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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: To find Bloomberg Surveillance on Apple podcast, Suncloud, Bloomberg dot

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Speaker 1: com and of course on the Bloomberg terminals in the

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Speaker 1: count Well. The outlooks that we had at the end

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Speaker 1: of the year are basically useless, like all the outlooks

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Speaker 1: Bill Gross wrote over the years. Let's migrate on Thatch

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Speaker 1: to a conversation with one William Gross, former PIMCO of

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Speaker 1: co c i O that barely describes his contribution to

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Speaker 1: bond investment. He's put out a book which is hugely readable.

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Speaker 1: I wasn't sure what to expect from the stamp collector.

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Speaker 1: I'm still standing has a lot of smart notes in it,

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Speaker 1: in some extremely frank talk about his turmoil of the

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Speaker 1: recent years. Bill Gross, Um, thank you so much. I

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Speaker 1: love the idea in the beginning of the book there

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Speaker 1: never was a bond king. I met you the first

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Speaker 1: time at the Waldorf Story, and you were almost in

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Speaker 1: tears because you got the bond market wrong. I can't

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Speaker 1: remember Bill if it was price up, yield down, or

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Speaker 1: yields up, price down. But you blew it on a

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Speaker 1: but at that at that time, you completely blew it.

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Speaker 1: What did you get right that made you the so

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Speaker 1: called bond king? Well, I think Tom that I from

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Speaker 1: an early stage I wrote a book called the you know,

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Speaker 1: the Long Term Secular View of Financial Markets and UM.

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Speaker 1: It seemed to me that if you know, you could

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Speaker 1: eliminate human emotion, which is what you just talked about

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Speaker 1: on a day to day basis that if you look

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Speaker 1: three to five years out and had a intelligent forecast

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Speaker 1: as to the direction of inflation, UM and the economy,

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Speaker 1: than you have a better chance. Not not that you

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Speaker 1: terribly succeed, but you'd have a better chance. And so

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Speaker 1: I think the the secular outlook at PIMCO, which was

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Speaker 1: three to five years was key going forward. You were

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Speaker 1: in Indian Wells. There's a small tennis tournament there UH

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Speaker 1: this week which will be of great interest to those

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Speaker 1: that follow tennis. And part of his getting the ball

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Speaker 1: in play and putting the ball back and forth across

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Speaker 1: the net. You started out in the mail room at PIMCO.

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Speaker 1: How did you get the ball moving on the Pimco

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Speaker 1: tennis court. Starting out in the mail room, well, we

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Speaker 1: had a billion dollar portfolio. Pacific Mutual did. It wasn't

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Speaker 1: Pimco at the time. And Uh I just graduated from

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Speaker 1: U C. L A. Anderson, I had a master's degree.

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Speaker 1: I was clipping coupons, um, not exactly in the mail room,

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Speaker 1: but clipping coupons. And uh I said to myself, wouldn't

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Speaker 1: it be better to get out of the vault and

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Speaker 1: into the chine and and maybe you could trade these bonds? Um.

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Speaker 1: You know, back then there weren't computers, IBM at A

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Speaker 1: three sixty, etcetera. But um, you couldn't really move them

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Speaker 1: back and forth except physically. And so most banks and

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Speaker 1: most insurance companies didn't. And so I thought that if

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Speaker 1: I could take five million of that one billion portfolio

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Speaker 1: and traded and performed, then we could get some clients

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Speaker 1: and grow a little investment company. Called a little investment company,

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Speaker 1: they grew quite large. Bill. You talk also about your

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Speaker 1: start just even with education, with two hundred dollars into

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Speaker 1: your pants, going to Las Vegas gambling and getting ten

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Speaker 1: thousand dollars to pay for your college education. Partly that

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Speaker 1: gambling to the markets and how the game has changed.

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Speaker 1: How much has the game changed over your tenure? Those

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Speaker 1: change a lot, you know since I when I started, UH,

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Speaker 1: there weren't really liquid UH mortgage passed through certainly, wasn't

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Speaker 1: interest in foreign bonds. There weren't any tips, inflation protected securities, etcetera, etcetera.

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Speaker 1: And so that and the evolution of financial futures, which

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Speaker 1: is probably the biggest change. You introduced liquidity into the marketplace,

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Speaker 1: and it allowed for even a small firm at the

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Speaker 1: time like Pimco UH to to basically trade and to

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Speaker 1: make money. UH. Financial futures back in the day were cheap, cheap, cheap,

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Speaker 1: and we could buy a treasury bond through the financial

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Speaker 1: futures market and turn a at the time ten percent

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Speaker 1: yield into a twelve percent yield. And UH the first

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Speaker 1: mover advantage for Pimco in terms of all of these

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Speaker 1: categories was quite critical as well. Bill. The reason why

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Speaker 1: I ask is because we're in an era where a

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Speaker 1: lot of people talk about the distortions in the de

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Speaker 1: bond markets by the Federal Reserve, where the feed is

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Speaker 1: prepared to start moving back from some of their support

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Speaker 1: from their bond purchases. Today marks the last day of

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Speaker 1: those pandemic era purchases, at least the expansion much. Can

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Speaker 1: the bond market really give the same kinds of messages

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Speaker 1: as it did back when you started out clipping coupons, Well,

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Speaker 1: certainly not as much. There's there's more involvement by almost

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Speaker 1: all central banks, despite the pullback that you mentioned occurring today.

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Speaker 1: And um, you know, interest rates are so artificially low

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Speaker 1: that that it's hard for institutional investors or even individual

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Speaker 1: and private investors too to make much of a difference.

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Speaker 1: Central banks control the market. Um. I think they're terribly

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Speaker 1: wrong in terms of what they've done, stayed so low

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Speaker 1: for so long. Uh, and now we have inflation, not

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Speaker 1: necessarily because of those policies, but probably in a large

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Speaker 1: part because of them. And so it's um, it's just

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Speaker 1: a difficult market. You you try and anticipate the central banks,

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Speaker 1: which has been relatively seen the past few years because

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Speaker 1: they haven't done anything. But now they're about moving. It's

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Speaker 1: simply a question of what Coal and others UM do

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Speaker 1: in terms of the policy rate. Bill Gross I've been

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Speaker 1: out to Newport to see your Monroe trader on your

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Speaker 1: desk of long ago and far away where you calculated

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Speaker 1: convexity like no one that could do it. And part

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Speaker 1: of the as you mentioned, the first mover advantage of

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Speaker 1: PIMCO was intellect. I want you to speak about what

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Speaker 1: you and Dr al Arian did when the two of

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Speaker 1: you got together and put intellect first for a bye

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Speaker 1: side house. Every single by side shop had to react

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Speaker 1: and pattern themselves against what you and Mohammed invented. Tell

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Speaker 1: us how you put intellect first at your Pimco. Well,

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Speaker 1: we we did build a small company than a larger

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Speaker 1: company of very smart people. And um, it wasn't just

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Speaker 1: myself and uh and Mohammed. Mommed came much later. PIMCO

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Speaker 1: was very much of a success before Mohammed, but Paul

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Speaker 1: mcculloy was very key in terms of FED policy and

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Speaker 1: anticipating the Great Recession. Chris Dialmus was very important in

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Speaker 1: terms of bringing financial futures to the company. Um, there

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Speaker 1: were lots of others that were innovators, that were mild

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Speaker 1: risk takers, and um, you know, putting together a group

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Speaker 1: of bond kings and later Queen's was quite important. Was

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Speaker 1: the challenges that you had later in your career and

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Speaker 1: I don't want to get into the soap opera of it,

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Speaker 1: but Bill gross or the challenges that you had, like

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Speaker 1: at so many other shops due to the decline and

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Speaker 1: profitability of the Bye side. It used to be a

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Speaker 1: cozy job bill. You'd show up for two hours, then

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Speaker 1: you'd go pay cof golf trying to get your handicap

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Speaker 1: up and that bill the Bye side. You know, every

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Speaker 1: single by side story is about lower and lower and

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Speaker 1: lower reven new and squeezed margin. Is that what you

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Speaker 1: ran into later in your career, Well, that's what I

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Speaker 1: was advocating. In the von market. There was this um

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Speaker 1: uh extension of trading into E T F s and

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Speaker 1: too um vehicles that charged lower and lower and lower fees.

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Speaker 1: I sensed that as a trade, as a UM as

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Speaker 1: a a sense, it as a trend because simply as

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Speaker 1: interest rates themselves lowered went down to five four three

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Speaker 1: to one, UM, you know, you couldn't charge fifty basis

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Speaker 1: points on a one tenure treasure. That's half of the

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Speaker 1: half of the yield. And it was almost an egregious

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Speaker 1: type of uh of situation, and so um, you know,

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Speaker 1: fees became important, became important in terms of my leaving

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Speaker 1: PIMCO because the the surviving contingent basically wanted higher yield

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Speaker 1: products hedge fund types of products, and I wanted to

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Speaker 1: stick to the old total return formula that had done

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Speaker 1: so well. The total return formula is in a very

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Speaker 1: tenuous moment simply because of where yields are and where

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Speaker 1: inflation is expected to be. Some people consider Jeff Gunlock

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Speaker 1: your successor when it comes to the bond king moniker.

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Speaker 1: You may disagree, others do. The question I have is

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Speaker 1: do you agree with his prognostications of a ten percent

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Speaker 1: inflation rate this year and the likelihood that the FED

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Speaker 1: is vastly behind the curve? Well, the latter, yes, Uh,

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Speaker 1: you know, a ten percent inflation rate is problematic. We'll

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Speaker 1: say a little bit of it tomorrow. And it depends

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Speaker 1: a course on commodity prices, oil prices, and you know

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Speaker 1: the wage follow on. But I do think inflation will

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Speaker 1: be in a fort five percent category for the next

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Speaker 1: several years. And and does that validated tenure at one

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Speaker 1: eighty or eighty five It does not. Um does it

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Speaker 1: mean that there will be a huge amount of sellers

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Speaker 1: because of the lack of FED buying um, you know,

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Speaker 1: probably not. You know, as we've seen in the last

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Speaker 1: few weeks, treasuries are a safe haven much like gold,

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Speaker 1: and so investors that can hit to stick at one

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Speaker 1: point eight percent until the coast clears. I do think

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Speaker 1: though that uh, you know, bonds are risk investment here.

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Speaker 1: Durations are very very very low, as low as almost

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Speaker 1: they've ever been. And so when uh inflation is accepted

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Speaker 1: in the marketplace at four to five percent, which I

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Speaker 1: think it might UM, then bonds are a sale. And

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Speaker 1: you know, once we get above on the tenure, once

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Speaker 1: we get above to fifteen UM, I think there's substantial risk.

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Speaker 1: There's a if you give me just one second, there's

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Speaker 1: a long term trend, a thirty five year downward trend

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Speaker 1: in terms of the tenure and the third year UM

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Speaker 1: that hasn't been broken. It's one of the most amazing

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Speaker 1: trend line that exist in financial markets. And right now,

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Speaker 1: the tenure at two fifteen would break of the downward

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Speaker 1: trend for thirty or five years, and so I think

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Speaker 1: that's critical, but I think it will happen. So you

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Speaker 1: do think that that trend will be broken. But do

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Speaker 1: you think that we're going to escape the negative real

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Speaker 1: yield vortex or do you think that that's going to

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Speaker 1: persist well and might in certain areas. I mean they're

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Speaker 1: they're less fewer and fewer negative yielding bonds. I think

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Speaker 1: we're down to four trillion as opposed to fifteen trillion

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Speaker 1: and the German tenures of but a magnificent eight basis

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Speaker 1: points this morning, um so UM. I think ultimately we

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Speaker 1: have to as a finance based global economy. Negative interest

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Speaker 1: rates are definitely a negative, a detriment to UH to

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Speaker 1: economic growth because they encourage or discourage savers, which is

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Speaker 1: the thrust of investment. If you don't have I means

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Speaker 1: you don't have an investment, and UM to a certain extent,

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Speaker 1: if you stayed down there in negative territory, investors will

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Speaker 1: put some of that money into a mattress and it

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Speaker 1: doesn't do very well in terms of productivity in a mattress.

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Speaker 1: We're going to continue with Bill Gross. He's gonna stay

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Speaker 1: where this with his new e book out. I'm still

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Speaker 1: standing right now and more timely, perhaps because of the

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Speaker 1: invasion of Ukraine. It is a launch of SpaceX. They're

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Speaker 1: preparing uh that right now. This is SpaceX Falcon nine.

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Speaker 1: It is a launch of forty eight Starlink satellites, and

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Speaker 1: you've got to you've got to believe that it is

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Speaker 1: somehow changed off of Cape Canaveral. Then it would have

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Speaker 1: been Lisa thirteen or fourteen days ago. Well, and actually

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Speaker 1: this is important because it comes at a time and

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Speaker 1: we do have this dominance of the tracking of a

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Speaker 1: lot of individuals through their phones, which is part of

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Speaker 1: how Ukraine actually got ahead of Russia and even attract tanks.

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Speaker 1: There was an anecdote that actually they could tell where

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Speaker 1: the tanks were because Google Maps was saying that there

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Speaker 1: was a lot of traffic there. So these satellites are

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Speaker 1: integral in the way that we understand the world and

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Speaker 1: they we're operating, and it is a new regime. This

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Speaker 1: will be a number of minutes here of a launch

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Speaker 1: and then fifty six minutes in is when we would

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Speaker 1: see a deployment. Make that one hour, sixty five minutes

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Speaker 1: in we'll see the deployment of the starlink at satellites.

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Speaker 1: We'll leave Cape Canado right now. For all of you

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Speaker 1: on Bloomberg Radio and Bloomberg Television. Someone who's been of

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Speaker 1: a great support to us over the years when William

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Speaker 1: Gross always in forever of his Pimco and of course

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Speaker 1: tenure at Janice as well. Out with a wonderful new book,

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Speaker 1: Bill Gross. There is a hilarious moment in the book.

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Speaker 1: And I'm not surprised because I've tried to fire you

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Speaker 1: at least three times. Lu Roue Keiser went after you

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Speaker 1: on Wall Street Week and said, who is this young turk?

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Speaker 1: Get rid of them? How did lu Roue Keiser fire

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Speaker 1: Bill Gross? Well, we always had a question as panelist,

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Speaker 1: and my question was about the fiscal deficit and UH expanding,

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Speaker 1: And so I thought I'd be cute and bring a

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Speaker 1: rubber band into the studio and fire it at lose

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Speaker 1: ear when I talked about an expanding fiscal deficit. I

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Speaker 1: did that. It was a good shot. Missed his ear.

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Speaker 1: He smiled, and UH went on in the conversation, but

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Speaker 1: clearly it was very miffed and at the end UH

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Speaker 1: he had his producer farming. It didn't take long. An

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Speaker 1: important question. I know, Lisa and I've talked about this before,

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Speaker 1: the parlor game of fed guessing. You've been a pinata

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Speaker 1: on this. Sometimes you've got it right, sometimes you've got

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Speaker 1: it wrong. Sometimes it's what you believe in and not

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Speaker 1: so much what you think the FED will actually do.

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Speaker 1: I get it is their value to the modern FED

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Speaker 1: watching what I call the FED parlor game. Well, I

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Speaker 1: think there still is uh, you know, debating whether it's

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Speaker 1: a quarter or fifty base points may not have been

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Speaker 1: of or may not be too much value. But if

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Speaker 1: you can analyze the fits rather longer term moves in

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Speaker 1: terms of twelve, thirty six months, and that's the critical judgment,

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Speaker 1: and that becomes very difficult politically and otherwise. So I

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Speaker 1: still think since central banks control the market, do you

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Speaker 1: want to try and guess um what Powell and others

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Speaker 1: are thinking in terms of interest rate hikes? And so yes,

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Speaker 1: I'd say listen closely. Well, especially at a time when

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Speaker 1: you think that the trend is going to be broken,

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Speaker 1: the downward trend of yields that we had experienced for decades.

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Speaker 1: At what point or do you think that investors should

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Speaker 1: look to just break even on an inflation adjusted basis

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Speaker 1: rather than actually get returns from financial instruments the way

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Speaker 1: they've become accustomed to. Well, if you're talking about tips

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Speaker 1: or in general, because I think that there's been this

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Speaker 1: feeling where you were talking about investing in risky your

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Speaker 1: assets to try to get bigger returns for the likes

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Speaker 1: of pension funds and foundations. And you have a lot

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Speaker 1: of big investors coming out and saying, look, you've got

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Speaker 1: to lower your expectations in order to not just lose

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Speaker 1: your shirt in really risky assets. What's your view? Yeah, correct,

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Speaker 1: I think going forward, and I've said this for a

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Speaker 1: few years now, and obviously not with the fangs and

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Speaker 1: the high flyers that hasn't been the case. They've done

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Speaker 1: very well until the last few months. But I think

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Speaker 1: an investor can really only expect five to six percent

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Speaker 1: going forward. Um. You know, these are days in which

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Speaker 1: interest rates will be rising, They will be pressuring corporate

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Speaker 1: profit margins. They will be affecting the housing market and

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Speaker 1: slowing the economy down. Um, there's less liquidity in the

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Speaker 1: marketplace and and so UM, you know, a five to

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Speaker 1: six percent return instead of a tin banger like Peter

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Speaker 1: Lynch used to call it, or even ten to twenty,

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Speaker 1: which millennials um and new investors think they deserve. Um,

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Speaker 1: it is probably a pretty good number, Bill if you're

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Speaker 1: restarting a career now, which asset class would you choose

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Speaker 1: as having the most promise, well, not bonds, um, you know,

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Speaker 1: probably commodities, and not just because it's hot. Um. I

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Speaker 1: wouldn't choose real because I think that's um been thwarted

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Speaker 1: as well, because of the potential for higher indust rates.

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Speaker 1: Bonds stocks um, you know, stocks are stocks for me,

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Speaker 1: would still be an exciting young person's type of asset

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Speaker 1: class despite the lower returns going forward. There's lots to choose. Uh,

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Speaker 1: there's lots of a difference to make in terms of

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Speaker 1: analyzing various sectors. And so I don't know I pick stocks.

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Speaker 1: I pick stocks in the beginning, but they wouldn't have me.

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Speaker 1: So I I went down and clip coupons the girls.

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Speaker 1: How do was our listeners and our viewers? And I

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Speaker 1: love thank you for the mention of the Bloomberg in

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Speaker 1: your book. I'm still standing where you say you get

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Speaker 1: up in the morning and look at the Bloomberg screen

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Speaker 1: for five hours. I mean, you know that's a great

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Speaker 1: retirement bill. But when you when you get up in

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Speaker 1: the morning, and even with your caution over the years,

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Speaker 1: you've never been associated with the gloom crew. How should

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Speaker 1: our listeners and viewers respond to? Typically the Friday data

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Speaker 1: and Internet dump of gloom out there on the markets.

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Speaker 1: Well should you should take it very carefully because you know, Tom,

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Speaker 1: human emotion is is critical in terms of an investor

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Speaker 1: and attitudes towards markets. Um, you know, I've been a

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Speaker 1: glass half empty because that's what fund investors are. They

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Speaker 1: have to protect capital. But at the same time, PIMCO

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Speaker 1: and myself rode the bond bull market from all the

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Speaker 1: way down to a few years ago, and that's a

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Speaker 1: very bullish, optimistic type of attitude in terms of bond prices.

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Speaker 1: So I think an investor has to know who they

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Speaker 1: are and then to to try and apply that servitablate

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Speaker 1: to markets. You're more qualified on this and maybe five

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Speaker 1: or ten guys in the world. I've been preaching for

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Speaker 1: the last fifteen days that Ukraine is a crisis of

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Speaker 1: tangible assets, commodities, things, as Gartman says, things that fall

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Speaker 1: in your foot, like an oil drum, et cetera. You're

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Speaker 1: the king. Some would say, of financial instruments. What's different

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Speaker 1: about the financial system now given tangible asset crisis versus

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Speaker 1: intangible asset financial instrument crisis like what we saw. Well,

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Speaker 1: I think certainly liquidity is different in terms of at

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Speaker 1: least Russia's central bank reserves, and I think that begins

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Speaker 1: to affect other countries as well, and then ultimately it

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Speaker 1: effects investor's attitude. You know, UM momentum which is a

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Speaker 1: valid alpha generator meaning UM. Those that follow momentum types

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Speaker 1: of trends have done very well over the past ten

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Speaker 1: or twenty years. As markets have moved up UM. Momentum

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Speaker 1: is now of course shifted the other way UM, and

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Speaker 1: and so an investor has to be cautious of this

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Speaker 1: ever increasing trend of higher and higher prices than buying

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Speaker 1: the dips, because momentum is going the other way, and

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Speaker 1: so I think financially that's a key consideration relative to

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Speaker 1: what you mentioned with things, Bill, You've had a history

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Speaker 1: of bold bats throughout your career. What's your boldest bet

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Speaker 1: right now at this moment? Oh? Um, very few. You

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Speaker 1: know I'm doing UM. I'm doing arbitrage corporate buyouts by

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Speaker 1: Microsoft and Google. You know Google announced one just the

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Speaker 1: other day. I'm content to take four or five. Actually,

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Speaker 1: my biggest bet has taken place over the last year.

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Speaker 1: I did very well and have done very well in

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Speaker 1: gas pipelines partnerships, Uh, there aren't too many of them,

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Speaker 1: but they yield eight to nine percent and their tax deferred.

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Speaker 1: Check your tax consultant. But um, you know they've gone

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Speaker 1: up as the fangs and high flighters have gone down.

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Speaker 1: And so the last six to twelve months have been

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Speaker 1: very good to my uh foundation. Girl. It's good to

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Speaker 1: see you. Thank you so Mutching. Congratulations on the essays

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Speaker 1: within your book, and of course of wonderful new text

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Speaker 1: as well from Bill Gross. I'm still standing. Let's get

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Speaker 1: to the institutional conversation of the day. All institutions react.

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Speaker 1: We wait on the international Monetary phone in Christiana, Gorgeva.

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Speaker 1: But David mel Pass is at the World Bank. To

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Speaker 1: his immense credit, they have not taken down World Bank

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Speaker 1: research on the Russian Federation, but front and center on

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Speaker 1: the front of the page of their website, the World

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Speaker 1: Bank Group is taking quick action to support Ukraine. David

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Speaker 1: mel Pass, what do you do this morning? Hi, good

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Speaker 1: morning Tom. Well, I'm grateful that our board on Monday

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Speaker 1: passed a major package Monday afternoon, so that money becomes

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Speaker 1: available right away, meaning I don't know today or tomorrow

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Speaker 1: through means for Ukraine, and that helps them survive as

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Speaker 1: there as they're fighting, uh, fighting back against the Russian invasion. UH.

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Speaker 1: It goes for things like food and salaries and doctors

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Speaker 1: that they desperately need. So today now we look to

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Speaker 1: build a bigger, a bigger, broader package that can begin

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Speaker 1: to think about reconstruction as well. But right now we're

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Speaker 1: focused on refugees, on the region, and on how do

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Speaker 1: you how do you hold it together? Do you believe

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Speaker 1: that you can have a relationship with Mr Putin the

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Speaker 1: invader where you can go directly into these these ravaged

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Speaker 1: cities and provide World Bank support, or you basically working

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Speaker 1: at the border like the Red Cross. Today we're working

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Speaker 1: through the Ministry of Finance of Ukraine, which still exists

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Speaker 1: and is operational, so they're they're supporting the basic services

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Speaker 1: in Ukraine. We're not working with Russians in Ukraine or

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Speaker 1: with Russians in Russia. We've suspended, we've stopped all of

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Speaker 1: our operations in both Russia and Belarus. David, there's a

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Speaker 1: lot of focus on Ukraine and helping the refugees, as

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Speaker 1: there should be. There's also growing focus on nations that

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Speaker 1: rely on Ukraine and Russia for wheat, for a lot

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Speaker 1: of the commodities and thinking of Egypt of their import

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Speaker 1: parts of wheat come from Russia and Ukraine. How are

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Speaker 1: you preparing a package to help some of those countries

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Speaker 1: as they deal with the food inflation and a commodities

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Speaker 1: inflation more broadly that they haven't seen before. Yeah, this

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Speaker 1: is a huge problem for developing countries in general, and

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Speaker 1: especially the poorest ones. People at the that are that

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Speaker 1: are inland from ports are having a great deal of

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Speaker 1: trouble getting food because the supplies would cut off. I

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Speaker 1: spoke with the Prime Minister of Egypt on on Thursday

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Speaker 1: or Friday last week. The Egypt is a major importer

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Speaker 1: from Ukraine. But fortunately they have storage and their crop

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Speaker 1: will be coming in. So as you look around the world,

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Speaker 1: the key variables here are how can global production be

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Speaker 1: boosted outside of Ukraine and Russia. So that would and

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Speaker 1: you know the US, UH and Canada and even Mexico

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Speaker 1: are major potential suppliers both of agricultural products and of energy,

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Speaker 1: so making it productively rapidly available is going to be

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Speaker 1: one of the key the key responses of the world

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Speaker 1: to this horrible situation that's hitting Ukraine. I have to

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Speaker 1: say on efficiency there's lots of things that countries can

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Speaker 1: do and we urge. For example, in the US, the

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Speaker 1: the the efficiency is constrained greatly by the Jones Act,

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Speaker 1: by the ethanol mandates that are hugely, hugely de productive.

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Speaker 1: They cancel production UH and in Europe they they have

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Speaker 1: restraints across their economy on what people can do and

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Speaker 1: what they can produce. So lifting some of that would

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Speaker 1: add to the global supplies and help respond to the crisis.

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Speaker 1: When you talk about efficiencies, David how much you also

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Speaker 1: talking about car free days or perhaps restrictions on how

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Speaker 1: food is consumed in certain places. I think everyone can conserve.

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Speaker 1: What we don't want to see is made is advanced

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Speaker 1: countries cording things. You know, it's income, but on people

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Speaker 1: to allow their supplies to go into the markets and

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Speaker 1: that allows them to get to the people that need

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Speaker 1: it the most. That's part of an efficiency gain. But

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Speaker 1: so I think there are some cost savings that can

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Speaker 1: be done. But as we look globally, the biggest issue

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Speaker 1: is how do you really how do you really tackle

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Speaker 1: UH the the output that can can be made available

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Speaker 1: by each country. For example, there's nickel supply shortages, the

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Speaker 1: London stock Exchange stopped its trading of nickel, but Indonesia

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Speaker 1: is a big nickel producer, so there there are alternatives

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Speaker 1: around the world, and those can be ramped up, ramped

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Speaker 1: up as the world responds. The Russia situation right now

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Speaker 1: doesn't look like it will be it will be. Oh,

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Speaker 1: it will be a temporary When it's a it's a

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Speaker 1: longer lasting UH set of problems for the world in

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Speaker 1: interacting with Russia on oil, on wheat, on basic minerals,

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Speaker 1: and there need to be supplies elsewhere. You just touched

431
00:26:59,600 --> 00:27:02,000
Speaker 1: on a broader question, David, I wonder if we can

432
00:27:02,040 --> 00:27:06,120
Speaker 1: finish that please, the risk of a increase, an escalation

433
00:27:06,160 --> 00:27:09,800
Speaker 1: and increase in nationalism. How do we prevent that from happening.

434
00:27:13,440 --> 00:27:16,040
Speaker 1: I don't think. I think it's very hard to do that.

435
00:27:16,080 --> 00:27:19,359
Speaker 1: People live in nations and they feel nationalistic and they

436
00:27:19,400 --> 00:27:22,000
Speaker 1: feel patriotic for their nation. What we need to do,

437
00:27:22,040 --> 00:27:26,399
Speaker 1: I think, is have a rule of law that's really meaningful. UH.

438
00:27:26,440 --> 00:27:29,919
Speaker 1: In the in the eighties and nineties, I talked a

439
00:27:29,920 --> 00:27:33,120
Speaker 1: lot about constitutional law for Latin America. It was having

440
00:27:33,440 --> 00:27:37,240
Speaker 1: severe problems forming democracies, and it matters a lot what

441
00:27:37,359 --> 00:27:41,119
Speaker 1: your original statutes are and how you can implement those

442
00:27:41,480 --> 00:27:45,320
Speaker 1: uh so worldwide. If we keep pushing on transparency, on

443
00:27:45,480 --> 00:27:48,880
Speaker 1: rule of law, on on people finding ways to resolve

444
00:27:48,960 --> 00:27:55,320
Speaker 1: disputes without fighting. Uh that I think is the way forward. Unfortunately,

445
00:27:55,520 --> 00:28:00,280
Speaker 1: there arise authoritarian leaders that don't do that world because

446
00:28:00,359 --> 00:28:03,480
Speaker 1: in the middle of trying to have good governance for

447
00:28:03,680 --> 00:28:06,879
Speaker 1: countries as we work with them. Devin mount Pass always

448
00:28:06,880 --> 00:28:08,840
Speaker 1: wonderful to catch out with you said, it's been so long,

449
00:28:08,920 --> 00:28:17,720
Speaker 1: David mount Past, the President of the World Bank. Right

450
00:28:17,720 --> 00:28:20,200
Speaker 1: now our interview of the day on the American response

451
00:28:20,200 --> 00:28:23,200
Speaker 1: and particularly the American and NATO response to what we've

452
00:28:23,280 --> 00:28:27,600
Speaker 1: seen with war in Ukraine. James Trevidis UH who has

453
00:28:27,760 --> 00:28:29,840
Speaker 1: been a wonderful friend of the show, of course with

454
00:28:29,960 --> 00:28:33,600
Speaker 1: his public services UH in the Navy as a European

455
00:28:33,720 --> 00:28:37,240
Speaker 1: Commander and also at the same time NATO Supreme Allied Commander.

456
00:28:37,640 --> 00:28:40,800
Speaker 1: Author is two thousand thirty four. I can't say enough

457
00:28:41,160 --> 00:28:44,520
Speaker 1: how timely that frightening book is my book of the summer.

458
00:28:44,560 --> 00:28:48,240
Speaker 1: I believe it was a year ago. I can't remember. James. Now,

459
00:28:48,480 --> 00:28:51,239
Speaker 1: James Trevidis, I'm gonna talk about Ben Hodges General, I'm

460
00:28:51,240 --> 00:28:55,000
Speaker 1: gonna talk about Mark Kimmitt General. They have an urgency

461
00:28:55,280 --> 00:29:01,000
Speaker 1: about urban warfare, give us the same urgency about able warfare.

462
00:29:01,080 --> 00:29:05,080
Speaker 1: In the Black Sea. What does Ukraine Russia look like

463
00:29:05,680 --> 00:29:11,040
Speaker 1: on water? Russia dominates the Black Sea and really has

464
00:29:11,160 --> 00:29:14,200
Speaker 1: for centuries. They've been the dominant power there. If you

465
00:29:14,320 --> 00:29:20,560
Speaker 1: spin around the Black Sea tom you see Romania, Bulgaria, Turkey, Georgia, Ukraine,

466
00:29:20,560 --> 00:29:24,680
Speaker 1: but it's Russia is the monster force there. They will

467
00:29:24,760 --> 00:29:29,160
Speaker 1: continue to dominate it. Turkey has a choke hold on

468
00:29:29,320 --> 00:29:33,440
Speaker 1: the Dark Knells, the Bosphorus, the strait that controls access

469
00:29:33,480 --> 00:29:35,880
Speaker 1: to the Black Sea. But it's going to be Russia's

470
00:29:35,960 --> 00:29:38,840
Speaker 1: game up there because that's where their Black Sea Fleet

471
00:29:38,960 --> 00:29:42,200
Speaker 1: is located. Think having the U. S. Navy's seventh fleet

472
00:29:42,680 --> 00:29:46,480
Speaker 1: inside the Black Sea. That's the advantage that Russians have.

473
00:29:46,760 --> 00:29:49,600
Speaker 1: And your important essay for Bloomer Opinion, the single money

474
00:29:49,640 --> 00:29:52,200
Speaker 1: sentences that your time of duty. There were form in

475
00:29:52,320 --> 00:29:55,760
Speaker 1: thousand Americans in service in Europe and that's been whittled

476
00:29:55,760 --> 00:29:58,400
Speaker 1: down for whatever reason, to a hundred thousand. What is

477
00:29:58,440 --> 00:30:03,120
Speaker 1: your timeline to see a rebuild of American military in Europe?

478
00:30:03,360 --> 00:30:05,680
Speaker 1: Is it a question of weeks and months or is

479
00:30:05,680 --> 00:30:09,480
Speaker 1: this going to be long drawn out extended process depends

480
00:30:09,520 --> 00:30:13,000
Speaker 1: on Vladimir Putin, and so far he is certainly giving

481
00:30:13,080 --> 00:30:15,520
Speaker 1: us plenty of reason to think we are going to

482
00:30:15,680 --> 00:30:18,760
Speaker 1: increase our troop levels in Europe. I don't think we're

483
00:30:18,800 --> 00:30:21,200
Speaker 1: going back to four hundred thousand, the way we were

484
00:30:21,280 --> 00:30:23,960
Speaker 1: during the Cold War, but look for the US presence

485
00:30:24,000 --> 00:30:27,320
Speaker 1: to go from around fifty thousand and perhaps seventy thousand

486
00:30:27,640 --> 00:30:32,320
Speaker 1: permanently based forward if Putin continues. And more importantly, Tom,

487
00:30:32,360 --> 00:30:36,800
Speaker 1: you're seeing the Germans and others increasing their defense spending

488
00:30:37,240 --> 00:30:40,680
Speaker 1: extremely quickly. All of that will move troops to the

489
00:30:40,760 --> 00:30:45,160
Speaker 1: borders of NATO. The NATO alliance will keep Russia out.

490
00:30:45,440 --> 00:30:48,480
Speaker 1: When you say the borders of NATO, Admiral, are you

491
00:30:48,520 --> 00:30:52,680
Speaker 1: talking about Poland? Most importantly, I think it's Poland, but

492
00:30:52,920 --> 00:31:02,160
Speaker 1: also all around the eastern eastern Europe, So I think Estonia, Latvia, Lithuania, Romania, Bulgaria.

493
00:31:02,280 --> 00:31:06,280
Speaker 1: They have either borders on Russia or borders on Russia

494
00:31:06,400 --> 00:31:10,800
Speaker 1: client states like Belarus, or as to the conversation, Tom

495
00:31:10,800 --> 00:31:14,040
Speaker 1: and I just had borders on the Black Sea. There's

496
00:31:14,040 --> 00:31:16,520
Speaker 1: going to have to be an upgrade, if you will,

497
00:31:16,560 --> 00:31:21,920
Speaker 1: in troops forward. That alliance realizes that it's in progress now. Admiral,

498
00:31:22,120 --> 00:31:25,000
Speaker 1: there's a story today on a Bloomberg terminal that Putin's

499
00:31:25,120 --> 00:31:28,640
Speaker 1: endgame sorry to look more and more like simply reducing

500
00:31:28,760 --> 00:31:32,400
Speaker 1: Ukraine to rubble. What do you suggest are the next steps,

501
00:31:32,400 --> 00:31:35,320
Speaker 1: since the sanctions have gone almost as far as they

502
00:31:35,360 --> 00:31:37,960
Speaker 1: can go at this point, the next steps to try

503
00:31:38,000 --> 00:31:42,360
Speaker 1: to bring a swift end to this conflict. First, unfortunately,

504
00:31:42,600 --> 00:31:46,040
Speaker 1: I agree. When you're the Russian military and you have

505
00:31:46,240 --> 00:31:50,840
Speaker 1: performed as badly as they have with poor logistics, poor

506
00:31:50,880 --> 00:31:54,640
Speaker 1: command and control, war criminal behavior, at some point your

507
00:31:54,640 --> 00:31:57,760
Speaker 1: only tool left is a big hammer, and they're starting

508
00:31:57,760 --> 00:32:01,760
Speaker 1: to swing that thing hard through Ukraine Indian cities, trying

509
00:32:01,760 --> 00:32:06,000
Speaker 1: to make Ukraine look like Syria on the Dnieper River.

510
00:32:06,360 --> 00:32:10,520
Speaker 1: That's a terrible outcome for everybody, and its war criminal behavior.

511
00:32:10,640 --> 00:32:14,400
Speaker 1: What we should do about it is continue the massive

512
00:32:14,480 --> 00:32:16,920
Speaker 1: sanctions they will bite, that will take time. On the

513
00:32:17,000 --> 00:32:22,800
Speaker 1: military front, continue to supply the Ukrainians with absolutely everything

514
00:32:22,880 --> 00:32:27,000
Speaker 1: they need short of our troops going in boots on

515
00:32:27,040 --> 00:32:30,160
Speaker 1: the ground and fighting. That's a path to World War

516
00:32:30,280 --> 00:32:35,760
Speaker 1: three level confrontation. But that's more material going into Ukraine.

517
00:32:35,760 --> 00:32:39,520
Speaker 1: And above all, let's get these mid twenty nine fighters

518
00:32:39,560 --> 00:32:43,200
Speaker 1: from Poland into the hands of the Ukrainians. It's complicated,

519
00:32:43,280 --> 00:32:46,240
Speaker 1: I get that, but that could be a game change.

520
00:32:46,280 --> 00:32:49,160
Speaker 1: We've gotta stop to show your general Adam, excuse me,

521
00:32:49,200 --> 00:32:52,360
Speaker 1: I got the wrong service there. Almost Venus is really important.

522
00:32:52,760 --> 00:32:56,160
Speaker 1: The images right now are the opera House of seven

523
00:32:56,240 --> 00:32:59,640
Speaker 1: in Odessa. This isn't Normandy where the Germans are shooting

524
00:32:59,640 --> 00:33:03,160
Speaker 1: from the lifts. This is Odessa with sandbags and a

525
00:33:03,200 --> 00:33:06,200
Speaker 1: bunch of Ukrainians. How do we get those jets from

526
00:33:06,200 --> 00:33:11,400
Speaker 1: Poland to Odessa to defend against a well equipped Russian navy.

527
00:33:11,520 --> 00:33:13,960
Speaker 1: The polls have said they're willing to turn them over

528
00:33:14,120 --> 00:33:19,360
Speaker 1: to the NATO Alliance flyman Ramstein Air Base in Germany. Tom,

529
00:33:19,400 --> 00:33:21,520
Speaker 1: I think the next stop for them would be put

530
00:33:21,560 --> 00:33:24,680
Speaker 1: them in Leviv. Um. Lviv is gonna stand for a

531
00:33:24,720 --> 00:33:28,840
Speaker 1: long time. Uh, the Russians are not on some effective

532
00:33:28,920 --> 00:33:32,600
Speaker 1: high speed blitz cried across Ukraine. Put them in Lviv.

533
00:33:32,720 --> 00:33:35,640
Speaker 1: Build your defense from their turn them over to the Ukrainians.

534
00:33:35,920 --> 00:33:38,560
Speaker 1: Let the Ukrainians do what they want to do, Let

535
00:33:38,600 --> 00:33:41,560
Speaker 1: them create a Ukrainian no flies on. What does that

536
00:33:41,600 --> 00:33:44,160
Speaker 1: do to NATO and NATO being independent? I mean if

537
00:33:44,160 --> 00:33:47,920
Speaker 1: we go into western Ukraine and Leviv, that's fine. But

538
00:33:48,040 --> 00:33:51,960
Speaker 1: the zeitgeis this morning is this is hugely problematic for

539
00:33:52,000 --> 00:33:57,080
Speaker 1: the NATO. You're experienced with the answer tom is turned

540
00:33:57,080 --> 00:34:00,120
Speaker 1: them over to the Ukrainians, do not operate them with

541
00:34:00,240 --> 00:34:03,360
Speaker 1: NATO pilots. When they are turned over to the Ukrainians,

542
00:34:03,360 --> 00:34:07,320
Speaker 1: they become Ukrainian jets operating out of Ukrainian bases in

543
00:34:07,440 --> 00:34:12,360
Speaker 1: western Ukraine. UM, NATO can correctly say it is not

544
00:34:12,440 --> 00:34:16,440
Speaker 1: a belligerent in the combat. Is it somewhat risky? Absolutely,

545
00:34:16,680 --> 00:34:18,840
Speaker 1: but at this point go back to those images you

546
00:34:18,880 --> 00:34:21,839
Speaker 1: were showing a minute ago about two million refugees. We're

547
00:34:21,840 --> 00:34:24,680
Speaker 1: gonna have to take some risk to solve this problem. Meanwhile,

548
00:34:24,719 --> 00:34:27,280
Speaker 1: on the Russian side, Admiral, how much are they running

549
00:34:27,320 --> 00:34:29,400
Speaker 1: out of the fuel? And I mean this in every

550
00:34:29,440 --> 00:34:32,120
Speaker 1: meaning of the word, to continue with this battle. And

551
00:34:32,160 --> 00:34:34,920
Speaker 1: I'm talking about this with parts that are getting stalled

552
00:34:34,960 --> 00:34:37,279
Speaker 1: out as some of these sanctions bites that they need

553
00:34:37,280 --> 00:34:39,319
Speaker 1: to repair their planes. I'm talking about the fact that

554
00:34:39,320 --> 00:34:41,640
Speaker 1: we have not seen the full air power of the

555
00:34:41,719 --> 00:34:47,080
Speaker 1: Russian Army despite Vladimir Putin's resolution. UM, all of the

556
00:34:47,239 --> 00:34:51,600
Speaker 1: logistic failures are coming home to rust Um, Russia does

557
00:34:51,680 --> 00:34:54,880
Speaker 1: not have the kind of twenty one century military that

558
00:34:55,040 --> 00:34:58,160
Speaker 1: NATO does that the United States has. And you see

559
00:34:58,640 --> 00:35:01,520
Speaker 1: always and this is true in business as it is

560
00:35:01,560 --> 00:35:06,960
Speaker 1: in war. Logistics eat strategy for lunch um professionals. No

561
00:35:07,520 --> 00:35:10,799
Speaker 1: logistics are what drive wars, and so we ought to

562
00:35:10,960 --> 00:35:14,640
Speaker 1: capitalize on that at the back office end, crushing them

563
00:35:14,640 --> 00:35:17,799
Speaker 1: with the sanctions, and at the front office end, if

564
00:35:17,840 --> 00:35:21,040
Speaker 1: you will, the client facing into this, by giving the

565
00:35:21,160 --> 00:35:24,200
Speaker 1: Ukrainians the tools to take apart what they can put

566
00:35:24,239 --> 00:35:28,239
Speaker 1: on the battlefield. Admiral A clinic as always James tur

567
00:35:28,320 --> 00:35:31,719
Speaker 1: Vedas that the fullness premount on Commander and nights South.

568
00:35:38,320 --> 00:35:41,000
Speaker 1: Let us go to an important conversation. She has been

569
00:35:41,160 --> 00:35:44,560
Speaker 1: fabulous on the microeconomics of oil, and we're gonna pause

570
00:35:44,600 --> 00:35:48,439
Speaker 1: with them. Rita send chief oil analyst Energy aspects here

571
00:35:49,000 --> 00:35:52,080
Speaker 1: with the tour de force. Coming out of the financial crisis,

572
00:35:52,239 --> 00:35:55,120
Speaker 1: which was my great mentor Magdan Desis of the London

573
00:35:55,200 --> 00:35:59,680
Speaker 1: School of Economics and Amrita. Professor Desig got so upset

574
00:36:00,320 --> 00:36:03,919
Speaker 1: and a misunderstanding of general equilibrium theory that he wrote

575
00:36:03,960 --> 00:36:07,000
Speaker 1: a book about it. Tell us about the new oil

576
00:36:07,120 --> 00:36:11,759
Speaker 1: economics given this jump condition in price. Is there an

577
00:36:11,760 --> 00:36:16,560
Speaker 1: oil equilibrium out there this morning, right now, Tom, And

578
00:36:16,600 --> 00:36:19,040
Speaker 1: it's it's a fantastic question that you've asked. There is

579
00:36:19,080 --> 00:36:21,880
Speaker 1: no equilibrium in the market, and that's why you've seen prices,

580
00:36:22,320 --> 00:36:25,200
Speaker 1: not just the level, but the volatility that you're seeing.

581
00:36:25,480 --> 00:36:28,000
Speaker 1: We've moved up ten dollars down, ten dollars up, ten

582
00:36:28,040 --> 00:36:31,320
Speaker 1: dollars in a day. I mean, these kind of numbers

583
00:36:31,800 --> 00:36:34,200
Speaker 1: very much tell you that the market is struggling to

584
00:36:34,360 --> 00:36:39,319
Speaker 1: find what the true prices. These are incredibly complex things.

585
00:36:39,440 --> 00:36:42,320
Speaker 1: Don't give us the math of an emerita, But which

586
00:36:42,480 --> 00:36:47,720
Speaker 1: part of our disequilibrium given massive jump conditions is the

587
00:36:47,840 --> 00:36:52,600
Speaker 1: disequilibrium we should focus on. The dissequilibrium is originating from

588
00:36:52,640 --> 00:36:56,560
Speaker 1: the supply side. Obviously, because Russia is unable to sell production,

589
00:36:57,440 --> 00:36:59,360
Speaker 1: you are going to see some shot ins. But the

590
00:36:59,440 --> 00:37:02,920
Speaker 1: reason you see these jumps is absolutely on the demand side.

591
00:37:03,200 --> 00:37:05,319
Speaker 1: You and I both know that demand is very in

592
00:37:05,360 --> 00:37:08,640
Speaker 1: the last thing, it takes a long time to react

593
00:37:08,719 --> 00:37:11,920
Speaker 1: to such prices, especially by the way governments around the

594
00:37:11,960 --> 00:37:16,160
Speaker 1: world are reintroducing subsidies. So now suddenly consumers are not

595
00:37:16,280 --> 00:37:19,279
Speaker 1: even fully exposed to the true price of oil. But

596
00:37:19,400 --> 00:37:22,160
Speaker 1: that's precisely why you're going to get these big discrete

597
00:37:22,239 --> 00:37:25,520
Speaker 1: jumps and prices until you get to that point where okay,

598
00:37:25,680 --> 00:37:28,560
Speaker 1: demand really starts to hurt and you get back to

599
00:37:28,640 --> 00:37:32,120
Speaker 1: that equilibrium. The problem is it's searching for that price.

600
00:37:32,160 --> 00:37:35,320
Speaker 1: It's in the price discovery mode this market, and whenever

601
00:37:35,360 --> 00:37:38,160
Speaker 1: it's in price discovery mode, which is very rare, you

602
00:37:38,200 --> 00:37:41,160
Speaker 1: are going to get huge volatility. Well I'm ready. Let's

603
00:37:41,160 --> 00:37:43,000
Speaker 1: sit on that point for a moment, especially because the

604
00:37:43,080 --> 00:37:46,200
Speaker 1: kind of Phillips CEO came out yesterday and said he

605
00:37:46,280 --> 00:37:48,640
Speaker 1: does think that prices are getting to a place where

606
00:37:48,640 --> 00:37:51,279
Speaker 1: we are starting to see demand destruction. You do see

607
00:37:51,320 --> 00:37:56,319
Speaker 1: airlines actually curtailing their schedules to preserve capital. Considering that

608
00:37:56,360 --> 00:37:59,120
Speaker 1: some of the less flown or less popular routes are

609
00:37:59,160 --> 00:38:02,640
Speaker 1: consuming a lot out of expensive fuel. How much will

610
00:38:02,680 --> 00:38:06,120
Speaker 1: this make a difference on the margins? How how big

611
00:38:06,280 --> 00:38:09,120
Speaker 1: is that imbalance so that little moves can actually have

612
00:38:09,440 --> 00:38:12,879
Speaker 1: a big impact. I think the important thing to bear

613
00:38:12,920 --> 00:38:15,960
Speaker 1: in mind is that we started this year with nearly

614
00:38:16,040 --> 00:38:18,840
Speaker 1: record low inventories, and that's why we don't really have

615
00:38:18,920 --> 00:38:22,280
Speaker 1: a cushion right. So now, if we're talking about losing

616
00:38:22,360 --> 00:38:25,680
Speaker 1: to three million barrels per day of Russian production. That's

617
00:38:25,719 --> 00:38:27,600
Speaker 1: how much demand will need to come off. So to

618
00:38:27,680 --> 00:38:30,280
Speaker 1: your point, yes, we are seeing airlines at the margin

619
00:38:30,680 --> 00:38:33,319
Speaker 1: curtailing some routes. That's going to help. You are going

620
00:38:33,360 --> 00:38:35,560
Speaker 1: to lose some demand in Russia as well in parts

621
00:38:35,560 --> 00:38:38,480
Speaker 1: of Europe as well, But it's not big enough, especially

622
00:38:38,560 --> 00:38:42,760
Speaker 1: if you think about Asia not exposed fully because subsidies

623
00:38:42,760 --> 00:38:45,560
Speaker 1: are coming back. B they are in a post pandemic

624
00:38:45,680 --> 00:38:49,200
Speaker 1: recovery where people are very very keen to travel both

625
00:38:49,280 --> 00:38:52,720
Speaker 1: by car and by a s. So that's the problem

626
00:38:52,760 --> 00:38:55,600
Speaker 1: in this cycle where we are in anything but the

627
00:38:55,640 --> 00:38:58,719
Speaker 1: recessionary environment. We are actually in a very it's it's

628
00:38:58,760 --> 00:39:02,120
Speaker 1: a recovery environment. And then we've hated with a supply

629
00:39:02,200 --> 00:39:04,640
Speaker 1: shock and we are given that back trap. How high

630
00:39:04,680 --> 00:39:07,319
Speaker 1: could oil prices go based on the sanctions that we've

631
00:39:07,360 --> 00:39:10,520
Speaker 1: seen already put into effect. I mean, I would say

632
00:39:10,560 --> 00:39:14,240
Speaker 1: prices can easily go above hundred and fifty. Now beyond

633
00:39:14,280 --> 00:39:16,520
Speaker 1: that honestly does become a number. And this is where

634
00:39:16,520 --> 00:39:19,200
Speaker 1: elasticity has become very difficult to a certain as well.

635
00:39:19,680 --> 00:39:22,880
Speaker 1: Every retail prices different people. The government's put on taxes,

636
00:39:22,920 --> 00:39:25,600
Speaker 1: they put on subsidies, so the exposure is not going

637
00:39:25,640 --> 00:39:28,080
Speaker 1: to be the same. The oil burden, as we call

638
00:39:28,200 --> 00:39:30,640
Speaker 1: on GDP, is going to be very, very different. But

639
00:39:31,040 --> 00:39:33,120
Speaker 1: the reason I say it's above hundred and fifty and

640
00:39:33,160 --> 00:39:36,040
Speaker 1: not like two hundred or even higher is unlike in

641
00:39:36,080 --> 00:39:39,399
Speaker 1: the past, isn't just oil that's rising. It's natural gas,

642
00:39:39,480 --> 00:39:44,280
Speaker 1: it's food, it's metal. So it's a very inflationary environment overall,

643
00:39:44,560 --> 00:39:46,680
Speaker 1: which is why oil doesn't need to do all the

644
00:39:46,800 --> 00:39:49,920
Speaker 1: work right to kind of curtail demand. Um, there are

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Speaker 1: other factors that are really pushing consumers to spend less

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Speaker 1: and rita as always, thank you, I'm ready to send

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Speaker 1: that of energy aspects. This is the Bloomberg Surveillance Podcast.

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Speaker 1: Thanks for listening. Join us live weekdays from seven to

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Speaker 1: subscribe to the Surveillance Podcast on Apple podcast, SoundCloud, Bloomberg

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Speaker 1: dot com, and of course on the terminal. I'm Tom

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Speaker 1: keene In. This is Bloomberg