1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,840 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,120 Speaker 1: or watch us live on YouTube. 6 00:00:27,280 --> 00:00:29,440 Speaker 2: Let's check in with one of the experts we always 7 00:00:29,480 --> 00:00:31,319 Speaker 2: love to chat with when it comes to global energy, 8 00:00:31,320 --> 00:00:35,600 Speaker 2: and that's Ellen Wald, Senior Fellow at the Atlantic Council. Ellen, 9 00:00:35,640 --> 00:00:38,159 Speaker 2: we're seeing, obviously, the spike up and energy prices and 10 00:00:38,200 --> 00:00:41,440 Speaker 2: that seems like we've seen this before. Is this an 11 00:00:41,479 --> 00:00:44,640 Speaker 2: efficient market that you're looking at right here? And how 12 00:00:44,640 --> 00:00:46,520 Speaker 2: do you think this plays out over the coming days. 13 00:00:47,440 --> 00:00:50,360 Speaker 3: Honestly, what I think we're seeing is a global energy 14 00:00:50,400 --> 00:00:52,560 Speaker 3: crisis unfolding in real time. 15 00:00:53,479 --> 00:00:55,240 Speaker 4: I'm surprised, honestly. 16 00:00:54,920 --> 00:00:58,440 Speaker 3: That prices didn't spike to eighty five when the market opened, 17 00:00:59,040 --> 00:01:02,000 Speaker 3: you know, Sunday night in Asia, because it was clear 18 00:01:02,120 --> 00:01:05,680 Speaker 3: once uh you know, tankers were not moving through the 19 00:01:05,720 --> 00:01:08,679 Speaker 3: straight orform moves either way, that this is going to 20 00:01:08,720 --> 00:01:13,120 Speaker 3: be a major energy crisis unless it was resolved by today. 21 00:01:13,160 --> 00:01:15,000 Speaker 3: I mean, I think that that unless they can get 22 00:01:15,040 --> 00:01:18,560 Speaker 3: the tankers moving in the next couple of days, we're 23 00:01:18,600 --> 00:01:21,840 Speaker 3: going to see extremely high oil prices, which will frankly 24 00:01:21,880 --> 00:01:25,240 Speaker 3: be warranted given that no oil is moving out of 25 00:01:25,360 --> 00:01:29,000 Speaker 3: the Persian Gulf. And while you know, consumers in the 26 00:01:29,080 --> 00:01:31,160 Speaker 3: United States may have plenty of oil, we're not going 27 00:01:31,240 --> 00:01:35,240 Speaker 3: to necessarily see you know, gas lines, We've got product, 28 00:01:35,280 --> 00:01:39,600 Speaker 3: we've got oil. We're not immune to you know, price 29 00:01:39,680 --> 00:01:42,640 Speaker 3: bikes in the in the price of crude oil globally, 30 00:01:42,720 --> 00:01:45,480 Speaker 3: and so this is going to affect people, you know, 31 00:01:45,480 --> 00:01:47,480 Speaker 3: in terms of what they're paying at the pump. But 32 00:01:47,560 --> 00:01:50,960 Speaker 3: other countries, okay, that depend and rely on this oil 33 00:01:51,200 --> 00:01:55,280 Speaker 3: could potentially start to see shortages unless there is a plan, 34 00:01:55,360 --> 00:01:57,800 Speaker 3: unless they start rolling out a plan to either get 35 00:01:57,800 --> 00:02:01,160 Speaker 3: things moving or you know, find alternatives. 36 00:02:01,920 --> 00:02:03,840 Speaker 5: So you say that some of the important issues in 37 00:02:03,920 --> 00:02:07,120 Speaker 5: terms of oil prices as well as natural gas prices 38 00:02:07,160 --> 00:02:10,720 Speaker 5: are the potential damage to oil infrastructure in Iran. You 39 00:02:10,760 --> 00:02:13,440 Speaker 5: also talk about the extent of delays and marine traffic 40 00:02:13,560 --> 00:02:16,720 Speaker 5: entering and exiting the Persian Golf, as well as OPEK, 41 00:02:16,840 --> 00:02:19,560 Speaker 5: plus the response there from the US and China as well. 42 00:02:19,840 --> 00:02:22,519 Speaker 5: How do you think about some of these challenges or 43 00:02:22,520 --> 00:02:24,720 Speaker 5: all the different important variables that we're seeing as it 44 00:02:24,720 --> 00:02:25,919 Speaker 5: relates to oil prices. 45 00:02:27,280 --> 00:02:29,440 Speaker 3: I think that the most important variable right now is 46 00:02:29,480 --> 00:02:32,680 Speaker 3: how long this military conflict is going to last, because 47 00:02:32,680 --> 00:02:35,720 Speaker 3: that's what is pushing up the price of insurance so 48 00:02:35,800 --> 00:02:39,200 Speaker 3: much that tankers are unwilling to attempt even to cross 49 00:02:39,240 --> 00:02:42,120 Speaker 3: the straight orform moves. It's just too expensive, meaning it's 50 00:02:42,160 --> 00:02:44,560 Speaker 3: too risky. So, you know, if they can get a 51 00:02:44,560 --> 00:02:46,840 Speaker 3: handle in this military conflict, but it doesn't look like 52 00:02:46,880 --> 00:02:49,560 Speaker 3: that's going to happen, you know, within the next week 53 00:02:49,639 --> 00:02:51,880 Speaker 3: or two at least, seems like it's probably going to 54 00:02:52,000 --> 00:02:55,360 Speaker 3: intensify in fact, and so that means that yes, opek 55 00:02:55,400 --> 00:02:56,840 Speaker 3: plus has reacted. 56 00:02:56,880 --> 00:02:58,280 Speaker 4: But the problem is most. 57 00:02:58,040 --> 00:03:00,680 Speaker 3: Of its big producers, the ones with all the spare capacity, 58 00:03:01,200 --> 00:03:03,320 Speaker 3: are the same ones that are in the Persian Gulf 59 00:03:03,400 --> 00:03:07,239 Speaker 3: that rely on, you know, on the Persian Gulf to 60 00:03:07,240 --> 00:03:09,440 Speaker 3: get oil out. Now we know that Saudi Arabia is 61 00:03:09,480 --> 00:03:12,359 Speaker 3: starting to make plans to load more oil on the 62 00:03:12,400 --> 00:03:14,600 Speaker 3: red seed. That's great, but it's still not going to 63 00:03:14,600 --> 00:03:17,520 Speaker 3: account for all of the oil. Iraq is going to 64 00:03:17,560 --> 00:03:19,600 Speaker 3: be in a huge issue. They're going to have to 65 00:03:19,680 --> 00:03:22,440 Speaker 3: shut down production. In fact, they're already starting to shut 66 00:03:22,440 --> 00:03:26,200 Speaker 3: down production because they don't have the storage capacity to 67 00:03:26,400 --> 00:03:28,239 Speaker 3: just hold on to crude oil if it can't be 68 00:03:28,320 --> 00:03:33,280 Speaker 3: loaded into tankers. So that's already starting to affect affect production. 69 00:03:33,840 --> 00:03:35,800 Speaker 3: And then I do think that China is a big 70 00:03:36,760 --> 00:03:41,440 Speaker 3: wild card here. Can China put its considerable economic weight 71 00:03:41,600 --> 00:03:45,240 Speaker 3: to bear on Iran potentially to get it to maybe 72 00:03:45,520 --> 00:03:49,960 Speaker 3: concede or make some concessions to end the military conflict 73 00:03:50,040 --> 00:03:52,240 Speaker 3: sooner so that we can get the oil flowing. 74 00:03:52,960 --> 00:03:55,160 Speaker 2: It seems oddly enough that one of the winners here 75 00:03:55,240 --> 00:03:58,280 Speaker 2: might be President Putin and Russia to the extent that 76 00:03:58,280 --> 00:04:00,000 Speaker 2: they can move their oil at these higher prices. 77 00:04:00,160 --> 00:04:03,480 Speaker 4: Is Russia as a player. 78 00:04:03,240 --> 00:04:06,960 Speaker 3: Here, yeah, exactly, Well, Russia is in a very good 79 00:04:07,000 --> 00:04:09,560 Speaker 3: spot personally, That's what I think. 80 00:04:09,720 --> 00:04:10,840 Speaker 4: Russia is in a very good spot. 81 00:04:10,840 --> 00:04:14,160 Speaker 3: It can move more oil to China to satisfy some 82 00:04:14,280 --> 00:04:17,880 Speaker 3: of the oil that China's not getting from the Middle East. 83 00:04:18,080 --> 00:04:19,440 Speaker 4: Although I believe there. 84 00:04:19,279 --> 00:04:21,160 Speaker 3: Have been some issues in terms of loading at one 85 00:04:21,160 --> 00:04:24,880 Speaker 3: port that was recently attacked by Ukraine, which is certainly 86 00:04:24,920 --> 00:04:27,719 Speaker 3: precipitous on their part. But Russia is also going to 87 00:04:27,720 --> 00:04:29,440 Speaker 3: be able to charge a lot more for its oil, 88 00:04:29,560 --> 00:04:33,000 Speaker 3: So this kind of conflagration is having the effect of 89 00:04:33,080 --> 00:04:36,719 Speaker 3: kind of lining Putent's pockets, which is probably going to 90 00:04:36,880 --> 00:04:40,599 Speaker 3: cause some problems down the road for the Trump administration 91 00:04:40,720 --> 00:04:43,400 Speaker 3: if they're really looking to put an end to the 92 00:04:43,560 --> 00:04:46,320 Speaker 3: Russia UK Craine conflict, you know, some time in the 93 00:04:46,360 --> 00:04:48,560 Speaker 3: next year or so. 94 00:04:48,560 --> 00:04:52,480 Speaker 5: So I'm also curious how will multinational companies, if you 95 00:04:52,520 --> 00:04:55,919 Speaker 5: think about energy shipping insurance, how do they assess and 96 00:04:56,000 --> 00:04:59,479 Speaker 5: price in the geopolitical risk here from conflicts like this. 97 00:05:00,680 --> 00:05:02,479 Speaker 3: I mean, I'm not you know, I'm not an insurance 98 00:05:02,800 --> 00:05:06,200 Speaker 3: expert here, but they're definitely looking at this and they're saying, Wow, 99 00:05:06,320 --> 00:05:09,719 Speaker 3: the potential for a ship to get you know, severely damaged, 100 00:05:09,800 --> 00:05:12,479 Speaker 3: have an oil spill and whatnot is really high right 101 00:05:12,480 --> 00:05:15,839 Speaker 3: now in the Persian Gulf, and so they are adjusting 102 00:05:15,880 --> 00:05:18,800 Speaker 3: their rates accordingly. Now there will be some ships who 103 00:05:18,800 --> 00:05:21,120 Speaker 3: may be willing to you know, either self insure or 104 00:05:21,240 --> 00:05:24,080 Speaker 3: chance it and may take that risk that right now 105 00:05:24,120 --> 00:05:27,919 Speaker 3: that doesn't seem very likely. Plus you've also got the 106 00:05:28,040 --> 00:05:30,599 Speaker 3: risk in you know, in the Red Sea of the 107 00:05:30,640 --> 00:05:33,440 Speaker 3: hoothis that they could you know, kind of take up 108 00:05:33,480 --> 00:05:37,040 Speaker 3: their mission again and start harassing ships there, which is 109 00:05:37,080 --> 00:05:39,920 Speaker 3: a problem because you know, a Ramco at the very 110 00:05:40,000 --> 00:05:42,800 Speaker 3: least is hoping to start loading oil out of its 111 00:05:42,839 --> 00:05:44,960 Speaker 3: port in Gyanbu. And then if it wants to send 112 00:05:45,000 --> 00:05:48,000 Speaker 3: that oil to Asia, it's going to have to leave 113 00:05:48,040 --> 00:05:51,760 Speaker 3: the Red Sea, you know, go round the Arabian Peninsula 114 00:05:51,800 --> 00:05:54,360 Speaker 3: and out that way. And if the houthis start posing problems, 115 00:05:54,400 --> 00:05:57,400 Speaker 3: that's another issue to increase prices. 116 00:05:58,040 --> 00:06:00,520 Speaker 2: And we got the oil pricing spiking high. Here's an 117 00:06:00,520 --> 00:06:02,960 Speaker 2: intra day high, seventy seven dollars eighty five cents for. 118 00:06:03,000 --> 00:06:04,880 Speaker 4: WTI good oil. A rack. 119 00:06:05,040 --> 00:06:07,680 Speaker 2: Here's a red headline crossing the Bloomberg terminal. A rack 120 00:06:07,880 --> 00:06:11,640 Speaker 2: starts shutting oil output at Ramala as storage fills. So, 121 00:06:11,839 --> 00:06:14,920 Speaker 2: just as you were saying, Ellen, so Ellen, what role 122 00:06:14,960 --> 00:06:17,080 Speaker 2: does the US play here? Can we just crank up 123 00:06:17,080 --> 00:06:19,520 Speaker 2: our drilling and are refining to maybe offset some of 124 00:06:19,560 --> 00:06:22,200 Speaker 2: the decreased supply out the middle least? 125 00:06:22,880 --> 00:06:25,840 Speaker 3: Well, you can bet that, you know, every every fracking 126 00:06:25,880 --> 00:06:28,600 Speaker 3: company is calling up people there. You know, anyone who's 127 00:06:28,680 --> 00:06:31,239 Speaker 3: idled rigs has got to be putting them back into production. 128 00:06:31,400 --> 00:06:31,640 Speaker 1: Now. 129 00:06:31,960 --> 00:06:34,880 Speaker 3: I bet there's teams headed from North Dakota at the 130 00:06:34,960 --> 00:06:37,200 Speaker 3: moment to get things going. I mean, this is really 131 00:06:37,480 --> 00:06:41,200 Speaker 3: you know, this is the moment for the American oil industry, 132 00:06:41,240 --> 00:06:44,640 Speaker 3: and it can really prove how agile, how quick it is. 133 00:06:44,760 --> 00:06:46,720 Speaker 4: If these producers that have been. 134 00:06:46,640 --> 00:06:50,159 Speaker 3: Talking about slowing down production, this is their moment to 135 00:06:50,160 --> 00:06:53,359 Speaker 3: get things going and sell that oil, refine that oil. 136 00:06:53,440 --> 00:06:57,040 Speaker 3: We have limited extra refining capacity in the United States, 137 00:06:57,200 --> 00:07:00,200 Speaker 3: but we do have more production capacity. It's all about 138 00:07:00,240 --> 00:07:02,680 Speaker 3: you know what we can get going, and you know 139 00:07:02,880 --> 00:07:07,880 Speaker 3: what American companies can do with personnel, with people. You know, 140 00:07:07,960 --> 00:07:11,400 Speaker 3: if there's money and financing available, they're certainly going to 141 00:07:11,480 --> 00:07:14,960 Speaker 3: make that money selling oil, either you know, internationally or 142 00:07:15,000 --> 00:07:16,920 Speaker 3: at home. So I would say this is the moment 143 00:07:17,000 --> 00:07:18,320 Speaker 3: for the American fracker. 144 00:07:18,920 --> 00:07:20,440 Speaker 4: Great, great to hear. I'm sure the folks down in 145 00:07:20,480 --> 00:07:21,640 Speaker 4: the patch they're ready to go. 146 00:07:21,760 --> 00:07:25,080 Speaker 2: Ellen Wald, Senior Fellow at the Atlantic Council, giving us 147 00:07:25,120 --> 00:07:26,520 Speaker 2: the latest on global energy. 148 00:07:28,160 --> 00:07:32,320 Speaker 6: Stay with us more from Bloomberg Surveillance coming up after this. 149 00:07:39,600 --> 00:07:43,160 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 150 00:07:43,240 --> 00:07:46,400 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 151 00:07:46,480 --> 00:07:50,160 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 152 00:07:50,280 --> 00:07:51,800 Speaker 1: watch us live on YouTube. 153 00:07:52,040 --> 00:07:54,680 Speaker 2: Win thin chief econmisce at Bank of Nasau. Wait, when 154 00:07:54,680 --> 00:07:57,400 Speaker 2: you see the geopolitics on certay, we've kind of become 155 00:07:57,440 --> 00:07:59,440 Speaker 2: a little bit used to that, but now we see 156 00:07:59,480 --> 00:08:04,520 Speaker 2: it in time with higher energy prices, for example, how 157 00:08:04,640 --> 00:08:06,640 Speaker 2: is the last several days or last several weeks has 158 00:08:06,640 --> 00:08:08,400 Speaker 2: that impacted your economic outlook at all? 159 00:08:08,920 --> 00:08:11,000 Speaker 7: Well, first of all, thanks for having me. It's always 160 00:08:11,000 --> 00:08:15,720 Speaker 7: a pleasure. So I still think we're still in early days. 161 00:08:16,480 --> 00:08:19,120 Speaker 7: I think the big question that's hanging over us, over 162 00:08:19,160 --> 00:08:22,680 Speaker 7: everyone is, well, is this what's the duration and scope 163 00:08:22,880 --> 00:08:24,560 Speaker 7: of this attack? Is it going to be a twelve 164 00:08:24,680 --> 00:08:27,720 Speaker 7: day attack we saw last June? Because is it gonna 165 00:08:27,720 --> 00:08:29,520 Speaker 7: be a month of a bartment followed by a groundovation 166 00:08:29,600 --> 00:08:31,000 Speaker 7: like you saw during the first Golf War? 167 00:08:31,440 --> 00:08:36,320 Speaker 4: Would be a groundovation followed by multi year occupants occupancy. 168 00:08:36,720 --> 00:08:39,199 Speaker 4: We don't know. It's so so early, And be. 169 00:08:39,200 --> 00:08:41,600 Speaker 7: Honest, it's it's the goals that the administration have put 170 00:08:41,640 --> 00:08:44,360 Speaker 7: forth have been very fuzzy. So I think markets, as 171 00:08:44,400 --> 00:08:48,600 Speaker 7: you know, hate uncertainty, They hate they really hate prolonged uncertainty. 172 00:08:48,800 --> 00:08:52,240 Speaker 7: So it's really it's the big question is how long is. 173 00:08:52,200 --> 00:08:53,640 Speaker 4: This going to go on? And you know, sort of 174 00:08:53,720 --> 00:08:56,240 Speaker 4: the breadth and depth and it's to be determined. 175 00:08:56,360 --> 00:08:57,880 Speaker 7: But you know, I think the problem with market is 176 00:08:58,280 --> 00:09:00,640 Speaker 7: after a while you start pricing and like really bad outcomes, 177 00:09:00,640 --> 00:09:01,520 Speaker 7: and that that's the concern. 178 00:09:02,120 --> 00:09:04,560 Speaker 5: I mean, how do you actually forecast during a time 179 00:09:04,640 --> 00:09:06,560 Speaker 5: like this. It's been so much uncertainty. I can only 180 00:09:06,640 --> 00:09:09,080 Speaker 5: imagine what it was like when we had this gap 181 00:09:09,160 --> 00:09:11,840 Speaker 5: in data, government data because the government shut down. You've 182 00:09:11,840 --> 00:09:15,599 Speaker 5: got tariffs. Now we've also got this geopolitical uncertainty. 183 00:09:15,720 --> 00:09:16,720 Speaker 4: What does your job look like? 184 00:09:17,120 --> 00:09:19,600 Speaker 7: It's tinari, It's it's you know, the whole the phrase, 185 00:09:19,720 --> 00:09:21,240 Speaker 7: the fog of war, that's that's where we are. 186 00:09:21,280 --> 00:09:22,480 Speaker 4: When when does this fog lift? 187 00:09:23,520 --> 00:09:25,560 Speaker 7: Obviously again the market's the quicker the better, But you know, 188 00:09:25,600 --> 00:09:27,280 Speaker 7: to me, you just you can only see downside here. 189 00:09:28,240 --> 00:09:30,440 Speaker 7: You know, we've talked about I'm go ingenough to remember 190 00:09:30,480 --> 00:09:32,280 Speaker 7: all the oil shocks from the seventies. You know, it's 191 00:09:32,280 --> 00:09:35,080 Speaker 7: it's stacklation, higher unemployment, high inflation. 192 00:09:35,200 --> 00:09:36,120 Speaker 4: It really gets ugly. 193 00:09:37,080 --> 00:09:39,280 Speaker 7: So the markets are repricing, and I think Paul you 194 00:09:39,280 --> 00:09:41,280 Speaker 7: mentioned that the risk of higher inflation because it's not 195 00:09:41,320 --> 00:09:45,839 Speaker 7: just what supplies, it's the shipping lanes, transport, it's all 196 00:09:45,920 --> 00:09:48,280 Speaker 7: sort of all sorts of like sort of second third 197 00:09:48,320 --> 00:09:49,880 Speaker 7: level effects that we just don't know about. 198 00:09:50,400 --> 00:09:51,600 Speaker 4: But to me, they're all bad. 199 00:09:51,880 --> 00:09:54,120 Speaker 7: If you're you know, to me, uncertainty, if your household 200 00:09:54,440 --> 00:09:55,920 Speaker 7: all of a sudden your gas prices. 201 00:09:55,720 --> 00:09:57,600 Speaker 4: Go well, you pull in right uncertainly, you're pulling. You 202 00:09:57,600 --> 00:09:58,720 Speaker 4: worred about your job, you're pull in. 203 00:09:58,880 --> 00:10:01,560 Speaker 7: If you're firm and looking at best thinking about investing, 204 00:10:01,600 --> 00:10:03,520 Speaker 7: you see all what's going on while we're gonna pull 205 00:10:03,520 --> 00:10:06,360 Speaker 7: in and if you're the Fed, we're gonna do it 206 00:10:06,400 --> 00:10:08,920 Speaker 7: while we want to cut rates, probably because the livey 207 00:10:08,960 --> 00:10:10,520 Speaker 7: labor markets is softening. 208 00:10:11,679 --> 00:10:13,960 Speaker 4: But you don't know to your point, nor you don't 209 00:10:13,960 --> 00:10:14,680 Speaker 4: really know what's going on. 210 00:10:14,760 --> 00:10:15,040 Speaker 1: You don't. 211 00:10:15,080 --> 00:10:15,800 Speaker 4: It's kind of being on. 212 00:10:15,760 --> 00:10:19,600 Speaker 7: Hold, so to me, so being on hold and pulling 213 00:10:19,640 --> 00:10:21,360 Speaker 7: back is not a good thing in sort of in 214 00:10:21,400 --> 00:10:23,840 Speaker 7: terms of sort of wider economy. So I do see 215 00:10:23,880 --> 00:10:25,640 Speaker 7: some downside risks if this is prolonged. 216 00:10:25,679 --> 00:10:28,120 Speaker 2: Yep, Okay, let's put that to the side just for 217 00:10:28,160 --> 00:10:30,720 Speaker 2: the moment. How is the US economy doing? 218 00:10:30,800 --> 00:10:34,280 Speaker 7: From your perspective, it's doing solid. You know, we saw 219 00:10:34,320 --> 00:10:36,880 Speaker 7: the Q four g D print a couple of weeks ago. 220 00:10:37,480 --> 00:10:39,640 Speaker 7: Headline was, you know, softly expected. We know there is 221 00:10:39,640 --> 00:10:42,360 Speaker 7: some impact from the government shutdown, But I was focusing 222 00:10:42,400 --> 00:10:45,400 Speaker 7: on the consumption portions slower it's been. 223 00:10:45,440 --> 00:10:49,080 Speaker 4: It's been sequentially slowing since I think mid year of 224 00:10:49,160 --> 00:10:49,640 Speaker 4: last year. 225 00:10:50,679 --> 00:10:52,640 Speaker 7: Yeah, sure, of course there's all these distortions, right, we 226 00:10:52,679 --> 00:10:54,920 Speaker 7: had the shutdown, we had the weather, all these things. 227 00:10:54,960 --> 00:10:58,920 Speaker 4: But taking junk conjunction note to me like nor you mentioned. 228 00:10:58,640 --> 00:11:00,200 Speaker 7: This, like as what do you do with this sort 229 00:11:00,200 --> 00:11:01,600 Speaker 7: of figure out what it's To me, it's like a puzzle, 230 00:11:02,360 --> 00:11:03,640 Speaker 7: big puzzle that you're trying to figuret you get some 231 00:11:03,720 --> 00:11:06,800 Speaker 7: clues pieces here and there. So got slow inflation, I'm sorry, 232 00:11:06,800 --> 00:11:09,679 Speaker 7: slowing consumption as well as to me when I think 233 00:11:09,760 --> 00:11:14,000 Speaker 7: is a very soft labor mark that's still softening, and 234 00:11:14,080 --> 00:11:15,800 Speaker 7: to me, you put those two together and it's not 235 00:11:15,840 --> 00:11:18,600 Speaker 7: a great mix. Then you've got higher oil prices can 236 00:11:18,720 --> 00:11:21,320 Speaker 7: hit the pocketbook. So I don't think it's a recession. 237 00:11:21,360 --> 00:11:23,000 Speaker 7: I think that's you know, that's tail risk. 238 00:11:23,920 --> 00:11:25,280 Speaker 4: But I do look for sort of. 239 00:11:25,320 --> 00:11:29,360 Speaker 7: Softening economy the fens on hold because obviously there's inflation risks. 240 00:11:29,400 --> 00:11:30,959 Speaker 4: But I think when pushed customs comes. 241 00:11:30,800 --> 00:11:34,199 Speaker 7: To shove, they worry about their full employment mandate. 242 00:11:34,280 --> 00:11:36,280 Speaker 5: Right now, So what do you make of the disconnect 243 00:11:36,280 --> 00:11:38,520 Speaker 5: because I think if you ask the average US consumer, 244 00:11:39,000 --> 00:11:41,719 Speaker 5: they would say times are tough right now, right economically, 245 00:11:41,800 --> 00:11:44,080 Speaker 5: but then you see a solid economy when we're looking 246 00:11:44,080 --> 00:11:45,880 Speaker 5: at the data. What do you make of that disconnect 247 00:11:45,880 --> 00:11:48,280 Speaker 5: between the super consumer confidence and then the actual data 248 00:11:48,280 --> 00:11:49,200 Speaker 5: that we're seeing right now. 249 00:11:49,320 --> 00:11:50,920 Speaker 4: No, that's been like a million O A question for 250 00:11:50,920 --> 00:11:53,360 Speaker 4: the last couple quarters. Things haven't really aligned. 251 00:11:53,400 --> 00:11:55,199 Speaker 7: But you know, we talked about this K shape economy 252 00:11:55,200 --> 00:11:57,960 Speaker 7: where I can't remember the exact numbers, but something like 253 00:11:57,960 --> 00:12:00,360 Speaker 7: twenty percent of the upper income people driving like over 254 00:12:00,400 --> 00:12:00,800 Speaker 7: half of the. 255 00:12:00,880 --> 00:12:02,760 Speaker 4: Consumption something like that. Thinks even more than that. 256 00:12:03,760 --> 00:12:07,320 Speaker 7: So the bulk of Americans AAA eighty percent are struggling. 257 00:12:07,400 --> 00:12:09,079 Speaker 7: They are worried about the price of eggs, they worry 258 00:12:09,120 --> 00:12:12,600 Speaker 7: about their prices of gas. They're not getting these They're 259 00:12:12,600 --> 00:12:14,960 Speaker 7: not the ones they are benefiting from the massive tax cuts. 260 00:12:14,960 --> 00:12:17,800 Speaker 7: So the question has always been, well, in this K 261 00:12:17,880 --> 00:12:21,040 Speaker 7: shape economy, can can that upper sloping K sort of 262 00:12:21,080 --> 00:12:23,240 Speaker 7: support the lower sloping K part. 263 00:12:24,320 --> 00:12:26,120 Speaker 4: The other distortion I think that's out there is the 264 00:12:26,480 --> 00:12:28,680 Speaker 4: AI investment. You know, investment has been a big driver 265 00:12:28,840 --> 00:12:30,480 Speaker 4: and we get this unbalanced growth. 266 00:12:30,840 --> 00:12:32,439 Speaker 7: Whether it's the K shape whether it's the sort of 267 00:12:32,520 --> 00:12:36,000 Speaker 7: AI stuff, it's it's to me, healthy economy is where 268 00:12:36,120 --> 00:12:39,000 Speaker 7: people are getting hired, people feel comfortable going out and spending, 269 00:12:39,040 --> 00:12:41,000 Speaker 7: people aren't worried about the jobs, and that's to me 270 00:12:41,080 --> 00:12:42,720 Speaker 7: is sort of the US the most sort of the 271 00:12:42,720 --> 00:12:47,480 Speaker 7: healthiest outlook. And again it's uh, you know, it's to be. 272 00:12:47,360 --> 00:12:48,160 Speaker 4: Determined right now. 273 00:12:48,520 --> 00:12:50,800 Speaker 7: The good news that the economy's been resilient, We're coming 274 00:12:50,840 --> 00:12:52,640 Speaker 7: into this year pretty solid. 275 00:12:52,760 --> 00:12:55,640 Speaker 4: But again, the longest drags out there more worried. I get. 276 00:12:55,800 --> 00:12:57,360 Speaker 2: And you mentioned AI, and I think you know a 277 00:12:57,360 --> 00:12:59,480 Speaker 2: lot of folks feel like that's having some impact on 278 00:12:59,720 --> 00:13:00,800 Speaker 2: the liabor market today. 279 00:13:00,840 --> 00:13:03,600 Speaker 4: And maybe A characterized as a. 280 00:13:03,000 --> 00:13:08,040 Speaker 2: Low fire, low higher job economy, maybe that's being impacted 281 00:13:08,040 --> 00:13:08,880 Speaker 2: by AI. 282 00:13:09,080 --> 00:13:11,360 Speaker 4: Do we need as many entry level jobs. 283 00:13:11,120 --> 00:13:12,960 Speaker 2: On the white collar side and all that type of things, 284 00:13:13,000 --> 00:13:14,920 Speaker 2: And how do you get how do you feel? 285 00:13:14,920 --> 00:13:16,680 Speaker 4: Well? I hear you talk about solid time, Paul. 286 00:13:16,720 --> 00:13:19,840 Speaker 7: You're you're the view that that A as a job killer, 287 00:13:20,040 --> 00:13:21,720 Speaker 7: and I'm with you on that one, at least over 288 00:13:21,760 --> 00:13:23,920 Speaker 7: the short to medium term. It's hard to me to 289 00:13:23,960 --> 00:13:26,440 Speaker 7: figure out how this ends up. Sure, some engineers and 290 00:13:26,480 --> 00:13:29,160 Speaker 7: what have you, We'll get some jobs but short term, 291 00:13:29,240 --> 00:13:31,959 Speaker 7: I just see so much you know, sort of downside 292 00:13:32,720 --> 00:13:35,280 Speaker 7: for the labor market. So that's another yet another sort 293 00:13:35,280 --> 00:13:37,800 Speaker 7: of I would just also say, you know, investment in 294 00:13:38,120 --> 00:13:40,439 Speaker 7: data center, that's all capital intensives, not labor intensive. 295 00:13:40,520 --> 00:13:43,040 Speaker 5: Right. I want to end where we started talking about 296 00:13:43,040 --> 00:13:46,560 Speaker 5: the geopolitical tensions. What does consumer spending tend to look 297 00:13:46,600 --> 00:13:50,480 Speaker 5: like during periods of uncertainty as it relates to geopolitical conflict? 298 00:13:50,640 --> 00:13:52,640 Speaker 4: Yeah, so again it's on the present duration. 299 00:13:52,760 --> 00:13:54,679 Speaker 7: But if it's I think in general like we saw 300 00:13:54,720 --> 00:13:56,360 Speaker 7: after say nine to eleven, or you know, some. 301 00:13:56,280 --> 00:13:58,559 Speaker 4: Of these big geopilical events, people. 302 00:13:58,360 --> 00:14:00,800 Speaker 7: Just sort of pull in you thing of buying a car, 303 00:14:00,960 --> 00:14:02,679 Speaker 7: buying Washington, Well, you're probably gon to put that off, 304 00:14:02,679 --> 00:14:03,520 Speaker 7: and she kind of fail. 305 00:14:03,360 --> 00:14:04,959 Speaker 4: What's going on? It sounds silly, you know. 306 00:14:04,960 --> 00:14:06,839 Speaker 7: I don't think grandma's waiting home, you know, trying to 307 00:14:06,840 --> 00:14:07,600 Speaker 7: figure out what's going on. 308 00:14:07,640 --> 00:14:10,679 Speaker 4: You're on. But when you're seeing this on the news, uh, 309 00:14:10,720 --> 00:14:11,840 Speaker 4: and you're seeing. 310 00:14:11,640 --> 00:14:15,400 Speaker 7: Impact cast pump and you're hearing your neighbor getting laid off, 311 00:14:15,400 --> 00:14:17,440 Speaker 7: these are all things that sort of things that make 312 00:14:17,480 --> 00:14:21,200 Speaker 7: you go hmm. And And that's again Mark's hayten uncertainty. 313 00:14:21,200 --> 00:14:24,040 Speaker 7: Firms hating certainty in households hat and I hate uncertainty. 314 00:14:24,520 --> 00:14:26,400 Speaker 7: Everyone you know wants some sort of certainty and and 315 00:14:26,760 --> 00:14:28,880 Speaker 7: I think that's sort of where we're at right now. 316 00:14:28,880 --> 00:14:32,080 Speaker 4: So I use my fingers crossed right exactly, my fingers crossed. Wain, 317 00:14:32,120 --> 00:14:33,000 Speaker 4: thanks so much for joining us. 318 00:14:33,000 --> 00:14:34,680 Speaker 2: Always appreciate getting a few minutes of your. 319 00:14:34,600 --> 00:14:35,000 Speaker 4: Time went in. 320 00:14:35,040 --> 00:14:38,920 Speaker 2: He's the chief economist at the Bank of Nassau. 321 00:14:40,280 --> 00:14:41,000 Speaker 8: Stay with us. 322 00:14:41,240 --> 00:14:44,440 Speaker 6: More from Bloomberg Surveillance coming up after this. 323 00:14:51,720 --> 00:14:55,280 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 324 00:14:55,360 --> 00:14:58,360 Speaker 1: weekday afternoons from seven to ten a m. Eastern Listen 325 00:14:58,440 --> 00:15:02,040 Speaker 1: on Apple, Karplay and Android with the Bloomberg Business app, 326 00:15:02,160 --> 00:15:03,920 Speaker 1: or watch us live on YouTube. 327 00:15:04,160 --> 00:15:04,320 Speaker 4: Well. 328 00:15:04,360 --> 00:15:08,640 Speaker 2: One of the reasons offered by the administration as to 329 00:15:08,640 --> 00:15:12,440 Speaker 2: go to war with Iran is potentially regime change, and 330 00:15:12,440 --> 00:15:15,280 Speaker 2: a lot of folks are asking is that possible? Who 331 00:15:15,320 --> 00:15:19,520 Speaker 2: would ignite that regime change and who perhaps would assume power? 332 00:15:19,520 --> 00:15:21,240 Speaker 2: I think our next guest has some views on that. 333 00:15:21,440 --> 00:15:22,240 Speaker 4: Ali Safabi. 334 00:15:22,640 --> 00:15:26,240 Speaker 2: He is a member of Iran's Parliament in exile, the 335 00:15:26,360 --> 00:15:29,280 Speaker 2: National Council of Resistance of Iran, and he's also a 336 00:15:29,320 --> 00:15:33,240 Speaker 2: president of Near Eastern Policy Research, which is a consulting 337 00:15:33,280 --> 00:15:36,280 Speaker 2: in policy analysis firm in Washington, DC, Ali, thanks so 338 00:15:36,360 --> 00:15:41,560 Speaker 2: much for joining us here. Is regime change possible with 339 00:15:41,720 --> 00:15:44,440 Speaker 2: these events in Iran over the last several days. 340 00:15:45,600 --> 00:15:48,880 Speaker 9: There's all good to be with you. Well, regime change 341 00:15:48,960 --> 00:15:53,000 Speaker 9: is indeed possible. There's no doubt about it, because you 342 00:15:53,040 --> 00:15:56,400 Speaker 9: have a nation that has been suppressed for forty seven years. 343 00:15:57,480 --> 00:16:00,920 Speaker 9: You have had one hundred thousand dissidents of the main 344 00:16:01,080 --> 00:16:04,640 Speaker 9: Ranian opposition, the major diner have executed by this regime. 345 00:16:05,160 --> 00:16:09,680 Speaker 9: And you saw this past January, thousands were slaughtered, and 346 00:16:09,720 --> 00:16:13,400 Speaker 9: of course we have seen the same thing happening in 347 00:16:13,480 --> 00:16:17,720 Speaker 9: twenty twenty two, twenty nineteen, twenty seventeen. And yes, the 348 00:16:17,720 --> 00:16:22,000 Speaker 9: Iranian people are very determined despite the cost that it 349 00:16:22,040 --> 00:16:26,960 Speaker 9: has exacted on them to overthrow this regime. But that said, we, 350 00:16:27,160 --> 00:16:30,480 Speaker 9: as the resistance movement that has been fighting this regime 351 00:16:30,520 --> 00:16:33,920 Speaker 9: for forty seven years and the previous regime, the Shaws 352 00:16:33,960 --> 00:16:38,920 Speaker 9: regime since nineteen sixty five, do not believe that change 353 00:16:39,160 --> 00:16:42,240 Speaker 9: would come from the air. The change will not come 354 00:16:42,240 --> 00:16:47,040 Speaker 9: true foreign intervention. Change must come from within Iran, underground, 355 00:16:47,200 --> 00:16:51,160 Speaker 9: indigenous organic by the Ranian people and by a very 356 00:16:51,240 --> 00:16:57,840 Speaker 9: potent and structured resistance within Iran itself. But yes, change 357 00:16:57,880 --> 00:17:00,000 Speaker 9: is indeed possible. I think the a Reny regime is 358 00:17:00,080 --> 00:17:05,800 Speaker 9: at the end of the line. Their economy is bankrupt, 359 00:17:04,560 --> 00:17:10,560 Speaker 9: their currency is in a free fall, There's massive unemployment, 360 00:17:11,000 --> 00:17:15,960 Speaker 9: systemic corruption, and the regional policy has been defeated. 361 00:17:16,040 --> 00:17:18,359 Speaker 8: So yes, indeed changes is at hand. 362 00:17:18,600 --> 00:17:21,640 Speaker 2: So President Trump called on the Iranian people to rise 363 00:17:21,720 --> 00:17:25,200 Speaker 2: up and topple their government. Do you expect that the 364 00:17:25,280 --> 00:17:27,280 Speaker 2: Iranian people are prepared to do that? 365 00:17:29,040 --> 00:17:33,280 Speaker 9: I believe that the Iranian people are very independent minded people, 366 00:17:33,359 --> 00:17:37,200 Speaker 9: as has been demonstrated throughout our history, and they're not 367 00:17:37,280 --> 00:17:40,560 Speaker 9: going to rise up or sit down on a call 368 00:17:40,600 --> 00:17:44,800 Speaker 9: of anybody from the outside. They will decide to rise 369 00:17:44,880 --> 00:17:47,280 Speaker 9: up when they think the time is right. Obviously, at 370 00:17:47,280 --> 00:17:53,160 Speaker 9: this current moment, with bombs dropping all over Iran, Iranian 371 00:17:53,200 --> 00:17:58,840 Speaker 9: people are understandably careful not to do anything to get 372 00:17:58,880 --> 00:18:02,399 Speaker 9: themselves into harms way, after all, there's a war ongoing. 373 00:18:02,920 --> 00:18:08,720 Speaker 9: But as missus Rajavi said the other day, that they 374 00:18:08,760 --> 00:18:12,040 Speaker 9: should try to take care take care of especially those 375 00:18:12,080 --> 00:18:15,200 Speaker 9: who've been injured, and she also called on the all 376 00:18:15,320 --> 00:18:23,040 Speaker 9: party it involved to exercise restraint when it comes to 377 00:18:23,119 --> 00:18:28,479 Speaker 9: Iranian infrastructure and civilian areas. And yes, they will rise up, 378 00:18:28,520 --> 00:18:32,160 Speaker 9: but in a methodic way, and this has to be organized. 379 00:18:32,480 --> 00:18:35,560 Speaker 9: To expect that when bombs are dropping for millions, one 380 00:18:35,680 --> 00:18:38,640 Speaker 9: is to come to the streets. It's just very unrealistic. 381 00:18:39,960 --> 00:18:43,359 Speaker 9: No similar situation. You have seen people coming up. But 382 00:18:43,480 --> 00:18:47,159 Speaker 9: once these conflicts of size and given that they're in, 383 00:18:47,280 --> 00:18:51,240 Speaker 9: regime is weakened tremendously with the loss of harmony, which 384 00:18:51,280 --> 00:18:54,359 Speaker 9: as Missus Rajavi said yesterday, means the end of the 385 00:18:54,560 --> 00:18:58,359 Speaker 9: religious tyranny in Iran. They will come out, but it 386 00:18:58,440 --> 00:19:01,800 Speaker 9: has to be an organized fashion. Nothing will happen spontaneously. 387 00:19:03,240 --> 00:19:07,120 Speaker 5: In what ways has the current conflict altered the domestic, 388 00:19:07,160 --> 00:19:10,680 Speaker 5: political or social environment inside Iran? 389 00:19:12,440 --> 00:19:13,639 Speaker 8: Well, the very good question. 390 00:19:13,840 --> 00:19:18,199 Speaker 9: Well, I think it has demonstrated to the people of 391 00:19:18,200 --> 00:19:23,720 Speaker 9: Iran that the possibility to toppling this regime is much 392 00:19:23,800 --> 00:19:26,880 Speaker 9: greater than any other time in the history of our nation. 393 00:19:28,040 --> 00:19:34,159 Speaker 9: And it has also shown that the Ringing people in 394 00:19:34,280 --> 00:19:37,880 Speaker 9: order to topple this regime, they must get organized. And 395 00:19:37,920 --> 00:19:40,679 Speaker 9: I think if you look at the trend of events 396 00:19:40,760 --> 00:19:48,080 Speaker 9: in Iran, particularly since twenty seventeen. You see that happening. Previously, 397 00:19:48,119 --> 00:19:51,639 Speaker 9: there were protests by let's say, some sectors of Iranian society. 398 00:19:52,040 --> 00:19:57,080 Speaker 9: But what happened in January you had basically all walks 399 00:19:57,080 --> 00:20:00,640 Speaker 9: of life in Iran, from students to bizarre merchants, to workers, 400 00:20:00,640 --> 00:20:04,360 Speaker 9: to farmers, nurses, you name it, were out on the streets. 401 00:20:04,400 --> 00:20:07,119 Speaker 9: And this wasn't just in one or two cities. It 402 00:20:07,200 --> 00:20:10,679 Speaker 9: was in four hundred different cities in thirty one provinces. 403 00:20:10,720 --> 00:20:15,119 Speaker 9: And interestingly, the slogans were all universal. One as to 404 00:20:15,160 --> 00:20:19,119 Speaker 9: the dictator too down with the oppressor, whether the Shah 405 00:20:19,240 --> 00:20:22,760 Speaker 9: or the leader, meaning that Theyrenian people having learned the 406 00:20:22,840 --> 00:20:26,399 Speaker 9: lessons of the nineteen seventy nine revolution when an impostor 407 00:20:26,760 --> 00:20:31,440 Speaker 9: Romaine came in from abroad and stole that revolution, they 408 00:20:31,440 --> 00:20:33,879 Speaker 9: are not very clear that I they know exactly what 409 00:20:33,920 --> 00:20:37,280 Speaker 9: they want. They don't want relics of the past, and 410 00:20:37,640 --> 00:20:40,080 Speaker 9: they don't want the current regime. They wanted to look 411 00:20:40,119 --> 00:20:43,879 Speaker 9: to the future, which is a democratic future, a republican 412 00:20:43,920 --> 00:20:47,679 Speaker 9: form of government, which is why mister Rajavi and the 413 00:20:47,800 --> 00:20:51,440 Speaker 9: NCRO announced the formation of a provisional government that would 414 00:20:51,440 --> 00:20:54,560 Speaker 9: hold three and fair elections in Iran within six months 415 00:20:54,600 --> 00:20:58,440 Speaker 9: of the Milor's overthrow to elect the Constituted Assembly, whose 416 00:20:58,480 --> 00:21:01,160 Speaker 9: members elected by the real people would draft the new 417 00:21:01,200 --> 00:21:05,800 Speaker 9: constitution for a new republic and lead Iran into the 418 00:21:05,840 --> 00:21:09,280 Speaker 9: twenty first century towards a glorious future which we are 419 00:21:09,800 --> 00:21:13,320 Speaker 9: very hopeful for and we have fought for for forty 420 00:21:13,400 --> 00:21:17,240 Speaker 9: seven years. So this is a very realistic objective, very 421 00:21:17,280 --> 00:21:21,280 Speaker 9: realistic future, and it will come. It just takes time, 422 00:21:21,680 --> 00:21:25,800 Speaker 9: it takes effort, it takes sacrifice, and Iranian people are ready. 423 00:21:25,840 --> 00:21:29,520 Speaker 9: They're ready, and of course the organized resistance also is ready. 424 00:21:29,880 --> 00:21:35,320 Speaker 9: Bear in mind that before the US attacked Commedies Compound 425 00:21:35,359 --> 00:21:39,440 Speaker 9: a week earlier, the Amkare resistance units attacked the two 426 00:21:39,480 --> 00:21:41,959 Speaker 9: hundred and fifty of them and they had no drawnes 427 00:21:42,040 --> 00:21:46,520 Speaker 9: and they had no Tomahawk missiles. They attacked it underground, 428 00:21:46,920 --> 00:21:50,600 Speaker 9: while of course we lost about one hundred and some arrested, 429 00:21:50,840 --> 00:21:53,920 Speaker 9: but the remaining members of that two hundred and fifty 430 00:21:53,920 --> 00:21:55,720 Speaker 9: assault force returned safety. 431 00:21:55,760 --> 00:21:58,920 Speaker 8: So there is an organized opposition to do this. 432 00:21:59,119 --> 00:22:03,919 Speaker 2: Just about the Ayatola Kamani was targeted and killed by 433 00:22:03,920 --> 00:22:06,800 Speaker 2: the US military. How important of an event is that 434 00:22:07,080 --> 00:22:09,359 Speaker 2: and what is next for the clerical leadership of Iran. 435 00:22:09,400 --> 00:22:13,920 Speaker 9: Given that Sesson, well, that was a very very important development. 436 00:22:14,480 --> 00:22:18,560 Speaker 9: In a sense, it beheaded the regime eliminated if you 437 00:22:18,600 --> 00:22:22,399 Speaker 9: were the lynch pin of the clerical establishment. And I 438 00:22:22,440 --> 00:22:25,800 Speaker 9: do not believe despite the pretenses that you see these 439 00:22:25,880 --> 00:22:30,320 Speaker 9: days a three man council trying to appoint his successor, 440 00:22:31,920 --> 00:22:37,399 Speaker 9: that's not going to happen. Kameny's stature and the power 441 00:22:37,560 --> 00:22:42,639 Speaker 9: emerge for him being at the helm for thirty nine years, 442 00:22:43,080 --> 00:22:44,440 Speaker 9: nobody can replace him. 443 00:22:44,760 --> 00:22:47,720 Speaker 8: And I think in the weeks ahead you will see. 444 00:22:49,080 --> 00:22:50,520 Speaker 9: Some sort of if you will, I don't want to 445 00:22:50,520 --> 00:22:55,399 Speaker 9: call it disintegration, but fragmentation within the regime itself, and 446 00:22:55,680 --> 00:22:58,600 Speaker 9: of course to the extent that the organized opposition and 447 00:22:58,640 --> 00:23:03,800 Speaker 9: there Inni people can get better organized take actions that 448 00:23:03,880 --> 00:23:04,960 Speaker 9: is needed to be taken. 449 00:23:05,640 --> 00:23:08,040 Speaker 8: I think change will come. 450 00:23:08,160 --> 00:23:12,080 Speaker 9: Change will come, and I must say that a firm 451 00:23:12,119 --> 00:23:15,200 Speaker 9: policy is a Virnean regime is helpful to the Rani people. 452 00:23:15,560 --> 00:23:19,120 Speaker 9: Remember that for forty seven years the West. 453 00:23:20,280 --> 00:23:22,240 Speaker 8: Offered concessions to this regime. 454 00:23:22,320 --> 00:23:25,280 Speaker 9: Even now, some countries are not willing to call for 455 00:23:25,359 --> 00:23:28,600 Speaker 9: the overthrow of the Iranian regime. The British haven't yet 456 00:23:28,640 --> 00:23:31,719 Speaker 9: put the IRGC on the terrorist list, and so I 457 00:23:31,760 --> 00:23:35,560 Speaker 9: think that's what the watershed moment, and we are now 458 00:23:35,600 --> 00:23:38,960 Speaker 9: in an entirely new phase, a new, if you will, 459 00:23:39,400 --> 00:23:41,320 Speaker 9: a strategic situation. 460 00:23:41,680 --> 00:23:45,080 Speaker 2: Yep, Ali, thank you so much, Sir Ali Savabi. He 461 00:23:45,320 --> 00:23:49,679 Speaker 2: is the member of Iran's Parliament exile, that is the 462 00:23:49,800 --> 00:23:54,160 Speaker 2: National Council of Resistance of Iran. With the reporting from 463 00:23:54,280 --> 00:23:58,399 Speaker 2: what may come next for the leadership of Iran, but 464 00:23:58,440 --> 00:24:03,120 Speaker 2: again the military operation continues and mister Sabab saying this 465 00:24:03,160 --> 00:24:04,520 Speaker 2: will take time. 466 00:24:06,520 --> 00:24:10,720 Speaker 6: Stay with us. More from Bloomberg Surveillance coming up after this. 467 00:24:17,960 --> 00:24:21,520 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 468 00:24:21,600 --> 00:24:24,760 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 469 00:24:24,840 --> 00:24:28,520 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 470 00:24:28,640 --> 00:24:30,240 Speaker 1: watch us live on YouTube. 471 00:24:30,480 --> 00:24:33,440 Speaker 2: Volatility today, again, we like to look at the VIX 472 00:24:33,480 --> 00:24:36,640 Speaker 2: here just for the equity market volatility up almost four 473 00:24:36,680 --> 00:24:38,639 Speaker 2: big points here to twenty five and change here. We 474 00:24:38,640 --> 00:24:40,960 Speaker 2: did get the twenty seven earlier today, So this is 475 00:24:41,000 --> 00:24:43,600 Speaker 2: a VIX level that's been hovering around sixteen, seventeen eighteen 476 00:24:43,600 --> 00:24:44,200 Speaker 2: for a long time. 477 00:24:44,240 --> 00:24:48,040 Speaker 4: So big increase in global volatility. Somebody gets paid to 478 00:24:48,040 --> 00:24:48,480 Speaker 4: do this stuff. 479 00:24:48,520 --> 00:24:52,320 Speaker 2: Michael schau Will put folio manager in Ion Asset Management. Michael, 480 00:24:52,359 --> 00:24:53,960 Speaker 2: you wake up over the last couple of days and 481 00:24:54,000 --> 00:24:56,800 Speaker 2: you see this geopolitical news and the market's been a 482 00:24:56,840 --> 00:24:58,960 Speaker 2: little bit pricing a lot of it in. But boy, 483 00:24:59,400 --> 00:25:01,160 Speaker 2: got some volatility today? 484 00:25:01,240 --> 00:25:02,040 Speaker 4: Is it looks like. 485 00:25:02,560 --> 00:25:06,080 Speaker 2: This adventure in Iran looks like it will be going 486 00:25:06,080 --> 00:25:08,879 Speaker 2: on maybe a little bit longer than initially thought it. 487 00:25:09,240 --> 00:25:11,440 Speaker 4: How do you dress volatility in a portfolio? 488 00:25:12,160 --> 00:25:14,480 Speaker 10: I mean you have to come in set up for it. 489 00:25:14,520 --> 00:25:17,200 Speaker 10: As you said that, you did have plenty of warning 490 00:25:17,280 --> 00:25:21,040 Speaker 10: last week that something was happening. And frankly, anybody who's 491 00:25:21,040 --> 00:25:23,560 Speaker 10: been alive in paying attention over the last couple of 492 00:25:23,560 --> 00:25:27,000 Speaker 10: months has known that something that something was in the air. 493 00:25:27,920 --> 00:25:29,399 Speaker 10: You know, I would say, right now, it looks like 494 00:25:29,480 --> 00:25:32,520 Speaker 10: the Asians were least prepared, or maybe it's because there's 495 00:25:32,560 --> 00:25:36,119 Speaker 10: so much US money in Asia right now, it seems 496 00:25:36,160 --> 00:25:38,160 Speaker 10: to me that the bulk of a panic took place 497 00:25:38,160 --> 00:25:43,199 Speaker 10: Sunday afternoon Monday evening. We calmed down in yesterday's US session, 498 00:25:44,080 --> 00:25:46,719 Speaker 10: and it looks like things got pitty hairy in Asia overnight, 499 00:25:46,800 --> 00:25:48,720 Speaker 10: judging by what I saw when I woke up this morning. 500 00:25:49,600 --> 00:25:51,800 Speaker 5: So how do you play this market? I mean, how 501 00:25:51,800 --> 00:25:54,239 Speaker 5: are you advising your clients during this time period? I mean, 502 00:25:54,240 --> 00:25:56,600 Speaker 5: we saw energy as the best performing sector in the 503 00:25:56,640 --> 00:25:58,240 Speaker 5: S and P five hundred today. But are there any 504 00:25:58,240 --> 00:26:00,000 Speaker 5: specific sectors that you're keeping an eye on? 505 00:26:00,840 --> 00:26:03,200 Speaker 10: Well, I mean, I think energy was what you wanted 506 00:26:03,240 --> 00:26:04,800 Speaker 10: to own, and I think you wanted to earn it 507 00:26:04,840 --> 00:26:07,520 Speaker 10: for various reasons. We've been bullished on energy since the 508 00:26:07,520 --> 00:26:11,560 Speaker 10: fourth quarter and fortunately added to positions you know at 509 00:26:12,359 --> 00:26:15,040 Speaker 10: that point in time, you know, I think now, I 510 00:26:15,040 --> 00:26:17,320 Speaker 10: think there's a lot of noise going on. I do 511 00:26:17,359 --> 00:26:19,280 Speaker 10: think it's very important to keep an eye on credit. 512 00:26:19,440 --> 00:26:24,520 Speaker 10: Credit had been quietly misbehaving, or particularly credit related equities 513 00:26:24,560 --> 00:26:28,879 Speaker 10: have been quietly misbehaving going into this, I think, without 514 00:26:28,920 --> 00:26:31,480 Speaker 10: any obvious linkage to a van So look, I think 515 00:26:31,520 --> 00:26:33,600 Speaker 10: this is going to be a test of the market's 516 00:26:33,640 --> 00:26:36,840 Speaker 10: nerve now and we'll learn a lot by you know, 517 00:26:36,880 --> 00:26:38,520 Speaker 10: what bottom's early and what bottom's like. 518 00:26:39,560 --> 00:26:46,080 Speaker 2: Allocation here, what's typically your portfolios allocation? Stocks, bonds, commodities, alternatives, 519 00:26:46,600 --> 00:26:50,040 Speaker 2: because diversification is the tried and true way to try 520 00:26:50,080 --> 00:26:51,359 Speaker 2: to deal with volatile well. 521 00:26:51,359 --> 00:26:53,800 Speaker 10: I mean I run a hedge fund, I'm not an advisor, 522 00:26:54,280 --> 00:26:57,679 Speaker 10: so you know, in my portfolio we've been sort of 523 00:26:57,760 --> 00:27:00,680 Speaker 10: heavy on commodities for the last eighteen months or so, 524 00:27:02,520 --> 00:27:04,320 Speaker 10: and you know, just as I say, we spent the 525 00:27:04,359 --> 00:27:08,040 Speaker 10: fourth quarter lightening up somewhat on precious medals and adding 526 00:27:08,080 --> 00:27:10,760 Speaker 10: to adding to energy. Look, I think the global economy 527 00:27:10,840 --> 00:27:13,560 Speaker 10: is still fine. I think the global economy will will 528 00:27:13,560 --> 00:27:15,840 Speaker 10: find a way. You know, we'll find a way through this. 529 00:27:16,040 --> 00:27:18,119 Speaker 10: But you know, we've been adamant for more than a 530 00:27:18,160 --> 00:27:22,240 Speaker 10: year now that the ownership of commodities is much much 531 00:27:22,240 --> 00:27:25,400 Speaker 10: more important, both of the sort of industrial and economic 532 00:27:25,480 --> 00:27:28,400 Speaker 10: level and at the portfolio level than people understand. 533 00:27:29,000 --> 00:27:32,840 Speaker 5: So how far do you think these precious metals, Well, 534 00:27:32,960 --> 00:27:34,480 Speaker 5: how many legs do you have to run? If I 535 00:27:34,520 --> 00:27:36,359 Speaker 5: think about it on a year to date basis, I'm 536 00:27:36,359 --> 00:27:38,840 Speaker 5: looking at spot gold, it's not about twenty percent so 537 00:27:38,920 --> 00:27:41,800 Speaker 5: far in twenty twenty six. How much further do you 538 00:27:41,800 --> 00:27:42,719 Speaker 5: think this rally can go? 539 00:27:43,280 --> 00:27:46,520 Speaker 10: You know, I think precious medals probably made a major 540 00:27:46,560 --> 00:27:48,760 Speaker 10: peak in January, and I think it's going to take 541 00:27:48,880 --> 00:27:51,760 Speaker 10: quite some time to get who that silver may actually 542 00:27:51,800 --> 00:27:54,040 Speaker 10: have made its peak at one hundred and twenty Gold 543 00:27:54,119 --> 00:27:56,440 Speaker 10: I think makes a higher high. But I think it's 544 00:27:56,480 --> 00:27:58,399 Speaker 10: going to be some distant stand of rode as I 545 00:27:58,440 --> 00:28:01,960 Speaker 10: say it's it's I think it's all about energy for 546 00:28:02,040 --> 00:28:04,080 Speaker 10: the rest of this half of the year. And I 547 00:28:04,119 --> 00:28:06,440 Speaker 10: think what's going to surprise people is that even if 548 00:28:06,480 --> 00:28:10,119 Speaker 10: this particular episode calms down in the next two to 549 00:28:10,160 --> 00:28:12,880 Speaker 10: three weeks and energy has a pullback, it doesn't pull 550 00:28:12,920 --> 00:28:15,160 Speaker 10: back to where it was a couple of months ago. 551 00:28:15,880 --> 00:28:19,720 Speaker 2: So I mean just recently is a few a month 552 00:28:19,840 --> 00:28:21,520 Speaker 2: or two ago, or even a few weeks ago, there 553 00:28:21,560 --> 00:28:24,720 Speaker 2: was a discussion of there's a global oil glut in 554 00:28:24,760 --> 00:28:25,520 Speaker 2: the marketplace. 555 00:28:25,920 --> 00:28:27,760 Speaker 4: We don't buy that. No, we did. 556 00:28:27,800 --> 00:28:30,320 Speaker 10: We bought crude when we saw that. We were buyers 557 00:28:30,320 --> 00:28:33,280 Speaker 10: of crude after Venezuela, where there was this sort of 558 00:28:33,320 --> 00:28:36,639 Speaker 10: final flush out of this idea that somehow, you know, 559 00:28:36,720 --> 00:28:39,320 Speaker 10: a few million extra vowels and Venezuela were going to 560 00:28:39,320 --> 00:28:42,280 Speaker 10: come on board. No, I think the balance between supply 561 00:28:42,400 --> 00:28:45,920 Speaker 10: and demand for crude is tighter than people realized. I 562 00:28:45,920 --> 00:28:51,800 Speaker 10: think the tendency to stockpile globally is accelerating arm and 563 00:28:52,000 --> 00:28:54,760 Speaker 10: I think at fifty five dollars a bowel, crude was 564 00:28:54,800 --> 00:28:57,640 Speaker 10: a pretty good one way beat to the upside. No, granted, 565 00:28:57,640 --> 00:29:00,720 Speaker 10: at seventy five eighty dollars to the bowels, it's a 566 00:29:00,720 --> 00:29:04,760 Speaker 10: more nuance bet. But as I say, I think people 567 00:29:04,800 --> 00:29:09,160 Speaker 10: came into via much too bearish crude oil arm and 568 00:29:10,000 --> 00:29:12,280 Speaker 10: you know there's been a somewhat hurried adjustment to that. 569 00:29:13,040 --> 00:29:16,600 Speaker 5: How do you think about opportunities outside of the United States. 570 00:29:16,560 --> 00:29:20,400 Speaker 10: I mean, we like non US markets. I think the 571 00:29:21,360 --> 00:29:25,040 Speaker 10: you know, the relationship between emerging market performance and S 572 00:29:25,080 --> 00:29:27,320 Speaker 10: and P performance, it's what I would call a very 573 00:29:27,400 --> 00:29:29,520 Speaker 10: trendy performance. What I mean by that is it tends 574 00:29:29,560 --> 00:29:31,840 Speaker 10: to be several years in one direction or the other. 575 00:29:33,000 --> 00:29:36,200 Speaker 10: And I think emerging markets, you know, sort of finished 576 00:29:36,200 --> 00:29:39,480 Speaker 10: a ten to fifteen year period of out underperformance against 577 00:29:39,520 --> 00:29:43,240 Speaker 10: the US last year, and all things being equal, I 578 00:29:43,240 --> 00:29:46,040 Speaker 10: think over the next five years EM beats EM beats 579 00:29:46,120 --> 00:29:46,600 Speaker 10: V S and P. 580 00:29:46,960 --> 00:29:47,640 Speaker 4: That doesn't mean it. 581 00:29:47,600 --> 00:29:49,720 Speaker 10: Goes up every day for five years. There'll be plenty 582 00:29:49,720 --> 00:29:52,040 Speaker 10: of pullbacks. But I think you want to be looking 583 00:29:52,800 --> 00:29:56,800 Speaker 10: to diversify outside. And again I have the latitude to 584 00:29:56,840 --> 00:29:59,520 Speaker 10: do whatever I want to do. I run a much 585 00:29:59,560 --> 00:30:02,120 Speaker 10: more glow wal portfolio today and I would have done 586 00:30:02,120 --> 00:30:03,160 Speaker 10: two or three years ago. 587 00:30:03,760 --> 00:30:05,360 Speaker 2: And that kind of goes to the issue of just 588 00:30:05,440 --> 00:30:09,000 Speaker 2: an economic discussion globalism. I mean, this is an administration 589 00:30:09,160 --> 00:30:12,840 Speaker 2: that suggests, you know, America first, and we've seen that 590 00:30:12,960 --> 00:30:16,200 Speaker 2: actually in a lot of corporate movements, corporate actions. Do 591 00:30:16,200 --> 00:30:20,440 Speaker 2: you think globalization is on the wayne dead dying on the. 592 00:30:20,400 --> 00:30:22,800 Speaker 10: Way and yeah, yeah, I mean basically, look, I start 593 00:30:22,840 --> 00:30:26,480 Speaker 10: with China first before I said America first. Look, I've 594 00:30:26,640 --> 00:30:30,320 Speaker 10: coined a phrase fragmentation, which I've been using to describe 595 00:30:30,360 --> 00:30:34,040 Speaker 10: as sort of end of globalization and tracking it. You 596 00:30:34,120 --> 00:30:37,760 Speaker 10: sort of see this word fragment, fragmented, fragmentation. It's popping 597 00:30:37,840 --> 00:30:41,760 Speaker 10: up all over the place all of a sudden. And look, 598 00:30:41,800 --> 00:30:47,000 Speaker 10: I think globalization its peak was probably twenty fifteen in retrospect. 599 00:30:47,240 --> 00:30:50,040 Speaker 10: It clearly took a big ding in twenty eighteen, took 600 00:30:50,080 --> 00:30:52,640 Speaker 10: another ding in COVID, and what was left of it, 601 00:30:54,480 --> 00:30:56,960 Speaker 10: you know, I think fell apart over the last eighteen months. 602 00:30:57,000 --> 00:30:59,280 Speaker 10: Doesn't mean we don't We're still going to have tons 603 00:30:59,280 --> 00:31:02,000 Speaker 10: and tons of global trade, but I think the tendency 604 00:31:02,080 --> 00:31:04,640 Speaker 10: is going to be to split the world between a 605 00:31:04,800 --> 00:31:08,320 Speaker 10: US dominated sphere of influence and a Chinese dominated sphere 606 00:31:08,320 --> 00:31:08,920 Speaker 10: of influence. 607 00:31:09,320 --> 00:31:10,200 Speaker 4: And although there. 608 00:31:10,160 --> 00:31:14,240 Speaker 10: Will be trade between those spheres, you know, the tendency 609 00:31:14,280 --> 00:31:18,880 Speaker 10: is to see those relationships attenuate and a deeper relationship 610 00:31:18,880 --> 00:31:20,440 Speaker 10: within the spheres of influence. 611 00:31:21,160 --> 00:31:24,320 Speaker 5: It feels like the word uncertainty has been used more 612 00:31:24,400 --> 00:31:27,760 Speaker 5: times than not. I'm curious, you know, as we think 613 00:31:27,760 --> 00:31:31,400 Speaker 5: about a potential resurgence or surge in inflation, as people 614 00:31:31,400 --> 00:31:34,240 Speaker 5: are really weighing some of these geopolitical tensions, how do 615 00:31:34,280 --> 00:31:36,960 Speaker 5: you think about the outlook and how to position yourself 616 00:31:37,000 --> 00:31:40,600 Speaker 5: given the lack of you know, certainty on the outlook 617 00:31:40,680 --> 00:31:42,400 Speaker 5: for inflation and the economy more broadly. 618 00:31:43,520 --> 00:31:46,440 Speaker 10: I mean again, I you know, came into be strongly 619 00:31:46,480 --> 00:31:50,760 Speaker 10: believing in at least reflation. You know, I think we certainly, 620 00:31:50,840 --> 00:31:55,680 Speaker 10: we certainly see that. You certainly see strengthening PPI actual inflation. Yeah, Look, 621 00:31:55,680 --> 00:31:59,160 Speaker 10: I think it's very sticky. I think it's easier for 622 00:31:59,240 --> 00:32:01,200 Speaker 10: inflation to get from two and a half to three 623 00:32:01,240 --> 00:32:02,760 Speaker 10: and a half and from two and a half to 624 00:32:02,800 --> 00:32:06,200 Speaker 10: one and a half. So, you know, I look at 625 00:32:06,200 --> 00:32:10,160 Speaker 10: the long end of the curves as potentially dangerous. But 626 00:32:10,200 --> 00:32:12,760 Speaker 10: there's a lot of cross currents here. As I say, credit, wow, 627 00:32:12,880 --> 00:32:14,800 Speaker 10: is me more than inflation at this point in time. 628 00:32:15,200 --> 00:32:18,360 Speaker 10: I think the performance of credit is absolutely going to 629 00:32:18,440 --> 00:32:22,000 Speaker 10: make all bake twenty twenty six thirty seconds. 630 00:32:22,040 --> 00:32:24,640 Speaker 2: Private credit cockroaches, is that where you think the concern 631 00:32:24,720 --> 00:32:26,000 Speaker 2: is the first and foremost. 632 00:32:25,840 --> 00:32:28,720 Speaker 10: Private credit is where the excess was and whether his 633 00:32:28,800 --> 00:32:30,200 Speaker 10: excess for his mistakes. 634 00:32:30,280 --> 00:32:31,440 Speaker 4: Very good, Michael. 635 00:32:31,160 --> 00:32:33,240 Speaker 2: Shall, thank you so much for joining us. Michael Shall 636 00:32:33,480 --> 00:32:36,800 Speaker 2: is a portfolio manager for Ion Asset Management based here 637 00:32:36,840 --> 00:32:38,040 Speaker 2: in New York City. 638 00:32:39,800 --> 00:32:44,000 Speaker 6: Stay with us more from Bloomberg Surveillance coming up after this. 639 00:32:51,240 --> 00:32:54,840 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 640 00:32:54,920 --> 00:32:58,440 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Apple, 641 00:32:58,480 --> 00:33:01,840 Speaker 1: Karclay and Android Otto with the Bloomberg Business Up or 642 00:33:01,960 --> 00:33:03,600 Speaker 1: what is live on YouTube. 643 00:33:03,760 --> 00:33:07,400 Speaker 2: The military operations in Iran, the US has hit more 644 00:33:07,440 --> 00:33:11,640 Speaker 2: than one thousand Iran assets. Now comes a hard part, 645 00:33:11,680 --> 00:33:14,680 Speaker 2: so says our next guest, Becca Wasser, Defense lead for 646 00:33:14,720 --> 00:33:17,920 Speaker 2: Bloomberg Economics Beca. I'd love for you to just summarize 647 00:33:17,960 --> 00:33:21,280 Speaker 2: what you understand to be the military operations to date, 648 00:33:21,720 --> 00:33:23,800 Speaker 2: and then maybe what maybe coming in the next several 649 00:33:23,920 --> 00:33:25,400 Speaker 2: days and maybe even weeks. 650 00:33:26,880 --> 00:33:30,320 Speaker 11: So, the United States has hit over one thousand targets 651 00:33:30,360 --> 00:33:35,240 Speaker 11: in Iran. These are largely going after Iran's missile program, 652 00:33:35,280 --> 00:33:40,360 Speaker 11: both its missile storage sites, production facilities, and missile launchers, 653 00:33:40,640 --> 00:33:44,920 Speaker 11: as well as Iran's navy and key command and control centers. 654 00:33:45,000 --> 00:33:47,520 Speaker 11: There's been a division of labor with Israel, who has 655 00:33:47,600 --> 00:33:52,680 Speaker 11: largely gone after some of the leadership, as well as 656 00:33:52,760 --> 00:33:57,760 Speaker 11: government buildings and at least one nuclear site. So this 657 00:33:57,800 --> 00:34:00,040 Speaker 11: is what it's looked like to date. There's been a 658 00:33:59,800 --> 00:34:04,360 Speaker 11: tremendous amount of firepower and intense firepower at that thrown 659 00:34:04,440 --> 00:34:07,640 Speaker 11: at Iran. In the coming days, I think we expect 660 00:34:07,640 --> 00:34:10,799 Speaker 11: to see more strikes, in part because President Trump has 661 00:34:10,840 --> 00:34:13,520 Speaker 11: said that the big wave is coming, and so what 662 00:34:13,560 --> 00:34:16,719 Speaker 11: that ends up looking like is probably going after more 663 00:34:16,800 --> 00:34:21,319 Speaker 11: navy targets, additional missile targets. But at some point the 664 00:34:21,400 --> 00:34:24,160 Speaker 11: United States is going to run out of pre planned 665 00:34:24,160 --> 00:34:26,880 Speaker 11: targets to strike, which means it's going to either have 666 00:34:27,000 --> 00:34:30,560 Speaker 11: to restrike some of the same targets or generate more, 667 00:34:30,640 --> 00:34:32,920 Speaker 11: which can be a little bit of a riskier endeavor 668 00:34:33,000 --> 00:34:39,680 Speaker 11: because it requires US intelligence and surveillance and reconnaissance assets 669 00:34:39,719 --> 00:34:41,759 Speaker 11: and fighter jets flying overhead. 670 00:34:42,560 --> 00:34:42,880 Speaker 4: BETA. 671 00:34:43,000 --> 00:34:45,560 Speaker 5: Tell us what exactly you understand to be the depth 672 00:34:45,600 --> 00:34:48,200 Speaker 5: of Iran's missile capabilities. 673 00:34:48,840 --> 00:34:53,000 Speaker 11: So nobody truly knows exactly how many missiles Ron has 674 00:34:53,320 --> 00:34:56,560 Speaker 11: and how many they actually have left after their missile 675 00:34:56,560 --> 00:35:01,080 Speaker 11: program has been severely degraded by Israeli and U strikes. 676 00:35:01,239 --> 00:35:04,520 Speaker 11: But prior to all of this, the United States estimated 677 00:35:04,520 --> 00:35:08,440 Speaker 11: in twenty twenty two that Iran had about three thousand 678 00:35:08,520 --> 00:35:12,680 Speaker 11: ballistic missiles of various ranges. Israel said that that number 679 00:35:12,719 --> 00:35:15,759 Speaker 11: dropped to about two thousand after the Twelve Day War, 680 00:35:16,200 --> 00:35:19,120 Speaker 11: So we can assume that there had been some rebuilding 681 00:35:19,160 --> 00:35:22,640 Speaker 11: between the Twelve Day War and this operation, but no 682 00:35:22,680 --> 00:35:25,759 Speaker 11: one knows exactly how many they have. That being said, 683 00:35:25,840 --> 00:35:29,000 Speaker 11: it's not just Iran's missiles that matter here, it's also 684 00:35:29,239 --> 00:35:33,440 Speaker 11: its large amount of one way attack drones that it 685 00:35:33,480 --> 00:35:36,960 Speaker 11: has used in great effect to menace some of the 686 00:35:37,000 --> 00:35:40,120 Speaker 11: Gulf states and to attack US bases throughout the region. 687 00:35:40,560 --> 00:35:40,880 Speaker 4: Beka. 688 00:35:40,920 --> 00:35:44,160 Speaker 2: We understand one of the objectives for the US intervention 689 00:35:44,280 --> 00:35:47,680 Speaker 2: here was to degrade the nuclear capabilities of the Iranians. 690 00:35:48,080 --> 00:35:51,320 Speaker 2: But again past reporting, we've learned that those are those facilities, 691 00:35:51,320 --> 00:35:54,760 Speaker 2: many of them are built way underground and very hardened bunkers. 692 00:35:54,840 --> 00:35:57,400 Speaker 2: Is there, what's the US military saying about its ability 693 00:35:57,440 --> 00:36:02,440 Speaker 2: to attack those targets. 694 00:36:00,480 --> 00:36:03,600 Speaker 11: Has the ability to attack those targets, It requires heavy 695 00:36:03,640 --> 00:36:08,080 Speaker 11: bombers flying either from the continental United States or somewhere 696 00:36:08,120 --> 00:36:11,239 Speaker 11: else overseas, like the base in Diego, Garcia that has 697 00:36:11,280 --> 00:36:14,640 Speaker 11: been in the news so much lately, or bases in Europe, 698 00:36:14,840 --> 00:36:18,000 Speaker 11: and it also requires them to use heavy bunker buster 699 00:36:18,120 --> 00:36:22,520 Speaker 11: bombs to get to those hardened targets. Underneath that being said, 700 00:36:22,560 --> 00:36:25,640 Speaker 11: we haven't seen the United States try and strike any 701 00:36:25,719 --> 00:36:29,399 Speaker 11: of those nuclear sites quite yet, but we have seen 702 00:36:29,440 --> 00:36:32,600 Speaker 11: them use bombers and some of the more heavier bombs 703 00:36:32,880 --> 00:36:36,680 Speaker 11: to go after some of the missile cities that Iran 704 00:36:36,760 --> 00:36:40,960 Speaker 11: has that are also hardened underground. So we can maybe 705 00:36:41,040 --> 00:36:44,000 Speaker 11: see some additional strikes on nuclear sites in the coming 706 00:36:44,040 --> 00:36:46,880 Speaker 11: days as part of that big wave that both President 707 00:36:46,920 --> 00:36:50,799 Speaker 11: Trump and Secretary Rubio have talked about. But it does 708 00:36:50,920 --> 00:36:53,799 Speaker 11: go against what President Trump has said previously that his 709 00:36:54,040 --> 00:36:59,000 Speaker 11: earlier operation obliterated Iran's nuclear program, So if the US 710 00:36:59,120 --> 00:37:02,520 Speaker 11: restrikes those, it might go against what he's said before. 711 00:37:03,200 --> 00:37:06,120 Speaker 5: Super quickly, just curious, how do you think about the 712 00:37:06,200 --> 00:37:09,080 Speaker 5: idea of how complex and costly this could potentially be 713 00:37:09,160 --> 00:37:12,839 Speaker 5: for Washington as we look toward more than difficult, more 714 00:37:12,840 --> 00:37:13,800 Speaker 5: difficult targets. 715 00:37:15,280 --> 00:37:18,600 Speaker 11: Absolutely, there are risks ahead and abound, and I think 716 00:37:18,640 --> 00:37:21,920 Speaker 11: that's something that we've heard really consistently from President Trump 717 00:37:21,960 --> 00:37:26,040 Speaker 11: and from other leaders, particularly General Dan Keane at the 718 00:37:26,080 --> 00:37:30,319 Speaker 11: Defense Department, where they have warned that more casualties are likely, 719 00:37:30,440 --> 00:37:35,000 Speaker 11: not only civilian casualties, but casualties of military service members. 720 00:37:35,120 --> 00:37:37,200 Speaker 11: And at the end of the day, we can cost 721 00:37:37,239 --> 00:37:41,160 Speaker 11: the number of airplanes that have been shot down in 722 00:37:41,239 --> 00:37:44,480 Speaker 11: friendly fire incidents, we can cost the number of missiles, 723 00:37:44,760 --> 00:37:46,560 Speaker 11: but the one thing that we can't actually put a 724 00:37:46,600 --> 00:37:49,680 Speaker 11: price tag on is the blood and treasure lost from 725 00:37:49,800 --> 00:37:50,920 Speaker 11: our service members. 726 00:37:53,120 --> 00:37:57,279 Speaker 2: Beer Defense lead for Bloomberg Economics, based in Washington and DC. 727 00:37:57,960 --> 00:38:02,799 Speaker 1: This is the Bloomberg Surveillance pod Cast, available on apples, Spotify, 728 00:38:02,880 --> 00:38:06,680 Speaker 1: and anywhere else you get your podcasts. Listen live each 729 00:38:06,719 --> 00:38:10,520 Speaker 1: weekday seven to ten am Eastern on Bloomberg dot Com, 730 00:38:10,680 --> 00:38:14,479 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 731 00:38:14,800 --> 00:38:17,920 Speaker 1: You can also watch us live every weekday on YouTube 732 00:38:18,200 --> 00:38:20,240 Speaker 1: and always on the Bloomberg terminal