WEBVTT - Bloomberg Surveillance TV: March 5th, 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 Amerie Hordernt. Join us each day

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

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

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

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

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

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<v Speaker 2>Terminal and the Bloomberg Business app. So here's the late

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<v Speaker 2>sis this morning. The Middle East conflict entering at sixth

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<v Speaker 2>day with no signs of eas inc Iran allowing to

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<v Speaker 2>intensify tax in the coming days. Brian Garner a stefail,

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<v Speaker 2>writing prices, inflation, and jobs continue to be the most

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<v Speaker 2>important issues to voter. US national security and foreign policy

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<v Speaker 2>trail far behind. Brian joined us now for more Bran.

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<v Speaker 2>That begs the question how much risk is the president

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<v Speaker 2>willing to take care?

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<v Speaker 3>I think he's all in at this point.

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<v Speaker 4>You know, maybe if the markets start to back up again,

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<v Speaker 4>then he reconsiders, because he you know, as we've known

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<v Speaker 4>throughout the Trump presidency.

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<v Speaker 3>He does point to the markets as a.

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<v Speaker 4>Barometer for his political success, but for now, I think

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<v Speaker 4>he's all in.

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<v Speaker 2>So Brian, when you say the markets, which market are

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<v Speaker 2>we tilkn abativity to the now? Or is a gas

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<v Speaker 2>prices does the energy move actually matts out?

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<v Speaker 4>Right? We're actually in the fog of war, right, John Jonathan.

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<v Speaker 4>It's tough to figure out which markets we are talking about.

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<v Speaker 4>You know, I was listening to you guys earlier, and

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<v Speaker 4>you're talking about the kind of the very modest responses

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<v Speaker 4>that we've had, and that you know, a lot, especially

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<v Speaker 4>on the equity side, that people think that this is

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<v Speaker 4>going to be very short and that there is a

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<v Speaker 4>buying opportunity here and that it's all going to be

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<v Speaker 4>fine at the end of the day. And that may

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<v Speaker 4>be correct. I'm not here to say, you know, that's

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<v Speaker 4>not the correct view. But there is a risk that

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<v Speaker 4>this goes on for longer than what people are pricing

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<v Speaker 4>in today.

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<v Speaker 3>I mean, it's the old line.

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<v Speaker 4>Wars are really easy to start, their much harder to stop,

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<v Speaker 4>and so nobody, but nobody knows for how long this

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<v Speaker 4>is going to go on and what the ramifications are

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<v Speaker 4>for the economy.

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<v Speaker 5>Yeah, markets though stock markets in particular, watch PCE CPI,

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<v Speaker 5>all sorts of alphabet soup of different indicators, a lot

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<v Speaker 5>of individual consumers. Just look at the price of gas

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<v Speaker 5>that's put on a billboard and that has been going

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<v Speaker 5>up sharply over the past couple of days. I just

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<v Speaker 5>wonder how far that can go before that gets the

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<v Speaker 5>White House's attention more than anything that's happening in stocks.

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<v Speaker 4>I think when we get into the summer season, let's

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<v Speaker 4>see what it's like when we get closer to the

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<v Speaker 4>driving season of post Memorial Day, when Americans hit the

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<v Speaker 4>road and when they head to the airports, our airline

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<v Speaker 4>tickets price is going to start to go up as

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<v Speaker 4>fuel prices potentially rise. So again, this is a potential

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<v Speaker 4>political risk for the administration. Let's go back a little

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<v Speaker 4>bit to October when he was meeting in Asia right

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<v Speaker 4>ahead of the November elections, which were state and local

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<v Speaker 4>but a referendum on the Trump administration. And what we

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<v Speaker 4>saw was, I think was a reaction to a perception

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<v Speaker 4>that the president was too interested internationally not enough on

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<v Speaker 4>domestic affordability issues, and there was a pushback from voters.

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<v Speaker 4>You know, we've got the midterm elections in November, and

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<v Speaker 4>this is a significant political risk for the administration and

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<v Speaker 4>Republicans generally.

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<v Speaker 5>Talking about the midterm elections, President Trump hasn't weighed in

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<v Speaker 5>on a really contentious race in Texas for.

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<v Speaker 3>Quite a while.

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<v Speaker 5>Now it's headed to run off for between two Republican candidates,

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<v Speaker 5>John Corner and the senator who has been a long

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<v Speaker 5>standing Republican in the Congress, and Texas Attorney General Ken Paxton.

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<v Speaker 5>Now President Trump is getting in there saying I'm going

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<v Speaker 5>to endorse somebody and the other person's going to drop out.

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<v Speaker 5>Does this indicate he's going to take a more significant

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<v Speaker 5>role in some of these races.

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<v Speaker 4>I think we've already had those those indications. Uh uh, Lisa,

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<v Speaker 4>I mean going back for months. I mean it was

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<v Speaker 4>it was the White House that was really behind a

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<v Speaker 4>lot of the redistricting efforts in Texas and in other states.

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<v Speaker 4>The President and the White House is throwing its full weight,

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<v Speaker 4>has been throwing its full weight unsuccessfully so far to

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<v Speaker 4>get Indiana to redistrict.

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<v Speaker 3>The White Houses all in they they really want.

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<v Speaker 4>To maintain a especially a House Republican majority so they

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<v Speaker 4>can avoid investigations in a in a in the second

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<v Speaker 4>half of the term and try and get some of

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<v Speaker 4>the legislative agenda through which would be blocked if Democrats

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<v Speaker 4>flipped the House, much less the Senate. But yeah, I

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<v Speaker 4>think I think we have had all along lots of

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<v Speaker 4>indications that this White House is all in on the

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<v Speaker 4>on the midterm elections and maintaining a majority for Republicans.

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<v Speaker 2>So, Brian, without of mind, as we started the air,

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<v Speaker 2>we had a flurry of populist proposals one after another,

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<v Speaker 2>day after day, and it's kind of gone quiet. We

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<v Speaker 2>can need that efit sometimes say so, Jonathan.

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<v Speaker 4>I think it's a little quiet because you know, obviously

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<v Speaker 4>the big headlines of the day, the only headline of

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<v Speaker 4>the day is Iran.

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<v Speaker 3>But behind the scenes there are still things going on.

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<v Speaker 4>Now you want, I think Republicans want those back in

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<v Speaker 4>the headlines, and they want they want to be seen

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<v Speaker 4>as as addressing affordability issues.

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<v Speaker 3>So they are going to pivot at some point.

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<v Speaker 4>And and you know the rest of the agenda, the

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<v Speaker 4>deregulatory agenda that doesn't need Congressional support, that continues as

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<v Speaker 4>as is. You know, there have been moves among the

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<v Speaker 4>banking regulators. You know, I do a lot of work

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<v Speaker 4>with my KBW colleagues on banking regulation.

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<v Speaker 3>There's a lot of work going on there.

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<v Speaker 4>So the the agenda is generally on track. The problem

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<v Speaker 4>is that it's being drowned out by everything else, and

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<v Speaker 4>they're going to try and pivot and you know, message

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<v Speaker 4>that they're working on affordability issues, but the war complicates that.

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<v Speaker 4>There's no easy way to shift a war off of

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<v Speaker 4>the headlines and off the top story of the evening

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<v Speaker 4>news and.

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<v Speaker 3>Get back to those affordability issues.

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<v Speaker 2>Ryan does want to infilm the other I think that's

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<v Speaker 2>what we're really trying to get to.

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<v Speaker 3>Here.

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<v Speaker 2>Are we underestimating the president's willingness to pursue his goals

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<v Speaker 2>in the Middle East despite the way you.

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<v Speaker 4>Know, I think what we have seen throughout this year,

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<v Speaker 4>the first year plus of the second term, is that

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<v Speaker 4>he is looking legacy wise. He is looking more internationally

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<v Speaker 4>than we would have maybe have expected him to do

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<v Speaker 4>so going into the year Venezuela.

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<v Speaker 3>Hear the engagement with the EU and NATO about future policy.

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<v Speaker 4>So I think we have to try and figure out

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<v Speaker 4>how he sees his legacy and what he wants to

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<v Speaker 4>get within the concept two of maintaining a majority in

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<v Speaker 4>the midterms. But what I think the signals have been

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<v Speaker 4>all along that he is very interested in a foreign

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<v Speaker 4>policy type legacy. He keeps pointing to it, He keeps

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<v Speaker 4>pointing to the peace talks that he is engaged in,

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<v Speaker 4>and I think he sees that in an historical context

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<v Speaker 4>as potentially his biggest legacy.

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<v Speaker 2>Stay with us. More Bloomberg surveillance coming up.

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<v Speaker 3>After this.

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<v Speaker 2>US and Israeli military strikes, creating the largest power of

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<v Speaker 2>vacuum in Iran for decades, with a slim chance of

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<v Speaker 2>a popular uprising, several candidates are reportedly angling to take control.

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<v Speaker 2>The former Deputy National Security advice of Victoria codes right

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<v Speaker 2>in the following. Indications are that another theocratic protegev company

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<v Speaker 2>is said to take charge. This doesn't provide any opening

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<v Speaker 2>to an end of hostilities. Victoria joins US now for more, Victoria,

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<v Speaker 2>welcome to the program. The operation in Venezuela was surgical

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<v Speaker 2>Caracas had Dousi Rodriguez. How different is the operation in

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<v Speaker 2>Iran and what's available to transition to in Saehran?

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<v Speaker 3>Well, it's radically different.

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<v Speaker 1>I mean, this is obviously a very significant military campaign

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<v Speaker 1>that the President has initiated. Against the Islamic Republic, which

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<v Speaker 1>is going extremely well. By the way, we are seeing

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<v Speaker 1>a dramatic reduction in the number of missiles around is

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<v Speaker 1>able to fire off at their neighbors and at Israel,

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<v Speaker 1>and that means that they're running out of missiles. That

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<v Speaker 1>we've also degraded their missile defense systems and their launchers.

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<v Speaker 1>So that is going according to plan, and I think

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<v Speaker 1>we'll see that campaign continue. But yes, we do have

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<v Speaker 1>this vacuum at the top of the Iranian government. There

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<v Speaker 1>is a very hardline cleric, Alireza Arafi, who is considered

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<v Speaker 1>for Supreme Leader. He's not very well known, he does

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<v Speaker 1>have some support in the military. Another name that's been

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<v Speaker 1>floated as Hassan Ruhani. Your audience may remember him. He

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<v Speaker 1>was president from twenty thirteen to twenty twenty one and

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<v Speaker 1>was the lead negotiator on the Obama era nucle deal

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<v Speaker 1>that did bring a fairly significant economic relief to Iran,

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<v Speaker 1>so that he might be fairly a fairly popular name.

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<v Speaker 1>And then finally you have the son of the deceased

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<v Speaker 1>Supreme Leader of Taiba Kamani. He is a much more

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<v Speaker 1>I think polarizing figure. He's known for being extremely corrupt.

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<v Speaker 1>He does not have a great deal of support in

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<v Speaker 1>the army. So his name is obviously very well known.

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<v Speaker 1>He has a lot of power, but it's not clear

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<v Speaker 1>that that's going to be well received by the Iranian people.

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<v Speaker 2>Well, given the objectives of the US government, how well

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<v Speaker 2>received would it be by the American government? Victoria, what's

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<v Speaker 2>your sense on what would be palatable to this White House.

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<v Speaker 1>No, I don't think that would be that would be

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<v Speaker 1>well received at all, And I wouldn't give him a

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<v Speaker 1>particularly long life expectancy if that, if that were to happen,

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<v Speaker 1>And so I do think you're going to have an

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<v Speaker 1>ongoing sort of search for individuals that are more pro American,

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<v Speaker 1>that are willing to sort of oversee more of a

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<v Speaker 1>t transition period. And don't count the Iranian people out. Obviously,

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<v Speaker 1>they've taken things into their own hands before in nineteen

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<v Speaker 1>seventy nine, and the issues surrounding the protests that we

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<v Speaker 1>saw in December and early January haven't gone away. As

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<v Speaker 1>a matter of fact, they've been made worse by the

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<v Speaker 1>military action of the United States. These are endemic economic problems.

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<v Speaker 1>They have just run away inflation and their currency is cratering.

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<v Speaker 1>And everyone is fleeing what's left of their stock market,

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<v Speaker 1>So you have a really really horrible economic situation. Eventually

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<v Speaker 1>that does drive people out onto the streets. So, especially

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<v Speaker 1>with the regime being revealed to be so weak as

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<v Speaker 1>the American intervention has revealed them to be, I do

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<v Speaker 1>think we have more than more a greater chance perhaps

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<v Speaker 1>of a popular uprising victoria.

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<v Speaker 5>Everything that you're talking about to find a new leader

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<v Speaker 5>or to coalesce around what that new leadership might look

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<v Speaker 5>like takes time. Do you have a sense of how

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<v Speaker 5>long that really implies that this conflict could go on?

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<v Speaker 1>Well, what it means is that they can't really make

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<v Speaker 1>decisions while they're in this kind of liminal state without

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<v Speaker 1>major leadership. And when you're involved in, you know, a

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<v Speaker 1>major military conflict, that kind of vacuum of leadership can

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<v Speaker 1>be extremely deadly. So I think that is why you're

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<v Speaker 1>seeing some rather bizarre decisions out of Tehran, like the

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<v Speaker 1>intense attacks on countries that had been mediators for them,

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<v Speaker 1>like Oman and Qatar. You know, the launching of a

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<v Speaker 1>missile toward Turkey. All of these things suggests that nobody's

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<v Speaker 1>really firmly in charge.

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<v Speaker 3>So I don't think.

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<v Speaker 1>Anybody knows how long this is going to go on,

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<v Speaker 1>nor do they know how effective any new leadership would

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<v Speaker 1>be once it's chosen.

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<v Speaker 5>A number of analysts have raised the point that, yes,

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<v Speaker 5>the US clearly has superior military power, as does Israel,

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<v Speaker 5>and there's increasing pressure by other regional countries to stop ran.

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<v Speaker 5>At the same time, there have been questions around ammunition

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<v Speaker 5>ammunitions more broadly, and whether the United States is running

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<v Speaker 5>to an uncomfortably low place.

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<v Speaker 1>What do you make of that? Well, I agree with

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<v Speaker 1>Secretary Haig Seth what he said yesterday that for this engagement,

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<v Speaker 1>I think we're well supplied. I think we will be

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<v Speaker 1>fine for the weeks, not months, that are likely to

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<v Speaker 1>be the time period for this for this episode. What

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<v Speaker 1>concerns me more is if we were in a longer

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<v Speaker 1>term war with a more powerful adversary, namely China. And

0:12:35.720 --> 0:12:39.040
<v Speaker 1>at the Heritage Foundation, we've recently done our first large

0:12:39.080 --> 0:12:42.760
<v Speaker 1>scale AI based simulation of what that would look like

0:12:42.920 --> 0:12:47.760
<v Speaker 1>over a year's period, and given the capabilities of AI,

0:12:47.840 --> 0:12:51.080
<v Speaker 1>we've been able to run thousands of scenarios for both

0:12:51.160 --> 0:12:54.600
<v Speaker 1>US and China, and the ammunition is the terrifying part.

0:12:54.800 --> 0:12:57.600
<v Speaker 1>We really we run out pretty quickly in that kind

0:12:57.600 --> 0:13:01.040
<v Speaker 1>of a conflict. So I think we're ok for a run.

0:13:01.200 --> 0:13:04.880
<v Speaker 1>I'm very concerned though, going forward that our stockpiles will

0:13:04.920 --> 0:13:08.000
<v Speaker 1>be way too low, and so we're very hopeful that

0:13:08.080 --> 0:13:11.960
<v Speaker 1>Congress uses the one point five trillion dollar defense budget

0:13:12.000 --> 0:13:16.880
<v Speaker 1>that President Trump has proposed to really remedy that deficit.

0:13:17.120 --> 0:13:18.320
<v Speaker 2>Victoria, I think we're all in trade.

0:13:18.320 --> 0:13:18.520
<v Speaker 3>Now.

0:13:18.760 --> 0:13:23.760
<v Speaker 2>What else comes out when you perform that scenario analysis, Well, I.

0:13:23.760 --> 0:13:26.640
<v Speaker 1>Mean, it really was fascinating to see. I mean, we

0:13:27.000 --> 0:13:30.680
<v Speaker 1>call it Project Title Wave. It's on our website. Obviously,

0:13:30.720 --> 0:13:33.640
<v Speaker 1>it's the first report we've ever done that. The US

0:13:33.720 --> 0:13:36.720
<v Speaker 1>government asked us to redact parts of it. They didn't

0:13:36.760 --> 0:13:40.080
<v Speaker 1>they didn't want our conclusions and recommendations to be publicly

0:13:40.840 --> 0:13:43.320
<v Speaker 1>publicly available, and we did agree to do that on

0:13:43.360 --> 0:13:45.680
<v Speaker 1>the basis that they would work with us on them.

0:13:46.360 --> 0:13:49.719
<v Speaker 1>So we're working on that, and ammunition is one key

0:13:49.760 --> 0:13:51.760
<v Speaker 1>piece of it. The other piece we looked at closely

0:13:51.840 --> 0:13:55.520
<v Speaker 1>was energy, because if we're in a conflict with China,

0:13:55.559 --> 0:13:59.360
<v Speaker 1>that's likely in the Pacific, closer to China itself, and

0:13:59.400 --> 0:14:02.400
<v Speaker 1>we would have to project power across the Pacific, which

0:14:02.440 --> 0:14:04.560
<v Speaker 1>means we would have to get all this ammunition and

0:14:04.640 --> 0:14:08.720
<v Speaker 1>other material across the ocean, and that's also very concerning.

0:14:08.800 --> 0:14:11.240
<v Speaker 1>We don't have the tankers that we would need to move.

0:14:11.280 --> 0:14:14.160
<v Speaker 1>We have plentiful energy here at home, obviously, but we

0:14:14.200 --> 0:14:16.679
<v Speaker 1>don't have the means to move it the way we

0:14:16.760 --> 0:14:19.440
<v Speaker 1>would need to in that kind of a conflict. So

0:14:19.920 --> 0:14:23.680
<v Speaker 1>we have, we've it was a fascinating project. We're considering

0:14:23.760 --> 0:14:29.000
<v Speaker 1>doing another very similar related project on European conflict with Russia,

0:14:29.400 --> 0:14:31.560
<v Speaker 1>and so I think it's a it's a really interesting

0:14:32.120 --> 0:14:37.479
<v Speaker 1>example of how artificial intelligence is transforming policy analysis.

0:14:38.240 --> 0:14:41.680
<v Speaker 2>Stay with US mult Bloomberg Surveillance coming up after this.

0:14:51.200 --> 0:14:55.160
<v Speaker 2>Executives from hyposcapas and artificial intelligence firms signing a White

0:14:55.200 --> 0:14:59.160
<v Speaker 2>House pledge to cover electricity bills for data sense of projects.

0:14:59.320 --> 0:15:02.120
<v Speaker 2>Jettish of what you imply at rightsing the media has

0:15:02.120 --> 0:15:05.160
<v Speaker 2>it backwards. Data centers won't push on pricing, they will

0:15:05.200 --> 0:15:09.240
<v Speaker 2>actually push down pricinc Jet joins us now for more. Jeed, welcome.

0:15:09.240 --> 0:15:11.040
<v Speaker 2>I've been looking forward to this conversation. I want to

0:15:11.040 --> 0:15:13.400
<v Speaker 2>give you some time just to explain why you believe

0:15:13.400 --> 0:15:13.960
<v Speaker 2>that's the case.

0:15:14.800 --> 0:15:16.320
<v Speaker 3>Well, thanks for having me.

0:15:16.800 --> 0:15:20.200
<v Speaker 6>We're actually out with our racks and stacks which is

0:15:20.200 --> 0:15:24.920
<v Speaker 6>our monthly Data center empower index today. So a lot

0:15:24.920 --> 0:15:26.680
<v Speaker 6>of data, a lot of things to talk about. And

0:15:26.720 --> 0:15:29.560
<v Speaker 6>I think, you know, on the heels of the pledge

0:15:29.560 --> 0:15:33.320
<v Speaker 6>from the White House, from the tech companies, if you

0:15:33.400 --> 0:15:36.360
<v Speaker 6>just think about it, what the utilities are going to

0:15:36.400 --> 0:15:42.080
<v Speaker 6>get is subsidized generation, and so is that going to

0:15:42.160 --> 0:15:45.760
<v Speaker 6>drive up or downpricing? I think I would say it

0:15:46.280 --> 0:15:49.760
<v Speaker 6>obviously would drive down. And so I think there's a

0:15:49.760 --> 0:15:52.800
<v Speaker 6>fear narrative around data centers. You know, not in my

0:15:52.880 --> 0:15:57.280
<v Speaker 6>backyard type of phenomenon, but that is is if we

0:15:57.360 --> 0:16:00.280
<v Speaker 6>look at what is driving up prices and we've written

0:16:00.320 --> 0:16:04.120
<v Speaker 6>about this in our report Pain at the Plug and

0:16:04.200 --> 0:16:06.440
<v Speaker 6>if you look at PGM, which is the most notable

0:16:06.960 --> 0:16:11.040
<v Speaker 6>rto experiencing that that's not a function of data centers

0:16:11.040 --> 0:16:11.960
<v Speaker 6>that are driving that up.

0:16:12.440 --> 0:16:16.240
<v Speaker 5>Jed how much is assuming a really rapid build out

0:16:16.320 --> 0:16:18.920
<v Speaker 5>of some of the power centers that a lot of

0:16:18.960 --> 0:16:22.320
<v Speaker 5>big techniques are looking to engage with. In other words,

0:16:22.400 --> 0:16:25.280
<v Speaker 5>is there a time mismatch here Until they get those

0:16:25.320 --> 0:16:28.680
<v Speaker 5>power plants up and running, they will be sucking demand

0:16:28.800 --> 0:16:29.960
<v Speaker 5>away from utilities.

0:16:31.760 --> 0:16:34.560
<v Speaker 6>I'm not so sure that that is true, actually, I

0:16:34.600 --> 0:16:38.440
<v Speaker 6>mean when we in our you know, when I mean,

0:16:38.480 --> 0:16:43.000
<v Speaker 6>the data shows that there is a rapid increase, a surge,

0:16:43.000 --> 0:16:48.480
<v Speaker 6>if you will, of gas turbines to provide base load power,

0:16:49.360 --> 0:16:52.120
<v Speaker 6>and so you know, I'm not sure that that is

0:16:52.160 --> 0:16:54.600
<v Speaker 6>a true statement in terms of that they're going to

0:16:54.640 --> 0:17:01.760
<v Speaker 6>be sucking the power from the the rate based or constituents.

0:17:01.840 --> 0:17:04.320
<v Speaker 6>I think that is a fear narrative that's being driven,

0:17:04.400 --> 0:17:07.520
<v Speaker 6>but I don't think that's supported by the data that

0:17:07.520 --> 0:17:08.359
<v Speaker 6>that we are seeing.

0:17:08.800 --> 0:17:09.320
<v Speaker 4>So how do you.

0:17:09.280 --> 0:17:11.560
<v Speaker 5>Explain the fact that utility bills have been going up

0:17:11.600 --> 0:17:15.520
<v Speaker 5>so significantly, in particular power bills in a lot of locations,

0:17:15.560 --> 0:17:19.680
<v Speaker 5>particularly those closer to a lot of these AI.

0:17:19.800 --> 0:17:27.280
<v Speaker 6>Centers, such as where in Texas for example, So in Texas,

0:17:27.320 --> 0:17:30.359
<v Speaker 6>which does have you know, I don't think that you're

0:17:30.400 --> 0:17:36.280
<v Speaker 6>seeing AI data centers that are directly driving up pricing

0:17:36.560 --> 0:17:42.040
<v Speaker 6>in Texas specifically. So I think what you are seeing

0:17:42.200 --> 0:17:46.280
<v Speaker 6>is is you're seeing certainly a migration shift to Texas

0:17:46.280 --> 0:17:49.760
<v Speaker 6>in terms of population increase, and you're seeing you know,

0:17:49.800 --> 0:17:56.960
<v Speaker 6>a very favorable industrial permitting and industry which is obviously

0:17:57.119 --> 0:18:00.200
<v Speaker 6>increasing load of which you know, data centers are part

0:18:00.240 --> 0:18:05.200
<v Speaker 6>of that where you're seeing the highest increase in electricity

0:18:05.200 --> 0:18:06.320
<v Speaker 6>pricing in the US.

0:18:07.600 --> 0:18:09.280
<v Speaker 3>I mean, I live in Massachusetts.

0:18:09.840 --> 0:18:15.840
<v Speaker 6>My electricity prices are through the roof Connecticut, New York, California, Illinois.

0:18:16.960 --> 0:18:18.560
<v Speaker 3>You know, you're you're seeing.

0:18:18.440 --> 0:18:21.520
<v Speaker 6>Very high pricing there and you're not seeing data centers.

0:18:21.760 --> 0:18:23.040
<v Speaker 5>So what do you think is driving it?

0:18:23.080 --> 0:18:23.240
<v Speaker 4>Then?

0:18:24.680 --> 0:18:28.800
<v Speaker 6>I think the so I think it's starts to get into.

0:18:29.359 --> 0:18:31.680
<v Speaker 6>You know, when you start digging into it, what you'll

0:18:31.720 --> 0:18:36.639
<v Speaker 6>see is transmission. Most of what we talk about is

0:18:36.680 --> 0:18:39.400
<v Speaker 6>on the generation or the capacity side, and a lot

0:18:39.400 --> 0:18:44.840
<v Speaker 6>of these markets have been deregulated for the capacity, but

0:18:44.920 --> 0:18:49.280
<v Speaker 6>are not deregulated for transmission and distribution. And the more

0:18:49.960 --> 0:18:53.120
<v Speaker 6>renewables that you're going to have, you're going to stress

0:18:53.160 --> 0:18:57.280
<v Speaker 6>the system over a certain percentage, and is that variability

0:18:57.720 --> 0:19:00.720
<v Speaker 6>ticks up. We found that most rtos have over ten

0:19:00.760 --> 0:19:06.439
<v Speaker 6>percent of variable assets. That the generation will actually be

0:19:06.560 --> 0:19:11.960
<v Speaker 6>usurped by the variability costs, and that's requiring more transmission.

0:19:12.480 --> 0:19:16.160
<v Speaker 6>And so when you look at those states with very

0:19:16.200 --> 0:19:21.320
<v Speaker 6>high RPS subsidies, you're actually seeing the highest power pricing.

0:19:21.400 --> 0:19:24.679
<v Speaker 6>Now some will push back and say, hey, causation is

0:19:24.720 --> 0:19:27.000
<v Speaker 6>not correlation, and that's fair. I think some of this

0:19:27.160 --> 0:19:30.320
<v Speaker 6>is being figured out, and obviously there's going to be

0:19:30.359 --> 0:19:33.200
<v Speaker 6>some impact in terms of adding data centers which do

0:19:33.280 --> 0:19:36.800
<v Speaker 6>act like a semi fab or a steel mill, et cetera.

0:19:38.000 --> 0:19:39.480
<v Speaker 3>But if you now have.

0:19:39.680 --> 0:19:42.560
<v Speaker 6>Your tech firms that have all made a pledge that

0:19:42.560 --> 0:19:45.400
<v Speaker 6>they're going to bring their own capacity and they're also

0:19:45.440 --> 0:19:51.040
<v Speaker 6>going to be responsible for interconnects, that's a huge underwritten

0:19:51.080 --> 0:19:55.000
<v Speaker 6>subsidy for that power, which should lead to lower prices,

0:19:55.000 --> 0:19:55.840
<v Speaker 6>not higher prices.

0:19:56.000 --> 0:19:58.760
<v Speaker 2>So genet you is explain this runs contrary to the

0:19:58.840 --> 0:20:01.919
<v Speaker 2>popular narrative you hear so much of on programs like this.

0:20:02.119 --> 0:20:04.760
<v Speaker 2>As you and the team identify these data points, what

0:20:04.800 --> 0:20:06.439
<v Speaker 2>do you believe the investment opportunity is.

0:20:07.240 --> 0:20:09.240
<v Speaker 6>Well, I think the obvious one is you need to

0:20:09.280 --> 0:20:12.720
<v Speaker 6>have ge Vernovaz a core holding within your portfolio. And

0:20:12.800 --> 0:20:14.800
<v Speaker 6>the most pushback that we get on that one is

0:20:14.880 --> 0:20:17.000
<v Speaker 6>all the stocks run. You know, we picked it up

0:20:17.040 --> 0:20:20.760
<v Speaker 6>it I think it was around two hundred dollars per

0:20:20.800 --> 0:20:23.040
<v Speaker 6>share and it's now at eight hundred and thirty dollars

0:20:23.040 --> 0:20:25.880
<v Speaker 6>per share. But you're continuing to see we haven't even

0:20:25.920 --> 0:20:29.600
<v Speaker 6>seen all of the maintenance in the service side of

0:20:29.640 --> 0:20:32.280
<v Speaker 6>the business that flows into the into the model.

0:20:32.320 --> 0:20:33.960
<v Speaker 3>So we still continue to believe that.

0:20:33.920 --> 0:20:38.080
<v Speaker 6>There's upside to that one on the nuclear side, BWX

0:20:38.160 --> 0:20:42.159
<v Speaker 6>technology or centrist on sharing up the supply chain, so

0:20:42.400 --> 0:20:45.440
<v Speaker 6>anything that's baslow. What we are seeing is the economy

0:20:45.480 --> 0:20:49.520
<v Speaker 6>in the US is shifting from a largely service focused

0:20:49.560 --> 0:20:54.000
<v Speaker 6>or highly optimate optimized energy efficient economy that if we

0:20:54.040 --> 0:20:59.359
<v Speaker 6>move to a multipolar economic system globally, that's going to

0:20:59.400 --> 0:21:02.800
<v Speaker 6>require shoring that requires a lot more power. And then

0:21:02.920 --> 0:21:07.880
<v Speaker 6>specifically baseload not surge or peak, so that's benefiting, that's

0:21:07.920 --> 0:21:15.040
<v Speaker 6>going to benefit net gas, coal, hydroelectric, geothermal, and I

0:21:15.160 --> 0:21:19.520
<v Speaker 6>might be missing one or two, but that's really the

0:21:19.600 --> 0:21:24.760
<v Speaker 6>driver here. So you're seeing the contribution of baseload being

0:21:24.840 --> 0:21:26.800
<v Speaker 6>valued more than that or surge peak.

0:21:27.680 --> 0:21:31.240
<v Speaker 2>This is the Bloomberg Savandans podcast, bringing you the best

0:21:31.240 --> 0:21:34.560
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0:21:34.640 --> 0:21:37.560
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