WEBVTT - Trump’s Demand for Hormuz Support Faces Resistance 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.240 us live on YouTube. 0:00:27.520 --> 0:00:31.520 Shabana Versacci is with Bloomberg Television all of our media 0:00:31.680 --> 0:00:36.319 worldwide to say that she is someone doing Horizons, doing 0:00:36.400 --> 0:00:40.320 Daybreak Middle East. She is definitive on her Middle East, 0:00:40.320 --> 0:00:43.960 and as Robert D. Kaplan talks about from Morocco to Persia, 0:00:44.040 --> 0:00:46.159 we are honored that she would join us this morning 0:00:46.600 --> 0:00:50.440 from her Dubai Jubani. I think the war coverage, particularly 0:00:50.440 --> 0:00:54.640 over the weekend is almost wrote almost cursory in the 0:00:54.760 --> 0:00:57.840 United States. Let us start with the airports. Do you 0:00:57.840 --> 0:01:01.160 have an airport in Dubai by the you have another 0:01:01.240 --> 0:01:05.000 airport towards Abu Dhabi being built out as well. The 0:01:05.040 --> 0:01:08.520 distance maybe it's a forty fifty minute drive to the two. 0:01:09.080 --> 0:01:12.920 What is a state of tension at the Dubai airports 0:01:13.040 --> 0:01:13.640 this morning? 0:01:17.240 --> 0:01:19.559 Hi Tomboll, good morning, Good to be on your show. 0:01:20.120 --> 0:01:22.800 Let me just run you through what happened specifically with 0:01:22.880 --> 0:01:25.720 Dubai International Airport DXP. That is the main one that's 0:01:25.760 --> 0:01:30.000 operational right now. It was hit in the early hours 0:01:30.000 --> 0:01:34.440 of the morning. A fuel depot exploded into flames. Later on, 0:01:34.480 --> 0:01:36.560 the Dubai Media Office came out to say that it 0:01:36.640 --> 0:01:40.640 caused limited damage and no injuries. But for a while 0:01:40.720 --> 0:01:47.040 the Dubai Civil Aviation Authority moved to suspend flights temporarily. 0:01:47.080 --> 0:01:48.919 They have resumed now, a lot of them have resumed. 0:01:48.920 --> 0:01:52.960 Many flights were canceled that the state owned airline Emirates 0:01:52.960 --> 0:01:56.040 has resumed travel now. But I think what you're referring 0:01:56.080 --> 0:01:58.600 to is the fact that some of those flights were 0:01:58.640 --> 0:02:01.800 redirected to a new air that's being built, as you say, 0:02:01.880 --> 0:02:05.840 around forty five minutes away Dubai Mactoom. But again, you know, 0:02:05.920 --> 0:02:07.840 this is just part of parts of the bigger picture here, 0:02:07.880 --> 0:02:11.400 which is that Iran continues to strike not necessarily US 0:02:11.520 --> 0:02:14.239 assets in the region, but key transportation on the dist 0:02:14.240 --> 0:02:14.880 six hubs. 0:02:14.960 --> 0:02:17.680 What is the tension in Dubai, I think within the 0:02:17.760 --> 0:02:21.320 media coverage in America, do we don't know the tension 0:02:21.360 --> 0:02:25.040 in Kuwait? We don't know the tension in Cutter across 0:02:25.080 --> 0:02:28.800 the United Arab Emirates. What is the tension in Dubai 0:02:29.120 --> 0:02:31.440 or is it just a random missile that may come in. 0:02:34.680 --> 0:02:38.560 Let me tell you that UAE alone have received two 0:02:38.720 --> 0:02:41.920 thirds of the projectiles that Iran have fired over so 0:02:42.000 --> 0:02:46.920 more than any other Gulf nation. They have successfully intercepted 0:02:47.000 --> 0:02:51.000 around one thousand, six hundred drones around three hundred missiles. 0:02:51.040 --> 0:02:54.200 The interception rates is anything between ninety two percent and 0:02:54.280 --> 0:02:56.520 ninety four percent, depending on whether you're talking about drones 0:02:56.560 --> 0:02:59.600 or missiles. So the interception rate is very high. But 0:02:59.639 --> 0:03:02.679 that's not to say that some debris or interceptions of 0:03:02.760 --> 0:03:07.360 debris is causing a damage to some Skyrise buildings, as 0:03:07.639 --> 0:03:11.480 you may have seen reports of that. But increasingly, I 0:03:11.520 --> 0:03:14.040 would say what has happened in the last twenty four 0:03:14.120 --> 0:03:18.000 to forty eight hours is Iran seem to be targeting 0:03:18.760 --> 0:03:22.560 a lot more strategic assets in the region that aren't 0:03:22.560 --> 0:03:27.280 necessarily linked to US bases or US control centers. And 0:03:27.480 --> 0:03:31.360 this I think is perhaps marks a new chapter in 0:03:31.400 --> 0:03:34.320 this war, because they have attempted to strike at the 0:03:34.440 --> 0:03:37.320 Fugeaport a couple of times of the course of this weekend, 0:03:37.800 --> 0:03:41.640 a key strategic port not on the Strait. I should 0:03:41.720 --> 0:03:44.200 also remind viewers this is a port that is on 0:03:44.960 --> 0:03:50.080 the Gulf of Aman, a key outlet to get UAE 0:03:50.200 --> 0:03:52.440 oil out of the region. The fact that they keep 0:03:52.480 --> 0:03:56.760 going after it suggests that not only is Iran focusing 0:03:56.840 --> 0:03:59.040 on that one choke point around the Strait of Hormas, 0:03:59.080 --> 0:04:01.400 but there also begins to target some of the key 0:04:01.840 --> 0:04:04.840 ports around the Arabian Gulf and the Gulf of Aman 0:04:04.920 --> 0:04:05.320 as well. 0:04:05.560 --> 0:04:05.960 Jumana. 0:04:06.000 --> 0:04:08.280 The Strait of Humus is clearly one of the areas 0:04:08.280 --> 0:04:12.600 of focus here. President Trump has asked other nations to 0:04:12.640 --> 0:04:15.120 help secure the passage through the Strait of Hormus. What 0:04:15.160 --> 0:04:18.800 do we know about any responses from any of our allies. 0:04:18.839 --> 0:04:19.480 I guess. 0:04:21.720 --> 0:04:24.599 That's right. So that was the main us overnight. He's 0:04:24.600 --> 0:04:27.280 calling on what he says around seven nations to join 0:04:27.320 --> 0:04:30.760 in on this coalition to help secure the safe passage 0:04:30.880 --> 0:04:33.560 of vessels through the straits, including the likes of UK 0:04:33.720 --> 0:04:37.359 and France, obviously NATO allies. In an FT interview, he 0:04:37.440 --> 0:04:40.920 hinted that there would be diplomatic repercussions if the NATO 0:04:40.960 --> 0:04:43.719 allies did not join in on these efforts. He's also 0:04:43.800 --> 0:04:47.200 suggested that South Korea Japan join in we've heard from 0:04:47.240 --> 0:04:49.800 the Japanese Minister of Defense overnight. He said that the 0:04:49.839 --> 0:04:52.359 threshold for them to get involved is super high. And 0:04:52.400 --> 0:04:54.560 then the big one is China. Of course, the lion's 0:04:54.560 --> 0:04:57.120 share of the oil that's transported through the strait ends 0:04:57.200 --> 0:05:00.760 up in China's hands. From an economic perspective, of course, 0:05:00.960 --> 0:05:05.160 they have a prerogative to ensure the safe passage of vessels, 0:05:05.200 --> 0:05:07.960 but they so far have not put out any official 0:05:08.000 --> 0:05:10.080 commentary suggesting that they're willing to sign up to this. 0:05:10.279 --> 0:05:13.599 Jaman One final question here into your busy afternoon and 0:05:13.640 --> 0:05:18.000 into the evening in Dubai. Are the Arab nations together 0:05:19.080 --> 0:05:22.719 in a you know, ancient view against Persia or is 0:05:22.720 --> 0:05:24.360 it every tribe for themselves. 0:05:27.560 --> 0:05:29.640 Well, let me just point you to a call that 0:05:29.720 --> 0:05:33.720 took place between the Saudi Crown Princes Royal Highness MBS 0:05:34.600 --> 0:05:38.279 with the President of the UEE MBZ. And you know, 0:05:38.320 --> 0:05:41.680 for anyone who's been following the news in the region, 0:05:41.880 --> 0:05:45.159 even before this war erupted, there had started to be 0:05:45.279 --> 0:05:48.360 some more regional friction between the UAE and Saudi Arabia 0:05:48.400 --> 0:05:54.760 over there differing objectives around the war in Yemen, also 0:05:54.839 --> 0:05:57.320 in Sudan, as well, what we see in since the 0:05:57.320 --> 0:06:00.760 inception of this war is a reproshment of sorts, and 0:06:00.839 --> 0:06:05.240 what you are getting are these United Communicats from GCC 0:06:05.400 --> 0:06:08.240 foreign ministers, more and more of these calls taking place, 0:06:08.440 --> 0:06:12.359 all of them at condemning the attacks, the Iranian attacks, 0:06:12.360 --> 0:06:14.480 and in fact going so far as calling them terrorist 0:06:14.520 --> 0:06:18.760 attacks in their territory, also reiterating the right to self defense. 0:06:18.880 --> 0:06:21.440 But none of them, and I should say, have gone 0:06:21.440 --> 0:06:24.159 so far as to suggest that they would get militarily 0:06:24.240 --> 0:06:26.920 involved in this war. For the time being, they're just 0:06:27.080 --> 0:06:31.039 emphasizing their right to self preservation and to self defense. 0:06:31.080 --> 0:06:33.280 And then of course later on down the track they're 0:06:33.320 --> 0:06:34.719 going to have to do maybe a little bit of 0:06:34.720 --> 0:06:37.680 soul searching about the types of strategic alliances that they have. 0:06:37.880 --> 0:06:40.280 A terrific brief, Thank you so much. Giovanni Briscacci is 0:06:40.320 --> 0:06:43.080 shoes of course, driving all of our Middle East coverage 0:06:43.080 --> 0:06:49.520 with Bloomberg Horizon out of Dubai. Stay with us. More 0:06:49.640 --> 0:06:52.520 from Bloomberg Surveillance coming up after this. 0:07:00.080 --> 0:07:03.800 Listening to the Bloomberg Surveillance podcast catch us Live weekday 0:07:03.800 --> 0:07:07.400 afternoons from seven to ten am Eastern Listen on Applecarplay 0:07:07.440 --> 0:07:10.720 and Android auto with the Bloomberg Business app or watch 0:07:10.800 --> 0:07:12.000 us live on YouTube. 0:07:12.560 --> 0:07:16.440 We agree with true Excellence and hydrocarbons at an LC 0:07:16.640 --> 0:07:21.240 operational research. Julian Lee is definitive with Bloomberg News and oil. 0:07:21.720 --> 0:07:26.240 What's the story Julian right now? In oil that's not visible? 0:07:28.920 --> 0:07:31.720 I think what's not visible at the moment is exports 0:07:31.720 --> 0:07:35.840 out of the Persian Gulf. What we're seeing is a 0:07:35.880 --> 0:07:41.520 near total closure of the straight offor moves. Yes, there've 0:07:41.520 --> 0:07:46.520 been a couple of small Indian oil tankers going through 0:07:46.560 --> 0:07:51.440 over the weekend. They were likely carrying liquefied petroleum gases, 0:07:51.600 --> 0:07:55.760 which are popular as a cooking fuel in India. One 0:07:55.760 --> 0:07:59.360 thing I think that's interesting about those vessels is that 0:07:59.400 --> 0:08:03.080 they took a much more northerly passage through Hormus than 0:08:03.520 --> 0:08:07.760 is usual, much closer to the Iranian coast, outside of 0:08:07.880 --> 0:08:12.160 the normal shipping lanes. They could mean a number of things. 0:08:12.200 --> 0:08:14.240 I mean it could mean that those shipping lanes have 0:08:14.320 --> 0:08:17.000 been mined, as the Uranians would like us to believe. 0:08:17.920 --> 0:08:21.000 It could simply mean that the Uranians want to keep 0:08:21.040 --> 0:08:24.400 a better eye on what's going through Hormos. Most of 0:08:24.440 --> 0:08:27.920 the rest of what's gone through is either Iranian owned 0:08:28.680 --> 0:08:32.319 or linked to China, but that the movements to Hormus 0:08:32.320 --> 0:08:33.360 are very very small. 0:08:33.520 --> 0:08:37.480 Paint the window in Singapore, the Straits of Malacca of 0:08:37.520 --> 0:08:43.760 the transformation of oil to naphtha, naphtha to ethylene in 0:08:43.880 --> 0:08:48.000 ethylene into all the plastics and petrochemicals that are out there. 0:08:48.400 --> 0:08:51.880 That sequence of what we do with oil is that 0:08:52.080 --> 0:08:53.240 shattered as well. 0:08:55.160 --> 0:08:59.360 I think it's certainly coming under strain. You know, this 0:08:59.559 --> 0:09:03.720 is perhaps the other side of the oil market that 0:09:03.800 --> 0:09:07.160 we don't appreciate quite so much. We're very used to 0:09:08.040 --> 0:09:12.280 crude oil going into refineries being turned into gasoline and 0:09:12.320 --> 0:09:15.960 diesel fuel and jet fuel and heating oil. The other 0:09:16.040 --> 0:09:18.840 side of that, on the side where all the sort 0:09:18.840 --> 0:09:23.280 of longer term growth is is in feedstocks for plastics, 0:09:24.720 --> 0:09:30.360 but that is perhaps less the sort of base load 0:09:30.480 --> 0:09:33.440 coming out of the Middle East. A lot of that 0:09:33.640 --> 0:09:37.960 is heavier crude that tends to go into refineries for 0:09:38.040 --> 0:09:42.439 processing into fuels. But at some point this is going 0:09:42.480 --> 0:09:48.040 to pinch perhaps, And you know, the big problem I 0:09:48.080 --> 0:09:51.680 think at the moment is just that the amount of 0:09:51.720 --> 0:09:55.560 oil that has been prevented from coming out of the 0:09:55.559 --> 0:09:59.480 Persian Gulf is bigger than the amount that can be 0:09:59.600 --> 0:10:04.440 divert elsewhere by Saudi Arabia, the United Arab Emirates, and 0:10:04.480 --> 0:10:07.160 to some extent to Rock Julian Lee. 0:10:07.200 --> 0:10:08.880 Please stay with us right now. We've got to get 0:10:08.880 --> 0:10:10.319 to the market open, and we're going to come back 0:10:10.320 --> 0:10:13.640 with doctor Lee in London, of course, expert on all 0:10:13.679 --> 0:10:16.480 that we see here in hydrocarbons. And we do that 0:10:16.520 --> 0:10:19.480 with oil under one oh two barely one oh one 0:10:19.559 --> 0:10:23.240 point ninety three, generally signaling what we see in the 0:10:23.360 --> 0:10:28.040 equity markets, with futures up sixty one previcts under twenty 0:10:28.040 --> 0:10:32.319 five earlier. A better take on a Monday morning with 0:10:32.520 --> 0:10:34.839 our market opening, Alexis. 0:10:34.360 --> 0:10:37.240 Christophorus, Thanks so much, Tom, And we had a nice 0:10:37.320 --> 0:10:40.600 rally for stock futures heading into this Monday morning opening 0:10:40.640 --> 0:10:44.360 bell and it looks like it's dipping over into regular trading. 0:10:44.520 --> 0:10:47.000 S and P five hundred up now about sixty points 0:10:47.000 --> 0:10:50.200 at sixty six ninety one. Dow Jones industrial leverage right 0:10:50.200 --> 0:10:51.880 out of the gate, up three hundred and seventy seven 0:10:51.880 --> 0:10:55.679 points level at forty six nine fifty four. NASDA composite 0:10:55.720 --> 0:10:58.160 climbing two hundred twenty eight points now twenty two thousand 0:10:58.160 --> 0:11:00.440 and three twenty nine. The Russell two thousand coming along 0:11:00.480 --> 0:11:02.720 for the ride, up now thirty three points. We do 0:11:02.800 --> 0:11:04.840 have oil pulling back a bit. Brent is at one 0:11:04.920 --> 0:11:07.640 oh one ninety the barrel, WTI crewed ninety four to 0:11:07.640 --> 0:11:11.440 seventy one the barrel. We've also got precious medals mixed 0:11:11.640 --> 0:11:13.880 spot gold now at fifty twenty two the ounce, and 0:11:14.040 --> 0:11:18.360 bitcoin at seventy three nine hundred and sixteen dollars. Early 0:11:18.400 --> 0:11:21.440 movers shares of Nebius up thirteen and a half percent 0:11:21.480 --> 0:11:24.200 after Facebook parent Meta said it's going to pay up 0:11:24.200 --> 0:11:26.640 to twenty seven billion dollars over the next five years 0:11:26.640 --> 0:11:30.400 for access to AI infrastructure from the Neo Cloud company. 0:11:30.600 --> 0:11:33.800 That's your Bloomberg opening bell report, Tom and Paul Alexis. 0:11:33.840 --> 0:11:35.959 Thank you so much. I appreciate it. Right now around 0:11:36.000 --> 0:11:39.560 the world, across this nation, it is Bloomberg surveillance. Paul 0:11:39.600 --> 0:11:43.000 Sweeney with Julian Lee at Queenten Victoria Street. 0:11:43.400 --> 0:11:46.960 Julian, just for argument's sake, let's assume they were ended today. 0:11:47.440 --> 0:11:50.559 Where would Brent be, would Brent get back to its 0:11:50.600 --> 0:11:54.240 pre war levels and over what time frame might that occur? 0:11:55.640 --> 0:11:58.520 Well, you know, fortunately I'm not in the business of 0:11:58.559 --> 0:12:02.920 price forecasting any longer. I gave that up twelve years 0:12:02.960 --> 0:12:06.480 ago and when I came to Bloomberg, so I you know, 0:12:07.160 --> 0:12:10.320 I can't give you a forecast. If you look at 0:12:10.400 --> 0:12:14.640 the market fundamentals, if you get the flow through hor 0:12:14.679 --> 0:12:21.679 moves normalized, the market was relatively weak. There's nothing significant 0:12:21.720 --> 0:12:27.240 that has changed in the supply demand dynamics other than 0:12:27.760 --> 0:12:32.200 the closure of hor Moos. We haven't had significant damage 0:12:32.280 --> 0:12:37.439 to oil production installations in the Middle East or in Iran, thankfully, 0:12:38.400 --> 0:12:42.240 so you know, the supply side in time would get 0:12:42.280 --> 0:12:45.520 back to where it was. But I think that would 0:12:45.600 --> 0:12:48.800 take time. I mean, it's it's not a matter of 0:12:49.600 --> 0:12:52.240 simply turning on a tap and everything's back to normal. 0:12:52.280 --> 0:12:54.840 There's there's all sorts of logistics that have to be 0:12:54.920 --> 0:12:57.400 sorted out. And if we look at right at what's 0:12:57.440 --> 0:13:03.600 happening now, Saudi Arabia has said it will divert crude 0:13:03.679 --> 0:13:07.200 to the Red Sea. It has a pipeline that has 0:13:07.240 --> 0:13:12.079 the capacity to take seven million barrels a day. The 0:13:12.679 --> 0:13:18.120 CEO of Saudi Aramco said last Tuesday that they were 0:13:18.240 --> 0:13:24.160 ramping up to that capacity. But that's a seven hundred 0:13:24.160 --> 0:13:30.240 and fifty mile pipeline. Oil doesn't move very fast through pipelines. 0:13:30.280 --> 0:13:34.520 I mean, you know, perhaps not much faster than a 0:13:34.559 --> 0:13:37.720 decent runner can run. So that means it could take 0:13:37.760 --> 0:13:42.320 anywhere from you know, four to ten days for an 0:13:42.400 --> 0:13:47.120 additional input into that pipeline to turn up in increased 0:13:47.200 --> 0:13:50.720 volumes coming out at the other end. So that's the 0:13:50.760 --> 0:13:57.079 sort of logistical disruption or the sort of time frames 0:13:57.080 --> 0:14:00.240 that we're looking at just to make that switch from 0:14:00.360 --> 0:14:03.840 east to west. Putting the whole thing back together would 0:14:03.920 --> 0:14:05.240 perhaps take even longer. 0:14:05.520 --> 0:14:08.880 Julian Ly, thank you so much in London, writing for 0:14:08.960 --> 0:14:15.080 Bloomberg News. Stay with us more from Bloomberg Surveillance coming 0:14:15.160 --> 0:14:16.200 up after this. 0:14:23.400 --> 0:14:27.000 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:14:27.080 --> 0:14:30.600 weekday afternoons from seven to ten am Eastern. Listen on Apple, 0:14:30.640 --> 0:14:33.960 Karplay and Android Otto with the Bloomberg Business app, or 0:14:34.120 --> 0:14:35.600 watch us live on YouTube. 0:14:35.800 --> 0:14:38.600 Tricia Scarlatta joins us a diverse get out the calendar 0:14:38.600 --> 0:14:43.920 Paul March College admissions. If you're not early decision or 0:14:43.960 --> 0:14:48.359 whatever the other eight kinds of decision are. Tricia Scarlatta 0:14:48.440 --> 0:14:52.080 has the worst worst job at JP Morgan has Jamie 0:14:52.120 --> 0:14:55.200 Diamond ever called you up and said, how about that 0:14:55.280 --> 0:14:56.320 tuition I'm paying? 0:14:56.960 --> 0:15:01.040 Jamie has not, but I've had have other senior executives 0:15:01.040 --> 0:15:02.360 who have called me for some advice. 0:15:02.400 --> 0:15:05.480 For sure, for someone Jamie Okay, Jasuine Lee kills it 0:15:05.480 --> 0:15:07.240 in the Wall Street Journal this week and the four 0:15:07.400 --> 0:15:11.480 zillion East Coast brats going to Saint Andrews. They go 0:15:11.520 --> 0:15:13.760 out on the pier walk there with their red robes 0:15:14.160 --> 0:15:19.000 and all that give us an update on the insanity 0:15:19.120 --> 0:15:22.360 of the college process. As you see it at JP Markets. 0:15:23.280 --> 0:15:25.840 The process is insanity. And I love that you mentioned 0:15:25.880 --> 0:15:29.840 the international schools because they are certainly more cost effective. 0:15:30.040 --> 0:15:31.840 And as I mentioned earlier, I had a nephew that 0:15:31.880 --> 0:15:34.760 went to Saint Andrews and did tremendously well. You know, 0:15:34.880 --> 0:15:36.600 I wish I could tell you that I thought costs 0:15:36.640 --> 0:15:39.800 were coming down. They are not coming down. They historically 0:15:39.840 --> 0:15:41.920 have never come down. They are up five to seven 0:15:41.960 --> 0:15:45.040 percent every year. Even during COVID, costs continued to go up, 0:15:45.840 --> 0:15:49.200 So I don't see that changing. I think what we 0:15:49.240 --> 0:15:51.200 need to make sure we tell families is they need 0:15:51.240 --> 0:15:54.080 to start early and do it as often as they can. 0:15:54.160 --> 0:15:58.280 Make those contributions. You know, look The reality is we're 0:15:58.280 --> 0:16:01.440 getting less international students come to the US. Right those 0:16:01.480 --> 0:16:04.040 were the people paying the full vote because they didn't 0:16:04.040 --> 0:16:07.960 get aid. We also just have less kids, so that 0:16:08.080 --> 0:16:12.800 means less tuition being paid. These schools have created institutions 0:16:12.800 --> 0:16:15.240 that are so expensive because they have so many programs. 0:16:15.280 --> 0:16:18.640 When we went to college, there weren't two hundred three 0:16:18.720 --> 0:16:20.960 hundred programs. They have to pay for that. They've got 0:16:20.960 --> 0:16:23.600 to generate revenue, so the costs are not going to 0:16:23.600 --> 0:16:26.840 come down, and unfortunately there's just not enough free money 0:16:26.840 --> 0:16:27.480 to go around. 0:16:28.200 --> 0:16:31.040 And having sat on a university board, I'll tell you 0:16:31.120 --> 0:16:33.280 right now, cut your costs by fifty percent. 0:16:33.360 --> 0:16:36.000 Start there. Then come talk to your students and the families. 0:16:36.000 --> 0:16:38.080 But they won't do that. Now talk to just about 0:16:38.080 --> 0:16:40.160 five twenty nine plans? What are they? How do they 0:16:40.160 --> 0:16:41.280 help parents? 0:16:41.760 --> 0:16:44.000 Very very simple. The best thing about a five to 0:16:44.040 --> 0:16:46.280 twenty nine account is the fact that you can actually 0:16:46.400 --> 0:16:49.680 save on taxes. So you're going to take your after 0:16:49.760 --> 0:16:52.760 tax dollars, make a contribution into a five to twenty 0:16:52.840 --> 0:16:55.960 nine plan, and that's going to grow tax deferred over 0:16:55.960 --> 0:16:59.239 the lifetime of the account till you start making those withdrawals. 0:16:59.560 --> 0:17:02.200 And there are tons of qualified draw withdraws that you 0:17:02.280 --> 0:17:05.159 can make, and as long as it's qualified, there are 0:17:05.200 --> 0:17:06.320 no taxes to be happening. 0:17:07.359 --> 0:17:09.400 Use a five twenty nine not enough? 0:17:09.840 --> 0:17:13.760 So about forty percent now, so we're you're and if 0:17:13.800 --> 0:17:16.360 you look at it, about fifty percent of Americans don't 0:17:16.359 --> 0:17:18.040 even know what a five to twenty nine account is. 0:17:18.080 --> 0:17:19.880 Can I just interject, because. 0:17:19.880 --> 0:17:25.240 We're wonderful, here's the rule days. You just butt in. 0:17:25.320 --> 0:17:28.840 You don't ask the politenesses out here, ladies and johnman 0:17:30.320 --> 0:17:31.640 the rules. 0:17:32.119 --> 0:17:34.199 I love the fact that you can roll over a 0:17:34.240 --> 0:17:36.640 five twenty like, let's say, yeah, since my kids don't 0:17:36.760 --> 0:17:38.760 use all the money in there, which fat chance, Yeah 0:17:38.920 --> 0:17:40.800 I can. I can send it to my grandkids. 0:17:40.840 --> 0:17:44.640 Absolutely, Look, everybody worries they're going to overfund these accounts. 0:17:44.680 --> 0:17:47.080 Trust me, you are not going to overfund. We just 0:17:47.119 --> 0:17:49.560 all talked about it. You're not overfunding. The average account 0:17:49.560 --> 0:17:51.880 size is somewhere in the forty to fifty thousand dollars range. 0:17:51.920 --> 0:17:55.280 Families are not oversaving. But yes, you can change beneficiaries. 0:17:55.440 --> 0:17:58.320 There's so much flexibility in these accounts. And we just 0:17:58.359 --> 0:18:01.520 did a survey on LinkedIn. What's your biggest reason why 0:18:01.520 --> 0:18:03.600 you're not opening a five to twenty nine account, And 0:18:03.640 --> 0:18:06.119 the biggest reason was because we don't think it's flexible. 0:18:06.359 --> 0:18:08.720 You've got tons of flexibility now you are. So if 0:18:09.680 --> 0:18:11.480 you have too much money, you can roll over to 0:18:11.520 --> 0:18:14.080 a roth Ira up to thirty five thousand dollars. There's 0:18:14.119 --> 0:18:16.520 so much flexibility in terms of the withdrawals. It's not 0:18:16.600 --> 0:18:20.920 just college anymore. It's K through twelve, it's credentialing, it's tutoring. 0:18:21.200 --> 0:18:24.119 It continuously expands. Yes, can you use. 0:18:24.000 --> 0:18:25.960 Five twenty nine for SAYT prep? 0:18:26.080 --> 0:18:29.480 Yep, you can. You can think about all the money 0:18:29.520 --> 0:18:32.200 we spend as parents on SAT prep exactly. 0:18:32.320 --> 0:18:35.960 How about just aid? A lot of schools offer a 0:18:35.960 --> 0:18:36.440 lot of aid. 0:18:36.480 --> 0:18:38.359 If you know where to look for it, you bet 0:18:38.560 --> 0:18:41.080 talk to us about how that factors into the equation. 0:18:41.280 --> 0:18:45.119 Listen, I adore the families that have the conversation and 0:18:45.160 --> 0:18:48.080 say we can't pay ninety thousand dollars a year. There 0:18:48.119 --> 0:18:50.919 are tons of state institutions that are wonderful that you 0:18:50.920 --> 0:18:54.159 could pay in state tuition. There are also things called 0:18:54.560 --> 0:18:58.240 a safety a safety school. So if you're somebody who 0:18:58.280 --> 0:19:01.120 because of your income level, which is probably somewhere around 0:19:01.160 --> 0:19:03.240 two hundred plus you're not really going to get anything. 0:19:03.320 --> 0:19:05.920 It's probably a little bit lower than that. The key 0:19:06.040 --> 0:19:10.760 is to be to be applying to safeties because that 0:19:11.000 --> 0:19:15.280 school will give you money off the top because you're 0:19:15.359 --> 0:19:18.680 still more attractive than somebody getting financially Okay, just. 0:19:18.640 --> 0:19:21.120 As a decide, she mentioned full Bote. I saw full 0:19:21.160 --> 0:19:25.040 Boat play at the Cave at Durham is a great band. 0:19:25.640 --> 0:19:28.000 The fact of the matter is there's all this media 0:19:28.080 --> 0:19:32.159 blather about schools giving out tons of scholarships. Anybody who 0:19:32.200 --> 0:19:34.760 makes over fourteen thousand a year gets to go see 0:19:35.119 --> 0:19:38.280 and all sort. What I hear from our listeners and 0:19:38.400 --> 0:19:43.200 viewers is at the travesty, we're all paying full tuition, 0:19:43.560 --> 0:19:47.160 room and board. What percentage of people that in your 0:19:47.200 --> 0:19:48.760 research are paying. 0:19:48.560 --> 0:19:54.920 Full bote about about forty percent, forty to fifty percent. Yeah, 0:19:55.040 --> 0:19:56.800 what's the good percentage? Now that number is going to 0:19:56.840 --> 0:19:59.240 come down again because our international students are going to 0:19:59.280 --> 0:20:02.399 come down. International students coming up just because of the 0:20:02.440 --> 0:20:05.359 whole thing with people coming into the country, so I'll. 0:20:05.200 --> 0:20:07.120 Feel comfortable coming that is correct. 0:20:08.359 --> 0:20:11.160 When does this end? I mean I mentioned today at 0:20:11.200 --> 0:20:15.080 some point Marlborough cigarettes became too expensive. I don't know 0:20:15.440 --> 0:20:17.960 we at a point where this just becomes too expensive. 0:20:18.119 --> 0:20:18.639 I don't know. 0:20:18.720 --> 0:20:20.760 I mean I have not seen it. If we look 0:20:20.800 --> 0:20:23.600 at history, history has not shown it at all. And 0:20:23.640 --> 0:20:26.320 we're looking at now. So eighteen years from now you 0:20:26.400 --> 0:20:29.040 want to send three kids to college. I mean it's 0:20:29.240 --> 0:20:30.440 you know, you're looking at millions. 0:20:30.560 --> 0:20:33.080 Have you ever had two pages in Jamie Diamond's annual 0:20:33.119 --> 0:20:34.880 report letter? You deserve that? 0:20:35.000 --> 0:20:35.600 Oh well, thank you. 0:20:35.640 --> 0:20:37.879 I appreciate that you'll work on that. 0:20:38.119 --> 0:20:38.800 It's a crisis. 0:20:38.880 --> 0:20:40.960 It for sure is a crisis. It is the family's 0:20:40.960 --> 0:20:41.960 biggest expense. 0:20:42.000 --> 0:20:44.240 Within the Vatican. I mean you can get two pages 0:20:44.280 --> 0:20:47.880 in or two paragraphs in to his work. I appreciate 0:20:47.920 --> 0:20:50.679 that this has been great. Don't be a stranger. Tricia 0:20:50.680 --> 0:20:54.440 Scarlatti here full vote for Alexis Christopherus and everybody else. 0:20:54.680 --> 0:20:58.840 That's what she's going to ring out of education savings 0:20:59.080 --> 0:21:04.960 at JP Morgan Asset Management. Stay with us. More from 0:21:05.000 --> 0:21:07.640 Bloomberg Surveillance coming up after this. 0:21:14.880 --> 0:21:18.480 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:21:18.560 --> 0:21:26.959 weekday afternoons from seven to ten am, or live on YouTube. 0:21:27.040 --> 0:21:30.280 Giving us a lighter touch, Miss Pistopherus, what. 0:21:30.280 --> 0:21:32.240 Do you have this morning, I went, I went digging, 0:21:32.280 --> 0:21:34.240 and I found this one in the Wall Street Journal 0:21:34.560 --> 0:21:36.919 that says, when it comes to income tax red and 0:21:36.960 --> 0:21:39.480 blue states, they're growing further up. 0:21:39.680 --> 0:21:42.879 So that yeah, don't choices little charts. 0:21:43.080 --> 0:21:44.880 Yeah, it was, it's actually quite there's a love, lovely 0:21:44.960 --> 0:21:48.080 visual with this. So Republican led states are looking to 0:21:48.280 --> 0:21:51.359 entice new residents with lower taxes. Democratic led states are 0:21:51.400 --> 0:21:54.120 looking to hire taxes on top earners because they need 0:21:54.119 --> 0:21:57.680 to plug those budget gaps and also to fund social services. 0:21:58.240 --> 0:22:01.440 So in just the past five year, okay, twenty three 0:22:01.480 --> 0:22:04.960 states have lowered their top income tax income tax rates, 0:22:05.680 --> 0:22:09.680 Mississippi and Oklahoma looking to eliminate it all together. And then, 0:22:09.720 --> 0:22:11.400 of course here in New York City, we've also got 0:22:11.440 --> 0:22:16.040 Washington State looking to raise income taxes on high income households. 0:22:16.320 --> 0:22:18.600 And here's another. I mean, I just looked at this stat. 0:22:18.680 --> 0:22:20.720 I think this says it all. According to the Tax Foundation, 0:22:20.800 --> 0:22:24.560 the middle ground is quickly disappearing. Twenty years ago, fifteen 0:22:24.600 --> 0:22:27.560 states had top income tax rates on wage income below 0:22:27.640 --> 0:22:31.440 five percent, and just one exceeded ten percent. Today, more 0:22:31.440 --> 0:22:33.520 than half of the states have gone below five percent 0:22:33.640 --> 0:22:34.199 over the week, and. 0:22:34.240 --> 0:22:37.159 The guy I can't pronounce it runs uber dearra. I 0:22:37.240 --> 0:22:41.159 just can't. Yep, Yeah, I can't. I gave up. Okay, 0:22:41.400 --> 0:22:44.680 you know Mark Crumpton yelled at me Dari's movement. He's 0:22:44.720 --> 0:22:46.320 moving in California some point. 0:22:46.400 --> 0:22:47.760 That's right, another executive. 0:22:47.760 --> 0:22:48.320