WEBVTT - Bloomberg Surveillance TV: April 16th, 2026

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

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

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<v Speaker 2>with Lisa Bromwitz and Amerie Hordern. Join us each day

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

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

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

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

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

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<v Speaker 2>Terminal and the Bloomberg Business app. We begin to sout

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<v Speaker 2>with stocks extending gains after posting fresh record highs. Max

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<v Speaker 2>Katner of HSBC writing, what matters more than geopolitics is

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<v Speaker 2>what's driving the global earnings outlook. The big question is

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<v Speaker 2>whether US exceptionalism will make a proper comeback. Max joins us.

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<v Speaker 3>Now for more.

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<v Speaker 2>Max, you've been Max overweight for quite a while. We

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<v Speaker 2>were talking about it at the top of the program.

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<v Speaker 4>Here.

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<v Speaker 2>Do you see this as comfort with the risk in

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<v Speaker 2>the Middle East or renewed confidence the US tech trade.

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<v Speaker 5>I think it's probably more the latter. In fact, I

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<v Speaker 5>think I would argue does really does the iron more

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<v Speaker 5>really matter that much to the global earnings out look,

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<v Speaker 5>particularly to the earnings outlook of the SMP. Bear in mind,

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<v Speaker 5>when you look at the SMP, you look at you

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<v Speaker 5>with large caps. It's not like consumer cyclicals are thirty

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<v Speaker 5>forty percent.

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<v Speaker 3>Absolutely not right. Actually, you look at consumer discretionary strip.

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<v Speaker 5>Out Amazon and Tesla, you're talking about sort of four

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<v Speaker 5>and a half percent of the SMP. And even there,

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<v Speaker 5>when you linked within those, you look at the proper

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<v Speaker 5>consumer ciclicals, you're talking something like two to three percent

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<v Speaker 5>of the SMP. So even if let's say the lower

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<v Speaker 5>end of the k of the slightly weaker households in

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<v Speaker 5>terms of household health and financial health, if they are

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<v Speaker 5>hurt the least, does it really matter for SMP earnings?

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<v Speaker 5>I would argue no, because you look at tech, you

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<v Speaker 5>look at the tech sector, you look at the AI sectors.

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<v Speaker 3>Actually, when you.

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<v Speaker 5>Look takeing AAI together, that nowaday for almost fifty percent

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<v Speaker 5>of market cap. So to me, I don't think what

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<v Speaker 5>we've seen in the last eleven training sessions is the

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<v Speaker 5>irrational reaction. I think actually what was irrational was the

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<v Speaker 5>really sort of the twenty percent de rating and compression

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<v Speaker 5>that we've seen in S ANDP multiples at the beginning

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<v Speaker 5>of the war.

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<v Speaker 2>Max two points you made SMP earnings S ANDP multiples.

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<v Speaker 2>It's the same true of the international backdrop, the global

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<v Speaker 2>earning story, the European equity story.

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<v Speaker 5>I think on the European earning story is probably slightly

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<v Speaker 5>more nuanced. When you look at stuff like chemicals, stuff

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<v Speaker 5>like authors, they are going to be probably more effected.

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<v Speaker 5>So I think where we're in right now, we're probably

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<v Speaker 5>in the sort of global relief rally, not just because

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<v Speaker 5>of US runt, but also because of things like interest

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<v Speaker 5>rate volatility that has basically more than doubles right during March.

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<v Speaker 5>That's now really really come down quite a lot, and

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<v Speaker 5>that helps pretty much everything. Now, when interest rate wall

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<v Speaker 5>comes down, what helps that? The most that helps really

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<v Speaker 5>gets from March. So what do you want to do

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<v Speaker 5>right now is basically lip the performance picture of March.

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<v Speaker 3>So my advice to investor is very simple.

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<v Speaker 5>You just download a performance picture across sectors, across region,

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<v Speaker 5>across asset classes in March, and you.

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<v Speaker 3>Just flip it right.

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<v Speaker 5>You buy the stuff that didn't work in March. You

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<v Speaker 5>sell the stuff that did work and protected you. I

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<v Speaker 5>think in a second stage, the second trade, probably in

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<v Speaker 5>a couple of weeks or a couple of months, that

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<v Speaker 5>is probably then more going towards Okay, what's actually changed

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<v Speaker 5>from the fundamental backdrop a little bit like with Russia

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<v Speaker 5>Ukraine were on a redative basis, then we're probably talking

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<v Speaker 5>about right.

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<v Speaker 3>The AI outlook, the takeout look.

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<v Speaker 5>Is still strong, so probably then it's worth rotating from

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<v Speaker 5>Europe to.

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<v Speaker 3>The US, but not right now. Right now you're still.

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<v Speaker 5>Playing that reshaped recovery trade.

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<v Speaker 1>And how much max is this really predicated on the

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<v Speaker 1>idea that big tech suddenly is once again a have

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<v Speaker 1>in trade after kind of being kicked around for a

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<v Speaker 1>couple of months. Are we seeing anything fundamentally different now?

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<v Speaker 1>Given the pressure from higher commodity prices, that will press

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<v Speaker 1>certain consumers in some regions more than another's.

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<v Speaker 5>Yeah, look, I think I'm not disputing that it will

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<v Speaker 5>hurt certain consumers. But at the end of the day,

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<v Speaker 5>our job as analysts, our job as portfolio managers is

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<v Speaker 5>to look at the aggregate number. We've got to look

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<v Speaker 5>at the aggrid PC or retail sales number. What's that

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<v Speaker 5>driven by? That's not driven by the lowest twenty percent. Right,

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<v Speaker 5>this is a very cynical thing to say. The lower

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<v Speaker 5>end of the K that's been struggling already since COVID,

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<v Speaker 5>that's been struggling even more with you know, stuff like

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<v Speaker 5>food prices going up even more than more and headline

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<v Speaker 5>CPI they've been really struggling even more.

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<v Speaker 3>They're now going to struggle even more.

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<v Speaker 5>Now from our perspective, Does that matter for the PC

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<v Speaker 5>or for their headline retail sales numbers. No, they are

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<v Speaker 5>not the main contributors to that. So therefore that's why

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<v Speaker 5>I'm saying, you know what, actually on the headline numbers,

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<v Speaker 5>there's probably not going to be that awful much of change.

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<v Speaker 5>And on the tech side of things, I think one

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<v Speaker 5>thing has fundamentally changed to the last two quarters, pretty

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<v Speaker 5>much since November, since the Q three reporting season, we've

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<v Speaker 5>kind of given up on the AI earnings outlook. Right,

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<v Speaker 5>that was the first times where markets have actually not

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<v Speaker 5>rewarded but actually punished higher AI capis. The result of

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<v Speaker 5>that was black prices of AI, of hate for hyperscalers,

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<v Speaker 5>but earnings going through the roof still and now relative

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<v Speaker 5>tech valuations if you look at S and P tech

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<v Speaker 5>versus X tech or Max seven valuations, you're close to

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<v Speaker 5>ten year lows, so that tech premium is almost entirely vanished.

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<v Speaker 5>That really puts TAG and us on a bit of

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<v Speaker 5>a longer term perspective on a really really I would

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<v Speaker 5>argue even cheap foundation there.

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<v Speaker 1>Max, I feel like you should change your name from

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<v Speaker 1>Max Ketner to Max Polish because you've had Max Polish

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<v Speaker 1>for quite a while with one huge caveat, which is

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<v Speaker 1>what the yield backdrop ends up looking like. That could

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<v Speaker 1>be the fly in the ointment if you see that

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<v Speaker 1>danger level, particularly with the ten year yield. There's a

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<v Speaker 1>lot of uncertainty around the FED. The polymarket trading betting

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<v Speaker 1>odds now have the chances of a FED cher J.

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<v Speaker 1>Powell leaving the board by May thirtieth at only thirty

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<v Speaker 1>one percent. I mean, how much do you see this

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<v Speaker 1>as a real risk versus just some sort of theoretical

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<v Speaker 1>risk out there given the fact that a lot of

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<v Speaker 1>inflationary metrics have been relatively under control.

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<v Speaker 5>Yeah, just to be clear, so we've not been sort

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<v Speaker 5>of Max bullish on equities for a year and we

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<v Speaker 5>don't see any risks at all. It was just more

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<v Speaker 5>in mid March that we thought, right, probably there's been

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<v Speaker 5>enough happening now and you know, we're probably pretty close

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<v Speaker 5>to particularly systematic positioning very clean, which is still the.

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<v Speaker 3>Case, and that has driven on us to that max

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<v Speaker 3>bullish stance. Am I still going to be that in

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<v Speaker 3>three to six months time?

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<v Speaker 5>I think that's very questionable because what you've been asking,

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<v Speaker 5>I think that is not a theoretical risk. That is

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<v Speaker 5>a real risk because at the end of the day, look,

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<v Speaker 5>US earnings out look is really strong. At the end

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<v Speaker 5>of the day, actually Q one reporting seating ahead of that,

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<v Speaker 5>we've now seen the highest negative to positive pre announcement ratio.

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<v Speaker 3>From US corporates.

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<v Speaker 5>US Corpress are telling us ahead of the Q one

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<v Speaker 5>reporting seeling things are not only fine, they're even better

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<v Speaker 5>than they themselves have expected by the most in five years.

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<v Speaker 3>And that really I.

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<v Speaker 5>Think that is something that brings perhaps the danger back

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<v Speaker 5>that things are not going sort of goldilocks, not too hot,

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<v Speaker 5>not to gold. But then in a couple of months,

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<v Speaker 5>with so sicky inflation and with perhaps the unemployment rate

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<v Speaker 5>going down even further because of that very low brake

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<v Speaker 5>even payroll and a really really solid and accelerating earnings backdrop,

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<v Speaker 5>that suddenly things are just too good.

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<v Speaker 3>So I wouldn't put it on Kevin Walsh.

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<v Speaker 5>I would simply put it on the data perhaps in

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<v Speaker 5>a couple of months just looking too hot and therefore

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<v Speaker 5>the terminal rate maybe having to move more towards four percent,

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<v Speaker 5>and that of course would put pressure across all the

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<v Speaker 5>asset classes with the dollar the only say havement again, well.

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<v Speaker 6>Max in that situation, could us exceptionalism make a proper comeback?

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<v Speaker 6>You say that's your third stage in your note.

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<v Speaker 3>I think that is then the case.

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<v Speaker 5>Yeah, I absolutely think that's the case, because right now,

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<v Speaker 5>what is the use acceptionalism, right it is inflation is

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<v Speaker 5>sort of sticky, and actually growth is kind of fine

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<v Speaker 5>and accelerating as particularly the superior profitability.

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<v Speaker 3>Right against the rest of the world.

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<v Speaker 5>Now, when you nick something, I priced the book ratios

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<v Speaker 5>of the US against the rest of the world, and

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<v Speaker 5>you compare that to the return on equity on a

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<v Speaker 5>relative basis between the US and the rest of the world,

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<v Speaker 5>what you will see is that the compression, that relative

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<v Speaker 5>compression was way more significantly more than is justified what's

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<v Speaker 5>been happening on the relative profitability side. So I do

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<v Speaker 5>think people have really really overreacted to some sort of

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<v Speaker 5>AI funding concerns since Q four last year. And I

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<v Speaker 5>think that is then when we realizing, you know what,

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<v Speaker 5>maybe the US is as stupid as that sounds, is

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<v Speaker 5>even too cheap given that superior profitability outlook at some stage,

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<v Speaker 5>I think, given that sticky inflation backdrop, given that the

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<v Speaker 5>pop down growth side also is more than fine, I

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<v Speaker 5>think in a couple of months we're talking probably about

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<v Speaker 5>a bit more of a challenging rate outlook.

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<v Speaker 7>There.

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<v Speaker 3>Stay with us.

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<v Speaker 2>Marvel and Birk surveillance coming up after this, General Karon

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<v Speaker 2>Gibson of Academy Securities, you think I'm joking. Maybe I'm

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<v Speaker 2>not writing each day that the golf remains closed to

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<v Speaker 2>business increases risk to the global economy around benefits from

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<v Speaker 2>a closed golf.

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<v Speaker 3>We do not.

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<v Speaker 2>General Gibson joins us now for more. General Gibson, good morning,

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<v Speaker 2>Good morning, and welcome to the studio here in Washington.

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<v Speaker 2>It's good to see you. Let's talk about the risks

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<v Speaker 2>on the ground right now, the state of the ceasefire

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<v Speaker 2>and the state of the blockade.

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<v Speaker 3>What's your assessment of things.

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<v Speaker 4>So the ceasefire is holding, which is a good sign,

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<v Speaker 4>establishing the ceasefire was a positive step by stepping off

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<v Speaker 4>that escalatory kinetic ladder that we had been on, and

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<v Speaker 4>an extension of a ceasefire I think is a sign

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<v Speaker 4>that perhaps there's some productive dialogue going on in the

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<v Speaker 4>back channel. If it were increasingly frustrated, we would probably

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<v Speaker 4>see a bold an additional bold action by the United

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<v Speaker 4>States in terms of the blockade.

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<v Speaker 3>I think that's a very.

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<v Speaker 4>Bold move and attempt to decline or decrease some of

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<v Speaker 4>Iran's leverage and to deny them revenue, whether that's from

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<v Speaker 4>the toll that they exact on passage of vessels or

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<v Speaker 4>from their own exports, and ideally that will bring them

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<v Speaker 4>to the table to make additional concessions. I have no

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<v Speaker 4>doubt about the US Navy's ability to execute this mission

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<v Speaker 4>with the same kind of competence, professionalism, and precision of

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<v Speaker 4>all the missions they've performed throughout this campaign. But it

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<v Speaker 4>does not solve the transit problem of vessels that remain

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<v Speaker 4>stuck in the golf well.

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<v Speaker 6>In the past, we've seen the Fifth Fleet escort tankers

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<v Speaker 6>through the straight or from most can we see.

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<v Speaker 4>That that is certainly possible. It's another feasible option. It's

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<v Speaker 4>resource intensive, and so now there is another carrier as

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<v Speaker 4>I understand, steaming towards the Golf. Both the blockade and

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<v Speaker 4>escorts are resource intensive. It's not just the ships that

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<v Speaker 4>are escorting them, destroyers of fighter cap for combat air patrol, intelligence,

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<v Speaker 4>surveillance and reconnaissance, mind sweepers. And even if we are

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<v Speaker 4>scorting vessels, particularly if we're the only nation that's doing it,

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<v Speaker 4>we can't escort the same number of vessels that previously

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<v Speaker 4>we're flowing through the Golf prior to this conflict, so.

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<v Speaker 6>The volume will be low. But if the US fIF

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<v Speaker 6>Fleet were to do this, when could they actually start

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<v Speaker 6>doing it?

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<v Speaker 4>I think if they want to impose both the blockade

0:11:20.800 --> 0:11:23.360
<v Speaker 4>and escorts, we probably want to wait for the arrival

0:11:23.400 --> 0:11:26.800
<v Speaker 4>of the other, the additional carrier strike group that as

0:11:26.800 --> 0:11:29.720
<v Speaker 4>I understand, is on its way there. I think it's

0:11:29.760 --> 0:11:35.320
<v Speaker 4>important to note, though, that Iron's ability to choke off

0:11:35.400 --> 0:11:39.360
<v Speaker 4>the Golf is very broad. It's really based on a

0:11:39.400 --> 0:11:42.199
<v Speaker 4>perception of risk. It doesn't take a lot of resources

0:11:42.200 --> 0:11:44.400
<v Speaker 4>on their part. It's not hard to drop a mine

0:11:44.480 --> 0:11:47.080
<v Speaker 4>or two, or even to say we've dropped minds over here,

0:11:47.120 --> 0:11:50.120
<v Speaker 4>and then someone has to verify it. Demonstrate the feasibility

0:11:50.160 --> 0:11:53.320
<v Speaker 4>of sailing through there, and the decision to flow through

0:11:53.320 --> 0:11:55.599
<v Speaker 4>the golf as you know, well, it's not a military

0:11:55.920 --> 0:12:02.120
<v Speaker 4>or a political decision, it's an economic decision on commercial risk.

0:12:02.760 --> 0:12:06.120
<v Speaker 1>Unless there is a transformation in terms of the way

0:12:06.160 --> 0:12:09.080
<v Speaker 1>that trips transit through the strait of ourmous, will things

0:12:09.160 --> 0:12:12.080
<v Speaker 1>ever be the same again because of this perceived risk

0:12:12.280 --> 0:12:15.240
<v Speaker 1>that is now in the forefront of every shipping company's minds.

0:12:15.559 --> 0:12:18.400
<v Speaker 4>I think perceived risk is exactly what it boils down to,

0:12:18.480 --> 0:12:21.600
<v Speaker 4>and so there's a much that must happen to lower

0:12:21.640 --> 0:12:25.719
<v Speaker 4>that perception. The ceasefire is an important step because right

0:12:25.720 --> 0:12:28.240
<v Speaker 4>now we don't see anyone you know, taking any hits

0:12:28.240 --> 0:12:29.800
<v Speaker 4>from drones and missiles.

0:12:29.360 --> 0:12:29.760
<v Speaker 3>Et cetera.

0:12:30.400 --> 0:12:34.679
<v Speaker 4>Also, progress on the diplematic front would be an important

0:12:34.880 --> 0:12:40.640
<v Speaker 4>confidence builder. But this period of risk, or this perception

0:12:40.720 --> 0:12:43.800
<v Speaker 4>of risk extends beyond shipping. You know, we've seen strikes

0:12:43.840 --> 0:12:48.240
<v Speaker 4>against airfields, against you know, to buy There's much that

0:12:48.280 --> 0:12:51.160
<v Speaker 4>will need to be done to lower that temperature across

0:12:51.200 --> 0:12:53.439
<v Speaker 4>the region, and I know that our golf partners are

0:12:53.600 --> 0:12:56.640
<v Speaker 4>very interested in seeing this result so that they can

0:12:56.720 --> 0:13:00.680
<v Speaker 4>resume a normal commercial and iron Man.

0:13:01.040 --> 0:13:04.559
<v Speaker 2>Stay with us more Bloomberg surveillance coming up after this.

0:13:13.679 --> 0:13:16.720
<v Speaker 2>Bob mcmalley of Rapid and Energy Group expecting a prolonged

0:13:16.720 --> 0:13:19.440
<v Speaker 2>hormost disruption, writing, if the strait does not reopen by

0:13:19.480 --> 0:13:22.520
<v Speaker 2>three q we estimate the oil price rally, we'll likely

0:13:22.559 --> 0:13:25.160
<v Speaker 2>need to be counted by extensive demand destruction in the

0:13:25.160 --> 0:13:28.520
<v Speaker 2>form of severe hits to GDP growth. Bob joined us

0:13:28.520 --> 0:13:30.600
<v Speaker 2>now for more, but welcome to the show. I wonder

0:13:30.600 --> 0:13:33.160
<v Speaker 2>if you share that enthusiasm and confidence of the Treasury

0:13:33.200 --> 0:13:36.040
<v Speaker 2>Secretary for lower gas prices in the months ahead.

0:13:37.520 --> 0:13:38.560
<v Speaker 3>Well, good to be with you.

0:13:38.559 --> 0:13:41.720
<v Speaker 7>You know, our base case is that we will avoid

0:13:41.840 --> 0:13:45.320
<v Speaker 7>that worst case recession caps the oil price fake.

0:13:45.480 --> 0:13:46.800
<v Speaker 3>That's how it's been done in the past.

0:13:47.160 --> 0:13:51.280
<v Speaker 7>We're cautiously optimistic we will get to a better outcome.

0:13:51.760 --> 0:13:54.440
<v Speaker 7>Not right away, but we will have either a cease

0:13:54.480 --> 0:13:57.960
<v Speaker 7>fire in the coming weeks that allows a full resumption

0:13:58.520 --> 0:14:03.400
<v Speaker 7>of hormos flows, or or the US military will get

0:14:03.440 --> 0:14:06.840
<v Speaker 7>on with the job of degrading around's ability to interrupt

0:14:06.840 --> 0:14:10.040
<v Speaker 7>shipping in the coming weeks. That may take a little longer,

0:14:10.360 --> 0:14:13.600
<v Speaker 7>but I'm cautiously optimistic we maybe see the end of

0:14:13.760 --> 0:14:17.000
<v Speaker 7>the oil price rally, hopefully before it has to come

0:14:17.040 --> 0:14:21.320
<v Speaker 7>to recession. However, gas prices that's another story. We have

0:14:21.400 --> 0:14:24.480
<v Speaker 7>to see how things turn out this summer. I hope

0:14:24.520 --> 0:14:25.720
<v Speaker 7>maybe by the end of the summer and have a

0:14:25.720 --> 0:14:28.760
<v Speaker 7>three handle, but that would be that would be optimistic.

0:14:29.960 --> 0:14:32.360
<v Speaker 6>Bob, what is the reporting that Iron could consider rallying

0:14:32.400 --> 0:14:35.160
<v Speaker 6>ships to safely go through the.

0:14:34.960 --> 0:14:37.920
<v Speaker 3>Gulf of Oman. How would that affect flows?

0:14:37.920 --> 0:14:40.160
<v Speaker 6>How many more vessels could we see actually then start

0:14:40.200 --> 0:14:40.560
<v Speaker 6>to move?

0:14:42.360 --> 0:14:45.560
<v Speaker 7>Well? In the old days before this, the way out

0:14:45.840 --> 0:14:48.040
<v Speaker 7>we go through Omani waters and the way in through

0:14:49.080 --> 0:14:52.560
<v Speaker 7>Iranian waters, they kind of split the highways if you will,

0:14:52.600 --> 0:14:56.760
<v Speaker 7>the t SS's and I think, you know, if it's

0:14:56.800 --> 0:15:00.920
<v Speaker 7>just Omani waters open, it's not clear we can get back.

0:15:00.760 --> 0:15:03.760
<v Speaker 3>To a full and safe restart of flows.

0:15:03.920 --> 0:15:06.960
<v Speaker 7>Possibly. But I think what Iran is really signaling here,

0:15:07.000 --> 0:15:09.760
<v Speaker 7>and it's more important, is that it realizes, and this

0:15:09.840 --> 0:15:12.200
<v Speaker 7>is very important and very hopeful in the long term,

0:15:12.560 --> 0:15:15.240
<v Speaker 7>it realizes no one's going to let them be the

0:15:15.280 --> 0:15:16.720
<v Speaker 7>toal keeper of Hormuz.

0:15:16.760 --> 0:15:20.080
<v Speaker 3>In the long term. They did move and play the

0:15:20.120 --> 0:15:20.760
<v Speaker 3>oil card.

0:15:21.160 --> 0:15:24.120
<v Speaker 7>I don't think the US expected that, and because they

0:15:24.200 --> 0:15:28.440
<v Speaker 7>have this leverage, they have stronger ability to extract concessions

0:15:28.440 --> 0:15:30.560
<v Speaker 7>from the United States on nuclear and other things, and

0:15:30.640 --> 0:15:34.760
<v Speaker 7>they probably WI will. However, they realize that Golf Cooperation

0:15:34.840 --> 0:15:37.920
<v Speaker 7>Council countries Israel, the United States, there's no way we're

0:15:37.920 --> 0:15:40.440
<v Speaker 7>going to allow them to choke this thing forever. So

0:15:40.480 --> 0:15:42.600
<v Speaker 7>I think it's kind of an admission that, yeah, we

0:15:42.680 --> 0:15:46.440
<v Speaker 7>know at some point flows are going to resume. Whether

0:15:46.480 --> 0:15:48.840
<v Speaker 7>it's through totally Omani waters, we could do that if

0:15:48.840 --> 0:15:51.040
<v Speaker 7>we had to, or back to the old ways, partially

0:15:51.040 --> 0:15:53.680
<v Speaker 7>Irani and partially Omani, but it's going to come back

0:15:53.720 --> 0:15:55.320
<v Speaker 7>to freedom of navigation eventually.

0:15:56.360 --> 0:15:59.560
<v Speaker 6>The President yesterday was talking a lot about his conversations

0:15:59.600 --> 0:16:02.800
<v Speaker 6>with on his upcoming trip to China. Right now, I

0:16:02.840 --> 0:16:06.120
<v Speaker 6>know China is taking him much less crude from the

0:16:06.160 --> 0:16:08.640
<v Speaker 6>Middle East, about half of what's going on in terms

0:16:08.640 --> 0:16:11.360
<v Speaker 6>of they used to import from Saudi Arabia. How are

0:16:11.440 --> 0:16:14.120
<v Speaker 6>they dealing with the problem right now, because I know

0:16:14.160 --> 0:16:16.240
<v Speaker 6>you have a new note right now actually talking about

0:16:16.240 --> 0:16:18.440
<v Speaker 6>how China is going to weather this storm.

0:16:19.480 --> 0:16:21.920
<v Speaker 7>So China stocked up well, I mean, they're not enjoying it,

0:16:21.960 --> 0:16:24.680
<v Speaker 7>but they're doing better than their many other Asian neighbors.

0:16:24.960 --> 0:16:28.840
<v Speaker 7>They had one point two billion in crude inventories they've

0:16:28.840 --> 0:16:31.920
<v Speaker 7>been hoarding like mad other commodities as well. They're going

0:16:31.960 --> 0:16:35.400
<v Speaker 7>to begin to draw those down. They're dropping runs again.

0:16:35.440 --> 0:16:37.760
<v Speaker 7>They're in a better position than many of their neighbors

0:16:37.760 --> 0:16:40.600
<v Speaker 7>with regard to this famine of oil that is now

0:16:40.920 --> 0:16:41.920
<v Speaker 7>certainly in Asia.

0:16:42.560 --> 0:16:44.480
<v Speaker 3>So with regard to the loss of the one.

0:16:44.360 --> 0:16:46.640
<v Speaker 7>Point six or so they were getting from Iran, I

0:16:46.640 --> 0:16:50.640
<v Speaker 7>think we expect more stock draws, more run cuts. No fun,

0:16:51.160 --> 0:16:53.560
<v Speaker 7>but it's not a disaster. But I just step back

0:16:53.560 --> 0:16:57.960
<v Speaker 7>and say this, I think this whole Iran and China

0:16:58.000 --> 0:17:01.400
<v Speaker 7>link is overstated. China has much more going on with

0:17:01.480 --> 0:17:03.600
<v Speaker 7>the other side of the Golf and the Golf Cooperation

0:17:03.720 --> 0:17:07.560
<v Speaker 7>Council countries in terms of economic and financial linkages, and

0:17:07.680 --> 0:17:09.720
<v Speaker 7>the relationship with the United States is very important. It's

0:17:09.720 --> 0:17:13.280
<v Speaker 7>got big agenda items on trade, chips and other things,

0:17:13.320 --> 0:17:17.520
<v Speaker 7>Taiwan and so, you know, I wouldn't overstate how tight

0:17:17.600 --> 0:17:21.359
<v Speaker 7>that linkage and that relationship with Iran really is. With China,

0:17:21.440 --> 0:17:23.240
<v Speaker 7>and they're dealing with it, you know pretty well. I

0:17:23.240 --> 0:17:26.040
<v Speaker 7>don't think they're going to militarily challenge our blockade. I

0:17:26.040 --> 0:17:28.880
<v Speaker 7>think they understand this is not about China, It's about Iran.

0:17:29.400 --> 0:17:32.439
<v Speaker 7>And so I'm optimistic that the China aspect of this

0:17:32.480 --> 0:17:34.640
<v Speaker 7>can be managed pretty well.

0:17:34.800 --> 0:17:37.040
<v Speaker 1>Bob, what are you looking forward to understand? Whether the

0:17:37.040 --> 0:17:39.880
<v Speaker 1>blockade of the blockade could get removed, and the first

0:17:39.880 --> 0:17:42.160
<v Speaker 1>blockade get removed, and the second one could get removed,

0:17:42.200 --> 0:17:44.440
<v Speaker 1>we could actually get free flow in some form or

0:17:44.480 --> 0:17:45.720
<v Speaker 1>another in the near term.

0:17:46.480 --> 0:17:48.640
<v Speaker 7>Well, I don't think the blockade is going to be removed,

0:17:48.720 --> 0:17:51.360
<v Speaker 7>the US blockade on Iran. Indeed, it looks like it's

0:17:51.400 --> 0:17:55.560
<v Speaker 7>being expanded this morning to allow checks for ships that

0:17:55.640 --> 0:17:59.600
<v Speaker 7>may have contraband or weapons and nuclear weapons and so forth.

0:17:59.600 --> 0:18:01.520
<v Speaker 3>So if it's expanding, so.

0:18:01.600 --> 0:18:03.639
<v Speaker 7>I think, Look, there's going to be a big deal

0:18:03.680 --> 0:18:07.560
<v Speaker 7>at some point, and there'll be resolution on nuclear on missiles,

0:18:07.800 --> 0:18:11.560
<v Speaker 7>on proxies, on giving her on some of its money back,

0:18:11.640 --> 0:18:14.280
<v Speaker 7>et cetera. And that'll include the straight of horror moves,

0:18:14.280 --> 0:18:16.960
<v Speaker 7>and we'll be lifting a blockade. We don't think we're

0:18:17.000 --> 0:18:19.680
<v Speaker 7>there yet. Unfortunately, we think this has to get worse

0:18:19.720 --> 0:18:21.760
<v Speaker 7>before it gets better. But at the end of the day,

0:18:21.760 --> 0:18:23.800
<v Speaker 7>I think there's going to be a settlement of all

0:18:23.840 --> 0:18:28.320
<v Speaker 7>the issues and we'll see a lifting of blockades being

0:18:28.320 --> 0:18:30.920
<v Speaker 7>imposed by both sides, and we have to hope that

0:18:31.000 --> 0:18:33.919
<v Speaker 7>by then we will not have seen extensive destruction to

0:18:34.280 --> 0:18:38.800
<v Speaker 7>physical infrastructure, which would prolong the recovery in flows beyond

0:18:38.800 --> 0:18:40.600
<v Speaker 7>the three to four months we're already looking at.

0:18:41.520 --> 0:18:45.119
<v Speaker 2>This is the Bloomberg Savandics podcast, bringing you the best

0:18:45.119 --> 0:18:48.440
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