1 00:00:02,520 --> 00:00:10,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:14,120 Speaker 1: Bloomberg Balance of Power podcast ketsays live weekdays at noon 3 00:00:14,240 --> 00:00:17,400 Speaker 1: and five pm Eastern on Apple, Cocklay and Android Auto 4 00:00:17,520 --> 00:00:20,680 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 5 00:00:20,720 --> 00:00:24,119 Speaker 1: get your podcasts, or watch us live on YouTube. 6 00:00:25,360 --> 00:00:27,840 Speaker 2: It's round three of talks between the US and Iran 7 00:00:27,960 --> 00:00:31,840 Speaker 2: in Geneva today, with just days ago until President Trump's 8 00:00:31,840 --> 00:00:34,320 Speaker 2: self imposed deadline for Toronto make a deal over its 9 00:00:34,400 --> 00:00:38,000 Speaker 2: nuclear program or risk potential military action from the United States, 10 00:00:38,000 --> 00:00:41,800 Speaker 2: which of course is amassing great military force in the 11 00:00:41,840 --> 00:00:44,560 Speaker 2: region as we have seen in recent weeks. And while 12 00:00:44,560 --> 00:00:46,280 Speaker 2: the President said once again in his State of the 13 00:00:46,360 --> 00:00:49,960 Speaker 2: Union address just this Tuesday that he would prefer diplomacy prevail, 14 00:00:50,280 --> 00:00:53,040 Speaker 2: it does seem the administration is starting to move the 15 00:00:53,080 --> 00:00:55,280 Speaker 2: goalposts a little bit in terms of what they would 16 00:00:55,320 --> 00:00:58,200 Speaker 2: like diplomacy to ultimately achieve, what kind of deal they 17 00:00:58,280 --> 00:01:01,240 Speaker 2: ultimately want reach, perhaps not just about the nuclear program, 18 00:01:01,240 --> 00:01:04,280 Speaker 2: but maybe other things like ballistic missiles as well. Just 19 00:01:04,280 --> 00:01:06,520 Speaker 2: take a listen to the Secretary of State Marco Rubio 20 00:01:06,560 --> 00:01:07,720 Speaker 2: from yesterday. 21 00:01:07,800 --> 00:01:10,559 Speaker 3: The negotiations tomorrow, and the talks tomorrow will be largely 22 00:01:10,560 --> 00:01:13,920 Speaker 3: focused on the nuclear program, and we hope progress can 23 00:01:13,959 --> 00:01:16,320 Speaker 3: be made because that's the President's preference, to make progress 24 00:01:16,319 --> 00:01:19,160 Speaker 3: on the diplomatic front. But it's also important to remember 25 00:01:19,319 --> 00:01:24,319 Speaker 3: that Iran refuses refuses to talk about the ballistic missiles. 26 00:01:26,200 --> 00:01:27,480 Speaker 2: So we want to get more on this. As we 27 00:01:27,520 --> 00:01:29,480 Speaker 2: turn to Bloomberg's Tyler Kendall, who is live at the 28 00:01:29,480 --> 00:01:31,760 Speaker 2: White House. And usually I would say Tyler's on the 29 00:01:31,760 --> 00:01:34,399 Speaker 2: White House North lawn for us, but she's actually been 30 00:01:34,440 --> 00:01:36,240 Speaker 2: moving about a little bit because there's also some high 31 00:01:36,240 --> 00:01:38,640 Speaker 2: profile visitors to the White House today that Tyler is 32 00:01:38,640 --> 00:01:40,880 Speaker 2: trying to catch. Tyler. Have you seen New York City 33 00:01:40,880 --> 00:01:43,000 Speaker 2: Mayor's are Mom Donnie or the Netflix CEO? 34 00:01:43,080 --> 00:01:43,280 Speaker 4: Yet? 35 00:01:45,600 --> 00:01:48,720 Speaker 5: No, not yet, And if you're joining us on Bloomberg Television, 36 00:01:48,760 --> 00:01:51,480 Speaker 5: you'll probably see my head is on the honest wivel. 37 00:01:51,520 --> 00:01:54,400 Speaker 5: As we were waiting for these two potential high profile 38 00:01:54,480 --> 00:01:56,880 Speaker 5: visits here today reports that the New York City mayor 39 00:01:57,160 --> 00:01:59,840 Speaker 5: Mom Donnie, will be here. We're not totally sure exactly 40 00:01:59,880 --> 00:02:02,400 Speaker 5: what he will be discussing with President Trump, but amid 41 00:02:02,400 --> 00:02:04,960 Speaker 5: of reports that the Netflix CEO Ted Sarandos will be 42 00:02:05,040 --> 00:02:07,720 Speaker 5: here as well, we have probably a clearer picture on 43 00:02:07,800 --> 00:02:10,640 Speaker 5: what he would like to talk to with this White House, 44 00:02:10,680 --> 00:02:14,240 Speaker 5: including its bid for a Warner Brothers acquisition, as well 45 00:02:14,280 --> 00:02:16,919 Speaker 5: as as you know Cayley, President Trump in the last 46 00:02:16,919 --> 00:02:21,639 Speaker 5: week calling on Netflix to remove from its board Susan Rice, 47 00:02:21,680 --> 00:02:26,040 Speaker 5: a former Biden and Obama administration official, threatening that there 48 00:02:26,040 --> 00:02:29,440 Speaker 5: could be consequences. You might have seen in the past week. 49 00:02:29,520 --> 00:02:32,200 Speaker 5: Susan Rice had said on a podcast that Democrats will 50 00:02:32,639 --> 00:02:37,480 Speaker 5: remember those media corporations and law firms and companies that 51 00:02:37,560 --> 00:02:41,120 Speaker 5: quote bent the knee to the Trump administration. The Netflix CEO, 52 00:02:41,280 --> 00:02:44,880 Speaker 5: in an interview on the BBC shrugged off these concerns, 53 00:02:44,919 --> 00:02:47,560 Speaker 5: saying that this is a business deal, not a political deal. 54 00:02:47,800 --> 00:02:50,680 Speaker 5: But of course this is all just underscoring the political 55 00:02:50,760 --> 00:02:53,240 Speaker 5: dynamic to any potential acquisition. 56 00:02:55,680 --> 00:02:58,920 Speaker 2: Well, Tyler, as we are looking out, are you specifically 57 00:02:58,960 --> 00:02:59,520 Speaker 2: are looking out? 58 00:02:59,520 --> 00:03:00,680 Speaker 6: And I'm making sure I'm keeping an. 59 00:03:00,600 --> 00:03:02,080 Speaker 2: Eye on the feed for you a holler if I 60 00:03:02,120 --> 00:03:04,160 Speaker 2: see anyone you need to go and talk to. But 61 00:03:04,240 --> 00:03:06,400 Speaker 2: we know that President Trump, in addition to these meetings today, 62 00:03:06,400 --> 00:03:08,760 Speaker 2: also is probably going to be kept abreast of what's 63 00:03:08,800 --> 00:03:11,440 Speaker 2: happening in Geneva. In the talks between the US and 64 00:03:11,480 --> 00:03:14,360 Speaker 2: Iran just talk to us about what exactly what kind 65 00:03:14,400 --> 00:03:16,520 Speaker 2: of deal the president is now looking for. Is this 66 00:03:16,600 --> 00:03:19,720 Speaker 2: going to be just a deal over the nuclear program, 67 00:03:20,320 --> 00:03:23,200 Speaker 2: or is this now about something much beyond that and 68 00:03:23,240 --> 00:03:25,359 Speaker 2: for a much longer period of time, perhaps if Steve 69 00:03:25,400 --> 00:03:28,079 Speaker 2: Whitcoff is to be believed, an indefinite deal. 70 00:03:30,320 --> 00:03:33,280 Speaker 5: Right, And Kaylie, you're framing this up perfectly because it 71 00:03:33,280 --> 00:03:36,920 Speaker 5: doesn't appear that there are those contrasting parameters between the 72 00:03:37,040 --> 00:03:39,960 Speaker 5: US and Iran on what a potential deal will look like. 73 00:03:40,000 --> 00:03:42,640 Speaker 5: It is our understanding that this current round of talks 74 00:03:42,680 --> 00:03:46,240 Speaker 5: is focused just on that nuclear program, amid disagreements about 75 00:03:46,320 --> 00:03:48,520 Speaker 5: how much and whether, if at all, a roun should 76 00:03:48,520 --> 00:03:51,720 Speaker 5: have domestic enrichment capacity, as well as what will happen 77 00:03:51,880 --> 00:03:56,120 Speaker 5: to Iran's current stockpile of highly enriched uranium. We're getting 78 00:03:56,160 --> 00:03:58,280 Speaker 5: some conflicting headlines about what may or may not be 79 00:03:58,320 --> 00:04:00,880 Speaker 5: a red line for the US there, But we heard 80 00:04:00,880 --> 00:04:03,960 Speaker 5: from the Secretary of State Marco Rubio saying that the 81 00:04:04,080 --> 00:04:06,320 Speaker 5: US also needs to see some of these other critical 82 00:04:06,360 --> 00:04:09,240 Speaker 5: agenda items put on the table for a potential deal, 83 00:04:09,280 --> 00:04:12,880 Speaker 5: mainly Iran's ballistic missile program, but also it's support for 84 00:04:13,000 --> 00:04:16,000 Speaker 5: proxy militia groups in the region, and as you well know, 85 00:04:16,080 --> 00:04:18,520 Speaker 5: deadlines shift a lot here in Washington. But we did 86 00:04:18,560 --> 00:04:21,480 Speaker 5: hear from President Trump saying that Iron has until next 87 00:04:21,600 --> 00:04:25,240 Speaker 5: week to reach a deal, and there's definitely the military 88 00:04:25,279 --> 00:04:27,840 Speaker 5: firepower to back up that threat. You will know that 89 00:04:27,839 --> 00:04:30,800 Speaker 5: there has just been such an amassing of US military 90 00:04:30,839 --> 00:04:34,279 Speaker 5: assets in the region, as Israel actually confirmed this morning 91 00:04:34,320 --> 00:04:36,719 Speaker 5: that the US didn't move over F twenty two fighter 92 00:04:36,800 --> 00:04:39,240 Speaker 5: jets as well as refueling planes to the country, the 93 00:04:39,240 --> 00:04:42,000 Speaker 5: first time any such move has been taken. 94 00:04:42,160 --> 00:04:44,320 Speaker 6: So we have our eyes on all sides of this. 95 00:04:44,440 --> 00:04:46,800 Speaker 5: The US has not weighed in yet, though we do 96 00:04:46,920 --> 00:04:49,680 Speaker 5: know that the White House's position has been that diplomacy 97 00:04:49,760 --> 00:04:52,440 Speaker 5: is the first choice, but potential military action is not 98 00:04:52,560 --> 00:04:53,240 Speaker 5: off the table. 99 00:04:54,680 --> 00:04:57,240 Speaker 2: All right, Bloomberg's Tyler Kendall live at the White House, 100 00:04:57,279 --> 00:04:59,160 Speaker 2: Thank you so much. Of course, these talks between the 101 00:04:59,240 --> 00:05:01,640 Speaker 2: US and Aron the potent outcome as something financial markets 102 00:05:01,640 --> 00:05:05,080 Speaker 2: are paying very close attention to you, especially perhaps if 103 00:05:05,120 --> 00:05:08,520 Speaker 2: you're an oil trader, as we consider what military conflict 104 00:05:08,560 --> 00:05:11,560 Speaker 2: could mean for oil supply coming out of the Middle East. 105 00:05:11,560 --> 00:05:14,840 Speaker 2: Could you actually see Iran in retaliation close off the 106 00:05:14,880 --> 00:05:17,640 Speaker 2: straight of four moves, or attack the energy infrastructure of 107 00:05:17,680 --> 00:05:21,200 Speaker 2: other US golf allies and OPEC producers. These are all 108 00:05:21,240 --> 00:05:23,800 Speaker 2: within the realm of possibility, and of course that could 109 00:05:23,839 --> 00:05:26,880 Speaker 2: have implications for the price per barrel of oil and 110 00:05:27,000 --> 00:05:30,160 Speaker 2: therefore prices at the pump for Americans. This is actually 111 00:05:30,160 --> 00:05:33,000 Speaker 2: something we got into yesterday with Republican Senator Steve Danes 112 00:05:33,080 --> 00:05:37,119 Speaker 2: of Montana. How could this economically impact people here at home? 113 00:05:37,200 --> 00:05:38,160 Speaker 6: This was his response. 114 00:05:38,760 --> 00:05:40,960 Speaker 7: We've decoupled. 115 00:05:42,080 --> 00:05:45,359 Speaker 8: Our country from many of the global markets has relasd 116 00:05:45,360 --> 00:05:45,719 Speaker 8: to oil. 117 00:05:45,839 --> 00:05:47,440 Speaker 7: We were overly dependent on the midd least. 118 00:05:47,480 --> 00:05:50,440 Speaker 8: Today the United States is the largest producer of oil 119 00:05:50,800 --> 00:05:53,800 Speaker 8: and old ribas in the world, and that helps soften 120 00:05:54,120 --> 00:05:57,240 Speaker 8: the blows if there is any kind of connectuativity going. 121 00:05:57,040 --> 00:05:58,120 Speaker 7: On in Iran. 122 00:05:58,600 --> 00:06:01,120 Speaker 8: So I'm not as concerned about what happened oil price 123 00:06:01,160 --> 00:06:03,800 Speaker 8: is given the fact that we have done a stellar job, 124 00:06:03,880 --> 00:06:06,919 Speaker 8: thanks to President Trump and the American energy industry, of 125 00:06:07,000 --> 00:06:10,320 Speaker 8: becoming much more self deficient, self sufficient, and we are 126 00:06:10,360 --> 00:06:13,360 Speaker 8: now energy dominant. We are an exporter of energy, where 127 00:06:13,400 --> 00:06:15,080 Speaker 8: once upon a time we were a net importer. 128 00:06:17,080 --> 00:06:18,839 Speaker 2: We want to get another take now as we turn 129 00:06:18,880 --> 00:06:21,200 Speaker 2: here at Bloomberg TV, and Radio to Bob McNally. He's 130 00:06:21,240 --> 00:06:23,919 Speaker 2: president and founder of Rapid and Energy Group, also former 131 00:06:23,960 --> 00:06:26,920 Speaker 2: Special Assistant and Senior Director for International Energy on the 132 00:06:27,000 --> 00:06:29,800 Speaker 2: National Security Council under President George W. 133 00:06:29,880 --> 00:06:30,440 Speaker 6: Bush. 134 00:06:30,560 --> 00:06:32,719 Speaker 2: Bob, welcome back to Balance of Power. I wonder if 135 00:06:32,800 --> 00:06:34,800 Speaker 2: you agree with the senator's assessment. 136 00:06:35,880 --> 00:06:37,159 Speaker 6: Hi, Kaylee, great to be back. 137 00:06:37,440 --> 00:06:44,039 Speaker 4: The Senators absolutely correct from a broad macroeconomic perspective. 138 00:06:44,200 --> 00:06:44,400 Speaker 9: Right. 139 00:06:44,480 --> 00:06:47,800 Speaker 4: The fact that we are an oil exporter means that 140 00:06:47,920 --> 00:06:51,440 Speaker 4: if we were to see a sudden rise in oil 141 00:06:51,520 --> 00:06:57,239 Speaker 4: prices from the perspective of our whole economy, the impact 142 00:06:57,279 --> 00:07:00,520 Speaker 4: would be less than if we were a big net importer. 143 00:07:01,000 --> 00:07:06,200 Speaker 4: So our companies, our investors, our industries that employ people 144 00:07:06,279 --> 00:07:09,720 Speaker 4: producing energy, their value would go up. So it is 145 00:07:10,000 --> 00:07:15,640 Speaker 4: true at the economic standpoint broadly. However, as the Senator 146 00:07:15,680 --> 00:07:21,040 Speaker 4: well knows, from the perspective of a voting motorist going 147 00:07:21,080 --> 00:07:25,440 Speaker 4: to the pump to pay for gasoline, there being a 148 00:07:25,480 --> 00:07:29,080 Speaker 4: net exporter doesn't help us too much in terms of 149 00:07:29,280 --> 00:07:34,520 Speaker 4: insulating that consumer from the pump price implications of a 150 00:07:34,560 --> 00:07:37,000 Speaker 4: crude oil price spike. So it's a bit of a 151 00:07:37,040 --> 00:07:40,600 Speaker 4: mixed story, but he's correct at the economic broad economic 152 00:07:40,640 --> 00:07:41,440 Speaker 4: GDP level. 153 00:07:43,040 --> 00:07:45,520 Speaker 2: Okay, So if you were advising this president, as you've 154 00:07:45,560 --> 00:07:48,600 Speaker 2: advised presidents in the past, Bob, about the implications that 155 00:07:48,640 --> 00:07:51,800 Speaker 2: taking military action could have for energy specifically, what would 156 00:07:51,800 --> 00:07:53,880 Speaker 2: you be telling him? How should he be calibrating his 157 00:07:54,000 --> 00:07:56,280 Speaker 2: moves here with that consideration in mind. 158 00:07:57,440 --> 00:07:59,960 Speaker 4: Well, I think the first thing is he has to understand, 159 00:08:00,000 --> 00:08:02,360 Speaker 4: and the president has to understand there are no quick 160 00:08:02,400 --> 00:08:06,760 Speaker 4: and easy solutions here. The SPR the Strategic Patroleum Reserve, 161 00:08:07,040 --> 00:08:10,080 Speaker 4: even if it was full, which it is not, unfortunately, 162 00:08:10,360 --> 00:08:13,560 Speaker 4: could not offset the loss of horror moves that when 163 00:08:13,600 --> 00:08:17,320 Speaker 4: we think about taking on Iran, it has the capability 164 00:08:17,360 --> 00:08:20,640 Speaker 4: to disrupt that twenty million barrels a day of crude 165 00:08:20,720 --> 00:08:24,440 Speaker 4: and some refined products twenty percent of LNG for longer, 166 00:08:24,480 --> 00:08:26,560 Speaker 4: perhaps than people think. It's not going to be the 167 00:08:26,560 --> 00:08:28,360 Speaker 4: first Golf War. It's not going to be the Second 168 00:08:28,360 --> 00:08:30,600 Speaker 4: Golf War when it was over in a few hours 169 00:08:30,600 --> 00:08:33,400 Speaker 4: to days. It's not going to be Nabbing Maduro or 170 00:08:33,400 --> 00:08:36,040 Speaker 4: even the twelve Day war. And so it's the most 171 00:08:36,120 --> 00:08:38,839 Speaker 4: serious kind of risk you can run. That being said 172 00:08:38,880 --> 00:08:43,680 Speaker 4: to be fair, you know, if we defang Iran and 173 00:08:43,720 --> 00:08:47,760 Speaker 4: we achieve our goals with Iran, and Iran is neutralized, 174 00:08:48,160 --> 00:08:51,760 Speaker 4: the benefits from an energy security standpoint, economic standpoint, and 175 00:08:52,360 --> 00:08:56,360 Speaker 4: terrorism and security standpoint are enormous. So I would be 176 00:08:56,400 --> 00:09:01,040 Speaker 4: telling him enormous risks, enormous rewards, and I would be 177 00:09:01,120 --> 00:09:07,400 Speaker 4: suggesting the priority militarily ought to be to suppress Iran's 178 00:09:07,440 --> 00:09:13,400 Speaker 4: still intact inventory of mines, missiles, drones, boats, submarines and 179 00:09:13,480 --> 00:09:18,240 Speaker 4: other things that could stretch out that interruption of horror moves, 180 00:09:18,240 --> 00:09:21,160 Speaker 4: because that is what's really going to hurt the global 181 00:09:21,160 --> 00:09:24,000 Speaker 4: economy and the US economy if Iran can shut down 182 00:09:24,000 --> 00:09:26,160 Speaker 4: that waterway well. 183 00:09:26,200 --> 00:09:28,240 Speaker 2: And so that's when the other Gulf States and other 184 00:09:28,240 --> 00:09:30,480 Speaker 2: OPEC producers come in here, Bob, because it's not just 185 00:09:30,520 --> 00:09:33,080 Speaker 2: about a risk reward calculation for the United States, but 186 00:09:33,120 --> 00:09:35,520 Speaker 2: our allies in this region as well, who might be 187 00:09:35,559 --> 00:09:38,480 Speaker 2: worried what if Iran comes for our infrastructure, actually takes 188 00:09:38,480 --> 00:09:40,920 Speaker 2: out our capacity for a significant period of time, our 189 00:09:40,960 --> 00:09:44,360 Speaker 2: ability to actually not just move this stuff through the 190 00:09:44,360 --> 00:09:47,360 Speaker 2: strait of horror moves, but originate it in our countries. 191 00:09:48,400 --> 00:09:51,360 Speaker 4: Absolutely, they do not want to see a conventional war, 192 00:09:51,800 --> 00:09:55,240 Speaker 4: wide scale war in their region. Look Saudi Arabia, it 193 00:09:56,160 --> 00:09:59,360 Speaker 4: suffered about as close a call as you could have 194 00:09:59,440 --> 00:10:02,400 Speaker 4: in September twenty nineteen when Iran attacked not only the 195 00:10:02,400 --> 00:10:06,360 Speaker 4: most important Saudi infrastructure, arguably the most important energy or 196 00:10:06,400 --> 00:10:10,480 Speaker 4: even economic facility on the planet, the Adcake stabilization plant. Now, 197 00:10:10,520 --> 00:10:14,000 Speaker 4: Iran chose back then to just show what it could do. 198 00:10:14,080 --> 00:10:17,400 Speaker 4: It didn't destroy it. So Saudi Arabia, UA other countries 199 00:10:17,440 --> 00:10:21,760 Speaker 4: are very vulnerable. So is Iran if this conflict spreads 200 00:10:21,760 --> 00:10:25,880 Speaker 4: to attacking each other's above ground energy infrastructure. Kaylie, you 201 00:10:25,880 --> 00:10:29,400 Speaker 4: got to be careful with predictions. I'm thinking that's less likely. 202 00:10:29,440 --> 00:10:32,120 Speaker 4: Saudi Arabia is in a better place with Iran right now. 203 00:10:32,320 --> 00:10:35,840 Speaker 4: If Iran were to inflict catastrophic damage on Saudi or 204 00:10:35,880 --> 00:10:39,080 Speaker 4: other facilities, I think their response would be the ending 205 00:10:39,080 --> 00:10:41,560 Speaker 4: of the Iranian regime, So it would only be something 206 00:10:41,600 --> 00:10:45,120 Speaker 4: they do in extreme dire straits. It'd probably be the 207 00:10:45,200 --> 00:10:48,920 Speaker 4: last thing the Iranians did. And so I think the 208 00:10:49,000 --> 00:10:52,600 Speaker 4: focus will be on raising the price of oil to 209 00:10:52,840 --> 00:10:56,319 Speaker 4: try to back President Trump off temporarily. 210 00:10:56,559 --> 00:10:58,640 Speaker 7: And you do that by just stopping the flow through 211 00:10:58,640 --> 00:10:59,080 Speaker 7: who are. 212 00:10:58,960 --> 00:11:01,560 Speaker 4: Moved, because that's something you can start again once the 213 00:11:01,600 --> 00:11:02,320 Speaker 4: conflict's over. 214 00:11:03,760 --> 00:11:06,120 Speaker 2: Okay, So, how far in terms of raising the price 215 00:11:06,120 --> 00:11:09,079 Speaker 2: of oil realistically. Do you think we could see in 216 00:11:09,400 --> 00:11:12,120 Speaker 2: this scenario, Bob, Because right now I'm looking at Brent 217 00:11:12,200 --> 00:11:13,760 Speaker 2: crude seventy two dollars a barrel. 218 00:11:13,800 --> 00:11:16,920 Speaker 6: Are we talking triple digits once again? Are we talking ninety? 219 00:11:16,960 --> 00:11:17,679 Speaker 6: Do you have a sense? 220 00:11:18,640 --> 00:11:19,920 Speaker 7: Yeah? 221 00:11:18,920 --> 00:11:22,760 Speaker 4: I think on the outbreak of conflict, should that happen, 222 00:11:23,240 --> 00:11:25,400 Speaker 4: I think we're probably going up another three to five 223 00:11:25,480 --> 00:11:26,640 Speaker 4: dollars a barrel easily. 224 00:11:27,160 --> 00:11:27,959 Speaker 7: We've had We've been. 225 00:11:27,920 --> 00:11:30,079 Speaker 4: Telling clients for some time now, there's a seventy five 226 00:11:30,120 --> 00:11:34,120 Speaker 4: percent probability of military escalation. As you mentioned, there's a 227 00:11:34,120 --> 00:11:36,400 Speaker 4: good five to ten dollars in the price right now, 228 00:11:36,559 --> 00:11:39,640 Speaker 4: more spreading in the options markets, but we think we 229 00:11:39,679 --> 00:11:41,400 Speaker 4: have a ways to go, so it's probably up three 230 00:11:41,440 --> 00:11:44,440 Speaker 4: to five. You know, Kaylee, I can actually see a 231 00:11:44,520 --> 00:11:48,320 Speaker 4: relief drop in oil prices as the conflict extends, because 232 00:11:48,360 --> 00:11:50,000 Speaker 4: the market may think, oh, wait a minute, when the 233 00:11:50,080 --> 00:11:53,280 Speaker 4: US shoots at an adversary in the Gulf, it wins 234 00:11:53,320 --> 00:11:55,640 Speaker 4: within hours to days. I hear over and over, oh, 235 00:11:55,679 --> 00:11:57,160 Speaker 4: the US is going to clean up the straight up 236 00:11:57,160 --> 00:11:58,120 Speaker 4: our moves in days. 237 00:11:58,559 --> 00:11:59,600 Speaker 7: I think that's mistaken. 238 00:11:59,800 --> 00:12:02,200 Speaker 4: I wouldn't be surprised if we saw a spike and 239 00:12:02,240 --> 00:12:04,959 Speaker 4: then a reversal. But I think if Iran chose, and 240 00:12:05,040 --> 00:12:08,720 Speaker 4: our military advisors tell us, if Iran chose to make 241 00:12:08,800 --> 00:12:12,280 Speaker 4: the horror moves straight unsafe, it could do so for 242 00:12:12,440 --> 00:12:15,720 Speaker 4: weeks square, like back in April when the Houties absorbed 243 00:12:15,760 --> 00:12:18,920 Speaker 4: fifty two days of pummeling by the US military and 244 00:12:18,960 --> 00:12:21,600 Speaker 4: we did not stop them from making Babo Mondablin say. 245 00:12:21,720 --> 00:12:24,760 Speaker 4: Iran has much better weaponry, better coastline than the Huties, 246 00:12:24,920 --> 00:12:28,080 Speaker 4: So I can almost see spikes and reversals here. And 247 00:12:28,120 --> 00:12:30,800 Speaker 4: if it gets to a prolonged horrorm moves disruption well 248 00:12:30,840 --> 00:12:33,080 Speaker 4: over one hundred dollars a barrel, it'll have to cause 249 00:12:33,120 --> 00:12:35,200 Speaker 4: to demand destruction through economic downturn. 250 00:12:36,600 --> 00:12:41,000 Speaker 2: Wow, that's incredible to consider, Bob. It's so valuable to 251 00:12:41,000 --> 00:12:43,400 Speaker 2: have you weighing in on this potential conflict. But I 252 00:12:43,440 --> 00:12:45,319 Speaker 2: also want to ask you about some other areas as 253 00:12:45,320 --> 00:12:48,560 Speaker 2: well as of course, we're seeing another escalation at the 254 00:12:48,640 --> 00:12:52,240 Speaker 2: very least rhetoric around our relationship with Cuba, and of 255 00:12:52,240 --> 00:12:55,400 Speaker 2: course the US playing more active role now and choking 256 00:12:55,400 --> 00:12:58,160 Speaker 2: off Cuban supplies, including that of energy. Bloomberg is now 257 00:12:58,200 --> 00:13:00,280 Speaker 2: out with a story that's just crossed a red headline 258 00:13:00,360 --> 00:13:03,280 Speaker 2: on the Bloomberg terminal about the Trump administration aiming to 259 00:13:03,360 --> 00:13:07,320 Speaker 2: make Cuba more dependent on the United States for supplies. Apparently, 260 00:13:07,400 --> 00:13:10,400 Speaker 2: this plan would include reassuring energy companies that they can 261 00:13:10,400 --> 00:13:15,040 Speaker 2: sell oil and fuel to Cuban businesses, and authorizing the 262 00:13:15,080 --> 00:13:19,400 Speaker 2: resale of Venezuelan oil to Cuba under certain conditions. I 263 00:13:19,400 --> 00:13:21,679 Speaker 2: know you're hearing this news just as it's breaking, and 264 00:13:21,720 --> 00:13:23,240 Speaker 2: I'm reading it to you, Bob, But I wonder if 265 00:13:23,240 --> 00:13:24,760 Speaker 2: you have a thought as to whether or not Cuba 266 00:13:24,800 --> 00:13:28,480 Speaker 2: can actually become a real market for American energy what 267 00:13:28,520 --> 00:13:29,240 Speaker 2: this would entail. 268 00:13:30,320 --> 00:13:35,480 Speaker 4: Absolutely Now, I think the Trump administration it began with Venezuela, 269 00:13:35,520 --> 00:13:41,160 Speaker 4: but I think it's vision of ejecting foreign influence, adversarial 270 00:13:41,240 --> 00:13:46,800 Speaker 4: infants in our hemisphere and confronting and defeating regimes in 271 00:13:46,840 --> 00:13:50,479 Speaker 4: the region that are hostile to the United States is underway, 272 00:13:50,600 --> 00:13:55,000 Speaker 4: and Cuba's probably next after Venezuela. On that being said, 273 00:13:55,320 --> 00:13:57,239 Speaker 4: I don't think you're going to see as an aggressive 274 00:13:57,280 --> 00:13:58,679 Speaker 4: approach to Cuba. 275 00:13:58,400 --> 00:13:59,360 Speaker 7: As you do with Venezuela. 276 00:13:59,400 --> 00:14:02,560 Speaker 4: I don't think the administration, Marco Rubio, the President, want 277 00:14:02,600 --> 00:14:05,320 Speaker 4: to cause a humanitarian crisis and Cuba in some ways 278 00:14:05,440 --> 00:14:08,280 Speaker 4: is even more vulnerable than many other countries in the region. 279 00:14:08,400 --> 00:14:11,240 Speaker 4: So I think the Russians are sending a boat there. 280 00:14:11,280 --> 00:14:13,800 Speaker 4: I don't think we want to have another Cuban crisis 281 00:14:13,800 --> 00:14:16,360 Speaker 4: with Russia, so I don't think we're necessarily in a 282 00:14:16,440 --> 00:14:19,720 Speaker 4: huge hurry. And I think they're going to be toggling 283 00:14:19,760 --> 00:14:23,680 Speaker 4: things and calibrating pressure and inducements. But I think they 284 00:14:23,760 --> 00:14:29,040 Speaker 4: see that the trend is toward pushing Cuba to come 285 00:14:29,080 --> 00:14:31,320 Speaker 4: closer to the United States, and so I think that 286 00:14:31,360 --> 00:14:34,280 Speaker 4: maybe is reflected in this sort of balanced policy and 287 00:14:34,320 --> 00:14:37,120 Speaker 4: balanced announcement you're seeing well. 288 00:14:37,160 --> 00:14:39,200 Speaker 2: And of course Venezuela is tied into this as well, 289 00:14:39,200 --> 00:14:42,320 Speaker 2: and you mentioned it, Bob. What role is the Venezuelan 290 00:14:42,480 --> 00:14:45,240 Speaker 2: oil that the US is now selling playing in the 291 00:14:45,240 --> 00:14:46,280 Speaker 2: global market right now? 292 00:14:46,280 --> 00:14:47,480 Speaker 6: What kind of factor is it? 293 00:14:48,560 --> 00:14:50,680 Speaker 4: You know, it's a big factor, but for a small 294 00:14:50,720 --> 00:14:54,840 Speaker 4: part of the market. If you're a complex refiner and 295 00:14:54,920 --> 00:14:59,000 Speaker 4: you'd love to slurp, if you will to consume then 296 00:14:59,040 --> 00:15:03,080 Speaker 4: as well as gunk, heavy, sulfurous, poisonous oil, your love, 297 00:15:03,160 --> 00:15:05,320 Speaker 4: it's a huge deal because you couldn't get this really, 298 00:15:05,360 --> 00:15:07,560 Speaker 4: it was all going to China. So if you're a 299 00:15:07,640 --> 00:15:10,360 Speaker 4: Chinese competitor with the United States refiner. You're not happy. 300 00:15:10,520 --> 00:15:13,920 Speaker 4: If you're a US refiner that likes this stuff. Christmas 301 00:15:13,960 --> 00:15:16,400 Speaker 4: just keeps on rolling on for you. It's wonderful. But 302 00:15:16,520 --> 00:15:19,440 Speaker 4: the overall volumes in the measure, in the hundreds of 303 00:15:19,480 --> 00:15:21,840 Speaker 4: thousands of barrels a day, are a drop in the bucket. 304 00:15:21,880 --> 00:15:24,880 Speaker 4: In the broader global oil market. What's happening in Iran 305 00:15:25,000 --> 00:15:27,400 Speaker 4: is much more important. What's happening in Russia is much 306 00:15:27,400 --> 00:15:29,920 Speaker 4: more important than's happening in Venezuela in terms of the 307 00:15:29,920 --> 00:15:32,960 Speaker 4: broad market. It's more of a niche of the market, 308 00:15:33,000 --> 00:15:37,560 Speaker 4: this supply and demand for this very healthy, heavy sulfurous crude. 309 00:15:39,640 --> 00:15:41,800 Speaker 2: All right, Bob, We so appreciate it a voice of 310 00:15:41,840 --> 00:15:44,400 Speaker 2: expertise on this sector and how it ties into these 311 00:15:44,440 --> 00:15:47,680 Speaker 2: many geopolitical dynamics we are facing right now. Thank you 312 00:15:47,760 --> 00:15:49,920 Speaker 2: so much, Bob McNally, founder and president of the Rapid 313 00:15:49,960 --> 00:15:52,320 Speaker 2: and Energy Group, and again former Special Assistant and Senior 314 00:15:52,400 --> 00:15:55,560 Speaker 2: Director for International Energy on the National Security Council under 315 00:15:55,600 --> 00:15:57,000 Speaker 2: President George W. 316 00:15:57,080 --> 00:15:57,360 Speaker 7: Bush. 317 00:15:57,440 --> 00:15:59,600 Speaker 2: Now regarding those talks between the US and Iran which 318 00:15:59,600 --> 00:16:02,080 Speaker 2: again are underway in Geneva, a third round today, we 319 00:16:02,120 --> 00:16:05,120 Speaker 2: do have some fresh reporting out this from Axios that 320 00:16:05,240 --> 00:16:07,560 Speaker 2: Jared Kushner and Steve Whitcoff, who of course are the 321 00:16:07,640 --> 00:16:10,880 Speaker 2: U two US envoys who are charged with leading these talks, 322 00:16:11,160 --> 00:16:14,720 Speaker 2: were disappointed by the morning session. Remember there was talks 323 00:16:14,720 --> 00:16:17,240 Speaker 2: this morning. Then they took a break and returned for 324 00:16:17,280 --> 00:16:20,920 Speaker 2: a second session, and according to Axios, that evening session 325 00:16:21,320 --> 00:16:24,240 Speaker 2: is still ongoing. So these negotiations are still underway, but 326 00:16:24,280 --> 00:16:27,800 Speaker 2: again Wikoff and Kushner apparently disappointed by what they heard 327 00:16:27,840 --> 00:16:30,920 Speaker 2: from the Iranians earlier today. We'll continue to follow this 328 00:16:31,000 --> 00:16:33,240 Speaker 2: story for you, and we'll have more with our political panel. 329 00:16:33,360 --> 00:16:35,520 Speaker 10: Stay with us on Balance of Power. We'll have much 330 00:16:35,560 --> 00:16:36,720 Speaker 10: more coming up after this. 331 00:16:41,120 --> 00:16:44,600 Speaker 1: You're listening to the Bloomberg Balance of Power podcast Ketch 332 00:16:44,680 --> 00:16:47,520 Speaker 1: us live weekdays at noon and five pm. E's durn 333 00:16:47,680 --> 00:16:51,080 Speaker 1: on Apple, Cockway and Android Auto with the Bloomberg Business App. 334 00:16:51,120 --> 00:16:54,160 Speaker 1: You can also listen live on Amazon Alexa from our 335 00:16:54,200 --> 00:16:59,320 Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty. 336 00:17:00,120 --> 00:17:00,920 Speaker 6: Course of It's Thursday. 337 00:17:00,920 --> 00:17:03,680 Speaker 2: That means we're two days post President Trump's State of 338 00:17:03,720 --> 00:17:06,439 Speaker 2: the Union address, which, as we all anticipated, focused at 339 00:17:06,520 --> 00:17:09,840 Speaker 2: least in part on the issue of affordability, casting blame 340 00:17:09,880 --> 00:17:13,880 Speaker 2: on Democrats for the higher prices Americans are experiencing, even 341 00:17:13,920 --> 00:17:16,560 Speaker 2: more than a year after the presidency of Joe Biden 342 00:17:16,600 --> 00:17:18,760 Speaker 2: came to an end, and also pointing to areas in 343 00:17:18,800 --> 00:17:22,320 Speaker 2: which prices have come down since President Trump took office. 344 00:17:22,359 --> 00:17:24,119 Speaker 2: It's a message that he delivered to the millions of 345 00:17:24,160 --> 00:17:26,679 Speaker 2: people who tuned in for at least part of that 346 00:17:26,760 --> 00:17:27,879 Speaker 2: almost two hour long. 347 00:17:27,760 --> 00:17:28,880 Speaker 6: Speech on Tuesday night. 348 00:17:28,920 --> 00:17:31,119 Speaker 2: But it's a message now that the administration is taking 349 00:17:31,480 --> 00:17:35,040 Speaker 2: on the road, not just via President Trump, but other surrogates, 350 00:17:35,040 --> 00:17:40,040 Speaker 2: including today Vice President jd Vance, who made travel to Wisconsin, 351 00:17:40,119 --> 00:17:43,800 Speaker 2: actually just wrapping up a speech at a machining facility 352 00:17:43,800 --> 00:17:46,120 Speaker 2: in Plover, Wisconsin, doing his best to sell the Trump 353 00:17:46,200 --> 00:17:50,000 Speaker 2: economic agenda, answering questions there from local media, including around 354 00:17:50,400 --> 00:17:53,120 Speaker 2: the President's tariffs, which he say are aimed says are 355 00:17:53,119 --> 00:17:55,439 Speaker 2: aimed at helping Americans, and we want to bring the 356 00:17:55,440 --> 00:17:58,040 Speaker 2: panel in on this as we turn now to Rick Davis, 357 00:17:58,040 --> 00:18:00,359 Speaker 2: who of course is a Republican strategist, partner at Court 358 00:18:00,400 --> 00:18:03,320 Speaker 2: Capital and Bloomberg Politics contributor, joined today by Megan Hayes, 359 00:18:03,520 --> 00:18:07,320 Speaker 2: former special assistant to President Biden and Democratic strategists. Welcome 360 00:18:07,359 --> 00:18:09,720 Speaker 2: to you both, Rick, I'd love to get your take 361 00:18:09,760 --> 00:18:13,560 Speaker 2: on just jd Vance as the messenger here, with his upbringing, 362 00:18:13,600 --> 00:18:16,119 Speaker 2: with his populist bonafides, Is he actually one of the 363 00:18:16,119 --> 00:18:19,359 Speaker 2: better people to sell this economy, this Trump economy to 364 00:18:19,440 --> 00:18:19,879 Speaker 2: the public. 365 00:18:21,240 --> 00:18:23,120 Speaker 11: Yeah, I would say, just as a note, I think 366 00:18:23,200 --> 00:18:25,679 Speaker 11: that part of what the administration is doing better this 367 00:18:25,760 --> 00:18:28,440 Speaker 11: year than they did a year ago is sending the cabinet, 368 00:18:28,520 --> 00:18:31,520 Speaker 11: is sending the vice president out on these tours around 369 00:18:31,560 --> 00:18:34,760 Speaker 11: the country to promote the message that the President delivered 370 00:18:34,840 --> 00:18:39,199 Speaker 11: on Tuesday. So kudos to the administration for getting their 371 00:18:39,280 --> 00:18:44,720 Speaker 11: organizational act together and realizing in a competitive midterm they've 372 00:18:44,720 --> 00:18:47,000 Speaker 11: really got an extra you got to work at extra hard. 373 00:18:48,000 --> 00:18:48,240 Speaker 7: Yes. 374 00:18:48,359 --> 00:18:48,560 Speaker 10: Jd. 375 00:18:48,720 --> 00:18:51,639 Speaker 11: Vance in the Midwest is a commodity that's worth selling. 376 00:18:52,400 --> 00:18:57,200 Speaker 11: He's got a lot of popularity in Ohio and Minneapolis, Minnesota, 377 00:18:57,359 --> 00:19:03,280 Speaker 11: not necessarily Minneapolis and Wisconson, and so yes, I mean 378 00:19:03,280 --> 00:19:06,000 Speaker 11: there's going to be some competitive races there and having 379 00:19:06,080 --> 00:19:09,080 Speaker 11: him present there is going to help the Republican turn out. 380 00:19:10,840 --> 00:19:11,080 Speaker 10: Well. 381 00:19:11,160 --> 00:19:13,200 Speaker 2: So if he might be a better person to sell 382 00:19:13,200 --> 00:19:15,560 Speaker 2: the message mag And I do wonder about the message 383 00:19:16,080 --> 00:19:19,000 Speaker 2: itself that they're trying to sell. You obviously worked for 384 00:19:19,040 --> 00:19:22,280 Speaker 2: a president that tried and really struggled to say my 385 00:19:22,359 --> 00:19:26,720 Speaker 2: economy is better, at least statistically via the data, then 386 00:19:26,840 --> 00:19:30,040 Speaker 2: you might feel that it is. We know that dog 387 00:19:30,160 --> 00:19:32,359 Speaker 2: Joe Biden for much of his presidency in his re 388 00:19:32,440 --> 00:19:35,280 Speaker 2: election campaign while there was one, and it seems President 389 00:19:35,320 --> 00:19:37,520 Speaker 2: Trump is in the same position. Now, how do you 390 00:19:37,600 --> 00:19:40,399 Speaker 2: sell the idea of affordability to an electorate that is 391 00:19:40,440 --> 00:19:42,760 Speaker 2: still saying, at least toppolsters, things are too expensive. 392 00:19:43,880 --> 00:19:46,000 Speaker 12: Yeah, I mean, Jadvance can put lipstick on a peg, 393 00:19:46,000 --> 00:19:48,480 Speaker 12: but it's still a peg. He's going into Wisconsin, where 394 00:19:48,480 --> 00:19:51,480 Speaker 12: they've lost twenty two hundred manufacturing jobs since Donald Trump 395 00:19:51,560 --> 00:19:54,320 Speaker 12: took off it. They've already laid off four thousand people 396 00:19:54,320 --> 00:19:57,520 Speaker 12: in their workforce and sixteen family farms, which is a 397 00:19:57,600 --> 00:20:00,359 Speaker 12: seven hundred percent increase from twenty twenty five, or have 398 00:20:00,400 --> 00:20:04,119 Speaker 12: declared bankruptcy. That's not happening because the economy is doing 399 00:20:04,200 --> 00:20:06,800 Speaker 12: well and these tariffs are helping them. They are a 400 00:20:06,840 --> 00:20:09,840 Speaker 12: direct impact, and they are attacks on people in their 401 00:20:09,880 --> 00:20:12,800 Speaker 12: state and they are losing jobs in their economy suffering 402 00:20:12,880 --> 00:20:15,400 Speaker 12: because of it. So Jdvance can go there and try 403 00:20:15,440 --> 00:20:19,520 Speaker 12: to spin all of Donald Trump's narratives and the administration's policies. 404 00:20:19,520 --> 00:20:21,520 Speaker 12: But the fact of the matter is people in Wisconsin, 405 00:20:21,880 --> 00:20:24,080 Speaker 12: just like along with the rest of the country, really 406 00:20:24,119 --> 00:20:26,639 Speaker 12: feel it in their pocketbooks when they can't afford things. 407 00:20:26,680 --> 00:20:29,080 Speaker 12: So they can go there and give speeches, but you know, 408 00:20:29,119 --> 00:20:31,320 Speaker 12: it does not change that people still can't afford things, 409 00:20:31,320 --> 00:20:34,400 Speaker 12: and the numbers don't lie. When people's increase and electricity 410 00:20:34,440 --> 00:20:36,399 Speaker 12: goes up and they can't afford to pay it, that 411 00:20:36,560 --> 00:20:38,960 Speaker 12: is a real problem for a lot of the American people. 412 00:20:40,760 --> 00:20:43,679 Speaker 2: Well, it's obviously a problem that Jadvance is trying to 413 00:20:43,720 --> 00:20:46,760 Speaker 2: tackle today or at least a message his way around. 414 00:20:46,800 --> 00:20:49,240 Speaker 2: But it's not just that that Jadvance is up to Rick, 415 00:20:49,280 --> 00:20:51,399 Speaker 2: because as of Tuesday night, when the President announced it 416 00:20:51,440 --> 00:20:53,680 Speaker 2: mid State of the Union, apparently jd Vance is also 417 00:20:54,040 --> 00:20:56,600 Speaker 2: helping to lead the war on fraud, a war that 418 00:20:56,680 --> 00:21:00,000 Speaker 2: he launched yesterday by announcing a pause on federal medical 419 00:21:00,280 --> 00:21:04,520 Speaker 2: reimbursements to Minnesota. Is this an assignment that jd Vance, 420 00:21:04,520 --> 00:21:06,480 Speaker 2: as we consider not just Jadvance the vice president but 421 00:21:06,560 --> 00:21:10,000 Speaker 2: jd Vance the potential twenty twenty eight presidential candidate, is 422 00:21:10,000 --> 00:21:11,880 Speaker 2: this an assignment that he can make work for him. 423 00:21:13,080 --> 00:21:15,560 Speaker 11: Yeah, it's a bit of an insider deal. You know, 424 00:21:15,680 --> 00:21:21,800 Speaker 11: MAGA has been obsessed with this you know situation in Minnesota. 425 00:21:21,880 --> 00:21:29,919 Speaker 11: It's been highly circulated around mega social media you know platforms, 426 00:21:30,000 --> 00:21:33,640 Speaker 11: and I would say, from what I've seen in the numbers, 427 00:21:33,720 --> 00:21:39,040 Speaker 11: has not broken into sort of the popular nationwide discussion. 428 00:21:39,400 --> 00:21:41,200 Speaker 11: President put it on the agenda Tuesday. 429 00:21:42,160 --> 00:21:43,080 Speaker 7: I think if jd. 430 00:21:43,240 --> 00:21:46,040 Speaker 11: Vance is looking to pursue a presidential race in twenty 431 00:21:46,040 --> 00:21:49,360 Speaker 11: eight and wants to be the darling of the mega movement, 432 00:21:50,240 --> 00:21:52,879 Speaker 11: then yeah, it makes sense that he'd want to own this. 433 00:21:53,000 --> 00:21:57,480 Speaker 11: But I think that from a broader perspective, I can't 434 00:21:57,520 --> 00:22:02,080 Speaker 11: disagree that unless you're talking about affordability in a place 435 00:22:02,240 --> 00:22:06,040 Speaker 11: like Wisconsin, especially today, then you're missing the mark on 436 00:22:06,080 --> 00:22:10,200 Speaker 11: what the messaging is. And so, yeah, great that he's 437 00:22:10,240 --> 00:22:11,720 Speaker 11: going to do it. I think it helps him with 438 00:22:11,800 --> 00:22:15,280 Speaker 11: the base of the MAGA movement. But is that going 439 00:22:15,320 --> 00:22:17,879 Speaker 11: to change any votes leading up to the midterms. No, 440 00:22:18,600 --> 00:22:23,600 Speaker 11: And frankly, a lot of his prospects for national office 441 00:22:23,600 --> 00:22:26,560 Speaker 11: in the future are tied to their ability to not 442 00:22:26,680 --> 00:22:29,639 Speaker 11: have a bloodbath in November of this year, and so 443 00:22:30,720 --> 00:22:32,360 Speaker 11: I'm not sure I'd spend a lot of time talking 444 00:22:32,359 --> 00:22:35,879 Speaker 11: about fraud unless it's directly related what the price of 445 00:22:35,920 --> 00:22:36,439 Speaker 11: bacon is. 446 00:22:38,520 --> 00:22:40,080 Speaker 2: Well, Megan, I'd love for you to weigh in on 447 00:22:40,119 --> 00:22:42,960 Speaker 2: that idea of the twenty twenty eight prospects as well. 448 00:22:42,960 --> 00:22:44,560 Speaker 2: I know we're a long way out from that, but 449 00:22:44,680 --> 00:22:47,560 Speaker 2: it seems that President Trump keeps playing into this oh 450 00:22:47,600 --> 00:22:50,080 Speaker 2: who will I pick kind of narrative on JD. Vance, 451 00:22:50,119 --> 00:22:52,600 Speaker 2: the Vice President, Marco Rubio, the Secretary of State, And 452 00:22:52,640 --> 00:22:56,000 Speaker 2: it was not Vance that really was applauded by the 453 00:22:56,000 --> 00:22:58,240 Speaker 2: President out of the State of the Union, but Marco Rubio, 454 00:22:58,280 --> 00:22:59,760 Speaker 2: who was called out for his efforts to diple the 455 00:22:59,800 --> 00:23:02,680 Speaker 2: matter on a variety of fronts, and at least half 456 00:23:02,720 --> 00:23:05,640 Speaker 2: of the room stood for him at that point. Where 457 00:23:05,640 --> 00:23:09,600 Speaker 2: do you come down on this idea of Vance versus Rubio, 458 00:23:09,640 --> 00:23:11,720 Speaker 2: and the two, of course are reportedly very good friends. 459 00:23:13,359 --> 00:23:14,920 Speaker 6: It will be interesting to see how it sort of 460 00:23:14,920 --> 00:23:15,320 Speaker 6: plays out. 461 00:23:15,359 --> 00:23:17,240 Speaker 12: I think that part of this fraud assignment is that 462 00:23:17,320 --> 00:23:19,920 Speaker 12: Jade Vance needs something to do, and he needs something 463 00:23:19,920 --> 00:23:22,480 Speaker 12: that he can actually try to tackle as vice president 464 00:23:22,520 --> 00:23:25,160 Speaker 12: because normally the vice president handles a lot of foreign policy. 465 00:23:25,160 --> 00:23:27,439 Speaker 12: That's what we did when Joe Biden was the vice president. 466 00:23:27,440 --> 00:23:29,440 Speaker 12: We traveled all over the world and really held the 467 00:23:29,480 --> 00:23:33,679 Speaker 12: diplomatic core and those negotiations, but Marco Rubio is clearly 468 00:23:33,760 --> 00:23:35,800 Speaker 12: much more effective at doing that. We saw that in 469 00:23:35,880 --> 00:23:37,919 Speaker 12: Munich this year. Jade Vance kind of went there and 470 00:23:38,240 --> 00:23:40,119 Speaker 12: made a disgrace, had a lot of mess that the 471 00:23:40,200 --> 00:23:42,359 Speaker 12: United States had to then clean up. But Marco Rubio 472 00:23:42,440 --> 00:23:44,679 Speaker 12: went said very similar things, but his tone was different, 473 00:23:44,680 --> 00:23:47,880 Speaker 12: and he's received much differently abroad. So it's just it's 474 00:23:47,920 --> 00:23:49,520 Speaker 12: sort of interesting to see how it plays I just 475 00:23:49,520 --> 00:23:52,639 Speaker 12: think that Marco Rubio has more of an opportunity to 476 00:23:52,720 --> 00:23:55,199 Speaker 12: show the American people what he can do diplomatically, and 477 00:23:55,240 --> 00:23:56,440 Speaker 12: that he's already been a senator. 478 00:23:56,440 --> 00:23:58,959 Speaker 6: He seems to be a much better candidate. 479 00:23:58,960 --> 00:24:02,400 Speaker 12: And Jadvance will always be tied to Donald Trump's economic policies, 480 00:24:02,400 --> 00:24:05,040 Speaker 12: where Marco Riveo gets to sort of distance himself from 481 00:24:05,040 --> 00:24:07,800 Speaker 12: the domestic policy. So it'll be interesting to see how 482 00:24:07,840 --> 00:24:10,360 Speaker 12: it plays out. But I don't think jade Vance has 483 00:24:10,400 --> 00:24:12,240 Speaker 12: a really good shot unless they can clean up the 484 00:24:12,240 --> 00:24:14,200 Speaker 12: economy and people really feel it. 485 00:24:15,760 --> 00:24:15,960 Speaker 6: Well. 486 00:24:15,960 --> 00:24:18,720 Speaker 2: On the issue of the economy and of affordability. Obviously, 487 00:24:18,760 --> 00:24:21,320 Speaker 2: housing plays a role in that, and we understand that 488 00:24:21,359 --> 00:24:24,160 Speaker 2: the New York City Mayor Zarnmumdanni is meeting with President 489 00:24:24,200 --> 00:24:26,800 Speaker 2: Trump at the White House today to discuss housing. Keeping 490 00:24:26,800 --> 00:24:29,640 Speaker 2: in mind that the President also talked about Mom Donnie 491 00:24:29,760 --> 00:24:31,720 Speaker 2: in his State of the Union address on Tuesday, here's 492 00:24:31,720 --> 00:24:34,639 Speaker 2: a reminder. And even the new communist mall of New 493 00:24:34,720 --> 00:24:36,080 Speaker 2: York City, I think he's a nice guy. 494 00:24:36,240 --> 00:24:37,960 Speaker 7: Actually speak to him a lot. 495 00:24:38,920 --> 00:24:42,320 Speaker 2: Bad policy, but nice guy just said they want people 496 00:24:43,160 --> 00:24:44,760 Speaker 2: to shovel snow. 497 00:24:44,800 --> 00:24:47,479 Speaker 7: They got hit high. 498 00:24:47,520 --> 00:24:48,760 Speaker 6: He says. He speaks to him a lot. 499 00:24:48,840 --> 00:24:51,879 Speaker 2: Rick apparently speaking him to him in person at the 500 00:24:51,880 --> 00:24:54,680 Speaker 2: White House today. According to Bloomberg's reporting, and this is 501 00:24:54,760 --> 00:24:57,080 Speaker 2: via sources familiar with the matter, they're expected to focus 502 00:24:57,119 --> 00:25:00,480 Speaker 2: on housing development in New York City, specifically discussed ways 503 00:25:00,760 --> 00:25:04,240 Speaker 2: the city can pave the way for more big projects. 504 00:25:04,440 --> 00:25:06,920 Speaker 2: Are you surprised to see this kind of collaboration between 505 00:25:06,960 --> 00:25:10,200 Speaker 2: a Republican president and someone he's describing as a communist? 506 00:25:11,960 --> 00:25:16,400 Speaker 11: Any Republican president, Yes, this Republican president. No. Donald Trump 507 00:25:16,760 --> 00:25:19,040 Speaker 11: seems to always fall in love with those he hates 508 00:25:19,080 --> 00:25:22,840 Speaker 11: the most and obviously said a lot of really tough 509 00:25:22,880 --> 00:25:26,600 Speaker 11: things about Mondani before the election. Mandanni came to Washington 510 00:25:26,680 --> 00:25:28,399 Speaker 11: met with the President and you thought he was his 511 00:25:28,760 --> 00:25:33,280 Speaker 11: new adopted son. It's quite a turnaround. But look, I mean, 512 00:25:33,320 --> 00:25:35,040 Speaker 11: at the end of the day, I think even for 513 00:25:35,119 --> 00:25:39,200 Speaker 11: Donald Trump, these policies that Mondannie's promoting in New York City, 514 00:25:39,640 --> 00:25:42,240 Speaker 11: especially one hundred billion dollars plan to build two hundred 515 00:25:42,280 --> 00:25:49,359 Speaker 11: thousand union produced housing units, is more than Donald Trump 516 00:25:49,440 --> 00:25:53,320 Speaker 11: can swallow. Mandanni needs the federal government. He won't have 517 00:25:53,359 --> 00:25:55,560 Speaker 11: that opportunity to get money out of the state in 518 00:25:55,560 --> 00:25:57,919 Speaker 11: an election year. And so if he wants to make 519 00:25:57,920 --> 00:26:00,280 Speaker 11: go on his promises, he's got to find a benefactor. 520 00:26:00,840 --> 00:26:03,399 Speaker 11: And why not go to the biggest person in the world, 521 00:26:03,400 --> 00:26:04,720 Speaker 11: and that's in Washington. 522 00:26:06,440 --> 00:26:08,960 Speaker 2: And I should note that it's actually political reporting that 523 00:26:09,000 --> 00:26:11,359 Speaker 2: we're leaning on here. Megan, please weigh in on this 524 00:26:11,440 --> 00:26:14,320 Speaker 2: as well. If your mom, Donnie, having just kind of 525 00:26:14,359 --> 00:26:17,359 Speaker 2: ridden this incredible wave to the mayor to become the 526 00:26:17,359 --> 00:26:20,600 Speaker 2: mayor of New York City, with this very specific message 527 00:26:20,600 --> 00:26:23,399 Speaker 2: to a democratic based specifically the left side of the 528 00:26:23,440 --> 00:26:26,240 Speaker 2: Democratic Party, how does it play optically for you to 529 00:26:26,280 --> 00:26:30,640 Speaker 2: be working closely with this president that Democrats clearly are 530 00:26:30,680 --> 00:26:31,359 Speaker 2: not a fan of. 531 00:26:32,800 --> 00:26:34,280 Speaker 6: I mean, I think it plays well for him. 532 00:26:34,320 --> 00:26:36,400 Speaker 12: He's he's doing what he needs to do to get 533 00:26:36,440 --> 00:26:38,479 Speaker 12: things done for his city, and that's exactly what our 534 00:26:38,480 --> 00:26:40,800 Speaker 12: elected officials should do. They should cross party lines and 535 00:26:41,280 --> 00:26:42,960 Speaker 12: work with people to get it done. I do think 536 00:26:43,000 --> 00:26:45,200 Speaker 12: it's problematic for Donald Trump and the fact that he's 537 00:26:45,240 --> 00:26:47,040 Speaker 12: taking the wind out of the sales of all the 538 00:26:47,080 --> 00:26:50,119 Speaker 12: Republicans that are trying to plaint Memnami as a boogeyman 539 00:26:50,280 --> 00:26:52,359 Speaker 12: while working with him, inviting him to the White House 540 00:26:52,400 --> 00:26:55,680 Speaker 12: and having these jovial conversations. So, you know, it's interesting 541 00:26:55,720 --> 00:26:58,439 Speaker 12: because the whole Republican Party is trying to make the 542 00:26:58,440 --> 00:27:00,879 Speaker 12: whole country believe that everyone is Dami and everyone is 543 00:27:00,920 --> 00:27:02,560 Speaker 12: a Communist and it's going to be like New York 544 00:27:02,600 --> 00:27:04,640 Speaker 12: City when it's just I mean, that's just not true, 545 00:27:04,680 --> 00:27:07,240 Speaker 12: as we all know. So the more that Trump cozies 546 00:27:07,320 --> 00:27:08,879 Speaker 12: up to them and they become buddy buddy, I think 547 00:27:08,920 --> 00:27:11,560 Speaker 12: it's just bad politically for Trump and Republicans. It doesn't 548 00:27:11,600 --> 00:27:13,280 Speaker 12: I don't think it impacts Democrats at all. 549 00:27:14,880 --> 00:27:18,359 Speaker 2: Well, and when we consider the issue specifically today that 550 00:27:18,400 --> 00:27:21,760 Speaker 2: they're discussing this one of housing, Megan, is this an 551 00:27:21,800 --> 00:27:24,159 Speaker 2: area in which Democrats and Republicans, to your point on 552 00:27:24,240 --> 00:27:27,080 Speaker 2: on working together for the betterment of your constituency. Is 553 00:27:27,080 --> 00:27:29,320 Speaker 2: this going to be one of the few bipartisan areas 554 00:27:29,560 --> 00:27:32,919 Speaker 2: of compromise, perhaps even legislative effort that we see in 555 00:27:32,960 --> 00:27:35,640 Speaker 2: this midterm years. Housing basically as good as it gets. 556 00:27:35,680 --> 00:27:38,560 Speaker 2: If you're looking for progress on something, I. 557 00:27:38,480 --> 00:27:41,840 Speaker 12: Mean, I would sure hope. So housing is extremely unaffordable 558 00:27:41,880 --> 00:27:44,280 Speaker 12: for people. There isn't enough rental homes for people to 559 00:27:44,320 --> 00:27:46,119 Speaker 12: live in. So I do think it is a major issue. 560 00:27:46,119 --> 00:27:49,919 Speaker 12: And it's not just impacting cities, it's impacting small communities 561 00:27:49,960 --> 00:27:51,520 Speaker 12: as well. So it is something that I would hope 562 00:27:51,520 --> 00:27:54,320 Speaker 12: that people could work bipartisan on because it does impact 563 00:27:54,480 --> 00:27:56,600 Speaker 12: literally every single person needs a place to live. 564 00:27:56,680 --> 00:27:58,600 Speaker 6: So I just you know, if there's one. 565 00:27:58,480 --> 00:28:00,280 Speaker 12: Issue that we could cross the lines of I always 566 00:28:00,280 --> 00:28:02,400 Speaker 12: thought it'd be healthcare, but I guess housing will have. 567 00:28:02,400 --> 00:28:02,680 Speaker 5: To do. 568 00:28:04,600 --> 00:28:04,960 Speaker 4: All right. 569 00:28:05,000 --> 00:28:08,080 Speaker 2: Megan Hayes and Rick Davis our political panel today. Thank 570 00:28:08,119 --> 00:28:10,360 Speaker 2: you so much for joining us, and I do want 571 00:28:10,400 --> 00:28:12,200 Speaker 2: to bring our audience here on Bloomberg TV and Radio 572 00:28:12,280 --> 00:28:14,960 Speaker 2: up to date on what we're watching in Geneva. Of course, 573 00:28:15,040 --> 00:28:17,600 Speaker 2: talks between the US and Iran that are being mediated 574 00:28:17,840 --> 00:28:20,280 Speaker 2: by Oman, and Oman is now saying that the talks 575 00:28:20,320 --> 00:28:24,320 Speaker 2: have finished for today and that the talks made significant progress. Again, 576 00:28:24,359 --> 00:28:26,679 Speaker 2: it's the mediator that's saying that we'll see what the 577 00:28:26,680 --> 00:28:29,439 Speaker 2: readout is from the United States and from Iran. Rather 578 00:28:29,560 --> 00:28:32,600 Speaker 2: enough progress was made to avoid military action for now. 579 00:28:32,640 --> 00:28:33,800 Speaker 2: We'll have more ahead right here. 580 00:28:34,000 --> 00:28:36,160 Speaker 10: Stay with us on Balance of Power. We'll have much 581 00:28:36,200 --> 00:28:37,359 Speaker 10: more coming up after this. 582 00:28:42,760 --> 00:28:46,400 Speaker 1: You're listening to the Bloomberg Balance of Power podcast Ketchays 583 00:28:46,480 --> 00:28:49,720 Speaker 1: live weekdays at noon and five pm Eastern on Apple, 584 00:28:49,800 --> 00:28:53,160 Speaker 1: Cocklay and Android Auto with the Bloomberg Business app. Listen 585 00:28:53,240 --> 00:28:56,360 Speaker 1: on demand wherever you get your podcasts, or watch us 586 00:28:56,400 --> 00:28:57,560 Speaker 1: live on YouTube. 587 00:28:58,880 --> 00:29:01,080 Speaker 10: Keep Nvidio in my mind because I need to ask 588 00:29:01,200 --> 00:29:05,800 Speaker 10: Chef about this madhouse reaction today. Thanks for being with us. 589 00:29:06,400 --> 00:29:09,320 Speaker 10: It's the Thursday edition of Balance of Power. You made 590 00:29:09,360 --> 00:29:11,680 Speaker 10: it a little Friday, and glad you here on Bloomberg Radio. 591 00:29:12,040 --> 00:29:15,200 Speaker 10: We're streaming live as always on YouTube search Bloomberg Business 592 00:29:15,240 --> 00:29:17,680 Speaker 10: News Live. Unless that's already part of your routine. It's 593 00:29:17,760 --> 00:29:20,400 Speaker 10: nice to meet you here again. We'll welcome our global 594 00:29:20,400 --> 00:29:24,200 Speaker 10: television audience to the conversation coming up at about one 595 00:29:24,240 --> 00:29:27,760 Speaker 10: pm Eastern Time. With our eyes on the other side 596 00:29:27,760 --> 00:29:29,600 Speaker 10: of the Potomac we're looking at the Pentagon here. In 597 00:29:29,640 --> 00:29:31,320 Speaker 10: the first half of this hour, we just talked to 598 00:29:31,360 --> 00:29:35,920 Speaker 10: Beca about Iran. This is a whole different matter involving Anthropic. 599 00:29:35,960 --> 00:29:38,160 Speaker 10: It's a story that we introduced to you earlier this 600 00:29:38,240 --> 00:29:40,680 Speaker 10: week in a conversation with Gregory Allen at the Center 601 00:29:40,680 --> 00:29:45,360 Speaker 10: for Strategic and International Studies. Gregory Allen, boy is the 602 00:29:45,400 --> 00:29:48,480 Speaker 10: salve that makes social media work. I think more than 603 00:29:48,480 --> 00:29:52,000 Speaker 10: four hundred thousand of you have watched this conversation on 604 00:29:52,080 --> 00:29:56,040 Speaker 10: YouTube alone. You start adding TikTok and the rest, and 605 00:29:56,080 --> 00:29:58,240 Speaker 10: this guy is helping to keep the lights on around here. 606 00:29:58,280 --> 00:30:03,640 Speaker 10: Listen to Gregory Ellen on guardrails that Anthropic wants to 607 00:30:03,680 --> 00:30:07,360 Speaker 10: see on its AI technology, so it will not include 608 00:30:07,480 --> 00:30:12,640 Speaker 10: mass surveillance or human free weapons, autonomous think the terminator, 609 00:30:13,440 --> 00:30:16,040 Speaker 10: of course, the top brass Well. I guess beginning with 610 00:30:16,080 --> 00:30:20,440 Speaker 10: Pete Hegseth don't want Anthropic to be making those decisions. 611 00:30:20,440 --> 00:30:22,920 Speaker 10: They want to be able to use this technology for 612 00:30:23,720 --> 00:30:28,440 Speaker 10: whatever they can. Now the best and final offers reportedly 613 00:30:28,480 --> 00:30:30,800 Speaker 10: gone out, and Bloomberg's done a lot of reporting on this. 614 00:30:31,560 --> 00:30:35,200 Speaker 10: Here's the aforementioned Gregory Allen. His take from csis knowing 615 00:30:35,280 --> 00:30:37,560 Speaker 10: that he worked on the AI program at the Pentagon 616 00:30:37,600 --> 00:30:38,480 Speaker 10: just a couple of years ago. 617 00:30:38,520 --> 00:30:41,560 Speaker 9: Listen, I'm sympathetic to the DoD In saying it needs 618 00:30:41,560 --> 00:30:44,840 Speaker 9: flexibility in these contracts terms. What I think is an 619 00:30:44,960 --> 00:30:49,120 Speaker 9: unreasonable escalation is threatening to designate Anthropic as a supplying 620 00:30:49,200 --> 00:30:51,480 Speaker 9: chain risk. That's what we do when we find out 621 00:30:51,480 --> 00:30:55,600 Speaker 9: companies are secretly have Chinese or Russian ownership, to take 622 00:30:55,720 --> 00:30:59,000 Speaker 9: a domestic AI champion at a time when the White 623 00:30:59,040 --> 00:31:01,640 Speaker 9: House is saying that the AI race with China is 624 00:31:01,680 --> 00:31:04,000 Speaker 9: equivalent to the space race during the Cold War with 625 00:31:04,040 --> 00:31:06,360 Speaker 9: the Soviet Union, you do not want to take one 626 00:31:06,400 --> 00:31:09,000 Speaker 9: of the crown jewels of your industry and light it 627 00:31:09,040 --> 00:31:11,240 Speaker 9: on fire over something like this. 628 00:31:12,760 --> 00:31:16,120 Speaker 10: Ah, but that might be about to happen with reports 629 00:31:16,160 --> 00:31:19,360 Speaker 10: now that the Pentagons got out to the old line 630 00:31:19,360 --> 00:31:21,560 Speaker 10: defense contractors and even some of the new ones to 631 00:31:21,600 --> 00:31:25,960 Speaker 10: find out how integrated their systems are with Aanthropic. How 632 00:31:25,960 --> 00:31:29,480 Speaker 10: difficult would it be to cut the cord and potentially 633 00:31:29,560 --> 00:31:32,040 Speaker 10: run this company into the ground if in fact they 634 00:31:32,040 --> 00:31:34,400 Speaker 10: were deemed a supply chain risk. This is what's on 635 00:31:34,440 --> 00:31:37,320 Speaker 10: the line here. We're talking about a company that was 636 00:31:37,360 --> 00:31:38,920 Speaker 10: going to be one of the biggest IPOs in the 637 00:31:38,960 --> 00:31:39,800 Speaker 10: world this year. 638 00:31:40,280 --> 00:31:41,160 Speaker 7: Hold your breath. 639 00:31:41,680 --> 00:31:44,760 Speaker 10: Mike Shepherd's been reporting on this for days and helped 640 00:31:44,800 --> 00:31:47,560 Speaker 10: to craft this beautiful, big take that we have on 641 00:31:47,680 --> 00:31:52,640 Speaker 10: the story today. Anthropics Pentagon showdown is about more than 642 00:31:52,680 --> 00:31:53,600 Speaker 10: AI guardrails. 643 00:31:53,640 --> 00:31:53,800 Speaker 5: Mike. 644 00:31:53,840 --> 00:31:56,080 Speaker 7: It's great to see you. As always, We're. 645 00:31:55,960 --> 00:31:58,360 Speaker 10: Going to get an up or down, The secretary says 646 00:31:58,360 --> 00:32:00,000 Speaker 10: by Friday, that's the ultimate. 647 00:32:00,520 --> 00:32:03,040 Speaker 7: Is this not looking for a prop It's unclear. 648 00:32:03,320 --> 00:32:05,960 Speaker 13: We're getting no signal though that the company is ready 649 00:32:06,000 --> 00:32:10,000 Speaker 13: to yield to the Pentagon's demands that it relinquished as 650 00:32:10,080 --> 00:32:12,960 Speaker 13: part of its usage policy those two conditions that you 651 00:32:13,080 --> 00:32:18,160 Speaker 13: just mentioned, no mass surveillance and no fully autonomous weaponry. Now, 652 00:32:18,800 --> 00:32:22,040 Speaker 13: the catch is in this conversation is the two sides 653 00:32:22,080 --> 00:32:23,560 Speaker 13: there maybe an element of them. 654 00:32:23,440 --> 00:32:24,600 Speaker 7: Talking past each other. 655 00:32:25,640 --> 00:32:28,840 Speaker 13: The Pentagon has said that look, we just want lawful 656 00:32:28,960 --> 00:32:33,000 Speaker 13: use of this, and lawful use, of course, precludes mass 657 00:32:33,000 --> 00:32:37,280 Speaker 13: surveillance of Americans domestically and fully autonomous weapons. They insist 658 00:32:37,320 --> 00:32:41,480 Speaker 13: that a human will always be involved. But Anthropic has 659 00:32:41,800 --> 00:32:45,160 Speaker 13: really stood by those two conditions as its redline, and 660 00:32:45,240 --> 00:32:48,400 Speaker 13: it will be interesting to see how, if at all, 661 00:32:48,760 --> 00:32:51,280 Speaker 13: they try to come to some sort of final compromise. 662 00:32:51,360 --> 00:32:53,200 Speaker 7: Based on that final offer. 663 00:32:52,920 --> 00:32:54,960 Speaker 10: Do we have any sense of you call Boeing and 664 00:32:55,040 --> 00:32:57,720 Speaker 10: Lockheed after they do their internal review, what their answers 665 00:32:57,760 --> 00:33:01,560 Speaker 10: would be. How deeply integrated Anthropic is in these defense 666 00:33:01,600 --> 00:33:04,160 Speaker 10: companies knowing that their technology was used in the capture 667 00:33:04,160 --> 00:33:05,320 Speaker 10: of Maduro in Venezuela. 668 00:33:05,360 --> 00:33:07,880 Speaker 13: Well, it's a great question because it does it spread? 669 00:33:08,160 --> 00:33:10,280 Speaker 13: I mean, when you think about the impact of this 670 00:33:10,760 --> 00:33:13,560 Speaker 13: how wide is the blast radius of this move? So, 671 00:33:13,560 --> 00:33:16,240 Speaker 13: in other words, a Boeing and Lockheader using it, say 672 00:33:16,320 --> 00:33:19,800 Speaker 13: in human resources or in their financial accounting. And we 673 00:33:19,840 --> 00:33:23,600 Speaker 13: have heard so much about the way Claude plug ins 674 00:33:23,640 --> 00:33:29,360 Speaker 13: can be used across business uses. What does it mean 675 00:33:29,400 --> 00:33:31,920 Speaker 13: for that, Let's say we're not even talking about, say 676 00:33:32,000 --> 00:33:35,600 Speaker 13: a classified use of this technology by a Boeing or 677 00:33:35,680 --> 00:33:38,240 Speaker 13: a Lockheat or even a Raytheon or other old line 678 00:33:38,240 --> 00:33:41,560 Speaker 13: defense contractor what does it mean for that? Does that 679 00:33:41,640 --> 00:33:43,800 Speaker 13: mean they have to disconnect that? And what is the 680 00:33:44,280 --> 00:33:47,320 Speaker 13: what are the business implications then for Anthropic There and 681 00:33:47,360 --> 00:33:50,240 Speaker 13: Greg Allen in other parts of his conversation, which was 682 00:33:50,280 --> 00:33:54,120 Speaker 13: an excellent interview, and I recommend the nearly million people 683 00:33:55,080 --> 00:33:56,200 Speaker 13: kus then for listening. 684 00:33:56,200 --> 00:33:56,880 Speaker 7: But if you hadn't. 685 00:33:56,920 --> 00:34:00,720 Speaker 13: It really was a great en lightening conversation. That was 686 00:34:00,760 --> 00:34:03,160 Speaker 13: one of his key points that this could really spill 687 00:34:03,280 --> 00:34:07,160 Speaker 13: far beyond just this dispute over the government b. 688 00:34:07,280 --> 00:34:09,080 Speaker 10: When we're trying to get this industry off the ground, 689 00:34:09,200 --> 00:34:12,439 Speaker 10: at least by the view of the administration. Just like that, guests, 690 00:34:12,480 --> 00:34:14,759 Speaker 10: and Sean Parnell is listening to us again, Mike. He 691 00:34:14,920 --> 00:34:17,360 Speaker 10: just went up on social media on Twitter. This is 692 00:34:17,360 --> 00:34:21,000 Speaker 10: a spokesperson for the Pentagon. The Department of War has 693 00:34:21,080 --> 00:34:24,719 Speaker 10: no interest in using AI to conduct mass surveillance of Americans, 694 00:34:25,040 --> 00:34:27,800 Speaker 10: which is illegal, he says, Nor do we want to 695 00:34:27,880 --> 00:34:31,440 Speaker 10: use AI to develop autonomous weapons that operate without human involvement. 696 00:34:31,480 --> 00:34:35,160 Speaker 10: He just wrote this, This narrative is fake and is 697 00:34:35,200 --> 00:34:39,920 Speaker 10: being peddled by leftists in the media. You guys are 698 00:34:39,960 --> 00:34:42,160 Speaker 10: here and that says Sep and I read this. Here's 699 00:34:42,160 --> 00:34:45,280 Speaker 10: what we're asking. Allow the Pentagon to use Anthropics model 700 00:34:45,320 --> 00:34:46,759 Speaker 10: for all lawful purposes. 701 00:34:47,320 --> 00:34:47,720 Speaker 7: Lawful. 702 00:34:48,600 --> 00:34:51,280 Speaker 10: This is simple, common sense request that will prevent Anthropic 703 00:34:51,280 --> 00:34:55,920 Speaker 10: from jeopardizing critical military operations and potentially putting our warfighters 704 00:34:55,960 --> 00:35:00,080 Speaker 10: at risk. We will not let any company dictate in 705 00:35:00,120 --> 00:35:02,200 Speaker 10: terms regarding how we make operational decisions. 706 00:35:02,239 --> 00:35:02,839 Speaker 7: Get this mic. 707 00:35:03,080 --> 00:35:06,880 Speaker 10: They have until five oh one pm Eastern time Friday 708 00:35:06,960 --> 00:35:07,480 Speaker 10: to decide. 709 00:35:07,719 --> 00:35:10,840 Speaker 13: Yeah, and we are bracing for that. And again you 710 00:35:11,000 --> 00:35:15,040 Speaker 13: heard the argument there that in essence, we don't need 711 00:35:15,160 --> 00:35:18,680 Speaker 13: your usage policy, we already comply with it. We don't 712 00:35:18,719 --> 00:35:22,040 Speaker 13: need these conditions on the contract because we've got you there. 713 00:35:22,040 --> 00:35:26,160 Speaker 13: But Anthropic is in essence saying they want that additional check, 714 00:35:26,239 --> 00:35:30,200 Speaker 13: They want that additional assurance. You know, in writing a 715 00:35:30,280 --> 00:35:33,280 Speaker 13: pinky square, I don't know how else to how else 716 00:35:33,320 --> 00:35:36,359 Speaker 13: to put it. And there is a backdrop to this Joe, 717 00:35:36,440 --> 00:35:38,600 Speaker 13: and that is something else that in our big Take 718 00:35:38,680 --> 00:35:41,240 Speaker 13: we explored and the whole question of whether this Pentagon 719 00:35:41,239 --> 00:35:44,239 Speaker 13: in this administration is fully abiding. 720 00:35:43,800 --> 00:35:46,280 Speaker 7: By the lawful use of force. 721 00:35:46,480 --> 00:35:50,279 Speaker 13: And you know what US law and international law have 722 00:35:50,600 --> 00:35:54,120 Speaker 13: recognized over the years, and this specifically refers to how 723 00:35:54,160 --> 00:35:56,680 Speaker 13: the boot strikes were carried out, how the raid that 724 00:35:56,840 --> 00:36:00,960 Speaker 13: captured Venezula and strong men Nicholas Maduro carried out. And 725 00:36:01,000 --> 00:36:04,400 Speaker 13: there were a number of former military officials, members of Congress, 726 00:36:04,960 --> 00:36:07,560 Speaker 13: human rights observers, and others who said, wait a minute, 727 00:36:07,640 --> 00:36:08,919 Speaker 13: some of those moves. 728 00:36:08,640 --> 00:36:09,640 Speaker 7: Have crossed the line. 729 00:36:10,120 --> 00:36:13,280 Speaker 13: And the question is, you know, is the Pentagon moving 730 00:36:13,320 --> 00:36:18,040 Speaker 13: too swiftly with this rapidly evolving technology, with which when 731 00:36:18,080 --> 00:36:20,920 Speaker 13: you talk to Dario Amida and others from Anthropic and 732 00:36:21,040 --> 00:36:24,640 Speaker 13: other AI companies, they all acknowledge it's not perfect. It 733 00:36:24,719 --> 00:36:28,040 Speaker 13: is still error prone, and they do want to make 734 00:36:28,080 --> 00:36:31,120 Speaker 13: sure that there is an extra safety and safeguard. 735 00:36:30,680 --> 00:36:34,759 Speaker 10: On God, James is already producing a special for five 736 00:36:35,000 --> 00:36:36,000 Speaker 10: one pm Friday. 737 00:36:37,520 --> 00:36:39,040 Speaker 7: What do you think of this hardline? 738 00:36:39,080 --> 00:36:42,319 Speaker 10: Though they're acting like this company has somehow crossed the 739 00:36:42,360 --> 00:36:45,640 Speaker 10: Pentagon or broken the law. My god, the company is 740 00:36:45,680 --> 00:36:47,720 Speaker 10: going to turn into a pumpkin at five on one tomorrow. 741 00:36:47,760 --> 00:36:51,920 Speaker 13: Well, this hardline was actually being baked into the AI 742 00:36:52,200 --> 00:36:55,680 Speaker 13: strategy at the Pentagon for some time. The document that 743 00:36:55,680 --> 00:36:58,800 Speaker 13: they published last month kind of laying out their vision 744 00:36:58,880 --> 00:37:03,440 Speaker 13: for accelerating a option of artificial intelligence by the military 745 00:37:03,760 --> 00:37:07,360 Speaker 13: becoming an AI first force that included language Joe, that 746 00:37:07,480 --> 00:37:12,280 Speaker 13: really pointed toward doing away with those kinds of usage 747 00:37:12,320 --> 00:37:15,920 Speaker 13: requirements from the companies that the Pentagon sees as a 748 00:37:16,000 --> 00:37:18,600 Speaker 13: hindrance and an insistence on look, we will use this 749 00:37:18,719 --> 00:37:22,359 Speaker 13: technology by the letter of the law, and therefore we 750 00:37:22,400 --> 00:37:25,440 Speaker 13: do not need your usage policy. They don't want to 751 00:37:25,480 --> 00:37:30,680 Speaker 13: be constrained by an additional consul or asterisk or anything 752 00:37:30,719 --> 00:37:35,359 Speaker 13: else coming from the company that might do they want 753 00:37:35,360 --> 00:37:39,160 Speaker 13: to sign off from the company in the event that 754 00:37:39,200 --> 00:37:41,400 Speaker 13: they have to go to war, that they have to 755 00:37:41,480 --> 00:37:44,720 Speaker 13: use force. And the answer is from the Pentagon phone calls. 756 00:37:44,960 --> 00:37:46,799 Speaker 13: They don't want to be making that phone call. 757 00:37:47,040 --> 00:37:49,319 Speaker 10: Fascinating, Mike, Well, I guess we're about to find out 758 00:37:50,080 --> 00:37:52,520 Speaker 10: a little more than twenty four hours from now we're 759 00:37:52,640 --> 00:37:55,680 Speaker 10: sitting here talking the morning after in video results. I 760 00:37:55,719 --> 00:37:57,400 Speaker 10: have to ask you about this because it's the biggest 761 00:37:57,400 --> 00:37:58,799 Speaker 10: story of the day, of course, in the market, and 762 00:37:58,800 --> 00:38:01,319 Speaker 10: it might be for many more days. I'm just trying 763 00:38:01,320 --> 00:38:02,880 Speaker 10: to get my head around this and pull me in 764 00:38:02,920 --> 00:38:07,799 Speaker 10: off the ledge. Ninety four percent profit growth, seventy three 765 00:38:07,880 --> 00:38:12,080 Speaker 10: percent revenue growth, a beat and rays, a conference call 766 00:38:12,160 --> 00:38:14,879 Speaker 10: that was borderline inspiring. Don't look at me. I don't 767 00:38:14,920 --> 00:38:16,759 Speaker 10: know anything, and I'm not trying to turn you into 768 00:38:16,760 --> 00:38:20,240 Speaker 10: a stock analyst. How do we have this experience after 769 00:38:20,320 --> 00:38:22,880 Speaker 10: so much doubt leading into the tape and a stock 770 00:38:22,960 --> 00:38:25,479 Speaker 10: that's been just kind of hanging around and everybody wants 771 00:38:25,520 --> 00:38:25,960 Speaker 10: to sell it. 772 00:38:26,200 --> 00:38:28,840 Speaker 13: Well, you know, Joe, for you know, the past couple 773 00:38:28,840 --> 00:38:30,920 Speaker 13: of years, in video really has been the bell of 774 00:38:30,920 --> 00:38:32,719 Speaker 13: the ball when it comes to earnings, when it comes 775 00:38:32,760 --> 00:38:35,960 Speaker 13: to tech, when it comes to the AI boom, and 776 00:38:36,080 --> 00:38:37,719 Speaker 13: some of the. 777 00:38:37,320 --> 00:38:38,319 Speaker 7: Bloom is off the roads. 778 00:38:38,360 --> 00:38:38,560 Speaker 8: Here. 779 00:38:38,640 --> 00:38:42,000 Speaker 13: We are really seeing that investors are growing skeptical about 780 00:38:42,040 --> 00:38:45,400 Speaker 13: how much longer this AI infrastructure. 781 00:38:45,040 --> 00:38:46,040 Speaker 7: Privateory can last. 782 00:38:46,160 --> 00:38:48,560 Speaker 13: Is it more than a video I think they're also 783 00:38:48,640 --> 00:38:51,160 Speaker 13: looking at, you know, the longer term, what are going 784 00:38:51,200 --> 00:38:52,960 Speaker 13: to need the long term use cases? 785 00:38:53,040 --> 00:38:54,640 Speaker 7: Will it eventually run out of steam? 786 00:38:54,640 --> 00:38:54,799 Speaker 5: Now? 787 00:38:54,880 --> 00:38:58,880 Speaker 13: Jensen Wong and his CFO AT and Vidia collect Cress 788 00:38:59,080 --> 00:39:03,000 Speaker 13: insisted yesterday that we have enough customer demands just going. 789 00:39:03,600 --> 00:39:07,279 Speaker 13: The need for compute power is growing exponentially. And we 790 00:39:07,440 --> 00:39:11,040 Speaker 13: even saw in the past week deals that Meta struck 791 00:39:11,640 --> 00:39:15,000 Speaker 13: to buy millions of video shifts and then am D 792 00:39:15,600 --> 00:39:19,279 Speaker 13: to buy AMD stock and buy billions of dollars of 793 00:39:19,360 --> 00:39:23,640 Speaker 13: their hardware too. So there is clearly some momentum from 794 00:39:23,680 --> 00:39:27,600 Speaker 13: the so called hyperscalers. And yet also the AMD deal 795 00:39:27,640 --> 00:39:29,680 Speaker 13: with Meta does raise the prospect of. 796 00:39:29,920 --> 00:39:31,480 Speaker 7: What does that mean for video? 797 00:39:31,880 --> 00:39:34,760 Speaker 13: Is that some competition and does that put some stress 798 00:39:35,120 --> 00:39:37,640 Speaker 13: on the long term storyline? And that is something else. 799 00:39:37,760 --> 00:39:40,680 Speaker 13: And then Michael Burry also weighed in a big short 800 00:39:40,640 --> 00:39:43,759 Speaker 13: of thing. He pointed out, you know, can't win, He 801 00:39:43,880 --> 00:39:47,240 Speaker 13: can't win, and the concerns that he raised this morning 802 00:39:47,280 --> 00:39:52,720 Speaker 13: about you know, purchase obligations going way up and really 803 00:39:52,800 --> 00:39:55,880 Speaker 13: just raising the question about what does that mean if 804 00:39:56,080 --> 00:39:59,600 Speaker 13: you know, the demand train slows a little bit, where 805 00:39:59,600 --> 00:40:03,359 Speaker 13: does that leave and video and the words from him 806 00:40:03,440 --> 00:40:05,880 Speaker 13: really do carry that kind of weight with investors. And 807 00:40:05,920 --> 00:40:08,640 Speaker 13: we have also seen just the broader fear and loathing 808 00:40:08,880 --> 00:40:13,719 Speaker 13: about how disruptive AI is going to be and you 809 00:40:13,760 --> 00:40:17,400 Speaker 13: know what the adoption start to look like across the economy, 810 00:40:17,560 --> 00:40:24,920 Speaker 13: fear and loathing with Mike Shephard, I love it. Thanks 811 00:40:24,920 --> 00:40:27,080 Speaker 13: for listening to the Balance of Power podcast. 812 00:40:27,719 --> 00:40:30,839 Speaker 10: Make sure to subscribe if you haven't already, at Apple, Spotify, 813 00:40:30,920 --> 00:40:33,520 Speaker 10: or wherever you get your podcasts, and you can find 814 00:40:33,560 --> 00:40:36,359 Speaker 10: us live every weekday from Washington, DC at noon time 815 00:40:36,440 --> 00:40:38,560 Speaker 10: Eastern at Bloomberg dot com