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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: In Washington after Bloomberg reported via sources familiar with the matter,

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Speaker 2: that a ceasefire agreement has been reached between Israel and Hamas,

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Speaker 2: although we should point out we just got a statement

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Speaker 2: from the Israeli Prime Minister Benjamin Netanyahu's office saying there

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Speaker 2: are still several unresolved points in the outline of the

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Speaker 2: ceasefire and hostage release agreement, and they hope the details

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Speaker 2: will be finalized tonight. Of course, these developments follow what

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Speaker 2: had been days of signaling from officials in the Biden

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Speaker 2: administration that things were getting closer, including Jake Sullivan, who

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Speaker 2: told our colleague Jenny Letterd this at a visit to

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Speaker 2: Bloomberg at the beginning of this week.

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Speaker 3: I think the pressure is building for Hamas to come

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Speaker 3: to yes. I think Israel also has achieved a huge

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Speaker 3: amount of its military objectives in Gaza, and therefore they

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Speaker 3: are in a position to be able to say yes.

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Speaker 3: So there is a distinct possibility that we can get

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Speaker 3: this deal done this week.

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Speaker 4: You heard that here and saw it on Bloomberg on Monday.

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Speaker 4: Here we are on Wednesday with reports of a breakthrough

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Speaker 4: here and joining us at the table is the leader

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Speaker 4: of our national security coverage in Washington. Bloomberg's Nick Wadham's.

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Speaker 4: Great to see you, Nick. I know you're extremely busy

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Speaker 4: at the moment. These headlines, though, coming from the Israeli

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Speaker 4: Prime Minister's office, make us wonder what's really going on here,

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Speaker 4: and it brings us back to May when Joe Biden

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Speaker 4: announced what appeared to be a comprehensive seven point plan,

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Speaker 4: only to be frowned on by Benjamin Netanyahu. Is this

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Speaker 4: deja vu? Or is this a real breakthrough?

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Speaker 5: Well, you know, up to about I would say, five

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Speaker 5: minutes ago, we thought this was a real breakthrough. I

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Speaker 5: mean President Elect Trump announced on truth Social he had

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Speaker 5: Chuck Schumer from the Senate floor saying he'd just been

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Speaker 5: informed by the administration that they had a deal. We

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Speaker 5: and many others were told by US officials and folks

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Speaker 5: in the region that the deal was done, so it's

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Speaker 5: unclear whether these comments from the Prime Minister are some

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Speaker 5: sort of face saving exercise or really mean that this

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Speaker 5: deal is now being frozen in its tracks. I mean,

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Speaker 5: what you are going to see here, though, is a

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Speaker 5: test because President elect Trump has essentially in the last

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Speaker 5: few minutes taken credit for this, saying it was his

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Speaker 5: election in November that meant this deal could be done.

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Speaker 5: And a big part of that narrative is that he

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Speaker 5: was finally really able to put the squeeze on bb

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Speaker 5: in a way that President Biden was not. So now

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Speaker 5: that Israel seems to be equivocating a little bit, we've

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Speaker 5: got some more reporting to do.

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Speaker 2: It looks like well, and we'll let you get to

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Speaker 2: it in just a minute, Nick, But while we have

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Speaker 2: you this notion that obviously nothing is done until it's done.

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Speaker 2: It also isn't a permanent ceasefire until it is one,

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Speaker 2: even if they can reach an agreement tonight on whatever

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Speaker 2: this temporary.

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Speaker 6: Pause will be. Is this really the easier part.

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Speaker 2: Than figuring out a way to fully end this war

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Speaker 2: on a permanent basis?

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Speaker 5: Yeah, I mean, this is such a heavy lift in

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Speaker 5: so many ways, in a depressing way, this really is

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Speaker 5: the easiest part. I mean, you have a pause in

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Speaker 5: the fighting, you have a release of some three dozen hostages.

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Speaker 5: Presumably the fundamental equation remains unchanged. And we've spoken about

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Speaker 5: this many times. Israel has said no halt to the

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Speaker 5: war until Gaza is freed of Hamas. You had Secretary

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Speaker 5: of State blinking yesterday, I believe, essentially saying that they

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Speaker 5: believe Hamas has managed to recruit almost as many fighters

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Speaker 5: as it's lost in this So Hamas appears to remain,

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Speaker 5: at least in the US view, somewhat undiminished. Where does

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Speaker 5: that leave us? How do we transition then? If Hamas

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Speaker 5: remains in power, and net and Yahoo insists that Israel

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Speaker 5: won't stop until they're out of power, those are questions

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Speaker 5: no one has been able to resolve. But at least

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Speaker 5: for the time being, it does appear that we would

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Speaker 5: have a halt. That then the US would try to

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Speaker 5: sort of spin or seek to get momentum from to

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Speaker 5: bring a lasting ceasefire that could bring a permanent into

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Speaker 5: this conflict.

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Speaker 4: That would also, though, mean those concerns you outline a

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Speaker 4: continuation of the US military presence in the Middle East,

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Speaker 4: at least of the level we have now that's right.

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Speaker 5: I mean, there's there's absolutely no question that the US

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Speaker 5: is going to maintain that presence President elect Trump. You know,

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Speaker 5: he said just a few days ago, listen, if this

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Speaker 5: thing is not wrapped up before I get into office,

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Speaker 5: all hell is going to break loose. The idea was that, Okay,

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Speaker 5: Hamas presumably listened to that and was felt some pressure

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Speaker 5: that you know, no way out. Also he would have

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Speaker 5: leaned on net Yahoo. But I mean, I mean, I

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Speaker 5: do think when you look at the underlying force posture

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Speaker 5: and strategic deployment for the region, and things are not

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Speaker 5: going to change. We are not backing down. The US

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Speaker 5: is not bringing people back, and it's forced posture is

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Speaker 5: going to remain very high.

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Speaker 2: As we are now just days away from Donald Trump's inauguration, Nick,

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Speaker 2: We've had conversations with multiple national security experts, people focused

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Speaker 2: on the Middle East, who have suggested that Donald Trump

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Speaker 2: is inheriting what has a dramatically weakened Iran, and I

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Speaker 2: wonder to what extent the weakening of Iran is attributing

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Speaker 2: to the timing here as well. Knowing that Israel was

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Speaker 2: able to dismantle a lot of the infrastructure and take

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Speaker 2: out most of Hesbalah leadership in addition.

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Speaker 6: To everything it's been waging with Hamas.

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Speaker 2: Is this deal likely to go forward if Iran isn't saying, Cammas,

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Speaker 2: you do kind of need to do this.

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Speaker 6: We can't back you up in the same way.

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Speaker 5: Well, I mean, Iran's role is a huge factor here,

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Speaker 5: and yes, I mean a big element in this is

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Speaker 5: that Hamas seems to be much more isolated than it was.

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Speaker 5: I mean, you have Iran, you have Hesballah, you have Sirious.

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Speaker 5: So all of these dominoes have fallen and that has

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Speaker 5: fundamentally changed Hamas's calculus. So whether or not they say

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Speaker 5: they're going to give up the fight permanently, there is

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Speaker 5: no question that Hamas has been seriously weakened. And that

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Speaker 5: is a direct result of the fact that Iran has

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Speaker 5: also been very seriously weakened. And you know what's to come.

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Speaker 5: Trump has promised a reimposition of maximum pressure on Iran,

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Speaker 5: so you can expect to see his administration really tight

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Speaker 5: in the economic screws on them.

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Speaker 2: All Right, Nick Wadams, I know you got work to do,

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Speaker 2: so we'll let you go leading our national security team

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Speaker 2: in Washington. Thank you so much and we want to

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Speaker 2: get more on these developed developments. Now in turn to

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Speaker 2: another expert in the region, Garshamali is with US former

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Speaker 2: director for Syria and Lebanon at the National Security Council,

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Speaker 2: now founder and CEO of Greenwich Media Strategies. Welcome back

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Speaker 2: to Bloomberg TV and Radio.

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Speaker 6: Hagar As.

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Speaker 2: I'm sure you just heard us describing we have sources

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Speaker 2: saying that yes, there is a deal in place. The

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Speaker 2: Israeli Prime Minister's office, though, seems to be saying not

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Speaker 2: quite so fast.

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Speaker 6: Do you think this one's real?

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Speaker 7: I do think this.

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Speaker 8: One is real, And for the last few days I've

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Speaker 8: been saying that we've never been so close. And the

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Speaker 8: reason for that is that you have a lot of

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Speaker 8: moving parts that have converged. I know that you're going

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Speaker 8: to see president like Trump take credit and Biden take credit,

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Speaker 8: and they're each going to, you know, thump their chest

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Speaker 8: about it. But the fact is that you had a

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Speaker 8: lot of different factors feed into this. The most important

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Speaker 8: is the shifting geopolitical dynamics in the Middle East, and

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Speaker 8: that really accelerated after the fall of US side. That's

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Speaker 8: really what shifted Hamas's view. Suddenly they were completely alone

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Speaker 8: Hamas is nothing without its backers.

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Speaker 7: So now you've got Iran is on the defense.

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Speaker 8: Hasbella's been decapitated, and when us AT falls and therefore

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Speaker 8: their land bridge to Iran is also gone, Suddenly they

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Speaker 8: were on their own. And back in December, that's when

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Speaker 8: Hamas started to accept terms of this deal that they

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Speaker 8: were not willing to accept before, namely with regards to

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Speaker 8: Israeli military presence in Gaza, particularly on the Egypt Gaza border.

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Speaker 7: And so that's when you saw them shift their tune.

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Speaker 8: Of course, the maruhu're coming from Biden and Trump, each

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Speaker 8: for different reasons.

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Speaker 7: Biden wants one last success. Trump doesn't want this hanging

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Speaker 7: over his head. That plays a significant role as well.

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Speaker 8: But it's really all of these factors that played into this,

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Speaker 8: and that's also why I believe that this will find,

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Speaker 8: this final push will go through.

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Speaker 4: Ugard's great to see you, and we appreciate your being

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Speaker 4: with us here in the clutch with breaking news. I

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Speaker 4: wonder if it's possible, though, that really we needed both

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Speaker 4: sides to be working this negotiation and maybe both deserve credit.

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Speaker 4: Donald Trump and his news conference last week, stood there

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Speaker 4: with Steve Witkoff talking about the progress that they had made.

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Speaker 4: Did it in fact take both administrations if you will.

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Speaker 7: I'm a believer in that. That's my own opinion that

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Speaker 7: it's both.

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Speaker 8: That a lot of the success can be attributed to

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Speaker 8: the fact that you have both working on it for

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Speaker 8: different reasons, with different messages that complement each other. Because

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Speaker 8: on the Biden side, they've been working on this for

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Speaker 8: well over a year.

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Speaker 7: They've been pushing these parties.

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Speaker 8: They know these negotiators, they know all the issues, all

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Speaker 8: the concerns, all the needs, and they've been working this.

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Speaker 8: But when you have Trump coming into office, someone who's

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Speaker 8: notoriously erratic, unpredictable, who assassinated Iran's a general costum Soulimani

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Speaker 8: in twenty twenty, that shifts things because that instills a

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Speaker 8: little bit more fear on one hand on the objectionable

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Speaker 8: actors like Hamas and Iran, but also Trump is able

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Speaker 8: to twist Netanyah, who's arms a bit further because Nettan Yah,

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Speaker 8: who simply likes him more, and we've seen that play

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Speaker 8: out many times. And a lot of that could be

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Speaker 8: attributed to Trump's first administration and the policies he pursued

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Speaker 8: toward Israel back then moving the embassy to Jerusalem, recognizing

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Speaker 8: the annexation of goal On Heights, and so on. And

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Speaker 8: so when you've got the mix of the two of them,

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Speaker 8: it plays very well for a situation like this. And

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Speaker 8: by the way, allegedly Steve Witkoff himself said that said

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Speaker 8: something to that effect when he was in Israel.

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Speaker 7: The Israeli Pressed for the last.

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Speaker 8: Few days has said that Steve Witkoff said that Brett

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Speaker 8: McGirk out in the region that he was leading these negotiations.

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Speaker 8: They have been working in tandem for the last couple

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Speaker 8: of months because the Biden administration has an interest in

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Speaker 8: passing on their plans, of course to the next administration.

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Speaker 7: That's just simply how it always works.

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Speaker 8: But they've been working on both of them, and their

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Speaker 8: messaging has apparently been different. Is there very Pressed, for example,

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Speaker 8: said that Steve Whitkoff in his meetings said you better

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Speaker 8: get to this deal or else to Israel by the way,

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Speaker 8: Tantanyahu did specifically.

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Speaker 7: So the mix of those messages.

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Speaker 8: And goals I do think plays really well, and I

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Speaker 8: agree with you they could both take.

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Speaker 7: Credit for this.

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Speaker 9: Well.

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Speaker 2: So as we consider which administration is ultimately going to

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Speaker 2: take credit or whether that credit will be shared. Obviously,

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Speaker 2: it's not just about the presidents, but others, including for example,

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Speaker 2: the Secretary of State Anthony B. Lincoln, who actually talked

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Speaker 2: about the circumstances with Hamas in particular and whether or

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Speaker 2: not this war could turn, this war with Hamas could

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Speaker 2: turn into something everlasting. He spoke at the Atlantic Council yesterday. Hgar,

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Speaker 2: this is what he said, and we'll have a respond.

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Speaker 10: Each time Asrael completes its military operations and pulls back AMAS,

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Speaker 10: militants regroup and re emerge because there's nothing else to

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Speaker 10: fill the void.

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Speaker 4: Indeed, we assess.

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Speaker 10: That Hamas has recruited almost as many new militants as

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Speaker 10: it is lost. That is a recipe for an enduring

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Speaker 10: insurgency and perpetual war, so Gar.

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Speaker 2: It brings us to the question of even if you

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Speaker 2: get a ceasefire, now, even if you can turn that

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Speaker 2: into something permanent, how permanent realistically it will be if

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Speaker 2: Israel's goal of complete eradication of an ideology is not

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Speaker 2: one that can actually be reached.

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Speaker 8: What you say, you have two issues playing out here,

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Speaker 8: two different but two related factors that could really lead

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Speaker 8: into something a long lasting insurgency.

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Speaker 7: For sure.

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Speaker 8: One is the fact that, as Secretary Blincoln was talking about,

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Speaker 8: is the difficulty in reaching a permanent solution. And now,

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Speaker 8: when you have a cease fire, it's obviously great news

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Speaker 8: and it's something a lawed, but this is phase.

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Speaker 7: If they come to this, this would be.

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Speaker 8: Phase one of three phases, and the third phase is

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Speaker 8: where a permanent end to this would be negotiated. So

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Speaker 8: the good news is that you've now opened this door

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Speaker 8: to potential future negotiations, but they're obviously very fragile and

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Speaker 8: without real real thinking and buy in by the parties

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Speaker 8: on how the future of Gaza will look and how

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Speaker 8: that permanent solution looks, then it's going to be very

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Speaker 8: tenuous now blinking. In that speech at the Atlantic Council,

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Speaker 8: he did say that for months now, the Bide administration

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Speaker 8: has worked on a post conflict plan. They've passed that

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Speaker 8: on to the Trump folks, and they've worked with certain partners.

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Speaker 8: There is some smart thinking on this issue, but we

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Speaker 8: don't know the full details of it, so we don't

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Speaker 8: know if those terms are really feasible. They include things,

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Speaker 8: for example, like a Middle Eastern peacekeeping mission that would

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Speaker 8: be there how Gaza would be governed in the future.

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Speaker 7: But again, very very tenuous, very difficult issues.

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Speaker 8: Hamas's one goals to survive, so they're not going to

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Speaker 8: take it. They're not going to go down easily. The

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Speaker 8: Palestinian authority or another authority to take control over gozens.

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Speaker 8: It's going to be very difficult. And the second issue

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Speaker 8: you have playing out here is that the way Israel

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Speaker 8: approached the war in Gaza.

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Speaker 7: Whether you know my views.

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Speaker 8: I've been very clear about my views. I worked in

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Speaker 8: counter terrorism. I'm more than happy to see Hamas completely decimated.

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Speaker 8: But the way they approached it and the humanitarian crisis

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Speaker 8: that ensued is going to push a lot of those

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Speaker 8: gosins into the arms of the enemy. And that's the problem.

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Speaker 8: So even if you erase Hamas, there is going to

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Speaker 8: be grievances there. There's going to be angst and very

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Speaker 8: recent i mean very fresh wounds there that could lead

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Speaker 8: them to the arms of a different terrorist group with

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Speaker 8: open arms, just under a different name. And that's why

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Speaker 8: Secretary B. Lincoln was saying that I do think that

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Speaker 8: that's a significant risk, and the only way to go

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Speaker 8: about that at this stage is to plan for a

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Speaker 8: very long peace process. But hopefully if you can include

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Speaker 8: in that a deal that leads to state solution, something

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Speaker 8: where you have the light at the end of the tunnel.

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Speaker 7: That's the only way you're going to be able to

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Speaker 7: try and circumvent.

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Speaker 8: Some of that inevitability of individuals joining further insurgent or

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Speaker 8: tear spoofs.

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Speaker 4: Magarwin our remaining moment here if I can add to

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Speaker 4: the permanent war argument. Terry Hayes at Pangaea out with

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Speaker 4: analysis following this headline, suggesting that this will not lower

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Speaker 4: geopolitical risk. Israel will remain split hamas is not out

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Speaker 4: to Anthony Blincoln's point, battlefields from Yemen to the Red

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Speaker 4: Sea to Lebanon will continue to be regional flashpoints behind

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Speaker 4: it all. Yes, a weekend I ran, but also China.

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Speaker 4: How much does Donald Trump have to worry about even

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Speaker 4: after this deal is struck, if it's real.

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Speaker 7: Well, he has a lot to worry about. There's still

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Speaker 7: a lot of work there.

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Speaker 8: The fact is that with Trump in office, the one

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Speaker 8: region that I have real hope for that I have

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Speaker 8: not had hope for in decades is the Middle East.

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Speaker 8: That I don't share that for the whole world or

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Speaker 8: for the United States, But when it comes to the

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Speaker 8: Middle East in particular, I believe then the reason for

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Speaker 8: that is that Iran is at the root of most

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Speaker 8: of the problems in the Middle East, whether it's backing

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Speaker 8: terroist groups in Yemen and in Syria and Iraq and Lebanon,

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Speaker 8: or it's pursuing actual terrorists behavior across the region and

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Speaker 8: pushing its ideology and the expansion of it across the region,

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Speaker 8: trying to compete and become the regional hegemon. So with

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Speaker 8: Iran on the defense this way, and with them knowing

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Speaker 8: that they have a leader coming in who isn't afraid

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Speaker 8: to assassinate one of their generals, that's going to make

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Speaker 8: them behave So I have hope for the Middle East.

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Speaker 7: But listen, you're talking about it.

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Speaker 4: We want to share your hope. Agar, come back and

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Speaker 4: bring more hope to us. Agar Shamali with us on

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Speaker 4: Balance of Power. This is Bloomberg.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

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Speaker 1: us live weekdays at noon and five pm Eastern on

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Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business app.

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Speaker 1: You can also listen live on Amazon Alexa from our

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Speaker 1: flagship New York station. Just say Alexa, play Blue Whomberg

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Speaker 1: eleven thirty.

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Speaker 2: This is Balance of Power Life from Washington. I'm Kaylee

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Speaker 2: Lines alongside Joe Matthew. This is, of course the early

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Speaker 2: edition of Balance of Power. But we have a lot

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Speaker 2: of coverage coming up for you throughout the course of today,

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Speaker 2: not just the late edition of Balance of Power, but

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Speaker 2: we will also be here this evening for special coverage

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Speaker 2: of the farewell address of Joe Biden, given from the

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Speaker 2: Oval Office at the White House tonight at eight pm

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Speaker 2: Eastern Time.

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Speaker 6: It's just one of many speeches he.

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Speaker 2: Has given or will give this week, as he has

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Speaker 2: just days left in office, five days to be exact.

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Speaker 4: Jeff addressing the American people in prime time. It's a

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Speaker 4: venue he hasn't used terribly often over the course of

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Speaker 4: these four years. But we're wondering exactly what he's going

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Speaker 4: to say, Kaylee. With news of what appears to be

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Speaker 4: a possible cease fire in the Middle East, we thought

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Speaker 4: there was a deal and he may well announce one,

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Speaker 4: but after some hedging, I guess from the Israeli Prime

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Speaker 4: Minister's office, We're playing this a little bit carefully here,

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Speaker 4: so I'm guessing that we have a couple of scripts

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Speaker 4: in play, and we're going to talk to our panel

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Speaker 4: about this next. Rick and Jenie are with us, But

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Speaker 4: why don't we start at the White House? Bloomberg's Tyler

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Speaker 4: Kendall is on the North lawn right now. It's an

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Speaker 4: important day there as the staff, the communications department, and

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Speaker 4: the rest prepare for a farewell address to the nation. Tyler,

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Speaker 4: how's it going well, Joe.

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Speaker 11: The last time that President Biden addressed the nation from

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Speaker 11: the Oval Office, it was back in July when he

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Speaker 11: had dropped out of the twenty twenty four presidential race,

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Speaker 11: and at the time he said there were a few

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Speaker 11: priorities that he wanted to spend his remaining months in

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Speaker 11: office focused on. In one of them was securing a

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Speaker 11: deal for the hostages in Gaza to be released. So

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Speaker 11: as these details start to emerge, we will wait and

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Speaker 11: see if President Biden does end up announcing that deal

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Speaker 11: and having that be part of these farewell address tonight. However, Joe,

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Speaker 11: as you know, this is largely considered to be his

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Speaker 11: capstone speech after more than fifty years here in Washington.

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Speaker 11: Elected to the Senate in nineteen seventy three, and Caylee

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Speaker 11: mentioned it before. This has been a week of farewell

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Speaker 11: events for President Biden, and for a sense of the

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Speaker 11: tone of the messaging that we could expect tonight, I

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Speaker 11: want you to take a lesson here to how he

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Speaker 11: addressed this State Department on Monday during one of his

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Speaker 11: farewell addresses to the employees there.

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Speaker 12: Common I took office, our nation had become stronger at home,

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Speaker 12: are stronger in the world, and now America is more capable,

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Speaker 12: and I would argue better prepared, and we've been in

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Speaker 12: a long long time.

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Speaker 11: Bloomberg News is also reporting that President Biden is expected

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Speaker 11: to talk about the country's economic turnaround, noting how he

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Speaker 11: took office amid the height of the COVID nineteen pandemic.

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Speaker 11: We are also expecting him to teut some of his

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Speaker 11: legislative victories, including the bipartisan Infrastructure Bill, as well as

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Speaker 11: the Chips and Science Act. But of course, Joe and Kelley,

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Speaker 11: as you both know, this is coming against the backdrop

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Speaker 11: of low approval ratings for President Biden. According it to Gallup,

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Speaker 11: he is leaving office with a thirty nine percent approval

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Speaker 11: rating That is about eighteen percentage points lower than when

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Speaker 11: he took office four years ago.

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Speaker 2: All right, Bloomberg Tyler Kendall live at the White House

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Speaker 2: for us this afternoon. Thank you so much, And as

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Speaker 2: we look ahead to this farewell address, we want to

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Speaker 2: bring in our signature political panel. Rick Davis is with

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Speaker 2: US Republican Strategists and partner at Stone Court Capital, alongside

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Speaker 2: Democratic strategist Genie Shanzeno, political science professor at Iona University

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Speaker 2: and Senior Democracy Fellow at the Center for the Study

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Speaker 2: of the Presidency and Congress. Genie just on Tyler's last

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Speaker 2: point about the fact that Joe Biden is leaving office

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Speaker 2: as a deeply unpopular president, can he say anything tonight

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Speaker 2: to help make history view him differently than that?

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Speaker 13: I'm not sure he can say anything in particular tonight,

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Speaker 13: but I and I don't have hope he will do

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Speaker 13: what I'm advising, Kaylee. But I'm really hoping that they

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Speaker 13: don't go with a litany of accomplishments that we have

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Speaker 13: achieved and a litany of policies and the amount of

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Speaker 13: legislation we've passed, because one thing we know about this administration,

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Speaker 13: they've had a habit of trying to convince the American

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Speaker 13: public to feel something that they simply don't, hence those

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Speaker 13: low approval ratings Tyler was just talking about. So you know,

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Speaker 13: I am hoping that he could try to do this

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Speaker 13: in a different way, which would be to come to

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Speaker 13: it with a bit of humility and honesty about where

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Speaker 13: the American public finds itself.

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Speaker 7: And nobody is.

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Speaker 13: Better positioned to do that than Joe Biden fifty years

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Speaker 13: in Washington, d C. So I think there's a way

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Speaker 13: to do it. I'm not sure he's going to get there,

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Speaker 13: and that is my concern. So I will be watching

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Speaker 13: with you tonight, Kayley, with baited breath, to see if you.

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Speaker 7: Can get there.

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Speaker 4: We'll be watching together with Rick and Jeanie. They'll be

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Speaker 4: with us as part of our special coverage, and I'm

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Speaker 4: guessing Rick that this will be fine tuned until the

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Speaker 4: last moment, until it's loaded into the teleprompter. Not unlike

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Speaker 4: a State of the Union, give us a sense of

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Speaker 4: what's happening behind the scenes right now, especially in light

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Speaker 4: of what appears to be a massive developing story in

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Speaker 4: the Middle East.

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Speaker 14: Yeah, that's right. I mean, there is a paragraph that's

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Speaker 14: probably been altered as we speak around the Middle East

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Speaker 14: peace process. So that's probably one of them that's getting

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Speaker 14: hacked up. But look, Joe Biden is a medaler, right.

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Speaker 14: He loves to take speeches right in the columns, change

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Speaker 14: things right to the last minute. I mean, the worst

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Speaker 14: job in the world is being the teleprompter operator on

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Speaker 14: a Biden you know, campaign or in the White House,

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Speaker 14: because he's getting changes all the way up to the

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Speaker 14: time they go broadcast. So but these are more refinements.

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Speaker 14: The substance of his administration is baked, right. We know

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Speaker 14: the good news and the bad news. And as indicated,

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Speaker 14: the public is basically checked out on the Biden presidency.

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Speaker 14: He's not going to leave a popular president, but he'll leave.

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Speaker 4: He'll will leave.

440
00:21:44,480 --> 00:21:47,440
Speaker 14: As a president who accomplished many things, regardless of whether

441
00:21:47,480 --> 00:21:49,920
Speaker 14: you liked what he did or not. And so this

442
00:21:50,000 --> 00:21:52,359
Speaker 14: is his chance of sort of setting the record the

443
00:21:52,400 --> 00:21:55,359
Speaker 14: way he wants it and actually blow through a little

444
00:21:55,359 --> 00:21:57,879
Speaker 14: bit of the clouds around the economy. I mean, we

445
00:21:58,040 --> 00:22:01,800
Speaker 14: have the most robust economy of any departing president I

446
00:22:01,840 --> 00:22:06,160
Speaker 14: can remember, especially one that has an approval rating sub

447
00:22:06,240 --> 00:22:09,760
Speaker 14: for percent, And so I would think that he would

448
00:22:09,800 --> 00:22:12,760
Speaker 14: want to try one more time to convince the American

449
00:22:12,800 --> 00:22:16,399
Speaker 14: public that the economic benefits that he brought to the

450
00:22:16,440 --> 00:22:20,919
Speaker 14: administration are enduring, will last through the next administration, and

451
00:22:20,960 --> 00:22:24,919
Speaker 14: that they were done by his policies and his policies alone.

452
00:22:26,400 --> 00:22:28,280
Speaker 2: Well, which might bring it back to some of the

453
00:22:28,359 --> 00:22:31,280
Speaker 2: legislative accomplishments that Genie is not so sure he should

454
00:22:31,320 --> 00:22:32,560
Speaker 2: be trying.

455
00:22:32,320 --> 00:22:33,520
Speaker 6: Too much to talk about.

456
00:22:34,240 --> 00:22:36,399
Speaker 2: But Genie, on that note of the economy, something he

457
00:22:36,440 --> 00:22:40,040
Speaker 2: has long struggled with, how quickly do you think American

458
00:22:40,240 --> 00:22:44,600
Speaker 2: minds could change their hindsight view of Joe Biden if

459
00:22:44,640 --> 00:22:48,080
Speaker 2: indeed we do see improvements in the economy, more infrastructure

460
00:22:48,119 --> 00:22:51,800
Speaker 2: projects actually being completed in relatively short order, or is

461
00:22:51,800 --> 00:22:53,680
Speaker 2: that all going to be things that Donald Trump gets

462
00:22:53,680 --> 00:22:57,200
Speaker 2: credit for because he'll be in the oval office next No.

463
00:22:57,560 --> 00:23:00,879
Speaker 13: I think overtime people's views will evolve, is probably the

464
00:23:00,880 --> 00:23:02,960
Speaker 13: best way to say it. On Joe Biden, as they

465
00:23:03,000 --> 00:23:06,600
Speaker 13: do on all modern presidents, and Donald Trump in office

466
00:23:06,760 --> 00:23:10,480
Speaker 13: will have the same challenges any president in sitting in

467
00:23:10,520 --> 00:23:14,639
Speaker 13: the office has. And you know, the reality is is

468
00:23:14,680 --> 00:23:18,440
Speaker 13: that if Joe Biden rather tries again tonight like Rick

469
00:23:18,560 --> 00:23:22,280
Speaker 13: is urging him too, It is again like trying to

470
00:23:22,359 --> 00:23:25,119
Speaker 13: convince somebody who doesn't want to date you, to date you.

471
00:23:25,640 --> 00:23:28,840
Speaker 13: We've gone through this for the last four years, Like,

472
00:23:29,720 --> 00:23:33,360
Speaker 13: stop telling people things are going great. You know, He's

473
00:23:33,400 --> 00:23:36,439
Speaker 13: Brick's right on the numbers. The economy looks good. But

474
00:23:36,960 --> 00:23:40,840
Speaker 13: the American public spoke during the election. They are not happy.

475
00:23:41,119 --> 00:23:44,080
Speaker 13: And it's not just Republicans, it is Democrats as well.

476
00:23:44,160 --> 00:23:45,919
Speaker 13: And as we just look at what's happening in the

477
00:23:45,920 --> 00:23:51,399
Speaker 13: Middle East, Democrats in particular are saying two million people

478
00:23:51,480 --> 00:23:55,399
Speaker 13: forty six thousand people on the Gaza Strip killed. Please

479
00:23:55,480 --> 00:23:59,119
Speaker 13: stop celebrating these wins. So he's got to be very

480
00:23:59,160 --> 00:24:01,840
Speaker 13: careful about how he threads this needle. He's not in

481
00:24:01,880 --> 00:24:05,440
Speaker 13: an advantageous position. There's a lot we need to thank

482
00:24:05,520 --> 00:24:07,960
Speaker 13: Joe Biden for, but I think the way in which

483
00:24:08,000 --> 00:24:09,840
Speaker 13: they do this, he's got to be careful. But I'm

484
00:24:09,840 --> 00:24:13,360
Speaker 13: not sure he's listening either to his advisors, speech writers,

485
00:24:13,480 --> 00:24:14,360
Speaker 13: or certainly he's.

486
00:24:14,160 --> 00:24:14,560
Speaker 6: Not to me.

487
00:24:14,760 --> 00:24:16,880
Speaker 13: So you know, I think we'll just have to wait

488
00:24:16,880 --> 00:24:17,520
Speaker 13: and see how he.

489
00:24:17,480 --> 00:24:18,280
Speaker 7: Tries to do this.

490
00:24:19,480 --> 00:24:22,199
Speaker 4: Likely to strike a tone of optimism, I think we

491
00:24:22,240 --> 00:24:24,600
Speaker 4: can expect Rick Davis, But you know, five days from now,

492
00:24:24,600 --> 00:24:26,880
Speaker 4: there's another important speech to be delivered, and that's Donald

493
00:24:26,920 --> 00:24:30,959
Speaker 4: Trump's inauguration speech. We remember kind of the dark, dystopian

494
00:24:31,000 --> 00:24:34,320
Speaker 4: world he described in his first inaugural address. What do

495
00:24:34,359 --> 00:24:35,520
Speaker 4: you think they're working on now?

496
00:24:36,560 --> 00:24:38,639
Speaker 14: Yeah, we were just getting used to Donald Trump as

497
00:24:38,720 --> 00:24:43,240
Speaker 14: president in twenty seventeen. In January for his innaugur address,

498
00:24:43,280 --> 00:24:47,480
Speaker 14: and we're shocked by how dark and dismal he described

499
00:24:47,640 --> 00:24:50,320
Speaker 14: not just the United States but the rest of the world.

500
00:24:50,760 --> 00:24:55,560
Speaker 14: I do think he has changed somewhat turning the campaign.

501
00:24:55,840 --> 00:25:00,520
Speaker 14: He even though I would say, was more pessimistic about

502
00:25:01,000 --> 00:25:03,040
Speaker 14: the economy. I don't know if that was a device

503
00:25:03,119 --> 00:25:06,399
Speaker 14: to just make all the things that are bad in

504
00:25:06,400 --> 00:25:11,480
Speaker 14: your life. Ne're from Joe Biden, But yeah, it would

505
00:25:11,480 --> 00:25:15,199
Speaker 14: be hopeful that he talks about his solutions to the

506
00:25:15,240 --> 00:25:18,600
Speaker 14: problems rather than just an iteration of how bad people

507
00:25:18,600 --> 00:25:20,800
Speaker 14: have it, because I do think there's a chance he

508
00:25:20,920 --> 00:25:23,479
Speaker 14: talks past people and how they feel today. When we

509
00:25:23,520 --> 00:25:28,640
Speaker 14: do look at surveys and especially consumer indexes, people actually

510
00:25:28,640 --> 00:25:32,440
Speaker 14: feel pretty good about their personal situation. They worry, as

511
00:25:32,560 --> 00:25:36,679
Speaker 14: Donald Trump has pounded into them, that the future is

512
00:25:36,720 --> 00:25:40,919
Speaker 14: not bright. And so we'll see this is also his

513
00:25:41,080 --> 00:25:45,080
Speaker 14: last term in office. We're now seeing a lame duck president.

514
00:25:45,440 --> 00:25:48,680
Speaker 14: Leaving office and a lame duck president entering office a

515
00:25:48,800 --> 00:25:52,320
Speaker 14: first time in our lifetime that we'll have actually witnessed this,

516
00:25:52,600 --> 00:25:55,440
Speaker 14: And so how does that play out in both men's

517
00:25:55,440 --> 00:25:57,680
Speaker 14: speeches both tonight and a week.

518
00:25:57,440 --> 00:25:59,960
Speaker 4: For about that's something else.

519
00:26:00,160 --> 00:26:04,800
Speaker 2: Yeah, well, except that the lame duck president who's entering

520
00:26:04,840 --> 00:26:08,040
Speaker 2: office will be working with something that the outgoing president

521
00:26:08,080 --> 00:26:10,400
Speaker 2: hasn't been working with for the last two years, which

522
00:26:10,440 --> 00:26:13,719
Speaker 2: is Republican control of both chambers of Congress. So realistically,

523
00:26:13,800 --> 00:26:15,600
Speaker 2: at least in the first two years of what's going

524
00:26:15,640 --> 00:26:18,000
Speaker 2: to be a lame duck four years, Rick, he still

525
00:26:18,080 --> 00:26:20,200
Speaker 2: has the ability to get quite a lot done.

526
00:26:21,560 --> 00:26:25,399
Speaker 14: Yeah, and look, I mean Joe Biden said he was

527
00:26:25,440 --> 00:26:27,440
Speaker 14: going to be a lame duck and then change his mind.

528
00:26:27,560 --> 00:26:30,400
Speaker 14: Let's hope Donald Trump he doesn't have the same options.

529
00:26:30,840 --> 00:26:33,600
Speaker 14: But yeah, he's got a good run, certainly for the

530
00:26:33,640 --> 00:26:36,760
Speaker 14: next two years before mid terms, with a compliant House

531
00:26:36,800 --> 00:26:40,960
Speaker 14: and a compliant Senate. And I think they're doing everything

532
00:26:41,000 --> 00:26:44,639
Speaker 14: they can to front load this administration in order to

533
00:26:44,680 --> 00:26:46,840
Speaker 14: do as much as they can in these first two years.

534
00:26:48,760 --> 00:26:51,040
Speaker 4: A lame duck on the way out, a lame duck

535
00:26:51,080 --> 00:26:54,720
Speaker 4: on the way in, Jeanie. A Republican majority of one

536
00:26:54,760 --> 00:26:56,840
Speaker 4: in the House, how's anything going to get done?

537
00:26:58,320 --> 00:27:00,560
Speaker 13: It's going to be hard, And you all just reminded me.

538
00:27:00,600 --> 00:27:03,320
Speaker 13: I was listening to Pam Bondi's hearings and she was

539
00:27:03,359 --> 00:27:06,680
Speaker 13: asked by one of the senators, can Donald Trump run

540
00:27:06,720 --> 00:27:09,200
Speaker 13: again or is he term limited out? And she said,

541
00:27:09,480 --> 00:27:12,360
Speaker 13: unless we change the constitution, he is term limited out.

542
00:27:13,080 --> 00:27:14,600
Speaker 7: So presumably that's right.

543
00:27:14,640 --> 00:27:19,040
Speaker 13: But this is actually an enormous concern because you know,

544
00:27:19,080 --> 00:27:21,360
Speaker 13: there's one thing Donald Trump doesn't dound to be described

545
00:27:21,400 --> 00:27:22,600
Speaker 13: at because that is lame.

546
00:27:23,119 --> 00:27:25,200
Speaker 7: So I'm not sure he's going to like that monitor.

547
00:27:25,359 --> 00:27:27,640
Speaker 13: But he did say this is it for him.

548
00:27:28,040 --> 00:27:29,160
Speaker 7: There's that he.

549
00:27:29,119 --> 00:27:31,560
Speaker 4: Doesn't like that. He doesn't like the Donald Duck thing either,

550
00:27:31,640 --> 00:27:33,360
Speaker 4: so I'm not sure that name is going to work

551
00:27:33,880 --> 00:27:36,520
Speaker 4: in either regard, although he did say if elected, we'd

552
00:27:36,520 --> 00:27:40,960
Speaker 4: never have to vote again. Seriously, not literally. Our panel,

553
00:27:40,960 --> 00:27:43,040
Speaker 4: we're going to let that one hang there. Jemmie Shanzo

554
00:27:43,080 --> 00:27:45,440
Speaker 4: and Rick Davis, thank you both. As always our signature panel.

555
00:27:45,440 --> 00:27:48,160
Speaker 4: They're going to be back in our special coverage. As

556
00:27:48,240 --> 00:27:50,800
Speaker 4: Kaylee mentioned eight pm Eastern time, the address we've been

557
00:27:50,800 --> 00:27:55,080
Speaker 4: talking about after fifty three years in public service, in

558
00:27:55,119 --> 00:27:58,119
Speaker 4: public life, Joe Biden says, farewell from the Oval Office,

559
00:27:58,119 --> 00:27:59,320
Speaker 4: and we'll have a lot more on that. It's going

560
00:27:59,359 --> 00:28:01,280
Speaker 4: to be interesting to see how the speech is written

561
00:28:01,359 --> 00:28:02,080
Speaker 4: and how it's delivered.

562
00:28:02,320 --> 00:28:05,040
Speaker 2: Yeah, especially on the economy, as he is going to

563
00:28:05,080 --> 00:28:07,080
Speaker 2: be speaking on a day when we got inflation data

564
00:28:07,119 --> 00:28:09,879
Speaker 2: that at least the market seems pretty happy about.

565
00:28:10,480 --> 00:28:11,920
Speaker 4: We're going to get should accomplished here.

566
00:28:12,640 --> 00:28:13,640
Speaker 6: I wouldn't go that far.

567
00:28:17,119 --> 00:28:20,600
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

568
00:28:20,680 --> 00:28:24,080
Speaker 1: us live weekdays at noon and five pm Eastern on Apple,

569
00:28:24,160 --> 00:28:27,520
Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen

570
00:28:27,560 --> 00:28:30,679
Speaker 1: on demand wherever you get your podcasts, or watch us

571
00:28:30,720 --> 00:28:31,720
Speaker 1: live on YouTube.

572
00:28:33,359 --> 00:28:36,119
Speaker 4: Kaylee, we are obsessed with the core right, but energy

573
00:28:36,119 --> 00:28:39,200
Speaker 4: prices are something that we all need to manage, and

574
00:28:39,200 --> 00:28:41,760
Speaker 4: with crude oil bumping up against eighty dollars a barrel here,

575
00:28:41,800 --> 00:28:44,400
Speaker 4: there are questions about where we're going in the immediate

576
00:28:44,480 --> 00:28:46,240
Speaker 4: term and whether Donald Trump can make good on a

577
00:28:46,280 --> 00:28:49,840
Speaker 4: promise to cut energy prices by half. This was part

578
00:28:49,880 --> 00:28:53,479
Speaker 4: of the conversation today in one of many confirmation hearings

579
00:28:53,560 --> 00:28:57,520
Speaker 4: underway on Capitol Hill. Chris Wright Liberty Energy. We told

580
00:28:57,520 --> 00:28:59,480
Speaker 4: you about this tap by Donald Trump to run the

581
00:28:59,560 --> 00:29:02,080
Speaker 4: Energy to Apartment. This is from his testimony in the

582
00:29:02,120 --> 00:29:03,120
Speaker 4: Senate earlier today.

583
00:29:03,920 --> 00:29:07,400
Speaker 15: Federal policies today make it too easy to stop projects

584
00:29:07,760 --> 00:29:12,040
Speaker 15: and very hard hard to start and complete projects. This

585
00:29:12,120 --> 00:29:16,640
Speaker 15: makes energy more expensive and less reliable. President Trump is

586
00:29:16,760 --> 00:29:20,600
Speaker 15: committed to lowering energy costs, and to do so, we

587
00:29:20,680 --> 00:29:25,200
Speaker 15: must prioritize cutting red tape, enabling the private sector investments,

588
00:29:25,440 --> 00:29:28,960
Speaker 15: and building the infrastructure we need to make energy more

589
00:29:29,000 --> 00:29:31,120
Speaker 15: affordable for families and businesses.

590
00:29:33,040 --> 00:29:35,800
Speaker 4: Just the right voice for this conversation now is Tom

591
00:29:35,920 --> 00:29:38,400
Speaker 4: Close Up back with us on Bloomberg, Global head of

592
00:29:38,520 --> 00:29:41,520
Speaker 4: Energy Analysis at Opus. Tom, it's great to see you,

593
00:29:41,840 --> 00:29:44,000
Speaker 4: Welcome back. I hope the years start now well for you,

594
00:29:44,040 --> 00:29:45,880
Speaker 4: and we want to get into a lot of different

595
00:29:45,880 --> 00:29:48,960
Speaker 4: things here with regard to energy prices and your forecast

596
00:29:49,400 --> 00:29:51,920
Speaker 4: for the new year. But based on what you're hearing

597
00:29:52,160 --> 00:29:54,640
Speaker 4: from the Trump team, which you heard today in this

598
00:29:54,800 --> 00:29:57,840
Speaker 4: confirmation hearing, on what Donald Trump was saying even on

599
00:29:57,880 --> 00:30:00,960
Speaker 4: the campaign trail, based on the baseline he has to

600
00:30:01,000 --> 00:30:03,960
Speaker 4: come into office, is it possible to cut energy prices

601
00:30:04,000 --> 00:30:05,720
Speaker 4: by fifty percent this year?

602
00:30:07,200 --> 00:30:09,680
Speaker 16: I don't think it's possible to cut a buy fifty percent.

603
00:30:09,840 --> 00:30:12,960
Speaker 16: But I think that he set out for a reasonable task.

604
00:30:13,040 --> 00:30:16,040
Speaker 16: I think you'll hear them talk about three million barrels

605
00:30:16,080 --> 00:30:20,240
Speaker 16: of oil equivalent in the Trump term, and that's actually

606
00:30:20,360 --> 00:30:24,400
Speaker 16: like me shooting under one hundred golf. That's not a

607
00:30:24,480 --> 00:30:28,800
Speaker 16: herculean task because we'll probably add about six hundred thousand

608
00:30:28,800 --> 00:30:32,280
Speaker 16: barrels a day under normal circumstances. We'll add plenty of

609
00:30:32,360 --> 00:30:36,040
Speaker 16: natural gas, and then gas liquids get attached in that.

610
00:30:36,240 --> 00:30:40,000
Speaker 16: So that's a reasonable view half the price. No, And

611
00:30:40,040 --> 00:30:43,240
Speaker 16: as a matter of fact, right now, inflation is alive

612
00:30:43,320 --> 00:30:46,680
Speaker 16: and well in the oil business. We're up about eleven

613
00:30:46,760 --> 00:30:50,440
Speaker 16: or twelve percent so far in twenty twenty five. Nothing

614
00:30:50,480 --> 00:30:53,280
Speaker 16: to do with Trump policies for the most part, although

615
00:30:53,320 --> 00:30:57,360
Speaker 16: a lot of nervousness and uncertainty about what the tariffs

616
00:30:57,440 --> 00:30:59,120
Speaker 16: might do to prices.

617
00:31:00,280 --> 00:31:02,800
Speaker 2: Well and how much of what we've seen most recently

618
00:31:03,080 --> 00:31:05,760
Speaker 2: tom is also attributable to the tightening of sanctions on

619
00:31:05,800 --> 00:31:10,760
Speaker 2: Russian oil, specifically that the Biden administration has finally agreed

620
00:31:10,760 --> 00:31:12,280
Speaker 2: to in its waning days.

621
00:31:13,160 --> 00:31:17,480
Speaker 16: Yeah, that's part of it. These sanctions for the first

622
00:31:17,520 --> 00:31:21,960
Speaker 16: time really have teeth. Remember when Russia invaded Ukraine, we

623
00:31:22,080 --> 00:31:25,840
Speaker 16: thought that, oh, they were going to have impede impediments

624
00:31:25,920 --> 00:31:28,360
Speaker 16: of several million barrels a day of the crude they

625
00:31:28,440 --> 00:31:31,120
Speaker 16: sense of the world. What happened was it just got

626
00:31:31,160 --> 00:31:33,920
Speaker 16: re routed and China and India took most of it.

627
00:31:34,200 --> 00:31:36,480
Speaker 16: This time, it looks as though it might be a

628
00:31:36,520 --> 00:31:39,840
Speaker 16: cutting production by about seven hundred thousand barrels a day,

629
00:31:40,400 --> 00:31:42,960
Speaker 16: So for the short term, that helps. The other thing

630
00:31:43,000 --> 00:31:46,440
Speaker 16: I have to really emphasize is that we're in the

631
00:31:46,480 --> 00:31:49,719
Speaker 16: season where oil prices go up. Oil prices are not

632
00:31:49,840 --> 00:31:53,360
Speaker 16: like a Tarantino movie or you know, a movie by

633
00:31:53,440 --> 00:31:57,440
Speaker 16: the Coen Brothers. It's more like you know the Hallmark

634
00:31:57,560 --> 00:31:59,960
Speaker 16: movie where you know the plot pretty much when you

635
00:32:00,200 --> 00:32:02,760
Speaker 16: tune in, and the plot for the first one hundred

636
00:32:02,840 --> 00:32:06,000
Speaker 16: days of any year is usually for higher prices. So

637
00:32:06,520 --> 00:32:08,800
Speaker 16: I think we're going to go onward and upward in

638
00:32:08,840 --> 00:32:12,920
Speaker 16: this first hundred days. Will be above eighty for WTI shortly,

639
00:32:12,960 --> 00:32:15,560
Speaker 16: and will probably be in the mid to high eighties

640
00:32:15,600 --> 00:32:20,000
Speaker 16: for Brent. But then this is a front end loaded year.

641
00:32:20,360 --> 00:32:22,840
Speaker 16: I mean, by the end of the year, and perhaps

642
00:32:22,840 --> 00:32:25,479
Speaker 16: the Trump administration may take credit for this, we're going

643
00:32:25,520 --> 00:32:28,280
Speaker 16: to see a lot lower prices in the second half

644
00:32:28,320 --> 00:32:29,800
Speaker 16: of the year than what we see in the first

645
00:32:29,960 --> 00:32:30,920
Speaker 16: hundred days.

646
00:32:31,720 --> 00:32:35,840
Speaker 4: All right, so no plot twists coming in the immediate term, Tom,

647
00:32:35,880 --> 00:32:38,360
Speaker 4: I wonder we've been asking about oil here should we

648
00:32:38,400 --> 00:32:42,640
Speaker 4: be asking you instead about natural gas. Everyone is submitting

649
00:32:43,160 --> 00:32:46,640
Speaker 4: the President elect to lift the moratorium on LNG exports.

650
00:32:47,080 --> 00:32:48,920
Speaker 4: Is it going to be boom times this year?

651
00:32:50,160 --> 00:32:52,600
Speaker 16: I don't think so. I think those are mostly you know,

652
00:32:52,640 --> 00:32:55,240
Speaker 16: a lot of the things that the Biden administration did

653
00:32:55,480 --> 00:32:59,480
Speaker 16: were you know, we're measured, you know, in terms of

654
00:32:59,560 --> 00:33:02,720
Speaker 16: it doesn't really makes sense to have a moratorium on

655
00:33:02,880 --> 00:33:06,920
Speaker 16: LNG when we are going to be the Saudi Arabia, Russia, US,

656
00:33:07,160 --> 00:33:10,560
Speaker 16: and Persian Gulf of the world for natural gas. The

657
00:33:10,640 --> 00:33:13,560
Speaker 16: thing the watch about natural gas is this, we have

658
00:33:13,680 --> 00:33:15,280
Speaker 16: plenty of it, and we have plenty of it in

659
00:33:15,320 --> 00:33:18,200
Speaker 16: the ground that we can bring to market. But when

660
00:33:18,240 --> 00:33:22,120
Speaker 16: you get a cold winter in the northern hemisphere, and

661
00:33:22,160 --> 00:33:25,840
Speaker 16: this really qualifies as a cold winter, you can have

662
00:33:25,880 --> 00:33:28,680
Speaker 16: all sorts of problems. You've got plenty of gas natural

663
00:33:28,720 --> 00:33:31,120
Speaker 16: gas in Henry Hub, but you don't have it in

664
00:33:31,160 --> 00:33:34,480
Speaker 16: New York, Boston, Chicago and places that need it. For

665
00:33:34,600 --> 00:33:38,560
Speaker 16: commercial businesses, there's a really good chance next week that

666
00:33:38,560 --> 00:33:41,360
Speaker 16: we're going to have what they call natural gas urtailments

667
00:33:41,440 --> 00:33:45,120
Speaker 16: or interruptions, where you know, maybe you're a pizza parlor

668
00:33:45,280 --> 00:33:49,040
Speaker 16: and you get cut off on natural gas when the

669
00:33:49,160 --> 00:33:52,160
Speaker 16: residents and the hospitals and the schools eat it. And

670
00:33:52,200 --> 00:33:56,160
Speaker 16: when that happens, a lot of those commercial customers turn

671
00:33:56,240 --> 00:33:59,880
Speaker 16: to oil and they buy diesel, jet fuel, kerosene, heating oil,

672
00:34:00,320 --> 00:34:02,880
Speaker 16: you name it. And there really looks like there's a

673
00:34:02,920 --> 00:34:05,320
Speaker 16: good chance that we could get a little bit of

674
00:34:05,360 --> 00:34:07,400
Speaker 16: a sticker shock for some of the middle of the

675
00:34:07,440 --> 00:34:09,040
Speaker 16: barrel products next week.

676
00:34:10,680 --> 00:34:14,719
Speaker 2: Well, of course, next week also brings with it the inauguration.

677
00:34:14,840 --> 00:34:17,120
Speaker 2: To get to where we started this conversation, the impact

678
00:34:17,200 --> 00:34:20,359
Speaker 2: that Donald Trump's administration will have. You mentioned in your

679
00:34:21,160 --> 00:34:24,040
Speaker 2: first answer Tom this question around what tariffs ultimately are

680
00:34:24,080 --> 00:34:27,240
Speaker 2: going to mean, and that in theory points us toward Canada,

681
00:34:27,280 --> 00:34:30,520
Speaker 2: where the US is getting a lot of this product from.

682
00:34:30,560 --> 00:34:33,120
Speaker 2: What would happen if we were to see a twenty

683
00:34:33,120 --> 00:34:37,360
Speaker 2: five percent tariff implemented on all Canadian goods, energy products included,

684
00:34:37,400 --> 00:34:40,040
Speaker 2: What would the immediate translation be on prices here in

685
00:34:40,040 --> 00:34:40,439
Speaker 2: the US?

686
00:34:41,040 --> 00:34:45,360
Speaker 16: The immediate translation would be the Canadian companies would really suffer.

687
00:34:45,640 --> 00:34:48,719
Speaker 16: I mean they are stranded producers. Now. Some of the

688
00:34:48,800 --> 00:34:51,960
Speaker 16: refiners in the US Midwest and in the Rocky Mountains

689
00:34:51,960 --> 00:34:55,880
Speaker 16: are stranded customers, and they need Canadian crew to run on.

690
00:34:56,400 --> 00:34:58,319
Speaker 16: You know, there's a lot of US crew. But it's

691
00:34:58,400 --> 00:35:01,319
Speaker 16: very very light, and it's very very sweet, and it

692
00:35:01,360 --> 00:35:04,560
Speaker 16: makes too much gasoline and propane and buttane and things

693
00:35:04,640 --> 00:35:08,319
Speaker 16: like that. So we're very dependent on Canadian crude. I

694
00:35:08,400 --> 00:35:10,440
Speaker 16: got to tell you, I don't know what's going to happen.

695
00:35:10,480 --> 00:35:13,000
Speaker 16: I pull it the circus of uncertainty, and I don't

696
00:35:13,000 --> 00:35:14,880
Speaker 16: know which of the three rings is going to be

697
00:35:14,920 --> 00:35:17,480
Speaker 16: open because we don't know how they're going to collect

698
00:35:17,480 --> 00:35:20,479
Speaker 16: the twenty five percent tariff. I assume that it would

699
00:35:20,520 --> 00:35:24,440
Speaker 16: be on Mexico as well. But I think ultimately it

700
00:35:24,520 --> 00:35:27,759
Speaker 16: moves into that narrative of higher prices in the first

701
00:35:27,760 --> 00:35:30,400
Speaker 16: one hundred days of the year, and then the market

702
00:35:30,400 --> 00:35:33,480
Speaker 16: will make an adjustment for it. I mean, Canadian crude,

703
00:35:33,719 --> 00:35:37,279
Speaker 16: which sells for about thirteen dollars under WTI now may

704
00:35:37,320 --> 00:35:40,360
Speaker 16: sell for thirty dollars under by the time the second

705
00:35:40,440 --> 00:35:41,720
Speaker 16: half of the year comes around.

706
00:35:43,520 --> 00:35:46,880
Speaker 2: Tom we're just getting some breaking news regarding the ceasefire

707
00:35:46,920 --> 00:35:49,759
Speaker 2: agreement between Israel and Hamas. Both Cutter and now the

708
00:35:49,800 --> 00:35:53,560
Speaker 2: White House have said an agreement has been reached and

709
00:35:53,600 --> 00:35:56,720
Speaker 2: a ceasefire will begin on Sunday. A statement just released

710
00:35:56,760 --> 00:35:59,120
Speaker 2: from the White House show says after many months of

711
00:35:59,120 --> 00:36:02,120
Speaker 2: intensive diploma to see Israel and Hamas have reached a

712
00:36:02,160 --> 00:36:05,000
Speaker 2: ceasefire and hostage deal. This deal will halt the fighting

713
00:36:05,040 --> 00:36:09,200
Speaker 2: and Gaza surge, much needed humanitarian assistance to Palestinian civilians,

714
00:36:09,239 --> 00:36:12,320
Speaker 2: and reunite hostages with their families after more than fifteen

715
00:36:12,360 --> 00:36:15,160
Speaker 2: months in captivity. And we will hear remarks from the

716
00:36:15,200 --> 00:36:17,080
Speaker 2: President on this pretty soon.

717
00:36:17,239 --> 00:36:19,600
Speaker 4: He says, I will speak more about this soon, Kayley,

718
00:36:19,680 --> 00:36:22,640
Speaker 4: suggesting he may be speaking from the White House ahead

719
00:36:22,680 --> 00:36:25,440
Speaker 4: of his scheduled farewell address which is at eight pm.

720
00:36:25,480 --> 00:36:29,000
Speaker 4: While we have Tom close on the line, Tom, you

721
00:36:29,080 --> 00:36:31,160
Speaker 4: may or may not have seen this coming. While it

722
00:36:31,280 --> 00:36:36,200
Speaker 4: lowers potentially the political temperature in the Middle East, what

723
00:36:36,200 --> 00:36:38,560
Speaker 4: does it mean for energy markets? Is this good news

724
00:36:38,640 --> 00:36:39,440
Speaker 4: or a non factor?

725
00:36:40,880 --> 00:36:44,600
Speaker 16: It's probably a non factor. Here's the interesting thing. When

726
00:36:44,600 --> 00:36:48,520
Speaker 16: the Moss War broke out on October seventh, you didn't

727
00:36:48,560 --> 00:36:51,120
Speaker 16: really see much of a reaction in oil, and I

728
00:36:51,120 --> 00:36:54,040
Speaker 16: would submit that oil has really lost a lot of

729
00:36:54,040 --> 00:36:57,320
Speaker 16: the speculative flavor that had had oh back with the

730
00:36:58,080 --> 00:37:01,160
Speaker 16: Arab spring years or back in two thousand and seven,

731
00:37:01,160 --> 00:37:04,280
Speaker 16: in two thousand and eight. There's so many better places

732
00:37:04,320 --> 00:37:07,760
Speaker 16: to sort of speculate about price appreciation. You have crypto,

733
00:37:08,200 --> 00:37:11,480
Speaker 16: which is probably attracting about four trillion, and you have

734
00:37:11,600 --> 00:37:15,000
Speaker 16: big tech, and those companies didn't exist when crude oil

735
00:37:15,080 --> 00:37:19,480
Speaker 16: futures first started, and now they're worth about seventeen trillion dollars.

736
00:37:19,560 --> 00:37:24,240
Speaker 16: So we never really saw the positioning go to where

737
00:37:24,280 --> 00:37:28,000
Speaker 16: people were betting on higher prices after the massage Israeli war.

738
00:37:28,360 --> 00:37:30,440
Speaker 16: So I don't think there's much of a reaction now

739
00:37:30,480 --> 00:37:32,880
Speaker 16: that there's peace and God, we all hope that this

740
00:37:33,000 --> 00:37:34,720
Speaker 16: is a lasting piece in the region.

741
00:37:36,520 --> 00:37:38,680
Speaker 2: All right, Tom, thank you so much for joining us.

742
00:37:38,719 --> 00:37:41,680
Speaker 2: Tom close, of course is with Opus.

743
00:37:43,320 --> 00:37:46,799
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

744
00:37:46,840 --> 00:37:49,680
Speaker 1: us live weekdays at noon and five pm. E's durn

745
00:37:49,840 --> 00:37:53,280
Speaker 1: on Apple, Cocklay and Android Auto with the Bloomberg Business App.

746
00:37:53,320 --> 00:37:56,319
Speaker 1: You can also listen live on Amazon Alexa from our

747
00:37:56,360 --> 00:38:00,239
Speaker 1: flagship New York station. Just say Alexa, Play bloom at

748
00:38:00,280 --> 00:38:02,440
Speaker 1: eleven thirty.

749
00:38:02,400 --> 00:38:05,879
Speaker 4: Here in Fortress, Washington. It has been incredible to try

750
00:38:05,880 --> 00:38:07,200
Speaker 4: to get around here. And if you're coming to the

751
00:38:07,280 --> 00:38:09,120
Speaker 4: inaugural I'm going to give you a big warning right now.

752
00:38:09,160 --> 00:38:13,000
Speaker 4: You won't even recognize it. With thirty miles that's three

753
00:38:13,120 --> 00:38:18,680
Speaker 4: zero miles of security fencing, that's like ten twelve feet tall,

754
00:38:18,680 --> 00:38:20,720
Speaker 4: the big black the stuff they put around the Capitol

755
00:38:20,800 --> 00:38:24,080
Speaker 4: for January sixth, it's basically wrapping the whole city. The

756
00:38:24,120 --> 00:38:27,040
Speaker 4: streets are being closed and Washington is ready. When I

757
00:38:27,080 --> 00:38:29,759
Speaker 4: came in this morning, an army I don't know where

758
00:38:29,760 --> 00:38:33,560
Speaker 4: they get these guys, but an army of people shoveling

759
00:38:33,600 --> 00:38:36,560
Speaker 4: snow drifts off of Pennsylvania Avenue to make room for

760
00:38:36,680 --> 00:38:40,440
Speaker 4: more security gates for the big inaugural parade. We'll be

761
00:38:40,520 --> 00:38:44,480
Speaker 4: ready for you when you get here. Confirmation hearings taking

762
00:38:44,480 --> 00:38:46,360
Speaker 4: place on Capitol Hill as we speak. And now we

763
00:38:46,480 --> 00:38:51,160
Speaker 4: got the big breaker. You gotta love Bloomberg. I know

764
00:38:51,239 --> 00:38:54,000
Speaker 4: you do. That's why you're here, whether you're on the

765
00:38:54,080 --> 00:38:57,239
Speaker 4: radio and satellite radio, YouTube, maybe you catch us on TV.

766
00:38:57,360 --> 00:38:59,720
Speaker 4: If it was on Monday, you knew what was coming

767
00:38:59,719 --> 00:39:03,920
Speaker 4: today because Jake Sullivan was here the President's National security

768
00:39:03,960 --> 00:39:06,320
Speaker 4: advisor to let us know what was happening with the

769
00:39:06,360 --> 00:39:08,919
Speaker 4: potential ceasefire in the Middle East. Remember here's what he said.

770
00:39:09,640 --> 00:39:12,200
Speaker 3: I think the pressure is building for Hamas to come

771
00:39:12,239 --> 00:39:15,520
Speaker 3: to yes. I think Israel also has achieved a huge

772
00:39:15,520 --> 00:39:18,520
Speaker 3: amount of its military objectives in Gaza, and therefore they

773
00:39:18,560 --> 00:39:20,640
Speaker 3: are in a position to be able to say yes.

774
00:39:21,080 --> 00:39:23,919
Speaker 3: So there is a distinct possibility that we can get

775
00:39:23,920 --> 00:39:25,640
Speaker 3: this deal done this week.

776
00:39:28,000 --> 00:39:33,920
Speaker 4: This week, here we are on Wednesday, ceasefire just announced.

777
00:39:33,920 --> 00:39:37,040
Speaker 4: If you're joining us, Israel and Hamas have agreed to

778
00:39:37,120 --> 00:39:40,720
Speaker 4: a deal now that brings at least a temporary halt

779
00:39:40,760 --> 00:39:43,239
Speaker 4: to the war, of course in Gaza, but also means

780
00:39:43,280 --> 00:39:47,000
Speaker 4: the release of hostages. More than fifteen months of fighting

781
00:39:47,080 --> 00:39:50,080
Speaker 4: under their belts. Now there is little left of Gaza,

782
00:39:52,280 --> 00:39:54,319
Speaker 4: and we're looking at the potential for some thirty three

783
00:39:54,320 --> 00:39:56,840
Speaker 4: hostages now to be released. We have a lot of

784
00:39:56,920 --> 00:39:59,160
Speaker 4: questions about this, of course, details is the President going

785
00:39:59,200 --> 00:40:01,480
Speaker 4: to talk later today. We'll be talking to some smart

786
00:40:01,480 --> 00:40:04,280
Speaker 4: people about it along the way. But from a military

787
00:40:04,320 --> 00:40:06,880
Speaker 4: standpoint here and from a national security standpoint, we have

788
00:40:06,920 --> 00:40:08,480
Speaker 4: a lot of questions, and that's why we're lucky to

789
00:40:08,480 --> 00:40:11,320
Speaker 4: be joined by Rebecca Grant, vice president of the Defense

790
00:40:11,360 --> 00:40:14,560
Speaker 4: Program at the Lexington Institute. Rebecca, it's good to have you.

791
00:40:14,960 --> 00:40:17,239
Speaker 4: It's been too long, and we welcome you back to Bloomberg.

792
00:40:17,280 --> 00:40:20,600
Speaker 4: I wonder your thoughts here. As I mentioned, after fifteen

793
00:40:20,640 --> 00:40:24,920
Speaker 4: months of war, in many cases with support from the

794
00:40:25,000 --> 00:40:28,120
Speaker 4: United States military either by way of intelligence, we've seen

795
00:40:28,120 --> 00:40:31,160
Speaker 4: a couple of counter attacks against Israel from Iran in

796
00:40:31,200 --> 00:40:34,560
Speaker 4: this time, all going back to October seventh. What are

797
00:40:34,560 --> 00:40:36,719
Speaker 4: the lessons learned here for the United States from a

798
00:40:36,719 --> 00:40:37,799
Speaker 4: military standpoint?

799
00:40:39,160 --> 00:40:41,839
Speaker 17: Well, this is such a big achievement, and none of

800
00:40:41,840 --> 00:40:45,240
Speaker 17: this would have been possible without the thirty to thirty

801
00:40:45,239 --> 00:40:49,000
Speaker 17: five thousand US forces that have been deployed to Central Command.

802
00:40:49,360 --> 00:40:53,279
Speaker 17: That augmentation started right after October seventh, twenty twenty three.

803
00:40:53,680 --> 00:40:58,200
Speaker 17: It's involved, for example, five different aircraft carriers that have

804
00:40:58,400 --> 00:41:01,799
Speaker 17: rotated through to keep a lid on Iran and to

805
00:41:02,080 --> 00:41:05,680
Speaker 17: assist Israel in their defense against Iran's missiles. So a

806
00:41:05,719 --> 00:41:09,480
Speaker 17: ton of credit to the US military forces. They're all branches,

807
00:41:09,520 --> 00:41:13,200
Speaker 17: air force, fighters, bombers, you name it, really helping to

808
00:41:13,320 --> 00:41:17,960
Speaker 17: keep a lid and then give the pressure on hamas well.

809
00:41:18,000 --> 00:41:20,640
Speaker 4: You were last here, Rebecca, right around the time we

810
00:41:20,640 --> 00:41:24,680
Speaker 4: were sending an additional carrier strike group into the regions.

811
00:41:24,680 --> 00:41:27,040
Speaker 4: So I know that you're steeped in all of this.

812
00:41:27,560 --> 00:41:33,040
Speaker 4: Will we maintain a similar footprint, a similar posture following

813
00:41:33,320 --> 00:41:35,640
Speaker 4: Joe Biden's departure from the White House and following I

814
00:41:35,640 --> 00:41:37,760
Speaker 4: guess the implementation of this cease fire.

815
00:41:37,560 --> 00:41:41,440
Speaker 17: Deal, and that's going to be one of President Trump's

816
00:41:41,440 --> 00:41:43,719
Speaker 17: biggest set of decisions, what to do with the Mid

817
00:41:43,800 --> 00:41:47,360
Speaker 17: East force posture. I don't expect any changes right away,

818
00:41:47,800 --> 00:41:50,200
Speaker 17: because we'll want to keep the destroyers there that do

819
00:41:50,280 --> 00:41:55,120
Speaker 17: balistic missile defense. We're also still guarding the Red Sea

820
00:41:55,200 --> 00:41:58,440
Speaker 17: shipping lanes, and then we're doing force protection for our

821
00:41:58,480 --> 00:42:01,680
Speaker 17: own US forces in Iraq, and then there's always Syria.

822
00:42:02,239 --> 00:42:05,800
Speaker 17: But longer term, what President Trump wants is peace in

823
00:42:05,840 --> 00:42:10,080
Speaker 17: the Middle East built around the normalization of relations between

824
00:42:10,120 --> 00:42:15,120
Speaker 17: Saudi and Israel, and this Trumpet presidency, we need to

825
00:42:15,160 --> 00:42:19,480
Speaker 17: see a smart and calculated draw down of US forces

826
00:42:19,520 --> 00:42:21,840
Speaker 17: in the Middle East so that they can go to

827
00:42:21,920 --> 00:42:24,080
Speaker 17: other places in the world where we need them, China

828
00:42:24,120 --> 00:42:24,960
Speaker 17: if necessary.

829
00:42:26,120 --> 00:42:29,719
Speaker 4: Over the course of this fifteen months, the US policy

830
00:42:29,920 --> 00:42:34,840
Speaker 4: in Israel became very controversial, among progressive Democrats many others

831
00:42:35,239 --> 00:42:38,560
Speaker 4: who were critical of the Biden administration approach, specifically here

832
00:42:38,600 --> 00:42:42,520
Speaker 4: when it came to essentially allowing in their words, and

833
00:42:42,560 --> 00:42:45,800
Speaker 4: I know that this is very controversial, but allowing civilian

834
00:42:45,840 --> 00:42:49,200
Speaker 4: deaths even as we provided military support to Israel. I

835
00:42:49,200 --> 00:42:53,160
Speaker 4: know Joe Biden urged restraint repeatedly in caution in his

836
00:42:53,280 --> 00:42:56,680
Speaker 4: meetings with Benjamin Netan Yahoo. But at one point there

837
00:42:56,680 --> 00:43:01,920
Speaker 4: were lawmakers Rebecca threatening to hold back or change to

838
00:43:02,040 --> 00:43:06,040
Speaker 4: some degree lessen our military support to Israel, in fact,

839
00:43:06,120 --> 00:43:10,759
Speaker 4: stall the shipment of weapons programs until certain conditions were met.

840
00:43:11,360 --> 00:43:15,600
Speaker 4: Are those lawmakers going to be silent in a Trump administration?

841
00:43:15,719 --> 00:43:17,680
Speaker 4: I'm assuming this is going to be all in on Israel.

842
00:43:19,200 --> 00:43:21,520
Speaker 17: Well, I think that what we've seen in the end

843
00:43:22,080 --> 00:43:27,080
Speaker 17: is very strong support for Israel. It's been a tragic war,

844
00:43:27,160 --> 00:43:30,200
Speaker 17: of course, but remember it's Hamas that put their military

845
00:43:30,239 --> 00:43:35,160
Speaker 17: capabilities in amongst civilians and led to that in the end,

846
00:43:35,400 --> 00:43:39,160
Speaker 17: we did not stop shippments to Israel. Quite the contrary,

847
00:43:39,719 --> 00:43:43,440
Speaker 17: We've continued to support Israel with munitions, and of course

848
00:43:43,840 --> 00:43:46,920
Speaker 17: Israel has made great use of the US designed F

849
00:43:47,000 --> 00:43:49,400
Speaker 17: thirty five that they used as a fighter jet to

850
00:43:49,440 --> 00:43:53,400
Speaker 17: take down Iran's air defenses. So Israel's security is paramount.

851
00:43:53,560 --> 00:43:55,920
Speaker 17: It's the cornerstone of stability in the Middle East. The

852
00:43:56,000 --> 00:43:58,440
Speaker 17: US is going to continue to support that heavily, and

853
00:43:58,480 --> 00:44:01,560
Speaker 17: I hope take a lot of lessons learned, particularly in

854
00:44:01,600 --> 00:44:04,560
Speaker 17: the drone and missile defense regions, from what we've seen

855
00:44:04,719 --> 00:44:08,520
Speaker 17: Israel do as they have restored Israeli security.

856
00:44:09,920 --> 00:44:13,080
Speaker 4: I wonder from a greater standpoint, what your expectation is

857
00:44:13,719 --> 00:44:17,200
Speaker 4: for procurement reform at the Pentagon under a Trump administration,

858
00:44:17,600 --> 00:44:19,680
Speaker 4: the weapons programs that we might be looking at the

859
00:44:19,760 --> 00:44:22,000
Speaker 4: level of spending. We keep hearing Rebecca about the first

860
00:44:22,000 --> 00:44:26,239
Speaker 4: trillion dollar defense budget. Ever, Marco Rubio is testifying. A

861
00:44:26,239 --> 00:44:28,239
Speaker 4: lot of people think it'll be a very easy move

862
00:44:28,320 --> 00:44:31,320
Speaker 4: for him to become the Secretary of State, but testifying

863
00:44:31,320 --> 00:44:34,320
Speaker 4: in his confirmation hearing earlier, he talked about the triumphalism

864
00:44:34,360 --> 00:44:39,319
Speaker 4: that followed the Cold War and the sleepwalking essentially that

865
00:44:39,400 --> 00:44:42,480
Speaker 4: we did, thinking that, as he put it, all mankind

866
00:44:42,680 --> 00:44:46,560
Speaker 4: was destined to abandon national sovereignty. He called it a

867
00:44:46,560 --> 00:44:50,640
Speaker 4: fantasy and a dangerous delusion, and I wonder how that

868
00:44:50,800 --> 00:44:54,160
Speaker 4: informs your view on the way this administration will not

869
00:44:54,200 --> 00:44:56,800
Speaker 4: only approach diplomacy but military spending.

870
00:44:58,280 --> 00:45:02,640
Speaker 17: Well, we're all wide awake now with Iran, with the

871
00:45:02,719 --> 00:45:06,200
Speaker 17: Russia China alliance. Actually, I think Santor Rubio has done

872
00:45:06,239 --> 00:45:11,280
Speaker 17: a fantastic job laying out the importance of American safety, strength,

873
00:45:11,320 --> 00:45:15,200
Speaker 17: and prosperity. You know, he's the A plus student of

874
00:45:15,239 --> 00:45:18,480
Speaker 17: this round of Cabinet nominees and is doing a superb job.

875
00:45:18,520 --> 00:45:21,720
Speaker 17: And I look forward to his leadership as Secretary of State.

876
00:45:22,200 --> 00:45:25,000
Speaker 17: But the fact is we are facing a lot of

877
00:45:25,080 --> 00:45:28,840
Speaker 17: problems around the world and a real challenge in maintaining

878
00:45:29,000 --> 00:45:33,480
Speaker 17: US leadership. Back to the military side, defense budgets are big,

879
00:45:33,560 --> 00:45:36,080
Speaker 17: but in real growth terms they've been flat.

880
00:45:36,360 --> 00:45:37,880
Speaker 6: We spend a lot less.

881
00:45:37,640 --> 00:45:40,200
Speaker 17: Now on defense than we did back in the Cold

882
00:45:40,239 --> 00:45:42,640
Speaker 17: War or even in the Reagan build up. So I

883
00:45:42,680 --> 00:45:45,239
Speaker 17: want to see some smart reform, but I also want

884
00:45:45,239 --> 00:45:48,240
Speaker 17: to see US invest in technology, to stay ahead in AI,

885
00:45:48,719 --> 00:45:53,080
Speaker 17: to make the transition to drones and unmanned systems, and

886
00:45:53,120 --> 00:45:56,319
Speaker 17: of course to pay our service members appropriately.

887
00:45:56,400 --> 00:45:58,920
Speaker 6: But look, mcno mistake, We're not going to be.

888
00:45:58,960 --> 00:46:01,080
Speaker 17: Able to do a big cut back in the defense

889
00:46:01,080 --> 00:46:03,960
Speaker 17: budget because our military is our global insurance.

890
00:46:04,000 --> 00:46:04,400
Speaker 5: Policy.

891
00:46:04,520 --> 00:46:07,560
Speaker 6: Is that simple m Well.

892
00:46:07,400 --> 00:46:10,759
Speaker 4: We heard from Marco Rubio on that insurance policy when

893
00:46:10,760 --> 00:46:14,040
Speaker 4: it comes to China, specifically Rebecca earlier today and the

894
00:46:14,120 --> 00:46:15,640
Speaker 4: confirmation hearing. Here's what he said.

895
00:46:16,480 --> 00:46:19,240
Speaker 9: We welcome the Chinese Communist Party into the global order,

896
00:46:20,000 --> 00:46:23,040
Speaker 9: and they took advantage of all of its benefits and

897
00:46:23,080 --> 00:46:27,759
Speaker 9: they ignored all of its obligations and responsibilities. Instead, they

898
00:46:27,800 --> 00:46:32,000
Speaker 9: have repressed and lied, and cheated and hacked and stolen

899
00:46:32,320 --> 00:46:36,080
Speaker 9: their way into global superpower status. And they have done

900
00:46:36,160 --> 00:46:39,480
Speaker 9: so at our expense and at the expense of the

901
00:46:39,480 --> 00:46:40,640
Speaker 9: people of their own country.

902
00:46:41,880 --> 00:46:43,680
Speaker 4: I don't want to get too abstract on you here,

903
00:46:43,719 --> 00:46:45,840
Speaker 4: Rebecca Grant, but what's the war that we're supposed to

904
00:46:45,880 --> 00:46:48,360
Speaker 4: be preparing for if it is in fact China that

905
00:46:48,480 --> 00:46:50,240
Speaker 4: is our greatest threat. I think you've got a picture

906
00:46:50,280 --> 00:46:52,920
Speaker 4: of an aircraft carrier behind you. There. Is that the

907
00:46:53,000 --> 00:46:56,880
Speaker 4: approach that we're tanking, we're taking as a carrier, strike groups, tanks, missiles,

908
00:46:56,960 --> 00:46:59,880
Speaker 4: or should we be building drones and creating new cyber

909
00:47:00,080 --> 00:47:02,320
Speaker 4: warfare weapons that we've never used.

910
00:47:03,200 --> 00:47:06,319
Speaker 17: Well, it's all of the above. And don't forget the

911
00:47:06,440 --> 00:47:10,040
Speaker 17: space domain, where China is very active and wanting to

912
00:47:10,120 --> 00:47:13,600
Speaker 17: assert control and China has weapons that can hit our

913
00:47:13,640 --> 00:47:18,000
Speaker 17: satellites up in orbit. So big picture, I love what

914
00:47:18,120 --> 00:47:22,000
Speaker 17: sender Rubio is saying. This is now basically official US policy.

915
00:47:22,080 --> 00:47:24,759
Speaker 17: We know that we let China into the game. They

916
00:47:24,800 --> 00:47:26,480
Speaker 17: were no good, and we're going to have a big

917
00:47:26,560 --> 00:47:30,000
Speaker 17: job to get out of it. That starts with military strength,

918
00:47:30,280 --> 00:47:33,320
Speaker 17: taking lessons learned from Ukraine and applying them to see

919
00:47:33,360 --> 00:47:36,680
Speaker 17: control in the Pacific. But it also will really mean

920
00:47:36,840 --> 00:47:39,960
Speaker 17: a lot of economic steps. I do expect to see tariffs,

921
00:47:40,360 --> 00:47:44,200
Speaker 17: I want to see AI export control regulations, but also

922
00:47:44,360 --> 00:47:47,200
Speaker 17: a boost to our great tech leaders. We have a

923
00:47:47,280 --> 00:47:52,279
Speaker 17: significant lead over China in AI. Keeping that lead is

924
00:47:52,280 --> 00:47:54,440
Speaker 17: something our big corporations will help us do, and we've

925
00:47:54,440 --> 00:47:56,560
Speaker 17: got to make sure that we keep it. And then

926
00:47:56,600 --> 00:47:59,399
Speaker 17: we do have to integrate drones and all this other

927
00:47:59,440 --> 00:48:03,360
Speaker 17: new technology into what the military calls all domain warfare

928
00:48:03,400 --> 00:48:06,720
Speaker 17: to deter China. Yeah, and finally, don't forget China's building

929
00:48:06,760 --> 00:48:09,880
Speaker 17: more nuclear weapons and they don't do arms control, so

930
00:48:09,960 --> 00:48:12,720
Speaker 17: we'll have to be very serious on the strategic deterrent

931
00:48:12,840 --> 00:48:14,640
Speaker 17: side as well.

932
00:48:14,760 --> 00:48:16,640
Speaker 4: I need an hour with you, but I only have

933
00:48:16,719 --> 00:48:18,960
Speaker 4: a minute left. We're going to see a new stealth

934
00:48:19,000 --> 00:48:22,600
Speaker 4: bomber apparently we heard Pete Hagsith talk about B twenty one.

935
00:48:22,600 --> 00:48:25,319
Speaker 4: Do we see an next generation fighter under the Trump administration?

936
00:48:26,560 --> 00:48:27,000
Speaker 6: I hope.

937
00:48:27,040 --> 00:48:29,320
Speaker 17: So we need the B twenty one with a second

938
00:48:29,360 --> 00:48:33,160
Speaker 17: production site, build more of those raiders. China's real afraid

939
00:48:33,160 --> 00:48:36,160
Speaker 17: of them, and I'd like to see a Secretary of

940
00:48:36,200 --> 00:48:39,840
Speaker 17: Defense hegseeth green light the next generation air dominance, the

941
00:48:39,880 --> 00:48:43,400
Speaker 17: new Air Force fighter that's ready to go. China's already

942
00:48:43,400 --> 00:48:45,959
Speaker 17: experimented with some of their answers. We want to see

943
00:48:46,000 --> 00:48:48,839
Speaker 17: that dominant US airpower get the green light.

944
00:48:50,000 --> 00:48:52,720
Speaker 4: I saw those images of that Chinese stealth fighter flying

945
00:48:52,719 --> 00:48:54,799
Speaker 4: around the Delta thing. I thought, if you I don't,

946
00:48:54,840 --> 00:48:56,799
Speaker 4: is this real? You need to come back soon. Tell

947
00:48:56,880 --> 00:49:01,200
Speaker 4: us when you're back. Rebecca Grant Lexington institute the perfect

948
00:49:01,320 --> 00:49:06,319
Speaker 4: voice on a breaking story today. Thanks for listening to

949
00:49:06,360 --> 00:49:09,759
Speaker 4: the Balance of Power podcast. Make sure to subscribe if

950
00:49:09,760 --> 00:49:12,520
Speaker 4: you haven't already, at Apple, Spotify, or wherever you get

951
00:49:12,520 --> 00:49:15,560
Speaker 4: your podcasts, and you can find us live every weekday

952
00:49:15,560 --> 00:49:19,360
Speaker 4: from Washington, DC at noontime Eastern at Bloomberg dot com.