WEBVTT - Bloomberg Surveillance TV: January 5th, 2026 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordern. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.040 Terminal and the Bloomberg Business App. You are Denny if 0:00:37.040 --> 0:00:39.760 your DNNY research selling a year round SMP target of 0:00:39.800 --> 0:00:43.120 seventy seven hundred and a decade end target of ten k. 0:00:43.440 --> 0:00:46.440 He writes this, this ballmarket could be one of the 0:00:46.479 --> 0:00:48.720 longer ones. Joined us now for more ed Good morning, 0:00:48.920 --> 0:00:51.040 Good morning. Let's just start with the longevity of this thing. 0:00:51.320 --> 0:00:53.720 Already several years Indio, why do you think this can 0:00:53.760 --> 0:00:56.000 take another leg and another lequa after that? 0:00:56.280 --> 0:00:59.720 Well, I think the economy is demonstrated its resilience or 0:00:59.760 --> 0:01:02.200 with the past few years, I mean all the shocks 0:01:02.200 --> 0:01:04.640 that have hit it, starting with the pandemic and then 0:01:05.520 --> 0:01:10.000 the tariffs most recently and yet real GDP is at 0:01:10.000 --> 0:01:12.960 an all time record high, and so I'm just extrapolating 0:01:13.000 --> 0:01:15.520 that that continues, that the economy will continue to grow 0:01:16.040 --> 0:01:18.560 through the end of the decade, and that by the 0:01:18.640 --> 0:01:20.480 end of the decade we could very well see the 0:01:20.520 --> 0:01:25.040 market anticipating something like five one hundred dollars a share 0:01:25.360 --> 0:01:27.440 for the S and P five hundred, but a twenty 0:01:27.520 --> 0:01:29.119 multiple on it and you get ten thousand. 0:01:29.440 --> 0:01:31.520 Certain things happened last year that people thought would be 0:01:31.600 --> 0:01:34.399 relevant and turned out to be irrelevant. I'm thinking of 0:01:34.400 --> 0:01:36.560 the tariffs of April of last year, irrelevant to the 0:01:36.600 --> 0:01:39.000 headline a's acre of five hundred index at least, and 0:01:39.040 --> 0:01:40.679 then later on and through the year, the fact that 0:01:40.720 --> 0:01:43.720 unemployment carried on climbing and it didn't seem to disrupt 0:01:43.720 --> 0:01:45.479 this secuity market. It's not going to be the story 0:01:45.480 --> 0:01:46.759 for twenty six as well. Yeah. 0:01:46.760 --> 0:01:50.920 Absolutely, And I think twenty twenty five demonstrated that the 0:01:50.960 --> 0:01:53.559 economy could grow even when we have a labor market 0:01:53.600 --> 0:01:57.040 that's not growing much at all, and that can only 0:01:57.040 --> 0:02:02.080 happen if productivity is booming. Productivity growth during the first 0:02:02.120 --> 0:02:04.720 half of the decade kind of recovered. It was really 0:02:04.800 --> 0:02:06.920 quite depressed at the beginning of the decade, it's recovered 0:02:06.920 --> 0:02:10.120 to kind of this annual average of about two percent. 0:02:10.520 --> 0:02:12.960 I think we're heading to three percent and going from 0:02:13.000 --> 0:02:14.760 two to three percent, it doesn't seem like a lot, 0:02:14.760 --> 0:02:16.679 but it is a lot when it comes to real 0:02:16.720 --> 0:02:18.519 GDP and keeping a lot on inflation. 0:02:18.680 --> 0:02:20.760 As you know better than most, what often happens coming 0:02:20.760 --> 0:02:22.959 into the new year. People look for the other thing, 0:02:23.360 --> 0:02:25.000 not the thing that's been working for years, but they 0:02:25.000 --> 0:02:26.800 look for the other things that they sa time to 0:02:26.840 --> 0:02:27.440 move away from. 0:02:27.600 --> 0:02:29.200 If you get to the other thing. 0:02:29.560 --> 0:02:32.520 Well I'm in that camp. I'm in the notion that 0:02:32.560 --> 0:02:35.799 it's time to rebalance them. I mean, when you've got 0:02:35.880 --> 0:02:40.160 information technology and communication services accounting for forty five percent 0:02:40.560 --> 0:02:42.640 of the market cap of the S and P five hundred, 0:02:42.680 --> 0:02:46.079 maybe it's time to rebalance a bit. And I've been 0:02:46.120 --> 0:02:52.440 recommending also overweighting financials and industrials, and I would continue 0:02:52.440 --> 0:02:54.400 to overweight them and put some money also on an 0:02:54.400 --> 0:02:59.200 overweight basis into healthcare. I think every company is basically 0:02:59.200 --> 0:03:01.760 turning about to be a technology company. Either make it 0:03:01.840 --> 0:03:04.679 or you use it, and so I am kind of 0:03:04.760 --> 0:03:08.280 key on the impressive four ninety three everybody's focusing on 0:03:08.280 --> 0:03:10.800 the Magnificent seven. But I don't know about you. I'm 0:03:10.840 --> 0:03:14.440 getting AI fatigue. I'm a little tired of the whole 0:03:15.320 --> 0:03:18.480 thesis here, and I think the market's starting to show 0:03:18.520 --> 0:03:21.080 that as well, and the four ninety three are looking 0:03:21.120 --> 0:03:22.919 more interesting because there would be the ones that are 0:03:23.240 --> 0:03:25.800 using the technology to reach productivity. At earnings. 0:03:26.160 --> 0:03:28.400 Last year, there was a big overhang on questions of 0:03:28.400 --> 0:03:31.919 how tariffs would impact companies in thus their share price. 0:03:32.200 --> 0:03:33.359 What do you think is going to be the big 0:03:33.360 --> 0:03:35.040 policy question mark of this year? 0:03:35.920 --> 0:03:39.480 Well, I think everybody's focusing on the fiscal stimulus that's 0:03:40.080 --> 0:03:43.280 kind of locked into the system with the One Big 0:03:43.320 --> 0:03:46.840 Beautiful Bill Act that was passed last July, but it 0:03:46.880 --> 0:03:49.920 was retroactive to the beginning of last year, and so 0:03:50.320 --> 0:03:55.400 according to Secretary of Treasury Avestent, a lot of a 0:03:55.400 --> 0:03:57.960 lot of households are going to get an extra one 0:03:57.960 --> 0:04:01.160 thousand to two thousand dollars in refine, more than would 0:04:01.160 --> 0:04:03.680 otherwise have been the case, and that could be very stimulative. 0:04:04.080 --> 0:04:07.000 We already have very simulative monetary policy. The Fed's cut 0:04:07.000 --> 0:04:08.640 the FED funds rate by one hundred and seventy five 0:04:08.680 --> 0:04:14.240 basis points since twenty twenty three, and so you know, 0:04:14.840 --> 0:04:18.680 I think the policies are kind of locked in, and 0:04:18.720 --> 0:04:21.200 the question is what kind of impact they'll have on 0:04:21.240 --> 0:04:23.919 the economy. Obviously a positive one, but the big question 0:04:24.040 --> 0:04:25.200 is what about inflation. 0:04:25.600 --> 0:04:28.520 Well, given they're locked in, do you think consumers are 0:04:28.560 --> 0:04:32.800 ready preemptively spent those checks they're about to get. 0:04:32.520 --> 0:04:35.640 I don't think so. I think they're going to be 0:04:35.680 --> 0:04:40.839 pleasantly surprised by the refunds. I mean, you know, claiming 0:04:40.880 --> 0:04:45.680 your refunds is not something that's easily to predict, So 0:04:45.920 --> 0:04:47.760 I do think that there's going to be a stimulus 0:04:47.800 --> 0:04:48.120 from it. 0:04:48.320 --> 0:04:50.040 Why do you think this will leave the Federal Reserve 0:04:50.120 --> 0:04:51.279 and policy for the year ahead. 0:04:52.120 --> 0:04:55.960 Well, you know, we've got a lot of known unknowns. 0:04:56.000 --> 0:04:58.320 We'll see who the next FED chair is, but we 0:04:58.360 --> 0:05:01.280 also know that whoever is the FED, it's only really 0:05:01.360 --> 0:05:04.159 one vote on the FMC, so defense are going to 0:05:04.160 --> 0:05:08.000 remain data dependent. And I think that with the economy 0:05:08.080 --> 0:05:10.119 likely to be quite strong, at least in the first 0:05:10.400 --> 0:05:13.599 half of the year, I think the Fed's done at 0:05:13.680 --> 0:05:14.839 least for the next six months. 0:05:14.880 --> 0:05:16.840 One man, one vote is not how we've been thinking 0:05:16.839 --> 0:05:20.960 about the Federal reserve of a previous leaderships and previous administrations. 0:05:20.960 --> 0:05:21.719 Why is it changing. 0:05:22.080 --> 0:05:27.360 Well, the previous FED chairs were consensus builders. That's what 0:05:27.400 --> 0:05:29.440 they spent a lot of time doing, and there was 0:05:29.839 --> 0:05:32.479 very successful at it. Particularly FED Chair Powell was a 0:05:32.520 --> 0:05:36.800 great consensus builder builder. But I think the next FED 0:05:36.880 --> 0:05:39.960 chair is going to be much more aligned with the President, 0:05:40.000 --> 0:05:41.920 with the White House, and I think there could be 0:05:41.960 --> 0:05:43.760 a lot I think there could be a lot more 0:05:43.760 --> 0:05:47.280 independence among the FED committee. 0:05:47.279 --> 0:05:49.560 Is that the unintended consequence of this push five for us? 0:05:49.680 --> 0:05:51.479 Yeah, I mean everybody's been talking about the FED is 0:05:51.480 --> 0:05:56.120 going to be less independent. I think they'll be more independent. 0:05:56.200 --> 0:05:57.960 I think you'll see more dissension. 0:05:58.520 --> 0:06:00.560 You mean they're going to be more independent because it's 0:06:00.600 --> 0:06:03.560 so obvious. Potentially the FED chair is so tethered to 0:06:03.600 --> 0:06:06.680 the president, everyone else will feel like they can be 0:06:06.800 --> 0:06:07.839 honest and speak out. 0:06:08.080 --> 0:06:08.279 Yeah. 0:06:08.320 --> 0:06:10.720 Well, if you've got a FED chair that's Trump dependent, 0:06:11.880 --> 0:06:14.880 everybody else's data dependent. I think you're going to have 0:06:15.640 --> 0:06:18.880 a difference of opinion and it's going to be pretty visible, 0:06:18.920 --> 0:06:20.400 as it has been in the last minutes. 0:06:20.839 --> 0:06:24.159 When you say that they only have one vote. Do 0:06:24.200 --> 0:06:26.640 you think this administration might take a different approach when 0:06:26.640 --> 0:06:29.320 I think about the FED and potentially elevate a governor 0:06:29.360 --> 0:06:31.800 Waller so they get an extra seat because it is 0:06:31.839 --> 0:06:32.839 a deliberative body. 0:06:33.160 --> 0:06:36.440 Well, I think Waller would make the most sense because 0:06:36.440 --> 0:06:39.520 he's got the experience, he knows all the players, and 0:06:40.200 --> 0:06:43.159 he could be more of a consensus builders than somebody 0:06:43.160 --> 0:06:50.440 that's just kind of you figure out the FED. But yeah, 0:06:49.839 --> 0:06:52.760 I think whoever is the next FED chair, they're going 0:06:52.800 --> 0:06:55.440 to realize they have a consensus problem and they have 0:06:55.480 --> 0:06:57.440 to deal with it. And so I think at the 0:06:57.520 --> 0:07:00.599 end of the day, the FED it isn't going to 0:07:00.600 --> 0:07:02.720 be much different than what it is right now. Even 0:07:02.720 --> 0:07:07.599 if the President continues to demand that the FED funds 0:07:07.600 --> 0:07:09.960 will be brought down to one percent, it's just not 0:07:10.040 --> 0:07:11.760 going to happen if the economy is doing well and 0:07:11.800 --> 0:07:14.880 if inflation is still kind of stuck around three percent 0:07:14.960 --> 0:07:15.920 rather than down to two. 0:07:17.280 --> 0:07:20.760 Stay with us more Bloomberg surveillance coming up after this. 0:07:30.080 --> 0:07:32.600 Former City and US Intelligence official Norman Rule rights in 0:07:32.640 --> 0:07:35.280 the following. In addition to ensuring US influence out of 0:07:35.320 --> 0:07:38.880 Venezuela's all reserves, the administration will seek to reduce China's 0:07:38.880 --> 0:07:42.960 political influence over a region normal. Jounderstaw for more normally 0:07:42.960 --> 0:07:46.240 and welcome. We talked about how impressively clean this operation 0:07:46.560 --> 0:07:50.200 was over the weekend. Given your experience, given historic examples 0:07:50.240 --> 0:07:53.480 of similar events, what was your reaction to what took place? 0:07:56.400 --> 0:08:00.360 Ordinary display of the skill of US military and untelgence 0:08:00.400 --> 0:08:04.559 officials working together for many months and then putting an 0:08:04.600 --> 0:08:10.240 amazing array of US military intelligence operatives together on the ground. 0:08:10.280 --> 0:08:14.640 But it also showed the extraordinary nature of US technology. 0:08:15.320 --> 0:08:19.800 The Venezuelans talked about having air defenses that could spot 0:08:20.040 --> 0:08:24.000 stealth fighters, and the United States managed to put not 0:08:24.120 --> 0:08:30.440 only dozens of aircraft but helicopters throughout Venezuela's skies, and 0:08:30.520 --> 0:08:33.080 Venezuela's air defense was not able to pick it up. Now, 0:08:33.120 --> 0:08:37.520 put that in context of the US military technology being 0:08:37.600 --> 0:08:40.480 used by Israel and the United States in Iran just 0:08:40.559 --> 0:08:47.920 a few months ago against Russian and Iranian technology in Iran, 0:08:48.040 --> 0:08:51.320 and you really get a picture of the extraordinary capacity 0:08:51.400 --> 0:08:56.560 for US military technology, personnel, and intelligence capability with our 0:08:56.600 --> 0:09:00.400 partners worldwide. It's quite a picture for our ad series 0:09:00.440 --> 0:09:00.960 and partners. 0:09:01.240 --> 0:09:04.280 Iran was the big focus in June. Obviously, Venezuela is 0:09:04.320 --> 0:09:07.720 the big focus now norm what country could be next 0:09:07.760 --> 0:09:10.400 where the US has a more aggressive foreign policy. 0:09:11.679 --> 0:09:13.880 I think it's important to take a real hard look 0:09:13.920 --> 0:09:17.960 at the December National Security Strategy, because the National Security 0:09:18.000 --> 0:09:21.640 Strategy makes clear that the United States will be inclined 0:09:21.679 --> 0:09:26.000 to be non interventionist, but use robust military and economic force, 0:09:26.160 --> 0:09:29.760 most likely in the Western hemisphere, and then otherwise use 0:09:29.880 --> 0:09:35.280 economic and military tools only when needed outside of that 0:09:35.440 --> 0:09:42.040 environment for limited purposes, not state building, not to put 0:09:42.280 --> 0:09:46.000 new governments in place. And I think that template has 0:09:46.080 --> 0:09:50.480 been consistent for the administration throughout the previous year, and 0:09:50.559 --> 0:09:53.040 I think in twenty twenty six as well, So I 0:09:53.080 --> 0:09:56.920 think the Western hemisphere is likely to remain the administration's focus, 0:09:57.280 --> 0:10:00.319 but the Iranians have been put on notice. Has been 0:10:00.320 --> 0:10:05.760 some additional social media activity by the administration, but if activity, 0:10:05.920 --> 0:10:09.240 military activity work undertaken by the administration, it would likely 0:10:09.320 --> 0:10:10.000 be limited. 0:10:10.080 --> 0:10:10.679 This is not an. 0:10:10.520 --> 0:10:14.280 Administration looking to involve the US in a conventional conflict. 0:10:14.520 --> 0:10:17.280 When it comes to Venezuela and now, the acting President 0:10:17.400 --> 0:10:21.120 of Rodriguez, given the fact that she was the number 0:10:21.120 --> 0:10:24.679 two her brother runs the National Assembly, she was by 0:10:24.720 --> 0:10:29.240 the Panamanian leader said this in thedorism without Maduro. Is 0:10:29.280 --> 0:10:32.800 this regime containment instead of change. 0:10:33.440 --> 0:10:35.920 Well, I think you've got a couple of different issues here. 0:10:35.960 --> 0:10:38.800 So the US posture again is being clarified as interest 0:10:38.880 --> 0:10:43.600 driven state craft. We're interested in stopping drugs, migration, adversary, 0:10:43.640 --> 0:10:48.520 exclusion from oil, democracy restoration is being positioned as. 0:10:48.720 --> 0:10:50.359 A downstream objective. 0:10:50.640 --> 0:10:53.640 Now, let's put this in the contact as the Venezuelans, 0:10:53.640 --> 0:10:56.640 they've just seen an extraordinary display of US power. They 0:10:56.720 --> 0:11:00.800 cannot compete with us. They have no allies of any consequence. 0:11:01.400 --> 0:11:03.600 So they're going to try to do several things. First, 0:11:03.600 --> 0:11:06.960 they need to buy time, They need to sustain internal cohesion, 0:11:07.040 --> 0:11:11.199 they need to deal legitimize any potential successor, and they 0:11:11.200 --> 0:11:14.200 need to then think about how do they manage this 0:11:14.360 --> 0:11:18.800 environment while Congress the rest of the world puts themselves 0:11:18.800 --> 0:11:22.040 together against the Trump administration, and then seek out maybe 0:11:22.240 --> 0:11:26.240 overtures for a negotiated coexistence with the Trump administration, if 0:11:26.240 --> 0:11:29.440 only to prevent follow on strikes, and then maximize their 0:11:29.440 --> 0:11:32.320 influence in any possible ongoing transition. 0:11:32.559 --> 0:11:35.079 Norman, we're tracking live pitches of the form of Venezweman 0:11:35.160 --> 0:11:37.080 leader heading to a court here in New York City, 0:11:37.440 --> 0:11:40.160 which is stunning in and of itself. In an ideal 0:11:40.200 --> 0:11:42.880 world norm this is what people would like to see. 0:11:43.280 --> 0:11:45.080 They would have liked to send this guy step down 0:11:45.120 --> 0:11:47.400 a long time ago. And then the nobel prize is 0:11:47.400 --> 0:11:50.120 when it walks into Caracas the following day to streets 0:11:50.160 --> 0:11:53.160 celebrating her arrival and she takes over in democracy rates. 0:11:53.760 --> 0:11:54.880 No, and that's not the real world. 0:11:55.120 --> 0:11:57.280 Could you share with us the cold hard reality of 0:11:57.320 --> 0:11:59.880 the real world and how difficult it will be between 0:12:00.080 --> 0:12:04.679 age the resistance that hasn't yet shown itself yet in Venezuela, 0:12:04.760 --> 0:12:07.920 but could manifest materialize in a months to count. 0:12:09.320 --> 0:12:12.680 Well. To be clear, I'm not of Venezuelan in domestic 0:12:12.760 --> 0:12:17.040 political expert, but for the Venezuelan opposition to take charge, 0:12:17.080 --> 0:12:21.400 they're going to have to overcome the architecture of the military, 0:12:21.520 --> 0:12:25.960 the security forces, the Cuban security forces who are ingrained 0:12:26.000 --> 0:12:30.040 within the architecture of the Venezuelan government, the entire political 0:12:30.080 --> 0:12:32.920 system of Venezuela, which will be among the first to 0:12:32.920 --> 0:12:36.840 be put on trial. I mean, the Venezuelan Interior Minister 0:12:37.040 --> 0:12:39.880 and the acting the new president will be among the 0:12:39.920 --> 0:12:42.360 first to be put on trial for corruption and human rights. 0:12:42.600 --> 0:12:46.239 So they're going to need a safe haven, a amnesty. 0:12:46.320 --> 0:12:48.480 This is an awful lot to ask for. So the 0:12:48.520 --> 0:12:51.360 President was not out of his lane to say that 0:12:51.400 --> 0:12:53.760 it's going to be a tough road to hope for 0:12:53.880 --> 0:12:58.840 the incoming president to just to just step in. And 0:12:58.880 --> 0:13:00.880 I think for this reason, the Secretary of State was 0:13:00.880 --> 0:13:04.000 also accurate to describe this as a as a process. 0:13:04.040 --> 0:13:08.160 But in any case, this is a situation in motion. 0:13:10.080 --> 0:13:13.560 Stay with US mult Bloomberg surveillance coming up after this. 0:13:22.120 --> 0:13:24.360 Let's stick with the energy market. The US of course 0:13:24.440 --> 0:13:27.360 ready to use the commodity for leverage in Venezuela. 0:13:28.559 --> 0:13:31.920 There's a quarantine right now in which sanctioned oil shipments. 0:13:32.080 --> 0:13:34.240 There's a boat and that boat is under US sanctions. 0:13:34.240 --> 0:13:35.960 We go get a quarter or or we will seize it. 0:13:36.200 --> 0:13:38.839 That remains in place, and that's a tremendous amount of 0:13:38.880 --> 0:13:41.440 leverage that will continue to be in place until we 0:13:41.480 --> 0:13:43.839 see changes not just further the national interests of the 0:13:43.960 --> 0:13:46.800 United States, which is number one, but also that lead 0:13:46.880 --> 0:13:49.040 to a better future for the people of Venezuela. 0:13:49.200 --> 0:13:52.000 Bob mcdaney, the founder and president of Rapidant Energy Group, 0:13:52.080 --> 0:13:53.960 joined US now for more Bob, as you and I 0:13:54.120 --> 0:13:56.720 start this conversation with tracking live pictures of the former 0:13:56.760 --> 0:13:59.920 Venaswevan leader making this way to court here in New York. 0:14:00.240 --> 0:14:03.560 This is an individual whoever saw the biggest energy reserves 0:14:03.840 --> 0:14:06.439 on the planet, and this was a sector an industry 0:14:06.440 --> 0:14:09.760 in that country plagued by under investment. Can you frame 0:14:09.840 --> 0:14:12.640 for us, Bob, how long it would take to really 0:14:12.720 --> 0:14:16.120 scale up production in that country now that individual is 0:14:16.120 --> 0:14:16.920 out of the country. 0:14:17.720 --> 0:14:21.280 Hi, Jonathan, Sure, it's a matter of many years to 0:14:21.440 --> 0:14:25.800 decades and tens of billions of dollars. The good news is, 0:14:26.520 --> 0:14:29.000 especially US companies, they know how to do it. They 0:14:29.040 --> 0:14:34.000 have the engineering, logistical, technical expertise. But it's going to 0:14:34.040 --> 0:14:37.680 take boatloads of money and we won't be seeing real 0:14:37.800 --> 0:14:41.160 oil until after the end of the second Trump term. 0:14:41.160 --> 0:14:42.840 We just need to be realistic about that. 0:14:43.240 --> 0:14:45.360 But Bob, is the will there given the fact that 0:14:45.400 --> 0:14:48.280 these are companies that had to flee Venezuela in two 0:14:48.320 --> 0:14:49.040 thousand and seven. 0:14:50.400 --> 0:14:54.480 Absolutely, you know they're tantalized, but they are cautiously tantalized. 0:14:54.520 --> 0:14:56.360 I was in the White House twenty three years ago 0:14:56.880 --> 0:14:59.880 after we were chased out by Hugo Chavez. No fun 0:15:00.120 --> 0:15:02.760 at all, and they will be very cautious in going 0:15:02.840 --> 0:15:05.640 back in. But it also gets to this transition will 0:15:05.920 --> 0:15:07.480 what kind of government are we going to have there, 0:15:07.480 --> 0:15:10.000 what kind of contract terms, what kind of physical security 0:15:10.400 --> 0:15:14.040 there are There's a wide and deep set of big 0:15:14.160 --> 0:15:17.400 questions that these oil companies and their boards are going 0:15:17.440 --> 0:15:20.680 to consider before they rush in. I think it's right 0:15:20.720 --> 0:15:22.440 that they're up in inequity pricing. 0:15:22.440 --> 0:15:23.600 It's an arc. It's got this right. 0:15:23.640 --> 0:15:26.720 It's a nothing burger for short term crude futures. It's 0:15:26.760 --> 0:15:30.440 another tailwind for US oil companies majors coming after this 0:15:30.520 --> 0:15:32.960 sort of walk back from this peak demand narrative. You 0:15:32.960 --> 0:15:35.240 think about it, US oil majors have just had a 0:15:35.280 --> 0:15:39.360 great extended holiday season. Peak demand is fading in twenty thirty. 0:15:39.440 --> 0:15:42.280 That's good for them, and now the world's largest oil 0:15:42.320 --> 0:15:44.960 reserves may be available to them when it really counts 0:15:45.040 --> 0:15:45.920 after twenty thirty. 0:15:46.240 --> 0:15:48.200 Well, you also got it right. I actually thought of 0:15:48.240 --> 0:15:51.040 you in the morning after this all took place, because 0:15:51.240 --> 0:15:53.840 before the Christmas holidays you said there was a seventy 0:15:53.880 --> 0:15:56.920 percent chance that Madua would be out. Did you think 0:15:56.960 --> 0:15:58.560 it was going to happen this quickly? 0:15:59.760 --> 0:16:01.240 Yeah, yes, we did. 0:16:01.760 --> 0:16:04.360 I think the market has gotten you mentioned June in 0:16:04.400 --> 0:16:05.320 the Iran war. 0:16:06.080 --> 0:16:07.720 The market doesn't understand Trump. 0:16:08.480 --> 0:16:11.920 It was surprised when he attacked Iran, It was surprised 0:16:12.000 --> 0:16:15.479 when he puts sanctions on Rosneft and Luke Oil in October, 0:16:15.800 --> 0:16:19.000 and it was surprised when he attacked when he removed Maduro. 0:16:19.480 --> 0:16:22.080 I think what the market doesn't understand is the President's 0:16:22.160 --> 0:16:27.000 willingness to take risk when it comes to confronting adversaries 0:16:27.000 --> 0:16:30.680 on top tier foreign policy challenges, even if energy is 0:16:30.720 --> 0:16:33.000 at stake. And the reason why Emmerie and you just 0:16:33.040 --> 0:16:35.800 mentioned it. The President the White House believes, and I 0:16:35.880 --> 0:16:39.440 happen to agree, we're heading into oversupply. He can lean 0:16:39.560 --> 0:16:43.080 into this softening crude market and take risk even with 0:16:43.240 --> 0:16:46.360 Iran and Russia, which are really more important near term 0:16:46.440 --> 0:16:47.320 than Venezuela. 0:16:47.800 --> 0:16:50.720 So what are you telling clients is the next potential 0:16:51.080 --> 0:16:53.520 risk taking this administration is going to go for? 0:16:54.840 --> 0:16:57.640 Iran and Russia are up next. Look at the presidents 0:16:57.680 --> 0:17:03.680 talking about Israel is not kidding about preventing Iran from 0:17:03.720 --> 0:17:09.439 reconstituting its its missile and nuclear programs, and with the 0:17:09.560 --> 0:17:12.960 unrest for seeing there maybe stirring the pot. So the 0:17:12.960 --> 0:17:15.240 President's been talking very forcefully. Look what he said with 0:17:15.240 --> 0:17:18.479 Prime Minister net Yahoo willingness to intervene if the regime 0:17:18.520 --> 0:17:21.760 shoots protesters. I think when the market sort of lifts 0:17:21.800 --> 0:17:25.040 its gaze from this fascination with Venezuela and realize this 0:17:25.280 --> 0:17:28.199 is not a real issue with a short term, it's 0:17:28.280 --> 0:17:31.440 going to say, wait a minute, how credible is President 0:17:31.480 --> 0:17:33.879 Trump when it comes to Russia and Iran. 0:17:33.960 --> 0:17:36.960 With Russia, Putin's not going to agree to armistice. 0:17:37.000 --> 0:17:40.680 And while President Trump often has a friendly demeanor towards Putin, 0:17:40.800 --> 0:17:44.280 says nice things, he also tightened sanctions and I think 0:17:44.320 --> 0:17:47.120 he's willing to do so even more into next year. 0:17:47.200 --> 0:17:50.600 So let's look to Iran and Russia for real potential 0:17:50.640 --> 0:17:52.480 supply disruptions, not Venezuela. 0:17:52.480 --> 0:17:54.320 When you say that up next, well, can you just 0:17:54.320 --> 0:17:56.359 give a staytown on what you mean by that? Because 0:17:56.440 --> 0:17:58.320 up next, after what we saw I have had, awakens 0:17:58.320 --> 0:18:00.720 a very different scenario for Iran and for Russia. What 0:18:00.760 --> 0:18:01.840 do you mean by their up next? 0:18:02.680 --> 0:18:07.320 Well, I think if Iran doesn't agree to halt its 0:18:07.359 --> 0:18:11.360 missile capabilities, its reconstitution, it's nuclear capabilities, and as if 0:18:11.400 --> 0:18:13.919 we even see this continued unrest. I think there will be, 0:18:13.960 --> 0:18:17.760 and we told clients seventy percent probability of another wave 0:18:17.840 --> 0:18:22.800 of at least Israelia strikes on Iran, perhaps supported or 0:18:22.920 --> 0:18:25.399 joined by the United States. We're at a solid seventy 0:18:25.440 --> 0:18:29.680 percent on that also sanctions, tighter sanctions we've let Iran off. 0:18:29.840 --> 0:18:31.760 Trump could go to China and say cut it out, 0:18:31.800 --> 0:18:34.520 We're serious, do business with Iran or do business in the 0:18:34.600 --> 0:18:35.199 United States. 0:18:35.760 --> 0:18:36.919 So really cutting. 0:18:36.680 --> 0:18:39.879 Into their oil exports at least and military action at 0:18:39.880 --> 0:18:43.200 best seventy percent probability in the coming let's say months. 0:18:43.920 --> 0:18:46.960 Putin Russia same thing so far. They just wanted to 0:18:47.000 --> 0:18:49.800 widen the Eural's discount to Brent. They just wanted to, 0:18:50.280 --> 0:18:53.720 you know, hurt Putin's revenue, not cut into production. If 0:18:53.760 --> 0:18:56.240 oil prices keep falling, it's a big condition. If oil 0:18:56.280 --> 0:18:58.800 prices keep softening, I think he'll be willing to be 0:18:58.920 --> 0:19:02.240 tougher on in India, China and other customers of Russians 0:19:02.320 --> 0:19:03.160 Russia's crude. 0:19:03.520 --> 0:19:05.960 How consistent is that with the national security strategy that 0:19:06.000 --> 0:19:07.760 they put out at the end of last year. 0:19:09.240 --> 0:19:11.399 You know, it is consistent, But the subtle you got 0:19:11.440 --> 0:19:12.040 to read into it. 0:19:12.080 --> 0:19:15.480 Trump didn't say, Look, we're going back to the Western hemisphere, 0:19:15.520 --> 0:19:17.639 and we're all about not only the Monroe doctrine, but 0:19:17.640 --> 0:19:19.679 the Trump correlated which means we won't even let our 0:19:19.680 --> 0:19:22.639 adversaries have economic stakes in our region. That's what the 0:19:22.640 --> 0:19:25.840 focus was. But he didn't say we're completely pulling up 0:19:25.920 --> 0:19:28.840 stakes in Europe, the Middle East and Asia. 0:19:28.960 --> 0:19:30.440 Didn't say that not acting that way. 0:19:30.480 --> 0:19:32.560 We don't think China has a free hand in Taiwan, 0:19:32.960 --> 0:19:34.840 we don't think Putin has a free hand in Putin 0:19:35.240 --> 0:19:38.040 in Ukraine, and in the Middle East, we're going nowhere. 0:19:38.040 --> 0:19:40.359 So we're kind of having it both ways. I think we're. 0:19:40.480 --> 0:19:43.960 Having our internationalism, our global alliances and the Eurasian land 0:19:44.000 --> 0:19:46.800 mass on the one hand, but telling the world, yeah, 0:19:46.800 --> 0:19:49.720 we're really going to be busy in the Western Hemisphere. 0:19:49.760 --> 0:19:51.720 I'm ready. That was certainly part of the conversation over 0:19:51.760 --> 0:19:54.160 the weekend. Does this speed to the idea that maybe 0:19:54.200 --> 0:19:57.520 they're going to refocus everything on the so called Western hemisphere, 0:19:57.600 --> 0:19:59.600 ultimately Latin American, and take their off the ball in 0:19:59.640 --> 0:20:01.760 places the Middle East and Europe. 0:20:01.840 --> 0:20:04.840 Well, one thing is for sure is that they definitely 0:20:04.880 --> 0:20:07.680 are monitoring the price of oil and to Bob's point, 0:20:07.720 --> 0:20:09.840 does that give them a lot more leverage around the world? 0:20:09.960 --> 0:20:12.640 Only there Arepasca actually came out with a telegram over 0:20:12.680 --> 0:20:15.480 the weekend and was talking about how if the US 0:20:15.560 --> 0:20:17.840 is able to hold prices near fifty dollars a barrel, 0:20:18.080 --> 0:20:21.760 that puts serious pressure on Russia's state capitalist economic model. 0:20:22.040 --> 0:20:24.199 So already this is going to put pressure on all 0:20:24.240 --> 0:20:26.960 these other countries, even if the administration decides they're just 0:20:27.080 --> 0:20:28.760 focusing on the Western hemisphere. 0:20:28.800 --> 0:20:30.359 Well, just before you go, I wanted to combat some 0:20:30.400 --> 0:20:32.560 time and talk about a much longer term issue, the 0:20:32.640 --> 0:20:36.560 life Spanish shale. How are you considering the life Spanish 0:20:36.560 --> 0:20:39.320 shale with the developments that we saw took place over 0:20:39.359 --> 0:20:39.840 the weekend. 0:20:41.560 --> 0:20:43.960 Well, we think shale is going to be around forever, 0:20:44.200 --> 0:20:46.560 and there are other deposits around the world. Look at 0:20:46.600 --> 0:20:50.119 what Argentina is doing, so other shale deposits open up. 0:20:50.119 --> 0:20:53.679