Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you,
Speaker 1: along with my co host Lisa Brahma wits each day
Speaker 1: we bring you the most noteworthy and useful interviews for
Speaker 1: you and your money. Whether at the grocery store or
Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
Speaker 1: podcast or wherever you listen to podcasts, as well as
Speaker 1: at Bloomberg dot com. Well, that's a coronavirus, and the
Speaker 1: spread of the coronavirus continues to extend. To Paul over
Speaker 1: the economic outlook globally, investors are really looking towards central
Speaker 1: governments for some type of fiscal stimness. It can't just
Speaker 1: be lower rates. And in fact, today the UK announced
Speaker 1: the thirty nine billion dollar stimulus package. That's hours after
Speaker 1: the Bank of England cut interest rates. So the UK
Speaker 1: doing their part. The question now for markets is what
Speaker 1: will be the US response. To get a sense of that,
Speaker 1: we welcome our good friend Marty Shanker. He's a chief
Speaker 1: content officer for Bloomberg News. He joins us here in
Speaker 1: our Bloomberg Interact or Broker studio. So, Marty, it seems
Speaker 1: like today, maybe even yesterday, the market's been sitting there saying, Okay,
Speaker 1: United State, its government, where is our fiscal response here?
Speaker 1: We've seen the FED through the emergency rate cut. We're
Speaker 1: probably gonna get more rate cuts coming up, But what's
Speaker 1: the fiscal response? What do you think is going on
Speaker 1: down in Washington. Well, Paula, I have to say, it's
Speaker 1: not necessarily as a stimulus deficit. It's more of a
Speaker 1: leadership deficit. Uh. We were talking before we went on
Speaker 1: the air about the TARP experience that in two thousand
Speaker 1: and eight, when basically the markets were telling the government
Speaker 1: to get its act together, and in fact it did
Speaker 1: um and by all accounts, that helped rescue the financial
Speaker 1: system from ruin. Uh. You are not getting a sense
Speaker 1: of that kind of leadership out of Washington. And it's
Speaker 1: both the White House and Congress. It's not just a
Speaker 1: Donald Trump issue. So we saw over in Europe. We
Speaker 1: saw in England there was a coordinated effort between the
Speaker 1: central Bank there that cut cut rates by fifty basis
Speaker 1: points in emergency ray cup. But that also opened up
Speaker 1: a way to to give bridge loans to businesses suffering
Speaker 1: in the wake of the coronavirus induced slow down. What
Speaker 1: are people hoping for from President Trump and from Congress. Well,
Speaker 1: I think that they want a uh you know, there's
Speaker 1: this notion of micro targeted responses, but it's more a
Speaker 1: series of micro targeted responses for small businesses that have
Speaker 1: to close down to be able to get credit. It's
Speaker 1: also uh, the ability to make sure that people get
Speaker 1: paid if they're forced to be at home for caregiving
Speaker 1: or because their self quarantining themselves. So I mean it's
Speaker 1: what what they really need is a bipartisan agreement on
Speaker 1: which kind of measures the government should take and for
Speaker 1: people to put aside their partisan difference differences and come
Speaker 1: up with a rational plan. The problem is that Washington
Speaker 1: has become so dysfunctional. There were reports that Donald Trump
Speaker 1: will refuse to sit down with Nancy Pelosi because of
Speaker 1: the impeachment vitriol, that that created such bad feelings between
Speaker 1: the two of them, which is ridiculous in a situation
Speaker 1: like that. But I think you're seeing that in the markets.
Speaker 1: So we have heard, I guess of a payroll tax cut,
Speaker 1: and have you heard anything out of Washington that gives
Speaker 1: you confidence that we may have a tarp like product
Speaker 1: or you know, kind of piece of legislation that would
Speaker 1: really be on accompassing and really address the issues that
Speaker 1: you just outline. Well, I don't get a sense, and
Speaker 1: I mean, we're all sitting in New York at the
Speaker 1: same feeling that there is not that sense of urgency
Speaker 1: because of the uncertainty over the effects of the virus.
Speaker 1: We've never seen anything like this before, but there is
Speaker 1: definitely no indication right now. Congress is UH scheduled to
Speaker 1: adjourn um this Friday, and the optics of the Congress
Speaker 1: leaving town um without having done anything UH to promote
Speaker 1: some sense of stability is just breathtaking to me. Meanwhile,
Speaker 1: this is an election year and we are getting the
Speaker 1: campaign ramping up on both the part of former Vice
Speaker 1: President Joe Biden as well as Bernie Sanders, and Biden
Speaker 1: is becoming the very clear front runner. Is getting very
Speaker 1: difficult to see how we are going to see a
Speaker 1: Bernie Sanders Democratic candidates. I would say it's virtually impossible. Okay,
Speaker 1: it's virtually impossible. So what's the playbook going forward? How
Speaker 1: likely is it? Have we heard anything about Bernie Sanders
Speaker 1: perhaps conceding and having his supporters go behind Biden. I
Speaker 1: don't have any reporting of my own. I just have
Speaker 1: you know. My guess is that Bernie Sanders is definitely
Speaker 1: going to stay in this race through next Tuesday. He
Speaker 1: will absolutely be vigorous in the debate Sunday night. I
Speaker 1: think it's an important that you do that. Yeah, a
Speaker 1: number of the surrogates of Bernie Sanders are making the
Speaker 1: point that Joe Biden has not been vetted. Um in
Speaker 1: that kind of situation. When you have one on one
Speaker 1: Bernie Sanders against Joe Biden without a studio audience, which
Speaker 1: is what's going to happen this Sunday, you will get
Speaker 1: a very granular examination of policy differences, and I think
Speaker 1: Joe Biden's ability to explain those differences is going to
Speaker 1: be a major issue. People are not that focused on
Speaker 1: the election per se, and some of the issues that
Speaker 1: they have been harping on him in gun control a
Speaker 1: very big issue, and yet hard to sort of make
Speaker 1: that an issue, and people are holding up and quarantining themselves.
Speaker 1: How important is it for the Democrats to come up
Speaker 1: with some sort of cohesive either strategy with respect of
Speaker 1: the coronavirus or message or or something on that front. Well,
Speaker 1: I would say it's actually one step above that. It's
Speaker 1: a question as we discussed leadership, and I think that
Speaker 1: the Democrats their strategy is they need to obviously defeat
Speaker 1: Donald Trump, but they need to do it by contrasting
Speaker 1: their approach as leaders of a government entity. And I
Speaker 1: think Joe Biden, his ability to stand above the fray
Speaker 1: and show real presidential quote unquote leadership is what's going
Speaker 1: to carry the day for him. The election is still
Speaker 1: seven eight months away, and a lot could happen in
Speaker 1: those seven or eight months. So, uh, this this, it
Speaker 1: seems to me it will be a Biden Trump race
Speaker 1: and it's going to be the ability of people to
Speaker 1: perceive leadership that's going to determine who is our next president.
Speaker 1: So how much of a risk is this the President Trump?
Speaker 1: This coronavirus because one could argue to date we haven't
Speaker 1: necessarily seen the leadership from the White House that perhaps
Speaker 1: is needed. Well, this is the you know a number
Speaker 1: of people, I'm not invented this. This could be the
Speaker 1: Katrina moment for Donald Trump. If he is not able
Speaker 1: to get control of this situation, it could do him
Speaker 1: as presidency. All those people who want to change may
Speaker 1: actually opt for the change being back ending the chaos.
Speaker 1: And that is what I think this race is going
Speaker 1: to boil down to. Marty. You've you're a chief content officer,
Speaker 1: You're the person at the top. How many times have
Speaker 1: you washed your hands today? Uh? Well, I've been using
Speaker 1: the purel. I've been I've I think I've washed my
Speaker 1: hands every hour. And I was just talking to the
Speaker 1: attendant in the men's room here and he says, they
Speaker 1: are going through the soap faster than you can ever remember.
Speaker 1: Everybody's hands, Well, I mean, I think that's a very
Speaker 1: good thing. They're they're they're kind of raw. Everyone's hands
Speaker 1: are kind of a little cracked because people are just scrubbing.
Speaker 1: Is that they're about to go into surgery. Marty party Shanker,
Speaker 1: thank you so much for being with us. Marty Marty Shakers,
Speaker 1: chief content officer for Bloomberg. Well, it seems to be
Speaker 1: a race as to how quickly Wall Street strategists can
Speaker 1: downgrade their expectations for earnings. The latest Goldman Sachs chief
Speaker 1: strategist for US Equities, David Coston said the eleven year
Speaker 1: old bullmarket u S Stacks is about to become history,
Speaker 1: and he now predicts that earnings will drop at least
Speaker 1: twelve percent in each of the next two quarters due
Speaker 1: to plunging oil prices, as well as the spread of
Speaker 1: the coronavirus and people staying at home and not traveling.
Speaker 1: The question is how do you invest right? I mean,
Speaker 1: this does expect sort of a decline in equities going forward.
Speaker 1: How long do people expect it to go on for?
Speaker 1: Is this a time to be buying or just to
Speaker 1: get out of the market. And Bill Smead has tons
Speaker 1: of experience with all of this, is the CEO and
Speaker 1: chief investment officer at SMED Capital Management, which has more
Speaker 1: than two billion dollars of assets that are management. Joining
Speaker 1: us from Seattle, Bill, I'd love to get your thoughts
Speaker 1: around that. How do you sort of reframe your investing
Speaker 1: assumptions based on the events over the past month or so. Well,
Speaker 1: thanks for having us, and this is a great time
Speaker 1: to think about those kinds of long term things that
Speaker 1: are the most important. So what what we feel this
Speaker 1: is from an investment standpoint is the exacerbation of a
Speaker 1: trend that's been in place for a good five to
Speaker 1: ten years, which is that the anemic economy UH scenario
Speaker 1: where people don't want to own uh, companies that are
Speaker 1: tied closely to the main street on the ground economy
Speaker 1: and instead want to own the successful technology companies that
Speaker 1: that have uh don't seem to have any be impacted
Speaker 1: by where people are. Right, if you're stuck at home,
Speaker 1: you might still be sitting on your Facebook, UH, maybe
Speaker 1: more than even even normal. So so we from a
Speaker 1: from a historical standpoint, this looks to us like Paul
Speaker 1: Volker tightening credit in when bonds were already so oversold
Speaker 1: and so miserable. The bond market had been terrible for
Speaker 1: thirty years, and incomes Paul Volcan and he titans credit
Speaker 1: and bonds get slaughtered. Stocks were already cheap, they got
Speaker 1: slaughtered again. Uh. And and Y two K. The Y
Speaker 1: two K thing caused people to buy a whole bunch
Speaker 1: of technology stuff in and get really excited about technology
Speaker 1: right before the end. And in this particular case, you know,
Speaker 1: growth investments have been doing dramatically better. Value holds most
Speaker 1: of the stocks that are economically sensitive. Therefore, what's getting
Speaker 1: punished the most at the end of a major trend
Speaker 1: is the thing that was already cheap. So Bill, is
Speaker 1: there a valuation point here for the market that you
Speaker 1: think investors should be kind of keeping their eye on
Speaker 1: to try to get a sense of where the bottom
Speaker 1: might be. Well, that's a great question if historical situations
Speaker 1: like this have any merit in analyzing. And remember you're
Speaker 1: talking about an exogenous event that no one could see coming.
Speaker 1: And then uh, Saudi Arabia took out the Amazon playbook
Speaker 1: and decided to UH use their their UH position to
Speaker 1: undercut everyone else's price and put them out of business. Uh.
Speaker 1: Those two things happened. In other words, of Saudi Arabians
Speaker 1: would have never been able to do this if the
Speaker 1: coronavirus had not greatly affected demand around the world for
Speaker 1: oil and gas right now. So so so these two
Speaker 1: just completely wild, historically unusual things are hitting simultaneously. So
Speaker 1: what you should expect is that that investments you make
Speaker 1: now in in the areas that people are the most
Speaker 1: afraid of right now are likely to produce the highest
Speaker 1: returns over the course of the next ten years. And
Speaker 1: the investments that they run back to immediately and have
Speaker 1: sold way less that that they they've they've got the
Speaker 1: most confidence in are highly unlikely to be the best
Speaker 1: investments of the next ten years. Are you basically saying
Speaker 1: by stock cell bonds. Well, first of all, uh, you know,
Speaker 1: mathematically a tenure treasury has zero chance of investment success
Speaker 1: in the next ten years unless you consider point seven
Speaker 1: percent return UH and investment success if if someone's retirement
Speaker 1: goals get matched with point seven percent return, or a
Speaker 1: pension planner and endowment works at point seven that so
Speaker 1: that's d o A. Right, this is the antithesis of
Speaker 1: the treasuries were percent to start the year and went
Speaker 1: to fifteen percent. Bond investors got slaughtered. But those third
Speaker 1: percent bonds for thirty years were one of the best
Speaker 1: investments you could possibly make, even though you had to
Speaker 1: get abused for a while, uh, in the first year
Speaker 1: that you owned them. All Right, that's the nature. That's
Speaker 1: the nature of this, uh, the courage to own things
Speaker 1: that will do well over ten years but make you
Speaker 1: feel like a fool in the short run. And talking
Speaker 1: about just the pain. Uh. The market has rolled over,
Speaker 1: taken a leg lower even still with the SMP now
Speaker 1: down more than four percent and the down Paul down
Speaker 1: four and a half percent as we sit here, Yeah,
Speaker 1: looking at the vix here out six points to fifty three.
Speaker 1: You talk about fear in the marketplace of Bill, that's
Speaker 1: kind of a good example here. So just real quick, Bill,
Speaker 1: what are some of the things. What's your bottom line
Speaker 1: advice to your clients and your investors right here? Well,
Speaker 1: first of all, for people that are going to be
Speaker 1: investors for the next thirty years, especially people that have been,
Speaker 1: uh you know, have been sitting on the sidelines, to
Speaker 1: begin some kind of dollar cost averaging here looks like, uh,
Speaker 1: it would be a fantastic idea because the virus itself
Speaker 1: is no matter what the ultimate totals are, and we
Speaker 1: all we all feel terrible because we you know, we
Speaker 1: we hate that anyone would would die from this, but
Speaker 1: we will kind of have a really strong feel within
Speaker 1: thirties sixty days what the total of this is going
Speaker 1: to be. And at the point that starts to decline,
Speaker 1: that's when investors will get their legs back underneath them.
Speaker 1: So so yeah, so that our our view. So we're
Speaker 1: gonna have to leave it at that, Thank you so much.
Speaker 1: Phil Smead Smead Capital Management. One of the narratives that
Speaker 1: I've been hearing about and people are looking for some
Speaker 1: sense of capitulation in the market is just wait for
Speaker 1: the retail investors when they start dumping stock, that's when
Speaker 1: you know it's over. Our next guest maybe says, maybe
Speaker 1: not so sure. Eric Falchun a senior et analysts for
Speaker 1: Bloomberg Intelligence. He joined us here in a Bloomberg interactor
Speaker 1: Brooker Studio. So, Eric, what's the et F world telling
Speaker 1: me about how the individual retail investor has been looking
Speaker 1: at this market altility? Look? I mean it was just
Speaker 1: like was a great snapshot because et s were big
Speaker 1: at that point and they took in money every month.
Speaker 1: And these are e t f s like Vanguard, SWAB
Speaker 1: and the Ice shares Core series. What we do is
Speaker 1: in our flow data, we separate out spy I w
Speaker 1: M because those are used like pseudo futures. They get
Speaker 1: the traders committed out of those things like a hotel.
Speaker 1: So those flows can contaminate or overshadow the rest of
Speaker 1: the e t F so we separate them out. So
Speaker 1: we look at those e t f s used by
Speaker 1: advisors and allocators. They continued to take in money. Um
Speaker 1: could that's the chart I'm looking at for. If that
Speaker 1: goes negative, I think it's time to worry. But over
Speaker 1: the years, whenever that as long as that's positive, I've
Speaker 1: tended to just take a deep breath. Although this sell
Speaker 1: off does feel just a little more severe than remember
Speaker 1: Q four was pretty rough. Um. So I'm looking at
Speaker 1: those numbers and I'm seeing that for the most part,
Speaker 1: um investors are continuing. And there's really two main reasons
Speaker 1: for this. One is this the Internet has spread information.
Speaker 1: People are sharing information with each other. They've read a
Speaker 1: lot of education on how timing the market's almost impossible
Speaker 1: to win, So there's education on not biting, not taking
Speaker 1: the bait of a of a red on the screen.
Speaker 1: The second thing is advisors have moved from a broker
Speaker 1: model where a mutual fund pays them, to a fiduciary
Speaker 1: model where they get a percentage of the client assets.
Speaker 1: Once you move to the fiduciary model, you're with your
Speaker 1: investor shoulder to shoulder. And now one of their biggest
Speaker 1: value propositions is called behavioral coaching. So what they're saying
Speaker 1: is one of the reasons you need me is because
Speaker 1: I'm going to talk you off the ledge. So with
Speaker 1: these advisors acting like as a major buffer, and in
Speaker 1: the past the broker might want to turn the account
Speaker 1: because they get kicked back from the mutual funds. So
Speaker 1: I think the retail investor is a much stronger, more
Speaker 1: disciplined retail investor than in Bygone is Eric. I'm glad
Speaker 1: you're here. I really am. I've always too good. I mean,
Speaker 1: when you know, I can always expect this kind of
Speaker 1: take from you, which I think is totally important and
Speaker 1: sort of like a gut check or reality check. You know,
Speaker 1: here's the narrative, and this is why everything is just fine,
Speaker 1: and ETFs are functioning well and people aren't freaking out
Speaker 1: and they're not running for the exits that said, are
Speaker 1: we I'll present the other side. That's my nickname. Like
Speaker 1: for him, it's everything is fine guy. I will say though,
Speaker 1: that there is a question, first of all, of whether
Speaker 1: the real shifts and allocations are going to be the
Speaker 1: real issue here. Basically, are we going to see people
Speaker 1: move there for one case, or change your allocations or
Speaker 1: sort of become more risk off and risk averse, And
Speaker 1: that that's really the type of tweaking and changing that's
Speaker 1: really going to have an effect on markets. It's not
Speaker 1: going to be this. Possibly. What I would look for
Speaker 1: is this look for active mutual funds. Those are owned
Speaker 1: by older investors rumors, and they largely were probably put
Speaker 1: in there by a broker, so they might have less
Speaker 1: loyalty shorter time horizon. I'm watching those flows. You could
Speaker 1: see some selling pressure if we saw if we see
Speaker 1: major flows in two thousand eighteen, Uh, same thing. Um,
Speaker 1: we saw five billion come out of active mutual funds.
Speaker 1: That's a lot. We don't have data showing quite the
Speaker 1: same in this recent self, but it could get bad.
Speaker 1: That would be one and a lot of those people
Speaker 1: have the four one case you're talking about. In terms
Speaker 1: of the younger I think they're rebalancing into equities because
Speaker 1: remember how you like this chart that shows equity net
Speaker 1: fund flows have been negative over the past couple of years,
Speaker 1: and you're like, what's going on? What's going on there?
Speaker 1: Isn't bearish. It's that people are taking off the equities
Speaker 1: a little because they're rebalancing back, and a fixed then
Speaker 1: comes to trying to keep a percentage allocation to equities. Now,
Speaker 1: if equities sell off, that percentage goes down. You may
Speaker 1: even see them rebalanced into equities. But yes, there's gonna
Speaker 1: be some panicking. Of course, not everybody's like this. I
Speaker 1: just think the core of the retail investor is much
Speaker 1: stronger than than people give them credit for, really valuable.
Speaker 1: And I could go for another ten minutes. We didn't
Speaker 1: even get to h BYG. We didn't even get to
Speaker 1: the high bond e t f s, which have seen
Speaker 1: really big outflows and really big discount to navs. Actually,
Speaker 1: and and and THEUNI one, the MUNI one h y
Speaker 1: D had a seven percent discount. Our MUNI analyst Eric
Speaker 1: Kazawski says, that's a leading indicator. Look for the bonds
Speaker 1: to catch up. So if you see a discount, that's
Speaker 1: probably bad. Seconds. Eric, we could talk for ten minutes.
Speaker 1: I wish we could, Eric valtun As we will senior
Speaker 1: et F analyst Bloomberg get intelligence joining us here in
Speaker 1: our interactive broker studios. It's sort of like a game
Speaker 1: of Whackable Where do you look first? Do you look
Speaker 1: at the coronavirus, the progression of the disease where it's spread,
Speaker 1: at the fiscal response to it, or do you look
Speaker 1: at the price of oil which is down yet again
Speaker 1: today now thirty three dollars and thirty seven cents of
Speaker 1: barrel traded on the n imax as the price war
Speaker 1: wages and and engrages on I should say between Saudi
Speaker 1: Arabia and Russia. Let's focus on that right now. And
Speaker 1: we're lucky to have Dr Ariel coh and senior fellow
Speaker 1: at the Atlantic Council Founding Principle of International Market Analysis.
Speaker 1: Uh And also he of course is a frequent contributor
Speaker 1: to this show, joining us from Washington, d C. Can
Speaker 1: you give us a sense, Ariel, of just how long
Speaker 1: this price war can go on before we see a
Speaker 1: complete rearranging of the oil producing nations in terms of
Speaker 1: both their economies as well as their power relative to
Speaker 1: each other. Well, let's start with the last part of
Speaker 1: what you said. I think the rearrangement is underway. The
Speaker 1: week part. The weak players such as Venezuela, Iran, Libya,
Speaker 1: which is in the middle of a civil war, are
Speaker 1: all too hurt, whereas UM the United States shale patch,
Speaker 1: which has high production costs, really needs to re examine
Speaker 1: uh it's capex. Its capex is high because shale wells
Speaker 1: last only eighteen months to twenty four months as opposed
Speaker 1: to conventional wealth. So our production in the shale patch
Speaker 1: is somewhere between thirty and sixty dollars, whereas in Saudi
Speaker 1: Arabia it's around ten dollars or less or and in
Speaker 1: Rush it varies greatly depends on a structure and a location,
Speaker 1: from ten of fifteen dollars for established fields too as
Speaker 1: high as sixty and more dollars a barrel cost UH
Speaker 1: in Arctic offshore continental shelf. But so the ones with
Speaker 1: the longest um um breathing space for this war, the
Speaker 1: Saudis on the Adham. The Saudis have also higher balancing
Speaker 1: point for their budget. They need something like seventy dollars
Speaker 1: a barrel price UH to balance their budget. So it's
Speaker 1: a very very complicated competition, and I think at least
Speaker 1: a quarter the Saudis are trying to force the Russians
Speaker 1: to the negotiating table as well as to force some
Speaker 1: of our shale production to shut down because they're losing
Speaker 1: money when the oil price is so low UH. In
Speaker 1: the worst case scenario, if the coronavirus causes a global
Speaker 1: recession UM, it can go two or three quarters. So
Speaker 1: hopefully god willing, by the end of the year at
Speaker 1: worst case scenario or Q one one, we will see
Speaker 1: an improvement. So Dr Colin when this news broke that
Speaker 1: Saudi was essentially starting this price were ramping up product,
Speaker 1: and I was really shocked because I just when I
Speaker 1: kind of did the math and thought about the near
Speaker 1: term costs for the potential longer term gains, i e.
Speaker 1: Weakening some of the weaker players the most, notably maybe
Speaker 1: the U S shail business, the math just didn't seem
Speaker 1: to work. Were you how surprised, if if at all,
Speaker 1: were you about what's going on with Saudi Arabia now Russia? Yes,
Speaker 1: but I would um say differently. I would say the
Speaker 1: Russians were the ones who started this war. The Saudis
Speaker 1: UH proposed a cut UM one point five million barrels
Speaker 1: and the Russians didn't agree to that UM and UH Rosa,
Speaker 1: the Russian state oil company H the Beheamoth was upset
Speaker 1: because the US is sanctioning UH them for UH selling
Speaker 1: Venezuela oil. UH. There's also friction between Rosneft, the Russian
Speaker 1: national world champion in Saudi Arabia, competition for markets in
Speaker 1: India and Eastern Europe. So the blood between Moscow and
Speaker 1: the Riad was bad. UH. And the ones who fired
Speaker 1: the first shot are the Russians. Keeping in mind that
Speaker 1: they are really upset that the United States managed to
Speaker 1: surpass both Russia and Saudi Arabia as being a number
Speaker 1: one producer of oil at thirteen million barrels a day. Harriel,
Speaker 1: you testify in front of Congress. You've consulted UH with
Speaker 1: the Senate, the House Judiciary committees. I'm trying to understand
Speaker 1: what the U S response is to all of this.
Speaker 1: If anything, given the fact that Russia's aggression and frankly
Speaker 1: anger was really directed at the U S shail patch, UH,
Speaker 1: we can continue limit Russian ability to develop uh it's
Speaker 1: offshore oil resources, which are quite considerable. I'll remind our
Speaker 1: listeners that Russ, the same RUSSNEV that destroyed the OPEC
Speaker 1: plus agreement between Russia and Saudi UM was the one
Speaker 1: that several years ago UH did uh An agreement was
Speaker 1: exon getting excens technology to develop its offshore resources. So
Speaker 1: that's important for them. Russian oil basins are mature. They
Speaker 1: don't have a lot of new UH and cheap reserves
Speaker 1: to develop whatever is greenfield in like eastern Siberia, uh
Speaker 1: It's um in the middle of nowhere was no infrastructure.
Speaker 1: UH they need new pipelines and in the long term
Speaker 1: they have another problem because of the global warming. The tundra,
Speaker 1: the paramaufrost is melting, and a lot of Russian pipelines,
Speaker 1: both oil and gas would start to sink, So that
Speaker 1: would require a huge capex. So even the Russians the
Speaker 1: oil prices, and one one more thing, they said they
Speaker 1: have six years, six years UH to sustain oil prices
Speaker 1: at twenty five dollars a barrel. Yes, they have reserves,
Speaker 1: they have hundreds and twenty five billion UH in the
Speaker 1: National Oil Fund UH and whatnot. But I do not
Speaker 1: believe for a moment that this UH low oil prices,
Speaker 1: let's say five to thirty will sustain itself for more
Speaker 1: than one year. DOCTA. Ariel Cohen, thank you so much
Speaker 1: for joining us. We always appreciate your perspective on global markets.
Speaker 1: Dr Ariel Cohen. He's a senior Fellow at the Atlantic Council,
Speaker 1: also founding Principle of International Market Analysis based in Washington,
Speaker 1: d C. Thanks for listening to the Bloomberg P and
Speaker 1: L podcast. You can subscribe and listen to interviews at
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney,
Speaker 1: I'm on Twitter at PT Sweeney, Lisa bram Boyd's I'm
Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.
Speaker 1: You can always catch us worldwide on Bloomberg Radio