June 20, 2025 • 38 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
US President Donald Trump signaled he would give diplomacy a chance before deciding whether to strike Iran, dialing back on recent comments that suggested military action could be imminent.
“Based on the fact that there’s a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks,” Trump said in a dictated message, according to White House spokeswoman Karoline Leavitt. Iran maintained Friday it won’t negotiate with the US while an Israeli assault continues. The only way to end the imposed war is to “unconditionally stop” the enemy’s aggression, Iranian President Masoud Pezeshkian said Friday in a post on X.
Oil prices fell following a report from Reuters that Iran is ready to discuss limitations on nuclear enrichment, but will not consider stopping entirely. That puts the country’s leadership at odds with Trump, who has called for zero enrichment.
Israel launched its surprise attack on Iran a week ago, saying the threat of its sworn enemy acquiring nuclear weapons had to be neutralized. While that goal hasn’t been fully met, the Islamic Republic’s military capabilities have been degraded and a number of its top generals and atomic scientists have been killed. Iran has struck back at Israel with waves of ballistic missiles and drones, and there have been heavy casualties on both sides.
Trump, who is scheduled to attend a national security meeting in the Oval Office on Friday, has publicly mused for days about the US joining the fray. His latest stance signals a step back after a run of tough rhetoric, including demands for Tehran residents to relocate and threats toward Iran’s Supreme Leader Ayatollah Ali Khamenei, and his early departure from this week’s Group of Seven summit in Canada to return to Washington.
Today's show features:
- Dan Williams, Reporter for Bloomberg News Based in Jerusalem, on life in Israel given the Israel/Iran War
- Alex Vatanka, Senior Fellow at the Middle East Institute on life in Iran
- John Erath, Senior Policy Director for the Center for Arms Control and Non-Proliferation on Iran's nuclear ambitions
- and Peter Atwater, President of Financial Insyghts on the overall US macro environment
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:08):
This is Bloomberg Business Weekdaily reporting from the magazine that
helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business, finance
and tech news as it happens. The Bloomberg Business Weekdaily
Podcast with Carol Masser and Tim Steneveek On Bloomberg Radio.
Speaker 3 (00:32):
It's Friday. Talks aimed at de escalating the week long
war between Israel and Iran got underway in Geneva today.
This is after US President Donald Trump signaled he would
give diplomacy a chance before deciding whether to intervene militarily. Now,
oil prices did fall following a report from Reuter's earlier
that iron is ready to discuss limitations on uranium enrichment,
(00:53):
but will not consider stopping entirely while it's under military attacks.
And Tim, we know that these attacks have continued.
Speaker 1 (01:00):
Yeah for the latest, Let's head to Jerusalem, where we
find Bloomberg News reporter Dan Williams joining us from there
just after nine pm in the evening. Dan, when we
spoke to you earlier this week you were in London.
You told us that you weren't expecting to be in
London that long. You've obviously made it back to Jerusalem.
The airport does not have normal traffic right now, difficult
(01:22):
to get in and out. Just give us an idea
of how you made it back from London to Jerusalem.
Speaker 4 (01:27):
Hi, good afternoon.
Speaker 5 (01:28):
Yes, as you noted, the air space is closed around Israel,
not just Israel. Other countries in the Middle East are
also taking that precaution, given how busy the airspace is
with wallplanes and missiles going back and forth. These rallies
have started opening up the skies, but only for select
returning Israelis. There's some one hundred and one hundred and
(01:49):
fifty thousand on abroad, so basically, as a workaround, I
was sent back overland through Egypt, flown from London to
Charmel Scheff, which is a famous result on the Red
Sea in the Egyptian Sinai. It added a number of
hours to the trip. Overall a pleasant trip. There are
a few hiccups there, but that's pretty much what we're
seeing across the board.
Speaker 4 (02:09):
Overland travel through Egypt, through Jordan.
Speaker 5 (02:12):
Back and forth by those who are unable or unwilling
perhaps to take what limited air options there are right now.
Speaker 3 (02:18):
Sounds pretty difficult. It's pretty tricky having gotten back home,
I'm assuming it's pretty difficult to see some of what
was around you. But tell us about what is life
like in Jerusalem today?
Speaker 4 (02:29):
Well, since you ask, I'll share with you.
Speaker 5 (02:31):
A couple hours ago, we actually had a sirens across
the country. There was a volley of some thirty missiles
from Iran.
Speaker 4 (02:39):
They set off as a precaution.
Speaker 5 (02:41):
These really sirens everywhere, and I got to join my
family in the communal bomb shelter, a place I hadn't
experienced previously, along with a number of neighbors, some of
whom I hadn't met previously. But that really has been
the daily experience here across the country, certainly in my
neighborhood and in my block, including in the early hours
of the night when some.
Speaker 4 (02:59):
Of these attacks have taken place.
Speaker 5 (03:01):
Basically a very sophisticated early alert system that gives you
a few minutes to organize yourself and then with the
sirens sound to tell you that the missiles are in
course potentially to strike where you are. That gives you
a few more seconds, a couple more minutes to find
shelter in a bomb shelter. People aren't taking chances they
might have taken shelter at home previously. They're all going
to these underground shelters provided by the municipality, by the country,
(03:25):
because as we've seen, the destruction wrought by those missiles
that have managed to penetrate Israel's air defenses has been substantial.
Speaker 1 (03:32):
Dan, I'm wondering about, not just anecdotally, but what the
numbers tell us about Israeli citizens you have been mobilized
to serve in this specific conflict versus just the ongoing
war in Gaza. Obviously there's been a lot of disruption
to the economy as a result. We're bloomberg. We focus
on the numbers, We look at the economies a lot
here and get an understanding of what the bigger impacts
(03:53):
of these events can be. What can you tell us
about just Israeli citizenry right now, who has been called
up to serve what has been disrupted? Just give us
an idea.
Speaker 4 (04:04):
That's an excellent question.
Speaker 5 (04:05):
But it's worth remembering this Israeli Iranian war, it's not
just a war in its own right. It's actually the culmination,
the cresting of a more than two month old war
that began with a Hamas attack on Israel on October seventh,
twenty twenty three.
Speaker 4 (04:17):
You recall that in the.
Speaker 5 (04:18):
Early days of that war, we're talking more than twenty
months ago now, Isran listed some three hundred thousand reservists
that were mobilized. That took a big chunk out of
the economy. You literally saw shops shutting down entire malls,
not just as a precaution against rocket attacks, but simply
because shops were short staffed. Anyone between the age of
twenty one thirty five had a very good chance of
(04:39):
being in uniform at that point, many people leaving their
families behind their careers, and that was very disruptive. As
that war made progress, Gaza.
Speaker 4 (04:47):
Was largely overrun.
Speaker 5 (04:48):
Many of the soldiers were demobbed, allowed to return home.
This war with Iran is mainly being fought by the
air force, which you can assume is fully mobilized. We're
talking two hundred warplanes just in the first waive, dozens
of warplanes every day in various places, and not just
the run.
Speaker 4 (05:04):
We've had air strikes.
Speaker 5 (05:05):
In Gaza today and in Lebanon, potentially patrols in Syria
as well. I don't have the numbers for air force deployment,
whether it's standing military or reservists. I know it's probably
lower than the ground forces which have been deployed in
far smaller numbers. Are four divisions now active in Gaza.
And of course his Home Front Command, which is basically
(05:25):
a military version of a civil defense force. Its responsibility
is to handle emergencies on the home front, dig people
out of rubble, provide first aid and such.
Speaker 3 (05:35):
Dan US President Donald Trump signal he would give diplomacy
a chance before deciding whether to intervene militarily in the
war between Israel and Iran. How is that being received there?
Speaker 5 (05:49):
Well, if you notice to the mood, if you notice
the mood music from Israeli statements. Since that announcement was
weave by the White House, there's a tendency among his Raelies.
We've commented on this to perhaps try to persuade the
President to decide in favor of military intervention, at least
when it comes to bombing. For DOEU the famous now
underground deep underground uranium and Richmond site the Ranians have.
(06:09):
It's so deep underground in a mountain that is really
firepower may.
Speaker 4 (06:13):
Not be enough to reach it.
Speaker 5 (06:14):
It may be a job that can be left only
to the American Air Force with the famous Mother of
All bombs, thirty pounds that would be dropped from a
B two, and I think these rallies openly want that
to happen. Failing that, they say they can manage the
job alone. It's a difficult job, but they say they
can manage it alone. The question is how long the
Uranians can keep up their retaliatory missile attacks. It would
(06:36):
appear those are tapering off. Today we had something in
the order, as I said, of thirty missiles, whereas in
the opening weekend five days ago as an average of
about one hundred missiles on every twenty four hour cycle.
Speaker 4 (06:48):
So that seems to be dropping off.
Speaker 5 (06:49):
These really says as a result of their preemptive attacks
against launchers.
Speaker 4 (06:53):
I think we will know more at the end of
this weekend.
Speaker 5 (06:57):
Especially as the Uranians are apparently holding stop gap talks
with European powers now in Geneva, perhaps to find a
way back to diplomacy, which would satisfy Trump, indirectly satisfy Israel,
and perhaps bring this story to a close.
Speaker 1 (07:10):
Dan, you mentioned that if the US does not get
involved with the massive thirty thousand pound bunker buster bomb.
Israel could handle this itself. How would they do that?
What's the reporting telling you?
Speaker 4 (07:25):
Obviously this strict military secrecy.
Speaker 5 (07:27):
I don't know, but the Israelis insist, including skeptical ex
generals who say they've been briefed on this, that it
is possible. The two things that come to mind are
a simply sustained bombing. At one side. It's worth remembering
back in September, Israel killed the chief of Masrella, the
chief of Hesboala, Hassan Masralla.
Speaker 4 (07:44):
He was in a.
Speaker 5 (07:45):
Bunker underneath a residential building by then largely vacated, something
like twenty meters underground, with a multi story building above him.
Speaker 4 (07:52):
What these Raelies did was drop fifty.
Speaker 5 (07:54):
Four bombs, bomb off to bomb off, the bomb basically
deepening the cradle until he was reached. In theory, the
same thing could be done on a much larger scale,
much more sustained, with Foudeau.
Speaker 4 (08:04):
Keep in mind, these really.
Speaker 5 (08:05):
Say they have complete dominance of the Iranian sky, so
in theory there'd be no problem with them going back
and forth with their smaller airplanes smaller delivery payloads and
simply do it for days and perhaps weeks until they
crack that nut. The other possibility is a ground forces
operation commandos who would penetrate it and literally go floor
to floor, destroying anything they come across, blowing up, engaging
(08:27):
whatever personnel.
Speaker 4 (08:28):
There are down there.
Speaker 5 (08:29):
There is a precedent also from last summer where Israel
did this with an underground HESBLA facility in Syria.
Speaker 4 (08:35):
That might serve as a tactical precedent.
Speaker 3 (08:37):
All right, Dan, gonna leave it there. We know it's
late there in Jerusalem. Appreciate being able to touch base
with you. Do stay safe, thinking about you, your family,
and certainly your community. Bloomberg News reporter Dan Williams.
Speaker 2 (08:48):
There in Jerusalem, you're listening to the Bloomberg Business Weekdaily podcast.
Catch us live weekday afternoons from two to five pm
Eastern Listen on Apple CarPlay and Android Auto with the
Bloomberg Business This Act, or watch us live on YouTube
and folks.
Speaker 3 (09:04):
It is an economy battered by years of trade embargos,
sanctions and endemic mismanagement. We're talking about Iran and that Israeli.
In Western intelligence assessment seen by Bloomberg suggested that the
war could lead to an economic collapse in Iran an
inflation of eighty percent if not higher now. According to
this report, it would likely result in social discontent and
(09:25):
challenging of the stability of the ruling regime.
Speaker 1 (09:29):
Tim Yeah, we wanted to talk really about the daily
existence of Iranians right now and how it shifted really
over the last fifty or so years, specifically the last
fifteen years. The challenge is about life and Iran for
its citizens who are currently under attack, their challenges, and
what they're experiencing. To help us understand that, Alex Watanka's
back with a senior fellow at Middle East Institute. It's
(09:51):
an organization with the mission to quote increase knowledge of
the Middle East among citizens of the US and to
promote a better understanding between the people of these two areas.
Organization has received funding from various sources, including corporations, foundations
in various Middle Eastern governments such as the UAE and Qatar,
as well as the US government. Alex joins us once
again from Washington, DC. Alex, We've spoken to our reporters
(10:15):
on the ground in Israel. We haven't been able to
do the same for people on the ground in Tehran
and other parts of Iran. We wanted to speak with
you. You were born there, You're still in touch with people
throughout the country. Can you give us an understanding of
what life is like day to day right now?
Speaker 6 (10:32):
Yeah, Tim and Kerret great to be back with you. Look,
you're right, I mean, I obviously that's my day job
trying to track what's going on in the country of Iran,
but the last few days actually being very hard. With
some exceptions, Internet is essentially no longer accessible. The authorities
believe the Israelis are using access to the Internet for
their operations against the Iranian regime.
Speaker 4 (10:54):
The other way of looking at it.
Speaker 6 (10:56):
Is maybe the Urdian authorities are concerned about public mobilization.
There is for sure a lot of messaging going into
Iran from the large Iranian diaspora, which is vastly anti regime.
So there's a very lively debate outside of Iran among
Iranians across the world that what should what would be
(11:16):
best for the country. There are those who are saying
regime change is the opportunity right now, but there are
also many who are skeptical in saying, actually, we don't
know if regime change is the outcome. It could be
civil war, it could be something worse. So let's take
it take it easy.
Speaker 3 (11:31):
Here, well, Alex, what I want to also do is
take a step back, and what has life been like
under the Ayatola, who has been raining for what some
thirty six years? What has life been like for Iranians
before this attack?
Speaker 4 (11:45):
So, Carol, I mean, let me.
Speaker 6 (11:48):
Let me just remind everybody that Iran had a revolution
in nineteen seventy nine and Iola Bomani and his people,
including the one who's the supremetor today.
Speaker 4 (11:58):
Haminy took all over.
Speaker 6 (12:00):
And if you asked the seventy five percent of Iranians
who were born after that revolution, they will tell you
life has not been pretty because it's been a very
repressive regime across the board. It's been domestically repressive, and
it's been very adventurous, ideological, stubborn and in terms of
its foreign policy and the reason why we're seeing this
(12:21):
war happen. And again, let's put aside if Israel was
justified to attack Iran or not last week, that's a
separate issue. But the fact that this Islamic republic for
so long has been sort of taunting the Israeli saying
you don't have a right to exist and so on.
Speaker 4 (12:35):
So a lot of.
Speaker 6 (12:35):
Iranians are asking, you know, we don't like what Israel's
doing to Iran right now. But at the same time,
you're not exactly innocent. You asked for this, you will
taunted them life.
Speaker 3 (12:44):
Well, well, I guess what I'm but what is life like?
What does the average Iranian make? What is their existence
like in terms of a home, food on the table,
what is that like?
Speaker 6 (12:57):
So it's a medium sized economy, I mean, should have
been a top twenty economy if they weren't under sanctions.
They should be the size of Turkey, if not bigger,
because Iran, and like Turkey, is a lot of oil
and gas. So very educated population of ninety million, pretty significant,
industrial based, agriculture based. Again, a lot of you know,
parts of the economy. I mean the idea it's oil
(13:19):
and oil, it is not true. It's much more multifaceted
than that. But sanctions have really had a great impact
on life. So, you know, one of the headlines for
your average Uranian in terms of life is there are
no jobs. Inflation is rampant, there's repression, there is isolation,
So what do a lot of Iranians do look for
a way out. Immigration has become basically the way out.
(13:41):
That's why you have this large diaspora around the world,
not because people want to leave their homes, but because
the opportunities just don't exist in Iraq.
Speaker 1 (13:49):
What has been the resistance to the government and how
is that proliferated or not since two thousand and nine, there's.
Speaker 6 (13:58):
Always been resistance, going back to nineteen seventy nine, has
it been always an effective resistance? That's the big question
mark To this day, we have a large Iranian political opposition,
but it's not united.
Speaker 4 (14:09):
There's a lot of.
Speaker 6 (14:10):
Energy there, but they haven't agreed on an agenda in
terms of the day after. So you have the shaw Son,
who is obviously very well known here United States. He's
on TV quite a bit. He is the most prominent figure.
He has an agenda. He wants to sort of transition
Iran out of the Islamic Republic into something else. I
have heard him personally many times.
Speaker 4 (14:28):
I think he has got some great ideas.
Speaker 6 (14:30):
I do have question marks what he can unify the
diaspra in terms of the day after in Iran. I
have also the question in terms of whether he can
unify the folks in Iran. I mean, that's where the
battle is going to be. It's not the Diastra, it's
those ninety million Iranians.
Speaker 4 (14:45):
Where are they're going to come lead them?
Speaker 6 (14:47):
That's the big question mark ahead for the opposition.
Speaker 1 (14:50):
The reason I asked specifically about two thousand and nine
is because of the protests following the election in Iran,
the presidential election, and my understanding has been that there
has not really been you know, there was a sense
of unification there, but that was pretty quickly quashed and
since then nothing really has emerged.
Speaker 6 (15:10):
So two thousand and nine is not the only time
a team that people came in the streets. You have
many other examples going back to ninety nine, and even
before two thousand and nine was significant a couple of reasons. One,
it happened two years before the Arab Spring, so the
Iranians were ahead of the Arabs in terms of coming
out in the streets.
Speaker 4 (15:29):
But the other part of the two.
Speaker 6 (15:30):
Thousand and nine uprising in Iran was because part of
the regime came to the street, So it wasn't just
people from the street ordin Iranians. It was part of
the regime that came out against back then in that election,
Mahmod Ahmadinejad. If you remember that, fella, but two thousand
and nine, you've had plenty of protests. I mean the
largest ones just happened a few years ago in twenty
(15:51):
twenty two with the Massa Amani, the young Iranian woman
who was killed just because she wasn't wearing her headscarf,
which is by law mandatory in it. She was killed
for that, which, by the way, just raises another issue.
Imagine living in a society where you can decide what
your dress code will be. So this is a regime
that's lost its people a long time ago. The question
(16:13):
is do they have time to catch up. They're trying,
They're just trying to play the nationalist card. I wonder
if it's too late, if they can stay in power.
Speaker 3 (16:21):
What do the people want and what does the region want?
And forgive me, but just got about forty seconds here,
what kind of an Iran do they want going forward?
Speaker 6 (16:29):
Yeah, that's a no brainer. People won the end of
the Islamic Republic. That's a no brainer. And I think
that's true for the rest of the region. Nobody wants
the Islamic Republic. The big question market at what costs?
And can it be done in a different way other
than bombs dropping in their heads? Because people remember Iraq,
they remember other cases of civil wars in the region.
So that's the big challenge for American policy makers, Europeans
(16:50):
and others who trying to steer this situation forward.
Speaker 3 (16:53):
If the US doesn't get more involved, can it be
can better change come to Iran again? Just got about
twenty seconds, big question.
Speaker 6 (17:02):
Mark, But look, my bottom line is this, It's for
the people of Iran to decide their destiny. US can
help them, but us right now I don't see the
appetite getting involved in a big way.
Speaker 3 (17:10):
All right. Good to leave with there, Alex, thanks so much,
Have a good weekend. Save fun Alex Vedonka. He's senior
fellow at the Middle East Institute. When we come back
and check out.
Speaker 2 (17:19):
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Speaker 3 (17:37):
As the world waits to see what happens in terms
of the US role in the war between Israel and Iran,
whether or not there will be more of a role,
the latest evidence from the ground does suggest that they
would need to significantly escalate attacks if they want to
eradicate the Islamic Republic's nuclear capabilities. Now, satellite images, there's
(17:57):
this incredible story on the Bloomberg Highly recommend that you
check it out at on the Bloomberg terminal or at
Bloomberg dot com. But these satellite images essentially tim show
that atomic installations were only grazed after four days of bombardment.
Speaker 1 (18:11):
The Israeli ron conflict comes down largely to nuclear capabilities,
who has it, who wants it, and perhaps who needs
it to keep world order without actually disrupting it with
US is John Eirath, Senior policy director for the Center
for Arms Control and Non Proliferation. It's a nonpartisan nonprofit
that's dedicated to reducing and eventually eliminating the threats posed
(18:33):
by nuclear, chemical, and biological weapons through congressional engagement and
public education. John, good to have you with us this afternoon.
Appreciate you joining us on the program. Your specialty is
thinking about these weapons in the context of getting rid
of them, and I'm wondering over your career where we
(18:53):
are given a world in a world right now when
it comes to non proliferation of these weapons.
Speaker 7 (19:02):
Well, it's a mixed story. Since the Cold War, about
eighty percent of the nuclear weapons that ever existed have
been eliminated. But right now we see the pendulum swinging
a little bit in the other direction, where the nuclear
weapons are given a little bit more currency, where you
see proliferators such as North Korea and Iran putting more
(19:27):
emphasis on possessing those weapons and giving a little more
important students. So, what is going to happen in the
next few weeks and months, particularly with regards to Iran
is going to have a significant impact on how these
weapons are viewed in the future and what the world
is going to look like and how the world is
(19:47):
going to think about them.
Speaker 3 (19:49):
You know, my follow up was going to be, but
I feel like you've answered it. You know, are we
indeed on the cusp of what could be a very
very serious turn for the worse when it comes to
nuclear proliferation. It sounds like you are saying yes, depending
on how this plays out.
Speaker 7 (20:04):
Absolutely, if Iran it is allowed to acquire nuclear weapons.
If they are, if they're perceived coming out of this
conflict as becoming significant in the currency of international politics,
then there are going to be other governments that are
(20:25):
going to want to follow suit. There's also the case
of Uprussia and Ukraine. Russia has been using threats of
nuclear weapons to advance its objectives regarding Ukraine, particularly with
the nuclear blackmail that it has been conducting. It's been
making threats with nuclear weapons pretty much every Tuesday since
(20:47):
the war in Ukraine began in twenty twenty two to
keep Western nations from supplying arms and ammunition to Ukraine,
to withhold to limit what they apply to the Ukraineans,
and it's been very effective. Countries such as North Korea
are paying attention to this. Then they're looking for their
own means of nuclear blackmail. If Russia comes out of
(21:10):
this war perceived as having succeeded and retaining its objectives
through nuclear blackmail, other countries, starting with Kim John Loon,
are going to take.
Speaker 3 (21:18):
Notice, okay, and forgive me if this sounds naive. The
US is the only nation right to have ever actually
used nuclear warfare weapons, I should say in warfare. So
having said that, why is it? Again? Forgive if this
sounds naive, but why is the US allowed to have
nuclear weapons and other nations versus an Iran or North Korea?
(21:43):
Is it just because we believe in the control and
the safety and that they actually won't be used, considering
the US is been the only one who used it? Like,
help me understand this.
Speaker 7 (21:57):
I think if you ask that question of a number
of different US leaders, you would get a number of
different answers. I used to work for the US government.
If my answer would be that having used nuclear weapons,
I think that I would say that for the US,
I would say I would wish that we hadn't and
(22:21):
having nuclear weapons, I would say that I would hope
that the US would never be in a position to
use them again. The official US nuclear policy, as expressed
in the Nuclear Pasture Review that was done most recently
by the Biden administration, but basically repeating language from the
(22:41):
Trump administration and from every administration previous to that, was
that the US nuclear weapons are for defense and deterrence,
not for offensive use, but basically to protect against somebody
else using nuclear weapons against US, and that has been
very much much the policy of US administration since the Pole.
Speaker 3 (23:03):
And we should remind everyone who's listening we're talking about
John Rath, Senior policy director for the Center for Arms
Control and Non Proliferation. It's a non powerson, nonprofit. John
has worked with the government some thirty years in arms
control and non proliferation, and most recently a two year
assignment with the US National Security Council. So this guy
understands it certainly from the inside.
Speaker 6 (23:24):
John.
Speaker 1 (23:24):
A lot of our conversation is focused on iron We
mentioned North Threia there, but I want to hit on
Russia a little bit because there seems to be, at
least within the international community, a tolerance for Russia having
nuclear weapons that does not extend to other countries that
are not necessarily allies currently of the United States. I
know there's a lot of history here with the Cold
War and also the agreements post Cold War that the
(23:45):
US and Russia have with one another to prevent the
proliferation of nuclear weapons. But why do you think the
international community tolerates Russia having nuclear weapons.
Speaker 7 (23:55):
I think it's a case of familiarity Russia inherited the
nuclear weapons from the Soviet Union. Three other countries did
as well, Ukraine, Kazakhstan, Belarus, and there was a concerted
effort made led by the United States in the early
days following the Cold War to return all of those
(24:18):
weapons to Russian control. This was one of the highest
priorities of the Clinton administration back in the early nineties,
and it was a case where it was seen as
Russia being the responsible steward for these weapons, and it's
seen as being a more desirable outcome than proliferating nuclear
(24:38):
technology through three more countries.
Speaker 4 (24:41):
That was seen as putting a.
Speaker 7 (24:45):
Chink in the wall and allowing more countries to have
nuclear weapons and possibly leading to greater proliferation in other places.
What nowadays would look back at that and say, maybe
that wasn't a good idea, But that was very much
spirit of the time.
Speaker 3 (25:03):
We mentioned in our lead up to you a great
read on on the Bloomberg about the satellite images that
reveal that President Trump's dilemmo over the Iran nuclear complex.
You know, there's a lot more that needs to be done.
What do we know about the damage that really has
been done so far to nuclear's the nuclear capabilities by iron,
(25:24):
and especially when it comes to non civilian uses, what
do we know about that?
Speaker 8 (25:27):
In particular, what we know is that Iran has been
enriching uranium levels that are not necessary for anything but weapons.
Speaker 7 (25:40):
That is to say, there is no civilian there is
no benign reason doing rich uranium to the levels that
Iran has been. This is what is god Israel upset. Israel, however,
has chosen use military means to address this issue. It
is possible that Israel may be able to significantly degrade, destroy,
(26:07):
disable Iran's enrichment facilities. It may be possible that should
the US become involved, the US may be able to
do more than Israel to destroy or degrade these enrichment facilities.
But that is actually besides the point, because Iran can
simply rebuild. It may be with considerable expense and considerable effort,
(26:34):
but they can rebuild. They built them once, they can
do it again. Maybe it will be better and more
difficult to destroy the next time, but it can be rebuilt,
so the military effort is all more or less a waste.
It's only through diplomacy and diplomatic effort that we can
(26:57):
get through a permanent solution in this case. Now you'd
expect that from me. I'm a career diplomat. When you
interview a somebody who has born a uniform for thirty years,
he's going to talk about the military needs as being
the only way forward, the only solution. But you're talking
to a diplomat, so I'm going to feature the diplomatic needs.
Speaker 1 (27:18):
What is the diplomatic solution, then, what, in your view,
would actually stop Iran from wanting and being able to
achieve a nuclear weapon?
Speaker 3 (27:27):
And did we have it? The deal that President Trump
pulled out of in twenty eighteen, the deal.
Speaker 7 (27:36):
That was done in twenty fifteen basically blocked the pathway
to nuclear weapons for Iran, and it had a robust
verification mechanism so that we would know if Iran was cheating,
we would know if Iran was doing something.
Speaker 4 (27:54):
That they weren't.
Speaker 7 (27:55):
Supposed to the problem with it was that it had
a ten year sunset provision, so under certain circumstances, after
ten years to say now twenty twenty five, Iran could
resume enrichment activity. And the Trump administration, the first Trump administration,
didn't like that and tried to renegotiate, got a cold
(28:18):
shoulder from Iran and from the Europeans.
Speaker 8 (28:22):
And.
Speaker 7 (28:24):
Decided at that point, rather than to try to fix
that problem or do anything else, make another effort to
pull up. So I think you would start with something
along those lines. But without that sunset provision, certainly you
could bring back most of the elements of the verification
(28:47):
provisions in the IaaS of provision and the confidence that
gave that Iran was not conducting these activities.
Speaker 3 (28:57):
Not easy, not easy at all. Thank you so much,
Really appreciate getting some time with you on this Friday.
Speaker 6 (29:04):
John Earth.
Speaker 3 (29:05):
He is senior policy director for the nonpartisan Center for
Arms Control and Non Proliferation. Joining us there in New Jersey.
Speaker 2 (29:13):
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
live weekday afternoons from two to five pm Eastern Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 1 (29:28):
Bettle Reserve Governor Christopher Waller said the Fed can lower
interest rates as soon as next month, reiterating his view
that the inflation hit from tariffs is likely to be
short lived. Here's Governor Waller earlier today on CNBC.
Speaker 9 (29:43):
Right now, the data of the last few months has
been showing that trend inflation is looking pretty good, even
on a twelve month basis. So I've labeled these good
news rate cuts when if inflation comes down to target,
we can actually bring rates down. I've been saying this
since about November of twenty three, so I think we're
in that position now. We could do this and as
(30:06):
early as July.
Speaker 1 (30:07):
That's Chris Waller earlier on CNBC, I said short lived.
That was my homage to j Powell. Okay, he says
short lived.
Speaker 3 (30:16):
Hey, if Jay does it, I'm good with us.
Speaker 1 (30:19):
That's what I'm thrown out there.
Speaker 3 (30:19):
I'm totally good with it. Hey, Peter at Order is
back with us. He's president of Financial Insights, adjunct lecturer
of economics at the College William and Mary, also author
of the book The Confidence Map, Charting a path from
Chaos to Clarity. He joins us from just outside for Philadelphia.
It feels like right now is a perfect time to
talk about what feels like again from chaos or a
(30:41):
moment of chaos. Peter, it's good to have you back
with us. I am curious about as we try to
game out the stuff that happens around US geopolitically, Tara
wars and so on, is all of this kind of
a fool's errand in terms of trying to figure out
what really is the impact ultimately on markets and how
(31:04):
to price it in.
Speaker 10 (31:06):
Well, Carol, thanks for having me today. And social media
would certainly lead you to believe that there's a whole
new meme out there called nothing ever happened.
Speaker 4 (31:17):
And it seems to.
Speaker 10 (31:19):
Be the belief that whether it's Tariff's, COVID, geopolitical events,
none of it matters. And the fact that it's arising
now strikes me as a really interesting moment. It sadly
reminds me of this what the Turkey might say around
the beginning of November, nothing ever happened. And I think
(31:41):
that's the risk that not only are investors complacent, but
I sense that there's a they're acting with impunity. And
I see this in several dimensions where investors don't believe
that there will ever be punishment, that there is now
(32:04):
no downside to trading.
Speaker 1 (32:07):
What do you mean by that, though, because is it
because the FED steps in? Is it because the US
government steps in? What's the put.
Speaker 10 (32:16):
So that the it's a combination of puts. One is
you've had repeated success where the markets have only gone
up in their minds for the last ten to fifteen years.
You have policymaker puts on both the fiscal and monetary
policy side. You also have this belief that the regime
(32:38):
politically is not particularly willing to go against the market,
in fact, just the opposite. So you had the taco trade,
and you have a sense that while we may skirt
the rules, there will never be any punishment for doing so.
Speaker 3 (32:57):
You know, it's interesting, Peter, I keep thinking about this too,
and I have to say, we know tariffs are going
to be higher, right on some level. We know supply
chains are continuing to be rebuilt and brought back here.
If immigration and the clamp down on immigration continues less workers,
(33:20):
that's going to have a cost. It does sound like
there are a lot of factors that go into the
US economic equation that there's a good chance they're going
to be different going forward.
Speaker 10 (33:30):
They will be, But one of the things we know
is that when we look at risks, if they are
abstract to us, we will find ways to avoid them.
And so what I sense is that tariffs just like
COVID still remain abstract. People haven't experienced the consequences, and
(33:52):
so until we get that, we can find all of
these reasons to ignore it. But having said that, what
is so interesting about this moment is that people are
looking at these risks in the eye and laughing at them.
There's almost a there's a belligerent response to them that
(34:12):
they're not going to matter.
Speaker 1 (34:13):
Move on, Peter, you joined us in March, and one
answer that you gave to a question that we had
for you really ricochet around. A lot of people ended
up watching the clip on YouTube. You said there was
a clear possibility that the US becomes uninvestable under President Trump.
Is it more likely now or less likely now than
(34:35):
it was to you back in March?
Speaker 10 (34:38):
It's less likely now, but I know that from a
particularly foreign investor perspective, there is still apprehension about how
welcome they and their money are here. And if I
look at what happens in immigration and trade, we have
(35:03):
started to see clear controls, and so we know that
our policies related to labor, goods and services and capital
all move is one. And so I think that there
is still concern and I think appropriately so around what
happens to capital flows in all of this.
Speaker 3 (35:26):
So let's just bring it back to one of the
big events of the week, and that is FED policy.
And we did play some sound from Governor Waller Fed
Governor Waller who was on CNBC earlier today and then
talking about maybe there could be some moves in July.
Do you think that, I don't know, how are you
thinking about monetary policy FED monetary policy and how they
are kind of trying to figure out what is the
(35:48):
right policy here and kind of factoring in all of
these things that you're talking about.
Speaker 10 (35:54):
Yeah, so that the FED, in their desire to be
data dependent, feels compelled to wait until things are real,
and so there is reluctance on the part of many
participants at the FED to act until they see the results.
Having said that, I would keep an eye on the tenure.
(36:17):
The tenure ultimately is going to be what leads policymakers
to move up or down. And right now you've got
they would appear to have the ability to lower rates
some you know what that really means. We'll wait and see,
(36:37):
but their trend following at the end of the day,
you know, the markets will always move faster than a
bureaucratic committee in Washington.
Speaker 1 (36:47):
Always, Peter, before we let you go on the INVESTI
on what is investible right now? Listener Ryan Horan getting
in touch, asking about your alternatives away from US markets
when Europe came and grow in his view his views
also that Asia is likely intercession. He wants to know
where do you invest for capital appreciation?
Speaker 10 (37:08):
So I think you have to look at commodities in
this environment. You know, one of the things we know
is that when you.
Speaker 4 (37:17):
Start to.
Speaker 10 (37:19):
Encumber trade, you run the risk of goods in the
wrong places, and commodity prices responding to that on a
local basis. And when I look particularly around food inputs,
you look at rice prices for example, we can look
at current oil prices. I think that the risk is
(37:41):
in real acid prices.
Speaker 3 (37:44):
All right, Really appreciate it, Peter, Thank you so much
as always. Peter Atwater, President of Financial Insights, adjunct lecturer
of Economics at William and Mary. Joining us from outside Philadelphia.
And of course we've also talked about his book, which
we have talked about here on air. It is the
Confidence Map, Charting a path from Chaos to Clarity. Appreciate
(38:05):
his input on so much again coming at us. He
mentioned the ten year note. Folks, we're looking at a
yield to four to thirty seven. We've seen it spike
up a little bit earlier in today's session, but we're
definitely off some of the earlier higher levels to your
note with the yield of three point nine.
Speaker 2 (38:23):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
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(38:43):
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Speaker 2 (00:08):
This is Bloomberg Business Weekdaily reporting from the magazine that
helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business, finance
and tech news as it happens. The Bloomberg Business Weekdaily
Podcast with Carol Masser and Tim Steneveek On Bloomberg Radio.
Speaker 3 (00:32):
It's Friday. Talks aimed at de escalating the week long
war between Israel and Iran got underway in Geneva today.
This is after US President Donald Trump signaled he would
give diplomacy a chance before deciding whether to intervene militarily. Now,
oil prices did fall following a report from Reuter's earlier
that iron is ready to discuss limitations on uranium enrichment,
(00:53):
but will not consider stopping entirely while it's under military attacks.
And Tim, we know that these attacks have continued.
Speaker 1 (01:00):
Yeah for the latest, Let's head to Jerusalem, where we
find Bloomberg News reporter Dan Williams joining us from there
just after nine pm in the evening. Dan, when we
spoke to you earlier this week you were in London.
You told us that you weren't expecting to be in
London that long. You've obviously made it back to Jerusalem.
The airport does not have normal traffic right now, difficult
(01:22):
to get in and out. Just give us an idea
of how you made it back from London to Jerusalem.
Speaker 4 (01:27):
Hi, good afternoon.
Speaker 5 (01:28):
Yes, as you noted, the air space is closed around Israel,
not just Israel. Other countries in the Middle East are
also taking that precaution, given how busy the airspace is
with wallplanes and missiles going back and forth. These rallies
have started opening up the skies, but only for select
returning Israelis. There's some one hundred and one hundred and
(01:49):
fifty thousand on abroad, so basically, as a workaround, I
was sent back overland through Egypt, flown from London to
Charmel Scheff, which is a famous result on the Red
Sea in the Egyptian Sinai. It added a number of
hours to the trip. Overall a pleasant trip. There are
a few hiccups there, but that's pretty much what we're
seeing across the board.
Speaker 4 (02:09):
Overland travel through Egypt, through Jordan.
Speaker 5 (02:12):
Back and forth by those who are unable or unwilling
perhaps to take what limited air options there are right now.
Speaker 3 (02:18):
Sounds pretty difficult. It's pretty tricky having gotten back home,
I'm assuming it's pretty difficult to see some of what
was around you. But tell us about what is life
like in Jerusalem today?
Speaker 4 (02:29):
Well, since you ask, I'll share with you.
Speaker 5 (02:31):
A couple hours ago, we actually had a sirens across
the country. There was a volley of some thirty missiles
from Iran.
Speaker 4 (02:39):
They set off as a precaution.
Speaker 5 (02:41):
These really sirens everywhere, and I got to join my
family in the communal bomb shelter, a place I hadn't
experienced previously, along with a number of neighbors, some of
whom I hadn't met previously. But that really has been
the daily experience here across the country, certainly in my
neighborhood and in my block, including in the early hours
of the night when some.
Speaker 4 (02:59):
Of these attacks have taken place.
Speaker 5 (03:01):
Basically a very sophisticated early alert system that gives you
a few minutes to organize yourself and then with the
sirens sound to tell you that the missiles are in
course potentially to strike where you are. That gives you
a few more seconds, a couple more minutes to find
shelter in a bomb shelter. People aren't taking chances they
might have taken shelter at home previously. They're all going
to these underground shelters provided by the municipality, by the country,
(03:25):
because as we've seen, the destruction wrought by those missiles
that have managed to penetrate Israel's air defenses has been substantial.
Speaker 1 (03:32):
Dan, I'm wondering about, not just anecdotally, but what the
numbers tell us about Israeli citizens you have been mobilized
to serve in this specific conflict versus just the ongoing
war in Gaza. Obviously there's been a lot of disruption
to the economy as a result. We're bloomberg. We focus
on the numbers, We look at the economies a lot
here and get an understanding of what the bigger impacts
(03:53):
of these events can be. What can you tell us
about just Israeli citizenry right now, who has been called
up to serve what has been disrupted? Just give us
an idea.
Speaker 4 (04:04):
That's an excellent question.
Speaker 5 (04:05):
But it's worth remembering this Israeli Iranian war, it's not
just a war in its own right. It's actually the culmination,
the cresting of a more than two month old war
that began with a Hamas attack on Israel on October seventh,
twenty twenty three.
Speaker 4 (04:17):
You recall that in the.
Speaker 5 (04:18):
Early days of that war, we're talking more than twenty
months ago now, Isran listed some three hundred thousand reservists
that were mobilized. That took a big chunk out of
the economy. You literally saw shops shutting down entire malls,
not just as a precaution against rocket attacks, but simply
because shops were short staffed. Anyone between the age of
twenty one thirty five had a very good chance of
(04:39):
being in uniform at that point, many people leaving their
families behind their careers, and that was very disruptive. As
that war made progress, Gaza.
Speaker 4 (04:47):
Was largely overrun.
Speaker 5 (04:48):
Many of the soldiers were demobbed, allowed to return home.
This war with Iran is mainly being fought by the
air force, which you can assume is fully mobilized. We're
talking two hundred warplanes just in the first waive, dozens
of warplanes every day in various places, and not just
the run.
Speaker 4 (05:04):
We've had air strikes.
Speaker 5 (05:05):
In Gaza today and in Lebanon, potentially patrols in Syria
as well. I don't have the numbers for air force deployment,
whether it's standing military or reservists. I know it's probably
lower than the ground forces which have been deployed in
far smaller numbers. Are four divisions now active in Gaza.
And of course his Home Front Command, which is basically
(05:25):
a military version of a civil defense force. Its responsibility
is to handle emergencies on the home front, dig people
out of rubble, provide first aid and such.
Speaker 3 (05:35):
Dan US President Donald Trump signal he would give diplomacy
a chance before deciding whether to intervene militarily in the
war between Israel and Iran. How is that being received there?
Speaker 5 (05:49):
Well, if you notice to the mood, if you notice
the mood music from Israeli statements. Since that announcement was
weave by the White House, there's a tendency among his Raelies.
We've commented on this to perhaps try to persuade the
President to decide in favor of military intervention, at least
when it comes to bombing. For DOEU the famous now
underground deep underground uranium and Richmond site the Ranians have.
(06:09):
It's so deep underground in a mountain that is really
firepower may.
Speaker 4 (06:13):
Not be enough to reach it.
Speaker 5 (06:14):
It may be a job that can be left only
to the American Air Force with the famous Mother of
All bombs, thirty pounds that would be dropped from a
B two, and I think these rallies openly want that
to happen. Failing that, they say they can manage the
job alone. It's a difficult job, but they say they
can manage it alone. The question is how long the
Uranians can keep up their retaliatory missile attacks. It would
(06:36):
appear those are tapering off. Today we had something in
the order, as I said, of thirty missiles, whereas in
the opening weekend five days ago as an average of
about one hundred missiles on every twenty four hour cycle.
Speaker 4 (06:48):
So that seems to be dropping off.
Speaker 5 (06:49):
These really says as a result of their preemptive attacks
against launchers.
Speaker 4 (06:53):
I think we will know more at the end of
this weekend.
Speaker 5 (06:57):
Especially as the Uranians are apparently holding stop gap talks
with European powers now in Geneva, perhaps to find a
way back to diplomacy, which would satisfy Trump, indirectly satisfy Israel,
and perhaps bring this story to a close.
Speaker 1 (07:10):
Dan, you mentioned that if the US does not get
involved with the massive thirty thousand pound bunker buster bomb.
Israel could handle this itself. How would they do that?
What's the reporting telling you?
Speaker 4 (07:25):
Obviously this strict military secrecy.
Speaker 5 (07:27):
I don't know, but the Israelis insist, including skeptical ex
generals who say they've been briefed on this, that it
is possible. The two things that come to mind are
a simply sustained bombing. At one side. It's worth remembering
back in September, Israel killed the chief of Masrella, the
chief of Hesboala, Hassan Masralla.
Speaker 4 (07:44):
He was in a.
Speaker 5 (07:45):
Bunker underneath a residential building by then largely vacated, something
like twenty meters underground, with a multi story building above him.
Speaker 4 (07:52):
What these Raelies did was drop fifty.
Speaker 5 (07:54):
Four bombs, bomb off to bomb off, the bomb basically
deepening the cradle until he was reached. In theory, the
same thing could be done on a much larger scale,
much more sustained, with Foudeau.
Speaker 4 (08:04):
Keep in mind, these really.
Speaker 5 (08:05):
Say they have complete dominance of the Iranian sky, so
in theory there'd be no problem with them going back
and forth with their smaller airplanes smaller delivery payloads and
simply do it for days and perhaps weeks until they
crack that nut. The other possibility is a ground forces
operation commandos who would penetrate it and literally go floor
to floor, destroying anything they come across, blowing up, engaging
(08:27):
whatever personnel.
Speaker 4 (08:28):
There are down there.
Speaker 5 (08:29):
There is a precedent also from last summer where Israel
did this with an underground HESBLA facility in Syria.
Speaker 4 (08:35):
That might serve as a tactical precedent.
Speaker 3 (08:37):
All right, Dan, gonna leave it there. We know it's
late there in Jerusalem. Appreciate being able to touch base
with you. Do stay safe, thinking about you, your family,
and certainly your community. Bloomberg News reporter Dan Williams.
Speaker 2 (08:48):
There in Jerusalem, you're listening to the Bloomberg Business Weekdaily podcast.
Catch us live weekday afternoons from two to five pm
Eastern Listen on Apple CarPlay and Android Auto with the
Bloomberg Business This Act, or watch us live on YouTube
and folks.
Speaker 3 (09:04):
It is an economy battered by years of trade embargos,
sanctions and endemic mismanagement. We're talking about Iran and that Israeli.
In Western intelligence assessment seen by Bloomberg suggested that the
war could lead to an economic collapse in Iran an
inflation of eighty percent if not higher now. According to
this report, it would likely result in social discontent and
(09:25):
challenging of the stability of the ruling regime.
Speaker 1 (09:29):
Tim Yeah, we wanted to talk really about the daily
existence of Iranians right now and how it shifted really
over the last fifty or so years, specifically the last
fifteen years. The challenge is about life and Iran for
its citizens who are currently under attack, their challenges, and
what they're experiencing. To help us understand that, Alex Watanka's
back with a senior fellow at Middle East Institute. It's
(09:51):
an organization with the mission to quote increase knowledge of
the Middle East among citizens of the US and to
promote a better understanding between the people of these two areas.
Organization has received funding from various sources, including corporations, foundations
in various Middle Eastern governments such as the UAE and Qatar,
as well as the US government. Alex joins us once
again from Washington, DC. Alex, We've spoken to our reporters
(10:15):
on the ground in Israel. We haven't been able to
do the same for people on the ground in Tehran
and other parts of Iran. We wanted to speak with
you. You were born there, You're still in touch with people
throughout the country. Can you give us an understanding of
what life is like day to day right now?
Speaker 6 (10:32):
Yeah, Tim and Kerret great to be back with you. Look,
you're right, I mean, I obviously that's my day job
trying to track what's going on in the country of Iran,
but the last few days actually being very hard. With
some exceptions, Internet is essentially no longer accessible. The authorities
believe the Israelis are using access to the Internet for
their operations against the Iranian regime.
Speaker 4 (10:54):
The other way of looking at it.
Speaker 6 (10:56):
Is maybe the Urdian authorities are concerned about public mobilization.
There is for sure a lot of messaging going into
Iran from the large Iranian diaspora, which is vastly anti regime.
So there's a very lively debate outside of Iran among
Iranians across the world that what should what would be
(11:16):
best for the country. There are those who are saying
regime change is the opportunity right now, but there are
also many who are skeptical in saying, actually, we don't
know if regime change is the outcome. It could be
civil war, it could be something worse. So let's take
it take it easy.
Speaker 3 (11:31):
Here, well, Alex, what I want to also do is
take a step back, and what has life been like
under the Ayatola, who has been raining for what some
thirty six years? What has life been like for Iranians
before this attack?
Speaker 4 (11:45):
So, Carol, I mean, let me.
Speaker 6 (11:48):
Let me just remind everybody that Iran had a revolution
in nineteen seventy nine and Iola Bomani and his people,
including the one who's the supremetor today.
Speaker 4 (11:58):
Haminy took all over.
Speaker 6 (12:00):
And if you asked the seventy five percent of Iranians
who were born after that revolution, they will tell you
life has not been pretty because it's been a very
repressive regime across the board. It's been domestically repressive, and
it's been very adventurous, ideological, stubborn and in terms of
its foreign policy and the reason why we're seeing this
(12:21):
war happen. And again, let's put aside if Israel was
justified to attack Iran or not last week, that's a
separate issue. But the fact that this Islamic republic for
so long has been sort of taunting the Israeli saying
you don't have a right to exist and so on.
Speaker 4 (12:35):
So a lot of.
Speaker 6 (12:35):
Iranians are asking, you know, we don't like what Israel's
doing to Iran right now. But at the same time,
you're not exactly innocent. You asked for this, you will
taunted them life.
Speaker 3 (12:44):
Well, well, I guess what I'm but what is life like?
What does the average Iranian make? What is their existence
like in terms of a home, food on the table,
what is that like?
Speaker 6 (12:57):
So it's a medium sized economy, I mean, should have
been a top twenty economy if they weren't under sanctions.
They should be the size of Turkey, if not bigger,
because Iran, and like Turkey, is a lot of oil
and gas. So very educated population of ninety million, pretty significant,
industrial based, agriculture based. Again, a lot of you know,
parts of the economy. I mean the idea it's oil
(13:19):
and oil, it is not true. It's much more multifaceted
than that. But sanctions have really had a great impact
on life. So, you know, one of the headlines for
your average Uranian in terms of life is there are
no jobs. Inflation is rampant, there's repression, there is isolation,
So what do a lot of Iranians do look for
a way out. Immigration has become basically the way out.
(13:41):
That's why you have this large diaspora around the world,
not because people want to leave their homes, but because
the opportunities just don't exist in Iraq.
Speaker 1 (13:49):
What has been the resistance to the government and how
is that proliferated or not since two thousand and nine, there's.
Speaker 6 (13:58):
Always been resistance, going back to nineteen seventy nine, has
it been always an effective resistance? That's the big question
mark To this day, we have a large Iranian political opposition,
but it's not united.
Speaker 4 (14:09):
There's a lot of.
Speaker 6 (14:10):
Energy there, but they haven't agreed on an agenda in
terms of the day after. So you have the shaw Son,
who is obviously very well known here United States. He's
on TV quite a bit. He is the most prominent figure.
He has an agenda. He wants to sort of transition
Iran out of the Islamic Republic into something else. I
have heard him personally many times.
Speaker 4 (14:28):
I think he has got some great ideas.
Speaker 6 (14:30):
I do have question marks what he can unify the
diaspra in terms of the day after in Iran. I
have also the question in terms of whether he can
unify the folks in Iran. I mean, that's where the
battle is going to be. It's not the Diastra, it's
those ninety million Iranians.
Speaker 4 (14:45):
Where are they're going to come lead them?
Speaker 6 (14:47):
That's the big question mark ahead for the opposition.
Speaker 1 (14:50):
The reason I asked specifically about two thousand and nine
is because of the protests following the election in Iran,
the presidential election, and my understanding has been that there
has not really been you know, there was a sense
of unification there, but that was pretty quickly quashed and
since then nothing really has emerged.
Speaker 6 (15:10):
So two thousand and nine is not the only time
a team that people came in the streets. You have
many other examples going back to ninety nine, and even
before two thousand and nine was significant a couple of reasons. One,
it happened two years before the Arab Spring, so the
Iranians were ahead of the Arabs in terms of coming
out in the streets.
Speaker 4 (15:29):
But the other part of the two.
Speaker 6 (15:30):
Thousand and nine uprising in Iran was because part of
the regime came to the street, So it wasn't just
people from the street ordin Iranians. It was part of
the regime that came out against back then in that election,
Mahmod Ahmadinejad. If you remember that, fella, but two thousand
and nine, you've had plenty of protests. I mean the
largest ones just happened a few years ago in twenty
(15:51):
twenty two with the Massa Amani, the young Iranian woman
who was killed just because she wasn't wearing her headscarf,
which is by law mandatory in it. She was killed
for that, which, by the way, just raises another issue.
Imagine living in a society where you can decide what
your dress code will be. So this is a regime
that's lost its people a long time ago. The question
(16:13):
is do they have time to catch up. They're trying,
They're just trying to play the nationalist card. I wonder
if it's too late, if they can stay in power.
Speaker 3 (16:21):
What do the people want and what does the region want?
And forgive me, but just got about forty seconds here,
what kind of an Iran do they want going forward?
Speaker 6 (16:29):
Yeah, that's a no brainer. People won the end of
the Islamic Republic. That's a no brainer. And I think
that's true for the rest of the region. Nobody wants
the Islamic Republic. The big question market at what costs?
And can it be done in a different way other
than bombs dropping in their heads? Because people remember Iraq,
they remember other cases of civil wars in the region.
So that's the big challenge for American policy makers, Europeans
(16:50):
and others who trying to steer this situation forward.
Speaker 3 (16:53):
If the US doesn't get more involved, can it be
can better change come to Iran again? Just got about
twenty seconds, big question.
Speaker 6 (17:02):
Mark, But look, my bottom line is this, It's for
the people of Iran to decide their destiny. US can
help them, but us right now I don't see the
appetite getting involved in a big way.
Speaker 3 (17:10):
All right. Good to leave with there, Alex, thanks so much,
Have a good weekend. Save fun Alex Vedonka. He's senior
fellow at the Middle East Institute. When we come back
and check out.
Speaker 2 (17:19):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Apple car
Play and Android Auto with the Bloomberg Business app. You
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Speaker 3 (17:37):
As the world waits to see what happens in terms
of the US role in the war between Israel and Iran,
whether or not there will be more of a role,
the latest evidence from the ground does suggest that they
would need to significantly escalate attacks if they want to
eradicate the Islamic Republic's nuclear capabilities. Now, satellite images, there's
(17:57):
this incredible story on the Bloomberg Highly recommend that you
check it out at on the Bloomberg terminal or at
Bloomberg dot com. But these satellite images essentially tim show
that atomic installations were only grazed after four days of bombardment.
Speaker 1 (18:11):
The Israeli ron conflict comes down largely to nuclear capabilities,
who has it, who wants it, and perhaps who needs
it to keep world order without actually disrupting it with
US is John Eirath, Senior policy director for the Center
for Arms Control and Non Proliferation. It's a nonpartisan nonprofit
that's dedicated to reducing and eventually eliminating the threats posed
(18:33):
by nuclear, chemical, and biological weapons through congressional engagement and
public education. John, good to have you with us this afternoon.
Appreciate you joining us on the program. Your specialty is
thinking about these weapons in the context of getting rid
of them, and I'm wondering over your career where we
(18:53):
are given a world in a world right now when
it comes to non proliferation of these weapons.
Speaker 7 (19:02):
Well, it's a mixed story. Since the Cold War, about
eighty percent of the nuclear weapons that ever existed have
been eliminated. But right now we see the pendulum swinging
a little bit in the other direction, where the nuclear
weapons are given a little bit more currency, where you
see proliferators such as North Korea and Iran putting more
(19:27):
emphasis on possessing those weapons and giving a little more
important students. So, what is going to happen in the
next few weeks and months, particularly with regards to Iran
is going to have a significant impact on how these
weapons are viewed in the future and what the world
is going to look like and how the world is
(19:47):
going to think about them.
Speaker 3 (19:49):
You know, my follow up was going to be, but
I feel like you've answered it. You know, are we
indeed on the cusp of what could be a very
very serious turn for the worse when it comes to
nuclear proliferation. It sounds like you are saying yes, depending
on how this plays out.
Speaker 7 (20:04):
Absolutely, if Iran it is allowed to acquire nuclear weapons.
If they are, if they're perceived coming out of this
conflict as becoming significant in the currency of international politics,
then there are going to be other governments that are
(20:25):
going to want to follow suit. There's also the case
of Uprussia and Ukraine. Russia has been using threats of
nuclear weapons to advance its objectives regarding Ukraine, particularly with
the nuclear blackmail that it has been conducting. It's been
making threats with nuclear weapons pretty much every Tuesday since
(20:47):
the war in Ukraine began in twenty twenty two to
keep Western nations from supplying arms and ammunition to Ukraine,
to withhold to limit what they apply to the Ukraineans,
and it's been very effective. Countries such as North Korea
are paying attention to this. Then they're looking for their
own means of nuclear blackmail. If Russia comes out of
(21:10):
this war perceived as having succeeded and retaining its objectives
through nuclear blackmail, other countries, starting with Kim John Loon,
are going to take.
Speaker 3 (21:18):
Notice, okay, and forgive me if this sounds naive. The
US is the only nation right to have ever actually
used nuclear warfare weapons, I should say in warfare. So
having said that, why is it? Again? Forgive if this
sounds naive, but why is the US allowed to have
nuclear weapons and other nations versus an Iran or North Korea?
(21:43):
Is it just because we believe in the control and
the safety and that they actually won't be used, considering
the US is been the only one who used it? Like,
help me understand this.
Speaker 7 (21:57):
I think if you ask that question of a number
of different US leaders, you would get a number of
different answers. I used to work for the US government.
If my answer would be that having used nuclear weapons,
I think that I would say that for the US,
I would say I would wish that we hadn't and
(22:21):
having nuclear weapons, I would say that I would hope
that the US would never be in a position to
use them again. The official US nuclear policy, as expressed
in the Nuclear Pasture Review that was done most recently
by the Biden administration, but basically repeating language from the
(22:41):
Trump administration and from every administration previous to that, was
that the US nuclear weapons are for defense and deterrence,
not for offensive use, but basically to protect against somebody
else using nuclear weapons against US, and that has been
very much much the policy of US administration since the Pole.
Speaker 3 (23:03):
And we should remind everyone who's listening we're talking about
John Rath, Senior policy director for the Center for Arms
Control and Non Proliferation. It's a non powerson, nonprofit. John
has worked with the government some thirty years in arms
control and non proliferation, and most recently a two year
assignment with the US National Security Council. So this guy
understands it certainly from the inside.
Speaker 6 (23:24):
John.
Speaker 1 (23:24):
A lot of our conversation is focused on iron We
mentioned North Threia there, but I want to hit on
Russia a little bit because there seems to be, at
least within the international community, a tolerance for Russia having
nuclear weapons that does not extend to other countries that
are not necessarily allies currently of the United States. I
know there's a lot of history here with the Cold
War and also the agreements post Cold War that the
(23:45):
US and Russia have with one another to prevent the
proliferation of nuclear weapons. But why do you think the
international community tolerates Russia having nuclear weapons.
Speaker 7 (23:55):
I think it's a case of familiarity Russia inherited the
nuclear weapons from the Soviet Union. Three other countries did
as well, Ukraine, Kazakhstan, Belarus, and there was a concerted
effort made led by the United States in the early
days following the Cold War to return all of those
(24:18):
weapons to Russian control. This was one of the highest
priorities of the Clinton administration back in the early nineties,
and it was a case where it was seen as
Russia being the responsible steward for these weapons, and it's
seen as being a more desirable outcome than proliferating nuclear
(24:38):
technology through three more countries.
Speaker 4 (24:41):
That was seen as putting a.
Speaker 7 (24:45):
Chink in the wall and allowing more countries to have
nuclear weapons and possibly leading to greater proliferation in other places.
What nowadays would look back at that and say, maybe
that wasn't a good idea, But that was very much
spirit of the time.
Speaker 3 (25:03):
We mentioned in our lead up to you a great
read on on the Bloomberg about the satellite images that
reveal that President Trump's dilemmo over the Iran nuclear complex.
You know, there's a lot more that needs to be done.
What do we know about the damage that really has
been done so far to nuclear's the nuclear capabilities by iron,
(25:24):
and especially when it comes to non civilian uses, what
do we know about that?
Speaker 8 (25:27):
In particular, what we know is that Iran has been
enriching uranium levels that are not necessary for anything but weapons.
Speaker 7 (25:40):
That is to say, there is no civilian there is
no benign reason doing rich uranium to the levels that
Iran has been. This is what is god Israel upset. Israel, however,
has chosen use military means to address this issue. It
is possible that Israel may be able to significantly degrade, destroy,
(26:07):
disable Iran's enrichment facilities. It may be possible that should
the US become involved, the US may be able to
do more than Israel to destroy or degrade these enrichment facilities.
But that is actually besides the point, because Iran can
simply rebuild. It may be with considerable expense and considerable effort,
(26:34):
but they can rebuild. They built them once, they can
do it again. Maybe it will be better and more
difficult to destroy the next time, but it can be rebuilt,
so the military effort is all more or less a waste.
It's only through diplomacy and diplomatic effort that we can
(26:57):
get through a permanent solution in this case. Now you'd
expect that from me. I'm a career diplomat. When you
interview a somebody who has born a uniform for thirty years,
he's going to talk about the military needs as being
the only way forward, the only solution. But you're talking
to a diplomat, so I'm going to feature the diplomatic needs.
Speaker 1 (27:18):
What is the diplomatic solution, then, what, in your view,
would actually stop Iran from wanting and being able to
achieve a nuclear weapon?
Speaker 3 (27:27):
And did we have it? The deal that President Trump
pulled out of in twenty eighteen, the deal.
Speaker 7 (27:36):
That was done in twenty fifteen basically blocked the pathway
to nuclear weapons for Iran, and it had a robust
verification mechanism so that we would know if Iran was cheating,
we would know if Iran was doing something.
Speaker 4 (27:54):
That they weren't.
Speaker 7 (27:55):
Supposed to the problem with it was that it had
a ten year sunset provision, so under certain circumstances, after
ten years to say now twenty twenty five, Iran could
resume enrichment activity. And the Trump administration, the first Trump administration,
didn't like that and tried to renegotiate, got a cold
(28:18):
shoulder from Iran and from the Europeans.
Speaker 8 (28:22):
And.
Speaker 7 (28:24):
Decided at that point, rather than to try to fix
that problem or do anything else, make another effort to
pull up. So I think you would start with something
along those lines. But without that sunset provision, certainly you
could bring back most of the elements of the verification
(28:47):
provisions in the IaaS of provision and the confidence that
gave that Iran was not conducting these activities.
Speaker 3 (28:57):
Not easy, not easy at all. Thank you so much,
Really appreciate getting some time with you on this Friday.
Speaker 6 (29:04):
John Earth.
Speaker 3 (29:05):
He is senior policy director for the nonpartisan Center for
Arms Control and Non Proliferation. Joining us there in New Jersey.
Speaker 2 (29:13):
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
live weekday afternoons from two to five pm Eastern Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 1 (29:28):
Bettle Reserve Governor Christopher Waller said the Fed can lower
interest rates as soon as next month, reiterating his view
that the inflation hit from tariffs is likely to be
short lived. Here's Governor Waller earlier today on CNBC.
Speaker 9 (29:43):
Right now, the data of the last few months has
been showing that trend inflation is looking pretty good, even
on a twelve month basis. So I've labeled these good
news rate cuts when if inflation comes down to target,
we can actually bring rates down. I've been saying this
since about November of twenty three, so I think we're
in that position now. We could do this and as
(30:06):
early as July.
Speaker 1 (30:07):
That's Chris Waller earlier on CNBC, I said short lived.
That was my homage to j Powell. Okay, he says
short lived.
Speaker 3 (30:16):
Hey, if Jay does it, I'm good with us.
Speaker 1 (30:19):
That's what I'm thrown out there.
Speaker 3 (30:19):
I'm totally good with it. Hey, Peter at Order is
back with us. He's president of Financial Insights, adjunct lecturer
of economics at the College William and Mary, also author
of the book The Confidence Map, Charting a path from
Chaos to Clarity. He joins us from just outside for Philadelphia.
It feels like right now is a perfect time to
talk about what feels like again from chaos or a
(30:41):
moment of chaos. Peter, it's good to have you back
with us. I am curious about as we try to
game out the stuff that happens around US geopolitically, Tara
wars and so on, is all of this kind of
a fool's errand in terms of trying to figure out
what really is the impact ultimately on markets and how
(31:04):
to price it in.
Speaker 10 (31:06):
Well, Carol, thanks for having me today. And social media
would certainly lead you to believe that there's a whole
new meme out there called nothing ever happened.
Speaker 4 (31:17):
And it seems to.
Speaker 10 (31:19):
Be the belief that whether it's Tariff's, COVID, geopolitical events,
none of it matters. And the fact that it's arising
now strikes me as a really interesting moment. It sadly
reminds me of this what the Turkey might say around
the beginning of November, nothing ever happened. And I think
(31:41):
that's the risk that not only are investors complacent, but
I sense that there's a they're acting with impunity. And
I see this in several dimensions where investors don't believe
that there will ever be punishment, that there is now
(32:04):
no downside to trading.
Speaker 1 (32:07):
What do you mean by that, though, because is it
because the FED steps in? Is it because the US
government steps in? What's the put.
Speaker 10 (32:16):
So that the it's a combination of puts. One is
you've had repeated success where the markets have only gone
up in their minds for the last ten to fifteen years.
You have policymaker puts on both the fiscal and monetary
policy side. You also have this belief that the regime
(32:38):
politically is not particularly willing to go against the market,
in fact, just the opposite. So you had the taco trade,
and you have a sense that while we may skirt
the rules, there will never be any punishment for doing so.
Speaker 3 (32:57):
You know, it's interesting, Peter, I keep thinking about this too,
and I have to say, we know tariffs are going
to be higher, right on some level. We know supply
chains are continuing to be rebuilt and brought back here.
If immigration and the clamp down on immigration continues less workers,
(33:20):
that's going to have a cost. It does sound like
there are a lot of factors that go into the
US economic equation that there's a good chance they're going
to be different going forward.
Speaker 10 (33:30):
They will be, But one of the things we know
is that when we look at risks, if they are
abstract to us, we will find ways to avoid them.
And so what I sense is that tariffs just like
COVID still remain abstract. People haven't experienced the consequences, and
(33:52):
so until we get that, we can find all of
these reasons to ignore it. But having said that, what
is so interesting about this moment is that people are
looking at these risks in the eye and laughing at them.
There's almost a there's a belligerent response to them that
(34:12):
they're not going to matter.
Speaker 1 (34:13):
Move on, Peter, you joined us in March, and one
answer that you gave to a question that we had
for you really ricochet around. A lot of people ended
up watching the clip on YouTube. You said there was
a clear possibility that the US becomes uninvestable under President Trump.
Is it more likely now or less likely now than
(34:35):
it was to you back in March?
Speaker 10 (34:38):
It's less likely now, but I know that from a
particularly foreign investor perspective, there is still apprehension about how
welcome they and their money are here. And if I
look at what happens in immigration and trade, we have
(35:03):
started to see clear controls, and so we know that
our policies related to labor, goods and services and capital
all move is one. And so I think that there
is still concern and I think appropriately so around what
happens to capital flows in all of this.
Speaker 3 (35:26):
So let's just bring it back to one of the
big events of the week, and that is FED policy.
And we did play some sound from Governor Waller Fed
Governor Waller who was on CNBC earlier today and then
talking about maybe there could be some moves in July.
Do you think that, I don't know, how are you
thinking about monetary policy FED monetary policy and how they
are kind of trying to figure out what is the
(35:48):
right policy here and kind of factoring in all of
these things that you're talking about.
Speaker 10 (35:54):
Yeah, so that the FED, in their desire to be
data dependent, feels compelled to wait until things are real,
and so there is reluctance on the part of many
participants at the FED to act until they see the results.
Having said that, I would keep an eye on the tenure.
(36:17):
The tenure ultimately is going to be what leads policymakers
to move up or down. And right now you've got
they would appear to have the ability to lower rates
some you know what that really means. We'll wait and see,
(36:37):
but their trend following at the end of the day,
you know, the markets will always move faster than a
bureaucratic committee in Washington.
Speaker 1 (36:47):
Always, Peter, before we let you go on the INVESTI
on what is investible right now? Listener Ryan Horan getting
in touch, asking about your alternatives away from US markets
when Europe came and grow in his view his views
also that Asia is likely intercession. He wants to know
where do you invest for capital appreciation?
Speaker 10 (37:08):
So I think you have to look at commodities in
this environment. You know, one of the things we know
is that when you.
Speaker 4 (37:17):
Start to.
Speaker 10 (37:19):
Encumber trade, you run the risk of goods in the
wrong places, and commodity prices responding to that on a
local basis. And when I look particularly around food inputs,
you look at rice prices for example, we can look
at current oil prices. I think that the risk is
(37:41):
in real acid prices.
Speaker 3 (37:44):
All right, Really appreciate it, Peter, Thank you so much
as always. Peter Atwater, President of Financial Insights, adjunct lecturer
of Economics at William and Mary. Joining us from outside Philadelphia.
And of course we've also talked about his book, which
we have talked about here on air. It is the
Confidence Map, Charting a path from Chaos to Clarity. Appreciate
(38:05):
his input on so much again coming at us. He
mentioned the ten year note. Folks, we're looking at a
yield to four to thirty seven. We've seen it spike
up a little bit earlier in today's session, but we're
definitely off some of the earlier higher levels to your
note with the yield of three point nine.
Speaker 2 (38:23):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
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afternoons from two to five pm Eastern on Bloomberg dot com,
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(38:43):
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