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Trump’s Visit Stirs Long Island GOP · Balance of Power

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Speaker 2: The threat from President Trump against Iran has been total obliteration.
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Speaker 2: Unless they reopen the Strait, that threat may be changing
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Speaker 2: to economic isolation. That is the way forward, it seems
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Speaker 2: for the administration, and based on analysis that we have
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Speaker 2: seen from Bloomberg Economics, it could be easier said than done.
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Speaker 2: The Treasury Secretary Scott Bessett laying out the one two
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Speaker 2: punch threat today and interview on Newsmax.
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Speaker 3: Listen watch this space for more announcements coming next week,
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Speaker 3: because we are going to apply measures like have never
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Speaker 3: been seen in the history of economic isolation on a country.
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Speaker 3: So it will be a combination of economic isolation like
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Speaker 3: the world has never seen before and the continued blockade
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Speaker 3: in the Strait of Hormouth that will keep anything from
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Speaker 3: going enter out of the Iranian ports.
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Speaker 4: So let's get more on what exactly it is that
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Speaker 4: we could see that the world has not yet seen.
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Speaker 4: As we turned to Tyler Kendall, Bloomberg Washington correspondent who
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Speaker 4: is live on the north lawn of the White House.
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Speaker 4: As Joe has mentioned, Tyler, Iron has already been under
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Speaker 4: sanctioned by the United States and others for decades forty
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Speaker 4: seven years. How much further can the US push things right?
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Speaker 5: And to put even a finer point on that, Kaylee,
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Speaker 5: Data cited by Bloomberg News shows that nearly twenty two
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Speaker 5: hundred new sanctions have been applied between now and twenty eighteen,
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Speaker 5: underscoring that Aron's economy really has weather waves of sanctions,
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Speaker 5: though the economy has been severely hit. The IMF said
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Speaker 5: in April that they're expecting Iron's economy to shrink this
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Speaker 5: year by six point one percent, and according to Central
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Speaker 5: Bank data, inflation on a year over year basis is reaching.
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Speaker 6: Seventy seven percent.
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Speaker 5: At the moment, the administration is making it very clear
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Speaker 5: that they are opting against expanding military operations for a
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Speaker 5: number of different factors that we know about. As Joe
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Speaker 5: mentioned our own reporting from Bloomberg Economics. When it comes
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Speaker 5: to ideas that our stockpiles need to be replenished. But
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Speaker 5: they're opting for this economic strong stronghold in a sense.
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Speaker 5: But we have to keep in mind that the US
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Speaker 5: had given financial relief to the country earlier this year
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Speaker 5: amid the negotiations, and it wasn't enough to keep that
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Speaker 5: ceasefire in place.
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Speaker 6: We'll have to see where it goes from here, Kayley.
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Speaker 5: One of the ideas floated is perhaps the US could
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Speaker 5: further target Chinese refiners who are importing Iranian crude, but
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Speaker 5: that of course has its own array of rep when
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Speaker 5: it comes to the Beijing Washington trade truce just ahead
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Speaker 5: of the Chinese president coming here to the US.
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Speaker 6: In about a month's time.
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Speaker 2: Well, you just put your finger on it, Tyler. I mean,
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Speaker 2: that is what would make a difference. Right, if we
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Speaker 2: start sanctioning or tariffing, I should use the word oil
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Speaker 2: exports to China, that would essentially render Iran out of business.
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Speaker 2: That's not something the White House is considering, is it.
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Speaker 5: Well, we had heard this previously threatened by the administration.
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Speaker 5: It's something that's been threatened in other conflicts as well, Joe,
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Speaker 5: including when it comes to Russia and China being a
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Speaker 5: big benefactor there. We know that the majority of sanctions
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Speaker 5: arounning crud ends up going to these Chinese teapot refiners.
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Speaker 6: We'll see where it ultimately goes from here.
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Speaker 5: I brought up that backdrop that we have to keep
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Speaker 5: in mind with which is that the Chinese president is
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Speaker 5: going to be here in Washington in just a few
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Speaker 5: weeks time. But last night we also saw the US
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Speaker 5: move to impose these new sanctions about these new tariffs
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Speaker 5: excuse me, of up to one hundred percent for certain drones,
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Speaker 5: which didn't explicitly mention China in that announcement, but if
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Speaker 5: you read through the details, it became pretty evident that
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Speaker 5: this was over the US's national security concerns and considered
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Speaker 5: to be a move against China, and Joe actually follows
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Speaker 5: what has been a recent series of moves, including from
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Speaker 5: the FCC to block certain Chinese tech exports. So we'll
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Speaker 5: have to see where it goes from here and whether
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Speaker 5: the administration is willing to.
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Speaker 6: Go that far.
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Speaker 4: Tyler, We're keeping an eye on Joint Base Andrews as
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Speaker 4: the President is on board Marine one getting set to
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Speaker 4: land at Joint Base Andrews. Well, of course he'll board
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Speaker 4: Air Force one, which is going to take him to
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Speaker 4: Garden City. He's heading to Long Island to talk about
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Speaker 4: crime and as we watch here to see if he
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Speaker 4: might have some words with reporters before boarding the new aircraft.
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Speaker 4: Why bring this message there now?
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Speaker 5: Well, Kayley, he's going to be in front of I
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Speaker 5: think it's safe to say relatively friendly crowd. Of course,
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Speaker 5: at the President's events. He's going to be speaking to
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Speaker 5: the NASA County Police Academy.
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Speaker 6: In Long Island.
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Speaker 5: The White House says to expect him to release new
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Speaker 5: FBI crime statistics showing a decrease in violent crime in
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Speaker 5: twenty twenty five.
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Speaker 6: This is an area that.
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Speaker 5: The GOP has typically pulled better on compared to Democrats.
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Speaker 5: It's very clear that Republicans are trying to figure out
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Speaker 5: how to hone their messaging as we get closer to
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Speaker 5: November and the midterms, and the polling shows us that
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Speaker 5: they're playing defense when it comes to the economy, an
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Speaker 5: area where the party has historically pulled better on compared
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Speaker 5: to Democrats.
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Speaker 6: We'll see, though, if the economy does come up.
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Speaker 5: We had heard from one of the President's close advisors,
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Speaker 5: the NEC director Kevin Hassett, earlier this week saying to
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Speaker 5: expect Republicans to keep rolling out ideas related to the economy,
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Speaker 5: including tax cuts, as we get closer to election day,
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Speaker 5: even if it means that they won't be enacted until
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Speaker 5: after election day, depending on what happens with control of Congress.
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Speaker 5: So something to watch here for sure, but definitely an
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Speaker 5: area that the administration is probably going to start highlighting
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Speaker 5: even more as we get closer and closer to November.
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Speaker 2: Tyler Kendall Bloomberg, Washington Correspondent live at the White House.
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Speaker 2: We thank you so much, Tyler. As the President makes
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Speaker 2: his way to southern Nassauq Cony. Yes, Garden City, New
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Speaker 2: York is where the President will be holding forth. That's
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Speaker 2: producer James Country and he's going to be surrounded by
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Speaker 2: first responders in an area, as Tyler said, that is
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Speaker 2: quite friendly to President Trump. Remember he went to the
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Speaker 2: Nassau Coliseum. This is back in September twenty four. As
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Speaker 2: many at the time Kaylee were asking, well, why is
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Speaker 2: he going to Long Island now instead of a swing state.
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Speaker 7: Here was his message.
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Speaker 8: Then, I will cut taxes for family, small businesses, and workers,
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Speaker 8: including restoring the salt deduction, saving thousands of dollars for
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Speaker 8: residents of New York, Pennsylvania, New Jersey and other high
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Speaker 8: cost states. I will deliver the greatest economy in the
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Speaker 8: history of the world to our country and one of
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Speaker 8: the greatest economies in the history of New York State.
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Speaker 2: And we fast forward to this fourteenth of August twenty
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Speaker 2: twenty six, back in Long Island with our panel. Bloomberg
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Speaker 2: Politics contribut Rick Davis and Jeanie Shanzano are with us.
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Speaker 2: Rick is a partner at Stone Court Capital Republican strategist.
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Speaker 2: Genie our democratic analyst and democracy visiting fellow at Harvard
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Speaker 2: Kennedy Schools ASH Center. Genie, you're our New Yorker, so
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Speaker 2: I'm going to start with you here. You've been to
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Speaker 2: Long Island in Nassau County, and even more specifically, I'm
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Speaker 2: going to bet to Garden City, realizing that Long Island
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Speaker 2: is not a monolith. But the President is probably going
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Speaker 2: to have a very good time there when he faces
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Speaker 2: the crowd this afternoon. Why does he go to a
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Speaker 2: friendly location when he could be changing minds and speaking
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Speaker 2: to affordability around the country.
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Speaker 9: Yeah, you know, as you said, producer James Country. So
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Speaker 9: we love it, and of course it is also the home.
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Speaker 9: In addition to producer James, it is also the home
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Speaker 9: of the Nasau County executive who is currently running for
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Speaker 9: governor of New York. And even though Donald Trump lives
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Speaker 9: in Florida now, he is a New Yorker at heart,
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Speaker 9: God bless him, and he really does care about what happens.
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Speaker 6: To the future of this state.
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Speaker 9: So, Bruce Blae this is also to support him. But
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Speaker 9: you know, I think what the President is trying to
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Speaker 9: do in talking about crime today, if he stays on message,
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Speaker 9: is trying to turn the page from a very unpopular
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Speaker 9: economy right now. And that is the problem. Usually Donald
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Speaker 9: Trump would turn to immigration or the economy, but he's
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Speaker 9: underwater on both of those things right now, so he's
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Speaker 9: going to the third choice, which is crime. Unfortunately for
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Speaker 9: the President, it is very, very hard to turn the
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Speaker 9: page on the economy because whether people are Republican or Democrat,
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Speaker 9: as we saw in Rick's favorite consumer sentiment from you
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Speaker 9: much today, the numbers are way down amongst Republicans, Democrats,
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Speaker 9: and independents. People do not feel good about the economy today.
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Speaker 4: Yeah, I'm glad you mentioned that, Genie, because you're exactly right.
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Speaker 4: In July just a month ago, Republican sentiment was at
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Speaker 4: eighty eight point two. Fast forward to this preliminary August read,
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Speaker 4: it's down to seventy eight point seven and nine and
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Speaker 4: a half points drop. You saw deterioration less so though
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Speaker 4: for independence, down three points for Democrats as well. That's
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Speaker 4: probably not a trend you want to see as we're
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Speaker 4: getting closer to the midterms, Rick, could the President try
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Speaker 4: to course correct at least in some way in his
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Speaker 4: remarks in Long Island this afternoon?
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Speaker 10: Well, I'm just I'm a cynic, you know. I think
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Speaker 10: he wants to play golf this weekend. So it's like,
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Speaker 10: where's the friendliest crowd I can go to before I
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Speaker 10: head to the golf course.
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Speaker 4: Well, the crowd he's going to right now, Rick, sorry
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Speaker 4: to interrupt you, appears to be reporters who are gathered
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Speaker 4: beneath the wing of Air Force one. He's showing them
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Speaker 4: a piece of paper. And if we can get our
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Speaker 4: ears on that, it'll be interesting to see what exactly
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Speaker 4: it is that he felt was so important he had
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Speaker 4: to go talk to them about it before he boards
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Speaker 4: the aircraft. Let's listen now live to President Trump, and
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Speaker 4: we maybe can't hear him that well, Joe.
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Speaker 2: Yeah, I'm not hearing him either, but I want to
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Speaker 2: see what's on this piece of paper.
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Speaker 7: We got to zoom in on this.
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Speaker 2: James talking with folks who were waiting to greet him
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Speaker 2: on the tarmac at Joint Bass Andrews on his way
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Speaker 2: to Long Island. He's been known to pull out the
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Speaker 2: blueprints for any project he's working on, and this appears
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Speaker 2: to be prescription drug prices, which brings us straight back
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Speaker 2: to the affordability issue, Kaylee. Maybe this is something he
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Speaker 2: plans to incorporate into this speech today.
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Speaker 7: Looks like we don't have good audio on this.
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Speaker 2: Unfortunately, we'll have to play this back and get a
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Speaker 2: better sense of what he said. We should note, though,
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Speaker 2: the Caroline Levitt is with him, Kayley, and maybe one
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Speaker 2: of her final trips with the President of the United States.
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Speaker 4: She's just got a few weeks left, as she said,
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Speaker 4: to depart at the end of the month. As Joe says,
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Speaker 4: unfortunately we can't hear the president well right now, but
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Speaker 4: fortunately for us, we can't hear the thoughts of Rick
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Speaker 4: Davis and Jeanie Shanzy.
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Speaker 8: No.
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Speaker 4: Rick, I'm sorry for interrupting you. Please continue what you
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Speaker 4: were saying.
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Speaker 10: Well, notwithstanding the mimeograph that he's sporting around on the
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Speaker 10: press right now, you know, I don't think this would
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Speaker 10: be considered a really significant event when it comes to
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Speaker 10: trying to change the tide of the midterm elections less
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Speaker 10: than eighty days away. Look, it's the dead of August.
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Speaker 10: Nobody is paying much attention to this. Smart people are
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Speaker 10: at the beach trying to beat the heat, and the
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Speaker 10: President's probably.
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Speaker 7: Going to be playing golf this weekend.
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Speaker 10: So we've sandwiched this into the agenda to give him
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Speaker 10: something to talk about, to try and you know, like
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Speaker 10: cap the weekend, maybe drive the Sunday shows. But I
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Speaker 10: don't think anybody thinks it's going to take away from
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Speaker 10: the really bad news that you pointed out, Kaylee, about
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Speaker 10: the consumer sentiment, the retail sales, the deficit numbers going up.
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Speaker 10: You know, there's been a whole raft of big glaring issues,
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Speaker 10: including the prices of the thirty year bond. There are
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Speaker 10: real trouble signs in this economy, and he wants to
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Speaker 10: talk about the Golden Age.
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Speaker 6: He is so off message.
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Speaker 10: He's going to have to retreat on this if he
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Speaker 10: expects to win Republican seats back in Congress.
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Speaker 2: He's getting on the airplane right now, Genie making his
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Speaker 2: way up the stairs. I guess whatever presentation that was
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Speaker 2: was a pretty brief one. He's still got that piece
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Speaker 2: of paper in his hand that apparently has to do
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Speaker 2: with prescription drug prices sinking on behalf of the administration's efforts.
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Speaker 2: As he gets out to Long Island's be a pretty
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Speaker 2: quick trip.
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Speaker 7: I think he was scheduled to speak.
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Speaker 2: Around three pm, I guess, presumably to Rick's point, before
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Speaker 2: a golf game. What's the best case scenario here? You
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Speaker 2: get some group photos with first responders that you can
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Speaker 2: use later on in the midterm campaign, or is this
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Speaker 2: really just an excuse to golf.
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Speaker 9: Best case scenario for his campaign team is that he
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Speaker 9: stays on message. He talks about crime numbers, he talks
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Speaker 9: about as he's trying to do there it looks like
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Speaker 9: prescription drug prices, and he talks about what he's going
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Speaker 9: to do about the economy. However, last time he went
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Speaker 9: out to a rally, he said things like we may
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Speaker 9: need to send oil prices higher amid the war in Iran.
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Speaker 9: I mean, just blatantly taking credit for higher oil prices.
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Speaker 9: He's got a Treasury secretary. And I heard Mike McGee
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Speaker 9: mentioned this earlier on your show, saying there's no such
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Speaker 9: thing as a key shaped economy.
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Speaker 6: That's over, that's done with.
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Speaker 9: We're in the C shaped economy. And you know, to
13:22
Speaker 9: add to the litany that Rick just gave, today is
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Speaker 9: the birthday of Social Security. It is ninety one years
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Speaker 9: old today, ninety one years ago Franklin Roosevelt signed it
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Speaker 9: into law. It is going to run dry by the
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Speaker 9: time I need it. Joe Matthew and Kaylee Line hoping
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Speaker 9: to run dry unless Congress does something about it. Why
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Speaker 9: not have the president talking about that, what he's going
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Speaker 9: to do about that? I mean, I wish Democrats.
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Speaker 11: What is wet.
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Speaker 9: So there's a lot to talk about, But I'm not
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Speaker 9: feeling confident he's going to stay on message. And he
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Speaker 9: probably does want to get to the golf course, and
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Speaker 9: I can't.
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Speaker 11: Deny him that.
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Speaker 4: If you want to keep funding Social Security at least
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Speaker 4: right now, you have to keep borrowing and issuing new debt.
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Speaker 4: We've seen some big figures on the auctions this week.
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Speaker 4: The thirty year auction yesterday was it the highest yield
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Speaker 4: since two thousand and one. This isn't a sustainable trajectory.
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Speaker 7: No, it's not.
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Speaker 10: And everybody in Congress knows that there's been no effort
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Speaker 10: to try and rein in federal spending. Now we're seeing
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Speaker 10: the results of that with these high bond yields and
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Speaker 10: a lot of bankers are starting to say stay away
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Speaker 10: from bonds with this kind of deficit forty trillion and
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Speaker 10: more this year alone. Excuse me, I can't swallow the
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Speaker 10: amount of debt that the federal government is producing these days.
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Speaker 7: It's for real troubling signs.
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Speaker 10: And you know, there are a lot of things that
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Speaker 10: we know, and one of the things we know the
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Speaker 10: best is the debt market tends to send the signal
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Speaker 10: to the White House, and they need to start listening
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Speaker 10: to that signal.
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Speaker 4: All right, Rick Davis, we appreciate you trying your best,
15:03
Speaker 4: and Jeanie Shanzina, thank you both so much. Our political
15:06
Speaker 4: fanel on this Friday edition of Balance of Power, and
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Speaker 4: we'll have more coming up live from both Washington and
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Speaker 4: New York. Today. Tom Closa, chief energy advisor to golf Oil,
15:16
Speaker 4: is straight ahead here.
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15:37
Speaker 2: We've got a couple of important numbers before we talk
15:40
Speaker 2: to Tom Closa. WTI West Texas Intermediate Croot is above
15:43
Speaker 2: eighty two dollars a barrel. It's up a little more
15:46
Speaker 2: than one percent right now. So is Brent four dollars
15:49
Speaker 2: and seven cents the national average for gas. And if
15:52
Speaker 2: we've learned anything from Tom Closa, it's not crude oil
15:56
Speaker 2: that is the story right now.
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Speaker 7: It's the distillates.
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Speaker 2: Gasoline at four oh seven in New York, where the
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Speaker 2: President is today four fourteen a gallon of diesel Kayley
16:06
Speaker 2: Lines five dollars and forty two cents.
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Speaker 7: And as we know, the economy runs on diesel.
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Speaker 4: Yeah, that's absolutely right. And if you want diesel, you
16:17
Speaker 4: need refiners. And that really is where the kink in
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Speaker 4: the chain seems to be right now. As Tom Closa
16:23
Speaker 4: has warned us before, and Barimo may warn us again
16:26
Speaker 4: as he's joining us once again on balance of Power.
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Speaker 4: He's a chief Energy advisor to Golf Oil and is
16:31
Speaker 4: back with us on Bloomberg TV and Radio. Tom, It's
16:34
Speaker 4: good to see you as always. That was the message
16:37
Speaker 4: you brought last time we spoke, that you have to
16:39
Speaker 4: watch diesel and that there could be even more pain
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Speaker 4: there coming. Is that still the case seems like Tom
16:50
Speaker 4: maybe having a little bit of difficulty hearing us. Of course, Joe,
16:54
Speaker 4: as we consider the picture for diesel and where that
16:56
Speaker 4: refining capacity is and is not, one of the big
16:59
Speaker 4: challenges is Russia because Ukrainian drone strikes have been targeting
17:03
Speaker 4: Russian refineries. And add on another layer to this as
17:07
Speaker 4: we consider potentially sanctions that could go on Russia or
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Speaker 4: secondary tariffs on buyers of Russian oil if the sanctions
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Speaker 4: bill passed by the Senate goes through, and then the
17:17
Speaker 4: US potentially couldn't be intensifying sanctions or putting in secondary
17:21
Speaker 4: sanctions against Iranian oil if that is what is entailed
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Speaker 4: in the Treasury Secretary Scott Weston's promise of further economic
17:30
Speaker 4: isolation for Iran.
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Speaker 2: I think Tom Closa can hear us now if that's right. James,
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Speaker 2: chief Energy Advisor for Gulf Oil, it's great to have
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Speaker 2: you back, Tom close that we've been learning lessons from
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Speaker 2: you as we speak here. I don't know if you
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Speaker 2: could hear our conversation earlier. But when you've got gasoline
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Speaker 2: above four dollars a gallon still and you're looking at
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Speaker 2: five point forty two for diesel, I know you've pointed
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Speaker 2: us to the distilled products here, pay less attention to
17:57
Speaker 2: the crew. This isn't going to change even if the
18:01
Speaker 2: price of crude starts to come down. When you consider
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Speaker 2: refining bottlenecks, right, how worried are you?
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Speaker 12: Yeah, I don't think it changes. And you know, one
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Speaker 12: thing that's been missed is that we've we're down about
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Speaker 12: seven to eight million barrels a day of refining capacity,
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Speaker 12: much of which was knocked out by drones, and that
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Speaker 12: means less demand for crude. So yeah, krudeol prices are
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Speaker 12: in the eighties. But guess what the price of diesel
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Speaker 12: is about one hundred and eighty dollars in every corner
18:26
Speaker 12: of the country without taxes. You know, we are looking
18:29
Speaker 12: at the most expensive harvest season. You know, I live
18:33
Speaker 12: in New Jersey, so we don't harvest much of anything,
18:35
Speaker 12: but the rest of the country, you're looking at prices
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Speaker 12: that have never been.
18:39
Speaker 7: This high ever.
18:44
Speaker 4: Well so, if they've never been this high ever, and
18:47
Speaker 4: we're considering the trajectory of where things will go, a
18:50
Speaker 4: lot of that may very well be dependent on crude
18:55
Speaker 4: influencing the price of product. And that brings us to
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Speaker 4: the Middle East. Tom If we consider the US's promise
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Speaker 4: via the Treasury Secretary Scott Besson Too and Lisia a
19:05
Speaker 4: new campaign of untrusted and economic isolation against Iran, do
19:10
Speaker 4: you interpret that to mean potentially putting secondary sanctions on
19:15
Speaker 4: buyers of Iranian crude? What would that mean for global
19:19
Speaker 4: energy markets?
19:20
Speaker 12: Well, I think it certainly means we're not going to
19:23
Speaker 12: have full and at unfettered access to crude oil, whether
19:26
Speaker 12: it comes from the Persian Golf or the Red Sea,
19:28
Speaker 12: or come from the Caspian or Russia. You know, the
19:31
Speaker 12: crude oil flows are going to be suppressed. But like
19:35
Speaker 12: I said, if you've got seven or eight million barrels
19:37
Speaker 12: a day of global refining, that's down, and in some
19:41
Speaker 12: cases it's going to be down into twenty twenty seven,
19:43
Speaker 12: you don't have as much demand for crude oil. So
19:46
Speaker 12: I really think the refined products and particularly the diesel
19:49
Speaker 12: side of it. You know, America goes crazy about gasoline prices,
19:53
Speaker 12: but diesel is really the world product. It's the one
19:56
Speaker 12: that you use thirty million barrels a day or so
19:59
Speaker 12: globally versus about twenty six for gasoline. I did a
20:04
Speaker 12: piece this morning looking at hurricane season, and I got
20:08
Speaker 12: to tell you, it's very, very frightening. All we need
20:10
Speaker 12: is any sort of probability cone in the Gulf of
20:13
Speaker 12: Mexico and we go apocalyptic again.
20:17
Speaker 7: Man, that's a nightmare scenario. Tom.
20:20
Speaker 2: It does appear that this administration is bracing for a
20:24
Speaker 2: longer conflict than it was originally bargaining for. And we've
20:27
Speaker 2: had a lot of experts tell us here on Bloomberg
20:30
Speaker 2: TV and Radio that it is very likely this will
20:32
Speaker 2: still be underway in some form when voters go to
20:35
Speaker 2: the polls in November and maybe as we walk into
20:38
Speaker 2: the winter. And I'm wondering what all of that would
20:41
Speaker 2: mean for heating oil for those in the Northeast and
20:44
Speaker 2: other areas who are going to be looking to fill
20:46
Speaker 2: up their tanks in a couple months.
20:48
Speaker 12: Right now, you're looking at heating oil crisis that will
20:51
Speaker 12: probably be above five dollars account, and you could get
20:54
Speaker 12: into crazy insane numbers like six or seven dollars should
20:58
Speaker 12: there be a hurricane, or should if Russia has to
21:02
Speaker 12: import some diesel. You know, they've been exporters of diesel
21:06
Speaker 12: to the tune of about eight hundred thousand barrels a
21:08
Speaker 12: day in past years. So it's a significant crisis. And
21:13
Speaker 12: it's not just agriculture, and it's not just heating oil.
21:17
Speaker 12: You think about everything that moves across the country, it
21:19
Speaker 12: moves basically by virtue of diesel or marine diesel in
21:24
Speaker 12: some cases. So it's a problem. You know, the jet
21:26
Speaker 12: fuel shortage or the jet fuel disruption that we had
21:30
Speaker 12: earlier in the years gone, that's the good news. The
21:32
Speaker 12: bad news is in order to ramp up jet fuel production,
21:37
Speaker 12: they had to borrow a little bit from diesel production,
21:40
Speaker 12: and that's the problem for the last one hundred and
21:43
Speaker 12: twenty five days of the year.
21:46
Speaker 4: Well, so, is the only solution to this in the
21:48
Speaker 4: near term demand destruction? At what level?
21:51
Speaker 13: Is that?
21:51
Speaker 4: Broad top?
21:53
Speaker 12: Well? I think you know you're seeing demand destruction in
21:55
Speaker 12: the terms of refineries. Refiners can buy if they're going
21:59
Speaker 12: to sell something for one hundred and eighty dollars or
22:01
Speaker 12: one hundred and thirty dollars. There's no risk in buying,
22:04
Speaker 12: so there's no demand destruction there. It's just the inability
22:08
Speaker 12: to ramp up production that's been lost. I do think
22:11
Speaker 12: we'll see demand destruction on you in the middle of
22:14
Speaker 12: the barrel to a certain extent. We'll have to see
22:17
Speaker 12: how the harvest season goes. We've never had a you know,
22:21
Speaker 12: we had a planting season back in twenty twenty two
22:24
Speaker 12: where you saw sky high diesel prices. We've never seen
22:27
Speaker 12: it for the harvest season, and that largely takes over,
22:31
Speaker 12: you know, the middle of the country in the next
22:32
Speaker 12: ninety days.
22:34
Speaker 2: Always great to meet Tom close up in the middle
22:36
Speaker 2: of the barrel, Chief Energy Advisor, Gulf Oil.
22:39
Speaker 7: Tom.
22:39
Speaker 2: Thank you, great to see you. Hope you have a
22:40
Speaker 2: good weekend. Stay with us on Balance of Power. We'll
22:43
Speaker 2: have much more coming up after this.
22:48
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
22:52
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23:01
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23:05
Speaker 4: The Treasury Secretary of the US. Scott Besson says to
23:07
Speaker 4: watch this space for updates next week, potentially on the
23:11
Speaker 4: United States is so called unpreceded and economic isolation plan
23:15
Speaker 4: for Iran. It seems the administration is looking to pivot
23:18
Speaker 4: to economic pressure rather than pursuing continued military and kinetic options,
23:24
Speaker 4: and perhaps Joe, it's a blueprint that they're looking at
23:26
Speaker 4: as well, and another feeder when it comes to Cuba.
23:31
Speaker 4: After of course a lot of buzz, especially after the
23:34
Speaker 4: Venezuela operation to start this year, that the US perhaps
23:37
Speaker 4: was going to be considering a military option to overturn
23:40
Speaker 4: the communist dictatorship in Cuba. Our colleague Eric Martin is
23:44
Speaker 4: now reporting that no, in fact, what they are looking
23:47
Speaker 4: to do is economic pressure and ramping up of sanctions.
23:51
Speaker 2: Using the same playbook in the Caribbean here Kayley and
23:54
Speaker 2: Eric is one of the best at this and it's
23:57
Speaker 2: a really fascinating story. The Trump administry a strategy when
24:01
Speaker 2: it comes to Cuba hasn't been producing a lot of results.
24:06
Speaker 2: The government has rejected US calls for change. So yes,
24:09
Speaker 2: economic pressure, cutting off all forms of revenue and by
24:14
Speaker 2: the way, there aren't many left. We talked frequently Kaylee
24:17
Speaker 2: about the fact that they're enduring blackouts and quite a
24:20
Speaker 2: bit of chaos on the ground on the island, but
24:23
Speaker 2: the idea of troops landing there in some sort of
24:26
Speaker 2: Venezuela esque operation seems to be off the table for now.
24:31
Speaker 2: And I'll tell you our colleague David Weston, who's with
24:34
Speaker 2: me here at World Headquarters. You sit in this chair
24:36
Speaker 2: long enough, you meet all the celebrities at Kaylee. He's
24:39
Speaker 2: actually seizing on this issue. On this week's edition of
24:42
Speaker 2: Bloomberg Wall Street Week, David Weston investors hopes for Cuba's economy.
24:47
Speaker 2: What is there to hope for right now? Yeah, Joe,
24:49
Speaker 2: I think if you stay here long enough, you will
24:50
Speaker 2: actually find a celebrity. Come on, and we missed you, Kyley,
24:55
Speaker 2: but we're happy to have Joe here.
24:56
Speaker 14: So yeah. I mean, it's nice to talk about economic sanctions,
24:59
Speaker 14: but it didn't work so well in Iran, has been
25:01
Speaker 14: going on for quite a while, didn't work so well
25:02
Speaker 14: in North Korea. Venezuela, as you point out, was not
25:05
Speaker 14: economic sanctions. That was good old fashioned military mite. So
25:09
Speaker 14: we'll see what happens in Cuba. But what we did
25:11
Speaker 14: is we took a look at Cuba. We certainly considered
25:14
Speaker 14: what the various options are. We have an expert from
25:16
Speaker 14: University College London goes through four different options, one of
25:19
Speaker 14: which is military, one of which is in increased sanctions.
25:21
Speaker 14: But the main question we were asking is what happens afterwards.
25:25
Speaker 14: There will be an afterwards, what are the possibilities for investment,
25:28
Speaker 14: particularly a lot of Cuban Americans, as you know, who
25:31
Speaker 14: are eager to go back in there. And so we talked,
25:33
Speaker 14: among other things, with an investor named Andro No Darcy Leon.
25:37
Speaker 14: He has invested a lot in real estate, particularly resort
25:40
Speaker 14: real estate, including in Puerto Rico. He's eager to get
25:43
Speaker 14: back in to his native country, and this is part
25:46
Speaker 14: of what he had to say.
25:47
Speaker 13: The offering of services in Cuba is obviously significantly limited
25:50
Speaker 13: by how broken that economy is. And so for many
25:54
Speaker 13: years now, the tourism market in Cuba was not a
25:58
Speaker 13: market that had you know, five star properties, I mean
26:02
Speaker 13: upro rop scale luxury was not really something that you
26:05
Speaker 13: saw in a significant way in Cuba. It was it
26:07
Speaker 13: was a lower rated market. The good thing is that
26:11
Speaker 13: there is a significant amount of existing properties there, existing
26:14
Speaker 13: assets and existing infrastructure within the tourism industry. I think
26:19
Speaker 13: it requires firms like Hours going and acquiring those properties,
26:23
Speaker 13: reinvesting in reimagining and upgrading those properties, and also bringing
26:27
Speaker 13: the operating conditions of those properties to a world class scale.
26:31
Speaker 13: And so that's the lens through which we're looking at
26:33
Speaker 13: investing in Cuba. Surely there will also be the development
26:37
Speaker 13: of brand new resorts. I think there will be an
26:39
Speaker 13: opportunity for the development of branded residential product right which
26:44
Speaker 13: often is joined together with resorts or other types of
26:47
Speaker 13: hospitality properties. And so we think the future is very
26:51
Speaker 13: bright in that sector, without a doubt, and it's a
26:54
Speaker 13: very important pillar of the economic recovery of the island.
26:57
Speaker 14: So again that's andrododarci Leon who is an investor in
27:00
Speaker 14: real estate, particularly in resorts. And we talked to various people,
27:03
Speaker 14: all of whom seem to agree on one thing. There
27:05
Speaker 14: are some economic reforms that are being undertaken even as
27:08
Speaker 14: we speak, in response to the sanctions. Nobody seems to
27:11
Speaker 14: believe that's going to work. People are very skeptical about
27:14
Speaker 14: that that that will fundamentally change things. They seem that,
27:16
Speaker 14: particularly mister nadarci Leone said it's got to be a
27:18
Speaker 14: fundamental political change to really give investors the assurance that
27:23
Speaker 14: they would need that they can put their money in
27:25
Speaker 14: and get their money back out again. So we'll see
27:27
Speaker 14: that there's a lot of appetite. People really want to
27:29
Speaker 14: go back in when they get the chance.
27:32
Speaker 4: Well, it is interesting, as I heard what he told you, David,
27:35
Speaker 4: I would imagine frankly, that President Trump, a real estate
27:38
Speaker 4: guy at heart, is viewing it through a somewhat similar lens.
27:42
Speaker 14: Yeah, I'm sure that's right. And listen, I don't know
27:44
Speaker 14: real estate that well at all. I have been to
27:46
Speaker 14: Havan a couple of times on news trips actually back
27:49
Speaker 14: at ABC News, and it could be beautiful. I mean,
27:52
Speaker 14: that's really pretty, and there's a lot of culture there,
27:56
Speaker 14: beautiful oceans and beautiful beaches and things easily imagine, even
28:01
Speaker 14: as not a real estate guy, some really nice resorts
28:04
Speaker 14: along the beach there.
28:04
Speaker 7: Now, I was.
28:05
Speaker 2: Lucky to go to Cuba on a trip for the
28:07
Speaker 2: dedication of the Hemingway House back when relations were starting
28:11
Speaker 2: to thaw. You could get on a jet Blue in
28:13
Speaker 2: Flora and fly to Cuba.
28:15
Speaker 7: David.
28:15
Speaker 2: That would also need to be part of this right
28:17
Speaker 2: to actually be able to get people.
28:19
Speaker 14: Well, absolutely, it has to be fundamental changes. It's going
28:23
Speaker 14: to come from the United States and we've got to
28:25
Speaker 14: let people in. There's got to be a change down there.
28:27
Speaker 14: But I bet you went to the bar, right the
28:28
Speaker 14: Hemingway Bar for you go over there exactly it is
28:30
Speaker 14: it is.
28:31
Speaker 7: It's a really cool place.
28:32
Speaker 2: It's an incredibly special place. I'm sure the cars will
28:35
Speaker 2: still be there, but you what, four people of Cuba
28:38
Speaker 2: are going to go through between now, and.
28:39
Speaker 14: That's part of the when you talk about these unprecedented
28:42
Speaker 14: economic sanctions. As I say, it hasn't worked that often
28:46
Speaker 14: in my experience around the world. But the way it
28:49
Speaker 14: works is by hurting the people and the people putting
28:52
Speaker 14: pressure on the regime, which is what we were told
28:54
Speaker 14: in reporting out this story, and so that you really
28:57
Speaker 14: have to worry about. You're really getting at the regime
28:59
Speaker 14: through the people. Well, and there's a lot of pain
29:01
Speaker 14: that has to be inflected, I fear before there's really
29:03
Speaker 14: a change.
29:05
Speaker 4: All right, Well, it should be a great episode of
29:07
Speaker 4: Wall Street Week tonight, which you can find as always
29:10
Speaker 4: at six pm Eastern Time here on Bloomberg TV and Radio.
29:13
Speaker 4: David Weston, thank you so much, David, with Joe and
29:15
Speaker 4: New York. They've both been to Havana. I'm still here
29:17
Speaker 4: in DC. I gotta get my act together, get out
29:21
Speaker 4: in the world a little bit. But fascinating to have
29:23
Speaker 4: this conversation around economic pressure on Cuba perhaps being the
29:27
Speaker 4: option the administration resorts to rather than something kinetic. As
29:31
Speaker 4: we've told you, it does seem increasingly like that's the
29:33
Speaker 4: direction they're leaning when it comes to Iran as well,
29:36
Speaker 4: the Treasury Secretary saying that at a period of economic
29:38
Speaker 4: isolation is coming for Iran on an unprecedented level, and
29:43
Speaker 4: as we consider what that may mean for the military
29:45
Speaker 4: options that the US finds itself with or without. We
29:48
Speaker 4: turn now to Retire General Mark Kimmitt, who was back
29:51
Speaker 4: with us in our Washington, d C. Studio. He, of
29:53
Speaker 4: course is former Assistant Secretary of State for Political and
29:57
Speaker 4: Military Affairs. General Welcome back to Bloomberg TV Radio.
30:00
Speaker 7: Thanks.
30:01
Speaker 4: As we hear this kind of rhetoric from the administration,
30:04
Speaker 4: and we've heard similar things from President Trump as well,
30:06
Speaker 4: who just within the last week has suggested low keying
30:08
Speaker 4: it focusing more on economic measures. Is it because our
30:12
Speaker 4: military measures were not and cannot be enough?
30:16
Speaker 11: I think that's true, it's really got to be a
30:18
Speaker 11: combination of economic, diplomatic, and military. I don't think you
30:22
Speaker 11: can do any of those in isolation. Right now, the
30:27
Speaker 11: military doesn't seem to be able to break through the
30:31
Speaker 11: resistance model of patients and standing back and taking the
30:36
Speaker 11: blows as Iran has been doing. So I think what
30:40
Speaker 11: they're doing is turning up the knob on the economic sanctions,
30:43
Speaker 11: turning down the knob on the military a little bit,
30:46
Speaker 11: while still trying to work the diplomatic simultaneously.
30:49
Speaker 4: Is it turning down the knob on the military because
30:52
Speaker 4: we have to You've seen the reporting, I'm sure, just
30:54
Speaker 4: as I have, that we're running low on munitions, both
30:58
Speaker 4: air defenses and for scissor and magness.
31:01
Speaker 11: Well, it's that, But I also think it shows yet
31:04
Speaker 11: again the fallacy of winning a war through air campaigns alone.
31:10
Speaker 11: There hasn't been an air campaign that's won a war
31:13
Speaker 11: since the airplane has come into the air.
31:16
Speaker 2: Well, with all of that said, General, and it's great
31:18
Speaker 2: to have you back with us today on Bloomberg.
31:21
Speaker 7: What should people be preparing for? Then?
31:23
Speaker 2: We've had forty seven years of economic strangulation in Iran
31:27
Speaker 2: that has not broken the back of the regime. What
31:30
Speaker 2: actually changes behavior here? You know, that's the right question
31:35
Speaker 2: to ask. You've got to understand with the Iranians, they
31:40
Speaker 2: follow what people would call the Middle East model, which
31:43
Speaker 2: is they're not trying to win, They're trying to not lose,
31:48
Speaker 2: and they win by not losing.
31:50
Speaker 11: It's a resistance model. They resist and they show patients.
31:55
Speaker 11: You never hear them say we're going to defeat the Americans.
31:58
Speaker 11: You hear them say we will re exist, which means
32:01
Speaker 11: that they will take a lot of pain.
32:03
Speaker 7: They're like rocky.
32:04
Speaker 11: As long as they get through the fifteenth round and
32:07
Speaker 11: they haven't been knocked out, they think they've won.
32:10
Speaker 7: We've seen that with.
32:10
Speaker 11: Hesbola, We've seen that with Hamas. That is the typical
32:14
Speaker 11: way they fight, and us trying to fight it in
32:17
Speaker 11: a conventional manner, not recognizing that patience is required. I
32:24
Speaker 11: think we forget how we became a country, which is
32:28
Speaker 11: the Revolutionary War. We outlasted the British and they just
32:32
Speaker 11: finally got tired and went home.
32:33
Speaker 2: Well, that also required an uprising, and I wonder if
32:37
Speaker 2: that is in the offing here. Is that the strategy
32:40
Speaker 2: general that you make conditions so painful on the ground
32:43
Speaker 2: in Iran, it's not just the regime, it's the people
32:46
Speaker 2: who can't take it anymore, and they go into the
32:48
Speaker 2: streets and rise up against leadership.
32:52
Speaker 11: Well, they've tried that a couple of times, and they
32:55
Speaker 11: have among the most brutal regimes of all. It's a
33:00
Speaker 11: theocratic fascist regime that anytime you have any type of resistance,
33:06
Speaker 11: any type of protests, they will just gun you down
33:09
Speaker 11: in the streets.
33:10
Speaker 4: Well, it's horrible to consider it. And as Jill raises
33:15
Speaker 4: the prospect of not being able to take any more
33:18
Speaker 4: of people reaching their limits, we've seen reporting as well
33:21
Speaker 4: that sailors aboard the USS Lincoln perhaps are reaching their
33:24
Speaker 4: own limits as they are dealing with an extended deployment.
33:27
Speaker 4: They've been aboard since November. We're more than two hundred
33:30
Speaker 4: and sixty days in, and it does seem relief is coming.
33:32
Speaker 4: They're sending the George Washington in to get those troops home.
33:37
Speaker 4: Yet their families had to go to the press to
33:40
Speaker 4: raise concern about this, these conditions, and the President was
33:43
Speaker 4: actually asked about those stories as he boarded Air Force
33:46
Speaker 4: One earlier this afternoon. Listened to his response.
33:55
Speaker 8: Well, now that ship is moving, know that on that
33:58
Speaker 8: ship is moving right.
33:59
Speaker 7: Now, well very shortly, and.
34:01
Speaker 8: It's being replaced with another very similar ship. No, no, no,
34:07
Speaker 8: not nearly long.
34:08
Speaker 7: It up, Thank you everybody.
34:12
Speaker 4: So, if it was difficult to hear the questions of
34:13
Speaker 4: the reporter for a radio audience, he was asked whether
34:17
Speaker 4: or not they were concerned, he said, no, they're not.
34:19
Speaker 4: He was asked whether their deployment has been too long,
34:22
Speaker 4: He says, not nearly long enough. Is that the proper
34:24
Speaker 4: messaging from the commander in chief?
34:27
Speaker 11: I probably would have used different words, but I think
34:30
Speaker 11: one must understand what the Navy it's about. Expectations. These
34:35
Speaker 11: kids and their families plan their entire lives around a
34:39
Speaker 11: six to seven month rotation, everything down to and including
34:44
Speaker 11: having a family.
34:45
Speaker 6: I know this, I'm a Navy kid.
34:47
Speaker 7: Yeah, exactly.
34:48
Speaker 11: And so if the expectation is that you're going to
34:51
Speaker 11: be out there for six to seven months and then
34:54
Speaker 11: you're going to go back and see your family, and
34:56
Speaker 11: now it gets extended eight, nine, ten months and you're
35:00
Speaker 11: on the high seas, it's not unexpected why those sailors
35:07
Speaker 11: are feeling the way they do. A small number, we hope,
35:09
Speaker 11: but nonetheless enough that it's a concern. This isn't like
35:15
Speaker 11: in Iraq in two thousand and four when we had
35:18
Speaker 11: to extend some of our troop units indefinitely. When soldiers
35:24
Speaker 11: go off to war, marines go off to war, it's
35:27
Speaker 11: kind of for the duration as long as the war
35:30
Speaker 11: fight goes on. But the Navy is very, very systematic
35:34
Speaker 11: about the rotations.
35:36
Speaker 7: If for no other.
35:36
Speaker 11: Reasons, a supply chain issue, one that's waiting is in
35:41
Speaker 11: dry dock getting fixed.
35:44
Speaker 4: Okay, So if it really is ultimately about expectations for
35:47
Speaker 4: those who are getting set to board the George Washington
35:50
Speaker 4: and deployed to the Middle East, what would their expectation
35:52
Speaker 4: be of how long they will be there and what
35:55
Speaker 4: it is they can anticipate they will be engaged in.
35:57
Speaker 11: Well, I think the more important question is has their
36:00
Speaker 11: leadership managed those expectations. Have they been talking to family,
36:05
Speaker 11: Have they been talking to the sailors and saying, we
36:07
Speaker 11: hope this is only six to seven months. But as
36:10
Speaker 11: you prepared for this cruise, have you prepared your family
36:13
Speaker 11: for it going a little bit longer than previously?
36:17
Speaker 4: Well, do you think the leadership has enough information to
36:19
Speaker 4: be able to properly manage expectations at this point is
36:22
Speaker 4: the United States really know how long we're going.
36:24
Speaker 11: To be at this, No, And that's what You've got
36:27
Speaker 11: to be honest, and you've got to tell your families
36:29
Speaker 11: that you've got to prepare. You're going to say, look,
36:32
Speaker 11: we're going to do the best we can. We can't
36:34
Speaker 11: guarantee this is only going to be six to seven months,
36:38
Speaker 11: but that's the nation's duty.
36:40
Speaker 14: All right.
36:40
Speaker 4: General, thank you so much. We appreciate your input on this.
36:43
Speaker 4: The former Brigadier General retired Brigadier General always a General,
36:47
Speaker 4: Mark Himmitt here with us on Balance of Power.
36:54
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36:57
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