WEBVTT - Houston Police Chief Says Challenge Is Getting Resources 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.960 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Earlier today, 0:00:33.200 --> 0:00:36.199 we spoke with Houston Police Chief are to us A 0:00:36.280 --> 0:00:38.960 Vado to discuss the current situation in Houston on the 0:00:39.000 --> 0:00:43.440 ground as Hurricane Harvey continues to rain down destruction on 0:00:43.560 --> 0:00:47.199 Southeast Texas. We started by asking what the most pressing 0:00:47.240 --> 0:00:50.320 problems were for the Houston Police Department as they continue 0:00:50.320 --> 0:00:53.720 to rescue thousands of people. The issue for us is 0:00:53.760 --> 0:00:57.120 obviously a capacity. You know, we've we've had so many 0:00:57.120 --> 0:00:59.960 resources trying to get here throughout the state and country, 0:01:00.240 --> 0:01:03.360 but flash flooding and flooding has impacted not just the 0:01:03.400 --> 0:01:05.760 city of Houston, but the entire region, a big part 0:01:05.800 --> 0:01:08.559 of our state, and so you know, we're running on fumes, 0:01:08.600 --> 0:01:11.319 but we're still getting it done. In our department alone 0:01:11.319 --> 0:01:16.440 already has about thirty rescues, So right now you're saying 0:01:16.440 --> 0:01:19.920 that there are backup efforts trying to get to you 0:01:19.959 --> 0:01:22.920 but cannot Does that include supplies as well that are 0:01:22.920 --> 0:01:25.760 trying to get to you. We're having a difficult time 0:01:25.760 --> 0:01:30.760 getting supplies through to to the city and to the region. Unfortunately, 0:01:30.760 --> 0:01:34.800 this storm has sat here for a daze now, but 0:01:34.880 --> 0:01:39.600 it's also impacted other roadways and so we leave convoys 0:01:39.640 --> 0:01:42.920 over the last few days of people and equipment and 0:01:42.959 --> 0:01:45.880 supplies have had a real challenge getting here. I'm I mean, 0:01:45.880 --> 0:01:48.240 it's still pouring down rain here in downtown Houston. I'm 0:01:48.240 --> 0:01:50.880 on my way to the heck So Emerge Communication Center 0:01:51.120 --> 0:01:54.080 and that's becoming a problem. And we've got a bunch 0:01:54.080 --> 0:01:55.920 of our stations now if I think we have four 0:01:56.000 --> 0:01:58.880 or five that we've had to evacuate. So it's just 0:01:58.960 --> 0:02:01.600 one one challenge after the other. But you know, we're 0:02:01.680 --> 0:02:04.200 rising to the task and we'll get to it with 0:02:04.320 --> 0:02:07.160 the help of our fellow Texans and the fellow Americans 0:02:07.200 --> 0:02:10.320 that are coming here to help. Chief as Surveato speak 0:02:10.360 --> 0:02:12.320 a little bit, if you can in detail about what's 0:02:12.360 --> 0:02:16.120 going on at the George Brown Convention Center, and also 0:02:16.160 --> 0:02:17.800 if you can just give us an update on things 0:02:17.840 --> 0:02:23.000 like electric and communications networks, airports and so on. Yeah, 0:02:23.080 --> 0:02:24.960 well the airports are still shut down. They're only going 0:02:25.040 --> 0:02:28.600 to be open for uh humanitarian and searching and obviously 0:02:28.960 --> 0:02:33.240 response uh flights, which means that people are coming here 0:02:33.280 --> 0:02:35.960 to help us. Uh. The George are brown the centers 0:02:36.160 --> 0:02:39.240 at capacity. We have I think on nine thousand folks there, 0:02:39.240 --> 0:02:42.560 but we're starting to open other shelters and uh we'll 0:02:42.560 --> 0:02:47.080 start transporting up exactly weis to those places. Our water 0:02:47.160 --> 0:02:49.400 supply is still intact, but you know how that goes. 0:02:49.480 --> 0:02:51.560 You just never know what will happen. You know that 0:02:51.680 --> 0:02:55.200 historically at some point in these storms anyone in the country, 0:02:55.280 --> 0:02:57.320 you end up having a disruption of water supply. So 0:02:57.720 --> 0:03:01.720 people should they if they, uh they can make you know, 0:03:01.760 --> 0:03:03.960 try to store us own your own in your back 0:03:03.960 --> 0:03:07.400 stupor containers, whatever you can in your home. Uh. Some 0:03:07.440 --> 0:03:10.680 of the cell piwers are starting to fail. Uh And 0:03:10.720 --> 0:03:12.680 so you know, it's it's it's what you would expect, 0:03:12.680 --> 0:03:15.200 an aread of one challenge after the other. But I'm 0:03:15.280 --> 0:03:17.720 very proud of the fact that our cities are region 0:03:17.800 --> 0:03:19.720 and our men and women in the Houston Department, our 0:03:19.720 --> 0:03:23.200 first responding community, are are still working they've been working 0:03:23.200 --> 0:03:28.200 NonStop since Friday. What about the main public hospitals. Uh, well, 0:03:28.520 --> 0:03:30.800 we've had to evacuate. Uh I know of at least 0:03:30.800 --> 0:03:34.280 one major hospitals evacuated. But you know, we've one of 0:03:34.280 --> 0:03:36.440 the things that the blessing that we have here in 0:03:36.480 --> 0:03:39.640 the city of Houston is it are our medicine here 0:03:39.680 --> 0:03:41.440 is a world right now. We've got some of the 0:03:41.440 --> 0:03:44.800 best doctors and nurses, uh, you know, from around the world, 0:03:44.880 --> 0:03:47.760 and uh, there's a reason that foreign leaders come here 0:03:48.320 --> 0:03:51.000 for treatment. And so we have a lot of capacity 0:03:51.600 --> 0:03:56.040 and we've been able to successfully transfer patients safely from 0:03:56.080 --> 0:03:59.360 facilities that have set down. What kind of aid have 0:03:59.520 --> 0:04:02.240 you already received from the federal government and what are 0:04:02.240 --> 0:04:05.320 you expecting? Well, the relief is that's coming, and we've 0:04:05.320 --> 0:04:08.440 got people here on the ground, so I'm still trying 0:04:08.440 --> 0:04:12.360 to get here. We know we have supplies coming. Uh. 0:04:12.520 --> 0:04:16.839 We we have rescue vehicles here. We've got uh National 0:04:16.839 --> 0:04:20.120 Guard high high high water vehicles here. But the currents 0:04:20.160 --> 0:04:23.520 have been strong for votes are trying to rescue folks. 0:04:23.520 --> 0:04:27.440 So it's just although we have the help, obviously, we 0:04:27.480 --> 0:04:30.200 don't have enough help. Chief, what's the best way that 0:04:30.240 --> 0:04:32.840 people who are listening to you can help. Well. One 0:04:32.839 --> 0:04:35.159 of the things we don't need more people self self 0:04:35.480 --> 0:04:38.640 dispatching themselves to the region of we want trying to 0:04:38.680 --> 0:04:42.960 get here is uh is precarious at best. Yeah, what 0:04:43.000 --> 0:04:45.039 we need is people to you know, donate to the 0:04:45.080 --> 0:04:47.880 Red Cross, go to the City of Houston website and 0:04:48.040 --> 0:04:53.400 uh donate food and obviously the recovery for our the 0:04:53.440 --> 0:04:58.840 poor citizens that and residents of this state have lost everything. Uh, 0:04:58.960 --> 0:05:01.599 they're going to need financial assistance, and so anything you 0:05:01.600 --> 0:05:04.680 can give, you know, it's uh, we'll we'll, we'll pay 0:05:04.680 --> 0:05:08.080 it forward. And just lastly, how are you fixed for 0:05:08.120 --> 0:05:11.080 a fuel, for food, for medicine for you and for 0:05:11.160 --> 0:05:14.160 all of your colleagues. You know what. It's a challenge, 0:05:14.240 --> 0:05:17.040 but we're balancing it. It's really interesting. You know, some 0:05:17.200 --> 0:05:20.400 a pizza place brought pizza to our folks yesterday and 0:05:21.040 --> 0:05:23.200 some guys said, well some citizens, Well the rest of 0:05:23.200 --> 0:05:25.359 the city starving there you guys eating pizza. What he 0:05:25.400 --> 0:05:27.680 doesn't know is that our folks have been going not 0:05:27.760 --> 0:05:31.279 going home since Friday. Their families are but that their 0:05:31.320 --> 0:05:35.159 families have been evacuated. If we can't feed our first responders, 0:05:35.320 --> 0:05:37.479 then nobody's going to respond to a lot of people 0:05:37.520 --> 0:05:40.280 are still unparil so it's a challenge to get all 0:05:40.279 --> 0:05:44.120 these things done. Our officers are being they're out of uniforms. 0:05:44.480 --> 0:05:48.040 We need help trying to get these uniforms washed because 0:05:48.320 --> 0:05:53.520 they've been contaminated. They've been in chest high water rescuing people. 0:05:53.560 --> 0:05:56.039 And so we're not making excuses and we're not going 0:05:56.080 --> 0:05:57.960 to stop and we're not going to arrest until this 0:05:58.040 --> 0:06:01.400 job gets done. That is as saved oh he is 0:06:01.480 --> 0:06:04.160 the chief of Police for the City of Houston. As 0:06:04.200 --> 0:06:08.120 those rescue and relief efforts continue. And Lisa, just to note, 0:06:08.160 --> 0:06:10.200 you know the seaports in Houston as well as in 0:06:10.240 --> 0:06:13.839 Corpus Christie, they've been closed to most ships before Harvey 0:06:13.880 --> 0:06:17.560 made landfall last Friday. This means a lot of rerouting 0:06:17.600 --> 0:06:21.479 for those ships for the freighters. Also, rail traffic has 0:06:21.520 --> 0:06:26.679 been suspended. UPS has suspended freight service in Houston and Beaumont, Texas. 0:06:26.920 --> 0:06:29.800 So there's going to be not only a humanitarian issue 0:06:29.839 --> 0:06:31.880 that needs to be dealt with, but there's also going 0:06:31.960 --> 0:06:35.680 to be an untangling of transport uh transport lines and 0:06:35.720 --> 0:06:39.640 transport networks. Indeed, and the police department in Houston sure 0:06:39.720 --> 0:06:42.960 has a lot going on. They've rescued more than three 0:06:42.960 --> 0:06:47.359 thousand people, and there are reports coming out today that 0:06:47.440 --> 0:06:50.640 there have been looters that have been violent that they're 0:06:50.640 --> 0:06:53.320 also trying to deal with. So quite a quite a 0:06:53.320 --> 0:06:56.680 situation that's unfolding. Also, there is a question of what 0:06:56.760 --> 0:07:00.960 the death toll is. So far, it has remained fairly limited, 0:07:01.000 --> 0:07:05.120 but many are expecting the numbers to rise. So definitely 0:07:05.520 --> 0:07:09.440 a tragic situation right now unfolding. Yeah, and some forecasters 0:07:09.440 --> 0:07:13.520 are saying that Houston will see another two feet of 0:07:13.680 --> 0:07:16.520 rain as it continues to pummel the area. Amazing, and 0:07:16.640 --> 0:07:19.720 this will obviously also raise questions about how this will 0:07:19.760 --> 0:07:23.520 get paid for and flood insurance which is currently provided 0:07:23.520 --> 0:07:28.480 by the US government in an underfunded and actually unsound program, 0:07:28.760 --> 0:07:43.120 the n f I P Let's turn our attention now 0:07:43.200 --> 0:07:46.280 to the energy markets. Right now, nimex gasoline is higher 0:07:46.320 --> 0:07:49.840 by more than two percent. The crude oil is falling 0:07:49.840 --> 0:07:51.920 one and a half percent. Here to have explain all 0:07:51.960 --> 0:07:54.360 this is Stephen Shorky is the president of the Short 0:07:54.400 --> 0:07:57.200 Group and he joins us now. Steven, thanks very much 0:07:57.200 --> 0:07:59.920 for being with us, So just briefly explain the diverge 0:08:00.240 --> 0:08:02.520 because on the surface it doesn't seem to make a 0:08:02.520 --> 0:08:05.680 lot of sense, but I know it does well. Absolutely. 0:08:06.120 --> 0:08:10.680 Hurricanes historically tend to be very barish for the stuff 0:08:10.680 --> 0:08:13.520 you put into the refinery crude oil, and very bullish 0:08:13.520 --> 0:08:15.800 for the stuff you take out of the refinery that 0:08:15.960 --> 0:08:19.120 is the product. And this is because, of course refineries 0:08:19.160 --> 0:08:21.960 now in the Gulf Coast epy center, a good majority 0:08:22.000 --> 0:08:23.680 of them now or a good share of them I 0:08:23.680 --> 0:08:26.840 should say, are shut in. So when the refinery shuts in, 0:08:26.920 --> 0:08:29.280 a refinery is the only person in the world that 0:08:29.360 --> 0:08:32.600 actually buys crudal physical crudal. So when you have that 0:08:32.720 --> 0:08:35.880 much capacity right now shut in, and right now the 0:08:35.920 --> 0:08:38.400 capacity that is linked to the New York Mercantile Exchange, 0:08:38.600 --> 0:08:41.480 one out of every four barrels of refining capacity is 0:08:41.559 --> 0:08:44.120 now shut in. So that's a lot of crudal that's 0:08:44.120 --> 0:08:47.480 floating around here. But the real big difference between this 0:08:47.720 --> 0:08:50.240 hurricane and the last hurricane that we saw in this 0:08:50.280 --> 0:08:53.439 region two thousand and eight with Hurricane Pike and Hurricane 0:08:54.000 --> 0:08:57.960 Goose stuff was the reversal of a major pipeline. Back 0:08:58.000 --> 0:09:00.400 in two thousand and eight, we used to take Rudel 0:09:00.440 --> 0:09:02.640 into the Houston market area and ship it up to 0:09:02.920 --> 0:09:05.360 the middle part of the country and into the Chicago 0:09:05.400 --> 0:09:09.160 market area. We reverse that pipeline in two thousand and twelve, 0:09:09.440 --> 0:09:11.920 So now there's a lot of oil that comes from 0:09:11.960 --> 0:09:14.800 Canada and from the Upper Midwest down into the Euston 0:09:14.840 --> 0:09:17.320 market to go to those refineries and then go to 0:09:17.360 --> 0:09:20.240 the export market. So now with the situation of the 0:09:20.240 --> 0:09:23.439 refineries being shut in so you can't boil that oil, 0:09:23.720 --> 0:09:27.120 and with the ports closed you can't export that crude oil, 0:09:27.400 --> 0:09:29.640 we are now in the process of building a very 0:09:29.760 --> 0:09:33.040 large glut and crude oil prices, hence why we're seeing 0:09:33.480 --> 0:09:38.760 them barrish reaction in the crude all market. Conversely, as 0:09:38.760 --> 0:09:41.320 we said, if you can't boil crude oil, well you 0:09:41.400 --> 0:09:45.520 can't make gasoline or diesel fuel. Hence why those markets 0:09:45.559 --> 0:09:49.400 are rallying over the past few days. Right, Stephen, that's fascinating. 0:09:49.440 --> 0:09:52.200 I'm looking right now at crude UH at a little 0:09:52.200 --> 0:09:54.840 bit less than forty six dollars a barrel. Are you 0:09:55.640 --> 0:10:00.480 thinking that perhaps this price will go substantially lower should 0:10:00.679 --> 0:10:04.760 the closures of these refineries get prolonged for for several 0:10:04.760 --> 0:10:08.720 weeks or more. Yes, I do because we also have 0:10:08.840 --> 0:10:11.120 to appreciate what time of the year we are at. 0:10:11.480 --> 0:10:13.959 We are now approaching the Labor Day holiday, which now 0:10:14.040 --> 0:10:17.920 means this summer holiday driving season is over. So guest 0:10:18.040 --> 0:10:21.719 Lene demand was about the fall regardless, that means we're 0:10:21.760 --> 0:10:25.559 also heading into September October, which is the fall maintenance 0:10:25.559 --> 0:10:29.600 season for the refineries. So the refiners were already starting 0:10:29.640 --> 0:10:31.960 to pair back purchases because they were going to go 0:10:32.000 --> 0:10:35.240 into maintenance. And so of course when a refiners in maintenance, 0:10:35.320 --> 0:10:38.800 it's not boiling oil, it's not buying oil. So therefore, 0:10:39.120 --> 0:10:42.800 with what this hurricane and if we see prolonged stoppages 0:10:43.040 --> 0:10:45.960 in and this, we're just these stoppages are just going 0:10:46.040 --> 0:10:48.480 to roll over into the maintenance season. So we could 0:10:48.480 --> 0:10:51.520 see a prolonged maintenance season and a tremendous amount of 0:10:51.559 --> 0:10:55.360 demand destruction already on top of what we're experiencing. So 0:10:55.559 --> 0:10:59.280 how low do you expect crude values to go in 0:10:59.400 --> 0:11:03.040 that scenario? Area? Uh? In that scenario, if we take 0:11:03.040 --> 0:11:06.480 out now normally between now in Halloween, we could expect 0:11:06.559 --> 0:11:09.400 crudal demand by us of finders here in um the 0:11:09.520 --> 0:11:13.880 fall anywhere between eight hundred thousand barrels a day upwards 0:11:13.880 --> 0:11:16.440 of over one point two million barrels a day. So 0:11:16.480 --> 0:11:20.400 if you take that normal uh seasonal demand instruction, and 0:11:20.400 --> 0:11:25.200 then you uh you compound it by extended closures because 0:11:25.240 --> 0:11:29.600 of hurricane related damage, then certainly we're now at the 0:11:29.640 --> 0:11:32.280 bottom of the range. We're in that mid forty dollar range. 0:11:32.320 --> 0:11:34.959 This is exactly where crudal has more or less found 0:11:34.960 --> 0:11:37.120 support over the past two and a half years. We 0:11:37.240 --> 0:11:40.080 have had some outliers, some dips below forty, even a 0:11:40.120 --> 0:11:44.000 dip below thirty. I'm certainly not expecting a dip below thirty, 0:11:44.040 --> 0:11:48.360 but any sort of prolonged outage both related to refinery 0:11:48.440 --> 0:11:52.120 capacity and also the export market with the port closures 0:11:52.120 --> 0:11:55.280 and pipeline issues, we could certainly see that forty dollar 0:11:55.360 --> 0:11:59.200 barrier tested in a perfect scenario. Well, Stephen, maybe just 0:11:59.240 --> 0:12:02.800 the expand on that, because some weather forecasters say that 0:12:02.840 --> 0:12:06.880 the Houston and the that area in Texas could see 0:12:06.920 --> 0:12:10.520 another two feet of rain. How long does it take 0:12:10.520 --> 0:12:13.040 to restart one of these refineries and what kind of 0:12:13.080 --> 0:12:15.800 safety checks do they need to go through in order 0:12:15.840 --> 0:12:19.600 to even start that process? Right now, the good news 0:12:19.640 --> 0:12:22.400 here is, unlike two thousand and five with Hurricane Katrina, 0:12:22.559 --> 0:12:25.720 on that Friday, if we recall for everyone was expecting. 0:12:25.760 --> 0:12:29.160 Every meteorologist thought that storm was going into the Florida Panhandle. 0:12:29.440 --> 0:12:32.480 It took a nasty turn over the weekend, and by Sunday, 0:12:32.559 --> 0:12:35.480 of course, it devastated New Orleans and the oil and 0:12:35.520 --> 0:12:38.960 gas infrastructure in that area. The good news here is 0:12:39.320 --> 0:12:43.880 this storm was well followed, so the industry initiated it's 0:12:43.880 --> 0:12:47.120 emergency protocols and a timely fashion. They shut down in 0:12:47.160 --> 0:12:51.360 a timely fashion. Even better, unlike Katrina, this storm did 0:12:51.400 --> 0:12:55.200 not develop into a monster cats fork storm until it 0:12:55.240 --> 0:12:57.480 was close to the shore, so you're not going to 0:12:57.520 --> 0:12:59.240 get it didn't have enough time to build up that 0:12:59.280 --> 0:13:02.920 wall of seaward that to flood the areas. Yeah, I 0:13:02.920 --> 0:13:04.200 mean it could have been. What I'm saying is it 0:13:04.240 --> 0:13:07.000 could have been a lot worse. So that said, the 0:13:07.080 --> 0:13:10.600 ongoing rain PIM is a problem because right now the 0:13:10.720 --> 0:13:14.040 closures with the refineries are in the Corpus Christie, which 0:13:14.120 --> 0:13:16.920 is west of Houston up to Houston. Now, with the 0:13:16.960 --> 0:13:19.320 track of all of this rain, we're moving towards the 0:13:19.440 --> 0:13:23.200 Texas Louisiana border, so that's going to threaten the Port. 0:13:23.320 --> 0:13:26.960 Arthur Beaumont Texas Refinery Epicenter. That's another one point five 0:13:27.040 --> 0:13:30.120 million barrels of refinery capacity. And then we can go 0:13:30.160 --> 0:13:33.559 into the Louisiana to the Mississippi Coast Refinery Center. That's 0:13:33.600 --> 0:13:36.120 another three point seven million barrels a day of demand. 0:13:36.320 --> 0:13:40.040 So that's a considerable amount of capacity that is in 0:13:40.080 --> 0:13:42.960 the wake of the storm that is susceptible to flooding. 0:13:43.040 --> 0:13:45.959 So we're by no means out of the woods, so 0:13:46.040 --> 0:13:48.880 that that this is still a bullishry event for gasoline prices. 0:13:48.880 --> 0:13:50.920 Stephen Shark, thank you so much for joining us. Stephen 0:13:50.920 --> 0:13:53.520 Shork as president of the Shark Group, also the author 0:13:53.600 --> 0:14:08.920 of the short report. Well, overnight, North Korea did do 0:14:09.040 --> 0:14:12.640 another missile test, in this time it went over Japan. 0:14:12.840 --> 0:14:16.760 Japan called this unprecedented. And here to give us a 0:14:16.840 --> 0:14:20.960 little more perspective on how this changes the backdrop for 0:14:21.080 --> 0:14:25.640 the US negotiations and dealings with North Korea is Brad Taylor. 0:14:25.680 --> 0:14:30.320 He's retired Special Forces lieutenant colonel, also author of Ghosts 0:14:30.400 --> 0:14:34.160 of War, which is available in paperback now. And Brad, 0:14:34.200 --> 0:14:36.280 thank you so much for joining us. I know that 0:14:36.360 --> 0:14:40.360 you were part of the Combined Unconventional Warfare Task Force 0:14:40.440 --> 0:14:44.320 review of how the US is dealing with North Korea, 0:14:44.360 --> 0:14:46.960 and I would love to get your sense of how 0:14:47.080 --> 0:14:51.120 much this latest provocation from North Korea ups the anti 0:14:51.240 --> 0:14:54.360 ups the tension and changes the backdrop for the US 0:14:54.560 --> 0:14:58.440 dealings with that region. Well, it uh at tensions quite 0:14:58.480 --> 0:15:00.200 a bit just because of the tensions where were at 0:15:00.280 --> 0:15:02.760 right now. It just amplifies it. But it's not you know, 0:15:02.880 --> 0:15:05.120 Japan screaming about it being unprecedent. It's actually the third 0:15:05.120 --> 0:15:08.600 time the missile's gone over Japan, so it's not entirely unprecedented. 0:15:08.880 --> 0:15:10.480 In the past, they always said they were launching the 0:15:10.480 --> 0:15:13.080 satellite uh no, satellite made into space, and so at 0:15:13.120 --> 0:15:15.000 least they were willing to camouflage the fact that they're 0:15:15.000 --> 0:15:16.880 testing the missile. This time, they just launched a missile, 0:15:16.880 --> 0:15:19.160 didn't say anything about the satellite. So it's definitely a 0:15:19.160 --> 0:15:21.840 poke in the eye. Uh Some of the unique things 0:15:21.840 --> 0:15:24.440 of it they launched this thing from Pyongyang right outside 0:15:24.480 --> 0:15:27.040 during the National Airport, which in the past they've alays 0:15:27.120 --> 0:15:30.280 launched them out in the hinter lands in the military basis. Basically, 0:15:30.280 --> 0:15:31.320 they're saying, you know, if you want to do a 0:15:31.320 --> 0:15:33.160 first strike or not, you have to take out Pyongang, 0:15:33.240 --> 0:15:37.480 which definitely amps up our capabilities for first strike. If 0:15:37.520 --> 0:15:39.640 you are going to write this as a novel with 0:15:39.800 --> 0:15:42.440 a happy ending, what would it be like? And then 0:15:42.440 --> 0:15:45.800 you can give us the alternative. I don't think there 0:15:45.880 --> 0:15:48.520 is a happy ending for this one. They're not going 0:15:48.560 --> 0:15:50.560 to give up the nuclear missiles. They've seen what happens 0:15:50.560 --> 0:15:54.680 when other regimes give up the nuclear missiles market off. 0:15:54.680 --> 0:15:56.640 He gave up his missiles, and you know, ten years 0:15:56.720 --> 0:15:59.480 later we came, we saw he died. So I'm a 0:15:59.560 --> 0:16:01.360 saying gave his up. We took kids regime down. So 0:16:01.400 --> 0:16:04.600 he wants the missiles. For him, the missiles are intertwined 0:16:04.600 --> 0:16:07.680 with his regime's stability. So when we say either get 0:16:07.760 --> 0:16:09.680 rid of the missiles or lose your resime, that's the 0:16:09.720 --> 0:16:11.440 same thing. To him. Getting rid of his missiles, it 0:16:11.480 --> 0:16:13.640 means the loss of his regime. So he's it's really 0:16:13.680 --> 0:16:16.160 off the table. Now. He'll certainly do talks, and we'll 0:16:16.200 --> 0:16:18.160 do bilettle talks and six party talks and all that 0:16:18.240 --> 0:16:20.320 kind of stuff, but he's going to keep marshing forward. 0:16:20.880 --> 0:16:25.680 So what is a better case scenario than a catastrophic 0:16:25.680 --> 0:16:29.320 altercation that leaves thousands and thousands of people dead in 0:16:29.400 --> 0:16:33.400 the region at this point. Well, the best case would 0:16:33.400 --> 0:16:35.400 be of China. You know, China has all the leverage 0:16:35.400 --> 0:16:38.000 in North Korea. And if China started leveraging the sanctions 0:16:38.080 --> 0:16:40.440 and we you know, this is our seventh set of 0:16:40.480 --> 0:16:43.640 sanctions and they were all voted um unanimously, so that's 0:16:43.640 --> 0:16:46.520 not unprecedented either. What happens though, is Russia and China 0:16:46.920 --> 0:16:50.000 failed to enforce their part of the sanctions. The problem 0:16:50.000 --> 0:16:52.360 with that is it's not in China's interest to enforce 0:16:52.400 --> 0:16:55.120 the sanctions. They do not want. I mean, sanctions work 0:16:55.160 --> 0:16:57.760 because you struggle, you hammer the people so much the 0:16:58.080 --> 0:17:00.800 leadership decides to change. Well, in this case, the leadership 0:17:00.880 --> 0:17:02.720 doesn't care about the people. So the only way the 0:17:02.760 --> 0:17:05.440 leadership would change is if the people overturned the leadership. 0:17:05.720 --> 0:17:08.679 And China definitely does not want that. What China does 0:17:08.720 --> 0:17:11.080 not want it's against their interest to have a unified 0:17:11.119 --> 0:17:13.960 Korean peninsula underneath this way of South Korea. Right. Well, 0:17:14.000 --> 0:17:17.359 I mean we were talking with j Leftwitz a couple 0:17:17.400 --> 0:17:20.879 of weeks ago, who was the former Human rights envoid 0:17:20.920 --> 0:17:24.200 to North Korea for the US, and he was saying, look, 0:17:24.240 --> 0:17:28.080 the US has to drop this UH unified Korean Peninsula 0:17:28.200 --> 0:17:31.239 concept entirely to get China on board. Do you have 0:17:31.280 --> 0:17:34.960 any sense that the US is taking that approach and 0:17:35.119 --> 0:17:37.320 is moving closer to some kind of agreement with China 0:17:37.560 --> 0:17:40.320 that would actually tighten the screws on this situation in 0:17:40.359 --> 0:17:43.719 a non catastrophic way. I think they're doing it right now. 0:17:43.840 --> 0:17:46.480 China historically when they sign a new sanction, they go 0:17:46.520 --> 0:17:48.600 ahead and do it, and then something will go along 0:17:48.680 --> 0:17:49.879 later on a couple of years down the road and 0:17:49.880 --> 0:17:52.120 they'll start slipping up on it. So on the surface, yes, 0:17:52.440 --> 0:17:54.479 they're all going to be on board. The one thing 0:17:54.480 --> 0:17:57.639 that wasn't reported, Russians actually flew a fleet of nuclear 0:17:57.680 --> 0:17:59.760 capable bombers out of the Sea of Japan. They got 0:17:59.760 --> 0:18:03.040 interest upted by South Korean UH fighter jets during the 0:18:03.080 --> 0:18:05.560 exercises we're doing last week, so they're they're playing the 0:18:05.560 --> 0:18:08.880 game too. Do you have any idea what exactly does 0:18:08.880 --> 0:18:11.080 the leader of North Korea want from all of this? 0:18:12.600 --> 0:18:14.880 What I think he wants is just to survive. That's 0:18:14.960 --> 0:18:17.720 what he's looking at. His his sole function in life, 0:18:17.760 --> 0:18:20.200 his regime survivability. His father was the same way. His 0:18:20.280 --> 0:18:23.040 grandfather who started the country was the same way. That's 0:18:23.040 --> 0:18:26.160 what they want. So is it possible that there's some 0:18:26.240 --> 0:18:30.280 way that either the United States, China, South Korea could 0:18:30.359 --> 0:18:34.720 ensure his survivability and say, all right, survive, keep your weapons, 0:18:35.359 --> 0:18:38.720 just don't launch them. Well, yeah, that's one school of 0:18:38.760 --> 0:18:40.439 thought is exactly that we might as well live with it. 0:18:40.480 --> 0:18:41.879 We live with it with Russia, we lived with it 0:18:41.920 --> 0:18:45.080 with Pakistan, all these other nuclear capable countries. But the 0:18:45.119 --> 0:18:47.680 problem is, you know, his thing is if he thinks 0:18:47.720 --> 0:18:50.360 his regime's going down, he's gonna launch everything he's got. 0:18:50.400 --> 0:18:53.120 He's going out with the blaze of glory, which makes 0:18:53.160 --> 0:18:55.320 it very hard to do any kind of provocative actions 0:18:55.320 --> 0:18:58.119 against him. So he launches a missile over Japan. We 0:18:58.160 --> 0:19:00.600 know it's not gonna hit anything that's a provocative if 0:19:00.640 --> 0:19:02.200 we try to do the same thing to him, he's 0:19:02.280 --> 0:19:05.280 loved to trigger and say they're attacking me. How much 0:19:05.320 --> 0:19:08.560 closer are we to a nuclear altercation at this point? 0:19:09.400 --> 0:19:11.960 I don't think we're close to a nuclear altercation. But 0:19:12.320 --> 0:19:15.440 what people fail to remember is that, uh, he's got 0:19:15.480 --> 0:19:18.800 five thousand tons of chemical and biological weapons. He's got 0:19:18.880 --> 0:19:20.600 enough devastation there he doesn't even need to use a 0:19:20.680 --> 0:19:23.159 nuke UH and if it if he launched all that 0:19:23.200 --> 0:19:26.119 into South Korea. Most of South Korea, the population is 0:19:26.119 --> 0:19:28.359 within the artillery fan of North Korea, and you can't 0:19:28.640 --> 0:19:30.280 It doesn't matter if you have a sad missile system 0:19:30.320 --> 0:19:32.760 of patriot battery or whatever. You're not taking out artillery. 0:19:32.960 --> 0:19:37.359 It's going to be devastation on a biblical scale. Well, Brad, 0:19:37.720 --> 0:19:39.600 let's let's say you get the call from the White 0:19:39.600 --> 0:19:43.639 House and they underscore that they don't they're not playing 0:19:43.720 --> 0:19:46.480 politics here. They just want an assessment of what you 0:19:46.520 --> 0:19:50.960 would recommend be done. And there's no issue about whether 0:19:51.160 --> 0:19:54.000 someone comes out looking good bad, or you know, whether 0:19:54.040 --> 0:19:57.080 they made the right decision in the past. I think 0:19:57.119 --> 0:19:58.320 the first thing that needs to be done is that 0:19:58.359 --> 0:19:59.960 the administration needs to get on the same set. To me, 0:20:00.040 --> 0:20:02.600 is it it about what signals are sending? When Rex Tillerson 0:20:02.640 --> 0:20:05.000 says we have no reason, I have no desire for 0:20:05.040 --> 0:20:07.640 regime change. We want you to talk, come on, let's talk, 0:20:07.960 --> 0:20:10.240 and then President Trump says I'm gonna rain fire and 0:20:10.240 --> 0:20:13.639 fury on you. That the posting party's seeing both those signals. 0:20:13.640 --> 0:20:15.360 Now he's trying to read, what does what does that mean? 0:20:15.600 --> 0:20:17.200 Am I getting fire and fury or do they want 0:20:17.200 --> 0:20:20.560 to talk? Well? Was it sort of encouraging to you 0:20:20.600 --> 0:20:23.560 that we did not get an immediate response from President 0:20:23.600 --> 0:20:28.439 Trump via Twitter, but after a market and noted silence, 0:20:28.640 --> 0:20:32.680 there was a very thought out statement that came from 0:20:32.720 --> 0:20:36.280 the White House instead. Yeah, I was, and I actually 0:20:36.440 --> 0:20:39.000 thought about now, He's called the hermit Kingdom for a reason, 0:20:39.080 --> 0:20:42.399 so he's definitely ensconsin his own little world there, but 0:20:42.440 --> 0:20:44.280 he does get news. And I wondered to myself, was 0:20:44.359 --> 0:20:47.119 he seen the devastations from Hurricane Harvey and thought this 0:20:47.160 --> 0:20:48.359 would be the time I can do this with a 0:20:48.359 --> 0:20:50.520 little blowback because they got their hands full. I don't 0:20:50.520 --> 0:20:51.879 know if he's as smart or not, but it did 0:20:51.920 --> 0:20:55.240 cross my mind. Is there anything that the South Koreans 0:20:55.240 --> 0:20:59.840 should be doing that would make the situation less perilous there? 0:21:00.000 --> 0:21:01.600 And they're they're doing pretty much what we want to 0:21:01.680 --> 0:21:03.159 have a new president in there right now. Although he 0:21:03.200 --> 0:21:05.880 did do a pretty provocative act when the missile went off, 0:21:05.920 --> 0:21:08.520 he launched a bunch of the exercise going on an 0:21:08.560 --> 0:21:11.840 ulti Freedom Guardian, which is really a tabletop map exercise. 0:21:11.840 --> 0:21:13.720 It happens by annually. It's not that big a deal. 0:21:14.280 --> 0:21:17.280 But when he launched the missiles um, the President ordered 0:21:18.000 --> 0:21:21.119 F fifteen strike to simulate destruction of the regime. So 0:21:21.119 --> 0:21:23.080 I'm not sure that was a smart thing to do. 0:21:23.960 --> 0:21:26.040