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Speaker 2: This is the way we were all here, doctorson Thank
Speaker 2: you so much Bank of NASA, with all of his
Speaker 2: work over the years on international economics, Ned Phelps, who
Speaker 2: we miss every day. The laureate from your Columbia would say,
Speaker 2: what separates us is dynamism, and right now we have
Speaker 2: American exceptionalism because we have Ned Phelps dynamism.
Speaker 3: Can we do that with a forty trillion dollar deficit?
Speaker 4: Yeah, mister Pholps was so tuned into sources of growth
Speaker 4: and how to stimulate growth and you know.
Speaker 5: Through policy and what have you.
Speaker 4: But anyway, but we'll certainly all miss him. So I
Speaker 4: don't think it's a coincidence that we had this intervention
Speaker 4: in the bond market on the same day that I
Speaker 4: was announced that our national debt hit forty trillion.
Speaker 5: Someone obviously got some early.
Speaker 4: News debt debt that's everywhere, right, It's not just a
Speaker 4: US phenomena. You see global yields everywhere, Germany, Japan, everywhere,
Speaker 4: yields arise, and we're in the world washed with debt.
Speaker 4: It was fine when interest rates for zero one percent.
Speaker 4: All of a sudden we're looking at four or five percent,
Speaker 4: and it starts to get really messy.
Speaker 5: And that's sort of the big driver I think that's
Speaker 5: going through global markets right now.
Speaker 6: So are we in a higher interest rate environment for
Speaker 6: a longer? Is this the new normal?
Speaker 7: You know? Four seventy on the on the ten year,
Speaker 7: maybe even more.
Speaker 4: Well, I think for old timers, I guess we could
Speaker 4: say this is the old normal, right, this is the
Speaker 4: rates that held basically before the Great Financial Crisis. So
Speaker 4: you know, I think a lot of US old timers saying, well, okay, look,
Speaker 4: you can live with four or five percent, but I
Speaker 4: think that's great when that GP, for instance, was maybe
Speaker 4: sixty percent. Now got that GDP one hundred and plus percent,
Speaker 4: and all of a sudden.
Speaker 6: At the graph of that jet debt to GDP on
Speaker 6: the Bloomberg terminal, and back in like in the eighties,
Speaker 6: it was like forty percent. Now we're at one hundred
Speaker 6: and almost one hundred and thirty percent. That seems important
Speaker 6: to me, is it?
Speaker 1: Uh?
Speaker 4: We get away with a lot because we are the
Speaker 4: face that we're the world's reserve currency, at least for now.
Speaker 4: I'm not saying it's going to end any time in
Speaker 4: our lifetime, but you know, these things don't last forever.
Speaker 4: Before us, it was Stirling, there's gold before that. But
Speaker 4: we do have, you know, sort of this seniorage. We
Speaker 4: have this benefit, we get lower costs being this sort
Speaker 4: of the safe haven asset. But it's it's it's again,
Speaker 4: it's messy. It kind of I hate to kind of
Speaker 4: take this the kop up, but it works, though it
Speaker 4: doesn't at some point it's gonna be taking point. This
Speaker 4: may be for a warning sign. I don't think where
Speaker 4: things blow up, but this is why a warning sign. Hey,
Speaker 4: markets are paying attention.
Speaker 2: So the Bank of dan saw, how are you advising
Speaker 2: where we are one one, three months, six months out?
Speaker 2: Or does win thin look for an unexpected and unknown
Speaker 2: unknown you can't frame.
Speaker 4: That's yeah, that's uh. Look, there's so many uh bout that.
Speaker 4: That's my favorite phrase. But yes, we have so many
Speaker 4: known unknowns, but there's always the unknown unknown.
Speaker 5: But right now we've got The.
Speaker 4: Biggest unknown to me is you know where yield's going
Speaker 4: and what's the FED doing. I mean, I think mister
Speaker 4: Wharfs did not do the market as any favored by
Speaker 4: back in July, just saying repeating his mind.
Speaker 2: How far out the curve does the FED go? Textbooks
Speaker 2: tell me two years? Maybe inside the belly of the curve.
Speaker 2: All of a sudden that may change. She's got to
Speaker 2: talk about ten year, twenty year dynamics.
Speaker 5: Well, that's the problem with all these changes in the market.
Speaker 4: We're also getting a new FED chair who obviously wants
Speaker 4: to shake up communications, wants the market community.
Speaker 3: I just said this to two guests ago. We don't
Speaker 3: repeat it with you.
Speaker 2: We got massive forward guidance yesterday.
Speaker 5: That's right.
Speaker 4: Look, well we've all revealed the pain point for the Treasury,
Speaker 4: right I think you know, thirty year year yields above
Speaker 4: five percent, that's a pain point. Ten you're approaching five
Speaker 4: that's a pain point. So I expect more more intervention.
Speaker 4: I mean, this is sort of a shot across about
Speaker 4: is you know, one from two billion to four billion
Speaker 4: at least four billion of buybacks, you know, kind of
Speaker 4: small potatoes. But that's just one of many things that
Speaker 4: they can do, but again it's there.
Speaker 5: These are more tactical than strategic.
Speaker 4: I mean, what's underlying the bomb right now is still
Speaker 4: massive depthits you know, you point out forty trillion debt,
Speaker 4: massive private sector supply, AI hyper scales, all that high inflation,
Speaker 4: and we go back to FED who we don't really
Speaker 4: know that the reaction function yet, and that's something I
Speaker 4: think that would be really on mister Warshaw, you know,
Speaker 4: in the coming weeks.
Speaker 3: Well, I'll get one more in here because I had
Speaker 3: to go win thin nerd here.
Speaker 6: Yeah, very good heads up all the mucky MUCKs, including Tom.
Speaker 6: We're gonna be heading out to Wyoming next week and
Speaker 6: I'm not sure what's out there.
Speaker 5: I'm jealous some mountains never gotten the invite adviser.
Speaker 6: I don't know what do you expect to hear from
Speaker 6: FED chairman to Washing and do you think that'll be
Speaker 6: his comments may be influenced by this.
Speaker 7: The Treasury departments.
Speaker 5: You know, it's really it's a good question, Paul.
Speaker 4: You know he was asked about it the July FM
Speaker 4: seeing he said, I hadn't even thought about It's a blank.
Speaker 5: Page to you. Well, he's got a Ton to talk about.
Speaker 4: Now, he's you know, he's balancing this his reticence to
Speaker 4: give any sort of Ford guidance with the hunger that
Speaker 4: the markets have. And if things were sort of chugging along, okay,
Speaker 4: we're we're worrying more inflation or anything like this. I
Speaker 4: think saying keeping a trap shuit would probably be no,
Speaker 4: okay strategy.
Speaker 5: We're at this tipping point.
Speaker 4: We're in this these crosswords and use all these analogy
Speaker 4: you miss, but we're at this, you know, a time,
Speaker 4: very difficult time for markets, and to have a FED
Speaker 4: that's unwilling to do that sort of guidance is to
Speaker 4: me it is very uh nerve wracking, and that markets
Speaker 4: are showing that.
Speaker 3: Yeah, I gotta go nerd here, we gotta get back.
Speaker 2: I'm gonna pick up off of Ned Phelps to Robert
Speaker 2: Bundell at Columbia with wind in a few years ago.
Speaker 2: What's Donald Trump's trilemma? Columbia invented the trilemma standard for
Speaker 2: in exchange dynamics. I see Philippine pace so almost to
Speaker 2: sixty two. Every nation, France has a story and it's
Speaker 2: ugly as well. But what is the president's trilemma?
Speaker 4: Well, I'll throw this out there and I mean mention
Speaker 4: this relations that they the sudministration came up for the
Speaker 4: second term two of the There are many sort of
Speaker 4: legs of the table they want. But to me, the
Speaker 4: two things are are existent are week dollar and lower yields.
Speaker 4: Because if you're actively trying to weeken the dollar, and
Speaker 4: I think that's part of the whole Trump organization planned
Speaker 4: on shore manufacturing, want on shore manufacturing and get a
Speaker 4: week of dollar make it more competitive. But if you're
Speaker 4: a foreign investor and you're holding US treasure, you think
Speaker 4: about you holding US treasures, We all of a sudden
Speaker 4: a week of dollar is gonna eat intoy return. So
Speaker 4: you're gonna have to ask for a higher return for
Speaker 4: you know, the exchange rate risk and sort of the
Speaker 4: reputational risk that the that the US is is I
Speaker 4: think is growing. So those two, to me are it's
Speaker 4: more of a dilember right now, but it's it's it's
Speaker 4: something that it consists it and I think we're paying
Speaker 4: the price right now is that Marcus are really sort
Speaker 4: of flailing for some kind of anchor and you have
Speaker 4: to higher all pressures you throw in there, which is
Speaker 4: I think right, totally messing things up.
Speaker 2: Friend Crude ninety three fifty five of Bara Winton, Thank
Speaker 2: you so much at the Bank of NASA.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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Speaker 2: George Conkalvas with us right now. I head of US
Speaker 2: macro Strategy. I'm FG securities. Have you ever seen anything
Speaker 2: like what we witnessed yesterday? We talked about it, but
Speaker 2: there it was.
Speaker 8: I mean, look, if you think about Augusts are always
Speaker 8: kind of sneaky. They come out their sleep sleepy time
Speaker 8: here is in August, and then you get these sort
Speaker 8: of kind of headline shocks.
Speaker 3: And if you think.
Speaker 8: About the August is that we had post financial crisis,
Speaker 8: post European crisis, Like there was financial reasons why August
Speaker 8: would get like volatile. Now we're shifting to the sovereigns
Speaker 8: in the limelight. So like the sovereigns now are really
Speaker 8: developed markets in US included are now having to kind
Speaker 8: of fend for themselves and like, that's like the big
Speaker 8: shif that's happened in the last fifteen twenty years. And
Speaker 8: I think that's kind of what we saw yesterday.
Speaker 6: So as head of US micro strategy here, what are
Speaker 6: we doing here?
Speaker 7: I mean, we've got.
Speaker 6: Interest rates markedly higher, stocks hitting all time highs seemingly
Speaker 6: every day.
Speaker 7: Where are we allocating capital these days?
Speaker 2: Now?
Speaker 8: So look, we're being mindful of the focus on the
Speaker 8: long term sector of the rates market. And if you
Speaker 8: really go back and you look at what's been driving
Speaker 8: this move, a lot of it is termed premium, the
Speaker 8: additional yield compensation that we need for long term rates.
Speaker 8: For the first time in many, many, many years, you
Speaker 8: are getting compensated for the like in the bomb market again, right,
Speaker 8: So you have to pick your spots, and I think
Speaker 8: like dollar cost averaging in on every acid class, including
Speaker 8: the bomb market, makes sense.
Speaker 6: So again, on a two year I can get four
Speaker 6: to twenty if I want to go out a little
Speaker 6: bit more.
Speaker 7: In a ten year, I.
Speaker 6: Get four seventy. Am I spending any time at all
Speaker 6: in a corporate bond market?
Speaker 8: I mean, look, I think in general, Okay, so if
Speaker 8: we kind of zoom out again. We're in an environment
Speaker 8: where sovereigns are competing for capital for the first time
Speaker 8: with the private sector. That's a that's a big dynamic
Speaker 8: we all talk about all the time. The crowding out
Speaker 8: effect is now a real palpable thing. We're actually seeing
Speaker 8: crowding out between the AI issuance versus sovereigns. So I
Speaker 8: think you have as long as you're being compensated for it.
Speaker 8: And then yeah, IG has a place in people's portfolios.
Speaker 8: But when spreads you're super tight, you want to be
Speaker 8: defensive a little bit.
Speaker 2: The George Michael Darta and ed Yard Any both say,
Speaker 2: you know what rates are back to normal within a
Speaker 2: spect and all that our dumbest listener, that's me.
Speaker 3: Okay, the listeners and viewers who are.
Speaker 2: Not sophisticated, would you know they think Operation Twist is
Speaker 2: Chubby Checker. The answer is, they know forty trillions in
Speaker 2: number number. They know the interest expense is what it is. Yes,
Speaker 2: I'm looking at the Fibonacci, the log Fibonacci of the
Speaker 2: move yesterday, and we're already a third of the way
Speaker 2: back to where we were before. The best bombshell yields
Speaker 2: are going up this morning three basis points. What happens
Speaker 2: when he has to reintervene as he intervened yesterday up
Speaker 2: the ante.
Speaker 8: Yeah, look, I think this is this is obviously a
Speaker 8: very delicate balance, and I think we need to be
Speaker 8: careful in trying to call it a twist or yield
Speaker 8: curve controls. I mean, this is a operation mentords market
Speaker 8: function and liquidity for the treasure market. It could have
Speaker 8: an outside move again because of the sleepy August environment
Speaker 8: that we're in. So plus or minus two or three
Speaker 8: basis points, we're not going to make a big deal
Speaker 8: about it. That ten big move yesterday was significant. So
Speaker 8: that kind of shows you where positioning was were people
Speaker 8: were scared to actually be invested in the long term
Speaker 8: sector and they got a rude awakening yesterday. Let's see
Speaker 8: if we grind back up, if we unwind this whole.
Speaker 3: I'm seeing on the Bloomberg terminal, Boss Sweeney, we are
Speaker 3: that guy. Yeah.
Speaker 8: Look, so look, if that were to continue, I think
Speaker 8: that that's going to have a date with Kevin Warsh
Speaker 8: next week with Jackson Hole and how that gets characterized
Speaker 8: around what's the view on the FED on rates?
Speaker 7: What do you expect to hear from mister Walsh next week?
Speaker 8: So, I mean we really So there's really three options.
Speaker 2: Right.
Speaker 8: You can kind of stick to the script, which is
Speaker 8: it's a symposium around digital YEP, and the market's not
Speaker 8: going to like that. You can do a version of that,
Speaker 8: and then towards the end of the open remarks mentioned
Speaker 8: something about current macro conditions, what the FET's thinking is
Speaker 8: without giving too much forward guidance, or maybe we finally
Speaker 8: get Kevin Warsh coming out and laying out what is
Speaker 8: his framework, what does he look at? What is he
Speaker 8: thinking about? Like the path, because that's what the market's
Speaker 8: yearning for, because if you got that, you'd have a
Speaker 8: pretty big rally in every asset class, rates, equities, and credit.
Speaker 7: No reasonably that's gonna happen, though, right, I don't think
Speaker 7: it's gonna happen.
Speaker 8: I think I think it somewhere between option two.
Speaker 3: Yeah, George think us so much.
Speaker 2: George Conkab has had a USMC OR strategy on a
Speaker 2: movable story.
Speaker 3: To say the least. He's with MUFG Securities. Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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Speaker 3: It's just one stock.
Speaker 2: It's there's an affinity to the CFA program because in
Speaker 2: the accounting of the CFA you use. John Deere is
Speaker 2: one of the representative textbook companies. No I never understood
Speaker 2: equipment leasing.
Speaker 3: He did.
Speaker 2: Robert Teeter joins his chief investment strategist and equipment leasing
Speaker 2: at Silvercrest.
Speaker 3: Asset John Deere. The beginning of the year, there.
Speaker 2: Must be five reasons not to buy it. John Deere
Speaker 2: is up twenty seven percent with a pop this morning
Speaker 2: this year, and.
Speaker 3: Yet there were five reasons not to buy it. January first, Well,
Speaker 3: I think one.
Speaker 9: Are the really interesting things going on here. That story
Speaker 9: is one of them. That the healthcare news is another.
Speaker 9: You know, people are looking for a second story. You know,
Speaker 9: the AI story has been around for a while. It's
Speaker 9: very exciting, it's very powerful. But when you look ahead
Speaker 9: the next year, as people tend to do when we
Speaker 9: get into August here and start thinking ahead, you know
Speaker 9: what our next year's number is going to be like,
Speaker 9: they'll be great, but will they be higher than this year?
Speaker 9: Higher earnings growth, And so I think people are looking
Speaker 9: for other places to put capital. We've seen that in
Speaker 9: small cap doing well this year, and we see that
Speaker 9: in some of these powerful moves outside of it AI
Speaker 9: where you get a little bit of a catalyst and
Speaker 9: people are very quick to jump in and say this
Speaker 9: is a spot where I could be for the next year.
Speaker 6: So earnings for twenty twenty six are going to be
Speaker 6: twenty for the year twenty percent plus, you know, maybe
Speaker 6: double digits next year ten eleven, twelve, thirteen percent. With
Speaker 6: something like that, Can the market perform next year with
Speaker 6: a slower rate of growth for earnings?
Speaker 9: I think it can in the path that it has
Speaker 9: the past few weeks, meaning the broader market doing a
Speaker 9: bit better than the S and P, maybe some of
Speaker 9: the AI and tech stuff starting to go sideways for
Speaker 9: a bit and getting some of this capital flowing into
Speaker 9: other areas. And when you do the math on market
Speaker 9: cap of some of these huge tech names, even if
Speaker 9: you're just rebalancing a little bit out of those into
Speaker 9: something else, it gives a long runway for some of
Speaker 9: these other names to perform for a while, so I
Speaker 9: think the market can continue to perform. I'll just be
Speaker 9: a little bit broader market.
Speaker 6: What do you make of these higher yields we're seeing
Speaker 6: not just in the US treasures but around the world, Japan.
Speaker 7: In Europe and so on.
Speaker 6: What's going on out there with Is it higher rates
Speaker 6: for longer out there?
Speaker 7: Do you think?
Speaker 9: I think it is mostly because we don't have a
Speaker 9: clean resolution to oil price, and if you just chart
Speaker 9: oil price versus CPI, it's been very meaningful and we
Speaker 9: don't know when that's going to go away. I do
Speaker 9: think that the yields are really important here that you know,
Speaker 9: the yield on the tenure is something you should put,
Speaker 9: you know, front and center on your screen and monitor.
Speaker 9: We now know a really critical level kind of around
Speaker 9: four to seventy five on the tenure. As you said,
Speaker 9: we're going in the wrong direction today. If you get
Speaker 9: back up there again, that starts to look really interesting.
Speaker 3: Okay, cut to the chase. What is it Thursday? Already?
Speaker 5: Now we're ones? You know Thursday?
Speaker 3: There are Is it really like claims?
Speaker 2: Today?
Speaker 3: Day Friday?
Speaker 2: I can't even keep track? Sweets in charge of keeping track?
Speaker 2: Are you here tomorrow.
Speaker 5: No, please, Robert, I'll be here if you want me.
Speaker 3: I look at where we are in the emotion.
Speaker 2: I hear in restaurants people come up and all that is,
Speaker 2: I got cash, and I'm happy having cash. They yield
Speaker 2: and all that. But we all know instinctively we're not
Speaker 2: supposed to be in cash. So what do you do
Speaker 2: if you're scared stiff?
Speaker 9: Yeah, So we've been encouraging people to check back in
Speaker 9: on those long term goals.
Speaker 3: You know.
Speaker 9: One of the things that can happen when you've had
Speaker 9: a long bawl run like we've had, is that portfolios
Speaker 9: can get a little bit of an allied balance in
Speaker 9: the other direction, a little too much equity. And we've
Speaker 9: been encouraging people to pull back and rebalance. Their tax
Speaker 9: might be an issue, other things might be an issue,
Speaker 9: but have a game plan. And on the cash side,
Speaker 9: you're right, the yields are so much better now it's
Speaker 9: not as big of a penalty to have some money
Speaker 9: in cash. But I would say job number one, rebalance
Speaker 9: back to target. Job number two, make sure you're diversified
Speaker 9: across sectors, because we think people will be looking for
Speaker 9: other places to deploy capital. Next year, and job number
Speaker 9: three make sure that the cash is working for you
Speaker 9: and that you're getting a decent yield because they are available.
Speaker 6: Can stocks continue to perform if rates continue to at
Speaker 6: these high levels, maybe even higher from here?
Speaker 5: I think that's the real test.
Speaker 9: So I thought it was kind of a brilliant move
Speaker 9: by Treasury to just put a little bit of an
Speaker 9: announcement out there. Small amount is not really a consequential
Speaker 9: dollar amount, but it sets a marker, and the market
Speaker 9: for me is now I think, you know, on the
Speaker 9: ten year, four seventy five, And so if we get
Speaker 9: back up there and start testing that again, I think
Speaker 9: ebodies will struggle.
Speaker 3: Then before you leave the studio, we're going to get there.
Speaker 3: We're four seventy one und up. I mean this is
Speaker 3: moving in real time, folks.
Speaker 2: I mean most people Robert two, they don't care about this,
Speaker 2: But the fact is it's reversing.
Speaker 9: Rapidly, reversing rapidly. And I think what was so brilliant
Speaker 9: about the move is it was such a small move.
Speaker 9: So if you do get a bit of a fail
Speaker 9: and you get yields back up to four seventy five here,
Speaker 9: they can sort of put it off as well, this
Speaker 9: was just a small technical adjustment, not a big deal.
Speaker 9: But it tells you whether it's important or not, and
Speaker 9: I think it is important.
Speaker 6: Is it the beginning of it, like it's Tom was
Speaker 6: suggesting a policy by the Treasury here to keep moving
Speaker 6: into this bond market and trying to move this yields lower.
Speaker 6: I'm not sure where that came from, whether it was
Speaker 6: from the President was, whether it's from the Treasury itself.
Speaker 5: Is this a Was that a one.
Speaker 7: Time play yesterday? You think it's something more sustainable.
Speaker 9: Maybe, Well, that's what I think was so interesting about it.
Speaker 9: I think it can be presented as a one time play.
Speaker 9: But if we test that level again, as you say,
Speaker 9: we're getting close to doing that, we'll find out very
Speaker 9: quickly whether this is a change in policy or was
Speaker 9: just a one off. And I think we'll find that
Speaker 9: out over the next couple of days. If we drift
Speaker 9: higher in yield.
Speaker 2: Should investors that want to act in August to frame
Speaker 2: up year end allocation? You know, I'm not a fan
Speaker 2: of rebalancing, but we're going to rebalance and all that
Speaker 2: act now or delay posts the speech into September.
Speaker 9: More data now, I think now is a good time
Speaker 9: to do it. And the reason I think that is,
Speaker 9: I don't think you're going to get a lot of
Speaker 9: data out of Jackson Hole. You have a few things
Speaker 9: looming on the horizon that are unpredictable and somewhat coin
Speaker 9: toss in a way, one being the oil price, and
Speaker 9: so it's better to take that action now, set yourself
Speaker 9: up for a good year next year, which I think
Speaker 9: we will have a decent economy, good earnings backdrop, and
Speaker 9: you want to be in precision to participate in a
Speaker 9: broader wag. And I think the broadening out is a
Speaker 9: really healthy signal here Killer.
Speaker 2: Robert Tianka so much, Chief investment strategist, Silvercrest Asset Management.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
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Speaker 2: Patrick Sykes is spectacular out of Istanbul with Bloomberg Middle East.
Speaker 2: He's breaking news editor and he joins us right now. Patrick,
Speaker 2: I saw administer Vitis, who's been a great supporter of
Speaker 2: my work on CNN yesterday, I think it was, and
Speaker 2: he was skating with these statements by the administration that
Speaker 2: the Gulf of Hormuz is open from where you view
Speaker 2: in Istanbul, is the Straight of Armuz open?
Speaker 10: Is it's on and off depending on you know, the
Speaker 10: time of day. But when it's on, it's clearly on
Speaker 10: at a rate that's still vastly lower than you know,
Speaker 10: anything resembling its pre war status. It is clear that
Speaker 10: the US military is coordinating with tankers to kind of
Speaker 10: usher them, escort them through the strait. It does seem
Speaker 10: realistic to me that, you know, the military strikes in
Speaker 10: previous weeks that we saw from the US around Iran's
Speaker 10: coast did degrade the ability, albeit not completely, but the
Speaker 10: ability of the Iranian military to try and target those tankers.
Speaker 10: But we do still see, you know, a tax getting through.
Speaker 10: So whatever help is on the way and in place,
Speaker 10: it's clearly not a blanket measure, but it is volume
Speaker 10: is getting through.
Speaker 6: Yeah, Patrick, from your perspective in Istanbul, President Trump announced
Speaker 6: plans to subject Iran to quote an economic d day.
Speaker 6: What do you think that means for people in your
Speaker 6: corner of the world.
Speaker 10: Yeah, I mean passing the language. She pointed to things
Speaker 10: like exchange houses, bank transfers, airports, but also shipping companies
Speaker 10: and I think in the in the round, Uh, the
Speaker 10: assumption is that the biggest targets Toll go after based
Speaker 10: on those parameters, would be China trying to obviously Iran's
Speaker 10: biggest customer, customer of oil throughout all these years of sanctions,
Speaker 10: and that is the real lifeline that, you know, the
Speaker 10: realist that the US would want to break if it
Speaker 10: were realistically going to hope to try and impose some
Speaker 10: kind of change in behavior, you know, within leadership in Tehran.
Speaker 10: Whether or not that breaking point comes is another thing.
Speaker 10: But then more broadly in the region, you've got countries
Speaker 10: like Turkey where I am. Turkey imports Iranian gas under
Speaker 10: a long term contract, and you've got the UA, you know,
Speaker 10: closer to Iran or just just on the other side
Speaker 10: of the strait. Big a lot of trade going in
Speaker 10: terms of fruit and vegetables and finance. Of course, very
Speaker 10: hard to kind of separate those completely.
Speaker 2: Patrick, ugly Americans like me, we didn't get the map, right,
Speaker 2: I mean, the British, you know, the people like Patrick psychs.
Speaker 2: I mean, they know the map cold over there, the
Speaker 2: darn knells all that, Patrick, the Caspian Sea. When the
Speaker 2: President says we're going to cut off all economics to Iran,
Speaker 2: the history of this back three four hundred years is
Speaker 2: east of everything else, there's the Caspian Sea to funnel
Speaker 2: stuff into Iran, right.
Speaker 10: Yeah, that is another outlet, and I think you know,
Speaker 10: more broadly, while the focus has been on hormones because
Speaker 10: of the oil factor and the energy implications for the
Speaker 10: global economy, Iran has definitely sought in recent weeks to
Speaker 10: tap all other alternative forms of trade and transport that
Speaker 10: it has. The Caspian is one of those that we
Speaker 10: saw it getting targeted by the Ukrainians with a drone
Speaker 10: a few weeks ago, so that itself is not invulnerable,
Speaker 10: but we've I've also seen stamus from Iranian officials, you know,
Speaker 10: looking at deals with Iraq for transiting oil, with Tajikistan
Speaker 10: for selling oil products, with new connections to Pakistani ports.
Speaker 10: So they're going to tap every lever they can to
Speaker 10: reduce the pressure.
Speaker 3: Patrick, thank you so much.
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