WEBVTT - Oil Surges as Iran War Disrupts Supplies 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 --> 0:00:21.240 on Apple car Play or Android Auto with the Bloomberg 0:00:21.320 --> 0:00:24.840 Business App. Listen on demand wherever you get your podcasts, 0:00:25.280 --> 0:00:27.120 or watch us live on YouTube. 0:00:27.280 --> 0:00:29.440 Let's check in with one of the experts we always 0:00:29.480 --> 0:00:31.319 love to chat with when it comes to global energy, 0:00:31.320 --> 0:00:35.600 and that's Ellen Wald, Senior Fellow at the Atlantic Council. Ellen, 0:00:35.640 --> 0:00:38.159 we're seeing, obviously, the spike up and energy prices and 0:00:38.200 --> 0:00:41.440 that seems like we've seen this before. Is this an 0:00:41.479 --> 0:00:44.640 efficient market that you're looking at right here? And how 0:00:44.640 --> 0:00:46.520 do you think this plays out over the coming days. 0:00:47.440 --> 0:00:50.360 Honestly, what I think we're seeing is a global energy 0:00:50.400 --> 0:00:52.560 crisis unfolding in real time. 0:00:53.479 --> 0:00:55.240 I'm surprised, honestly. 0:00:54.920 --> 0:00:58.440 That prices didn't spike to eighty five when the market opened, 0:00:59.040 --> 0:01:02.000 you know, Sunday night in Asia, because it was clear 0:01:02.120 --> 0:01:05.680 once uh you know, tankers were not moving through the 0:01:05.720 --> 0:01:08.679 straight orform moves either way, that this is going to 0:01:08.720 --> 0:01:13.120 be a major energy crisis unless it was resolved by today. 0:01:13.160 --> 0:01:15.000 I mean, I think that that unless they can get 0:01:15.040 --> 0:01:18.560 the tankers moving in the next couple of days, we're 0:01:18.600 --> 0:01:21.840 going to see extremely high oil prices, which will frankly 0:01:21.880 --> 0:01:25.240 be warranted given that no oil is moving out of 0:01:25.360 --> 0:01:29.000 the Persian Gulf. And while you know, consumers in the 0:01:29.080 --> 0:01:31.160 United States may have plenty of oil, we're not going 0:01:31.240 --> 0:01:35.240 to necessarily see you know, gas lines, We've got product, 0:01:35.280 --> 0:01:39.600 we've got oil. We're not immune to you know, price 0:01:39.680 --> 0:01:42.640 bikes in the in the price of crude oil globally, 0:01:42.720 --> 0:01:45.480 and so this is going to affect people, you know, 0:01:45.480 --> 0:01:47.480 in terms of what they're paying at the pump. But 0:01:47.560 --> 0:01:50.960 other countries, okay, that depend and rely on this oil 0:01:51.200 --> 0:01:55.280 could potentially start to see shortages unless there is a plan, 0:01:55.360 --> 0:01:57.800 unless they start rolling out a plan to either get 0:01:57.800 --> 0:02:01.160 things moving or you know, find alternatives. 0:02:01.920 --> 0:02:03.840 So you say that some of the important issues in 0:02:03.920 --> 0:02:07.120 terms of oil prices as well as natural gas prices 0:02:07.160 --> 0:02:10.720 are the potential damage to oil infrastructure in Iran. You 0:02:10.760 --> 0:02:13.440 also talk about the extent of delays and marine traffic 0:02:13.560 --> 0:02:16.720 entering and exiting the Persian Golf, as well as OPEK, 0:02:16.840 --> 0:02:19.560 plus the response there from the US and China as well. 0:02:19.840 --> 0:02:22.519 How do you think about some of these challenges or 0:02:22.520 --> 0:02:24.720 all the different important variables that we're seeing as it 0:02:24.720 --> 0:02:25.919 relates to oil prices. 0:02:27.280 --> 0:02:29.440 I think that the most important variable right now is 0:02:29.480 --> 0:02:32.680 how long this military conflict is going to last, because 0:02:32.680 --> 0:02:35.720 that's what is pushing up the price of insurance so 0:02:35.800 --> 0:02:39.200 much that tankers are unwilling to attempt even to cross 0:02:39.240 --> 0:02:42.120 the straight orform moves. It's just too expensive, meaning it's 0:02:42.160 --> 0:02:44.560 too risky. So, you know, if they can get a 0:02:44.560 --> 0:02:46.840 handle in this military conflict, but it doesn't look like 0:02:46.880 --> 0:02:49.560 that's going to happen, you know, within the next week 0:02:49.639 --> 0:02:51.880 or two at least, seems like it's probably going to 0:02:52.000 --> 0:02:55.360 intensify in fact, and so that means that yes, opek 0:02:55.400 --> 0:02:56.840 plus has reacted. 0:02:56.880 --> 0:02:58.280 But the problem is most. 0:02:58.040 --> 0:03:00.680 Of its big producers, the ones with all the spare capacity, 0:03:01.200 --> 0:03:03.320 are the same ones that are in the Persian Gulf 0:03:03.400 --> 0:03:07.239 that rely on, you know, on the Persian Gulf to 0:03:07.240 --> 0:03:09.440 get oil out. Now we know that Saudi Arabia is 0:03:09.480 --> 0:03:12.359 starting to make plans to load more oil on the 0:03:12.400 --> 0:03:14.600 red seed. That's great, but it's still not going to 0:03:14.600 --> 0:03:17.520 account for all of the oil. Iraq is going to 0:03:17.560 --> 0:03:19.600 be in a huge issue. They're going to have to 0:03:19.680 --> 0:03:22.440 shut down production. In fact, they're already starting to shut 0:03:22.440 --> 0:03:26.200 down production because they don't have the storage capacity to 0:03:26.400 --> 0:03:28.239 just hold on to crude oil if it can't be 0:03:28.320 --> 0:03:33.280 loaded into tankers. So that's already starting to affect affect production. 0:03:33.840 --> 0:03:35.800 And then I do think that China is a big 0:03:36.760 --> 0:03:41.440 wild card here. Can China put its considerable economic weight 0:03:41.600 --> 0:03:45.240 to bear on Iran potentially to get it to maybe 0:03:45.520 --> 0:03:49.960 concede or make some concessions to end the military conflict 0:03:50.040 --> 0:03:52.240 sooner so that we can get the oil flowing. 0:03:52.960 --> 0:03:55.160 It seems oddly enough that one of the winners here 0:03:55.240 --> 0:03:58.280 might be President Putin and Russia to the extent that 0:03:58.280 --> 0:04:00.000 they can move their oil at these higher prices. 0:04:00.160 --> 0:04:03.480 Is Russia as a player. 0:04:03.240 --> 0:04:06.960 Here, yeah, exactly, Well, Russia is in a very good 0:04:07.000 --> 0:04:09.560 spot personally, That's what I think. 0:04:09.720 --> 0:04:10.840 Russia is in a very good spot. 0:04:10.840 --> 0:04:14.160 It can move more oil to China to satisfy some 0:04:14.280 --> 0:04:17.880 of the oil that China's not getting from the Middle East. 0:04:18.080 --> 0:04:19.440 Although I believe there. 0:04:19.279 --> 0:04:21.160 Have been some issues in terms of loading at one 0:04:21.160 --> 0:04:24.880 port that was recently attacked by Ukraine, which is certainly 0:04:24.920 --> 0:04:27.719 precipitous on their part. But Russia is also going to 0:04:27.720 --> 0:04:29.440 be able to charge a lot more for its oil, 0:04:29.560 --> 0:04:33.000 So this kind of conflagration is having the effect of 0:04:33.080 --> 0:04:36.719 kind of lining Putent's pockets, which is probably going to 0:04:36.880 --> 0:04:40.599 cause some problems down the road for the Trump administration 0:04:40.720 --> 0:04:43.400 if they're really looking to put an end to the 0:04:43.560 --> 0:04:46.320 Russia UK Craine conflict, you know, some time in the 0:04:46.360 --> 0:04:48.560 next year or so. 0:04:48.560 --> 0:04:52.480 So I'm also curious how will multinational companies, if you 0:04:52.520 --> 0:04:55.919 think about energy shipping insurance, how do they assess and 0:04:56.000 --> 0:04:59.479 price in the geopolitical risk here from conflicts like this. 0:05:00.680 --> 0:05:02.479 I mean, I'm not you know, I'm not an insurance 0:05:02.800 --> 0:05:06.200 expert here, but they're definitely looking at this and they're saying, Wow, 0:05:06.320 --> 0:05:09.719 the potential for a ship to get you know, severely damaged, 0:05:09.800 --> 0:05:12.479 have an oil spill and whatnot is really high right 0:05:12.480 --> 0:05:15.839 now in the Persian Gulf, and so they are adjusting 0:05:15.880 --> 0:05:18.800 their rates accordingly. Now there will be some ships who 0:05:18.800 --> 0:05:21.120 may be willing to you know, either self insure or 0:05:21.240 --> 0:05:24.080 chance it and may take that risk that right now 0:05:24.120 --> 0:05:27.919 that doesn't seem very likely. Plus you've also got the 0:05:28.040 --> 0:05:30.599 risk in you know, in the Red Sea of the 0:05:30.640 --> 0:05:33.440 hoothis that they could you know, kind of take up 0:05:33.480 --> 0:05:37.040 their mission again and start harassing ships there, which is 0:05:37.080 --> 0:05:39.920 a problem because you know, a Ramco at the very 0:05:40.000 --> 0:05:42.800 least is hoping to start loading oil out of its 0:05:42.839 --> 0:05:44.960 port in Gyanbu. And then if it wants to send 0:05:45.000 --> 0:05:48.000 that oil to Asia, it's going to have to leave 0:05:48.040 --> 0:05:51.760 the Red Sea, you know, go round the Arabian Peninsula 0:05:51.800 --> 0:05:54.360 and out that way. And if the houthis start posing problems, 0:05:54.400 --> 0:05:57.400 that's another issue to increase prices. 0:05:58.040 --> 0:06:00.520 And we got the oil pricing spiking high. Here's an 0:06:00.520 --> 0:06:02.960 intra day high, seventy seven dollars eighty five cents for. 0:06:03.000 --> 0:06:04.880 WTI good oil. A rack. 0:06:05.040 --> 0:06:07.680 Here's a red headline crossing the Bloomberg terminal. A rack 0:06:07.880 --> 0:06:11.640 starts shutting oil output at Ramala as storage fills. So, 0:06:11.839 --> 0:06:14.920 just as you were saying, Ellen, so Ellen, what role 0:06:14.960 --> 0:06:17.080 does the US play here? Can we just crank up 0:06:17.080 --> 0:06:19.520 our drilling and are refining to maybe offset some of 0:06:19.560 --> 0:06:22.200 the decreased supply out the middle least? 0:06:22.880 --> 0:06:25.840 Well, you can bet that, you know, every every fracking 0:06:25.880 --> 0:06:28.600 company is calling up people there. You know, anyone who's 0:06:28.680 --> 0:06:31.239 idled rigs has got to be putting them back into production. 0:06:31.400 --> 0:06:31.640 Now. 0:06:31.960 --> 0:06:34.880 I bet there's teams headed from North Dakota at the 0:06:34.960 --> 0:06:37.200 moment to get things going. I mean, this is really 0:06:37.480 --> 0:06:41.200 you know, this is the moment for the American oil industry, 0:06:41.240 --> 0:06:44.640 and it can really prove how agile, how quick it is. 0:06:44.760 --> 0:06:46.720 If these producers that have been. 0:06:46.640 --> 0:06:50.159 Talking about slowing down production, this is their moment to 0:06:50.160 --> 0:06:53.359 get things going and sell that oil, refine that oil. 0:06:53.440 --> 0:06:57.040 We have limited extra refining capacity in the United States, 0:06:57.200 --> 0:07:00.200 but we do have more production capacity. It's all about 0:07:00.240 --> 0:07:02.680 you know what we can get going, and you know 0:07:02.880 --> 0:07:07.880 what American companies can do with personnel, with people. You know, 0:07:07.960 --> 0:07:11.400 if there's money and financing available, they're certainly going to 0:07:11.480 --> 0:07:14.960 make that money selling oil, either you know, internationally or 0:07:15.000 --> 0:07:16.920 at home. So I would say this is the moment 0:07:17.000 --> 0:07:18.320 for the American fracker. 0:07:18.920 --> 0:07:20.440 Great, great to hear. I'm sure the folks down in 0:07:20.480 --> 0:07:21.640 the patch they're ready to go. 0:07:21.760 --> 0:07:25.080 Ellen Wald, Senior Fellow at the Atlantic Council, giving us 0:07:25.120 --> 0:07:26.520 the latest on global energy. 0:07:28.160 --> 0:07:32.320 Stay with us more from Bloomberg Surveillance coming up after this. 0:07:39.600 --> 0:07:43.160 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:07:43.240 --> 0:07:46.400 weekday afternoons from seven to ten am Eastern Listen on 0:07:46.480 --> 0:07:50.160 Applecarplay and Android Otto with the Bloomberg Business app, or 0:07:50.280 --> 0:07:51.800 watch us live on YouTube. 0:07:52.040 --> 0:07:54.680 Win thin chief econmisce at Bank of Nasau. Wait, when 0:07:54.680 --> 0:07:57.400 you see the geopolitics on certay, we've kind of become 0:07:57.440 --> 0:07:59.440 a little bit used to that, but now we see 0:07:59.480 --> 0:08:04.520 it in time with higher energy prices, for example, how 0:08:04.640 --> 0:08:06.640 is the last several days or last several weeks has 0:08:06.640 --> 0:08:08.400 that impacted your economic outlook at all? 0:08:08.920 --> 0:08:11.000 Well, first of all, thanks for having me. It's always 0:08:11.000 --> 0:08:15.720 a pleasure. So I still think we're still in early days. 0:08:16.480 --> 0:08:19.120 I think the big question that's hanging over us, over 0:08:19.160 --> 0:08:22.680 everyone is, well, is this what's the duration and scope 0:08:22.880 --> 0:08:24.560 of this attack? Is it going to be a twelve 0:08:24.680 --> 0:08:27.720 day attack we saw last June? Because is it gonna 0:08:27.720 --> 0:08:29.520 be a month of a bartment followed by a groundovation 0:08:29.600 --> 0:08:31.000 like you saw during the first Golf War? 0:08:31.440 --> 0:08:36.320 Would be a groundovation followed by multi year occupants occupancy. 0:08:36.720 --> 0:08:39.199 We don't know. It's so so early, And be. 0:08:39.200 --> 0:08:41.600 Honest, it's it's the goals that the administration have put 0:08:41.640 --> 0:08:44.360 forth have been very fuzzy. So I think markets, as 0:08:44.400 --> 0:08:48.600 you know, hate uncertainty, They hate they really hate prolonged uncertainty. 0:08:48.800 --> 0:08:52.240 So it's really it's the big question is how long is. 0:08:52.200 --> 0:08:53.640 This going to go on? And you know, sort of 0:08:53.720 --> 0:08:56.240 the breadth and depth and it's to be determined. 0:08:56.360 --> 0:08:57.880 But you know, I think the problem with market is 0:08:58.280 --> 0:09:00.640 after a while you start pricing and like really bad outcomes, 0:09:00.640 --> 0:09:01.520 and that that's the concern. 0:09:02.120 --> 0:09:04.560 I mean, how do you actually forecast during a time 0:09:04.640 --> 0:09:06.560 like this. It's been so much uncertainty. I can only 0:09:06.640 --> 0:09:09.080 imagine what it was like when we had this gap 0:09:09.160 --> 0:09:11.840 in data, government data because the government shut down. You've 0:09:11.840 --> 0:09:15.599 got tariffs. Now we've also got this geopolitical uncertainty. 0:09:15.720 --> 0:09:16.720 What does your job look like? 0:09:17.120 --> 0:09:19.600 It's tinari, It's it's you know, the whole the phrase, 0:09:19.720 --> 0:09:21.240 the fog of war, that's that's where we are. 0:09:21.280 --> 0:09:22.480 When when does this fog lift? 0:09:23.520 --> 0:09:25.560 Obviously again the market's the quicker the better, But you know, 0:09:25.600 --> 0:09:27.280 to me, you just you can only see downside here. 0:09:28.240 --> 0:09:30.440 You know, we've talked about I'm go ingenough to remember 0:09:30.480 --> 0:09:32.280 all the oil shocks from the seventies. You know, it's 0:09:32.280 --> 0:09:35.080 it's stacklation, higher unemployment, high inflation. 0:09:35.200 --> 0:09:36.120 It really gets ugly. 0:09:37.080 --> 0:09:39.280 So the markets are repricing, and I think Paul you 0:09:39.280 --> 0:09:41.280 mentioned that the risk of higher inflation because it's not 0:09:41.320 --> 0:09:45.839 just what supplies, it's the shipping lanes, transport, it's all 0:09:45.920 --> 0:09:48.280 sort of all sorts of like sort of second third 0:09:48.320 --> 0:09:49.880 level effects that we just don't know about. 0:09:50.400 --> 0:09:51.600 But to me, they're all bad. 0:09:51.880 --> 0:09:54.120 If you're you know, to me, uncertainty, if your household 0:09:54.440 --> 0:09:55.920 all of a sudden your gas prices. 0:09:55.720 --> 0:09:57.600 Go well, you pull in right uncertainly, you're pulling. You 0:09:57.600 --> 0:09:58.720 worred about your job, you're pull in. 0:09:58.880 --> 0:10:01.560 If you're firm and looking at best thinking about investing, 0:10:01.600 --> 0:10:03.520 you see all what's going on while we're gonna pull 0:10:03.520 --> 0:10:06.360 in and if you're the Fed, we're gonna do it 0:10:06.400 --> 0:10:08.920 while we want to cut rates, probably because the livey 0:10:08.960 --> 0:10:10.520 labor markets is softening. 0:10:11.679 --> 0:10:13.960 But you don't know to your point, nor you don't 0:10:13.960 --> 0:10:14.680 really know what's going on. 0:10:14.760 --> 0:10:15.040 You don't. 0:10:15.080 --> 0:10:15.800 It's kind of being on. 0:10:15.760 --> 0:10:19.600 Hold, so to me, so being on hold and pulling 0:10:19.640 --> 0:10:21.360 back is not a good thing in sort of in 0:10:21.400 --> 0:10:23.840 terms of sort of wider economy. So I do see 0:10:23.880 --> 0:10:25.640 some downside risks if this is prolonged. 0:10:25.679 --> 0:10:28.120 Yep, Okay, let's put that to the side just for 0:10:28.160 --> 0:10:30.720 the moment. How is the US economy doing? 0:10:30.800 --> 0:10:34.280 From your perspective, it's doing solid. You know, we saw 0:10:34.320 --> 0:10:36.880 the Q four g D print a couple of weeks ago. 0:10:37.480 --> 0:10:39.640 Headline was, you know, softly expected. We know there is 0:10:39.640 --> 0:10:42.360 some impact from the government shutdown, But I was focusing 0:10:42.400 --> 0:10:45.400 on the consumption portions slower it's been. 0:10:45.440 --> 0:10:49.080 It's been sequentially slowing since I think mid year of 0:10:49.160 --> 0:10:49.640 last year. 0:10:50.679 --> 0:10:52.640 Yeah, sure, of course there's all these distortions, right, we 0:10:52.679 --> 0:10:54.920 had the shutdown, we had the weather, all these things. 0:10:54.960 --> 0:10:58.920 But taking junk conjunction note to me like nor you mentioned. 0:10:58.640 --> 0:11:00.200 This, like as what do you do with this sort 0:11:00.200 --> 0:11:01.600 of figure out what it's To me, it's like a puzzle, 0:11:02.360 --> 0:11:03.640 big puzzle that you're trying to figuret you get some 0:11:03.720 --> 0:11:06.800 clues pieces here and there. So got slow inflation, I'm sorry, 0:11:06.800 --> 0:11:09.679 slowing consumption as well as to me when I think 0:11:09.760 --> 0:11:14.000 is a very soft labor mark that's still softening, and 0:11:14.080 --> 0:11:15.800 to me, you put those two together and it's not 0:11:15.840 --> 0:11:18.600 a great mix. Then you've got higher oil prices can 0:11:18.720 --> 0:11:21.320 hit the pocketbook. So I don't think it's a recession. 0:11:21.360 --> 0:11:23.000 I think that's you know, that's tail risk. 0:11:23.920 --> 0:11:25.280 But I do look for sort of. 0:11:25.320 --> 0:11:29.360 Softening economy the fens on hold because obviously there's inflation risks. 0:11:29.400 --> 0:11:30.959 But I think when pushed customs comes. 0:11:30.800 --> 0:11:34.199 To shove, they worry about their full employment mandate. 0:11:34.280 --> 0:11:36.280 Right now, So what do you make of the disconnect 0:11:36.280 --> 0:11:38.520 because I think if you ask the average US consumer, 0:11:39.000 --> 0:11:41.719 they would say times are tough right now, right economically, 0:11:41.800 --> 0:11:44.080 but then you see a solid economy when we're looking 0:11:44.080 --> 0:11:45.880 at the data. What do you make of that disconnect 0:11:45.880 --> 0:11:48.280 between the super consumer confidence and then the actual data 0:11:48.280 --> 0:11:49.200 that we're seeing right now. 0:11:49.320 --> 0:11:50.920 No, that's been like a million O A question for 0:11:50.920 --> 0:11:53.360 the last couple quarters. Things haven't really aligned. 0:11:53.400 --> 0:11:55.199 But you know, we talked about this K shape economy 0:11:55.200 --> 0:11:57.960 where I can't remember the exact numbers, but something like 0:11:57.960 --> 0:12:00.360 twenty percent of the upper income people driving like over 0:12:00.400 --> 0:12:00.800 half of the. 0:12:00.880 --> 0:12:02.760 Consumption something like that. Thinks even more than that. 0:12:03.760 --> 0:12:07.320 So the bulk of Americans AAA eighty percent are struggling. 0:12:07.400 --> 0:12:09.079 They are worried about the price of eggs, they worry 0:12:09.120 --> 0:12:12.600 about their prices of gas. They're not getting these They're 0:12:12.600 --> 0:12:14.960 not the ones they are benefiting from the massive tax cuts. 0:12:14.960 --> 0:12:17.800 So the question has always been, well, in this K 0:12:17.880 --> 0:12:21.040 shape economy, can can that upper sloping K sort of 0:12:21.080 --> 0:12:23.240 support the lower sloping K part. 0:12:24.320 --> 0:12:26.120 The other distortion I think that's out there is the 0:12:26.480 --> 0:12:28.680 AI investment. You know, investment has been a big driver 0:12:28.840 --> 0:12:30.480 and we get this unbalanced growth. 0:12:30.840 --> 0:12:32.439 Whether it's the K shape whether it's the sort of 0:12:32.520 --> 0:12:36.000 AI stuff, it's it's to me, healthy economy is where 0:12:36.120 --> 0:12:39.000 people are getting hired, people feel comfortable going out and spending, 0:12:39.040 --> 0:12:41.000 people aren't worried about the jobs, and that's to me 0:12:41.080 --> 0:12:42.720 is sort of the US the most sort of the 0:12:42.720 --> 0:12:47.480 healthiest outlook. And again it's uh, you know, it's to be. 0:12:47.360 --> 0:12:48.160 Determined right now. 0:12:48.520 --> 0:12:50.800 The good news that the economy's been resilient, We're coming 0:12:50.840 --> 0:12:52.640 into this year pretty solid. 0:12:52.760 --> 0:12:55.640 But again, the longest drags out there more worried. I get. 0:12:55.800 --> 0:12:57.360 And you mentioned AI, and I think you know a 0:12:57.360 --> 0:12:59.480 lot of folks feel like that's having some impact on 0:12:59.720 --> 0:13:00.800 the liabor market today. 0:13:00.840 --> 0:13:03.600 And maybe A characterized as a. 0:13:03.000 --> 0:13:08.040 Low fire, low higher job economy, maybe that's being impacted 0:13:08.040 --> 0:13:08.880 by AI. 0:13:09.080 --> 0:13:11.360 Do we need as many entry level jobs. 0:13:11.120 --> 0:13:12.960 On the white collar side and all that type of things, 0:13:13.000 --> 0:13:14.920 And how do you get how do you feel? 0:13:14.920 --> 0:13:16.680 Well? I hear you talk about solid time, Paul. 0:13:16.720 --> 0:13:19.840 You're you're the view that that A as a job killer, 0:13:20.040 --> 0:13:21.720 and I'm with you on that one, at least over 0:13:21.760 --> 0:13:23.920 the short to medium term. It's hard to me to 0:13:23.960 --> 0:13:26.440 figure out how this ends up. Sure, some engineers and 0:13:26.480 --> 0:13:29.160 what have you, We'll get some jobs but short term, 0:13:29.240 --> 0:13:31.959 I just see so much you know, sort of downside 0:13:32.720 --> 0:13:35.280 for the labor market. So that's another yet another sort 0:13:35.280 --> 0:13:37.800 of I would just also say, you know, investment in 0:13:38.120 --> 0:13:40.439 data center, that's all capital intensives, not labor intensive. 0:13:40.520 --> 0:13:43.040 Right. I want to end where we started talking about 0:13:43.040 --> 0:13:46.560 the geopolitical tensions. What does consumer spending tend to look 0:13:46.600 --> 0:13:50.480 like during periods of uncertainty as it relates to geopolitical conflict? 0:13:50.640 --> 0:13:52.640 Yeah, so again it's on the present duration. 0:13:52.760 --> 0:13:54.679 But if it's I think in general like we saw 0:13:54.720 --> 0:13:56.360 after say nine to eleven, or you know, some. 0:13:56.280 --> 0:13:58.559 Of these big geopilical events, people. 0:13:58.360 --> 0:14:00.800 Just sort of pull in you thing of buying a car, 0:14:00.960 --> 0:14:02.679 buying Washington, Well, you're probably gon to put that off, 0:14:02.679 --> 0:14:03.520 and she kind of fail. 0:14:03.360 --> 0:14:04.959 What's going on? It sounds silly, you know. 0:14:04.960 --> 0:14:06.839 I don't think grandma's waiting home, you know, trying to 0:14:06.840 --> 0:14:07.600 figure out what's going on. 0:14:07.640 --> 0:14:10.679 You're on. But when you're seeing this on the news, uh, 0:14:10.720 --> 0:14:11.840 and you're seeing. 0:14:11.640 --> 0:14:15.400 Impact cast pump and you're hearing your neighbor getting laid off, 0:14:15.400 --> 0:14:17.440 these are all things that sort of things that make 0:14:17.480 --> 0:14:21.200 you go hmm. And And that's again Mark's hayten uncertainty. 0:14:21.200 --> 0:14:24.040 Firms hating certainty in households hat and I hate uncertainty. 0:14:24.520 --> 0:14:26.400 Everyone you know wants some sort of certainty and and 0:14:26.760 --> 0:14:28.880 I think that's sort of where we're at right now. 0:14:28.880 --> 0:14:32.080 So I use my fingers crossed right exactly, my fingers crossed. Wain, 0:14:32.120 --> 0:14:33.000 thanks so much for joining us. 0:14:33.000 --> 0:14:34.680 Always appreciate getting a few minutes of your. 0:14:34.600 --> 0:14:35.000 Time went in. 0:14:35.040 --> 0:14:38.920 He's the chief economist at the Bank of Nassau. 0:14:40.280 --> 0:14:41.000 Stay with us. 0:14:41.240 --> 0:14:44.440 More from Bloomberg Surveillance coming up after this. 0:14:51.720 --> 0:14:55.280 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:14:55.360 --> 0:14:58.360 weekday afternoons from seven to ten a m. Eastern Listen 0:14:58.440 --> 0:15:02.040 on Apple, Karplay and Android with the Bloomberg Business app, 0:15:02.160 --> 0:15:03.920 or watch us live on YouTube. 0:15:04.160 --> 0:15:04.320 Well. 0:15:04.360 --> 0:15:08.640 One of the reasons offered by the administration as to 0:15:08.640 --> 0:15:12.440 go to war with Iran is potentially regime change, and 0:15:12.440 --> 0:15:15.280 a lot of folks are asking is that possible? Who 0:15:15.320 --> 0:15:19.520 would ignite that regime change and who perhaps would assume power? 0:15:19.520 --> 0:15:21.240 I think our next guest has some views on that. 0:15:21.440 --> 0:15:22.240 Ali Safabi. 0:15:22.640 --> 0:15:26.240 He is a member of Iran's Parliament in exile, the 0:15:26.360 --> 0:15:29.280 National Council of Resistance of Iran, and he's also a 0:15:29.320 --> 0:15:33.240 president of Near Eastern Policy Research, which is a consulting 0:15:33.280 --> 0:15:36.280 in policy analysis firm in Washington, DC, Ali, thanks so 0:15:36.360 --> 0:15:41.560 much for joining us here. Is regime change possible with 0:15:41.720 --> 0:15:44.440 these events in Iran over the last several days. 0:15:45.600 --> 0:15:48.880 There's all good to be with you. Well, regime change 0:15:48.960 --> 0:15:53.000 is indeed possible. There's no doubt about it, because you 0:15:53.040 --> 0:15:56.400 have a nation that has been suppressed for forty seven years. 0:15:57.480 --> 0:16:00.920 You have had one hundred thousand dissidents of the main 0:16:01.080 --> 0:16:04.640 Ranian opposition, the major diner have executed by this regime. 0:16:05.160 --> 0:16:09.680 And you saw this past January, thousands were slaughtered, and 0:16:09.720 --> 0:16:13.400 of course we have seen the same thing happening in 0:16:13.480 --> 0:16:17.720 twenty twenty two, twenty nineteen, twenty seventeen. And yes, the 0:16:17.720 --> 0:16:22.000 Iranian people are very determined despite the cost that it 0:16:22.040 --> 0:16:26.960 has exacted on them to overthrow this regime. But that said, we, 0:16:27.160 --> 0:16:30.480 as the resistance movement that has been fighting this regime 0:16:30.520 --> 0:16:33.920 for forty seven years and the previous regime, the Shaws 0:16:33.960 --> 0:16:38.920 regime since nineteen sixty five, do not believe that change 0:16:39.160 --> 0:16:42.240 would come from the air. The change will not come 0:16:42.240 --> 0:16:47.040 true foreign intervention. Change must come from within Iran, underground, 0:16:47.200 --> 0:16:51.160 indigenous organic by the Ranian people and by a very 0:16:51.240 --> 0:16:57.840 potent and structured resistance within Iran itself. But yes, change 0:16:57.880 --> 0:17:00.000 is indeed possible. I think the a Reny regime is 0:17:00.080 --> 0:17:05.800 at the end of the line. Their economy is bankrupt, 0:17:04.560 --> 0:17:10.560 their currency is in a free fall, There's massive unemployment, 0:17:11.000 --> 0:17:15.960 systemic corruption, and the regional policy has been defeated. 0:17:16.040 --> 0:17:18.359 So yes, indeed changes is at hand. 0:17:18.600 --> 0:17:21.640 So President Trump called on the Iranian people to rise 0:17:21.720 --> 0:17:25.200 up and topple their government. Do you expect that the 0:17:25.280 --> 0:17:27.280 Iranian people are prepared to do that? 0:17:29.040 --> 0:17:33.280 I believe that the Iranian people are very independent minded people, 0:17:33.359 --> 0:17:37.200 as has been demonstrated throughout our history, and they're not 0:17:37.280 --> 0:17:40.560 going to rise up or sit down on a call 0:17:40.600 --> 0:17:44.800 of anybody from the outside. They will decide to rise 0:17:44.880 --> 0:17:47.280 up when they think the time is right. Obviously, at 0:17:47.280 --> 0:17:53.160 this current moment, with bombs dropping all over Iran, Iranian 0:17:53.200 --> 0:17:58.840 people are understandably careful not to do anything to get 0:17:58.880 --> 0:18:02.399 themselves into harms way, after all, there's a war ongoing. 0:18:02.920 --> 0:18:08.720 But as missus Rajavi said the other day, that they 0:18:08.760 --> 0:18:12.040 should try to take care take care of especially those 0:18:12.080 --> 0:18:15.200 who've been injured, and she also called on the all 0:18:15.320 --> 0:18:23.040 party it involved to exercise restraint when it comes to 0:18:23.119 --> 0:18:28.479 Iranian infrastructure and civilian areas. And yes, they will rise up, 0:18:28.520 --> 0:18:32.160 but in a methodic way, and this has to be organized. 0:18:32.480 --> 0:18:35.560 To expect that when bombs are dropping for millions, one 0:18:35.680 --> 0:18:38.640 is to come to the streets. It's just very unrealistic. 0:18:39.960 --> 0:18:43.359 No similar situation. You have seen people coming up. But 0:18:43.480 --> 0:18:47.159 once these conflicts of size and given that they're in, 0:18:47.280 --> 0:18:51.240 regime is weakened tremendously with the loss of harmony, which 0:18:51.280 --> 0:18:54.359 as Missus Rajavi said yesterday, means the end of the 0:18:54.560 --> 0:18:58.359 religious tyranny in Iran. They will come out, but it 0:18:58.440 --> 0:19:01.800 has to be an organized fashion. Nothing will happen spontaneously. 0:19:03.240 --> 0:19:07.120 In what ways has the current conflict altered the domestic, 0:19:07.160 --> 0:19:10.680 political or social environment inside Iran? 0:19:12.440 --> 0:19:13.639 Well, the very good question. 0:19:13.840 --> 0:19:18.199 Well, I think it has demonstrated to the people of 0:19:18.200 --> 0:19:23.720 Iran that the possibility to toppling this regime is much 0:19:23.800 --> 0:19:26.880 greater than any other time in the history of our nation. 0:19:28.040 --> 0:19:34.159 And it has also shown that the Ringing people in 0:19:34.280 --> 0:19:37.880 order to topple this regime, they must get organized. And 0:19:37.920 --> 0:19:40.679 I think if you look at the trend of events 0:19:40.760 --> 0:19:48.080 in Iran, particularly since twenty seventeen. You see that happening. Previously, 0:19:48.119 --> 0:19:51.639 there were protests by let's say, some sectors of Iranian society. 0:19:52.040 --> 0:19:57.080 But what happened in January you had basically all walks 0:19:57.080 --> 0:20:00.640 of life in Iran, from students to bizarre merchants, to workers, 0:20:00.640 --> 0:20:04.360 to farmers, nurses, you name it, were out on the streets. 0:20:04.400 --> 0:20:07.119