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Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you,

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Speaker 1: along with my co host Lisa Brahma wits each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money. Whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple

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Speaker 1: podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. Well, that's a coronavirus, and the

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Speaker 1: spread of the coronavirus continues to extend. To Paul over

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Speaker 1: the economic outlook globally, investors are really looking towards central

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Speaker 1: governments for some type of fiscal stimness. It can't just

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Speaker 1: be lower rates. And in fact, today the UK announced

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Speaker 1: the thirty nine billion dollar stimulus package. That's hours after

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Speaker 1: the Bank of England cut interest rates. So the UK

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Speaker 1: doing their part. The question now for markets is what

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Speaker 1: will be the US response. To get a sense of that,

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Speaker 1: we welcome our good friend Marty Shanker. He's a chief

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Speaker 1: content officer for Bloomberg News. He joins us here in

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Speaker 1: our Bloomberg Interact or Broker studio. So, Marty, it seems

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Speaker 1: like today, maybe even yesterday, the market's been sitting there saying, Okay,

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Speaker 1: United State, its government, where is our fiscal response here?

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Speaker 1: We've seen the FED through the emergency rate cut. We're

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Speaker 1: probably gonna get more rate cuts coming up, But what's

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Speaker 1: the fiscal response? What do you think is going on

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Speaker 1: down in Washington. Well, Paula, I have to say, it's

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Speaker 1: not necessarily as a stimulus deficit. It's more of a

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Speaker 1: leadership deficit. Uh. We were talking before we went on

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Speaker 1: the air about the TARP experience that in two thousand

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Speaker 1: and eight, when basically the markets were telling the government

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Speaker 1: to get its act together, and in fact it did

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Speaker 1: um and by all accounts, that helped rescue the financial

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Speaker 1: system from ruin. Uh. You are not getting a sense

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Speaker 1: of that kind of leadership out of Washington. And it's

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Speaker 1: both the White House and Congress. It's not just a

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Speaker 1: Donald Trump issue. So we saw over in Europe. We

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Speaker 1: saw in England there was a coordinated effort between the

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Speaker 1: central Bank there that cut cut rates by fifty basis

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Speaker 1: points in emergency ray cup. But that also opened up

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Speaker 1: a way to to give bridge loans to businesses suffering

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Speaker 1: in the wake of the coronavirus induced slow down. What

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Speaker 1: are people hoping for from President Trump and from Congress. Well,

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Speaker 1: I think that they want a uh you know, there's

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Speaker 1: this notion of micro targeted responses, but it's more a

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Speaker 1: series of micro targeted responses for small businesses that have

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Speaker 1: to close down to be able to get credit. It's

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Speaker 1: also uh, the ability to make sure that people get

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Speaker 1: paid if they're forced to be at home for caregiving

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Speaker 1: or because their self quarantining themselves. So I mean it's

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Speaker 1: what what they really need is a bipartisan agreement on

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Speaker 1: which kind of measures the government should take and for

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Speaker 1: people to put aside their partisan difference differences and come

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Speaker 1: up with a rational plan. The problem is that Washington

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Speaker 1: has become so dysfunctional. There were reports that Donald Trump

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Speaker 1: will refuse to sit down with Nancy Pelosi because of

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Speaker 1: the impeachment vitriol, that that created such bad feelings between

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Speaker 1: the two of them, which is ridiculous in a situation

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Speaker 1: like that. But I think you're seeing that in the markets.

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Speaker 1: So we have heard, I guess of a payroll tax cut,

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Speaker 1: and have you heard anything out of Washington that gives

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Speaker 1: you confidence that we may have a tarp like product

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Speaker 1: or you know, kind of piece of legislation that would

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Speaker 1: really be on accompassing and really address the issues that

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Speaker 1: you just outline. Well, I don't get a sense, and

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Speaker 1: I mean, we're all sitting in New York at the

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Speaker 1: same feeling that there is not that sense of urgency

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Speaker 1: because of the uncertainty over the effects of the virus.

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Speaker 1: We've never seen anything like this before, but there is

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Speaker 1: definitely no indication right now. Congress is UH scheduled to

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Speaker 1: adjourn um this Friday, and the optics of the Congress

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Speaker 1: leaving town um without having done anything UH to promote

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Speaker 1: some sense of stability is just breathtaking to me. Meanwhile,

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Speaker 1: this is an election year and we are getting the

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Speaker 1: campaign ramping up on both the part of former Vice

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Speaker 1: President Joe Biden as well as Bernie Sanders, and Biden

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Speaker 1: is becoming the very clear front runner. Is getting very

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Speaker 1: difficult to see how we are going to see a

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Speaker 1: Bernie Sanders Democratic candidates. I would say it's virtually impossible. Okay,

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Speaker 1: it's virtually impossible. So what's the playbook going forward? How

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Speaker 1: likely is it? Have we heard anything about Bernie Sanders

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Speaker 1: perhaps conceding and having his supporters go behind Biden. I

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Speaker 1: don't have any reporting of my own. I just have

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Speaker 1: you know. My guess is that Bernie Sanders is definitely

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Speaker 1: going to stay in this race through next Tuesday. He

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Speaker 1: will absolutely be vigorous in the debate Sunday night. I

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Speaker 1: think it's an important that you do that. Yeah, a

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Speaker 1: number of the surrogates of Bernie Sanders are making the

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Speaker 1: point that Joe Biden has not been vetted. Um in

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Speaker 1: that kind of situation. When you have one on one

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Speaker 1: Bernie Sanders against Joe Biden without a studio audience, which

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Speaker 1: is what's going to happen this Sunday, you will get

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Speaker 1: a very granular examination of policy differences, and I think

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Speaker 1: Joe Biden's ability to explain those differences is going to

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Speaker 1: be a major issue. People are not that focused on

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Speaker 1: the election per se, and some of the issues that

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Speaker 1: they have been harping on him in gun control a

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Speaker 1: very big issue, and yet hard to sort of make

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Speaker 1: that an issue, and people are holding up and quarantining themselves.

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Speaker 1: How important is it for the Democrats to come up

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Speaker 1: with some sort of cohesive either strategy with respect of

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Speaker 1: the coronavirus or message or or something on that front. Well,

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Speaker 1: I would say it's actually one step above that. It's

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Speaker 1: a question as we discussed leadership, and I think that

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Speaker 1: the Democrats their strategy is they need to obviously defeat

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Speaker 1: Donald Trump, but they need to do it by contrasting

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Speaker 1: their approach as leaders of a government entity. And I

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Speaker 1: think Joe Biden, his ability to stand above the fray

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Speaker 1: and show real presidential quote unquote leadership is what's going

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Speaker 1: to carry the day for him. The election is still

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Speaker 1: seven eight months away, and a lot could happen in

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Speaker 1: those seven or eight months. So, uh, this this, it

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Speaker 1: seems to me it will be a Biden Trump race

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Speaker 1: and it's going to be the ability of people to

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Speaker 1: perceive leadership that's going to determine who is our next president.

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Speaker 1: So how much of a risk is this the President Trump?

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Speaker 1: This coronavirus because one could argue to date we haven't

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Speaker 1: necessarily seen the leadership from the White House that perhaps

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Speaker 1: is needed. Well, this is the you know a number

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Speaker 1: of people, I'm not invented this. This could be the

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Speaker 1: Katrina moment for Donald Trump. If he is not able

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Speaker 1: to get control of this situation, it could do him

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Speaker 1: as presidency. All those people who want to change may

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Speaker 1: actually opt for the change being back ending the chaos.

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Speaker 1: And that is what I think this race is going

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Speaker 1: to boil down to. Marty. You've you're a chief content officer,

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Speaker 1: You're the person at the top. How many times have

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Speaker 1: you washed your hands today? Uh? Well, I've been using

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Speaker 1: the purel. I've been I've I think I've washed my

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Speaker 1: hands every hour. And I was just talking to the

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Speaker 1: attendant in the men's room here and he says, they

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Speaker 1: are going through the soap faster than you can ever remember.

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Speaker 1: Everybody's hands, Well, I mean, I think that's a very

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Speaker 1: good thing. They're they're they're kind of raw. Everyone's hands

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Speaker 1: are kind of a little cracked because people are just scrubbing.

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Speaker 1: Is that they're about to go into surgery. Marty party Shanker,

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Speaker 1: thank you so much for being with us. Marty Marty Shakers,

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Speaker 1: chief content officer for Bloomberg. Well, it seems to be

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Speaker 1: a race as to how quickly Wall Street strategists can

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Speaker 1: downgrade their expectations for earnings. The latest Goldman Sachs chief

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Speaker 1: strategist for US Equities, David Coston said the eleven year

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Speaker 1: old bullmarket u S Stacks is about to become history,

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Speaker 1: and he now predicts that earnings will drop at least

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Speaker 1: twelve percent in each of the next two quarters due

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Speaker 1: to plunging oil prices, as well as the spread of

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Speaker 1: the coronavirus and people staying at home and not traveling.

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Speaker 1: The question is how do you invest right? I mean,

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Speaker 1: this does expect sort of a decline in equities going forward.

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Speaker 1: How long do people expect it to go on for?

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Speaker 1: Is this a time to be buying or just to

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Speaker 1: get out of the market. And Bill Smead has tons

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Speaker 1: of experience with all of this, is the CEO and

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Speaker 1: chief investment officer at SMED Capital Management, which has more

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Speaker 1: than two billion dollars of assets that are management. Joining

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Speaker 1: us from Seattle, Bill, I'd love to get your thoughts

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Speaker 1: around that. How do you sort of reframe your investing

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Speaker 1: assumptions based on the events over the past month or so. Well,

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Speaker 1: thanks for having us, and this is a great time

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Speaker 1: to think about those kinds of long term things that

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Speaker 1: are the most important. So what what we feel this

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Speaker 1: is from an investment standpoint is the exacerbation of a

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Speaker 1: trend that's been in place for a good five to

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Speaker 1: ten years, which is that the anemic economy UH scenario

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Speaker 1: where people don't want to own uh, companies that are

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Speaker 1: tied closely to the main street on the ground economy

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Speaker 1: and instead want to own the successful technology companies that

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Speaker 1: that have uh don't seem to have any be impacted

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Speaker 1: by where people are. Right, if you're stuck at home,

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Speaker 1: you might still be sitting on your Facebook, UH, maybe

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Speaker 1: more than even even normal. So so we from a

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Speaker 1: from a historical standpoint, this looks to us like Paul

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Speaker 1: Volker tightening credit in when bonds were already so oversold

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Speaker 1: and so miserable. The bond market had been terrible for

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Speaker 1: thirty years, and incomes Paul Volcan and he titans credit

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Speaker 1: and bonds get slaughtered. Stocks were already cheap, they got

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Speaker 1: slaughtered again. Uh. And and Y two K. The Y

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Speaker 1: two K thing caused people to buy a whole bunch

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Speaker 1: of technology stuff in and get really excited about technology

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Speaker 1: right before the end. And in this particular case, you know,

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Speaker 1: growth investments have been doing dramatically better. Value holds most

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Speaker 1: of the stocks that are economically sensitive. Therefore, what's getting

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Speaker 1: punished the most at the end of a major trend

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Speaker 1: is the thing that was already cheap. So Bill, is

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Speaker 1: there a valuation point here for the market that you

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Speaker 1: think investors should be kind of keeping their eye on

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Speaker 1: to try to get a sense of where the bottom

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Speaker 1: might be. Well, that's a great question if historical situations

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Speaker 1: like this have any merit in analyzing. And remember you're

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Speaker 1: talking about an exogenous event that no one could see coming.

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Speaker 1: And then uh, Saudi Arabia took out the Amazon playbook

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Speaker 1: and decided to UH use their their UH position to

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Speaker 1: undercut everyone else's price and put them out of business. Uh.

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Speaker 1: Those two things happened. In other words, of Saudi Arabians

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Speaker 1: would have never been able to do this if the

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Speaker 1: coronavirus had not greatly affected demand around the world for

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Speaker 1: oil and gas right now. So so so these two

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Speaker 1: just completely wild, historically unusual things are hitting simultaneously. So

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Speaker 1: what you should expect is that that investments you make

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Speaker 1: now in in the areas that people are the most

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Speaker 1: afraid of right now are likely to produce the highest

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Speaker 1: returns over the course of the next ten years. And

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Speaker 1: the investments that they run back to immediately and have

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Speaker 1: sold way less that that they they've they've got the

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Speaker 1: most confidence in are highly unlikely to be the best

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Speaker 1: investments of the next ten years. Are you basically saying

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Speaker 1: by stock cell bonds. Well, first of all, uh, you know,

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Speaker 1: mathematically a tenure treasury has zero chance of investment success

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Speaker 1: in the next ten years unless you consider point seven

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Speaker 1: percent return UH and investment success if if someone's retirement

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Speaker 1: goals get matched with point seven percent return, or a

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Speaker 1: pension planner and endowment works at point seven that so

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Speaker 1: that's d o A. Right, this is the antithesis of

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Speaker 1: the treasuries were percent to start the year and went

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Speaker 1: to fifteen percent. Bond investors got slaughtered. But those third

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Speaker 1: percent bonds for thirty years were one of the best

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Speaker 1: investments you could possibly make, even though you had to

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Speaker 1: get abused for a while, uh, in the first year

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Speaker 1: that you owned them. All Right, that's the nature. That's

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Speaker 1: the nature of this, uh, the courage to own things

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Speaker 1: that will do well over ten years but make you

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Speaker 1: feel like a fool in the short run. And talking

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Speaker 1: about just the pain. Uh. The market has rolled over,

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Speaker 1: taken a leg lower even still with the SMP now

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Speaker 1: down more than four percent and the down Paul down

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Speaker 1: four and a half percent as we sit here, Yeah,

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Speaker 1: looking at the vix here out six points to fifty three.

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Speaker 1: You talk about fear in the marketplace of Bill, that's

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Speaker 1: kind of a good example here. So just real quick, Bill,

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Speaker 1: what are some of the things. What's your bottom line

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Speaker 1: advice to your clients and your investors right here? Well,

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Speaker 1: first of all, for people that are going to be

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Speaker 1: investors for the next thirty years, especially people that have been,

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Speaker 1: uh you know, have been sitting on the sidelines, to

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Speaker 1: begin some kind of dollar cost averaging here looks like, uh,

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Speaker 1: it would be a fantastic idea because the virus itself

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Speaker 1: is no matter what the ultimate totals are, and we

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Speaker 1: all we all feel terrible because we you know, we

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Speaker 1: we hate that anyone would would die from this, but

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Speaker 1: we will kind of have a really strong feel within

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Speaker 1: thirties sixty days what the total of this is going

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Speaker 1: to be. And at the point that starts to decline,

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Speaker 1: that's when investors will get their legs back underneath them.

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Speaker 1: So so yeah, so that our our view. So we're

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Speaker 1: gonna have to leave it at that, Thank you so much.

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Speaker 1: Phil Smead Smead Capital Management. One of the narratives that

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Speaker 1: I've been hearing about and people are looking for some

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Speaker 1: sense of capitulation in the market is just wait for

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Speaker 1: the retail investors when they start dumping stock, that's when

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Speaker 1: you know it's over. Our next guest maybe says, maybe

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Speaker 1: not so sure. Eric Falchun a senior et analysts for

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Speaker 1: Bloomberg Intelligence. He joined us here in a Bloomberg interactor

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Speaker 1: Brooker Studio. So, Eric, what's the et F world telling

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Speaker 1: me about how the individual retail investor has been looking

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Speaker 1: at this market altility? Look? I mean it was just

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Speaker 1: like was a great snapshot because et s were big

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Speaker 1: at that point and they took in money every month.

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Speaker 1: And these are e t f s like Vanguard, SWAB

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Speaker 1: and the Ice shares Core series. What we do is

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Speaker 1: in our flow data, we separate out spy I w

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Speaker 1: M because those are used like pseudo futures. They get

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Speaker 1: the traders committed out of those things like a hotel.

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Speaker 1: So those flows can contaminate or overshadow the rest of

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Speaker 1: the e t F so we separate them out. So

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Speaker 1: we look at those e t f s used by

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Speaker 1: advisors and allocators. They continued to take in money. Um

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Speaker 1: could that's the chart I'm looking at for. If that

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Speaker 1: goes negative, I think it's time to worry. But over

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Speaker 1: the years, whenever that as long as that's positive, I've

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Speaker 1: tended to just take a deep breath. Although this sell

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Speaker 1: off does feel just a little more severe than remember

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Speaker 1: Q four was pretty rough. Um. So I'm looking at

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Speaker 1: those numbers and I'm seeing that for the most part,

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Speaker 1: um investors are continuing. And there's really two main reasons

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Speaker 1: for this. One is this the Internet has spread information.

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Speaker 1: People are sharing information with each other. They've read a

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Speaker 1: lot of education on how timing the market's almost impossible

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Speaker 1: to win, So there's education on not biting, not taking

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Speaker 1: the bait of a of a red on the screen.

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Speaker 1: The second thing is advisors have moved from a broker

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Speaker 1: model where a mutual fund pays them, to a fiduciary

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Speaker 1: model where they get a percentage of the client assets.

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Speaker 1: Once you move to the fiduciary model, you're with your

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Speaker 1: investor shoulder to shoulder. And now one of their biggest

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Speaker 1: value propositions is called behavioral coaching. So what they're saying

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Speaker 1: is one of the reasons you need me is because

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Speaker 1: I'm going to talk you off the ledge. So with

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Speaker 1: these advisors acting like as a major buffer, and in

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Speaker 1: the past the broker might want to turn the account

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Speaker 1: because they get kicked back from the mutual funds. So

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Speaker 1: I think the retail investor is a much stronger, more

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Speaker 1: disciplined retail investor than in Bygone is Eric. I'm glad

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Speaker 1: you're here. I really am. I've always too good. I mean,

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Speaker 1: when you know, I can always expect this kind of

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Speaker 1: take from you, which I think is totally important and

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Speaker 1: sort of like a gut check or reality check. You know,

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Speaker 1: here's the narrative, and this is why everything is just fine,

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Speaker 1: and ETFs are functioning well and people aren't freaking out

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Speaker 1: and they're not running for the exits that said, are

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Speaker 1: we I'll present the other side. That's my nickname. Like

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Speaker 1: for him, it's everything is fine guy. I will say though,

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Speaker 1: that there is a question, first of all, of whether

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Speaker 1: the real shifts and allocations are going to be the

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Speaker 1: real issue here. Basically, are we going to see people

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Speaker 1: move there for one case, or change your allocations or

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Speaker 1: sort of become more risk off and risk averse, And

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Speaker 1: that that's really the type of tweaking and changing that's

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Speaker 1: really going to have an effect on markets. It's not

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Speaker 1: going to be this. Possibly. What I would look for

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Speaker 1: is this look for active mutual funds. Those are owned

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Speaker 1: by older investors rumors, and they largely were probably put

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Speaker 1: in there by a broker, so they might have less

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Speaker 1: loyalty shorter time horizon. I'm watching those flows. You could

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Speaker 1: see some selling pressure if we saw if we see

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Speaker 1: major flows in two thousand eighteen, Uh, same thing. Um,

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Speaker 1: we saw five billion come out of active mutual funds.

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Speaker 1: That's a lot. We don't have data showing quite the

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Speaker 1: same in this recent self, but it could get bad.

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Speaker 1: That would be one and a lot of those people

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Speaker 1: have the four one case you're talking about. In terms

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Speaker 1: of the younger I think they're rebalancing into equities because

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Speaker 1: remember how you like this chart that shows equity net

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Speaker 1: fund flows have been negative over the past couple of years,

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Speaker 1: and you're like, what's going on? What's going on there?

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Speaker 1: Isn't bearish. It's that people are taking off the equities

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Speaker 1: a little because they're rebalancing back, and a fixed then

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Speaker 1: comes to trying to keep a percentage allocation to equities. Now,

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Speaker 1: if equities sell off, that percentage goes down. You may

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Speaker 1: even see them rebalanced into equities. But yes, there's gonna

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Speaker 1: be some panicking. Of course, not everybody's like this. I

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Speaker 1: just think the core of the retail investor is much

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Speaker 1: stronger than than people give them credit for, really valuable.

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Speaker 1: And I could go for another ten minutes. We didn't

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Speaker 1: even get to h BYG. We didn't even get to

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Speaker 1: the high bond e t f s, which have seen

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Speaker 1: really big outflows and really big discount to navs. Actually,

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Speaker 1: and and and THEUNI one, the MUNI one h y

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Speaker 1: D had a seven percent discount. Our MUNI analyst Eric

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Speaker 1: Kazawski says, that's a leading indicator. Look for the bonds

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Speaker 1: to catch up. So if you see a discount, that's

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Speaker 1: probably bad. Seconds. Eric, we could talk for ten minutes.

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Speaker 1: I wish we could, Eric valtun As we will senior

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Speaker 1: et F analyst Bloomberg get intelligence joining us here in

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Speaker 1: our interactive broker studios. It's sort of like a game

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Speaker 1: of Whackable Where do you look first? Do you look

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Speaker 1: at the coronavirus, the progression of the disease where it's spread,

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Speaker 1: at the fiscal response to it, or do you look

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Speaker 1: at the price of oil which is down yet again

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Speaker 1: today now thirty three dollars and thirty seven cents of

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Speaker 1: barrel traded on the n imax as the price war

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Speaker 1: wages and and engrages on I should say between Saudi

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Speaker 1: Arabia and Russia. Let's focus on that right now. And

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Speaker 1: we're lucky to have Dr Ariel coh and senior fellow

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Speaker 1: at the Atlantic Council Founding Principle of International Market Analysis.

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Speaker 1: Uh And also he of course is a frequent contributor

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Speaker 1: to this show, joining us from Washington, d C. Can

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Speaker 1: you give us a sense, Ariel, of just how long

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Speaker 1: this price war can go on before we see a

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Speaker 1: complete rearranging of the oil producing nations in terms of

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Speaker 1: both their economies as well as their power relative to

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Speaker 1: each other. Well, let's start with the last part of

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Speaker 1: what you said. I think the rearrangement is underway. The

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Speaker 1: week part. The weak players such as Venezuela, Iran, Libya,

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Speaker 1: which is in the middle of a civil war, are

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Speaker 1: all too hurt, whereas UM the United States shale patch,

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Speaker 1: which has high production costs, really needs to re examine

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Speaker 1: uh it's capex. Its capex is high because shale wells

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Speaker 1: last only eighteen months to twenty four months as opposed

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Speaker 1: to conventional wealth. So our production in the shale patch

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Speaker 1: is somewhere between thirty and sixty dollars, whereas in Saudi

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Speaker 1: Arabia it's around ten dollars or less or and in

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Speaker 1: Rush it varies greatly depends on a structure and a location,

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Speaker 1: from ten of fifteen dollars for established fields too as

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Speaker 1: high as sixty and more dollars a barrel cost UH

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Speaker 1: in Arctic offshore continental shelf. But so the ones with

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Speaker 1: the longest um um breathing space for this war, the

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Speaker 1: Saudis on the Adham. The Saudis have also higher balancing

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Speaker 1: point for their budget. They need something like seventy dollars

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Speaker 1: a barrel price UH to balance their budget. So it's

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Speaker 1: a very very complicated competition, and I think at least

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Speaker 1: a quarter the Saudis are trying to force the Russians

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Speaker 1: to the negotiating table as well as to force some

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Speaker 1: of our shale production to shut down because they're losing

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Speaker 1: money when the oil price is so low UH. In

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Speaker 1: the worst case scenario, if the coronavirus causes a global

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Speaker 1: recession UM, it can go two or three quarters. So

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Speaker 1: hopefully god willing, by the end of the year at

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Speaker 1: worst case scenario or Q one one, we will see

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Speaker 1: an improvement. So Dr Colin when this news broke that

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Speaker 1: Saudi was essentially starting this price were ramping up product,

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Speaker 1: and I was really shocked because I just when I

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Speaker 1: kind of did the math and thought about the near

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Speaker 1: term costs for the potential longer term gains, i e.

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Speaker 1: Weakening some of the weaker players the most, notably maybe

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Speaker 1: the U S shail business, the math just didn't seem

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Speaker 1: to work. Were you how surprised, if if at all,

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Speaker 1: were you about what's going on with Saudi Arabia now Russia? Yes,

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Speaker 1: but I would um say differently. I would say the

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Speaker 1: Russians were the ones who started this war. The Saudis

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Speaker 1: UH proposed a cut UM one point five million barrels

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Speaker 1: and the Russians didn't agree to that UM and UH Rosa,

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Speaker 1: the Russian state oil company H the Beheamoth was upset

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Speaker 1: because the US is sanctioning UH them for UH selling

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Speaker 1: Venezuela oil. UH. There's also friction between Rosneft, the Russian

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Speaker 1: national world champion in Saudi Arabia, competition for markets in

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Speaker 1: India and Eastern Europe. So the blood between Moscow and

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Speaker 1: the Riad was bad. UH. And the ones who fired

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Speaker 1: the first shot are the Russians. Keeping in mind that

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Speaker 1: they are really upset that the United States managed to

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Speaker 1: surpass both Russia and Saudi Arabia as being a number

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Speaker 1: one producer of oil at thirteen million barrels a day. Harriel,

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Speaker 1: you testify in front of Congress. You've consulted UH with

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Speaker 1: the Senate, the House Judiciary committees. I'm trying to understand

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Speaker 1: what the U S response is to all of this.

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Speaker 1: If anything, given the fact that Russia's aggression and frankly

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Speaker 1: anger was really directed at the U S shail patch, UH,

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Speaker 1: we can continue limit Russian ability to develop uh it's

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Speaker 1: offshore oil resources, which are quite considerable. I'll remind our

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Speaker 1: listeners that Russ, the same RUSSNEV that destroyed the OPEC

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Speaker 1: plus agreement between Russia and Saudi UM was the one

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Speaker 1: that several years ago UH did uh An agreement was

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Speaker 1: exon getting excens technology to develop its offshore resources. So

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Speaker 1: that's important for them. Russian oil basins are mature. They

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Speaker 1: don't have a lot of new UH and cheap reserves

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Speaker 1: to develop whatever is greenfield in like eastern Siberia, uh

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Speaker 1: It's um in the middle of nowhere was no infrastructure.

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Speaker 1: UH they need new pipelines and in the long term

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Speaker 1: they have another problem because of the global warming. The tundra,

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Speaker 1: the paramaufrost is melting, and a lot of Russian pipelines,

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Speaker 1: both oil and gas would start to sink, So that

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Speaker 1: would require a huge capex. So even the Russians the

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Speaker 1: oil prices, and one one more thing, they said they

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Speaker 1: have six years, six years UH to sustain oil prices

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Speaker 1: at twenty five dollars a barrel. Yes, they have reserves,

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Speaker 1: they have hundreds and twenty five billion UH in the

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Speaker 1: National Oil Fund UH and whatnot. But I do not

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Speaker 1: believe for a moment that this UH low oil prices,

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Speaker 1: let's say five to thirty will sustain itself for more

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Speaker 1: than one year. DOCTA. Ariel Cohen, thank you so much

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Speaker 1: for joining us. We always appreciate your perspective on global markets.

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00:26:40,960 --> 00:26:43,439
Speaker 1: Dr Ariel Cohen. He's a senior Fellow at the Atlantic Council,

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00:26:43,480 --> 00:26:47,720
Speaker 1: also founding Principle of International Market Analysis based in Washington,

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00:26:47,920 --> 00:26:50,080
Speaker 1: d C. Thanks for listening to the Bloomberg P and

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Speaker 1: L podcast. You can subscribe and listen to interviews at

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Speaker 1: Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney,

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Speaker 1: I'm on Twitter at PT Sweeney, Lisa bram Boyd's I'm

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Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.

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Speaker 1: You can always catch us worldwide on Bloomberg Radio