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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
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Speaker 2: Wall Street this morning. Stops looking for some direction as
Speaker 2: big Tech plans another massive AI spend in the face
Speaker 2: of what could be Tainan's central banks worldwide. Joining US
Speaker 2: Shaman Massa var ROCKMANI the wealth management CIO and head
Speaker 2: of the Investment Strategy group at Goldman Sachs Charmin. It's
Speaker 2: good to see you, hello, Thank you for being here.
Speaker 2: Our central banks avants become a headwind to the Secretary
Speaker 2: market rally.
Speaker 3: We actually had a very exhibit on one of our
Speaker 3: client calls. If you look at the twenty one past
Speaker 3: strikes that the US has had on the middle Eastern
Speaker 3: North Africa. Up to eight months, eight weeks after the
Speaker 3: initial strike, the equity markets have been up on average
Speaker 3: four percent, and that's exactly where we are. So everybody saying, oh,
Speaker 3: the equity market is going ahead, how can they ignore
Speaker 3: the price of oil, whether it's wto or brent, what
Speaker 3: is exactly going on. Growth is still robust. Obviously we're
Speaker 3: going to get Q one numbers, but I think nobody's
Speaker 3: thinking that we're in recession is imminent. And if you
Speaker 3: look at the earnings we've gotten, they've been incredible, substantially
Speaker 3: greater than consensus, and this is a pretty significant in
Speaker 3: terms of exceeding expectations. It's a pretty significant number. It's
Speaker 3: not like, oh, we exceeded earnings by two percent, three percent,
Speaker 3: five percent. It's double digit. And if you look at
Speaker 3: the number of quarters where we've exceeded expectations and the
Speaker 3: number of consecutive quarts, it's just incredible. And so when
Speaker 3: people talk about the impact of the war, we have
Speaker 3: said the US economy is unbelievably resilient, and people continue
Speaker 3: to underestimate that. So as we look at this, I
Speaker 3: don't think anybody knows exactly how long this will last.
Speaker 3: If it lasts a lot longer and oil prices stay
Speaker 3: at these levels, then the economy will be weaker, and
Speaker 3: so the idea that people can raise rates in the
Speaker 3: face of weakening economy, especially in the US when you
Speaker 3: have a dual mandate, I think we need to factor
Speaker 3: in a lot of uncertainty.
Speaker 4: Do you think that there is a lack of logic
Speaker 4: when people say, well, oil prices are at this level
Speaker 4: and you see still that robust growth in the economy,
Speaker 4: So that means that the inflationary impacts can get passed
Speaker 4: through much more directly and easily because of the CAPEC spend,
Speaker 4: because of how all these companies are doing. Do you
Speaker 4: see that as a logical connection or do you think
Speaker 4: it just hasn't been long enough with oil prices at
Speaker 4: this level.
Speaker 3: They're actually two points. You're right, it hasn't been long enough.
Speaker 3: Number one, because if this war were to last and
Speaker 3: we see all prices here, eventually we will get to
Speaker 3: negative numbers in the equity market. But for now, the
Speaker 3: idea that we're up four to five percent is actually
Speaker 3: totally in line with history, and from our perspective, one
Speaker 3: of the pillars of our investment philosophy is history is
Speaker 3: a useful guide. So first we have that as the
Speaker 3: backdrop that we need to follow. The other thing that
Speaker 3: people need to think about is the energy intensity in
Speaker 3: terms of usage of oil is a lot different than
Speaker 3: the early eighties. So when we had the Arab oil embargo,
Speaker 3: then we had the Iran Iraq War, we had the
Speaker 3: Iranian Revolution, prices skyrocketed, but at that time the energy
Speaker 3: consumption in the US in terms of barrels per capita
Speaker 3: per year were substantially higher. In fact, it was around
Speaker 3: that's say, thirty barrels a year. That number is down
Speaker 3: around twenty three twenty four now. So there's also a
Speaker 3: view that energy crude oil will not impact as much.
Speaker 3: Obviously it will fertilizer. As we hear about all of
Speaker 3: these things to last a while.
Speaker 4: It does affect the cost of components, and we saw
Speaker 4: this with some of the hyper scalers reporting earnings last night.
Speaker 4: Meta for example, increase their expected capex in part because
Speaker 4: of higher component costs, maybe also because of some of
Speaker 4: the transportation issues that people are experiencing. At what point
Speaker 4: does that become a sticking point, Maybe not for the
Speaker 4: biggest tech companies, but for some of the tech companies
Speaker 4: out there that are facing an existential threat but are
Speaker 4: having to pay that much more to even play ball.
Speaker 3: I think there is a big question mark about the
Speaker 3: returns to the kapex for AI companies. The hyper scalers
Speaker 3: obviously have so much cash flow from other factors that
Speaker 3: they can do quite well. And if you look at
Speaker 3: their earnings, whether it was the latest reports or last years,
Speaker 3: they're just being phenomenal. But the rest of the economy
Speaker 3: is actually doing quite well, and people underestimate again the resilience.
Speaker 3: If you think about oil production in the US, US
Speaker 3: produces double the levels of Saudi Arabia, right, It's just incredible.
Speaker 3: You think about natural gas, US has become the largest
Speaker 3: exporter of natural gas in ten years, far exceeding Qatar.
Speaker 3: So as we think about these factors, people need to
Speaker 3: think that the shock is not as great. And at
Speaker 3: the end of the day, both sides want to end
Speaker 3: this war. The question is what is a respectable off
Speaker 3: ramp for both sides, And I think the market is
Speaker 3: saying we will get there. Well, there'll be fits and
Speaker 3: start the escalation, the escalation, and we're going to have
Speaker 3: to go through that and That's why we recommend our
Speaker 3: clients stay invested, don't try to time this market. Nobody
Speaker 3: can do that consistently very well.
Speaker 5: But in the beginning, conventional thinking was four to six weeks.
Speaker 5: We're now eight to nine weeks into this war. How
Speaker 5: much longer with these kind of elevated prices do you
Speaker 5: think the economy could withstand? Julian Emmanuel says July and
Speaker 5: then things might start to break down. Do you have
Speaker 5: a date where you're looking at Not.
Speaker 3: Really, because nobody really knows, right if you look at
Speaker 3: the probabilities, it's not as if it's so obvious how
Speaker 3: long this will last. I think we know both sides
Speaker 3: don't want it to last. July and oil not the conflict.
Speaker 5: How long the economy could withstand tripled crude?
Speaker 3: Well, in the US, we're just sort of just around
Speaker 3: triple digit, right, and we've been here before, and prices
Speaker 3: last under these levels for a while. I don't think
Speaker 3: the economy is going to break. We had initially expected
Speaker 3: GDP to be around two point three when we started,
Speaker 3: then momentum two point four percent. Now because of the
Speaker 3: war and oil prices, we've lowered it to two point
Speaker 3: one percent, But we have a very low probability of
Speaker 3: recession even at these levels if prices were to stay here,
Speaker 3: I think to say, exactly, is it July? Again? If
Speaker 3: you believe the resilience of the economy and adjustments, and
Speaker 3: we're talking about the US that is ample crude and
Speaker 3: natural gas, right, it's really the rest of the world.
Speaker 3: And if the US is a big importer and less
Speaker 3: of an exporter, then not in terms of hydrocarbons and
Speaker 3: things like that, but in aggregate, the damage to the
Speaker 3: economy is going to be much less than it is,
Speaker 3: for example, to Europe or to China.
Speaker 4: Do you think we're moving into a phase where the
Speaker 4: offset to equity were is increasingly gold and commodities and
Speaker 4: not develop market bonds, which increasingly are subject to potentially
Speaker 4: spending issues, deficit issues as well as just the national
Speaker 4: inflation in the system.
Speaker 3: That's a very good question, because all our clients are
Speaker 3: asking us how can they hedge against the risk of war,
Speaker 3: And we tell clients that at the end of the day,
Speaker 3: the best hedge against inflation has been historically US equities
Speaker 3: in aggregate. So in fact, that's why again we say
Speaker 3: stay invested. Gold is not a good inflation hedge and
Speaker 3: not a good inflation hedge. So the idea that gold
Speaker 3: is something you need to have in your portfolio is
Speaker 3: something we totally disagree with. We don't think you're truly
Speaker 3: be part of a client's strategic acid allocation, and tactically
Speaker 3: we've actually said that when you see these kinds of
Speaker 3: price increases driven by central banks, especially initially by China
Speaker 3: and then countries like Turkey, Poland, clients shouldn't be caught
Speaker 3: up in the euphoria and the momentum of gold. And
Speaker 3: obviously we've seen a pretty significant decline from peak levels.
Speaker 2: Stay with us. More Bloomberg surveillance coming up after this.
Speaker 2: Let's talk about this economy. US economic growth accelerating at
Speaker 2: the start of the year, fueled by solid business and
Speaker 2: consumer demand, insulating this economy from heightened geopolitical risk as
Speaker 2: the FED remains very much on the sidelines. Joining us
Speaker 2: now to discuss as the National Economic Council Director Kevin said, Kevin,
Speaker 2: welcome back to the programs. Always good to catch up.
Speaker 2: We'll talk about this economy in just a moment. I
Speaker 2: think we need to follow on from the Federal Reserve
Speaker 2: and the news conference with Chairman Poll just yesterday stepping
Speaker 2: aside as the FED chair but staying gone as a governor, Kevin.
Speaker 2: Was anyone in the administration giving a heads up ahead
Speaker 2: of time before you heard that announcement?
Speaker 1: You know, communications with the Federal Reserve and the administration
Speaker 1: are still open when they're policy concerns. But I can't
Speaker 1: really discuss that. I could say that I'm disappointed in
Speaker 1: what Jay said, but I'm going to sort of stay
Speaker 1: out of it as we await just a couple of
Speaker 1: weeks Kevin Worsh's confirmation. I think when Kevin gets in there,
Speaker 1: it's going to really be a sea change at the
Speaker 1: FED that we're all looking forward to Kevin.
Speaker 2: In the meantime, the President has articulated his disappointment like
Speaker 2: you just have previously. The President suggested that if the
Speaker 2: Chairman stayed down beyond his time, not sure what he
Speaker 2: meant specifically beyond his time, that he would fire him.
Speaker 2: Is the President intervening certain options to intervene.
Speaker 1: You know, I think that in the end, our hope
Speaker 1: is that Chairman Powell understands that the Justice Department has
Speaker 1: stood down. They've just asked the Inspector General at the
Speaker 1: FED to look into this, which is something the Inspector
Speaker 1: General is probably doing anyway, and so that I think
Speaker 1: that it's time to de escalate and move on.
Speaker 2: Kevin, do you think the President has sufficiently de escalated
Speaker 2: to allow him to move on?
Speaker 1: Well, you know, he doesn't think so, and I think
Speaker 1: that in the end he'll study the matter and we
Speaker 1: hope he comes around.
Speaker 2: The Treasury Secretary says it's an insult to the other
Speaker 2: Republican nominees on the board, the likes of Governor Waller,
Speaker 2: Mickey Bowman, people that you and I know fairly. Wow,
Speaker 2: do you believe it's also an insult and does it
Speaker 2: complicate the way this particular institution will operate in the
Speaker 2: months of meetings to count.
Speaker 1: Again, I don't want to start getting too much into
Speaker 1: having the White House argue with the Fed right now
Speaker 1: while we're waiting Kevin Worsh's confirmation, which looks like it's
Speaker 1: a lock to me. The bottom line is that Kevin
Speaker 1: Worsh is going to go in there. He's going to
Speaker 1: be new leadership. He's going to be fresh leadership, and
Speaker 1: we fully expect that that's going to help everybody see
Speaker 1: how important the independence of the FED is now as
Speaker 1: a logical matter, if you just sort of say, hey,
Speaker 1: we like the IG to look into something. The IG
Speaker 1: is the Federal Reserves Inspector General, and so it's completely
Speaker 1: respectful of the independence of the FED. We do respect
Speaker 1: the independence of the FED, and I think that the
Speaker 1: best way to show that it's not a artists and
Speaker 1: organization is to move on.
Speaker 2: There has been a pretty aggressive push to reduce interest rates.
Speaker 2: At the same time, this Federal Reserve is shifting towards
Speaker 2: articulating a more symmetrical reaction function. Not there yet, but
Speaker 2: getting closer to it. Kevin supporting that is the economic
Speaker 2: data from earlier on this morning. Do you think there
Speaker 2: is space just to wait to see to work out
Speaker 2: how things turn out before thinking about reducing interest rates?
Speaker 1: Right, well, well, first of all, let's talk about the
Speaker 1: economic data for a second, because it was just kind
Speaker 1: of a whole bunch of blockbuster numbers. A two percent
Speaker 1: number actually, you know, for me being capital spending guy,
Speaker 1: used to be the capital spending guy at the FED
Speaker 1: when I was a young economist. That the thing that
Speaker 1: was amazing, as you know, and you highlighted the capital
Speaker 1: spending boom and one of the things that sort of
Speaker 1: drag it down from a really high number was the
Speaker 1: quality of the imports has skyrocketed, and so almost half
Speaker 1: of the imports were capital goods, which were coming in
Speaker 1: to build factories in the US. Typically in the past,
Speaker 1: you know, our imports are things like consumer goods that
Speaker 1: are perishable. So the bottom line is that it's really
Speaker 1: strong data. We got initial claims the lowest they've been
Speaker 1: since the nineteen sixties. We've got government employment the lowest
Speaker 1: has been since the Second World War. We've got all
Speaker 1: these positive movements in terms of fiscal responsibility and economic
Speaker 1: growth moving forward, and so then, but we do have
Speaker 1: this temporary disruption with energy markets, which is very serious.
Speaker 1: As you mentioned, the energy prices are high, gasoline prices
Speaker 1: are high. But you know, my read of the academic
Speaker 1: literature on what you do when you have an oil
Speaker 1: shock like this is not that you raise rates into it,
Speaker 1: especially given how I think we're highly confident that this
Speaker 1: is going to be a temporary disruption. Futures markets agree
Speaker 1: with that as well, and so I think it would
Speaker 1: be a policy error for this EASB or the FED
Speaker 1: to hike rates into a temporary spike in energy prices,
Speaker 1: and their own economic studies sort of suggest this is true,
Speaker 1: because if you look at it, what they want to
Speaker 1: do is make sure that future inflation goes back towards
Speaker 1: the target. The best forecast of future inflation is not
Speaker 1: top line inflation, but core inflation at core inflation, and
Speaker 1: the last CPI number was fine. The PC's kind of
Speaker 1: crept up a little bit, but it doesn't tell the
Speaker 1: story of the top light, and the top light is
Speaker 1: the kind of thing that I think someone could overreact to.
Speaker 4: It might not be appropriate, Kevin, to have a rate
Speaker 4: hike at this point, but do you agree with your
Speaker 4: colleague treasure Secretary Scott Beston, who came out and said
Speaker 4: it might be appropriate to stay on hold for a
Speaker 4: while as this does progress and works itself out again.
Speaker 1: I am highly confident that the productivity boom is going
Speaker 1: to keep core prices under control. And my old friend
Speaker 1: Alan's green Span and the ninety saw that because of
Speaker 1: the computer revolution that we could have high growth and
Speaker 1: that wasn't a flips curve kind of thing that you
Speaker 1: needed to respond to, as he let us have four
Speaker 1: or five of the best economic gears that we've seen
Speaker 1: in my lifetime. And I think that we have that
Speaker 1: opportunity again and it would be a shame if we
Speaker 1: squandered it.
Speaker 4: So you think that it is appropriate to currently cut
Speaker 4: rates de fite the increasing concern by some of the
Speaker 4: FED members that we are entering a potentially inflationary moment.
Speaker 4: Do you think it's inappropriate to go to something more
Speaker 4: of a symmetric type of approach.
Speaker 1: Well, they've been sort of saying we're leaning towards cutting,
Speaker 1: and then there was some dispute about what's going to
Speaker 1: happen at the next meeting. But I think that getting
Speaker 1: interest rates down could really supercharge the economy from where
Speaker 1: we are, but not be super inflationary. So you saw
Speaker 1: that the weak spot the weak spot in the GDP
Speaker 1: report was residential investment, which was down eight percent. Residential
Speaker 1: investment is kind of the most intrasensitive thing there is,
Speaker 1: and I think that FED policy has a chance of
Speaker 1: moving the yield curve in a way that could really
Speaker 1: help home buyers. And one of the things that I
Speaker 1: remember from the nineties is that when we want to
Speaker 1: have sort of low inflation, high growth, then one of
Speaker 1: the things that happens is you get a lot of
Speaker 1: construction residential construction. And when you have residential construction, it
Speaker 1: has a big positive effect on GDP because you have
Speaker 1: like an empty house that has to get filled with
Speaker 1: a w dryer and a TV and carpet and furniture
Speaker 1: and everything else. And that's much different than if you
Speaker 1: have like an old house where you're moving from what
Speaker 1: old house to another. And so new construction is really
Speaker 1: the thing that could lift this to four or five
Speaker 1: percent growth, and it's being held back by hydrostrates.
Speaker 4: What's the pathway to get there? Given the fact that
Speaker 4: longer and the longer term yield curve is seeing some
Speaker 4: of the highest rates that has this cycle, five percent
Speaker 4: in the thirty year yesterday for the first time in
Speaker 4: a while. And frankly, a lot of people in the
Speaker 4: market think that if the interest rate were cut at
Speaker 4: the front end, that would only exacerbate the creep higher
Speaker 4: in yields at the long end. How do you see that?
Speaker 1: Yeah, I mean there are times when that's true, but
Speaker 1: not a time when we're in the middle of a
Speaker 1: huge positive supply shock. And so I think a little
Speaker 1: bit of movement and Kevin Wirsh, hopefully soon to be
Speaker 1: chairman Worsh has described how one can do that and
Speaker 1: maybe play with the balance sheet a little bit at
Speaker 1: the same time and move things in a direction that
Speaker 1: helps America's homeowners. I think that if we could get
Speaker 1: that last little bit of the economy going on all cylinders,
Speaker 1: that we'd really really be back very close to talking
Speaker 1: about the golden days.
Speaker 5: Kevin. We have triple to crued this morning, WTI much higher,
Speaker 5: and actually what you're seeing across America, especially in a
Speaker 5: place like California, they've actually breached six dollars a gallon
Speaker 5: when it comes to gasoline. I know the White House
Speaker 5: has some measures, they've extended the Jones Act waiver, but
Speaker 5: what else are you thinking about.
Speaker 1: Well, we've already done a whole bunch of things, including
Speaker 1: you know, basically opening up the drilling that was offshore
Speaker 1: drilling in California that was shut down by the state
Speaker 1: and that's actually you know, alive and pumping out barrels.
Speaker 1: The bottom line is that we're very convinced that this
Speaker 1: is you know, a suicidal Irradian regime that was set
Speaker 1: on really big disruptive things in the region that would
Speaker 1: be perhaps permanently harmful. And when we had them signal
Speaker 1: in their negotiations, they were just about ready to have
Speaker 1: eleven nuclear bombs. Then the President decided to take action
Speaker 1: to defend the entire earth for good's sake. And so
Speaker 1: right now, the thing that I look at in terms
Speaker 1: of the economic effects of the war is how difficult
Speaker 1: it is for Iranians right now, as if the government
Speaker 1: doesn't care about them at all, and so they're having
Speaker 1: a hyperinflation, they're running out of food, they don't have
Speaker 1: any distilled products to driver out of their cars. They're
Speaker 1: shutting down businesses. Even the Persian rug dealers are shutting down.
Speaker 1: It's time for that government to just see that they
Speaker 1: shouldn't aspire to have a nuclear weapon, and if they
Speaker 1: just give that up, then we can go back to
Speaker 1: having normal relations.
Speaker 5: What could hope, right, but what could this government do
Speaker 5: to shield Americans from higher gasoline prices? Are things like
Speaker 5: an export ban on the table.
Speaker 1: Now, what we've done is, as you know, we've done
Speaker 1: the Jones Act. We've opened up drilling in California. We've
Speaker 1: pursued like different changing the ethanol standards so the cored
Speaker 1: ethanol can be used more in the summer. We've taken
Speaker 1: every single step that we could, and we understand that,
Speaker 1: you know, it would have been a lot worse if
Speaker 1: we hadn't done that. But the fact is that our
Speaker 1: expectation is that things are going to get better very
Speaker 1: very quickly, if we could just get the irradiance to
Speaker 1: like finish the negotiations and realize that it's in the
Speaker 1: interest of their own people to stop things that could
Speaker 1: turn into you know, serious hunger events and so on.
Speaker 2: Kevin, Unfortunately, and you and I probably an agreement here. Unfortunately,
Speaker 2: they've got a track record of doing a lot of
Speaker 2: things that aren't in the interest of their own people.
Speaker 2: In the meantime, there seems to be a preference to
Speaker 2: maintain the blockade and put the squeeze on them. How
Speaker 2: close are we to them breaching storage capacity, so to speak?
Speaker 2: What's our understanding of that. Do we have a decent
Speaker 2: gauge of where things are at inside the country?
Speaker 1: You know, like it's a well to well thing. But
Speaker 1: the basic idea is that if you shut down a well,
Speaker 1: then the pressure can build and then the you know,
Speaker 1: oil can kind of squirt everywhere, and then when you
Speaker 1: open the well up again, you get a lot less
Speaker 1: oil out of the well. That's the sort of theory
Speaker 1: of what could happen, and it's certainly possible because they're
Speaker 1: writting out of storage that they're going to have to
Speaker 1: shut in wells. The one thing I can say is
Speaker 1: that their production went from five million barrels a day
Speaker 1: to one million barrels a day because of President Trump's
Speaker 1: you know, policies in the previous term, when he really
Speaker 1: put in tough sanctions on Iran to try to stop
Speaker 1: the nuclear program. And after Joe Biden came in, he
Speaker 1: just stopped the sanctions and the energy production went back
Speaker 1: up to five billion barrels a day over a couple
Speaker 1: of years. And so the Iranians, you know, they had
Speaker 1: they took them a couple of years to get things fixed,
Speaker 1: probably with new wells and so on, because it can
Speaker 1: harm wells. But we have an experience of them being
Speaker 1: shut almost down to nothing and then getting back up.
Speaker 2: Kevin a partner's stepping up to how we're just hearing
Speaker 2: from the president here out on social media. So I
Speaker 2: assure this is the first time you're hearing Golf here.
Speaker 2: I'll read it for you. The Chancellor of Germany should
Speaker 2: spend more time on ending the war with Russia and
Speaker 2: Ukraine and fixing his broken country, especially immigration and energy,
Speaker 2: and less time on interfering with those that are getting
Speaker 2: rid of the Iranian nuclear threat, there by making the world,
Speaker 2: including Germany, a safer place. I believe the German chancellor
Speaker 2: earlier this week suggested that the president was being humiliated
Speaker 2: by the Iranians. Just what is the relationship, like Kevin
Speaker 2: with our European partners at the moment?
Speaker 1: Oh, you know, I think that the European partners are
Speaker 1: feeling stress because they're very unwise energy policies have exposed
Speaker 1: them much more to energy shocks from the Middle East,
Speaker 1: and it looks like the German chancers lose it as
Speaker 1: cool a little bit, and I would suggest that, you know,
Speaker 1: you take a deep breath and recognize that the best
Speaker 1: way for Europe to get its economy back on track
Speaker 1: is to help us resolve this problem and then also
Speaker 1: examine their own policies, which are so anti free market
Speaker 1: that their economies are happy when they get one percent growth.
Speaker 1: I think Germany is a great country. I lived there
Speaker 1: for a time, and I think there's a heck of
Speaker 1: a lot of potential for that country. But they sure
Speaker 1: earned achieving it right now, and it's not just because
Speaker 1: of oil.
Speaker 2: Stay with us. More Bloomberg surveillance coming up after this.
Speaker 2: Let's get to Crude offering their four year highs. With
Speaker 2: President Trump reportedly gearing up for a military briefing on
Speaker 2: Iran that could open the door for fresh escalations, here's
Speaker 2: the same for Victoria Coach of the Heritage Foundation right
Speaker 2: in the following. We're going to have a tipping point
Speaker 2: in the coming weeks where Iran just can't sustain itself anymore.
Speaker 2: That's when the president will have the most leverage, Victoria.
Speaker 2: John just now for more of Victorry. Welcome to the program.
Speaker 2: This is a high stakes, blinking contest. With that, there
Speaker 2: is no doubt which side do you think is better
Speaker 2: positioned to wait it out?
Speaker 6: Well, Jonathan, good to be with you. I think that
Speaker 6: for all the reasons you've been discussing this morning, the
Speaker 6: United States is best position to wait this out, if
Speaker 6: you will. And we have to look at what's actually
Speaker 6: happening to the Iranian economy. We had some really important
Speaker 6: reporting yesterday on the first metrics we've gotten out. And
Speaker 6: bear in mind, I mean they haven't had a stock
Speaker 6: market for more than two months. It's been shut down.
Speaker 6: Nobody knows what their equities are worth. If anything. Their
Speaker 6: currency is down. If you look at it over the
Speaker 6: last ten years, it's down ninety eight percent, and so
Speaker 6: you just have a lack of value in that country
Speaker 6: that is catastrophic. And Secretary Bessett was talking about this
Speaker 6: yesterday as well. The economic fury, the economic front of
Speaker 6: this war is what is sort of causing the devastating
Speaker 6: consequences to Iran. They can't go on that much longer.
Speaker 6: We're not happy about our oil prices. I know. I
Speaker 6: think Julian was absolutely correct. This is putting a lot
Speaker 6: of pressure on what should be a very successful time
Speaker 6: for the economy. But at the same time, it's just
Speaker 6: it's apples and oranges. What's happening in the United States
Speaker 6: and Iran. And they're going to have to blink Victoria.
Speaker 5: No doubt that the Iranian economy is in straits right now.
Speaker 5: But how long can this administration deal with one hundred
Speaker 5: and seven dollars and going north when it comes to
Speaker 5: WTI No.
Speaker 6: I mean, this obviously is something they're going to have
Speaker 6: to bring down. And I think that's why the President's
Speaker 6: getting that briefing today, and there are a range of
Speaker 6: options on the table. There always are. General Kine, the
Speaker 6: Chairman of the Joint Chiefs, is someone in whom the
Speaker 6: President has enormous confidence. He's performed extraordinarily well over the
Speaker 6: course of really the last year and months, but very
Speaker 6: much over the course of the last two months. So
Speaker 6: they can look at the kind of military action that
Speaker 6: would force an opening of the strait. I might favor
Speaker 6: that personally, I'd want to see the details. We do
Speaker 6: have options in terms of our special operators, who are
Speaker 6: especially trained to deal with nuclear material. So you're getting
Speaker 6: a person who's both a special operator and a nuclear scientist.
Speaker 6: That's quite a combination. I think we're the only ones
Speaker 6: who have that. They could go in and go after
Speaker 6: the highly enriched geranium. And you also have the infrastructure
Speaker 6: targets that the President's been talking about for the last
Speaker 6: week or so that would have that kind of final
Speaker 6: crippling effect on the Iranian economy.
Speaker 5: Well, when it comes to opening up the trader for
Speaker 5: most In this Axios report, it says that such an
Speaker 5: operation could include ground forces. One source said, what would
Speaker 5: that look like?
Speaker 6: Well, I mean that you would have to see how
Speaker 6: as I said, I want to see the options here,
Speaker 6: and there are a lot of reasons we shouldn't be
Speaker 6: seeing them. But at the same time, I mean, you
Speaker 6: can put people on the Iranian side of the strait
Speaker 6: to prevent them from using ships and missiles against any
Speaker 6: maritime traffic coming through the strait. You could put in
Speaker 6: some demining efforts to get rid of some dozen minds
Speaker 6: they theoretically put in there, and then you can have
Speaker 6: the naval escorts that you were talking about, so you
Speaker 6: can use our navy assets to escort the ships through
Speaker 6: and prevent the Iranians from attacking them.
Speaker 4: Yes, Kenna, Victoria, we got signs that the US Social
Speaker 4: Command is prepared to plan for a quote short and
Speaker 4: powerful way of strikes on Iran. Do you have any
Speaker 4: sense of what this would be focused on.
Speaker 6: I think in that case, Stephanie, we're looking at the
Speaker 6: infrastructure targets that the President was talking about, bridges, power plants,
Speaker 6: that kind of facilities, and this is going to be
Speaker 6: what would really shut around down and dread people from
Speaker 6: moving around. We're already seeing these reports of their big
Speaker 6: industries starting to close. They've lost as many of as
Speaker 6: a million jobs, and that what would be crushing about
Speaker 6: this is there may be ten to twelve million more
Speaker 6: jobs that would be at risk if the president took
Speaker 6: this kind of action. That's fifty percent of their workforce.
Speaker 6: So essentially fifty percent unemployment happens overnight to Iran, and
Speaker 6: you just wonder how the country can continue functioning after that.
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