1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio News. You're listening to the 2 00:00:10,119 --> 00:00:14,160 Speaker 1: Bloomberg Balance of Power podcast ketsays live weekdays at noon 3 00:00:14,240 --> 00:00:17,440 Speaker 1: and five pm Eastern on Apple Cocklay and Android Auto 4 00:00:17,520 --> 00:00:20,680 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 5 00:00:20,720 --> 00:00:25,040 Speaker 1: get your podcasts, or watch us live on YouTube. 6 00:00:25,680 --> 00:00:27,480 Speaker 2: We are just shy of one hundred dollars a barrel 7 00:00:27,520 --> 00:00:30,280 Speaker 2: on Brent about a ninety four to sixty six right 8 00:00:30,320 --> 00:00:31,600 Speaker 2: now on WTI. 9 00:00:31,640 --> 00:00:31,720 Speaker 3: It. 10 00:00:31,720 --> 00:00:34,640 Speaker 2: Of course, higher price per barrel does translate into higher 11 00:00:34,680 --> 00:00:38,519 Speaker 2: prices at the pump if you're an American consumer and 12 00:00:38,600 --> 00:00:41,479 Speaker 2: driver of a vehicle. This creates quite the political problem 13 00:00:41,520 --> 00:00:43,879 Speaker 2: for the President and frankly for the Republican Party as 14 00:00:43,880 --> 00:00:46,919 Speaker 2: we get closer to the midterms. The question is how 15 00:00:46,920 --> 00:00:48,879 Speaker 2: does the President respond? Does it make him change his 16 00:00:48,920 --> 00:00:53,479 Speaker 2: calculation when it comes to what the US and Israel 17 00:00:53,560 --> 00:00:57,000 Speaker 2: are doing in Iran at the moment, considering that Iran 18 00:00:57,080 --> 00:01:00,680 Speaker 2: has effectively made the straight Offoe Mows closed to transit 19 00:01:00,680 --> 00:01:03,000 Speaker 2: for this time, our very own colleague Bloomberg Josh Wingrove, 20 00:01:03,120 --> 00:01:04,959 Speaker 2: was asking the President about the this aboard Air Force 21 00:01:05,000 --> 00:01:07,240 Speaker 2: one last night Take a listen. 22 00:01:07,480 --> 00:01:08,800 Speaker 4: One about the strain of war moves. 23 00:01:08,840 --> 00:01:11,520 Speaker 5: There's no traffic really going through Brown's you know, in 24 00:01:11,520 --> 00:01:15,199 Speaker 5: the ship's choices. But we haven't leaned out. We've wiped 25 00:01:15,200 --> 00:01:18,800 Speaker 5: out their navy. The navy is now at the bottom 26 00:01:18,840 --> 00:01:23,039 Speaker 5: of the sea. So that's the choice. This is an excurgeon. 27 00:01:23,040 --> 00:01:25,480 Speaker 5: When we figure to out prices, we go up. We say, well, 28 00:01:26,440 --> 00:01:28,760 Speaker 5: they'll also come down. They'll come down very fast, and 29 00:01:28,840 --> 00:01:32,600 Speaker 5: we will have gotten rid of a major cancer by 30 00:01:32,680 --> 00:01:33,600 Speaker 5: the face of the earth. 31 00:01:35,280 --> 00:01:37,960 Speaker 6: Now, the President is pointing us to a news conference 32 00:01:38,000 --> 00:01:41,119 Speaker 6: that will take place a few hours from now, remembering 33 00:01:41,160 --> 00:01:45,120 Speaker 6: they're all in Miami at Durral for the GOP retreat. 34 00:01:45,200 --> 00:01:47,560 Speaker 6: The President says, I'll be going to speaker Mike Johnson's 35 00:01:47,560 --> 00:01:51,640 Speaker 6: fundraising event at four PM. Then prior to leaving four DC, 36 00:01:51,880 --> 00:01:54,600 Speaker 6: I will hold a news conference from a dural ballroom 37 00:01:55,040 --> 00:01:57,160 Speaker 6: at approximately five point thirty pm. 38 00:01:57,200 --> 00:01:59,040 Speaker 4: Thank you for your attention to this matter. 39 00:01:59,520 --> 00:02:02,640 Speaker 6: Bloomberg Washington correspondent Tyler Kendall is on the North Lawn 40 00:02:02,640 --> 00:02:05,000 Speaker 6: on a beautiful day to day in the nation's capital, 41 00:02:05,080 --> 00:02:08,359 Speaker 6: not maybe as nice as Miami. Tyler, what's the President 42 00:02:08,400 --> 00:02:11,520 Speaker 6: going to have in store for reporters when he meets 43 00:02:11,520 --> 00:02:12,399 Speaker 6: the press later. 44 00:02:13,160 --> 00:02:15,280 Speaker 3: Yeah, Hey, Joe. Well, at this point, there's a lot 45 00:02:15,280 --> 00:02:18,360 Speaker 3: of questions about exactly what you and Kaylee were outlining 46 00:02:18,400 --> 00:02:21,720 Speaker 3: when it comes to what's turning into higher retail gas 47 00:02:21,760 --> 00:02:25,079 Speaker 3: prices at the pump. And so far the Trump administration 48 00:02:25,120 --> 00:02:28,360 Speaker 3: has really been downplaying the oil price spike. Right. You 49 00:02:28,440 --> 00:02:31,399 Speaker 3: had the Energy Secretary Christopher Wright in an interview over 50 00:02:31,440 --> 00:02:33,600 Speaker 3: the weekend saying that this is not going to be 51 00:02:34,120 --> 00:02:37,040 Speaker 3: a long term conflict. The thing is we're seeing major 52 00:02:37,080 --> 00:02:40,399 Speaker 3: Middle East producers cut production. The straight up for moves 53 00:02:40,440 --> 00:02:43,800 Speaker 3: is effectively closed. And President Trump previewed over the weekend 54 00:02:43,840 --> 00:02:46,720 Speaker 3: that the conflict is expected to widen as the US 55 00:02:46,760 --> 00:02:49,440 Speaker 3: looks to expand its list of targets. Throw on that, 56 00:02:49,480 --> 00:02:52,720 Speaker 3: Bloomberg News now reporting that President Trump is looking at 57 00:02:52,800 --> 00:02:58,160 Speaker 3: deploying special forces to potentially extract Iron's stockpile of highly 58 00:02:58,280 --> 00:03:01,520 Speaker 3: enriched uranium. And at the moment, it doesn't feel like 59 00:03:01,600 --> 00:03:04,400 Speaker 3: there is de escalation on the table, which is leading 60 00:03:04,440 --> 00:03:07,919 Speaker 3: to questions on just how long this disruption will last. 61 00:03:07,960 --> 00:03:09,240 Speaker 2: Now, it appears that. 62 00:03:10,760 --> 00:03:13,520 Speaker 3: A G seven meeting earlier today, in a statement that 63 00:03:13,560 --> 00:03:16,720 Speaker 3: came from it, ease some concerns about oil supplies. The 64 00:03:16,760 --> 00:03:20,600 Speaker 3: G seven finance ministers ultimately saying that they're not ready 65 00:03:20,639 --> 00:03:25,960 Speaker 3: yet to deploy from their strategic stock piles however, and reserves. 66 00:03:26,000 --> 00:03:28,800 Speaker 3: When it comes to oil, however, the option is still 67 00:03:28,919 --> 00:03:31,000 Speaker 3: on the table. That's one thing that we're looking at, 68 00:03:31,120 --> 00:03:34,119 Speaker 3: Joe and Keiley, as there's new reporting out from Reuters 69 00:03:34,120 --> 00:03:36,520 Speaker 3: that President Trump has an array of options he could 70 00:03:36,520 --> 00:03:40,840 Speaker 3: be considering when it comes to oil. This includes export curbs, 71 00:03:40,880 --> 00:03:43,640 Speaker 3: intervening in oil futures markets, and then also potentially a 72 00:03:43,680 --> 00:03:46,280 Speaker 3: gas tax holiday. That's something that we had heard rumbling 73 00:03:46,360 --> 00:03:49,400 Speaker 3: Zump last week. It would only be temporary and it 74 00:03:49,440 --> 00:03:52,800 Speaker 3: would re wire Congress to get done, which isn't leaving 75 00:03:52,840 --> 00:03:55,320 Speaker 3: this White House at the moment with that many options. 76 00:03:56,440 --> 00:03:58,360 Speaker 2: Yeah, we of course heard a lot about that back 77 00:03:58,360 --> 00:04:01,240 Speaker 2: in twenty twenty two as well, when Russia invaded Ukraine, 78 00:04:01,240 --> 00:04:03,080 Speaker 2: and we know how that went. Tyler, I also am 79 00:04:03,120 --> 00:04:05,760 Speaker 2: curious about how the White House is messaging, knowing that 80 00:04:05,800 --> 00:04:08,520 Speaker 2: President Trump, when he's outlined the objectives of this conflict 81 00:04:08,560 --> 00:04:11,240 Speaker 2: with Iran, has said time and again that he would 82 00:04:11,280 --> 00:04:13,840 Speaker 2: like to see a regime change and that he wanted 83 00:04:13,880 --> 00:04:15,680 Speaker 2: to be involved. He said last week in the selection 84 00:04:16,000 --> 00:04:19,200 Speaker 2: of the leader, what's the administration's response to the fact 85 00:04:19,200 --> 00:04:21,679 Speaker 2: that now it's the Supreme leaders, the deceased Supreme leader's 86 00:04:21,680 --> 00:04:23,839 Speaker 2: son who has become Iran's next supreme leader. 87 00:04:24,360 --> 00:04:26,520 Speaker 3: Well, Kayley, we heard directly from President Trump in an 88 00:04:26,520 --> 00:04:28,599 Speaker 3: interview over the weekend where he said that he is 89 00:04:28,720 --> 00:04:31,800 Speaker 3: quote not happy, as analysts point to the fact that 90 00:04:31,960 --> 00:04:35,560 Speaker 3: this does signal a continuation of a hard line regime, 91 00:04:35,680 --> 00:04:37,960 Speaker 3: and this likely isn't going to be a leader that's 92 00:04:38,000 --> 00:04:40,360 Speaker 3: going to look to cooperate with the US. As you 93 00:04:40,440 --> 00:04:42,560 Speaker 3: well know, the White House was hoping that there could 94 00:04:42,600 --> 00:04:45,680 Speaker 3: be a more amenable leader to the US's demands, as 95 00:04:45,720 --> 00:04:48,280 Speaker 3: President Trump last week inside the Oval Office said that 96 00:04:48,320 --> 00:04:52,000 Speaker 3: the potential worst case scenario for this military conflict would 97 00:04:52,000 --> 00:04:54,880 Speaker 3: be if new leadership in Iran was quote just as 98 00:04:54,920 --> 00:04:57,520 Speaker 3: bad as the old regime. Now, it is important to 99 00:04:57,520 --> 00:05:00,880 Speaker 3: point out this new leader is closely aligned with the IRGC, 100 00:05:01,080 --> 00:05:04,600 Speaker 3: that military faction within Iran, and that is something critical 101 00:05:04,640 --> 00:05:07,200 Speaker 3: to look out for here, because we heard from Iran's 102 00:05:07,200 --> 00:05:10,560 Speaker 3: president actually over the weekend saying that he has instructed 103 00:05:10,800 --> 00:05:15,839 Speaker 3: the military not to strike countries that are not striking Iran. 104 00:05:15,920 --> 00:05:18,080 Speaker 3: But then just today we have these headlines coming out 105 00:05:18,080 --> 00:05:22,800 Speaker 3: that NATO is intercepting missiles headed for Turkey. So there 106 00:05:22,800 --> 00:05:26,480 Speaker 3: seems to be a little bit of a distance perhaps 107 00:05:26,480 --> 00:05:30,080 Speaker 3: between Iran's president and now the new Supreme Leader, though 108 00:05:30,120 --> 00:05:32,600 Speaker 3: at this point the president did come out. Iran's president 109 00:05:32,680 --> 00:05:35,200 Speaker 3: did come out after those remarks and said the regime 110 00:05:35,240 --> 00:05:38,239 Speaker 3: is ultimately not going to back down. As Joan Kelly, 111 00:05:38,279 --> 00:05:41,039 Speaker 3: it feels like there is no a diplomatic off ramp 112 00:05:41,160 --> 00:05:42,159 Speaker 3: right now on the table. 113 00:05:43,600 --> 00:05:45,960 Speaker 2: All right, Bloomberg, Tyler Kendall live at the White House, 114 00:05:46,200 --> 00:05:48,080 Speaker 2: Thank you so much. As Tyler points to the fact 115 00:05:48,080 --> 00:05:50,560 Speaker 2: that there are now missiles being lobbed at Turkey. Of course, 116 00:05:50,760 --> 00:05:53,000 Speaker 2: many countries in the Middle East have been targeted by 117 00:05:53,040 --> 00:05:55,920 Speaker 2: Iran's retaliation. It does feel like a very dangerous moment 118 00:05:55,960 --> 00:05:58,320 Speaker 2: in the large part of the world, in the area 119 00:05:58,360 --> 00:06:00,479 Speaker 2: surrounding the Middle East. But to hear this Secretary of 120 00:06:00,480 --> 00:06:03,360 Speaker 2: State Mark Rubio say it, this moment is going to 121 00:06:03,440 --> 00:06:06,120 Speaker 2: lead us to more safety in the long term. Take 122 00:06:06,120 --> 00:06:07,279 Speaker 2: a listen to Secretary. 123 00:06:07,560 --> 00:06:09,640 Speaker 7: I want everyone to know your military is getting the 124 00:06:09,720 --> 00:06:12,760 Speaker 7: job done, and every single day this regime in Iran 125 00:06:12,920 --> 00:06:16,320 Speaker 7: has less missiles, has less launchers, their factories work less, 126 00:06:16,320 --> 00:06:18,680 Speaker 7: and their navy is being eviscerated, and the world is 127 00:06:18,680 --> 00:06:20,840 Speaker 7: going to be a safer and a better place when 128 00:06:20,839 --> 00:06:22,160 Speaker 7: this mission is accomplished. 129 00:06:24,040 --> 00:06:26,760 Speaker 2: Let's see how our next guest feels about that statement. 130 00:06:26,839 --> 00:06:29,719 Speaker 2: Jane Harmon is with us, the former Democratic Congressman from California, 131 00:06:29,800 --> 00:06:32,719 Speaker 2: former ranking member of the House Intelligence Committee, also author 132 00:06:32,800 --> 00:06:36,880 Speaker 2: of Insanity Defense. Why failure to confront hard national security 133 00:06:36,920 --> 00:06:40,359 Speaker 2: problems makes us less safe? So let's talk Jane and 134 00:06:40,360 --> 00:06:42,520 Speaker 2: welcome back to Bloomberg TV and Radio, about what is 135 00:06:42,520 --> 00:06:46,160 Speaker 2: making us less or more safe? Ultimately, does this conflict 136 00:06:46,160 --> 00:06:48,640 Speaker 2: with Iran bring the Middle East and bring the world 137 00:06:48,680 --> 00:06:50,040 Speaker 2: to a better place? 138 00:06:51,960 --> 00:06:53,280 Speaker 8: I think ultimately no. 139 00:06:54,040 --> 00:06:57,000 Speaker 9: I think there are some aspects that are positive, such 140 00:06:57,040 --> 00:07:02,960 Speaker 9: as degrading further Iran's military capacity. Let's understand, its nuclear 141 00:07:03,560 --> 00:07:06,880 Speaker 9: ability was not obliterated as the administration claimed a few 142 00:07:06,880 --> 00:07:09,600 Speaker 9: months ago, and they're trying to rebuild right now. But 143 00:07:09,920 --> 00:07:12,920 Speaker 9: I think I think those little bombs in New York 144 00:07:12,920 --> 00:07:16,960 Speaker 9: City a day ago, I think that the homeland attacks 145 00:07:16,960 --> 00:07:20,560 Speaker 9: could increase, especially now that our Homeland Department has been 146 00:07:20,640 --> 00:07:23,920 Speaker 9: pretty pretty neutered at the top. 147 00:07:24,800 --> 00:07:27,080 Speaker 8: But here's what I would say. 148 00:07:27,360 --> 00:07:29,280 Speaker 9: I say the big winners and there are only two 149 00:07:29,520 --> 00:07:33,920 Speaker 9: and they are Russia and China. We've waived additional sanctions 150 00:07:33,920 --> 00:07:36,120 Speaker 9: on Russia. I thought we were going to increase them 151 00:07:36,520 --> 00:07:40,520 Speaker 9: to stop Russia Russia's invasion of Ukraine, but we've waived them, 152 00:07:40,520 --> 00:07:43,800 Speaker 9: and they're selling oil, making money, and they can perpetuate the. 153 00:07:43,760 --> 00:07:44,680 Speaker 8: War in Ukraine. 154 00:07:45,040 --> 00:07:48,720 Speaker 9: And China now benefits from the fact that we have 155 00:07:48,840 --> 00:07:53,600 Speaker 9: repivoted to the Middle East. We have fewer assets in 156 00:07:53,720 --> 00:07:59,640 Speaker 9: Asia against China. China is building is not just rebuilding, 157 00:07:59,640 --> 00:08:03,720 Speaker 9: but bilding enormous military capacity, and it seems to me 158 00:08:04,200 --> 00:08:04,680 Speaker 9: has all. 159 00:08:04,600 --> 00:08:06,120 Speaker 8: The moral authority it needs. 160 00:08:06,440 --> 00:08:09,160 Speaker 9: I hope it doesn't do this to annex Taiwan, given 161 00:08:09,240 --> 00:08:09,920 Speaker 9: what we're doing. 162 00:08:10,280 --> 00:08:11,760 Speaker 8: So who are the losers? 163 00:08:12,040 --> 00:08:15,680 Speaker 9: The big losers our president, ultimately, I would predict, but 164 00:08:15,800 --> 00:08:19,080 Speaker 9: in the shorter term the United States Congress, which is 165 00:08:19,120 --> 00:08:22,600 Speaker 9: sitting by and doing nothing. The Senate punted on the 166 00:08:22,680 --> 00:08:26,800 Speaker 9: vote last week to invote the War Powers Act. They 167 00:08:26,800 --> 00:08:29,720 Speaker 9: didn't even vote on it. And so the President is 168 00:08:29,760 --> 00:08:32,920 Speaker 9: claiming free reign to do whatever he wants, including charging 169 00:08:33,040 --> 00:08:36,079 Speaker 9: taxpayers one to two billion dollars a day to support 170 00:08:36,080 --> 00:08:39,079 Speaker 9: the effort we have underway, and that effort is leading 171 00:08:39,120 --> 00:08:42,760 Speaker 9: to the highest gas prices in American history. So if 172 00:08:42,800 --> 00:08:45,520 Speaker 9: I were the Congress, this is advice to both parties. 173 00:08:45,720 --> 00:08:48,199 Speaker 9: I'd figure out a way to work together to stop this. 174 00:08:48,679 --> 00:08:50,880 Speaker 9: And I'd also figure out a way, if you want 175 00:08:50,880 --> 00:08:53,920 Speaker 9: to win your election, to show that you're doing anything. 176 00:08:54,760 --> 00:08:57,280 Speaker 9: The President is trampling on the Article one branch of 177 00:08:57,320 --> 00:08:57,880 Speaker 9: our government. 178 00:09:00,040 --> 00:09:03,720 Speaker 6: Jane is referring to the improvised explosive that was thrown 179 00:09:03,760 --> 00:09:06,200 Speaker 6: near Mayor Mom Donnie's residence. And I just want to 180 00:09:06,240 --> 00:09:09,840 Speaker 6: mention quickly the Attorney General, Pam Bondi Jane just posted 181 00:09:09,880 --> 00:09:12,880 Speaker 6: on Twitter. We have indicted the two alleged ISIS inspired 182 00:09:12,960 --> 00:09:15,160 Speaker 6: terrorists whot tempted a bomb of protest in New York. 183 00:09:15,200 --> 00:09:16,520 Speaker 4: She's got a couple of pictures here. 184 00:09:16,840 --> 00:09:19,920 Speaker 6: We will not allow ISIS as poisonous anti American ideology 185 00:09:19,960 --> 00:09:22,720 Speaker 6: to threaten this nation. And I know that the ongoing threat, 186 00:09:22,760 --> 00:09:26,880 Speaker 6: whether it's from a cell or a lone wolf, is 187 00:09:26,920 --> 00:09:29,079 Speaker 6: a very real one. But I'd like to just ask you, 188 00:09:29,640 --> 00:09:32,480 Speaker 6: with the prospect of a potentially widening war, Jane, and 189 00:09:32,520 --> 00:09:34,080 Speaker 6: it's great to have you back today, what do you 190 00:09:34,160 --> 00:09:37,600 Speaker 6: make of not once, but twice NATO having to intercept 191 00:09:37,640 --> 00:09:42,000 Speaker 6: the ballistic missile fire from Iran in Turkish airspace, and 192 00:09:42,040 --> 00:09:45,040 Speaker 6: in fact today we saw a debris fall in southern 193 00:09:45,040 --> 00:09:48,640 Speaker 6: Turkey about one hundred and fifty miles away from an 194 00:09:48,640 --> 00:09:49,199 Speaker 6: air base. 195 00:09:49,640 --> 00:09:52,280 Speaker 4: Why are these not Article five incursions? 196 00:09:53,240 --> 00:09:56,120 Speaker 9: They are Article five incursions, or they could be the 197 00:09:56,120 --> 00:09:59,679 Speaker 9: country that's attacked has to invoke Article five and maybe 198 00:09:59,720 --> 00:10:01,880 Speaker 9: Turkey he is holding back. Turkey has a kind of 199 00:10:01,920 --> 00:10:05,160 Speaker 9: complicated relationship in the Middle East with all these countries 200 00:10:05,160 --> 00:10:09,160 Speaker 9: in case you missed it, but maybe they're holding back. 201 00:10:09,160 --> 00:10:13,720 Speaker 9: But let's see what else happens. There was an explosion 202 00:10:13,800 --> 00:10:18,240 Speaker 9: in Norway yesterday and nobody has been able to trace that. 203 00:10:18,240 --> 00:10:22,920 Speaker 9: That's another new Article five new NATO countries, So let's 204 00:10:22,920 --> 00:10:26,600 Speaker 9: see if Iron is provoking Europe. Might be true. But 205 00:10:26,640 --> 00:10:31,880 Speaker 9: the other piece of this shoe is the domestic fallout. 206 00:10:32,200 --> 00:10:36,800 Speaker 9: Domestic USA fallout. Those IEDs in New York couldn't might 207 00:10:36,880 --> 00:10:38,960 Speaker 9: not be a one office you point out, This could 208 00:10:39,000 --> 00:10:41,360 Speaker 9: be going on in the country, you know, think Washington, 209 00:10:41,440 --> 00:10:41,679 Speaker 9: d C. 210 00:10:42,120 --> 00:10:42,640 Speaker 8: Someplace. 211 00:10:42,920 --> 00:10:47,160 Speaker 9: It's not that hard, unfortunately, to be inspired and then 212 00:10:47,200 --> 00:10:50,280 Speaker 9: to carry out a terror attack, and that could be 213 00:10:50,360 --> 00:10:53,679 Speaker 9: our new future in the United States. But meanwhile, soaring 214 00:10:53,800 --> 00:10:59,480 Speaker 9: gas prices, the markets are unstable, and Congress is sitting 215 00:10:59,480 --> 00:11:03,480 Speaker 9: on its hand. And let's let's understand these costs. Congress 216 00:11:03,520 --> 00:11:07,040 Speaker 9: can't duckt voting on the budget. Eventually Congress will have 217 00:11:07,080 --> 00:11:09,480 Speaker 9: to vote on the budget. Yes, it can have a 218 00:11:09,600 --> 00:11:12,320 Speaker 9: broader government shutdown than the one we already have that's 219 00:11:12,320 --> 00:11:16,280 Speaker 9: causing law of TSA lines. But if Congress can't find 220 00:11:16,280 --> 00:11:18,400 Speaker 9: a way out of this, I don't know what the 221 00:11:18,600 --> 00:11:23,680 Speaker 9: justification is to anyone for anyone to be there. And yes, 222 00:11:23,720 --> 00:11:26,680 Speaker 9: there are some well motivated people in both parties in Congress. 223 00:11:26,840 --> 00:11:29,440 Speaker 9: Seems like more in the minority party a lot more 224 00:11:29,679 --> 00:11:32,520 Speaker 9: at the moment. But would what would I like to see? 225 00:11:32,559 --> 00:11:34,960 Speaker 9: I would like to see a function in Congress that 226 00:11:35,080 --> 00:11:38,760 Speaker 9: holds the president across the board in check for this 227 00:11:39,240 --> 00:11:43,679 Speaker 9: completely unprovoked war of choice, which is hugely dangerous and 228 00:11:43,720 --> 00:11:48,920 Speaker 9: which was I guess inspired to some extent by his 229 00:11:49,640 --> 00:11:53,440 Speaker 9: friendship with bb net and Yahoo. But even Israel, my 230 00:11:53,640 --> 00:11:58,280 Speaker 9: view is now seems to have free license to bomb 231 00:11:58,360 --> 00:12:01,960 Speaker 9: the refineries in in Iran and to be doing a 232 00:12:02,080 --> 00:12:04,840 Speaker 9: huge amount of bombing along the southern coast of Lebanon 233 00:12:05,400 --> 00:12:08,720 Speaker 9: to prevent Hesboa from ever coming back. It seems to 234 00:12:08,720 --> 00:12:11,480 Speaker 9: me that we're better options that we could have taken, 235 00:12:11,640 --> 00:12:16,960 Speaker 9: and sadly we missed the movie. 236 00:12:18,559 --> 00:12:20,640 Speaker 2: Well as you talk about all the different bombs that 237 00:12:20,679 --> 00:12:23,800 Speaker 2: are dropping, Jane, the munitions that we are expending. You 238 00:12:23,880 --> 00:12:26,160 Speaker 2: of course used to lead the Commission on the National 239 00:12:26,200 --> 00:12:29,280 Speaker 2: Defense Strategy. So I'm wondering, after this conflict is over, 240 00:12:29,320 --> 00:12:32,720 Speaker 2: whenever that may be, what kind of strategic disadvantage we 241 00:12:32,760 --> 00:12:34,800 Speaker 2: may be in having expended all of this, knowing the 242 00:12:34,840 --> 00:12:37,800 Speaker 2: defense industrial base is only capable of producing so much 243 00:12:38,120 --> 00:12:39,760 Speaker 2: so quickly in order to restock. 244 00:12:40,679 --> 00:12:44,800 Speaker 9: Well, great question, and to be fair, our commission recommended 245 00:12:44,960 --> 00:12:50,960 Speaker 9: increased defense spending. We talked about the broken defense industrial 246 00:12:51,000 --> 00:12:55,360 Speaker 9: base that dib and ways to regenerate. We talked about 247 00:12:55,400 --> 00:12:57,720 Speaker 9: the fact that the business model of the tech sector 248 00:12:58,040 --> 00:13:00,480 Speaker 9: is much more efficient than the business model of the 249 00:13:00,480 --> 00:13:04,160 Speaker 9: Pentagon and urged that there be more synergy there. But 250 00:13:04,240 --> 00:13:06,840 Speaker 9: we also urged by the way that we use all 251 00:13:06,840 --> 00:13:11,040 Speaker 9: elements of national power, not just hard assets, but also 252 00:13:11,880 --> 00:13:15,080 Speaker 9: all the things Trump has dismantled. Sadly, this administration has 253 00:13:15,120 --> 00:13:20,480 Speaker 9: dismantled our soft power, our development, our State department. The 254 00:13:20,520 --> 00:13:23,360 Speaker 9: State Department is a shadow of its former self, our 255 00:13:23,440 --> 00:13:27,680 Speaker 9: use of partners and allies, and it's interesting to see. 256 00:13:27,840 --> 00:13:30,480 Speaker 9: It will be interesting to see what partners and allies 257 00:13:30,520 --> 00:13:35,160 Speaker 9: the US has if and when this Iran adventure ends again. 258 00:13:35,240 --> 00:13:39,080 Speaker 9: Let me say it is important to degrade Roun's military capacity. 259 00:13:39,920 --> 00:13:42,520 Speaker 9: The shock and of our military is impressive. It is 260 00:13:42,640 --> 00:13:45,240 Speaker 9: tragic that we've lost seven lives so far, and we 261 00:13:45,320 --> 00:13:48,800 Speaker 9: may lose more if the President is able as he 262 00:13:48,840 --> 00:13:51,839 Speaker 9: says he wants to to protect the traffic through the 263 00:13:51,840 --> 00:13:55,280 Speaker 9: Straits of Hormuz, which is blocking twenty percent of the 264 00:13:55,320 --> 00:14:01,920 Speaker 9: region's oil exports to the world. I just call on Congress, 265 00:14:02,320 --> 00:14:06,720 Speaker 9: get it together act, invoke the War Powers Act, put 266 00:14:06,760 --> 00:14:10,920 Speaker 9: strict limits on what goes on after this, and surely 267 00:14:11,200 --> 00:14:15,720 Speaker 9: get a handle on the costs, and make clear that 268 00:14:15,760 --> 00:14:19,400 Speaker 9: the American people have to be supporting this in order 269 00:14:19,520 --> 00:14:21,760 Speaker 9: for our president to go forward. 270 00:14:23,400 --> 00:14:25,600 Speaker 6: Jane, it's great to have you back. Let's stay in 271 00:14:25,640 --> 00:14:27,640 Speaker 6: touch as we learn more here. The next couple of 272 00:14:27,720 --> 00:14:30,520 Speaker 6: days could be interesting, both overseas and here at home. 273 00:14:30,560 --> 00:14:32,400 Speaker 4: I think we've already determined. 274 00:14:32,440 --> 00:14:35,600 Speaker 6: Jane Harmon, former Democratic congresswoman from California, a former ranking 275 00:14:36,040 --> 00:14:39,040 Speaker 6: member of the House Intel Committee and author of Insanity Defense. 276 00:14:39,040 --> 00:14:42,120 Speaker 6: Why are a failure to confront hard national security problems 277 00:14:42,120 --> 00:14:46,040 Speaker 6: makes us less safe. Kaylee, I'll remind everybody, for the 278 00:14:46,080 --> 00:14:48,880 Speaker 6: first time since February, employees of the diplomatic mission in 279 00:14:48,880 --> 00:14:54,120 Speaker 6: Saudi Arabia American employees have been given mandatory departure orders. 280 00:14:54,520 --> 00:14:56,840 Speaker 4: Mandatory they are not allowed. 281 00:14:56,560 --> 00:14:58,760 Speaker 6: To stay even if they want to, which could give 282 00:14:58,840 --> 00:15:00,240 Speaker 6: us a sense of what might be next. 283 00:15:00,360 --> 00:15:02,440 Speaker 2: Yeah, speaks to how dangerous this moment is in the 284 00:15:02,440 --> 00:15:04,840 Speaker 2: Middle East. And wonder what commentary we may get from 285 00:15:04,840 --> 00:15:07,000 Speaker 2: President Trump about that when he holds a news conference 286 00:15:07,000 --> 00:15:09,800 Speaker 2: from Florida later today Again that expected five thirty pm 287 00:15:10,240 --> 00:15:11,840 Speaker 2: Eastern time. We'll have more on that in the late 288 00:15:11,960 --> 00:15:14,560 Speaker 2: edition of Balance of Power. But still ahead here in 289 00:15:14,600 --> 00:15:16,600 Speaker 2: this hour here on Bloomberg TV and Radio will turn 290 00:15:16,640 --> 00:15:19,320 Speaker 2: to our political panel as we consider the political ramiflications 291 00:15:19,320 --> 00:15:19,720 Speaker 2: of all of this. 292 00:15:19,800 --> 00:15:21,760 Speaker 6: Here at home, they with us on Balance of Power. 293 00:15:21,760 --> 00:15:23,440 Speaker 6: We'll have much more coming up after this. 294 00:15:27,800 --> 00:15:31,280 Speaker 1: You're listening to the Bloomberg Balance of Power podcast ketch 295 00:15:31,320 --> 00:15:34,400 Speaker 1: Ys live weekdays at noon and five pm Eastern on 296 00:15:34,520 --> 00:15:37,760 Speaker 1: Apple Cockway and Android Auto with the Bloomberg Business app. 297 00:15:37,800 --> 00:15:40,800 Speaker 1: You can also listen live on Amazon Alexa from our 298 00:15:40,840 --> 00:15:45,960 Speaker 1: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 299 00:15:46,840 --> 00:15:49,000 Speaker 2: The House is not here in Washington. President Trump is 300 00:15:49,000 --> 00:15:52,280 Speaker 2: also not here in Washington. They're down in Florida. President 301 00:15:52,320 --> 00:15:54,920 Speaker 2: Trump is set to speak to the House GOP conference 302 00:15:54,960 --> 00:15:57,840 Speaker 2: as they have their retreat at Hesderau Golf Club, and 303 00:15:57,880 --> 00:16:00,320 Speaker 2: then shortly after at five thirty pm Eastern time, he's 304 00:16:00,320 --> 00:16:03,760 Speaker 2: planning to hold a news conference. We can imagine that 305 00:16:03,800 --> 00:16:07,080 Speaker 2: Iron will be featuring quite heavily on the agenda. I'm 306 00:16:07,120 --> 00:16:08,920 Speaker 2: sure he's going to get more questions about not just 307 00:16:08,960 --> 00:16:11,440 Speaker 2: the US's strategy here, Joe, but also his strategy for 308 00:16:11,520 --> 00:16:15,920 Speaker 2: combating what could be persistently potentially higher oil and gasoline prices. He, 309 00:16:15,960 --> 00:16:20,680 Speaker 2: of course, on true Social overnight suggested that higher oil 310 00:16:20,720 --> 00:16:23,440 Speaker 2: prices are a very small price to pay, and this 311 00:16:23,480 --> 00:16:26,680 Speaker 2: is a quote USA and World Safety and Peace. 312 00:16:26,880 --> 00:16:31,040 Speaker 6: Yeah, suggesting as well that if you don't understand where 313 00:16:31,040 --> 00:16:33,160 Speaker 6: he's coming from, then you're a fool. But of course, 314 00:16:33,160 --> 00:16:36,600 Speaker 6: now we've got an average for a regular unleaded nationally 315 00:16:36,880 --> 00:16:39,320 Speaker 6: of three dollars and forty seven cents, and that is 316 00:16:39,400 --> 00:16:41,960 Speaker 6: up pretty significantly from where we were on Friday, and 317 00:16:42,000 --> 00:16:45,160 Speaker 6: a lot of analysts, including Bob McNally and Tom Closa, 318 00:16:45,160 --> 00:16:48,200 Speaker 6: who was with us on Friday, Patrick de Hannick gas body. 319 00:16:48,240 --> 00:16:51,760 Speaker 6: They've all identified four dollars a gallon as a real possibility. 320 00:16:52,240 --> 00:16:54,280 Speaker 6: You were on the road over the weekend. You're in 321 00:16:54,360 --> 00:16:56,600 Speaker 6: Virginia three thirty nine across the board, you said, which 322 00:16:56,640 --> 00:16:57,080 Speaker 6: is interesting. 323 00:16:57,120 --> 00:16:59,920 Speaker 2: In Virginia to northern Virginia three thirty nine at every single. 324 00:16:59,640 --> 00:17:01,640 Speaker 4: Station, nobody wants to top the guy next door. 325 00:17:01,680 --> 00:17:04,439 Speaker 2: I guess not when prices are elevating this quickly. 326 00:17:04,520 --> 00:17:08,320 Speaker 6: It's really amazing, and it's really the heart of our 327 00:17:08,400 --> 00:17:10,720 Speaker 6: conversation with our political panel. 328 00:17:10,960 --> 00:17:11,800 Speaker 4: Let's bring them in right now. 329 00:17:11,840 --> 00:17:15,800 Speaker 6: Bloomberg Politics contributor Genie Shanzano, Democracy visiting fellow at Harvard 330 00:17:15,880 --> 00:17:19,520 Speaker 6: Kennedy School's Ash Center, and Republican strategist Mara Gillespie, Blue 331 00:17:19,560 --> 00:17:23,520 Speaker 6: Stack Strategies founder and veteran of John Bayner's Speaker's Office. 332 00:17:23,520 --> 00:17:25,400 Speaker 4: It's great to have you both here, Genie. 333 00:17:25,960 --> 00:17:29,240 Speaker 6: Democrats obviously don't want to be paying more for gasoline, 334 00:17:29,280 --> 00:17:32,560 Speaker 6: but the Machiavellian view would suggest that this is pretty 335 00:17:32,560 --> 00:17:35,800 Speaker 6: good for Democrats on the midterm campaign trail. Are you 336 00:17:35,800 --> 00:17:38,920 Speaker 6: making ads out of this post? Already a small price 337 00:17:39,000 --> 00:17:39,760 Speaker 6: to pay for peace. 338 00:17:41,400 --> 00:17:44,040 Speaker 10: Yeah, I'm sure ads will be made, But of course 339 00:17:44,119 --> 00:17:47,879 Speaker 10: this is horrible for everybody. As gas prices rise, it 340 00:17:48,000 --> 00:17:52,120 Speaker 10: is regressive. People who can least afford it are hit 341 00:17:52,240 --> 00:17:56,600 Speaker 10: the hardest. And of course even Trump supporters, what did 342 00:17:56,600 --> 00:17:59,639 Speaker 10: they vote for, especially Trump supporters, they voted for the 343 00:18:00,119 --> 00:18:02,960 Speaker 10: messed on a war on cost and what did they 344 00:18:03,040 --> 00:18:06,119 Speaker 10: end up with? A war in a foreign country. Many 345 00:18:06,200 --> 00:18:10,399 Speaker 10: people still do not understand what our interest is there. 346 00:18:10,480 --> 00:18:13,280 Speaker 10: And so that's the dilemma that Donald Trump faces as 347 00:18:13,400 --> 00:18:16,320 Speaker 10: he comes out this afternoon or this evening and tries 348 00:18:16,359 --> 00:18:18,159 Speaker 10: to address the American public on this. 349 00:18:19,960 --> 00:18:23,120 Speaker 2: Well again he does that. After Maura, he addresses House 350 00:18:23,160 --> 00:18:26,760 Speaker 2: Republicans who all have to be on the ballot in November. 351 00:18:26,800 --> 00:18:29,800 Speaker 2: This retreat and draw was supposed to be talking about 352 00:18:29,840 --> 00:18:31,800 Speaker 2: mid term strategy. This is not what they wanted to 353 00:18:31,840 --> 00:18:33,440 Speaker 2: have to strategize around, No. 354 00:18:33,400 --> 00:18:34,960 Speaker 11: But it's what they're going to have to because this 355 00:18:35,040 --> 00:18:36,679 Speaker 11: is going to play a very big role in what 356 00:18:36,800 --> 00:18:41,000 Speaker 11: happens come November. Now only is the House already fractured 357 00:18:41,080 --> 00:18:45,360 Speaker 11: and dwindling in numbers, we're hearing of more members who 358 00:18:45,400 --> 00:18:48,440 Speaker 11: are not wanting to run for reelection, and I think 359 00:18:48,480 --> 00:18:49,879 Speaker 11: A large part of this is that what are they 360 00:18:50,080 --> 00:18:52,080 Speaker 11: just to message on. There are a lot of things 361 00:18:52,080 --> 00:18:53,520 Speaker 11: that the House wants to be able to tap, but 362 00:18:53,520 --> 00:18:56,760 Speaker 11: they simply cannot. If one week the President is having 363 00:18:56,800 --> 00:18:59,360 Speaker 11: low gas prices and then this is happening right now 364 00:18:59,400 --> 00:19:01,440 Speaker 11: where it is already jumped well over a dollar from 365 00:19:01,440 --> 00:19:02,760 Speaker 11: what it was when he was touting it at the 366 00:19:02,800 --> 00:19:04,919 Speaker 11: Day of the Union address. And so I think when 367 00:19:04,960 --> 00:19:08,320 Speaker 11: you talk about the affordability message that Republicans have been 368 00:19:08,359 --> 00:19:10,919 Speaker 11: harping on the White House to provide more clarity on 369 00:19:11,040 --> 00:19:14,440 Speaker 11: and more messaging on that they are going to struggle, 370 00:19:14,880 --> 00:19:17,000 Speaker 11: and so unfortunately, I think that's probably what's being discussed. 371 00:19:17,520 --> 00:19:19,560 Speaker 11: But it seems as though many members have a hard time, 372 00:19:19,640 --> 00:19:23,120 Speaker 11: especially the Republican Party, having those frank conversations to the President, 373 00:19:23,359 --> 00:19:25,520 Speaker 11: because what he wants to hear is that everyone's happy 374 00:19:25,520 --> 00:19:27,960 Speaker 11: and things are going great. That's how he operates, and 375 00:19:28,000 --> 00:19:29,679 Speaker 11: in the reality is going to be starkly different. 376 00:19:29,840 --> 00:19:31,840 Speaker 6: GINI will there be a long term view looking back 377 00:19:31,880 --> 00:19:35,600 Speaker 6: on this as a good thing that we hear this 378 00:19:35,680 --> 00:19:37,719 Speaker 6: frequently from the President from other Republicans. 379 00:19:37,720 --> 00:19:39,280 Speaker 4: Been forty seven years in the making. 380 00:19:39,880 --> 00:19:44,800 Speaker 6: Many Americans have been killed by terror sponsored by Iran 381 00:19:44,840 --> 00:19:49,320 Speaker 6: and realizing that this is causing some big disruptions right now. 382 00:19:49,920 --> 00:19:53,520 Speaker 6: The president's line speaks for itself small price to pay 383 00:19:54,520 --> 00:19:57,720 Speaker 6: for what he sees as long term peace. Could he 384 00:19:57,880 --> 00:20:00,719 Speaker 6: be viewed at some point in the future as the 385 00:20:00,720 --> 00:20:03,960 Speaker 6: only leader who is brave enough to make this move. 386 00:20:06,119 --> 00:20:09,720 Speaker 10: That would depend on what happens. And of course, before 387 00:20:09,760 --> 00:20:12,480 Speaker 10: you set forth in terms of engaging in a war 388 00:20:12,560 --> 00:20:15,560 Speaker 10: in the Middle East, you want to think carefully about 389 00:20:15,600 --> 00:20:18,800 Speaker 10: whether what you want to achieve is achievable. 390 00:20:19,160 --> 00:20:20,919 Speaker 4: And that's the problem here. 391 00:20:21,400 --> 00:20:25,399 Speaker 10: We've had many presidents since nineteen seventy nine. All of 392 00:20:25,440 --> 00:20:28,000 Speaker 10: them have been faced, as their administrations had to Donald 393 00:20:28,000 --> 00:20:30,920 Speaker 10: Trump's point, with a question of should we go in 394 00:20:31,080 --> 00:20:34,320 Speaker 10: or not. There is a reason that, for instance, Barack 395 00:20:34,359 --> 00:20:38,320 Speaker 10: Obama chose to try to negotiate on nuclear weapons with Iran. 396 00:20:38,920 --> 00:20:42,560 Speaker 10: It is because achieving what the president wants to achieve 397 00:20:43,160 --> 00:20:45,840 Speaker 10: is very, very difficult. What he needs to achieve to 398 00:20:45,920 --> 00:20:49,399 Speaker 10: win is regime change and replacement. And we see the 399 00:20:49,440 --> 00:20:53,000 Speaker 10: replacement today it is somebody who is more hardlined than 400 00:20:53,040 --> 00:20:57,080 Speaker 10: his predecessor. So yes, history will prove him right if 401 00:20:57,080 --> 00:20:59,080 Speaker 10: he can achieve what he set out to achieve, but 402 00:20:59,200 --> 00:21:02,760 Speaker 10: so far nobody can tell a story that supports this 403 00:21:02,920 --> 00:21:05,760 Speaker 10: war that gets us to the end he wants in 404 00:21:05,840 --> 00:21:09,520 Speaker 10: a winning way, and that's the problem for the president. 405 00:21:09,880 --> 00:21:14,040 Speaker 10: And at the same time, it's costing Americans a whole lot, 406 00:21:14,080 --> 00:21:16,679 Speaker 10: including now seven military lives. 407 00:21:18,600 --> 00:21:21,160 Speaker 2: Yeah, and that cost is a very heavy toll, obviously more, 408 00:21:21,280 --> 00:21:24,280 Speaker 2: but there also is the literal financial cost. There's estimates 409 00:21:24,320 --> 00:21:26,920 Speaker 2: that this is costing a billion maybe two billion dollars 410 00:21:27,000 --> 00:21:30,159 Speaker 2: per day, which raises the specter of needing supplemental funding 411 00:21:30,640 --> 00:21:32,800 Speaker 2: from Congress if the President asks for it. Do you 412 00:21:32,800 --> 00:21:34,800 Speaker 2: think he's likely to get it? Could we actually see 413 00:21:34,800 --> 00:21:37,280 Speaker 2: Democrats who are on board with that effort. 414 00:21:37,720 --> 00:21:40,000 Speaker 11: He'd had to make the case to Congress, and he 415 00:21:40,040 --> 00:21:43,440 Speaker 11: has so far been refusing to do so. I think 416 00:21:43,440 --> 00:21:45,720 Speaker 11: that that's part of what I think Genie is talking about, too, 417 00:21:45,840 --> 00:21:48,960 Speaker 11: is that without this clearly defined plan and making the 418 00:21:48,960 --> 00:21:51,199 Speaker 11: case to the married people who largely don't understand why 419 00:21:51,240 --> 00:21:54,280 Speaker 11: we're even at war with Iran, and then wondering why 420 00:21:54,440 --> 00:21:57,960 Speaker 11: we are implentting strikes without necessarily a plan of how 421 00:21:58,000 --> 00:21:59,680 Speaker 11: to get out of it, there's been confusing messaging we 422 00:21:59,720 --> 00:22:02,800 Speaker 11: talked to about gen You mentioned there but more than 423 00:22:02,840 --> 00:22:05,640 Speaker 11: that too, I think you also look at the president's 424 00:22:05,640 --> 00:22:08,159 Speaker 11: flippant remarks about the small price to pay. It's not 425 00:22:08,200 --> 00:22:10,360 Speaker 11: a big deal, Pete Haig Seth saying this is what happens, 426 00:22:10,480 --> 00:22:13,040 Speaker 11: This happens in war. Being so dismissive and flippant about 427 00:22:13,040 --> 00:22:16,000 Speaker 11: something that's so very serious, it just shows again at 428 00:22:16,040 --> 00:22:19,119 Speaker 11: this disconnect between the White House and what the American 429 00:22:19,119 --> 00:22:22,720 Speaker 11: people are feeling and facing, between the White House and reality, 430 00:22:22,960 --> 00:22:25,359 Speaker 11: what our allies are looking at and wondering, where do 431 00:22:25,440 --> 00:22:26,000 Speaker 11: you stand? 432 00:22:26,240 --> 00:22:28,200 Speaker 2: What is this for? And where does it end? 433 00:22:28,480 --> 00:22:30,439 Speaker 11: And I think not being serious in a situation that 434 00:22:30,520 --> 00:22:34,280 Speaker 11: is so very serious is a bit of a slap 435 00:22:34,320 --> 00:22:35,840 Speaker 11: in the face to those of us who are wondering 436 00:22:36,520 --> 00:22:37,600 Speaker 11: what's going to play out? 437 00:22:37,920 --> 00:22:39,320 Speaker 2: To Genie's point, where does this end? 438 00:22:39,359 --> 00:22:40,600 Speaker 11: And what happens next? 439 00:22:40,760 --> 00:22:45,119 Speaker 6: Well, so what should happen? Maybe better to ask than 440 00:22:45,160 --> 00:22:47,240 Speaker 6: what will happen? At five point thirty when the President 441 00:22:47,600 --> 00:22:49,840 Speaker 6: gets to the podium, he will have spent the whole 442 00:22:49,920 --> 00:22:53,680 Speaker 6: day with members, hearing probably some real concern behind closed 443 00:22:53,720 --> 00:22:55,159 Speaker 6: doors about all of this. 444 00:22:55,240 --> 00:22:56,359 Speaker 4: What does he need to say? 445 00:22:56,359 --> 00:22:59,600 Speaker 6: He hasn't had the Oval Officer address, or that FaceTime 446 00:22:59,600 --> 00:23:02,359 Speaker 6: with the American people. Since this began outside of a 447 00:23:02,440 --> 00:23:06,199 Speaker 6: couple questions in the driveway, some telephone interviews, posts on 448 00:23:06,280 --> 00:23:08,520 Speaker 6: truth social this could be an opportunity, or it is 449 00:23:08,520 --> 00:23:10,920 Speaker 6: an opportunity, How should he handle it? 450 00:23:10,920 --> 00:23:13,560 Speaker 11: It's absolutely an opportunity for him to address the nation 451 00:23:14,040 --> 00:23:17,199 Speaker 11: and taking a position of leadership and accountability. That this 452 00:23:17,320 --> 00:23:19,720 Speaker 11: was started x y Z. This started because of x 453 00:23:19,800 --> 00:23:21,600 Speaker 11: y Z. We are now in a phase where we 454 00:23:21,680 --> 00:23:24,199 Speaker 11: are implementing x y Z strikes. You know, he just 455 00:23:24,240 --> 00:23:25,600 Speaker 11: needs to lay it out in a way that shows 456 00:23:25,680 --> 00:23:27,919 Speaker 11: us that he understands the severity of the situation, but 457 00:23:27,960 --> 00:23:30,040 Speaker 11: also that he actually has a clear plan and a 458 00:23:30,080 --> 00:23:32,320 Speaker 11: clear mission. You want detail, We want details, but we 459 00:23:32,359 --> 00:23:36,280 Speaker 11: also want a confident goal. I would say that watching 460 00:23:36,359 --> 00:23:39,680 Speaker 11: him get distracted by how great he's doing, or curtains 461 00:23:40,440 --> 00:23:42,439 Speaker 11: or wearing a hat that says USA, I mean, I 462 00:23:42,440 --> 00:23:44,679 Speaker 11: think that he gets so distracted by other things that 463 00:23:44,720 --> 00:23:47,680 Speaker 11: it takes away from what is actually impacting us right now, 464 00:23:47,680 --> 00:23:50,199 Speaker 11: what's happening on the ground and to the people who 465 00:23:50,240 --> 00:23:52,720 Speaker 11: are sacrificing and serving. And so I think that I 466 00:23:52,760 --> 00:23:56,400 Speaker 11: would want to see him show some empathy, show some accountability, 467 00:23:56,400 --> 00:23:58,520 Speaker 11: and take responsibility for the position that he has as 468 00:23:58,600 --> 00:24:00,879 Speaker 11: commander in chief and leader of the free world and 469 00:24:00,920 --> 00:24:03,159 Speaker 11: present United States, and in what his role is in 470 00:24:03,200 --> 00:24:04,200 Speaker 11: what is happening right now. 471 00:24:05,160 --> 00:24:09,440 Speaker 2: Well, GINI, of course, is not only the president's role 472 00:24:09,520 --> 00:24:12,040 Speaker 2: to make this case. He's charged others with his within 473 00:24:12,080 --> 00:24:14,200 Speaker 2: his administration to go out and make the case as well, 474 00:24:14,200 --> 00:24:16,520 Speaker 2: including the Secretary of State Mark Rubio. We've heard from 475 00:24:16,520 --> 00:24:19,480 Speaker 2: repeatedly that Energy secretary was out on Sunday morning television, 476 00:24:19,520 --> 00:24:23,400 Speaker 2: as was the Press secretary. Do you see anyone if 477 00:24:23,680 --> 00:24:27,240 Speaker 2: President Trump cannot so clearly define it, is anyone within 478 00:24:27,280 --> 00:24:30,280 Speaker 2: the administration doing a better job as messenger. 479 00:24:32,960 --> 00:24:35,600 Speaker 10: It's such a good question, Kayleie. You know, I think 480 00:24:35,680 --> 00:24:39,159 Speaker 10: what people are hearing is the bomb bast is the 481 00:24:39,240 --> 00:24:42,040 Speaker 10: sort of bro talk, and this is the kind of 482 00:24:42,119 --> 00:24:46,320 Speaker 10: Pete Hegseth, Secretary of War talk that Donald Trump is echoing. 483 00:24:46,359 --> 00:24:49,679 Speaker 10: The White House is putting out videos with references to 484 00:24:49,800 --> 00:24:54,000 Speaker 10: films like Top Gun, Maverick and references to video games. 485 00:24:54,440 --> 00:24:58,120 Speaker 10: That sort of bravado is pretty much what people are hearing. 486 00:24:58,440 --> 00:25:01,320 Speaker 10: You do have some voices in the administration who can 487 00:25:01,400 --> 00:25:05,280 Speaker 10: make a more coherent argument, but the reality is this 488 00:25:05,359 --> 00:25:09,040 Speaker 10: stops with the President and everybody has to be on 489 00:25:09,200 --> 00:25:12,640 Speaker 10: the same page. What are you doing and why are 490 00:25:12,680 --> 00:25:16,080 Speaker 10: you doing it? And when does it end? Those simple 491 00:25:16,160 --> 00:25:18,719 Speaker 10: but not so simple questions. They have been yet to 492 00:25:18,800 --> 00:25:22,720 Speaker 10: articulate a coherent answer that people can say, Aha, well, 493 00:25:22,760 --> 00:25:25,359 Speaker 10: this then is in my interest and we will go 494 00:25:25,440 --> 00:25:28,720 Speaker 10: along with this. But the President showcased all of where 495 00:25:28,720 --> 00:25:31,399 Speaker 10: he stands on this this weekend with what you and 496 00:25:31,520 --> 00:25:34,680 Speaker 10: Joe were talking about earlier, to call people concerned about 497 00:25:34,680 --> 00:25:38,399 Speaker 10: oil and gas prices fools for not seeing what he 498 00:25:38,480 --> 00:25:41,560 Speaker 10: sees without m articulating it. That is why we are 499 00:25:41,600 --> 00:25:44,160 Speaker 10: in this problem. So it's up to the President tonight. 500 00:25:44,600 --> 00:25:47,400 Speaker 10: Nobody else considergate on this. We are in a war 501 00:25:47,440 --> 00:25:48,200 Speaker 10: in the Middle East. 502 00:25:49,240 --> 00:25:51,000 Speaker 4: I don't know what you make of the memes that 503 00:25:51,040 --> 00:25:52,120 Speaker 4: are coming out of the White House. 504 00:25:52,119 --> 00:25:56,720 Speaker 6: They had call of duty footage interspersed with drones crashing 505 00:25:56,760 --> 00:26:00,000 Speaker 6: into Iran. And it was the last weekend that they 506 00:26:00,200 --> 00:26:03,480 Speaker 6: UFC put out the fight card for the octagon that's 507 00:26:03,520 --> 00:26:05,720 Speaker 6: going to be on the South Lawn. 508 00:26:06,280 --> 00:26:08,320 Speaker 4: They're going to be eighty thousand people apparently on the 509 00:26:08,320 --> 00:26:08,960 Speaker 4: ellipse for this. 510 00:26:08,960 --> 00:26:12,280 Speaker 6: This speaks directly to the base though, Maura, how do 511 00:26:12,320 --> 00:26:14,080 Speaker 6: you remove that and still be maga. 512 00:26:14,840 --> 00:26:16,159 Speaker 11: I don't know how you still be maga if you 513 00:26:16,160 --> 00:26:18,119 Speaker 11: we're looking at this and the hypocrisy is just so 514 00:26:18,240 --> 00:26:20,600 Speaker 11: rampant to me. I mean, you're looking at this and 515 00:26:20,680 --> 00:26:23,840 Speaker 11: for such criticisms of previous administrations for being so insulated 516 00:26:23,880 --> 00:26:26,680 Speaker 11: and having been out of touch with reality. I don't 517 00:26:26,680 --> 00:26:28,600 Speaker 11: know how you don't see this being completely out of 518 00:26:28,680 --> 00:26:30,920 Speaker 11: touch with reality and what's happening, and it just takes 519 00:26:30,920 --> 00:26:33,760 Speaker 11: away from the seriousness of the situation we find ourselves in. 520 00:26:34,040 --> 00:26:37,200 Speaker 11: All right, Mark Gillespie and Jeanie Shanzeno our political panel today. 521 00:26:37,240 --> 00:26:39,359 Speaker 11: Thank you both so much for being with us. And 522 00:26:39,359 --> 00:26:41,399 Speaker 11: we still have more ahead here on Balance of Powers. 523 00:26:41,440 --> 00:26:43,240 Speaker 11: We get back to the markets and what we're seeing 524 00:26:43,320 --> 00:26:45,680 Speaker 11: in oil. We're off the highs of the session, but 525 00:26:45,720 --> 00:26:47,760 Speaker 11: we're still teetering around one hundred dollars. We'll have more 526 00:26:47,800 --> 00:26:50,720 Speaker 11: with Rebecca Babin of CIBC Private Wealth. 527 00:26:50,800 --> 00:26:52,359 Speaker 4: Stay with us on Balance of Power. 528 00:26:52,400 --> 00:27:06,480 Speaker 6: We'll have much more coming up after Thisstening. 529 00:27:00,359 --> 00:27:03,520 Speaker 1: To the Bloomberg Balance of Power podcast. Catch us live 530 00:27:03,640 --> 00:27:07,199 Speaker 1: weekdays at noon and five pm Eastern on Almalcarchlay and 531 00:27:07,200 --> 00:27:10,560 Speaker 1: Android Auto with the Bloomberg Business app. Listen on demand 532 00:27:10,600 --> 00:27:15,600 Speaker 1: wherever you get your podcasts or watch us live on YouTube. 533 00:27:15,720 --> 00:27:19,120 Speaker 6: Who had thought ninety five dollars a barrel would seem cheap, Well, 534 00:27:19,119 --> 00:27:21,320 Speaker 6: of course it doesn't to anyone. But the reversal of 535 00:27:21,400 --> 00:27:24,480 Speaker 6: fortune that we have seen from one hundred and nineteen 536 00:27:24,640 --> 00:27:27,720 Speaker 6: dollars is significant, and it has a lot to do 537 00:27:28,119 --> 00:27:30,560 Speaker 6: with efforts that are being made by G seven nations 538 00:27:30,600 --> 00:27:33,720 Speaker 6: to find some relief. We talked about the impact though, 539 00:27:34,119 --> 00:27:37,320 Speaker 6: on the oil shock on the economy with Austin Goldsby 540 00:27:37,520 --> 00:27:40,040 Speaker 6: Fed Bank of Chicago earlier today on Bloomberg TV and 541 00:27:40,119 --> 00:27:40,720 Speaker 6: Radio listen. 542 00:27:41,320 --> 00:27:45,639 Speaker 12: As with any supply side shock, it can lead you 543 00:27:45,680 --> 00:27:50,520 Speaker 12: in a stagflationary direction, which is to say, the inflation 544 00:27:51,200 --> 00:27:53,879 Speaker 12: side of the mandate getting worse at the same time 545 00:27:54,200 --> 00:27:56,639 Speaker 12: the employment side of the mandate is getting worse. And 546 00:27:56,680 --> 00:28:00,400 Speaker 12: that's always the worst case scenario for the central because 547 00:28:00,440 --> 00:28:04,520 Speaker 12: there's not an obvious monetary policy answer. 548 00:28:07,119 --> 00:28:10,080 Speaker 6: And of course that worst case scenario may have grown 549 00:28:10,359 --> 00:28:13,440 Speaker 6: even more worse over the weekend with the remarkable move 550 00:28:13,480 --> 00:28:17,479 Speaker 6: that we saw in energy prices with investors eyes on Iran. 551 00:28:17,560 --> 00:28:19,480 Speaker 6: Whether it was a short squeeze or not, it was 552 00:28:19,560 --> 00:28:22,560 Speaker 6: not fun this morning, and we welcome Christina Kino to 553 00:28:22,600 --> 00:28:25,800 Speaker 6: the Conversation, the managing editor for Bloomberg Markets Live Blog, 554 00:28:25,840 --> 00:28:29,119 Speaker 6: fresh off her debut on Bloomberg this weekend. Christine, it 555 00:28:29,200 --> 00:28:32,239 Speaker 6: is great to see you. How are we rationalizing this 556 00:28:32,359 --> 00:28:35,560 Speaker 6: type of reversal. Is it as simple as the G 557 00:28:35,720 --> 00:28:37,520 Speaker 6: seven news or is there more at play here? 558 00:28:37,760 --> 00:28:39,920 Speaker 13: Yeah, Joe, I mean I think there's a confluence of 559 00:28:39,960 --> 00:28:42,680 Speaker 13: factors here. As you mentioned, the G seven US definitely 560 00:28:42,760 --> 00:28:45,880 Speaker 13: helps because some of the knee jerk reaction is definitely 561 00:28:46,080 --> 00:28:50,240 Speaker 13: about supply, especially given the newsflow out of Iran in 562 00:28:50,280 --> 00:28:52,840 Speaker 13: Israel as well over the weekend, as well as the 563 00:28:52,840 --> 00:28:56,320 Speaker 13: neighboring country is Kuwait and Ua curtailing production, so all 564 00:28:56,320 --> 00:28:59,360 Speaker 13: of that contributing to higher oil prices. But I think 565 00:28:59,360 --> 00:29:02,840 Speaker 13: there's also a little bit of positioning here, as you mentioned, 566 00:29:02,840 --> 00:29:05,280 Speaker 13: you know, a move as big as this, a swift 567 00:29:05,320 --> 00:29:09,960 Speaker 13: as this, definitely will have some investors reconsidering or maybe 568 00:29:09,960 --> 00:29:11,840 Speaker 13: it's time to pull back a little bit. And I 569 00:29:11,880 --> 00:29:14,160 Speaker 13: suppose the broader way to look at this as well 570 00:29:14,280 --> 00:29:16,440 Speaker 13: is you know, markets are following a little bit the 571 00:29:16,440 --> 00:29:20,360 Speaker 13: playbook that they deployed last week when war first broke out. 572 00:29:20,440 --> 00:29:21,360 Speaker 4: Over the past. 573 00:29:21,160 --> 00:29:24,240 Speaker 13: Weekend, we saw an initial battle selling, particularly during the 574 00:29:24,280 --> 00:29:26,760 Speaker 13: Asia and European sessions, and then a little bit of 575 00:29:26,800 --> 00:29:29,880 Speaker 13: a climb down when it came to the US sessions. 576 00:29:29,920 --> 00:29:32,600 Speaker 13: So now it really just depends what sort of details 577 00:29:32,920 --> 00:29:35,840 Speaker 13: next emerge out of the conflict. And it looks like 578 00:29:35,840 --> 00:29:37,440 Speaker 13: we have a long road ahead of us. 579 00:29:38,840 --> 00:29:39,000 Speaker 3: Well. 580 00:29:39,000 --> 00:29:41,720 Speaker 2: And when we talk about details, Christine, as President Trump 581 00:29:41,720 --> 00:29:43,720 Speaker 2: has suggested he has a plan. We've already seen the 582 00:29:43,720 --> 00:29:46,760 Speaker 2: floating of things like insurance and escorts for tankers and 583 00:29:46,840 --> 00:29:49,720 Speaker 2: vessels in the street for mows to some extent. Is 584 00:29:49,720 --> 00:29:52,120 Speaker 2: this also a market that has been conditioned by the 585 00:29:52,200 --> 00:29:54,960 Speaker 2: taco trade or so called Trump put and that's what's 586 00:29:55,000 --> 00:29:57,280 Speaker 2: going on here. They expect that that will kick in 587 00:29:57,280 --> 00:29:58,280 Speaker 2: in a more material way. 588 00:29:58,600 --> 00:30:00,800 Speaker 13: I mean absolutely, Kaylee. They have more than a few 589 00:30:00,840 --> 00:30:04,160 Speaker 13: examples to go off of when it comes to this 590 00:30:04,240 --> 00:30:08,000 Speaker 13: potential kind of anticipation of President Trump backing down. But 591 00:30:08,280 --> 00:30:10,880 Speaker 13: you know, when it comes to the conflict, though, I 592 00:30:10,880 --> 00:30:14,040 Speaker 13: think the issue is that it's not a one sided 593 00:30:14,200 --> 00:30:18,240 Speaker 13: issue that can be resolved immediately by the President just 594 00:30:18,280 --> 00:30:20,520 Speaker 13: climbing down, right it is. I mean, of course that 595 00:30:20,560 --> 00:30:23,600 Speaker 13: would help, and the US is a major player in 596 00:30:23,640 --> 00:30:26,360 Speaker 13: this conflict, but there are other sides to consider here, 597 00:30:26,400 --> 00:30:28,239 Speaker 13: and there are some things that kind of have been 598 00:30:28,280 --> 00:30:31,960 Speaker 13: put into motion, especially when it comes to closures of 599 00:30:33,480 --> 00:30:38,160 Speaker 13: refineries or curtailing of supply and production. That's not necessarily 600 00:30:38,200 --> 00:30:40,600 Speaker 13: something that can be turned back on overnight. And this 601 00:30:40,640 --> 00:30:43,760 Speaker 13: is why I think a lot of market watchers wondering 602 00:30:43,880 --> 00:30:47,880 Speaker 13: if the transitory effect of higher oil prices can turn 603 00:30:47,920 --> 00:30:51,200 Speaker 13: into something more than that, because all these processes just 604 00:30:51,240 --> 00:30:51,760 Speaker 13: take time. 605 00:30:53,360 --> 00:30:56,080 Speaker 2: It's a great point. Christina Quino, managing editor for Bloomberg's 606 00:30:56,080 --> 00:30:58,680 Speaker 2: Markets Live Blog, thank you so much. And it's on 607 00:30:58,680 --> 00:31:00,520 Speaker 2: that point I want to turn now to next guest. 608 00:31:00,520 --> 00:31:02,840 Speaker 2: Rebecca Babin is with us. She's senior equity trader and 609 00:31:02,840 --> 00:31:06,760 Speaker 2: managing director at CIBC Private Wealth. Welcome back to Bloomberg 610 00:31:06,840 --> 00:31:09,280 Speaker 2: TV and Radio, Rebecca. I would love to just begin 611 00:31:09,320 --> 00:31:11,200 Speaker 2: with the point Christine was making about the idea that 612 00:31:11,240 --> 00:31:14,680 Speaker 2: this isn't necessarily just as easy as an on off switch. 613 00:31:14,720 --> 00:31:16,960 Speaker 2: When President Trump says, and this is quoting him directly 614 00:31:17,000 --> 00:31:19,480 Speaker 2: from True Social last night, that these are short term 615 00:31:19,560 --> 00:31:22,400 Speaker 2: higher oil prices, that they will drop rapidly when the 616 00:31:22,440 --> 00:31:25,800 Speaker 2: destruction of Iron's nuclear threat is over, to what extent 617 00:31:25,880 --> 00:31:28,280 Speaker 2: is it true? How quick could that actually happen. 618 00:31:29,400 --> 00:31:31,000 Speaker 14: So this is a great point, and I think we 619 00:31:31,000 --> 00:31:34,800 Speaker 14: should distinguish between the type of disruptions that we're talking about. 620 00:31:34,880 --> 00:31:38,360 Speaker 14: If we are talking about logistical disruptions, meaning the ships 621 00:31:38,360 --> 00:31:40,720 Speaker 14: are loaded, they're sitting outside the strait of horror moves 622 00:31:41,080 --> 00:31:44,400 Speaker 14: and we're just waiting for it to open up for 623 00:31:44,480 --> 00:31:46,600 Speaker 14: those ships to kind of get where they need to go. 624 00:31:47,000 --> 00:31:50,440 Speaker 14: We're talking about something that can kind of heal the 625 00:31:50,520 --> 00:31:54,480 Speaker 14: market rather quickly ten twelve days to get to where 626 00:31:54,520 --> 00:31:55,720 Speaker 14: they need to be to. 627 00:31:55,840 --> 00:31:57,120 Speaker 8: Export the crude. Right. 628 00:31:57,440 --> 00:32:00,960 Speaker 14: But once we start talking about supply shut ins in 629 00:32:01,000 --> 00:32:03,120 Speaker 14: the Middle East, and we're starting to see that happen 630 00:32:03,200 --> 00:32:06,480 Speaker 14: in Iraq two point five million barrels and five hundred 631 00:32:06,520 --> 00:32:09,760 Speaker 14: thousand barrels in Kuwait, then you're talking about a much 632 00:32:09,960 --> 00:32:13,760 Speaker 14: longer process to get those barrels back online. It's not 633 00:32:13,840 --> 00:32:16,560 Speaker 14: just they're sitting there waiting to move. You need to 634 00:32:16,640 --> 00:32:20,720 Speaker 14: restart the system, which then takes a couple of weeks, 635 00:32:20,960 --> 00:32:23,120 Speaker 14: and then you need the shipping through. So you kind 636 00:32:23,120 --> 00:32:26,480 Speaker 14: of have to amplify that timeline when you talk about 637 00:32:26,560 --> 00:32:30,880 Speaker 14: production that's lost as opposed to just logistical constraints. 638 00:32:31,720 --> 00:32:34,160 Speaker 6: And so here we have the largest oil disruption in 639 00:32:34,200 --> 00:32:38,320 Speaker 6: market history if that twenty percent remains locked up. Did 640 00:32:38,360 --> 00:32:42,080 Speaker 6: we get a sense this morning, Rebecca, of what prices 641 00:32:42,120 --> 00:32:44,400 Speaker 6: could look like. That jumped to almost one hundred and 642 00:32:44,440 --> 00:32:47,640 Speaker 6: twenty dollars a barrel really spooked a lot of investors 643 00:32:47,760 --> 00:32:49,680 Speaker 6: this morning. When could we see that number again? 644 00:32:50,840 --> 00:32:50,880 Speaker 13: So? 645 00:32:51,040 --> 00:32:53,800 Speaker 14: I think you see that number when we have new 646 00:32:53,920 --> 00:32:57,080 Speaker 14: lack of confidence on a timeline and a plan. So 647 00:32:57,240 --> 00:33:01,760 Speaker 14: when there's this open ended timeline, market knows we have SPR, 648 00:33:02,120 --> 00:33:06,520 Speaker 14: we have a tremendous amount of SPR in the global market. 649 00:33:06,600 --> 00:33:09,880 Speaker 14: We have inventories, we have floating storage. We have China 650 00:33:09,920 --> 00:33:13,880 Speaker 14: that's built up their inventories. The market knows that, but 651 00:33:13,960 --> 00:33:16,840 Speaker 14: it can't wrap its head around how meaningful that will 652 00:33:16,880 --> 00:33:19,280 Speaker 14: be if we can't put a timeline on this, So 653 00:33:19,400 --> 00:33:24,440 Speaker 14: that panic will resume as this timeline becomes more opaque. 654 00:33:25,000 --> 00:33:27,080 Speaker 14: So I think that's the key thing the market is 655 00:33:27,120 --> 00:33:30,640 Speaker 14: trying to evaluate is how long does this last. I 656 00:33:30,680 --> 00:33:33,000 Speaker 14: know I have some buffers built in. I know there's 657 00:33:33,040 --> 00:33:36,160 Speaker 14: some levers we can pull, but these are not indefinite, 658 00:33:36,160 --> 00:33:38,720 Speaker 14: and when I shut in production in the Middle East, 659 00:33:39,040 --> 00:33:42,680 Speaker 14: those levers effectively run out a runway to help US 660 00:33:42,920 --> 00:33:45,440 Speaker 14: and we get those spikes again. So I think that's 661 00:33:45,520 --> 00:33:48,160 Speaker 14: where you start to see these things come back into play. 662 00:33:48,200 --> 00:33:51,560 Speaker 14: And it was a really good example overnight. Your previous 663 00:33:51,560 --> 00:33:54,720 Speaker 14: guests did highlight that there were some technical factors at play, 664 00:33:55,440 --> 00:33:57,640 Speaker 14: certainly on the open in the overnight session, there's been 665 00:33:57,680 --> 00:34:01,320 Speaker 14: a tremendous amount of call options traded and Brent crude 666 00:34:01,400 --> 00:34:05,080 Speaker 14: dealers came in short and needed to cover. But that's 667 00:34:05,120 --> 00:34:09,800 Speaker 14: going to reaccelerate. That trade isn't over and could certainly 668 00:34:09,800 --> 00:34:12,120 Speaker 14: see those types of panic moves again. 669 00:34:13,600 --> 00:34:15,600 Speaker 2: Well, so if we continue to see the panic moves 670 00:34:15,600 --> 00:34:18,280 Speaker 2: and the pressure to the upside Rebecca off of concern 671 00:34:18,400 --> 00:34:22,080 Speaker 2: over a supply shock, at what time, at what level 672 00:34:22,160 --> 00:34:25,479 Speaker 2: does this become not about supply but actually turn into 673 00:34:25,480 --> 00:34:27,279 Speaker 2: a demand destruction conversation. 674 00:34:28,680 --> 00:34:31,560 Speaker 14: That's a critical question. There's a lot of analysis being 675 00:34:31,600 --> 00:34:34,319 Speaker 14: done on that. I think across the street. When I 676 00:34:34,360 --> 00:34:37,080 Speaker 14: look at on an inflation justed basis, if we look 677 00:34:37,080 --> 00:34:39,000 Speaker 14: at the spike that happened in two thousand and eight, 678 00:34:39,040 --> 00:34:42,399 Speaker 14: we're looking at much higher crude prices kind of over 679 00:34:42,440 --> 00:34:45,160 Speaker 14: two hundred. If we inflation adjust where we would need 680 00:34:45,200 --> 00:34:48,880 Speaker 14: to be to see that type of impact, I think 681 00:34:49,120 --> 00:34:51,800 Speaker 14: the key metric that you've talked about is four dollars 682 00:34:51,840 --> 00:34:54,879 Speaker 14: gasoline prices in the United States. That's where you start 683 00:34:54,880 --> 00:34:57,720 Speaker 14: to see an impact in the US. For emerging markets, 684 00:34:57,800 --> 00:35:00,319 Speaker 14: it's different, right. I think when we start to see 685 00:35:00,320 --> 00:35:04,359 Speaker 14: one hundred and fifty dollars crud for em countries, that's 686 00:35:04,400 --> 00:35:07,080 Speaker 14: where you start to look at seeing some real demand 687 00:35:07,120 --> 00:35:10,560 Speaker 14: destruction start and it will accelerate from there. Those are 688 00:35:10,600 --> 00:35:13,640 Speaker 14: the benchmarks that are being thrown around again. We have 689 00:35:13,680 --> 00:35:16,319 Speaker 14: to see how this evolves, and the time at which 690 00:35:16,360 --> 00:35:20,560 Speaker 14: it spends at those prices is critical. If it's short term, 691 00:35:20,600 --> 00:35:22,960 Speaker 14: we can absorb it and move on. But if this 692 00:35:23,080 --> 00:35:26,880 Speaker 14: has that open ended timeline, you will see the demand 693 00:35:26,880 --> 00:35:29,560 Speaker 14: destruction start to be much more extreme. 694 00:35:30,719 --> 00:35:33,279 Speaker 6: As they say, the best cure for high prices is 695 00:35:33,360 --> 00:35:37,280 Speaker 6: high prices. Rebecca, I want to ask you about carg Island, 696 00:35:37,920 --> 00:35:40,920 Speaker 6: because there are reports out there today that the United 697 00:35:40,920 --> 00:35:46,040 Speaker 6: States may consider seizing carg Island, which is about fifteen 698 00:35:46,040 --> 00:35:48,319 Speaker 6: miles off the coast of Iran and it's kind of 699 00:35:48,600 --> 00:35:51,520 Speaker 6: the transfer station, if you will, where tankers are loaded 700 00:35:51,600 --> 00:35:54,960 Speaker 6: up before they pass through the Strait of Hormuz. The 701 00:35:55,000 --> 00:35:57,720 Speaker 6: conventional wisdom here in Washington is you would need boots 702 00:35:57,760 --> 00:35:59,799 Speaker 6: on the ground to do that, And I wonder if 703 00:35:59,840 --> 00:36:03,920 Speaker 6: the United States chose to make that move and seize 704 00:36:03,920 --> 00:36:07,320 Speaker 6: the centerpiece of Iran's oil industry here. 705 00:36:08,280 --> 00:36:09,920 Speaker 4: Is that an all bets are off moment? 706 00:36:10,040 --> 00:36:12,840 Speaker 6: Or would that reassure the market knowing that that site 707 00:36:12,920 --> 00:36:14,200 Speaker 6: was secured by Americans? 708 00:36:15,840 --> 00:36:18,919 Speaker 14: Great question. I tend to think that's an all bets 709 00:36:18,920 --> 00:36:23,600 Speaker 14: are off moment. That to me is carg Island has 710 00:36:23,680 --> 00:36:26,760 Speaker 14: been maintained throughout the course of this conflict. It wasn't 711 00:36:26,800 --> 00:36:30,879 Speaker 14: touched during the June twelve Day war. It's how we 712 00:36:31,200 --> 00:36:36,040 Speaker 14: think about the long term preservation of crude output and supplies. 713 00:36:36,040 --> 00:36:38,200 Speaker 14: And if you go after that, you've got to be 714 00:36:38,239 --> 00:36:39,080 Speaker 14: able to move. 715 00:36:38,880 --> 00:36:40,040 Speaker 8: That crewed through the Strait. 716 00:36:40,480 --> 00:36:44,200 Speaker 14: That means you are one hundred percent invested and in 717 00:36:44,239 --> 00:36:47,880 Speaker 14: the Strait having to protect every single ship that goes through. 718 00:36:48,600 --> 00:36:50,080 Speaker 8: I don't think that that. 719 00:36:50,080 --> 00:36:56,080 Speaker 14: Will provide the market confidence unless the strait is also open, 720 00:36:56,480 --> 00:37:00,120 Speaker 14: So it has to come hand in glove with a 721 00:37:00,120 --> 00:37:05,200 Speaker 14: a logistical output for that crude that can be safely transferred. 722 00:37:05,239 --> 00:37:08,680 Speaker 14: Just going after it without that I think actually does 723 00:37:08,719 --> 00:37:11,600 Speaker 14: the opposite for the crude market and may may create 724 00:37:11,640 --> 00:37:12,800 Speaker 14: a more panicked environment. 725 00:37:14,160 --> 00:37:16,640 Speaker 2: Well, and when we consider it the wider environment, Rebecca, 726 00:37:16,680 --> 00:37:19,120 Speaker 2: it's one thing for crude and product prices to go 727 00:37:19,280 --> 00:37:21,879 Speaker 2: up in and of themselves, but that of course can 728 00:37:21,920 --> 00:37:24,480 Speaker 2: feed through into other prices too. When we think about 729 00:37:24,480 --> 00:37:26,520 Speaker 2: the idea that you need fuel to get the things 730 00:37:26,520 --> 00:37:30,360 Speaker 2: that ship goods to consumers and customers all over the world, 731 00:37:30,400 --> 00:37:33,480 Speaker 2: how quickly could we be talking about this being a 732 00:37:33,520 --> 00:37:35,839 Speaker 2: reinflationary kind of thing. I know you said a lot 733 00:37:35,960 --> 00:37:39,960 Speaker 2: depends on time and duration, but what is the lag 734 00:37:40,440 --> 00:37:42,360 Speaker 2: on that feed through to costs elsewhere? 735 00:37:43,560 --> 00:37:45,520 Speaker 14: Well, if we look at just the move and gasoline 736 00:37:45,520 --> 00:37:48,120 Speaker 14: prices last week, you can see that there's been a 737 00:37:48,160 --> 00:37:52,480 Speaker 14: pretty quick transition mechanism into into at least gasoline prices. 738 00:37:52,600 --> 00:37:55,280 Speaker 14: How it filters through into the rest of the products 739 00:37:55,280 --> 00:37:59,960 Speaker 14: that crude is an input for varies dramatically by industry. Right, 740 00:38:00,080 --> 00:38:02,440 Speaker 14: so we're going to see some things that have a 741 00:38:02,520 --> 00:38:05,040 Speaker 14: much quicker uptake of it and some lagged And there's 742 00:38:05,280 --> 00:38:08,400 Speaker 14: very smart economists out there, I think, who are trying 743 00:38:08,400 --> 00:38:11,760 Speaker 14: to figure out this exact question. But I think it's months. 744 00:38:11,840 --> 00:38:13,480 Speaker 14: I don't think it's a week scenario. 745 00:38:13,920 --> 00:38:16,879 Speaker 8: Is it three months? Is it six months. It's likely in. 746 00:38:16,800 --> 00:38:20,600 Speaker 14: That window of the timeline that I hear from economists 747 00:38:20,640 --> 00:38:23,160 Speaker 14: in terms of how much impact it takes or how 748 00:38:23,200 --> 00:38:25,640 Speaker 14: long it takes to flow through into prices. 749 00:38:25,840 --> 00:38:27,280 Speaker 8: But again, it will vary by. 750 00:38:27,160 --> 00:38:29,760 Speaker 14: Industry, and that'll be something I think the equity market 751 00:38:29,760 --> 00:38:34,120 Speaker 14: will be watching exceptionally closely as we as this extends 752 00:38:34,160 --> 00:38:34,720 Speaker 14: out longer. 753 00:38:35,760 --> 00:38:39,320 Speaker 6: How do you read the lack of movement in oil stocks, Rebecca, 754 00:38:39,360 --> 00:38:41,560 Speaker 6: we're talking so much about the commodity I'm looking at 755 00:38:41,600 --> 00:38:42,799 Speaker 6: Exxon and Chevron here. 756 00:38:42,840 --> 00:38:43,719 Speaker 4: They're up modestly. 757 00:38:43,800 --> 00:38:47,160 Speaker 6: The XL is down seven cents, and they've been kind 758 00:38:47,200 --> 00:38:50,839 Speaker 6: of just floating around for the last week plus while 759 00:38:50,840 --> 00:38:53,239 Speaker 6: this has all happened. Does that imply to you that 760 00:38:53,239 --> 00:38:56,520 Speaker 6: that stock traders see this as a short term blip. 761 00:38:57,880 --> 00:38:59,120 Speaker 8: I think it implies two things. 762 00:38:59,120 --> 00:39:01,560 Speaker 14: First, there was a tre is build up in energy 763 00:39:01,600 --> 00:39:04,200 Speaker 14: equities leading up to this event, so they priced in 764 00:39:04,400 --> 00:39:06,920 Speaker 14: a lot of this kind of heading into the event. 765 00:39:07,360 --> 00:39:09,319 Speaker 14: In the last week or so, when we've seen this 766 00:39:09,440 --> 00:39:13,120 Speaker 14: kind of volatility driven increase, it's primarily in the front 767 00:39:13,120 --> 00:39:15,120 Speaker 14: of the curve, right The back of the curve is 768 00:39:15,160 --> 00:39:18,640 Speaker 14: still relatively anchored, and that does speak to the timeline 769 00:39:18,680 --> 00:39:21,440 Speaker 14: that I think the market is using, which is, you know, 770 00:39:21,719 --> 00:39:24,919 Speaker 14: weeks a month, but not extended. And unless we see 771 00:39:24,960 --> 00:39:27,840 Speaker 14: the back of the curve start to really adjust higher, 772 00:39:28,280 --> 00:39:31,239 Speaker 14: then we could see the next leg higher and energy equities. 773 00:39:31,239 --> 00:39:34,320 Speaker 8: But I just don't think with the back end at sixty. 774 00:39:33,960 --> 00:39:37,080 Speaker 14: Five, you know, we're looking at, you know, a windfall 775 00:39:37,160 --> 00:39:40,799 Speaker 14: for equities. It will take a more more dramatic move, 776 00:39:40,920 --> 00:39:43,840 Speaker 14: and knowing that this is going to be a long term, 777 00:39:44,000 --> 00:39:49,000 Speaker 14: not transitory event for that reacceleration, I think in the equities. 778 00:39:49,719 --> 00:39:51,520 Speaker 6: You know, Kaylee told us this morning we needed to 779 00:39:51,520 --> 00:39:53,719 Speaker 6: call it Rebecca Babin today, and I'm sure glad we did. 780 00:39:53,760 --> 00:39:55,040 Speaker 4: Rebecca, this has been really helpful. 781 00:39:55,080 --> 00:39:59,280 Speaker 6: Senior equity trader, Managing Directors CIBC Private Wealth Rebecca Babin 782 00:39:59,320 --> 00:40:01,879 Speaker 6: with us on Balance of Power here on Bloomberg's TV 783 00:40:02,040 --> 00:40:03,680 Speaker 6: and radio. 784 00:40:05,920 --> 00:40:08,360 Speaker 4: Thanks for listening to the Balance of Power podcast. 785 00:40:08,960 --> 00:40:12,120 Speaker 6: Make sure to subscribe if you haven't already, at Apple, Spotify, 786 00:40:12,200 --> 00:40:14,759 Speaker 6: or wherever you get your podcasts, and you can find 787 00:40:14,840 --> 00:40:18,080 Speaker 6: us live every weekday from Washington, DC at noontime Eastern 788 00:40:18,400 --> 00:40:19,880 Speaker 6: at Bloomberg dot com.