WEBVTT - This Is How Big Money Is Trading the War in Iran 0:00:02.720 --> 0:00:17.800 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:18.640 --> 0:00:22.320 Hello and welcome to another episode of the Odd Lots podcast. 0:00:22.440 --> 0:00:24.320 I'm Joe Wisenthal. 0:00:23.800 --> 0:00:24.920 And I'm Tracy Alloway. 0:00:25.120 --> 0:00:28.720 Tracy, we're recording this March twenty fifth, twenty twenty six. 0:00:28.840 --> 0:00:30.120 That's nine ten am in there. 0:00:30.160 --> 0:00:31.760 Are you going to do the seconds as well? 0:00:31.920 --> 0:00:35.920 No, But the reason they do mention the time this 0:00:36.200 --> 0:00:38.600 cash trading in the stock market hasn't open. The reason 0:00:38.600 --> 0:00:40.879 I mentioned the time is not just because things are 0:00:40.880 --> 0:00:45.199 moving fast, but to establish we've had market moving headlines 0:00:45.200 --> 0:00:47.440 already this morning. Oh and so just in the last 0:00:47.479 --> 0:00:50.720 like fifteen to twenty minutes, we got some headlines attributed 0:00:50.760 --> 0:00:53.840 to the Forest News Agency out of Iran saying there 0:00:53.880 --> 0:00:56.279 is no interest in talks, there's no interest in ceasefire 0:00:56.280 --> 0:00:59.120 in the US position about pursuing a ceasefire is a 0:00:59.200 --> 0:01:03.040 logical that mood futures down a little bit. We're you know, 0:01:03.080 --> 0:01:05.720 it's a cliche, you know, a headline driven market. 0:01:05.760 --> 0:01:06.639 You hear that a lot. 0:01:07.000 --> 0:01:10.000 The last several weeks have felt like the headline driven 0:01:10.040 --> 0:01:11.960 market to drive all headline driven market. 0:01:11.959 --> 0:01:14.040 No, it really, I know it's a cliche, but it 0:01:14.040 --> 0:01:16.080 really is a headline driven market, and I think part 0:01:16.120 --> 0:01:19.039 of the issue here is because no one's entirely sure 0:01:19.600 --> 0:01:22.360 what the goals are when it comes to Iran, It's 0:01:22.520 --> 0:01:26.040 really hard to judge progress of the conflict on any 0:01:26.080 --> 0:01:29.560 sort of fundamental basis, right, so all you can look 0:01:29.600 --> 0:01:32.920 at is basically what Trump and the other two sides 0:01:33.080 --> 0:01:36.240 are saying, and so you get these big reactions every 0:01:36.319 --> 0:01:39.319 time they tweet something or post on truth social and 0:01:39.360 --> 0:01:42.080 then tend to contradict each other absolutely. 0:01:42.120 --> 0:01:44.280 And you know, I do think, Look, there is this 0:01:44.440 --> 0:01:47.720 extreme level of skepticism from almost any headline you get 0:01:47.760 --> 0:01:50.720 out of us White House. I think if you go 0:01:50.840 --> 0:01:55.040 back to the post Liberation day environment, particularly with these 0:01:55.080 --> 0:01:58.400 sort of modest approchement with China, you would get these 0:01:58.440 --> 0:02:01.560 headlines we're talking, and then the Chinese would put out 0:02:01.560 --> 0:02:04.120 a headline, we're not talking. But then it turns out 0:02:04.200 --> 0:02:06.480 that there was a little bit more talk than what 0:02:06.680 --> 0:02:10.520 maybe the Chinese side had admitted to. So often, I think, 0:02:10.680 --> 0:02:13.160 as much as you is, many people are inclined to 0:02:13.160 --> 0:02:17.440 disbelieve headlines. I don't think people disbelieve them entirely. When 0:02:17.680 --> 0:02:22.000 Trump said yesterday that the Iranians had sent him a prize, 0:02:22.080 --> 0:02:25.639 that was extremely valuable, and it's like, who, I mean, 0:02:25.639 --> 0:02:28.440 that's tough to take seriously, but is there. 0:02:28.440 --> 0:02:32.120 Some modest signal? I don't know. It's really tough. 0:02:32.480 --> 0:02:34.040 It's really tough, but I you know, I just want 0:02:34.080 --> 0:02:36.160 to say two other things real quickly on this, which 0:02:36.200 --> 0:02:39.320 is that even with the headlines today about Iran rejecting ceasefire, 0:02:39.480 --> 0:02:41.800 futures are still up. So it's not like people have 0:02:41.880 --> 0:02:45.760 like completely, oh, nothing's happening and for all. 0:02:45.639 --> 0:02:46.400 To talk about. 0:02:46.480 --> 0:02:49.200 And we've had multiple guests and they're the smartest people 0:02:49.240 --> 0:02:51.079 in the world to talk about. Oil is going to 0:02:51.160 --> 0:02:53.600 surge the longer this goes on. As of the time 0:02:53.639 --> 0:02:56.640 we're talking about this, Brent crude is still right around 0:02:56.760 --> 0:02:58.920 or just under one hundred dollars. We haven't had the 0:02:59.040 --> 0:03:02.600 mega surge yet. So I like to take market seriously, 0:03:02.800 --> 0:03:05.440 even if sometimes I don't always understand what. 0:03:05.400 --> 0:03:06.119 They're doing well. 0:03:06.400 --> 0:03:08.959 The big question to me is whether or not markets 0:03:09.000 --> 0:03:11.480 are still in denial right and you see people talking 0:03:11.480 --> 0:03:15.400 about like, oh, people are being very optimistic about the future. 0:03:15.440 --> 0:03:18.399 I saw the Morgan Stanley report saying that corporate profits 0:03:18.400 --> 0:03:21.600 were going to go up later this year. The oil 0:03:21.760 --> 0:03:25.880 price again, we're talking about the closure of the strait 0:03:25.880 --> 0:03:28.120 of war moves, which is the sort of thought experiment 0:03:28.200 --> 0:03:31.280 that has been deviled oil analysts for decades, and yet 0:03:31.960 --> 0:03:33.840 you know, the reaction has been kind of muted. 0:03:34.000 --> 0:03:34.200 Yeah. 0:03:34.480 --> 0:03:37.360 Meanwhile, in the rates market, there's a lot going on 0:03:37.440 --> 0:03:39.360 there too, and you still have a lot of bond 0:03:39.360 --> 0:03:43.280 traders who are very reluctant to price out the possibility 0:03:43.320 --> 0:03:46.200 of a rate cut later this year completely. 0:03:46.760 --> 0:03:49.000 And it feels like the idea of a rate cut, 0:03:49.080 --> 0:03:52.240 at least for now, does not seem anywhere near the 0:03:52.360 --> 0:03:56.120 quote table. But yeah, anyway, so how do traders even 0:03:56.360 --> 0:03:58.120 make sense of this headline? How do they know what 0:03:58.200 --> 0:04:01.920 headlines to believe? Why does there sometimes seem to be 0:04:01.960 --> 0:04:04.120 this gap between what a lot of people think the 0:04:04.120 --> 0:04:07.200 market should be and where it actually is very excited 0:04:07.200 --> 0:04:10.000 to say, we have one of the most plugged in 0:04:10.160 --> 0:04:12.280 people that we know as someone who is talking to 0:04:12.480 --> 0:04:15.320 people who move serious money every single days. He goes 0:04:15.320 --> 0:04:16.800 around the world and he has dinners with them and 0:04:16.839 --> 0:04:19.039 he talks to them about their trades. Even brought us 0:04:19.080 --> 0:04:22.680 a nice gift which is a core t shirt. It 0:04:22.800 --> 0:04:25.560 is the cover the Macro Dinner's twenty twenty six tour 0:04:25.600 --> 0:04:26.840 with a nice Deutsche Bank logo. 0:04:27.080 --> 0:04:28.800 You should read some of those cities just to get 0:04:28.839 --> 0:04:30.120 an ideas. 0:04:29.600 --> 0:04:33.000 To the Macro Dinner Tour Jan fourth, London, Jan twenty one, Geneva, 0:04:33.080 --> 0:04:39.679 Jan twenty ninth, Milan, Miami, buddhap Has, London, New York City, Montreal, Copenhagen, Ria, Dooha, Dubai, etcetera. 0:04:39.680 --> 0:04:40.360 You get the idea. 0:04:40.680 --> 0:04:43.800 He's always talking to people and he has the one 0:04:43.800 --> 0:04:46.080 of the most plugged in people that we talked to. 0:04:46.120 --> 0:04:47.680 We are going to be speaking, of course, to the 0:04:47.680 --> 0:04:50.680 one and only Ozon Tarman, vice Chair of Global Macro 0:04:50.800 --> 0:04:54.040 at Deutsche Bank. So Ozon, thank you for coming back 0:04:54.120 --> 0:04:54.920 on out lots. 0:04:54.800 --> 0:04:57.680 Joe and Tracy's an absolute pleasure, highlights off the week, 0:04:57.800 --> 0:04:59.520 very close to it. I used to live in New 0:04:59.600 --> 0:05:00.360 York City as well. 0:05:00.680 --> 0:05:03.040 It's great have you here in the studio. It's a 0:05:03.080 --> 0:05:05.200 pretty wild market to trade, I assume. 0:05:05.320 --> 0:05:08.359 Very very wild market trade. And on the T shirt, unfortunately, 0:05:08.360 --> 0:05:12.479 for example, the three odd cutary leg that I was 0:05:12.520 --> 0:05:15.479 looking forward to, we'll see what happens. So we'll see, 0:05:15.560 --> 0:05:19.240 we'll see, we'll see what happens with that. But unnecessarily 0:05:19.279 --> 0:05:23.640 untradable still traders always smell things, always have a sense 0:05:23.680 --> 0:05:26.880 of where the painting is, where the momentum is. Even 0:05:27.480 --> 0:05:30.680 walking in now I became a veteran of this wonderful show. 0:05:31.000 --> 0:05:33.640 I was thinking, this time around, we should really say Wednesday. 0:05:34.120 --> 0:05:38.159 That's how I know that what I can say now 0:05:38.240 --> 0:05:41.279 one day later may look a little bit different exits, etcetera. 0:05:41.440 --> 0:05:45.839 But still walking now. Obviously it's a big cliche to 0:05:45.920 --> 0:05:50.120 say it takes two to tango or tackle three maybe, 0:05:50.520 --> 0:05:53.359 but that being said, at the moment of paint trade, 0:05:53.400 --> 0:05:57.479 the momentum trade is for this equity rally and oil 0:05:57.560 --> 0:06:01.599 fall to continue. There are many unfortunately, I have told 0:06:01.640 --> 0:06:04.520 all my clients friends since wounded hurt players out there, 0:06:05.240 --> 0:06:09.000 certainly in race markets, certainly on front end, so people 0:06:09.040 --> 0:06:13.760 are reluctant to take fresh bets. But as I constantly 0:06:13.800 --> 0:06:17.839 hold these conversations round tables, I do get the sense 0:06:17.880 --> 0:06:20.799 that now getting to know the president well as well, 0:06:21.080 --> 0:06:24.600 people did expect this. We want the war, I want 0:06:24.600 --> 0:06:26.800 the war mission accomplished moment, which is trying to do 0:06:26.920 --> 0:06:30.880 in a few ways. Then the big debate is yes, 0:06:30.920 --> 0:06:35.200 and we do get these spikes of equity sire, oil lower. 0:06:35.240 --> 0:06:37.280 At the end as you're rightly said, even Brent is 0:06:37.600 --> 0:06:39.840 lower than under them, we should talk vi Vidia is 0:06:39.880 --> 0:06:42.560 even lower. But do you fade it or not? That's 0:06:42.560 --> 0:06:45.560 what it boils down to. Another big true cliche is 0:06:45.560 --> 0:06:48.080 what does Iran do? What does Iran say? As we speak? 0:06:48.080 --> 0:06:51.320 Because of Fars? Like you said, Israel twelve said, these 0:06:51.320 --> 0:06:54.880 talks are happening fast. Iran said no, We're still waiting 0:06:55.520 --> 0:06:58.480 which one to fad. That's the big question. Mark my god. 0:06:58.560 --> 0:07:01.720 Feel from what I sense from the clients is there 0:07:01.800 --> 0:07:05.240 is room for a squeeze here in equity hire oil over, 0:07:05.400 --> 0:07:08.239 but the tail risk is very very fat. 0:07:08.480 --> 0:07:08.680 Yeah. 0:07:09.200 --> 0:07:11.960 Wait, so talk to us more about positioning. I mean, 0:07:12.040 --> 0:07:14.720 going into this war, I think everyone was pretty much 0:07:14.840 --> 0:07:19.760 expecting rate cuts later in the year, oil prices. Nothing 0:07:19.840 --> 0:07:24.640 dramatic there, certainly did Everyone just change very very quickly, 0:07:24.680 --> 0:07:27.040 And now we're left with positioning that can lead to 0:07:27.360 --> 0:07:28.800 a bigger squeeze higher. 0:07:28.760 --> 0:07:31.040 Very elevant question. I want to take us back to 0:07:31.200 --> 0:07:35.200 February twenty seven, the night before the attack on Iran. Again, 0:07:35.240 --> 0:07:38.880 I was visiting Palm Beach and Miami, and the field 0:07:39.320 --> 0:07:44.240 couldn't be more different. The main obsession focus of the 0:07:44.400 --> 0:07:48.600 US client based the key players was AI extreiny research. 0:07:48.960 --> 0:07:52.520 Something big is going to happen. Schumer how fifty percent 0:07:52.640 --> 0:07:54.800 of white color jobs could be lost in twelve to 0:07:54.840 --> 0:07:59.840 eighteen months. So finally, not only rate cut expectations where 0:07:59.840 --> 0:08:02.920 it can increasing, we were getting bull flatteners. So even 0:08:03.000 --> 0:08:05.920 long end was coming down. Thursday Friday, it was around 0:08:05.920 --> 0:08:08.600 four or five. And I do remember before Iran US 0:08:08.640 --> 0:08:12.120 ten year close top tick three point nine three and 0:08:12.240 --> 0:08:14.320 it cannot be named, but some one of those more 0:08:14.600 --> 0:08:18.280 legendary France clients of mine comes to me with an email, Osan, 0:08:18.480 --> 0:08:20.760 we nail this this that bond is the new gold. 0:08:21.280 --> 0:08:24.520 Oh we need to talk about our friend goals as well. Yeah, 0:08:24.560 --> 0:08:27.160 one more thing, another good friend. I did bring this 0:08:27.240 --> 0:08:29.800 on paper because it's very very telling. This guy sends 0:08:29.840 --> 0:08:32.319 me a message I think the Tuesday or Wednesday before Iran, 0:08:32.760 --> 0:08:34.839 the multi tillium question is can the rest of the 0:08:34.880 --> 0:08:37.439 world isolate itself from this destruction? I'm not sure he 0:08:37.559 --> 0:08:41.040 was talking more about the AI fears. Another observation today 0:08:41.080 --> 0:08:44.160 reminds me of early February twenty twenty. While we also 0:08:44.240 --> 0:08:46.600 people falling over in China. It became clear by the 0:08:46.640 --> 0:08:48.439 day that we were about to see a pandemic. The 0:08:48.559 --> 0:08:51.120 SMP made new all time high. The same is today 0:08:51.120 --> 0:08:54.360 with Iran. Nobody cares. I mean, yeah, rings sow true 0:08:54.360 --> 0:08:54.719 now right. 0:08:54.760 --> 0:08:57.040 Actually, let's a about Golden Position for a second. The 0:08:57.080 --> 0:08:59.080 last time we had you on with September, and one 0:08:59.120 --> 0:09:03.200 of the themes of that was the relentless bid into gold, 0:09:03.760 --> 0:09:06.080 and whenever we frame a conversation, I'm like, oh my god, 0:09:06.120 --> 0:09:08.040 this is gonna be the top. It was not the 0:09:08.040 --> 0:09:10.439 top even closed. So that was gold was around thirty 0:09:10.480 --> 0:09:13.079 eight hundred ounced during that episode. It got over fifty 0:09:13.080 --> 0:09:16.160 five hundred dollars. And now it's in early February. As 0:09:16.200 --> 0:09:19.360 of yesterday we saw a ten day gold sell off. 0:09:19.880 --> 0:09:23.280 How much is this just about all these different trades 0:09:23.360 --> 0:09:26.880 not working at once, the steepener trade not working at once, 0:09:26.960 --> 0:09:29.199 the oil trade not working at the same time, and 0:09:29.320 --> 0:09:32.840 essentially a lot of players being forced to liquidate the 0:09:32.880 --> 0:09:34.959 one big winning thing that they had in their portfolio. 0:09:35.080 --> 0:09:38.000 Very much so, and look, I love you guys. But 0:09:38.080 --> 0:09:40.720 on the last show as well, when we all started 0:09:40.760 --> 0:09:43.760 with Golden Media, Golden Media, I was very you know, 0:09:43.960 --> 0:09:46.640 happily and politely answering, but in my mind, I was saying, 0:09:46.679 --> 0:09:48.840 this is annoting sign. I know it, of course, and 0:09:48.880 --> 0:09:51.560 then I listened to our show this so I'm like, 0:09:51.800 --> 0:09:53.800 risk on this works, risk of these works. I'm like 0:09:54.160 --> 0:09:56.920 Joe Sacy, like it has to be something that comes 0:09:56.920 --> 0:10:00.760 from the left field that gets the whole thing. And 0:10:00.920 --> 0:10:03.520 even though the guy says here Iran, people look and 0:10:03.640 --> 0:10:08.319 nobody cares. The repercussions on the positions, just like you said, 0:10:08.840 --> 0:10:12.120 led people to get out of all winners, and gold 0:10:12.200 --> 0:10:15.040 was a big winner. Emerging markets were big winners. So 0:10:15.800 --> 0:10:20.080 that was the first trigger. And then another story. Now 0:10:20.240 --> 0:10:23.760 once you are in this position, once you realize it's 0:10:23.760 --> 0:10:25.760 not days, it's not weeks, this is going to continue 0:10:25.840 --> 0:10:30.640 on and on petro dollar countries, other people start selling 0:10:30.880 --> 0:10:36.080 their winners to build defense mechanisms. I mean, it's almost 0:10:36.120 --> 0:10:41.400 like public reporting. In terms of China, my motherland, Turkey, India, 0:10:41.520 --> 0:10:44.040 they have these gold reserves for reasons. So that's another 0:10:44.080 --> 0:10:47.800 reason why first technicals you go after your winner, and 0:10:47.840 --> 0:10:51.400 then fundamentally some of these strong hands, for understandable reasons, 0:10:51.840 --> 0:10:54.640 are selling them. Everything happened back to Tracy's question. So 0:10:54.960 --> 0:10:59.360 people were all into these bear flat steepeners first, then 0:10:59.559 --> 0:11:02.400 they believe in bull latinus because everything was all rys, 0:11:02.400 --> 0:11:04.720 We're coming down. Then you get into this world and 0:11:04.720 --> 0:11:08.839 thanks for jumping onto it Monday after Iran warflation. Warflation, 0:11:09.280 --> 0:11:12.439 this is serious inflactation. Expectations will increase. It's not as 0:11:12.480 --> 0:11:16.680 simple as finding the next Venezuela Jersey and my God 0:11:16.800 --> 0:11:21.320 from like getting ready for cut discussion one, two or 0:11:21.320 --> 0:11:26.240 maybe three in FED at least hold ECB and certainly 0:11:26.280 --> 0:11:28.760 cut the Bank of England. Look where we are now. 0:11:28.800 --> 0:11:30.960 For a while we've priced in four hikes for Bank 0:11:31.000 --> 0:11:34.559 of England and ECB. We're right below three now for both. 0:11:35.720 --> 0:11:39.240 That's huge. That means seats are lost, pods are closed. 0:11:40.720 --> 0:11:43.920 How many times have you heard the word liquidation or 0:11:44.000 --> 0:11:45.920 you know a pod shot blowing up in the past 0:11:45.920 --> 0:11:46.760 few weeks A lot? 0:11:46.840 --> 0:11:51.520 Unfortunately, right, capitulation. And I teach all our young stars 0:11:51.600 --> 0:11:55.360 or mentors. So after all, the cliche is, oh, investment 0:11:55.400 --> 0:11:57.360 bank will do well, trading floor will do well because 0:11:57.400 --> 0:12:00.840 you know, bit off fear or not like that. After 0:12:00.840 --> 0:12:03.800 a while, there is really something called bad wall stilty, 0:12:04.200 --> 0:12:07.080 and this is bad wall stilty from these crazy headlines 0:12:07.120 --> 0:12:10.240 being that much slaves to what somebody says at Friday 0:12:10.320 --> 0:12:14.680 ten pm to Saturday eight eleven pm. Two. Also this 0:12:14.840 --> 0:12:18.559 much of liquidation and capitation. After a while, people say 0:12:18.920 --> 0:12:22.560 the best thing is a blank piece of paper less trading, 0:12:22.679 --> 0:12:27.400 and let's watch. That's why you're opening question. Some people 0:12:27.559 --> 0:12:31.880 see this market as untradable, but unfortunately, in times like this, 0:12:32.080 --> 0:12:36.080 especially if you're not wounded, somehow flat is the new up. 0:12:36.240 --> 0:12:39.839 If you have survived, these are the moments to make 0:12:39.880 --> 0:12:43.080 the difference. Who knows, Joe, maybe this is right around 0:12:43.120 --> 0:12:47.000 April night, twenty twenty five moments. This is when maybe 0:12:47.040 --> 0:12:50.080 this is right around the dip and we will remember 0:12:50.120 --> 0:12:53.240 it like the time we were able to look through it. 0:12:53.400 --> 0:13:08.920 I have my doubts. But maybe. 0:13:10.600 --> 0:13:11.760 What is a pain trade? 0:13:11.960 --> 0:13:13.160 And why is that. 0:13:13.200 --> 0:13:14.240 A useful concept? 0:13:14.679 --> 0:13:16.840 Very good questions. You know, you know what triggers me 0:13:17.600 --> 0:13:20.240 a paintred I mean it's not the ideal definition, maybe 0:13:20.280 --> 0:13:21.880 because you don't want your clients and friends to be 0:13:21.920 --> 0:13:25.280 in pain, but a lot of it. Even before the 0:13:25.360 --> 0:13:29.760 days of quant trading, crowding out positioning is so important 0:13:29.760 --> 0:13:32.520 for this market. After a while, it can become as 0:13:32.559 --> 0:13:37.320 important as a fundamental factor. After a while, you do 0:13:38.320 --> 0:13:42.000 feel that in these echo chambers. Players almost want to 0:13:42.040 --> 0:13:45.439 believe because of the prising fundamentals and what they're talking about. 0:13:45.440 --> 0:13:48.800 So pain trade is when that hurd gets a belief 0:13:48.840 --> 0:13:51.240 in a trade so much and when it works just 0:13:51.280 --> 0:13:53.400 ether way around. I mean, what happens to gold is 0:13:53.440 --> 0:13:56.840 a big one because for a long time it was unshaken, 0:13:56.880 --> 0:14:02.080 but sometimes even smaller instances, for the past fifteen to 0:14:02.120 --> 0:14:06.920 eighteen months, we really believe that big dollar would trade salt. 0:14:07.040 --> 0:14:09.480 What I mean by that is either because of hage 0:14:09.559 --> 0:14:14.160 ratio didalarization, dollar wouldn't be the safe haven that it 0:14:14.400 --> 0:14:17.920 used to be. It would make sense to sell dollars 0:14:17.960 --> 0:14:21.080 whenever one has a chance now all of a sudden 0:14:21.440 --> 0:14:25.200 because of Iran, because of people building up setting their 0:14:25.200 --> 0:14:28.680 winners to go to save havens. If we trade towards 0:14:28.680 --> 0:14:31.760 the one ten, one eleven before one twenty one, twenty one, 0:14:32.600 --> 0:14:36.480 that's a much less talked about pain trade. Why because 0:14:36.480 --> 0:14:39.480 it's gonna further shake places like rest of the world, 0:14:39.680 --> 0:14:43.200 emerging markets, Korea, etcetera, et cetera. And of course it 0:14:43.240 --> 0:14:45.880 opens conversation right. Sometimes you say sometimes pain trade is 0:14:45.920 --> 0:14:49.200 to abvious. Sometimes we said, no, you know that trade 0:14:49.280 --> 0:14:51.680 is there for a reason. Conscience is going to continue 0:14:51.760 --> 0:14:54.360 to work. You develop a market, you trade on it 0:14:54.720 --> 0:14:55.080 on the. 0:14:55.040 --> 0:14:57.040 Dollar, and this is related to gold as well. We 0:14:57.080 --> 0:14:59.560 do seem to be in this weird situation where like, okay, 0:14:59.560 --> 0:15:04.920 people are liquidating the successful trades to raise cash, go neutral, whatever. 0:15:05.720 --> 0:15:07.960 But at the same time, you still have plenty of 0:15:08.000 --> 0:15:11.600 people talking about diversification away from the US, and you 0:15:11.600 --> 0:15:14.560 could make a very strong argument that given what's happening 0:15:14.600 --> 0:15:17.240 in the oil market right now, maybe you don't want 0:15:17.240 --> 0:15:20.080 to only price that in dollars. Maybe you want to 0:15:20.120 --> 0:15:23.320 start thinking about other currencies. How are people thinking about 0:15:23.400 --> 0:15:26.880 the I guess like US exceptionalism trade at the moment, 0:15:26.920 --> 0:15:28.600 because there's two cross currents. 0:15:28.720 --> 0:15:33.320 For sure, it's moving from US exceptionalism setting your US 0:15:33.400 --> 0:15:37.400 assets to more hag ratios. It definitely moved, let's put 0:15:37.440 --> 0:15:40.560 it that way again. At the beginning of January February, 0:15:40.640 --> 0:15:44.320 all these events one after another, Venuezuela, Greenland, Mike got 0:15:44.440 --> 0:15:45.720 so much happened in three months? 0:15:46.280 --> 0:15:47.000 Tell us about it? 0:15:47.040 --> 0:15:51.880 Well, Powell's case again, not necessarily selling your US set, 0:15:51.960 --> 0:15:56.640 but buying more, buying less, increasing your heratios had become fashionable. 0:15:56.920 --> 0:16:00.160 But your very right races my partner and success one 0:16:00.160 --> 0:16:02.480 of them. George was head of our effects strategy. He 0:16:02.560 --> 0:16:05.440 has this, George, yeah, we all do. He has this 0:16:06.320 --> 0:16:09.600 rough formula euro dollars roughly two thirds oil price, one 0:16:09.640 --> 0:16:12.480 third gas price. It should have traded around one twelve 0:16:12.560 --> 0:16:15.760 fifty one thirteen as we speak, it doesn't. Part of 0:16:15.800 --> 0:16:18.960 the reason is exactly this. Despite what oil is doing, 0:16:18.960 --> 0:16:22.440 despite what gas is doing, people do want to own 0:16:22.480 --> 0:16:26.600 a little bit less dollars. But unfortunately, as I sit here, 0:16:27.080 --> 0:16:28.840 as I come to my old lost every three months 0:16:28.920 --> 0:16:33.280 or so wide Shaedasche Bank proudly waving my blue make 0:16:33.320 --> 0:16:37.800 europreate again, hat it's in trouble of it. Whether this world, 0:16:37.840 --> 0:16:41.640 you know, takes another one week, two week, two months, 0:16:42.080 --> 0:16:45.320 the wounds will say, the wounds will especially stay in 0:16:45.560 --> 0:16:50.640 oil and gas prices. We disrupt the supply enough and 0:16:50.760 --> 0:16:53.640 the big important with the ones we need those oil 0:16:53.680 --> 0:16:56.760 and gas price is lower is Europe. So in an 0:16:56.840 --> 0:17:00.600 understanding way, it's talking about when concent starts becoming more 0:17:00.640 --> 0:17:03.960 sense in these on tables and beyond, it's becoming a 0:17:03.960 --> 0:17:09.280 bit fashionable to start questioning the European equities, European credits. 0:17:09.320 --> 0:17:12.280 Funny enough, it doesn't show as much yet in the effects, 0:17:12.960 --> 0:17:15.679 but watch out for the equity and credit angle of 0:17:15.760 --> 0:17:16.359 the zurop date. 0:17:16.600 --> 0:17:20.280 So this is really important, which is that basically, okay, 0:17:20.800 --> 0:17:23.800 there's this long term pessimism about Europe, but there had 0:17:23.840 --> 0:17:28.640 been some optimism recently, and cheaper energy prices certainly help 0:17:28.720 --> 0:17:32.640 the relative competitiveness and profitability of the domestic industrial giants 0:17:32.680 --> 0:17:37.040 and so forth. But we're going to probably be regardless 0:17:37.080 --> 0:17:38.800 of the length of the war, in a period of 0:17:38.800 --> 0:17:42.720 structurally higher energy prices, and that continues to build to 0:17:42.760 --> 0:17:45.840 the negative side of Europe. So let's talk a little 0:17:45.840 --> 0:17:49.639 bit more about oil, because if you just talk to 0:17:49.680 --> 0:17:51.760 the oil analysts who I love, like their hair is 0:17:51.760 --> 0:17:53.960 on fire right now and they probably you know, this 0:17:54.200 --> 0:17:59.080 is cataclysm. But Brent crude not only is it well 0:17:59.119 --> 0:18:01.640 off its highes from a week ago, it's not even 0:18:01.680 --> 0:18:04.800 anywhere close to it ties in twenty twenty two at 0:18:04.840 --> 0:18:07.280 the peak of the inflation. I mean, we got at 0:18:07.280 --> 0:18:09.520 one point in March twenty twenty two, Brent crude was 0:18:09.520 --> 0:18:12.120 at one thirty nine. We're below ninety nine. Actually right 0:18:12.119 --> 0:18:14.640 now when I'm talking about this, the thing is like, oh, 0:18:14.680 --> 0:18:17.480 you close the straight of hormones oil just explodes, et cetera. 0:18:17.920 --> 0:18:19.720 We all know it, we all see it. There is 0:18:19.800 --> 0:18:22.639 nothing that any of us. You can be online all 0:18:22.720 --> 0:18:24.800 day and talk to all the energy experts. You are like, 0:18:25.080 --> 0:18:27.720 you do not know more information than the market does. 0:18:27.960 --> 0:18:30.399 So talk to us like how you're thinking about oil 0:18:30.480 --> 0:18:32.199 and the fact that there does seem to be this 0:18:32.280 --> 0:18:35.000 gap between the hair on fire rhetoric of the oil 0:18:35.040 --> 0:18:38.200 and oers versus the prices which are high but even 0:18:38.200 --> 0:18:41.200 by the scille last five years not i'msand. 0:18:40.920 --> 0:18:43.440 I was as the question was coming. I was preparing 0:18:43.440 --> 0:18:47.000 for my next but first of all, on the oil 0:18:47.040 --> 0:18:50.240 on fire. We all see and respect Jeff Curry what 0:18:50.280 --> 0:18:55.080 he said about molecules and interesting people are watching right. 0:18:55.080 --> 0:18:57.960 Did you see the tweet of head of Iran Parliament? 0:18:58.040 --> 0:19:03.080 Oh yeah, you also he usually you can't print molecule exactly. 0:19:03.200 --> 0:19:05.920 This is another thing. He also referred to another thing 0:19:05.960 --> 0:19:09.399 as fake news. Everyone around the world is now talking 0:19:09.520 --> 0:19:11.560 the same. That actually reminds me of a friend who 0:19:11.680 --> 0:19:15.480 visited Afghanistan and he met some people working for the Taliban, 0:19:15.560 --> 0:19:18.399 and like they started what's happening him like Pepe the 0:19:18.400 --> 0:19:20.639 frog names and they called him a soy boy and 0:19:20.680 --> 0:19:23.000 stuff like that, like everyone talks the same way anyway, 0:19:23.520 --> 0:19:25.360 A bit of a divergence, but a little. 0:19:25.119 --> 0:19:27.040 Bit depressing that this is the common liguage. 0:19:27.200 --> 0:19:28.800 Now, this is the lingua frank of the internet. 0:19:28.840 --> 0:19:37.080 We all everyone, but this physical versus paper, the papers trading. 0:19:37.359 --> 0:19:40.719 He's very very important. So this friend of mine, ex collegue, 0:19:40.720 --> 0:19:44.000 I worked with him for decades, big commoditistrators. Now a 0:19:44.080 --> 0:19:47.159 dear client and you know one of these guys he 0:19:47.560 --> 0:19:51.359 talks to meth t Russia's mit execuse. He sends me 0:19:51.400 --> 0:19:54.280 a message and we are now even one more weekly. 0:19:54.440 --> 0:19:55.359 This is last week. 0:19:55.800 --> 0:19:59.200 And he doesn't do on high all the times on 0:19:59.320 --> 0:20:02.320 High on if it's not starting to open in one 0:20:02.359 --> 0:20:05.320 month now three weeks, the world has a huge, huge, 0:20:05.359 --> 0:20:07.040 huge problem. And this is not all on this guy 0:20:07.040 --> 0:20:10.520 doesn't say, yeah, kutart ELNGI will need months to restart 0:20:10.600 --> 0:20:12.760 once rooms is clear. And in all we have ten 0:20:12.800 --> 0:20:16.800 millibytes of shuttings already, and Asian Refinance are very very 0:20:16.840 --> 0:20:19.760 start pipelines to date CEA would take years and also 0:20:19.800 --> 0:20:21.320 are not a panacea. 0:20:21.320 --> 0:20:21.720 Et cetera. 0:20:21.920 --> 0:20:25.600 That he talks about woties, so I get it brand 0:20:25.680 --> 0:20:29.399 versus what WTIWTI is trading even better, etcetera, etcetera. But 0:20:29.920 --> 0:20:33.760 especially if the like so far is correct, if we 0:20:33.840 --> 0:20:36.080 have a lot of talk. But one way another, this 0:20:36.440 --> 0:20:39.040 rumos is only two three tanks, you know, Yeah, one 0:20:39.080 --> 0:20:42.840 Indian tank, one China tank. I do fear that these 0:20:42.840 --> 0:20:46.080 guys warning us about physical deliberty maybe more right? 0:20:46.240 --> 0:20:49.000 Yeah, And look, of course, and I get the largic 0:20:49.160 --> 0:20:51.800 But the people in the oil market who are trading, 0:20:51.840 --> 0:20:55.560 whether they're speculators or they're hedge funds, whether they're real 0:20:55.760 --> 0:20:58.720 oil companies who are having the hedge production, they have 0:20:58.800 --> 0:21:01.200 a lot of money at all, and they know all 0:21:01.200 --> 0:21:04.119 of this. There is nothing that can be said about 0:21:04.119 --> 0:21:06.960 the longer this goes on blah blah blah, the more 0:21:07.040 --> 0:21:09.320 they get shut in blah blah blah, running out of storage. 0:21:09.359 --> 0:21:11.320 It's going to take time to rebuild. There's nothing they 0:21:11.320 --> 0:21:12.960 could be said. And yet here we are. 0:21:13.440 --> 0:21:15.719 And I respect their approach as well. 0:21:16.080 --> 0:21:18.879