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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast kettas live weekdays at noon

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Speaker 1: and five pm Eastern on Apple Cocklay and Android Auto

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Speaker 1: with the Bloomberg Business App. Listen on demand wherever you

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Speaker 1: get your podcasts, or watch us live on YouTube.

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Speaker 2: Markets.

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Speaker 3: Of course, try to make sense of conflicting narratives when

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Speaker 3: it comes to the war in Iran, which is Joe

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Speaker 3: mentioned is now in its fifth week, knowing that President

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Speaker 3: Trump initially suggested this could be a four to six

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Speaker 3: week operation, and yet as of right now, there is

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Speaker 3: no clear end in sight. A headline just crossing the

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Speaker 3: terminal that Israel says it has struck one hundred and

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Speaker 3: seventy Iranian targets in just the past twenty four hours,

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Speaker 3: and of course we saw over the weekend more US

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Speaker 3: service members, including an amphibious assault ship with sailors and

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Speaker 3: marines thousands of them on board, arriving in the theater,

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Speaker 3: with more on the way. All of that's to say, though,

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Speaker 3: that there is still potentially a diplomatic offramp being pursued

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Speaker 3: by President Trump. As he gave a status update to

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Speaker 3: reporters a Bord Air Force one last night.

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Speaker 4: They've agreed to send eight boats two days ago, and

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Speaker 4: then they edited another two so was ten boats. And

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Speaker 4: now today they gave us as a tribute. I don't know,

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Speaker 4: I can't define it exactly, but they gave us, I think,

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Speaker 4: out of a sign of respect, twenty boats of oil,

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Speaker 4: big big boats of oil going through the Harmost straight.

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Speaker 4: We're doing extremely well and that negotiation, but you never

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Speaker 4: know where they're end because we negotiate with them and

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Speaker 4: then we always have to blow them up.

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Speaker 5: We always have to blow them up, the President says,

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Speaker 5: stark rhetoric that would match the tone of his truth

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Speaker 5: social post this morning, following his post last week on

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Speaker 5: a Monday in the seven am hour. He did the

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Speaker 5: same thing today, with of course, eyes on the markets.

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Speaker 5: This didn't really make a lot of people feel good, though,

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Speaker 5: as he did talk about serious discussions with a new

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Speaker 5: and more reasonable regime. Unclear exactly what he's referring to,

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Speaker 5: but without a deal, he says, and if the Strait

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Speaker 5: is not immediately open, we will conclude our lovely stay

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Speaker 5: in Iran, the President writes, by blowing up and completely

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Speaker 5: obliterating all of their electric generating plants, oil wells, and

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Speaker 5: carg Island, and he says, and possibly all desalinization plants

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Speaker 5: which we have purposely not yet touched. Jeff Mason is

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Speaker 5: Bloomberg's White House correspondent and joins us live here in

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Speaker 5: our Washington bureau.

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Speaker 2: Jeff, it's great to see you.

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Speaker 5: I can't imagine another president issuing rhetoric like this, but

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Speaker 5: it's difficult to tell. Is Kaylee framed this perfectly at

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Speaker 5: the top of the hour, We've got a good cop,

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Speaker 5: bad cop, and it's the same guy.

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Speaker 2: Who were you listening to? Well? Indeed, I mean, I

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Speaker 2: think that's the question. It's you. Guys.

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Speaker 6: Also mentioned the fact that there have been mixed messages

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Speaker 6: on the war, and there have been mixed messages on

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Speaker 6: the war from the very beginning when the president first

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Speaker 6: announced it, and I think there are different motivations behind that.

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Speaker 6: One of them is clearly he's sensitivity to the markets

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Speaker 6: and the way the market is responding. You've heard him

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Speaker 6: come out and say, ah, the war is not going

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Speaker 6: to last very long or it's going to end quickly,

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Speaker 6: when he is upset about the oil price is going up,

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Speaker 6: But then in the same breath or the next day,

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Speaker 6: in this case, the next day he issues another threat,

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Speaker 6: and if you're in the market, it's hard to interpret

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Speaker 6: that other than to say it's a little bit of

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Speaker 6: Jekyll and Hyde.

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Speaker 3: Well, well, you should point out we are expecting this

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Speaker 3: hour a briefing from the White House Press Secretary Carolinelevit

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Speaker 3: will see if we can get any more clarity from

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Speaker 3: her either way. But when we consider that the president himself,

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Speaker 3: it's not just what he's saying in media gaggles like

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Speaker 3: what we saw born Air Force Wan or on social media.

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Speaker 3: He's also doing some singular interviews. You spoke with our

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Speaker 3: Colleagueinry Herder and briefly on the phone today. He also

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Speaker 3: spoke with The Financial Times talking about how he wants

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Speaker 3: to take a Ron's oil.

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Speaker 7: What do you understand that to mean?

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Speaker 6: Jeff the President is someone who obviously has a real

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Speaker 6: estate background. He speaks in the language, and I think

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Speaker 6: he has a paradigm of gifts.

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Speaker 2: This is something good for me.

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Speaker 6: He talked about Iran was making a tribute, perhaps to

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Speaker 6: the United States with the boats.

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Speaker 2: I don't cover.

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Speaker 6: Iran as a full time job, but I'm pretty sure

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Speaker 6: that wasn't a tribute, but that I guess I say

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Speaker 6: all of that in terms of like, this is just

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Speaker 6: the psychology of the president, and when he uses language

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Speaker 6: like that, that's the paradigm that he sees it, or

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Speaker 6: the framework through which he sees these things.

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Speaker 5: Out of a sign of respect, he said, I can't

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Speaker 5: define it exactly, but they let ten boats through, he says, big,

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Speaker 5: big boats of oil.

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Speaker 2: Those are not American interests, to be clear.

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Speaker 6: And it's interesting that too, because the President has liked

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Speaker 6: to emphasize that the United States does not rely on

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Speaker 6: oil coming through the Strait of Hormones as much as

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Speaker 6: other countries do, which has been a sticking point for

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Speaker 6: him in terms of feeling that NATO allies should be

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Speaker 6: stepping up more, should be helping the United States more.

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Speaker 6: That said, I think it's also really important to notice

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Speaker 6: or to point out that even if that is true,

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Speaker 6: that the US has so many other oil sources, the

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Speaker 6: US is connected to the rest of the world via

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Speaker 6: the global economy. So if our allies, if US allies

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Speaker 6: are suffering because of a war that the United States

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Speaker 6: and Israel started with Iran, and that that is leading

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Speaker 6: to oil prices or this strait being closed or mostly closed.

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Speaker 2: Even if the US doesn't.

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Speaker 6: Rely on as much oil or natural gas coming through

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Speaker 6: there others do, and that has an impact as well.

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Speaker 3: Yeah, even our energy that we produce here at home

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Speaker 3: hasn't been able to prevent four dollar gallon of gas

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Speaker 3: in much of the country. Jeff Mason covering the White

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Speaker 3: House for US here at Bloomberg, Thank you so much.

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Speaker 3: And of course, as we consider what is driving those

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Speaker 3: oil prices up, largely, it is because the Strait of

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Speaker 3: Ormus remains in effective closed, if not just controlled by Iran,

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Speaker 3: which is why President Trump is issuing this ultimatum open

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Speaker 3: the Straight or else get your energy infrastructure and potentially

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Speaker 3: water infrastructure as well attacked. In addition to the many

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Speaker 3: attacks and strikes that have been carried out on military

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Speaker 3: targets already in Iran, a military operation which the President

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Speaker 3: does maintain is still a head of schedule. Here's something else,

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Speaker 3: he told reporters a board Air Force one last.

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Speaker 2: Night with Iran, where week sit ahead of schedule?

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Speaker 4: If you would have said that in three days we

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Speaker 4: were going to knock out one hundred and fifty eight

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Speaker 4: ships here retire navy, which we did. We knocked out

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Speaker 4: their entire air force. We knocked out most of them missiles.

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Speaker 4: That's why you see missile attacks. But they're down to sputtering.

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Speaker 3: So let's get more on this now as we turn

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Speaker 3: Joe to Michael Allen, Managing director of Beacon Global Strategies,

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Speaker 3: also former Special assistant to President George W. Bush in

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Speaker 3: the national security sector. He's here with us in our Washington,

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Speaker 3: d C.

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Speaker 7: Studio. Michael, welcome back to Spoomberg TV.

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Speaker 2: Are you so much?

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Speaker 7: Always get to see you.

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Speaker 3: The President, of course, says we're still ahead of schedule,

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Speaker 3: though by my calculation, we don't have that much more

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Speaker 3: time to be ahead of schedule. If this was only

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Speaker 3: supposed to be a max six week operation in the

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Speaker 3: first place, and we're in week five, do you expect

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Speaker 3: that it is going to end at six weeks with

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Speaker 3: the signals we are seeing, both from the troop presence

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Speaker 3: that is getting even larger in the Middle East and

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Speaker 3: the rhetoric.

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Speaker 7: From the President.

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Speaker 2: I don't think so.

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Speaker 8: I think that we still have work to do to

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Speaker 8: sort of set the conditions around the strait of horror

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Speaker 8: moves for us to even begin to move to an

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Speaker 8: escort mission. Work, of course, have been in an attack mission.

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Speaker 8: We've been in a missile defense mission, but to shift

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Speaker 8: they have to finish degrading the coastal defenses of Iran.

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Speaker 8: They probably need to degrade their drones more and of

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Speaker 8: course fast boats. So we're bringing the equipment over. It's

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Speaker 8: going to take time, but I think it's going to

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Speaker 8: be a little bit longer than forecast. That's the narrative

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Speaker 8: in the major papers this morning. The New York Times

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Speaker 8: talking about several hundred US Special Operations Forces rangers and

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Speaker 8: Navy seals joining thousands of Marines and Army paratroopers in deployment,

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Speaker 8: The Post talking about a Pentagon preparing for weeks of

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Speaker 8: ground operations in Iran. Does that feel to you like

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Speaker 8: where we're going or is this a deal that's about

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Speaker 8: to be struck as the President suggest I.

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Speaker 2: Definitely don't think there's a deal in the offing.

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Speaker 8: I don't even know that we've met indirectly, so to speak.

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Speaker 8: What I think might be happening is that the President

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Speaker 8: is serious or is seriously thinking about taking carg Island

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Speaker 8: right now. That's not my base case. I'm not sure

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Speaker 8: or certain that he would. It might be just something

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Speaker 8: that gives him options, gives him leverage. Allows him to

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Speaker 8: take an economic hostage if the Iranians continue not to

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Speaker 8: cooperate when it comes time to reopen the straight But yeah,

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Speaker 8: I think he's making sure he's got the tools in

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Speaker 8: place to do that if he feels like he needs to.

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Speaker 3: Well, when we think about the Iranian regime, which President

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Speaker 3: Trump described on True Social Today as new and also

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Speaker 3: as more reasonable, I wonder if that matches your assessment, Mike.

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Speaker 3: Is this really a new regime or is it just

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Speaker 3: a cast of characters that has changed at the top

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Speaker 3: of the same regime.

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Speaker 8: Well, it seems like the new boss is the same

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Speaker 8: as the old boss. It's a hardcore element of the

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Speaker 8: iran Is people that are good with the Islamic Revolutionary Guard,

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Speaker 8: that are in good standing with the clerics. Maybe some

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Speaker 8: of these newer people have some ability to compromise more,

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Speaker 8: or maybe they're more pragmatic than others, but I think they're.

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Speaker 2: All hardliners over there.

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Speaker 8: I think that there's mad as a hornet right now

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Speaker 8: as well, and so I don't know that the conditions

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Speaker 8: are really set for anyone to earnestly put forward positions

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Speaker 8: other than the ones so far which have been totally maximalist.

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Speaker 8: Like get the United States out of the Middle East

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Speaker 8: and you see everything Iran, including your ballistic missile program.

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Speaker 2: How important is it to you?

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Speaker 5: And it does seem to be to the administration, whether

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Speaker 5: part of a deal or we go in and get

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Speaker 5: the thousand pounds of enriched uranium that's sitting somewhere, likely underground.

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Speaker 8: This would be one of the biggest operations I think

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Speaker 8: in American history.

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Speaker 2: It would be in norm gale Are importance scale.

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Speaker 8: It would be it's not just the special Operations raid

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Speaker 8: think of Sama bin Laden or against Maduro. I think

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Speaker 8: it would take let's just guess here, one thousand troops

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Speaker 8: set up perimeter for more than a day at least

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Speaker 8: to use yeah, earth moving equipment and who knows what else,

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Speaker 8: to dig it out under fire, and then put it

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Speaker 8: on an airplane.

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Speaker 2: To ship out again.

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Speaker 8: I could see carg Island happening sooner than I could

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Speaker 8: really this HU although one you can't rule it l

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Speaker 8: with President Trump, and I've heard General say that if

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Speaker 8: we've planned it well enough, that we can do it.

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Speaker 8: But it does seem a little bit daunting, and it's

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Speaker 8: important and it's critical to do, but maybe there's other

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Speaker 8: ways for us to neutralize it over time. People say, well,

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Speaker 8: you know what if we just stared at it over

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Speaker 8: over satellites and if roan ever comes close to where

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Speaker 8: we think it's buried, we'll just hit them again. But

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Speaker 8: you know, it's another big question mark on how we

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Speaker 8: might use ground troops.

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Speaker 7: But is that where we stumble into quagmire risk? More substantially,

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Speaker 7: I think we're.

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Speaker 8: Only in a total clack quagmire with ground troops as

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Speaker 8: if we invade and try to hold territory.

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Speaker 7: Like for the island, for example.

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Speaker 8: For an extended period of time, And so I don't

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Speaker 8: think we would be around Esfahan retrieving the HU for

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Speaker 8: an extended period of time. But yeah, I think if

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Speaker 8: you're holding carg Island, I have been persuaded by a

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Speaker 8: lot of sort of the export expert testimony that yeah,

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Speaker 8: you know what it would be, they would hold us

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Speaker 8: in harm because of the drones, proximity to drones and

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Speaker 8: the rest.

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Speaker 2: So I think there's a lot to that.

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Speaker 5: You've talked to us about the taco trade before, which

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Speaker 5: doesn't seem to be working for investors in quite the

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Speaker 5: same way. John Author's writing on the Bloomberg about a

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Speaker 5: different acronym. It's not taco, it's wacko. Will the Ayatola's

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Speaker 5: chicken out? And he says raiders are concluding they almost

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Speaker 5: certainly will not. And so prices enter Holy Week under

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Speaker 5: the worst pressure of this now month old conflict. Nobody's

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Speaker 5: going to want to go along into this long weekend

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Speaker 5: for fear of what happens.

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Speaker 2: Michael, Well, yeah, I agree.

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Speaker 8: I mean the Iotola's the regime is this is obviously

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Speaker 8: an existential threat. I mean our targeting alone, but of

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Speaker 8: course you add what Israel's doing there. They feel like

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Speaker 8: they can use any tool in their toolkit. That's why

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Speaker 8: they're taking shots at the Gulf Arabs, That's why they're

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Speaker 8: taking shots earlier in the campaign at their energy infrastructure.

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Speaker 8: That's of course why they feel so liberated to have

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Speaker 8: threatened ships going through the Strait. And so I feel

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Speaker 8: like they are going to fight. Their back is against

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Speaker 8: the wall and everything for them is.

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Speaker 2: On the table.

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Speaker 3: Well, and then there's the proxies to consider. You already

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Speaker 3: have the front that has opened up on the border

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Speaker 3: with Lebanon an Israel as they go after Hesbla, and

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Speaker 3: now the Huthis also are launching drones and missiles at Israel.

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Speaker 3: We all remember what they were able to do with

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Speaker 3: commercial shipping, effectively cutting it off in the Red Sea

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Speaker 3: back in twenty twenty three. How high is the risk

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Speaker 3: that we could see that scenario repeating?

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Speaker 8: Oh, I think it's very high. I mean, people have

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Speaker 8: been trying to figure out for the last few weeks

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Speaker 8: why the Hohothy was the dog that didn't bark. But

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Speaker 8: you know, they've started to engage a little bit more

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Speaker 8: here if they start not just targeting Israel, as you say,

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Speaker 8: but beginning to target again ships transiting you know, Katie

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Speaker 8: bar the door.

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Speaker 2: I don't know. Oil prices are going higher and higher

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Speaker 2: and higher.

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Speaker 5: Markets are turning lower before our ours here. By the way,

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Speaker 5: I just want to mention the S and P is

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Speaker 5: down five now, the Nasdaq is down eighty nine points

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Speaker 5: after early gains. In our remaining moment, you spend time

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Speaker 5: on national security, as we've already established, and whenever you

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Speaker 5: visit in the George W. Bush administration, you were certainly

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Speaker 5: gaming out any number of possibilities involving Iran or these

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Speaker 5: these options we're talking about for President Trump, things that

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Speaker 5: you had your eyes on.

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Speaker 2: Carg Island, et cetera. Carg Island.

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Speaker 8: I think has been on everyone's list for some period

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Speaker 8: of time when we were thinking about sanctions and maximum pressure,

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Speaker 8: because it was always how do you get to the

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Speaker 8: Iranian oil?

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Speaker 2: And here's their choke point, if you will.

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Speaker 8: By the way, the world's choke point, of course, is

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Speaker 8: the strait of our moves.

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Speaker 2: This is their change that out too. What's that straight?

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Speaker 5: Yes, we've had these maps, you had these battle plans

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Speaker 5: in front of you.

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Speaker 9: Oh.

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Speaker 8: No, I had sort of a different role, more along

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Speaker 8: the putting pressure on Iran in that particular office and

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Speaker 8: less the military plans. But no, I know that these

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Speaker 8: two items have been part of military planning for some

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Speaker 8: period of time, and I think this is something that

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Speaker 8: we've got to figure out how to deal with or

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Speaker 8: else we've given the Iranians a lot more leverage than

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Speaker 8: they had before.

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Speaker 2: This thing began.

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Speaker 5: Well, I know this is something that you've been very

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Speaker 5: close to for some time. We'd like to stay close

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Speaker 5: to you on this, Michael, Thank you for coming in.

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Speaker 5: Michael Allen, Managing Director, Beacon Global Strategies. We'll assemble our

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Speaker 5: political panel next for their take on this. Rick Davis

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Speaker 5: and Genie Shanzano on the way here. Stay with on

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Speaker 5: Balance of Power. Will have much more coming up after this.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast ketsas

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Speaker 1: live weekdays at noon and five pm Eastern on Apple

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Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. You

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Speaker 1: New York station, Just say Alexa play Bloomberg eleven thirty.

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Speaker 3: Here in Washington, it's fairly quiet in town except for

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Speaker 3: all of the spring breakers who have traveled here to

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Speaker 3: see the cherry blossoms, see visits and museums in the

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Speaker 3: monuments on what is spring break? For many across the country,

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Speaker 3: it is also not spring break but two week recess

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Speaker 3: time for those who are not here in Washington. Members

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Speaker 3: of Congress, both the House and Senate out for two weeks,

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Speaker 3: Joe having left town without funding the Department of Homeland Security,

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Speaker 3: which is now in a shutdown that is record long

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Speaker 3: in length. We thought the Senate had reached a compromise.

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Speaker 3: The House said no, thank you, and we will see

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Speaker 3: no progress until members return two weeks.

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Speaker 2: From Yeah, the storyline White House calls.

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Speaker 10: Him back sooner.

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Speaker 5: Well, I guess that could happen this week or next.

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Speaker 5: The storyline late Thursday was we got a deal TSA

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Speaker 5: hang on the paychecks are common, and that part still

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Speaker 5: happened because the President, of course signed an executive order

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Speaker 5: to pay TSA agents. We're told they're going to start

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Speaker 5: getting paid today, Kaylee. Whether that helps to kind of

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Speaker 5: unwind some of the issues at the airports, It still

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Speaker 5: leaves FEMA and the Coastguard, and I'm not sure why

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Speaker 5: no one's talking about that. But of course the President

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Speaker 5: of the United States has his focus today on Iran

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Speaker 5: and the latest here with this war that is now

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Speaker 5: entering its fifth week, and we want to bring in

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Speaker 5: our political panel for the latest on all of this.

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Speaker 5: With a new threat from the President on truth social

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Speaker 5: that will conclude our lovely stay in Iran by blowing

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Speaker 5: up and completely obliterating all of their electric generating plants.

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Speaker 2: He even threatens desalinization plants.

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Speaker 5: Bloomberg Politics contributors Rick Davis and Genie Shanzano are with us.

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Speaker 5: Genius of course, our democratic analyst and democracy visiting fellow

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Speaker 5: at Harvard Kennedy School's Ash Center. Rick is our Republican

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Speaker 5: strategist and partner at Stone court capital Genie. The President says,

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Speaker 5: a lot of stuff, and it's not always factored in

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Speaker 5: on a serious level. When you start threatening power plants,

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Speaker 5: desalinization plants, he says.

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Speaker 2: Oil wells in Iran.

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Speaker 5: Many have noted that these would be war crimes if

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Speaker 5: the President followed through on them. How should we interpret

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Speaker 5: this rhetoric?

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Speaker 11: Yeah, I mean, they are absolutely war crimes. They are

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Speaker 11: a violation of international law. These targets are civilian targets.

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Speaker 11: This is not unlike what Russia has done in Ukraine

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Speaker 11: that we have spoken out viscerally against rightly. So for

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Speaker 11: the President of the United States to sort of cavalierly

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Speaker 11: put this on truth social with these threats is jarring.

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Speaker 11: The reality is, and I think the President is well

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Speaker 11: aware of this, is he is in a very tough bind,

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Speaker 11: as are we as the United States, because at this

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Speaker 11: point Iran holds all the cards. There is no way

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Speaker 11: for us to de escalate. At this point, they don't

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Speaker 11: trust us to negotiate, nor should they, because the last

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Speaker 11: two times we.

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Speaker 10: Did, we bombed them.

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Speaker 11: Afterwards, they have a threat to their entire nation. State

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Speaker 11: is under threat by Israel and the United States because

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Speaker 11: we not only want regime change. We want to wipe

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Speaker 11: them out, so they have very little incentive and they're

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Speaker 11: holding all the cards right now. The longer this drags on,

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Speaker 11: the more desperate the United States and the world economy

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Speaker 11: gets in, the more leverage they have. So it's a

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Speaker 11: very tough situation. We need to find an exit and

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Speaker 11: the President, and I think his bluster and sort of

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Speaker 11: bravado shows this is searching desperately for one.

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Speaker 10: But he hasn't come up with a game plan yet.

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Speaker 11: And that's where we stand today, with oil prices shooting up,

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Speaker 11: fertilizer prices shooting up, and the world economy literally on

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Speaker 11: the brink unless he is able to figure out an

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Speaker 11: off ramp here.

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Speaker 3: Well and Rick, as we consider the market forces here,

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Speaker 3: what we're seeing in oil and commodities prices, what we've

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Speaker 3: seen in stock markets. Many are pointing to the timing

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Speaker 3: of the statements we've gotten from President Trump and how

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Speaker 3: he may be wary of that as well. Even the

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Speaker 3: Speaker of Iron's Parliament posted on Twitter on x yesterday

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Speaker 3: heads up pre market so called news or truth is

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Speaker 3: often just a setup for profit taking. Basically, it's a

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Speaker 3: reverse indicator, and what do we get a couple hours

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Speaker 3: before the bell rings this morning, Rick, President Trump at

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Speaker 3: on True Social talking both about great progress and negotiations

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Speaker 3: and threatening Iranian energy infrastructure.

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Speaker 7: Is that timing coincidence?

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Speaker 2: Well, you know, if it were just one message.

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Speaker 12: That I'd say it wasn't coincidental, because you'd be trying

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Speaker 12: to bolster the price, you know, take down the price

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Speaker 12: oil or bolster the stock market.

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Speaker 2: But when you deliver both those.

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Speaker 12: Messages, it's like trying to figure out what the net

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Speaker 12: effect on the markets are. It just, you know, I

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Speaker 12: think just slumps everything. So look, one of the things

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Speaker 12: the President is desperately in need to do, and the

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Speaker 12: pulling data, now that we've been in this over a month,

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Speaker 12: is starting to really firm up strongly, is that he's

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Speaker 12: got to convince the American public that this escapade is

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Speaker 12: worth its effort. You know, the public is coming in

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Speaker 12: hard against this war. They're coming in hard against ground troops.

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Speaker 12: They're unhappy that the price of gasoline has gone up

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Speaker 12: to almost four dollars. I think it's three point ninety

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Speaker 12: nine today. And so this now the war in Iran

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Speaker 12: is second only to the cost of living. And there's

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Speaker 12: some crucial connections between the two, and so I think

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Speaker 12: the President has to start spending less time on the

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Speaker 12: back of airplanes are true social taking hotshots at the

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Speaker 12: Iranian public or the Iranian leadership, and spend more time

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Speaker 12: having a conversation with the American public as to why

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Speaker 12: this is important to them. What does this mean for

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Speaker 12: national security, what does this mean for their economic security,

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Speaker 12: what does this mean for inflation? These are all questions

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Speaker 12: that the public are raising, and they're not getting any

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Speaker 12: discussion with the administration on this, with.

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Speaker 5: Still no formal address from the president, so we rely

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Speaker 5: on the post sun truth Social Genie, what do you

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Speaker 5: make of the first line of this post? The president

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Speaker 5: clearly trying to convince people that regime change has occurred.

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Speaker 2: He says the US is in serious discussions.

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Speaker 5: With a new and more reasonable regime to end our

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Speaker 5: military operations in Iran. Will this be a consistent talking point,

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Speaker 5: you think, Genie, because if you read this post, it

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Speaker 5: sounds like objectives are being met.

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Speaker 11: Yeah, and that's absolutely what he's trying to say. Of course,

442
00:21:44,640 --> 00:21:47,440
Speaker 11: when Marco Rubio was pressed on this over the weekend,

443
00:21:47,560 --> 00:21:50,080
Speaker 11: he could not give a name as to who the

444
00:21:50,200 --> 00:21:53,480
Speaker 11: new regime is and what we do know is that

445
00:21:53,560 --> 00:21:56,800
Speaker 11: the new regime is a son the family member of

446
00:21:56,840 --> 00:22:00,520
Speaker 11: the old mid regime who is more hardlined than his father,

447
00:22:00,840 --> 00:22:04,600
Speaker 11: whose wife, child, father, and family members were all killed

448
00:22:04,640 --> 00:22:07,760
Speaker 11: in himself may have been severely wounded in that attack.

449
00:22:08,240 --> 00:22:11,440
Speaker 11: So there is no sign here in anybody who's familiar

450
00:22:11,560 --> 00:22:15,160
Speaker 11: with Iran knows that this is a very deep regime.

451
00:22:16,280 --> 00:22:19,359
Speaker 11: The fact is is that if we go back to January,

452
00:22:19,800 --> 00:22:24,159
Speaker 11: the Iranian nation, the Iranian regime is in far better

453
00:22:24,400 --> 00:22:28,760
Speaker 11: straits today and excuse the pun, than they were in January.

454
00:22:29,119 --> 00:22:32,280
Speaker 11: They are economically in better shape. They no longer have

455
00:22:32,440 --> 00:22:35,880
Speaker 11: sanctions because while we are bombing them, we have removed

456
00:22:35,920 --> 00:22:37,919
Speaker 11: the sanctions to get the oil out in the market,

457
00:22:37,920 --> 00:22:38,760
Speaker 11: which makes sense.

458
00:22:39,480 --> 00:22:41,440
Speaker 10: They are more hardlined.

459
00:22:41,800 --> 00:22:44,439
Speaker 11: They don't have protests going on in their country the

460
00:22:44,480 --> 00:22:45,240
Speaker 11: way they did.

461
00:22:45,640 --> 00:22:50,280
Speaker 10: So this is a very very difficult regime to destroy.

462
00:22:50,560 --> 00:22:54,480
Speaker 11: That's why all the presidents before Donald Trump didn't take

463
00:22:54,640 --> 00:22:56,000
Speaker 11: this view of Iran.

464
00:22:56,359 --> 00:22:58,200
Speaker 10: And so this is where we are today.

465
00:22:58,400 --> 00:23:00,960
Speaker 11: The United States is in worse shape and Iran is

466
00:23:01,000 --> 00:23:03,879
Speaker 11: in better shape. The world economy is in worshape, Iran

467
00:23:03,960 --> 00:23:07,640
Speaker 11: is in better shape. That is not winning in anybody's estimation,

468
00:23:07,800 --> 00:23:08,400
Speaker 11: or definition.

469
00:23:10,440 --> 00:23:12,560
Speaker 3: Well, so when we consider what it may take to

470
00:23:12,680 --> 00:23:16,080
Speaker 3: win if indeed ultimately regime change or seizing the uranium,

471
00:23:16,119 --> 00:23:18,520
Speaker 3: or seizing car Island, or things that the US might

472
00:23:18,640 --> 00:23:21,520
Speaker 3: want to pursue here Rick that could very well involve

473
00:23:21,920 --> 00:23:24,080
Speaker 3: ground forces. How do you think it makes a difference

474
00:23:24,119 --> 00:23:26,080
Speaker 3: in the President's mind to make the decision to send

475
00:23:26,080 --> 00:23:29,040
Speaker 3: ground troops in or not knowing conquress is gone for

476
00:23:29,119 --> 00:23:31,919
Speaker 3: two weeks in any kind of effort to exercise war powers,

477
00:23:31,960 --> 00:23:35,240
Speaker 3: authority would be on a break presumably until then.

478
00:23:36,480 --> 00:23:39,520
Speaker 12: Yeah, I think the President's pretty satisfied that after his

479
00:23:39,600 --> 00:23:45,800
Speaker 12: initial attacks on Iran that the Republicans blinked on war powers.

480
00:23:45,880 --> 00:23:47,800
Speaker 12: The leadership in the House and the leadership in the

481
00:23:47,840 --> 00:23:52,600
Speaker 12: Senate basically filed it off saying that not necessary. They're

482
00:23:52,640 --> 00:23:56,359
Speaker 12: the same leadership, so I can imagine they take the

483
00:23:56,359 --> 00:23:59,680
Speaker 12: heat for the president if he put a ground invasion

484
00:24:00,359 --> 00:24:05,040
Speaker 12: into Iran. Basically saying that no.

485
00:24:06,880 --> 00:24:08,359
Speaker 2: Resolution was necessary.

486
00:24:09,440 --> 00:24:14,439
Speaker 12: It runs a foul of everything that's happened historically around

487
00:24:14,440 --> 00:24:18,920
Speaker 12: these kinds of incursions. But this is a patent pending

488
00:24:19,359 --> 00:24:23,360
Speaker 12: Trump Congress. They do what he wants to do when

489
00:24:23,400 --> 00:24:28,000
Speaker 12: he wants to do it. There's very little leeway. Frankly,

490
00:24:28,760 --> 00:24:31,679
Speaker 12: you could argue that the President wanted to scramble the

491
00:24:31,720 --> 00:24:34,760
Speaker 12: deck a bit on the DHS side, and that's exactly

492
00:24:34,840 --> 00:24:37,760
Speaker 12: what he got. At one point he supported the Senate

493
00:24:37,800 --> 00:24:39,960
Speaker 12: and then he supported the House, and you can't have

494
00:24:40,040 --> 00:24:42,600
Speaker 12: it both ways. So at the end of the day,

495
00:24:43,400 --> 00:24:45,800
Speaker 12: I think the President has a free hand here when

496
00:24:45,840 --> 00:24:48,440
Speaker 12: it comes to being able to do what he wants

497
00:24:48,480 --> 00:24:52,480
Speaker 12: to do with the war effort in Iran without Congress

498
00:24:52,520 --> 00:24:55,359
Speaker 12: putting any shackles on his power.

499
00:24:57,320 --> 00:25:00,440
Speaker 5: Caroline Levitgenie is talking about the TSA right now. She's

500
00:25:00,520 --> 00:25:02,639
Speaker 5: just started at the White House briefing, which was a

501
00:25:02,720 --> 00:25:05,400
Speaker 5: late ad to the schedule. She says, the President's found

502
00:25:05,400 --> 00:25:06,879
Speaker 5: a way to make sure they get paid. He was

503
00:25:06,920 --> 00:25:08,320
Speaker 5: honored to do it, but it should be an eye

504
00:25:08,359 --> 00:25:11,680
Speaker 5: opening moment for the American people. There she is now

505
00:25:11,680 --> 00:25:16,119
Speaker 5: for those of you with us here on Bloomberg TV, Genie,

506
00:25:16,119 --> 00:25:18,840
Speaker 5: what do you make of this move? The President gets

507
00:25:18,880 --> 00:25:22,800
Speaker 5: TSA agents paid, takes away the pressure point to potentially

508
00:25:22,840 --> 00:25:25,359
Speaker 5: reopen the department. I don't know what it means for

509
00:25:25,400 --> 00:25:27,159
Speaker 5: FEMA or the Coastguard, but could we be in a

510
00:25:27,200 --> 00:25:30,679
Speaker 5: world now where DHS goes unfunded for months or the

511
00:25:30,680 --> 00:25:31,320
Speaker 5: rest of the year.

512
00:25:33,080 --> 00:25:34,600
Speaker 10: We absolutely could.

513
00:25:35,000 --> 00:25:37,840
Speaker 11: You know, it is just if any American needed another

514
00:25:37,920 --> 00:25:40,960
Speaker 11: reminder how dysfunctional DC is.

515
00:25:41,480 --> 00:25:42,560
Speaker 10: I mean, this is it.

516
00:25:42,720 --> 00:25:45,840
Speaker 11: They jet off for a two week vacation. We're in

517
00:25:45,880 --> 00:25:49,600
Speaker 11: the longest partial shutdown of a US department and we're

518
00:25:49,880 --> 00:25:52,560
Speaker 11: doing this at a time of war. I mean, let's

519
00:25:52,560 --> 00:25:56,199
Speaker 11: not forget DHS was created post nine to eleven to

520
00:25:56,320 --> 00:25:59,000
Speaker 11: address terrorists there. So we are in a war with

521
00:25:59,080 --> 00:26:03,679
Speaker 11: the Iranian region. They are very good at using terrorists,

522
00:26:03,680 --> 00:26:07,160
Speaker 11: soft targets and others to attack, and we have let

523
00:26:07,400 --> 00:26:08,920
Speaker 11: DHS go unfunded.

524
00:26:08,960 --> 00:26:10,359
Speaker 10: It makes no sense.

525
00:26:11,160 --> 00:26:14,520
Speaker 11: If the President could have paid TSA agents before he's

526
00:26:14,560 --> 00:26:16,680
Speaker 11: doing it now, he should have done it before he's

527
00:26:16,720 --> 00:26:20,320
Speaker 11: doing it now. But we need a Congress that functions.

528
00:26:20,400 --> 00:26:23,000
Speaker 11: And this is quite literally a pox on both of

529
00:26:23,040 --> 00:26:28,040
Speaker 11: their houses. Although Republicans and their infinite wisdom took something

530
00:26:28,080 --> 00:26:30,400
Speaker 11: that Democrats may have been a little bit blamed for

531
00:26:30,720 --> 00:26:33,320
Speaker 11: and they hoisted it on themselves by making it now,

532
00:26:33,560 --> 00:26:36,880
Speaker 11: you know, Republican on Republican violence, as we saw over

533
00:26:36,920 --> 00:26:41,080
Speaker 11: the weekend as the House Republicans and Senate Republicans traded barbs.

534
00:26:41,160 --> 00:26:44,280
Speaker 11: So this is a bad situation, and it's at a

535
00:26:44,359 --> 00:26:46,960
Speaker 11: dangerous time for this to happen, and they could go

536
00:26:47,119 --> 00:26:49,040
Speaker 11: unfunded if Congress doesn't act.

537
00:26:50,480 --> 00:26:53,359
Speaker 3: All right, Jeanie Shanzeno and Rick Davis our political panel today,

538
00:26:53,359 --> 00:26:55,760
Speaker 3: Bloomberg Politics contributors. The both of them thank you so

539
00:26:55,880 --> 00:26:57,440
Speaker 3: much in a bumjow that we ran out of time

540
00:26:57,440 --> 00:26:58,800
Speaker 3: there and we didn't get to talk about the fact

541
00:26:58,840 --> 00:27:02,439
Speaker 3: that Senator Lindsay Graham's off Carolina spotting Disney World.

542
00:27:03,520 --> 00:27:05,040
Speaker 2: Mickey just goes on Funday.

543
00:27:05,080 --> 00:27:06,960
Speaker 5: Yeah, I guess he was eating the tater tots with

544
00:27:07,040 --> 00:27:09,280
Speaker 5: Mickey at Disney World. He said he was there for

545
00:27:09,320 --> 00:27:12,879
Speaker 5: meetings though it was working. Yeah, so are we. This

546
00:27:12,960 --> 00:27:15,320
Speaker 5: is Bloomberg. Stay with us on Balance of Power. We'll

547
00:27:15,359 --> 00:27:16,919
Speaker 5: have much more coming up after this.

548
00:27:21,240 --> 00:27:24,720
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

549
00:27:24,760 --> 00:27:28,240
Speaker 1: us live weekdays at noon and five pm Eastern on Apple,

550
00:27:28,280 --> 00:27:31,320
Speaker 1: Cocklay and Android Auto with the Bloomberg Business app. You

551
00:27:31,320 --> 00:27:34,800
Speaker 1: can also listen live on Amazon Alexa from our flagship

552
00:27:34,880 --> 00:27:38,800
Speaker 1: New York station, Just say Alexa play Bloomberg eleven thirty.

553
00:27:40,520 --> 00:27:42,680
Speaker 5: We want to dig a bit deeper with Christine Aquino,

554
00:27:43,119 --> 00:27:46,080
Speaker 5: Bloomberg's managing editor for the Markets Live blog. She's got

555
00:27:46,080 --> 00:27:48,240
Speaker 5: her eyes on all the corners of the markets here.

556
00:27:48,280 --> 00:27:51,320
Speaker 5: With a lot of confusion, Christine, that we've been talking

557
00:27:51,320 --> 00:27:53,760
Speaker 5: about politically, and of course that goes for the market

558
00:27:53,840 --> 00:27:56,639
Speaker 5: as well, with the President speaking on two different tracks

559
00:27:56,680 --> 00:27:59,600
Speaker 5: when it comes to Iran. If Washington can't figure out

560
00:27:59,640 --> 00:28:02,240
Speaker 5: always what he's saying, how about Wall Street? What is

561
00:28:02,240 --> 00:28:05,760
Speaker 5: the sentiment today as markets fluctuate from positive to negative

562
00:28:06,400 --> 00:28:10,040
Speaker 5: and investors just looking for some indication. Caroline Levitt at

563
00:28:10,080 --> 00:28:12,040
Speaker 5: the White House, I'll just mention now she's at the

564
00:28:12,040 --> 00:28:16,040
Speaker 5: podium in the briefing room, says that the Pentagon estimate

565
00:28:16,200 --> 00:28:20,600
Speaker 5: remains the case. She's reiterating the timeline estimate of four

566
00:28:20,640 --> 00:28:24,840
Speaker 5: to six weeks for the Iran war, saying that President

567
00:28:24,840 --> 00:28:27,640
Speaker 5: Trump may be interested in Arab states paying for the war.

568
00:28:28,600 --> 00:28:31,000
Speaker 5: Is any of this helping to soothe investors?

569
00:28:31,480 --> 00:28:34,720
Speaker 9: Well, Joe, I think we have reached this point in

570
00:28:34,800 --> 00:28:37,520
Speaker 9: terms of markets grappling with the impact of the Iran war,

571
00:28:37,640 --> 00:28:40,240
Speaker 9: where you know, it's a little bit of a holding pattern.

572
00:28:40,280 --> 00:28:43,800
Speaker 9: There aren't really any concrete developments either way, either toward

573
00:28:43,840 --> 00:28:47,280
Speaker 9: a ceasefire or a major escalation, and so we are

574
00:28:47,360 --> 00:28:49,440
Speaker 9: reaching this point where you do get it says that

575
00:28:49,440 --> 00:28:52,200
Speaker 9: there is a little bit of investor fatigue when it

576
00:28:52,240 --> 00:28:55,560
Speaker 9: comes to investors prissing in the risks from the conflict.

577
00:28:55,600 --> 00:28:58,240
Speaker 9: But today, of course, Marcus seemed to be paying more

578
00:28:58,280 --> 00:29:01,000
Speaker 9: attention to feed your Jerome Pawwell, who did weigh in

579
00:29:01,360 --> 00:29:03,800
Speaker 9: a little bit on the impact of that, primarily through

580
00:29:04,040 --> 00:29:06,520
Speaker 9: the channel of inflation, and as you can see from

581
00:29:06,520 --> 00:29:09,800
Speaker 9: both Green and the screen for stocks and bonds, Powell

582
00:29:09,840 --> 00:29:12,600
Speaker 9: has managed to soothe at least some of the inflation

583
00:29:12,640 --> 00:29:14,480
Speaker 9: concerns that have been lingering for markets.

584
00:29:16,240 --> 00:29:18,280
Speaker 3: Well, yeah, looking at the ten yere yeeld down nine

585
00:29:18,320 --> 00:29:21,920
Speaker 3: basis points on the day, Christine, is this now a

586
00:29:21,960 --> 00:29:25,280
Speaker 3: bond market that seems to be thinking that it's just

587
00:29:25,320 --> 00:29:27,320
Speaker 3: an inflationary shock that the FED will look to or

588
00:29:27,360 --> 00:29:29,560
Speaker 3: act or look through rather or that this is going

589
00:29:29,560 --> 00:29:33,440
Speaker 3: to turn more into a growth shock hence sealed lower.

590
00:29:33,760 --> 00:29:35,720
Speaker 9: Yeah, there's probably a little bit of both of those

591
00:29:35,760 --> 00:29:38,280
Speaker 9: elements that you mentioned, Kaylee. I mean, in terms of

592
00:29:38,320 --> 00:29:41,719
Speaker 9: the immeded reaction, it does seem like Fetcher Powell very

593
00:29:41,760 --> 00:29:45,040
Speaker 9: much emphasizing that they are treating the oil shock as

594
00:29:45,120 --> 00:29:49,680
Speaker 9: an inflationary a temporary inflationary impulse and therefore not necessarily

595
00:29:49,720 --> 00:29:52,720
Speaker 9: something that they're going to be responding to. And so accordingly,

596
00:29:52,760 --> 00:29:55,800
Speaker 9: we have seen markets kind of put betts back on

597
00:29:55,960 --> 00:29:59,320
Speaker 9: potential rate cuts, not a lot, but they have shifted

598
00:29:59,520 --> 00:30:03,120
Speaker 9: their too from pricing rate hikes as recently as last week.

599
00:30:03,160 --> 00:30:06,200
Speaker 9: And then of course that all feeds into their perception

600
00:30:06,400 --> 00:30:10,280
Speaker 9: of the impact of higher energy costs on consumption and growth.

601
00:30:10,320 --> 00:30:13,160
Speaker 9: As you mentioned, that is kind of the second order

602
00:30:13,200 --> 00:30:16,320
Speaker 9: impact of higher oil prices eventually, right, is that it

603
00:30:16,360 --> 00:30:19,600
Speaker 9: will just be difficult for households and consumers to afford

604
00:30:19,720 --> 00:30:22,560
Speaker 9: energy and therefore something that could crimp the rest of

605
00:30:22,600 --> 00:30:24,640
Speaker 9: their ability to consume just in general.

606
00:30:25,760 --> 00:30:30,080
Speaker 5: Christine Goldman Sachs sees capitulation here based on the number

607
00:30:30,080 --> 00:30:33,520
Speaker 5: of heavy short sales by hedge funds. And I'm wondering

608
00:30:33,520 --> 00:30:36,200
Speaker 5: what you make of this note. With hedge funds cutting

609
00:30:36,200 --> 00:30:40,080
Speaker 5: global equity holdings for a six straight week driven by

610
00:30:40,200 --> 00:30:44,120
Speaker 5: short sales in Europe, short exposure in macro products that

611
00:30:44,200 --> 00:30:47,400
Speaker 5: trade broad economic themes is now at eleven percent, a

612
00:30:47,560 --> 00:30:51,160
Speaker 5: ten year high. Does that guarantee a snap back when

613
00:30:51,160 --> 00:30:52,160
Speaker 5: this whole thing ends?

614
00:30:52,600 --> 00:30:55,120
Speaker 9: Yeah, I mean potentially we could see a squeeze Joe,

615
00:30:55,160 --> 00:30:58,960
Speaker 9: because we have seen just an overwhelming impulse to sell

616
00:30:59,160 --> 00:31:02,440
Speaker 9: by investors, but very interestingly so hedge funds. Of course,

617
00:31:02,600 --> 00:31:04,960
Speaker 9: one part of the market. We have seen retail investors

618
00:31:04,960 --> 00:31:08,000
Speaker 9: actually turning a little bit more optimistic when it comes

619
00:31:08,000 --> 00:31:10,560
Speaker 9: to flows into ETF and so you do have a

620
00:31:10,600 --> 00:31:13,200
Speaker 9: market that is functioning a little bit more in a

621
00:31:13,240 --> 00:31:14,680
Speaker 9: two way basis at the moment.

622
00:31:14,720 --> 00:31:15,920
Speaker 10: And that's probably why.

623
00:31:16,160 --> 00:31:19,320
Speaker 9: Even though we have spoken about that level break last

624
00:31:19,360 --> 00:31:22,160
Speaker 9: week that was very key support for the S and

625
00:31:22,200 --> 00:31:26,040
Speaker 9: P five hundred, it hasn't necessarily been a straight line decline,

626
00:31:26,040 --> 00:31:28,360
Speaker 9: just because you are seeing these two way flows from

627
00:31:28,400 --> 00:31:31,040
Speaker 9: retail investors as well as institutional investors at the moment.

628
00:31:31,080 --> 00:31:35,760
Speaker 3: Joe, all right, Christina Kino, managing editor of the Bloomberg

629
00:31:35,800 --> 00:31:38,600
Speaker 3: Markets Live Blog, thank you so much. Now, we're continuing

630
00:31:38,640 --> 00:31:39,920
Speaker 3: to keep an eye on the brief ring from the

631
00:31:39,960 --> 00:31:42,880
Speaker 3: White House Press Secretary Caroline Lovett, who just told reporters

632
00:31:42,880 --> 00:31:46,560
Speaker 3: that President Trump has declined to rule out around a

633
00:31:46,680 --> 00:31:49,360
Speaker 3: ron ground operation. Of course, we know that the President

634
00:31:49,400 --> 00:31:52,440
Speaker 3: has not been ruling out actually using ground forces, but

635
00:31:52,480 --> 00:31:54,600
Speaker 3: she is just reiterating this, and we want to get

636
00:31:54,600 --> 00:31:57,280
Speaker 3: into how popular or not that idea may be with

637
00:31:57,320 --> 00:31:59,920
Speaker 3: the American electorate. As we turn to Cliff Young of IPSO,

638
00:32:00,080 --> 00:32:02,240
Speaker 3: where he is US Public Affairs Chair. He's also professor

639
00:32:02,280 --> 00:32:04,560
Speaker 3: of Texas A and M University's Bush School of Government

640
00:32:04,760 --> 00:32:06,800
Speaker 3: and Public Service and is here with us in our Washington,

641
00:32:06,840 --> 00:32:10,200
Speaker 3: d C studio. Welcome back quick to Bloomberg TV and Radio.

642
00:32:10,280 --> 00:32:13,360
Speaker 3: If we indeed do see ground forces at some point

643
00:32:13,800 --> 00:32:16,360
Speaker 3: in some form, how is that likely to sit with

644
00:32:16,440 --> 00:32:18,240
Speaker 3: the American people based on your polling.

645
00:32:18,120 --> 00:32:20,600
Speaker 13: Well, first and foremost Americans are not in favor of

646
00:32:20,640 --> 00:32:24,120
Speaker 13: that in a general sense, not just specifically with iron,

647
00:32:24,200 --> 00:32:29,800
Speaker 13: but in general. They've been against strong muscular interventions for

648
00:32:30,000 --> 00:32:32,720
Speaker 13: they have them, you know, the idea of forever wars

649
00:32:32,760 --> 00:32:36,120
Speaker 13: in their head, and so they're not in favor. More specifically,

650
00:32:37,360 --> 00:32:41,880
Speaker 13: a majority of Americans would be against interventions of that kind,

651
00:32:42,320 --> 00:32:44,480
Speaker 13: and only some percent of Americans would be in favor

652
00:32:44,480 --> 00:32:48,960
Speaker 13: of strong intervention with lots of troops on the ground,

653
00:32:49,200 --> 00:32:51,720
Speaker 13: and so there's not a lot of support overall for

654
00:32:51,800 --> 00:32:53,200
Speaker 13: such interventions.

655
00:32:53,240 --> 00:32:56,120
Speaker 5: Really interesting to put numbers on this, Cliff, It's great

656
00:32:56,160 --> 00:32:56,680
Speaker 5: to have you back.

657
00:32:56,720 --> 00:32:58,040
Speaker 2: More than a month into the conflict.

658
00:32:58,080 --> 00:33:01,920
Speaker 5: You find at episodes more people disapprove than approve, sixty

659
00:33:02,000 --> 00:33:06,360
Speaker 5: one percent disapprove, thirty five percent approve. But I'm curious

660
00:33:06,400 --> 00:33:09,200
Speaker 5: about the trajectory that you've seen in the last five weeks.

661
00:33:09,280 --> 00:33:11,840
Speaker 5: You point out President Trump's approval rating has declined three

662
00:33:11,880 --> 00:33:14,720
Speaker 5: points since the strikes began at forty percent.

663
00:33:14,800 --> 00:33:18,920
Speaker 2: What does that mean He's bleeding support ever so slowly.

664
00:33:20,280 --> 00:33:22,560
Speaker 13: Trump and his administration have him fallen off a cliff,

665
00:33:23,160 --> 00:33:26,600
Speaker 13: But overall Americans are beginning to feel it. I would

666
00:33:26,640 --> 00:33:29,160
Speaker 13: say it's less to do with the abstract notion of

667
00:33:29,240 --> 00:33:33,600
Speaker 13: intervention and much more specifically about price at the gas pump.

668
00:33:33,600 --> 00:33:37,760
Speaker 13: Got Americans feel that people feel that in general, and

669
00:33:38,200 --> 00:33:41,000
Speaker 13: that's what's really eroding support in the short term.

670
00:33:41,640 --> 00:33:44,320
Speaker 3: So it's about the economics here at home, essentially, is

671
00:33:44,360 --> 00:33:47,480
Speaker 3: what you're saying. We've known for a long time that

672
00:33:47,520 --> 00:33:50,280
Speaker 3: affordability is the issue that seems to be top of

673
00:33:50,320 --> 00:33:52,000
Speaker 3: mind for voters. Is it fair to say that this

674
00:33:52,120 --> 00:33:56,360
Speaker 3: war is actually exacerbating the affordability concerns that were pre existing.

675
00:33:56,760 --> 00:34:00,400
Speaker 13: Yes, And typically foreign interventions don't affect the home front,

676
00:34:00,840 --> 00:34:03,960
Speaker 13: don't affect domestic issues. One thing is one thing, another

677
00:34:03,960 --> 00:34:06,760
Speaker 13: thing is another, we often say. But in this specific case,

678
00:34:06,760 --> 00:34:10,160
Speaker 13: obviously the price of oil is critical for everyone and

679
00:34:10,200 --> 00:34:13,479
Speaker 13: for Americans household budgets, and they're feeling it right now,

680
00:34:13,800 --> 00:34:16,280
Speaker 13: and it goes against a primary issue of the midterms,

681
00:34:16,280 --> 00:34:20,920
Speaker 13: which is affordability. And indeed, going into this conflict, we

682
00:34:20,920 --> 00:34:23,239
Speaker 13: were saying that the Republicans are going to have a

683
00:34:23,360 --> 00:34:27,120
Speaker 13: challenging year. Trump's party will have a challenging year. I

684
00:34:27,120 --> 00:34:29,799
Speaker 13: think we could say even more so given what we're

685
00:34:29,800 --> 00:34:30,360
Speaker 13: seeing today.

686
00:34:30,480 --> 00:34:32,759
Speaker 5: Interesting, there are three numbers that you put on one

687
00:34:32,800 --> 00:34:35,880
Speaker 5: page that say everything you need to know a cliff

688
00:34:35,920 --> 00:34:40,400
Speaker 5: based on your findings. Americans unclear on goals, pessimistic about

689
00:34:40,440 --> 00:34:43,640
Speaker 5: gas prices and security. The White House has been working

690
00:34:43,680 --> 00:34:47,760
Speaker 5: overtime to try to delineate clear objectives here, but people

691
00:34:47,840 --> 00:34:51,560
Speaker 5: still aren't always feeling it. Sixty five percent say gas

692
00:34:51,600 --> 00:34:53,880
Speaker 5: prices will get worse. We're at three ninety nine today,

693
00:34:53,960 --> 00:34:57,560
Speaker 5: so welcome to four dollars a gallon. Sixty six percent

694
00:34:57,640 --> 00:35:01,440
Speaker 5: say the President has not clearly explained goals. This number

695
00:35:01,480 --> 00:35:03,920
Speaker 5: is a problem for the White House. Twenty nine percent

696
00:35:04,280 --> 00:35:08,200
Speaker 5: believe US involvement in Iran will improve US security. How

697
00:35:08,239 --> 00:35:10,200
Speaker 5: difficult will this be for the President if he can't

698
00:35:10,200 --> 00:35:11,440
Speaker 5: get that number higher?

699
00:35:12,080 --> 00:35:15,200
Speaker 13: That's the trifecta, that trifecta problems.

700
00:35:15,280 --> 00:35:16,440
Speaker 2: Indeed, we might.

701
00:35:16,320 --> 00:35:18,239
Speaker 5: Be able to swallow high gas prices if we think

702
00:35:18,239 --> 00:35:19,239
Speaker 5: this is making us safer for.

703
00:35:19,280 --> 00:35:23,040
Speaker 13: Me, then even then true, Even then, the number one

704
00:35:23,120 --> 00:35:27,560
Speaker 13: issue is affordability. That will always weigh more in people's

705
00:35:27,600 --> 00:35:31,760
Speaker 13: mind than security. And so it really comes down. Obviously

706
00:35:31,800 --> 00:35:34,759
Speaker 13: all three are important. Most importantly is how much am

707
00:35:34,800 --> 00:35:38,279
Speaker 13: I paying at the gas pump? Can I make ends meet?

708
00:35:38,520 --> 00:35:41,680
Speaker 13: Can I afford things and make my family go well?

709
00:35:41,719 --> 00:35:44,040
Speaker 3: So, when we consider that those are the domestic concerns,

710
00:35:44,080 --> 00:35:46,120
Speaker 3: this has been a president that has been much more

711
00:35:46,120 --> 00:35:48,520
Speaker 3: internationally focused than you might have thought listening to his

712
00:35:48,560 --> 00:35:51,040
Speaker 3: campaign speeches and his messaging initially when he came to

713
00:35:51,080 --> 00:35:53,319
Speaker 3: office a second time. It's not just iron, it's also

714
00:35:53,360 --> 00:35:57,120
Speaker 3: been Venezuela. He's talked a big game about Greenland, even Cuba.

715
00:35:57,400 --> 00:36:00,719
Speaker 3: What are any of those initiatives popular you were talking about,

716
00:36:00,719 --> 00:36:02,920
Speaker 3: how this isn't just a run, it's interventionism as a

717
00:36:02,920 --> 00:36:04,800
Speaker 3: whole that Americans are disapproving of.

718
00:36:05,080 --> 00:36:07,600
Speaker 13: Yeah, it's an agenda that's misaligned with what people here

719
00:36:07,640 --> 00:36:10,560
Speaker 13: in the United States want. Indeed, I would even double

720
00:36:10,600 --> 00:36:16,120
Speaker 13: down and say misaligned with his base the Maga Republicans,

721
00:36:16,160 --> 00:36:19,439
Speaker 13: the America First Republicans don't want forever wars, and we're

722
00:36:19,440 --> 00:36:22,840
Speaker 13: beginning to see on the margins a winning a way.

723
00:36:22,680 --> 00:36:23,400
Speaker 2: Of that support.

724
00:36:24,000 --> 00:36:27,480
Speaker 13: Indeed, he still has strong support among Republicans in general,

725
00:36:27,880 --> 00:36:30,960
Speaker 13: but there are cracks and fissures in the foundation.

726
00:36:31,680 --> 00:36:34,719
Speaker 5: Biggest drops are on cost of living and the economy.

727
00:36:34,760 --> 00:36:36,919
Speaker 5: It's almost as if we're not talking about a war.

728
00:36:37,000 --> 00:36:41,280
Speaker 5: But you did ask about moral leadership in the world.

729
00:36:41,120 --> 00:36:44,560
Speaker 13: What did you learn, Oh, Americans are highly critical of

730
00:36:44,560 --> 00:36:47,880
Speaker 13: what we're doing. Once again, going back to Forever Wars,

731
00:36:47,640 --> 00:36:50,360
Speaker 13: there's a high level of critique of what was done.

732
00:36:51,080 --> 00:36:53,040
Speaker 13: There was a desire to change things in the last

733
00:36:53,120 --> 00:36:56,360
Speaker 13: few electoral cycles, the change America's position vis v the

734
00:36:56,400 --> 00:37:00,319
Speaker 13: rest of the world when it comes to our military might.

735
00:37:00,920 --> 00:37:05,640
Speaker 13: And today many Americans, the majority of Americans, believe that

736
00:37:05,680 --> 00:37:07,880
Speaker 13: we're not the same more leader that we once were.

737
00:37:08,680 --> 00:37:12,160
Speaker 13: And Trump is confronting that today and we see it

738
00:37:12,160 --> 00:37:12,840
Speaker 13: in his numbers.

739
00:37:13,239 --> 00:37:15,719
Speaker 3: Well, and we talk about this as President Trump confronting

740
00:37:16,200 --> 00:37:18,760
Speaker 3: this kind of grim reality in terms of public sentiment.

741
00:37:18,760 --> 00:37:20,360
Speaker 3: But you were speaking a moment ago, Cliff about how

742
00:37:20,360 --> 00:37:22,920
Speaker 3: this was reflective of his party as a whole and

743
00:37:23,000 --> 00:37:25,440
Speaker 3: Republicans who were going to have to stand for re

744
00:37:25,560 --> 00:37:30,520
Speaker 3: election in November. Looking at the midterms picture right now,

745
00:37:31,080 --> 00:37:34,359
Speaker 3: how has this war changed in your mind the mid

746
00:37:34,480 --> 00:37:38,359
Speaker 3: term outcome or potentially exacerbated how extreme those outcomes could

747
00:37:38,400 --> 00:37:40,000
Speaker 3: look like When we're talking about seats flipping.

748
00:37:40,160 --> 00:37:42,640
Speaker 13: Yeah, we already thought that the Dems were most probably

749
00:37:42,680 --> 00:37:45,160
Speaker 13: going to take the House. Now the question is by

750
00:37:45,160 --> 00:37:49,120
Speaker 13: how much and if this sort of scenario persists. It

751
00:37:49,120 --> 00:37:51,560
Speaker 13: doesn't have the persist until election day, but well into

752
00:37:51,600 --> 00:37:55,040
Speaker 13: this year, that difference could be large, The victory gap

753
00:37:55,040 --> 00:37:57,920
Speaker 13: could be large. Indeed, we are already not just us

754
00:37:57,920 --> 00:38:01,799
Speaker 13: at episodes, but in general, the market of in forecasters

755
00:38:01,920 --> 00:38:05,320
Speaker 13: are already reassessing the Senate. I think it's in play

756
00:38:05,640 --> 00:38:08,000
Speaker 13: where it wasn't maybe a few months ago, maybe fifty

757
00:38:08,000 --> 00:38:10,279
Speaker 13: to fifty. We can debate that a bit that the

758
00:38:10,680 --> 00:38:17,040
Speaker 13: specific proof, specific point estimate, but ultimately the administration and

759
00:38:17,080 --> 00:38:19,640
Speaker 13: the party, the Republican Party, are in a bad place today.

760
00:38:19,880 --> 00:38:22,600
Speaker 5: You look at history and your research, White House typically

761
00:38:22,600 --> 00:38:24,960
Speaker 5: loses seats in the midterms. Everyone knows that, and you

762
00:38:25,040 --> 00:38:26,800
Speaker 5: put a number on it. The average is a twenty

763
00:38:26,920 --> 00:38:29,879
Speaker 5: five seat swing. We talked to Susan Delbany last week,

764
00:38:29,880 --> 00:38:32,760
Speaker 5: who chairs the d Triple. See they're going after Trump

765
00:38:32,840 --> 00:38:35,920
Speaker 5: plus thirteen seats around the country. They think that number

766
00:38:35,920 --> 00:38:39,160
Speaker 5: could be in the thirties or forties, Cliff, And obviously

767
00:38:39,840 --> 00:38:41,560
Speaker 5: a Democrat is going to speak that way at this

768
00:38:41,640 --> 00:38:45,120
Speaker 5: stage of the race. Will the price of gas determine

769
00:38:45,120 --> 00:38:46,040
Speaker 5: whether that's true?

770
00:38:46,480 --> 00:38:48,919
Speaker 13: Yeah, the price of gas and the sense of affordability,

771
00:38:49,120 --> 00:38:51,400
Speaker 13: So it's not just gas, but that has a big driver.

772
00:38:51,480 --> 00:38:53,640
Speaker 13: But how do people feel, how American feel in general?

773
00:38:53,880 --> 00:38:56,279
Speaker 13: Are they able to make ends meet? And ultimately, I

774
00:38:56,320 --> 00:38:58,799
Speaker 13: would not be surprised. We would, you know, if we

775
00:38:58,880 --> 00:39:03,719
Speaker 13: had a thirty or forty seats swing. I wouldn't. We

776
00:39:03,760 --> 00:39:08,080
Speaker 13: haven't redone our models at hypsociat, but the indicators everything,

777
00:39:08,120 --> 00:39:11,240
Speaker 13: approval ratings, generic ballot, they all are pointing in that direction.

778
00:39:12,000 --> 00:39:14,160
Speaker 3: Well, of course, we're talking about an election that is

779
00:39:14,200 --> 00:39:17,160
Speaker 3: still just over seven months away, Cliff. You said a

780
00:39:17,160 --> 00:39:19,680
Speaker 3: moment ago that it's not necessarily about November. But if

781
00:39:19,719 --> 00:39:22,319
Speaker 3: this goes on for much further, is the when's the

782
00:39:22,320 --> 00:39:25,200
Speaker 3: crunch point where there's not going to be recovering. If

783
00:39:25,239 --> 00:39:27,600
Speaker 3: you are someone an incumbent in the Republican Party, who

784
00:39:27,680 --> 00:39:29,919
Speaker 3: was trying to stay in power in November. Where does

785
00:39:30,080 --> 00:39:33,120
Speaker 3: where is there kind of no room for recovery.

786
00:39:33,320 --> 00:39:36,240
Speaker 13: I think June or July that's sort of the point

787
00:39:36,239 --> 00:39:39,400
Speaker 13: of no return. That said, it's much easier to go

788
00:39:39,480 --> 00:39:42,640
Speaker 13: down in the polls and come back up. That goes

789
00:39:43,080 --> 00:39:45,400
Speaker 13: to sort of approval ratings as well as a generic ballot.

790
00:39:45,600 --> 00:39:49,200
Speaker 13: So anything they lose now, they might recuperate a little bit,

791
00:39:49,360 --> 00:39:52,319
Speaker 13: but they won't get back to SaaS quoante. So overall

792
00:39:52,400 --> 00:39:55,000
Speaker 13: sort of the conditions are set. It looks like it's

793
00:39:55,000 --> 00:39:56,640
Speaker 13: going to be a difficult year for Republicans.

794
00:39:56,760 --> 00:39:58,640
Speaker 5: You know, the President talks about the Golden Age and

795
00:39:58,680 --> 00:40:00,360
Speaker 5: how this is the greatest economy in the world. It

796
00:40:00,480 --> 00:40:04,120
Speaker 5: really was before we started striking Iran. You find out

797
00:40:04,239 --> 00:40:10,040
Speaker 5: sixty eight percent of Americans do not believe the economy

798
00:40:10,080 --> 00:40:14,400
Speaker 5: is booming. Only thirty percent believe that. That runs against

799
00:40:14,480 --> 00:40:16,439
Speaker 5: every message that's coming out of the White House.

800
00:40:16,440 --> 00:40:17,880
Speaker 13: And that's an earlier poll, by the way, and we

801
00:40:18,200 --> 00:40:20,799
Speaker 13: specifically put that in there. Now, things were not good

802
00:40:20,840 --> 00:40:23,600
Speaker 13: going into to Iran. Things were not going into this

803
00:40:24,000 --> 00:40:27,919
Speaker 13: moment already for Republicans. Americans do not feel like things

804
00:40:27,960 --> 00:40:31,560
Speaker 13: are going well again. They see themselves of having difficulties

805
00:40:31,560 --> 00:40:35,640
Speaker 13: making ends meet. It's aboutfordability. It's not about the inflation rate.

806
00:40:35,760 --> 00:40:37,920
Speaker 13: Inflation rates have come down, but how much they have

807
00:40:38,000 --> 00:40:40,680
Speaker 13: to spend to make the family go. That has not

808
00:40:40,760 --> 00:40:44,799
Speaker 13: improved in their minds. And obviously, you know, you know,

809
00:40:45,000 --> 00:40:48,680
Speaker 13: high high prices at the gas pump do not help.

810
00:40:49,360 --> 00:40:50,920
Speaker 5: I'm sure there's going to be something good we can

811
00:40:50,960 --> 00:40:52,839
Speaker 5: talk about one of these days, Cliff.

812
00:40:52,560 --> 00:40:53,160
Speaker 2: I just know it.

813
00:40:53,320 --> 00:40:56,120
Speaker 5: Cliff Young with IPSOS and Texas A and M University's

814
00:40:56,160 --> 00:41:00,319
Speaker 5: Bush School of Government. Great conversation, fascinating numbers, Kale. It's

815
00:41:00,320 --> 00:41:01,080
Speaker 5: not getting better for.

816
00:41:01,080 --> 00:41:01,720
Speaker 2: This White House.

817
00:41:02,000 --> 00:41:03,680
Speaker 7: No, And of course we're hearing from the White House

818
00:41:03,760 --> 00:41:04,040
Speaker 7: right now.

819
00:41:04,040 --> 00:41:06,479
Speaker 3: The Press Secretary Caroline Lovett says the US is trying

820
00:41:06,520 --> 00:41:08,520
Speaker 3: to figure out who's in charge of Iran. We'll see

821
00:41:08,560 --> 00:41:10,560
Speaker 3: if we have an answer by five pm when we're

822
00:41:10,600 --> 00:41:11,879
Speaker 3: back on Bloomberg TV.

823
00:41:12,160 --> 00:41:12,840
Speaker 7: And to Rede.

824
00:41:15,200 --> 00:41:17,640
Speaker 2: Thanks for listening to the Balance of Power podcast.

825
00:41:18,239 --> 00:41:21,400
Speaker 5: Make sure to subscribe if you haven't already, at Apple, Spotify,

826
00:41:21,480 --> 00:41:24,040
Speaker 5: or wherever you get your podcasts, and you can find

827
00:41:24,120 --> 00:41:27,360
Speaker 5: us live every weekday from Washington, DC at noontime Eastern

828
00:41:27,640 --> 00:41:29,160
Speaker 5: at Bloomberg dot com