WEBVTT - Don't See Oil North of $70 Without Escalation: Kamel 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penel Podcast. I'm Paul swing you 0:00:05.360 --> 0:00:07.760 along with my co host Lisa Brahmas. Each day we 0:00:07.880 --> 0:00:10.399 bring you the most noteworthy and useful interviews for you 0:00:10.520 --> 0:00:12.640 and your money, whether at the grocery store or the 0:00:12.640 --> 0:00:15.960 trading floor. Find a Bloomberg Penl podcast on Apple podcast 0:00:16.120 --> 0:00:18.080 or wherever you listen to podcasts, as well as at 0:00:18.079 --> 0:00:20.880 Bloomberg dot com. Well, I'm just gonna keep asking this 0:00:20.960 --> 0:00:23.319 question throughout the morning. Is it over? Are we done 0:00:23.360 --> 0:00:25.520 with the attention between the US and you were on 0:00:25.600 --> 0:00:28.280 joining US? Now? Is I have a COMMEL practice head 0:00:28.560 --> 0:00:31.600 focused on the Middle East, North Africa as other well 0:00:31.640 --> 0:00:34.280 as others at Eurasia Group joining US now on the phone? 0:00:34.880 --> 0:00:36.920 Can I get it? Just get a sense? Is it over? 0:00:37.240 --> 0:00:40.520 I am? Well, let's I think we're off the peak 0:00:40.560 --> 0:00:43.840 of the crisis. The Araanians conducted what is I think 0:00:43.840 --> 0:00:48.440 a largely symbolic attack on basis that hosts U S 0:00:48.440 --> 0:00:52.839 troops in Iraq. Those attacks were very calibrated. They were 0:00:52.880 --> 0:00:56.920 designed not to cause casualties or not to create conditions 0:00:56.960 --> 0:01:00.760 for Trump to overreact. The President speaking in in a 0:01:00.800 --> 0:01:02.960 few minutes, so we'll hear more from him, but I 0:01:03.000 --> 0:01:07.240 expect movement towards less less tensions. So I am. Are 0:01:07.240 --> 0:01:10.760 you surprised that the Iranian response was I guess as 0:01:10.800 --> 0:01:13.160 restrained as it was because I guess that what we 0:01:13.200 --> 0:01:17.520 had heard up until today was the general that was 0:01:17.640 --> 0:01:21.000 taken out was such a large figure and an important 0:01:21.000 --> 0:01:24.039 figure in Tehran. Are you surprised that the response wasn't 0:01:24.080 --> 0:01:28.760 maybe even more pronounced. Well, I think that everything that 0:01:28.800 --> 0:01:31.920 we've been hearing from the Iranians hinted as at a 0:01:32.040 --> 0:01:35.760 much more robust military response. So to a certain extent, 0:01:35.959 --> 0:01:41.080 they did exercise the level of restraint over here. So um, 0:01:41.120 --> 0:01:44.600 I think I'm pretty sure that there are regional powers 0:01:44.640 --> 0:01:47.200 that have tried to to be into ease tensions, international 0:01:47.200 --> 0:01:51.320 powers as well to really calm their Iranians down. Now, 0:01:51.360 --> 0:01:55.200 another factor I think that helped calm the situation is 0:01:55.240 --> 0:01:58.640 that the Iranians are thinking the long term. They want 0:01:58.680 --> 0:02:02.080 the US out of Iran, and they're fine with that 0:02:02.240 --> 0:02:05.960 as a long term victory, something that cements their power 0:02:06.000 --> 0:02:08.760 in the Middle East. So let's talk about that, because 0:02:08.760 --> 0:02:10.400 that was one of my main questions when I was 0:02:10.440 --> 0:02:14.200 reading all of this Iran. Iran wants the US out 0:02:14.200 --> 0:02:17.079 of Iraq, right, I mean it wants them to bodraw 0:02:17.160 --> 0:02:21.959 their troops. Does sort of pushing down the tensions accelerate 0:02:22.000 --> 0:02:24.840 that process, and it appears that the Iraqis are more 0:02:24.880 --> 0:02:27.840 eager to get the U S troops out. Well, I 0:02:27.840 --> 0:02:31.160 think that the less miniatary confrontation that you have in 0:02:31.240 --> 0:02:34.600 Iraq between the US and Iran, the easier it will 0:02:34.639 --> 0:02:37.840 be for President Trump to withdraw forces. He can't easily 0:02:37.840 --> 0:02:41.120 do it under fire as and when he's been attacked 0:02:41.160 --> 0:02:44.720 in Iraq left and right. When there are tensions between Iran, 0:02:45.720 --> 0:02:50.840 moving towards a widespread confrontation absent that any form of 0:02:51.000 --> 0:02:55.320 really going down away, moving away from tension creates easier 0:02:55.400 --> 0:02:57.840 conditions for that. But again, I think that there are 0:02:57.880 --> 0:03:02.200 local dynamics here. The ir Arcus themselves feel that US 0:03:02.320 --> 0:03:07.120 presence in the country has become challenging a little bit problematic. 0:03:08.080 --> 0:03:10.760 So I think it will see more domestic pressure on 0:03:10.800 --> 0:03:14.880 the US, perhaps, if not to withdraw, to severely restrict 0:03:15.000 --> 0:03:17.600 US operations in the country. Well, at the top of 0:03:17.600 --> 0:03:19.640 the hour, we will be hearing from President Trump. Will 0:03:19.639 --> 0:03:22.960 you'll be making comments on the Iran situation? What do 0:03:23.000 --> 0:03:25.720 you what will you be listening for in his comments, 0:03:25.760 --> 0:03:28.240 what do you think Iranians Iranians will be listening for. 0:03:29.760 --> 0:03:32.600 I think the Iranians are expecting big boards the President 0:03:32.639 --> 0:03:35.440 to declare victory, victory, victorian, that he's done what no 0:03:35.560 --> 0:03:39.480 other could could do. I think that's that's that will 0:03:39.560 --> 0:03:43.200 happen in some way, shape or form. I think the 0:03:43.320 --> 0:03:45.840 key issue for the Iranians is to see whether Mr 0:03:45.920 --> 0:03:49.320 Trump will authorize some form of follow up in terms 0:03:49.320 --> 0:03:52.640 of reaction. That's what they really care about. If there 0:03:52.760 --> 0:03:56.960 is no US response in in reaction to the missile 0:03:57.080 --> 0:04:00.320 attacks from Iran, I think the Iranians would feel much 0:04:00.360 --> 0:04:04.760 more comfortable as and we're moving away from a sharper escalation. 0:04:05.120 --> 0:04:07.920 So that's what I think what the press press conferences about. 0:04:07.960 --> 0:04:11.040 The press conference for the President himself is not just 0:04:11.160 --> 0:04:15.000 about Iran. This is about positioning himself as a strong leader, 0:04:15.080 --> 0:04:18.040 someone that has been able to do things that other 0:04:18.160 --> 0:04:20.920 leaders or other US presidents were not able to do. 0:04:21.440 --> 0:04:25.400 So it's it's also made for domestic consumptional for domestic 0:04:25.520 --> 0:04:28.040 audience in the US. So let's talk about the price 0:04:28.040 --> 0:04:31.239 of oil. It is down today and having the biggest 0:04:31.279 --> 0:04:34.520 two day down draft since December two, and I'm wondering 0:04:34.920 --> 0:04:37.320 whether this is the beginning of more to come in 0:04:37.360 --> 0:04:39.880 the senses as people realize, or isn't gonna necessarily be 0:04:39.920 --> 0:04:42.760 a disruption and supply all of a sudden things start 0:04:42.800 --> 0:04:45.839 to look a little bit more oversupplied with a demand 0:04:45.920 --> 0:04:49.920 that seems to be basically balanced at this point. Well, 0:04:49.960 --> 0:04:53.920 I think that is that's a very interesting idea. Perhaps 0:04:53.960 --> 0:04:57.360 some of that risk that will will will be taken off, 0:04:57.480 --> 0:04:59.600 I think will be reflected in all the prices, so 0:04:59.720 --> 0:05:03.400 we'll the some form of a depth, maybe a few dollars. 0:05:04.240 --> 0:05:08.360 But again, it's not that Iran or U s Irn 0:05:08.440 --> 0:05:12.880 tensions have become zero that we're returning to a stable equilibrium. 0:05:12.920 --> 0:05:15.279 There are many problems still in the Middle East that 0:05:15.560 --> 0:05:21.239 could cause those disruptions. It's not like we've we've returned stability. 0:05:21.080 --> 0:05:23.720 The demand and supply picture, I think is a little 0:05:23.760 --> 0:05:26.919 bit complicated. But we do have the US China trade 0:05:26.960 --> 0:05:30.560 agreement that could also help maybe provide some boost to 0:05:30.560 --> 0:05:34.200 oil prices, maybe not to maybe not lift them up 0:05:34.200 --> 0:05:36.320 to seventy. But I think we're in a world where 0:05:36.360 --> 0:05:39.920 sixty five dollars it seems to be the bottom or 0:05:40.200 --> 0:05:44.160 or could be the bottom in this environment. Uh, absent 0:05:44.240 --> 0:05:47.400 any real confrontation or real outages in the Middle East, 0:05:47.480 --> 0:05:51.280 you're not really talking about oil moving north of seventy 0:05:51.360 --> 0:05:55.440 on a or in a strong direction. Really, we need 0:05:55.520 --> 0:05:58.800 to see data from US shell hard evidence that US 0:05:58.880 --> 0:06:03.159 shows the seb it in that investments in US share 0:06:03.200 --> 0:06:05.760 that is actually much lower, much more prudent, and therefore 0:06:06.120 --> 0:06:10.200 supply it will be limited. So I am get a 0:06:10.320 --> 0:06:12.800 sense of kind of the next steps for Iran. I 0:06:12.880 --> 0:06:16.640 guess from your perspective, what is it in Iran's best 0:06:16.680 --> 0:06:22.280 interest rate here to say, okay, this is over Essentially, Well, 0:06:22.320 --> 0:06:24.000 I don't think the irene is are going to be 0:06:24.680 --> 0:06:27.440 a fully thing that it's over. They'll say that they 0:06:27.480 --> 0:06:31.600 are fighting really an effort or struggle to get the 0:06:31.720 --> 0:06:35.880 US out to make the region region governed government by 0:06:35.960 --> 0:06:39.440 states that are inherently part of it. And I think 0:06:39.440 --> 0:06:41.880 the key word here is get the getting the US 0:06:42.000 --> 0:06:46.400 to withdraw from different places. I don't think that the U. 0:06:46.560 --> 0:06:49.880 S C. Run relationship is going to be okay anytime soon. 0:06:50.760 --> 0:06:52.960 Mr Trump has withdrawn from the j C p o A, 0:06:53.279 --> 0:06:56.960 he has killed a senior Iranian commander he had, he 0:06:57.080 --> 0:07:01.960 has sanctioned the country. So we still have a long 0:07:02.279 --> 0:07:05.440 term issue around the US Iran relationship and whether you 0:07:05.520 --> 0:07:09.240 can get a pathway that is sustainable that gets us 0:07:09.279 --> 0:07:13.960 away from confrontation and towards the excavation. But certainly we 0:07:14.120 --> 0:07:16.800 were away from the peak of a crisis. Just real 0:07:16.880 --> 0:07:19.320 quick here about thirty seconds. I'm wondering President Trump is 0:07:19.360 --> 0:07:23.920 going to speak in response to the Iranian retaliation. What 0:07:24.000 --> 0:07:25.600 do you expect him to say? Or what do you want? 0:07:25.600 --> 0:07:28.080 What do you what are you looking for? I think 0:07:28.120 --> 0:07:30.600 it's going to say that that the Iranian response was 0:07:30.680 --> 0:07:34.160 weak and therefore there there it's not necessary for the 0:07:34.280 --> 0:07:36.640 US to move and do much more, and that US 0:07:36.720 --> 0:07:40.800 power remains robust, and he is ready when their Indians 0:07:40.880 --> 0:07:44.280 do something that crosses the line to respond. Am Kamal, 0:07:44.480 --> 0:07:46.640 thank you so much for joining us a M as 0:07:46.640 --> 0:07:49.560 a practice head Middle East and North Africa for the 0:07:49.720 --> 0:07:51.680 Eurasia Group. Some of the smartest folks out there, and 0:07:51.760 --> 0:07:55.280 we're talking about geopolitics. He's based uh in London and 0:07:55.360 --> 0:07:57.840 Tom King was recently this earlier this week at their 0:07:57.880 --> 0:08:00.280 offices at Eurasia Group, getting a great over view of 0:08:00.320 --> 0:08:03.880 all things geopolitical, whether it's the Middle East or China 0:08:03.880 --> 0:08:05.800 and Hong Kong. They do some great work and we 0:08:05.840 --> 0:08:22.120 appreciate them. Coming on Bloomberg Radio, the question of the 0:08:22.280 --> 0:08:25.640 day is it over? Are we done with the brief, 0:08:26.080 --> 0:08:30.120 very brief, if perhaps non existent, and recognizable turmoil that 0:08:30.200 --> 0:08:33.800 we saw in markets due to Iran US relations tends 0:08:34.160 --> 0:08:37.640 tensing up joining us now Scott Reren, Senior Global market strategist, 0:08:37.640 --> 0:08:41.600 it was Fargo Investment Institute overseers overseeing nearly two trillion 0:08:41.679 --> 0:08:46.960 dollars joining us from St. Louis, Missouri? Is it over? Scott? Well, Lisa, 0:08:47.040 --> 0:08:50.719 Happy New Year? And probably while the market appears to 0:08:50.840 --> 0:08:53.120 think we're not going to see uh too much of 0:08:53.160 --> 0:08:55.319 an escalation, you know, we think at least in the 0:08:55.600 --> 0:08:58.719 in the near term, we're likely to see uh some 0:08:58.800 --> 0:09:01.319 more tip for tad, a little bit more escalation. But 0:09:01.720 --> 0:09:04.640 you know that's not really changing and has not changed 0:09:05.040 --> 0:09:09.120 really what our outlook is as we look out over, Scott, 0:09:09.120 --> 0:09:12.880 give us your outlook for given the incredible kind of 0:09:13.040 --> 0:09:17.640 market uh. You know a response we saw in what 0:09:17.720 --> 0:09:19.719 do you do for an encore here? Well, I tell 0:09:19.720 --> 0:09:22.240 you it's it's it's tough, Paul, and what we've been 0:09:22.360 --> 0:09:27.600 doing UM. For during the second half of we raised 0:09:27.600 --> 0:09:30.400 a little cash, we backed off of industrials, We've got 0:09:30.440 --> 0:09:34.000 a little less cyclical, And that's pretty much our stance 0:09:34.120 --> 0:09:37.920 right now because for us, UH stocks are very close 0:09:38.000 --> 0:09:40.480 to fair value. We still like tech, we still like 0:09:40.559 --> 0:09:43.640 consumer discretionary, we still like financials. But you know, if 0:09:43.720 --> 0:09:46.640 we see a total return somewhere in the mid single 0:09:46.760 --> 0:09:50.000 digit area, I think that's about right UM for us. 0:09:50.200 --> 0:09:54.280 Probably the the the upside surprise. You have to ask yourself, 0:09:54.520 --> 0:09:56.920 you know, how much chasing are we going to see here, 0:09:56.960 --> 0:09:59.959 because there's a lot of underinvested, whether they're professionals or 0:10:00.040 --> 0:10:03.239 retail investors, a lot of people with cash on the sidelines. 0:10:03.280 --> 0:10:05.920 We've seen a little chasing here. And then I think 0:10:06.040 --> 0:10:11.720 also a factor that that could make our outlook too conservatives, 0:10:12.240 --> 0:10:16.800 too conservative, is if we see UH the international economy 0:10:16.920 --> 0:10:19.280 stabilized and do a little bit better than what we thought. 0:10:19.320 --> 0:10:21.160 So I think those are a couple of the factors 0:10:21.559 --> 0:10:23.600 that we're trying to keep a close eye on, trying 0:10:23.640 --> 0:10:26.280 to project, But for right now, we think stocks are 0:10:26.320 --> 0:10:29.120 pretty close to fair value. There was a conversation on 0:10:29.200 --> 0:10:32.360 Bloomberg Television this morning about this idea that seems to 0:10:32.400 --> 0:10:35.880 be pervasive in markets, which is, honestly, unless we get 0:10:35.920 --> 0:10:38.520 a massive shock, stocks are going to keep rallying. Risk 0:10:38.559 --> 0:10:40.480 assets look good and you don't want to miss out. 0:10:41.040 --> 0:10:43.319 The problem is, if we see a shock is the 0:10:43.400 --> 0:10:46.080 big caveat and it seems like if we see a shock, 0:10:46.600 --> 0:10:48.920 everyone's going to try to escape out of the same 0:10:49.080 --> 0:10:52.839 narrow exit. How concerned are you about the lack of 0:10:52.960 --> 0:10:56.280 hedging and sort of the crowdedness of some of these 0:10:56.520 --> 0:10:59.360 risk trades. Well, you know, a lot of times, you know, 0:10:59.480 --> 0:11:01.480 as she is, you approach a market high, and if 0:11:01.559 --> 0:11:05.000 you look at the performance, for instance, between the SNP 0:11:05.200 --> 0:11:07.679 equalated index and just the S and P, you know, 0:11:07.800 --> 0:11:10.280 the performance is starting to widen there a little bit. 0:11:10.360 --> 0:11:13.160 It's nowhere near what you usually see at the market top. 0:11:13.320 --> 0:11:15.960 So really, you know, I think there's a decent amount 0:11:16.000 --> 0:11:18.480 of liquidity in the market, but if you really see 0:11:19.160 --> 0:11:23.000 a meaningful shock um as is usually the case, you 0:11:23.080 --> 0:11:25.720 know there's there's a lack of liquidity on the way down. 0:11:25.760 --> 0:11:28.760 I mean, the bids just go away, um and and 0:11:29.080 --> 0:11:31.480 and there's not a lot of people stepping in to buy, 0:11:31.640 --> 0:11:33.480 and that's where you see these big gaps down, So 0:11:33.559 --> 0:11:36.160 I think I'm not sure that's going to be any 0:11:36.240 --> 0:11:39.480 worse than it has been on meaningful, big shocks in 0:11:39.559 --> 0:11:41.679 the past. And it's certainly something that you want to 0:11:41.760 --> 0:11:43.760 think about. And you know that's why, you know, we've 0:11:43.800 --> 0:11:46.319 talked to our our clients. You know, we had leaned 0:11:46.440 --> 0:11:49.959 hard towards stocks, you know, for really the last eight years, 0:11:50.040 --> 0:11:52.800 and for instance, you know, if you're in a sixty 0:11:52.920 --> 0:11:55.960 forty stock bomb type of portfolio, we want our clients 0:11:56.040 --> 0:11:58.240 to be pretty close to that right now, because, as 0:11:58.280 --> 0:12:00.760 I said, you know, there's a lot of disks out there. 0:12:01.160 --> 0:12:04.199 Stocks are not cheap um, and we just want to 0:12:04.240 --> 0:12:06.240 be a little more careful here than we had been 0:12:06.320 --> 0:12:08.839 in previous years. Scott, I want to get your thoughts 0:12:08.960 --> 0:12:14.000 on valuations in the equity market. We've seen obviously move 0:12:14.080 --> 0:12:18.480 up in the sp with very little to know earnings growth. 0:12:18.840 --> 0:12:20.160 Give us a sense of kind of where we are 0:12:20.320 --> 0:12:23.320 valuation wise historically. Well, you know, we've got a one 0:12:23.400 --> 0:12:25.640 seventy five number out there, so right now you're looking 0:12:25.679 --> 0:12:29.880 at about eighteen points six times uh this year's earnings, 0:12:29.920 --> 0:12:31.840 and if you look at you know, over the last 0:12:31.880 --> 0:12:35.760 twenty years or so, you know, the average forward price 0:12:35.800 --> 0:12:38.920 to earnings ratio would be let's say sixteen points three 0:12:39.080 --> 0:12:41.520 something like that, so you know you're certainly trading at 0:12:41.559 --> 0:12:43.960 a premium to that. Now you could make the argument, 0:12:44.520 --> 0:12:47.120 uh that you know, we're in a lower interest rate environment, 0:12:47.240 --> 0:12:50.440 that feds eazy, people are under invested, and so it's 0:12:50.679 --> 0:12:54.120 common that you get this push up in valuations in 0:12:54.200 --> 0:12:56.679 the in the later stages of a cycle. So you know, 0:12:56.800 --> 0:13:01.160 valuations are are above average. Um, we would argue that 0:13:01.240 --> 0:13:04.280 they're not meaningfully stretched. I mean, if you look back 0:13:04.320 --> 0:13:06.800 at the FED model, and I haven't run these numbers lately, 0:13:06.840 --> 0:13:09.000 but if you looked at that correlation over a long 0:13:09.040 --> 0:13:11.760 period time, it probably suggests the p on the SMP 0:13:11.880 --> 0:13:14.160 should be you know, twenty eight or some crazy number 0:13:14.280 --> 0:13:18.120 like that. So you know, these correlations haven't held. It 0:13:18.280 --> 0:13:20.720 makes some sense that we're a little bit of a premium, 0:13:21.200 --> 0:13:24.240 but we don't think there's too much upside in terms 0:13:24.280 --> 0:13:26.760 of evaluations from here. We need to see some underlying 0:13:26.800 --> 0:13:29.400 earnings growth. Scott, thanks so much for joining us. We 0:13:29.440 --> 0:13:33.319 appreciate you coming on. Scott Wren, senior global market strategist 0:13:33.360 --> 0:13:36.400 for Wells Fargo Investment Institute, joining us on the phone 0:13:36.440 --> 0:13:55.080 from St. Louis time to check in with Bloomberg Opinion. 0:13:55.080 --> 0:13:58.360 We're joined by Opinion Coomas Justin Fox. He joins us 0:13:58.400 --> 0:14:00.360 here and I'm Bloomberg Interactive Brokers to deal with a 0:14:00.480 --> 0:14:03.079 fascinating come about a story that I'm very interested in, 0:14:03.160 --> 0:14:07.160 which is has the US past peak auto? Are people 0:14:07.320 --> 0:14:10.599 still going to drive cars going forward? Justin takes a 0:14:10.640 --> 0:14:13.160 look at it in terms of our team still driving cars. 0:14:13.200 --> 0:14:15.480 So Justin, thanks so much for joining us. What's going 0:14:15.559 --> 0:14:17.959 I know when I turned seventeen that day I was 0:14:18.040 --> 0:14:20.520 at the DMV getting my license. I never looked back. 0:14:20.680 --> 0:14:24.200 Is that still happening? Um less and less, although a 0:14:24.280 --> 0:14:26.760 lot of it among sixteen and seventeen year olds is 0:14:26.800 --> 0:14:29.680 basically because in lots of states you can barely drive 0:14:29.800 --> 0:14:31.720 even after you get your license. There are all of 0:14:31.760 --> 0:14:34.920 these restrictions, and so there's really been a collapse in 0:14:35.000 --> 0:14:38.520 the percentage of sixteen year olds getting license. It's a 0:14:38.600 --> 0:14:40.800 little more than half what it was in the eighties, 0:14:41.160 --> 0:14:46.040 back when we got our lessons. Um and you get 0:14:46.040 --> 0:14:48.240 two older ages and it and it's not as big 0:14:48.320 --> 0:14:52.040 a decline, but basically every age court in the cohort 0:14:52.120 --> 0:14:55.280 in the US below forty five is less. People are 0:14:55.400 --> 0:14:57.400 less likely to have licenses than they were in the 0:14:57.480 --> 0:15:00.240 early eighties. How much is this due to people moving 0:15:00.280 --> 0:15:04.960 to cities and moving away from more suburban and rural areas. 0:15:05.720 --> 0:15:08.720 I mean, since the eighties, I think most development and 0:15:08.840 --> 0:15:11.800 most population growth has been in suburbian not in cities, 0:15:11.840 --> 0:15:14.680 even though there's been a modest return over the past 0:15:14.920 --> 0:15:20.120 um twenty years or so. And I mean this trend 0:15:20.360 --> 0:15:23.680 first got a lot of attention um probably seven or 0:15:23.680 --> 0:15:26.320 eight years ago. A researcher named Michael Sivak, who was 0:15:26.400 --> 0:15:29.240 then at the University of Michigan, sort of pointed it out. 0:15:29.280 --> 0:15:31.400 The media picked up on it, and a lot of 0:15:31.480 --> 0:15:35.520 it was a pretty precipitous decline in like two thousand seven, 0:15:35.600 --> 0:15:37.640 two thousand eight, two thousand nine, and a lot of 0:15:37.680 --> 0:15:41.160 that was gas was really expensive and the economy was 0:15:41.240 --> 0:15:43.960 awful and there was so there was a little bit 0:15:43.960 --> 0:15:46.320 of a bounce back in two thousand fifteen and two 0:15:46.360 --> 0:15:49.680 thousand sixteen. But what's really interesting is that has now stopped. 0:15:49.920 --> 0:15:52.680 When you look at the percentage of teams getting licenses 0:15:52.720 --> 0:15:56.080 and everybody getting licenses, it's just stopped rising. Let's see 0:15:56.320 --> 0:15:59.400 uber impact, you know, when I was down at Duke 0:15:59.480 --> 0:16:02.360 University recently, somebody was telling me, like when I was there, 0:16:02.600 --> 0:16:06.520 parking impossible to get now, like lots of parking spaces 0:16:06.560 --> 0:16:08.160 around the kids aren't bringing their cars because they just 0:16:08.280 --> 0:16:10.960 uber everywhere. Yeah, I mean, I'm sure that is an 0:16:11.040 --> 0:16:13.840 element in a lot of places. It's like sixteen year 0:16:13.880 --> 0:16:17.240 olds aren't supposed to be able to take uber um, 0:16:18.400 --> 0:16:23.320 but happens all uh man. They can tell you with 0:16:23.360 --> 0:16:28.640 their parents and all, but supposedly. But I'm sure that 0:16:28.840 --> 0:16:31.200 is part of it. There are alternatives like that. I'm 0:16:31.240 --> 0:16:35.000 sure smaller families are part of it, so there aren't 0:16:35.160 --> 0:16:38.000 five different kids to get around. If it's one or two, 0:16:38.200 --> 0:16:40.840 then a parent might be able to do it and 0:16:40.920 --> 0:16:43.080 they spend more time with them. And I mean, there 0:16:43.320 --> 0:16:47.840 was a big like public transportation um sort of hit 0:16:47.920 --> 0:16:51.600 it's all modern low in the US in the in 0:16:51.680 --> 0:16:54.560 the eighties, and then had another drop in the mid 0:16:54.720 --> 0:16:58.360 nineties when gas prices were super cheap and and the 0:16:58.440 --> 0:17:02.320 economy was booming. But it rose a lot um through 0:17:02.440 --> 0:17:06.320 about two thousand fourteen. But it's not rising lightly either, 0:17:06.440 --> 0:17:08.320 so it is kind of I mean, one thing, if 0:17:08.320 --> 0:17:11.840 you look at older Americans or just people with jobs, 0:17:12.359 --> 0:17:16.640 telecommuting people. More people are able to do jobs without 0:17:17.880 --> 0:17:20.920 driving there. But I think it's really confusing. I gotta say, 0:17:21.040 --> 0:17:24.480 I'm not I'm not totally getting any of these explanations 0:17:24.600 --> 0:17:26.359 because I know I grew up in New York City, 0:17:26.440 --> 0:17:28.640 and yes, I failed my driver's task more than once. 0:17:29.119 --> 0:17:31.840 It wasn't my fault, let's not talk about it. But 0:17:31.880 --> 0:17:33.399 it was a sick shift and the guy hated me. 0:17:33.560 --> 0:17:35.879 But it's okay, I've forgiven you if you're listening. But 0:17:35.960 --> 0:17:38.720 I will say sort of, um, I will say that 0:17:38.920 --> 0:17:41.760 it was a source of deep anxiety growing up, Like 0:17:41.920 --> 0:17:45.200 what happens if you're you can't leave a big city. 0:17:45.320 --> 0:17:46.879 I mean, how do you not have a license? How 0:17:46.920 --> 0:17:49.480 do you travel somewhere and rent a car? I'm sorry 0:17:49.560 --> 0:17:53.359 that I just don't believe that simply uh, having an 0:17:53.480 --> 0:17:56.719 uber once in a while changes that. I think, I mean, 0:17:56.880 --> 0:17:59.360 for most people, it doesn't. It's still clear that most 0:17:59.400 --> 0:18:02.920 Americans get driver's licenses, most Americans have cars, but I 0:18:03.000 --> 0:18:06.600 think there's a larger minority that will not. And I 0:18:06.720 --> 0:18:08.440 just and I don't you know, I don't see car 0:18:08.600 --> 0:18:11.000 use collapsing. But it's pretty clear when you look at 0:18:11.200 --> 0:18:15.280 like per capita miles traveled, it's stopped rising. Well. But 0:18:15.400 --> 0:18:18.280 this the interesting point here is how autonomous driving will 0:18:18.280 --> 0:18:19.879 actually play into this. And I know that my ten 0:18:19.960 --> 0:18:21.840 year old sometimes asks me, you know, am I ever 0:18:21.880 --> 0:18:23.440 gonna have to go to the driver's license? Do I 0:18:23.480 --> 0:18:25.160 have to get on that. I'm like, no, no, no, please, 0:18:25.200 --> 0:18:26.960 You're fine. And I think about it, and you know, 0:18:27.560 --> 0:18:29.480 is there going to be just this model of managing 0:18:29.560 --> 0:18:32.600 these cars that are kind of driving themselves around and 0:18:32.920 --> 0:18:35.920 maximizing their use instead of having people with a bunch 0:18:35.920 --> 0:18:38.720 of cars parked in there driving. I mean, yes, someday, 0:18:38.920 --> 0:18:41.400 but I I will say, people have spent a huge 0:18:41.400 --> 0:18:44.320 amount of time and energy talking and thinking about that 0:18:44.440 --> 0:18:46.680 over the past few years, and it doesn't seem like 0:18:46.800 --> 0:18:49.000 it's going to be happening for another decade or two 0:18:49.119 --> 0:18:51.840 at the earliest. So your son is still gonna have 0:18:51.920 --> 0:18:54.359 to drive if if you want them to drive. So 0:18:54.640 --> 0:18:56.479 I'll tell him. I'll tell him lots of scary stories. 0:18:57.280 --> 0:19:01.240 When the guy comes in and says, are you scared? Little? 0:19:01.920 --> 0:19:04.240 I hate nervous drivers. Anyway, I'm not I'm not going 0:19:04.320 --> 0:19:06.000 to relive it over on the air, except that I 0:19:06.080 --> 0:19:08.400 just did, how many cars do you have, faull Um 0:19:08.640 --> 0:19:12.840 boy in our family? I'm gonna say three, yes, why 0:19:12.880 --> 0:19:15.440 have four kids? Are you know that that that's such 0:19:15.440 --> 0:19:17.359 an one of them as a pickup truck, which my 0:19:17.480 --> 0:19:19.639 friends are just shocked that we have in this And 0:19:19.960 --> 0:19:23.320 how old were they when I started driving all of them? 0:19:24.320 --> 0:19:26.119 So he had more than more than two kids, so 0:19:26.200 --> 0:19:28.600 that they had to shuttle themselves around. Justin Fox, thank 0:19:28.640 --> 0:19:30.879 you so much for being with us. Justin Fox is 0:19:30.960 --> 0:19:34.240 a Bloomberg opinion columnist. Great column about lots of American 0:19:34.280 --> 0:19:51.600 teens still shutting cars right now. My big question is 0:19:51.920 --> 0:19:56.200 given the fact that Iran can't necessarily be seen internally 0:19:56.359 --> 0:19:58.480 as standing down, I do wonder what the response is 0:19:58.520 --> 0:20:00.480 going to be. Chris lew joining us for now, Senior 0:20:00.520 --> 0:20:03.200 fellow at the University of Virginia Miller Center, also former 0:20:03.320 --> 0:20:06.600 Deputy Secretary of Labor under President Obama. He has served 0:20:06.760 --> 0:20:10.320 in a variety of administrations over decades. Thank you so 0:20:10.440 --> 0:20:12.959 much for being with us. On the phone from Charlottesville, Virginia. 0:20:12.960 --> 0:20:15.159 I just want to first get reaction. If you were 0:20:15.240 --> 0:20:20.120 listening to President Trump's comments on Iran, what was your takeaway? Well, 0:20:20.160 --> 0:20:22.800 I thought it was encouraging in the sense that, you know, 0:20:22.920 --> 0:20:26.359 he was offered an off ramp to de escalate, and 0:20:26.440 --> 0:20:28.959 it appears that he is taking that for now. Um, 0:20:29.240 --> 0:20:31.080 it will be interesting to see what the Iranians think 0:20:31.119 --> 0:20:33.880 of this. I mean, he he was, in my mind 0:20:33.920 --> 0:20:37.640 taking sort of a premature victory lap. I'm not sure 0:20:37.680 --> 0:20:40.159 that will play that well, and I think there are 0:20:40.280 --> 0:20:43.119 still remain questions what the long term strategy is. I mean, 0:20:43.480 --> 0:20:47.040 he talked about imposing additional economic sanctions, trying to get 0:20:47.200 --> 0:20:50.400 NATO involved in this, trying to negotiate a new deal. 0:20:50.520 --> 0:20:52.639 But you know, if we simply take a look at 0:20:52.640 --> 0:20:55.520 where we are now and where we were when he 0:20:55.640 --> 0:20:57.800 took office, it's hard to say that we are in 0:20:57.880 --> 0:21:00.960 a better situation now than where we were with the 0:21:01.040 --> 0:21:04.240 Iran nuclear deal. It's interesting, Chris, maybe take a step 0:21:04.280 --> 0:21:06.520 back here, given what we heard from the president here, 0:21:06.560 --> 0:21:10.800 what do you think the administration's strategy is here just 0:21:10.920 --> 0:21:12.960 over the less several days as it relates to our rent. 0:21:14.040 --> 0:21:15.440 You know, I think it's been a little confusing, and 0:21:15.480 --> 0:21:18.040 I think that's you know, the legitimate questions that members 0:21:18.040 --> 0:21:21.399 of Congress are asking about, you know, whether there was 0:21:22.080 --> 0:21:25.000 uh an imminent attack that they were trying to prevent 0:21:25.160 --> 0:21:29.480 and killing celemony. Uh, you know what the long term 0:21:29.600 --> 0:21:35.240 strategy is with regard to run and so I think, Um, look, 0:21:35.320 --> 0:21:37.199 I think it was helpful to have the President out 0:21:37.200 --> 0:21:39.520 there speaking, but I'm not sure he necessarily answered any 0:21:39.560 --> 0:21:43.360 of those questions. I'm wondering also what the broader message 0:21:43.440 --> 0:21:46.920 from this incident would be if URON does not retaliate 0:21:47.000 --> 0:21:48.640 any further. I know that there have been a number 0:21:48.680 --> 0:21:51.399 of reports that Kim John un over in North Korea 0:21:51.480 --> 0:21:54.200 is suspected to be incentivized to double down on his 0:21:54.359 --> 0:21:57.720 nuclear production simply because he doesn't want to be taken 0:21:57.720 --> 0:22:00.560 out by a drone either. So, uh, was what was 0:22:00.600 --> 0:22:03.439 your sense of that? Well, I think that's exactly right. 0:22:03.480 --> 0:22:06.160