1 00:00:02,520 --> 00:00:16,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Single best idea on 2 00:00:16,160 --> 00:00:18,800 Speaker 1: a Friday, will do it quickly? What a week? I mean? 3 00:00:18,920 --> 00:00:22,279 Speaker 1: Am I as exhausted as I was? What three weeks ago? 4 00:00:22,400 --> 00:00:25,959 Speaker 1: Six weeks ago? I don't think so. But nevertheless, my 5 00:00:26,079 --> 00:00:29,600 Speaker 1: head's spinning over the market reaction, over the worry about 6 00:00:29,640 --> 00:00:33,879 Speaker 1: long term yields. Just the reports of Japan midnight two 7 00:00:33,960 --> 00:00:38,120 Speaker 1: am Eastern Time on their GDP, of negative statistic on 8 00:00:38,720 --> 00:00:42,320 Speaker 1: GDP with some huge political ramifications. I'd look for that. 9 00:00:42,400 --> 00:00:46,160 Speaker 1: I think the trade negotiation I'm guessing. I'm not predicting. 10 00:00:46,640 --> 00:00:50,600 Speaker 1: I'm guessing the trade negotiations with Japan in the United 11 00:00:50,640 --> 00:00:54,560 Speaker 1: States will be absolutely fascinating. Just look at the size 12 00:00:54,600 --> 00:00:58,200 Speaker 1: of Toyota imports. Maybe not like the seventies of the eighties, 13 00:00:58,240 --> 00:01:02,360 Speaker 1: but still huge. It was great to catch up with 14 00:01:02,480 --> 00:01:05,639 Speaker 1: William Lee of the Milkin Institute. He's been incredibly busy 15 00:01:05,959 --> 00:01:10,520 Speaker 1: with their wonderful conference. Thank you to Carrol Masser, Salibassek 16 00:01:10,600 --> 00:01:13,759 Speaker 1: and our team Romain Bostic for the coverage out there 17 00:01:13,800 --> 00:01:19,440 Speaker 1: at Milkin. Here's Billy the chief economist of the Milkan Institute. 18 00:01:19,920 --> 00:01:22,320 Speaker 1: On tariffs and services. 19 00:01:22,560 --> 00:01:25,640 Speaker 2: It's pretty hard to tariff services, isn't it, especially when 20 00:01:25,800 --> 00:01:29,679 Speaker 2: when it's a license for American banks to sell financial 21 00:01:29,680 --> 00:01:32,720 Speaker 2: products in China and so so, I think the whole 22 00:01:32,760 --> 00:01:35,560 Speaker 2: notion that tariffs has been done away with, especially with 23 00:01:35,640 --> 00:01:38,759 Speaker 2: the different rounds of tarif productions we've had over many decades. 24 00:01:38,920 --> 00:01:41,680 Speaker 2: But they are real serious barriers to trade that Ricardo 25 00:01:41,720 --> 00:01:44,559 Speaker 2: didn't deal with. Our non tariff barriers, and the legal 26 00:01:44,600 --> 00:01:48,200 Speaker 2: requirements and health requirements and and and and quality standards 27 00:01:48,240 --> 00:01:52,440 Speaker 2: that are demanded of US exports into various countries. Those 28 00:01:52,440 --> 00:01:55,200 Speaker 2: are the obstacles that are part of the negotiation practice 29 00:01:55,200 --> 00:01:58,360 Speaker 2: that President Trump wanted to incentivize by putting up this 30 00:01:59,040 --> 00:02:02,080 Speaker 2: huge tier parias. Look, you guys, let's get service, getting 31 00:02:02,120 --> 00:02:03,760 Speaker 2: rid of the real series blocks the trade. 32 00:02:03,800 --> 00:02:06,200 Speaker 1: William Lee, We'll have them on for a longer conversation. 33 00:02:06,440 --> 00:02:09,519 Speaker 1: All of us work with the International Monetary Fund and 34 00:02:09,560 --> 00:02:13,280 Speaker 1: the Pacific RIM and now at Milkin Institute. Part of 35 00:02:13,320 --> 00:02:15,280 Speaker 1: what we do in Survanna as we do market coverage. 36 00:02:15,280 --> 00:02:18,600 Speaker 1: What's the stock market can do? Equities, bonds, currencies, commodities, 37 00:02:19,000 --> 00:02:22,280 Speaker 1: But we really like to speak with authorities. I can't 38 00:02:22,280 --> 00:02:26,760 Speaker 1: say enough about our conversation today with ellen Wald. The 39 00:02:26,760 --> 00:02:32,400 Speaker 1: book is Saudi inc. And she was just fabulous on 40 00:02:32,480 --> 00:02:36,840 Speaker 1: the nations and the tribes of the Arabian Peninsula and 41 00:02:36,880 --> 00:02:40,720 Speaker 1: from Morocco over to Persia as well. After the president's 42 00:02:40,760 --> 00:02:43,559 Speaker 1: trip to the Middle East, ellen Wald. 43 00:02:43,600 --> 00:02:46,600 Speaker 3: Every oil industry in the Middle East is run differently, 44 00:02:46,600 --> 00:02:49,000 Speaker 3: and I think that's a common misperception. People think it's 45 00:02:49,040 --> 00:02:52,840 Speaker 3: just this monolithic, you know, national oil companies, but it's 46 00:02:52,880 --> 00:02:56,280 Speaker 3: actually very different. A Rampo has a totally different break 47 00:02:56,320 --> 00:03:00,639 Speaker 3: even price from say the Kuwait Oil Company or or 48 00:03:01,600 --> 00:03:05,120 Speaker 3: you know the UAE or you know, even bock Rain 49 00:03:05,240 --> 00:03:08,040 Speaker 3: for example. So a Ramcos is basically the lowest in 50 00:03:08,080 --> 00:03:10,920 Speaker 3: the world. Their break even is, you know, depending on 51 00:03:11,040 --> 00:03:14,359 Speaker 3: what they're producing, you can be between two dollars and 52 00:03:14,800 --> 00:03:17,320 Speaker 3: ten dollars. They usually like to say around six. It's 53 00:03:17,360 --> 00:03:20,360 Speaker 3: kind of an average. That's the lowest in the entire world. 54 00:03:20,400 --> 00:03:23,520 Speaker 3: So no matter how low oil prices go, a Ramco 55 00:03:23,760 --> 00:03:26,440 Speaker 3: is still going to come out on top. Now that's 56 00:03:26,440 --> 00:03:30,200 Speaker 3: different from the price that the Saudi government would like 57 00:03:30,280 --> 00:03:33,200 Speaker 3: oil to be at to balance their budget, which I 58 00:03:33,200 --> 00:03:36,120 Speaker 3: think is really a totally useless figure. People like to 59 00:03:36,480 --> 00:03:38,440 Speaker 3: bring this out, the IMF likes to talk about it, 60 00:03:38,600 --> 00:03:41,800 Speaker 3: but that really doesn't influence the Saudi government all that 61 00:03:41,920 --> 00:03:45,320 Speaker 3: much because the Saudi government isn't selling oil. A Ramco 62 00:03:45,480 --> 00:03:48,680 Speaker 3: sells oil. The Saudi government gets revenue from that oil 63 00:03:49,040 --> 00:03:51,320 Speaker 3: and those oil sales, but they're not actually selling it, 64 00:03:51,480 --> 00:03:54,480 Speaker 3: and so their price point, their break even points are higher, 65 00:03:54,920 --> 00:03:57,800 Speaker 3: and they needed a higher price for their budget. 66 00:03:58,160 --> 00:04:02,160 Speaker 1: Ellen, well, the Atlantic and to excuse me, the Atlantic Council, 67 00:04:02,320 --> 00:04:07,240 Speaker 1: I should say there on the Middle East, single best 68 00:04:07,280 --> 00:04:09,480 Speaker 1: idea and of course on your commute across the nation, 69 00:04:09,680 --> 00:04:12,720 Speaker 1: the idea is to listen to Bloomberg Surveillance in the 70 00:04:12,760 --> 00:04:19,920 Speaker 1: morning on YouTube, subscribe to Bloomberg podcasts and on YouTube podcasts. 71 00:04:19,960 --> 00:04:29,320 Speaker 1: This is single best idea.