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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Bloomberg

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Speaker 1: This Weekend Podcast with David Gura, Christina Raffini, and Lisa Matteo.

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Speaker 2: Thanks for joining us for today's selection of conversations from

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Speaker 2: the show.

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Speaker 3: You can listen to our favorite discussions right here on

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Speaker 3: the podcast, but also make sure to join us live

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Speaker 3: every Saturday and Sunday morning starting at seven am Easter.

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Speaker 4: We're on Bloomberg Television, Radio and the Bloomberg Business App,

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Speaker 4: bringing you unique takes and in depth interviews on news, politics, lifestyle,

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Speaker 4: and culture.

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Speaker 2: As we talk constantly, it seems about the affordability crisis

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Speaker 2: here in this country. Everything is getting more expensive, including travel,

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Speaker 2: and this morning our top story another one hits the dust.

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Speaker 2: Spirit Airlines has ceased operation and grounded its fleet following

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Speaker 2: a collapse of that final federal bailout proposal.

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Speaker 3: This morning, Transportation sectory Sean Duffy taking to social media

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Speaker 3: stating the Department of Transportation is working with major US

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Speaker 3: carriers including United, Delta, Jet Blue, and Southwest to cap

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Speaker 3: ticket prices for stranded Spirit Airlines passengers, while others offer

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Speaker 3: reduced fares and employee support Following service disruptions joining us now.

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Speaker 3: Jeff Mason, our White House correspondent, back with us on set,

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Speaker 3: along with the Points Guy, Managing editor Clint Henderson, and

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Speaker 3: Patrick Dehan had patrolling analysis for Gas Buddy. As Lisa

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Speaker 3: mentioned just a moment ago, this is a fuel story,

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Speaker 3: very much of fuel story, so we'll get into both

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Speaker 3: how that's affecting air travel and cars and trucks as well.

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Speaker 3: Jeff Mason, let me start with you and just get

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Speaker 3: your perspective on how this fell apart. We heard the

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Speaker 3: President yesterday as he made his way from the White

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Speaker 3: House to Florida, indicating that this deal wasn't dead. He

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Speaker 3: was waiting to see I guess what was on the table.

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Speaker 3: And then around three o'clock this morning we heard from

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Speaker 3: Spirit that they were in fact closing their doors. What

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Speaker 3: happened between when he was walking outside the White House

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Speaker 3: in the Rose Garden to when we got that announcement

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Speaker 3: early in the morning today.

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Speaker 5: Well, I think it sounds like it just didn't turn

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Speaker 5: out to be a good enough deal for the government

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Speaker 5: and the President, as we've talked about before, likes to

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Speaker 5: describe himself as a deal maker. He wrote a book

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Speaker 5: about being a deal maker. It's something that's actually hanging

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Speaker 5: over the Iran war right.

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Speaker 6: Now as well.

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Speaker 5: He wants a good deal and it just wasn't a

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Speaker 5: good enough deal for him, which is actually sort of understandable,

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Speaker 5: because running an airline is not easy, and not just

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Speaker 5: running the airline, but the financials of this particular airline

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Speaker 5: were obviously so poor that it's now gone out of business,

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Speaker 5: and it just didn't turn out to be what they wanted.

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Speaker 7: From the federal.

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Speaker 2: Side, we're talking about the constraints of trying to run

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Speaker 2: a budget airline in this country versus europe. Negotiations with

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Speaker 2: really only one pilot's union drives up costs, and then

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Speaker 2: of course fuel is the big cost, and it's hard

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Speaker 2: to do trying to.

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Speaker 8: Keep those prices low.

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Speaker 2: Speaking of Clint, I want to ask you, if you

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Speaker 2: are a consumer and you liked this budget airline option,

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Speaker 2: where are you going to notice this the most, Which

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Speaker 2: routes are going to take a hit, and how many

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Speaker 2: passengers have any idea how many people are currently stranded

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Speaker 2: or without flights.

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Speaker 9: We don't know the exact number of stranded passengers, but

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Speaker 9: I will say all the major airlines have stepped up

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Speaker 9: to offer these rescue fares.

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Speaker 10: So that's really encouraging to see.

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Speaker 9: I know, American, Delta United, everyone's offering to help out

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Speaker 9: stranded passengers here. You know, as far as it goes

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Speaker 9: with pricing in any market that Spirit was operating, you're

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Speaker 9: going to see fares jump almost immediately. We saw Spirit

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Speaker 9: pull out of Minneapolis not too long ago, and Delta

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Speaker 9: race fares almost immediately by a substantial margin.

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Speaker 10: So that's why, you know, we all love to hate Spirit, but.

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Speaker 9: You're really going to hate it when they leave markets

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Speaker 9: like Orlando for Lauderdale, you know, places where they drive

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Speaker 9: costs down, you're going to see prices really spike.

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Speaker 2: Yeah, earlier I was referring it to it as the

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Speaker 2: waffle House of the air To be clear, I like

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Speaker 2: waffle House. I'm a big waffle House fan. Sometimes it

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Speaker 2: hits the spot, and with Spirits sometimes you just needed

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Speaker 2: to get there, and now that's one less option.

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Speaker 3: I guess Clint I was asking Jeff about the kind

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Speaker 3: of political nature of all of this, how the president

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Speaker 3: was looking at this perspective. Deal take us behind the

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Speaker 3: scenes at this company. This is an airline that had

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Speaker 3: gone through two Chapter eleven filings in the last year.

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Speaker 3: I guess was retaining some optimism here that it could

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Speaker 3: make it through this latest stretch. How much of this

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Speaker 3: its decision to close down, is attributable to just general

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Speaker 3: problems within the company or are is it attributable to

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Speaker 3: just the fact that fuel prices have gone up as

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Speaker 3: much as they have recently.

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Speaker 9: Look, the cost of jet fuel was the nail on

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Speaker 9: the coffin. But the truth is Spirit has not really

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Speaker 9: been a profitable company for half of a decade now.

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Speaker 9: So my fear is that this is not just a

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Speaker 9: Spirit problem. This is a low cost carrier model problem.

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Speaker 9: So you know, a bailout of the other low cost

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Speaker 9: carriers or even the mainline carriers could be coming if

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Speaker 9: the cost of jet fuel remains.

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Speaker 10: As high as it is. You know, I'm particularly worried

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Speaker 10: about airlines like Jet Blue.

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Speaker 9: You know, the truth is, it's very hard to remain

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Speaker 9: profitable with the.

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Speaker 10: Cost of jet fuel as high as it is.

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Speaker 9: But my fears we end up with just the mainline

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Speaker 9: carriers left, you know, Alaska and Hawaiian, Southwest, American, Delta United,

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Speaker 9: and that means higher fares for all of us. Already,

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Speaker 9: we've seen fars jump between ten and thirty for summer travel,

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Speaker 9: so fasten your seatbelts.

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Speaker 5: On that front, the President has been wanting to have

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Speaker 5: a tour around the country. This is something that we

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Speaker 5: talked about before, to talk about his economy, to talk

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Speaker 5: about his success.

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Speaker 7: He can't afford the fuel. I'm just joking.

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Speaker 8: Yeah, he probably can.

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Speaker 11: He probably can't.

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Speaker 10: Sorry, not at all.

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Speaker 5: The irony of him wanting to talk about his record

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Speaker 5: in the months before the midterms is it's his actions

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Speaker 5: that are leading to this going up, leading to the

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Speaker 5: fuel prices going up, I mean leading to inflation, the

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Speaker 5: inflationary impact of the war, of the oil prices, of

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Speaker 5: gasoline prices. It makes a tough political sell when you're

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Speaker 5: trying to hold on to control of Congress.

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Speaker 2: So Patrick, on that note, gas prices we saw in

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Speaker 2: California were really high this week. Planes, trains, automobiles, maybe

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Speaker 2: not trains, but definitely cruise ships if you are trying

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Speaker 2: to get around, if you're trying to have any kind

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Speaker 2: of vacation. Seems like all of these options are not great.

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Speaker 2: And just when it comes to affordability, where are Americans

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Speaker 2: really going to start to feel these high gas prices

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Speaker 2: the most?

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Speaker 6: Yeah?

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Speaker 12: Absolutely, I mean West coast areas you're already seeing prices

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Speaker 12: over six dollars a gallon in California, you know, so

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Speaker 12: the West Coast may not be the place to travel

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Speaker 12: this summer. And the nation's interior, whether it's the Plains,

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Speaker 12: the Rockies, not so much the Great Lakes right now

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Speaker 12: due to some refinery issues, but the nation's interior is

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Speaker 12: going to be a little bit more insulated from those

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Speaker 12: higher prices this year. And that's just because that fuel

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Speaker 12: that is produced in those areas the Plaines and Rockies

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Speaker 12: can't as easily be exported as what's produced in say

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Speaker 12: the Gulf Coast or the East Coast or the West Coast,

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Speaker 12: where we're seeing a lot of pressure now from overseas markets,

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Speaker 12: from diesel to jet fuel to gasoline being exported. In fact,

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Speaker 12: in the last week alone, the EIA reports that nearly

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Speaker 12: one hundred million barrels of oil and refined products have

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Speaker 12: left US shores, and that's going to put an immense

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Speaker 12: amount of pressure, especially on the West Coast where California

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Speaker 12: now with the loss of two refineries in the last

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Speaker 12: eight months, that's far more critical.

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Speaker 13: California now left to import fuel.

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Speaker 12: And keep in mind the interesting part of this is

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Speaker 12: some airlines you mentioned Spirit Norse Atlantic saying we're done

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Speaker 12: with California because of the risk of a jet fuel

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Speaker 12: issue on the West Coast. It's certainly elevated. It's certainly

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Speaker 12: not what it might be in areas like Europe. But

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Speaker 12: you talk about jet fuel, the prices doubled, some airlines

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Speaker 12: saying we're not going to gamble on the West coast.

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Speaker 12: And look at all the airlines pulling back from some

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Speaker 12: of their routes looking at more efficient boosting capacity. I mean,

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Speaker 12: when of Boeing seven eighty seven to nine costs you know,

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Speaker 12: hundreds of thousands of dollars to fill, You're talking about

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Speaker 12: over five hundred dollars on an average seat map for

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Speaker 12: those three hundred seats. It's incredibly expensive right now to

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Speaker 12: fly these airlines overseas. The long hauls will probably stick,

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Speaker 12: but across the board, from gas to jet fuel to diesel,

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Speaker 12: consumers are going to be feeling it left and right

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Speaker 12: this summer.

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Speaker 3: Patrick, gaze into the gas, Buddy glass Ball, give us

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Speaker 3: your clairvoyant take here of what this looks like in

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Speaker 3: the summertime. We hear from Kevin Hasset, the President's closest

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Speaker 3: economic advisor that these prices could go down as quickly

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Speaker 3: as they've come up. It's something for the President says, well,

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Speaker 3: this is a blip. I think he said about the

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Speaker 3: surge that we've seen in in fuel prices.

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Speaker 8: Patrick, what's it going to take.

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Speaker 3: Say we had a cessation of fighting that was lasting,

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Speaker 3: permanent in the Middle East, how soon would prices recover

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Speaker 3: from fact they do?

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Speaker 12: Well, you know, you talk about prices going back to

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Speaker 12: their pre war level. I think that's next to impossible

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Speaker 12: to happen, probably for the good majority of the rest

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Speaker 12: of this year, unless the pendulum word to swing wildly

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Speaker 12: opened very quickly. I mean, everything would have to be

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Speaker 12: going backwards for us to get to that point where

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Speaker 12: that's possible. Right, we're not seeing any agreement between the

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Speaker 12: US and Iran. We're far apart on that. So strait

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Speaker 12: was open until it was closed. So even if there

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Speaker 12: is some clarity, it's going to take a little bit

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Speaker 12: of verification and time to build confidence. I don't think

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Speaker 12: we're going to see any real case of gas prices

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Speaker 12: this summer falling below four dollars. Maybe if the straight reopens,

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Speaker 12: we could see the national average falling to the mid

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Speaker 12: to upper three dollar range. But even then those prices

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Speaker 12: are still seventy five cents to a dollar a gallon,

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Speaker 12: more than what we're seeing over the winters. So Americans

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Speaker 12: are going to have to buckle up. I think we're

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Speaker 12: going to start a Memorial Day starting the summer driving

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Speaker 12: season with prices over four dollars, And if the President

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Speaker 12: doesn't act on reopening the Straight and coming up with

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Speaker 12: some solution, that gas prices this summer could even.

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Speaker 13: Hit five dollars a gallon.

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Speaker 12: Heck, they're already five dollars a gallon on the West Coast,

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Speaker 12: in the Great Lakes, they're pushing five dollars a gallon.

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Speaker 12: That may become more of a reality for much more

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Speaker 12: of the country if the Strait doesn't soon reopen.

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Speaker 3: Patrick, I only want to get back to airplanes here.

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Speaker 3: But you mentioned those gas prices price we're paying at

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Speaker 3: the pump. I know that there's been some speculation the

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Speaker 3: President might, through executive action, try to remove that gas tax.

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Speaker 3: Would that make a notional difference for those of us

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Speaker 3: who have.

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Speaker 7: Cars and drive around.

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Speaker 12: Well, first of all, that would require an Act of

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Speaker 12: Congress to waive that federal gas tax of eighteen point

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Speaker 12: four cents.

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Speaker 13: Let me color it this.

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Speaker 12: Way that Georgia and in Indiana both have gas tax

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Speaker 12: holidays right now, but you look at what happened in

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Speaker 12: the Great Lakes, and Indiana now is paying the exact

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Speaker 12: same as Michigan and Ohio when it comes to gasoline.

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Speaker 13: Those do to some refining issues. States have tried this.

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Speaker 12: In fact, I think Texas is now talking about other

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Speaker 12: states are looking at this. The Canadian government, for their part,

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Speaker 12: has also eased a ten cent a leader in Canada

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Speaker 12: excise tax. So it would work, but it will require Congress,

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Speaker 12: and that's anything but guaranteed. Right now, it would be

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Speaker 12: temper I mean, eighteen cents when the national average is

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Speaker 12: four forty five a gallon is kind of like rubbing

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Speaker 12: salt in the wound. But back to the airlines, by

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Speaker 12: the way, earlier this week you talk about trying to

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Speaker 12: run an airline in this type of environment.

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Speaker 13: Jet fuel in Chicago.

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Speaker 12: Briefly spiked well over five dollars a gallon just this week,

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Speaker 12: and you're seeing a lot of the these hotspots from coast

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Speaker 12: to coast, inland and areas of the coastal region. Jet

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Speaker 12: fuel's just all over the map. You fly into Dallas

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Speaker 12: and jet feels three eighty. You fly into Chicago and

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Speaker 12: it's over five dollars a gallon. That's got to be

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Speaker 12: a nightmare for airlines to sort this out.

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Speaker 2: Jeff talked to us about the messaging from the White

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Speaker 2: House because the President last night was essentially saying oil

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Speaker 2: is high, but it could be much higher. It could

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Speaker 2: have been much higher. It's actually not as high as

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Speaker 2: we expected it to be. Is that going to work

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Speaker 2: if we're rolling into midterms and these prices are still there, Because,

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Speaker 2: as we've been talking about, ad nauseum insurance is what

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Speaker 2: the shipping industry kind of runs on. And even if

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Speaker 2: the straight were to open tomorrow, the threshold not only

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Speaker 2: to pay these sailors and captains to be willing to

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Speaker 2: take that risk, but just the risk factor is going

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Speaker 2: to make insurance costs go up, which is going to

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Speaker 2: make shippy We're not going to get back to that

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Speaker 2: floor anytime soon.

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Speaker 5: Well, what the quote that you just decided is vintage

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Speaker 5: Donald Trump. I mean to say, oh, I thought it

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Speaker 5: was going to be higher, This isn't that bad, And

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Speaker 5: also to predict that they're going to come down just

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Speaker 5: like that. He doesn't know that, and the reality is

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Speaker 5: you're talking about five dollars gas.

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Speaker 13: Good grief.

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Speaker 5: I mean, being over four dollars a gallon is already painful.

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Speaker 5: But if consumers are going into the voting booths in

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Speaker 5: November having paid five dollars a gallon for gas, or

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Speaker 5: perhaps still paying that much, it's going to be very

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Speaker 5: painful for Republicans.

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Speaker 3: Clint Henderson with the points guy, let me ask you

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Speaker 3: about what you're looking for from the administration going forward here.

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Speaker 3: So we have Transportation Secretary Sean Duffy kind of tweeting

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Speaker 3: through this a lot of posts on social media this

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Speaker 3: morning about what should happen, noting the fact that there

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Speaker 3: are going to be these lower fares for passengers who

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Speaker 3: are stranded. What is as you see at the role

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Speaker 3: of the federal government here as an airline goes under

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Speaker 3: and passengers are picking up the pieces.

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Speaker 9: Yeah, well, it's really unusual in the United States to

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Speaker 9: see an airline.

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Speaker 10: Liquid hit like this.

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Speaker 9: I'm really glad the government stepped in to try to

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Speaker 9: encourage other airlines to take care of these passengers, because

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Speaker 9: we really just haven't seen anything like this since two

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Speaker 9: thousand and six, two thousand and eight. I expect more consolidation,

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Speaker 9: you know, as far as what the government can do,

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Speaker 9: I'd love to see them reopen the straight aforemos. That's

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Speaker 9: that's gonna be the big answer to a lot of

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Speaker 9: these issues. But right now, at the points guy, we're

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Speaker 9: telling people, go ahead and book all your flights for

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Speaker 9: the rest of the year if you can afford it.

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Speaker 9: Lock in prices now, because I do think we're just

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Speaker 9: going up from here. I'm booked through spring of next year,

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Speaker 9: just because I want to get ahead of it. Because

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Speaker 9: it's not just price of tickets, it's fuel surcharges being

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Speaker 9: added and rising bag fees. The airlines are going to

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Speaker 9: try to recoup this as best they can, and the

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Speaker 9: consumers are going to pay for it. And remember, because

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Speaker 9: the airlines are also reducing capacity unless we see a

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Speaker 9: drop in demand, there's more passengers trying to get fewer seats,

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Speaker 9: and that also leads to price increases.

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Speaker 7: Let's got spring break already.

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Speaker 14: Aspire.

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Speaker 2: I aspire to have a kind of life where I can

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Speaker 2: plan trips out two years and ad fancies guys hard time.

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Speaker 10: Imagine if I don't want to pay more.

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Speaker 2: Than I have to, that's I have already been playing

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Speaker 2: this summer. Jeff, weeple think about thirty seconds, but would

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Speaker 2: like the government to reopen the strait.

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Speaker 14: How's that going?

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Speaker 5: I mean, the President said this week that he's unhappy

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Speaker 5: with the deal or the most recent proposal from Iran.

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Speaker 5: It doesn't suggest that there's going to be any agreement

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Speaker 5: anytime soon, and there's going to have to be an

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Speaker 5: agreement before the strait is opened again.

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Speaker 2: And Iran semi official news agency saying something similarly bleak

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Speaker 2: this morning.

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Speaker 3: All right, thanks to all Jeff Maxon, our White House

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Speaker 3: correspondent here on set with us in New York, Clint

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Speaker 3: Henderson with the points guy Patrick Dehan of Gasbuddy, giving

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Speaker 3: us an update on those fuel prices, which of course

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Speaker 3: were a huge factor in Spirit's decision, so much as

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Speaker 3: it was Spirit's decision to close down news that we

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Speaker 3: got this morning at about three o'clock Wall Street Time.

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Speaker 3: Stay with us for more on Bloomberg this weekend.

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Speaker 2: Right after this, the two biggest US oil companies reported

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Speaker 2: earnings Friday for the first time since the Iran war began.

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Speaker 2: Exceon and Chevron beat xpecations, with oil and gas prices

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Speaker 2: rising since February which offset drop and supply.

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Speaker 3: We spoke with our colleague Javier bloss columnists for Energy

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Speaker 3: and Commodities.

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Speaker 7: Here Bloomberg opinion that the.

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Speaker 3: Ongoing threat to global energy supplies take a listen.

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Speaker 15: It's not just the price of oil and natural gas

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Speaker 15: outside the North.

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Speaker 11: America that have gone up.

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Speaker 15: Also, refining margins have been incredibly high through the month

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Speaker 15: of March, and both Exon and Chevron indicated that they

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Speaker 15: run the refinery is very hard through that period. So

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Speaker 15: I think that that is one of the key reasons

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Speaker 15: that the results have been as good and surprising to

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Speaker 15: the upside to Water Street.

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Speaker 2: We've been hearing from the administration. President Trump meant with

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Speaker 2: a head of sentcom and it seems like they want

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Speaker 2: to stick with this blockade. I have two questions for you.

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Speaker 2: How much pain is this actually inflicting on Iran? And

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Speaker 2: talk to us about the storage issue. The administration says

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Speaker 2: Aaron is running out of storage.

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Speaker 14: Is that real or not?

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Speaker 15: Well, Stepping from the first part of your question, it's

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Speaker 15: inflicting quite a lot of pain. Iran effectively is losing

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Speaker 15: around one hundred and seventy five million million dollars a

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Speaker 15: day in lost income from the oil revenue from the

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Speaker 15: oil esports. But the key question is that enough for

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Speaker 15: Iran to come to the negotiation table with an offer

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Speaker 15: that is good enough for President Trump, And the answer

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Speaker 15: potentially is not enough. Iran made quite a lot of

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Speaker 15: money for the first two months of the war where

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Speaker 15: it was able, and the US have no problem letting

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Speaker 15: Iran selling his oil. So in some way they have

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Speaker 15: some money that they cash in in the early days

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Speaker 15: and weeks of the war, and they can't use that

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Speaker 15: extra money that they made to cushion the current blow.

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Speaker 15: On the question of is going to be any long

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Speaker 15: term damage to the oil wells, my Viieo is no.

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Speaker 15: First of all, Iran is still loading oil into tankers.

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Speaker 15: It was on Friday according to satellite pictures that we

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Speaker 15: were with you in a bloomberg loading a super tanker

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Speaker 15: at car Island. So that's an indication that Iran still

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Speaker 15: has access to tankeys that they were inside the Persian

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Speaker 15: golf when the blockade started, and it has on short storage.

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Speaker 15: So I don't see Iran having to start reducing production

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Speaker 15: at the earliest until probably the middle of May. And

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Speaker 15: will that cause some damage, Probably not, And even if

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Speaker 15: there was some damage will be that really what is

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Speaker 15: going to proad the Iranian authorities to come to the

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Speaker 15: table with an offer. The President Trump is satisfied Again,

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Speaker 15: I don't think so.

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Speaker 3: In the midst of this ceasfire, how much production is

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Speaker 3: ron able to do? Just just give us your advantage

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Speaker 3: on the gree to which oil production run continues to pace.

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Speaker 15: Well, if we look at crude oil and condensates, Iran

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Speaker 15: was producing around three and a half million borrows a day,

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Speaker 15: sporting about one point eight million borrows a day, and

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Speaker 15: the rest goes to the domestic market. So Iran needs

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Speaker 15: to produce somewhere between one seven and one eight million

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Speaker 15: borrowers a day used.

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Speaker 11: To keep the country fuel.

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Speaker 15: Perhaps the demand now in Iran is a bit lower

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Speaker 15: than otherwise because of the destruction of the world, because

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Speaker 15: people are not traveling because mobility is down. But Iran

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Speaker 15: is a big oil consumer on his own, so significant

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Speaker 15: chunk or his production goes into the domestic market and

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Speaker 15: then the rest of it goes to the esport market.

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Speaker 15: At the moment, Iran is loading still tankers, but those

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Speaker 15: tankers cannot really reach the high seas that are stopped

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Speaker 15: by the US Navy. That's where we are today. At

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Speaker 15: some point they will run out of tankers. They will

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Speaker 15: need to start a store in the oil on shore

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Speaker 15: into tanks, and at some point they will have to

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Speaker 15: reduce production, cut shut down the world. Shut in the

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Speaker 15: world we call it in the oil industry. That moment

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Speaker 15: has yet to arrive.

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Speaker 2: You said, Iron probably has to make the decisions starting

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Speaker 2: at the end of May. What about other big producers

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Speaker 2: in the reason, Are there any other producers that you

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Speaker 2: think are nearing or will near their storage capacity and

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Speaker 2: start to throttle back potentially sooner rather than later.

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Speaker 15: Well, every other producer in the Persian goal have already

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Speaker 15: maxed out there storage capacity. That's what production in places

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Speaker 15: like kube Iraq Katar has completely collapsed. Saudi Arabia and

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Speaker 15: the United Arab Emi dates continue to produce oil. That's

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Speaker 15: because they have bypass pipelines that they can bypass the

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Speaker 15: Strato Hormus reach the Golf of Woman in the case

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Speaker 15: that the Ue or the Red Sea in the case

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Speaker 15: of Saudi Arabia.

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Speaker 11: That's the reason that they keep producing.

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Speaker 15: But everyone else in the region have to take those

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Speaker 15: decisions to shut in oil wells.

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Speaker 11: In the very early days of the war, and no one.

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Speaker 15: Really at the White House is talking about the Kubeiti

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Speaker 15: oil fields exploding because they have to be shut down.

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Speaker 15: I think that this focus on Iran having particular problem

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Speaker 15: is misplaced. Everyone in the regum produced oil from a

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Speaker 15: very similar carbonate reservoirs. Yes, perhaps the Iranian oil fields

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Speaker 15: are older and have so low pressure it has been

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Speaker 15: and the Sanchel don't have American technology, but the Iranian

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Speaker 15: petroleum engineers have been very creative over the last forty

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Speaker 15: plus years to keep those oil fields running despite everything

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Speaker 15: you mentioned.

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Speaker 3: The UAE UA saying cyanara at opek plus, which is

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Speaker 3: meeting this weekend, So I imagine those members are going

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Speaker 3: to lick their wounds then try to plot a path

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Speaker 3: forward here.

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Speaker 13: What does that look like?

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Speaker 3: How does opek plus move on from the UAE going

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Speaker 3: its own.

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Speaker 11: Well.

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Speaker 15: On the short term, nothing changes because with opech so

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Speaker 15: with the UE living, but they cannot increase production because

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Speaker 15: of the strait of hormones remains close and the UAE

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Speaker 15: is already maxed out on the bypass pipeline that they

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Speaker 15: are using.

444
00:20:59,280 --> 00:21:01,240
Speaker 11: So short term nothing changed.

445
00:21:01,920 --> 00:21:05,800
Speaker 15: Medium time, if the stray hormones reopens, the UE will

446
00:21:05,920 --> 00:21:07,240
Speaker 15: start increasing production.

447
00:21:07,600 --> 00:21:09,760
Speaker 11: They will be demand for those barrels.

448
00:21:09,359 --> 00:21:14,040
Speaker 15: Because we are really running down the walls oil inventories,

449
00:21:14,119 --> 00:21:18,320
Speaker 15: both on the commercial side and strategic inventories. Everyone is

450
00:21:18,320 --> 00:21:23,200
Speaker 15: going to have to buy extra oil to replenish those inventories.

451
00:21:23,600 --> 00:21:27,040
Speaker 15: But we were wondering where that extra oil was coming.

452
00:21:27,160 --> 00:21:29,280
Speaker 15: Now we have a bit of an answer that extra

453
00:21:29,320 --> 00:21:33,640
Speaker 15: oil probably is going to come from the UIE. Long term,

454
00:21:33,880 --> 00:21:35,880
Speaker 15: that's a more difficult one. I think that the UE

455
00:21:36,040 --> 00:21:38,760
Speaker 15: keeps increasing production. I put Saudi Arabia on a corner.

456
00:21:39,040 --> 00:21:41,200
Speaker 15: At some point in Saudi Arabia is to the side,

457
00:21:41,680 --> 00:21:45,159
Speaker 15: say middle of twenty seven, early twenty eight, do we

458
00:21:45,280 --> 00:21:48,439
Speaker 15: want to reduce production to keep prices higher or we

459
00:21:48,600 --> 00:21:52,040
Speaker 15: just join the United Arab EMI days and that also

460
00:21:53,080 --> 00:21:55,720
Speaker 15: other members in that cartel are going to be thinking

461
00:21:56,320 --> 00:22:00,000
Speaker 15: are we taking the right decision staying with the saudiast

462
00:22:00,600 --> 00:22:02,919
Speaker 15: or should we follow the UIE. And I think that

463
00:22:02,960 --> 00:22:06,040
Speaker 15: we're gonna see over the next few months other countries

464
00:22:06,040 --> 00:22:09,480
Speaker 15: are starting to talk quite openly about potentially leaving the cartel.

465
00:22:09,840 --> 00:22:11,640
Speaker 2: That was my question is if you look at those

466
00:22:11,640 --> 00:22:15,000
Speaker 2: OPAC members, especially once you do throwle production, I mean

467
00:22:15,119 --> 00:22:17,359
Speaker 2: some I think you can correct her around Libya and

468
00:22:17,400 --> 00:22:20,400
Speaker 2: Nigeria pretty much produced at a capacity most of the time.

469
00:22:20,440 --> 00:22:23,119
Speaker 2: But those who are really those big players have to

470
00:22:23,160 --> 00:22:26,040
Speaker 2: be watching us very closely, and can Saudi hold this together?

471
00:22:26,080 --> 00:22:28,520
Speaker 2: If you're going to pick the next potential defector out

472
00:22:28,520 --> 00:22:29,959
Speaker 2: of OPEK, who would be your bet?

473
00:22:31,160 --> 00:22:32,399
Speaker 11: I would say two names.

474
00:22:32,440 --> 00:22:35,480
Speaker 15: One on the OPEC plus group, on the Big Alliance,

475
00:22:35,520 --> 00:22:38,919
Speaker 15: I will be Kathakhstan. They are acting like they are out,

476
00:22:39,000 --> 00:22:41,520
Speaker 15: but they are keeping inside because of the relationship with

477
00:22:41,600 --> 00:22:45,960
Speaker 15: Russia and because probably they say, well, we're gonna produce

478
00:22:45,960 --> 00:22:48,000
Speaker 15: as much as we can. We are cheating all the time.

479
00:22:49,240 --> 00:22:51,480
Speaker 15: Better to cheat within the group and we get some

480
00:22:51,600 --> 00:22:54,760
Speaker 15: of the information and some of the upside. We are

481
00:22:54,800 --> 00:22:58,199
Speaker 15: free riding effectively the cartel. But can Kathakhtan at some

482
00:22:58,240 --> 00:23:00,879
Speaker 15: point say goodbye? I think that that's a candidate. The

483
00:23:00,920 --> 00:23:03,760
Speaker 15: other one inside OPEK and one of the founding countries

484
00:23:03,760 --> 00:23:07,840
Speaker 15: and one where the US has a lot more influenced. Venezuela,

485
00:23:08,480 --> 00:23:11,679
Speaker 15: the government of Delcia Rodriguez says that they're staying, but

486
00:23:11,880 --> 00:23:14,960
Speaker 15: at some point over the next twelve to eighteen months,

487
00:23:15,200 --> 00:23:18,040
Speaker 15: I will expect, I will hope that we will see

488
00:23:18,080 --> 00:23:23,679
Speaker 15: the democratic elections in Venezuela if that election turns to

489
00:23:24,560 --> 00:23:29,320
Speaker 15: opposition government, the opposition historically has been hostile to Opek,

490
00:23:29,640 --> 00:23:31,720
Speaker 15: and then we can see Venezuela leaving and that will

491
00:23:31,760 --> 00:23:34,199
Speaker 15: be a big deal because a country that wants to

492
00:23:34,200 --> 00:23:36,800
Speaker 15: produce more oil, that is going to have probably the

493
00:23:36,840 --> 00:23:39,399
Speaker 15: investment to produce more oil, and it was one of

494
00:23:39,440 --> 00:23:42,040
Speaker 15: the founding countries of Opek.

495
00:23:42,160 --> 00:23:43,200
Speaker 11: That will be a big deal.

496
00:23:43,240 --> 00:23:46,080
Speaker 15: That will be the first departure of one of the

497
00:23:46,119 --> 00:23:47,240
Speaker 15: original founders.

498
00:23:47,680 --> 00:23:49,040
Speaker 7: Have your last question for you.

499
00:23:49,520 --> 00:23:52,440
Speaker 3: Iron is doing all of this right now and there

500
00:23:52,480 --> 00:23:54,879
Speaker 3: is talk I know of finding ways to reroute oil

501
00:23:55,560 --> 00:23:56,640
Speaker 3: going forward in the future.

502
00:23:57,040 --> 00:23:59,000
Speaker 8: How long is that likely to take? How real is it?

503
00:23:59,080 --> 00:24:01,160
Speaker 3: There could be kind of a whole new infrastructure built

504
00:24:01,160 --> 00:24:03,840
Speaker 3: here the next years for decades to get oil out

505
00:24:03,840 --> 00:24:04,399
Speaker 3: of this region.

506
00:24:05,680 --> 00:24:08,679
Speaker 15: Well, you don't have a lot of permitting fights in

507
00:24:08,720 --> 00:24:12,600
Speaker 15: Saudi Arabia. The Royal Palace decides to do a new pipeline,

508
00:24:12,600 --> 00:24:16,400
Speaker 15: they just do it. The original east to west pipeline.

509
00:24:16,440 --> 00:24:17,960
Speaker 15: That is the one that we are using at the

510
00:24:17,960 --> 00:24:20,880
Speaker 15: moment to bypass the Stradio hormones. That that's the one

511
00:24:20,880 --> 00:24:23,240
Speaker 15: that runs from the Persian Gulf in the east of

512
00:24:23,280 --> 00:24:26,240
Speaker 15: Saudi Arabia to the west coast into the Red Sea

513
00:24:26,359 --> 00:24:29,119
Speaker 15: that was built in the eighties in four years, and

514
00:24:29,160 --> 00:24:32,639
Speaker 15: that's when they have to build the whole the whole line,

515
00:24:33,080 --> 00:24:36,200
Speaker 15: do all the earth movement, all the you know, all

516
00:24:36,240 --> 00:24:40,320
Speaker 15: the difficult job. So I will think that for five

517
00:24:40,440 --> 00:24:44,200
Speaker 15: years Marx we see a lot more pipelines.

518
00:24:44,440 --> 00:24:49,000
Speaker 11: So we have this odd situation. We are a peak of.

519
00:24:49,040 --> 00:24:51,760
Speaker 15: The influence of Iran on the Stradio hormones. They have

520
00:24:51,960 --> 00:24:54,600
Speaker 15: never had a grip on the stradi of hormones as

521
00:24:54,640 --> 00:24:57,879
Speaker 15: they have. But just because they are having that grip today,

522
00:24:58,400 --> 00:25:01,600
Speaker 15: that grip over time will will will will be weekend

523
00:25:01,800 --> 00:25:05,560
Speaker 15: because more countries in the region will build bypass pipeline.

524
00:25:05,600 --> 00:25:08,679
Speaker 15: I'm sure that Saudi Arabia will increase the capacity of

525
00:25:08,720 --> 00:25:10,280
Speaker 15: their East West pipeline.

526
00:25:10,400 --> 00:25:12,639
Speaker 11: I'm sure that the UIE is going to do the same.

527
00:25:13,080 --> 00:25:16,280
Speaker 15: Key question is does Kube built a pipeline and it's

528
00:25:16,320 --> 00:25:20,760
Speaker 15: so through where probably south to Saudi Arabia and then

529
00:25:20,800 --> 00:25:24,440
Speaker 15: across to the Red Sea. Do other countries do on

530
00:25:24,600 --> 00:25:28,919
Speaker 15: my Qatar built his own pipeline, perhaps through Saudi Arabia.

531
00:25:28,960 --> 00:25:32,560
Speaker 15: That's politically more complicated. What Iraq wants to do has

532
00:25:32,680 --> 00:25:36,320
Speaker 15: options through Syria, has another option through north to Turkey.

533
00:25:36,359 --> 00:25:38,760
Speaker 15: There's already a pipeline there. It will be a question

534
00:25:38,840 --> 00:25:44,560
Speaker 15: of expanding. So the reions pipeline politics are going to

535
00:25:44,640 --> 00:25:47,240
Speaker 15: get really interesting over the next few years.

536
00:25:48,160 --> 00:25:50,840
Speaker 2: And if you don't follow Javier on Twitter as most

537
00:25:50,880 --> 00:25:55,720
Speaker 2: of us do, please do you'll learn a time. Stay

538
00:25:55,760 --> 00:26:10,400
Speaker 2: with us for more on Bloomberg this weekend. Right after this, the.

539
00:26:10,359 --> 00:26:13,040
Speaker 3: Crypto project, held by the Trump and Whitcoff families is

540
00:26:13,119 --> 00:26:16,720
Speaker 3: under fresh scrutiny this week after Bloomberg reported investors put

541
00:26:16,720 --> 00:26:19,159
Speaker 3: in more than five hundred and fifty million dollars and

542
00:26:19,240 --> 00:26:22,200
Speaker 3: now are locked out of the majority of their holdings,

543
00:26:22,280 --> 00:26:25,280
Speaker 3: with the token trading around fifty four cents.

544
00:26:25,960 --> 00:26:26,240
Speaker 13: Now.

545
00:26:26,280 --> 00:26:28,960
Speaker 2: This is where actor Ben McKenzie, that's right, Be McKenzie

546
00:26:29,000 --> 00:26:31,600
Speaker 2: of the oc fame comes in. He is the writer

547
00:26:31,680 --> 00:26:34,879
Speaker 2: and director of a new film investigating cryptocurrency, and he

548
00:26:35,000 --> 00:26:38,560
Speaker 2: sat down with the leaders of Crypto, including Sam bankman

549
00:26:38,600 --> 00:26:40,200
Speaker 2: Fried and others. Take a listen.

550
00:26:40,760 --> 00:26:41,479
Speaker 7: How did you get here?

551
00:26:41,840 --> 00:26:44,919
Speaker 16: Shot a great question. Have a degree in economics as

552
00:26:44,920 --> 00:26:48,400
Speaker 16: an undergraduate. The pandemic hit. The showbiz really wasn't functioning,

553
00:26:48,480 --> 00:26:50,600
Speaker 16: especially for actors, and so I was bored out of

554
00:26:50,600 --> 00:26:52,119
Speaker 16: my mind and a buddy of mine came to me

555
00:26:52,160 --> 00:26:53,800
Speaker 16: and he said I should buy bitcoin.

556
00:26:53,880 --> 00:26:56,040
Speaker 6: It was, you know, in the news, the celebrities were

557
00:26:56,040 --> 00:26:56,399
Speaker 6: hawking it.

558
00:26:57,200 --> 00:26:59,960
Speaker 16: And I love my buddy, but he's given me terrible

559
00:27:00,160 --> 00:27:02,000
Speaker 16: financial advice before he had.

560
00:27:02,040 --> 00:27:03,840
Speaker 14: As many friends do, as many.

561
00:27:03,640 --> 00:27:06,480
Speaker 16: Friends do, and in my twenties he'd encouraged me to

562
00:27:06,520 --> 00:27:09,919
Speaker 16: invest in some random company that had supposedly produced synthetic blood.

563
00:27:10,359 --> 00:27:13,320
Speaker 16: This was a fairnose with some precursor scam. Anyway, I

564
00:27:13,440 --> 00:27:15,639
Speaker 16: put money in, he put money, and we both lost it.

565
00:27:15,760 --> 00:27:17,479
Speaker 16: He came back to me and said I was buy bitcoin,

566
00:27:17,760 --> 00:27:19,800
Speaker 16: and I'm like, Dave, I am not gonna buy bitcoin.

567
00:27:20,680 --> 00:27:21,240
Speaker 7: What is it?

568
00:27:21,600 --> 00:27:21,840
Speaker 11: You know?

569
00:27:22,160 --> 00:27:24,159
Speaker 16: And he did that thing or he's like it's a

570
00:27:24,160 --> 00:27:26,480
Speaker 16: crypto card scene and I'm like, so it's money. You

571
00:27:26,480 --> 00:27:29,880
Speaker 16: can buy stuff with it, oh.

572
00:27:28,800 --> 00:27:29,040
Speaker 6: You know?

573
00:27:29,080 --> 00:27:32,639
Speaker 16: And I was like, Dave, are you sure you know

574
00:27:32,640 --> 00:27:33,400
Speaker 16: what you're getting into?

575
00:27:33,440 --> 00:27:35,000
Speaker 6: Anyway, that led me down a rabbit hole.

576
00:27:35,080 --> 00:27:37,720
Speaker 3: Somebody with you talk isn't a storian of fraud, and

577
00:27:37,760 --> 00:27:39,359
Speaker 3: he talks about surf what goes through the mind of

578
00:27:39,600 --> 00:27:41,800
Speaker 3: a frauds or how a fraud is executed? What did

579
00:27:41,840 --> 00:27:44,120
Speaker 3: you learn about kind of the way that those who

580
00:27:44,119 --> 00:27:46,600
Speaker 3: are perpetrating frauds, be they financial or otherwise, are thinking

581
00:27:46,600 --> 00:27:48,000
Speaker 3: about what they're doing in real time.

582
00:27:48,119 --> 00:27:49,359
Speaker 6: Yeah, I found that fascinating.

583
00:27:49,800 --> 00:27:52,440
Speaker 16: This guy, Dan Davis wrote a book called Lying for Money,

584
00:27:52,440 --> 00:27:54,560
Speaker 16: which I highly recommend if you're into true crime and

585
00:27:54,560 --> 00:27:57,240
Speaker 16: how true crime and financial crime and how frauds work.

586
00:27:57,720 --> 00:27:58,879
Speaker 16: And one of the things he told me that I

587
00:27:58,920 --> 00:28:02,680
Speaker 16: thought was fascinating is that frusters are not like other criminals.

588
00:28:02,720 --> 00:28:06,520
Speaker 16: They're not They don't generally commit violent crimes, and they

589
00:28:06,560 --> 00:28:10,640
Speaker 16: often start out as legitimate businessman and then sometimes they

590
00:28:10,840 --> 00:28:12,080
Speaker 16: entered the fraud through a mistake.

591
00:28:12,200 --> 00:28:13,880
Speaker 6: Sometimes it's intentional.

592
00:28:14,359 --> 00:28:16,520
Speaker 16: But the lie gets bigger and bigger and bigger. But

593
00:28:16,560 --> 00:28:20,040
Speaker 16: they have to conceive of themselves as legitimate businessmen. They're

594
00:28:20,080 --> 00:28:22,920
Speaker 16: sort of the ultimate method actors, right, Like they have

595
00:28:22,960 --> 00:28:26,119
Speaker 16: to believe their own story, which I think explains perhaps

596
00:28:26,200 --> 00:28:28,720
Speaker 16: why Sam BigMan Fried was willing to talk to me

597
00:28:29,280 --> 00:28:32,480
Speaker 16: on camera, even though in our Twitter profile it said

598
00:28:32,760 --> 00:28:35,320
Speaker 16: writing a book on crypto and fraud, so like, I

599
00:28:35,359 --> 00:28:38,560
Speaker 16: couldn't understand that, but I think he felt I think he.

600
00:28:38,520 --> 00:28:40,920
Speaker 3: Still feels that he's a legitimate businessman. You sit down

601
00:28:40,960 --> 00:28:43,000
Speaker 3: with him in New York. Yeah, like we have a

602
00:28:43,040 --> 00:28:43,520
Speaker 3: clip of that.

603
00:28:43,840 --> 00:28:51,160
Speaker 16: I had a conversation with Alex Meshchensky, Yeah, yep. I

604
00:28:51,240 --> 00:28:55,680
Speaker 16: asked him how much real money is in crypto, and

605
00:28:55,760 --> 00:28:57,360
Speaker 16: he said ten to fifteen percent.

606
00:28:57,800 --> 00:28:59,760
Speaker 6: He said the rest is speculations.

607
00:28:59,800 --> 00:29:02,320
Speaker 17: So as of today, I think the number of dollars

608
00:29:02,320 --> 00:29:05,080
Speaker 17: in crypto not changed massively between then and now.

609
00:29:05,280 --> 00:29:06,840
Speaker 6: One would perhaps there's lessons.

610
00:29:06,960 --> 00:29:08,520
Speaker 13: They certainly have not increased.

611
00:29:09,160 --> 00:29:11,920
Speaker 17: I don't think they've decreased massively, though, which I think

612
00:29:11,960 --> 00:29:13,760
Speaker 17: lines up with some of your thoughts that, like a

613
00:29:13,760 --> 00:29:15,200
Speaker 17: lot of this was leverage leaving this.

614
00:29:15,440 --> 00:29:17,400
Speaker 16: Part of the problem if they haven't left, is that

615
00:29:17,480 --> 00:29:19,680
Speaker 16: people can't get their money out. Imagine this is a

616
00:29:19,720 --> 00:29:20,800
Speaker 16: regulated back.

617
00:29:20,880 --> 00:29:22,920
Speaker 13: Oh yeah, this would be a big That would be

618
00:29:22,960 --> 00:29:23,560
Speaker 13: a big problem.

619
00:29:24,000 --> 00:29:28,320
Speaker 16: This does not seem like the decentralized, democratized future of

620
00:29:28,360 --> 00:29:29,760
Speaker 16: money that we were promised.

621
00:29:29,920 --> 00:29:32,480
Speaker 17: I think we've seen all the major carnage in the

622
00:29:32,520 --> 00:29:33,880
Speaker 17: crypto industry already.

623
00:29:34,000 --> 00:29:36,320
Speaker 3: Throughout that interview, he's kind of making a claim that

624
00:29:36,880 --> 00:29:39,280
Speaker 3: all the front all the bad actors have been felled. Yeah,

625
00:29:39,480 --> 00:29:42,720
Speaker 3: and that crypto is wide open and a clearer slate

626
00:29:42,800 --> 00:29:44,880
Speaker 3: than perhaps we all expected.

627
00:29:44,680 --> 00:29:47,200
Speaker 16: Right, And then like five months later he's arrested. Yeah,

628
00:29:47,240 --> 00:29:48,960
Speaker 16: I mean, this is the constant this is a repetitive

629
00:29:48,960 --> 00:29:50,960
Speaker 16: theme in crypto is no, no.

630
00:29:50,880 --> 00:29:53,080
Speaker 6: Okay, that was the bad guy. Oh no, actually that

631
00:29:53,120 --> 00:29:54,160
Speaker 6: was the backing. Well, no, this one.

632
00:29:54,520 --> 00:29:58,560
Speaker 16: You know, at a certain point, the way I understand

633
00:29:58,560 --> 00:30:00,240
Speaker 16: it is this, Look, there's the retail trading pop and

634
00:30:00,280 --> 00:30:01,560
Speaker 16: those people are not bad people.

635
00:30:01,560 --> 00:30:02,760
Speaker 6: They're trying to make some money.

636
00:30:03,440 --> 00:30:05,600
Speaker 16: I mean maybe some of them are, but they represent

637
00:30:05,800 --> 00:30:09,000
Speaker 16: normal retail investors and I am not.

638
00:30:09,560 --> 00:30:11,239
Speaker 6: I am not doing this against them.

639
00:30:11,240 --> 00:30:13,480
Speaker 16: I'm trying to protect them from an industry that I

640
00:30:13,520 --> 00:30:15,440
Speaker 16: don't I think doesn't care about them, you know what

641
00:30:15,480 --> 00:30:15,760
Speaker 16: I mean.

642
00:30:15,840 --> 00:30:17,400
Speaker 6: I don't see the crypto.

643
00:30:17,080 --> 00:30:21,120
Speaker 16: Companies really doing anything to protect their customers. In fact,

644
00:30:21,120 --> 00:30:23,920
Speaker 16: what they're doing is trying to change the rules, get

645
00:30:24,160 --> 00:30:27,280
Speaker 16: special legislations so that they aren't treated like banks or

646
00:30:27,480 --> 00:30:32,640
Speaker 16: securities or whatever. And so yeah, I would say that,

647
00:30:32,760 --> 00:30:36,880
Speaker 16: like that's my motivation. I find the sort of constant

648
00:30:36,880 --> 00:30:39,920
Speaker 16: deflection of like just that one bad apple.

649
00:30:39,680 --> 00:30:40,040
Speaker 6: On that one.

650
00:30:40,080 --> 00:30:42,040
Speaker 16: But it doesn't make any sense. I mean, there's so

651
00:30:42,160 --> 00:30:45,200
Speaker 16: much crime in crypto. A crypto company last year estimated

652
00:30:45,200 --> 00:30:48,760
Speaker 16: that one hundred and fifty four billion dollars of criminal

653
00:30:48,760 --> 00:30:53,120
Speaker 16: activity was facilitated the a cryptocurrency in twenty twenty five alone,

654
00:30:53,440 --> 00:30:55,040
Speaker 16: and that's from a crypto company, So it might be

655
00:30:55,040 --> 00:30:57,800
Speaker 16: on the low end of the inspect That is an enormous,

656
00:30:57,800 --> 00:31:02,240
Speaker 16: staggering amount of criminal activity. And it's everything from like

657
00:31:02,320 --> 00:31:05,719
Speaker 16: Russian oligarchs selling sanctioned oil to the Chinese and exchange

658
00:31:05,720 --> 00:31:09,040
Speaker 16: for drones or sending to Ukraine. It's isis, it's a

659
00:31:09,080 --> 00:31:09,680
Speaker 16: lot of money launer.

660
00:31:09,720 --> 00:31:12,000
Speaker 2: North Koreans are very involved in it, you know, trying

661
00:31:12,000 --> 00:31:14,680
Speaker 2: to steal it, trying to use it, getting around sanctions.

662
00:31:15,000 --> 00:31:17,280
Speaker 16: Half the hackers, the North Round hackers, half of the

663
00:31:17,320 --> 00:31:20,440
Speaker 16: North Korea nuclear weapons program was funded via the crypto

664
00:31:20,480 --> 00:31:21,080
Speaker 16: hacking teams.

665
00:31:21,280 --> 00:31:23,640
Speaker 2: Why hasn't there been any kind of pushback because these

666
00:31:23,640 --> 00:31:26,000
Speaker 2: people have gone to jolly scams have been revealed and

667
00:31:26,160 --> 00:31:27,440
Speaker 2: there's you know concept.

668
00:31:27,120 --> 00:31:28,600
Speaker 16: That's a great that's a great question. I would let's

669
00:31:28,600 --> 00:31:30,040
Speaker 16: see there's I would say there's a couple of parts.

670
00:31:30,240 --> 00:31:32,600
Speaker 16: The first is so in twenty twenty two, we were

671
00:31:32,600 --> 00:31:34,440
Speaker 16: on our way. In twenty twenty three, we're on our

672
00:31:34,440 --> 00:31:36,680
Speaker 16: way to like some sort of reckoning. Yeah, Sam was

673
00:31:36,720 --> 00:31:40,160
Speaker 16: in jail. Shehan Peng Shao Finance pled guilty to money laundering,

674
00:31:41,400 --> 00:31:43,320
Speaker 16: a bunch of other people into jail. Alex Maschenski, who

675
00:31:43,320 --> 00:31:49,200
Speaker 16: I interview in the movie, is in jail. And then

676
00:31:49,560 --> 00:31:54,440
Speaker 16: Trump turned to suddenly loving cryptocurrency. In the summer of

677
00:31:54,880 --> 00:31:58,320
Speaker 16: spring summer of twenty twenty four re election, he had

678
00:31:58,360 --> 00:32:00,920
Speaker 16: called bitcoin a scam as recent he is twenty twenty one.

679
00:32:02,160 --> 00:32:04,880
Speaker 16: But whether he saw there was money to be made

680
00:32:04,920 --> 00:32:08,000
Speaker 16: for himself, or whether he saw a constituency that he

681
00:32:08,080 --> 00:32:11,360
Speaker 16: needed to will young men that might have been as well,

682
00:32:11,720 --> 00:32:15,080
Speaker 16: he's all of a sudden love crypto. Then people quite

683
00:32:15,080 --> 00:32:18,120
Speaker 16: frankly rationally did the calculation of well, if he's it's

684
00:32:18,120 --> 00:32:21,120
Speaker 16: a fifty fifty shot of him getting re elected, and

685
00:32:21,160 --> 00:32:23,760
Speaker 16: if he gets elected, he can do a lot and

686
00:32:23,840 --> 00:32:25,560
Speaker 16: has done a lot. I'll talk about that in a second.

687
00:32:25,800 --> 00:32:27,600
Speaker 16: So they started betting on it and the price went

688
00:32:27,640 --> 00:32:29,200
Speaker 16: up and it went crazy. It was like one hundred

689
00:32:29,200 --> 00:32:31,360
Speaker 16: and twenty thousand dollars by the time he was in office.

690
00:32:32,160 --> 00:32:33,760
Speaker 6: And now he's done, He's delivered on that.

691
00:32:34,040 --> 00:32:38,959
Speaker 16: They've disbanded the DOJ Cryptocrime Task Force, the SEC has

692
00:32:39,000 --> 00:32:42,480
Speaker 16: been gutted. They passed this bill called the Genius Act,

693
00:32:42,800 --> 00:32:44,400
Speaker 16: which if you know this Congress and it's called the

694
00:32:44,440 --> 00:32:49,600
Speaker 16: Genius Act, got to be stupid. And what it does

695
00:32:49,680 --> 00:32:52,600
Speaker 16: is allow, amongst other things, allow corporations to issue their

696
00:32:52,640 --> 00:32:56,120
Speaker 16: own money in the foremost table clips, So literal corporate.

697
00:32:55,760 --> 00:32:57,160
Speaker 6: Money is what we're talking about.

698
00:32:57,240 --> 00:32:59,640
Speaker 3: I'll ask you lastly just about what really seems to

699
00:32:59,640 --> 00:33:01,480
Speaker 3: animate the movie. You talked about just a moment ago.

700
00:33:01,560 --> 00:33:03,320
Speaker 3: That is, people who have done this and lost a

701
00:33:03,360 --> 00:33:05,880
Speaker 3: ton of money. So Celsius, which build itself, is this

702
00:33:05,960 --> 00:33:08,160
Speaker 3: kind of anti bank people put a ton of money

703
00:33:08,160 --> 00:33:10,640
Speaker 3: into and lost all of it, And a sobering moment

704
00:33:10,720 --> 00:33:12,160
Speaker 3: in the movie as you're talking to many of these

705
00:33:12,160 --> 00:33:15,080
Speaker 3: folks around the country, maybe around the world, who have

706
00:33:15,200 --> 00:33:17,400
Speaker 3: lost their fortunes in some cases and are having to

707
00:33:17,440 --> 00:33:19,800
Speaker 3: reckon with all of that. I think about that in

708
00:33:19,800 --> 00:33:21,880
Speaker 3: the context of the conversation with Alison Shinsky, who started

709
00:33:21,880 --> 00:33:23,400
Speaker 3: that company, who I think you later describe as kind

710
00:33:23,400 --> 00:33:25,640
Speaker 3: of a carnival barker and seems that way when you're

711
00:33:25,640 --> 00:33:27,080
Speaker 3: at a conference kind of sitting around with him on

712
00:33:27,080 --> 00:33:30,680
Speaker 3: couches like these. What is it that's so persuasive about

713
00:33:30,720 --> 00:33:33,200
Speaker 3: this industry to people that maybe they let their guard

714
00:33:33,320 --> 00:33:36,160
Speaker 3: down or they don't have any inhibitions about going into

715
00:33:36,200 --> 00:33:38,400
Speaker 3: this nascent financial product.

716
00:33:38,560 --> 00:33:39,160
Speaker 6: Yeah.

717
00:33:39,280 --> 00:33:42,520
Speaker 16: I mean it's partially get rich quick scheme, which is

718
00:33:42,520 --> 00:33:46,040
Speaker 16: the oldest scheme in the books, but to be sympathetic,

719
00:33:46,080 --> 00:33:47,720
Speaker 16: and I am sympathetic to the people that have lost

720
00:33:47,760 --> 00:33:50,320
Speaker 16: a lot of money. I think if crypto serves any function,

721
00:33:50,400 --> 00:33:53,920
Speaker 16: it's to redirect us back to the regulated system and

722
00:33:53,960 --> 00:33:57,800
Speaker 16: the failures of the regulated system to convince people that

723
00:33:58,160 --> 00:34:00,720
Speaker 16: they are to give people a shot at act getting ahead.

724
00:34:00,800 --> 00:34:03,040
Speaker 16: You know, I think the thing that's really pernicious about

725
00:34:03,040 --> 00:34:05,520
Speaker 16: it is that, you know, you mentioned the interviews I

726
00:34:05,520 --> 00:34:06,680
Speaker 16: did with the Celsius victims.

727
00:34:06,960 --> 00:34:07,479
Speaker 6: I bonded.

728
00:34:07,920 --> 00:34:09,439
Speaker 16: I bond with him at the beginning of the movie,

729
00:34:09,440 --> 00:34:10,560
Speaker 16: and at the end of the movie, I come back

730
00:34:10,600 --> 00:34:12,200
Speaker 16: to them and I ask them the same question, which

731
00:34:12,239 --> 00:34:15,000
Speaker 16: is do you still believe in it having lost.

732
00:34:14,800 --> 00:34:15,320
Speaker 6: All the money?

733
00:34:15,600 --> 00:34:18,680
Speaker 16: And they all said yes. So amongst the hardcore group

734
00:34:18,719 --> 00:34:21,480
Speaker 16: you're really talking about. I described the movie as a

735
00:34:21,560 --> 00:34:24,319
Speaker 16: It's a projection of the hopes and dreams of all

736
00:34:24,360 --> 00:34:27,040
Speaker 16: of those investors. And as long as the crypto industry,

737
00:34:27,440 --> 00:34:29,479
Speaker 16: as long as the crypto industry will.

738
00:34:29,440 --> 00:34:31,279
Speaker 6: Keep selling the story, as long as they're buying it.

739
00:34:31,400 --> 00:34:34,640
Speaker 2: Well, that's disappointing, highly accurate, and we're going to have

740
00:34:34,640 --> 00:34:37,200
Speaker 2: to leave it there. Thank you very much, McKinnie, Thank

741
00:34:37,239 --> 00:34:38,239
Speaker 2: you so much for coming in.

742
00:34:38,280 --> 00:34:43,400
Speaker 4: Thanks guys, stay with us for more on Bloomberg this weekend.

743
00:34:43,760 --> 00:34:56,960
Speaker 8: Right after this, Welcome back to Bloomberg this weekend.

744
00:34:57,040 --> 00:34:59,319
Speaker 3: I'm David Gera with Christina Raffini, and it is the

745
00:34:59,360 --> 00:35:02,480
Speaker 3: most exciting in two minutes in sports, the one hundred

746
00:35:02,520 --> 00:35:07,200
Speaker 3: and fifty second running of the Kentucky Derby tonight at Churchill.

747
00:35:06,880 --> 00:35:10,160
Speaker 2: Downs all right last year nearly half a billion dollars

748
00:35:10,239 --> 00:35:13,879
Speaker 2: or bet on race week. Recently, we spoke with David Popadopolis.

749
00:35:13,960 --> 00:35:17,120
Speaker 2: He is Bloomberg's managing editor and the in house expert

750
00:35:17,200 --> 00:35:20,280
Speaker 2: here on horse racing, especially when it comes to picking

751
00:35:20,320 --> 00:35:22,640
Speaker 2: an unlikely winner. Here's our long shot.

752
00:35:23,200 --> 00:35:30,759
Speaker 18: In general at the racetrack, betting on really really long shots,

753
00:35:30,920 --> 00:35:32,920
Speaker 18: is it fool's errands.

754
00:35:34,960 --> 00:35:37,279
Speaker 14: It's a it's a sucker bet, but.

755
00:35:37,239 --> 00:35:39,480
Speaker 2: It's so tempting because the payout is so huge.

756
00:35:39,560 --> 00:35:43,239
Speaker 18: That's exactly right. But so on most days of the year,

757
00:35:43,280 --> 00:35:47,160
Speaker 18: it's a terrible bet. Okay, on Kentucky Derby day in

758
00:35:47,200 --> 00:35:49,920
Speaker 18: the Derby, it's a fantastic bet, or at least it

759
00:35:50,000 --> 00:35:52,799
Speaker 18: has been over the last few decades. And when I

760
00:35:52,840 --> 00:35:55,080
Speaker 18: say really long shots, I'm not talking about.

761
00:35:54,800 --> 00:35:57,680
Speaker 14: Eight to one or twelve to one. Those can be fine.

762
00:35:57,840 --> 00:35:59,960
Speaker 18: I'm talking about forty to one, in fifty to one,

763
00:36:00,160 --> 00:36:04,480
Speaker 18: in eighty to one. Those horses have one a handful

764
00:36:04,520 --> 00:36:07,479
Speaker 18: of times in recent years, and you just hit one

765
00:36:07,560 --> 00:36:10,799
Speaker 18: of those, and man, it'll pay for a lot of

766
00:36:10,840 --> 00:36:11,760
Speaker 18: losing tickets.

767
00:36:12,760 --> 00:36:15,480
Speaker 14: The most recent of them, which is a few.

768
00:36:15,360 --> 00:36:18,760
Speaker 18: Years ago in twenty twenty two, a horse rich strike

769
00:36:20,080 --> 00:36:22,960
Speaker 18: one at odds of eighty to one. There are a

770
00:36:23,000 --> 00:36:25,919
Speaker 18: bunch of things that make that the case, that make

771
00:36:26,040 --> 00:36:29,480
Speaker 18: the Derby a great race to bet on really long shots,

772
00:36:30,200 --> 00:36:32,600
Speaker 18: and the single thing though, that drives it all is

773
00:36:33,160 --> 00:36:36,919
Speaker 18: it's just a very chaotic, random race. None of these

774
00:36:36,960 --> 00:36:40,200
Speaker 18: horses being young three year olds. The Derby's only for

775
00:36:40,239 --> 00:36:43,360
Speaker 18: three year old horses. None of them has ever raced

776
00:36:43,360 --> 00:36:47,359
Speaker 18: this far in their career. They've raced a mile, a

777
00:36:47,400 --> 00:36:49,319
Speaker 18: mile on a sixteen, so on, so so you don't

778
00:36:49,400 --> 00:36:51,920
Speaker 18: exactly know which of them are going to really relish

779
00:36:52,040 --> 00:36:52,600
Speaker 18: that distance.

780
00:36:52,640 --> 00:36:55,319
Speaker 14: That's one thing. The other thing is the crowd. One

781
00:36:55,400 --> 00:36:56,560
Speaker 14: hundred and fifty.

782
00:36:56,280 --> 00:37:00,200
Speaker 18: Thousand people there on hand. This is unlike anything these

783
00:37:00,200 --> 00:37:03,920
Speaker 18: horses have ever experienced before. They're used to like seven

784
00:37:04,000 --> 00:37:07,600
Speaker 18: thousand people showing up for a race and things being

785
00:37:07,640 --> 00:37:12,200
Speaker 18: sort of subdued, and horses being, you know, flight animals

786
00:37:12,640 --> 00:37:15,799
Speaker 18: skittish by nature. A lot of them are really set

787
00:37:15,840 --> 00:37:18,680
Speaker 18: off by the crowd and lose their minds before the race.

788
00:37:18,680 --> 00:37:19,360
Speaker 11: I know that.

789
00:37:19,480 --> 00:37:21,640
Speaker 2: So even horses who are used to racing can get

790
00:37:21,640 --> 00:37:23,280
Speaker 2: freaked out by the louder.

791
00:37:23,480 --> 00:37:27,960
Speaker 18: Oh wow, like a hundred percent happens all the time.

792
00:37:28,320 --> 00:37:31,239
Speaker 18: It happens all the time. And the last thing, and

793
00:37:31,600 --> 00:37:34,919
Speaker 18: perhaps the most important of those chaos factors, is the

794
00:37:34,960 --> 00:37:38,200
Speaker 18: size of the field. There are twenty horses in the

795
00:37:38,280 --> 00:37:42,280
Speaker 18: Kentucky Derby race on a typical race on that typical

796
00:37:42,880 --> 00:37:46,880
Speaker 18: sleepy Thursday in July where there're seven thousand people and

797
00:37:46,920 --> 00:37:49,120
Speaker 18: not one hundred and fifty thousand people on hand. There

798
00:37:49,120 --> 00:37:53,720
Speaker 18: aren't twenty horses in the starting gate. There are seven eight.

799
00:37:55,120 --> 00:37:58,760
Speaker 18: They actually a Churchill Downs. They have a special twenty

800
00:37:58,880 --> 00:38:01,600
Speaker 18: horse starting gate that they only bring out once a

801
00:38:01,680 --> 00:38:03,799
Speaker 18: year for the Kentucky Derby to get all twenty horses in.

802
00:38:04,160 --> 00:38:07,040
Speaker 18: And when you have twenty horses on the track at

803
00:38:07,080 --> 00:38:12,759
Speaker 18: the same time in a cavalry charge stampede. It creates

804
00:38:12,840 --> 00:38:18,520
Speaker 18: all sorts of traffic pile ups and collisions and suicidal

805
00:38:18,600 --> 00:38:22,280
Speaker 18: speed duels between two Like all sorts of weird things happen.

806
00:38:22,760 --> 00:38:27,279
Speaker 18: You have had year after year, terrific horses that have

807
00:38:27,320 --> 00:38:30,160
Speaker 18: done great things before the derby and great things after

808
00:38:30,200 --> 00:38:33,719
Speaker 18: the derby, flop terribly in the Derby just because all

809
00:38:33,760 --> 00:38:36,960
Speaker 18: this weird stuff happens, and so as a result get

810
00:38:37,080 --> 00:38:39,879
Speaker 18: you can get these really random results like that one

811
00:38:40,520 --> 00:38:41,680
Speaker 18: eighty to one a few years ago.

812
00:38:41,920 --> 00:38:43,640
Speaker 2: So if I wanted to place my bet, I don't

813
00:38:43,680 --> 00:38:46,279
Speaker 2: have to be at Churchill downstend Oh, talk to us

814
00:38:46,320 --> 00:38:49,640
Speaker 2: how the rise of online betting and gambling has changed

815
00:38:49,680 --> 00:38:51,520
Speaker 2: the Derby and how people wager on it.

816
00:38:52,000 --> 00:38:53,920
Speaker 6: Well, you know all.

817
00:38:53,719 --> 00:38:59,760
Speaker 18: These racetracks, Churchill Downs included, you know, has their betting app.

818
00:39:00,560 --> 00:39:01,480
Speaker 2: Have they had it for a while?

819
00:39:01,760 --> 00:39:06,359
Speaker 18: Yeah, So, Georgie Dowam's got Twin Spires, the New York

820
00:39:06,440 --> 00:39:11,360
Speaker 18: tracks have Nayra Bets, my betting app of choice. And

821
00:39:11,400 --> 00:39:14,879
Speaker 18: there are a whole bunch of others out there fan duel.

822
00:39:14,960 --> 00:39:17,839
Speaker 18: You know, the sports books now are trying to get

823
00:39:17,880 --> 00:39:20,000
Speaker 18: in a little bit, and I think they're having some success.

824
00:39:20,160 --> 00:39:23,200
Speaker 18: We ran the numbers on betting on uber long shots

825
00:39:23,320 --> 00:39:27,120
Speaker 18: in the Derby this century. It's produced a positive ROI

826
00:39:27,280 --> 00:39:31,280
Speaker 18: a positive return of fifty this century.

827
00:39:31,800 --> 00:39:34,080
Speaker 2: Bed All right, So what are you gonna do? Are

828
00:39:34,160 --> 00:39:36,279
Speaker 2: who are you backing? Are you gonna bet? Are you

829
00:39:36,280 --> 00:39:37,040
Speaker 2: gonna bet a long shot?

830
00:39:37,120 --> 00:39:40,960
Speaker 14: Are gonna bet? Of course I'm a gambler. Yes, I'm

831
00:39:40,960 --> 00:39:41,439
Speaker 14: gonna bet.

832
00:39:42,800 --> 00:39:44,880
Speaker 2: Renegade is an early favorite four to one odds, But

833
00:39:45,000 --> 00:39:47,160
Speaker 2: there's quite a few fifty to one horses.

834
00:39:47,400 --> 00:39:48,000
Speaker 6: Are you going to do it?

835
00:39:48,120 --> 00:39:50,759
Speaker 18: Yeah, so a few of the long shots for sure.

836
00:39:51,040 --> 00:39:53,520
Speaker 18: And actually, truth be told, being the true degenerate I am.

837
00:39:53,600 --> 00:39:58,200
Speaker 18: I've already locked some of those long shots locked in

838
00:39:58,280 --> 00:39:59,439
Speaker 18: bets in the futures market.

839
00:39:59,600 --> 00:40:01,600
Speaker 14: The odds change, ads, do change it?

840
00:40:01,600 --> 00:40:02,280
Speaker 7: Do you change? Okay?

841
00:40:02,520 --> 00:40:05,840
Speaker 18: And at the track it's it's it's a funny system

842
00:40:05,840 --> 00:40:07,200
Speaker 18: for a lot of people. Like when you bet a

843
00:40:07,280 --> 00:40:10,120
Speaker 18: horse at fifteen to one with twelve minutes to go

844
00:40:10,200 --> 00:40:13,200
Speaker 18: before the race, you don't necessarily get fifteen to one,

845
00:40:13,600 --> 00:40:17,360
Speaker 18: you get the final price that the horse goes off at. Okay,

846
00:40:17,440 --> 00:40:20,239
Speaker 18: But so for sure, some of the long shots and

847
00:40:20,320 --> 00:40:22,560
Speaker 18: then some of the more likely horses you know I

848
00:40:22,719 --> 00:40:23,960
Speaker 18: like the Puma.

849
00:40:25,840 --> 00:40:30,560
Speaker 14: Is a good name, good horse. More importantly, emerging market.

850
00:40:31,480 --> 00:40:33,000
Speaker 2: It's a horse named emerging market.

851
00:40:33,160 --> 00:40:34,400
Speaker 14: Yeah, so he's owned, but you.

852
00:40:34,440 --> 00:40:36,120
Speaker 2: Work at Bloomberg, you have to bet on the horse

853
00:40:36,239 --> 00:40:36,879
Speaker 2: emerging market.

854
00:40:37,200 --> 00:40:39,719
Speaker 18: I actually started my career in emerging markets. So yes,

855
00:40:40,440 --> 00:40:42,920
Speaker 18: actually owned by a hedge fun.

856
00:40:42,880 --> 00:40:46,760
Speaker 14: Guy at a Boston so a horse out of Japan

857
00:40:47,120 --> 00:40:48,040
Speaker 14: called Dan and Berman.

858
00:40:48,120 --> 00:40:51,239
Speaker 18: Now, the Japanese have been trying to win their first

859
00:40:51,280 --> 00:40:53,719
Speaker 18: Derby for many years now, and Dan and Berman there's

860
00:40:53,719 --> 00:40:55,320
Speaker 18: a lot of buzz around him that he might be

861
00:40:55,440 --> 00:40:55,759
Speaker 18: the one.

862
00:40:56,360 --> 00:40:58,520
Speaker 14: Chief Wallaby is the last of the four.

863
00:40:58,560 --> 00:41:00,640
Speaker 2: I'll give you got a love horse name. All right,

864
00:41:00,640 --> 00:41:02,160
Speaker 2: we're gonna have to leave it there, but if you

865
00:41:02,239 --> 00:41:04,160
Speaker 2: win on all those fifty one odds, you're gonna come

866
00:41:04,160 --> 00:41:05,520
Speaker 2: back tomorrow and tell us all about it.

867
00:41:05,760 --> 00:41:09,600
Speaker 14: Absolutely right, Thank you so much, No problem, the.

868
00:41:09,640 --> 00:41:12,560
Speaker 3: Great David Papadopolis, you missed that, and you missed out

869
00:41:12,560 --> 00:41:14,759
Speaker 3: with Yeah, that was fun. I'm just looking at the

870
00:41:14,800 --> 00:41:18,040
Speaker 3: latest odds here. Renegade five to one, Intrepido fifty five

871
00:41:18,080 --> 00:41:21,399
Speaker 3: to one. In your favorite emerging market, we're eleven to one.

872
00:41:21,920 --> 00:41:23,320
Speaker 3: All right, I'm going to engage in this.

873
00:41:23,800 --> 00:41:25,320
Speaker 2: I think I missed my window, but I should have.

874
00:41:25,360 --> 00:41:28,040
Speaker 2: I want to put money on emerging markets in general.

875
00:41:28,200 --> 00:41:30,080
Speaker 7: And the horse enjoyed that immensely. Again.

876
00:41:30,160 --> 00:41:32,480
Speaker 3: Kentucky Derby hundred fifty second running of it taking place

877
00:41:32,600 --> 00:41:33,520
Speaker 3: razy this weekend.

878
00:41:33,560 --> 00:41:34,840
Speaker 7: Get your mint tulips ready.

879
00:41:37,320 --> 00:41:40,200
Speaker 2: Thanks for joining us on today's Bloomberg This Weekend podcast.

880
00:41:40,400 --> 00:41:42,600
Speaker 2: Don't forget to tune in live for the show every

881
00:41:42,680 --> 00:41:45,280
Speaker 2: Saturday and Sunday morning, starting at seven am Eastern.

882
00:41:45,400 --> 00:41:48,359
Speaker 3: We're on Bloomberg Television, Radio and the Bloomberg Business App,

883
00:41:48,520 --> 00:41:51,960
Speaker 3: bringing you unique takes and in depth interviews on news, politics,

884
00:41:52,080 --> 00:41:53,280
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