> 0:35:38.160
<v Speaker 8>is growing sluggishly, has a big fiscal deficit, has a

0:35:38.160 --> 0:35:39.960
<v Speaker 8>big current account deficit.

0:35:40.040 --> 0:35:41.680
<v Speaker 3>That could be real trouble for the dollar.

0:35:42.280 --> 0:35:46.239
<v Speaker 2>What does one final question, what does the standard Charter bank,

0:35:46.320 --> 0:35:50.040
<v Speaker 2>with all of your heritage of the Pacific RIM and

0:35:50.080 --> 0:35:53.000
<v Speaker 2>particularly down south over to India, what do you see

0:35:53.040 --> 0:35:55.600
<v Speaker 2>of a vibrancy in the Pacific RIM right now?

0:35:55.920 --> 0:36:00.360
<v Speaker 8>Ex China, you know, they're hit with the same issues

0:36:00.400 --> 0:36:03.879
<v Speaker 8>everybody else has hit. You know, there's the deflation being

0:36:03.920 --> 0:36:08.359
<v Speaker 8>exported from China. There's loss of confidence because of the

0:36:08.680 --> 0:36:11.359
<v Speaker 8>you know, the risk on the tariff side. So you know,

0:36:11.640 --> 0:36:14.600
<v Speaker 8>nothing is catastrophic, but a lot is sluggish.

0:36:14.840 --> 0:36:17.719
<v Speaker 2>I look, you know, just in the space folks, I

0:36:17.719 --> 0:36:21.120
<v Speaker 2>can do this on the Bloomberg Professional Service. I got

0:36:21.160 --> 0:36:24.200
<v Speaker 2>like a five standard deviation plus two to minus three

0:36:24.840 --> 0:36:29.200
<v Speaker 2>on Taiwan dollar. I got a massively strong Taiwan dollar

0:36:29.640 --> 0:36:33.640
<v Speaker 2>Sing dollar in the rest is that on an asymmetric basis?

0:36:33.920 --> 0:36:37.120
<v Speaker 2>Is that strong EM or is that weak US? Or

0:36:37.160 --> 0:36:38.080
<v Speaker 2>is it something different?

0:36:38.600 --> 0:36:41.640
<v Speaker 8>Well, there's a lot of speculation on you know, what's

0:36:41.680 --> 0:36:45.399
<v Speaker 8>causing these moves, and I think there's some anticipation that

0:36:45.640 --> 0:36:51.160
<v Speaker 8>perhaps currency adjustment was substitute for some of the trade

0:36:51.160 --> 0:36:55.280
<v Speaker 8>impediment adjustment that the US wants that you know, especially

0:36:55.400 --> 0:36:59.880
<v Speaker 8>Asian currencies as a group, may prefer to allow their

0:37:00.080 --> 0:37:04.239
<v Speaker 8>and he's to appreciate rather than sort of say, use

0:37:04.360 --> 0:37:08.040
<v Speaker 8>that as a leakage. Yeah yeah, but rather than open

0:37:08.160 --> 0:37:11.759
<v Speaker 8>up vulnerable sectors like farming and stuff where which is

0:37:11.800 --> 0:37:15.160
<v Speaker 8>politically important, they say, let's socialize this. Everybody will take

0:37:15.160 --> 0:37:16.200
<v Speaker 8>the hit through the exchange.

0:37:16.280 --> 0:37:18.160
<v Speaker 2>And you know, my keymail me and he says, Tom,

0:37:18.280 --> 0:37:21.120
<v Speaker 2>use the damn terminal. So yeah, I'm doing the t function.

0:37:21.280 --> 0:37:22.320
<v Speaker 3>Yeah a monthly.

0:37:22.320 --> 0:37:23.719
<v Speaker 2>I'm trying to impress englander.

0:37:24.000 --> 0:37:24.200
<v Speaker 3>Here.

0:37:24.280 --> 0:37:29.240
<v Speaker 2>I got Taiwan dollar in April plus two standard deviations

0:37:29.280 --> 0:37:33.399
<v Speaker 2>on trend and now it's minus exactly minus three. That's

0:37:33.440 --> 0:37:38.120
<v Speaker 2>a five standard deviations swing. That's it's it's like more

0:37:38.160 --> 0:37:39.080
<v Speaker 2>than substantial.

0:37:39.760 --> 0:37:39.960
<v Speaker 3>Was that?

0:37:40.200 --> 0:37:43.080
<v Speaker 2>Will you come back now that we use the terminal?

0:37:43.680 --> 0:37:46.040
<v Speaker 3>I'm always impressed when I talk to you. Well please,

0:37:46.360 --> 0:37:46.879
<v Speaker 3>there you go.

0:37:47.360 --> 0:37:51.439
<v Speaker 2>So that's what the third divorce lawyers, Thank you so much,

0:37:51.520 --> 0:37:55.120
<v Speaker 2>greatly appreciate it. He's with a standard charter at Bank

0:37:55.160 --> 0:37:55.680
<v Speaker 2>and Studio.

0:37:56.200 --> 0:38:00.000
<v Speaker 1>This is the Bloomberg Surveillance Podcast. Listen live each weekday

0:38:00.160 --> 0:38:03.440
<v Speaker 1>starting at seven am Eastern on Applecarplay and Android Auto

0:38:03.560 --> 0:38:06.520
<v Speaker 1>with the Bloomberg Business app. You can also listen live

0:38:06.600 --> 0:38:10.200
<v Speaker 1>on Amazon Alexa from our flagship New York station. Just

0:38:10.239 --> 0:38:12.720
<v Speaker 1>say Alexa play Bloomberg eleven thirty.

0:38:12.800 --> 0:38:14.560
<v Speaker 2>They emailed the White House today, I say, can you

0:38:14.600 --> 0:38:16.840
<v Speaker 2>give me an oil tweet from the president because we

0:38:16.920 --> 0:38:20.160
<v Speaker 2>got Paul Sanki coming and joining us. Paul Sanki, Sankie

0:38:20.239 --> 0:38:23.520
<v Speaker 2>researcher four. Our conversation we're going to do quickly here

0:38:23.680 --> 0:38:27.719
<v Speaker 2>the President of the United States moments ago, all caps. Everyone,

0:38:27.840 --> 0:38:29.880
<v Speaker 2>come keep oil prices down.

0:38:30.000 --> 0:38:30.440
<v Speaker 3>Period.

0:38:31.160 --> 0:38:35.080
<v Speaker 2>I'm watching exclamation point. You're playing right into the hands

0:38:35.080 --> 0:38:38.840
<v Speaker 2>of the enemy. Don't do it. What would you say

0:38:39.000 --> 0:38:44.360
<v Speaker 2>to the White House and the manipulation of oil prices?

0:38:45.200 --> 0:38:47.719
<v Speaker 9>H I think the best trade is of oil of

0:38:47.760 --> 0:38:50.560
<v Speaker 9>the Chinese. And so they're the real you know, the

0:38:50.680 --> 0:38:52.680
<v Speaker 9>under the power underneath this order is there is that

0:38:52.800 --> 0:38:54.080
<v Speaker 9>buying an Iranian crude.

0:38:55.320 --> 0:38:57.240
<v Speaker 2>They put the bid on oil.

0:38:57.480 --> 0:38:59.920
<v Speaker 9>They put the bid on Iranian oil so that the

0:39:00.040 --> 0:39:02.440
<v Speaker 9>main buyer, by far, you know, eighty percent of Iranian

0:39:02.480 --> 0:39:04.680
<v Speaker 9>oil is a lot of it actually goes to Malaysia

0:39:04.800 --> 0:39:07.800
<v Speaker 9>and then is reflagged. So you see that Malaysia exports

0:39:07.840 --> 0:39:10.399
<v Speaker 9>more oil to China than it produces oil, so it's

0:39:10.400 --> 0:39:14.240
<v Speaker 9>obviously smuggled. And basically the other manipulation is the White

0:39:14.239 --> 0:39:16.360
<v Speaker 9>House turning their blind eye. And this is the second

0:39:16.360 --> 0:39:19.120
<v Speaker 9>administration that's done that to all these sanctions. So you know,

0:39:19.160 --> 0:39:22.440
<v Speaker 9>you haven't really interrupted Russian oil despite all the sanctions.

0:39:22.920 --> 0:39:25.600
<v Speaker 9>Iranian oil as of today is still flowing as it

0:39:25.800 --> 0:39:30.040
<v Speaker 9>was that you know, recent, very high levels compared to history,

0:39:30.640 --> 0:39:33.319
<v Speaker 9>and so there has been you know, concerted efforts not

0:39:33.440 --> 0:39:37.640
<v Speaker 9>to get the oil interrupted, and nobody, including Iran, wants

0:39:37.719 --> 0:39:40.080
<v Speaker 9>to interrupt the oil. The other thing here is that,

0:39:40.120 --> 0:39:41.839
<v Speaker 9>you know, people seem to think that there's some sort

0:39:41.880 --> 0:39:43.880
<v Speaker 9>of gate at the Straits of hor Moves when they

0:39:43.880 --> 0:39:46.640
<v Speaker 9>talk about closing the Straits of horr Moos, you know,

0:39:46.920 --> 0:39:48.680
<v Speaker 9>they think Iran has the power to do that. The

0:39:48.719 --> 0:39:52.800
<v Speaker 9>real question is does Iran start shooting missiles at tankers,

0:39:53.560 --> 0:39:55.760
<v Speaker 9>which is really going to be dramatic if it happens,

0:39:55.760 --> 0:39:57.879
<v Speaker 9>And of course that's what happened in the tanker War

0:39:58.280 --> 0:40:00.560
<v Speaker 9>of the seventies between Iran and a Rock, where they

0:40:00.600 --> 0:40:03.520
<v Speaker 9>were both firing missiles, and that's actually what got us

0:40:03.560 --> 0:40:06.960
<v Speaker 9>the nineteen seventies high in oil prices, which was over

0:40:06.960 --> 0:40:08.000
<v Speaker 9>one hundred dollars a barrel.

0:40:08.440 --> 0:40:11.960
<v Speaker 5>Given that background, why isn't Brent crude north of one

0:40:12.040 --> 0:40:12.960
<v Speaker 5>hundred dollars today?

0:40:13.520 --> 0:40:16.600
<v Speaker 9>There's plenty of oil, and you know, Chinese demand is weak,

0:40:17.000 --> 0:40:19.680
<v Speaker 9>suppliers abundon. I think to me, Tom and I have

0:40:19.719 --> 0:40:21.960
<v Speaker 9>known each other twenty five years. What's so extraordinary about

0:40:22.000 --> 0:40:24.640
<v Speaker 9>the current market is firstly that we're a one hundred

0:40:24.640 --> 0:40:26.520
<v Speaker 9>and three million barrels a day of demand, you know,

0:40:26.520 --> 0:40:29.440
<v Speaker 9>an extraordinary number, one hundred and three million barrels a

0:40:29.520 --> 0:40:31.279
<v Speaker 9>day of every day, you know, so this is like

0:40:31.320 --> 0:40:34.440
<v Speaker 9>one thy three hundred barrels a second of consumption. But

0:40:34.520 --> 0:40:36.759
<v Speaker 9>even more extraordinarily, which we would never have thought you

0:40:36.760 --> 0:40:39.960
<v Speaker 9>could do twenty years ago, you've got capacity of you know,

0:40:40.000 --> 0:40:41.680
<v Speaker 9>one hundred and eight million barrels a day, so there's

0:40:41.680 --> 0:40:44.560
<v Speaker 9>actually five million barrels a day spare. The interesting thing

0:40:44.600 --> 0:40:46.600
<v Speaker 9>about the spec capacity is it's all in the Gulf,

0:40:47.080 --> 0:40:49.840
<v Speaker 9>so the market is clearly as further to the answer

0:40:49.840 --> 0:40:52.080
<v Speaker 9>to your question is the market is thinking that the

0:40:52.800 --> 0:40:55.680
<v Speaker 9>risk of interruption in the Straits of horn Moves is low.

0:40:56.200 --> 0:41:00.560
<v Speaker 9>Basically because China, US, Europe, everybody set out pretty much

0:41:00.640 --> 0:41:04.080
<v Speaker 9>maybe less so want the oil to keep flowing, and

0:41:04.080 --> 0:41:07.560
<v Speaker 9>that the Iranian's only source of revenue now dollar revenue

0:41:07.600 --> 0:41:09.799
<v Speaker 9>is going to be oil. So it's difficult to see

0:41:09.800 --> 0:41:11.839
<v Speaker 9>exactly who wants to shut the straits of war moves,

0:41:12.280 --> 0:41:14.759
<v Speaker 9>and I think the odds on various betting sites are

0:41:14.800 --> 0:41:18.240
<v Speaker 9>far too high. It's actually quoted at thirty percent chance

0:41:18.320 --> 0:41:20.799
<v Speaker 9>the straits are shut by the end of June, which

0:41:20.840 --> 0:41:23.399
<v Speaker 9>I just think is extremely unlikely because I don't even

0:41:23.400 --> 0:41:25.560
<v Speaker 9>know how you would shut it short of sending missiles.

0:41:25.640 --> 0:41:27.879
<v Speaker 5>If you take the risk premium, assuming there's some risk

0:41:27.920 --> 0:41:30.720
<v Speaker 5>premium in global crude today, if you take that out,

0:41:31.880 --> 0:41:34.600
<v Speaker 5>is a market still pushing this monority lower?

0:41:36.000 --> 0:41:37.680
<v Speaker 9>Yes, I think so. I mean I think that you know,

0:41:37.680 --> 0:41:40.480
<v Speaker 9>we are in a plentiful supply situation. The one thing

0:41:40.520 --> 0:41:43.839
<v Speaker 9>that hasn't turned out well for the Bears has been

0:41:43.840 --> 0:41:47.799
<v Speaker 9>that demand remains pretty strong, particularly Middle Eastern heat. So

0:41:47.840 --> 0:41:51.279
<v Speaker 9>we saw a very cold winter in the globally in

0:41:51.960 --> 0:41:54.600
<v Speaker 9>you know the key markets, which would be Northeast, Asia, Europe,

0:41:54.600 --> 0:41:56.800
<v Speaker 9>and the US that gave us a lot of extra demand,

0:41:56.800 --> 0:41:59.120
<v Speaker 9>a million over a million miles a day of extra

0:41:59.160 --> 0:42:02.520
<v Speaker 9>demand just on than Q one and now we're getting

0:42:02.520 --> 0:42:04.560
<v Speaker 9>a good four hundred thousand bars a day of extra

0:42:04.560 --> 0:42:07.520
<v Speaker 9>demand because of the massive heat that we've had in

0:42:07.520 --> 0:42:09.399
<v Speaker 9>the Middle East. You're doing if you think it's hot

0:42:09.400 --> 0:42:12.800
<v Speaker 9>in New York today, Abby Dabbi recorded fifty three degrees

0:42:12.840 --> 0:42:15.200
<v Speaker 9>I think, which is one hundred and twenty seven degrees

0:42:16.040 --> 0:42:21.000
<v Speaker 9>in the shade in May. And as a result, experts

0:42:21.040 --> 0:42:23.200
<v Speaker 9>have been a bit constrained. Now having said that Saudi

0:42:23.280 --> 0:42:25.440
<v Speaker 9>is now all of them have now started sending as

0:42:25.520 --> 0:42:27.960
<v Speaker 9>much oil out of the Gulf as possible. So we

0:42:28.040 --> 0:42:32.160
<v Speaker 9>really need some incremental geopolitical disaster to make well go high.

0:42:32.600 --> 0:42:35.120
<v Speaker 2>Can we do something quaint like an individual stack?

0:42:35.800 --> 0:42:38.640
<v Speaker 10>Yeah, I don't know if he still does OXI Vicky

0:42:38.800 --> 0:42:42.680
<v Speaker 10>over at Axey with Warren Buffet twenty seven percent ownership

0:42:42.719 --> 0:42:45.920
<v Speaker 10>of Berkshire at the way, debt encumbered.

0:42:46.360 --> 0:42:51.319
<v Speaker 2>Essentially, his stock's gone nowhere for ten years. Akson has

0:42:51.360 --> 0:42:56.399
<v Speaker 2>sixty some thousand employees. Oxy's teen swings thirteen thousand employees.

0:42:56.719 --> 0:42:59.600
<v Speaker 2>Is mister Buffet got himself into a problem.

0:43:00.080 --> 0:43:03.160
<v Speaker 9>Warren Buffet, as you call him, owns actually more dollars

0:43:03.160 --> 0:43:05.600
<v Speaker 9>of Chevron than he does of Oxy. So my thought

0:43:05.760 --> 0:43:09.279
<v Speaker 9>is that if he wanted to engineer something. Yeah, you

0:43:09.320 --> 0:43:11.040
<v Speaker 9>know that you could. You could roll it all up

0:43:11.040 --> 0:43:14.160
<v Speaker 9>into Chevron and move on. So that's one option. But

0:43:14.160 --> 0:43:16.120
<v Speaker 9>of course Chevron's buying Hess at the moment, and we're

0:43:16.160 --> 0:43:18.759
<v Speaker 9>in arbitration on that deal. So I think a lot

0:43:18.800 --> 0:43:21.920
<v Speaker 9>will obviously depend on whether that arbitration says that Exxon

0:43:22.000 --> 0:43:23.960
<v Speaker 9>has a right of first refusal on the assets in

0:43:24.000 --> 0:43:27.160
<v Speaker 9>Guyana or whether Chevron simply wins the deal and moves on.

0:43:27.440 --> 0:43:29.799
<v Speaker 9>If Chevron wins Hess, it's in terrific shape. It's got

0:43:29.840 --> 0:43:32.880
<v Speaker 9>a great asset base with that extra Guyana leg that

0:43:32.880 --> 0:43:35.720
<v Speaker 9>they really need to make them source complete. The beauty

0:43:35.760 --> 0:43:38.120
<v Speaker 9>of Oxy for a Chevron would be that it would

0:43:38.160 --> 0:43:41.000
<v Speaker 9>catapult them pretty much beyond Exxon, you know, which would

0:43:41.000 --> 0:43:42.359
<v Speaker 9>be a historic moment for them.

0:43:42.400 --> 0:43:45.200
<v Speaker 2>To be larger and more international than the Exon.

0:43:45.320 --> 0:43:47.760
<v Speaker 9>Not more international, but larger because they've become the largest

0:43:47.760 --> 0:43:50.759
<v Speaker 9>player in the Permian. Chevron actually in twenty twenty, when

0:43:50.920 --> 0:43:53.640
<v Speaker 9>Xon was really struggling badly, went up to a higher

0:43:53.680 --> 0:43:55.920
<v Speaker 9>market cap. And I can tell you there was champagne

0:43:56.040 --> 0:43:59.200
<v Speaker 9>corks in the corridors of San Romano when Chevron. If

0:43:59.239 --> 0:44:01.799
<v Speaker 9>you think about the his but today, you know, would

0:44:01.800 --> 0:44:03.640
<v Speaker 9>Exon do another big deal? I think the main thing

0:44:03.680 --> 0:44:08.240
<v Speaker 9>here is Thomas is the Trump. You know, would Trump

0:44:08.280 --> 0:44:12.480
<v Speaker 9>be more ready to allow Exon for Conico, Phillips, you

0:44:12.520 --> 0:44:15.319
<v Speaker 9>know some of these mega deals that they sort of

0:44:15.360 --> 0:44:17.840
<v Speaker 9>have to do now because it doesn't look like oil

0:44:17.920 --> 0:44:19.920
<v Speaker 9>is going to get much out of a call it

0:44:20.000 --> 0:44:23.000
<v Speaker 9>sixty to eighty range. And really the thing for these

0:44:23.000 --> 0:44:25.799
<v Speaker 9>companies to do is to merge and create synergies and

0:44:25.840 --> 0:44:26.640
<v Speaker 9>increase returns.

0:44:26.680 --> 0:44:28.680
<v Speaker 2>I got eight ways to go here, I got time

0:44:28.719 --> 0:44:31.080
<v Speaker 2>for one question is as simply as I camp Paul

0:44:31.160 --> 0:44:36.360
<v Speaker 2>Sank for our American audience, what is our biggest misconception

0:44:36.880 --> 0:44:40.919
<v Speaker 2>of oil production and the Persian golf? After we all

0:44:41.000 --> 0:44:44.680
<v Speaker 2>read Daniel Jurgen's surprise, what's a thing we get wrong?

0:44:44.760 --> 0:44:45.000
<v Speaker 3>Now?

0:44:45.160 --> 0:44:46.880
<v Speaker 9>I think the single biggest thing people get wrong is

0:44:46.920 --> 0:44:49.560
<v Speaker 9>they think that, you know, there's there's more environmentally friendly

0:44:49.600 --> 0:44:52.200
<v Speaker 9>alternative to oil. When ail is naturally occurring, always say

0:44:52.200 --> 0:44:54.640
<v Speaker 9>it's liquid solar power. So the big idea is oil

0:44:54.760 --> 0:44:56.680
<v Speaker 9>just has a very bad public image. It's actually, if

0:44:56.719 --> 0:44:59.200
<v Speaker 9>we could if gas was announced as an invention today,

0:44:59.480 --> 0:45:01.840
<v Speaker 9>the word world would celebrate that we found the solution

0:45:01.880 --> 0:45:05.520
<v Speaker 9>to our energy problems that are environmental problems, and US

0:45:05.600 --> 0:45:08.680
<v Speaker 9>emissions are down based on our increased use of natural gas.

0:45:08.719 --> 0:45:11.160
<v Speaker 9>It's as simple as that. That's how we've actually reduced

0:45:11.200 --> 0:45:14.520
<v Speaker 9>CO two over time. The biggest misconception in the Gulf,

0:45:14.560 --> 0:45:16.560
<v Speaker 9>I think, is that they're all much more friendly and

0:45:16.640 --> 0:45:18.960
<v Speaker 9>talking to each other than you realize. You know, you

0:45:19.000 --> 0:45:21.000
<v Speaker 9>see all these back channels, and you can see that

0:45:21.080 --> 0:45:23.839
<v Speaker 9>even the US is talking to Iran. So I think

0:45:23.840 --> 0:45:27.600
<v Speaker 9>there's you know, a whole different level here for conspiracy theorists,

0:45:27.600 --> 0:45:29.760
<v Speaker 9>which is that you know, a lot of these guys

0:45:30.320 --> 0:45:32.440
<v Speaker 9>are much more trying to sort this out. And I'm

0:45:32.440 --> 0:45:34.960
<v Speaker 9>actually believing I'm not quite optimistic here, Tom, because I

0:45:35.000 --> 0:45:37.480
<v Speaker 9>believe that if you can actually have some sort of

0:45:37.520 --> 0:45:40.360
<v Speaker 9>transition in Iran, and that's going to be a terrible challenge.

0:45:40.400 --> 0:45:42.840
<v Speaker 9>You know, you're going to be in a Venezuela situation

0:45:42.960 --> 0:45:47.040
<v Speaker 9>quite possibly. In the seventy nine revolution, there was significant

0:45:47.120 --> 0:45:49.640
<v Speaker 9>civil war fighting in Iran for at least a year

0:45:49.760 --> 0:45:52.280
<v Speaker 9>or two posts the revolution. I mean that they continue

0:45:52.320 --> 0:45:55.080
<v Speaker 9>to basically fight within Iran, and at the moment there's

0:45:55.080 --> 0:45:58.240
<v Speaker 9>no opposition nor opposition leader in Iran, So you worry

0:45:58.280 --> 0:46:01.080
<v Speaker 9>that it's likely to go to the Revolutionary Guard, who

0:46:01.120 --> 0:46:04.160
<v Speaker 9>are effectively not just a military force, there an economic force.

0:46:04.239 --> 0:46:06.880
<v Speaker 9>So they run the u at the Iranian economy. And

0:46:06.960 --> 0:46:09.000
<v Speaker 9>as a result, the thing I'd be watching for is

0:46:09.040 --> 0:46:10.840
<v Speaker 9>for a split in the Revolutionary Guard.

0:46:11.520 --> 0:46:13.600
<v Speaker 2>Right at the time I got to ask how attached

0:46:13.719 --> 0:46:17.120
<v Speaker 2>is a revolutionary regard to Ayotola.

0:46:17.880 --> 0:46:20.240
<v Speaker 9>I mean, that's their job. Their job is not military,

0:46:20.239 --> 0:46:23.480
<v Speaker 9>their job is to protect the revolution, and they've turned

0:46:23.520 --> 0:46:26.719
<v Speaker 9>that into a massive, sort of corrupt they're sort of

0:46:26.760 --> 0:46:30.160
<v Speaker 9>like a cartel. They're like a government cartel that they're crooks,

0:46:30.160 --> 0:46:32.120
<v Speaker 9>their criminals. All these guys should be out, you know,

0:46:32.200 --> 0:46:33.880
<v Speaker 9>we've got to get rid of them. And I just

0:46:33.920 --> 0:46:35.840
<v Speaker 9>hope the Iranian people, who, as you said, have a

0:46:35.920 --> 0:46:37.279
<v Speaker 9>wonderful culture, can come through it.

0:46:37.320 --> 0:46:40.319
<v Speaker 2>So wrong, be a stranger your weekend note, You tore

0:46:40.440 --> 0:46:44.480
<v Speaker 2>apart me, you tore apart financial media. You said you'd

0:46:44.520 --> 0:46:47.799
<v Speaker 2>done seventeen things. Will you come back or.

0:46:47.760 --> 0:46:49.920
<v Speaker 3>Are we like you lumping us in with everyone? So

0:46:50.040 --> 0:46:50.960
<v Speaker 3>you're on a special list.

0:46:51.040 --> 0:46:53.680
<v Speaker 9>Man, you're on the yes every time. But you know

0:46:53.840 --> 0:46:56.080
<v Speaker 9>you don't pay me, So if you want to pay me,

0:46:56.160 --> 0:47:02.920
<v Speaker 9>may I'll come a day, Okay, I think Lisa likes,

0:47:02.960 --> 0:47:03.359
<v Speaker 9>get them.

0:47:03.280 --> 0:47:05.040
<v Speaker 3>A case of Kirkling hot dogs.

0:47:05.600 --> 0:47:10.320
<v Speaker 5>Can we dogs.

0:47:08.120 --> 0:47:10.120
<v Speaker 9>Have a quarter hot dog every morning, so I'm always

0:47:10.160 --> 0:47:11.320
<v Speaker 9>in the market for hot dogs.

0:47:11.640 --> 0:47:13.040
<v Speaker 3>Thank you, thank you, thank.

0:47:12.880 --> 0:47:14.160
<v Speaker 2>You so much for joining us.

0:47:14.480 --> 0:47:19.320
<v Speaker 1>This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,

0:47:19.440 --> 0:47:23.720
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0:47:23.840 --> 0:47:27.359
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0:47:27.400 --> 0:47:31.440
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