WEBVTT - Bloomberg Surveillance TV: April 23rd, 2026

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and am Marie Hordern. Join us each

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<v Speaker 2>day for insight from the best in markets, economics, and

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<v Speaker 2>geopolitics from our global headquarters in New York City. We

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<v Speaker 2>are live on Bloomberg Television weekday mornings from six to

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<v Speaker 2>nine am Eastern. Subscribe to the podcast on Apple, Spotify

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<v Speaker 2>or anywhere else you listen, and as always on the

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<v Speaker 2>Bloomberg Terminal and the Bloomberg Business app. This is a

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<v Speaker 2>view on Wall Street this morning, Keith Thurner of Truist, writing,

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<v Speaker 2>the weight of the evidence continues to suggest that the

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<v Speaker 2>bullmarket deserves the benefit of the doubt, and we would

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<v Speaker 2>view weakness as an opportunity. Keith joins us now for more. Keith,

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<v Speaker 2>Welcome to the program. I've got two wives. Why do

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<v Speaker 2>you believe the bullmarket deserves the benefit of the doubt.

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<v Speaker 2>Why do you think that a weakness is an opportunity?

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<v Speaker 3>Yeah?

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<v Speaker 4>Well, great to be with you all. Well, the first

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<v Speaker 4>thing is, I think the bullmarket has earned it. This

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<v Speaker 4>bullmarket has been battle tested through a series of shocks

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<v Speaker 4>from high inflation to fast paced interest rates, and each

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<v Speaker 4>time these companies have adapted and we're seeing profit margins

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<v Speaker 4>continue to expand, and we're seeing ford earning estimates at

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<v Speaker 4>new highs, not only in the SMP, but also by

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<v Speaker 4>the by midcaps, small caps, and even emerging markets as well.

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<v Speaker 4>So I don't want to be Polyannis either, Jonathan. I

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<v Speaker 4>think there is someone serting to We just had, you know,

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<v Speaker 4>a nice rally off the low, so it would be

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<v Speaker 4>perfectly normal to see some backing and filling after this.

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<v Speaker 4>But the last point is we also know. I think

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<v Speaker 4>there's so much focus on Iran and the situation there,

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<v Speaker 4>which is important, but let's not lose sight of the

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<v Speaker 4>dominant theme of this bull market, which you all talked about,

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<v Speaker 4>is AI and tech, and that story is likely not changing.

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<v Speaker 4>In some ways, it looks like it's actually accelerated.

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<v Speaker 2>Okay, sixteen days Lisa mentioned it, sixteen days of gains

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<v Speaker 2>for the Philadelphia Semi Conductor Index, a powerful rally. One

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<v Speaker 2>of the best months we've seen, by the way, and

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<v Speaker 2>about twenty five is for that particular index. Keith, when

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<v Speaker 2>you look at those moves, and when I look at

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<v Speaker 2>where we bottomed. Do you think we still underappreciate the

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<v Speaker 2>relationship between this rally and say mythos and anthropic and

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<v Speaker 2>perhaps we're looking too much towards the escalation and what's

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<v Speaker 2>been developing in the Middle East.

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<v Speaker 4>Yeah, I do, And you know we were when we

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<v Speaker 4>were selling off in masks, we were highlighting the technology

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<v Speaker 4>that you know, the valuations got to a twenty pe,

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<v Speaker 4>which was lower than the terror shock of last year,

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<v Speaker 4>and the premium relatives of the markets shrunk to the

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<v Speaker 4>lowest level in over a decade.

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<v Speaker 3>And one thing we just looked at, Johathan, I thought

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<v Speaker 3>it was really interested.

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<v Speaker 4>We looked at the peak to trough change in the

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<v Speaker 4>valuation or the compression of the valuation for the tech sector.

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<v Speaker 3>You know, over the last several months it was thirty

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<v Speaker 3>seven percent. We went from a thirty two pe to

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<v Speaker 3>our twenty.

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<v Speaker 4>When we look back to this decade, that's the most

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<v Speaker 4>severe compression we've seen out of any of the pullbacks,

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<v Speaker 4>more than COVID, more than the terror shock. And you

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<v Speaker 4>can argue that there was actually more usertanty in some

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<v Speaker 4>of these other areas as well. So I think we've

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<v Speaker 4>reset pretty well. Is momentum by far as the strongest

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<v Speaker 4>in the market. The forward earning estimates are being revised

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<v Speaker 4>higher over the last three months by almost twenty percent.

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<v Speaker 4>That's about double vSMP, So I think all in all,

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<v Speaker 4>kind of this tech story moved to the back burner.

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<v Speaker 3>Now it's moving.

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<v Speaker 4>Towards the front, the forefront again and again after this

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<v Speaker 4>big move, are we going to be able?

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<v Speaker 3>Are we going to pull back a little bit? Maybe?

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<v Speaker 3>But the last point on.

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<v Speaker 4>Tech is it just it just moved above the October high.

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<v Speaker 4>So since the October high, we're up point point two percent.

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<v Speaker 4>So ultimately I think this bull market and tech has

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<v Speaker 4>further to go.

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<v Speaker 1>We're in tech though, Keith, and this is a big

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<v Speaker 1>question mark underpinning this rally, given the fact that right

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<v Speaker 1>now the picks and shovels of tech seem to be rallying.

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<v Speaker 1>We're seeing the semiconductors, we're seeing the memory chips, we're

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<v Speaker 1>seeing the energy side of things. To eve Vernova with

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<v Speaker 1>respect to some of the way that they're electrifying some

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<v Speaker 1>of the data centers going forward, do you think that

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<v Speaker 1>next week is going to be a gut check in

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<v Speaker 1>terms of how the market responds to additional Kapex plans.

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<v Speaker 3>Likely will be.

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<v Speaker 4>But I also think, you know, as long as these

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<v Speaker 4>earning estimates continue to get revised higher, I think the

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<v Speaker 4>market will be okay if cap X continues to be.

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<v Speaker 3>At a rapid pace.

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<v Speaker 4>I don't think anyone's really expecting much of a pullback

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<v Speaker 4>in CAPEX. But really, what's got the market's attention more

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<v Speaker 4>recently is is a lack of availability for GPUs and

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<v Speaker 4>as we as these models are becoming more powerful, that

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<v Speaker 4>the demand for that will only grow. So listen, I

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<v Speaker 4>don't think we're going to see a big change in

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<v Speaker 4>the CAPEX story. I think in some ways, what we're

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<v Speaker 4>seeing more recently in the power of these models is

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<v Speaker 4>going to validate the expansion of that CAPEX I think

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<v Speaker 4>more interesting and we'll see what we're we gonna hear

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<v Speaker 4>about the employment side, because we're actually starting to see

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<v Speaker 4>a tick up in some of those announcements.

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<v Speaker 3>As far as displacement, how.

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<v Speaker 5>Do you treat that as an investor?

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<v Speaker 1>I mean, I know that from a psychological perspective, that

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<v Speaker 1>has a pretty big hit, and we're seeing that take

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<v Speaker 1>place even in places like China. Some of the anecdotal

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<v Speaker 1>information suggests that there's a real cramp down on employment

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<v Speaker 1>as a result of AI. Is that a good thing

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<v Speaker 1>as an investor because it reduces costs?

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<v Speaker 3>Yeah, you know.

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<v Speaker 4>Longer term it is somewhat circular, because we do need

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<v Speaker 4>people ding to move the economy forward. But I think

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<v Speaker 4>there's different time frames on this, and I think in

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<v Speaker 4>the short term, if you see profit margins continue to

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<v Speaker 4>move up and you're seeing the sales per employee or

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<v Speaker 4>cashflow for per.

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<v Speaker 3>Employee move up, I think ultimately the market will will

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<v Speaker 3>ward that.

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<v Speaker 4>Now, again, there's probably the greatest story to be told

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<v Speaker 4>from an economics store perspective, and we all know that.

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<v Speaker 4>But I think in the near term, the market is

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<v Speaker 4>going to focus on profits.

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<v Speaker 2>Hey, Keiate, that's the focus right now, that's for sure.

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<v Speaker 2>Thank you, sir, Keith Lender. There of trust, stay with us.

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<v Speaker 2>More Bloomberg surveillance coming up after this. Victoria Coach, the

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<v Speaker 2>former deputy National security advisor to President Trump. Right in

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<v Speaker 2>the following they runs to sustained such systematic damage that

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<v Speaker 2>they really can't recover. Time is entirely on the President's side.

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<v Speaker 2>Victoria joins us.

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<v Speaker 3>Now for more.

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<v Speaker 2>Victoria, welcome to the program. We call this at the

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<v Speaker 2>top of the program, our high stakes. Blinking contest is

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<v Speaker 2>around willing to risk regime collapse, and it's the US

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<v Speaker 2>willing to continue to maximize put maximum pressure, certain maximum

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<v Speaker 2>pressure on the Iranians and take the economic consequences that

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<v Speaker 2>the global economy might have to take.

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<v Speaker 5>Well, good morning, Jonathan.

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<v Speaker 6>I have to be careful what I write on my

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<v Speaker 6>x feed because I never know what you're going to

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<v Speaker 6>read back to me.

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<v Speaker 5>But I stand by that. I stand by that comment.

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<v Speaker 6>I think that you know, as we dive deeper into

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<v Speaker 6>what's happening in the Iranian economy.

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<v Speaker 5>And also the other piece.

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<v Speaker 6>Of this is the fact that since they haven't been

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<v Speaker 6>able to get product out of the Gulf since the

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<v Speaker 6>blockade began, they're starting to fill up their storage on

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<v Speaker 6>carg Island, and they're going to wind up at a

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<v Speaker 6>point in a matter of days. They might have a

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<v Speaker 6>week or two weeks, but I think it's a shorter

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<v Speaker 6>period where they're going to have to start thinking about

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<v Speaker 6>capping wells, and that's not a good thing. That could

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<v Speaker 6>really do permanent damage to their oil reserves, and they

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<v Speaker 6>have the second largest oil reserves on the planet. It's

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<v Speaker 6>one of their great strengths that's going to be a

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<v Speaker 6>decision point for them. So I do think that the

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<v Speaker 6>pressure that is building on the Iranians. I mean, they

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<v Speaker 6>have to restart their economy. They need to turn their

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<v Speaker 6>internet back on, their stock market back on, but most

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<v Speaker 6>of all, they need to start being able to get

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<v Speaker 6>product to market. So if that these days go by,

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<v Speaker 6>they're going to have to make that existential decision you

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<v Speaker 6>describe and make a choice between economic collapse and potentially

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<v Speaker 6>preserving the regime.

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<v Speaker 5>Victoria.

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<v Speaker 1>Do have confidence that this is a logical kind of

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<v Speaker 1>regime in Iran that the United States is dealing with

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<v Speaker 1>in the matter of financial collapse being enough of a

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<v Speaker 1>threat to really bring them to the table. And I

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<v Speaker 1>ask this because so many people have come on this

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<v Speaker 1>show and said their goal is simply survival.

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<v Speaker 6>Well, I would never call them rational, Alicia. I think

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<v Speaker 6>that they are right now very cornered. You've had the

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<v Speaker 6>decimation of the forty top leaders in the first day

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<v Speaker 6>of this action against them, and so they're still trying

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<v Speaker 6>to recover from that.

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<v Speaker 5>Nobody knows where the supreme leader is.

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<v Speaker 6>He's been Supreme Leader much Tabak Kamani for more than

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<v Speaker 6>a month and he hasn't even published a video greeting

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<v Speaker 6>the Iranian people. You know, famously he was a cardboard

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<v Speaker 6>cutout at the announcement of his appointment, So you know,

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<v Speaker 6>this is not in any way a stable, normal functioning government.

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<v Speaker 6>They also can't communicate their worried that these railays are

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<v Speaker 6>in their cell phones, probably for pretty good reason, and

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<v Speaker 6>so they're passing notes back and forth, and that's part

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<v Speaker 6>of the delay in the negotiations. You know, the president

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<v Speaker 6>wants to make sure he has somebody with the authority

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<v Speaker 6>to make those decisions at the table, and it's not

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<v Speaker 6>clear that person has emerged yet.

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<v Speaker 1>One difficulty, and one reason why a number of strategists

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<v Speaker 1>have been really pessimistic, is they don't see a way,

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<v Speaker 1>a path to an end that leaves the straight of

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<v Speaker 1>removes open free trade and commerce going through that and

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<v Speaker 1>the current regime in place. How do you see this

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<v Speaker 1>playing out in a way that brings the straight up,

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<v Speaker 1>removes back to sort of the free flow of commerce

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<v Speaker 1>that we were familiar with a couple months ago.

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<v Speaker 6>Well, I don't think we're going to return to the

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<v Speaker 6>sort of business as usual in Iran. I don't think

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<v Speaker 6>there's a universe in which the regime can reconstitute itself

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<v Speaker 6>as it was right, I would go back really to

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<v Speaker 6>early December of last year and the kind of control

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<v Speaker 6>it was able to exert over its people.

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<v Speaker 5>And this will be a very fluid period.

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<v Speaker 6>And I know that's that's disruptive and concerning for a

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<v Speaker 6>lot of folks. But at the same time, you know,

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<v Speaker 6>the other thing that's happening to them is they stop

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<v Speaker 6>being able to pay the salaries of their security apparatus,

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<v Speaker 6>the IRGC, the Islamic Islamic Revolutionary Guard Core. That's the

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<v Speaker 6>key to their being able to control the country physically,

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<v Speaker 6>is it's stopped paying it's its people, and their police

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<v Speaker 6>are stopped being paid as well. So that's going to

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<v Speaker 6>create more disruption within Iran as the people of Iran

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<v Speaker 6>realize that what's kept them down, the people who carried

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<v Speaker 6>out that horrible massacre in January, maybe aren't as loyal

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<v Speaker 6>as they were at that time because quite simple, they're

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<v Speaker 6>not being paid. So I agree this is this is

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<v Speaker 6>going to be very fluid. We're going to have something

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<v Speaker 6>different on the other side, and hopefully with the strength

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<v Speaker 6>of the United States, it's that if that weakened entity

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<v Speaker 6>is not able to assemble the same kind of power

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<v Speaker 6>the old government of Iran was. You know, we'll be

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<v Speaker 6>able to establish that control you're talking about over the

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<v Speaker 6>street and ensure the free patch of the passage of

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<v Speaker 6>shipping victory.

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<v Speaker 2>Just to final question, just briefly, if you can, you've

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<v Speaker 2>worked with the President on high profile foreign policy issues.

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<v Speaker 2>There is a comfort in this market right now that

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<v Speaker 2>the President is committed to de escalation. In your mind,

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<v Speaker 2>what would it take to return to hostilities.

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<v Speaker 6>I would take a provocative app action by the Iranians.

0:10:41.000 --> 0:10:43.080
<v Speaker 6>I mean President Trump has wanted that as the last

0:10:43.120 --> 0:10:46.920
<v Speaker 6>resort from the beginning. He has offered diplomacy repeatedly to

0:10:47.000 --> 0:10:50.120
<v Speaker 6>resolve this issue. But if the Iranians make a horrible decision,

0:10:50.120 --> 0:10:51.920
<v Speaker 6>and they don't have a great track record in that

0:10:51.960 --> 0:10:55.480
<v Speaker 6>they generally do make horrible decisions, then I think you'll

0:10:55.480 --> 0:10:57.559
<v Speaker 6>see the reapplication of American.

0:10:57.200 --> 0:11:00.280
<v Speaker 2>Might Victoria, thank you, always appreciate your time. No doubt

0:11:00.280 --> 0:11:03.959
<v Speaker 2>we'll catch up against the Victoria coach there the Heritage Foundation.

0:11:04.200 --> 0:11:07.240
<v Speaker 2>That's the situation that most people in this market ultimately

0:11:07.600 --> 0:11:11.600
<v Speaker 2>think we will avoid, and certainly want to avoid. Stay

0:11:11.640 --> 0:11:24.600
<v Speaker 2>with us. More Bloomberg surveillance coming up after this. So

0:11:24.640 --> 0:11:26.760
<v Speaker 2>here's the latest this morning, cud climbing for a fourth

0:11:26.760 --> 0:11:29.240
<v Speaker 2>consecutive day, back over one hundred dollars a barrel, with

0:11:29.240 --> 0:11:31.839
<v Speaker 2>the US and Iran seemingly dead. Luck joining us around

0:11:31.840 --> 0:11:34.440
<v Speaker 2>the table, Paul Sanki of Sanky Research, Paul going to

0:11:34.440 --> 0:11:36.559
<v Speaker 2>see you. Have you met Lisa before?

0:11:36.960 --> 0:11:41.320
<v Speaker 1>All right, okay, inside, let's.

0:11:41.080 --> 0:11:41.920
<v Speaker 7>Go on, We'll move on.

0:11:42.040 --> 0:11:45.760
<v Speaker 2>Cool. Before this war started the day before Exxon closed

0:11:45.800 --> 0:11:49.600
<v Speaker 2>it around one fifty. Exon closed yesterday around one fifty.

0:11:50.000 --> 0:11:53.720
<v Speaker 2>Why hasn't this war and this supply hammering that we've

0:11:53.720 --> 0:11:57.000
<v Speaker 2>seen in the last two months, energized the rally in

0:11:57.160 --> 0:11:57.800
<v Speaker 2>energy names.

0:11:58.200 --> 0:12:01.000
<v Speaker 7>Well, the energy names were running hard into this. You know,

0:12:01.000 --> 0:12:03.800
<v Speaker 7>they're the best performing sector of the year to date,

0:12:04.120 --> 0:12:06.320
<v Speaker 7>and that you know, very much reversed. So you had

0:12:06.360 --> 0:12:09.080
<v Speaker 7>tech going down, oil going up, and I think that

0:12:09.200 --> 0:12:12.480
<v Speaker 7>was important because in many ways, the market was adding

0:12:12.559 --> 0:12:14.680
<v Speaker 7>terminal value into the oil. So what they were doing

0:12:14.760 --> 0:12:16.600
<v Speaker 7>is they were buying on the basis that the oil

0:12:16.640 --> 0:12:19.640
<v Speaker 7>age isn't ending, and you know, you had fundamentally more

0:12:19.679 --> 0:12:22.000
<v Speaker 7>long term value. And x x on themselves had come

0:12:22.000 --> 0:12:24.199
<v Speaker 7>out with their long term energy plan in October around

0:12:24.240 --> 0:12:27.600
<v Speaker 7>the time BP capitulated, the IA capitulated on the end

0:12:27.640 --> 0:12:30.640
<v Speaker 7>of the oil age. So Excellon came out and said, actually,

0:12:30.640 --> 0:12:32.760
<v Speaker 7>we think global oil demand's going to be flat through

0:12:32.880 --> 0:12:35.760
<v Speaker 7>twenty fifty. So the market began to think, you know,

0:12:35.800 --> 0:12:39.199
<v Speaker 7>actually these and of course the AI energy requirement, natural

0:12:39.240 --> 0:12:42.040
<v Speaker 7>gas requirement, the market began to buy in in a

0:12:42.120 --> 0:12:44.120
<v Speaker 7>very big way to the idea that the oils were

0:12:44.160 --> 0:12:48.000
<v Speaker 7>fundamentally worth more because they have a much longer outlook

0:12:48.080 --> 0:12:48.960
<v Speaker 7>for their.

0:12:48.840 --> 0:12:51.000
<v Speaker 5>Products, and so that was bullish.

0:12:51.080 --> 0:12:52.880
<v Speaker 7>But of course, when you get into this situation, and

0:12:52.920 --> 0:12:55.959
<v Speaker 7>this is what we're looking at directly today, and I'll

0:12:56.000 --> 0:12:58.600
<v Speaker 7>mention in passing that there's also been some profit warnings

0:12:58.600 --> 0:13:00.800
<v Speaker 7>for Q. One that we saw is to do with

0:13:00.880 --> 0:13:05.000
<v Speaker 7>inventory values changing massively because of the crisis. So you're

0:13:05.040 --> 0:13:08.280
<v Speaker 7>going to have some very big headline losses reported by

0:13:08.280 --> 0:13:11.280
<v Speaker 7>the oils in terms of their working capital in the

0:13:11.320 --> 0:13:14.280
<v Speaker 7>earning season that's coming up right now. But then what

0:13:14.280 --> 0:13:17.360
<v Speaker 7>we saw here is that people are typically unwilling to

0:13:17.360 --> 0:13:19.960
<v Speaker 7>buy into the oils at a peak price. And what

0:13:20.000 --> 0:13:21.800
<v Speaker 7>we've seen at times is the ou price will come

0:13:21.840 --> 0:13:24.880
<v Speaker 7>down and the oils go up, and that's big investors

0:13:24.920 --> 0:13:27.040
<v Speaker 7>wanting to get into oil, but not wanting to buy

0:13:27.520 --> 0:13:30.000
<v Speaker 7>when jet fuels two hundred dollars a barrel. But you

0:13:30.040 --> 0:13:31.760
<v Speaker 7>can see the underlying bid is there.

0:13:32.000 --> 0:13:32.120
<v Speaker 6>Now.

0:13:32.160 --> 0:13:33.840
<v Speaker 7>Of course it gets more complicated because then we had

0:13:33.880 --> 0:13:36.560
<v Speaker 7>this huge tech rally, you know, so people were shoving

0:13:36.559 --> 0:13:38.520
<v Speaker 7>money back into in nvideo or whatever they were. So

0:13:38.559 --> 0:13:41.600
<v Speaker 7>we didn't get part of that bid either. And I'll

0:13:41.640 --> 0:13:44.000
<v Speaker 7>leave it to your geniuses to work out why tech

0:13:44.160 --> 0:13:46.680
<v Speaker 7>was so strong. But I think that the AI theme

0:13:46.760 --> 0:13:50.320
<v Speaker 7>has remained on course, and particularly the AI capex, and

0:13:50.360 --> 0:13:52.720
<v Speaker 7>so there is an argument that the AI themes, I mean,

0:13:52.760 --> 0:13:54.680
<v Speaker 7>all the language from the companies, it is going to

0:13:54.679 --> 0:13:56.400
<v Speaker 7>be vast. It is going to be huge, and people

0:13:56.440 --> 0:13:58.680
<v Speaker 7>wanted to buy back in. But I think over the

0:13:58.720 --> 0:14:01.199
<v Speaker 7>coming months this is going to unctual need to deterirorate badly.

0:14:01.240 --> 0:14:04.320
<v Speaker 7>This situation. It already is, but it's nothing to say

0:14:04.320 --> 0:14:06.920
<v Speaker 7>that it's going to not be deteriorate anything other than

0:14:06.960 --> 0:14:09.840
<v Speaker 7>deteriorrating over the next two months. We're locked into that.

0:14:10.480 --> 0:14:12.520
<v Speaker 7>And so I think the market has you know, it's

0:14:12.559 --> 0:14:15.720
<v Speaker 7>been a great rally, an all time rally by some measures.

0:14:16.040 --> 0:14:17.880
<v Speaker 7>But I think this is it's going to come back

0:14:17.920 --> 0:14:20.240
<v Speaker 7>to us. And I think John, another one of your

0:14:20.280 --> 0:14:22.640
<v Speaker 7>expert areas is the tea. You know, what we're looking

0:14:22.680 --> 0:14:25.320
<v Speaker 7>at as the teable and how government finances can really

0:14:25.360 --> 0:14:29.760
<v Speaker 7>handle this total disaster, And it's going to be difficult before.

0:14:29.480 --> 0:14:29.960
<v Speaker 5>We get there.

0:14:30.000 --> 0:14:32.840
<v Speaker 1>Though it's easy for people to say oil prices are

0:14:32.840 --> 0:14:36.200
<v Speaker 1>going to remain structurally higher for the foreseeable future as

0:14:36.200 --> 0:14:38.440
<v Speaker 1>a result of this, regardless of whether it gets resolved

0:14:38.520 --> 0:14:38.720
<v Speaker 1>or not.

0:14:38.800 --> 0:14:40.520
<v Speaker 5>Why is that not enough to.

0:14:40.520 --> 0:14:42.240
<v Speaker 1>Give a boost to some of these oil majors and

0:14:42.240 --> 0:14:43.840
<v Speaker 1>why aren't we seeing them investing capex?

0:14:44.240 --> 0:14:46.840
<v Speaker 7>Yeah, I think that's a good point, and I think

0:14:46.840 --> 0:14:49.160
<v Speaker 7>it becomes a demand destruction case. So what happened? You know,

0:14:49.200 --> 0:14:51.640
<v Speaker 7>we have an almost opposite of COVID effect here. But

0:14:51.720 --> 0:14:54.080
<v Speaker 7>what you saw with COVID is in twenty nineteen world

0:14:54.080 --> 0:14:56.440
<v Speaker 7>all the A one hit a record high, you structurally

0:14:56.480 --> 0:14:59.000
<v Speaker 7>lowered it, and you had just fought your way back

0:14:59.160 --> 0:15:02.480
<v Speaker 7>over six years, five years to be at record highs again.

0:15:02.560 --> 0:15:04.920
<v Speaker 7>Literally in February twenty six you were at all time

0:15:04.920 --> 0:15:07.440
<v Speaker 7>record highs for global oil demand. And I think what

0:15:07.480 --> 0:15:09.800
<v Speaker 7>you'll see out of this crisis is actually a structural

0:15:09.800 --> 0:15:12.520
<v Speaker 7>reduction in oil demand as well as a structural increase

0:15:12.520 --> 0:15:15.200
<v Speaker 7>in the oil price. So I think that's one of

0:15:15.200 --> 0:15:18.000
<v Speaker 7>the reasons why at this Energy forum we were talking

0:15:18.000 --> 0:15:20.920
<v Speaker 7>about this this week in case spant Off, the really

0:15:20.920 --> 0:15:23.920
<v Speaker 7>outstanding CEO of Diamondback, was talking about the fact that

0:15:23.960 --> 0:15:26.440
<v Speaker 7>the future strips at seventy two dollars for next year

0:15:27.000 --> 0:15:28.600
<v Speaker 7>and there's nothing he can do with that. You know,

0:15:28.640 --> 0:15:31.280
<v Speaker 7>he can't sell into it, he can't draw more on it.

0:15:31.280 --> 0:15:34.360
<v Speaker 7>It's really another interesting aspect of this crisis, which is

0:15:34.400 --> 0:15:38.760
<v Speaker 7>the future strip is disincentivizing investment in more oil supply

0:15:38.800 --> 0:15:40.680
<v Speaker 7>in the way that we need it. And so the

0:15:40.680 --> 0:15:43.120
<v Speaker 7>companies aren't changing their cap ex plans. The AI guys

0:15:43.200 --> 0:15:46.600
<v Speaker 7>our Tesla is, but you won't see any in my view,

0:15:46.600 --> 0:15:49.600
<v Speaker 7>you won't see any public oil company make a major

0:15:49.640 --> 0:15:52.000
<v Speaker 7>change to their KapS plan on this Q one Onnes's.

0:15:51.760 --> 0:15:54.080
<v Speaker 2>We've got about a minute left. Yeah, seem to think

0:15:54.080 --> 0:15:56.280
<v Speaker 2>this is going to get very bad, and I just

0:15:56.320 --> 0:15:58.360
<v Speaker 2>want you to spell out why, because there was a

0:15:58.360 --> 0:16:00.520
<v Speaker 2>degree of comfort the people of God that were a

0:16:00.600 --> 0:16:01.640
<v Speaker 2>de escalatory path.

0:16:02.040 --> 0:16:03.720
<v Speaker 7>Well, the comfort comes from the fact that the tank

0:16:03.760 --> 0:16:06.400
<v Speaker 7>has only stopped arriving last week. You know, it's a

0:16:06.440 --> 0:16:09.720
<v Speaker 7>forty day process, and so almost immediately what we've seen

0:16:09.840 --> 0:16:12.960
<v Speaker 7>is this the inventry numbers have now started to get scary,

0:16:13.360 --> 0:16:16.080
<v Speaker 7>and it's just starting. But you're not at the stage

0:16:16.080 --> 0:16:18.880
<v Speaker 7>of just outright crisis pricing. You know, you're not at

0:16:18.880 --> 0:16:21.480
<v Speaker 7>the stage where Americans, American very low share of their

0:16:21.480 --> 0:16:24.720
<v Speaker 7>income goes to gasoline three four. You know, it's eight

0:16:24.840 --> 0:16:27.160
<v Speaker 7>nine in Germany. It's not that big a price. It's

0:16:27.160 --> 0:16:29.520
<v Speaker 7>a sticker shock, but it's not really that huge an

0:16:29.520 --> 0:16:32.040
<v Speaker 7>effect for the average American. Obviously, it's regressive and bad

0:16:32.080 --> 0:16:35.440
<v Speaker 7>for poor people. So I think that the situation here

0:16:35.480 --> 0:16:37.960
<v Speaker 7>gets worse simply because it's guaranteed. You know, normally when

0:16:38.000 --> 0:16:40.800
<v Speaker 7>we're forecasting oil we can be very very wrong for

0:16:41.160 --> 0:16:44.360
<v Speaker 7>extraneous reasons. In this case, we can be sure that

0:16:44.440 --> 0:16:46.360
<v Speaker 7>the next two months is going to be an ongoing

0:16:46.440 --> 0:16:50.480
<v Speaker 7>absolute disaster, even if you open the straits tomorrow, because

0:16:50.520 --> 0:16:53.880
<v Speaker 7>it's just locked in by virtue of tanking tankers, and

0:16:53.920 --> 0:16:55.760
<v Speaker 7>the tankers are all in the wrong places, it probably

0:16:55.760 --> 0:16:58.880
<v Speaker 7>means it's three months. So it's a very bad situation,

0:16:58.920 --> 0:17:01.000
<v Speaker 7>and we're looking at where it's flight chains of breaking.

0:17:01.040 --> 0:17:04.359
<v Speaker 7>We focused on Australia on jet fuel. People are talking

0:17:04.400 --> 0:17:07.800
<v Speaker 7>about solvents in Japan for chip making. Today you know,

0:17:07.840 --> 0:17:10.879
<v Speaker 7>you'll see where the cracks really start to appear. And

0:17:10.920 --> 0:17:13.800
<v Speaker 7>then finally there's another issue, which is emergency invantries. The

0:17:13.880 --> 0:17:17.160
<v Speaker 7>first slug is easy to release, the second slug you're

0:17:17.200 --> 0:17:18.960
<v Speaker 7>going to release it, but you're going to be scared.

0:17:19.400 --> 0:17:21.320
<v Speaker 7>And then there's a question of can you really release

0:17:21.359 --> 0:17:24.240
<v Speaker 7>the third slug. So the emergency invantries are probably lower

0:17:24.600 --> 0:17:27.080
<v Speaker 7>in real actual terms than they appear on your screen,

0:17:27.119 --> 0:17:28.760
<v Speaker 7>and they appear very low.

0:17:28.880 --> 0:17:31.200
<v Speaker 2>And this is quite sober and stuff. Paul sank appreciate

0:17:31.200 --> 0:17:34.000
<v Speaker 2>your time. Thank you, sir, Paul Sank. You there Sanki Research.

0:17:35.040 --> 0:17:38.600
<v Speaker 2>This is the Bloomberg Surveillance Podcast, bringing you the best

0:17:38.600 --> 0:17:42.160
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