WEBVTT - Surveillance: BOE's Recession Warning (Podcast)

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<v Speaker 1>Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane along

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<v Speaker 1>with Jonathan Ferrill and Lisa Brownwitz Jay Lee. We bring

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<v Speaker 1>you insight from the best and economics, finance, investment and

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<v Speaker 1>international relations. Find Bloomberg Surveillance, an Apple podcast, SoundCloud, Bloomberg

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<v Speaker 1>dot Com and of course on the Bloomberg Terminal. I

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<v Speaker 1>want to send to Sebastian Page on some of this.

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<v Speaker 1>The chief investment strategist and head a global multi asset

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<v Speaker 1>at Hero Price said, this is a tough moment for

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<v Speaker 1>central banks and some people might say they've got themselves

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<v Speaker 1>into this mess to some extent. For the UK, they

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<v Speaker 1>face upside risk to inflation, potentially in downside risk to growth.

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<v Speaker 1>You'll view on what policy is going to look like

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<v Speaker 1>in that world and ultimately what it means for risk assets. Now,

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<v Speaker 1>the discussion on the UK is interesting. I like to

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<v Speaker 1>look at a I call it the Bloomberg Surveillance measure,

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<v Speaker 1>the five year five year forward. The five year five

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<v Speaker 1>year forward inflation in the UK is at around four

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<v Speaker 1>point seven percent. That's high, and compare that to the US,

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<v Speaker 1>where the five year five year forward is at three

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<v Speaker 1>point two percent. The signal I'm getting from this is

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<v Speaker 1>that growth is even more fragile in the UK, and

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<v Speaker 1>the view is that the BOE won't be able to

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<v Speaker 1>be as aggressive at the FED. And that also feeds

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<v Speaker 1>into the weakness in the pound that you were just

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<v Speaker 1>talking about. Well, the weakness and the pound actually help

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<v Speaker 1>the economy or hurt the economy. Look, it can help

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<v Speaker 1>in terms of exports for sure, but generally speaking it

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<v Speaker 1>also feeds into inflation, which then forces the hand of

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<v Speaker 1>the b o E as well, and then it gets complicated. Right. Look,

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<v Speaker 1>I think if you step back, you look at the

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<v Speaker 1>big picture. Markets got drunk on liquidity post COVID and

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<v Speaker 1>I know, Jonathan, you were talking about tom being out

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<v Speaker 1>earlier this week and you mentioned a hangover. I don't

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<v Speaker 1>know if that if that's the case, but right now

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<v Speaker 1>we're going through a hangover in world capital markets and

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<v Speaker 1>it's been remarkable in the sense of both stocks and

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<v Speaker 1>bonds ring down at the same time. Sterling through Right now, folks,

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<v Speaker 1>I'm gonna call an important level fifty one point two

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<v Speaker 1>four five zero on week pound. We'll see if we

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<v Speaker 1>get there. Sebastian, with your book you on the high

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<v Speaker 1>grounded tro price on this, John mentions, what's it mean

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<v Speaker 1>for risk assets? What's it mean for stocks? Does the

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<v Speaker 1>market valuation if we get a current set of currency

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<v Speaker 1>depreciations off of these absolutely historic central bank moments, can

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<v Speaker 1>the stock market adapt on valuation on multiples to sustain

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<v Speaker 1>a level market or even a modest single digit bull market. Yeah,

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<v Speaker 1>really good question, Tom. Look, we entered the year position

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<v Speaker 1>for this in our tactical portfolios underweight stocks and within bonds,

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<v Speaker 1>underweight deray s. And what's interesting is we tend to

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<v Speaker 1>be contrarians. We look at valuation opportunities, We look twelve

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<v Speaker 1>months out, so normally we would be leaning in both

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<v Speaker 1>stocks and bonds. And what's interesting is not what we're doing,

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<v Speaker 1>is what we're not doing, Tom. We're actually buying back treasuries,

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<v Speaker 1>closing our underweights. We're not closing our under weights and stocks.

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<v Speaker 1>And I said in surveillance back in November inflations the

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<v Speaker 1>number one risk for markets. I continue to say this.

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<v Speaker 1>Inflation is the number one risk for markets. And the

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<v Speaker 1>key question that's debated on your show all the time

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<v Speaker 1>is will the inflation shock lead to a recession? A

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<v Speaker 1>growth shock? Said? Great cans shop with you, sir as

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<v Speaker 1>always Sebastian Page there at t rod Price with a DP,

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<v Speaker 1>their chief economists wonderfully attuned to the dynamics of the

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<v Speaker 1>American economy. Neili Richardson joins us. Right now, I'm looking

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<v Speaker 1>at course cp I that John just mentioned, and I

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<v Speaker 1>guess it's a pause that McKee just mentioned. We migrate

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<v Speaker 1>from six point five to six point one percent on

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<v Speaker 1>the survey on core inflation. One percent of our audience

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<v Speaker 1>and radio and TV thinks people like mckeeth, Ferrell, Keene

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<v Speaker 1>and the rest are nuts saying that's a good trend.

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<v Speaker 1>How much does that trend have to move down to

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<v Speaker 1>where we can begin to relax? Hi, Tom, thanks for

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<v Speaker 1>starting off with an easy question. I think we're going

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<v Speaker 1>to stay on the edge of our seats until we

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<v Speaker 1>see that core inflation moved down below three percent. I

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<v Speaker 1>think that we can't take it as a foregone conclusion

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<v Speaker 1>that it moves down in a straight line either. Um.

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<v Speaker 1>Many on your show have said that the Fed can

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<v Speaker 1>only do so much, that this is a supply aside

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<v Speaker 1>issue as much of it as a demand issue, and

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<v Speaker 1>so we might see inflation bounds around even in the quarry.

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<v Speaker 1>Uh And so comfort is I think of below three

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<v Speaker 1>percent nearly. Do you think that people interpreted yesterday's press

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<v Speaker 1>conference correctly? No, I don't. Um. I think that it

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<v Speaker 1>was way too easy for the Fed, and I know

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<v Speaker 1>that's part of their job. Their job is to make

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<v Speaker 1>it look easy. But it's not about what the market

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<v Speaker 1>to do the day after the press conference is what

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<v Speaker 1>the inflation does months from now, And we haven't seen

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<v Speaker 1>it yet. And the numbers that might just read are

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<v Speaker 1>are concerning productivity went down, wages went up, uh, And

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<v Speaker 1>so that's not the place where the Fed wants to be.

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<v Speaker 1>They want if wages are going up, it's because the

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<v Speaker 1>economy is getting more productive, not because we have this

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<v Speaker 1>super tight, unhealthy supply shortage. And I think that is

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<v Speaker 1>the concerned. Wages may not boost inflation, but wage growth

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<v Speaker 1>keep it around a lot longer than anyone's expecting right now.

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<v Speaker 1>Another thing that really a lot of people picked up

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<v Speaker 1>on the j Pala said yesterday was that he really

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<v Speaker 1>sees the core rate, uh, the target rate to still

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<v Speaker 1>be around two to three percent in terms of how

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<v Speaker 1>far they will raise rates. Do you think that that's

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<v Speaker 1>something we can take at face value or do you

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<v Speaker 1>think that perhaps there is more willingness than perhaps was

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<v Speaker 1>reflected to go beyond that into a tightening that perhaps

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<v Speaker 1>was what people were pricing in earlier this week, but

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<v Speaker 1>not now. Well, I think that that uh four now,

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<v Speaker 1>in terms of the fundamentals which are strong and where

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<v Speaker 1>the Fed is guiding towards, I think that's appropriate. I'm

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<v Speaker 1>always struck by this comparison with going from six to

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<v Speaker 1>eleven versus where we are not now going from rock

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<v Speaker 1>bottom zero to three. We're still in the school zone

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<v Speaker 1>in terms of rate heights. We are not on the

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<v Speaker 1>open highway. So I think what the Fed is is

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<v Speaker 1>trying to say is that they can maneuver of soft landing.

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<v Speaker 1>Given that we're starting from such a very low point

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<v Speaker 1>on the federal funds rate. You're on an Indiana universe,

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<v Speaker 1>which I believe is a stomping ground of when James

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<v Speaker 1>Bullard John Farrell says what your bullet will speak tomorrow

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<v Speaker 1>and Indiana, folks is a really acclaimed interesting mathematics and economics,

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<v Speaker 1>uh combine Nila. There's a different view out in Indiana.

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<v Speaker 1>It's an optimism that America can heal and move on

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<v Speaker 1>away from the elites on the East coast. Is that

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<v Speaker 1>still in place. Can we technologically move on and move

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<v Speaker 1>forward like that Indiana optimism. I'll have to know Tom

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<v Speaker 1>that Governor Waller is also and I U affiliate we

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<v Speaker 1>have a good representation on the in the federal reserve

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<v Speaker 1>system right now. Um. You know, I think that the

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<v Speaker 1>optimism around innovation and product productivity is warranted. Um. That's

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<v Speaker 1>what makes the wage gains good for the economy, That's

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<v Speaker 1>what leads to profitability. Um. And we've seen a a

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<v Speaker 1>big uptick and an innovation just to get through the pandemic.

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<v Speaker 1>A lot of things that were expected well into the

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<v Speaker 1>future in terms of e commerce and I can a

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<v Speaker 1>I automation have been pulled forward. So the question is

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<v Speaker 1>can the economy build on that momentum on those games

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<v Speaker 1>to keep that productivity moving forward? John, I love this

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<v Speaker 1>that we have NILAN and I'm sorry, John, there's just

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<v Speaker 1>not enough Midwest, you know, freshwater representation in the economic discussion.

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<v Speaker 1>You get guys like your own Paul, who are a

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<v Speaker 1>beast of finance on the East Coast. NATA, we have

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<v Speaker 1>to run, thank you. Then we did cost a little

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<v Speaker 1>bit lighter. NATA richardson the of I d P. Thank

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<v Speaker 1>you very much. We'll drive forward this story through the

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<v Speaker 1>day on radio and television with Mark Chandler. His book

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<v Speaker 1>Political Economy of Tomorrow looked at the astrology of the

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<v Speaker 1>foreign exchange system. He's chief market strategist at Bannockburn. Mark,

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<v Speaker 1>you're a great student of this. I want to go

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<v Speaker 1>back too, I believe John Major and essentially the modern

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<v Speaker 1>collapse of the British financial system. Yes, there was a

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<v Speaker 1>few other moments along the way, including Mervin King comparing

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<v Speaker 1>contrast what is coming for Governor Bailey and what John

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<v Speaker 1>Major dealt with in was sterling collapse. Yeah, so I

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<v Speaker 1>remember the UK was part of the exchange rate mechanism

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<v Speaker 1>that limited how much the Sterling could move. It had

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<v Speaker 1>trouble keeping into that, maintaining that band. And now the

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<v Speaker 1>UK had gotten its freedom not limited by that band,

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<v Speaker 1>and Sterling had collapsed. You know, yesterday Chairman Poulos talk

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<v Speaker 1>that sort of like channeled Paul Looker. But I think

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<v Speaker 1>it's really Bailey He's doing it. Despite what LEAs was saying,

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<v Speaker 1>the UK spot the Bank of England's forecasting contraction in

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<v Speaker 1>g DT next year and still gonna be stagnant in

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<v Speaker 1>the hiking grates. And not only hiking rates, but they

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<v Speaker 1>also announced that starting September they will begin starting off

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<v Speaker 1>it's corporate bond foldings. Mark, What will be the lessons

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<v Speaker 1>here and this? I think folks of the Great Yan's

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<v Speaker 1>Nordwig and Mark Chandler together on this, Mark Chandler, How

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<v Speaker 1>does the ECB, in a more conservative block at the

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<v Speaker 1>ECB is represented by the bundes Bank, how do they

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<v Speaker 1>respond to what is we've seen this morning. I don't

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<v Speaker 1>think that what happens in the Bank of England makes

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<v Speaker 1>the ECB change their dynamics whatsoever. I do think the

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<v Speaker 1>hawks have been pressing for a July rate hikes, but

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<v Speaker 1>and the market, the swaps market had to priced in

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<v Speaker 1>about a twenty five basis point hike in July. But

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<v Speaker 1>I think that this is this is scary in the

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<v Speaker 1>sense that we saw that happen today with the staffew

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<v Speaker 1>orders in Germany. We could then expected industrial output in

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<v Speaker 1>trance Europe. You're up as a whole. It's not just

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<v Speaker 1>the UK, but you're up as a whole. Looks to

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<v Speaker 1>me like it's headed for her session. Is that being

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<v Speaker 1>priced into the euro right now? Mark? Well, I think partly,

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<v Speaker 1>but I think they really would trice into the euro

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<v Speaker 1>is how aggressive the FED is. I know a lot

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<v Speaker 1>of people are critical to spend that there behind the curve,

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<v Speaker 1>but I think that they're playing catchup. And it's not

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<v Speaker 1>just it's not just that the federals behind the curve.

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<v Speaker 1>Something wrong with the Federal Reserve. But look what happened Sweden,

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<v Speaker 1>who said they were gonna have great Greeks. And it's

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<v Speaker 1>the same thing that we've seen some other central banks,

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<v Speaker 1>like the Reserve. Think of Australia. I can wait. Even

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<v Speaker 1>so I think that all the major central banks are

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<v Speaker 1>behind the curve, partly because I want to stay in there.

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<v Speaker 1>This thing that the pandemic and then the Russian invasion

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<v Speaker 1>of Ukraine, and then the slowdown, the COVID sort of

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<v Speaker 1>induced slowdown in China. It's just it's just more than

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<v Speaker 1>anybody has would have expected. A ray of nothing in

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<v Speaker 1>our experience. Let us prepare for this. A lot of

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<v Speaker 1>people are talking about the potential for recession in Europe.

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<v Speaker 1>The Bank of England seeing a very high likelihood of

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<v Speaker 1>recession in England and the United Kingdom in the face

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<v Speaker 1>of these dynamics. In the US, there seems to be

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<v Speaker 1>a consensus that that is not the near term forecast

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<v Speaker 1>that there is so much of a momentum here underpinning

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<v Speaker 1>the strength. Do you think that that's were stated or

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<v Speaker 1>do you think that people can bet on that leading

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<v Speaker 1>to even more dollar strength. Well, I do think they

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<v Speaker 1>will get some more dollar strength there, and I think

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<v Speaker 1>that tomorrow we're gonna get the jobs to point the

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<v Speaker 1>US and I see the falling a little bit, but

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<v Speaker 1>we're still talking about three hundred tops three hundred eight

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<v Speaker 1>increasing jobs. It's hard for me to hear your session

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<v Speaker 1>with that, so I am very expensitive to this. We

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<v Speaker 1>are going to have a slowed down. I should have

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<v Speaker 1>just sive the same place later this year and into

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<v Speaker 1>next year, not so much an immediately. You know, in

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<v Speaker 1>the next quarter two we did have that sharp contraction

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<v Speaker 1>to one GDP, but that was really a statistical flues,

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<v Speaker 1>right because of trade and inventory. What we what we

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<v Speaker 1>kind of it's called final sales to domestic purchasers with

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<v Speaker 1>the actually relatively robust number mark. I want to go

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<v Speaker 1>back to how we were all weaned on this, because

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<v Speaker 1>all of us began foreign exchange in banking by watching

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<v Speaker 1>Julie Andrews and Mary Poppins. I mean let's be honest.

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<v Speaker 1>Dick Van Dyke stole the show and Mark Chandler, there's

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<v Speaker 1>a view of the Bank of England. I mean, Pharrell

0:12:59.640 --> 0:13:03.400
<v Speaker 1>grew up of this view of the Fidelity and Fiduciary Bank,

0:13:03.480 --> 0:13:05.960
<v Speaker 1>which was the bank in the movie Mary Poppins. We

0:13:06.000 --> 0:13:09.120
<v Speaker 1>have moved on from that from Mark, a new central

0:13:09.160 --> 0:13:12.720
<v Speaker 1>bank that is supposed to have a new social construct.

0:13:13.360 --> 0:13:16.920
<v Speaker 1>Is that social construct getting in the way of making

0:13:17.480 --> 0:13:21.200
<v Speaker 1>tough decisions? I don't know. I mean, he look what

0:13:21.240 --> 0:13:24.440
<v Speaker 1>they just did, a hight rate six members, I mean

0:13:24.480 --> 0:13:27.160
<v Speaker 1>they all voted in favor of actually six voted favor

0:13:27.160 --> 0:13:28.959
<v Speaker 1>of the rate type, three of them one of the

0:13:29.040 --> 0:13:32.480
<v Speaker 1>fifty basis point rate type. Knowing full well that the

0:13:32.520 --> 0:13:35.480
<v Speaker 1>cost of living squeeze is going to be crushing the

0:13:35.520 --> 0:13:38.520
<v Speaker 1>consumer and businesses in the UK. I don't know. I

0:13:38.520 --> 0:13:41.360
<v Speaker 1>don't see this as as some kind of give back

0:13:41.480 --> 0:13:45.320
<v Speaker 1>to the social social consciousness. Where I sort of see

0:13:45.360 --> 0:13:48.400
<v Speaker 1>that happening is really in Mexico, where yesterday Credit a

0:13:48.520 --> 0:13:52.160
<v Speaker 1>MLO announced the pact with businesses to limit the price

0:13:52.200 --> 0:13:57.240
<v Speaker 1>increased of like twenty four common products. Mark, we got

0:13:57.240 --> 0:13:59.480
<v Speaker 1>to leave it there on short notice. Mark Channeler today

0:13:59.520 --> 0:14:03.079
<v Speaker 1>with Bannock and I just love, love, love hit the tapestry, Lisa,

0:14:03.160 --> 0:14:06.559
<v Speaker 1>that Mr Chandler puts to the history and the social

0:14:06.600 --> 0:14:17.120
<v Speaker 1>aspects of all this financial blather that we do. I

0:14:17.120 --> 0:14:20.560
<v Speaker 1>would respectfully suggest folks to get every second of value

0:14:20.560 --> 0:14:23.720
<v Speaker 1>we can hear that Benjamin Broadbent, Deputy Governor of the

0:14:23.760 --> 0:14:26.800
<v Speaker 1>Bank of England X Goldman Sachs truly one of the

0:14:26.840 --> 0:14:31.840
<v Speaker 1>giant lights of uh United Kingdom economics and Governor Bailey

0:14:31.880 --> 0:14:34.080
<v Speaker 1>they would like to listen to Paul Sanky he is

0:14:34.160 --> 0:14:37.680
<v Speaker 1>founder and lead analyst at Sanky Research with an absolutely

0:14:37.680 --> 0:14:41.280
<v Speaker 1>blistering note for a two hour conversation. Paul, I want

0:14:41.320 --> 0:14:44.560
<v Speaker 1>to go to the nitty gritty of your expertise, which

0:14:44.640 --> 0:14:49.480
<v Speaker 1>is you link Henry Hubb and l N G into

0:14:49.520 --> 0:14:54.920
<v Speaker 1>a net gas explosion in price and profit. Discuss that

0:14:56.480 --> 0:15:01.480
<v Speaker 1>well supply US production is not U reacting to high prices,

0:15:01.520 --> 0:15:05.320
<v Speaker 1>so a lot of our normal elasticities are simply not there.

0:15:05.320 --> 0:15:07.840
<v Speaker 1>And the other key one is that coal prices are

0:15:07.960 --> 0:15:12.080
<v Speaker 1>very high and cold inventories are very low. So the

0:15:12.200 --> 0:15:15.120
<v Speaker 1>US prices you know, as you mentioned, has gone to

0:15:15.320 --> 0:15:17.440
<v Speaker 1>eight dollars fifty per m and b t U, which

0:15:17.560 --> 0:15:21.360
<v Speaker 1>is you know fifteen year high, and I've got clients

0:15:21.400 --> 0:15:25.000
<v Speaker 1>that think it's going to twenty. So the reason obviously

0:15:25.160 --> 0:15:29.280
<v Speaker 1>is that Europe is cutting off Russian gas and as

0:15:29.280 --> 0:15:31.760
<v Speaker 1>a result they have to import as much energy as

0:15:31.800 --> 0:15:34.720
<v Speaker 1>they can. They were dependent on the spot market, so

0:15:34.800 --> 0:15:37.440
<v Speaker 1>they don't have long term contracts and as a result,

0:15:37.480 --> 0:15:40.680
<v Speaker 1>effectively they're having to buy L and G from a buyer,

0:15:40.840 --> 0:15:45.280
<v Speaker 1>from someone who's already got the contract from Asia and

0:15:45.320 --> 0:15:47.680
<v Speaker 1>then put in scale folks in net gas, we frame

0:15:47.720 --> 0:15:51.400
<v Speaker 1>a two three, it's now eight and Mr Sanky just

0:15:51.440 --> 0:15:54.760
<v Speaker 1>said we should enjoy at twenty. Paul Sankey, let's look

0:15:54.760 --> 0:15:57.440
<v Speaker 1>at the United Kingdom and the United States galling to gas.

0:15:57.440 --> 0:16:00.560
<v Speaker 1>And they understand there's taxes, and John rives a little

0:16:00.600 --> 0:16:02.920
<v Speaker 1>car over there. I get it, but it's four dollars

0:16:02.920 --> 0:16:07.520
<v Speaker 1>fifty eight cents up to United Kingdom five dollars seventy

0:16:07.600 --> 0:16:10.520
<v Speaker 1>nine cents. You say, the profits are out there for

0:16:10.600 --> 0:16:13.720
<v Speaker 1>big oil like you've never seen in thirty years. It

0:16:13.800 --> 0:16:16.320
<v Speaker 1>goes back to Urgan in the prize, the whole thing.

0:16:16.840 --> 0:16:19.040
<v Speaker 1>What's a gal and a gas going to cost in

0:16:19.120 --> 0:16:23.160
<v Speaker 1>three or five years? Well, I think we're gonna hold

0:16:23.600 --> 0:16:25.760
<v Speaker 1>a hundred and cents to a hundred and fifty. We've

0:16:25.880 --> 0:16:27.880
<v Speaker 1>we've wobbled below a hundred and ten, as you know

0:16:27.960 --> 0:16:30.040
<v Speaker 1>on Brent. But now we're back in the range that

0:16:30.120 --> 0:16:34.120
<v Speaker 1>I anticipated after Russia, and the call was that it

0:16:34.160 --> 0:16:37.720
<v Speaker 1>would be a quagmia in in Ukraine and that would

0:16:38.120 --> 0:16:40.600
<v Speaker 1>over time. The longer that went on, the more Russian

0:16:40.600 --> 0:16:43.400
<v Speaker 1>oil and gaps we would lose. Now we're focused on

0:16:43.440 --> 0:16:47.400
<v Speaker 1>May the ninth, for you know, the key dates in

0:16:47.480 --> 0:16:51.200
<v Speaker 1>Russia where they celebrate the victory over the Nazis, and

0:16:51.240 --> 0:16:53.320
<v Speaker 1>we're wondering what's going to happen, but that could be

0:16:53.320 --> 0:16:56.000
<v Speaker 1>a key a key catalyst state whether or not Putin

0:16:56.080 --> 0:16:59.120
<v Speaker 1>declares victory, whether or not he goes to all out

0:17:00.160 --> 0:17:02.080
<v Speaker 1>you know, bombing. I don't know what he's going to do,

0:17:02.120 --> 0:17:04.560
<v Speaker 1>but we're watching that day carefully. But what we do

0:17:04.640 --> 0:17:07.320
<v Speaker 1>know is that Russian oil and gas is now effectively

0:17:07.359 --> 0:17:09.840
<v Speaker 1>gone from the market as far as you is concerned.

0:17:10.440 --> 0:17:12.320
<v Speaker 1>And that's a very very big deal of the markets

0:17:12.359 --> 0:17:15.400
<v Speaker 1>which were already tight as you know before this all

0:17:15.480 --> 0:17:18.520
<v Speaker 1>kicked off. Well, all of this goes to how much

0:17:18.520 --> 0:17:21.000
<v Speaker 1>can people keep betting on oil companies at a time

0:17:21.000 --> 0:17:23.280
<v Speaker 1>when there's a lot of complaints especially on the regulatory

0:17:23.280 --> 0:17:26.119
<v Speaker 1>and political side, about how much gas prices are going up,

0:17:26.160 --> 0:17:28.520
<v Speaker 1>how much oil prices are going up. Well. At the

0:17:28.560 --> 0:17:32.439
<v Speaker 1>same time, there is this uncertain backdrop on the macroeconomic picture.

0:17:32.480 --> 0:17:36.080
<v Speaker 1>Shall just reported a record profit. We've seen this time

0:17:36.119 --> 0:17:39.119
<v Speaker 1>and time again. How much more upside is there in

0:17:39.160 --> 0:17:42.320
<v Speaker 1>these companies given the fifty rally you're to date, given

0:17:42.320 --> 0:17:46.560
<v Speaker 1>the fact that there is all of this regulatory scrutiny,

0:17:46.800 --> 0:17:48.880
<v Speaker 1>you know, that's the number one concern of the clients,

0:17:48.960 --> 0:17:51.080
<v Speaker 1>so that you know. But the by side obviously is

0:17:51.119 --> 0:17:53.560
<v Speaker 1>my clients, the investors in oils, so worried that the

0:17:53.560 --> 0:17:56.800
<v Speaker 1>government won't tolerate The US government, for example, won't tolerate

0:17:57.560 --> 0:17:59.919
<v Speaker 1>ten or twenty dollar Henry Hub gas because of the

0:18:00.000 --> 0:18:03.000
<v Speaker 1>impact it will have on the US consumers. But you know,

0:18:03.040 --> 0:18:06.560
<v Speaker 1>the government's very weak and they don't have an energy policy,

0:18:06.880 --> 0:18:09.359
<v Speaker 1>and they have a couple of key senators, you know

0:18:09.480 --> 0:18:13.320
<v Speaker 1>Joe Manson obviously, who oppose any kind of interference and markets.

0:18:13.359 --> 0:18:15.800
<v Speaker 1>And it's complicated to interfere in the gas market. It's

0:18:15.800 --> 0:18:19.120
<v Speaker 1>a free market. These guys are selling gas directly by

0:18:19.160 --> 0:18:23.840
<v Speaker 1>contract through processing hubs like Shanna Um, and you know,

0:18:23.920 --> 0:18:26.000
<v Speaker 1>to to to shut that down as a government would

0:18:26.000 --> 0:18:30.080
<v Speaker 1>be would be difficult without legislation, and legislation we think

0:18:30.160 --> 0:18:32.439
<v Speaker 1>is very difficult. So I think, you know, much like

0:18:32.480 --> 0:18:34.639
<v Speaker 1>the OPEC meeting that you just asked me about before

0:18:34.640 --> 0:18:37.359
<v Speaker 1>we came on, they're kind of powerless. You know, there's

0:18:37.359 --> 0:18:38.879
<v Speaker 1>not much they can do, and we're just at the

0:18:38.920 --> 0:18:42.040
<v Speaker 1>mercy of the market. And that's why it's such a

0:18:42.080 --> 0:18:44.920
<v Speaker 1>crazy environment for the oils because you know, the money

0:18:44.920 --> 0:18:46.879
<v Speaker 1>they're gonna make is going to be enormous and it

0:18:46.920 --> 0:18:48.960
<v Speaker 1>will infuriate people. But what are you going to do about.

0:18:49.280 --> 0:18:51.480
<v Speaker 1>It's been a nuts environment, that's for sure. Paul, Thank

0:18:51.520 --> 0:18:54.600
<v Speaker 1>you as always, Bloody Paul, thank you that, thank you research.

0:18:55.080 --> 0:18:58.840
<v Speaker 1>This is the Bloomberg Surveillance Podcast. Thanks for listening. Join

0:18:58.960 --> 0:19:02.000
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0:19:02.240 --> 0:19:06.240
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0:19:06.320 --> 0:19:11.600
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