WEBVTT - Venezuela Regroups With New President, Old Repression Tactics 0:00:02.520 --> 0:00:10.520 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business 0:00:10.520 --> 0:00:14.400 Week Daily reporting from the magazine that helps global leaders 0:00:14.440 --> 0:00:18.360 stay ahead with insight on the people, companies, and trends 0:00:18.360 --> 0:00:23.360 shaping today's complex economy. Plus global business finance and tech 0:00:23.440 --> 0:00:27.320 news as it happens. The Bloomberg Business Week Daily Podcast 0:00:27.640 --> 0:00:31.720 with Carol Masser and Tim Stenebeck on Bloomberg Radio. 0:00:32.440 --> 0:00:35.120 While the US ray that captured Venezuela and President Nicholas 0:00:35.159 --> 0:00:39.640 Maduro put America's allies and adversaries definitely unnoticed, President Trump 0:00:39.720 --> 0:00:42.120 has a new World Order tim of his own. At 0:00:42.200 --> 0:00:44.000 least that's how it's been reporting out. 0:00:44.080 --> 0:00:46.320 Yeah. In the aftermath of the stunning late night operation 0:00:46.400 --> 0:00:49.280 at Sammaduro and his wife wist from a guarded military 0:00:49.320 --> 0:00:52.840 base near Caracas to a New York jail, President Trump 0:00:52.840 --> 0:00:55.200 demonstrated just how far the US is willing to go 0:00:55.240 --> 0:00:57.760 to eliminate a leader seen as a threat to American 0:00:57.760 --> 0:01:01.880 interests and security. So we're looking at the challenges that 0:01:02.160 --> 0:01:04.160 come next. Those are the ones that are presented by 0:01:04.160 --> 0:01:07.960 the US raid on Venezuela. We welcome Rockford Whites, President, 0:01:08.560 --> 0:01:11.280 Professor of Practice and Director of the Maritime Studies program 0:01:11.319 --> 0:01:15.080 at Toft's Universities, Fletcher's School, Fletcher School of Law and Diplomacy. 0:01:15.120 --> 0:01:17.720 He joins US from Tucson, Arizona. Professor, Good to have 0:01:17.760 --> 0:01:21.280 you on the program. What do you believe is the 0:01:21.319 --> 0:01:24.800 true motivation of the US when it comes to Venezuela, 0:01:26.400 --> 0:01:27.039 great question. 0:01:27.520 --> 0:01:29.840 What we're looking at here is this is a geopolitical 0:01:29.840 --> 0:01:33.679 competition between the United States and China and Russia over 0:01:33.800 --> 0:01:39.200 who is the main ally of Venezuela in the Caribbean. 0:01:40.640 --> 0:01:41.080 Wow. 0:01:41.280 --> 0:01:46.400 Okay, So before what we saw at late Friday and 0:01:46.440 --> 0:01:49.440 early Saturday, what would you have said is the true ally? 0:01:50.160 --> 0:01:52.080 Who would you have said is a true ally? And 0:01:52.120 --> 0:01:55.600 then now after how does the US become the true ally? 0:01:56.560 --> 0:01:59.160 Okay? All right, so great quest. I love these questions. 0:01:59.320 --> 0:02:03.280 So before it was a combination of China was their 0:02:03.400 --> 0:02:07.920 geoeconomic ally helping them with infrastructure, Russia was a military 0:02:07.960 --> 0:02:11.120 ally with basing rights there and supporting their military. And 0:02:11.160 --> 0:02:13.720 even Iran, even though it's not a great power, was 0:02:13.880 --> 0:02:17.520 helping Venezuela. So they had that was their sort of 0:02:17.520 --> 0:02:20.639 cast of characters, as well as Cuba. Cuba's frankly a 0:02:20.680 --> 0:02:24.560 little bit more reliant on Venezuela than vice versa. Everything 0:02:24.600 --> 0:02:29.600 has changed since Saturday morning in the sense that there 0:02:29.639 --> 0:02:35.799 is obviously new leadership in Venezuela, a transition leadership. It's 0:02:35.880 --> 0:02:38.639 unclear who will be in charge in the long run, 0:02:39.040 --> 0:02:42.840 but it's very clear that the great power that's going 0:02:42.880 --> 0:02:45.440 to have the most influence over Venezuela is now the 0:02:45.560 --> 0:02:46.240 United States. 0:02:46.880 --> 0:02:50.800 What I'm wondering, Professor White, you know, what's the international 0:02:50.840 --> 0:02:53.000 precedent for doing something like this? I mean, how should 0:02:53.040 --> 0:02:56.040 we read what is essentially a kidnapping of a leader 0:02:56.280 --> 0:02:59.880 of a foreign country and his wife, removal of the 0:03:00.240 --> 0:03:03.880 leader from said country. What's it akin to in our 0:03:03.960 --> 0:03:06.360 past history, our recent past history. And to be fair, 0:03:06.440 --> 0:03:09.240 it's not the first time the US or others have 0:03:09.320 --> 0:03:12.360 removed a global leader or worked behind the scenes to 0:03:12.440 --> 0:03:16.680 support US friendly groups leaders in foreign countries. So we 0:03:16.800 --> 0:03:19.720 get that we're not all naive, but I'm just curious, 0:03:20.360 --> 0:03:23.280 are we setting up for kind of a leader grab 0:03:23.360 --> 0:03:28.799 around the world among countries and among global powers? 0:03:30.480 --> 0:03:30.720 Great? 0:03:30.760 --> 0:03:33.280 Another great question, thank you, So let me try to 0:03:33.280 --> 0:03:37.240 answer it using history. So it was actually ironically thirty 0:03:37.280 --> 0:03:40.680 six years ago to the day that the United States 0:03:40.920 --> 0:03:46.320 took Noriega from Panama, and that's the closest parallel. So 0:03:47.160 --> 0:03:50.760 he also was charged with narco trafficking. He was also 0:03:50.880 --> 0:03:54.040 then taken to the United States for prosecution. They also 0:03:54.240 --> 0:03:56.320 justified it in exactly the same way. There was an 0:03:56.320 --> 0:03:58.960 indictment against him in the United States, so that covered 0:03:58.960 --> 0:04:02.680 the domestic law piece. And then under the UN Charter, 0:04:03.280 --> 0:04:06.480 countries are allowed self defense and it also self defense 0:04:06.520 --> 0:04:09.160 of their population. So it was framed this was back 0:04:09.160 --> 0:04:13.400 in nineteen ninety under Bush Senior as no Diego as 0:04:13.440 --> 0:04:17.640 a narco trafficker and therefore must be taken care of 0:04:17.680 --> 0:04:20.960 to protect the American people from the drug trade. That 0:04:21.160 --> 0:04:24.400 is allowed under the UN Charter as self defense, so 0:04:24.480 --> 0:04:27.719 that covers you under international law. Again, every legal issue 0:04:27.760 --> 0:04:30.600 is gray, so people will say it's against international law, 0:04:30.640 --> 0:04:32.600 but you can make a case that it's consistent with 0:04:32.680 --> 0:04:34.919 international law and the UN Charter. You can make a 0:04:34.920 --> 0:04:38.479 case that it's consistent with domestic law. And I would 0:04:38.480 --> 0:04:42.280 say it does set a precedent that other narco trafficking 0:04:42.360 --> 0:04:46.680 leaders around the world could be taken not just by 0:04:46.760 --> 0:04:48.279 the United States but by others. 0:04:49.000 --> 0:04:50.760 But this doesn't really apply to Taiwan. 0:04:51.160 --> 0:04:53.679 I've spent a lot of time in Taiwan, and narco 0:04:53.720 --> 0:04:56.599 trafficking is not their game, and so I think that 0:04:57.040 --> 0:04:58.599 the precedent can be narrowed. 0:04:58.960 --> 0:05:01.599 But it doesn't. It also means that. 0:05:02.040 --> 0:05:05.120 Other large countries, other great powers like China and Russia, 0:05:05.200 --> 0:05:07.720 will look at this to see how they can use 0:05:07.760 --> 0:05:08.640 it to their advantage. 0:05:08.880 --> 0:05:11.479 Well, you mentioned Taiwan, but what about Russia, and what 0:05:11.520 --> 0:05:14.200 about Vladimir Putin in Russia? Could he use this as 0:05:14.839 --> 0:05:17.560 justification for doing something to Zelenski. 0:05:18.880 --> 0:05:22.800 So Putin will try to come up with any justification 0:05:22.920 --> 0:05:25.680 to go after Zelenski. But Zelenski clearly is not a 0:05:25.800 --> 0:05:28.960 narco trafficker. I don't think anyone's saying that, so we 0:05:29.040 --> 0:05:31.760 can argue not. The other thing is Zelensky has very 0:05:31.800 --> 0:05:37.320 powerful friends right next door, the NATO, the Northern Niactary Organization. 0:05:37.360 --> 0:05:42.560 Poland borders Ukraine the US. Although Trump has not supported 0:05:42.640 --> 0:05:47.000 as much as maybe previous presidents have, We're behind Zelensky. 0:05:47.080 --> 0:05:52.200 Zelensky's got powerful friends. Venezuela really didn't have powerful friends 0:05:52.240 --> 0:05:54.360 in this part of the world. China is a very 0:05:54.400 --> 0:05:57.760 strong navy around Taiwan, for example, they don't have a 0:05:57.800 --> 0:06:00.760 major naval presence in the Caribbean as well. 0:06:01.240 --> 0:06:02.720 It is a naval power. 0:06:02.760 --> 0:06:05.000 It's not nearly as strong as either China or the 0:06:05.080 --> 0:06:08.039 United States, but it doesn't have a major Caribbean presence. 0:06:08.080 --> 0:06:12.400 So what's fundamentally happened is in the Americas, the US 0:06:12.760 --> 0:06:16.240 is the major great power with the major military And 0:06:16.520 --> 0:06:18.520 I will just note this because it is important for 0:06:18.600 --> 0:06:22.839 the bigger conversation. The Trump administration did issue its national 0:06:22.880 --> 0:06:26.880 security strategy just last month. It said we're going to 0:06:26.920 --> 0:06:30.640 focus more attention on the Americas, and it was consistent 0:06:30.760 --> 0:06:34.479 with this operation in Venezuela, though I will admit I 0:06:34.520 --> 0:06:38.240 was surprised at how much force was used to take 0:06:38.279 --> 0:06:40.480 Maduro and his wife one hundred and fifty aircraft. 0:06:40.560 --> 0:06:43.200 I mean, this was a major operation on Saturday. 0:06:44.480 --> 0:06:46.960 Wow, so many different places to go. Well, having said that, 0:06:47.800 --> 0:06:49.560 you know, listening to a lot of the coverage here 0:06:49.560 --> 0:06:54.359 on Bloomberg, professor wise, it sounds also like that the 0:06:54.560 --> 0:06:57.840 US intelligence has been on the ground for some time. 0:06:57.839 --> 0:06:59.240 We're going to talk about this a little bit later 0:06:59.279 --> 0:07:04.479 on on on our broadcast, but that they had help 0:07:04.880 --> 0:07:07.560 in kind of pulling this together. Is that a bad 0:07:07.600 --> 0:07:13.680 assumption or read into the US getting an assist from 0:07:14.000 --> 0:07:15.320 other leaders in Venezuela. 0:07:16.760 --> 0:07:17.960 I think it's an accurate read. 0:07:18.040 --> 0:07:22.280 I've been following this basically United days since Saturday, a 0:07:22.280 --> 0:07:25.400 lot of coffee. But basically what has happened is it's 0:07:25.440 --> 0:07:30.600 not surprising the United States has been focused on Maduro 0:07:30.800 --> 0:07:35.920 and his regime. Really, it's been bipartisan. Biden also had 0:07:35.920 --> 0:07:39.560 a bounty out for Maduro to be removed. So Maduro 0:07:39.920 --> 0:07:43.720 is not popular internationally, he's not popular domestically. He's essentially 0:07:43.800 --> 0:07:46.080 clinging on to power. I thought one of the most 0:07:46.080 --> 0:07:49.640 interesting things was that his almost his entire security staff 0:07:49.680 --> 0:07:53.120 were Cubans. This has come out from multiple sources, so 0:07:53.520 --> 0:07:56.320 it's not surprising that the United States would spend a 0:07:56.360 --> 0:08:01.440 couple months gathering intelligence. I have to say that this 0:08:01.600 --> 0:08:05.680 was almost perfectly executed from a special operations perspective. They 0:08:05.720 --> 0:08:11.040 had one mission kidnap said what kidnapped, but sees Maduro 0:08:11.080 --> 0:08:14.640 and his wife take them to the United States. At 0:08:14.720 --> 0:08:20.720 the same time, essentially take out the Venezuelan military. So 0:08:20.800 --> 0:08:23.520 the Venezuelan Navy essentially no longer exists. Same for the 0:08:23.520 --> 0:08:27.040 Air Force, no more radar, any tanks they had are 0:08:27.080 --> 0:08:31.000 probably gone. So this was executed very well, and of 0:08:31.040 --> 0:08:34.800 course intelligence was involved, so and Trump even said that publicly, 0:08:34.920 --> 0:08:38.280 CIA is already there. So I would say public sources 0:08:38.280 --> 0:08:40.720 have verified it, multiple sources. 0:08:40.720 --> 0:08:43.360 I think it's probably accurate to say that's correct. 0:08:43.800 --> 0:08:46.760 Well, that's one part of the mission, and that was 0:08:47.240 --> 0:08:50.560 certainly this mission. But I think many critics out there 0:08:50.640 --> 0:08:55.439 and even observers saying, now comes the hard part, the 0:08:55.480 --> 0:08:58.600 potential power vacuum. And we've seen what quote unquote nation 0:08:58.679 --> 0:09:01.640 building for the United STS data has looked like in 0:09:01.679 --> 0:09:04.240 the past. How does that play out? What is the 0:09:04.320 --> 0:09:06.120 right way for the US to do that? 0:09:07.080 --> 0:09:09.440 This is literally what I think is the most important 0:09:09.480 --> 0:09:12.160 question for today. So I call this the Day After challenge. 0:09:13.080 --> 0:09:15.640 This is a big deal. It's going to be very 0:09:15.679 --> 0:09:22.000 difficult to smoothly create a transition to a new government 0:09:22.280 --> 0:09:28.119 in a peaceful way without triggering an insurgency. The Venezuelan 0:09:28.160 --> 0:09:31.640 military wasn't really strong before Saturday. They're really not strong 0:09:31.720 --> 0:09:36.120 now that being said, similar to Vietnam, similar to Colombia. 0:09:36.160 --> 0:09:37.920 I used to live in Colombia. I know the country well. 0:09:37.920 --> 0:09:39.680 I've been to Venezuela as well as a tourist in 0:09:39.679 --> 0:09:43.800 the nineties. There's parts of Venezuela that are the perfect 0:09:43.840 --> 0:09:47.880 guerrilla warfare area. The United States has, I think no 0:09:48.040 --> 0:09:51.559 interest in a long term occupation of Venezuela because it 0:09:51.600 --> 0:09:54.520 would not be it would not be pretty, and it 0:09:54.520 --> 0:09:57.319 would look similar to some of our misadventures in the 0:09:57.360 --> 0:10:02.160 Middle East. I think the model to look cat is Panama. 0:10:02.880 --> 0:10:07.040 You have in Venezuela a recognized opposition. You have Maria 0:10:07.120 --> 0:10:10.959 Karina Machado, who is the recent Nobel Peace Prize winner. 0:10:11.080 --> 0:10:13.600 You have at Mundo Gonzales, who is the declared winner 0:10:13.640 --> 0:10:18.240 internationally recognized of the last presidential election. They're friends, They're 0:10:18.280 --> 0:10:22.040 a good opposition. I think what can happen is that 0:10:22.080 --> 0:10:24.680 they can be brought into this process and that the 0:10:24.800 --> 0:10:31.720 US can help them establish some level of control. Probably 0:10:31.760 --> 0:10:36.800 involves a few hundred, maybe a few thousand elite American 0:10:36.880 --> 0:10:42.080 troops guarding say the presidential palace in Caracas, and essentially 0:10:42.080 --> 0:10:44.559 having a presence at all the major military bases, certainly 0:10:44.600 --> 0:10:49.559 around Caracas, and then eventually that gets transitioned over to 0:10:51.240 --> 0:10:55.840 the new government. It's going to be hard. The essentially 0:10:55.920 --> 0:11:00.439 Venezuela has had a dysfunctional government since nineteen ninety nine. 0:11:00.920 --> 0:11:03.960 Maduro was in power for over ten years as a dictator. 0:11:04.320 --> 0:11:06.839 All of his allies are in the National Assembly, they're 0:11:06.880 --> 0:11:10.480 in the government, they're in the military. There's narco traffickers 0:11:10.480 --> 0:11:12.560 who are well armed. So it's not going to be easy, 0:11:13.080 --> 0:11:14.160 but I do think it's possible. 0:11:14.200 --> 0:11:15.000 I also, I think it's. 0:11:15.000 --> 0:11:18.960 Very different from Iraq or Afghanistan because there's no religious 0:11:19.000 --> 0:11:19.640 element here. 0:11:20.080 --> 0:11:21.280 Venezuelan's not only. 0:11:21.080 --> 0:11:23.240 Are they all Christian, that are all Catholic, So there's 0:11:23.280 --> 0:11:25.680 no that's not a piece of It doesn't mean it's easy. 0:11:26.200 --> 0:11:28.079 I think it's going to take a lot of bandwidth 0:11:28.080 --> 0:11:28.440 to do it. 0:11:28.480 --> 0:11:28.720 Well. 0:11:28.800 --> 0:11:32.280 I'm not sure if the Trump administration is ready to 0:11:33.080 --> 0:11:34.200 do it, but we will see. 0:11:34.400 --> 0:11:35.080 We will see. 0:11:36.240 --> 0:11:39.000 Stay with us more from Bloomberg Business Week Daily coming 0:11:39.120 --> 0:11:40.000 up after this. 0:11:44.240 --> 0:11:48.080 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:11:48.160 --> 0:11:50.840 us live weekday afternoons from two to five eas during 0:11:51.040 --> 0:11:54.280 Listen on Apple Karplay and Android Auto with the Bloomberg 0:11:54.320 --> 0:11:57.760 Business app, or watch us live on YouTube. 0:11:58.040 --> 0:12:00.520 Money Managers, They've been loading up on Benel and debth 0:12:00.559 --> 0:12:03.080 This is one of the stories that we've been reporting 0:12:03.120 --> 0:12:05.360 out here at Bloomberg. This has been happening in the 0:12:05.400 --> 0:12:08.360 past few months as President Trump ramped up pressure on 0:12:08.480 --> 0:12:11.760 President Maduro, with some investors seeing the potential for restructuring 0:12:11.800 --> 0:12:13.960 as early as this year. And then, of course Tim, 0:12:14.000 --> 0:12:15.480 then we had the weekend happened. 0:12:15.679 --> 0:12:17.840 So with more on that, let's head to Sarasota, Florida, 0:12:17.880 --> 0:12:21.280 and to Mike Collins, managing director, an executive portfolio advisor 0:12:21.320 --> 0:12:24.120 on the multisector team over at PGIM. PGIM fixed Income 0:12:24.160 --> 0:12:26.920 approximately one and a half trillion dollars and total assets 0:12:27.000 --> 0:12:29.760 under management for PGM fixed Income it's more than one 0:12:29.960 --> 0:12:33.520 billion dollars, Mike, big picture, how big of a deal 0:12:34.080 --> 0:12:36.400 is it what happened in Venezuela, especially when it comes 0:12:36.440 --> 0:12:38.520 to the global market and investing landscape. How are you 0:12:38.520 --> 0:12:39.040 looking at it? 0:12:40.080 --> 0:12:40.640 Yeah? 0:12:40.679 --> 0:12:43.560 Tim and Catroll, Happy New Year. Great, great to be here. 0:12:43.800 --> 0:12:45.760 You know, I get these questions all the time whenever 0:12:45.800 --> 0:12:49.040 you have these geopolitical flaw ups around the world, whether 0:12:49.120 --> 0:12:52.200 they're in Asia, the Middle East, or Latin America. And 0:12:52.200 --> 0:12:54.000 my answer is always the same, you know, kind of 0:12:54.040 --> 0:12:58.080 fade the headlines is generally the knee jerk instinct that 0:12:58.120 --> 0:13:00.720 you should have as an investor. You should really focus 0:13:01.360 --> 0:13:04.679 on the fundamentals of the global economy, the fundamentals of 0:13:04.720 --> 0:13:07.520 the US economy, where growth is going. 0:13:07.400 --> 0:13:08.920 To be, where inflation is going to be. 0:13:09.000 --> 0:13:12.319 Obviously, commodity prices are in the headlines today with the 0:13:12.360 --> 0:13:16.000 Venezuela thing. But remember Venezuela is producing now less than 0:13:16.080 --> 0:13:19.719 one percent of global oil. Remember sixty years ago, back 0:13:19.720 --> 0:13:23.360 when I was born, they were producing fifteen percent of 0:13:23.400 --> 0:13:26.439 the world's oil, and now they're less than one percent, right, 0:13:26.480 --> 0:13:29.199 So they have taken a huge fall from grace. They 0:13:29.240 --> 0:13:33.080 do not have a big impact economically on the global stage. 0:13:33.120 --> 0:13:35.440 Sixty years ago, believe it or not, Venezuela was in 0:13:35.480 --> 0:13:38.959 the top quartile of all countries in terms of GDP 0:13:39.160 --> 0:13:43.080 per capita. Today they are at the bottom of the list, right, 0:13:43.520 --> 0:13:46.120 And you think of other countries where they've been geopolitical 0:13:46.160 --> 0:13:51.120 flare ups. Typically these countries don't have huge international economic implications. 0:13:51.160 --> 0:13:53.679 So that's why the markets are just kind of, you know, 0:13:54.120 --> 0:13:57.360 whistling past the graveyard here and just ignoring the geopolitical risk. 0:13:58.160 --> 0:13:59.440 That is the standard playbook. 0:14:00.000 --> 0:14:02.559 Michael, just forgive me. I want to go back more 0:14:02.600 --> 0:14:06.240 than a trillion dollars over at PGM fixed income under management. 0:14:06.360 --> 0:14:09.920 I misspoke earlier, Okay, so if that's why, if that's 0:14:09.960 --> 0:14:13.240 why we're seeing sort of the relative calm today, let's 0:14:13.280 --> 0:14:17.320 then focused on focus on kind of what comes next 0:14:17.360 --> 0:14:20.040 and the political and potential implications for that, because I 0:14:20.080 --> 0:14:22.880 think that is a big question that investors have right now. 0:14:22.920 --> 0:14:26.080 I mean, certainly people don't want to see some prolonged 0:14:27.040 --> 0:14:29.160 and you know, dare I say boots on the ground 0:14:29.160 --> 0:14:32.480 mission in the country. But but I think that I mean, 0:14:32.520 --> 0:14:34.680 to me, going into this week, that was a big 0:14:34.680 --> 0:14:37.200 concern that I thought investors would have. What if this 0:14:37.280 --> 0:14:40.320 actually gets turns into something a kind of like we've 0:14:40.320 --> 0:14:44.160 seen with past quote unquote nation building activities from the US. 0:14:45.160 --> 0:14:47.720 We've spent most of the weekend and a lot of 0:14:47.760 --> 0:14:52.120 this morning doing deep dives into the situation in ven Azuell. 0:14:52.200 --> 0:14:54.560 I mean, I'm fortunate to work on this gigantic team 0:14:54.560 --> 0:14:58.360 where we have you know, geopolitic political analysts, we have 0:14:59.120 --> 0:15:03.840 really deep economic analytical resources. We have people who've been 0:15:03.880 --> 0:15:05.880 in the military, so we have a lot of great 0:15:05.920 --> 0:15:09.120 color just from our own team and our and our contacts. 0:15:09.160 --> 0:15:12.200 And there's really two scenarios right One team is the 0:15:12.240 --> 0:15:15.000 one you pointed out that that things do get ugly 0:15:15.800 --> 0:15:18.720 that Venezuela kind of gets worse, conditions get worse, that 0:15:18.760 --> 0:15:22.040 the US tries to do a more aggressive takeover, and 0:15:22.040 --> 0:15:25.040 it gets really messy some of the situations in the 0:15:25.040 --> 0:15:27.320 Middle East that your last guest was talking about. But 0:15:27.360 --> 0:15:30.640 there's also this upside scenario, right, and I think it 0:15:30.720 --> 0:15:33.840 kind of confirms the fact that we're moving into this, 0:15:34.200 --> 0:15:37.600 you know, G three ish type of world and the 0:15:37.720 --> 0:15:40.120 US is certainly trying to take the lead there and 0:15:40.120 --> 0:15:44.960 showing that, hey, we have control of the Americas here, 0:15:45.720 --> 0:15:50.320 which could result in better outcomes for countries like Venezuela, 0:15:50.400 --> 0:15:53.120 could result in better outcomes for the US, could result 0:15:53.160 --> 0:15:56.560 in better outcomes for other Latin American countries, right, And 0:15:56.560 --> 0:15:59.000 I think that's what the markets are focusing on. And 0:15:59.040 --> 0:16:02.320 we were looking at all the merging market debt quotes 0:16:02.360 --> 0:16:05.800 and runs out there right now, and generally the bonds 0:16:06.000 --> 0:16:08.440 are trading better, right, And I think they're looking at 0:16:08.440 --> 0:16:12.440 this as potentially the upside scenario, not the downside. 0:16:12.280 --> 0:16:13.400 But you're absolutely right. 0:16:13.440 --> 0:16:16.880 I mean, we really have to keep our radar attentive 0:16:16.920 --> 0:16:18.800 to those potential downside risks. 0:16:18.840 --> 0:16:21.320 Yeah, Mike, on that point, A raftive investment firm Yeing 0:16:21.360 --> 0:16:27.080 opportunities in Venezuela after that US strike. Trebeca Investment Partners 0:16:27.120 --> 0:16:30.480 is sending a team to excuse me, Caracos this week 0:16:30.720 --> 0:16:33.280 to inspect potential assets, calling it a gold rush. 0:16:33.320 --> 0:16:35.040 Have you guys changed. 0:16:36.360 --> 0:16:40.520 Any of your investment thesis when it comes to Venezuela 0:16:40.600 --> 0:16:41.520 at this point are. 0:16:41.400 --> 0:16:45.360 Not yet well. Remember they've been pretty heavily sanctioned in 0:16:45.480 --> 0:16:48.120 terms of trading and also trading some of their security. 0:16:48.240 --> 0:16:51.040 So good news is for people have a huge emerging 0:16:51.080 --> 0:16:54.880 market debt team and big investments around the world in 0:16:54.920 --> 0:16:57.760 emerging market debt. You know, this could potentially free up 0:16:57.760 --> 0:17:01.760 trading opportunities and relative value opportunity. I mean again, these bonds, 0:17:01.840 --> 0:17:04.320 some of their bonds have you know, doubled or tripled 0:17:05.160 --> 0:17:07.800 over the last over the last few weeks, so they're 0:17:07.800 --> 0:17:10.200 still creating It really just stress levels. Right, we're talking 0:17:10.400 --> 0:17:13.600 you know, twenty thirty cents on the dollar. But you know, 0:17:13.680 --> 0:17:15.960 there are opportunities, for sure, there are going to be 0:17:15.960 --> 0:17:19.040 a lot of relative opportunities. We're looking at even places 0:17:19.040 --> 0:17:22.159 like Columbia today we're talking about where their local interest 0:17:22.240 --> 0:17:25.119 rates are really high and their credit spreads are pretty wide, 0:17:25.160 --> 0:17:27.560 and so you know, I think it sets up the 0:17:27.560 --> 0:17:30.880 world for better relative value trading opportunities, and that's something 0:17:30.880 --> 0:17:32.480 we're really looking to capitalize on. 0:17:32.640 --> 0:17:34.320 So, Mike, if you had to kind of make a bet, 0:17:34.400 --> 0:17:37.439 I mean, is it fifty percent that the fortunes and 0:17:37.480 --> 0:17:41.439 maybe economic and investment outlook for Venezuela are changing for 0:17:41.480 --> 0:17:43.080 the better at this point? 0:17:43.320 --> 0:17:45.560 Or is it? You know, I would say it's a 0:17:45.560 --> 0:17:49.359 little better than a coin toss carola probably, but higher odds. 0:17:49.400 --> 0:17:52.520 Maybe I'm just you know, talking our book or agreeing 0:17:52.560 --> 0:17:55.000 with the market's reaction so far. But yeah, but it 0:17:55.040 --> 0:17:58.240 certainly feels like, you know, when you're having more private 0:17:58.280 --> 0:18:02.760 sector resources coming to a country that's been totally mismanaged 0:18:02.800 --> 0:18:06.600 in terms of their natural resources in their politics, you know, 0:18:06.880 --> 0:18:09.840 there is I think a higher likelihood of a better 0:18:09.880 --> 0:18:12.399 outcome there. But you know, the road to that better 0:18:12.480 --> 0:18:16.200 outcome can be really long, right, and what with all. 0:18:16.119 --> 0:18:18.359 Kinds of problems, right, lots of bumps can always happen. 0:18:18.600 --> 0:18:21.240 Certainly in a situation like this, many would. 0:18:21.080 --> 0:18:21.560 Agree with that. 0:18:21.880 --> 0:18:24.960 Hey, Mike, before you go, I'm thinking about the US 0:18:25.000 --> 0:18:27.240 this week. We do get a jobs report on Friday, 0:18:27.480 --> 0:18:29.960 We have a bunch of economic news. We did see 0:18:29.960 --> 0:18:32.919 the US treasury curve move down today, a little bit 0:18:32.960 --> 0:18:36.119 of economics news today. What is more important though, in 0:18:36.200 --> 0:18:38.280 terms of the US Treasury trade at this point is 0:18:38.280 --> 0:18:41.720 it the US economy what the Fed does ultimately, just 0:18:41.760 --> 0:18:44.200 give us about thirty forty seconds on that, if you would. 0:18:44.960 --> 0:18:47.800 Yeah, again, it's going back to the fundamentals, Carol, Right, 0:18:47.800 --> 0:18:50.760 And if you're looking at US growth, I mean, if anything, 0:18:50.880 --> 0:18:55.040 expectations for growth this year have ticked up over the 0:18:55.080 --> 0:18:58.040 last few months. We're entering twenty twenty six with really 0:18:58.119 --> 0:19:03.680 strong kind of real GDP or consumption and capital expenditure expectations, 0:19:03.720 --> 0:19:07.080 you know, momentum going into this year. So most forecasts 0:19:07.119 --> 0:19:09.840 now for US GDP have two handles right where it's 0:19:09.840 --> 0:19:11.600 not that long ago, they're. 0:19:11.160 --> 0:19:11.640 In the ones. 0:19:11.680 --> 0:19:15.520 I think the recession risks have moderated in the US 0:19:15.560 --> 0:19:19.080 and we've taken hour probabilities down, and the upside risk 0:19:19.600 --> 0:19:25.480 to growth to more productivity from AI maybe too higher 0:19:25.480 --> 0:19:28.520 inflation and permanently higher rates has gone up. And that's 0:19:28.560 --> 0:19:32.240 actually not a great environment for risk assets necessarily. 0:19:32.359 --> 0:19:32.520 Right. 0:19:32.560 --> 0:19:34.920 So we've been threading this needle. We call it the 0:19:35.760 --> 0:19:38.399 muddle through scenario where you kind of run at two percent, 0:19:38.480 --> 0:19:41.000 you have inflation stuck. You know, between two and three 0:19:41.280 --> 0:19:43.800 the fetiaeses a couple of times. That's a great environment 0:19:43.840 --> 0:19:47.440 for growth and for inflation and for financial assets. 0:19:47.840 --> 0:19:51.720 You're listening to the Bloomberg Business Week Daily podcast. Catch 0:19:51.760 --> 0:19:54.960 us live weekday afternoons from two to five eastering. Listen 0:19:55.000 --> 0:19:58.600 on Applecarplay and Android autto with the Bloomberg Business app, 0:19:58.760 --> 0:20:00.400 or watch US Live on you too. 0:20:01.520 --> 0:20:03.679 A big question that many people have been asking in 0:20:03.680 --> 0:20:05.560 the wake of the US strikes in Venezuela and the 0:20:05.600 --> 0:20:09.119 capture of President Nicholas Maduro is what comes next? The 0:20:09.119 --> 0:20:12.919 surgical extraction of Maduro is done, but what about the 0:20:12.960 --> 0:20:16.640 future of the country. Him and a Sunia is Bloomberg 0:20:16.680 --> 0:20:19.600 Economics geoeconomic analysts for Latin America. She joins U from 0:20:19.600 --> 0:20:22.439 the Bloomberg Buenos Aires Bureau Jimana, It's good to have 0:20:22.480 --> 0:20:24.560 you on the program. You and the team right. The 0:20:24.640 --> 0:20:27.920 range of possible outcomes is wide. What are some of 0:20:27.960 --> 0:20:28.639 these outcomes? 0:20:29.920 --> 0:20:32.760 Thank you thanks for having me. I think there are 0:20:32.800 --> 0:20:37.639 We can point out three possible scenarios for Venezuela going forward. 0:20:38.320 --> 0:20:42.320 The first one is that after this transition, there is 0:20:42.840 --> 0:20:47.399 the establishment of a stable, market friendly, pro West democratic 0:20:47.440 --> 0:20:51.119 government in Venezuela, and that would probably, of course be 0:20:51.960 --> 0:20:56.280 the best and most favorable outcome for Venezuela on the world, 0:20:57.160 --> 0:21:01.440 with consequences for debt markets, all prices, the Venezuela and 0:21:01.520 --> 0:21:03.200 diaspora and beyond. 0:21:04.000 --> 0:21:05.119 I just want to jump in. I just want to 0:21:05.160 --> 0:21:07.480 jump in here on this one. Who would be the 0:21:07.560 --> 0:21:09.680 leader of the country in a scenario such as this. 0:21:10.880 --> 0:21:13.240 I think in this scenario there are two dise things possibility. 0:21:13.280 --> 0:21:15.920 There could be one interpretation that is, the US has 0:21:16.040 --> 0:21:19.640 just cleared the path for the constitutional order to be restored, 0:21:19.640 --> 0:21:22.359 and in that case, the leader that should assume the 0:21:22.400 --> 0:21:25.200 government should be the winner of the twenty twenty four 0:21:25.200 --> 0:21:29.119 presidential elections. However, there's also the possibility that that leader, 0:21:29.200 --> 0:21:32.760 because of all the constit institutional disorder that has been 0:21:32.760 --> 0:21:35.000 in the past few years, there could be a call 0:21:35.080 --> 0:21:38.879 for a constitutional assembly, a constituent assembly, so that the 0:21:38.920 --> 0:21:41.840 government draft so that the country drafts the new constitution 0:21:42.080 --> 0:21:45.400 and then calls for presidential elections again, in which I 0:21:45.440 --> 0:21:52.840 think that Maria Corina Matchello, the winner of the Nobel 0:21:52.840 --> 0:21:56.040 Peace Prize and the leading figure in the opposition the 0:21:56.080 --> 0:21:59.040 winner of the twenty twenty three primaries who did not 0:21:59.160 --> 0:22:01.320