WEBVTT - Bloomberg Surveillance TV: May 7th, 2026 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.720 with Lisa Bromwitz and Amrie Hordernt. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.040 Terminal and the Bloomberg Business app. We begin this out 0:00:37.040 --> 0:00:39.599 where stocks holding at record highs as optimism grows over 0:00:39.640 --> 0:00:41.960 and enter the war. Darius down of forty two macro 0:00:42.240 --> 0:00:45.839 writing the twelve month outlook is bullish. The next few months, however, 0:00:45.960 --> 0:00:48.760 may prove volatile. Darius joins is now for more. Darvis, 0:00:48.800 --> 0:00:50.600 good morning, going to see you. Oh great, see you, Jay, 0:00:50.640 --> 0:00:52.400 Welcome to the program as well. What's going to be 0:00:52.400 --> 0:00:53.520 the source of that volatility? 0:00:53.920 --> 0:00:55.720 Well, I think we're not out of the wood yet 0:00:55.720 --> 0:00:57.600 as it relates to the strait of Hormoz dynamic and 0:00:57.640 --> 0:01:00.000 we also have the return of credibiles positioning across gold 0:01:00.120 --> 0:01:03.240 financial markets. So if we get another axio setline that 0:01:03.600 --> 0:01:05.520 is leaking in the wrong direction, then you can have 0:01:05.560 --> 0:01:07.160 a little bit more volatility. But when you take a 0:01:07.200 --> 0:01:09.479 medium term view on the markets and on the economy, 0:01:09.680 --> 0:01:11.360 things are about as good as they've been in a really 0:01:11.400 --> 0:01:11.720 long time. 0:01:11.720 --> 0:01:13.040 I'd say since early twenty twenty one. 0:01:13.160 --> 0:01:14.960 Let's just stay on that. Look at the economic data, 0:01:15.160 --> 0:01:17.039 look at the earning. How impressive is it that we've 0:01:17.040 --> 0:01:19.200 got a central bank that's still holding onto an easing bias. 0:01:20.400 --> 0:01:22.960 Well, that's a hotly separate conversation. 0:01:23.040 --> 0:01:24.760 But the thing I'd say about the FED is the 0:01:24.760 --> 0:01:27.200 biggest mistake the FED can make this year is doing anything. 0:01:27.720 --> 0:01:30.399 This is an economy that has accelerating inflation when you 0:01:30.400 --> 0:01:32.720 look at the inflation components that they care about, this 0:01:32.840 --> 0:01:35.640 economy that is accelerating bank credit growth. At the same time, 0:01:35.720 --> 0:01:38.360 we have a productivity boom, and we are, in our view, 0:01:38.360 --> 0:01:40.360 we think we're heading into a job with recovery. So 0:01:40.440 --> 0:01:42.440 on the push pull dynamic there, it's just say the 0:01:42.480 --> 0:01:44.160 FED should stay on hold. I think that would be 0:01:44.240 --> 0:01:46.639 The markets would probably not like the FED doing anything 0:01:46.640 --> 0:01:48.960 in any one direction because it would create tension on 0:01:48.960 --> 0:01:49.919 the other side of the mandate. 0:01:50.080 --> 0:01:51.600 It's not totally unrelated, though. 0:01:51.680 --> 0:01:54.200 The whole point is when you have such robust growth 0:01:54.200 --> 0:01:56.600 to John's point, the strongest as you were saying since 0:01:56.640 --> 0:01:58.600 twenty twenty one, and then you have a FED with 0:01:58.600 --> 0:02:01.600 an easing bias, how much does that increase the risk 0:02:01.800 --> 0:02:05.880 of an inflationary kind of impulse that creates a headway 0:02:05.920 --> 0:02:07.320 that people aren't really pricing in. 0:02:07.600 --> 0:02:09.560 Yeah, well, I think we're already seeing the inflationary impulse. 0:02:09.560 --> 0:02:11.240 If you look at, for instance, score PC. 0:02:11.160 --> 0:02:13.399 Inflation on three myth vnualized basis, we're a four point 0:02:13.400 --> 0:02:16.400 four percent supercore PC inflation, we're four point five percent. 0:02:16.520 --> 0:02:18.960 So we already have the inflationary impulse. And so the 0:02:18.960 --> 0:02:20.520 best thing that FAY can do right now is to 0:02:20.600 --> 0:02:23.639 jawbone that away to the extent possible. And our view, 0:02:23.639 --> 0:02:25.280 we think it's going to go away because if you 0:02:25.320 --> 0:02:28.000 look at the relationship between productivity growth, we think we're 0:02:28.000 --> 0:02:29.720 in a one hundred and fifty to twenter basis point 0:02:29.720 --> 0:02:32.600 acceleration and trend productivity growth that should knock off about 0:02:32.639 --> 0:02:35.240 forty to fifty basis points from trend inflation, while at 0:02:35.280 --> 0:02:38.000 the same time you have some very depressing components in 0:02:38.040 --> 0:02:39.760 the labor market that are weighing on wage inflation. 0:02:39.760 --> 0:02:42.000 From a cyclical and structural standpoint, the. 0:02:42.240 --> 0:02:45.120 Real inflation dynamic in the economy when we get past 0:02:45.160 --> 0:02:46.959 this inflation shock should be much lower. 0:02:46.960 --> 0:02:48.799 At our pain, you said that there was this depressive 0:02:48.840 --> 0:02:51.639 factor coming from the labor market. How would this market 0:02:51.639 --> 0:02:54.720 treate a very hot labor market report tomorrow, Let's say 0:02:54.960 --> 0:02:58.320 the number of jobs created much above what people had expected. 0:02:58.520 --> 0:03:01.679 Let's say wage increases much more than people expected. 0:03:01.960 --> 0:03:03.560 Yeah, I think what's going to happen is the market's 0:03:03.600 --> 0:03:05.839 going to price in more tightening in the short short 0:03:05.919 --> 0:03:07.720 rates curve. And so that's, in my opinion, I think 0:03:07.720 --> 0:03:10.680 that would be an appropriate response from the market. But 0:03:10.720 --> 0:03:13.160 the reality is, we don't think that dynamic is sustainable 0:03:13.440 --> 0:03:15.919 when you look at you know, for instance, core private 0:03:15.919 --> 0:03:19.840 services payrolls, which lops off healthcare, social services, education, and 0:03:19.880 --> 0:03:22.360 government basically everything that the government is the main consumer 0:03:22.440 --> 0:03:25.880 or the employer of that peaked two years ago two 0:03:25.960 --> 0:03:28.240 years ago. And so in our view, we think this 0:03:28.320 --> 0:03:31.240 AI dynamic is real. I mean, it's hard to statistically 0:03:31.240 --> 0:03:33.120 test it, but we think it's real. We think we've 0:03:33.160 --> 0:03:35.360 never seen a trend like this with the tabooming economy. 0:03:35.360 --> 0:03:37.360 Do you think when it comes to AI that actually 0:03:37.400 --> 0:03:39.920 it's going to help international stocks over US stocks. 0:03:40.120 --> 0:03:41.800 Yeah, I think it's going to help all the stocks 0:03:41.840 --> 0:03:44.280 that have been left behind by the megacap tech companies. 0:03:44.360 --> 0:03:45.800 And the reason we say that is not because we're 0:03:45.840 --> 0:03:48.120 bearish on the megacap tech companies, is that we think 0:03:48.160 --> 0:03:51.480 that the transfer of that technology will create a convergence 0:03:51.480 --> 0:03:54.440 in productivity, create a convergence in margins, create a convergence 0:03:54.440 --> 0:03:56.720 in ultimately evaluations with the stocks that have been left 0:03:56.720 --> 0:03:59.080 behind from a capital allocation standpoint. When wen't we see that, 0:04:00.000 --> 0:04:02.040 I think it's already ongoing. And the trade started a 0:04:02.120 --> 0:04:04.000 year and a half ago, so I think that trade. 0:04:04.040 --> 0:04:06.240 I mean, we obviously took a pause in the context 0:04:06.240 --> 0:04:08.360 of this straight or Her Moves dynamic, because that's a 0:04:08.400 --> 0:04:09.800 cyclical headwind in the economy. 0:04:10.000 --> 0:04:11.160 Once we open the straight or. 0:04:11.120 --> 0:04:13.320 Her Moves and those barrels of petroleum products are flowing, 0:04:13.440 --> 0:04:15.040 I think the market's going to start to look around 0:04:15.040 --> 0:04:16.719 and say, hey, we have a lot of credit bullish 0:04:16.720 --> 0:04:19.440 positioning here. We don't have any credit bulist positioning here, 0:04:19.640 --> 0:04:21.920 but we're going to see a convergence in the operating. 0:04:21.560 --> 0:04:22.880 And just sit on that just for a moment. The 0:04:22.880 --> 0:04:24.800 biggest risks of the tank rally might be a reopening 0:04:24.839 --> 0:04:25.240 of the strain. 0:04:25.720 --> 0:04:27.520 Yeah, well on a relative basis, I don't think you're 0:04:27.520 --> 0:04:29.160 going to sell tech stocks on that, but I think 0:04:29.160 --> 0:04:30.680 on a relative basis, yeah, can we. 0:04:30.640 --> 0:04:32.800 Just finish on the capex boom from big take? Do 0:04:32.839 --> 0:04:34.520 you think that is a bubble? How do you think 0:04:34.560 --> 0:04:37.160 about the capex intentions from a handful of companies. 0:04:37.360 --> 0:04:40.000 Well, look, I'm not smart enough to determine if it 0:04:40.000 --> 0:04:41.800 is or is not a bubble, but I will say 0:04:42.160 --> 0:04:44.240 very better, much better investors than I have have said 0:04:44.400 --> 0:04:46.800 when something doubles in three years and were obviously seeing 0:04:46.800 --> 0:04:48.440 a double one nick Ai capex in. 0:04:48.400 --> 0:04:49.680 One year, it's a bubble. 0:04:49.880 --> 0:04:51.920 And so the key takeaway is that whenever you have 0:04:52.080 --> 0:04:54.799 these historical capex bubbles, you go back to the railboat bubble, 0:04:54.880 --> 0:04:57.159 the consumer durable goods bubble the end, and the it 0:04:57.400 --> 0:04:58.120 capex bubble. 0:04:58.200 --> 0:04:59.679 They tend in in secular bear markets. 0:04:59.680 --> 0:05:01.560 So I think that's where we're headed longer term, but 0:05:01.600 --> 0:05:03.039 I don't think that's a medium term risk. 0:05:03.200 --> 0:05:05.440 What do you do with chips in the meantime seems 0:05:05.440 --> 0:05:06.960 to be a question I get along. We've seen this 0:05:07.040 --> 0:05:09.039 massive rally. Something that is stuck out for me this 0:05:09.080 --> 0:05:11.479 week was a comment from Barclays. We caught up with 0:05:11.480 --> 0:05:13.640 mister Oltman over there and he said, we need to 0:05:13.680 --> 0:05:15.840 focus on where we are, not how we got here. 0:05:15.960 --> 0:05:18.240 How we got here was super fast, vicious rally. Where 0:05:18.279 --> 0:05:20.200 are we now? The valuation? What is the price we're 0:05:20.240 --> 0:05:22.000 paying up for somebody? These chip stories. 0:05:22.279 --> 0:05:23.040 Yeah, I mean it's. 0:05:23.120 --> 0:05:25.440 Loony tunes price. But again, twice a silly price is 0:05:25.440 --> 0:05:26.000 not twice as. 0:05:25.880 --> 0:05:26.400 Silly, right. 0:05:26.600 --> 0:05:28.160 I think that our friend David Eino has said that 0:05:28.240 --> 0:05:30.640 a while back in the meeting. So the thing I 0:05:30.839 --> 0:05:33.640 just say on the chip stocks is that you have 0:05:33.720 --> 0:05:36.640 to take profits and start to look at businesses that 0:05:36.720 --> 0:05:39.840 are going to have a faster convergence in their profitability. 0:05:40.000 --> 0:05:41.479 These are lower comparative based. 0:05:41.279 --> 0:05:43.800 Businesses from the respective of margins, from the respective for earnings. 0:05:43.839 --> 0:05:46.000 So you transfer that technology, we're going to have a 0:05:46.040 --> 0:05:47.880 fast rate of change in their growth rates. 0:05:48.160 --> 0:05:49.600 In our opinion, that's a durable catalyst. 0:05:49.720 --> 0:05:51.719 So just pick them out. What sectors are you focused 0:05:51.760 --> 0:05:52.400 on right now? 0:05:52.640 --> 0:05:55.640 I mean financials are the obvious component. The banks, The banks, Yeah, 0:05:55.839 --> 0:05:56.480 the banks I mean. 0:05:56.360 --> 0:05:58.880 There's so much more. I mean it's very dark. But 0:05:59.520 --> 0:06:00.720 the banks a lot of you. 0:06:00.640 --> 0:06:04.400 Know, employee compensation as a percentage of their total revenue. 0:06:04.440 --> 0:06:05.640 You're expecting job cunts. 0:06:06.800 --> 0:06:11.040 I mean it's the underperforming banks will cut jobs. Underforming 0:06:11.040 --> 0:06:13.600 companies will cut jobs. But the best performing companies will 0:06:13.680 --> 0:06:15.520 just stop hiring. And we've seen that in the labor market. 0:06:15.560 --> 0:06:17.680 Little hire, we'll fire, stay with us. 0:06:18.000 --> 0:06:30.360 More Bloomberg surveillance coming up after this. So here's the 0:06:30.400 --> 0:06:33.720 laces this morning. Oil hovering their triple digits after plunging 0:06:33.760 --> 0:06:35.920 on hopes of a deal between the US and Iran. 0:06:36.000 --> 0:06:38.640 Max Layton the city joined US now for more, Max, 0:06:38.680 --> 0:06:42.159 welcome to the program. Hopium will drive the paper market, 0:06:42.240 --> 0:06:45.320 it will not help demand a supply clear at spot. 0:06:45.400 --> 0:06:48.680 Can we just start with physical? How tight are things still? 0:06:48.720 --> 0:06:51.800 What kind of prices are people paying up for physical barrels? 0:06:53.120 --> 0:06:53.400 Sure? 0:06:53.480 --> 0:06:55.720 Yeah, so the physical barrel price isn't isn't too much 0:06:55.800 --> 0:06:59.600 higher than the futures price. Actually, we've done a lot 0:06:59.600 --> 0:07:02.520 of questions about that particular subject over the last couple 0:07:02.560 --> 0:07:04.839 of weeks, and you know, it reminded me of what 0:07:04.920 --> 0:07:09.920 happened back in twenty twenty when oil went negative at WTI, 0:07:10.680 --> 0:07:15.960 actually across the USA, physical barrels went negative and price 0:07:16.040 --> 0:07:18.800 negative that day and the next day across the US, 0:07:18.880 --> 0:07:21.760 even though they didn't fill up on storage. And the 0:07:21.800 --> 0:07:24.360 point I'm trying to make here is that actually there's 0:07:24.360 --> 0:07:27.200 a lot of information in the futures price. People talk 0:07:27.240 --> 0:07:29.880 a lot about how spot price is the real physical price, 0:07:30.160 --> 0:07:34.200 but the spot price this this physical price actually, for 0:07:34.320 --> 0:07:37.880 example in the second quarter twenty twenty, actually priced off 0:07:38.480 --> 0:07:41.720 the futures price. So I'm not sure it says clear 0:07:41.760 --> 0:07:44.680 cut as Hey, all the information's in spot because a 0:07:44.680 --> 0:07:47.000 lot of the spot people, you know, they will be 0:07:47.040 --> 0:07:48.800 trading based on where the futures are. 0:07:49.000 --> 0:07:49.240 Max. 0:07:49.240 --> 0:07:50.920 This is really important. I just want to build on 0:07:50.960 --> 0:07:54.320 that because most people thought, particularly in the commodity market, 0:07:54.640 --> 0:07:58.040 that we'd see paper prices converge up to physical But 0:07:58.160 --> 0:08:01.400 physical has converged down to paper. 0:08:01.080 --> 0:08:05.120 Markets, right yep. And that's despite MAX. 0:08:05.240 --> 0:08:07.560 That's despite Max the strait still being closed. 0:08:09.760 --> 0:08:11.800 Yeah, And look, a lot of it is to do 0:08:11.920 --> 0:08:14.760 with the I think the fact that there's you know, 0:08:14.800 --> 0:08:17.840 it's quite binary in some ways. It's very difficult to 0:08:17.880 --> 0:08:25.119 predict if in particular, the IRGC leader Vahiti and mons 0:08:25.160 --> 0:08:27.360 tabacome Any are going to do a deal or not. 0:08:28.520 --> 0:08:30.720 And you know, I think it's fairly clear the US 0:08:30.800 --> 0:08:33.400 would like to deal, certainly, you know, on their terms. 0:08:34.320 --> 0:08:37.600 But in that environment where you basically don't know if 0:08:37.600 --> 0:08:39.800 there's going to be a deal or not, very difficult 0:08:39.840 --> 0:08:44.679 to predict. With this new leadership in Iran, you know, 0:08:44.760 --> 0:08:47.439 you're going to be subject to news and you're going 0:08:47.480 --> 0:08:49.640 to be moving around like crazy. Like a week ago, 0:08:49.679 --> 0:08:52.880 we're trading one hundred and twenty five front month and 0:08:52.920 --> 0:08:56.920 we're now at ninety eight. And it's on some hope 0:08:56.920 --> 0:09:00.720 of a deal, of an hope that we'll talk about. 0:09:00.480 --> 0:09:04.199 A deal, but putting a deal to a side the 0:09:04.240 --> 0:09:08.560 actual physical market and basically what you're saying in terms 0:09:08.640 --> 0:09:11.120 of if the physical market is coming down to where 0:09:11.160 --> 0:09:14.280 the futures market is, that basically shows that the world 0:09:14.320 --> 0:09:15.800 has enough oil right now, doesn't it. 0:09:18.600 --> 0:09:19.560 Well, I mean it does. 0:09:19.800 --> 0:09:22.880 Over the last couple of months, what we've lost, what 0:09:22.960 --> 0:09:26.160 we've actually lost in physical barrels is less than what 0:09:26.240 --> 0:09:29.640 we built over the preceding twelve months. So there's been 0:09:29.720 --> 0:09:32.120 quite a There was a decent buffer that we built 0:09:32.200 --> 0:09:35.920 up in the vicinity of seven eight hundred million barrels globally. 0:09:35.920 --> 0:09:39.000 Now most of that built in China, but even still globally, 0:09:39.040 --> 0:09:41.839 we built some significant barrels in the lead up to this, 0:09:42.559 --> 0:09:46.920 and we're kind of eating through that aggressively. Physically, the 0:09:46.960 --> 0:09:49.640 impact is going to be much more kind of spread 0:09:49.640 --> 0:09:54.120 out over time, and I would so, for example, even 0:09:54.160 --> 0:09:56.720 if there was a deal today, it would take at 0:09:56.840 --> 0:09:59.280 least a couple of months to ramp back up production 0:09:59.520 --> 0:10:04.319 to minds, to do all those kind of logistical things, 0:10:05.160 --> 0:10:08.160 and you would roughly double the losses that we've already 0:10:08.160 --> 0:10:11.280 seen over the last two months over the next two months. 0:10:11.320 --> 0:10:17.800 So physically, it's going to happen over time, yeah, I 0:10:17.800 --> 0:10:20.720 mean that. And the other big thing is, obviously, as 0:10:20.760 --> 0:10:24.160 you draw the inventores, there's a convex relationship between inventries 0:10:24.160 --> 0:10:29.120 and price, so you know, as you as you So 0:10:29.240 --> 0:10:32.360 initially we're just drawing what we built over the proceeding 0:10:32.360 --> 0:10:35.760 twelve leading up to the conflict. But eventually, certainly by 0:10:35.760 --> 0:10:37.959 the time you get into the third quarter, and that's 0:10:37.960 --> 0:10:40.400 why a lot of people are talking about that being 0:10:40.440 --> 0:10:42.959 the pinch point, then you get you can potentially get 0:10:42.960 --> 0:10:46.880 inventries down to levels which are consistent with you know, 0:10:46.920 --> 0:10:49.040 one hundred and fifty one hundred and eighty dollars brand 0:10:49.080 --> 0:10:51.880 two hundred dollars plus product prices, that kind of thing. 0:10:51.920 --> 0:10:54.600 So the physical that pool is a bit more gradual. 0:10:55.320 --> 0:10:57.560 Max, just real quick here, what would it take for 0:10:57.640 --> 0:10:59.920 you to actually lower your forecast for oil prices? 0:11:00.120 --> 0:11:00.959 Is given that you. 0:11:00.920 --> 0:11:03.600 Seem to see the market as much more realistic than 0:11:03.640 --> 0:11:04.920 other commodity strategists. 0:11:06.920 --> 0:11:09.400 Yeah, So look, I think it's all about for me, 0:11:09.960 --> 0:11:14.200 it's about any signs that this regime is going to put, 0:11:15.120 --> 0:11:17.680 is going to do a deal, and that they're essentially 0:11:17.720 --> 0:11:20.760 going to put I guess you know, one of the 0:11:20.800 --> 0:11:22.920 benefits of them doing a quick deal is it can 0:11:23.000 --> 0:11:27.280 be tied to legitimacy that they don't want to disrupt 0:11:27.360 --> 0:11:29.959 the global economy and that they'd rather do a deal 0:11:30.080 --> 0:11:33.880 and in exchange for obviously reduced sanctions and a number 0:11:33.960 --> 0:11:39.800 of other monetary benefits. So I think any sign because 0:11:39.840 --> 0:11:43.280 to me, when I take this to an extreme, I 0:11:43.320 --> 0:11:46.440 think this regime can last not just months. I think 0:11:46.440 --> 0:11:51.880 this regime can last under blockade for years. It's plausible 0:11:52.360 --> 0:11:55.960 that they simply print money and prioritize that money towards 0:11:56.559 --> 0:12:02.000 you know, the pro regime portion of the population, and 0:12:02.720 --> 0:12:05.840 so when you think about it from that perspective, this 0:12:05.880 --> 0:12:09.920 regime a lot of the choice about when they deal, 0:12:10.080 --> 0:12:12.440 how they deal is up to them. 0:12:12.840 --> 0:12:16.360 Stay with us more Bloomberg surveillance coming up after this, 0:12:25.600 --> 0:12:28.679 Terry Hanks of Pangaea Policy writing, we put the potential 0:12:29.040 --> 0:12:31.760 for snap back to hostilities as more than a trading 0:12:31.840 --> 0:12:34.880 risk at least. Terry joins us now for more. Terry, 0:12:35.000 --> 0:12:37.720 welcome to the program. This White House seems pretty committed 0:12:38.120 --> 0:12:41.560 to de escalation. They had the opportunity to escalate things 0:12:41.600 --> 0:12:44.080 earlier this week when things got volatile. What would it 0:12:44.120 --> 0:12:45.920 take to resume hostilities? 0:12:47.040 --> 0:12:49.920 Well, I'll take the answering that question, John, I'll take 0:12:49.960 --> 0:12:53.760 the other side of that argument. The White House would 0:12:53.840 --> 0:12:56.360 very much like to de escalate, but they wanted to 0:12:56.640 --> 0:13:00.280 de escalate based on Iran not getting a new and 0:13:00.360 --> 0:13:02.040 the strait of horn Mooz reopening. 0:13:02.559 --> 0:13:04.880 So as long as around won't. 0:13:04.600 --> 0:13:06.599 Agree to that, they're going to continue to do that, 0:13:07.080 --> 0:13:10.760 continue to push, and they're also you know, continuing to 0:13:10.840 --> 0:13:14.080 ratchet up the economic pressure on around. One way to 0:13:14.080 --> 0:13:17.320 look at this is that the White House is betting 0:13:17.679 --> 0:13:21.000 that the economic pressure on Iran causes around to buckle 0:13:21.120 --> 0:13:26.560 before there are serious consequences worldwide. But fundamentally, if Iran 0:13:27.160 --> 0:13:31.079 remains recalcitrant on any of this stuff and sticks to it, 0:13:31.320 --> 0:13:33.760 then I think you're that. I think you are, you know, 0:13:33.840 --> 0:13:38.640 at least likely to see not just rhetoric on ramping up. 0:13:38.679 --> 0:13:42.160 I think you're likely to see some action to show 0:13:42.160 --> 0:13:45.720 people that in Iran that the United States is serious 0:13:45.760 --> 0:13:46.720 about this terry. 0:13:46.720 --> 0:13:49.319 Though when it comes to this one pager, a lot 0:13:49.320 --> 0:13:53.079 of reporting about it basically outlines something very similar. 0:13:52.760 --> 0:13:53.960 To the JCPOA. 0:13:54.559 --> 0:13:57.280 How is that in and of itself acceptable to this 0:13:57.320 --> 0:13:57.880 White House? 0:13:59.160 --> 0:14:02.160 Well, I think there's a lot of crossfire reporting on this, 0:14:02.240 --> 0:14:06.119 and Marie, frankly, you get the kind of memorandum of understanding, 0:14:06.120 --> 0:14:08.719 and at the same time, the memorandum of understanding is 0:14:08.760 --> 0:14:13.000 supposed to describe a condition where serious negotiations will start 0:14:13.040 --> 0:14:16.319 based on that memorandum. So you know, there's a lot 0:14:16.360 --> 0:14:20.640 of gauze here, and you know, Trump is trying to 0:14:22.760 --> 0:14:27.080 limit their options in order to provide more progress and 0:14:27.240 --> 0:14:30.680 ultimately get them do a deal. But you know, the 0:14:30.720 --> 0:14:32.760 way I would look at that is, you know, I 0:14:32.760 --> 0:14:37.200 don't think that's certainly the base acceptable condition to the 0:14:37.320 --> 0:14:40.400 United States. Equally importantly, I don't think it's a base 0:14:40.440 --> 0:14:44.280 acceptable condition to our Gulf allies, who very much want 0:14:44.320 --> 0:14:47.160 to see the Iran genie put back in the bottle 0:14:47.680 --> 0:14:52.760 and for a generation at least, and want a situation 0:14:53.040 --> 0:14:54.920 where they don't have to worry about Iran as a 0:14:54.960 --> 0:14:56.760 threat overall. 0:14:57.240 --> 0:14:59.280 But when it comes to this White House, they're clearly 0:14:59.320 --> 0:15:01.800 concerned about how stocks around the world are being drawn 0:15:01.840 --> 0:15:04.360 down when it comes to fuel and other gasoline products 0:15:04.640 --> 0:15:06.040 and the midterm elections. 0:15:06.080 --> 0:15:07.280 How are they weighing both. 0:15:07.120 --> 0:15:09.680 These options, because obviously, if you escalate in terms of 0:15:09.960 --> 0:15:13.400 kinetic hostilities, that's going to be an increase in oil prices. 0:15:13.920 --> 0:15:16.480 Well, yeah, of course they're concerned about the economy, and 0:15:16.520 --> 0:15:19.360 they should be. But at the same time, I think 0:15:19.400 --> 0:15:22.720 it bears understanding that they're not concerned just about the economy. 0:15:22.800 --> 0:15:26.720 You know, there's there's a there's a long litany of 0:15:26.760 --> 0:15:30.440 things that we all could say. You all said on air, 0:15:30.480 --> 0:15:33.800 I've said, you know that there are lots of downsides 0:15:33.800 --> 0:15:36.640 for Trump going into this, and yet they did it anyway. 0:15:36.760 --> 0:15:40.520 So there's a you know, there's there is a geopolitical 0:15:41.440 --> 0:15:44.800 problem here, the iron nuke problem, and now the straight 0:15:44.880 --> 0:15:49.160 problem that is underappreciated. I think in a lot of 0:15:49.200 --> 0:15:52.840 this and was was considered by this White House to 0:15:52.880 --> 0:15:57.920 be so important that all the downsides, you know, didn't 0:15:57.920 --> 0:15:58.640 balance it out. 0:15:59.320 --> 0:16:03.600 Terry Wiki the potential political rammifications correctly here. Yesterday we 0:16:03.640 --> 0:16:06.360 saw the Indiana and Ohio primaries actually on Tuesday, but 0:16:06.440 --> 0:16:08.720 yesterday we got the actual results, and some of the 0:16:08.880 --> 0:16:12.760 candidates that President Trump supported, even at the behest of. 0:16:12.720 --> 0:16:14.360 Incumbents, were the winners. 0:16:14.400 --> 0:16:17.040 It seemed to indicate the President Trump still has quite 0:16:17.080 --> 0:16:20.440 the clutch over the Republican Party. Are we overestimating the 0:16:20.480 --> 0:16:24.480 political laws from this conflict in the midterms today? 0:16:24.520 --> 0:16:27.600 I think so, Liza on Behalf are for a number 0:16:27.640 --> 0:16:31.640 of reasons. One is that Trump showed in Indiana that 0:16:31.680 --> 0:16:33.600 the base will come out and the base will be 0:16:33.680 --> 0:16:34.400 motivated to. 0:16:36.160 --> 0:16:37.240 Give him what he wants. 0:16:37.440 --> 0:16:41.760 So you consider that accounter to the enthusiasm gap that 0:16:41.840 --> 0:16:45.640 so far as favorite Democrats. Secondly, on the redistricting business, 0:16:45.920 --> 0:16:47.600 you know, there's a lot of people who come on 0:16:47.680 --> 0:16:50.040 and will tell you, oh, you know, the Republicans are 0:16:50.040 --> 0:16:53.520 going to lose this and all the rest redistricting effects 0:16:54.600 --> 0:16:57.480 potentially as many as two hundred out of four hundred 0:16:57.480 --> 0:17:02.080 and thirty five seats in the House. Firstly, Secondly, if 0:17:01.400 --> 0:17:06.000 you bring all those redistrictings together, it comes up with 0:17:06.080 --> 0:17:10.160 assuming that the district stay R or D, it comes 0:17:10.240 --> 0:17:12.879 up with a very tiny R advantage today I think 0:17:12.920 --> 0:17:15.960 it's plus three plus four or something like that. But 0:17:16.119 --> 0:17:18.680 either way, there aren't going to be massive swings in 0:17:18.760 --> 0:17:22.239 the in the House and in the Senate. What it 0:17:22.280 --> 0:17:27.800 looks like is that the progressive left and you know, 0:17:27.840 --> 0:17:30.800 with people like Graham Plattner and the gentleman in Michigan 0:17:30.840 --> 0:17:35.600 who's running, are taking over. But really in doing that 0:17:35.760 --> 0:17:38.840 or seeding the center to people like Susan Collins. Also, 0:17:38.920 --> 0:17:41.920 that's also not good for Democrats. So you know, I'd 0:17:42.040 --> 0:17:44.080 urge everybody to take a breath on the narrative. 0:17:44.440 --> 0:17:47.080 What does that imply for policy that maybe people are underpricing. 0:17:49.600 --> 0:17:52.520 I think what it implies for policies a couple of things. 0:17:52.520 --> 0:17:56.640 One is that if there's a continued Republican Washington, all 0:17:56.680 --> 0:18:03.080 are Washington, then you know, legislation can continue as well 0:18:03.119 --> 0:18:06.720 as regulation. I think what markets are pricing in today 0:18:06.840 --> 0:18:10.040 is that majority in at least one house goes away. 0:18:10.920 --> 0:18:15.240 But even in that scenario, regulation continues. But if there's 0:18:15.280 --> 0:18:18.960 an all our Washington, then you should consider that animal 0:18:19.000 --> 0:18:21.160 spirits will continue to be up because there will continue 0:18:21.160 --> 0:18:26.159 to be optimism about the possibility of Trump continuing to 0:18:26.200 --> 0:18:30.320 stoke the economy and kind of bring it back to 0:18:30.440 --> 0:18:32.919 a position of greater dynamism than there was before. 0:18:33.119 --> 0:18:35.119 Terry Quick final question, can you believe it's been ten 0:18:35.200 --> 0:18:38.119 years since please clap at Jeff Bush in New Hampshire? 0:18:38.160 --> 0:18:38.720 Ten years. 0:18:39.320 --> 0:18:42.879 I'm so glad you brought that up, And just because 0:18:42.920 --> 0:18:45.720 it's great and you know, then we can also throw 0:18:45.760 --> 0:18:47.920 a lot of the Biden ones in, though you know, 0:18:48.440 --> 0:18:51.320 the quality of mercy is not strained and the quality 0:18:51.320 --> 0:18:53.040 of politicians are clearly going down. 0:18:53.960 --> 0:18:57.520 This is the Bloombergs Events podcast, bringing you the best 0:18:57.560 --> 0:19:00.880 in markets, economics, antio politics. You can watch the show 0:19:00.920 --> 0:19:03.879 live on Bloomberg TV weekday mornings from six am to 0:19:04.000 --> 0:19:07.760 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:19:07.920 --> 0:19:10.119 or anywhere else you listen, and as always on the 0:19:10.160 --> 0:19:12.600 Bloomberg Terminal and the Bloomberg Business app.