Latest / Balance of Power / Trump’s Diesel Deal With Putin Stirs GOP Unease

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Trump’s Diesel Deal With Putin Stirs GOP Unease · Balance of Power

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Speaker 1: Bloomberg Audio Studios.
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Speaker 6: The president's trip to Ohio. He's en route right now
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Speaker 6: with 22 days left. until the midterm elections. We're three
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Speaker 6: weeks out from tomorrow. And the administration has decided, and frankly,
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Speaker 6: this shouldn't really be news, that Ohio is must-win. This
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Speaker 6: is Senator John Houston's seat, that which was held at
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Speaker 6: one time by a man named J.D.
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Speaker 7: Vance.
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Speaker 6: And the prior occupant of a Senate seat in Ohio,
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Speaker 6: Sherrod Brown, wants the job back. And this has become
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Speaker 6: a knockdown drag out. One of the most expensive Senate
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Speaker 6: races in the country, right up there with Texas, Paxton
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Speaker 6: and Talrico. So this evening, the president will hold forth
1:04
Speaker 6: talking about all the issues that we bear down on
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Speaker 6: here every day, including, yes, the price of gas, the
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Speaker 6: price of diesel. And all of it leads itself to
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Speaker 6: the whole situation in Ukraine. We're going to connect the
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Speaker 6: dots on these issues after a wild weekend in geopolitics.
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Speaker 6: Bloomberg Washington correspondent Tyler Kendall joins us right now from
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Speaker 6: the North Lawn of the White House with the president
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Speaker 6: on his way to Ohio. Tyler, you can tell us
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Speaker 6: more about this energy ceasefire that the president announced over
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Speaker 6: the weekend because it's the very thing that he needs,
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Speaker 6: at least in terms of what the administration is telling us,
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Speaker 6: in lowering prices to make an argument before a crowd
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Speaker 6: like he is speaking to today in Ohio. What do
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Speaker 6: we know about this Russian diesel getting into the market?
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Speaker 7: Well, Joe, at this point, President Trump announced over the
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Speaker 7: weekend that we were going to see an energy truce
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Speaker 7: and that we would stop seeing attacks on refineries and
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Speaker 7: power plants. We've heard from both sides in this conflict,
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Speaker 7: Russia and Ukraine, both seeming to indicate that they were
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Speaker 7: not aware nor have signed on to any such agreement.
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Speaker 7: That is one part of the White House's push to
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Speaker 7: get there to be a stop in targeting Russian diesel
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Speaker 7: refineries in particular. That goes hand in hand with the
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Speaker 7: announcement that we got last week and which you alluded to,
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Speaker 7: which is that 13.5% Million barrels of Russian diesel will
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Speaker 7: be released from stockpiles over time, though there are questions
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Speaker 7: here about just how much of an impact that will
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Speaker 7: really make in the market. Our own analyst at Bloomberg
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Speaker 7: Intelligence released a new analysis earlier this morning that said
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Speaker 7: the initial supply probably won't have that big an impact
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Speaker 7: on prices that we pay at the pump. And that
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Speaker 7: the bigger question here is whether or not Russian refineries
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Speaker 7: can rebuild and actually increase their output, which then brings
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Speaker 7: us back around to the beginning here, which is that
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Speaker 7: we would need to see those attacks stopped. But Russia
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Speaker 7: continues to hit Ukraine. Plus, Joe, that doesn't even get
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Speaker 7: into some of the legal questions that members on Capitol
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Speaker 7: Hill are raising about Ukraine. this potential deal to release
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Speaker 7: Russian stockpiles, considering it upends what has been years of
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Speaker 7: sanctions practice here.
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Speaker 8: In the U.S.
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Speaker 6: Yeah, we're going to ask Congressman Mike Lawler about that
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Speaker 6: when he joins us in a few moments. I know
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Speaker 6: that he had strong feelings about that Russia sanctions bill.
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Speaker 6: Is this all part of the address this evening? Tyler,
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Speaker 6: do we have a sense of what the president's message
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Speaker 6: will be in Ohio?
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Speaker 7: Well, we did get somewhat of a preview, if you will, Joe,
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Speaker 7: because this marks President Trump's second visit to Ohio in
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Speaker 7: the last 10 days. So if we get some of
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Speaker 7: our cues from the last time he was there, he
3:42
Speaker 7: touted corporate investment in the state, bringing manufacturing jobs in,
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Speaker 7: in particular when it comes to the steel and auto industry.
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Speaker 7: He touted a new plant that's being built by Stellantis.
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Speaker 7: Maybe this is going to take a very similar tact tonight.
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Speaker 7: We're going to have to see. But the fact is,
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Speaker 7: that he is there in such a short amount of
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Speaker 7: time does underscore that Republicans are feeling the pressure when
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Speaker 7: it comes to this contest. You mentioned it, incumbent, Republican
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Speaker 7: Senator John Husted against former Senator Sherrod Brown. Our viewers
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Speaker 7: may know him as the former head of the Senate
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Speaker 7: Banking Committee. And there's a lot of time going into
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Speaker 7: this election. Keep in mind, President Trump won Ohio by
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Speaker 7: 11 percentage points in 2024. This was considered to be
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Speaker 7: Republican territory. There's also so much money going into this election. Joe,
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Speaker 7: the largest Republican super PAC pouring in $ 100 million into
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Speaker 7: this race so far, and we're not even towards the
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Speaker 7: finish line. Wow.
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Speaker 6: You probably heard what the president said about President Zelensky,
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Speaker 6: Donald Trump. has been blaming President Zelensky for bombing Russian refineries,
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Speaker 6: helping to lift the price, knowing, of course, that the
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Speaker 6: war with Iran has played a big role in this
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Speaker 6: as well. But it's distillates we're talking about here, and
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Speaker 6: diesel has been feeling the weight of these attacks on
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Speaker 6: Russian refineries, which is why the president advanced this idea
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Speaker 6: of an energy ceasefire. But listen to what he said
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Speaker 6: about Zelensky in the driveway on Friday.
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Speaker 9: You've lost 30% of your country, and you've had... Over
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Speaker 9: a million people killed. Between the two of them, over
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Speaker 9: two million people killed. That's a war that should have
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Speaker 9: never started. And I think it's time for Ukraine to
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Speaker 9: get a new president.
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Speaker 6: Wow, Tyler, are we back to where we were following
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Speaker 6: that first Oval Office meeting between these two?
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Speaker 1: That didn't sound good.
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Speaker 7: This has been a push and pull in the relationship
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Speaker 7: at this point for months. We've heard before that there
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Speaker 7: would be an energy ceasefire. That didn't end up happening.
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Speaker 7: We've heard before President Trump calling for the Ukrainian President
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Speaker 7: Zelensky to step down. Now, we should say Ukrainian President
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Speaker 7: Zelensky did a flurry of media interviews earlier today. He
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Speaker 7: himself broadcasted on his own social media channels. He, one,
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Speaker 7: confirmed that Ukraine would stop hitting Russian refineries, but only
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Speaker 7: if Russia stops its attacks first. And that means that
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Speaker 7: Ukraine will not be stopping its long-range strikes in particular.
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Speaker 7: He also did confirm that he would be willing to
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Speaker 7: hold an election in Ukraine, but if this truce were
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Speaker 7: fully implemented. That has put the ball in the Kremlin's court.
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Speaker 7: We did hear from Russian state media earlier today. saying
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Speaker 7: that the Kremlin didn't have a comment at this time
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Speaker 7: when it comes to this proposed energy truce. So at
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Speaker 7: this point, we're still waiting for additional details from the
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Speaker 7: White House on what, if anything, was really worked out
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Speaker 7: for a tangible deal that could ultimately lend to getting
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Speaker 7: these two sides back to the negotiating table.
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Speaker 6: Tyler, thank you. Live at the White House, Bloomberg Washington
6:39
Speaker 6: correspondent Tyler Kendall. As we turn to the voice of
6:42
Speaker 6: Mike Lawler, as we mentioned, the Republican congressman from New
6:45
Speaker 6: York joining us today on Bloomberg TV and radio. He's
6:48
Speaker 6: a member of the House Financial Services Committee, which is
6:50
Speaker 6: why we speak so frequently about issues involving the Federal Reserve.
6:54
Speaker 6: He's also on the Foreign Relations Committee, which dials us
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Speaker 6: directly into the story that we're talking about. Congressman, it's
7:00
Speaker 6: good to have you back on Bloomberg TV. I'd love
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Speaker 6: to know where your thoughts are on this Russian diesel deal.
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Speaker 6: It's very complicated, realizing that we had the Russian sanctions
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Speaker 6: bill that you co-sponsored. And I know that that was
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Speaker 6: something you felt passionately about at the time in your statement.
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Speaker 6: You said oil revenue, banks, oligarchs and the shadow fleet
7:18
Speaker 6: have kept this war machine running. But as I heard
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Speaker 6: from some Republicans over the weekend, they said, look, this
7:23
Speaker 6: is a president that's just trying to do what he
7:25
Speaker 6: can for the American people.
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Speaker 1: How do you see it?
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Speaker 4: Well, of course, there's domestic politics and economics that, of course,
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Speaker 4: we want to bring down diesel and fuel prices across
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Speaker 4: the country. There's also foreign policy that is the exclusive
7:43
Speaker 4: purview of the federal government. And when I look at
7:47
Speaker 4: the conflicts around the globe, I've said repeatedly, this all
7:52
Speaker 4: stems from the unholy alliance from Russia, China and Iran.
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Speaker 4: And the decisions that have been made both during the
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Speaker 4: Biden administration and the Trump administration are centered around combating
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Speaker 4: this malign influence. I fundamentally am opposed to any deal
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Speaker 4: with Russia that would put money in their pockets, especially
8:17
Speaker 4: as they continue this war of aggression against Ukraine. The
8:22
Speaker 4: fact is that Vladimir Putin is a vile dictator and
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Speaker 4: thug who has committed numerous acts of war crimes during
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Speaker 4: this conflict in Ukraine. The number of people dying on
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Speaker 4: the battlefield, as the president rightly points out, is outrageous.
8:45
Speaker 4: And the war should come to an end. But as
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Speaker 4: I said from the very beginning, the Biden administration should
8:51
Speaker 4: have put secondary sanctions in place and The Europeans should
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Speaker 4: have stopped purchasing Russian gas and oil from the very start.
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Speaker 4: They were financing the very war they were trying to stop.
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Speaker 4: So this has been going on for a very long
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Speaker 4: period of time where Russia's war has been financed by
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Speaker 4: oil purchases by Europe. So I don't want to contribute
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Speaker 4: to that in any way. And I think we should
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Speaker 4: not have that deal.
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Speaker 6: You have been very clear on this, Congressman, and your
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Speaker 6: clarity today is appreciated because I know that this isn't
9:29
Speaker 6: easy stuff. You've got people paying a lot of money here,
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Speaker 6: and diesel is the fuel for our economy here. To
9:37
Speaker 6: your point on Europeans, can we ask Europeans to stop
9:41
Speaker 6: buying oil if we're taking part in a deal like this?
9:45
Speaker 6: Does this compromise our view?
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Speaker 4: Well, first, look, the Europeans have been buying oil throughout
9:52
Speaker 4: this entire conflict.
9:54
Speaker 5: Absolutely.
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Speaker 4: And they should have stopped and they should have been
9:57
Speaker 4: working with the United States, frankly. to increase production here.
10:03
Speaker 4: By the way, this is also why Venezuela matters. The
10:07
Speaker 4: removal of Maduro has allowed the flow of oil back
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Speaker 4: into the United States. Over a million barrels of crude
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Speaker 4: oil a day, the highest since 2017. That is a
10:19
Speaker 4: positive step. And getting China out of the Western Hemisphere
10:23
Speaker 4: is critical. Cutting off China's supply from Iran is critical.
10:28
Speaker 4: I've been one of the leading people in applying sanctions,
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Speaker 4: passing sanctions legislation against that illicit oil trade between China
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Speaker 4: and Iran. Russia is the third leg here, if you will,
10:42
Speaker 4: which is why I've been so adamant about not allowing
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Speaker 4: the flow of oil out of Russia, because that is
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Speaker 4: what is financing Putin's wars. I mean, the Russians are
10:53
Speaker 4: losing 30,000 soldiers a month. It is insane. The average
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Speaker 4: length of life of a frontline Russian soldier is 17 minutes.
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Speaker 4: That's how insane this war really is. And I don't
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Speaker 4: think people around the globe really understand the consequences of
11:09
Speaker 4: this war. It is absolutely nuts what has gone on
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Speaker 4: at the hands of Russia in Ukraine. So this conflict
11:20
Speaker 4: needs to come to an end. President Trump wants it
11:22
Speaker 4: to come to an end. President Trump has been working
11:25
Speaker 4: to get a deal. But the challenge is you're dealing
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Speaker 4: with a vile dictator and thug in Vladimir Putin. Obviously,
11:33
Speaker 4: there's domestic pressures here with oil and gas prices. And
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Speaker 4: I'm just going to point out one other thing, though,
11:39
Speaker 4: because I think this is important. I listened to my
11:41
Speaker 4: Democratic colleagues understandably talk about gas prices. But these are
11:46
Speaker 4: the same people that want to cut U.S. oil and
11:49
Speaker 4: gas production. These are the same people that say we
11:52
Speaker 4: need to eliminate fossil fuels. What do you think gas
11:56
Speaker 4: prices and diesel prices will be if Democrats get their
11:59
Speaker 4: way when it comes to domestic production of energy? That's
12:03
Speaker 4: not talked about, but that's a reality. That is what
12:05
Speaker 4: they advocate for. And nobody, frankly, ever asked them, hey,
12:10
Speaker 4: you're concerned about gas prices, but what would actually happen
12:13
Speaker 4: if your plan to reduce oil and gas production in
12:16
Speaker 4: America went through? That's a real problem as we head
12:19
Speaker 4: to the midterm elections.
12:22
Speaker 6: We talked about the LNG export ban quite a lot
12:25
Speaker 6: during the Biden administration, but actual oil production, energy production
12:28
Speaker 6: at the time was at an all-time high. The fact is,
12:32
Speaker 6: it's the refining bottleneck, Congressman, and you know a lot
12:34
Speaker 6: about this because we talk about it so often that
12:37
Speaker 6: has resulted in the gasoline and diesel prices that we're
12:41
Speaker 6: talking about here. And I keep getting the same answer
12:44
Speaker 6: every time on this, right? You haven't built a refinery
12:46
Speaker 6: since the 1970s, and the only way you're going to
12:48
Speaker 6: get a new one is a permitting deal.
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Speaker 1: When you come back to Washington, will there be one?
12:52
Speaker 1: Will there be a permitting.
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Speaker 4: Bill to vote on? This is why I've been the
12:57
Speaker 4: leader on trying to get permitting reform done. You need
13:01
Speaker 4: a bipartisan permitting deal that allows for increased production, refining, transmission.
13:08
Speaker 4: inclusive of renewables, but also nuclear power. It's why I've
13:13
Speaker 4: called for Indian Point, for instance, in my district to
13:16
Speaker 4: be rebuilt and reopened. Utility rates in New York are
13:20
Speaker 4: up 58% under Kathy Hochul over the last six years.
13:23
Speaker 3: Why?
13:24
Speaker 4: Because New York shut down nuclear power, banned natural gas extraction,
13:28
Speaker 4: blocked pipelines. We need a true all of the above
13:31
Speaker 4: approach to energy production. and transmission in this country if
13:36
Speaker 4: we are going to bring down prices. That means building
13:40
Speaker 4: new refineries. And the fact is, this permitting deal is
13:43
Speaker 4: a good deal. And I do believe when we get
13:46
Speaker 4: back after the election, this will get done. It needs
13:50
Speaker 4: to get done. If folks want to bring down prices
13:53
Speaker 4: for the American people, we cannot be reliant on foreign
13:57
Speaker 4: sources of energy. We need to increase oil, gas, nuclear
14:02
Speaker 4: and renewable energy production in this country.
14:06
Speaker 1: That is vital.
14:07
Speaker 4: That is the only way you're going to start driving
14:09
Speaker 4: down prices. And by the way, that will help bring
14:11
Speaker 4: down inflation. It'll help bring down the cost of groceries
14:15
Speaker 4: and transportation. That is why energy is so critical, which
14:19
Speaker 4: is also why I've never understood the Democratic Party platform
14:23
Speaker 4: of ending oil and gas production in this country.
14:27
Speaker 6: Well, it depends on the Democrat you're talking to, of course.
14:29
Speaker 6: But the president promised on Friday, and we'll end it
14:32
Speaker 6: on this, Congressman, that if Republicans are elected in 22 days,
14:36
Speaker 6: energy prices will come down. Is that the mechanism he's
14:39
Speaker 6: talking about, or does that require ending the two wars
14:42
Speaker 6: that we've already been discussing?
14:45
Speaker 4: Look, these wars are going to come to an end,
14:48
Speaker 4: and there's outstanding issues that obviously have to be resolved.
14:52
Speaker 4: War is complex, as is foreign policy. And all of
14:55
Speaker 4: this is interconnected between China, Russia, Iran, Venezuela. And we've
15:01
Speaker 4: been working tirelessly to address these issues. But at the
15:04
Speaker 4: end of the day, if you want to have a
15:07
Speaker 4: sustainable low cost of energy, you need to increase domestic production,
15:12
Speaker 4: which is why permitting reform is so vital and why
15:15
Speaker 4: I've been championing this during my time in Congress.
15:18
Speaker 1: Think about this.
15:20
Speaker 4: We get the largest tax cut in American history passed
15:23
Speaker 4: The largest bipartisan housing bill passed in 36 years. You
15:27
Speaker 4: get permitting reform done. Those are three key economic indicators
15:33
Speaker 4: that will help drive down costs and put more money
15:36
Speaker 4: back in the pockets of the American people. Those are
15:38
Speaker 4: three important legislative priorities that we will get done by
15:42
Speaker 4: the end of this Congress.
15:44
Speaker 6: From New York's 17th District, Congressman Mike Lawler, the Republican
15:48
Speaker 6: who's on House Financial and Foreign Affairs, we thank you, Congressman,
15:50
Speaker 6: for being with us here three weeks from tomorrow.
15:54
Speaker 1: Unbelievable.
15:54
Speaker 6: We'll assemble our political panel next with more on the
15:56
Speaker 6: midterms as the ad money starts to flow big time.
15:59
Speaker 6: That's coming up next on Bloomberg TV and Radio. Stay
16:02
Speaker 6: with us on Balance of Power. We'll have much more
16:04
Speaker 6: coming up after this.
16:08
Speaker 5: You're listening to the Bloomberg Balance of Power podcast. Catch
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16:27
Speaker 6: Connecting the dots between policy here in Washington and the
16:31
Speaker 6: trading on Wall Street, which... As we just discussed with
16:34
Speaker 6: Congressman Mike Lawler, pretty tough to remove considering the geopolitical
16:37
Speaker 6: state of affairs and the fact that we have got
16:39
Speaker 6: elections in three weeks and a day. To that end,
16:43
Speaker 6: the headline as the president makes his way to Ohio
16:45
Speaker 6: to stump for Senator John Husted today, the headline of
16:48
Speaker 6: the Detroit Free Press polls show Abdul El-Sayed with clear
16:52
Speaker 6: but narrow lead in the U.S.
16:54
Speaker 1: Senate race.
16:55
Speaker 6: And they're pointing to the real clear average, the poll
16:58
Speaker 6: of polls, if you will, 48.1 to 45 percent over
17:03
Speaker 6: former Republican Congressman Mike Rogers. The Al-Sayed campaign, with the
17:10
Speaker 6: debate now under their belt from last week, is hoping
17:12
Speaker 6: that the former president of the United States can close
17:15
Speaker 6: the deal. That would be President Barack Obama, who recorded
17:19
Speaker 6: ads for Al-Sayed, and they start running today.
17:21
Speaker 7: Listen. Listen.
17:22
Speaker 8: 250 years ago, America was founded on a simple idea.
17:28
Speaker 8: This country belongs to all of us. Not just the wealthy,
17:32
Speaker 8: not just the well-connected, everyone. Today, that idea is under attack,
17:40
Speaker 8: and Michigan is where we fight back. That's why I'm
17:43
Speaker 8: asking you to support Abdul El-Sayed for the United States Senate.
17:49
Speaker 1: But hold on, that's just one side.
17:51
Speaker 6: The Senate Leadership Fund is launching a seven-figure ad buy
17:56
Speaker 6: at exactly the same time, attacking El-Sayed over groups that
18:01
Speaker 6: have backed his campaign. They say he's taken dirty money
18:04
Speaker 6: funded by radical extremists too risky for Michigan. These are
18:09
Speaker 6: going to be the closing arguments. and we assembled our
18:12
Speaker 6: political panel for their thoughts. Bloomberg Politics contributor Jeanne Shanzano
18:16
Speaker 6: with us right now, our Democratic analyst and Democracy Visiting
18:19
Speaker 6: Fellow at Harvard University's Kennedy School's Ash Center. Rosemary Becky
18:24
Speaker 6: is with us as well, Republican strategist and partner at
18:27
Speaker 6: Brownstein Hyatt.
18:28
Speaker 1: Jeanne, let's start with you.
18:30
Speaker 6: Barack Obama is still the closer here, and some would
18:33
Speaker 6: suggest the only thing that can help mobilize Democratic voters
18:38
Speaker 6: in the final stages of a campaign.
18:40
Speaker 1: Will this work?
18:43
Speaker 3: It's a very smart strategy. You know, nobody understands better
18:48
Speaker 3: how to deal with the kind of accusations. As you
18:51
Speaker 3: mentioned earlier, we are hearing from the Republicans and the president,
18:56
Speaker 3: quite frankly, calling Abdul Al-Sayed Mohammed just in the last
19:00
Speaker 3: couple days. Nobody understands being otherized in that way, the
19:05
Speaker 3: way Barack Obama does. And what he is doing is
19:09
Speaker 3: he is going out to Michigan. He's campaigning for al-Sayed.
19:12
Speaker 3: He's campaigning for the Democratic candidate for governor. And he
19:16
Speaker 3: is saying that, I can reassure you, I have been
19:19
Speaker 3: the victim of these attacks. And those attacks are unfounded.
19:25
Speaker 3: And we have to focus on dealing with what really
19:28
Speaker 3: matters to you, which is not trying to scare you
19:32
Speaker 3: about Abdul Al-Sayed, but about getting money back in your pockets,
19:37
Speaker 3: making sure that it isn't the special interests and only
19:40
Speaker 3: the very wealthy that have a say in our government.
19:43
Speaker 3: So between that and getting out the black vote, he
19:46
Speaker 3: is a perfect person to do that. And the ad,
19:49
Speaker 3: I think, was very well done.
19:52
Speaker 6: What's your thought on this, Rosemary, in the language that
19:55
Speaker 6: Republicans are using against al-Sayed, beginning with the president? He
19:59
Speaker 6: actually called him a jihadist in a speech over the weekend,
20:02
Speaker 6: a supporter of terrorists. This ad that I mentioned from
20:05
Speaker 6: Senate Leadership Fund, dirty money funded by radical extremists.
20:08
Speaker 1: Does that work in Michigan?
20:11
Speaker 10: So I think in Michigan, right, it's clearly all about
20:17
Speaker 10: affordability on the campaign trail right now. And the question becomes,
20:22
Speaker 10: you know, who's got better solutions? And I think on
20:27
Speaker 10: the Republican side, obviously, they're pointing to El-Sayed's potentially having
20:34
Speaker 10: extreme views or looking for more government, more taxes, things.
20:40
Speaker 11: Of that nature.
20:41
Speaker 10: And obviously on the Democratic side, they're pointing to President
20:47
Speaker 10: Obama and trying to walk back some of those claims
20:51
Speaker 10: that the Republicans had. So, I mean, as you pointed out,
20:54
Speaker 10: it is neck and neck there in Michigan. And, you know,
20:59
Speaker 10: if Mike Rogers can take this state, that would be
21:03
Speaker 10: critical and helpful, potentially to retaining the Senate and stuff.
21:09
Speaker 11: So it's, you know, both.
21:12
Speaker 10: We've got really extreme ads going on here. And it'll
21:17
Speaker 10: be interesting to see how this ultimately plays out.
21:21
Speaker 1: We mentioned the big three.
21:24
Speaker 6: As Republicans zero in on the three states that they
21:27
Speaker 6: believe are needed to maintain the majority in the Senate,
21:31
Speaker 6: it's Ohio where the president is today. It's Alaska where
21:35
Speaker 6: he will be tomorrow.
21:37
Speaker 1: And it is Iowa.
21:38
Speaker 6: And they're moving money around here, which is pretty fascinating
21:42
Speaker 6: to watch this happen. The triage game is still underway,
21:45
Speaker 6: and it likely will be right until it's time to
21:48
Speaker 6: vote here. This is MAGA Inc., of course, the Trump-aligned
21:51
Speaker 6: super PAC. Several hundred million dollars still to be spent.
21:56
Speaker 6: Planning some big moves here, as we read in Politico.
22:00
Speaker 6: The push includes cutting off spending to a group of
22:03
Speaker 6: less attainable House races. including in Michigan, the eighth district,
22:08
Speaker 6: as a matter of fact, with money now being funneled
22:11
Speaker 6: to these three Senate races. Jeannie, what does this tell
22:15
Speaker 6: you about the state of affairs when Republicans do not
22:19
Speaker 6: list Michigan or Texas on the list of must-wins?
22:24
Speaker 3: Yeah, it really does tell you. You know, I just
22:27
Speaker 3: think about those states you mentioned, Iowa, Ohio, and Alaska,
22:31
Speaker 3: reliably red states for so long. You know, the Midwest,
22:35
Speaker 3: particularly ruby red for so long, and the idea that
22:40
Speaker 3: Republicans are required to spend as much as they are
22:44
Speaker 3: to have a shot in these states. is something we
22:47
Speaker 3: could have never imagined a year ago. You know, we
22:49
Speaker 3: go back a year ago, and most of us were
22:52
Speaker 3: saying the map in the Senate favors Republicans, and that
22:56
Speaker 3: has completely changed now. And what has changed it? Just
22:59
Speaker 3: what you were talking about to Representative Lawler, which is
23:03
Speaker 3: the price of oil, the price of diesel, the tariff
23:07
Speaker 3: war with Canada, and the very unpopular war in Iran.
23:11
Speaker 3: And those things are what have put the Republican Party
23:15
Speaker 3: in this defensive position. And so, yes, you have Donald
23:18
Speaker 3: Trump out there. He can try to get out the vote.
23:21
Speaker 3: But are his voters really going to get out? It's
23:25
Speaker 3: hard to imagine because they are very concerned about their pocketbook.
23:30
Speaker 3: And you look at those poll numbers and they are
23:33
Speaker 3: not strong for Donald Trump. And this is going to
23:36
Speaker 3: be a referendum on the presidency.
23:38
Speaker 6: Well, Senate Leadership Fund has already dropped $ 100 million into
23:43
Speaker 6: the state of Ohio in this Senate race that the
23:45
Speaker 6: president will be working on today. And you do wonder,
23:50
Speaker 6: I mean, look, Jeannie mentioned affordability. Rosemary, we just got
23:54
Speaker 6: into this with Mike Lawler. Most of our conversation while
23:56
Speaker 6: I was asking him geopolitical questions really resolved into the
24:00
Speaker 6: cost of energy. This is everything right now, whether you're
24:02
Speaker 6: talking about diesel, gasoline, or just plain old crude oil.
24:06
Speaker 6: And the president of the United States made a bold
24:09
Speaker 6: promise when he spoke to supporters in New York late
24:13
Speaker 6: last week.
24:13
Speaker 1: Here's what he said.
24:15
Speaker 12: Since Hochul took office, she's raised your utility rates 48
24:21
Speaker 12: times and energy prices in New York have skyrocketed over
24:25
Speaker 12: 100 percent.
24:26
Speaker 13: Other than that, wonderful.
24:28
Speaker 5: It's horrible.
24:29
Speaker 13: This winter, home heating costs in your state are expected
24:33
Speaker 13: to explode still further from those rates, 100 percent increase,
24:38
Speaker 13: all because the radical left Democrats and Kathy Hochul don't
24:43
Speaker 13: know what the hell they're doing.
24:45
Speaker 1: If Bruce Blakeman gets in.
24:47
Speaker 9: He will cut your electric bills by 70, 80 and
24:50
Speaker 9: 90 percent.
24:52
Speaker 6: Now, that gets the crowd going, Rosemary, but it begs
24:55
Speaker 6: a very basic question. What is Bruce Blakeman going to
24:58
Speaker 6: do to get electricity bills down by 90 percent?
25:03
Speaker 10: No, that definitely begs the question. Look, as you pointed
25:06
Speaker 10: out and we've been talking about here, I mean, this
25:10
Speaker 10: is really about affordability. And, you know, frankly, when Americans
25:15
Speaker 10: go to vote, they will be looking very closely at
25:19
Speaker 10: energy costs, whether it's to fill up the tank or
25:23
Speaker 10: the cost of, you know, heating and cooling their homes.
25:28
Speaker 10: It's across the country and particularly in In the Northeast,
25:32
Speaker 10: those costs have risen significantly. And so that'll be, you know,
25:38
Speaker 10: the critical issue. And then the question for voters is
25:41
Speaker 10: who do they think has a better solution, whether it's
25:44
Speaker 10: the Republicans or the Democrats?
25:46
Speaker 11: And that's what it's going to.
25:47
Speaker 1: Come down to.
25:49
Speaker 6: Elon Musk has a solution, Jeannie, and it's a lot
25:52
Speaker 6: of money. This is something in The New York Times today.
25:55
Speaker 6: The richest person in the world is by far the
25:58
Speaker 6: largest known donor in the midterms. He may not be
26:01
Speaker 6: wearing the cheesehead hat and swinging the chainsaw around, but
26:05
Speaker 6: Elon Musk is a factor in this election with spending
26:09
Speaker 6: that includes $ 158 million he gave to the Senate Leadership
26:13
Speaker 6: Fund for a total of $ 276 million he's dropped in
26:19
Speaker 6: for Republican groups and his super PAC since July. In sum,
26:25
Speaker 6: the Times writes, one of the largest political donations in
26:29
Speaker 6: American history.
26:30
Speaker 1: What do Democrats have to say about that?
26:34
Speaker 3: Yeah, Joe, the richest man in the world, maybe who
26:37
Speaker 3: has ever lived, a trillionaire, and he is breaking all
26:40
Speaker 3: kinds of records on the midterm spending. Whatever could go wrong? Well,
26:45
Speaker 3: what happened, Joe, about return on investment, that old thing
26:49
Speaker 3: that everybody on Wall Street knows all about? As he
26:52
Speaker 3: is pouring this money in, their numbers are going down.
26:56
Speaker 3: I mean, his home state of Texas, he has poured
27:01
Speaker 3: so much money in. And Paxton's numbers are way down,
27:04
Speaker 3: and the same thing across the country. Just the end
27:07
Speaker 3: of last week, when Cook put 18 more races in
27:11
Speaker 3: the Democratic favor, their explanation was, despite all this spending
27:16
Speaker 3: being done, It is not helping at all.
27:19
Speaker 11: So, you know, I do have.
27:20
Speaker 3: Questions about return on investment. More importantly, you have a
27:24
Speaker 3: poll out just the other day showing young people, Republicans
27:28
Speaker 3: and Democrats, across the board, over 80% saying that they
27:33
Speaker 3: are deeply concerned about the amount of money and spending
27:36
Speaker 3: in our campaigns, and they don't feel like anybody has
27:39
Speaker 3: a voice in our government unless they are extremely wealthy.
27:43
Speaker 3: That is an indictment on the entire political class. And
27:47
Speaker 3: we should take campaign finance seriously.
27:51
Speaker 9: Wow.
27:51
Speaker 6: Mic drop from Jeannie Shanzano on this one. Elon's not
27:54
Speaker 6: going away, Rosemary. We're going to be talking about it
27:57
Speaker 6: for the next three weeks. So thank you both for
27:59
Speaker 6: great insights today. And we'll keep this conversation going. Jeannie Shanzano,
28:03
Speaker 6: Rosemary Becky, our great panel.
28:05
Speaker 1: Stay with us on Balance of Power. We'll have much
28:08
Speaker 1: more coming up after this.
28:13
Speaker 5: You're listening to the Bloomberg Balance of Power podcast. Catch
28:17
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28:20
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28:23
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28:27
Speaker 5: us live on YouTube.
28:29
Speaker 6: Looking at the calendar for this week, it is the
28:31
Speaker 6: calm before the storm today as we reach for the cliche.
28:34
Speaker 6: Just tomorrow alone, we have JPMorgan Chase, United Health, Wells Fargo.
28:39
Speaker 6: We roll into Bank of America, Morgan Stanley, BlackRock on Wednesday.
28:43
Speaker 6: Did I mention Goldman Sachs? It's time for earnings reporting season.
28:47
Speaker 6: And you know the drill here. By Friday, we're going
28:49
Speaker 6: to be inundated, and then we'll be drowning by next week.
28:52
Speaker 6: But we're coming in pretty hot, too, with the S &
28:55
Speaker 6: P 500 right near its all-time high. and investors betting
28:59
Speaker 6: on some pretty darn good news. And you wonder if
29:02
Speaker 6: this is a setup for disappointment or another leg higher
29:05
Speaker 6: in the market. That's why we wanted to talk to
29:07
Speaker 6: Nora before we got into this earnings reporting season, because
29:10
Speaker 6: by this time tomorrow, it'll be too late. Nora Melinda,
29:13
Speaker 6: Bloomberg Markets Correspondent, live in New York. Fasten the chin
29:16
Speaker 6: strap here, right? This is going to be a deluge.
29:19
Speaker 6: And based on what I just reminded everybody, we're coming
29:23
Speaker 6: in near our highs today. These are going to have
29:25
Speaker 6: to be some boffo earnings reports to make investors happy, Nora.
29:29
Speaker 2: Absolutely. It's interesting when you take a look at all
29:32
Speaker 2: the headwinds that we've been seeing, whether it's geopolitics, the
29:35
Speaker 2: rate outlook, inflation, and everything in between, but then you're
29:39
Speaker 2: still seeing major indexes having a strong year. They're both
29:43
Speaker 2: major indexes up double digits. So it's clear that we're
29:46
Speaker 2: still seeing some bullishness. But as you called out with
29:49
Speaker 2: this week being the kickoff of the unofficial kickoff of
29:51
Speaker 2: earnings season with banks starting to report tomorrow. We're going
29:54
Speaker 2: to hear from some of those big banks, and hopefully
29:56
Speaker 2: this will essentially give us some more context for where
29:59
Speaker 2: the Fed could potentially be heading next and what the
30:02
Speaker 2: health of corporate America generally looks like. Earlier today, I
30:04
Speaker 2: was talking with BI analyst Herman Chan on Bloomberg Intelligence,
30:09
Speaker 2: and he was just talking about how this is expected
30:11
Speaker 2: to be yet another crisis. strong quarter when it comes
30:14
Speaker 2: to banks and the results that we're going to be
30:15
Speaker 2: seeing out of them. If you do remember just in
30:17
Speaker 2: the second quarter, that was a blowout quarter as it
30:20
Speaker 2: relates to equity trading desks. And so that's an expectation
30:24
Speaker 2: that we're going to see again, a lot of focus
30:25
Speaker 2: there as to strength there. But what's going to be interesting,
30:29
Speaker 2: he was mentioning, is the fact that we may see
30:31
Speaker 2: a slowdown when it comes to equity trading quarter over quarter,
30:34
Speaker 2: but it still seems to be a lot of strength
30:36
Speaker 2: when we take a look at the year on year
30:39
Speaker 2: basis here.
30:40
Speaker 7: Okay.
30:41
Speaker 1: Interesting.
30:41
Speaker 6: You know, I actually, as an aside, love hearing you
30:44
Speaker 6: do Bloomberg Intelligence because it's a venue where you can
30:46
Speaker 6: go a little bit deeper and be a little bit
30:48
Speaker 6: more granular in the markets, which is always fascinating for me.
30:51
Speaker 6: The fact of the matter is, and I can disagree
30:53
Speaker 6: with myself now in my original setup here, we're above
30:56
Speaker 6: 7,800 on the S & P 500, but there's been
30:57
Speaker 6: a lot of noise recently. underneath the headline number here, right?
31:03
Speaker 6: There is a big swath of the S & P
31:06
Speaker 6: 500 that's in a bear market that's more than 20%
31:09
Speaker 6: off the highs here. And you wonder if that's substituting
31:13
Speaker 6: for the correction that everyone's been calling. Have we had
31:17
Speaker 6: the correction, I guess, is my question. Maybe we're set
31:20
Speaker 6: up nicely for earnings.
31:22
Speaker 2: I mean, it's a really interesting picture. As I talk
31:24
Speaker 2: to folks on Wall Street, my sources giving me a
31:26
Speaker 2: bit of a mixed opinion on this. To your point,
31:29
Speaker 2: we've been talking about the fact that we've been seeing
31:30
Speaker 2: all this bullishness in the market, but there are still
31:33
Speaker 2: a lot of laggards. And there's, of course, still continuing
31:35
Speaker 2: to be this market leadership, the concentration being heavily, heavily
31:40
Speaker 2: focused on the tech space.
31:41
Speaker 12: So.
31:42
Speaker 2: I think when you think about the broader economy and
31:44
Speaker 2: you think you spend so much time on balance of power,
31:47
Speaker 2: all of your programming talking so much about the conflict
31:50
Speaker 2: in the Middle East and the geopolitics that are in
31:52
Speaker 2: focus and the economic implications. And so when we think
31:55
Speaker 2: about these high oil prices, when we think about surging
31:58
Speaker 2: energy costs and the implications on businesses more broadly, it
32:02
Speaker 2: begs the question as to whether or not the fundamentals
32:04
Speaker 2: are still holding up. And that's what investors are really
32:07
Speaker 2: going to be digging into this earnings season.
32:10
Speaker 1: Yeah, it's a lot. It's a lot to cover. And
32:12
Speaker 1: with some of.
32:14
Speaker 6: The compression that we've seen in valuations, you wonder if
32:19
Speaker 6: maybe we're a coiled spring and not an overvalued market.
32:24
Speaker 6: We're going to find out together, Nora. Your next couple
32:26
Speaker 6: of days are going to be a doozy. We'll be
32:27
Speaker 6: spending it together. Thanks for being with us here today,
32:29
Speaker 6: of course. Nora Melinda, taking the big breath. before the
32:32
Speaker 6: reports start to drop before.
32:34
Speaker 1: The opening bell tomorrow morning.
32:36
Speaker 6: Of course, Nora pulls us right back into our lane,
32:38
Speaker 6: and that's geopolitics and the energy price that we've seen
32:42
Speaker 6: over the past couple of days here kicking back up
32:45
Speaker 6: with the headlines in the Middle East do make you wonder,
32:48
Speaker 6: not to mention the situation with Ukraine and Russia. when
32:52
Speaker 6: it comes to refining products. Saudi Arabia now says it
32:55
Speaker 6: is seeing more drone and cruise missile attacks today. We
32:59
Speaker 6: had obviously the outrageous and deadly attacks on the airport
33:04
Speaker 6: over the weekend that.
33:05
Speaker 1: Saw the deaths of at least 14 people.
33:08
Speaker 6: Now Saudi is not only continuing to intercept missiles and drones,
33:12
Speaker 6: but it's asking the United States for help in dealing
33:14
Speaker 6: with this. We're providing intelligence support right now, but whether
33:17
Speaker 6: we get jets in the air is something that the
33:20
Speaker 6: president says he's considering right now. And we want to
33:23
Speaker 6: talk more about this widening aperture of war in the
33:26
Speaker 6: Middle East with Natasha Hall, associate fellow with the Middle
33:30
Speaker 6: East and North Africa program at Chatham House.
33:33
Speaker 1: Natasha, it's been a while. I'm really glad to have
33:35
Speaker 1: you back.
33:36
Speaker 6: I'm wondering your thoughts on this new new front, if
33:39
Speaker 6: we can call it that, realizing the Houthis have been
33:43
Speaker 6: involved in some time from one extent to another to
33:46
Speaker 6: be brazenly striking Riyadh Airport, where the president of the
33:49
Speaker 6: United States touched down just a couple of weeks ago.
33:52
Speaker 6: Feels like a new level to me.
33:54
Speaker 1: Will the U.S. get further involved?
33:57
Speaker 14: I think that would be a really difficult prediction to
34:00
Speaker 14: make so close to midterm elections. I think Trump's bet
34:05
Speaker 14: is to essentially lift sanctions on Russia for a while
34:10
Speaker 14: and get diesel imports back and running to sort of
34:14
Speaker 14: decrease diesel and gas prices here in the United States
34:18
Speaker 14: and also make it seem like he's doing something to
34:20
Speaker 14: American constituents. Now, those same American constituents would not be
34:24
Speaker 14: happy if we were, again, elevating our involvement in the
34:28
Speaker 14: Middle East. And so he's in a difficult position here.
34:31
Speaker 14: Because Saudi Arabia really does need assistance, not just because
34:35
Speaker 14: of the strikes on the airport. But again, it's ongoing
34:38
Speaker 14: offensive against the Houthis because the Houthis have sort of
34:42
Speaker 14: essentially taken over Bab al-Mandeb. So another choke point that's
34:47
Speaker 14: being cut off by seemingly this ragtag group of, you know,
34:51
Speaker 14: militia commanders.
34:52
Speaker 13: Yeah.
34:53
Speaker 1: Well, yes, ragtag.
34:55
Speaker 6: And we know that Saudi Arabia has been a massive
34:58
Speaker 6: buyer of American weapons for a generation, Natasha.
35:03
Speaker 1: Does it know how to use them?
35:06
Speaker 11: I think it does. But I think, you know, I mean,
35:08
Speaker 11: not to the extent, obviously, of the U.S.
35:10
Speaker 14: Army, but the issue that we're seeing here and which
35:13
Speaker 14: is quite fascinating, actually, is that the Houthis in Yemen
35:17
Speaker 14: are overwhelming Saudi air defenses, which are using Patriot interceptors,
35:23
Speaker 14: with these drones, these just massive influxes of drones.
35:28
Speaker 11: And that's what we're seeing today.
35:30
Speaker 14: And so the fact that you can carry out this
35:32
Speaker 14: kind of asymmetric conflict in the Middle East for the
35:36
Speaker 14: foreseeable future is really something that we still haven't come
35:39
Speaker 14: to terms with. You know, the issue is even if
35:42
Speaker 14: there is some kind of barrage of missiles on Yemen,
35:46
Speaker 14: on the Houthis, then what? You know, I mean, the
35:49
Speaker 14: Houthis are an indigenous fighting force. They've been there for
35:53
Speaker 14: a very long time. They've been in control of Yemen's
35:55
Speaker 14: capital for a long time. And they continue to, you know,
35:59
Speaker 14: rear their heads at very strategic moments, especially this moment
36:04
Speaker 14: when they know that probably the U.S. president is is
36:08
Speaker 14: stuck with the midterm elections coming up as well. It
36:11
Speaker 14: almost seems like they're being strategic in how they're.
36:14
Speaker 11: Laying this out.
36:16
Speaker 6: It is fascinating to what extent our election cycle here
36:20
Speaker 6: seems to be motivating decisions on the other side of
36:23
Speaker 6: the world. You mentioned this campaign that Saudi Arabia launched
36:28
Speaker 6: in Yemen, along with Yemen, the the real government to
36:33
Speaker 6: do away with the Houthi militia, in fact, said that
36:37
Speaker 6: they would fight until they eliminate the group. I don't
36:40
Speaker 6: know if that's possible. You're suggesting I feel like maybe
36:43
Speaker 6: that that is not possible. But until and unless this
36:48
Speaker 6: group were eliminated, does the Babel Mandeb Strait remain the
36:51
Speaker 6: second choke point?
36:53
Speaker 14: I mean, this is the ultimate issue, and this isn't
36:55
Speaker 14: a new front. This has been going on for well
36:57
Speaker 14: over a decade. And you said the real government, that's
37:01
Speaker 14: the internationally recognized government, but that doesn't necessarily mean the
37:05
Speaker 14: government that's in control of the capital and government institutions
37:08
Speaker 14: and obviously the missiles that were left over from the
37:12
Speaker 14: old government that.
37:13
Speaker 11: The Houthis took over.
37:14
Speaker 14: I mean, this again is a group that really knows
37:17
Speaker 14: how to fight on the ground. They know the territory.
37:19
Speaker 14: They know how to dive in and out of caves
37:21
Speaker 14: to avoid... strikes from abroad, from other countries.
37:26
Speaker 11: And so what you.
37:27
Speaker 14: Would really need is ground troops, and no one's really
37:30
Speaker 14: willing to provide those. We've heard rumors about Syria providing mercenaries, essentially,
37:36
Speaker 14: but I am very, color me skeptical, let's say, about
37:40
Speaker 14: that happening. And then even then, you would have to
37:43
Speaker 14: hold that territory. And we've seen what that looks like
37:46
Speaker 14: in places like Afghanistan. So I think really what we're
37:50
Speaker 14: going to have to see is some kind of diplomatic
37:52
Speaker 14: solution to all of this. And we just haven't seen
37:56
Speaker 14: a lot of headway on that.
37:58
Speaker 6: Would that be separate from a diplomatic solution with Iran?
38:01
Speaker 6: Or you mean this entire region needs to see progress diplomatically?
38:05
Speaker 6: Because Iran is obviously biding its time here, and many
38:09
Speaker 6: think it's planning its next move to coincide with our elections.
38:13
Speaker 1: How about you?
38:15
Speaker 14: I think you hit the nail on the head when
38:16
Speaker 14: you said the entire region. None of these things are
38:20
Speaker 14: completely separate, right? I think the ongoing talks or lack
38:24
Speaker 14: of talks with Iran, Yemen, I think what we're seeing
38:28
Speaker 14: in Gaza, the West Bank, Syria, Lebanon, I think what
38:32
Speaker 14: we need to see is a stabilizing force in the
38:36
Speaker 14: United States actually being able to bring an end to
38:39
Speaker 14: the conflicts that it has leverage over. through its partner, Israel,
38:44
Speaker 14: but then also really trying to make feel secure the
38:48
Speaker 14: Gulf states and Gulf partners there and moving along with
38:53
Speaker 14: talks with Iran, either directly or through intermediaries. Because what
38:57
Speaker 14: we've seen is just one escalation over another and really
39:02
Speaker 14: no seeming end to all of this, which we're seeing
39:06
Speaker 14: in energy prices. But Ukraine is also feeling as well
39:10
Speaker 14: because If we have two carrier strike groups in the
39:14
Speaker 14: Middle East, or even three, and a lot of interceptors
39:18
Speaker 14: being used in one part of the world, Ukraine is
39:22
Speaker 14: at a loss too. So there needs to be some
39:24
Speaker 14: kind of geopolitical balance, balance of power, if you will,
39:29
Speaker 14: in some.
39:30
Speaker 11: Of these negotiations. And we really haven't seen that.
39:35
Speaker 6: You know, we've been mentioning the impact of our election
39:38
Speaker 6: calendar here. How about that in Israel? To what extent
39:42
Speaker 6: will that motivate Iran's next move and Israel's?
39:47
Speaker 9: Yeah.
39:47
Speaker 14: I mean, I think there's been a lot of talk
39:49
Speaker 14: about what's going to happen with Israeli elections.
39:52
Speaker 6: Our elections are just a week apart, right?
39:55
Speaker 11: The elections are just a week apart.
39:58
Speaker 14: But I think there's a little bit of dramatizing over
40:01
Speaker 14: what could actually change in Israel, especially with regards to
40:04
Speaker 14: these wars. It does not seem like opposition parties to
40:10
Speaker 14: Benjamin Netanyahu would change significantly in And so what really
40:15
Speaker 14: needs to happen is European countries, the regional countries, the
40:18
Speaker 14: United States needs to, on day one of whatever government comes,
40:23
Speaker 14: whatever coalition comes to power in Israel, have a set
40:27
Speaker 14: of demands in terms of what they need to do
40:31
Speaker 14: to win the goodwill of a world that really lacks
40:36
Speaker 14: goodwill when it comes to Israel at this point. Otherwise,
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Speaker 14: I just think we're going to see the same thing,
40:42
Speaker 14: regardless of what ruling coalition comes to power.
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Speaker 1: Natasha, we've just got a minute left.
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Speaker 6: The president has said he will not strike Iran before
40:52
Speaker 6: or until after the midterms. Obviously, something is going to
40:56
Speaker 6: be coming at that point in time. If that is
40:59
Speaker 6: the case, if the United States recommits itself to striking Iran...
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Speaker 6: Will Tehran respond to U.S. targets or maintain this asymmetric
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Speaker 6: approach where it strikes our allies in the region?
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Speaker 14: I think they'll probably do both, as they have for
41:17
Speaker 14: some time, because it's been effective. And I think, you know, unfortunately,
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Speaker 14: President Trump keeps laying all his cards out for everybody.
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Speaker 14: And so he did it once again by saying that
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Speaker 14: he doesn't want to get involved until after midterm elections.
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Speaker 14: And I think those in the region probably know that
41:33
Speaker 14: as well. And we'll be escalating, you know, as a result.
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Speaker 11: So remains to be seen.
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Speaker 14: But I would say that warring parties will use what's
41:44
Speaker 14: worked in the past.
41:47
Speaker 6: From Chatham House, Natasha Hall, it's great to see you
41:49
Speaker 6: and have you back. Thanks for listening to the Balance
41:55
Speaker 6: of Power podcast. Make sure to subscribe if you haven't already. Apple,
42:00
Speaker 6: Spotify or wherever you get your podcasts. And you can
42:03
Speaker 6: find us live every weekday from Washington, D.C. at noontime
42:06
Speaker 6: Eastern at Bloomberg.com.