WEBVTT - Surveillance: Aramco Has Built-In Resiliency, Wald Says 0:00:00.080 --> 0:00:13.040 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Lee. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:28.639 Bloomberg dot com, and of course on the Bloomberg. You know, 0:00:28.680 --> 0:00:31.639 we've got a guest here that he's done forensic accounting 0:00:31.680 --> 0:00:34.160 on all these unicorns. We can bring in, Michael Holland 0:00:34.159 --> 0:00:36.279 Holland and Company, Cham and Michael. Great to have you 0:00:36.280 --> 0:00:38.519 with us in New York. Let's begin with the I 0:00:38.640 --> 0:00:40.640 p O that Watson and may not be for a 0:00:40.680 --> 0:00:43.720 long long time. What's your takeaway from this whole SANKA 0:00:44.000 --> 0:00:47.440 over the last few months. It started Jonathan before then, 0:00:47.479 --> 0:00:49.400 first of all, thank you for having me on. It 0:00:49.560 --> 0:00:54.240 started well before the we Works budding fiasco. Zoom and 0:00:54.280 --> 0:00:57.760 Slack have been crucified in the market recently. These are 0:00:57.760 --> 0:01:01.440 two companies that came out of private equity. Venture capital 0:01:01.520 --> 0:01:07.560 had treated it historically crazy numbers relative to their sales, 0:01:07.560 --> 0:01:10.919 which had been growing rapidly. But as we saw with Uber, 0:01:11.720 --> 0:01:14.480 Uber I think may have been the genesis of some 0:01:14.600 --> 0:01:19.000 of this U S German drying because people were projecting 0:01:19.040 --> 0:01:22.120 the growth in revenues to be something that would somehow 0:01:22.240 --> 0:01:26.000 relate to growth and earnings, which never occurred. There are 0:01:26.040 --> 0:01:28.880 no earnings, and when companies like Slack and Zoom should 0:01:28.880 --> 0:01:33.399 know show no indication of earnings in our lifetimes, people 0:01:33.440 --> 0:01:36.600 begin to question the valuations at thirty times revenues. What's 0:01:36.600 --> 0:01:39.360 been interesting about this drama as we focused almost exclusively 0:01:39.360 --> 0:01:41.560 over the last couple of weeks on the governance issues. 0:01:41.600 --> 0:01:44.199 But this guy's way beyond government's issues, isn't it? Michael. 0:01:44.480 --> 0:01:47.160 You don't go from a forty seven billion dollar evaluation 0:01:47.200 --> 0:01:49.560 to ten to fifty in a number of months just 0:01:49.560 --> 0:01:52.360 because of governance issues. So you're right, you're absolutely right. 0:01:52.360 --> 0:01:55.640 Now we're talking mania. Go ahead, town, thank you, you're 0:01:55.680 --> 0:02:02.880 running the show now. Um cricket. Cricket took three minutes 0:02:02.880 --> 0:02:06.600 from Michael to appreciate what I got through exactly. Michael, 0:02:07.200 --> 0:02:10.800 where are the bankers on this? These these I gotta 0:02:10.800 --> 0:02:14.720 be careful here, these good people, these young turks doing 0:02:14.840 --> 0:02:19.920 financial innovation and unicorn nous. They're supposed to have advisors 0:02:19.960 --> 0:02:22.560 that give counsel on pricing. What was the one the 0:02:22.560 --> 0:02:27.400 other day's Smile Dental Dental smile, smile, direct, that's it. 0:02:27.639 --> 0:02:29.400 So do I need it? What do you think you do? 0:02:31.639 --> 0:02:35.600 But where are the bankers here? Where are the Goldmen, Sects, Morgan, Stanleys, 0:02:35.639 --> 0:02:39.560 JP Morgan to lend advice? So these embarrassments don't happen. 0:02:39.600 --> 0:02:41.960 Nobody's listening to them, from what I can tell, correct 0:02:42.000 --> 0:02:45.840 and think the nineties where the bankers are. Unfortunately for 0:02:45.880 --> 0:02:48.280 too many of them, they're in the line collecting fees 0:02:48.639 --> 0:02:52.799 and that's their job. And when they have no earnings 0:02:52.800 --> 0:02:55.800 to price things from, they can just use comparable. So 0:02:55.840 --> 0:02:58.960 if some if if one company is trading it twenty 0:02:59.040 --> 0:03:01.280 five times of the news, you can praise at a 0:03:01.720 --> 0:03:04.480 three and say it's cheap at the praise. Meanwhile, Microsoft 0:03:04.520 --> 0:03:07.440 is it seven times revenues? What's new about all of this? 0:03:07.760 --> 0:03:10.480 You're a banker, You go to a company, the private 0:03:10.560 --> 0:03:12.079 they want to go public. You look at the last 0:03:12.120 --> 0:03:14.320 funding ground, you make up the story to get the feet, 0:03:14.360 --> 0:03:16.040 turn around and say, you know what, I think we 0:03:16.080 --> 0:03:19.200 can take this a sixty. You give us the fee, 0:03:19.400 --> 0:03:22.680 we'll take the Did you see cutting in Illinois coming? 0:03:23.960 --> 0:03:26.360 Actually knew? I knew George Baker, Yeah I know, But 0:03:26.400 --> 0:03:28.679 did you see the debacco coming, And the answer is no, 0:03:28.960 --> 0:03:31.240 it was pretty ugly. It was ugly, But did we 0:03:31.320 --> 0:03:33.520 see the reason it was so ugly because no inside coming. 0:03:33.520 --> 0:03:35.840 I mean, that's in our collective memory. That's a deep 0:03:35.880 --> 0:03:39.640 misty past, John. It was like Northern Rock, frankly, I mean, 0:03:39.720 --> 0:03:43.320 did anybody no? And perhaps we should have done, because 0:03:43.320 --> 0:03:45.640 looking back, all the signs were there. Let's focus on 0:03:45.680 --> 0:03:48.440 what's happening in private markets. That's the concern for many people. 0:03:48.440 --> 0:03:50.720 How did we ever get to evaluation of forty seven 0:03:50.720 --> 0:03:55.120 billion dollars for this company? And Michael, how distorted is 0:03:55.160 --> 0:03:59.120 that market still distorted, Jonathan, because you have you have 0:03:59.280 --> 0:04:04.280 companies still trading at extreme valuations. Albeit the prices are 0:04:04.320 --> 0:04:06.760 down in the friend the public market, but anyone who 0:04:06.760 --> 0:04:09.960 owns a private firm is now looking at very suspect 0:04:10.040 --> 0:04:14.240 valuations for their home portfolio. Do you own Amazon? You 0:04:14.320 --> 0:04:18.120 own Amazon? Everybody wants to be Amazon. I think the root, 0:04:18.240 --> 0:04:21.040 the root, the root. Yeah, And Doug has written beautifully, 0:04:21.040 --> 0:04:22.840 thank God, about the long term. He's out in a a 0:04:23.000 --> 0:04:25.880 Holland time frame on that don't like as his usual 0:04:25.960 --> 0:04:30.800 date trading that he does. Michael Holland on Amazon. The 0:04:30.920 --> 0:04:33.880 root caused John of this UNICORNUS and we dog is. 0:04:33.920 --> 0:04:37.120 They all want to be Amazon, right, but you can't 0:04:37.240 --> 0:04:42.680 rationalize the actual business plan of cardboard boxes in a 0:04:42.760 --> 0:04:46.960 lobby was some of these other unicorn this products right? Correct. 0:04:47.160 --> 0:04:50.240 Software in the case of Zoom and slack is is 0:04:50.360 --> 0:04:54.159 very different because you have Microsoft there. Amazon never had 0:04:54.200 --> 0:04:57.560 a Microsoft. They became Microsoft. What's really going on here? 0:04:57.600 --> 0:05:00.680 His kids told him, Dad, lone up, load up on 0:05:00.839 --> 0:05:09.040 slack out. Kids got into this whenever Michael comes by, 0:05:09.080 --> 0:05:10.840 But I want to just talk about single names. I'd 0:05:10.839 --> 0:05:13.479 like to lean on his experience in China as well. 0:05:13.640 --> 0:05:16.039 Let's just get the macro back drop ready as well, Michael, 0:05:16.839 --> 0:05:21.200 the dates when China is really not improving. This stimulus 0:05:21.240 --> 0:05:25.080 effort so far has been targeted and gradual, and I 0:05:25.160 --> 0:05:27.440 just wonder whether it stays that way as they try 0:05:27.480 --> 0:05:30.520 and stabilize the situation, or whether we're about to get 0:05:30.560 --> 0:05:33.080 something new, something different. What's your reading? What's happening there 0:05:33.160 --> 0:05:35.960 right now? Michael Jonathan that you've watch says as I 0:05:36.040 --> 0:05:40.479 have this current regime, UH doesn't like to be bullied 0:05:40.560 --> 0:05:43.000 into doing things, so they don't want to appear that 0:05:43.040 --> 0:05:46.039 they're being frantic. And what they do read that Hong 0:05:46.120 --> 0:05:49.479 Kong or what's going on with Trump in the case 0:05:49.520 --> 0:05:52.240 of Mr she and I think that when you get 0:05:52.279 --> 0:05:55.719 the reserve ratio requirement residuced a little bit and you 0:05:55.760 --> 0:05:58.560 get different things going on, those are minor things that 0:05:58.560 --> 0:06:02.600 they're doing. I think they are very concerned about as 0:06:02.640 --> 0:06:06.039 they always are, about unemployment and the economy. They that's 0:06:06.040 --> 0:06:08.680 a big problem for them and if they if they 0:06:08.720 --> 0:06:11.680 can't get this economy moving better. And they say they 0:06:11.680 --> 0:06:13.440 have lots of tools, and they have some, but I 0:06:13.480 --> 0:06:14.920 don't think they've used a lot of them yet. I 0:06:14.960 --> 0:06:16.480 think they have to do what you're talking about. I 0:06:16.520 --> 0:06:19.799 think we will see sometimes then they're not too distant future. Uh, 0:06:19.880 --> 0:06:21.520 if they don't do a deal with Trump, which I 0:06:21.520 --> 0:06:24.680 don't think they're gonna do, but if they do. Um, 0:06:24.720 --> 0:06:26.200 if they don't do it, they're gonna have to come 0:06:26.240 --> 0:06:28.920 up with a lot of things. Final theme, banks banks 0:06:28.920 --> 0:06:31.600 for John Can we say banks for disappointment for two 0:06:31.600 --> 0:06:35.080 thousand and eighteen. In the last couple of weeks, banks, 0:06:36.040 --> 0:06:40.320 I mean the American financial institutions prospered out of the crisis, 0:06:40.400 --> 0:06:43.239 unlike the European banks. Do you buy the value trap 0:06:43.360 --> 0:06:46.080 or the value of deeply discounted Europe or do you 0:06:46.160 --> 0:06:50.040 climb on board the existing American banking structure. Europe's a 0:06:50.360 --> 0:06:52.680 big stretch for me, Tom, I don't really understand the 0:06:52.720 --> 0:06:54.880 problems and how when it can solve them over there. 0:06:55.600 --> 0:06:58.880 I think the US banks, led by Jamie diamond are 0:06:59.320 --> 0:07:01.840 where I want to be, and Jamie Diamonds Bank is 0:07:01.880 --> 0:07:04.880 one of my larger holdings. So and and once again, 0:07:04.880 --> 0:07:06.800 as we were talking a little bit earlier this morning, 0:07:07.240 --> 0:07:10.080 very reasonably priced twelve times runnings and two and a 0:07:10.120 --> 0:07:13.000 half times, how do you respond to the actual assumption 0:07:13.080 --> 0:07:16.720 of four point one percent the United Kingdom annuities right now? 0:07:16.960 --> 0:07:18.840 It just keeps coming down, down down. Do you have 0:07:18.920 --> 0:07:21.360 single digit gloom about equities or they can they do 0:07:21.440 --> 0:07:24.440 better than that? I don't know, but I think we 0:07:24.680 --> 0:07:27.400 would be foolish to presume we're going to have the 0:07:27.440 --> 0:07:29.320 next ten years like the last TURS. Doesn't make any 0:07:29.360 --> 0:07:31.440 sense to me. It could happen, but I don't think so. Yeah, 0:07:31.520 --> 0:07:35.000 Muhamma Hilarian just uh emailed and he says, say please 0:07:35.000 --> 0:07:36.880 say hello to Michael holl And. He wants to know 0:07:37.040 --> 0:07:39.040 could you be a quarterback for the New York Jets. 0:07:39.560 --> 0:07:43.160 Who it's too bad. Odell Beckham Jr. Did a number 0:07:43.240 --> 0:07:45.280 last night. They went through Michael Barr. Would they go 0:07:45.360 --> 0:07:48.200 through four or five quarterbacks? Oh? That that was awful. 0:07:48.720 --> 0:07:53.480 First you have and then then the I mean the mono, 0:07:53.600 --> 0:07:55.200 then you have the injury to the back up and 0:07:55.760 --> 0:07:59.640 for the third string. Monday. Miss you missed, missed this 0:08:00.600 --> 0:08:05.040 You miss jeffs Browns. Lucky you miss Jeff Browns. I'm sorry. 0:08:05.280 --> 0:08:08.080 What do we go on? Michael Holland, thank you very much. 0:08:09.040 --> 0:08:11.119 Tom a word on the banks just quickly, Jp Morgan. 0:08:11.200 --> 0:08:18.440 This year City City up. So it might feel bad, 0:08:18.960 --> 0:08:21.400 but it's actually been pretty deep. So drinks around. Michael 0:08:22.240 --> 0:08:37.360 definitely on Michael and Michael get to see you. Thank you. 0:08:39.920 --> 0:08:42.840 It's an important book, John Ferrell diving into it cover 0:08:42.920 --> 0:08:46.840 to cover, and it's on a set of narratives. He 0:08:46.920 --> 0:08:49.240 joins us. Now the author of that book, Robert Shillen 0:08:49.600 --> 0:08:55.040 University Professor, Bold Prize winner and the author of Narrative Economics, 0:08:55.040 --> 0:09:00.320 How Stories Go viral and drive major economic events. Professor, 0:09:00.400 --> 0:09:02.480 let's just begin with how important this field is, and 0:09:02.480 --> 0:09:05.040 how relatively new it is, and how much work still 0:09:05.080 --> 0:09:07.280 needs to be done. Just talk to us about it. Well, 0:09:07.320 --> 0:09:10.600 I think there's a revolution going on in economics starting 0:09:11.000 --> 0:09:14.920 with the new UH data on. You can now search 0:09:15.200 --> 0:09:21.040 you can search everything, newspapers, magazines, shows, um diaries, sermons 0:09:21.640 --> 0:09:24.319 all over, and so we we we can now get 0:09:24.400 --> 0:09:27.920 closer to reality than before when we just had aggregates 0:09:28.000 --> 0:09:31.800 like GDP to to study. Now we can get into 0:09:31.880 --> 0:09:35.360 what I think really drives the economy. It's changing patterns 0:09:35.360 --> 0:09:39.760 of thinking and changing narratives that interpret the events for 0:09:39.880 --> 0:09:43.160 us and also give an emotional color to it and 0:09:43.240 --> 0:09:45.160 can shape the events as well. And I think that's 0:09:45.160 --> 0:09:47.240 what's crucial to the to the field you're talking about 0:09:47.240 --> 0:09:48.920 at the moment. Talk to me about how this is 0:09:48.920 --> 0:09:51.839 different to say, the theory of reflexivity that George Sorice 0:09:51.880 --> 0:09:55.160 has really pushed along for markets, that markets can influence 0:09:55.160 --> 0:09:58.000 and shape the events they anticipate this feedback leak. There's 0:09:58.000 --> 0:10:00.360 two way loops. Why is this different and how does 0:10:00.400 --> 0:10:03.680 this build on that work in any way shape or form. Well, 0:10:03.760 --> 0:10:07.240 I read Sorrows book years ago and I thought that 0:10:07.440 --> 0:10:12.760 it was uh, it was intuitive and on target. I 0:10:13.160 --> 0:10:16.720 thought he wasn't good at citing earlier people who said 0:10:16.760 --> 0:10:19.800 similar things. It goes back to For example, in the 0:10:19.880 --> 0:10:24.880 nineteen forties, Robert K. Merton, sociologist, invented the term self 0:10:24.920 --> 0:10:28.959 fulfilling prophecy. So it goes it goes back to the 0:10:29.040 --> 0:10:32.600 nineteenth century if you searched properly. This is my habit. 0:10:32.720 --> 0:10:35.920 I always try to find win an idea appeared, So 0:10:36.080 --> 0:10:39.400 Reflectivity wasn't. It was a good book because it was 0:10:39.400 --> 0:10:42.480 written by a successful man who was writing it from 0:10:42.520 --> 0:10:45.120 the straight from the heart. He really believed this, and 0:10:45.160 --> 0:10:47.559 I think he was on target. You focus on a 0:10:47.640 --> 0:10:49.120 range of things. What I'd like to focus on with 0:10:49.120 --> 0:10:53.120 you this morning is how public confidence is shaped and 0:10:53.200 --> 0:10:55.840 influenced and where we are now. For those of you 0:10:55.920 --> 0:10:57.160 that don't get hold of the book, there was a 0:10:57.200 --> 0:10:59.720 great article of the weekend altered by you, I believe 0:11:00.280 --> 0:11:03.000 in the New York Times, setting off a recession with 0:11:03.120 --> 0:11:05.599 words I believe that came out last week told to 0:11:05.640 --> 0:11:07.720 me about how public opinion is right now, and used 0:11:07.720 --> 0:11:10.360 that as an example to explain to our listeners why 0:11:10.360 --> 0:11:14.400 this field is so important. It's an important new field. 0:11:14.440 --> 0:11:16.560 That doesn't mean that I've conquered it. I think it 0:11:16.600 --> 0:11:21.199 will take decades for research to really give us some 0:11:21.280 --> 0:11:24.280 kind of accounting of the impact of narrative. There's always 0:11:24.320 --> 0:11:27.160 many narratives. A lot of them are not what I 0:11:27.200 --> 0:11:29.600 call economic narratives. They don't have anything to do with 0:11:29.760 --> 0:11:34.280 economic activity, but it's certain ones of them do have. So. 0:11:34.440 --> 0:11:37.840 For example, the best example of a narrative is our 0:11:37.880 --> 0:11:41.679 president Donald Trump. He has captured the imagination of the 0:11:41.920 --> 0:11:46.640 entire world. It's all over. Uh, And why is it 0:11:46.720 --> 0:11:49.200 so fascinating? This is this is Uh? Why is he 0:11:49.280 --> 0:11:52.560 so fascinating? Well, obviously he got elected president, but how 0:11:52.600 --> 0:11:56.959 did he get there? I think that these things are 0:11:57.080 --> 0:12:00.440 poorly understood. And also the direct impact act that he 0:12:00.480 --> 0:12:05.360 has on economic confidence and on willingness to spend are 0:12:05.400 --> 0:12:09.120 also complicated. But did we get President Trump in the 0:12:09.200 --> 0:12:12.840 many new populisms that we have simply because of a 0:12:12.920 --> 0:12:17.679 new damp and GDP growth and indeed possibly a generational 0:12:18.480 --> 0:12:24.000 terminal value that's less than acceptable for society and for politicians. 0:12:25.240 --> 0:12:29.240 GDP growth first became popular in the nineteen thirties. That's 0:12:29.240 --> 0:12:36.400 a narrative, uh, and uh, it's a religion now Uh yeah, well, uh. 0:12:37.160 --> 0:12:40.000 I think narratives tap into our deep feelings. And you 0:12:40.120 --> 0:12:45.240 might sometimes think of narratives as representing a religion. So 0:12:45.400 --> 0:12:49.200 the idea that GDP growth is the primal measurement of 0:12:49.280 --> 0:12:53.800 success is obviously wrong because GDP growth is highest in wartime, 0:12:53.800 --> 0:12:56.480 when we're generally not happy at all, or maybe some 0:12:56.520 --> 0:12:59.880 people are happy in wartime. I don't know. I mentioned 0:12:59.880 --> 0:13:03.160 it increasingly polarized at times of war. Professor, Let's just 0:13:03.200 --> 0:13:05.240 finish up by talking about a news event this week, 0:13:05.600 --> 0:13:08.800 the Federal Reserve, and then fold in this field that 0:13:08.840 --> 0:13:11.240 you're starting to explore in a much deeper way, how 0:13:11.320 --> 0:13:16.320 policymakers can influence beliefs and shape outcomes. How the chairman 0:13:16.360 --> 0:13:19.440 of the Federal Reserve can identify what the popular narrative 0:13:19.520 --> 0:13:24.600 is right now in the public and then influence shape outcomes. Well, 0:13:24.640 --> 0:13:29.199 I think Federal Reserve chair people know that it's very 0:13:29.240 --> 0:13:32.920 important not just what they do, but what they say, 0:13:33.160 --> 0:13:38.080 uh and uh and so the problem is they don't 0:13:38.160 --> 0:13:42.199 have a discipline. They don't have scholarly research that will 0:13:42.280 --> 0:13:47.360 help them know what. In stense, you have to read history. 0:13:47.880 --> 0:13:50.840 So a lot of people are a major in history 0:13:50.880 --> 0:13:54.560 in college because you learn examples, and if it's good history, 0:13:54.760 --> 0:13:58.240 it gets into the narratives and the stories. So in 0:13:58.280 --> 0:14:01.920 the past, uh, people have made miss So I'll give 0:14:01.920 --> 0:14:03.720 you an example of what might have been a mistake, 0:14:04.080 --> 0:14:06.600 and that is cutting the lower bound for the federal 0:14:06.640 --> 0:14:11.720 funds rate to zero uh in right after the financial crisis. 0:14:12.559 --> 0:14:15.440 That might have been considered as completing the job, but 0:14:15.520 --> 0:14:18.679 it also brings on a scary narrative. It reminds us 0:14:18.720 --> 0:14:22.160 of Japan and it's lost decade, and the narrative might 0:14:22.160 --> 0:14:24.000 have been more. Maybe they shouldn't have cut it all 0:14:24.040 --> 0:14:26.600 the way to zero. We need to think about that. 0:14:26.840 --> 0:14:29.840 We'll come back Robert Schiller with this. We have another 0:14:29.880 --> 0:14:33.240 conversation with him coming up in the weeks on negative 0:14:33.320 --> 0:14:52.400 interest rates in Europe. John True and Tom Keenan, this 0:14:52.480 --> 0:14:54.560 is great. We love when our team goes out and 0:14:54.600 --> 0:14:59.000 finds good conversation without hysterics on whatever the issue of 0:14:59.000 --> 0:15:02.120 the moment is. John, what was cool is years ago 0:15:02.240 --> 0:15:04.840 you were cool on campus if you walked around with 0:15:04.960 --> 0:15:08.320 something Robert Lacey wrote, and then you were cool. And 0:15:08.360 --> 0:15:11.440 this took forever where you had the prize by Daniel 0:15:11.480 --> 0:15:13.800 Jurgen and only twelve people read it because it was 0:15:13.840 --> 0:15:16.200 so thick. Let me tell you you were walking around 0:15:16.200 --> 0:15:19.560 with that book, you were shredded that that waits so much. Yeah, 0:15:19.800 --> 0:15:22.600 really I was cutting chiseled back then, but aways you 0:15:22.800 --> 0:15:26.520 you carried around Jurgen's surprise. Recently the book is ellen 0:15:26.600 --> 0:15:30.000 walled Saudi Inc. And it's just only like a year 0:15:30.080 --> 0:15:34.720 two old, and it's just become definitive on the machinery 0:15:34.800 --> 0:15:37.960 of the oil combine in Saudi, the Arabian Kingdom's pursuit 0:15:38.040 --> 0:15:40.760 of profit and power. Place to say that anam world 0:15:41.080 --> 0:15:42.920 is with us here in the studio of the Atlantic 0:15:42.960 --> 0:15:46.640 Council Global Energy Center. Good Monituellen, Good morning. Let's just 0:15:46.680 --> 0:15:49.120 believe we'll have a look into this story right in 0:15:49.160 --> 0:15:50.880 front of our face right now, which is what is 0:15:50.920 --> 0:15:54.000 happening with Saudi Aramco and Saudi Arabian all production. There 0:15:54.040 --> 0:15:56.280 was a little bit of daylight between what the Kingdom 0:15:56.360 --> 0:15:58.120 is towning us about the output and when it comes 0:15:58.120 --> 0:16:00.800 back online and what a Ramco is town Guess it 0:16:00.800 --> 0:16:04.080 does seem that we're getting some conflicting signals that the 0:16:04.160 --> 0:16:08.480 Kingdom is really talking about very severe damage possibly months 0:16:08.520 --> 0:16:11.400 to get back online. And then we're also hearing though 0:16:11.400 --> 0:16:14.640 from the company that they see a production coming back 0:16:14.720 --> 0:16:18.600 much more quickly and also potentially by the end of September, 0:16:18.680 --> 0:16:24.160 even most of production returning. Who's that is the question 0:16:24.200 --> 0:16:26.800 of the hour and in charge of the company. We've 0:16:26.840 --> 0:16:32.240 got Amnoster who's the CEO. Very reliable, very very professional people. 0:16:32.320 --> 0:16:35.320 This is a very professional company. It's run like an 0:16:35.320 --> 0:16:39.360 American company based on its its American roots. They really 0:16:39.400 --> 0:16:44.080 pride themselves in working basically like like Exxon. But then 0:16:44.120 --> 0:16:47.120 on the other side, you've got the Saudi royal family. 0:16:47.160 --> 0:16:50.120 You've got the government, the monarchy, and of course Mohammad 0:16:50.120 --> 0:16:54.120 bin Salman, who has other priorities in mind. Potentially you 0:16:54.280 --> 0:16:57.280 nail it with your epilog page tune in fifty three. 0:16:57.640 --> 0:17:01.000 For their sons, there's been this trance for a royal 0:17:01.160 --> 0:17:05.520 power and royal prerogative. Do the son's in your book? 0:17:05.840 --> 0:17:08.040 Did they look at a Ramco and all that oil 0:17:08.280 --> 0:17:12.280 is ours? Or is there really any understanding of spinning 0:17:12.280 --> 0:17:14.800 it off to some public ownership. And this is the 0:17:14.920 --> 0:17:17.560 real question. And I actually addressed that in a new 0:17:17.600 --> 0:17:20.440 epilogue that has just been written and comes out with 0:17:20.480 --> 0:17:24.720 the paperback version of the book, which is that's the plunk, 0:17:25.720 --> 0:17:32.919 that's the um. It's actually available now in bookstores wherever 0:17:32.960 --> 0:17:36.119 good books are sold. That's enough anyway. But but the 0:17:36.200 --> 0:17:39.520 question is is really really gets a heart of the matter, 0:17:39.600 --> 0:17:43.080 because for many years the Saudi royal family saw this 0:17:43.160 --> 0:17:47.040 company as their life blood. Do they stage well, that 0:17:47.200 --> 0:17:50.399 is the question. Do we know well? Prince Mohammed and 0:17:50.480 --> 0:17:53.080 Salma has said that he sees the company as an 0:17:53.080 --> 0:17:56.760 asset to be sold, which is very different from how 0:17:56.880 --> 0:17:59.880 his forefathers and forebears saw the company. When when you're 0:18:00.000 --> 0:18:02.240 got a RAM call, what's your knowledge of the pipes 0:18:02.280 --> 0:18:03.840 of valves? I mean, have you been out there and 0:18:03.880 --> 0:18:07.480 actually seen these refineries? Um, I've seen some of them. Yes, 0:18:07.600 --> 0:18:10.200 they're all modern, state of the art, right. Oh, this 0:18:10.280 --> 0:18:13.159 is this is top of the line equipment. This is 0:18:13.240 --> 0:18:15.760 top of the line stuff. If a RAM who is 0:18:15.800 --> 0:18:18.520 the best that? Why can't they fix this quickly? I mean, 0:18:18.520 --> 0:18:20.719 I understand there was colossal damage and we don't know yet, 0:18:20.800 --> 0:18:24.000 John Dewey, we really don't. But come on, I mean, 0:18:24.160 --> 0:18:26.320 you know, you bring in the U. S Military and 0:18:26.400 --> 0:18:29.200 the Kuwaiti Navy or whatever and you get this fixed, right. 0:18:29.560 --> 0:18:32.320 So part of the issue is that they're very concerned 0:18:32.320 --> 0:18:37.400 about safety and the sites that were hit UM contained 0:18:37.520 --> 0:18:40.280 very volatile material and so they had to shut down 0:18:40.280 --> 0:18:43.439 the entire facility in order to assess the damage. But 0:18:43.560 --> 0:18:48.320 only some of the particular goosps the gas oil separation 0:18:48.320 --> 0:18:51.679 plans were damaged. Others are completely undamaged, and it's expected 0:18:51.840 --> 0:18:54.320 that they're going to bring that back online very quickly. 0:18:54.680 --> 0:18:57.040 And then the other thing that a RAMCO does is 0:18:57.240 --> 0:19:00.360 they have a lot of built in resiliency and they 0:19:00.440 --> 0:19:03.320 know how to have the parts and bring the parts 0:19:03.320 --> 0:19:05.760 in and repair it, so we can I think we 0:19:05.800 --> 0:19:09.320 can expect that they may bring production back online faster 0:19:09.480 --> 0:19:13.560 than is expected. I've always found diplomacy within OPAQUE absolutely 0:19:13.560 --> 0:19:16.360 fascinating how countries like Saudi Arabia and Iran can get 0:19:16.359 --> 0:19:18.679 along with each other within OPEC, and then obviously outside 0:19:18.720 --> 0:19:21.160 of OPEC there's major issues. I just wonder how much 0:19:21.160 --> 0:19:24.720 more complicated it gets now Alpha has gone and he's 0:19:24.760 --> 0:19:28.960 been replaced by Prince Amtulasie has been sellow. How complicated 0:19:29.000 --> 0:19:32.240 there things now that someone a member of the family 0:19:33.040 --> 0:19:38.080 is running energy policy within OPEQ. And that's an entirely 0:19:38.240 --> 0:19:42.200 new area to get into because the Saudis have never 0:19:42.359 --> 0:19:46.720 had a royal family member running oil policy and oil diplomacy. 0:19:46.720 --> 0:19:49.960 They've always had a professional, either someone from a RAMCO 0:19:50.480 --> 0:19:53.520 or really someone dedicated in the ministry who's not a 0:19:53.560 --> 0:19:58.159 family member. So that OPEC meeting in December in Vienna 0:19:58.240 --> 0:20:00.480 is going to be a big, big deal. Are seeing 0:20:00.520 --> 0:20:04.080 how Iran and Saudi Arabia get along there? If you're 0:20:04.119 --> 0:20:07.080 just joining us, ellen Wald, with us out of Jacksonville University, 0:20:07.119 --> 0:20:09.560 and also with the Atlantic Council of course the important 0:20:09.560 --> 0:20:13.399 book Saudi inc The Arabian Kingdom's pursuit of profit and power. 0:20:13.600 --> 0:20:16.320 Thrilled that she could join John and uh Me this morning. 0:20:16.320 --> 0:20:20.320 Your future is flat, allen Wald, if if we look 0:20:20.400 --> 0:20:23.800 at the sum total of Saudi, there's always been and 0:20:23.840 --> 0:20:26.440 this is where your Middle East history expertise really comes 0:20:26.480 --> 0:20:32.720 in a narrowness or separateness to their religious Islamic experiment 0:20:32.920 --> 0:20:36.600 versus the adjacent Arab states. Is that at play here 0:20:36.720 --> 0:20:41.040 in their response or are they communicating with their adjacent 0:20:41.200 --> 0:20:44.080 states in a new more modern way. Well, believe it 0:20:44.160 --> 0:20:46.480 or not, we just had news that this howdy government 0:20:46.680 --> 0:20:52.360 is instructing the leaders in mosques to discuss what happened 0:20:52.359 --> 0:20:54.760 with a Ramco in their Friday sermons and what is 0:20:54.760 --> 0:20:57.199 the symbolism of them. Well, it's a symbolism that you 0:20:57.400 --> 0:21:01.160 really cannot totally disconnect one from the other, and that 0:21:01.400 --> 0:21:04.119 the importance of the mosque and the importance of the 0:21:04.160 --> 0:21:09.040 relationship between the Saudi monarchy and the Islamic clerical establishment 0:21:09.440 --> 0:21:11.960 is really still key and plays a key role in 0:21:12.200 --> 0:21:15.080 how they communicate with their people. Explain, I'm going to 0:21:15.240 --> 0:21:18.120 understand that the distance from Yemen to Saudi means it's 0:21:18.200 --> 0:21:21.439 clearly this was not an attack from Yemen. But explain 0:21:21.520 --> 0:21:26.919 the triangulation of riod Yemen and Tehran, so they're clearly 0:21:26.960 --> 0:21:30.479 pretty close to each other. Um, Iran is across the Gulf, 0:21:30.520 --> 0:21:32.919 and Yemen is is now below. But there is this 0:21:33.000 --> 0:21:38.080 association between the rebels and Yemen, the Hoothies and the Iranians, 0:21:38.200 --> 0:21:41.159 and for a while that that connection was a bit suspect. 0:21:41.400 --> 0:21:44.680 But I've even heard of American military people have told 0:21:44.720 --> 0:21:46.920 me that when they were on tour in the Gulf, 0:21:46.960 --> 0:21:50.840 they saw the little boats ferrying things from Iran to 0:21:51.200 --> 0:21:54.600 Yemen right across across the Gulf and ferrying the supplise. 0:21:55.280 --> 0:21:58.120 So it's it's clear that, Um, you know that there 0:21:58.240 --> 0:22:02.560 is an association between Iran and the rebels in Yemen, 0:22:02.720 --> 0:22:06.359 and that there is coordination involved in these attacks on 0:22:06.400 --> 0:22:08.960 Saudi Arabia. Why do you think we'll end up in 0:22:09.000 --> 0:22:11.040 the blame game? Just read the Ta Leaves force as 0:22:11.080 --> 0:22:13.159 you see things right now. Yeah, this is this is 0:22:13.160 --> 0:22:16.560 a big question. The US is pretty firmly identifying Iran 0:22:16.760 --> 0:22:19.640 as the culport here, but Saudi Arabia seems to be 0:22:20.080 --> 0:22:22.439 taking a step back and saying, well, we think the 0:22:22.440 --> 0:22:24.480 equipment came from Iran, but we're not going to go 0:22:24.520 --> 0:22:27.240 ahead and blame them entirely. Let's bring in the U 0:22:27.320 --> 0:22:29.280 n And I think that this is a recognition of 0:22:29.280 --> 0:22:32.200 the fact that NBS doesn't want to go to war 0:22:32.240 --> 0:22:34.960 against Iran, and if he comes out and says Iran 0:22:35.000 --> 0:22:38.520 attacked us, he would be incumbent upon him to respond, 0:22:38.680 --> 0:22:40.879 and he can't or he knows he doesn't want to 0:22:40.920 --> 0:22:43.040 get into that. We mentioned the heritage here of all 0:22:43.080 --> 0:22:45.840 of our reading on air the Arab States, Robert Lacey 0:22:45.920 --> 0:22:49.880 and Daniel Jurgen and others. How far removed are we 0:22:50.000 --> 0:22:54.600 from our myths and our stereotypes of our relationship and 0:22:54.760 --> 0:22:57.879 oil in the Arab States. In Saudi Arabia, so oil 0:22:57.920 --> 0:23:01.120 has always operated kind of outside of a lot of 0:23:01.160 --> 0:23:05.919 the traditional issues in terms of say, Sunnisia conflict. Oil 0:23:05.960 --> 0:23:08.439 has always been been kind of outside of that. And 0:23:08.600 --> 0:23:12.320 like you said, Iran and Saudi Arabia can work together 0:23:12.440 --> 0:23:16.040 in oil, whereas in other respects they can't. But they 0:23:16.080 --> 0:23:20.040