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Trump Wants Hormuz Deal Immediately, Michigan Primary Day · Balance of Power

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Speaker 1: Bloomberg Audio Studios, podcasts, radio News. You're listening to the
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0:25
Speaker 2: Tech stocks ripping is Charlie mentioned and interesting to see
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Speaker 2: energy stocks once again under pressure today as we see
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Speaker 2: oil prices going lower. Perhaps that's going to mean fewer
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Speaker 2: profits for these energy companies. This is something we know
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Speaker 2: President Trump cares a lot about, as he accused these
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Speaker 2: companies essentially of profiteering once again in the Oval Office yesterday.
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Speaker 2: And we'll be talking about that in a moment with
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Speaker 2: the president of the American Petroleum Institute, Mike Summers. But
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Speaker 2: first we have to talk about what else. The President
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Speaker 2: said in the Oval Office as he explained his once
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Speaker 2: again calling off of more intense strikes on Iran, describing
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Speaker 2: the current chance as being the last one for Tehran.
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Speaker 3: This is the last chance.
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Speaker 4: This is the last chance for them to sign a
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Speaker 4: good document.
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Speaker 3: I don't know.
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Speaker 4: I think we're going to maybe get something, but I
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Speaker 4: want to give them every last chance before decapitation, very
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Speaker 4: tough to do what we have planned still planned. We'll
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Speaker 4: see what happens.
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Speaker 5: We'll see what happens again.
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Speaker 6: Not the first time we've heard about a last chance,
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Speaker 6: as The New York Post actually went through transcripts and
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Speaker 6: truth social posts to learn there is in fact a
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Speaker 6: number on this. He's done it now thirteen times, giving
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Speaker 6: around one last chance in this case, he says, before decapitation.
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Speaker 6: We've seen this walk up only to step back moment,
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Speaker 6: and there's a big question about whether this will in
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Speaker 6: fact be the last one. As Kaylie mentioned, there are
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Speaker 6: some good signs as Cutter signals progress on a deal,
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Speaker 6: and it's something that we want to discuss with Jordan Fabian,
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Speaker 6: who is our White House and Politics team leader here
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Speaker 6: in Washington, d C. Having covered the administration for many years.
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Speaker 6: Jordan is great to see you. Are we any closer
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Speaker 6: to a deal? And how many times does the president
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Speaker 6: get to do this? Well, it appears as many times
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Speaker 6: as he'd like.
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Speaker 7: But and another good question is what is a deal
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Speaker 7: If it's simply to restore traffic in the Strait of
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Speaker 7: Horne moves, Maybe we're back to where we were pre war,
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Speaker 7: but that leaves all the other war objects objectives that
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Speaker 7: the president had by the wayside as far as preventing
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Speaker 7: a Ran from acquiring a nuclear weapon, yes, they've degraded
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Speaker 7: their military capabilities, but they've shown they still have the
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Speaker 7: strength to hit targets throughout the region and threaten their neighbors.
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Speaker 7: And so you might ask at the end of this,
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Speaker 7: if it's just a deal to get traffic going in
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Speaker 7: horror moves, what was all this for? Not to mention
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Speaker 7: the fact that Iran has learned that it has a
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Speaker 7: very powerful lever in control of the Strait, and I
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Speaker 7: have some real questions about whether they're actually going to
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Speaker 7: restore true freedom of navigation given all we just went through.
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Speaker 2: Yeah, well, of course, the original memory and of an
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Speaker 2: understanding was just about immediately reopening the Straight of Hormus
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Speaker 2: and punting talks on more difficult issues like Iron's nuclear
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Speaker 2: ambitions to a later date. Would we expect Jordan, if
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Speaker 2: there is to be a deal, that it would be
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Speaker 2: in MoU form once again, or have they effectively decided
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Speaker 2: that that didn't work the first go around.
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Speaker 7: I don't know if we have that level of detail,
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Speaker 7: and it's not even clear which parties are talking right now,
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Speaker 7: we know that Iran and Oman are talking. We don't
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Speaker 7: know to the extent to which the US is involved
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Speaker 7: beyond Jared Kushner and Steve Wikoff just texting and on
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Speaker 7: the phone with intermediaries. So again, a deal might just
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Speaker 7: be the prelude to more talks. But again, the MoU approach,
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Speaker 7: as you pointed out, Kaylee, it was not effective. It
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Speaker 7: left the straight too ambiguous, which let Iran come back
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Speaker 7: and hit shipping didn't address the key questions for Trump.
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Speaker 7: And so you know what Trump says there DUPLICITUS negotiators, like,
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Speaker 7: how can you make a deal with people who are
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Speaker 7: duplicitist negotiators.
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Speaker 6: We're seeing oil prices pulled back today on hopes for
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Speaker 6: something to happen here, and it's not the first time
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Speaker 6: we've seen that. Although been a while since we've been
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Speaker 6: in the seventies for crude oil. Gas prices are still
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Speaker 6: hovering above four dollars a gallon, though, and that kind
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Speaker 6: of remains its own story and its own market. You
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Speaker 6: were covering the Biden administration, I remember distinctly talking to
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Speaker 6: you when prices topped five dollars a gallon.
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Speaker 5: How different is the rhetoric.
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Speaker 6: That we're hearing from this administration to the way Biden
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Speaker 6: messaged around what's a real problem for voters with a
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Speaker 6: few months to the election.
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Speaker 7: It's actually strikingly similar, Joe. For as many rips as
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Speaker 7: Trump likes to take a Biden, what they're saying as
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Speaker 7: far as the gasoline prices is quite similar. A lot
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Speaker 7: of job voting against the super majors in the oil industry,
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Speaker 7: launching of investigations or probes into you suppose that price
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Speaker 7: gouging in the gasoline retail gasoline market. You know, remember
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Speaker 7: Biden said something along the lines in twenty twenty two
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Speaker 7: of you know, the big oil companies are making more
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Speaker 7: money than God. And you had Trump say something pretty
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Speaker 7: similar yesterday in the Oval Office, saying that, you know,
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Speaker 7: they're making way too much profit and they need to
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Speaker 7: give money back to shareholders. The irony for Trump is that,
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Speaker 7: you know, with Biden, that was Russia's invasion of Ukraine
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Speaker 7: that triggered the price bike. This was Trump's own actions
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Speaker 7: that triggered the most recent price bike.
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Speaker 3: And so there's the difference for.
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Speaker 8: You, all right.
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Speaker 2: Jordan Fabian leading our White House and Politics team here
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Speaker 2: at Bloomberg, Thank you so much. It's like Jordan knew
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Speaker 2: exactly where we were planning to go next ye as
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Speaker 2: he talks about what we heard from the President in
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Speaker 2: the Oval Office yesterday calling out specific oil majors for
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Speaker 2: their profits.
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Speaker 4: Listen, they're making too much money based on a shortage.
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Speaker 4: They're making too much money. I don't like Chevron too
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Speaker 4: much money, Excellon Mobile, too much money.
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Speaker 9: When you look at one.
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Speaker 4: Company where they made twelve times what they made the
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Speaker 4: year before. They're going to give some of that back
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Speaker 4: to the public, and they better cut the retail price,
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Speaker 4: the consumer price.
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Speaker 2: So to Jordan's point, sounds like something we've heard from
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Speaker 2: prior administrations as well.
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Speaker 6: Well, yeah, that's true, and it's kind of amazing since
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Speaker 6: we hear so much about the president's relationship with the
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Speaker 6: oil industry while we may not be seeing a lot
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Speaker 6: of additional drilling, it's kind of a vibes thing that
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Speaker 6: there's just more positive energy in the energy space when
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Speaker 6: it comes to this administration. But stopping down to call
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Speaker 6: him out, what are we looking at for a gallon
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Speaker 6: of gas today? Klee four dollars according to Triple A
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Speaker 6: and eight cents nationally and we wanted to talk this
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Speaker 6: out with Mike Summers. I'm guessing he was listening to
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Speaker 6: this as well. Mike, of course runs the American Petroleum Institute,
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Speaker 6: where he's president and CEO speaking for the industry. It's
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Speaker 6: great to see you, Mike. Great and welcome back to Bloomberg.
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Speaker 6: Is this an argument within the family. How would you
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Speaker 6: describe the relationship between this administration and your industry and
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Speaker 6: what's you looking for you?
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Speaker 10: Well, first of all, I give the President a lot
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Speaker 10: of credit. His energy dominance agenda has really made the difference.
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Speaker 10: We've opened up the Gulf of America again for production.
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Speaker 10: We have more production on federal lands and of course
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Speaker 10: in federal waters. Their regulatory agenda has been very positive
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Speaker 10: for the American oil and gas industry. There's no question
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Speaker 10: this president has been focused on more production here in
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Speaker 10: the United States and that has provided a buffer during
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Speaker 10: this time when the Strait of Hormuz has been effectively closed.
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Speaker 10: So I give him a lot of credit for his
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Speaker 10: energy dominance agenda. At the same time, we know that
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Speaker 10: this industry is a price taker, not a price maker,
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Speaker 10: and because the trade of hormouse has been shut down
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Speaker 10: for basically five months, we're of course going to be
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Speaker 10: dealing with higher prices.
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Speaker 3: At the pump.
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Speaker 2: So in other words, is higher profit not a choice
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Speaker 2: or could they make a different choice.
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Speaker 10: Well, of course, this is an industry. As I said,
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Speaker 10: we are price takers, not price makers. As a consequence
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Speaker 10: of the Straight of Hormuz, which has been twenty million
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Speaker 10: barrels of oil a day not making it through the straight,
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Speaker 10: you're going to have to deal with higher prices. I'll
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Speaker 10: remind you though, in twenty twenty I was actually in
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Speaker 10: a meeting with the President in the cabinet room where
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Speaker 10: this industry was actually dealing with low prices, in fact,
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Speaker 10: negative thirty two dollars prices, And that was a time
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Speaker 10: when this industry was making virtually zero earnings.
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Speaker 3: So this is a commodity business.
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Speaker 10: Prices go up, prices go down, we have to deal
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Speaker 10: with the price swings, and on average, this industry actually
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Speaker 10: makes a fewer earnings and other large industries like tech,
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Speaker 10: like finance. So this is an industry that we do
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Speaker 10: have to deal with those highs and lows, and high
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Speaker 10: prices now mean investments for future production. One example of
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Speaker 10: that is during the two thousand and eight twenty twelve
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Speaker 10: period when we were dealing with significant earnings at that
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Speaker 10: point too. That was allowed us to finance what eventually
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Speaker 10: became the shale revolution, the fracking revolution, which allowed us
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Speaker 10: today now produce about fourteen mills and barrels of oil everything.
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Speaker 6: Surely the president understands everything we're talking about here, right,
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Speaker 6: I mean, he knows that there's a refining bottleneck in
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Speaker 6: this country, that there's a disconnect we talk about crack
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Speaker 6: spreads between the price of crude and what we pay
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Speaker 6: at the pump, that distilled products are their own story.
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Speaker 6: Is he just sounding the populist alarm in an election season?
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Speaker 5: I feel your pain, well.
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Speaker 10: I do think that everyone is concerned about high prices
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Speaker 10: at the pump for American consumers and high electricity.
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Speaker 5: Colony of guys out by name though Excellon Mobile.
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Speaker 10: And Chevron, absolutely, But what we understand that, you know,
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Speaker 10: we're in an election year and we're gonna have to
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Speaker 10: deal with that kind of incoming. But at the same time,
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Speaker 10: American consumers have to understand that during this time of
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Speaker 10: high earnings, this is the time when we invest for
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Speaker 10: future production going forward.
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Speaker 2: Well, as Joe's talking about the political considerations here, that
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Speaker 2: arguably is why we've seen the President float things like
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Speaker 2: a gas tax holiday for example. Do you fear that
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Speaker 2: he could even go so far if we see prices
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Speaker 2: permanently above four dollars a gallon, for example, to suggest
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Speaker 2: that maybe there should be export bans put in place
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Speaker 2: in this country.
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Speaker 3: What would that do well?
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Speaker 10: We would also be very concerned about any kind of
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Speaker 10: an export ban. I will say that there are a
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Speaker 10: lot of policies that they put in place that have
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Speaker 10: provided some kind of a buffer, for example, the Jonzact
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Speaker 10: waiver that they put into place. There are other things
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Speaker 10: they could do. There are changes that they could make
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Speaker 10: to the renewable fuels standard right now that are providing
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Speaker 10: a higher price at the pump that we don't need
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Speaker 10: to sustain right now given the kind of challenges that
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Speaker 10: we have. But we would be concerned about an export
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Speaker 10: ban primarily because there is a mismatch between the kind
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Speaker 10: of production that we have in the United States.
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Speaker 3: This WTI that we produce here in.
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Speaker 10: The United States isn't necessarily refined here in the United States.
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Speaker 10: So we import a lot of product from overseas, and
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Speaker 10: then we export a lot of product from the United
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Speaker 10: States to be refined elsewhere. That's actually to the benefit
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Speaker 10: of American consumers because we buy that lower quality crude
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Speaker 10: from other countries like Canada and then sell it to
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Speaker 10: American consumers at a discount. Any kind of an export
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Speaker 10: ban I think would be a great concern to this industry.
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Speaker 6: We've talked about the refining bottlenecks in this country and
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Speaker 6: the need to maintain these refineries. At some point, you
11:10
Speaker 6: need to take them down and fix the hardware. In
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Speaker 6: a country that hasn't built a refinery, I believe since
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Speaker 6: the nineteen seventies, is this the part that needs to
11:19
Speaker 6: be fixed.
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Speaker 10: Well, it's one of the reasons why we're so focused
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Speaker 10: on getting legislative permitting reform done, because it is very
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Speaker 10: hard to build anything in this country, particularly a new
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Speaker 10: oil refinery.
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Speaker 3: You're exactly right.
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Speaker 10: We haven't built refinery in this country since nineteen seventy six.
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Speaker 10: And if you think about the market that we were
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Speaker 10: in nineteen seventy six compared to the one that we're
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Speaker 10: in today, it's a completely different story. We were importing
11:42
Speaker 10: oil at that point, now we're exporting oil. It doesn't
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Speaker 10: make any sense we should be building more refineries in
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Speaker 10: this country, because that's the real bottleneck right now. Even
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Speaker 10: when you're dealing with lower prices from from a crude perspective,
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Speaker 10: you don't have the refining capacity that you need to
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Speaker 10: turn it into the products that we use on a
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Speaker 10: daily basis, like gasoline and diesel.
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Speaker 2: What are you hearing about permitting reform on Capitol Hill
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Speaker 2: right now? Or I guess maybe a better question is
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Speaker 2: are you hearing about it? Because we often don't.
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Speaker 10: This should be such a layup for the United States
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Speaker 10: Congress right now. I believe it should be a political
12:15
Speaker 10: imperative for them. You see prices going up, particularly on
12:18
Speaker 10: the electricity side, because of more demand on the electrical
12:21
Speaker 10: grid because of data centers and the advent of an
12:24
Speaker 10: artificial intelligence. Unfortunately, lawmakers just aren't focused on it because
12:29
Speaker 10: we're in an election year. I think that this should
12:32
Speaker 10: have been the first thing on the agenda this Congress.
12:34
Speaker 10: Republicans and Democrats should be able to agree because all
12:37
Speaker 10: sides benefit, whether it's alternative energies like wind and solar,
12:41
Speaker 10: or pipelines that would benefit oil and natural gas. But unfortunately,
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Speaker 10: I think they're a little bit too focused on what's
12:47
Speaker 10: coming in November and everybody wants to wait until they
12:50
Speaker 10: figure out who's going to win to decide who's going
12:52
Speaker 10: to benefit from permitting reform.
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Speaker 5: There's great hope in the markets today.
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Speaker 6: We see crude oil in the seventies for the first time,
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Speaker 6: and sometime is encourage you. How long would we need
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Speaker 6: to stay at these levels or move lower to see
13:04
Speaker 6: a significant changing gas.
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Speaker 3: Here's the bottom line.
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Speaker 10: Unfortunately, we're still not getting enough product through the Strait
13:09
Speaker 10: of Horror Moves even at the highest ends. They're saying
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Speaker 10: that we're getting only about seven million barrels of oil
13:14
Speaker 10: through the Strait of Her Moves at this point. Because
13:18
Speaker 10: of new pipeline capacity, you only need to get that
13:20
Speaker 10: level up to about eleven million barrels a day through
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Speaker 10: the Strait because of a lot of that product now
13:25
Speaker 10: flowing through pipelines. That is a great news story for
13:29
Speaker 10: the Middle East, and I think over time we need
13:31
Speaker 10: to continue to build that infrastructure so that we can
13:33
Speaker 10: avoid the straight over time.
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Speaker 3: But right now, we need to get that up to.
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Speaker 10: About eleven million barrels a day on a sustained basis
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Speaker 10: if we're going to get back to where we need
13:42
Speaker 10: to be, back to where we were prior to this
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Speaker 10: conflict beginning.
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Speaker 2: Well, so should this administration also tap the rest of
13:48
Speaker 2: the SPR drawt on that they said they would complete.
13:52
Speaker 2: I believe there's thirty nine million barrels left in that program.
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Speaker 10: So there are about thirty nine million barrels left in
13:57
Speaker 10: that program. We still have product in the Strategic Petroleum
14:00
Speaker 10: Reserve that was something that they negotiated at the beginning
14:02
Speaker 10: of this that expires at the end of August. They
14:04
Speaker 10: need to think about where they are and start considering
14:07
Speaker 10: whether they're going to do another release or another exchange,
14:09
Speaker 10: which is how this program is developed.
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Speaker 3: I don't know the answer to that yet.
14:13
Speaker 10: I don't think we're going to know until we know
14:14
Speaker 10: the results of whether this potential deal in the Middle
14:17
Speaker 10: East comes through. We've seen this before, of course. I
14:22
Speaker 10: do think that that has provided an important relief valve
14:25
Speaker 10: for American consumers those targeted SPR releases, not just in
14:29
Speaker 10: the United States but throughout the world. So there are
14:32
Speaker 10: a lot of these policies. Again, we're going to have
14:33
Speaker 10: to extend the Jones Act waivers as well. That has
14:36
Speaker 10: providing an important relief valve for American consumers.
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Speaker 2: All right, Mike Summers, the CEO and President of the
14:41
Speaker 2: American Petroleum Institute. Here with us in our Washington, DC studio.
14:45
Speaker 2: We still have more ahead here on Balance of Power
14:47
Speaker 2: while I assemble our political panel. Next on Bloomberg TV.
14:49
Speaker 6: And Radio, stay with us on Balance of Power. We'll
14:52
Speaker 6: have much more coming up after this.
14:57
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15:16
Speaker 5: Happy Primary Day.
15:17
Speaker 6: This is something we haven't had a chance to get
15:19
Speaker 6: to with so much news coming out of the White.
15:21
Speaker 5: House and the Congress.
15:22
Speaker 6: It is that last time to decide in states, including Michigan,
15:25
Speaker 6: which is one of the most closely watched and most
15:28
Speaker 6: expensive Senate primaries in the country.
15:32
Speaker 5: Fifty six million dollars.
15:34
Speaker 6: Spent to help Congresswoman Haley Stevens, the Democrat from Michigan,
15:38
Speaker 6: close the gap with Abdul al Sayd, who in recent
15:43
Speaker 6: polls is out running the establishment choice for this primary
15:48
Speaker 6: by double digits. My old friend Ed O'Keeffe now with
15:53
Speaker 6: CBS News went to Michigan to talk with both of
15:55
Speaker 6: them and asked them, if they win, who should be
15:57
Speaker 6: in and who should be out of the Democratic.
16:01
Speaker 11: Anybody who wants to take on fascism, anybody who wants
16:04
Speaker 11: to get money out of politics, anybody who wants to
16:06
Speaker 11: fight for union rights. Anybody who wants to make sure
16:09
Speaker 11: that people can live free with clean air and drink
16:12
Speaker 11: clean water. Anybody who wants to guarantee healthcare. Come on
16:15
Speaker 11: in the water is fine.
16:17
Speaker 12: I am very.
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Speaker 13: Eager to say that this is about the future of
16:20
Speaker 13: my state and anyone who's on board with the future
16:24
Speaker 13: of Michigan and our manufacturing economy and stopping members of
16:29
Speaker 13: Congress and presidents and vice presidents from trading stockswell in
16:34
Speaker 13: office of ushering in kind of a new generation of
16:39
Speaker 13: prosperity for folks.
16:43
Speaker 2: So let's get into this now with our political panel,
16:45
Speaker 2: as Bloomberg Politics contributors Rick Davis and Jeanie Shanzino join us. Rick,
16:49
Speaker 2: of course, republican strategist and Stonecairk capital partner. Genie our
16:52
Speaker 2: democratic analyst and democracy visiting fellow at Harvard Kennedy School's
16:56
Speaker 2: Ash Center. Genie is the Democrat I'll come to you first,
16:59
Speaker 2: because there's kind of a near term and long term
17:02
Speaker 2: way of looking at what's at stake in this race.
17:04
Speaker 2: And the near term, obviously it's about who wins and
17:07
Speaker 2: who's going to take on Mike Rogers in November, how
17:10
Speaker 2: likely that person is to win, and what that means
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Speaker 2: for the balance of the Senate. Then there's the longer
17:14
Speaker 2: term view as to what this signals in terms of
17:17
Speaker 2: a trajectory shift for the Democratic Party. So, as a
17:21
Speaker 2: Democrat right now, how are you feeling about the near
17:24
Speaker 2: and long term?
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Speaker 14: Yeah, And I think that's a great way to frame it, because,
17:28
Speaker 14: of course, in the short term, if Al Sayed does
17:32
Speaker 14: do what the polling suggests and wins this thing, he's
17:35
Speaker 14: got an uphill battle in the general election. Long term,
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Speaker 14: this is a huge wake up call in my mind, Kaylee,
17:42
Speaker 14: for the Democratic Party. You know, the Emerson poll that
17:47
Speaker 14: we've been talking about, which showed Al Sayed up I
17:49
Speaker 14: think by like fifteen points, also showed something that I
17:53
Speaker 14: think was even more important, an enormous generational divide in
17:58
Speaker 14: support for these two Canada. Now they're both in their
18:01
Speaker 14: early forties, you know, they are around the same age,
18:04
Speaker 14: so it's not about the candidates, but people under the
18:08
Speaker 14: age of fifty look, by and large support al Sayed
18:13
Speaker 14: by double digit numbers, and people over sixty more narrowly
18:17
Speaker 14: but still double digit support Stevens. And I think what
18:21
Speaker 14: the Democratic Party has to reckon with going forward. The
18:24
Speaker 14: brand is in a tank. They have an insurgency coming
18:28
Speaker 14: from their left that they've been unable to control. This
18:31
Speaker 14: has been going on since well before twenty sixteen, and
18:35
Speaker 14: they've got to grapple with that. And if they're just
18:37
Speaker 14: going to offer the same old and for many people
18:40
Speaker 14: Stevens is offering I'll win in the general but not
18:43
Speaker 14: much else, then their candidates are going to lose. So
18:47
Speaker 14: they've got to take seriously what they're offering and that
18:50
Speaker 14: this has more to do with just winning and getting
18:53
Speaker 14: the better of Donald Trump. It's got to do with
18:55
Speaker 14: a lot more about the party that goes back many,
18:58
Speaker 14: many years.
19:00
Speaker 6: Rick, do you buy the narrative in the media as
19:02
Speaker 6: somebody who's been around political campaigns for a long time,
19:05
Speaker 6: that this is a fight for the soul of the
19:08
Speaker 6: Democratic Party And if you're Mike Rogers, are you actually
19:12
Speaker 6: hoping that el said wins.
19:15
Speaker 9: Yeah, I think this is actually.
19:17
Speaker 15: More important story than all the previous sort of liberal
19:22
Speaker 15: democratic congressional districts fighting over you know, whether or not
19:25
Speaker 15: a socialist is going to be the mainstream Democrat. Those
19:29
Speaker 15: things really don't matter to the Democratic Party. Michigan's a
19:32
Speaker 15: big deal. Michigan's a swing state. You gotta win Michigan.
19:35
Speaker 15: They've been losing Michigan lately, the Democrats, and so they
19:39
Speaker 15: got to take this incredibly seriously. I don't know about
19:42
Speaker 15: the soul. I don't know what the soul of the
19:43
Speaker 15: Democratic Party is, but you know, Elsaiad is like blue Maga.
19:48
Speaker 9: I mean, like he's the real deal.
19:51
Speaker 15: You can you can actually find a lot of parallels
19:53
Speaker 15: with with with him and the Maga contingent in Michigan.
19:58
Speaker 9: It's why Donald Trump has done so well.
20:00
Speaker 15: Some of these same issues apply to the magabase that
20:03
Speaker 15: have applied tell Science Base and.
20:05
Speaker 9: So yeah, Democrats have to sort of get right with this.
20:08
Speaker 15: And as Genie says, if polls are correct, he swings
20:12
Speaker 15: into election as a Democratic nominee.
20:15
Speaker 9: And look, I love Mike Rogers.
20:19
Speaker 15: I want Mike Rodgers to be a Senator, and I
20:21
Speaker 15: think he'd be a really good one. His strength is
20:24
Speaker 15: foreign policy, national security not something you want to talk
20:27
Speaker 15: about in Michigan right now. I mean, the war is
20:29
Speaker 15: incredibly unpopular and he lost to Alyssa Slockin by a
20:33
Speaker 15: couple points in a good election year for Republicans. You
20:37
Speaker 15: imagine it's plus five minimum right now for Democrats. And
20:41
Speaker 15: he's running the same campaign he ran last time.
20:43
Speaker 9: So I don't know.
20:44
Speaker 15: I mean, I don't know what the electability is of
20:47
Speaker 15: an Abdul al Saiad.
20:49
Speaker 9: But he's got a lot of energy.
20:51
Speaker 15: He's going to roll over the establishment of all the
20:54
Speaker 15: polling is correct, I would say Michigan polling is notoriously bad,
20:59
Speaker 15: so we can't get too excited about that. But look,
21:02
Speaker 15: this is worth thinking about. Michigan is a key state
21:05
Speaker 15: for twenty eight and Democrats. Regardless of what happens, I've
21:09
Speaker 15: got to start paying attention to it.
21:12
Speaker 14: Well.
21:13
Speaker 2: And as we talk about it being potentially a loss
21:16
Speaker 2: for the establishment if he would win Genie, he also
21:19
Speaker 2: frames it as about not being just the establishment, but
21:23
Speaker 2: about the idea of money in politics. He has frequently
21:26
Speaker 2: brought up the contributions that Haley Stevens campaign has received
21:29
Speaker 2: from APAC and the Lobby for Israeli interests, as well
21:34
Speaker 2: as other kind of corporate aspects, including a utility in Michigan.
21:39
Speaker 2: But for APAC specifically, I wonder what signal this sends
21:41
Speaker 2: about their potential waning power or the reverse influence it
21:46
Speaker 2: has if they spend more money on a candidate that
21:49
Speaker 2: it actually could backfire.
21:52
Speaker 14: Yeah, and this is where I think when Rick talks
21:55
Speaker 14: about how, I'll say it is to a certain extent,
21:58
Speaker 14: you know, the less definition or reflection of MAGA. You
22:01
Speaker 14: see that not only is he weightlifting Kayleye in his
22:04
Speaker 14: basement and we are seeing things like that and speaking
22:08
Speaker 14: truth to power, but he is also saying I don't
22:12
Speaker 14: need corrupt as he calls it, and I'm not saying
22:15
Speaker 14: APEX money is corrupt, but I don't need outside corrupt
22:18
Speaker 14: money to win. Look at the millions that APAC and
22:21
Speaker 14: outsiders have dumped into her campaign. Earned media is not
22:26
Speaker 14: going to win these things anymore. I can do this
22:29
Speaker 14: by talking to left wing podcasters like Piker and others.
22:33
Speaker 14: So he is sort of pulling a Donald Trump. If
22:36
Speaker 14: you will, I can spend a lot less. I cannot
22:38
Speaker 14: be beholden to these big interests, and I can win
22:41
Speaker 14: if that proves to be the case, and I agree
22:44
Speaker 14: with Rick these particularly Michigan, but primary polling is really
22:49
Speaker 14: tough to do. But if it proves to be the
22:51
Speaker 14: case that he wins, I think you're going to have
22:53
Speaker 14: a reckoning in the Democratic Party, even more so than
22:56
Speaker 14: we've seen already about how they could connect with and
23:01
Speaker 14: how they utilize APEC going forward. We already saw that
23:04
Speaker 14: vote on Israel not that long ago in the House,
23:07
Speaker 14: with a number of Democrats voting against Israel. I think
23:12
Speaker 14: they may be looking at this and saying all of
23:15
Speaker 14: that money did nothing, and in fact, not only didn't
23:19
Speaker 14: it just even the field, it hurt her and that
23:22
Speaker 14: may cause them to reconsider this money. So a lot
23:26
Speaker 14: on sort of at stake, not just for APEC, not
23:30
Speaker 14: just for the establishment rather but APEC as well, and
23:32
Speaker 14: this earned media money flowing in.
23:37
Speaker 6: We should note just headline crossing the terminal, Jay Clayton
23:41
Speaker 6: has been sworn in as the nation's new Director of
23:45
Speaker 6: National Intelligence. They did not open the swearing into reporters,
23:49
Speaker 6: though I'm sure we'll be seeing an image shortly. Bill
23:52
Speaker 6: Pulti no longer DNI. I want to ask you both
23:55
Speaker 6: about this Reuter's IPSOS poll today. Rick, you talked about
23:58
Speaker 6: the headwinds facing Mike Rogers and why this might not
24:02
Speaker 6: be the friendliest cycle for him, And we find that
24:04
Speaker 6: Americans are choosing Democrats over Republicans as better stewards of
24:10
Speaker 6: the economy for the first time in almost a decade.
24:13
Speaker 6: It's been since twenty seventeen. In this poll, thirty seven
24:17
Speaker 6: percent of registered voters said the Democratic Party is a
24:21
Speaker 6: better approach to the economy compared with thirty six who
24:24
Speaker 6: picked the Republican Party. It's only a point and within
24:27
Speaker 6: a margin, but the fact is it's the first time
24:30
Speaker 6: we've seen it in so many years. Twenty seven percent
24:32
Speaker 6: said they were not sure. How does that play nationally?
24:35
Speaker 6: Do you pay attention to a number that close?
24:39
Speaker 15: Yeah, I try not to pay too much attention to
24:41
Speaker 15: national politics when you've got an election cycle that's really
24:44
Speaker 15: dictated by state politics. But Michigan, since we're talking about it,
24:49
Speaker 15: is a really good example. Economic drivers there are huge,
24:53
Speaker 15: and they're very grumpy and upset with this administration. I mean,
24:56
Speaker 15: Donald Trump's approval rating in the state of Michigan is
24:59
Speaker 15: in a loa thirties. I mean, it's five points below
25:03
Speaker 15: most polls nationally, and so it does get worse when
25:08
Speaker 15: you start looking into the microcosm of some of these
25:10
Speaker 15: important states like Michigan. It should wake everybody up that
25:14
Speaker 15: the first time we're seeing a national poll that indicates
25:18
Speaker 15: that Democrats will manage the economy better.
25:20
Speaker 9: But when you look at the rhetoric from the White House,
25:22
Speaker 9: and I think a.
25:23
Speaker 15: Lot of its communications is, you know, like we never
25:27
Speaker 15: talk about how the economy that we have today is
25:29
Speaker 15: impacting the lives of voters, and we like to talk
25:32
Speaker 15: about the markets, but that's not the same.
25:35
Speaker 5: It's not the same.
25:36
Speaker 6: Rick, You're right, and we'll have a lot more with
25:39
Speaker 6: our panel on the results of this contest tomorrow. Rick
25:42
Speaker 6: Davis and Jeanie Shanzano, thank you both for great analysis.
25:45
Speaker 6: As always, stay with us on Balance of Power. We'll
25:48
Speaker 6: have much more coming up after this.
25:54
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26:10
Speaker 2: SpaceX rallying ahead of its earnings today up eight percent.
26:14
Speaker 2: That brings it to about one hundred and twenty four
26:16
Speaker 2: dollars a share, So sure, that's better than yesterday's close,
26:19
Speaker 2: but we have to keep in mind that the IPO
26:21
Speaker 2: price was one hundred and thirty five dollars a share.
26:24
Speaker 2: After trading started, it went as high as two twenty five,
26:27
Speaker 2: so one twenty four on a relative basis is obviously
26:30
Speaker 2: significantly lower. And we've seen about a trillion dollars worth
26:33
Speaker 2: of market value erased since this company went public. I
26:36
Speaker 2: guess it raises the question, Joe, of whether that means
26:39
Speaker 2: a lower bar for the earnings results or potentially a
26:43
Speaker 2: high bar to try and get the rally going again.
26:46
Speaker 6: Well, there's also something that's going to happen two days later,
26:48
Speaker 6: and that's the expiration of yes the first major lock
26:51
Speaker 6: up here that will dump something like nine hundred million
26:55
Speaker 6: shares on the market, if my numbers are correct ed.
26:57
Speaker 6: Will let me know that makes one one wonder if
27:00
Speaker 6: this earnings report.
27:02
Speaker 5: Is useful at all.
27:04
Speaker 6: Ed Ludlow covers this for a living as the host
27:07
Speaker 6: of Bloomberg Tech. He joins us right now live from
27:09
Speaker 6: San Francisco ahead of another busy night, and I know
27:12
Speaker 6: we'll be talking a little bit later after the close,
27:14
Speaker 6: but what's your thought on this?
27:15
Speaker 5: Does this report matter.
27:16
Speaker 6: Knowing what's coming Thursday?
27:19
Speaker 16: You know it's the big event of the summer for
27:22
Speaker 16: financial markets.
27:23
Speaker 12: Is how it's being framed.
27:25
Speaker 16: You know, it's the first earnings right, just in really
27:28
Speaker 16: simple terms, it's a first earnings report, the first call
27:31
Speaker 16: since SpaceX's IPO. And the problem with all of the
27:35
Speaker 16: information that SpaceX gave in the documents just before it
27:39
Speaker 16: went public was it was either completely backward looking. So
27:43
Speaker 16: they told us how much money they'd spent, for example,
27:46
Speaker 16: last year, the year before, the first three months of
27:48
Speaker 16: this year, but gave us no indication of the future.
27:52
Speaker 12: So this is the first chance for people to ask
27:54
Speaker 12: about it.
27:55
Speaker 16: You know, how much money are they going to have
27:56
Speaker 16: to spend this year and next year to reach these
27:59
Speaker 16: sort of out of this world ambitions. How are their
28:02
Speaker 16: different businesses doing in the here and now, and take
28:05
Speaker 16: into account that everything that this IPO is based on
28:08
Speaker 16: were businesses that don't exist yet or are going to
28:11
Speaker 16: come far into the future.
28:15
Speaker 2: Well, and therein lies what a lot of people had
28:17
Speaker 2: questions about at the onset when they saw that perspectus,
28:20
Speaker 2: and how much that seemed to be reliant on hopes
28:22
Speaker 2: and dreams, and it's a little bit more tangible for AMD,
28:25
Speaker 2: which is also reporting after the bell. What are we
28:27
Speaker 2: expecting there?
28:28
Speaker 12: Yeah, Look, AMD is a really simple story.
28:31
Speaker 16: They are a distant number two player in the market
28:34
Speaker 16: for GPUs or chips that either train AI models or
28:39
Speaker 16: run AI models. But they would tell you they have
28:42
Speaker 16: a technology advantage that at the server level, their chips
28:46
Speaker 16: in the form of a server in aggregate, really perform,
28:50
Speaker 16: particularly on running.
28:51
Speaker 12: AI models, what we call influence.
28:52
Speaker 16: And so each quarter that goes by, you measure the
28:56
Speaker 16: growth in AMD sales and the deployment of its technology
28:59
Speaker 16: around the world and try and calculate if they're bridging
29:02
Speaker 16: the gap to in video, which, as we've said for
29:04
Speaker 16: a long time, has a near technical monopoly on the
29:07
Speaker 16: market for that compute in AI.
29:09
Speaker 6: Okay, so dummy and Washington asking a question here, ed, No,
29:14
Speaker 6: does CPOs matter more than GPUs at this point? And
29:18
Speaker 6: if you're looking at the market here in an Nvidia
29:21
Speaker 6: versus an AMD versus an Intel, who's got the better story.
29:26
Speaker 12: Yeah, So.
29:28
Speaker 16: A CPU can just basically run a single process, and
29:31
Speaker 16: for a really long time we focused on GPUs because
29:35
Speaker 16: they are the brain that runs multiple computations at once
29:39
Speaker 16: to either train an AO model or run it. But
29:41
Speaker 16: there are lots of processes involved in using AI that
29:44
Speaker 16: require CPUs, and AMD has a very good CPU product.
29:48
Speaker 16: Intel also has a very good CPU product, and basically
29:51
Speaker 16: the market's caught up with it themselves. They're like, Okay,
29:53
Speaker 16: if you're going to build lots of data centers that
29:55
Speaker 16: have lots of rows of servers, aren't you also just
29:58
Speaker 16: going to need a proportionate number of CPU use The answers, yes,
30:00
Speaker 16: yes you do. And AMD will have a story around that,
30:03
Speaker 16: for sure. It's a point of differentiation, or has been
30:06
Speaker 16: with Nvidia. The problem is in video, like, hey, shouldn't
30:10
Speaker 16: we do CPUs too, And now they do, and so
30:13
Speaker 16: they've continued to try and pull ahead in that respect
30:16
Speaker 16: as well.
30:18
Speaker 8: All Right, the.
30:19
Speaker 2: Host of Bloomberg Tech, Ed Ludlow, will be checking back
30:22
Speaker 2: in with Ed, as Joe said, later this afternoon to
30:24
Speaker 2: break down these results.
30:26
Speaker 12: Ed, thank you very much.
30:27
Speaker 2: And of course the results from AMD and SpaceX could
30:29
Speaker 2: very well send a signal to the wider market and
30:31
Speaker 2: determine the direction of travel in the trading day tomorrow,
30:34
Speaker 2: in the trading day to day. Obviously, that direction by
30:36
Speaker 2: and large is up. As we see stocks rallying in
30:39
Speaker 2: part because bond yields and oil prices are moving lower.
30:42
Speaker 2: It does seem like this is a market putting a
30:44
Speaker 2: lot of faith into the notion that there could be
30:47
Speaker 2: a deal in the offering between the US and Iran.
30:50
Speaker 2: As of course, President Trump in the Oval Office yesterday
30:52
Speaker 2: suggested he wanted to give a Ron one last chance
30:55
Speaker 2: to negotiate before decapitation. So how real is this? The
31:00
Speaker 2: markets thinking about this the right way. That's what we
31:02
Speaker 2: pose now to Suzanne Maloney, vice president and director for
31:05
Speaker 2: Foreign Policy at the Brookings Institution, who's joining us now
31:08
Speaker 2: on Bloomberg TV and Radio. Suzanne, great to have you
31:12
Speaker 2: on the program. Do you believe that this is really
31:15
Speaker 2: a Ron's last chance?
31:16
Speaker 9: Should they?
31:19
Speaker 8: I think the Iranians want to deal because it will
31:21
Speaker 8: be good for their own economy because they're suffering under
31:25
Speaker 8: the weight of US strikes over the course of the
31:27
Speaker 8: past five months, and as well as the embargo that
31:31
Speaker 8: the United States has imposed a thruance blockade of the
31:34
Speaker 8: Persian Gulf. So they want an end to this, but
31:38
Speaker 8: they're not prepared to relinquish what they believe is the
31:42
Speaker 8: major strategic leverage they gained from this war, and that
31:45
Speaker 8: is control of the Straight of Hormuz. We are, I think,
31:48
Speaker 8: at this point, close to an agreement that would echo
31:51
Speaker 8: some of the language in the MoU that was signed
31:54
Speaker 8: last month, but perhaps with a bit more specificity, and
31:58
Speaker 8: would perhaps provide a little bit more along angevity to
32:01
Speaker 8: some kind of an end to the war.
32:05
Speaker 6: Shocking report Suzanne by Reuters this morning. The US Army
32:10
Speaker 6: has used up quote virtually all un quote if it's
32:14
Speaker 6: long range missiles during the conflict with Iran. Are we
32:18
Speaker 6: at the point now where our munitions levels are dictating
32:21
Speaker 6: strategic decisions?
32:24
Speaker 8: Yes, I believe that we are, and I actually think
32:26
Speaker 8: we've been at that point for quite some time. I
32:28
Speaker 8: think that it was the concern about both interceptors and
32:32
Speaker 8: precisions strike missiles and attack ONMS that was one of
32:35
Speaker 8: the major factors in driving the Trump administration to agree
32:39
Speaker 8: to the Memorandum Understanding with Iran last month, and it
32:43
Speaker 8: is a major, I think point of hesitation for the administration,
32:47
Speaker 8: particularly from the Department of War, whose leaders have articulated
32:52
Speaker 8: a real concern about returning to full scale war with
32:55
Speaker 8: the Iran simply because of the readiness implications that it
32:58
Speaker 8: leaves for the United States village not just with respect
33:01
Speaker 8: to the middliest, but with respect to other theaters as
33:04
Speaker 8: well well.
33:07
Speaker 2: So if Iran understands this, if this is reported in media,
33:12
Speaker 2: and they hear about it and assume that it is true,
33:15
Speaker 2: why would they be negotiating with the US right now?
33:18
Speaker 2: Does it not signal that actually they could weigh us out.
33:23
Speaker 8: I think they could weigh us out, but it would
33:24
Speaker 8: come at a high cost to their own economy. The
33:26
Speaker 8: blockade is having its impact. The Iranians would like to
33:30
Speaker 8: get back to trying to rebuild what was damaged, and
33:33
Speaker 8: there was considerable damage to around civilian infrastructure as well
33:37
Speaker 8: as its military infrastructure during the war. They have to
33:41
Speaker 8: consolidate a regime which already lost a significant number of players,
33:46
Speaker 8: and they know that their own people were seriously dissatisfied
33:51
Speaker 8: before the war began with the state of the economy.
33:53
Speaker 12: So there are some real pressure.
33:55
Speaker 8: But I think the Iranians are more resilient than we
33:57
Speaker 8: gave them credit for, and they are prepared to kind
34:00
Speaker 8: of deploy that resilience is leverage in the negotiations. It
34:04
Speaker 8: sounds as though they're getting most of what they wanted
34:07
Speaker 8: out of the terms that we're hearing about in the
34:09
Speaker 8: media at this point.
34:11
Speaker 6: How many times will the President be taken seriously in
34:14
Speaker 6: his threats if he continues to pull them back, either
34:18
Speaker 6: by request of Iran's.
34:19
Speaker 5: Neighbors or in hopes of a deal.
34:21
Speaker 6: The New York Post this morning writing that it is
34:25
Speaker 6: now thirteen times. This is the thirteenth final ultimatum that
34:30
Speaker 6: he has delivered.
34:31
Speaker 5: What do the Iranians think of that?
34:35
Speaker 8: Well, so it is a bit like a theatrical performance.
34:38
Speaker 8: At this point, I think the Iranians have taken the
34:40
Speaker 8: measure of President Trump. They've assessed both the vulnerability of
34:44
Speaker 8: the US economy and the wider global economy to a
34:47
Speaker 8: long term closure of the strainer from WUS, as well
34:50
Speaker 8: as the political consequences for the President if there were
34:53
Speaker 8: to be a disruption that impacted oil prices and the
34:57
Speaker 8: wider economy in advance of the midter elections this fall. So,
35:02
Speaker 8: you know, they appreciate that his bluster is just that,
35:08
Speaker 8: but I think there's always the chance that he does deliver.
35:11
Speaker 8: And they've now experienced two wars, the June twelve Day
35:15
Speaker 8: War in twenty twenty five and this longer war and
35:18
Speaker 8: more ambitious war where the Iranians appear to have survived,
35:22
Speaker 8: but they've got a lot of work to do if
35:24
Speaker 8: they want to hang on to power.
35:27
Speaker 2: Suzane, I wonder what you make of Bloomberg's reporting today
35:30
Speaker 2: that Iran is actively considering allowing European nations to come
35:34
Speaker 2: in and help with the D mining effort in the
35:37
Speaker 2: Strait of Hormus. Is that surprising to you or is
35:40
Speaker 2: it in keeping with what you're suggesting where Iran does
35:43
Speaker 2: want to see this happen, a deal happen in some
35:47
Speaker 2: way because of the pressure that they are experiencing.
35:51
Speaker 8: Well. It is a shift in the position that the
35:53
Speaker 8: Iranians have articulated over the course of recent weeks and months.
35:57
Speaker 8: They have suggested that only they should be permitted to
36:00
Speaker 8: do the D mining because only they know where the
36:02
Speaker 8: mines might be. I think, you know, the Iranians are
36:06
Speaker 8: probably looking toward the future and developing some kind of
36:10
Speaker 8: opening with the Europeans is to their advantage. We'll see
36:14
Speaker 8: if they actually make good on this, and whether they
36:16
Speaker 8: actually do let the European companies and countries to come
36:20
Speaker 8: in and participate in this D mining because the minds
36:24
Speaker 8: are just one of the many forms of control that
36:26
Speaker 8: Iran has been asserting over the Strait, and once the
36:29
Speaker 8: entire strait is free, it's more likely that the rest
36:33
Speaker 8: of the world will seek alternative routes that are outside
36:37
Speaker 8: of the Iran's control.
36:39
Speaker 6: Suzan, do you believe either side's version when it comes
36:44
Speaker 6: to the status of negotiations.
36:48
Speaker 8: I think it's very hard to take seriously what we've
36:51
Speaker 8: been hearing, because the President has his own incentives to
36:54
Speaker 8: sort of inflate what he's hearing from the Iranians. He
36:58
Speaker 8: is either very very negative or he's overwhelmingly positive, and
37:01
Speaker 8: neither one of those extremes sounds entirely persuasive to me.
37:05
Speaker 8: But the reporting at this point does suggest some of
37:08
Speaker 8: the public statements by cuttering mediators and others that they
37:12
Speaker 8: feel that they're getting close to some kind of an arrangement.
37:15
Speaker 8: I think it's inevitable that we'll be back in this
37:18
Speaker 8: position once again, that there will be some breakdown in
37:20
Speaker 8: terms of the understanding or the implementation of any agreement
37:24
Speaker 8: between the United States and Iran. I think it's likely
37:27
Speaker 8: we're likely to see instability and occasional flare ups of
37:30
Speaker 8: violence in the Gulf more widely, and especially around the
37:34
Speaker 8: straight up hoomos for the weeks and months to come.
37:37
Speaker 8: This is not a one and done solution to anything.
37:41
Speaker 2: So potentially still status quo or at least volatility come
37:44
Speaker 2: midterm election day in November.
37:48
Speaker 8: I think that's absolutely to be expected. This volatility is
37:51
Speaker 8: just going to be a function of the purgent golf
37:55
Speaker 8: autonomy for the foreseeable future. It will continue to drive
37:58
Speaker 8: investments in alternative routes that would avoid the straight up
38:02
Speaker 8: promos and other types of arrangements that enable greater resilience
38:07
Speaker 8: on the part of the Gulf States. They experience a
38:11
Speaker 8: tremendous disruption over the course of the past five plus months,
38:15
Speaker 8: and they're in a position, i think, to ensure that
38:17
Speaker 8: they don't see that happen again.
38:20
Speaker 6: She's the vice president director for Foreign Policy at Brookings Institution.
38:24
Speaker 6: Suzanne Maloney. It's great to have you back, Suzanne. Thank
38:26
Speaker 6: you for joining us on Bloemberg TV and radio. It's remarkable, Kayley,
38:31
Speaker 6: every time we have asked someone that question, will this
38:33
Speaker 6: still be underway on November three, We've got the same answer.
38:37
Speaker 2: That's yes, yes, which doesn't necessarily spell good news. For
38:41
Speaker 2: the incumbents in power in Washington and the Republican Party specifically,
38:45
Speaker 2: although Republicans may be hoping they get a little bit
38:47
Speaker 2: more good news in Michigan tonight in the form of
38:49
Speaker 2: getting their preferred candidate to go up against Mike Rogers
38:52
Speaker 2: Abdul I'll say it, of course, favored over Haley Stevens,
38:55
Speaker 2: and we'll be discussing more on that on the late edition.
38:57
Speaker 6: We shall although Rick Davis pointing to the energy there.
39:00
Speaker 6: We'll see who's a more successful general election candidate.
39:03
Speaker 5: This is Bloomberg. Thanks for listening to the Balance of
39:07
Speaker 5: Power podcast.
39:09
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39:12
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39:14
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39:18
Speaker 6: Bloomberg dot com.