WEBVTT - Dire Straits? 0:00:03.800 --> 0:00:06.960 Welcome to Bloomberg Opinion. I'm Bonnie Quinn. This week, the 0:00:07.560 --> 0:00:10.039 people are not willing to back down to a bully. 0:00:10.200 --> 0:00:13.720 Taipei based Tim Coulpan on the ramifications of Speaker Pelosi's 0:00:13.760 --> 0:00:16.880 visit to Taiwan, and later David Fickling on the reopening 0:00:16.880 --> 0:00:19.440 of the Port of Odessa for grain shipments. But first 0:00:19.480 --> 0:00:22.880 to markets and John Authors. So John, quite the week. Yes, 0:00:22.960 --> 0:00:25.040 I wouldn't have thought so the first week in August. 0:00:25.079 --> 0:00:28.080 But here we are. Let's talk about false all clears. 0:00:28.520 --> 0:00:34.240 Is that what we've just got? I think so certainly. 0:00:34.880 --> 0:00:39.839 What you've seen was I thought an extreme overreaction to 0:00:39.880 --> 0:00:44.720 the notion that the FED was ready to pivot already, 0:00:44.760 --> 0:00:48.120 that the in some ways, that the battle against inflation 0:00:48.280 --> 0:00:53.120 was already one. Now, it's true that markets are about 0:00:53.159 --> 0:00:55.560 what's happening in the future, they're not about what's just happened. 0:00:56.480 --> 0:01:00.280 But when it comes to fighting inflation, rates do have 0:01:00.560 --> 0:01:05.800 to go up, and that has to tighten economic activity 0:01:05.840 --> 0:01:10.679 before inflation is beaten. You can't just skip those steps. 0:01:10.840 --> 0:01:12.440 You have to wait for them to work out in 0:01:12.440 --> 0:01:16.200 the real economy before you trade. Accordingly, he's saying, it's 0:01:16.200 --> 0:01:18.440 almost like the market is trying to trade both things 0:01:18.440 --> 0:01:20.720 at the same time. Yes, there might be very clear 0:01:20.760 --> 0:01:23.720 economic logic behind the notion that rates are going to 0:01:23.840 --> 0:01:27.319 go up, then the economy will slow, and then rachel 0:01:27.319 --> 0:01:29.920 will come down again. We've all read our economic textbooks, 0:01:30.400 --> 0:01:32.640 and you do want to guard against the future. But 0:01:32.720 --> 0:01:37.760 you can't thereby assume that you can already buy bonds 0:01:37.959 --> 0:01:41.680 as there's no nothing to worry about plainly the terms. 0:01:41.959 --> 0:01:44.240 There's a lot of problems, and you point out Lisa 0:01:44.280 --> 0:01:47.119 Shallad's points and also Ed Hyman's points, both of whom 0:01:47.120 --> 0:01:50.040 are excellent market commentators and should never be ignored. Right, 0:01:50.440 --> 0:01:54.000 We're in a genuinely unprecedented situation, in an era of 0:01:54.040 --> 0:01:59.279 international finance and unprecedented global pandemic. Any number of possibilities 0:01:59.640 --> 0:02:03.600 are sensibly open. Nobody can confidently say that anybody else 0:02:03.760 --> 0:02:06.600 is wrong about this. But there are very strong forces 0:02:06.760 --> 0:02:09.520 pushing bonds in both directions. And I think that's an 0:02:09.520 --> 0:02:11.880 important point because it is both directions. It's not like 0:02:11.919 --> 0:02:14.200 it's an ambivalent market here. It's a market that's very 0:02:14.280 --> 0:02:18.720 convinced of two different things. That's why there yeah, and 0:02:18.720 --> 0:02:20.040 that's why the Eel curve is a little bit like 0:02:20.080 --> 0:02:24.440 a slinky these days, but also because Nancy Pelosi decided 0:02:24.600 --> 0:02:27.320 to complicate things, if you want to put it that 0:02:27.360 --> 0:02:31.040 way this week. Yes, I think from the cold blooded 0:02:31.120 --> 0:02:35.280 view of a macro trader, the potential Taiwan straight issue 0:02:35.560 --> 0:02:40.480 adds up potentially to the Ukraine War plus the trade 0:02:40.480 --> 0:02:46.400 war with China all at once, only worse. It's absolutely 0:02:46.560 --> 0:02:51.600 not what anybody wants to see happen. And so the 0:02:51.720 --> 0:02:57.440 degree of saber rattling ahead of her trip, which I 0:02:57.560 --> 0:02:59.880 have to say I don't quite understand what the re 0:03:00.240 --> 0:03:04.760 for doing it this week was was very scary. I 0:03:04.800 --> 0:03:08.880 think you could see we had on Tuesday, we had 0:03:08.919 --> 0:03:13.480 a remarkable rise in bond yields I people sold their bonds, 0:03:13.560 --> 0:03:16.040 and in large part that was because there have been 0:03:16.080 --> 0:03:19.320 a somewhat extreme rush to the havens. People were wondering 0:03:19.320 --> 0:03:21.760 whether the Chinese are going to shoot Pelosi's plane down. 0:03:22.880 --> 0:03:25.239 I'm not joking that that that was going around there 0:03:25.240 --> 0:03:29.840 as a possibility, and the fact that she just landed 0:03:29.919 --> 0:03:33.400 safely and got out of the plane caused the bond 0:03:33.520 --> 0:03:38.880 market turn around. Um, so certainly you could see some 0:03:39.000 --> 0:03:43.080 kind of a short term sentiment extreme caused just by 0:03:43.120 --> 0:03:45.400 that event that seems to have gone away though in 0:03:45.480 --> 0:03:48.600 twenty four hours. Unless something else happens. China seems to 0:03:48.600 --> 0:03:53.320 have made its moves. It's already imposed economic you know, well, 0:03:53.320 --> 0:03:56.680 I guess sanctions. Yeah, there are sanctions on Taiwan, and 0:03:56.920 --> 0:03:59.800 it's going to engage in some drills. But this may 0:03:59.840 --> 0:04:02.760 not be the kick off to the retaking of Taiwan 0:04:02.920 --> 0:04:05.880 that market is looking for at some point in the future. Yeah, 0:04:05.880 --> 0:04:09.160 I mean, I mean, certainly, I am not a expert 0:04:09.240 --> 0:04:11.720 on military strategy, but I've read quite a number of 0:04:11.760 --> 0:04:13.600 notes now that have come out from people who are 0:04:14.200 --> 0:04:19.960 both the sanctions and the military exercises are quite a 0:04:20.000 --> 0:04:25.560 lot more lenient, quite a lot less aggressive than they 0:04:25.560 --> 0:04:28.880 could have been. There are much nastier sanctions packages they 0:04:28.880 --> 0:04:32.239 could have done, and they could be much more menacing 0:04:32.240 --> 0:04:34.159 when it comes to playing around with their military. So 0:04:34.760 --> 0:04:39.680 it looks as though sieg In Ping might have blinked 0:04:40.000 --> 0:04:43.440 and Nancy Pelosi hasn't. Can't imagine you'll get any great 0:04:43.440 --> 0:04:46.080 domestic political credit for it in the US, but it 0:04:46.760 --> 0:04:51.640 looks as though Pelosi might actually have one that particular contrado. Yes, 0:04:52.640 --> 0:04:55.600 they're not exactly equals, I guess in that respect, but 0:04:55.600 --> 0:04:58.279 but she may have one. So we're in August. We've 0:04:58.279 --> 0:05:00.840 had this huge move in bond market. We also saw 0:05:00.960 --> 0:05:04.040 the NASDAK reclaim lots of territory so far this week. 0:05:04.560 --> 0:05:07.920 It's very hard to believe in the idea that this 0:05:08.120 --> 0:05:10.520 could be a false or clear when you watch what's 0:05:10.520 --> 0:05:13.240 happening in the market. But I guess that's the essence 0:05:13.279 --> 0:05:16.920 of being a good trader, right. It's a very difficult one. 0:05:17.279 --> 0:05:22.080 Certainly a number of usual technical trading measures. I'm not 0:05:22.240 --> 0:05:24.800 normally a great fan of technical analysis, but it's at 0:05:24.800 --> 0:05:28.600 times like this, when markets have really been scared and 0:05:28.640 --> 0:05:32.400 when trading really is about mass psychology, that technical measures 0:05:32.440 --> 0:05:35.880 can be quite useful. And the degree to which we 0:05:35.920 --> 0:05:39.000 have had such a big reversal of such a big 0:05:39.000 --> 0:05:43.200 sell off doesn't usually happen unless the bottom is in, 0:05:43.520 --> 0:05:48.039 and that deserves some degree of respect. The nisy Fang 0:05:48.080 --> 0:05:52.000 plus index, so that the index just includes ten huge 0:05:52.000 --> 0:05:57.200 internet platform companies Apple, Amazon, Tesla, etcetera, is actually at 0:05:57.200 --> 0:06:02.520 this point up almost exactly from its low, which was 0:06:02.520 --> 0:06:06.560 in May. Some technicians would say that the rise means 0:06:06.600 --> 0:06:08.760 it's back in the bull market, still a long way 0:06:08.760 --> 0:06:13.880 below its peak, from last year, but that rise is 0:06:14.720 --> 0:06:19.560 in very very liquid stocks that people know about and 0:06:19.600 --> 0:06:24.560 are thinking about again can't be gainsaid. It doesn't seem 0:06:24.720 --> 0:06:28.680 to make sense to me, and that does imply I 0:06:28.760 --> 0:06:33.120 may in the long term be right right in inverted commas, 0:06:33.200 --> 0:06:37.240 but certainly in the short term there's something I must 0:06:37.360 --> 0:06:40.720 be missing that that you do need to have some 0:06:40.760 --> 0:06:43.920 degree of respect for that kind of a market movement. Well, listeners, 0:06:43.920 --> 0:06:45.920 if there's something you think John is missing, definitely let 0:06:46.000 --> 0:06:49.680 us know. John. Authors have you from Taipei now. On 0:06:49.720 --> 0:06:52.720 the House Speaker's visit to Taiwan with Tim Colburn, there 0:06:52.720 --> 0:06:55.360 were rumblings of the visit by the House Speaker, followed 0:06:55.360 --> 0:06:58.000 by nothing at all official on the agenda, and then 0:06:58.000 --> 0:07:01.479 suddenly as Morga's Board of meetings and press briefings talk 0:07:01.520 --> 0:07:03.640 to us about what the lasting consequences of this will 0:07:03.640 --> 0:07:06.960 be for Taiwan, both positive and negative. I mean there 0:07:06.960 --> 0:07:08.840 will be some positive ones. I guess it was a 0:07:08.920 --> 0:07:12.240 display of unity with the island. I think there will 0:07:12.280 --> 0:07:15.760 be more positive than negative. What we're hearing so far 0:07:15.840 --> 0:07:18.360 globally is a lot of pundits from around the world 0:07:18.480 --> 0:07:20.560 who have their take. You know, We're hearing from people 0:07:20.560 --> 0:07:23.640 in d C, in London and elsewhere, but there's not 0:07:23.640 --> 0:07:25.920 that many people in Taiwan who are talking about it. 0:07:26.000 --> 0:07:27.920 So so let me give you that perspective, and that 0:07:28.080 --> 0:07:30.320 is the Taiwanese people in general, see this is a 0:07:30.360 --> 0:07:34.160 positive thing. The world seems to have just suddenly realized 0:07:34.240 --> 0:07:37.640 that Taiwan is under threat, and all of the belligerents 0:07:37.680 --> 0:07:40.040 and saber rattling seems to have come as a bit 0:07:40.040 --> 0:07:43.240 of surprise too many people outside Taiwan, but people in 0:07:43.240 --> 0:07:45.560 Taiwan have been used to that. We've been dealing with 0:07:45.840 --> 0:07:50.200 for decades, various types of threats, direct indirect threats, military threats, 0:07:50.240 --> 0:07:54.520 economic threats, and even legal threats with passing of various 0:07:54.600 --> 0:07:59.000 laws in China that impact Taiwanese directly. So the positive 0:07:59.040 --> 0:08:01.000 really for the Taiwanese these and this is what I'm 0:08:01.040 --> 0:08:03.960 hearing from many many people, is that now the world 0:08:03.960 --> 0:08:06.840 has woken up. Now the world has got Taiwan on 0:08:06.920 --> 0:08:10.360 their radar, and they're very aware of the existence of 0:08:10.680 --> 0:08:15.080 threat from China, the belligerents from China. The downside, of course, 0:08:15.160 --> 0:08:19.280 is that the military have increased as we speak, China 0:08:19.400 --> 0:08:23.160 is going to be holding the largest military exercises around 0:08:23.160 --> 0:08:27.640 Taiwan since the Chinese Civil War. Essentially, they will be 0:08:27.800 --> 0:08:30.960 ringing the island of Taiwan with the various war games 0:08:30.960 --> 0:08:35.360 at six different points, very uncomfortably close to Taiwan. You know, 0:08:35.440 --> 0:08:38.360 you say that the world has woken up, but China 0:08:38.640 --> 0:08:42.120 has been ramping up things like military drills and so on. 0:08:42.679 --> 0:08:45.199 We've seen that, and I feel like, at least in markets, 0:08:45.400 --> 0:08:48.840 there was preparation for an effort to retake Taiwan or 0:08:48.920 --> 0:08:51.319 something like that in the near future. And then Ukraine happened, 0:08:51.840 --> 0:08:54.880 and some people thought that those chances went up in 0:08:54.920 --> 0:08:57.280 the near term. Some thought that that meant those chances 0:08:57.280 --> 0:08:59.560 went down in the near term. But why would it 0:08:59.600 --> 0:09:03.000 be in Taiwan's interest to just poke the bear? If 0:09:03.000 --> 0:09:06.400 you like, it's predicating the idea of victim blaming. I 0:09:06.400 --> 0:09:10.440 think it's got to reremembered that Taiwan has not threatened China, 0:09:10.600 --> 0:09:13.720 has not threatened to invade, has not threatened any military action, 0:09:14.280 --> 0:09:16.640 and it's not even threatened to change the status quo. 0:09:17.000 --> 0:09:20.520 So since President saying when got in and then got reelected, 0:09:20.640 --> 0:09:23.080 she's actually annoyed some people in her own party by 0:09:23.160 --> 0:09:26.560 not moving anywhere towards independence, And of course she's annoyed 0:09:26.600 --> 0:09:30.359 Paging by not going anywhere close to the idea of unification. 0:09:30.480 --> 0:09:33.480 She has not budged either way, and that's kind of 0:09:33.520 --> 0:09:36.680 annoyed everybody. But it needs to be remembered that Taiwan 0:09:36.720 --> 0:09:40.240 has not threatened anybody. Taiwan has not invited any of it. 0:09:40.400 --> 0:09:42.880 Pelosi wanted to come to Taiwan, and of course Taiwanese 0:09:42.880 --> 0:09:46.600 people welcome that. The President of Taiwan welcomed that. But 0:09:46.800 --> 0:09:49.840 China has d percent agency over how it acts and reacts. 0:09:49.840 --> 0:09:52.960 To think it's up to China to decide how it 0:09:53.000 --> 0:09:56.160 acts and reacts to the visit of the speaker of 0:09:56.160 --> 0:09:59.920 a democratically elected nation to the president of another democratic, 0:10:00.040 --> 0:10:03.720 ple elective nation. And to say that Taiwan is poking 0:10:03.720 --> 0:10:07.480 the bear or inviting some kind of reaction is victim blaming, 0:10:07.840 --> 0:10:10.880 and it takes away agency from Beijing to control its 0:10:10.880 --> 0:10:13.280 temper and decide what it wants to do. So great 0:10:13.360 --> 0:10:15.720 that needs to be remembered. Yeah, absolutely, that is a 0:10:15.720 --> 0:10:19.120 great reminder. At the same time, is Taiwan ready if 0:10:19.160 --> 0:10:22.520 there is some military action? Has Taiwan built up enough 0:10:22.640 --> 0:10:26.200 military Are the people interested in getting involved in some 0:10:26.280 --> 0:10:29.120 kind of a conflict. I don't think anybody in any 0:10:29.160 --> 0:10:32.200 any nation is interested in getting involved in a conflict. 0:10:32.240 --> 0:10:34.240 You know, I don't believe the pure, but we can't 0:10:34.240 --> 0:10:36.080 live in denial either of to him. I mean, there 0:10:36.120 --> 0:10:39.040 may be a conflict coming at some point, sure, absolutely, 0:10:39.200 --> 0:10:42.360 But when you're living in Taiwan and you're you're facing 0:10:42.360 --> 0:10:46.160 the threats constantly, the Taiwanese people are not willing to 0:10:46.200 --> 0:10:49.520 back down to a bully. Just because China wants something 0:10:49.640 --> 0:10:51.920 doesn't mean in the eyes of the Taiwanese people that 0:10:51.960 --> 0:10:54.720 they should do it. They have been bullied by China 0:10:54.760 --> 0:10:57.200 for a long time. They've seen what happened to Hong Kong, 0:10:58.000 --> 0:11:00.360 and the idea of one country to assist a which 0:11:00.400 --> 0:11:02.560 was dangled in front of the Taiwanese people for quite 0:11:02.559 --> 0:11:05.560 a long time, has disappeared. So it really don't how 0:11:05.600 --> 0:11:09.680 much choice. Yeah, no, absolutely. In the meantime, there have 0:11:09.840 --> 0:11:13.800 been some economic actions taken as well, so far, I 0:11:13.840 --> 0:11:16.320 guess not a massive amount of actions, but still, you know, 0:11:16.320 --> 0:11:19.960 it will hurt citrus farmers in Taiwan. Sand is not natural. 0:11:19.960 --> 0:11:21.840 Sand is not going to be exported to Taiwan, and 0:11:21.880 --> 0:11:25.520 so on. There's also the danger that the chip manufacturing 0:11:25.559 --> 0:11:28.200 industry might be hurt in some way by this. What 0:11:28.480 --> 0:11:32.679 is the view on the economic impact so far? Yeah, 0:11:32.720 --> 0:11:36.320 you're right, there's been close to two thousand food items 0:11:36.360 --> 0:11:39.840 supposedly banned from import. Citrus fruits are as types of 0:11:39.880 --> 0:11:42.800 snack foods. From an economic point of view, it's like 0:11:43.160 --> 0:11:47.839 one percent of export, but symbolically it's important, and these 0:11:47.880 --> 0:11:51.120 are kind of traditional, smaller industries that have a relatively 0:11:51.200 --> 0:11:54.120 higher labor employment rate. So you know, it's a bit 0:11:54.120 --> 0:11:56.480 of a pain. But one thing that I'm hearing from 0:11:56.480 --> 0:11:59.760 Taiwanese is great, it will make us less reliant on China, 0:12:00.040 --> 0:12:02.280 as many many people in Taiwan who feel that Taiwan 0:12:02.360 --> 0:12:05.079 is too reliant on China as an export market. I 0:12:05.080 --> 0:12:10.240 mean right, yeah, yeah, Well, the second largest economy and 0:12:10.360 --> 0:12:13.240 largest growing economy, even though China is slowing down, still 0:12:13.280 --> 0:12:16.120 a very very important market for everybody, not just for Taiwan, 0:12:16.160 --> 0:12:19.160 for everybody. Taiwanese aware of that, but they also a 0:12:19.440 --> 0:12:22.560 bit pragmatic, going well, economically, that doesn't make sense for 0:12:22.640 --> 0:12:25.280 us to be so reliant on a nation that is 0:12:25.320 --> 0:12:28.080 threatening to invade us. You know, there's there's definitely an 0:12:28.080 --> 0:12:31.080 issue there. So there's a certain amount of pragmatism by 0:12:31.120 --> 0:12:33.280 many Taiwanese right now saying, well, that kind of sucks, 0:12:33.320 --> 0:12:36.520 but it's your loss, not ours. On the chip side, 0:12:36.559 --> 0:12:39.640 there is definitely a risk. But Mark Leo, the chairman 0:12:39.679 --> 0:12:42.920 of t SMC, just said recently, if China was to invade, 0:12:42.960 --> 0:12:46.320 they would render t SMC inoperable. People who know the 0:12:46.360 --> 0:12:49.520 industry know very well, but you can't just invade Taiwan 0:12:49.600 --> 0:12:53.800 and take over the factories and somehow run it yourself. 0:12:53.840 --> 0:12:56.280 The factories are not just the equipment, it's to know how, 0:12:56.320 --> 0:12:59.040 it's the technology, it's the people, the software behind it, 0:12:59.600 --> 0:13:02.600 and actually just doesn't have the technical ability to make 0:13:02.679 --> 0:13:05.000 chips like the Taiwanese do. We know this for a 0:13:05.000 --> 0:13:09.160 fact because they've been trying. So if there was actually 0:13:09.240 --> 0:13:12.200 some kind of military action on the main island, everybody 0:13:12.240 --> 0:13:15.360 would lose, and Taiwan certainly would lose, but China would 0:13:15.360 --> 0:13:18.760 not get access to the chips. China needs Taiwan made 0:13:18.800 --> 0:13:22.079 chips just as much as everybody else, right, so they 0:13:22.160 --> 0:13:24.600 really would be shooting themselves in the foot. And the 0:13:24.679 --> 0:13:27.559 Chinese economy, which is growing very fast and it's got 0:13:27.559 --> 0:13:31.080 a very strong consumer in middle class economy needs the 0:13:31.120 --> 0:13:34.920 electronic products that are made by the Taiwanese. So it 0:13:34.960 --> 0:13:37.400 would be a very big risky move to try and 0:13:37.440 --> 0:13:39.920 take action on that front. Yeah, and I almost set 0:13:39.920 --> 0:13:43.360 to annunciated, but China could just nationalize the chip industry, 0:13:43.559 --> 0:13:46.320 you know, once it's taken over the island Milton. Well, 0:13:46.360 --> 0:13:48.079 they'd have to take over the island first, and that 0:13:48.080 --> 0:13:50.120 wouldn't be easy. You know, first of all, they'd have 0:13:50.120 --> 0:13:51.920 to take out the power stations. This is how the 0:13:51.920 --> 0:13:54.800 military started to think about it. They take out military 0:13:54.800 --> 0:13:59.760 installations first, take out power stations, take out infrastructure. And 0:14:00.200 --> 0:14:02.040 you know, if they do manage to love a whole 0:14:02.080 --> 0:14:05.200 lot of missiles and bombs of Taiwan and miss the 0:14:05.200 --> 0:14:08.880 semiconductor manufacturing factories and then managed to get boots on 0:14:08.920 --> 0:14:10.800 the ground and then managed to get people into the 0:14:10.840 --> 0:14:14.000 factories and then nationalize it, I don't think they have 0:14:14.120 --> 0:14:17.520 much left actually nationalize the The amount of destruction involved 0:14:17.520 --> 0:14:20.680 in the process of actually taking over the factories would 0:14:20.760 --> 0:14:24.360 render them useless. Anyway, Tim couldn as always do get 0:14:24.360 --> 0:14:27.560 in touch. Comments and opinions always welcome at Volley Quinn 0:14:27.560 --> 0:14:30.240 on Twitter or email v Quinn at Bloomberg dot net. 0:14:30.640 --> 0:14:33.280 The Inflation Reduction Act is a potential boon to many 0:14:33.320 --> 0:14:36.120 areas of the green economy. And it turns out the 0:14:36.160 --> 0:14:40.240 top ten districts for solar wind and battery compacity are 0:14:40.280 --> 0:14:43.800 eight six percent red. So if Republican districts tend to 0:14:43.840 --> 0:14:46.880 benefit from the green transition, why the disconnect? Why are 0:14:46.920 --> 0:14:50.280 Republicans not outwardly at least in favor. Liam Denning has 0:14:50.320 --> 0:14:53.480 been looking at the data. Liam, Why are Republicans at 0:14:53.520 --> 0:14:57.800 least outwardly not more in favor of the green transition? Well, 0:14:57.840 --> 0:15:02.320 I guess it's probably explained mostly ideology more than anything else. 0:15:02.760 --> 0:15:05.400 The genesis of this piece was I worked with an 0:15:05.440 --> 0:15:09.040 outside data firm called in a Section, and we wanted 0:15:09.080 --> 0:15:12.160 to really see if the reality is on the ground 0:15:12.200 --> 0:15:16.240 in terms of where stuff actually gets cited comports with 0:15:16.400 --> 0:15:19.400 this received wisdom on the sector in the US. You 0:15:19.440 --> 0:15:22.160 know this color code we have that basically green mixes 0:15:22.160 --> 0:15:24.640 with blue, but it doesn't mix with red. And actually, 0:15:24.680 --> 0:15:27.480 when you you know, you download all the data on 0:15:27.840 --> 0:15:31.120 where solar wind and batteries are cited or where they're 0:15:31.160 --> 0:15:34.080 planned to be cited, and then you cross references with 0:15:34.160 --> 0:15:38.280 where this stuff is being built. It's overwhelmingly in districts 0:15:38.280 --> 0:15:41.200 that are represented by Republicans. The other thing that you 0:15:41.240 --> 0:15:44.240 mapped when you mapped Green America was the emissions side 0:15:44.240 --> 0:15:46.960 of things, So the not so green America. It turns 0:15:46.960 --> 0:15:49.920 out that it's also the case that Republican congressional districts 0:15:50.000 --> 0:15:52.120 have the most emissions. Tell us a little bit about 0:15:52.120 --> 0:15:55.840 where these districts are. So, for example, Kevin McCarthy's district, 0:15:55.920 --> 0:15:59.480 it's a huge green energy district, and yet Kevin McCarthy 0:15:59.560 --> 0:16:03.800 is not exactly beer prototypical green energy. Yeah, we focused 0:16:03.800 --> 0:16:06.360 in on Kevin McCarthy obviously because he's very prominent. He's 0:16:06.360 --> 0:16:09.960 the House Minority leader, and his district is fascinating because, 0:16:09.960 --> 0:16:12.880 as you say, it is a big green energy hub 0:16:13.080 --> 0:16:17.200 in in California. In fact, in terms of planned and 0:16:17.320 --> 0:16:20.520 operating battery capacity, it's the number one district, not just 0:16:20.560 --> 0:16:23.200 in California but in the country. At the same time, 0:16:23.200 --> 0:16:27.400 it's also a big wind and solar area. His district 0:16:27.560 --> 0:16:31.440 hosts the cradle of California's wind industry, has the Harvey Desert, 0:16:31.480 --> 0:16:34.680 which hosts a lot of solar farms, and his district 0:16:34.760 --> 0:16:39.520 centers on Bakersfield, which is also the unofficial oil capital 0:16:39.760 --> 0:16:43.320 of California. So, you know, one of the takeaways we 0:16:43.400 --> 0:16:47.040 took from not just his district, but the entire project 0:16:47.320 --> 0:16:50.760 is that the underlying complexity is very different from what 0:16:50.800 --> 0:16:54.040 you hear, both in terms of kind of SoundBite politics, 0:16:54.120 --> 0:16:56.720 but also you know the left right battles you see 0:16:56.720 --> 0:16:59.360 play out on social media. Well, and some of this 0:16:59.600 --> 0:17:02.640 is do to the system too, I guess, right, because 0:17:03.080 --> 0:17:05.439 while the transition is happening, people are still working in 0:17:05.480 --> 0:17:09.000 the old energy quote unquote areas and particularly in these districts, 0:17:09.000 --> 0:17:10.760 so they want to hold on to their jobs, and 0:17:11.000 --> 0:17:13.520 there's an elector to consider it too. Yeah, I think 0:17:13.560 --> 0:17:15.920 there's a few things going on. So, as you say, 0:17:15.960 --> 0:17:19.119 there's that element of transition to use the word that 0:17:19.160 --> 0:17:22.160 everyone uses, and in a transition, you go from old 0:17:22.240 --> 0:17:25.560 to new. And one of the things that Bedevil's climate 0:17:25.600 --> 0:17:29.159 politics is that climate change operates on a geological time scale, 0:17:29.240 --> 0:17:33.159 and society operates on two year election cycles or you know, 0:17:33.280 --> 0:17:38.880 two second Twitter cycles, definitely not geological cycles. So while 0:17:38.920 --> 0:17:42.560 there is fairly consistent concern about climate change expressed by 0:17:42.680 --> 0:17:46.240 Americans in whichever pole you care to mention. You know, 0:17:46.280 --> 0:17:48.480 it doesn't always necessarily come to the top of the 0:17:48.520 --> 0:17:51.600 list around election time. I think the other thing that 0:17:51.800 --> 0:17:56.720 underlies all this is that a big reason why green 0:17:56.720 --> 0:17:59.640 infrastructure is built in red soil is that that red 0:17:59.680 --> 0:18:02.719 soil will tends to be more rural or semi rural. 0:18:03.280 --> 0:18:06.159 And you know, guess what we tend to build Giant 0:18:06.160 --> 0:18:10.520 wind turbines, giant solar farms, big battery projects, and big 0:18:10.600 --> 0:18:13.959 plant in general, whether it's power stations or industrial plants. 0:18:14.240 --> 0:18:16.000 Those tend to get built where the land is cheap. 0:18:16.080 --> 0:18:18.280 You know. A good example is wind power, which is 0:18:18.560 --> 0:18:21.959 very much a Midwestern phenomenal, at least in the onshore sector, 0:18:22.280 --> 0:18:25.679 mainly because that's where the wind blows. You know, of 0:18:25.720 --> 0:18:30.040 the country's wind potential is intense states down the middle 0:18:30.080 --> 0:18:33.960 of the country, and the house districts in those states 0:18:34.080 --> 0:18:38.639 are Republicans. So part of this is simply geography and 0:18:38.680 --> 0:18:42.280 geography being at odds with ideology. Well, and that's the 0:18:42.320 --> 0:18:43.679 only thing. It's going to take a long time to 0:18:43.800 --> 0:18:46.560 enact the screen transition, and probably a lot longer than 0:18:46.600 --> 0:18:49.240 we thought. And even countries in Europe are reconsidering things 0:18:49.280 --> 0:18:51.960 like nuclear now because they're being forced to so back 0:18:51.960 --> 0:18:53.440 to the United States. If it's going to take a 0:18:53.480 --> 0:18:55.840 lot longer than we thought to enact this transition, is 0:18:55.880 --> 0:18:59.560 it possible that the electorate will change and that perhaps 0:18:59.640 --> 0:19:03.240 even representatives change their mind. You know, a cynic would 0:19:03.240 --> 0:19:05.200 say that the one thing that tends to change a 0:19:05.240 --> 0:19:08.119 politician's mind is money. And I think one of the 0:19:08.160 --> 0:19:10.040 things that we kind of did some back of the 0:19:10.119 --> 0:19:14.720 envelope math On was saying, if measures like the Inflation 0:19:15.000 --> 0:19:18.960 Reduction Act are pasted and we see stimulus dollars flow 0:19:19.000 --> 0:19:22.199 into clean tech projects at scale, where will that money go? 0:19:22.320 --> 0:19:25.640 And when we think about the planned capacity for batteries, 0:19:25.680 --> 0:19:28.880 wind and sober in the US, three quarters to four 0:19:28.960 --> 0:19:30.920 fifths of that money is going to end up in 0:19:30.960 --> 0:19:34.560 red districts. And I think over time, as we see 0:19:34.880 --> 0:19:38.600 green energy facts on the ground being created and when 0:19:38.600 --> 0:19:43.520 they reach critical mass, bringing with them that sort of investment, 0:19:43.760 --> 0:19:48.080 creating a tax base and a constituency all their own, 0:19:48.080 --> 0:19:52.639 whether it's a business constituency or a local individual constituency, 0:19:52.720 --> 0:19:54.800 at some point that does have an impact. At some 0:19:54.880 --> 0:19:58.280 point a politician who is maybe saying we don't need 0:19:58.320 --> 0:20:01.119 any of this stuff, a local business leader is going 0:20:01.160 --> 0:20:03.240 to tap them on the back and say, actually, this 0:20:03.240 --> 0:20:07.359 stuff is making us money, Liam Denning. Many commodity prices 0:20:07.359 --> 0:20:11.040 are down substantially from their peaks. That's, however, cold comfort 0:20:11.080 --> 0:20:13.920 for nearly eight hundred million food insecure around the world. 0:20:14.080 --> 0:20:17.040 Let's get to David Fickling for some explanation. So, David, 0:20:17.080 --> 0:20:19.360 there was huge relief in grain markets when we saw 0:20:19.400 --> 0:20:21.840 that first ship leave the port of Odessa for Elebanon. 0:20:22.200 --> 0:20:24.480 Prices have come down for all sorts of grains and 0:20:24.600 --> 0:20:26.840 oil seeds, and it's a big difference from when we 0:20:26.880 --> 0:20:29.919 spoke earlier in the year about the difficulties in palm oil, 0:20:30.080 --> 0:20:33.240 wheat and other markets. But in terms of food security, 0:20:33.600 --> 0:20:36.600 the situation is much more complicated and multi factored than 0:20:36.720 --> 0:20:39.960 simply prices are too high. I think that's right. It's 0:20:40.040 --> 0:20:42.800 very much feels like we've passed the sort of acute 0:20:42.800 --> 0:20:46.800 phase of food crisis. But I think there's a chronic 0:20:46.880 --> 0:20:50.040 problem underlying this. To use the sort of medical metaphor, 0:20:50.080 --> 0:20:53.080 I mean, you look at a bunch of commodities, spring wheats, 0:20:53.200 --> 0:20:55.679 the benchmark in the US, it's done more than a 0:20:55.720 --> 0:20:58.119 third at this point from where it was in March 0:20:58.320 --> 0:21:00.840 palm all. You mentioned oil feeds that forty percent in 0:21:00.920 --> 0:21:04.480 papril corn prices, and by nearly a course in my 0:21:04.920 --> 0:21:08.080 sugar and Arabic a coffee. They're all a one year, 0:21:08.160 --> 0:21:11.200 nine months load. But although the price of these commodities 0:21:11.200 --> 0:21:15.439 are still actually reasonably hired by ten years standards, certainly 0:21:15.440 --> 0:21:17.200 compared to where we where a few months ago, there's 0:21:17.240 --> 0:21:20.000 come down a great deal and we're starting to see 0:21:20.000 --> 0:21:22.160 signs that maybe certain these things were returning to normal. 0:21:22.359 --> 0:21:25.239 So that's great, and we should be very excited for 0:21:25.320 --> 0:21:27.879 the world's poor and hungry that perhaps they have a 0:21:27.960 --> 0:21:30.280 chance to get food again. But that's not quite the case, 0:21:30.440 --> 0:21:33.440 is it. That's right, because I think there's a tendency 0:21:33.520 --> 0:21:36.439 for us in rich countries looking at commodity markets to 0:21:36.640 --> 0:21:41.119 rather overestimate the importance of the prices of benchmark commodity 0:21:41.160 --> 0:21:44.399 futures as a sort of index of the affordability of 0:21:44.440 --> 0:21:47.720 food for the world's poorest. It's certainly a factor, but 0:21:48.119 --> 0:21:50.200 one of many factors, and not even I would say 0:21:50.240 --> 0:21:52.639 the most important factor. You know, if I was to 0:21:52.720 --> 0:21:56.480 say one factor above all that affects food insecurity, and 0:21:56.680 --> 0:22:00.440 bear in mind the population of people facing under nourishment 0:22:00.480 --> 0:22:02.560 who don't have enough food through the year to give 0:22:02.600 --> 0:22:06.600 them a balanced diet. It's looking now at being the 0:22:06.720 --> 0:22:10.840 highest in one since the mid two thousands, about seven 0:22:10.960 --> 0:22:13.639 hundred and sixty eight million people, possibly higher than that. 0:22:13.720 --> 0:22:16.359 One in ten people in the world very nearly do 0:22:16.480 --> 0:22:19.160 not have enough nourishment to provide them with a balanced 0:22:19.160 --> 0:22:23.560 diet or a real improvement. That number, far from us 0:22:23.680 --> 0:22:25.399