WEBVTT - Strike Shuts US Ports, Mideast Latest 0:00:02.440 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.240 --> 0:00:12.120 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:12.200 --> 0:00:15.560 weekdays at ten am Eastern on Affocarplaying and Broun Auto 0:00:15.640 --> 0:00:18.560 with the Bloomberg Business app. Listen on demand wherever you 0:00:18.640 --> 0:00:22.360 get your podcasts, or watch us live on YouTube. 0:00:23.520 --> 0:00:25.880 Jess Metton, she's sitting in for Alex Steel today. I'm 0:00:25.880 --> 0:00:27.720 Paul Sweeney. We're live here on a Bloomberg Dinner at 0:00:27.720 --> 0:00:30.120 the Broker Studio. We're streaming live on YouTube as well, 0:00:30.160 --> 0:00:32.879 so you can check us out there Bloomberg you know, 0:00:33.000 --> 0:00:35.360 go to the YouTube dot com search Bloomberg Live, Radio, 0:00:35.360 --> 0:00:36.760 Bloomberg Podcast, any which way. 0:00:36.760 --> 0:00:37.479 We'll get you. 0:00:37.440 --> 0:00:40.080 There and we will have continuing coverage throughout the rest 0:00:40.159 --> 0:00:43.640 of the morning on the escalating tensions in the Mid 0:00:43.640 --> 0:00:45.800 East and the impact they're having on the markets. The 0:00:45.840 --> 0:00:49.240 other major story obviously out there, is the day one 0:00:49.560 --> 0:00:52.120 of the port strike here on the East Coast. I mean, 0:00:52.120 --> 0:00:54.240 I was looking at some graphics on various TV networks 0:00:54.240 --> 0:00:57.160 and it's pretty much all down the entire East Coast, 0:00:57.280 --> 0:00:59.800 winding around our friends in Florida and all the way 0:01:00.120 --> 0:01:02.800 to the Gulf Coast. We start thinking about you know, 0:01:02.880 --> 0:01:04.880 that's a lot of territory there that does a lot 0:01:04.880 --> 0:01:07.640 of shipping, So you really want to get some perspective 0:01:07.680 --> 0:01:09.920 on that. You go to the folks on the left 0:01:09.959 --> 0:01:11.959 side of this country, on the West coast, they had 0:01:11.959 --> 0:01:14.119 their labor issues. A couple of years ago. A Mario 0:01:14.160 --> 0:01:17.600 Kodero joins a CEO for the Port of Long Beach. Mario, 0:01:17.680 --> 0:01:20.320 thanks so much for joining us here. What role do 0:01:20.400 --> 0:01:23.080 you believe the West Coast ports your port in Long 0:01:23.120 --> 0:01:26.000 Beach can have and maybe relieving some of the pressure 0:01:26.360 --> 0:01:29.280 on shippers who can't unload or load their goods on 0:01:29.319 --> 0:01:31.160 the East coast. How are you guys approaching that? 0:01:32.360 --> 0:01:34.640 Well, thank you for the invitation. I mean, I think 0:01:34.640 --> 0:01:36.480 when you talk about Long Beach, we're part of the 0:01:36.640 --> 0:01:39.080 largest container gateway for the nation. So I think the 0:01:39.200 --> 0:01:43.320 road that we play is a continued rod that we 0:01:43.400 --> 0:01:47.240 move a great percentage of the nation's trade, and I 0:01:47.280 --> 0:01:50.120 think we're in a very good position to handle whatever 0:01:50.160 --> 0:01:52.960 search comes our way. And last, I'll make the point 0:01:53.000 --> 0:01:55.880 that August we had a historic number of containers moving 0:01:55.880 --> 0:01:58.160 through the Port of Long Beach. That number was nine 0:01:58.200 --> 0:02:03.480 hundred and thirteen thousand plus content. That's a historical high 0:02:03.600 --> 0:02:06.120 number for US, a record number, and when you add 0:02:06.120 --> 0:02:09.560 the Port of la for August, we approximate about one 0:02:09.639 --> 0:02:13.440 point nine million containers in this gateway the Sampeter Bay complex. 0:02:13.480 --> 0:02:16.079 So our role here is to continue to move cargo 0:02:16.120 --> 0:02:19.959 in an efficient manner. And again Port Labbach has a 0:02:20.000 --> 0:02:23.520 tremendous capacity right now, in that words, good capacity around 0:02:23.560 --> 0:02:27.079 seventy percent, so we are prepared to continue to move 0:02:27.080 --> 0:02:28.880 that containerized cargo that comes our way. 0:02:29.480 --> 0:02:33.160 I'm curious what kind of lessons did you end up 0:02:33.240 --> 0:02:35.920 learning from the pandemic because we had so many supply 0:02:36.400 --> 0:02:38.960 related issues with the chains there, and how could that 0:02:39.000 --> 0:02:41.079 help you try to navigate this instance? 0:02:42.160 --> 0:02:46.160 Great question, a lot of lessons learned. Number One, expanding 0:02:46.200 --> 0:02:48.960 operation hours. I've been a big spokesperson for twenty four 0:02:49.000 --> 0:02:52.240 to seven operations. Again, to qualify that or put that 0:02:52.320 --> 0:02:56.079 in perspective, you know, we're not going to go twenty 0:02:56.120 --> 0:02:59.000 four hours a day, seven days a week anytime soon, 0:02:59.080 --> 0:03:01.880 but there's a frame of expansion of hours. So in 0:03:01.960 --> 0:03:05.160 Long Beach we've done that. We've done staging areas, and 0:03:05.360 --> 0:03:07.480 again this is going to be very beneficial for us 0:03:07.480 --> 0:03:10.480 if in fact we need the stage containers outside the terminals, 0:03:10.639 --> 0:03:13.079 and I think the lessons learned from COVID. Again, it's 0:03:13.080 --> 0:03:16.400 a supply chain issue, so the warehouse that is the 0:03:16.520 --> 0:03:18.560 end product here of the supply chain in this region. 0:03:18.880 --> 0:03:21.959 They also are very collaborative with us and making sure 0:03:22.000 --> 0:03:25.079 that inventory moves. So again, a lot of lessons learned 0:03:25.080 --> 0:03:28.600 from COVID nineteen supply chain crisis. So we're applying those 0:03:28.680 --> 0:03:32.680 lessons and hopefully, again as I just noted, we're moving 0:03:32.720 --> 0:03:35.040 a record amount of cargo here at to Port Long 0:03:35.040 --> 0:03:37.800 Beach without any congestion or bottlenecks whatsoever. 0:03:38.360 --> 0:03:40.600 Hey, Mario, if I'm a shipper, I've got a ship 0:03:40.600 --> 0:03:43.440 at sea in the Atlantic steaming towards New York or something, 0:03:43.480 --> 0:03:47.040 and that's closed. Now what are the economics for me 0:03:47.320 --> 0:03:50.000 to say, Oh, I'll go to the Panama Canal, go 0:03:50.040 --> 0:03:51.640 through there, then I'll come up to your port in 0:03:51.680 --> 0:03:55.360 Long Beach. Is that realistic? Is that a decision option? 0:03:56.960 --> 0:04:01.560 Well, I mean that decision for shipper is based on economics, 0:04:01.600 --> 0:04:04.000 So obviously if they're going to come to the West Coast, 0:04:04.320 --> 0:04:07.200 I think that decision comes into play that for them, 0:04:07.560 --> 0:04:10.080 it's a reduced cost. With regard to the option that 0:04:10.120 --> 0:04:13.920 potentially could happen. But in that regard, yes, there's increased 0:04:13.960 --> 0:04:16.960 transportation costs for sure, but I think again, I think 0:04:17.000 --> 0:04:19.480 it's going to be a scenario which we'll be able 0:04:19.560 --> 0:04:22.159 to manage that and move forward as we have in 0:04:22.279 --> 0:04:26.599 previous instances. We talked about COVID nineteen. But again we 0:04:26.680 --> 0:04:29.160 have a lot of lessons learned from COVID nineteen, and 0:04:29.360 --> 0:04:31.920 one of them is we are prepared no matter where 0:04:31.960 --> 0:04:35.880 the options are in terms of cargo flow, we're going 0:04:35.960 --> 0:04:37.159 to be moving to cargo here. 0:04:37.720 --> 0:04:41.000 What other ports along the West coast do you foresee 0:04:41.000 --> 0:04:43.680 field cargo that ends up getting re routed? 0:04:45.920 --> 0:04:47.200 I'm sorry I repeat that question. 0:04:47.480 --> 0:04:49.719 So what other ports along the West coast do you 0:04:49.760 --> 0:04:53.640 foresee other field cargo ended up getting rerouted at this point? 0:04:53.880 --> 0:04:56.640 Well, Number one, poor Los Angeles. Again, they're part of 0:04:56.720 --> 0:05:00.320 this gateway, the Port of Oakland in northern California, and 0:05:00.360 --> 0:05:02.520 you also have the Port of Way NIMI. So there's 0:05:03.200 --> 0:05:05.360 other ports in the West coast here and again if 0:05:05.400 --> 0:05:07.880 you go to the northwest port of Seattle and Tacoma. 0:05:08.360 --> 0:05:10.440 So I think the West Coast is in a very 0:05:10.480 --> 0:05:14.800 good position to make sure that we not only receive 0:05:14.880 --> 0:05:16.760 the car a little, but continue to move it inland 0:05:17.120 --> 0:05:18.359 to the nation's midwest. 0:05:19.120 --> 0:05:19.400 Maria. 0:05:19.480 --> 0:05:23.560 One of the topics that I guess the long shoremen 0:05:23.800 --> 0:05:26.200 and the shippers have is a wages of course, and 0:05:26.440 --> 0:05:28.480 presumably that will work itself out. But the other one 0:05:28.520 --> 0:05:33.159 is automation and what that means for jobs. How do 0:05:33.200 --> 0:05:36.240 you guys talk to your long shorman about the need 0:05:36.279 --> 0:05:39.640 for you guys to automate to remain competitive versus their 0:05:39.720 --> 0:05:42.280 need to preserve jobs. What's that discussion like these days? 0:05:43.360 --> 0:05:46.720 Well, I mean you mentioned an issue here. Automation robotics 0:05:46.760 --> 0:05:50.560 has been a continued concern in all sectors of labor. 0:05:50.880 --> 0:05:52.640 So for the portal lombies, I think the way we've 0:05:52.680 --> 0:05:56.600 been able to navigate well with our labor partners is 0:05:56.920 --> 0:06:00.680 anyone who's interested in better developing the terminals of the 0:06:00.680 --> 0:06:03.359 poor long beach number one, you have to have a 0:06:03.440 --> 0:06:07.200 meeting of the mines with the IOWU, so that collaborative 0:06:07.200 --> 0:06:11.359 partnership and works well for us. So in that regard, 0:06:11.400 --> 0:06:14.200 that's been our policy. Anybody who wants to expand or 0:06:14.279 --> 0:06:17.080 develop their terminals, they have to go through the isow first, 0:06:17.360 --> 0:06:20.720 and that mitigates any serious differences as we go down 0:06:20.720 --> 0:06:23.599 the road. So for us, it's been a successful path. 0:06:23.880 --> 0:06:26.200 But on the other hand, again keep in mind this 0:06:26.240 --> 0:06:29.080 is an issue across the board in terms of workforce 0:06:29.720 --> 0:06:32.360 in the nation, if not the global community. 0:06:32.640 --> 0:06:35.479 Do you have a sense from retailers how they're potentially 0:06:35.520 --> 0:06:37.560 making contingency plans as of. 0:06:37.560 --> 0:06:41.880 Now, Well, I think what I can tell you is 0:06:42.640 --> 0:06:44.840 I gave you these record numbers that we're moving here 0:06:44.880 --> 0:06:47.800 at the Poor of Long Beach for August. That's almost 0:06:47.880 --> 0:06:50.159 a thirty four percent increase year to year. So I 0:06:50.200 --> 0:06:53.719 think the retailers in the shippers have already anticipated a 0:06:53.839 --> 0:06:56.760 scenario that's occurring in the East Coast and they've already 0:06:57.279 --> 0:06:59.960 made that decision to move their cargo to the West Coast. 0:07:00.120 --> 0:07:02.880 And again, the August numbers for both these ports Los 0:07:02.880 --> 0:07:05.800 Angeles and Long Beach here in the Sanpedo Bay complex 0:07:05.960 --> 0:07:10.400 are historical numbers, so that basically answers the question that 0:07:10.440 --> 0:07:13.080 I think they've already made those decisions, and I do 0:07:13.160 --> 0:07:15.400 expect to have additional car a little bit. Have me 0:07:15.440 --> 0:07:17.920 said all this, I want to make sure that again 0:07:17.960 --> 0:07:20.480 from the poor lobbies, we encourage that the parties in 0:07:20.520 --> 0:07:23.680 the East Coast moved to a resolution because any bottleneck 0:07:23.720 --> 0:07:26.680 and the supply chain in the nation is not good. 0:07:26.880 --> 0:07:30.560 So for my perspective, I think again, it's not about 0:07:30.720 --> 0:07:33.440 additional cargo that we're going to get. It's about hopefully 0:07:33.480 --> 0:07:36.720 these parties coming to a mutual resolution soon so that 0:07:36.760 --> 0:07:41.400 we don't impact the nation's supply chain anywhere in the country. 0:07:41.800 --> 0:07:43.480 Hey, Mary, thank you so much for joining us. Really 0:07:43.480 --> 0:07:46.560 appreciate getting some of your time at MARYA. Cordero, he's 0:07:46.600 --> 0:07:49.640 the CEO of the Port of Long Beach, giving us 0:07:49.640 --> 0:07:53.280 a sense of kind of they're busy and presumably they 0:07:53.280 --> 0:07:55.600 still have some capacity to take some shipments if somebody 0:07:55.600 --> 0:07:57.800 want to divert them from the East coast to the 0:07:57.800 --> 0:07:59.760 West coast. And the other thing we learned about talking 0:07:59.800 --> 0:08:02.080 to Jean Soroka, who is his counterpart at the Port 0:08:02.080 --> 0:08:06.280 of La is that those West coast ports, particular the 0:08:06.280 --> 0:08:08.720 ones in the La area, they just got a great 0:08:08.800 --> 0:08:12.280 view of China trade. They do contannerships could just keep 0:08:12.320 --> 0:08:14.640 coming back and forth back and forth into that port 0:08:14.880 --> 0:08:16.760 so you can get a good view. 0:08:17.400 --> 0:08:21.280 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:08:21.360 --> 0:08:24.880 weekdays at ten am Eastern on applecar Play and androyd 0:08:24.880 --> 0:08:27.679 Otto with the Bloomberg Business App. You can also listen 0:08:27.800 --> 0:08:30.880 live on Amazon Alexa from our flagship New York station 0:08:31.240 --> 0:08:35.000 Just Say Alexa playing Bloomberg eleven thirty. 0:08:35.880 --> 0:08:38.440 Tensions and Conflicts in the Middle East returned to Mick mulnoy. 0:08:38.480 --> 0:08:41.000 He's a co founder of the Lobo Institute. That's just 0:08:41.080 --> 0:08:43.600 the beginning. He's a former senior fellow at the Middle 0:08:43.640 --> 0:08:47.040 East Institute, former Deputy Assistant Secretary of Defense for the 0:08:47.040 --> 0:08:49.920 Middle East at the US Department of Defense. That was enough, 0:08:50.320 --> 0:08:53.720 former Power Military Operations officer at CIA, and of course 0:08:53.800 --> 0:08:56.840 a former US Marine Infantry officer. And for his service, 0:08:56.880 --> 0:08:59.720 we say thank you very much, Mick for your service. 0:09:00.120 --> 0:09:02.880 Make it looks like we're going to take another rung 0:09:03.120 --> 0:09:05.760 up on the escalation ladder today. What do you make 0:09:05.800 --> 0:09:07.480 of this news that the US is saying that it 0:09:07.559 --> 0:09:12.959 ran as preparing to hit Israel with ballistic missiles. 0:09:12.960 --> 0:09:15.440 Good to be with you, guys. I think this is expected. 0:09:15.480 --> 0:09:18.040 Of course, they've been claiming they're going to retaliate ever 0:09:18.080 --> 0:09:24.080 since we saw the assassination of the Hamas leader in Tehran. Then, 0:09:24.120 --> 0:09:28.000 of course the assassination of the Hesbela leader in Beirut 0:09:28.120 --> 0:09:30.760 and it was expected. Now the question is is it 0:09:30.800 --> 0:09:33.479 going to be like April where we have the capacity 0:09:33.480 --> 0:09:36.320 and we do have the capacity to essentially shoot down 0:09:36.400 --> 0:09:39.160 all of the incoming drones and missiles, or is it 0:09:39.200 --> 0:09:41.000 going to be more substantial or is it going to 0:09:41.000 --> 0:09:44.480 be coordinated with Hesbelah and the Huthis so that it 0:09:44.520 --> 0:09:47.800 can try to overwhelm the defenses of Israel and the 0:09:47.880 --> 0:09:51.000 United States combined. That's the question We'll see soon because 0:09:51.000 --> 0:09:52.880 it looks like it's eminent and it's going to take 0:09:52.920 --> 0:09:57.199 some of these projectiles hours to get to Israel. So 0:09:57.480 --> 0:09:59.720 we have to stand by and see how this goes. 0:10:00.200 --> 0:10:03.160 To what extent does the United States rely on Israeli 0:10:03.240 --> 0:10:07.040 intelligence streams and its assessment of those different regional threats. 0:10:09.320 --> 0:10:11.880 So there's a back and forth when it comes to 0:10:11.920 --> 0:10:19.120 the Israeli US intelligence cooperation. Oftentimes Israel has better intelligence 0:10:19.320 --> 0:10:21.480 on the threats that are immediate to them. Of course, 0:10:21.520 --> 0:10:25.520 the United States also has its independent intelligence and then 0:10:25.679 --> 0:10:30.560 and when it comes to big regional intelligence, usually the US, 0:10:30.600 --> 0:10:35.199 the CIA, and other organizations inside the intelligence community are 0:10:35.240 --> 0:10:39.000 better and past the information to Israel. For example, the 0:10:39.040 --> 0:10:43.560 IDEF spokesman said that the US had notified Israel that 0:10:44.160 --> 0:10:48.480 Iran was preparing these cruise ballistic missiles and potentially drones 0:10:49.040 --> 0:10:52.760 earlier this morning. So that shows the cooperation and the 0:10:52.800 --> 0:10:56.200 sharing that goes on near constantly, Mick. 0:10:56.679 --> 0:11:01.120 Immediately following the October attack on Israel prime mention Netnyan, 0:11:01.160 --> 0:11:04.080 who said quite simply that the strategy, the goal of 0:11:04.200 --> 0:11:08.120 Israel is to one eliminate Hamas and to get the 0:11:08.240 --> 0:11:12.920 hostages back. That seems to have broadened out significantly. The 0:11:13.000 --> 0:11:17.439 scope to now take in on Hesbela and going into Lebanon, 0:11:17.840 --> 0:11:22.040 dealing with all in any adversaries. Is that, in fact true, 0:11:22.120 --> 0:11:24.800 has his war aims broadened significantly? 0:11:27.360 --> 0:11:29.240 Well, I do think it's broadened, but I would have 0:11:29.320 --> 0:11:31.240 to say if somebody spends quite a bit of time 0:11:31.640 --> 0:11:36.160 in Israel. The Israelis have been messaging directly that they 0:11:36.360 --> 0:11:39.760 knew that this war in the north between Hesbelah would 0:11:39.760 --> 0:11:42.680 have to happen if they were to get their six 0:11:42.800 --> 0:11:46.800 hundred or excuse me, sixty thousand plus citizens back to 0:11:46.840 --> 0:11:50.000 their homes in northern Israel. They were very clear about that, 0:11:50.360 --> 0:11:53.520 and I think it's important to point out Hesblah has 0:11:53.559 --> 0:11:56.600 been just hacking Israel since October eighth, there's been over 0:11:56.720 --> 0:12:01.199 nine thousand missiles, rockets, drones, an say, tank weapons fired 0:12:01.200 --> 0:12:04.560 into Israel. And this was inevitable if this was going 0:12:04.640 --> 0:12:07.400 to continue, and I think they have shown that they 0:12:07.400 --> 0:12:10.600 have very good capabilities in Lebanon. I don't think it's 0:12:10.600 --> 0:12:14.160 in anybody's interest, including Israel, and it's certainly not Lebanon's, 0:12:14.160 --> 0:12:16.920 but this to turn into a full scale ground invasion. 0:12:17.240 --> 0:12:21.079 But from Israel's perspective, this was inevitable if Hezbolah was 0:12:21.120 --> 0:12:24.520 going to continue to attack their northern settlements and essentially 0:12:25.520 --> 0:12:27.720 put hat at least one third of their country off 0:12:27.760 --> 0:12:29.319 limits to their own citizens. 0:12:29.880 --> 0:12:33.559 Well, the conflicts between Israel and has blowed inevitably drawn 0:12:33.640 --> 0:12:36.360 in Iran into the conflict. What does that mean for 0:12:36.520 --> 0:12:38.680 the wider region in general? 0:12:38.760 --> 0:12:43.760 Now, So that was the biggest concern of the United States. 0:12:43.800 --> 0:12:46.440 That's why we've had so many military assets in the 0:12:46.440 --> 0:12:49.079 region to try to deter a course, and to a 0:12:49.120 --> 0:12:52.480 certain extent it has deterred Aron, I believe. And then 0:12:52.679 --> 0:12:56.319 also to defend and we've seen how capable the US 0:12:56.559 --> 0:12:59.160 was when it came to defending Israel, along with Israel 0:12:59.440 --> 0:13:02.200 and other countries in the regions such as Jordan, which 0:13:02.240 --> 0:13:06.840 defended Israel against the April thirteenth attack by Iron. But 0:13:06.920 --> 0:13:09.240 this is what the biggest concern is for the United States, 0:13:09.240 --> 0:13:12.959 that Iran would mount something that wasn't manageable, that wasn't 0:13:12.960 --> 0:13:15.920 for show, that was or actually just got through and 0:13:16.000 --> 0:13:19.640 caused substantial damage or loss of life in Israel, because 0:13:19.679 --> 0:13:23.080 I think it's been clear that Israel will respond directly 0:13:23.800 --> 0:13:27.440 to or on and they might take direct, meaningful strikes, 0:13:27.440 --> 0:13:29.760 not like they did last time in Iran. In fact, 0:13:29.960 --> 0:13:33.560 several of the IDF spokesperson have referenced their recent attack 0:13:34.040 --> 0:13:37.000 on the WHO thi's in WHO data Yemen is further 0:13:37.080 --> 0:13:42.480 away than from Israel than Iran's oil fields, specifically citing 0:13:42.600 --> 0:13:44.600 Iran's oil field. So I think there's a lot of 0:13:44.679 --> 0:13:48.080 messaging coming out of Israel right now that if Iran 0:13:48.200 --> 0:13:51.360 is successful so not for show like many in it 0:13:51.880 --> 0:13:55.120 believe April was, and actually causes damage to this could 0:13:55.160 --> 0:13:59.520 escalate very quickly and have impacts that go beyond the 0:13:59.559 --> 0:14:01.440 two cunt treason, certainly beyond the region. 0:14:02.280 --> 0:14:02.480 Mick. 0:14:02.520 --> 0:14:05.760 We've seen the US government repeatedly call for a restraint 0:14:05.840 --> 0:14:08.439 on the part of Israel, yet Primeister Netanya, who has 0:14:08.520 --> 0:14:12.800 effectively ignored those Please here, What is the current state 0:14:12.880 --> 0:14:17.120 of the US Israeli relationship. 0:14:19.360 --> 0:14:21.920 Well, I certainly think there is some tensions. I mean, 0:14:22.120 --> 0:14:26.560 the US overall supports Israel defeating Hamas of course they 0:14:26.560 --> 0:14:28.880 were the terrorist attack that attacked them on October seventh, 0:14:29.040 --> 0:14:32.200 and Heswela, which is a US designated terrorist organization and 0:14:32.280 --> 0:14:35.560 has been constantly attacking Israel. When it comes to the 0:14:35.600 --> 0:14:39.040 relationship in Gaza, I think there's been differences of how 0:14:39.040 --> 0:14:41.640 that was prosecuted, and now I think the US just 0:14:41.720 --> 0:14:45.320 wants to see this get contained and have a cease 0:14:45.320 --> 0:14:47.560 fire so that they can do everything that they would 0:14:47.640 --> 0:14:50.320 like to see policy wise, which is in the conflict 0:14:50.560 --> 0:14:53.880 in both Gaza and obviously not have one if you 0:14:53.920 --> 0:14:57.480 will in Lebanon. But Israel has their own interests, they're 0:14:57.520 --> 0:15:01.360 their own sovereign country, and they make their own decisions. 0:15:01.560 --> 0:15:03.960 If they were asking me, I would suggest to the 0:15:04.000 --> 0:15:06.880 White House that they take more of a behind the 0:15:06.920 --> 0:15:11.960 scenes role and not have public disagreements with Israel. They 0:15:12.000 --> 0:15:15.480 could certainly have private disagreements Israel when it comes to 0:15:15.520 --> 0:15:19.560 this seaspar because in Lebanon specifically, because this is very 0:15:19.560 --> 0:15:22.640 difficult for any country to tell another country that's been 0:15:22.680 --> 0:15:26.320 attacked again nine thousand missiles in less than one year 0:15:26.960 --> 0:15:29.160 not to do something that they know they would do, 0:15:29.800 --> 0:15:33.640 So that makes this a bit different. And essentially the 0:15:33.640 --> 0:15:36.560 Sea spire needs to come from Hesbela, who could simply 0:15:36.840 --> 0:15:42.040 stop attacking Israel, agree not to continue, potentially move to 0:15:42.080 --> 0:15:44.800 the Litati River, which is required by a UN resolution. 0:15:45.280 --> 0:15:48.880 So most of the I think negotiations on this side 0:15:48.880 --> 0:15:52.760 should be focused on Hesbela vice Israel, which both countries 0:15:52.800 --> 0:15:55.520 I think, put in the same situation, would be doing 0:15:55.560 --> 0:15:57.120 something similar to Israel right now. 0:15:57.960 --> 0:16:00.360 All right, thank you so much. As always, really appreciate 0:16:00.400 --> 0:16:02.240 getting some of your time and your perspective. 0:16:02.280 --> 0:16:02.920 Mick mulroy. 0:16:03.360 --> 0:16:05.320 He's a co founder of the Lobo Institute and really 0:16:05.320 --> 0:16:08.360 one of our expert voices that we rely upon whenever 0:16:08.400 --> 0:16:12.120 there's some of these geopolitical tensions, particularly in the Middle East, 0:16:12.160 --> 0:16:14.800 where he has so much experience. 0:16:16.080 --> 0:16:20.000 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:20.080 --> 0:16:23.160 weekdays at ten am Eastern on Focar playing and broud 0:16:23.160 --> 0:16:26.280 Otto with the Bloomberg Business app. Listen on demand wherever 0:16:26.320 --> 0:16:30.160 you get your podcasts, or watch us live on YouTube. 0:16:31.120 --> 0:16:34.840 Geopolitical story of the day movie markets is US is 0:16:34.840 --> 0:16:37.760 saying that is a rands preparing to hit Israel with 0:16:37.840 --> 0:16:40.520 ballistic missiles. We've been covering that story all day. We 0:16:40.520 --> 0:16:43.200 will continue to do so. Jonathan Panakoff he joins us now. 0:16:43.200 --> 0:16:46.680 He's a director of the Scowcroft Middle East Security Institute 0:16:46.680 --> 0:16:51.200 at the Atlantic Council. He is based in Washington, DC. Jonathan, 0:16:51.240 --> 0:16:53.600 thanks so much for joining us here. What do you 0:16:53.640 --> 0:16:56.680 make of the last I guess forty eight hours in 0:16:56.720 --> 0:17:00.400 the Middle East, with Israel having some troop and versions 0:17:00.480 --> 0:17:02.720 into southern Lebanon, and now the news today that the 0:17:02.760 --> 0:17:06.200 US says that Iran may be preparing to hit Israel 0:17:06.200 --> 0:17:08.600 with the ballistic missiles. That's been quite the escalation in 0:17:08.600 --> 0:17:09.520 the last forty eight hours. 0:17:09.560 --> 0:17:10.159 What do you make of it? 0:17:11.400 --> 0:17:13.879 Thanks for having me. It certainly has been the escalation. 0:17:14.359 --> 0:17:17.040 I don't expect it to end anytime soon. I think 0:17:17.119 --> 0:17:20.199 the Iran strike that is probably going to be coming 0:17:20.240 --> 0:17:23.320 shortly here, it's going to look slightly different than April. 0:17:23.520 --> 0:17:26.440 I think certainly it's still going to probably target first 0:17:26.640 --> 0:17:30.120 military assets in israel intelligence headquarters. 0:17:30.119 --> 0:17:30.600 Perhaps. 0:17:30.880 --> 0:17:32.679 I don't think they're going to see their runnings go 0:17:32.720 --> 0:17:36.800 after civilian infrastructure. But I do think the question is 0:17:36.840 --> 0:17:39.159 going to be how does Israel respond, And I'm skeptical 0:17:39.240 --> 0:17:41.840 that you will see the same response that you had 0:17:41.880 --> 0:17:44.520 in April. And then that means that the chances for 0:17:44.760 --> 0:17:48.560 increased escalation as we go up the escalatory ladder are 0:17:48.640 --> 0:17:50.520 only going to go up. So this is going to 0:17:50.560 --> 0:17:53.959 take a little bit of time to see where it resolves, 0:17:54.160 --> 0:17:56.879 and of course at the end of it, you still 0:17:56.920 --> 0:18:01.200 have what will be an ongoing war between Israel and Hezbolah. 0:18:01.880 --> 0:18:04.879 Has the UN Security Council had a reaction yet to 0:18:04.920 --> 0:18:06.040 the latest news on this. 0:18:07.800 --> 0:18:11.119 The Secretary General did come out and say every effort 0:18:11.119 --> 0:18:14.160 has to be made to try to prevent a full 0:18:14.200 --> 0:18:17.439 scale war between Israel and Hezbola that could engulf the region. 0:18:17.440 --> 0:18:20.480 But we haven't seen UN Security Council immediately this morning 0:18:20.640 --> 0:18:23.720 meet my senses, you'll see them meet as soon as 0:18:23.760 --> 0:18:28.080 Frankly Iran launchers and you start to see more kinetic 0:18:28.160 --> 0:18:31.119 action being taken. But the reality is going to be 0:18:31.320 --> 0:18:34.560 the impact of the UNSC is going to be, if anything, 0:18:34.920 --> 0:18:35.560 very minimal. 0:18:36.520 --> 0:18:38.720 Jonathan, I guess maybe with a little bit of hindsight, 0:18:38.760 --> 0:18:40.320 we should not have been too surprised that we've had 0:18:40.320 --> 0:18:42.560 this escalation here because you think about just last week 0:18:42.880 --> 0:18:45.480 Prime mentioned that Yahoo at the United Nations here in 0:18:45.480 --> 0:18:49.360 New York. Pretty defiant speech there is he boldened down 0:18:49.440 --> 0:18:51.840 to do more than maybe what the initial aims were, 0:18:51.880 --> 0:18:55.160 which is to get the hostages back and take out Hamas. 0:18:55.760 --> 0:18:57.040 His aims much broader now. 0:18:58.440 --> 0:19:01.399 They certainly are oka. I think Israel has been split 0:19:01.480 --> 0:19:03.840 for quite a while. They were some at the beginning 0:19:03.880 --> 0:19:07.000 of the war, including Yoev Galant, the Israeli Defense Minister, 0:19:07.160 --> 0:19:10.479 who said, no, we can actually deal with Hamas at 0:19:10.480 --> 0:19:13.280 a later time, we should go after Hezbala, and that 0:19:13.440 --> 0:19:17.199 was in late October of twenty twenty three. That's not 0:19:17.400 --> 0:19:19.760 the direction that Netanyahu chose to go. It's not the 0:19:19.760 --> 0:19:22.680 direction most security officials chose to go. But it also 0:19:22.800 --> 0:19:26.919 didn't resolve the fundamental challenge that you had. Hisbela beginning 0:19:26.960 --> 0:19:31.160 October eighth, begin rocket attacks into northern Israel that has 0:19:31.160 --> 0:19:36.000 displaced tens of thousands of Israeli citizens who Netanyahu has 0:19:36.040 --> 0:19:39.400 now faced political pressure to return them home. It's now 0:19:39.440 --> 0:19:42.159 been a year. The original promise was to restart at 0:19:42.160 --> 0:19:45.040 the beginning of the school year, that didn't happen, and 0:19:45.080 --> 0:19:47.080 so now I think the view is and we've seen 0:19:47.119 --> 0:19:50.120 this in the last few months, Israel very methodically went 0:19:50.160 --> 0:19:54.200 after Hezbala's command of control, its leadership. It took out 0:19:54.600 --> 0:19:56.960 more Hebela leaders in the last two months than it 0:19:57.000 --> 0:20:00.440 had in the last two decades, and so clearly there's 0:20:00.440 --> 0:20:02.720 a concern that this is going to escalate, and it 0:20:02.800 --> 0:20:05.800 probably will. But you're right, some of this has been 0:20:05.800 --> 0:20:08.359 telegraphed in the last few months about the direction we 0:20:08.400 --> 0:20:08.919 were heading. 0:20:09.600 --> 0:20:12.159 What types of weapons could Iran use in an attack 0:20:12.240 --> 0:20:15.359 and would they use all of their military capabilities for one? 0:20:16.680 --> 0:20:19.800 Yeah, I think so. Look, Iran has a really large 0:20:19.840 --> 0:20:23.760 inventory of ballistic missiles, of cruise missiles, of drones. You're 0:20:23.800 --> 0:20:27.679 talking about dozens of different types with significant ranges. The 0:20:27.720 --> 0:20:31.440 ballistic missiles, the time to get them from Iran to 0:20:31.680 --> 0:20:35.320 Israel is about twelve minutes, give or take, so it's 0:20:35.359 --> 0:20:37.680 really quick. The cruise missiles there is a little slower, 0:20:37.720 --> 0:20:40.840 the drones much lower than that. But the reality is, 0:20:40.840 --> 0:20:43.720 at the end of the day, Iran's number one concern 0:20:43.920 --> 0:20:48.200 is always regime stability and regime security, and so the 0:20:48.200 --> 0:20:50.639 odds that it's going to use the entirety of it's Arsenal, 0:20:50.760 --> 0:20:54.119 I think is very very low, because if it does so, 0:20:54.440 --> 0:20:57.600 then it's got nothing left to protect itself or even 0:20:57.640 --> 0:21:01.640 to protect Kabala in another month or two, if there's 0:21:01.680 --> 0:21:04.240 a need that, if follow looks like it's really suffering, 0:21:04.640 --> 0:21:06.760 the question for Ron is going to be, how does 0:21:06.800 --> 0:21:09.560 it respond in a meaningful way that can try to 0:21:09.640 --> 0:21:14.000 create some increased deterrence against Israel without actually leading to 0:21:14.040 --> 0:21:17.320 a full scale war that jeopardizes the stability of the 0:21:17.320 --> 0:21:20.440 Iranian regime. And that's going to be a really hard 0:21:20.520 --> 0:21:21.200