Latest / Bloomberg Intelligence / Don't See Oil North of $70 Without Escalation: Kamel

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Don't See Oil North of $70 Without Escalation: Kamel · Bloomberg Intelligence

• 0:02
  Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul swing you
• 0:05
  Speaker 1: along with my co host Lisa Brahmas. Each day we
• 0:07
  Speaker 1: bring you the most noteworthy and useful interviews for you
• 0:10
  Speaker 1: and your money, whether at the grocery store or the
• 0:12
  Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast
• 0:16
  Speaker 1: or wherever you listen to podcasts, as well as at
• 0:18
  Speaker 1: Bloomberg dot com. Well, I'm just gonna keep asking this
• 0:20
  Speaker 1: question throughout the morning. Is it over? Are we done
• 0:23
  Speaker 1: with the attention between the US and you were on
• 0:25
  Speaker 1: joining US? Now? Is I have a COMMEL practice head
• 0:28
  Speaker 1: focused on the Middle East, North Africa as other well
• 0:31
  Speaker 1: as others at Eurasia Group joining US now on the phone?
• 0:34
  Speaker 1: Can I get it? Just get a sense? Is it over?
• 0:37
  Speaker 1: I am? Well, let's I think we're off the peak
• 0:40
  Speaker 1: of the crisis. The Araanians conducted what is I think
• 0:43
  Speaker 1: a largely symbolic attack on basis that hosts U S
• 0:48
  Speaker 1: troops in Iraq. Those attacks were very calibrated. They were
• 0:52
  Speaker 1: designed not to cause casualties or not to create conditions
• 0:56
  Speaker 1: for Trump to overreact. The President speaking in in a
• 1:00
  Speaker 1: few minutes, so we'll hear more from him, but I
• 1:03
  Speaker 1: expect movement towards less less tensions. So I am. Are
• 1:07
  Speaker 1: you surprised that the Iranian response was I guess as
• 1:10
  Speaker 1: restrained as it was because I guess that what we
• 1:13
  Speaker 1: had heard up until today was the general that was
• 1:17
  Speaker 1: taken out was such a large figure and an important
• 1:21
  Speaker 1: figure in Tehran. Are you surprised that the response wasn't
• 1:24
  Speaker 1: maybe even more pronounced. Well, I think that everything that
• 1:28
  Speaker 1: we've been hearing from the Iranians hinted as at a
• 1:32
  Speaker 1: much more robust military response. So to a certain extent,
• 1:35
  Speaker 1: they did exercise the level of restraint over here. So um,
• 1:41
  Speaker 1: I think I'm pretty sure that there are regional powers
• 1:44
  Speaker 1: that have tried to to be into ease tensions, international
• 1:47
  Speaker 1: powers as well to really calm their Iranians down. Now,
• 1:51
  Speaker 1: another factor I think that helped calm the situation is
• 1:55
  Speaker 1: that the Iranians are thinking the long term. They want
• 1:58
  Speaker 1: the US out of Iran, and they're fine with that
• 2:02
  Speaker 1: as a long term victory, something that cements their power
• 2:06
  Speaker 1: in the Middle East. So let's talk about that, because
• 2:08
  Speaker 1: that was one of my main questions when I was
• 2:10
  Speaker 1: reading all of this Iran. Iran wants the US out
• 2:14
  Speaker 1: of Iraq, right, I mean it wants them to bodraw
• 2:17
  Speaker 1: their troops. Does sort of pushing down the tensions accelerate
• 2:22
  Speaker 1: that process, and it appears that the Iraqis are more
• 2:24
  Speaker 1: eager to get the U S troops out. Well, I
• 2:27
  Speaker 1: think that the less miniatary confrontation that you have in
• 2:31
  Speaker 1: Iraq between the US and Iran, the easier it will
• 2:34
  Speaker 1: be for President Trump to withdraw forces. He can't easily
• 2:37
  Speaker 1: do it under fire as and when he's been attacked
• 2:41
  Speaker 1: in Iraq left and right. When there are tensions between Iran,
• 2:45
  Speaker 1: moving towards a widespread confrontation absent that any form of
• 2:51
  Speaker 1: really going down away, moving away from tension creates easier
• 2:55
  Speaker 1: conditions for that. But again, I think that there are
• 2:57
  Speaker 1: local dynamics here. The ir Arcus themselves feel that US
• 3:02
  Speaker 1: presence in the country has become challenging a little bit problematic.
• 3:08
  Speaker 1: So I think it will see more domestic pressure on
• 3:10
  Speaker 1: the US, perhaps, if not to withdraw, to severely restrict
• 3:15
  Speaker 1: US operations in the country. Well, at the top of
• 3:17
  Speaker 1: the hour, we will be hearing from President Trump. Will
• 3:19
  Speaker 1: you'll be making comments on the Iran situation? What do
• 3:23
  Speaker 1: you what will you be listening for in his comments,
• 3:25
  Speaker 1: what do you think Iranians Iranians will be listening for.
• 3:29
  Speaker 1: I think the Iranians are expecting big boards the President
• 3:32
  Speaker 1: to declare victory, victory, victorian, that he's done what no
• 3:35
  Speaker 1: other could could do. I think that's that's that will
• 3:39
  Speaker 1: happen in some way, shape or form. I think the
• 3:43
  Speaker 1: key issue for the Iranians is to see whether Mr
• 3:45
  Speaker 1: Trump will authorize some form of follow up in terms
• 3:49
  Speaker 1: of reaction. That's what they really care about. If there
• 3:52
  Speaker 1: is no US response in in reaction to the missile
• 3:57
  Speaker 1: attacks from Iran, I think the Iranians would feel much
• 4:00
  Speaker 1: more comfortable as and we're moving away from a sharper escalation.
• 4:05
  Speaker 1: So that's what I think what the press press conferences about.
• 4:07
  Speaker 1: The press conference for the President himself is not just
• 4:11
  Speaker 1: about Iran. This is about positioning himself as a strong leader,
• 4:15
  Speaker 1: someone that has been able to do things that other
• 4:18
  Speaker 1: leaders or other US presidents were not able to do.
• 4:21
  Speaker 1: So it's it's also made for domestic consumptional for domestic
• 4:25
  Speaker 1: audience in the US. So let's talk about the price
• 4:28
  Speaker 1: of oil. It is down today and having the biggest
• 4:31
  Speaker 1: two day down draft since December two, and I'm wondering
• 4:34
  Speaker 1: whether this is the beginning of more to come in
• 4:37
  Speaker 1: the senses as people realize, or isn't gonna necessarily be
• 4:39
  Speaker 1: a disruption and supply all of a sudden things start
• 4:42
  Speaker 1: to look a little bit more oversupplied with a demand
• 4:45
  Speaker 1: that seems to be basically balanced at this point. Well,
• 4:49
  Speaker 1: I think that is that's a very interesting idea. Perhaps
• 4:53
  Speaker 1: some of that risk that will will will be taken off,
• 4:57
  Speaker 1: I think will be reflected in all the prices, so
• 4:59
  Speaker 1: we'll the some form of a depth, maybe a few dollars.
• 5:04
  Speaker 1: But again, it's not that Iran or U s Irn
• 5:08
  Speaker 1: tensions have become zero that we're returning to a stable equilibrium.
• 5:12
  Speaker 1: There are many problems still in the Middle East that
• 5:15
  Speaker 1: could cause those disruptions. It's not like we've we've returned stability.
• 5:21
  Speaker 1: The demand and supply picture, I think is a little
• 5:23
  Speaker 1: bit complicated. But we do have the US China trade
• 5:26
  Speaker 1: agreement that could also help maybe provide some boost to
• 5:30
  Speaker 1: oil prices, maybe not to maybe not lift them up
• 5:34
  Speaker 1: to seventy. But I think we're in a world where
• 5:36
  Speaker 1: sixty five dollars it seems to be the bottom or
• 5:40
  Speaker 1: or could be the bottom in this environment. Uh, absent
• 5:44
  Speaker 1: any real confrontation or real outages in the Middle East,
• 5:47
  Speaker 1: you're not really talking about oil moving north of seventy
• 5:51
  Speaker 1: on a or in a strong direction. Really, we need
• 5:55
  Speaker 1: to see data from US shell hard evidence that US
• 5:58
  Speaker 1: shows the seb it in that investments in US share
• 6:03
  Speaker 1: that is actually much lower, much more prudent, and therefore
• 6:06
  Speaker 1: supply it will be limited. So I am get a
• 6:10
  Speaker 1: sense of kind of the next steps for Iran. I
• 6:12
  Speaker 1: guess from your perspective, what is it in Iran's best
• 6:16
  Speaker 1: interest rate here to say, okay, this is over Essentially, Well,
• 6:22
  Speaker 1: I don't think the irene is are going to be
• 6:24
  Speaker 1: a fully thing that it's over. They'll say that they
• 6:27
  Speaker 1: are fighting really an effort or struggle to get the
• 6:31
  Speaker 1: US out to make the region region governed government by
• 6:35
  Speaker 1: states that are inherently part of it. And I think
• 6:39
  Speaker 1: the key word here is get the getting the US
• 6:42
  Speaker 1: to withdraw from different places. I don't think that the U.
• 6:46
  Speaker 1: S C. Run relationship is going to be okay anytime soon.
• 6:50
  Speaker 1: Mr Trump has withdrawn from the j C p o A,
• 6:53
  Speaker 1: he has killed a senior Iranian commander he had, he
• 6:57
  Speaker 1: has sanctioned the country. So we still have a long
• 7:02
  Speaker 1: term issue around the US Iran relationship and whether you
• 7:05
  Speaker 1: can get a pathway that is sustainable that gets us
• 7:09
  Speaker 1: away from confrontation and towards the excavation. But certainly we
• 7:14
  Speaker 1: were away from the peak of a crisis. Just real
• 7:16
  Speaker 1: quick here about thirty seconds. I'm wondering President Trump is
• 7:19
  Speaker 1: going to speak in response to the Iranian retaliation. What
• 7:24
  Speaker 1: do you expect him to say? Or what do you want?
• 7:25
  Speaker 1: What do you what are you looking for? I think
• 7:28
  Speaker 1: it's going to say that that the Iranian response was
• 7:30
  Speaker 1: weak and therefore there there it's not necessary for the
• 7:34
  Speaker 1: US to move and do much more, and that US
• 7:36
  Speaker 1: power remains robust, and he is ready when their Indians
• 7:40
  Speaker 1: do something that crosses the line to respond. Am Kamal,
• 7:44
  Speaker 1: thank you so much for joining us a M as
• 7:46
  Speaker 1: a practice head Middle East and North Africa for the
• 7:49
  Speaker 1: Eurasia Group. Some of the smartest folks out there, and
• 7:51
  Speaker 1: we're talking about geopolitics. He's based uh in London and
• 7:55
  Speaker 1: Tom King was recently this earlier this week at their
• 7:57
  Speaker 1: offices at Eurasia Group, getting a great over view of
• 8:00
  Speaker 1: all things geopolitical, whether it's the Middle East or China
• 8:03
  Speaker 1: and Hong Kong. They do some great work and we
• 8:05
  Speaker 1: appreciate them. Coming on Bloomberg Radio, the question of the
• 8:22
  Speaker 1: day is it over? Are we done with the brief,
• 8:26
  Speaker 1: very brief, if perhaps non existent, and recognizable turmoil that
• 8:30
  Speaker 1: we saw in markets due to Iran US relations tends
• 8:34
  Speaker 1: tensing up joining us now Scott Reren, Senior Global market strategist,
• 8:37
  Speaker 1: it was Fargo Investment Institute overseers overseeing nearly two trillion
• 8:41
  Speaker 1: dollars joining us from St. Louis, Missouri? Is it over? Scott? Well, Lisa,
• 8:47
  Speaker 1: Happy New Year? And probably while the market appears to
• 8:50
  Speaker 1: think we're not going to see uh too much of
• 8:53
  Speaker 1: an escalation, you know, we think at least in the
• 8:55
  Speaker 1: in the near term, we're likely to see uh some
• 8:58
  Speaker 1: more tip for tad, a little bit more escalation. But
• 9:01
  Speaker 1: you know that's not really changing and has not changed
• 9:05
  Speaker 1: really what our outlook is as we look out over, Scott,
• 9:09
  Speaker 1: give us your outlook for given the incredible kind of
• 9:13
  Speaker 1: market uh. You know a response we saw in what
• 9:17
  Speaker 1: do you do for an encore here? Well, I tell
• 9:19
  Speaker 1: you it's it's it's tough, Paul, and what we've been
• 9:22
  Speaker 1: doing UM. For during the second half of we raised
• 9:27
  Speaker 1: a little cash, we backed off of industrials, We've got
• 9:30
  Speaker 1: a little less cyclical, And that's pretty much our stance
• 9:34
  Speaker 1: right now because for us, UH stocks are very close
• 9:38
  Speaker 1: to fair value. We still like tech, we still like
• 9:40
  Speaker 1: consumer discretionary, we still like financials. But you know, if
• 9:43
  Speaker 1: we see a total return somewhere in the mid single
• 9:46
  Speaker 1: digit area, I think that's about right UM for us.
• 9:50
  Speaker 1: Probably the the the upside surprise. You have to ask yourself,
• 9:54
  Speaker 1: you know, how much chasing are we going to see here,
• 9:56
  Speaker 1: because there's a lot of underinvested, whether they're professionals or
• 10:00
  Speaker 1: retail investors, a lot of people with cash on the sidelines.
• 10:03
  Speaker 1: We've seen a little chasing here. And then I think
• 10:06
  Speaker 1: also a factor that that could make our outlook too conservatives,
• 10:12
  Speaker 1: too conservative, is if we see UH the international economy
• 10:16
  Speaker 1: stabilized and do a little bit better than what we thought.
• 10:19
  Speaker 1: So I think those are a couple of the factors
• 10:21
  Speaker 1: that we're trying to keep a close eye on, trying
• 10:23
  Speaker 1: to project, But for right now, we think stocks are
• 10:26
  Speaker 1: pretty close to fair value. There was a conversation on
• 10:29
  Speaker 1: Bloomberg Television this morning about this idea that seems to
• 10:32
  Speaker 1: be pervasive in markets, which is, honestly, unless we get
• 10:35
  Speaker 1: a massive shock, stocks are going to keep rallying. Risk
• 10:38
  Speaker 1: assets look good and you don't want to miss out.
• 10:41
  Speaker 1: The problem is, if we see a shock is the
• 10:43
  Speaker 1: big caveat and it seems like if we see a shock,
• 10:46
  Speaker 1: everyone's going to try to escape out of the same
• 10:49
  Speaker 1: narrow exit. How concerned are you about the lack of
• 10:52
  Speaker 1: hedging and sort of the crowdedness of some of these
• 10:56
  Speaker 1: risk trades. Well, you know, a lot of times, you know,
• 10:59
  Speaker 1: as she is, you approach a market high, and if
• 11:01
  Speaker 1: you look at the performance, for instance, between the SNP
• 11:05
  Speaker 1: equalated index and just the S and P, you know,
• 11:07
  Speaker 1: the performance is starting to widen there a little bit.
• 11:10
  Speaker 1: It's nowhere near what you usually see at the market top.
• 11:13
  Speaker 1: So really, you know, I think there's a decent amount
• 11:16
  Speaker 1: of liquidity in the market, but if you really see
• 11:19
  Speaker 1: a meaningful shock um as is usually the case, you
• 11:23
  Speaker 1: know there's there's a lack of liquidity on the way down.
• 11:25
  Speaker 1: I mean, the bids just go away, um and and
• 11:29
  Speaker 1: and there's not a lot of people stepping in to buy,
• 11:31
  Speaker 1: and that's where you see these big gaps down, So
• 11:33
  Speaker 1: I think I'm not sure that's going to be any
• 11:36
  Speaker 1: worse than it has been on meaningful, big shocks in
• 11:39
  Speaker 1: the past. And it's certainly something that you want to
• 11:41
  Speaker 1: think about. And you know that's why, you know, we've
• 11:43
  Speaker 1: talked to our our clients. You know, we had leaned
• 11:46
  Speaker 1: hard towards stocks, you know, for really the last eight years,
• 11:50
  Speaker 1: and for instance, you know, if you're in a sixty
• 11:52
  Speaker 1: forty stock bomb type of portfolio, we want our clients
• 11:56
  Speaker 1: to be pretty close to that right now, because, as
• 11:58
  Speaker 1: I said, you know, there's a lot of disks out there.
• 12:01
  Speaker 1: Stocks are not cheap um, and we just want to
• 12:04
  Speaker 1: be a little more careful here than we had been
• 12:06
  Speaker 1: in previous years. Scott, I want to get your thoughts
• 12:08
  Speaker 1: on valuations in the equity market. We've seen obviously move
• 12:14
  Speaker 1: up in the sp with very little to know earnings growth.
• 12:18
  Speaker 1: Give us a sense of kind of where we are
• 12:20
  Speaker 1: valuation wise historically. Well, you know, we've got a one
• 12:23
  Speaker 1: seventy five number out there, so right now you're looking
• 12:25
  Speaker 1: at about eighteen points six times uh this year's earnings,
• 12:29
  Speaker 1: and if you look at you know, over the last
• 12:31
  Speaker 1: twenty years or so, you know, the average forward price
• 12:35
  Speaker 1: to earnings ratio would be let's say sixteen points three
• 12:39
  Speaker 1: something like that, so you know you're certainly trading at
• 12:41
  Speaker 1: a premium to that. Now you could make the argument,
• 12:44
  Speaker 1: uh that you know, we're in a lower interest rate environment,
• 12:47
  Speaker 1: that feds eazy, people are under invested, and so it's
• 12:50
  Speaker 1: common that you get this push up in valuations in
• 12:54
  Speaker 1: the in the later stages of a cycle. So you know,
• 12:56
  Speaker 1: valuations are are above average. Um, we would argue that
• 13:01
  Speaker 1: they're not meaningfully stretched. I mean, if you look back
• 13:04
  Speaker 1: at the FED model, and I haven't run these numbers lately,
• 13:06
  Speaker 1: but if you looked at that correlation over a long
• 13:09
  Speaker 1: period time, it probably suggests the p on the SMP
• 13:11
  Speaker 1: should be you know, twenty eight or some crazy number
• 13:14
  Speaker 1: like that. So you know, these correlations haven't held. It
• 13:18
  Speaker 1: makes some sense that we're a little bit of a premium,
• 13:21
  Speaker 1: but we don't think there's too much upside in terms
• 13:24
  Speaker 1: of evaluations from here. We need to see some underlying
• 13:26
  Speaker 1: earnings growth. Scott, thanks so much for joining us. We
• 13:29
  Speaker 1: appreciate you coming on. Scott Wren, senior global market strategist
• 13:33
  Speaker 1: for Wells Fargo Investment Institute, joining us on the phone
• 13:36
  Speaker 1: from St. Louis time to check in with Bloomberg Opinion.
• 13:55
  Speaker 1: We're joined by Opinion Coomas Justin Fox. He joins us
• 13:58
  Speaker 1: here and I'm Bloomberg Interactive Brokers to deal with a
• 14:00
  Speaker 1: fascinating come about a story that I'm very interested in,
• 14:03
  Speaker 1: which is has the US past peak auto? Are people
• 14:07
  Speaker 1: still going to drive cars going forward? Justin takes a
• 14:10
  Speaker 1: look at it in terms of our team still driving cars.
• 14:13
  Speaker 1: So Justin, thanks so much for joining us. What's going
• 14:15
  Speaker 1: I know when I turned seventeen that day I was
• 14:18
  Speaker 1: at the DMV getting my license. I never looked back.
• 14:20
  Speaker 1: Is that still happening? Um less and less, although a
• 14:24
  Speaker 1: lot of it among sixteen and seventeen year olds is
• 14:26
  Speaker 1: basically because in lots of states you can barely drive
• 14:29
  Speaker 1: even after you get your license. There are all of
• 14:31
  Speaker 1: these restrictions, and so there's really been a collapse in
• 14:35
  Speaker 1: the percentage of sixteen year olds getting license. It's a
• 14:38
  Speaker 1: little more than half what it was in the eighties,
• 14:41
  Speaker 1: back when we got our lessons. Um and you get
• 14:46
  Speaker 1: two older ages and it and it's not as big
• 14:48
  Speaker 1: a decline, but basically every age court in the cohort
• 14:52
  Speaker 1: in the US below forty five is less. People are
• 14:55
  Speaker 1: less likely to have licenses than they were in the
• 14:57
  Speaker 1: early eighties. How much is this due to people moving
• 15:00
  Speaker 1: to cities and moving away from more suburban and rural areas.
• 15:05
  Speaker 1: I mean, since the eighties, I think most development and
• 15:08
  Speaker 1: most population growth has been in suburbian not in cities,
• 15:11
  Speaker 1: even though there's been a modest return over the past
• 15:14
  Speaker 1: um twenty years or so. And I mean this trend
• 15:20
  Speaker 1: first got a lot of attention um probably seven or
• 15:23
  Speaker 1: eight years ago. A researcher named Michael Sivak, who was
• 15:26
  Speaker 1: then at the University of Michigan, sort of pointed it out.
• 15:29
  Speaker 1: The media picked up on it, and a lot of
• 15:31
  Speaker 1: it was a pretty precipitous decline in like two thousand seven,
• 15:35
  Speaker 1: two thousand eight, two thousand nine, and a lot of
• 15:37
  Speaker 1: that was gas was really expensive and the economy was
• 15:41
  Speaker 1: awful and there was so there was a little bit
• 15:43
  Speaker 1: of a bounce back in two thousand fifteen and two
• 15:46
  Speaker 1: thousand sixteen. But what's really interesting is that has now stopped.
• 15:49
  Speaker 1: When you look at the percentage of teams getting licenses
• 15:52
  Speaker 1: and everybody getting licenses, it's just stopped rising. Let's see
• 15:56
  Speaker 1: uber impact, you know, when I was down at Duke
• 15:59
  Speaker 1: University recently, somebody was telling me, like when I was there,
• 16:02
  Speaker 1: parking impossible to get now, like lots of parking spaces
• 16:06
  Speaker 1: around the kids aren't bringing their cars because they just
• 16:08
  Speaker 1: uber everywhere. Yeah, I mean, I'm sure that is an
• 16:11
  Speaker 1: element in a lot of places. It's like sixteen year
• 16:13
  Speaker 1: olds aren't supposed to be able to take uber um,
• 16:18
  Speaker 1: but happens all uh man. They can tell you with
• 16:23
  Speaker 1: their parents and all, but supposedly. But I'm sure that
• 16:28
  Speaker 1: is part of it. There are alternatives like that. I'm
• 16:31
  Speaker 1: sure smaller families are part of it, so there aren't
• 16:35
  Speaker 1: five different kids to get around. If it's one or two,
• 16:38
  Speaker 1: then a parent might be able to do it and
• 16:40
  Speaker 1: they spend more time with them. And I mean, there
• 16:43
  Speaker 1: was a big like public transportation um sort of hit
• 16:47
  Speaker 1: it's all modern low in the US in the in
• 16:51
  Speaker 1: the eighties, and then had another drop in the mid
• 16:54
  Speaker 1: nineties when gas prices were super cheap and and the
• 16:58
  Speaker 1: economy was booming. But it rose a lot um through
• 17:02
  Speaker 1: about two thousand fourteen. But it's not rising lightly either,
• 17:06
  Speaker 1: so it is kind of I mean, one thing, if
• 17:08
  Speaker 1: you look at older Americans or just people with jobs,
• 17:12
  Speaker 1: telecommuting people. More people are able to do jobs without
• 17:17
  Speaker 1: driving there. But I think it's really confusing. I gotta say,
• 17:21
  Speaker 1: I'm not I'm not totally getting any of these explanations
• 17:24
  Speaker 1: because I know I grew up in New York City,
• 17:26
  Speaker 1: and yes, I failed my driver's task more than once.
• 17:29
  Speaker 1: It wasn't my fault, let's not talk about it. But
• 17:31
  Speaker 1: it was a sick shift and the guy hated me.
• 17:33
  Speaker 1: But it's okay, I've forgiven you if you're listening. But
• 17:35
  Speaker 1: I will say sort of, um, I will say that
• 17:38
  Speaker 1: it was a source of deep anxiety growing up, Like
• 17:41
  Speaker 1: what happens if you're you can't leave a big city.
• 17:45
  Speaker 1: I mean, how do you not have a license? How
• 17:46
  Speaker 1: do you travel somewhere and rent a car? I'm sorry
• 17:49
  Speaker 1: that I just don't believe that simply uh, having an
• 17:53
  Speaker 1: uber once in a while changes that. I think, I mean,
• 17:56
  Speaker 1: for most people, it doesn't. It's still clear that most
• 17:59
  Speaker 1: Americans get driver's licenses, most Americans have cars, but I
• 18:03
  Speaker 1: think there's a larger minority that will not. And I
• 18:06
  Speaker 1: just and I don't you know, I don't see car
• 18:08
  Speaker 1: use collapsing. But it's pretty clear when you look at
• 18:11
  Speaker 1: like per capita miles traveled, it's stopped rising. Well. But
• 18:15
  Speaker 1: this the interesting point here is how autonomous driving will
• 18:18
  Speaker 1: actually play into this. And I know that my ten
• 18:19
  Speaker 1: year old sometimes asks me, you know, am I ever
• 18:21
  Speaker 1: gonna have to go to the driver's license? Do I
• 18:23
  Speaker 1: have to get on that. I'm like, no, no, no, please,
• 18:25
  Speaker 1: You're fine. And I think about it, and you know,
• 18:27
  Speaker 1: is there going to be just this model of managing
• 18:29
  Speaker 1: these cars that are kind of driving themselves around and
• 18:32
  Speaker 1: maximizing their use instead of having people with a bunch
• 18:35
  Speaker 1: of cars parked in there driving. I mean, yes, someday,
• 18:38
  Speaker 1: but I I will say, people have spent a huge
• 18:41
  Speaker 1: amount of time and energy talking and thinking about that
• 18:44
  Speaker 1: over the past few years, and it doesn't seem like
• 18:46
  Speaker 1: it's going to be happening for another decade or two
• 18:49
  Speaker 1: at the earliest. So your son is still gonna have
• 18:51
  Speaker 1: to drive if if you want them to drive. So
• 18:54
  Speaker 1: I'll tell him. I'll tell him lots of scary stories.
• 18:57
  Speaker 1: When the guy comes in and says, are you scared? Little?
• 19:01
  Speaker 1: I hate nervous drivers. Anyway, I'm not I'm not going
• 19:04
  Speaker 1: to relive it over on the air, except that I
• 19:06
  Speaker 1: just did, how many cars do you have, faull Um
• 19:08
  Speaker 1: boy in our family? I'm gonna say three, yes, why
• 19:12
  Speaker 1: have four kids? Are you know that that that's such
• 19:15
  Speaker 1: an one of them as a pickup truck, which my
• 19:17
  Speaker 1: friends are just shocked that we have in this And
• 19:19
  Speaker 1: how old were they when I started driving all of them?
• 19:24
  Speaker 1: So he had more than more than two kids, so
• 19:26
  Speaker 1: that they had to shuttle themselves around. Justin Fox, thank
• 19:28
  Speaker 1: you so much for being with us. Justin Fox is
• 19:30
  Speaker 1: a Bloomberg opinion columnist. Great column about lots of American
• 19:34
  Speaker 1: teens still shutting cars right now. My big question is
• 19:51
  Speaker 1: given the fact that Iran can't necessarily be seen internally
• 19:56
  Speaker 1: as standing down, I do wonder what the response is
• 19:58
  Speaker 1: going to be. Chris lew joining us for now, Senior
• 20:00
  Speaker 1: fellow at the University of Virginia Miller Center, also former
• 20:03
  Speaker 1: Deputy Secretary of Labor under President Obama. He has served
• 20:06
  Speaker 1: in a variety of administrations over decades. Thank you so
• 20:10
  Speaker 1: much for being with us. On the phone from Charlottesville, Virginia.
• 20:12
  Speaker 1: I just want to first get reaction. If you were
• 20:15
  Speaker 1: listening to President Trump's comments on Iran, what was your takeaway? Well,
• 20:20
  Speaker 1: I thought it was encouraging in the sense that, you know,
• 20:22
  Speaker 1: he was offered an off ramp to de escalate, and
• 20:26
  Speaker 1: it appears that he is taking that for now. Um,
• 20:29
  Speaker 1: it will be interesting to see what the Iranians think
• 20:31
  Speaker 1: of this. I mean, he he was, in my mind
• 20:33
  Speaker 1: taking sort of a premature victory lap. I'm not sure
• 20:37
  Speaker 1: that will play that well, and I think there are
• 20:40
  Speaker 1: still remain questions what the long term strategy is. I mean,
• 20:43
  Speaker 1: he talked about imposing additional economic sanctions, trying to get
• 20:47
  Speaker 1: NATO involved in this, trying to negotiate a new deal.
• 20:50
  Speaker 1: But you know, if we simply take a look at
• 20:52
  Speaker 1: where we are now and where we were when he
• 20:55
  Speaker 1: took office, it's hard to say that we are in
• 20:57
  Speaker 1: a better situation now than where we were with the
• 21:01
  Speaker 1: Iran nuclear deal. It's interesting, Chris, maybe take a step
• 21:04
  Speaker 1: back here, given what we heard from the president here,
• 21:06
  Speaker 1: what do you think the administration's strategy is here just
• 21:10
  Speaker 1: over the less several days as it relates to our rent.
• 21:14
  Speaker 1: You know, I think it's been a little confusing, and
• 21:15
  Speaker 1: I think that's you know, the legitimate questions that members
• 21:18
  Speaker 1: of Congress are asking about, you know, whether there was
• 21:22
  Speaker 1: uh an imminent attack that they were trying to prevent
• 21:25
  Speaker 1: and killing celemony. Uh, you know what the long term
• 21:29
  Speaker 1: strategy is with regard to run and so I think, Um, look,
• 21:35
  Speaker 1: I think it was helpful to have the President out
• 21:37
  Speaker 1: there speaking, but I'm not sure he necessarily answered any
• 21:39
  Speaker 1: of those questions. I'm wondering also what the broader message
• 21:43
  Speaker 1: from this incident would be if URON does not retaliate
• 21:47
  Speaker 1: any further. I know that there have been a number
• 21:48
  Speaker 1: of reports that Kim John un over in North Korea
• 21:51
  Speaker 1: is suspected to be incentivized to double down on his
• 21:54
  Speaker 1: nuclear production simply because he doesn't want to be taken
• 21:57
  Speaker 1: out by a drone either. So, uh, was what was
• 22:00
  Speaker 1: your sense of that? Well, I think that's exactly right.
• 22:03
  Speaker 1: I mean, I think, um, the minute the president ripped
• 22:06
  Speaker 1: up a RAN nuclear deal, it makes it certainly harder
• 22:08
  Speaker 1: to try to um execute any kind of deal with
• 22:12
  Speaker 1: North Korea, because you know, the president the United States
• 22:15
  Speaker 1: can't be trusted to live up to their arrangements. UM.
• 22:18
  Speaker 1: I also think you know, this was as much of
• 22:20
  Speaker 1: anything unimportant, Um, the last night's attack was a way
• 22:23
  Speaker 1: that the Iranian leadership could show that there are people
• 22:26
  Speaker 1: that they were taking this seriously, but you know, I
• 22:28
  Speaker 1: think we should make the mistake. I mean, this is
• 22:30
  Speaker 1: a very dangerous regime that will figure out other ways
• 22:32
  Speaker 1: to strike back either Americans, allies, American businesses in ways
• 22:36
  Speaker 1: that maybe are as dangerous but are less able, were
• 22:41
  Speaker 1: less able to put our fingers that they did. Chris,
• 22:45
  Speaker 1: there's some that are suggesting that there is some politics
• 22:48
  Speaker 1: involved here and what's going on with Iran in terms
• 22:51
  Speaker 1: of uh the United States, uh, you know, taking out
• 22:54
  Speaker 1: General Solimany as it relates to impeachment. Do you think
• 22:57
  Speaker 1: there's a tie in there to what extent you know, Look,
• 23:01
  Speaker 1: I I I don't want to speculate on that. I'd
• 23:06
  Speaker 1: like to think that this was, um, this was a
• 23:09
  Speaker 1: thought out strategy. UM. That being said, Look, obviously we've
• 23:12
  Speaker 1: been talking about this attack for what the last five
• 23:15
  Speaker 1: or six days and not talking about impeachment. Impeachment is
• 23:18
  Speaker 1: still obviously out there on the horizon and probably shorter
• 23:22
  Speaker 1: term horizon. But I think it does ray sort of
• 23:24
  Speaker 1: broader issues as to um, what the administration's broader policy is,
• 23:30
  Speaker 1: and it's very muddled at the moment, and I'm sure
• 23:32
  Speaker 1: the actions over the last five or six days haven't
• 23:34
  Speaker 1: really clarified that in any way. What's your sense of
• 23:38
  Speaker 1: the recent developments about impeachment, about the fact that Senate
• 23:43
  Speaker 1: Democrats are trying to figure out how to pass it
• 23:45
  Speaker 1: off to Senate without necessarily getting a sort of wash,
• 23:49
  Speaker 1: a whitewashing of the whole affair. Yeah, you know, I look,
• 23:53
  Speaker 1: I think it's interesting. I mean, um, you know, UM,
• 23:55
  Speaker 1: I think the speaker, Speaker Pelosi will probably send over
• 23:58
  Speaker 1: the article's impeachment, she says soon. Um. And what we've
• 24:02
  Speaker 1: seen over the last couple of weeks since the House
• 24:04
  Speaker 1: past impeachment was a number of developments. We've seen, um,
• 24:08
  Speaker 1: some important reporting out of the New York Times about
• 24:10
  Speaker 1: other meetings that happened in the White House, UM on
• 24:13
  Speaker 1: the holding of Ukrainian aid that we didn't know about
• 24:16
  Speaker 1: an advance. We've had the release of some documents that show, um, um,
• 24:21
  Speaker 1: greater involvement by the White House in this decision. And
• 24:24
  Speaker 1: we obviously have the big news from the other day
• 24:26
  Speaker 1: that John Bolton, the former National Security Advisors, willing to testify.
• 24:30
  Speaker 1: So what that shows you is that there are additional
• 24:33
  Speaker 1: a lot of additional documents, additional witnesses and testimony, and
• 24:37
  Speaker 1: So even if, UM, even if Democrats were not able
• 24:40
  Speaker 1: to get an agreement up front that those documents and
• 24:44
  Speaker 1: witnesses would be part of a Senate trial, they've certainly
• 24:47
  Speaker 1: made a public case that we're only seeing basically the
• 24:50
  Speaker 1: tip of the iceberg right now. UM. This I think
• 24:53
  Speaker 1: will clearly be revisited. Even if the Senate trial starts
• 24:56
  Speaker 1: without an agreement on additional witnesses, there will be motion
• 25:00
  Speaker 1: by Senate Democrats to try to call those witnesses. And frankly,
• 25:03
  Speaker 1: a lot of this is going to rely on whether
• 25:05
  Speaker 1: it was handful of moderate Senate Republicans UM, and whether
• 25:09
  Speaker 1: they're willing to break from their leadership and call some
• 25:12
  Speaker 1: of these witnesses. So we're speaking with Chris Lucy and
• 25:15
  Speaker 1: your fellow at the University of Virginia Miller Center, also
• 25:17
  Speaker 1: former Deputy Secretary of Labor under President Obama, host of
• 25:20
  Speaker 1: other governmental service jobs that he has served in roles
• 25:23
  Speaker 1: that he has served throughout his career. I am wondering,
• 25:26
  Speaker 1: you know, I want to go back to Paul's question
• 25:27
  Speaker 1: where he was asking about the relation between UH the
• 25:32
  Speaker 1: strikes over in Iran as well as UH, you know,
• 25:35
  Speaker 1: the impeachment trials and does this give President Trump much
• 25:40
  Speaker 1: more popularity among Republicans and support among Republicans just because
• 25:44
  Speaker 1: it seems to have been incredibly successful. You know, look,
• 25:49
  Speaker 1: I think I think the jury is still out on
• 25:51
  Speaker 1: this right now, Um the um. Some of the recent
• 25:55
  Speaker 1: polling it shouldn't surprise you. I mean everything in this
• 25:58
  Speaker 1: country right now breaks on partisan lines, shows that about
• 26:02
  Speaker 1: fifty of Americans UM opposed the president's handling of the
• 26:06
  Speaker 1: situation in Iran right now. UM. You know again, I
• 26:09
  Speaker 1: think we'll have to wait and see what the longer
• 26:11
  Speaker 1: term developments on this are. I mean, you were only,
• 26:13
  Speaker 1: as I said, you know, five or six days from
• 26:16
  Speaker 1: the original um killing, and I think obviously less than
• 26:19
  Speaker 1: twenty four hours away from last night's events. And so
• 26:23
  Speaker 1: we're gonna have to let this play out a couple
• 26:24
  Speaker 1: more news cycles to see what happens. So, Chris, just
• 26:28
  Speaker 1: going back to impeachment real quickly. I'm just kind of
• 26:30
  Speaker 1: wondering what next steps are because we're obviously an uncharted
• 26:33
  Speaker 1: territory here. Who do you think has the leverage here? Uh,
• 26:38
  Speaker 1: between the Democrats and Republicans here, because it's you know,
• 26:41
  Speaker 1: Speaker Pelosi withholding the articles impeachment is unusual, I guess,
• 26:45
  Speaker 1: just given by the little bit of precedent with that
• 26:47
  Speaker 1: we do have. Well, look, I think the initial leverage
• 26:50
  Speaker 1: right now is being held by the Senate Republican leader,
• 26:53
  Speaker 1: Mitch McConnell. I mean, obviously he controls um the he
• 26:57
  Speaker 1: controls the process. He's got the fifty one votes to
• 26:59
  Speaker 1: move forward. Word. But I think, you know, I think
• 27:02
  Speaker 1: the challenge will be for him to keep some of
• 27:05
  Speaker 1: those moderate Republicans in line when Senate Democrats start asking
• 27:08
  Speaker 1: for additional votes and so, um, you know, I think that,
• 27:12
  Speaker 1: you know, I think we've only sort of seen the
• 27:15
  Speaker 1: first um, you know, um card being played at this point,
• 27:18
  Speaker 1: and it will be interesting to see how things play out.
• 27:19
  Speaker 1: And and again, you know, whether House Democrats try in
• 27:22
  Speaker 1: some way to call John Bolton as some part of
• 27:25
  Speaker 1: a formal hearing. I mean, he said he will testify
• 27:27
  Speaker 1: but for the Senate. But um, there's no reason, frankly
• 27:30
  Speaker 1: at this point why you would not testify before the
• 27:32
  Speaker 1: House as well. Chris LEU, thank you so much for
• 27:34
  Speaker 1: being with us in all your commentary. Chris Lew Senior
• 27:36
  Speaker 1: Fellow at the University of Virginia Miller Center, also former
• 27:39
  Speaker 1: Deputy Secretary of Labor under President Obama, among other roles.
• 27:44
  Speaker 1: Thanks for listening to the Bloomberg pl podcast. You can
• 27:46
  Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever
• 27:49
  Speaker 1: podcast platform you prefer. Paul Sweeney, I'm on Twitter at
• 27:52
  Speaker 1: pt Sweeney and Lisa bram Woyds I'm on Twitter at
• 27:55
  Speaker 1: Lisa Bramwoyits one before the podcast. You can always catch
• 27:58
  Speaker 1: us worldwide. I'm Bloomberg Radio