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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Lee.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomber Some

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Speaker 1: of these numbers worldwide still not great, just to subtle

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Speaker 1: a subtle sign of stabilization in some key economies, some

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Speaker 1: key countries, and we hope that continues. Tom. Great lineup

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Speaker 1: of guests through this morning, Bam bloom Book Surveillance as always,

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Speaker 1: and we begin this morning with Troitsky of sky Bridge. Troy,

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Speaker 1: always great to catch up with you. Howard Mark's putting

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Speaker 1: out a memo yesterday. Let me bring you a quote

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Speaker 1: from that, just to start this conversation off. The bottom

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Speaker 1: line for me is that I'm not all troubled, at all,

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Speaker 1: troubled saying markets may well be considerably lower sometime in

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Speaker 1: the coming months, and we're buying today when we find

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Speaker 1: good value. I don't find in these statements inconsistence. Your

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Speaker 1: response to that, Troy, Yeah, No, I think he's right.

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Speaker 1: I mean, you can never time a bottom perfectly right,

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Speaker 1: and so I think the broader point there is that

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Speaker 1: you know, there are many asset classes that are pricing

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Speaker 1: in apocalypse and many securities um Yet at the same time,

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Speaker 1: as you guys always note, you've seen unprecedented government government stimulus,

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Speaker 1: both at the fiscal level and more importantly in our opinion,

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Speaker 1: on the FED balance sheet level, and in terms of

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Speaker 1: money supply growth. So you know, it would be nice

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Speaker 1: to sit back in a perfect world and say, hey,

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Speaker 1: I'm going to time the perfect bottom and every security

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Speaker 1: and every asset class. But the reality is is that

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Speaker 1: you have tremendous discounts. Now you could take a little

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Speaker 1: bit of mark to market pain as you're legging in,

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Speaker 1: but that's the price you have to be willing to

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Speaker 1: take or to pay in order to have you know,

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Speaker 1: extraordinary upside. And that's one of the reasons why you know,

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Speaker 1: groups like oak Tree have been so successful over time,

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Speaker 1: and that they're in a position to add capital and

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Speaker 1: monetize dislocations, huge dislocations off the back of forced liquidation,

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Speaker 1: an ugly face that draw down a number of weeks ago.

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Speaker 1: Many people have been taking advantage of those dislocations, particularly

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Speaker 1: in high grade credit, and a question I want to

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Speaker 1: explore beginning with you this morning, Troy, is what the

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Speaker 1: recovery looks like in the lower quality segments of this

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Speaker 1: market towards high yield across an A M. What are

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Speaker 1: you looking at the moment? Yeah, so I think that

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Speaker 1: that's a million dollar question. And I think, you know,

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Speaker 1: the way this has always worked historically, in the way

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Speaker 1: it appears to be working now, but just at a

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Speaker 1: much more rapid pace, given you know the fact that

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Speaker 1: the FED response has been so much more muscular, and

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Speaker 1: you know you have TALF too that's coming online and

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Speaker 1: in the government stimulus. Is that you know, when you

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Speaker 1: go through a deep downturn in markets and markets are

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Speaker 1: pricing in you know, in some cases armageddon, in other cases,

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Speaker 1: you know, severe recession, you know the upend quality always

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Speaker 1: starts to move first, right. Analysts always have more confidence

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Speaker 1: when they're looking at you know, a company with an

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Speaker 1: unlovered balance sheet, or you're looking you know, at the

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Speaker 1: top of the capital structure and commercial real estate, or

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Speaker 1: or Celo said, hey, you can run math six ways

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Speaker 1: to Sunday doomsday, this to the cows come home. But

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Speaker 1: there's still money, good securities, and so you know, you've

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Speaker 1: seen that rebound start, you know, it's slow and fitful um.

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Speaker 1: And then what happens is as that liquidity starts to

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Speaker 1: filter down in and some of the more you know,

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Speaker 1: dire scenarios don't play out, um, you start to see

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Speaker 1: lower parts of the capital structure starting catch up or

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Speaker 1: lower quality. The thing that's interesting know about this is

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Speaker 1: that you've already had a pretty significant rebound in high

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Speaker 1: yield um. You know that. You know, dollar prices are

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Speaker 1: back up to about eighty five cents and a dollar.

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Speaker 1: So you know, I wouldn't get carried away right now

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Speaker 1: on specific high yield because you know, so much of

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Speaker 1: the potential upside has always been realized, already been realized.

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Speaker 1: Try You've got a beautiful vision into the hedge fund business.

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Speaker 1: And I know the media loves to try out somebody

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Speaker 1: who's up a hundred in the last three days. It's

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Speaker 1: all great and wonderful. What's the real story our alternative

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Speaker 1: investments doing? Are they? As a general statement, surviving creating

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Speaker 1: alpha here? Yeah? So I think it's a general statement

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Speaker 1: that would be true. I mean it's not like, you know,

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Speaker 1: the hedge fund industry has had a great run um by,

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Speaker 1: but there are time you always choke around it. But

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Speaker 1: but if you think of what's happened so far this year,

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Speaker 1: you know, in the most part capital has been protected.

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Speaker 1: I think discretionary macro managers and systematic trend followers have

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Speaker 1: done fairly well. You know. Some of the bigger MULTIPM

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Speaker 1: shops um you know, like you guys report on, like

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Speaker 1: Citadel and Millennium have done fine. Where there's a cute pain.

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Speaker 1: Um Hare's been more in the credit instructure, credit area

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Speaker 1: where they got caught up in the margin calling that

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Speaker 1: was hid in the reeds and a lot of their

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Speaker 1: assets were sold down, you know, in sympathy. And so

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Speaker 1: that's where you know, when we look at risk reward

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Speaker 1: versus fundamentals, we think there's the most upside there, and

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Speaker 1: we also think there's the most upside in distress corporate credit.

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Speaker 1: But again you have to be selective, you know, firmly

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Speaker 1: focus on good, good company with good balance sheet. You know,

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Speaker 1: no reason to get involved in energy or anything of

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Speaker 1: that nature. But you know, even hospitality names or you know,

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Speaker 1: six Flags is a good example of a of a

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Speaker 1: company that's good, good balance sheet, low dollar prices, that

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Speaker 1: franchise is very strong, and we'll survive, Troy. I think

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Speaker 1: it's interesting you're talking about margin calls and some of

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Speaker 1: the technical stress in markets appears that we've moved from

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Speaker 1: a financial market crisis going forward to a real economic crisis,

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Speaker 1: which is what we're looking at trying to assess. Now

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Speaker 1: there's sort of a knee jerk by the dip mentality

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Speaker 1: because it's worked in the past. What's the risk that

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Speaker 1: it's not going to work the same way this time

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Speaker 1: as people look into the abyss of a potential downturn

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Speaker 1: economically that rivals what we saw in in the nineties. Yeah, no, No,

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Speaker 1: it's a great question least. And I think you hit

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Speaker 1: the nail on the head with your w analysis. I mean,

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Speaker 1: I think that is arguably the biggest risk or that

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Speaker 1: you know and know the dreams of v shape recovery

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Speaker 1: went out the window, you know, four to six weeks ago.

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Speaker 1: No market participants thinks that's going to happen. But maybe

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Speaker 1: the you tend to have you know, a much much

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Speaker 1: longer bottom, right um So, And the other thing I'd

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Speaker 1: say is, no one is really recklessly buying dips, right Uh.

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Speaker 1: You know, people are trying to be very careful and

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Speaker 1: calculated on again like that we talked about with credit quality,

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Speaker 1: Like okay, let's start with the higher, higher top of

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Speaker 1: the capital structure. You know, obviously an I G. Credit

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Speaker 1: you're getting fed support directly, and then let's roll down.

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Speaker 1: So no, no one's you know, I think delusional enough

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Speaker 1: to think that markets are going to rebound in a

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Speaker 1: straight line. And you know, we're gonna have this you

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Speaker 1: know or twenty percent annualized keyword and annualized economic contraction,

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Speaker 1: and you know, mortgage delinquencies are going to go from

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Speaker 1: point nine percent to eight percent and then suddenly all

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Speaker 1: those people are gonna start paying in you know, two

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Speaker 1: weeks later. No one's doing that. People are trying to

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Speaker 1: be very careful and selective. UM. But but to your point,

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Speaker 1: if if things get materially worse than the economic level,

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Speaker 1: like meaning we don't really bottom in Q two, which

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Speaker 1: is the expectation, now, don't start to recover you know

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Speaker 1: in Q three, in Q four, UM, and instead it's

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Speaker 1: a it's a much longer stretch or or or a

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Speaker 1: false don with a W. Then clearly you know that's

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Speaker 1: the scenario where you could have more downside and markets. UM.

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Speaker 1: But then again against that uh and I know you

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Speaker 1: saw probably saw no it's coming over. I mean you

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Speaker 1: think of what the FED is doing from a liquidity standpoint,

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Speaker 1: it's just it's incredible. I mean, it's unreal. They're expanding

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Speaker 1: their balance sheet at almost fifteen times the taste of

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Speaker 1: q E three fifteen times. Money supply growth is growing

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Speaker 1: at an analyzed rate of seventy eight percent, while the

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Speaker 1: banking system excess reserves have gone up by you know,

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Speaker 1: probably about seven fift billion. That data series has to

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Speaker 1: come out, but that's you know, that's our estimate. So

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Speaker 1: you know that is that, in our humble opinion, is

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Speaker 1: what's really put a floor under market. Obviously, the fiscal

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Speaker 1: stimulus is very critical. TOALTH two is very critical. An

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Speaker 1: expansion of TOALTH two to include other assets like they

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Speaker 1: did back you know eight, you know they gradually expanded

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Speaker 1: that very critical. Hi, Troy, always great to get your

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Speaker 1: thoughts on a program. So I'm my best of the

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Speaker 1: team of Skybridge Anti even yours, Troyasky Skybridge Capital right

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Speaker 1: now to bring us up to date on the state

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Speaker 1: of the State of New York. Cathy Hokel joins us.

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Speaker 1: Of course, the Lieutenant Governor of this state Kathy, these

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Speaker 1: are extraordinary times. It is a test for all politicians

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Speaker 1: and the test of exhaustion. How are you getting to

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Speaker 1: the weekend? What is the path on this Wednesday to

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Speaker 1: get to a long weekend and to Easter. Well, for

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Speaker 1: those of us who are on the front lines, there

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Speaker 1: is no thought that this week is going to end.

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Speaker 1: So I'm looking forward to Easter to celebrate remotely with

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Speaker 1: my family Lisa virtually, and I want I wish everyone

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Speaker 1: a happy pass Over and happy Easter as we head

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Speaker 1: into this week. But this is a week where there's

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Speaker 1: tremendous temptation to uh start hearing some little glimmers of

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Speaker 1: hope and saying that people could become a little more complacent,

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Speaker 1: and you haven't seen Graham and Grandpa in a while,

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Speaker 1: you want to catch up with your siblings because these

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Speaker 1: are wonderful celebration. We have to make sure that people

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Speaker 1: do not succumb to that temptation. And that is the

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Speaker 1: warning that I cannot convey strongly enough that if we

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Speaker 1: start going back to our old ways or even just

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Speaker 1: taking a little more steps out, they're becoming a little

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Speaker 1: less uh, you know, guarded in our behavior toward others.

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Speaker 1: If we don't stay home, we could actually set ourselves back,

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Speaker 1: and after all the sacrifice that New Yorkers in American

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Speaker 1: have had to go through for the last three weeks,

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Speaker 1: we do not want to go there. And that's a

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Speaker 1: strong message. I wanted to make sure that everyone hears

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Speaker 1: these are wonderful holidays, and we'll certainly have next year

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Speaker 1: to celebrate, but let's make sure that everyone who can

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Speaker 1: will be sitting at those tables with us next year

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Speaker 1: because we took those preventative steps now and continued our

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Speaker 1: social distancing. I will say, I'm I'm looking forward to

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Speaker 1: my zoom pass a versator tonight. Lieutenant Governor. I'm wondering

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Speaker 1: everyone's trying to figure out how quickly New York can

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Speaker 1: restart its economy. Do you have any sense of the

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Speaker 1: path for that and what the plan is to reopen.

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Speaker 1: Before we can reopen, we have to have broad broadly

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Speaker 1: undertaken testing. And what we're doing now in the Governor

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Speaker 1: announced this yesterday, is that we are working with our

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Speaker 1: businesses to try to find ways to increase the capacity

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Speaker 1: for rapid testing. There are possibilities to do testing in

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Speaker 1: five minutes, fifteen minutes and get results back quickly, and

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Speaker 1: only when we feel secure that we can have a

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Speaker 1: workforce that is free of coronavirus because they've already contracted

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Speaker 1: it and they have developed the antibodies and are not

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Speaker 1: vulnerable themselves, or that they would spread it to others.

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Speaker 1: I think those are important scientific metrics that we're going

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Speaker 1: to be focusing on as we I start to identify

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Speaker 1: which industries can come back online. But again, this is

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Speaker 1: a conversation we want to have because we are anxious

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Speaker 1: to get this going again. But it is a little

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Speaker 1: bit premature to start giving out dates, and it's certainly

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Speaker 1: premature to know how that's going to look. All we

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Speaker 1: do know is that we have to continue these distancing

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Speaker 1: from each other, the social distance, reduced density, but the

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Speaker 1: increased testing will really be the link that tells us

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Speaker 1: when we were able to test enough New Yorkers to

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Speaker 1: start jump starting our economy again. Kathy, premature to be

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Speaker 1: thinking about many many things at this point. I'm sure,

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Speaker 1: given the crisis that it's unfolding right before our eyes

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Speaker 1: over the last few weeks. One thing we can discuss,

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Speaker 1: though there's not too premature to discuss, is the help

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Speaker 1: that you might need in the future. Kathy, what do

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Speaker 1: you need from the federal level. What kind of assistance

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Speaker 1: do you need from the government. We need money. Uh,

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Speaker 1: this is something that the governor just yesterday rode to

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Speaker 1: our congressional delegation. He's spoken to the President when there

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Speaker 1: is the next stimulus plan, and there needs to be

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Speaker 1: another one. They cannot overlook the fact that a place

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Speaker 1: like New York City, the epicenter, has now taken a

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Speaker 1: ten to fifteen billion dollar hit to our budget, and

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Speaker 1: we just wrapped up a budget a couple of days ago.

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Speaker 1: But it allows the governor to have flexibility to reopen

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Speaker 1: if necessary based on either a decline or hopefully an

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Speaker 1: increase in revenues. But we need financial assistance from the

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Speaker 1: federal government. We also have been asking for them to

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Speaker 1: invoke the Events Production Act much earlier than has been

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Speaker 1: even used at all in a wide scale way to

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Speaker 1: get us the personal protection equipment, to ramp up testing kits,

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Speaker 1: the testing supplies as well. As we've been saying for

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Speaker 1: weeks and liarly months, we need more ventilators to be

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Speaker 1: produced in this country. I think this crisis is going

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Speaker 1: to have a wholesale rethinking of where we get our

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Speaker 1: life saving products, are supplies, our medical supplies, our ventilators,

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Speaker 1: and I think that's going to make us wonder do

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Speaker 1: we want to continue to be reliant on other countries

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Speaker 1: when we have the capacity, that know how, in the

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Speaker 1: ability to make those right here in New York. And

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Speaker 1: I think that's going to be a conversation. They will

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Speaker 1: be had sooner than later. Another thing that's not theoretical

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Speaker 1: is the impact that the coronavirus and the shutdowns have

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Speaker 1: had on the economy. And one area that you highlighted

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Speaker 1: in a recent OpEd in The Hill was that women

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Speaker 1: are hit hardest. You argue by the impact of the coronavirus.

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Speaker 1: Why do you say that? In two areas, One is

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Speaker 1: that seventy six percent of healthcare workers are female. That's

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Speaker 1: staggering when you think about how we are honoring our

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Speaker 1: frontline workers. The people are putting on uniforms and hopefully

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Speaker 1: protective equipment going into their jobs, literally going into the

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Speaker 1: heat of battle every day. The majority of them, vast majority,

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Speaker 1: are women, and they've many of them have children, children

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Speaker 1: who otherwise would be occupied in school or being watched

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Speaker 1: by grandparents, So there is literally childcare crisis associated with them. Secondly,

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Speaker 1: two thirds of America's minimum wage workers are women. These

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Speaker 1: are the ones who worked in restaurants, and had worked

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Speaker 1: in hotels, and had worked in housekeeping, and all this

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Speaker 1: work that had to get done and now either laid

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Speaker 1: off or they're the ones vulnerable having to go in

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Speaker 1: to work every single day. Tenant Governor, you are more

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Speaker 1: qualified than any politician in this country to talk about

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Speaker 1: the cittiness of this pandemic. You are out of Buffalo.

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Speaker 1: You know the distance to Lockport, the distance to Batavia

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Speaker 1: down the US rather down the New York State Thruway system.

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Speaker 1: Is well. Explain to those in smaller cities, villages in

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Speaker 1: rural America why they need to support the big cities

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Speaker 1: in this pandemic. Oh. Absolutely, And I've been on radio

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Speaker 1: Intellivision NonStop saying, you know, we think about when there's

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Speaker 1: a snowstorm that paralyzes upstate New York, those utility trucks

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Speaker 1: are coming up from Long Island and New York City

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Speaker 1: to get our power back on. So I'll just talk

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Speaker 1: about something we all can relate to it in upstates.

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Speaker 1: I represent the entire state, and I spend vacia majority

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Speaker 1: of my time in New York City. So I feel

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Speaker 1: I'm adapted there as well. But what I've been saying

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Speaker 1: to Western New Yorkers just like we route one team

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Speaker 1: up here of football seas and we are one state,

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Speaker 1: and the Governor and I have said for sure, if

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Speaker 1: there is any part of that state upstate boundstate that

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Speaker 1: need life staving equipment, we will personally transform their ourselves.

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Speaker 1: We had to reassure people, and there was some anxiety,

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Speaker 1: some political people trying to make hay out of it,

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Speaker 1: which I think is disgraceful. But you know, we shut

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Speaker 1: exactly that. You know, that's that's not happening. We are

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Speaker 1: one state, period. That's the answer. Don't be a stranger.

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Speaker 1: Lieutenant Governor Oco from Buffalo and from New York, stay,

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Speaker 1: thank you so much for joining Bloomberg Surveillance worldwide. I

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Speaker 1: think we should carry forward into the Chairman's comments that

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Speaker 1: we'll see tomorrow. Of course, we'll have a lot of

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Speaker 1: details on that across all of the Bloomberg platforms. Steven

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Speaker 1: Roach is identified at Yale University with China and of

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Speaker 1: course his leadership at Morgan Stanley on the China Watch

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Speaker 1: for many years involving his Wonderful Look the Next Asia

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Speaker 1: and other efforts as well. Before that he had leadership

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Speaker 1: and looking at what we do with our monetary and

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Speaker 1: fiscal systems within the United States, and maybe we can

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Speaker 1: focus on that today. Stephen Rotch, I know you, John,

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Speaker 1: Lisa me. We never imagined this expansion of the balance

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Speaker 1: sheet back to calculus one. Is there a limit to

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Speaker 1: where a balance sheet can go? No, there's no limit

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Speaker 1: numerically in a world of electronic or fiat currencies. The

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Speaker 1: question is is there a limit economically? And um what

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Speaker 1: this ultimately means for addressing the problems that are now

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Speaker 1: afflicting the world. Tom The underpinning of this, and we

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Speaker 1: talked to William White about this yesterday. The folks the

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Speaker 1: conversation was hugely valuable was to go back to something

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Speaker 1: Joe Stiglitz has talked about, which is the underpinning of

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Speaker 1: this is the small G and economics, which is the

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Speaker 1: growth rate could be the growth rate of it'll the

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Speaker 1: growth rate of the US, it can be the growth

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Speaker 1: rate of New York City for that matter. How do

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Speaker 1: you Dove tell Steve Roach what we're going through right

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Speaker 1: now with the small G that's in all the equations. Well, look, um,

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Speaker 1: the monetary um stimulus, the fiscal stimulus. You know, the

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Speaker 1: two words we described to address these actions UH during

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Speaker 1: the global financial crisis of oh, you know nine was

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Speaker 1: big bazooka UH. And they're effective and addressing UH financial problems,

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Speaker 1: but they're not effective in addressing a pandemic. We know that,

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Speaker 1: and Chairman Powell said it very clearly when he gave

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Speaker 1: his rare interview on the Today Show now close to

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Speaker 1: a couple of weeks ago, when he said that, you know,

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Speaker 1: the FEDS actions are aimed at sparking post COVID recovery,

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Speaker 1: not in addressing the downside of containment and workers being

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Speaker 1: told to stay at home. So we're deluding ourselves into

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Speaker 1: thinking that these actions are going to bring an end

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Speaker 1: to this crisis. The only thing they can bring an

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Speaker 1: end to the crisis is containing the disease. We're trying

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Speaker 1: to build a bridge to the other side here, Professor,

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Speaker 1: on a number of levels and help companies get through

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Speaker 1: an unpresidented economic shutdown. I'm just wondering, from your perspective, Stephen,

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Speaker 1: what more needs to be done on the fiscal side,

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Speaker 1: both in terms of size and just calibration. The specific

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Speaker 1: policies that you'd like to see in the coming weeks

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Speaker 1: and months if we haven't seen them already. Well, you

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Speaker 1: use the words on calibration, I mean, I don't know

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Speaker 1: quite what that means, but I would take that as

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Speaker 1: meaning that the fiscal actions need to be focused at

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Speaker 1: providing support for our public health infrastructure which is woefully inadequate,

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Speaker 1: adequate the scientific research we need for anti viral medication

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Speaker 1: and ultimately the vaccine um. You know, I've I've argued

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Speaker 1: that we should place as much emphasis on that as

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Speaker 1: we do to bridge loans to corporations and even small

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Speaker 1: and medium sized businesses. Certainly, we've got to put a

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Speaker 1: floor under the economic carnage. But you know as well

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Speaker 1: as I do that, the longer the shutdown exists, the

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Speaker 1: more and more we're gonna have to go back to

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Speaker 1: the well, uh, in dealing with the these bridge loans.

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Speaker 1: We've got to get the science and the public health

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Speaker 1: infrastructure right before we can hope to do anything in

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Speaker 1: terms of supporting economic recovery. Stephen Roe, professor and former

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Speaker 1: Morgan Stanley Asia chairman, joining us right now. I'm wondering, Stephen,

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Speaker 1: taking a look at what the roadmap will be to

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Speaker 1: reopen the US economy. A lot of people are looking

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Speaker 1: to China. What are the initial size You're seeing a

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Speaker 1: lot of people questioning, uh, the sort of veracity of

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Speaker 1: the numbers that we're getting out of China. Are you

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Speaker 1: optimistic about what you've seen in terms of a bounce

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Speaker 1: back from the shut out over there? Look, the Chinese

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Speaker 1: template tells us some important things. It told us how

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Speaker 1: to address the disease, as did South Korea. And they're

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Speaker 1: there are two different models, and one is about Drayconian

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Speaker 1: lockdowns China, and the others about rigorous testing and contact

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Speaker 1: tracing South Korea. Uh, And what they're telling us about,

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Speaker 1: you know, the reopening is that, uh, it's possible to

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Speaker 1: reopen the supply side, but it's very very difficult to

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Speaker 1: reopen the demand side, given the shock that's occurred to

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Speaker 1: behavioral norms of disease infected and fearful of people, families

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Speaker 1: slash consumers. And so we've got to look very carefully

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Speaker 1: at at other countries in terms of their struggles to

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Speaker 1: reopen their systems and go back to anything close to normal.

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Speaker 1: It's gonna be very difficult to put Humpty Dumpty back

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Speaker 1: together again. The immediacy of the health crisis the entire

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Speaker 1: world is facing as a sort of overwhelmed some of

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Speaker 1: the tensions that seem to be percolating and ongoing between

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Speaker 1: the US and China. And I'm wondering how that plays

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Speaker 1: out at a time when there seems to be something

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Speaker 1: of an information war with a lot of bickering going

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Speaker 1: back and forth with US and China as to the

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Speaker 1: message who's who's it blame and taking leadership globally and

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Speaker 1: managing the health crisis. You know, look, that's a great point.

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Speaker 1: I've written about that on on the Bloomberg platform and

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Speaker 1: and elsewhere. Finger Pointing in the blame game is going

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Speaker 1: to get us nowhere if we really aspire for a collaboration,

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Speaker 1: which is what we need to address a global problem.

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Speaker 1: That's what a pandemic is. And and you know, the

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Speaker 1: Trump administration, you know, is backed off a little bit

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Speaker 1: from naming this the Chinese virus, or Secretary of State

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Speaker 1: Pompeo calls it the Wuhan virus. But you know where

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Speaker 1: we continue to uh point fingers uh and one another

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Speaker 1: in uh trying to assess culpability and blame and that's

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Speaker 1: just not the stuff of collaborating. We gotta put that

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Speaker 1: aside and UH and really work together. There's so much

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Speaker 1: we can do together. Stephen the China Watch. Elizabeth Economy

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Speaker 1: at c FAR I thought was way away out front

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Speaker 1: on the challenges domestically that Mr g has in China.

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Speaker 1: Minxing Pay of Claremont wrote a fabulous article for Foreign

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Speaker 1: Affairs in the last ten days on the Chinese Communist

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Speaker 1: Party on the future for we've given the shocks that

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Speaker 1: we've seen in the Chinese system. Do you share with

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Speaker 1: doctor Economy this worry about the stability of of of

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Speaker 1: president She's rain No, I don't. I think she's overblown that,

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Speaker 1: And I've felt that it was a case um before

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Speaker 1: this crisis, and I certainly feel that's the case now. Certainly,

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Speaker 1: the Chinese leadership did not necessarily perform admirably during the

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Speaker 1: early days of this horrific disease, and there's a there's

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Speaker 1: a lot of questions that are being raised both inside

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Speaker 1: of China, especially outside of China and looking back on that,

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Speaker 1: but you know, to to view this as an existential

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Speaker 1: threat to his leadership into the party I think goes

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Speaker 1: well beyond what is um actually accurate in the current situation. Professor,

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Speaker 1: you say we should collaborate with China. According to our reporting,

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Speaker 1: China is still concealing the cases and deaths and they're

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Speaker 1: intentionally leaving those cases and the reporting of those cases incomplete.

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Speaker 1: How can we collaborate with a country that intelligence of

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Speaker 1: fishals in this country think we shouldn't trust. Well, that's

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Speaker 1: a great question, and so you know, you've got to

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Speaker 1: look at, you know, what what the results are in

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Speaker 1: terms of how the Chinese economy is getting back to

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Speaker 1: UM at least production and what they're attempting to do

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Speaker 1: on consumption. If the numbers were as poor as you're reporting,

429
00:24:09,359 --> 00:24:14,440
Speaker 1: uh suggests, then UM, they would not have reopened Wuhan,

430
00:24:14,640 --> 00:24:19,479
Speaker 1: they would not have made progress in normalizing and bringing

431
00:24:19,520 --> 00:24:23,160
Speaker 1: production back and the travel back that they're doing right now.

432
00:24:23,240 --> 00:24:28,480
Speaker 1: So certainly there's issues of accuracy down to the last

433
00:24:28,680 --> 00:24:32,520
Speaker 1: decent point. We have problems with that in our country

434
00:24:32,520 --> 00:24:35,520
Speaker 1: as well, because we don't have data on testing and

435
00:24:35,600 --> 00:24:38,720
Speaker 1: the incidence of the disease. And you know, I just

436
00:24:38,720 --> 00:24:42,119
Speaker 1: think we have to be careful in um pointing fingers

437
00:24:42,119 --> 00:24:44,840
Speaker 1: at others. It's like the pot calling the kettle black hair.

438
00:24:45,480 --> 00:24:48,600
Speaker 1: Stephen roaches, thank you so much. With the university greatly

439
00:24:48,600 --> 00:24:55,560
Speaker 1: appreciated that. Today. What we've tried to do here, not

440
00:24:55,640 --> 00:24:58,880
Speaker 1: all the time, but throughout Bloomberg Surveillance is to bring

441
00:24:58,880 --> 00:25:02,280
Speaker 1: you the smartest asked, the most informed that we can.

442
00:25:02,359 --> 00:25:06,080
Speaker 1: Within the medical community. That's been someone like Dollar Bernheim

443
00:25:06,160 --> 00:25:09,040
Speaker 1: here Dr Brenheim, i should say, rather at Mount Sinai

444
00:25:09,040 --> 00:25:13,359
Speaker 1: and radiology Dr Hotez at Baylor University, Stephen Reiley, the

445
00:25:13,400 --> 00:25:17,200
Speaker 1: great epidemiologist over at Imperial College in London. And now

446
00:25:17,800 --> 00:25:21,919
Speaker 1: for the emergency room, she is Lauren Sour. She is

447
00:25:21,960 --> 00:25:26,560
Speaker 1: at the Johns Hopkins University and their medical system out

448
00:25:26,560 --> 00:25:31,600
Speaker 1: of their Bloomberg School of Public Health. And of course

449
00:25:31,640 --> 00:25:33,800
Speaker 1: we have to mention that Mr Bloomberg, of course is

450
00:25:34,160 --> 00:25:37,320
Speaker 1: with Bloomberg LP and a great benefactor of his engineering

451
00:25:37,359 --> 00:25:42,080
Speaker 1: school Johns Hopkins. And with that said, Laurence Sour is

452
00:25:42,160 --> 00:25:48,439
Speaker 1: exceptionally competent in emergency medicine and on the doings of

453
00:25:48,480 --> 00:25:52,280
Speaker 1: emergency rooms. Here is Lauren Soer. I think the key

454
00:25:52,400 --> 00:25:55,040
Speaker 1: is to actually not walk into the emergency room unless

455
00:25:55,080 --> 00:25:58,399
Speaker 1: you're absolutely critically ill. Um We want to keep people

456
00:25:58,400 --> 00:26:00,760
Speaker 1: out of the emergency department to make sure that the

457
00:26:00,800 --> 00:26:04,240
Speaker 1: space is there for the patients. We need this critical

458
00:26:04,280 --> 00:26:07,320
Speaker 1: resource the road. You're going to see stick patients in

459
00:26:07,359 --> 00:26:10,840
Speaker 1: the emergency department now, Um, a lot of emergency departments

460
00:26:10,840 --> 00:26:15,520
Speaker 1: are separating patients using KENT to separate out COVID likely

461
00:26:15,560 --> 00:26:18,840
Speaker 1: patients and COVID unlikely patients to reduce the risk of

462
00:26:18,880 --> 00:26:22,760
Speaker 1: spread in waiting rooms and things like that. Lauren, we

463
00:26:22,840 --> 00:26:25,800
Speaker 1: have seen in the last couple of days the beginning

464
00:26:25,840 --> 00:26:28,679
Speaker 1: of an understanding of this virus with the ebbs and

465
00:26:28,720 --> 00:26:31,119
Speaker 1: the flows, and of course all focused on the Prime

466
00:26:31,119 --> 00:26:34,680
Speaker 1: Minister of the United Kingdom, but for each and every

467
00:26:34,760 --> 00:26:38,080
Speaker 1: virus patient, there seems to be a point where they

468
00:26:38,080 --> 00:26:42,080
Speaker 1: get better and then they get worse as well. What

469
00:26:42,200 --> 00:26:46,280
Speaker 1: have you learned with the Johns Hopkins medical team about

470
00:26:46,359 --> 00:26:49,240
Speaker 1: the ebb and flow of the virus the day to

471
00:26:49,359 --> 00:26:53,120
Speaker 1: day of this pathogen. One of the things we've seen

472
00:26:53,160 --> 00:26:55,520
Speaker 1: about these patients is that they have to be watched

473
00:26:55,560 --> 00:26:59,679
Speaker 1: really carefully. UM. Their oxygen saturation can look like it's

474
00:26:59,680 --> 00:27:02,920
Speaker 1: going to be fine and then go uh, then really

475
00:27:02,960 --> 00:27:07,679
Speaker 1: go off the rails. We've seen these patients. We really

476
00:27:07,720 --> 00:27:09,520
Speaker 1: we really need to pay a close eye to them

477
00:27:09,520 --> 00:27:11,639
Speaker 1: to make sure that they're at the right resource level

478
00:27:11,720 --> 00:27:15,120
Speaker 1: for managing them, so trying not to move them out

479
00:27:15,119 --> 00:27:17,840
Speaker 1: of the CU into a step down unit too early

480
00:27:18,200 --> 00:27:20,880
Speaker 1: with the risk that they might get worse and then

481
00:27:20,960 --> 00:27:22,840
Speaker 1: have to be moved back to the I c U.

482
00:27:23,240 --> 00:27:26,160
Speaker 1: We want to avoid transferring patients as much as possible

483
00:27:26,240 --> 00:27:31,600
Speaker 1: and reduce the number of transfers within our public health system.

484
00:27:31,760 --> 00:27:34,480
Speaker 1: With a belinguered New York and yes there's other geographies

485
00:27:34,520 --> 00:27:38,280
Speaker 1: across this country. They're just overwhelmed right now. It's a

486
00:27:38,320 --> 00:27:42,320
Speaker 1: movement from the emergency room to a hospital bed and

487
00:27:42,359 --> 00:27:46,440
Speaker 1: then as the Prime Minister, to an intensive care unit.

488
00:27:46,960 --> 00:27:52,000
Speaker 1: Explain the differences of I see you. Explain the nuances

489
00:27:52,080 --> 00:27:55,240
Speaker 1: there that we need to know. Sure, So when the

490
00:27:55,280 --> 00:27:58,400
Speaker 1: patients move from the emergency department, depending on how sick

491
00:27:58,440 --> 00:28:00,840
Speaker 1: they are, they may go to a regular floor that

492
00:28:01,080 --> 00:28:03,080
Speaker 1: or up to the I see you and that I

493
00:28:03,200 --> 00:28:05,520
Speaker 1: see you level of care is really important for these

494
00:28:05,520 --> 00:28:10,359
Speaker 1: patients who may need mechanical ventilation or other higher level care.

495
00:28:10,800 --> 00:28:14,119
Speaker 1: That mechanical ventilation piece is really important. So if someone

496
00:28:14,240 --> 00:28:16,359
Speaker 1: can't breathe on their own and it's going to need

497
00:28:16,359 --> 00:28:19,959
Speaker 1: to be intibated and mechanically ventilated, which we've talked a

498
00:28:19,960 --> 00:28:23,760
Speaker 1: lot about with these patients, UM, you need that I

499
00:28:23,840 --> 00:28:26,479
Speaker 1: see you level of care because the staffing is higher.

500
00:28:26,560 --> 00:28:30,360
Speaker 1: So UM, you have more nurse to patient, higher nurse

501
00:28:30,400 --> 00:28:34,680
Speaker 1: to patient race vio, higher level of critical care doctors,

502
00:28:34,720 --> 00:28:38,120
Speaker 1: and you have the respiratory therapist you need to need

503
00:28:38,200 --> 00:28:41,400
Speaker 1: to manage the ventilators, and you have the antise geologists

504
00:28:41,440 --> 00:28:45,120
Speaker 1: there to manage the levels of medication that these patients require.

505
00:28:46,280 --> 00:28:50,040
Speaker 1: Explain to us your view on this debate of the

506
00:28:50,120 --> 00:28:54,320
Speaker 1: protection of nurses, the protection of doctors, and indeed of

507
00:28:54,440 --> 00:28:58,640
Speaker 1: all of hospitals in America. It's a ranging debate right

508
00:28:58,680 --> 00:29:03,440
Speaker 1: now about getting per tective gear in give us your perspective. Please.

509
00:29:04,280 --> 00:29:07,960
Speaker 1: We absolutely have to keep our medical staff are frontline

510
00:29:08,000 --> 00:29:11,280
Speaker 1: healthcare workers healthy because the patients are going to keep coming,

511
00:29:11,400 --> 00:29:14,320
Speaker 1: whether the physicians and the nurses and the respiratory therapist

512
00:29:14,400 --> 00:29:17,000
Speaker 1: and everyone else to keep the hospital running is there

513
00:29:17,040 --> 00:29:20,480
Speaker 1: and healthy or not. So the personal protective equipment or

514
00:29:20,480 --> 00:29:24,640
Speaker 1: we call it PPE is critical to protecting these these

515
00:29:24,680 --> 00:29:28,760
Speaker 1: healthcare workers. We need the masks or the pappers, the

516
00:29:28,800 --> 00:29:33,280
Speaker 1: personal air purifying devices, UM, so that you can safely

517
00:29:33,320 --> 00:29:36,200
Speaker 1: come and go from these patients rooms. You can safely

518
00:29:36,240 --> 00:29:38,400
Speaker 1: do the procedures you need to do to keep the

519
00:29:38,400 --> 00:29:42,520
Speaker 1: patients UH breathing. A lot of our procedures that we

520
00:29:42,600 --> 00:29:46,680
Speaker 1: do for these respiratory patients generate air assaults or smart

521
00:29:46,720 --> 00:29:50,320
Speaker 1: small particles that have the virus in it. So the

522
00:29:50,400 --> 00:29:54,960
Speaker 1: PPE is critical to keeping healthcare workers safe and and

523
00:29:55,640 --> 00:30:00,720
Speaker 1: the hospital running. Laurence with the Johns Hopkins University in

524
00:30:00,720 --> 00:30:03,880
Speaker 1: their Bloomberg School of Public Health just in Paul I thought,

525
00:30:03,880 --> 00:30:07,080
Speaker 1: there's just an extraordin ordinary time interview. She's truly in

526
00:30:07,120 --> 00:30:09,680
Speaker 1: the trenches. She's out of Boston University, and of course

527
00:30:09,760 --> 00:30:14,440
Speaker 1: Johns Hopkins as well, in her whole career is focused

528
00:30:15,000 --> 00:30:17,680
Speaker 1: on that room. We hate to go in. You know,

529
00:30:18,120 --> 00:30:22,560
Speaker 1: every parent dreads it for all sorts of reasons. I

530
00:30:22,640 --> 00:30:25,200
Speaker 1: hate to go on emergency rooms and these people to

531
00:30:25,360 --> 00:30:28,800
Speaker 1: spend their whole careers in them. I'm one block away

532
00:30:28,880 --> 00:30:32,520
Speaker 1: or from Mount Sinai's acclaimed emergency room, and it's it's

533
00:30:32,560 --> 00:30:35,800
Speaker 1: a science under its own within hospitals. Yeah, it's a

534
00:30:35,800 --> 00:30:38,440
Speaker 1: special calling I think for for those types of people.

535
00:30:38,560 --> 00:30:41,120
Speaker 1: Tom and they and they really are on the front

536
00:30:41,200 --> 00:30:43,840
Speaker 1: lines here. And you know Dr Sowers commentary there at

537
00:30:43,840 --> 00:30:47,240
Speaker 1: the end about the importance of PPE having the proper

538
00:30:47,320 --> 00:30:51,080
Speaker 1: equipment to protect our healthcare providers, particularly on the front lines,

539
00:30:51,720 --> 00:30:54,400
Speaker 1: is really critical. And that's something we've seen called out

540
00:30:54,400 --> 00:30:57,680
Speaker 1: by you know lots of politicians and speakers, whether it's

541
00:30:57,720 --> 00:31:00,440
Speaker 1: Andrew Cuomos talking about initially we have to have the

542
00:31:00,520 --> 00:31:03,440
Speaker 1: ppe UH and we have to have ventilators. And those

543
00:31:03,440 --> 00:31:06,239
Speaker 1: are the two key issues we've heard from you know

544
00:31:06,360 --> 00:31:08,880
Speaker 1: leaders around the country, around the world as they talk

545
00:31:08,960 --> 00:31:16,560
Speaker 1: about their response to this from the health care system.

546
00:31:16,640 --> 00:31:20,360
Speaker 1: Let me U move this to oil and this is extraordinary, folks.

547
00:31:20,400 --> 00:31:22,560
Speaker 1: It's off the radar to a great many of us

548
00:31:22,600 --> 00:31:25,640
Speaker 1: as we focus on this pandemic, we focus on this

549
00:31:25,800 --> 00:31:29,360
Speaker 1: massive economic contraction. I read not one, not too but

550
00:31:29,520 --> 00:31:34,240
Speaker 1: three Bloomberg hydrocarbon articles today on Alberta and it is

551
00:31:34,600 --> 00:31:38,080
Speaker 1: a depression. Paul sanky has been following this for years.

552
00:31:38,120 --> 00:31:40,920
Speaker 1: He's with MISSOOO. He is one of the best best

553
00:31:41,080 --> 00:31:44,880
Speaker 1: best is taking the microeconomics of oil and dovetailing it

554
00:31:44,920 --> 00:31:48,720
Speaker 1: into some vision of where oil and natural guests are heading.

555
00:31:48,720 --> 00:31:51,880
Speaker 1: Paul Sanki joins us UH this morning. Paul I was

556
00:31:52,000 --> 00:31:57,240
Speaker 1: flabbergasted by the financial price boosted by all that money

557
00:31:57,280 --> 00:32:01,840
Speaker 1: betting on higher oil prices. And rebound versus the physical price,

558
00:32:02,200 --> 00:32:08,400
Speaker 1: witnessing Western Canada oil plunging from ten and eight dollars

559
00:32:08,400 --> 00:32:12,400
Speaker 1: a barrel down under five dollars a barrel. Are we

560
00:32:12,560 --> 00:32:17,360
Speaker 1: actually going to be giving oil away for nothing? It's

561
00:32:17,360 --> 00:32:21,120
Speaker 1: getting close, I mean, certainly elaborates which doesn't as you know,

562
00:32:21,240 --> 00:32:24,760
Speaker 1: have a traditionally strong hand of cards when dealing with Russia.

563
00:32:25,160 --> 00:32:28,240
Speaker 1: But there are reports that Belarius offered four dollars a

564
00:32:28,320 --> 00:32:32,640
Speaker 1: barrel and and and the bid was hit by Russia. Though. Yeah,

565
00:32:32,680 --> 00:32:36,320
Speaker 1: things are obviously extraordinarily low and will remain that way

566
00:32:36,320 --> 00:32:39,520
Speaker 1: because obviously the demand environment here is unlike anything other

567
00:32:39,600 --> 00:32:44,320
Speaker 1: than ever seen times five for tomorrow, Okay, plus is

568
00:32:44,360 --> 00:32:47,280
Speaker 1: mating that we're talking about supply. Can they do enough

569
00:32:47,320 --> 00:32:50,600
Speaker 1: on the supply side to offset this massive drop we've

570
00:32:50,600 --> 00:32:54,640
Speaker 1: had in demand over the last several months. Obviously not

571
00:32:54,760 --> 00:32:56,920
Speaker 1: in the short term, but I think the markets very

572
00:32:56,960 --> 00:33:01,600
Speaker 1: focused on the level of inventory build, which will follow

573
00:33:01,640 --> 00:33:05,600
Speaker 1: obviously from from excess production over lack of demands. The

574
00:33:05,680 --> 00:33:09,680
Speaker 1: question is, um, you know, how long does the inventory overhang?

575
00:33:09,680 --> 00:33:12,080
Speaker 1: And there's a risk which really tom was reference thing,

576
00:33:12,120 --> 00:33:16,360
Speaker 1: which is that if you ultimately exceed storage capacity, which

577
00:33:16,400 --> 00:33:19,400
Speaker 1: is within the parameters of the current market. That's when

578
00:33:19,400 --> 00:33:21,719
Speaker 1: you could go negative on price. We've talked about this

579
00:33:22,640 --> 00:33:26,240
Speaker 1: since the Opaque meeting early March, that if the cost

580
00:33:26,280 --> 00:33:28,480
Speaker 1: of storage is above the price of a barrel, the

581
00:33:28,520 --> 00:33:31,120
Speaker 1: price will be negative. And we've seen it with natural gas,

582
00:33:30,960 --> 00:33:33,760
Speaker 1: and you know, we've seen it actually with barking creues.

583
00:33:33,840 --> 00:33:36,560
Speaker 1: Further to what Tom was saying as recently as a

584
00:33:36,560 --> 00:33:40,000
Speaker 1: couple of weeks ago. So the key question here is

585
00:33:40,000 --> 00:33:43,600
Speaker 1: is the extent to which imagery overhang can be mitigated.

586
00:33:43,760 --> 00:33:45,720
Speaker 1: It's not very bullish for the old price because you

587
00:33:45,760 --> 00:33:48,840
Speaker 1: then have specupacity for production. But at least we don't

588
00:33:48,840 --> 00:33:51,680
Speaker 1: have a total cataclysm in terms of um, you know,

589
00:33:51,840 --> 00:33:55,560
Speaker 1: just the inability to manage this black fiscus, you know,

590
00:33:55,720 --> 00:34:00,040
Speaker 1: somewhat dangerous liquid. Paul to that point, I think of

591
00:34:00,400 --> 00:34:03,640
Speaker 1: my favorite, my favorite story on the Bloomberg is about

592
00:34:03,680 --> 00:34:08,040
Speaker 1: the cost to rent out supertankers. In six months, it

593
00:34:08,120 --> 00:34:11,160
Speaker 1: has surged to more than seventy thousand dollars a day,

594
00:34:11,200 --> 00:34:14,400
Speaker 1: from thirty to forty thousand a day earlier last month.

595
00:34:14,680 --> 00:34:17,840
Speaker 1: And I'm wondering when din't we reach that tipping point.

596
00:34:17,960 --> 00:34:21,160
Speaker 1: Let's say there is a ten million barrel per day

597
00:34:21,239 --> 00:34:24,400
Speaker 1: production cut which some people are hoping for between Saudi

598
00:34:24,480 --> 00:34:28,360
Speaker 1: Arabia and Russia. How long do we still have before

599
00:34:28,400 --> 00:34:33,960
Speaker 1: we sort of tip the scales and and and exceed capacity. Um, well,

600
00:34:34,000 --> 00:34:36,600
Speaker 1: actually there's a slew to that. There's an interesting development

601
00:34:36,640 --> 00:34:38,800
Speaker 1: this week, which is that with a lack of need

602
00:34:38,920 --> 00:34:43,040
Speaker 1: for pipelines in the US, Phillips sixty thinks, for example,

603
00:34:43,120 --> 00:34:46,440
Speaker 1: is offering its new pipeline is a storage facility. So this,

604
00:34:46,840 --> 00:34:48,680
Speaker 1: you know, this is a very innovativety know in the

605
00:34:48,960 --> 00:34:53,480
Speaker 1: industry that can manage the extreme situations. So there's we

606
00:34:53,560 --> 00:34:55,640
Speaker 1: always thought that there would be a lot of different ways.

607
00:34:55,680 --> 00:34:58,960
Speaker 1: Filling train cars is another one, but as you can imagine,

608
00:34:58,960 --> 00:35:01,560
Speaker 1: and the old joke is the starts swimming filling swimming

609
00:35:01,560 --> 00:35:05,360
Speaker 1: pools around Houston. But you know that the fact is

610
00:35:05,480 --> 00:35:10,040
Speaker 1: that by by June, at the current rate, assuming that

611
00:35:10,120 --> 00:35:12,480
Speaker 1: New York is at a lockdown twenty eighth of April,

612
00:35:13,360 --> 00:35:16,160
Speaker 1: you would still be that the Saudi oil is on

613
00:35:16,239 --> 00:35:19,000
Speaker 1: the water, as you know, so that hits in May.

614
00:35:19,239 --> 00:35:22,120
Speaker 1: Um that May period is the one where you have

615
00:35:22,160 --> 00:35:26,000
Speaker 1: the lowest refining utilization with the highest supply, and that's

616
00:35:26,040 --> 00:35:27,960
Speaker 1: the point where you think that maybe we'll go over

617
00:35:28,000 --> 00:35:31,919
Speaker 1: the top of the tanks beyond that, hopefully demanded snapping back,

618
00:35:32,000 --> 00:35:33,640
Speaker 1: I think, you know, and I'm sure you guys have

619
00:35:33,680 --> 00:35:35,239
Speaker 1: a stronger you than me, But I don't think you

620
00:35:35,239 --> 00:35:38,680
Speaker 1: can keep the US economy, New York economy shutdown much

621
00:35:38,719 --> 00:35:41,080
Speaker 1: beyond the twenty eight I'd add that Tom would be

622
00:35:41,160 --> 00:35:44,239
Speaker 1: very interested by the combination here of OPEC plus and

623
00:35:44,280 --> 00:35:48,719
Speaker 1: then an emergency meeting of G twenty energy ministers on

624
00:35:48,800 --> 00:35:53,799
Speaker 1: Good Friday is also a very interesting moment the loyal history. Well, Paul,

625
00:35:53,840 --> 00:35:55,360
Speaker 1: let's talk about it. What do you expect the outcome

626
00:35:55,360 --> 00:35:58,160
Speaker 1: of that meeting to actually be? And when the Russians

627
00:35:58,160 --> 00:36:00,879
Speaker 1: start talking about US participation, I think a question we've

628
00:36:00,880 --> 00:36:02,719
Speaker 1: had on a program like this is what does US

629
00:36:02,760 --> 00:36:07,640
Speaker 1: participation in any cuts actually look like? Well, from the

630
00:36:07,680 --> 00:36:11,120
Speaker 1: Russian point of view, less sanctions, I think you can.

631
00:36:11,920 --> 00:36:14,160
Speaker 1: I don't think it will be explicitly, you know, I

632
00:36:14,160 --> 00:36:15,959
Speaker 1: don't think anyone's going to be dumb enough to link

633
00:36:15,960 --> 00:36:18,200
Speaker 1: it directly to the outcome of the meeting, But I

634
00:36:18,239 --> 00:36:21,520
Speaker 1: think in a few weeks time you might find, you know,

635
00:36:21,560 --> 00:36:23,680
Speaker 1: things are a bit easier for Russians around the world,

636
00:36:24,160 --> 00:36:27,680
Speaker 1: But in all seriousness, it's it's obviously a very big deal.

637
00:36:27,719 --> 00:36:29,800
Speaker 1: And it was described to me by your own truly

638
00:36:29,800 --> 00:36:32,239
Speaker 1: excellent journalists. Have you a Blast was saying this is

639
00:36:32,280 --> 00:36:35,080
Speaker 1: actually too big to fail. You know, Saudi's got so

640
00:36:35,160 --> 00:36:38,840
Speaker 1: much on the line here. If obviously it's annoyedly go ahead.

641
00:36:38,840 --> 00:36:40,719
Speaker 1: But I was just gonna say, it's enormously risky to

642
00:36:40,760 --> 00:36:44,239
Speaker 1: bring together the G twenty energy ministers at a time

643
00:36:44,320 --> 00:36:48,920
Speaker 1: like now and not deliver on Good Friday, exactly deliver

644
00:36:49,000 --> 00:36:51,400
Speaker 1: a big deal. You know. Well, let's help Pavey Blast

645
00:36:51,480 --> 00:36:53,319
Speaker 1: with his next story. Paul, we can all do that

646
00:36:53,360 --> 00:36:57,840
Speaker 1: together here. What is your recommendation of the correct approach

647
00:36:58,360 --> 00:37:01,000
Speaker 1: of the State Department and I guess our Energy Department

648
00:37:01,000 --> 00:37:04,480
Speaker 1: in Washington in these two sets of talks, what is

649
00:37:04,520 --> 00:37:07,600
Speaker 1: the most efficacious way for the US to help the

650
00:37:07,600 --> 00:37:10,920
Speaker 1: world out of this mess? Well, I think the optics

651
00:37:10,920 --> 00:37:14,080
Speaker 1: that they point to yesterday's short term energy Outlook published

652
00:37:14,080 --> 00:37:17,439
Speaker 1: by the US Department of Energy, and and they've got

653
00:37:17,560 --> 00:37:19,439
Speaker 1: production down, you know, a million, million and a half

654
00:37:19,440 --> 00:37:21,960
Speaker 1: barrels a day this year, and say, there you go,

655
00:37:22,120 --> 00:37:24,279
Speaker 1: that's the market and we will be cutting and that's

656
00:37:24,320 --> 00:37:26,880
Speaker 1: good enough for Stauity quite frankly, and then it becomes

657
00:37:26,880 --> 00:37:30,799
Speaker 1: a question of Russia versus Sauty, which is another very

658
00:37:30,840 --> 00:37:34,520
Speaker 1: interesting issue which surrounds a the fact that Staudi is

659
00:37:34,560 --> 00:37:37,239
Speaker 1: at search levels, so they're at over twelve million. Are

660
00:37:37,239 --> 00:37:39,839
Speaker 1: they cutting from there or are they cutting from where

661
00:37:39,840 --> 00:37:42,759
Speaker 1: they were before they searched. That's the problem for the Russians.

662
00:37:43,239 --> 00:37:45,880
Speaker 1: The Russians are physically constrained that they're going to have

663
00:37:45,920 --> 00:37:48,400
Speaker 1: to cut anyway, so they're starting with a cut offer.

664
00:37:48,920 --> 00:37:51,319
Speaker 1: But the understanding is the Russia is only down I

665
00:37:51,360 --> 00:37:53,920
Speaker 1: think only down about a million barrels a day. But

666
00:37:54,000 --> 00:37:56,480
Speaker 1: also it doesn't have storage, you know, they're short storage

667
00:37:56,480 --> 00:37:59,879
Speaker 1: where Staudy is not. Additionally, technically, Snawity can just flick

668
00:37:59,880 --> 00:38:03,239
Speaker 1: a switch. They've signed this system to be uh you know,

669
00:38:03,360 --> 00:38:05,040
Speaker 1: they can just turn it off and there's no damage,

670
00:38:05,040 --> 00:38:07,960
Speaker 1: whereas if Russia cuts hard, that's going to damage that

671
00:38:08,040 --> 00:38:11,680
Speaker 1: productive capacity, which is a key point. So you know,

672
00:38:11,719 --> 00:38:13,480
Speaker 1: there's a ton of things here. And then of course,

673
00:38:13,520 --> 00:38:16,520
Speaker 1: as you mentioned, Albertsa is cutting a million. I think

674
00:38:16,560 --> 00:38:19,000
Speaker 1: Brazil is struggling to so so there's a lot of

675
00:38:19,040 --> 00:38:23,480
Speaker 1: optical cut to the market driven West Saudi. Okay, it's

676
00:38:23,520 --> 00:38:26,640
Speaker 1: really just Russia versus Saudi that we're worried about. Paul,

677
00:38:26,680 --> 00:38:28,160
Speaker 1: thank you, thank you so much. Let us know in

678
00:38:28,200 --> 00:38:30,360
Speaker 1: a gallon a guest gets under a dollar gallon that

679
00:38:30,400 --> 00:38:33,440
Speaker 1: would like to know that as well. He is with missool.

680
00:38:34,040 --> 00:38:38,239
Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and

681
00:38:38,320 --> 00:38:43,640
Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast

682
00:38:43,680 --> 00:38:47,920
Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before

683
00:38:47,960 --> 00:38:51,760
Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg

684
00:38:51,880 --> 00:38:52,160
Speaker 1: Radio