WEBVTT - Bloomberg Surveillance TV: April 1st, 2026 0:00:00.040 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordert. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:35.840 Terminal and the Bloomberg Business app. 0:00:36.400 --> 0:00:37.040 Here's the latest. 0:00:37.080 --> 0:00:39.920 This morning, the President slamming NATO, telling the Telegraph he 0:00:40.000 --> 0:00:42.479 is strongly considering pulling the United States out of the 0:00:42.520 --> 0:00:45.520 Alliance as members refuse to join the war with Iran 0:00:45.800 --> 0:00:48.360 joining US. Now is Admiral Pierre van Die, the NATO 0:00:48.400 --> 0:00:51.919 commander for Transformation. Admiral, welcome to the program, sir. I'll 0:00:51.960 --> 0:00:54.520 share with you what the President said to the Telegraph. 0:00:54.840 --> 0:00:56.960 In their story this morning, they say the President was 0:00:57.000 --> 0:01:00.280 asked if he would consider reconsider the US's membersh ship 0:01:00.320 --> 0:01:03.040 of the Alliance after the conflict. He said, quote, oh yes, 0:01:03.320 --> 0:01:06.320 I would say it's beyond reconsideration. I was never swayed 0:01:06.319 --> 0:01:09.160 by NATO. I always knew they were a paper tiger, 0:01:09.440 --> 0:01:12.760 and Putin knows that too. By the way, Admiral, what's 0:01:12.800 --> 0:01:15.480 your reaction to that quote and what's the future of 0:01:15.520 --> 0:01:16.160 this alliance? 0:01:17.440 --> 0:01:18.560 So thank you for having me. 0:01:18.600 --> 0:01:21.720 It's the first time I'm on a US TV or life, 0:01:22.120 --> 0:01:24.200 so I'm very happy to be able to share some 0:01:24.240 --> 0:01:28.160 comments with you. So well clearly understand that we themity 0:01:28.360 --> 0:01:32.360 are not maneuvering on the political level. So I will 0:01:32.360 --> 0:01:36.720 not commend this debate, which is a strong one, which 0:01:36.800 --> 0:01:41.039 is about the transathletical inks and how the things go 0:01:41.160 --> 0:01:42.080 on the political side. 0:01:42.160 --> 0:01:43.360 I think what we have in. 0:01:43.240 --> 0:01:46.960 Front of us is a world where the crisis is 0:01:46.959 --> 0:01:49.280 not any more the good understanding of how the things 0:01:49.320 --> 0:01:53.000 are going. It's much more a question of shock. If 0:01:53.040 --> 0:02:00.080 I may an image, A crisis is when you're the 0:02:00.080 --> 0:02:01.600 ties of your car are flat. 0:02:03.040 --> 0:02:05.160 A shock is what you hit a tree. 0:02:05.480 --> 0:02:08.160 We are in a world where hitting trees now it's 0:02:08.240 --> 0:02:10.920 a new normal, and I think for an alliance it's 0:02:10.960 --> 0:02:14.400 a strong, strong challenge to be able to adapt at 0:02:14.440 --> 0:02:16.440 a very high speed to these shocks. 0:02:17.080 --> 0:02:20.400 Admiral, though this goes beyond just politics. This is about 0:02:20.440 --> 0:02:24.720 operational issues for the Alliance. When the UK only allows 0:02:24.720 --> 0:02:27.240 the US to use Basis for limited defensive action. 0:02:27.680 --> 0:02:29.440 When we see reports that Italy is. 0:02:29.360 --> 0:02:32.880 Denying and military aircraft permission to land in Sicily, and 0:02:32.919 --> 0:02:35.160 you have the US questioning whether they should even have 0:02:35.240 --> 0:02:38.400 bases in those places if they can't use them, the 0:02:38.480 --> 0:02:41.480 question still remains, what is the future of this alliance 0:02:41.600 --> 0:02:45.120 From an operational standpoint, what is the future of this alliance? 0:02:46.680 --> 0:02:49.840 I think the strength of the Alliance is to have 0:02:50.120 --> 0:02:55.120 having been able during more than seventy eighteen years to 0:02:55.240 --> 0:02:59.919 discuss and to find a way together. It's the consensus ace, 0:03:00.040 --> 0:03:03.560 which is not driven by majority but by consensus. And 0:03:03.639 --> 0:03:06.040 so that means that you have a unique place in 0:03:06.080 --> 0:03:08.880 the world where you have thirty two nations that discuss 0:03:09.040 --> 0:03:12.920 at political level on a daily basis. And so I 0:03:12.960 --> 0:03:16.400 know that since this war is going on in Ukraine, 0:03:16.480 --> 0:03:20.360 they are very intensive discussion at natal level. It's not 0:03:20.400 --> 0:03:23.760 only the nations themselves one by one with the US, 0:03:24.080 --> 0:03:27.639 it's it's all together in the in the NAC. It's 0:03:27.639 --> 0:03:31.200 a NATO non athnotic console where this discussion occur. And 0:03:31.240 --> 0:03:33.680 I think it's a strength for the West. It's something 0:03:33.680 --> 0:03:36.800 we need never to neglect is the fact that we 0:03:36.880 --> 0:03:40.480 are together. We are committed by bonds, and so we 0:03:40.600 --> 0:03:44.880 need to there always tensions that it's not the first time, 0:03:45.520 --> 0:03:49.280 but we need to to solve this as a united alliance. 0:03:50.680 --> 0:03:54.600 Can the alliance exist though without the support of the United. 0:03:54.360 --> 0:03:58.280 States, This is a great question. 0:03:58.760 --> 0:04:03.720 So mister Trump, during the LA he submits UH last 0:04:03.880 --> 0:04:09.200 summer he achieved to ask to the Allies to spend 0:04:09.240 --> 0:04:12.400 three point five percent of the GDP for their own defense. 0:04:12.720 --> 0:04:15.960 That comes by the fact that the US have other priorities. 0:04:16.160 --> 0:04:19.760 They are not only focused on Europe, and the crisis 0:04:19.800 --> 0:04:22.039 in a round is a good demonstration of what they said. 0:04:22.440 --> 0:04:24.720 So it's a moment for you Open to stand up 0:04:24.960 --> 0:04:25.320 and to. 0:04:25.279 --> 0:04:29.240 Do largely more than they have been habitted to they 0:04:29.240 --> 0:04:33.520 did before during the during the Postcord War decades, UH, 0:04:33.600 --> 0:04:37.160 the Opens have been somehow the free riders of their 0:04:37.200 --> 0:04:41.159 own security. Today there is a great change, and now 0:04:41.200 --> 0:04:43.800 we need to ramp up in all domains and to 0:04:43.880 --> 0:04:47.200 be able not to do without the US, but largely 0:04:47.360 --> 0:04:51.000 with a smaller force of the US given the other 0:04:51.080 --> 0:04:54.560 commitment these US forces up over the world. 0:04:55.120 --> 0:04:57.520 And what is it ability or will to potentially help 0:04:57.560 --> 0:04:59.560 the United States when it comes to reopening the straight 0:04:59.600 --> 0:05:03.040 or hormone A. We're struck by the UK Defense Secretary 0:05:03.080 --> 0:05:07.920 minister in an interview really struggling to answer basic questions 0:05:08.000 --> 0:05:10.800 even about how many frigates the US has the UK 0:05:10.960 --> 0:05:12.760 has presently at the moment. 0:05:15.000 --> 0:05:18.479 So there is we he inher it third years of 0:05:18.520 --> 0:05:22.360 these investments in all domains, in the industry, in the 0:05:22.360 --> 0:05:26.440 weapon stock, bise, in the in themitry, in the number 0:05:26.480 --> 0:05:29.240 of soldiers. So it's not by a flick of a 0:05:29.279 --> 0:05:32.400 switch that will we change that. That means a strong, 0:05:32.640 --> 0:05:35.800 long lasting commitment from the opens to be able to 0:05:35.880 --> 0:05:39.719 ramp up. So we inherit a very bad situation, and 0:05:39.760 --> 0:05:41.240 I think it's time out to wake up. 0:05:41.600 --> 0:05:43.839 Given the fact that there is a lot of questions 0:05:43.960 --> 0:05:48.039 right now about the US and the US's role with NATO. 0:05:48.560 --> 0:05:50.640 How likely is it that in five years NATO will 0:05:50.640 --> 0:05:51.200 still exist. 0:05:53.360 --> 0:05:54.880 It's a very political question. 0:05:55.160 --> 0:05:58.960 I think we don't kill we he inher it a 0:05:59.080 --> 0:06:03.520 system which is a good one. In fact, in other 0:06:03.680 --> 0:06:06.320 parts of the world, I think most of the alliance 0:06:06.360 --> 0:06:09.159 we discuss with, especially in the PACIFY, they are saying 0:06:09.200 --> 0:06:12.000 we should have something that looks like NET. So it 0:06:12.320 --> 0:06:15.719 is how it is, it's it's it's a big organization, 0:06:15.880 --> 0:06:18.320 but it's the one where we discuss on every day. 0:06:18.640 --> 0:06:20.839 You have a more than twelve thousand met read that 0:06:21.000 --> 0:06:23.520 on a daily basis. They work on plants, they work 0:06:23.560 --> 0:06:26.760 on intability, they work on training, they work on concepts. 0:06:26.880 --> 0:06:29.839 So this is a goal in the in Odiens. 0:06:30.200 --> 0:06:32.240 And so I think it's a moment where we need 0:06:32.279 --> 0:06:35.360 to have a cool hands and not saying okay, because 0:06:35.360 --> 0:06:37.479 there is a crisis, we will kill the baby. I 0:06:37.480 --> 0:06:40.039 think it's a moment we have an heritage, we have 0:06:40.120 --> 0:06:43.360 something that works. I think it's a moment where all 0:06:43.440 --> 0:06:45.680 the stakeholders need to be responsible. 0:06:45.960 --> 0:06:48.320 They need to they need to say okay what we 0:06:48.400 --> 0:06:48.800 hearer it? 0:06:49.160 --> 0:06:52.200 And with this, this this alliance, I think there is 0:06:52.240 --> 0:06:55.600 a lot to do still uh and killing it will 0:06:55.640 --> 0:06:57.599 not make the world safer. 0:06:58.400 --> 0:07:01.480 There was some questions about the act that missiles were 0:07:01.520 --> 0:07:05.919 logged at Turkey from Oran and that this potentially could 0:07:06.000 --> 0:07:08.919 engage NATO more directly in the conflict. 0:07:09.440 --> 0:07:10.560 What's your response to that? 0:07:12.040 --> 0:07:15.720 So some measures have been taken by secure It's the 0:07:15.840 --> 0:07:19.640 US General Greenevic, which is in chid of that kind 0:07:19.680 --> 0:07:23.760 of answers uh, and so he has taken measures in 0:07:23.840 --> 0:07:27.560 order to be sure that the NATO AR Area of 0:07:27.640 --> 0:07:32.240 responsibility is well protected against the will of Iran. 0:07:31.960 --> 0:07:34.400 To spread the crisis outside of its borders. 0:07:34.840 --> 0:07:37.200 And well, before you go, can I get clarification on something. 0:07:37.680 --> 0:07:41.560 Can you confirm whether Iran did try to strike the 0:07:41.600 --> 0:07:45.120 Diego Gassia base in the Internet Ocean, because we're still 0:07:45.160 --> 0:07:47.920 trying to gauge what the range actually is. What do 0:07:47.960 --> 0:07:48.800 you know about that? 0:07:49.960 --> 0:07:52.960 So it looks like they have tried to send a 0:07:53.000 --> 0:07:56.120 three stage ballistic missile which is much more looking like 0:07:56.480 --> 0:07:57.400 a commercial rocket. 0:07:57.680 --> 0:07:58.200 I think it was. 0:07:58.400 --> 0:08:01.760 It was a messaging and they are trying to demonstrate 0:08:01.800 --> 0:08:06.640 their their ability to expand and to spill the crisis 0:08:06.680 --> 0:08:08.120 outside of the Middle East. 0:08:08.560 --> 0:08:09.520 It's their strategy. 0:08:10.120 --> 0:08:11.960 And so I think it's a moment where back to 0:08:12.040 --> 0:08:14.600 the Islands, it's a moment where I think we need 0:08:14.640 --> 0:08:18.160 to show that we are united, we are committed to 0:08:18.200 --> 0:08:21.200 defend one billion pre citizen over the world and not 0:08:21.280 --> 0:08:22.320 kill the baby at a. 0:08:22.280 --> 0:08:25.240 Moment of tension with which I fully understand. 0:08:26.040 --> 0:08:29.680 Stay with us. More Bloomberg surveillance coming up after this. 0:08:38.720 --> 0:08:40.880 Oil down this morning by about a half of one 0:08:40.880 --> 0:08:43.640 percent on per and crude oil falling. As the President 0:08:43.679 --> 0:08:46.080 stokes optimism the AROUND war is nearing an end and 0:08:46.120 --> 0:08:49.760 possibly withdrawing before reopening the stratiformers and a world of 0:08:49.760 --> 0:08:52.880 the Atlantic Council noting potential issues with the plan, writing 0:08:52.880 --> 0:08:55.120 this would be a terrible president for the US because 0:08:55.160 --> 0:08:58.240 around it's actually in an enhanced position of making more 0:08:58.280 --> 0:09:01.240 money than before and joins US now for more and 0:09:01.280 --> 0:09:03.400 welcome to the program. The last time we spoke, which 0:09:03.400 --> 0:09:05.880 I believe was about a week ago, you said, unless 0:09:05.880 --> 0:09:08.840 this sends in ten to fourteen days, the energy crisis 0:09:08.840 --> 0:09:11.679 are going to approach severe levels. The President is now 0:09:11.720 --> 0:09:14.440 saying it's going to take another two weeks potentially. And 0:09:14.600 --> 0:09:16.280 with that in mind, what kind of levels are we 0:09:16.320 --> 0:09:18.280 going to approach in the next two weeks. 0:09:19.080 --> 0:09:21.720 Well, if you look at what's happening already in France 0:09:22.600 --> 0:09:25.120 and other countries where they're having runs. 0:09:24.840 --> 0:09:27.080 On gasoline stations, I mean gasoline stations are. 0:09:27.000 --> 0:09:31.080 Running dry because they're putting in these price controls and 0:09:31.120 --> 0:09:35.800 that's making everyone rush to buy. We're really having severe 0:09:35.840 --> 0:09:37.839 issues in a lot of countries that we in the 0:09:37.960 --> 0:09:41.400 US are quite insulated from because we're not experiencing this. Yes, 0:09:41.440 --> 0:09:45.680 we are seeing much higher gasoline prices, but the fact 0:09:45.720 --> 0:09:49.520 that we're not seeing any shortages is really giving us 0:09:49.600 --> 0:09:53.800 this sense of isolation. I think from the most important 0:09:53.800 --> 0:09:55.960 impact of this conflict. 0:09:55.880 --> 0:09:59.280 Ellen, can the straight be reopened or can you see 0:09:59.280 --> 0:10:02.400 a supplies start to flow through there? If Iran continues 0:10:02.440 --> 0:10:05.800 to hold on to a control of this region, And 0:10:05.840 --> 0:10:08.360 I ask this at a time when Cutter is seeing 0:10:08.360 --> 0:10:11.520 oil tankers being bombed in Qatari land. 0:10:12.520 --> 0:10:16.160 This is a really severe problem because if the United 0:10:16.200 --> 0:10:20.719 States ends this conflict or declares an end to it 0:10:21.120 --> 0:10:26.120 while leaving Iran basically a de facto control over passage 0:10:26.160 --> 0:10:29.360 into and out of the Persian Gulf, then we've actually 0:10:29.400 --> 0:10:32.240 put Iran in a much better position than they were 0:10:32.280 --> 0:10:35.319 in before this started, because. 0:10:35.040 --> 0:10:37.800 Now beforehand, they weren't actually controlling it. 0:10:37.800 --> 0:10:41.800 It was just this threat that they might actually limit 0:10:41.840 --> 0:10:45.360 traffic or they might threaten the safety of ships passing through. 0:10:45.520 --> 0:10:47.920 Now they are threatening the safety of ships passing through, 0:10:47.960 --> 0:10:51.440 and it is effective because tankers are refusing to cross 0:10:51.480 --> 0:10:54.480 because of Intera's issues and because they don't want to 0:10:54.480 --> 0:10:56.240 get hit by a drone. 0:10:56.920 --> 0:10:58.679 And then if we leave Iran's. 0:10:58.280 --> 0:11:00.319 Basically in a position to say, well, how how much 0:11:00.320 --> 0:11:00.640 are you. 0:11:00.640 --> 0:11:03.080 Going to pay us to leave you alone? 0:11:03.160 --> 0:11:05.880 And that is that's a whole new role for this 0:11:05.960 --> 0:11:08.800 country and also puts them in the position to make 0:11:08.840 --> 0:11:09.480 more money. 0:11:09.800 --> 0:11:12.200 Well, when it comes to the money ellen in the past, 0:11:12.240 --> 0:11:15.880 anytime the United States offered waivers for Iranian oil, it 0:11:15.920 --> 0:11:18.600 was put into an escrow account, and there was it 0:11:18.640 --> 0:11:21.280 was dictated that it had to be used for humanitarian 0:11:21.360 --> 0:11:24.720 aid for the people of Iran. I didn't see any 0:11:24.760 --> 0:11:27.800 of that sort of language in the general license. So 0:11:28.000 --> 0:11:31.040 where is this money going that the regime is making 0:11:31.120 --> 0:11:33.880 right now off of selling their crude and the toll. 0:11:34.800 --> 0:11:36.679 Presumably it's going straight to Iran. 0:11:37.320 --> 0:11:40.719 It's not going in dollars because there's still restrictions on 0:11:41.320 --> 0:11:42.760 what kind of currency Iran can use. 0:11:42.800 --> 0:11:44.640 But at this point do they really. 0:11:44.400 --> 0:11:47.320 Care whether you know, Pakistan is paying them in yon 0:11:47.520 --> 0:11:47.720 or not. 0:11:48.400 --> 0:11:50.800 It's going straight to the government now. 0:11:51.240 --> 0:11:54.920 Because militarily we've hit certain sites, We've we've hit you know, 0:11:55.000 --> 0:11:56.040 factories where their. 0:11:55.840 --> 0:11:58.640 Making these these missiles and drones. 0:11:58.880 --> 0:12:02.199 They're not necessarily to produce more of it right away, 0:12:02.400 --> 0:12:04.319 but the fact that they that they have this money 0:12:04.320 --> 0:12:06.520 means that they will be able to get back to 0:12:06.600 --> 0:12:08.320 this in the future, or they can funnel it to 0:12:08.360 --> 0:12:09.679 their to their proxies. 0:12:09.720 --> 0:12:12.920 I mean, the Hoothies are still a wild card here that. 0:12:14.240 --> 0:12:18.160 Could completely change the situation in the Red Sea. And 0:12:18.240 --> 0:12:22.400 if they're doing that with Iranian funds, then have we 0:12:22.559 --> 0:12:26.600 really even put you know, anything in this situation in 0:12:26.640 --> 0:12:29.439 a better place? And I would argue that not necessarily. 0:12:29.800 --> 0:12:32.320 I was told once again by a source yesterday that 0:12:32.360 --> 0:12:34.840 the Saudis are basically paying off the Hoothies to not 0:12:34.880 --> 0:12:35.520 get involved. 0:12:35.720 --> 0:12:37.040 At what point does that stop? 0:12:38.240 --> 0:12:41.920 It stops when they have access to the Persian Gulf 0:12:42.080 --> 0:12:45.400 again once they can once they can ship out of 0:12:45.440 --> 0:12:47.280 the Persian Golf, and they don't have a need to 0:12:47.800 --> 0:12:50.720 continue to pay off the Hoothies at maybe such a 0:12:50.760 --> 0:12:51.560 such a high rate. 0:12:52.280 --> 0:12:55.280 Ellen just more broadly, what's Saudi Arabia's role in all 0:12:55.320 --> 0:12:56.960 of this. We've heard from the UA, or at least 0:12:56.960 --> 0:12:59.920 reporting from the Wall Street Journal that they're considering serious 0:13:00.160 --> 0:13:03.360 getting involved in some sort of effort to make the 0:13:03.360 --> 0:13:07.040 straight of war moves independent and a free flow for traffic. 0:13:07.280 --> 0:13:09.680 When does Saudi Arabia get more intensely involved. 0:13:10.679 --> 0:13:13.000 I think they get intensely involved as a member of 0:13:13.040 --> 0:13:13.600 the GCC. 0:13:14.320 --> 0:13:16.320 You know, this is a waterway that they depend on. 0:13:16.400 --> 0:13:19.880 Me. Remember, we've had major, major wars on a much 0:13:20.000 --> 0:13:23.920 larger scale fought simply, you know, for freedom of the seas. 0:13:23.960 --> 0:13:26.360 This was something that that Woodrow Wilson cited when he 0:13:26.400 --> 0:13:27.760 brought the United States into. 0:13:27.600 --> 0:13:28.360 World War One. 0:13:28.679 --> 0:13:31.679 So the idea that Saudi Arabia and the UAE and 0:13:32.320 --> 0:13:36.000 Cutter and Kuwait and Iraq want free passage or a 0:13:36.040 --> 0:13:39.079 freedom of the season and freedom for passage through the 0:13:39.080 --> 0:13:43.840 straight of for moves, that's a very basic right of nations. 0:13:43.960 --> 0:13:47.280 And so I do think that if there's a potential 0:13:47.360 --> 0:13:49.760 for them to make a difference in securing that that 0:13:49.840 --> 0:13:53.400 they will get involved as part of the greater GCC. 0:13:54.440 --> 0:13:57.839 Stay with us Multblemberg Savannah's coming up off to this, 0:14:07.400 --> 0:14:09.720 The first treading day of April could be a long 0:14:10.040 --> 0:14:13.720 treading day. The President addressing the nation later on this evening, 0:14:13.840 --> 0:14:14.040 I was. 0:14:14.040 --> 0:14:16.400 Thinking to myself, how many people were excited, thinking maybe 0:14:16.400 --> 0:14:17.920 this is an April Fools joke, and I don't have 0:14:17.960 --> 0:14:20.520 to stay up until ten or eleven PM to understand 0:14:20.560 --> 0:14:22.520 exactly what the mood for Q two is going to be. 0:14:22.640 --> 0:14:24.800 Well, source called me last night after that news became 0:14:24.840 --> 0:14:27.600 public and said it's going to be the Academy Awards 0:14:27.640 --> 0:14:28.640 of Verbal Intervention. 0:14:29.320 --> 0:14:31.440 What's come a little bit later on this evening, it's 0:14:31.480 --> 0:14:34.080 everyone walked straight this morning, Steve and Uthur federated right 0:14:34.120 --> 0:14:36.040 in the following We are treating this as another brick 0:14:36.040 --> 0:14:38.240 in the wall of worry as the US markets advanced 0:14:38.240 --> 0:14:40.680 toward towards our s and P five hundred target of 0:14:40.720 --> 0:14:44.440 seventy five hundred for twenty twenty six. Steve, John Zusnaphimos, Steve. 0:14:44.280 --> 0:14:45.320 Good morning, good morning. 0:14:45.400 --> 0:14:48.080 Why is this just another brick and a climbable wall 0:14:48.320 --> 0:14:48.840 of worry? 0:14:50.160 --> 0:14:52.320 Well, we have an expression at federating hermies. 0:14:52.320 --> 0:14:55.600 You know, if it can't happen, it won't and I 0:14:55.600 --> 0:14:59.040 think you know the alternative really can't happen, and you're 0:14:59.040 --> 0:15:06.080 seeing her, you stepping in here. We can't have twenty million, okay. 0:15:05.840 --> 0:15:08.200 Eleven million barrels a day. I guess if they can. 0:15:08.200 --> 0:15:11.920 Keep the Red Sea open of the world's oil supply, 0:15:11.960 --> 0:15:17.560 which is eleven percent unavailable, that just takes oil, you know, roughly, 0:15:17.920 --> 0:15:19.880 I think, as you guys know, it's about ten bucks 0:15:19.880 --> 0:15:23.360 a barrel. So you're looking at a number in the 0:15:23.360 --> 0:15:28.640 one fifties that would kill the global economy. So we 0:15:28.760 --> 0:15:34.280 have a fifteen percent probability that that's what happens. So 0:15:34.360 --> 0:15:37.000 that's why we're sort of suddenly cautioned here. We have 0:15:37.080 --> 0:15:41.000 not added to equities. We're keeping our forecast in place 0:15:41.040 --> 0:15:45.760 at the moment, but every week that goes by, you know, 0:15:45.760 --> 0:15:48.280 we get closer to the summer driving season. I think 0:15:48.320 --> 0:15:53.200 you know that the gasoline output, you know, they have 0:15:53.240 --> 0:15:56.040 to store it in advance. They can't produce enough to 0:15:56.120 --> 0:16:01.160 meet demand during the summer season. So yeah, crack spreads 0:16:01.800 --> 0:16:04.480 are closing in on twenty dollars on top of the 0:16:04.480 --> 0:16:07.360 oil price. You know, that gets you two levels That 0:16:08.000 --> 0:16:13.040 often results in a demand response. So a few more 0:16:13.040 --> 0:16:15.480 weeks of this, you know, we're going to have to 0:16:15.520 --> 0:16:17.400 take down our GDP forecast. 0:16:17.960 --> 0:16:19.960 Just tell you it's going to be a fewal weeks. 0:16:20.400 --> 0:16:23.000 I think that's why he's looking at those number of weeks. 0:16:23.240 --> 0:16:25.480 I think they're doing the math on this, so they 0:16:25.520 --> 0:16:27.360 really do have to figure out a way to get 0:16:27.360 --> 0:16:31.240 this over in a couple more weeks or people are 0:16:31.240 --> 0:16:34.520 going to start taking down their GDP forecasts. We you know, 0:16:34.560 --> 0:16:38.200 we entered into this with GDP ahead of consensus. We're 0:16:38.240 --> 0:16:40.280 at four percent for this year because of all the 0:16:40.280 --> 0:16:42.680 stuff that's going on with the one big beautiful bill 0:16:42.760 --> 0:16:45.280 and you know, the stuff people have talked about, and 0:16:45.400 --> 0:16:47.040 the underlying earnings pretty good. 0:16:47.040 --> 0:16:48.080 Investments are pretty good. 0:16:48.120 --> 0:16:53.400 So fortunately we're entering into this with strong number. So 0:16:53.560 --> 0:16:56.400 this doesn't yet put us into a recession scenario. It's 0:16:56.440 --> 0:17:01.160 more like lower growth than we're anticipating. I'm also looking 0:17:01.240 --> 0:17:04.960 very carefully now. We've got earning season coming up in 0:17:05.000 --> 0:17:09.040 another ten days or so, and you know it's going 0:17:09.119 --> 0:17:11.520 to be great. We know that coming into the thing. 0:17:11.600 --> 0:17:14.159 But the question is is this going to be like 0:17:14.200 --> 0:17:16.760 the weather. You know, everyone's going to be talking about 0:17:16.760 --> 0:17:21.840 the weather here, which is the Mid East, and guidance 0:17:21.920 --> 0:17:24.879 might be more conservative, and that's probably not good for 0:17:24.920 --> 0:17:25.640 the market either. 0:17:25.720 --> 0:17:27.000 So there are a lot of unknowns. 0:17:27.119 --> 0:17:29.439 There are no unknowns, so then they're unknown unknowns and 0:17:29.480 --> 0:17:32.320 it's just a really muddy moment and everyone's really frustrated. 0:17:32.359 --> 0:17:34.360 Which when analyst came in yesterday and said, it gives 0:17:34.400 --> 0:17:35.720 me a lot of time to take a step back 0:17:35.760 --> 0:17:37.879 and have big thoughts. So I'm curious for you to 0:17:37.920 --> 0:17:41.600 have big thoughts to understand how structurally the market has changed. 0:17:41.960 --> 0:17:44.800 Even if say this is a short conflict, there will 0:17:44.800 --> 0:17:47.840 be an inflationary read through, and if the economy is strong, 0:17:47.880 --> 0:17:50.080 even more so. And right now it seems like we're 0:17:50.080 --> 0:17:53.400 pushing up against the limits of both fiscal borrowing as 0:17:53.440 --> 0:17:55.920 well as just how much the FED can stimulate or 0:17:55.960 --> 0:17:58.520 monetary policy makers can really stimulate. On the other end, 0:17:59.160 --> 0:18:01.119 how much do rates at four and a half to 0:18:01.160 --> 0:18:04.000 five percent in the United States maturely change the outlook 0:18:04.040 --> 0:18:06.440 for US equities going forward if they're not going to 0:18:06.520 --> 0:18:08.120 come down all that much, and if it's the same 0:18:08.160 --> 0:18:08.800 around the world. 0:18:08.960 --> 0:18:12.480 Okay, so we tend Lisa, you know, we're trying to 0:18:12.480 --> 0:18:15.480 invest against a three here horizon. So we're looking out 0:18:15.840 --> 0:18:18.359 past this and saying what world are we going to be? 0:18:18.400 --> 0:18:20.399 And we should be back to a world that's growing 0:18:20.480 --> 0:18:24.160 reasonably well, all those drivers we've talked about, the AI revolution, 0:18:24.240 --> 0:18:27.239 et cetera, and a market that is significantly cheaper than 0:18:27.320 --> 0:18:31.600 it was three months ago. So on that view, we'll 0:18:31.600 --> 0:18:34.320 come through this. The question is in the meantime, how 0:18:34.320 --> 0:18:37.520 do you navigate your way there? And as I said, 0:18:37.560 --> 0:18:40.159 if this goes on longer, I'm more worried about the 0:18:40.200 --> 0:18:43.520 demand impact. You're more worried about the inflation impact. But 0:18:43.680 --> 0:18:45.840 I would say four and a half is another Magano 0:18:46.040 --> 0:18:49.720 line for the Trump administration. We saw that back in 0:18:49.800 --> 0:18:53.720 April of last year. We got close to it again 0:18:54.000 --> 0:18:57.000 just recently. We're not backed down quite a bit now. 0:18:57.040 --> 0:18:59.600 But yeah, I mean four and a half is not 0:18:59.640 --> 0:19:00.120 a good. 0:19:00.480 --> 0:19:04.080 Can you have both not necessarily downside surprise if you 0:19:04.119 --> 0:19:06.040 do have some sort of ends to this and companies 0:19:06.080 --> 0:19:09.200 can maneuver through it, and then also get the disinflationary 0:19:09.280 --> 0:19:11.120 pull through that a lot of people are expecting later 0:19:11.160 --> 0:19:12.600 this year. I mean, do you have to have one 0:19:12.600 --> 0:19:15.280 of the other, either a downturn and growth or stick 0:19:15.320 --> 0:19:17.520 your inflation and central banks are not going to be 0:19:17.560 --> 0:19:19.719 cutting rates that potentially could pressure valuations. 0:19:19.760 --> 0:19:21.439 Well, I don't think the inflation is going to be 0:19:21.480 --> 0:19:24.679 stickier if they really do get this done in the 0:19:24.720 --> 0:19:27.880 next few weeks and get the straits reopened, right, because 0:19:28.119 --> 0:19:31.199 people are not going to factor in those higher prices forever, 0:19:31.240 --> 0:19:34.480 which is what you need to be stickier. So I'm 0:19:34.520 --> 0:19:37.040 still not on the sticky inflat. I'm more worried about 0:19:37.480 --> 0:19:41.480 the summer driving season, the demand impact. They're going to 0:19:41.600 --> 0:19:44.919 figure out a way, whether it's Trump declaring victory, but 0:19:45.040 --> 0:19:47.560 the Iranians, what are they going to do? The only 0:19:47.600 --> 0:19:49.400 thing they've got left is the straight of forem moves. 0:19:49.440 --> 0:19:51.720 So the markets, though, can you declare victory and still 0:19:51.720 --> 0:19:53.680 have the Iranians in control of the strait of removes 0:19:53.720 --> 0:19:54.960 and not have normal traffic? 0:19:55.080 --> 0:19:58.160 I think that's going to be very difficult, right, That's 0:19:58.200 --> 0:20:01.440 going to be the issue. So it's a two way negotiation. 0:20:02.840 --> 0:20:05.000 The you know, the market right now is like a 0:20:05.119 --> 0:20:08.800 multi dimensional chess board with some very smart players in it. 0:20:08.840 --> 0:20:12.200 And so I think when I play that kind of chess, 0:20:12.200 --> 0:20:14.320 I've got a board at my home if anyone wants 0:20:14.359 --> 0:20:19.520 to try it. The thing that the thing that makes 0:20:19.560 --> 0:20:22.879 me most difficult for me when I was younger and 0:20:23.000 --> 0:20:24.840 used to pay my sons were younger and a little 0:20:24.880 --> 0:20:30.920 bit crazier, is an unorthodox player that you can't predict 0:20:31.200 --> 0:20:32.159 that's on the board. 0:20:32.320 --> 0:20:34.800