Venezuela Regroups With New Leader

Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul Sweeney
Tuesday, January 6th, 2026

Featuring:
1) Liz Ann Sonders, Chief Investment Strategist & Kevin Gordon, Head of Macro Research and Strategy at Charles Schwab, joins for an extended conversation on why 2026 marks a transition year for markets.2) Ricardo Hausmann, Professor of the Practice of International Political Economy at Harvard Kennedy School, on why foreign control and oil exploitation cannot replace democratic legitimacy for Venezuela.3) Troy Gayeski, Chief Market Strategist at Future Standard, discusses why middle-market private equity is the best growth opportunity outside mega-cap tech.
4) Shannon O'Neil, Senior Vice President at the Council on Foreign Relations, discusses why Maduro’s capture does not guarantee democracy in Venezuela.5) Lisa Mateo joins with the latest headlines in newspapers across the US, including New York Times reporting on a flood of Maduro deepfakes online, and a Wall Street Journal story on an Equinox executive who says golf is not exercise.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple car Play or Android Auto with the Bloomberg
Business app. Listen on demand wherever you get your podcasts,

(00:25):
or watch us live on YouTube.

Speaker 2 (00:27):
We have Kevin Gordon and Lizzie Saunders together.

Speaker 3 (00:30):
I don't know they're in speaking to them. It's amazing
as it works out, we'll get to that in a moment.
Ready green in the screen. We welcome all of you
across your America, across Charles Schwabs America as well on YouTube.
Subscribe to Bloomberg Podcast. Did you have a YouTube brief?
We've sort of all thesting in the night. I know,
I know, it's pretty This internet thing's here to stay

(00:51):
on it is.

Speaker 2 (00:53):
It's like this. It's not going away.

Speaker 4 (00:55):
Exactly, so we'll take it. People are good.

Speaker 2 (00:57):
Listen.

Speaker 3 (00:58):
Do you have an ETF you're bringing out to everybody
else is flogging a new ETF? Okay, we're gonna get
to Josh Swab here and you know, Paul your observation
two days deep into the year.

Speaker 5 (01:11):
Yeah, I think people trying to digest some kind of
what we learned over the weekend with some geopolitical risk,
putting that on the front burner. But it seems like
looking at the market action. You know, folks are looking
past it a little bit at least at this point.
And for somebody who's going down to a room in
a few days, I'm paying attention to what's going on
in Venezuela.

Speaker 2 (01:26):
Seriously, it's like closer than Cuba.

Speaker 5 (01:28):
To my cost airspace in the Caribbean Saturday. So people
got stranded all through the Caribbean, not just okay, you
see islands.

Speaker 2 (01:34):
So this is special.

Speaker 3 (01:35):
We've done this a few times during the year, and
with this quality, we can do it. Liz Ane Saunders
is definitive on Wall Street. Literally, her public service and
allowing Americans to develop their fur own case is noted
a few years.

Speaker 2 (01:50):
Ago she had to go out. She's on a college tour.

Speaker 3 (01:53):
You know, she's like, she's like talking to like, you know,
people that actually went to class.

Speaker 2 (01:58):
You show up at Pepper and the thug.

Speaker 3 (02:01):
Walks in the room. How did you hire Kevin Gordon?
Tell us about how you find someone that damn smart?

Speaker 6 (02:09):
That question.

Speaker 7 (02:10):
So SCHWAB has a huge conference every year called Impact.

Speaker 6 (02:14):
A lot of Bloomberg folks.

Speaker 7 (02:15):
Come out, Carol and Tim and they broadcast from there.
Kevin's mom was in the business for thirty eight years.

Speaker 6 (02:23):
Thirty eight years.

Speaker 7 (02:24):
He's not in but on a firm platformed with us,
and she brought Kevin to Impact when he was still
Pepperdine and I met with him and I was had
had conversations within Schwab about needing to build the bench

(02:44):
and I met with him and I said, this is
the guy the only rub is he still in college?

Speaker 4 (02:49):
Can we wait?

Speaker 6 (02:51):
And the answer was yes, we can wait.

Speaker 3 (02:52):
What was your first day Schwab, Like, you know, you're
hired by it. You know she's thirty nine, but.

Speaker 4 (02:57):
She's a legendary was what was it like to.

Speaker 2 (03:01):
Be hired by liz Anne Sanders, who was iconic on
Wall Street Week a few years ago?

Speaker 8 (03:07):
You know, I still pinched myself every day. It's a dream.

Speaker 4 (03:09):
We have a ton of fun.

Speaker 8 (03:10):
We work really hard, but it's from from day one,
I mean, it's been this really fun, you know, just
sort of grind and figuring out how to make sense
of all this and and at the end of the day,
it's you know, can be used to make sense of
the ecomom.

Speaker 4 (03:25):
Lezanne sitting in your very seat.

Speaker 5 (03:27):
Earlier today, we had a Joan come in and he
has a new ETF and it's basically hedging. You can
take all your mag seven stuff, all your stuff that's
just ripped, do an exchange, put it into this ETF
and they're.

Speaker 4 (03:39):
Going to hedge it for you.

Speaker 5 (03:40):
Capture, you know, top yeat on the top, cover your
bottom a little bit.

Speaker 4 (03:44):
I looked at Thomas.

Speaker 5 (03:45):
Is that representative how the market's thinking is our investors
that you talked to, Are they concerned that we've gone
too far, too fast and they'd like to hedge, or
maybe they're asking me this should I get out?

Speaker 4 (03:55):
What are those conversations like?

Speaker 7 (03:56):
I would say that is a bit of the vibe.
When I'm out on the road doing client events, I
do get a lot of questions about how do I
protect some of these gains or how do I mitigate
what might have been a concentration that developed in their
own portfolios in a way other than having to trim
positions have the tax implications associated with it. Yeah, so

(04:18):
there's a lot more generic lowercase H hedge in questions
that we're getting.

Speaker 2 (04:24):
I mean, Kevin.

Speaker 3 (04:24):
Lizzie Saunders is too young to remember eighty seven or
ninety eight.

Speaker 2 (04:30):
Seven.

Speaker 3 (04:31):
What does a young stud like you do about worrying
about the thirty percent down event we can't see coming.

Speaker 8 (04:38):
Well, I think what's really interesting, I've spent a lot
of time thinking about this in the post pandemic world,
where you know, the gen z and the young, young
millennial cohortive investors for the most part, actually has not
really experienced what I think of as a real bear market.
I mean, everything has been sort of conditioned on. As
soon as you fall into bear market territory, there will
be some sort of stimulus or eight that comes in

(05:00):
right away, and then you get this launch.

Speaker 2 (05:02):
Off of the bottom.

Speaker 8 (05:03):
You had that in twenty twenty, you had that in
twenty twenty five, even in twenty twenty two. Yes, the
bear market was a little bit longer, but it wasn't
that spirit. It was twenty five percent from peak to trough.
So there has been this conditioning where you know it's
by the dip and just keep holding on, and that's
been that's been sort of the right call. But I
think that you know, moving forward, especially if there is
going to be a little bit of a broader rotation

(05:24):
outside of the megacaps that is going to weigh a
little bit more on index level.

Speaker 3 (05:27):
I'm going to give the younger crew major cred they're
way more serious about starting retirement earlier.

Speaker 2 (05:34):
Yeah, we're just seventy four.

Speaker 7 (05:40):
Weren't even four one k is when I started working.

Speaker 8 (05:42):
But I was also getting pushed though into the market,
whether they and I think there is a desire to
do so, which is good, but especially when you go
down the age spectrum, there is a sense that the
so called American dream of housing is becoming sort of
a lost opportunity. So it is pushing more people into
the stock market for better or worse.

Speaker 7 (05:59):
But that traditional retirement, even social security may not be
available now. I think one of the rubs right now
is the gambling mentality. Yes, and that's something that we're
at CHUAB very focused on. Is the differentiation between investing
and gambling. One of the ways I think of it
as investing as owning gambling is hoping and there is

(06:20):
that blending of the trading and the gambling side.

Speaker 6 (06:24):
That is something that we worry a little bit about.

Speaker 5 (06:26):
So, Lizen, how do you set up the conversation here
for just equity investors after we've had three years of
double digit returns very rare.

Speaker 4 (06:35):
Do we have a fourth one here? But how do
you set up that conversation for twenty twenty six.

Speaker 7 (06:40):
I think this could be a year where maybe index
level gains are a bit more muted, but opportunity continuing
to present itself outside of just the megacap names. So
you know, one of the things that happened last year
the market, you know, air quotes around the market is
more than just a cohor like the Magnificent seven big

(07:02):
drivers until the latter part of the year in performance,
but a lot of churn in rotation under the surface,
sub level bear markets in terms of maximum drawn down
on a rotational basis, And I think that was one
of the setups for this more recent environment of broader
participation action down the cap spectrum. And I think that
has legs, maybe not in a linear fashion, but has

(07:24):
legs this year.

Speaker 3 (07:25):
Across the nation from Pepper into the University of Delaware.
Charles Schwab is with us today, Lizzane Saunders in Kevin Gordon,
Decades of excellence from Lizanne Sounders Kevin Gordon. You know,
there's a lot of work from home going on. I
did that, and so we welcome all of you on YouTube.
Subscribe to Bloomberg Podcast. We're thunderstruck by our digital exercise.

Speaker 2 (07:49):
What are you doing to do the message digitally?

Speaker 8 (07:53):
I mean, we've got a really strong presence on YouTube,
and I think it's sort of an underappreciated, maybe underplayed,
unknown undernown aspect of of Schwab's digital for print. But
you know, also it was in social media, you know,
Lizanna and I not to I guess, you know, I
don't know toot our own horns too much, but we
try to be as active as possible across formerly Twitter,

(08:13):
x LinkedIn.

Speaker 2 (08:14):
Do you, Kevin? Do you make all the charts? Not
all of them?

Speaker 7 (08:17):
Not all of them, But you don't want me making
my own shots. Honestly, it's crayons and construction figures.

Speaker 8 (08:26):
But it's been a good way to interact with people.
And I think that, you know, the more so these days.
Everybody wants those kind of shorter form quick takes, but
things that are meaningful to you don't want, you know,
meetingless stuff.

Speaker 5 (08:37):
Hey, Kevin, we were all patting ourselves on the back
because the US had a pretty good twenty twenty five
in terms of equity return. Now where you go outside
the US even better, what are those conversations you have
with your clients, because quite frankly, I've never really thought
about investing outside of the US and my career.

Speaker 4 (08:53):
I'm sure some of my mutual fund somewhere have got
me there. But are you having more and more of
those conversation?

Speaker 8 (08:58):
You know, I'm just now reads starting to get and
I think probably the same for Lazan, and we rarely
speak at the same events. We're really kind of a
divide and conquered crew when we travel, so you know,
I'm just starting now to get questions about, hey, should
I consider this? What is the opportunity to look like?

Speaker 4 (09:13):
And that tends to happen.

Speaker 8 (09:14):
You get the big swings in performance first in favor
of a certain asset class, whether it is international, and
then the you know, the performance chasing tends to kick
in and then the flows start to move in that direction.

Speaker 9 (09:24):
So we found that it tends to work in.

Speaker 8 (09:26):
Maybe three year, you know, with a three year lag
where it starts to kick in three years after international
starts to outperform. It's not always the you know, textbook case,
but I have been starting to get more questions about that,
especially because you know Lazan mentioned earlier.

Speaker 9 (09:40):
There is a little bit more of.

Speaker 8 (09:41):
A concern now about concentration in portfolios, specifically with tech
and tech like parts of the market, just by virtue
of their size over the past ten years. If you
sort of set it and forget a portfolio, you know
ten years ago and didn't do much tech, and those
parts of your portfolio have grown to an immense portion.
So there has been more of a concern about how
do I trim that and add into to what might

(10:02):
work better.

Speaker 7 (10:02):
We've been joking that recommending international diversification has been about
constantly saying I'm sorry, and now it's your welcome.

Speaker 10 (10:10):
Exactly.

Speaker 4 (10:12):
Europe Asia just extraordinary in particularly.

Speaker 3 (10:15):
Does it have legs or is it just a dollar
dynamic where they requirement of a week now.

Speaker 4 (10:21):
Well maybe yes to both of those.

Speaker 7 (10:23):
I think there's the currency dynamic and that will probably
be a function or it will dry volatility in swings,
so I don't I think the international app performance is
probably not linear in nature, but for the most part,
I think.

Speaker 6 (10:36):
It has legs. If you look at the.

Speaker 7 (10:38):
Traditional fundamentals of the trajectory of earnings that represents a support.
A lot of at least developed economies don't have the
same inflation problem with which the US is still dealing,
so it means a different monetary policy backdrop.

Speaker 3 (10:55):
WELLZ, I have family members who have been hoping and
enjoying losing money, most of it are on bitdog.

Speaker 2 (11:04):
And all these are the young tucks. You know, they
don't talk.

Speaker 6 (11:06):
They're not in the triple leverage all cash.

Speaker 3 (11:08):
No, their parents are, but you know they go through
that bill to talk to me when they've lost that
much money. How does someone who lost it hoping rebuild?
How do they become an adult?

Speaker 11 (11:21):
Boy?

Speaker 6 (11:21):
That's a good question. You know.

Speaker 7 (11:23):
Sometimes the answers to questions like that are really boring.

Speaker 2 (11:27):
Which is boring.

Speaker 7 (11:31):
Investing should never be about a moment in time, get in,
get out.

Speaker 6 (11:36):
Neither of those are investing strategies.

Speaker 7 (11:38):
So where a strategy needs to be employed for somebody
that maybe made that mistake and got out is don't
try to time the get back in. Do it slowly,
develop a process over time dollar cost averaging. Again, the
stuff that is fairly boring to talk about. I also
use the analogy of a jigsaw puzzle, which I love

(12:01):
doing jigsaw puzzles, and you know, sort of pose the
question what's the most important piece and usually people will
say the last one, or the corner or any of
the side pieces, and we often say it's the picture
on the box. Try doing a complicated jigsaw puzzle without
the picture on the box.

Speaker 6 (12:15):
That's the plan.

Speaker 7 (12:16):
So the first thing is actually have a plan. Too
many investors and not just young investors, but they're just
sort of winging it, and have that actual plan and
use that as the base for Okay, how do I
get re engaged?

Speaker 5 (12:31):
And at a lot of I'm just going to use
my household. For young adults, it's all online, a lot
of digital and I'm like, who are you talking to?
Who's giving you advice about allocation and things like Well, Matt,
I think that matters a lot more in the context
of I mean, the macro environment today is I mean,
it's quite precarious.

Speaker 8 (12:53):
It's unique relative to history. I mean, you look at
just this year in many ways, I think of it
as being the year of the courts, not just from
a tariff standpoint, but also from Alisa Cook, you know,
a fed independence and the integrity of the fed in
the structural you know, soundness of it moving forward in
terms of making policy. All of that has carries a
lot of macro risks with it. But to hedge against
that are to guard against that, you do need some

(13:15):
extent somebody to talk to or at the very least,
to Zant's point, having a plan to help safeguard against.
Especially with what's happened over the weekend. I mean so
many questions, you know, I was sort of fielding a
ton from friends and family over the weekend about what
does this mean for portfolios? But you know, often you
get those kind of more panicky questions when it's somebody
who hasn't done something, you know, the sort of prep
work not to criticize. But that's why it matters a lot.

Speaker 2 (13:37):
O wise one, did you know where Keana was in
the map?

Speaker 8 (13:40):
Well, yes, but only because I did so, only because
I like I like geography, and I'm a little obsessed,
so well I.

Speaker 3 (13:45):
Like it too when I thought it was western Colombia,
which shows you what I know.

Speaker 2 (13:49):
Lizzie and Sunder is Kevin Gordon with this, This is a.

Speaker 3 (13:51):
Special moment there with Charles Schwab where the equity franchise
has been noted. This is out on the Left coast
decades and decades ago, long before Lizzie got there, And
it was Charles Schwab up in San Francisco building.

Speaker 2 (14:03):
Remember how original it was.

Speaker 10 (14:04):
Yep.

Speaker 2 (14:04):
It was like, you're kidding these and they're in San Francisco,
they're not for real.

Speaker 3 (14:09):
And down in La was Capitol Group with Robert Kirby
and John Lovelace and all that, and they'd put out
these studies which said, if you miss the ten biggest days. Ready, folks,
the jargon Gordon jargon has five hundred beeps. You give
up five percentage points of performance by missing the ten
biggest days in the year.

Speaker 8 (14:30):
Kevin Gordon discuss, Yes, And actually a lot of those
biggest days come in pretty significant volatility moments when you're
in bear markets, and it happens, you know, when you
kind of feel that panic settle in and it's, oh
my gosh, we're down x percent from the top. Should
I just get out and sell everything? And that's when
you tend to give up a lot of that future

(14:51):
return because you get these what Zanletes to call rip
your face off rallies. Sometimes in the middle of these
bear market moments, and it happened in April last year.

Speaker 7 (14:59):
And not only that, but some of the the biggest
single updates immediately followed some of the single biggest down days.

Speaker 2 (15:04):
The rebound right, And what's important your folks, I got
to know. I'm talking to Kevin Court Luzanne. I speak English.

Speaker 3 (15:10):
It's a four box solution. You mentioned one of the boxes,
which is you're out of the market, You've got to
get back in. The hard part is getting back in.

Speaker 2 (15:20):
It's nons a some wildly log normal.

Speaker 7 (15:24):
But I'll say again, neither get in nor get out,
if it's all or nothing is an investing strategy. That's
just gambling on moments in time, and I think that's
one of the mistakes that investors make.

Speaker 4 (15:34):
Louzanne, I'm going on forty years in this business. Coming
up in June.

Speaker 5 (15:38):
One of the biggest developments for me has been ETFs.
I mean, the money flowing into those is just extraordinary.
How does that factor into your discussion with plans?

Speaker 3 (15:47):
Oh?

Speaker 7 (15:48):
Yeah, And I think you know, we do a lot
of work on investor sentiment and that in the buckets
of attitudinal measures of sentiments. Some of the traditional indicators
like aaii market Association and investors intelligence ones I've been
following since I started forty years ago in this business.
But there's the behavioral side of investor sentiment, and one

(16:10):
key metric associated with that fun flows. When I started
in the business, it was all about mutual fund flows.

Speaker 6 (16:16):
Traditional mutual fund flows.

Speaker 7 (16:18):
Now completely served in terms of what's going on with ETFs,
and it is a really valuable way to kind of
proxy the behavioral measure of investor sentiment.

Speaker 2 (16:29):
Two thousand and four, you were like twenty seven years
old or something like that.

Speaker 10 (16:34):
I have a.

Speaker 3 (16:35):
Photo which is proved forty years old, Elizabeth Saunders at
the table with the bush, the younger in the fiscal policy.
Our fiscal policy now is way more moldy than it
was in.

Speaker 2 (16:47):
Two thousand and four? What should investors do? Should they
worry about that?

Speaker 7 (16:52):
So we get this question all the time. The number
one theme of questions that I get at client events
is around deficits, and.

Speaker 6 (17:00):
And often it's followed.

Speaker 7 (17:02):
By sort of an addendum to the question, what's the
tipping point? Is there going to be some sort of crescendo?
Is the dollar going to lose its reserve currency sets?
Are we going to default on our debt is China
literally or figurally going to wake up one day and
decide to dump all all treasuries, and we don't have
those sort of draconian worries. There's no replacement for the dollars,

(17:24):
the world's reserve currency. We are not going to default
on our debt. China dumping treasuries on mass, they'd be
aiming the guns squarely at their own economic foot. Now
they've been diversifying away from such a heavy weight in
dollar denominated securities, but that's been.

Speaker 6 (17:40):
A ten year process. That's not a recent thing.

Speaker 7 (17:44):
The biggest implication of a hind rising burden of debt,
in addition to the interest costs associated with that, is
it acts as a bit of a wet blanket on growth.
It constrains growth. And that's not a new phenomenon. That's
not a respective phenomenon. That's a phenomenon we've been living
with for quite some time, as are other countries that

(18:06):
experience that same groom.

Speaker 2 (18:07):
This has been wonderful.

Speaker 3 (18:08):
Elizabeth Saunders, Kevin Gordon, thank you always and forever with
shab stay with us. More from Bloomberg Surveillance coming up
after this.

Speaker 1 (18:24):
You're listening to the Bloomberg Surveillance Podcast. Catch us live
weekday afternoons from seven to ten am Eastern. Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch us live on YouTube.

Speaker 3 (18:36):
Riccardo Housman is definitive on his Venezuela. Ricardo, I want
to go back before your acclaim at Harvard, before your
public service decades ago, to your Venazuela. How did the
Houseman family get from a World War two Europe over
to Venezuela. How did your family emigrate to Venezuela a

(18:58):
lifetime ago?

Speaker 11 (19:01):
Well, a Jewish family, my father, they both went through
the Holocaust. My father lost both his parents. He arrived
at Venezuela at age seventeen with some He managed to
get himself to Spain, and then everybody in Spain thought
that Hitler was going to take over Spain, so he

(19:22):
ended up with another relative in Venezuela. And my mother
lived through the German occupation in Belgium and she was
freed by the USGIS in September nineteen forty four. She
was living with a Catholic family in a village in
the south of Belgium until they were liberated. She lived

(19:46):
for over a year thereafter after, as you know, they
got the papers to go to the train station in
nineteen forty two. So that's how they ended up in Venezuela. Venezuela,
they had a you know, they created a really really
nice life for themselves. And so when I grew up,

(20:08):
Venezuela was this heaven and well I had this image
of Europe. That's this horrible place where my parents had
come from.

Speaker 3 (20:18):
Right, I look Professor Hausman and against This is part
of the story, folks, from Venezuela to the tip of Rgin. Tina,
your economist essay written yesterday for zenniment in Betters is
absolutely scathing. You say the president of the United States
is quote delusional. What does President Trump get wrong?

Speaker 11 (20:40):
Well, he thinks that extracting oil from the ground is
a technical issue. But extracting oil from the ground, if
it was a technical issue, Venezuela.

Speaker 10 (20:50):
Would be a powerhouse.

Speaker 11 (20:52):
But the reason why oil production in Venezuela collapsed, that's
so many other things collapsed, is because oil is a
long term investment proposition. You have to part with a
lot of money and wait until you know you get
a cash flow to recover that money over a very
long period of time. And in that long period of time,
you have to be assured that you have some property

(21:14):
rights that are going to be respected. And if he
thinks that right now, he's going to recover oil production,
because he's going to tell us major companies to go
out and part with billions of dollars in Venezuela in
the context of an illegitimate government because Malula stole an election.

(21:36):
But this woman who's now president of Venezuela, she didn't
even win pretend to win an election.

Speaker 10 (21:41):
She was appointed by a guy who stole an election.

Speaker 11 (21:44):
And he's going to get concessions that have no approval
in law by any national Assembly that was elected by anybody.
And you would expect at the moment they will go
back to democracy, that any of those conditions are going
to be respected by a new by a new political majority.
So I think that there is the Democracy is not

(22:08):
a goal to be put after economic recovery. Democracy is
an instrument of economic recovery. It's the way of telling
Venezuelans your rights will be protected. Go back and and
and you know, dream, go back to.

Speaker 3 (22:25):
Camp where you knew as a kid, Ricarda. Housman with
us of Harvard University. Folks were thrilled that he could
be with the Shannon O'Neil coming up. We welcome all
of you around the world. Please subscribe to YouTube. Paul
and I humbled by the digital success this year. Paul
Sweeney with Riccardo Housman, Professor.

Speaker 5 (22:42):
Do we know or what can you tell us about
what the average Venezuelan really on the ground once from
this government going forward or from any government?

Speaker 11 (22:54):
Well, I mean Venezuelans voted massively in favor of a
change of direction. Right they when they were allowed to
have a primary that the government tried to prevent. Well,
Mariacarina Machallo won with ninety plus percent of the vote
when she was not allowed to run and she anointed
somebody to run instead.

Speaker 10 (23:15):
They voted.

Speaker 11 (23:17):
You know, this guy won with a margin of forty points,
and he didn't want buy more because they didn't not
let us Venezuelants abroad vote and they did not let
three million young Venezuelans to register.

Speaker 10 (23:31):
Had that happened, we would have won with an even
larger margin.

Speaker 11 (23:34):
So Venezuelans are unified politically in a new direction. If
you allowed venezuelants to choose, they would choose a very
competitive legal.

Speaker 10 (23:43):
Framework for oil and they would engineer on oil boom.
We don't need.

Speaker 11 (23:49):
A you know, American help to engineer an oil boom
because the world is full of oil companies that would
want to quit back into Venezuela under the right conditions,
and we have a political majority to create the right conditions.
But this system that they have described right now, it's

(24:11):
not workable. It's something that works on one on a
day to day basis that they're saying, well, we leave
the same bad guys that were empowered before, the guys
who are indicted. I mean the guys who are in
the same indictment as Nicolas malulu Are. One is the
Minister of Defense and the other one is the Minister

(24:32):
of the Internal Police.

Speaker 10 (24:34):
So it's the same guys.

Speaker 11 (24:35):
We're there and they pretend to say, well, we are
going to tell them what to do and they're going
to do our bidding.

Speaker 10 (24:42):
But when they say our bidding, they think that they.

Speaker 11 (24:45):
Can get a recovery of Venezuela without empowering Venezuelan citizens
with rights.

Speaker 10 (24:51):
That's not going to work.

Speaker 5 (24:52):
Professor Isert, do you think of there's a scenario where
the Trump administration can in fact exert control over this
government like.

Speaker 4 (24:58):
I think they think they can.

Speaker 11 (25:01):
Well, I mean what they think they again is to
say either you do what I tell you or I
kill you because I have drones. I don't want to
put boots on the ground. I have drones, I have missiles.
I can kill you, So you better do what we want.
But we dinner rupt Ricardo. But Paul nailed it with
that question.

Speaker 3 (25:19):
What this is about is in is direct community violence,
whether it's Cuba or Venezuela. I mean President Trump in
his advocates have to decide if they want to participate
with people who are violent. How do you in your
Venezuela how do we move forward to a constructive end?

(25:43):
What's the Houseman process? In January, February, in March of
this year.

Speaker 11 (25:51):
Well, you want to empower the people who have strategic
interests that are aligned with you, and that is all
the Venezuela Democrats.

Speaker 10 (26:01):
So this idea that you.

Speaker 11 (26:03):
Can do your thing without having to deal with the
organized Venezuelan opposition that, under enormously difficult situations, was able
to win an election. When you want you want to
You want to empower them to help you do you
want a strategic alliance with them?

Speaker 10 (26:23):
But you don't want to hear this dismissive.

Speaker 11 (26:27):
Description of Maria Acorina Machau as as somebody who's not
respected in Venezuela. I challenge you to mention somebody in
the world who's more respected than Maria Acorna Matchau. Obviously
she's super respected in Venezuela. That's why she can win
elections in Venezuela. Now that's different from saying she has
the command over troops.

Speaker 3 (26:48):
We're gonna share O'Neil with this, Professor Hausman. But let
me ask you this Viscal. This came up Paul, last
side of the dining room table. Where does the military
Venezuela fit in? I mean, if I look at the
Philip means and the shift from diu Terte to the
younger Marcos, the military play a part there. Instability is

(27:08):
the military of your Venezuela stable or unstable.

Speaker 11 (27:14):
The military of Venezuela is led by an arco terrorist
organization and they're still in power.

Speaker 10 (27:23):
But below that there's a lot of people who would
be willing, who.

Speaker 11 (27:27):
Would want to go back to a more democratic regime
under a civilian rule. But they cannot they're not allowed
to organize. They're being spied by the military, secret police,
and they're being put in prison, they're being tortured. So
what we need if Trump is going to demand something

(27:50):
from from Delci Rodriguez, is that she.

Speaker 10 (27:52):
Delivered josdal Cavego, the head.

Speaker 11 (27:55):
Of the police, Bladimir Padrino, the Minister of Defense. Those
are the heads of the Cartel of the Suns, the
Cartel Deloslis. They are the narco traffickers. They are now
in charge of the country, and they are the ones
who yesterday put in prison twelve journalists, so that the

(28:16):
number of political prisoners in Venezuela is.

Speaker 10 (28:18):
Going up, knock down. Okay, So.

Speaker 11 (28:23):
You want you want to fix the country, you need
to get rid of this leadership, this corrupt, criminal leadership
that is in control of the army, and to empower
the bulk of the army to go back to civilian rule.

Speaker 2 (28:41):
Paul, get one more questions in your professor.

Speaker 5 (28:43):
Professors, are scenario where the people of Venezuela rise up
and force change.

Speaker 11 (28:49):
I think that you know everybody now is willing to
give a line of credit because you know, we've tried
so hard to get rid of Maluro and we weren't
able to do it on our own. So everybody is
very happy that that the US was able to get
rid of Maluro. But and and they're hoping that this

(29:11):
is the beginning of a good process. But you know,
the statements of Trump after you at Madlago and afterwards
were extremely disempowering and concerning. They described a vision for
the future that I do not think is going to work,
and I don't think that Venezuelans are going to feel

(29:33):
that that is there is the right frame.

Speaker 3 (29:35):
Professor Hausman, thank you so much for leading our coverage
this morning. Ricardo Housman with the Kennedy School, Harvard, and
of course look to his piercing essay and the economists
stay with us. More from Bloomberg Surveillance coming up after this.

Speaker 1 (29:57):
You're listening to the Bloomberg Surveillance podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch us live on.

Speaker 2 (30:09):
YouTube anticipated here.

Speaker 3 (30:10):
Of course, with all the geopolitics and international relations put
to the wayside, to a Tuesday Troy Gyski.

Speaker 2 (30:17):
One of our first conversations of.

Speaker 3 (30:19):
The year with Future Standard is well, one of the
great charms of Troy Gyski is you need to be
in the market.

Speaker 2 (30:27):
I never hear you saying go to cash. Have you
ever said go to cash?

Speaker 12 (30:31):
Well, I think if you look historically, it's I honestly
can't remember, Tom, because if you think of the post
GFC era, right, hoarding cash is tipically been a losing bet,
and initially so much of that was driven by que
and Montrey, Splyby and pump Top. And even though you
used to joke around about tripper level cash, I don't
know if you remember the triple what are you laughing

(30:53):
about it?

Speaker 2 (30:54):
They took one hundred and eighty basis points this year.

Speaker 9 (30:58):
Levern cash at cash barring rates is a trade.

Speaker 12 (31:00):
But really like you, but you know, putting cash to work,
and we do think that's one of the biggest challenges
for investors now is how do you put those massive
cash hoards and money markets, savings accounts, et cetera to
work where it can meaningfully increase total return and income
without taking uncomfort levels of risk. And that's one of
the key attributes of alternatives is you know, whether it's

(31:21):
private credit, private real estate lending, or even private equity.

Speaker 9 (31:24):
If you have more of a growth bend, and.

Speaker 5 (31:26):
I know you have a focus these days on private markets,
private equity, private credit. That is, an average investor, what's
the best way to get exposure to that asset class.

Speaker 12 (31:35):
Yes, So the way the industry has evolved, right is
we've democratized to some extent. So it used to be
really all about large sovereign wealth funds or large pension
funds or endowments, and so we've created these evergreen vehicles,
which are registered investment corporations, which allows smaller investors to
also partake. And to put it in the big picture,
if you look at the major wealth firms, you're somewhere
between one and a half and seven percent penetration and

(31:58):
all their targets are somewhere between twenty and thirty. So
we're really in the very early evenings of this democratization wave.

Speaker 5 (32:04):
What do you think is a reasonable allocation for alternatives
in an average investors portfolio? Like I used to think
it was low single digits, but I hear Rias tell
me much higher than that.

Speaker 12 (32:14):
Yeah, much higher I think most firms are guiding folks
meeting wealth management firms that ultimately control the acid allocation decisions.
So somewhere around twenty to thirty percent. You don't want
to go to eighty or ninety per se because you
need liquidity, and the whole idea is to increase that
efficient frontier, have that better risk adjuster return truck, I

(32:35):
asked you where.

Speaker 2 (32:36):
This was fifture with us this morning.

Speaker 3 (32:38):
We welcome all of you across the nation the way
you listen to Bloomberg's Surveillance. Good morning on Serious XM
on Spotify. I didn't realize this, Like we're a podcast.

Speaker 2 (32:48):
Yeah, on Spotify. It's huge in the Pacific rip absolutely.
We have a consultant.

Speaker 3 (32:52):
Ray.

Speaker 2 (32:52):
YouTube has really helped us with all this and races.
It's like ginormous.

Speaker 3 (32:56):
We say good morning and on YouTube subscribe to Bloomberg Podcast.
I got a new thing. I'm trying to figure out
how to put out the three big interviews of the
day the next day. Sera are YouTube's helping me. Oh
she's smart, She's gone down in flames so far. But
I'll get there and get there, Troy.

Speaker 5 (33:14):
A lot of folks are wondering, can we have a
fourth consecutive year of double digit growth in public equity returns?

Speaker 4 (33:20):
How do you think about that?

Speaker 12 (33:22):
Yeah, so it's gonna be a little more challenging this year,
mainly given where starting multiples are and the fact that
money supplied isn't as excessive relative to nomenal GDP as
it had been. You know, that was one of the
things from a multiple expansion standpoint I was starting to
get a little.

Speaker 2 (33:36):
More concerned about.

Speaker 12 (33:37):
And then tom as you know, when you know it,
the FED comes in and pumps in one hundred and
twenty billion dollars.

Speaker 9 (33:41):
The fresh liquidity. You know, so you have this spread compressing.

Speaker 12 (33:44):
But if you look at Ernie's growth, it's hard to
figure out how you get less than twelve, you know,
market served?

Speaker 2 (33:49):
Really, you're your twelve? Is your's on?

Speaker 12 (33:52):
Yeah, well, twelve would arguably be even more of a
bare case. Right, So the estimate is fifteen roughly give
for the SMP. And when you think about how strong
nominal GDP growth continues to be, you know, real GDP
plus inflation, revenue.

Speaker 9 (34:06):
Should be strong, Earning should be strong, and so.

Speaker 12 (34:08):
Whether it's public equity or private equity, it looks like
good upside.

Speaker 3 (34:11):
So it's good upside and you're all in, like Belski is,
I mean, what does he know?

Speaker 9 (34:15):
It's not get carried away, but.

Speaker 3 (34:18):
You're all in on the stimulus in the June and
July and August. Pray tell what happens after the Trump
stimulus into the mid terms. Well, so go to cash
labor Day.

Speaker 9 (34:31):
I would not recommend triple ever cast.

Speaker 12 (34:33):
It's for the record, but if you think of the seasonality,
obviously January December of strong months. But it's very difficult
for an average investor to time that, even institutions time that.

Speaker 9 (34:44):
So you want to be fully invested.

Speaker 12 (34:45):
The question is how much do you have an alternatives
to complement any downside that you could get you in.

Speaker 2 (34:51):
Do you buy this kool aid? Well, I think that's
credit equity private credit in my IRA.

Speaker 4 (34:57):
Yeah, it's just the allocation. I don't have a problem
with that.

Speaker 5 (34:59):
Somebody alltions that you guys are talking about it much
higher than I would have thought. But I mean from
evaluation perspective, you can get arguably much better evaluations in
a private.

Speaker 4 (35:09):
Market than you can a public market.

Speaker 13 (35:10):
In these dases.

Speaker 12 (35:11):
Yeah, I mean that's one of the biggest disconnects right now,
particularly in the Russell two thousands. So if you think
of the use case for middle market private equity in particular,
it's really been a substitute or compliment for the Russell,
because the Russell is roughly nineteen times evd BA dah,
middle market private equity is roughly eleven. Now our books
priced a little more expensively because the better growth prospects,
but you're effectively getting that growth at a reasonable price.

(35:33):
And not only do you have better convexity and upside,
but you also have less downside in the event we
get that correction scenario.

Speaker 2 (35:39):
He doesn't talk to Randall Forsyth at barons like this.
What did you say? Convexity?

Speaker 12 (35:45):
Yeah, convexity so more upside than downside, right, that's the
second derivative, as you know of the delta. But yeah,
convexy's hard to find in a market right now. But
when you're at eleven times forward or eleven times forward ebitdah,
and you have ten to twelve percent revenue growth, that
tends to lead strong outcomes.

Speaker 3 (36:06):
Amid all this jargon, folks, Lisa just threw a gluten
free role at him.

Speaker 2 (36:11):
Amid all this jargon. What you talked about, This key
is revenue growth. Yes, if we have nominal GDP popping
like it's popping.

Speaker 3 (36:20):
The normal industrial company making four percent five percent revenue growth,
maybe they one year they get seven percent. Everybody gets paid.
All those numbers are bigger now right.

Speaker 12 (36:30):
Well, that's one hundred percent, Tom, that's such a big
shift from the period after the GFC where one and
a half percent real and one and a half percent
inflation was. It was not necessarily the new normal, but
remember it was the new normal for a long time.
Post pandemic, we've been more like six seven eight percent
annualized nominal GDP growth Q three blockbuster eight percent annualized

(36:51):
GDP growth from a nominal standpoint, and that's what drives revenue.
So if you're if you're long private credit, you're long
public credit, you're long private equity, you're a.

Speaker 9 (36:59):
Long public equity.

Speaker 12 (37:00):
Nominal GDP is what drives revenue growth, and it all
starts there.

Speaker 5 (37:04):
So we've got twelve thirteen, fourteen percent EPs growth and
the S and P five hundred for twenty twenty six.

Speaker 4 (37:12):
Is that enough for this market in this valuation?

Speaker 2 (37:14):
You think so?

Speaker 9 (37:15):
Twenty two point one times S and P. That's obviously
on the richer end of the range.

Speaker 12 (37:21):
The main driver of multiple expansions since October of twenty
two or even prior to that is excess money supply
relative to nominal GDP sorry relative nomal GP and also
the extraction of public equity share buybacks always outstrip you know,
any IPOs or secondary offerings, plus run a big merger
wave definitice merger wave. So that should continue. But given

(37:43):
that the excess and money supply isn't as great, I
think you'd be a little aggressive to expect multiples to
go from twenty two point one to twenty three unlikely
to get multiple depression smadge a multiple expansion plus the
earnings growth I mean.

Speaker 3 (37:56):
Here, I just bring up a representative tooth based company
times earnings yep, yeah, for stuff that comes out of
it too.

Speaker 12 (38:03):
Grows less, you know gross g and by the way, tom,
if I may back to growth at a reasonable price,
you know, typically companies like that are only grown revenue
like one to five percent exactly, and so you know,
true in a nominal GDP environment, you'll get that's higher,
you'll get better revenue growth. But these stable mature companies
can't do ten, twelve, fourteen, fifteen percent GF revenue growth.

Speaker 2 (38:25):
GFC is not about no more Garcia party. It's about,
you know the thing.

Speaker 3 (38:29):
So I'm in this bar and Davos years ago, and
Scaramucci's pouring me a wine from the Rhan Valley, some
common hermitage thing that I couldn't afford, best glass of
wine I've ever had, And I turned around in Gaysky's there.
We didn't see eighth nine coming. We were sitting in
that star in Davos. We didn't see it coming. For

(38:49):
our listeners and viewers who are going, Okay, it's gonna
happen again, we can't see it coming. What do you
tell them besides have a glass of overpriced Scaramuci wine.

Speaker 12 (38:59):
Well, it's never bad to have good wine to start with,
especially in the evening at Davos. However, when you look
at the conditions that are necessary and sufficient for a
global financial crisis, remember you had a dramatically over levered
consumer one hundred and thirty one hundred and thirty one
debt to income. Now it's roughly ninety four percent. Not

(39:21):
only have we declined dramatically, but since the end of
twenty two, consumer debt to nominal income has dropped by
eight percent. That's a huge number, so you have a
much more stable consumer. Obviously, the housing market's much more
stable as well, and the banking system is completely delevered.
So periodically this concern comes up. We think it's sub

(39:41):
one percent probability.

Speaker 2 (39:42):
I got to get this in Ned Ludlow rocking it
today out at CES. Have you been to CES? I
have not been?

Speaker 3 (39:49):
Yeah, either, having the Belajio breakfast right now. He has
mister Wang at the one o'clock Goward at eleven o'clock,
he has what your MIT is all about, the leadership
of AMD. Miss Sue grew up in Queen's really basic,
ended up with three. She did better at MIT than
you did.

Speaker 9 (40:09):
Okay, she's probably smarter than me, you know, But.

Speaker 2 (40:13):
Tell us what it's like as a kid coming out
of Queens, New York, the intimidation of Robert Solo and
Edgerton's MIT. It just must be I can't. I can't
imagine that.

Speaker 12 (40:26):
Well, I'll say it's a humbling experience, tom right, because
typically when you go there, you've always done well in school,
You've had good board scores. I hate to use this term,
but you used to be at least one of the
smarter people in the room, and then you show up
on MIT and it's like everybody's a genius and you're
getting like overwhelmed by just the workload.

Speaker 10 (40:46):
Right.

Speaker 12 (40:46):
That was, and I think particularly public schools prepare people well,
but you're just not used to that NonStop intense activity
in Yeah, and then it's also very competitive, right, because
everything's graded on a curve, so it's like, whoa, you
have to really mature fast.

Speaker 4 (41:02):
And engineering I would have done like English Lit.

Speaker 2 (41:05):
That's no, she did, and Lisa soon shaped electrical engineering.

Speaker 9 (41:09):
Yeah, challenge Yeah, CORSEIX so course six.

Speaker 10 (41:11):
Yeah.

Speaker 3 (41:12):
She she used to take the Wheatstone bridge across from
Queen's I ask you, thank you.

Speaker 2 (41:16):
So much for wisdom her stay with us.

Speaker 3 (41:18):
More from Bloomberg Surveillance coming up after this.

Speaker 1 (41:29):
You're listening to the Bloomberg Surveillance podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch us live on YouTube.

Speaker 3 (41:41):
She is Senior Vice President of the Consul and Foreign Relation.
She is my most definitive voice on Latin America. Shannon,
I have tattooed to my brain the last time you
were with us, and you were hugely skeptical that we
could write and that the Venezuelan people could quote unquote
do it themselves to rebuild. Give us an update after

(42:02):
these events. What do the people of Venezuela need to do?

Speaker 2 (42:07):
Well?

Speaker 13 (42:07):
This is the real challenge, right. We've seen just in
the last seventy two hours, the new regime led by
the previous vice president now the president of Venezuela, cracking
down on journalists on any sort of opposition. We really
haven't seen many protests or return to the streets, in
part because many of those people have left. We have
over eight million Venezuelans who have left in our elsewhere,

(42:27):
including Nobel Laureate Maria Corina Machado, including the man who
stood up for president and by all accounts won the
twenty twenty four elections.

Speaker 4 (42:35):
So it's been quite subdued.

Speaker 13 (42:37):
And the guns, the you know, repressive forces are out
on the streets.

Speaker 4 (42:40):
So what do they need to do.

Speaker 13 (42:42):
They need to rally, but it's very hard to do given.

Speaker 2 (42:45):
This hardarell for guns pointed at your head.

Speaker 13 (42:48):
That's the challenge, right, Hey.

Speaker 2 (42:49):
Ricardo Houseman, cut right to it, right, Paul, Yeah, absolutely So.

Speaker 5 (42:52):
I mean, I guess one of the questions this seems
like that Trump administration believes they can exert some influence
on this Venus whaling government.

Speaker 4 (43:01):
How do you do you think that can play out?

Speaker 13 (43:03):
I mean, I think they can exert some influence, but
we really haven't heard from the Trump administration and interest
in return to democracy, right, Those haven't been the words
coming from the President, from the.

Speaker 4 (43:11):
Secretary of State.

Speaker 13 (43:12):
They've talked about reviving the oil industry. They have talked about,
you know, bringing stability to Venezuela, but they haven't really
talked about democracy.

Speaker 3 (43:20):
I got to get this question into because I need
to be rude to doctor O'Neil this morning. Have you
spoken to anyone within the Trump administration of your expertise
on Venezuela, Guyana and everything South.

Speaker 13 (43:33):
I have not been speaking to them these last few days.

Speaker 2 (43:36):
That's half the problem probably, So I don't know.

Speaker 4 (43:40):
Open ending question here, how do you think this plays out?
I mean, I'm not sure much is going.

Speaker 5 (43:45):
To change here, I guess is what a lot of
people are starting to come to the conclusion and maybe
not a lot it's going to change here.

Speaker 13 (43:51):
I think there's sort of two scenarios. One is that,
as you say, not a lot changes. We have a
new leadership head, but not a regime change. Lots of
the other pieces stay in place as they are now,
you know, oil and others. You know, there may be
US players who come in though it's still kind of
a shaky market and the infrastructure is very weak after
years and years of sort of degradation.

Speaker 6 (44:11):
So one is sort of.

Speaker 13 (44:12):
As you say, stability, continuing, new figurehead, but not alloted changed.
The other is that, you know, the current president, Delcia Rodriguez,
she isn't able to keep all of these forces right,
the various different groups with guns together and we get
sort of a fragmentation, disintegration and a lot of violence.

Speaker 2 (44:29):
Vinstaville, you met with Elcia Rodriguez.

Speaker 13 (44:31):
I haven't no, because you're the.

Speaker 3 (44:32):
One person I think what Delcia Rodriguez is like twenty
eight to thirty years old. She and her mother take
over the Venezuelan embassy in London a million years ago.

Speaker 2 (44:42):
Is part of the Socialist protest. I mean, she's like
the real deal.

Speaker 4 (44:46):
Within the Socialist she was chief of staff to Ugo Chavez.

Speaker 13 (44:49):
I mean she has a long history with this movement.

Speaker 2 (44:51):
And she knows all the players.

Speaker 13 (44:53):
Is yeah, and she's been a player for a long time.

Speaker 3 (44:55):
Right, Shannon on you know, with us the Console Foreign
Relations after Ricardo Hausman of Harvard Tip brief Global Wall
Street on these events in Venezuela.

Speaker 2 (45:03):
Paul screening with doctor O'Neill.

Speaker 5 (45:06):
So, one of the expectations of the Trump administration is
that major global.

Speaker 4 (45:10):
Oil companies will go into Venezuela.

Speaker 5 (45:13):
And revive their energy infrastructure, creating more supply in.

Speaker 4 (45:17):
The marketplace, keeping oil energy prices down.

Speaker 5 (45:19):
But we've spoken to people saying I'm not so sure
because that's a it's a lot of money, and B
it's a long term investment, which means you're banking on
political stability in that country. It's a tough bet to
make these days.

Speaker 10 (45:32):
Isn't it.

Speaker 13 (45:32):
I think it's a really tough bet to make, and
especially if you're a public company, if you have shareholders.
You know, what we've seen in Venezuela for the last
twenty five years is really the solidifications of the consolidation
of crony capitalism. So if you're going in there, and
we're not yet disrupting some of the you know, the
bad players, the corruption, the back and forth. So one
is you need hundreds of billions of dollars in investment

(45:52):
just to get oil out of the ground and out
of the ports. Right, there aren't ports that can actually
do now. But two, who are you working with? You know,
if we can to a place again in the United
States where foreign corrept practices act, where other things are
being enforced, do you really want to be involved with
some of these characters.

Speaker 3 (46:08):
So you didn't talk to the Trump administration, I have
no idea what that's about. Have you spoken to mister
Worth over at Chevron.

Speaker 13 (46:15):
I haven't spoken with him, but I have talked with
some of the people in the general energy industry.

Speaker 2 (46:19):
How do they ask you?

Speaker 13 (46:21):
So they care about what's going to happen. Chevron has
been in Venezuela for the long haul, right, and they
have gotten, you know, exemptions to continue operating. So for them,
this is a good turn, right, they won't have to
worry so much about these ongoing exemptions for licenses. But
I do hear from others who are in this general space,
both the oil companies, but also the logistics companies, right,

(46:42):
those who build rigs, those who do other parts.

Speaker 4 (46:44):
There is a worry.

Speaker 13 (46:45):
You know, we're only three days into this. There's a
worry about this stability and really does it last? And
you know, oil companies others, they make long, multi year,
decades long bets.

Speaker 5 (46:56):
What is the news over the last seventy two hours
meant for just Latin America in general? I mean, is
everybody else looking over their shoulder these days? We think Cuba, Cuba,
maybe Columbia and maybe even some other countries.

Speaker 13 (47:08):
I mean, this is a real break in US policy
writ large for Latin America, for the world.

Speaker 4 (47:14):
Right, we had a policy.

Speaker 13 (47:16):
In the post World War two period that was really about,
you know, if not loved America wanted to be admired. Right,
we were a shining city on a hill. And now
we're back to gunboat diplomacy literally, right, is that we are,
you know, the mighty We are going to use coercive
power and it's going to be transactional. So all of
the countries around Venezuela are thinking about that.

Speaker 2 (47:34):
Globally, no sparks are coming off the wall.

Speaker 3 (47:36):
When Elliott Abrams and Shannon O'Neill are going out of
the sea, afarre. What is the distinction in the debate
between you and Elliott Abrams?

Speaker 13 (47:44):
You No, I think the distinction here, And you know,
Elliott's one of my great colleagues, so you know, I
have a lot of respect for him.

Speaker 4 (47:49):
I think the.

Speaker 13 (47:52):
We love Elliott, come on, you know, I think the
distinction here is right. He has worked in the first
Trump administration. He worked on Venezuela policy in the first.

Speaker 2 (48:00):
Did they call as I hope? So what's the distinction?

Speaker 9 (48:03):
I hope they did too.

Speaker 13 (48:04):
You know, I think the difference here is probably where
we get and how we get there, right, And there
is sort of this use of maximal force.

Speaker 2 (48:12):
America wants to get to the weekend? Right, Paul stop,
stop the show? Should Paul Sweeney keep his reservation in Aruba?

Speaker 13 (48:22):
I think you're good to go now right, the airspace
is back open.

Speaker 5 (48:24):
I think you're good to weekend? Was a little dicey, yes,
So what's the next step here? I mean for Venezuela,
I'm not sure who's who's gonna make the next step?
Is the US going to try too some policy here?
Is Venezuela going to react to the US.

Speaker 4 (48:39):
What should we be looking for?

Speaker 13 (48:41):
So I'd be looking for whether Delcia Rodriguez actually consolidates power.
Right we saw, you know, last night there were videos
of a gunfight happening near the you know, the presidential Palace.
You know, is that just you know, a one particular thing,
a drone that was flying, or is that sort of
a bit of a breakdown of these various I mean
there's four or five different types of groups and militia's
have guns in Venezuela. Up until recently, they've all been

(49:03):
working together. We'll see if that continues. So I would
be watching what happens on the ground there and then
from Washington, I would be watching, you know, do we
see any appetite to go beyond just the snatch and
grab that we saw?

Speaker 3 (49:14):
Ricardo Housman spoke emotionally about his family coming from Europe
to Venezuela and all the hardships of World War two
for Americans like me, Like literally, I'm so intimidated by
Shannon O'Neil, Like I didn't.

Speaker 2 (49:27):
Get a map out.

Speaker 3 (49:28):
So Caracas is on the water waving at a Ruba
and Currissou in Trinidad.

Speaker 2 (49:33):
And to Bason right, you go to these places, I
have no life. Okay, what's the rest of Venezuela think
of all this? You've got the oil to.

Speaker 3 (49:42):
The west, the oil to the east, and then Guiana. Okay,
along the water, I get it. But up in the
Andes and then down to the plains and then the
tropical nothingness towards Brazil. What do the rest of Venezuela think?

Speaker 13 (49:58):
What you have seen, especially of these last couple of
decades too, especially on the borders, is really lawlessness. And
on the Colombian border you've seen you know, the E
l N, which is a gorilla group from Columbia really
move in and solidify. So there's a lot of contraband
and illegal goold and mineral mining and the like. So
there's some of those areas that are really lawless. There
are other areas that you know, really aren't under central control.

(50:19):
So I think a question here. It's worked well under
Maduro because they've all sort of worked together, these various
arm groups, and there's a live and let live sort
of you know, kleptocratic model. The question is what happens now?
Does that continue and this you know, business as usual,
or do we see a breakdown, Teddy Rouseveld.

Speaker 9 (50:37):
But maybe it is, you know, but it's not funny.

Speaker 3 (50:40):
You've just described with all of your professionalism the violence
of Venezuela.

Speaker 2 (50:46):
We're going to drop our men and women into this.

Speaker 3 (50:48):
Is marines or green berets er what are the modern
green berets, seals or whatever.

Speaker 13 (50:54):
I don't think we are going to drop them in.
And that's the thing, right, I think what we have
done is is take out Maduro. But I don't see
US troops moving in for any long term.

Speaker 5 (51:04):
What I'm learning, I think a lot of other folks
have been learning over the last several days, is there's
a large number of people who have left Venezuela. Is
there any kind of I know, organization around those people?
Is there any movement of those people? There is there
any maybe drive from some of that population that drive
change in Venezuela? Or those are the folks that just

(51:25):
wash their hands.

Speaker 13 (51:26):
Look, I think you know Ricardo Hasman perhaps and his
family is one of these. You know, there are many
people who would love to go back to Venezuela. Right,
There's there's sort of you know, educated upper classes. Many
live in Miami, you live in other parts of the
United States. There's millions who are across Latin America, especially
South America, Columbia, Peru, Chile, Argentina and the like. I
think many would like to go back, but I don't
yet in talking to some of this diaspora in the

(51:47):
last few days, I don't yet see anybody thinking that
this is the moment.

Speaker 3 (51:51):
Okay, one final question, audible, we got ism yesterday Michael
McKee here at Bloomberg or Expert says we're on the
cusp of a manufacturing recession.

Speaker 2 (52:02):
Give us a Shannon O'Neill tariff's.

Speaker 3 (52:05):
Update on not you know, the emotion and the politics,
but on American output. Are tariffs diminishing our output? Is
McKinley faced in eighteen ninety eight.

Speaker 13 (52:17):
Yes, they are diminishing our output. And I think the
biggest challenge is that while you know, tariffs create a
wall that create protection and a reason to produce here,
all of the inputs to create those factories here are tariff,
and some of them tariff at very high rates. Aluminum, steel, copper,
the things to build the physical infrastructure, and the machines
that might be imported from China from other places. So

(52:39):
it's hard to stand up. It's more expensive today to
stand up a factory, so it's slower coming in.

Speaker 2 (52:43):
We got to go to the market. Shannon. You know, folks,
I'm a member of the Council on Foreign Relations, so I'm.

Speaker 3 (52:48):
Talking my book. Don't let Kurtz Phelim know this. Okay,
but you guys are rocking the magazine. I open the
magazine up, okay, Li's economies in the magazine. Yeah. Yeah,
And then the woe that replaced Liz sends me a
text on LinkedIn and says, hey, stupid, I've got an
article out too, back to back in Foreign Affairs, two

(53:08):
must reads on China. I mean, folks, get a subscription
to Foreign Affairs. Throw it at your brady twenty two
year old and say shut up and read it. Bonus, Lisa,
It's in a bigger font for you and me who
can actually read it.

Speaker 6 (53:24):
Excellent.

Speaker 2 (53:25):
Can you come back sometime soon, like.

Speaker 13 (53:28):
You know, anytime. I'm just up the road, Shanna.

Speaker 3 (53:30):
Thank you so much doctorning a off of Park Avenue
with Consol and Foreign Relations. I can't say enough about
her commitment to Latin America and making us wiser and brighter.

Speaker 2 (53:40):
Over the recent years.

Speaker 3 (53:42):
Stay with us more from Bloomberg Surveillance coming up after this.

Speaker 1 (53:54):
You're listening to the Bloomberg Surveillance podcast. Catch us Live
weekday afternoons from seven to ten an listen on Apple
Karplay and Android Otto with the Bloomberg Business up, or
watch us live on YouTube.

Speaker 3 (54:06):
We welcome back, seriously, Lisa, the lightness of newspapers.

Speaker 2 (54:11):
What do you have?

Speaker 4 (54:12):
Okay, we do? I want to talk more.

Speaker 14 (54:14):
It kind of flows into what we've been talking about
about Madodo, about the breaking news that happen and all
of the deep fakes that came out when the news broke,
and it kind of yes, AI and all the fake
fake pictures everything that came out because a lot of
AI generators they have rules against, you know, doing things
like this, for people creating images like this, but the

(54:37):
problem is that you can't control it some of the time.

Speaker 3 (54:39):
So that we are tearing the fancy billionaires for the
foot yacht.

Speaker 2 (54:44):
It's small, right, one hundred.

Speaker 4 (54:45):
Foot they control it and they can't.

Speaker 14 (54:49):
They can't because it's sometimes there's there's these workarounds for it.
So what the New York Times did did is that
they actually went on so they went onto like open AI.

Speaker 4 (54:58):
They went on to Gemini.

Speaker 14 (54:59):
They went onto the X platforms to see if they
could generate an image of my Doudo, and it turns
out they did so, so it can be done. But
it's this whole question of you know, these companies are saying, well,
you know, it can't be done, but it's happening. And
so this is the whole question behind this article is
what to believe?

Speaker 2 (55:18):
What's not unbelievable?

Speaker 3 (55:20):
Like I'm looking at Duke winning a college football ball game.

Speaker 4 (55:24):
I thought it was a hey, fake news exactly, it
was real.

Speaker 5 (55:28):
So but yes, it's tough to and this is the
first time we've seen with real time bigness.

Speaker 4 (55:32):
Yeah, real time big news.

Speaker 14 (55:34):
I mean there's been other stories too about you know,
fake crowds, you know in Venezuela, Like you see these
pictures on let's say your Instagram, theed or or wherever,
and a lot.

Speaker 4 (55:42):
Of this is not real.

Speaker 14 (55:44):
So it's hard to determine what to believe when you're
working news.

Speaker 2 (55:47):
Let's have to say about the show.

Speaker 14 (55:50):
Okay, Paul, I have a question for you to the
next story. Is golf exercise? It's exercise, yes, because I walk?

Speaker 2 (55:58):
You do walk?

Speaker 4 (55:59):
Yes, you know I'm going to call. No, we have caddies.
We have the jocks. So you don't hop in the
golf cart and go right.

Speaker 5 (56:03):
Now, I walk unless there are no caddies. But we
have a great caddy program.

Speaker 2 (56:06):
Show play slow.

Speaker 4 (56:08):
I played as quickly as possible. I'm ready golf. So
you get your ball, take a look and swack it.

Speaker 14 (56:13):
Okay, So okay, it's exercise in your case.

Speaker 9 (56:16):
I got it.

Speaker 14 (56:17):
But there's a lot of people, well they especially the
head of like Equinox, this book the Wall Street Journal,
who says, you know what, it's really not because you're
hopping in a golf cart. You're having like a beer
like the ninth.

Speaker 4 (56:27):
True, that's true. Get you're drinking ie, we do some Yeah.

Speaker 5 (56:33):
Swing oil is involved oil yep. Oh swing a little
transfusion going there, yep, that's how you roll.

Speaker 9 (56:41):
Well, they talked about this.

Speaker 14 (56:43):
He's basically saying, you know what, golf is not real exercise.
But he talked about the whole longevity market and how
big it's becoming for especially they're their top clients, how
they're paying like tens of thousands of dollars for these
top things.

Speaker 3 (56:56):
Twenty second audible. Here do you believe Lisa, that's society
has actually dramatically decreased it's consumption and alcohol.

Speaker 4 (57:05):
Oh, actually everywhere.

Speaker 14 (57:06):
No, most definitely, because even when I hang out with
a group of friends, you notice how some people order
the the mocktails because they think I'm not drinking anymore.
It's dry January, you know, like some people do that.

Speaker 4 (57:18):
How many took a gummy before that?

Speaker 2 (57:20):
So what is it?

Speaker 4 (57:21):
That's the web February February.

Speaker 9 (57:23):
Yeah, come back February.

Speaker 2 (57:25):
You know, Jenny Kreamhills are a mock too. Yeah. Next, okay, okay.

Speaker 14 (57:30):
This is the quick one, a five and thirty five
pound bluefin tuna smash reference.

Speaker 4 (57:35):
Okay.

Speaker 14 (57:35):
It's sold for more than two million dollars. It's Tokyo's
first fish auction of the year. It was bought by
this company, Kio Moricorp. They operate Sushi San my restaurant chains.
But the head of the company, he's like known as
the tuna King. Okay, and he says, the first fish
brings good luck.

Speaker 4 (57:54):
There's a picture here in the Telegraph. This is monster
tuna fish.

Speaker 12 (57:58):
It is a.

Speaker 14 (57:58):
Monster tuna fish. And within hours it was already being
sliced up and serve. Sure out at the restaurant. But
I'm a big sushi fan. Yes, I'm pretty basic. I
don't go you know, the eel and all that.

Speaker 2 (58:16):
Yeah, do you have like three times a day you
have sushi?

Speaker 4 (58:19):
Like it could rot to the tune out Yeah, protein, yes,
the newspapers.

Speaker 2 (58:24):
Lisa Manteo, Thank you so much.

Speaker 1 (58:26):
This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
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seven to ten am Eastern on Bloomberg dot com, the
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(58:46):
always on the Bloomberg terminal