05-22-25 *INTERVIEW* The Most Popular Substack in the Finance Category Doomberg

Episode Transcript

Speaker 1 (00:00):
My next guest is not just the most successful green
chicken on substack key or they h.

Speaker 2 (00:10):
And I don't mean that as sort of a woke.

Speaker 1 (00:12):
Pronoun change, but rather there there could be a group here,
even though I'm only talking to one chicken. Uh, but
not just the most successful green chicken on substack, but
actually the most successful of any form of poultry on substack.
I'm very pleased to welcome back to the show Doomberg,

(00:33):
just the clearest, most interesting analysis of energy and related geopolitics,
and occasionally some other things as well that you are
going to find anywhere Doomberg.

Speaker 2 (00:44):
Dot substack dot com. Hello Chicken Ross.

Speaker 3 (00:48):
Great to be back with you.

Speaker 4 (00:49):
I was about to say, go on, always great, always great,
the chat with you, sir.

Speaker 2 (00:55):
Uh.

Speaker 1 (00:55):
Okay, let's let's start with some some news. Actually you
probably noticed this because as Doomberg, you probably have a
Bloomberg terminal, and you probably see some news. But it
looks like, just maybe in the past hour or so,
the Senate voted fifty one to forty four to overturn

(01:16):
well the way this news article describes it as California's
electric vehicle mandate, I'm not sure if this is actually
an overturning of the entire waiver from the EPA, which
was what I thought they were dealing with. And I
will just note for listeners that the Parliamentarian.

Speaker 2 (01:32):
Said they can't do this, and.

Speaker 1 (01:34):
The Republicans and the Senate went ahead and did it anyway.
So do me tell me if you think this is
important and if so, why.

Speaker 3 (01:42):
Yeah, great question.

Speaker 4 (01:43):
I just saw the headline myself and haven't had time
to fully digest it, but I have some thoughts. I
believe what the Parliamentarian must be referring to as the
fact that since this is not sort of a finance
or reconciliation bill, that it should require sixty votes in
the Senate.

Speaker 3 (01:59):
And I think.

Speaker 4 (02:01):
The Republicans are either circumventing the filibuster or making the
case that the filibuster.

Speaker 3 (02:06):
Rules do not apply to this pot legislation.

Speaker 1 (02:08):
That's close. It's the Congressional Review Act. And she's saying
the Congressional Review Act, which kind of similar to philibuster stuff,
but the Congressional Review Act can be done with a
simple majority. But she's saying the cr doesn't apply to this,
and they're saying, yeah, it does.

Speaker 2 (02:22):
You're being too differential to the GAO.

Speaker 3 (02:25):
Yes exactly.

Speaker 4 (02:25):
I mean, essentially, it's a it's an argument about whether
sixty votes required her yes, fifty one, and the Republicans
are taking the stance that it's just fifty one. Of course,
this is going to end up in the courts. Just
to give people the relevant background. In the Clean Air Act,
California was given the ability to apply for waivers, and

(02:46):
the EPA, if they approve such waivers, effectively delegates national
emissions control over the over the entire US auto fleet
because carmakers aren't going to make cars just for California
and so over the decades since the Clean Air Act
has been passed, the rest of us in the country

(03:07):
have been subject to the whims of an organization called CARB,
the California Air Resources Board, and in the name of
do gooding and clean air and puppies and unicorns, the
entire automotive industry has been reworked to the whims of
the bureaucrats who were appointed to the position of the

(03:29):
board on CARB and Trump committed to overturning this, and
the big fight has been whether it could get through
the Senate. I thought that Trump and Republicans might have
buried it in a reconciliation bill so that the questions
of the applicability of the filibuster.

Speaker 3 (03:50):
Would not apply.

Speaker 4 (03:51):
But perhaps that would make such a bill more difficult
or challenging to get through the Senate, and Trump didn't
want to risk it.

Speaker 3 (03:58):
That's my view.

Speaker 4 (03:59):
But again I would say I haven't had a chance
to read too deeply into today's developments, you know, getting
ready for this interview, right.

Speaker 2 (04:05):
And I think this is all good news.

Speaker 1 (04:08):
Colorado is one of these states that I had a
previous governor say we're basically going to go buy whatever whatever.
California does not quite everything, but a lot of things.
There are people here who want to, you know, ban
gasoline powered lawnmowers and so on, all of this craziness.
All right, let's do let's do some other stuff. Probably
the most important question I'm gonna ask you today, as

(04:30):
I know you to be a football fan, is what
do you think of the tush push being allowed to
remain as part of the NFL after they failed to
ban it yesterday?

Speaker 4 (04:43):
Well, I mean, who doesn't like a good tush push?
And you know, such such things occur all the time,
and I think.

Speaker 3 (04:53):
This is just sort of a.

Speaker 4 (04:55):
A reflection of the reality of the game. It's got
a bit of a rugby feel to it. I suppose
that football isn't rugby, but I think, you know, it
just happens so often. It's kind of like holding happens
on every play. You know, let's just go ahead and
acknowledge that it's a part of the game. And in fact,
it opens up opportunities, I think for coaches to strategize

(05:18):
around it and so on, and it does change for example,
it might change a roster spot or.

Speaker 3 (05:21):
Two as well.

Speaker 4 (05:24):
Right, I mean, the short the ability to predictably gain
short yardages positively is just pretty powerful in football, and
I think it's it's actually a meaningful development.

Speaker 1 (05:35):
When's the last time an interviewer asked you a football question?

Speaker 4 (05:41):
Actually, I appeared on one of the top football substacks
and their podcast. The name of the substack escapes me,
but I had a whole discussion about the power of
the University of Texas endowment system.

Speaker 3 (05:56):
What's the university worth? We peg the value of the universe.

Speaker 4 (06:00):
If you have Texas at somewhere around one hundred billion,
and then you'd be surprised. Actually, the university system in
the US is unique and fascinating.

Speaker 1 (06:07):
Wow, we're talking with Doomberg. He's a green chicken or
they are a green chicken. And the website where you
should absolutely subscribe, and I am a paying subscriber is
Doomberg dot substack dot com. I think you can just
go to Doomberg dot com and you can get through
that way as well. Let's talk about China a little bit.
You've written a couple of very interesting pieces recently, one

(06:31):
being on the ascend and another piece about the wrong
end of the telescope.

Speaker 2 (06:38):
About about China.

Speaker 1 (06:40):
I want to start with the second one because you
and I were going back and forth a little bit
in the comments on your substack and you said something
that I think should attract a lot of people's attention.
And I'll let you word it yourself, but it was.

Speaker 2 (06:55):
Along the lines of why China might have a.

Speaker 1 (06:58):
Little bit less incentive than some people think to go
to take Taiwan to get control of advanced semiconductor manufacturing.

Speaker 2 (07:05):
Yeah.

Speaker 4 (07:06):
Well, again, because we've used sanctions as a weapon, and
I should say we are basically opposed to all sanctions.
Once you weaponize the US dollar system, you weaken it,
and sanctions are effectively an active war, and you put
the target of your sanctions on a war footing.

Speaker 3 (07:25):
And by sanctioning.

Speaker 4 (07:26):
China's semiconductor industry, we provoked Gigiping into spending scores of
billions of dollars to develop one where that probably wouldn't
have happened if we had focused inward on developing our
own capabilities to extend and keep our lead. China wouldn't
be nearly as close to the US as they are now.

(07:46):
Our view is they will soon surpass the US, and
sanctions have played a role in catalyzing that.

Speaker 3 (07:52):
And I just think.

Speaker 4 (07:55):
Even President Trump overestimates the power of sanctions. They never
work against strong countries and almost always rebound against the
country doing the sanctioning, in this case the US.

Speaker 1 (08:05):
So, just to paraphrase, you're saying that China might get
might advance so quickly in the development of semiconductors that
they won't even have the need to go take TSMC.

Speaker 3 (08:23):
They wouldn't have to take it. They just have to
blockade it.

Speaker 4 (08:26):
Because if they can supply their own ships and they
choke the rest of the world off of its supply,
then they get a two for one deal on the
trade and they would never have been in a position
to do that had we not provoked this ferocious response.
And by the way, many in the West suffer from
what I call techno arrogance, where we radically assume that

(08:46):
the US and Europe and the Western nations have this
great technological advantage over countries like China and India or Russia,
that the opposite is true. I mean, it's just an
army of scientists and engineers. China speed is.

Speaker 3 (08:58):
A real thing. They won't past the US.

Speaker 4 (09:01):
We are forcing the US is forcing them to surpass us.
And anybody who's worked in and around China, traveled to
China as I have, knows that just sitting idly on
a lead. When China is motivated and the Chinese Commis
Party makes it a national ambition to achieve a scientific objective,
they're going to crush it, and we best get ready

(09:24):
for it.

Speaker 1 (09:26):
I want to go back to the sanctions thing for
a minute, because I think this is really interesting and
important at a macro level, and it's something you clearly
think and write about a lot, and what I.

Speaker 2 (09:40):
Would like to figure out.

Speaker 1 (09:41):
And let's maybe focus a little more on Russia for
the moment than than China, and you have made consistent
points against sanctions on Russian oil, and maybe we'll get
to that in a second.

Speaker 2 (09:54):
But what I wonder.

Speaker 1 (09:56):
About is what other forms of leverage do we we
have that could perhaps change the behavior, if not of
Russia themselves, then maybe of other countries that are helping Russia,
or other countries that are helping Iran and so on.

Speaker 4 (10:11):
So the only leverage we had at the beginning of
the war in Ukraine, and that leverage is fleeting now
three plus years later, was to radically drive the price
of oil lower as quickly as we could. And the
best and only way to do that is to flood
the market with supply, not try to sanction Russia's volume.
And we have half jokingly said the US Navy should

(10:34):
be escorting Russian oil tankers to the market to reduce
the friction of getting every molecule we can to the market,
lower the price strip Russia of oil profits which we're
feeding the war machine three and a half years on
oil is far less of a concern to Russia. Broadly speaking,
the best leverage is strengthening yourself. The US should be

(10:55):
looking inward. Why don't we have a manufacturing sector. Why
does the US lag in producing patrollem engineers. Why is
it's so hard to build a nuclear reactor in the
country today, which is what we published about this morning.
China is cranking out nuclear reactors at a speed and
for a cost that is unbelievable compared to what can
happen over here. Fix your own house and don't necessarily

(11:19):
try to interfere in the home construction of others, because
they will circumvent you. Russia is wholly independent now. Russia
is producing three times the artillery shells of all of
natal combined. They have oil, gas, fertilizer, farmland, chemicals, munitions, steel, aluminum.

Speaker 3 (11:41):
They have everything they need.

Speaker 4 (11:42):
And by sanctioning the Russian economy, the West has forced
Russia to become totally self sufficient and they have achieved it.
And the arrogance of assuming that access to the US
dollar system would somehow cripple, you know, Russia, taking away
their access to it just a deeply naive and totally

(12:03):
misread history.

Speaker 1 (12:05):
This conversation, Folks, is probably the main reason I wanted
to have Doomberg on today because that line of thinking
I find very interesting and I don't hear it anywhere else,
and it's coming from a source that I trust, even
though I'm looking at a green chicken. And so I
want to keep going with this, and I hope you

(12:27):
all who are listening are thinking about this deeply. And again,
doomberg dot com would be a good place to start.
Or just go to your favorite search engine and type
in Duomberg and you'll get to their sub stack. And
if any of this interest to you, you should subscribe.
I am, as I said, a paying subscriber.

Speaker 2 (12:44):
Do me. Is there any even slightly better argument?

Speaker 1 (12:48):
Or maybe slightly better is irrelevant, because like a terrible
idea and then you'll get one that's slightly better is
still really bad. But what about this idea of kind
of secondary sanctions that Trump has talked about a little
bit for exam, You know, if you buy Russian oil,
then we will sanction you rather than sanctioning Russia as
a matter of pure real politic. If these countries other

(13:12):
perhaps than China, maybe subject to that kind of influence,
could we starve Russia financially that way? Or does it
just play into the original problem where all that would
really do is raise the price of oil, and so
it ends up benefiting Russia anyway, because they'll just find
a way to sell it one way or another.

Speaker 4 (13:32):
Threatening secondary sanctions against Russia is effectively threatening sanctions against
Indian and China because they are the two largest procurers
of Russian oil. And by the way, the US Northeast
was bailed out of the diesel crisis when shipments of
Indian diesel refined in India starting with Russian oil, arrived

(13:55):
shortly after the war started. It just sort of shows
you just how complicated and interconnected the world is. Trump
just raised tariffs, which is effectively equivalent to a sanction
on China, to one hundred and forty five percent, and
they didn't. They didn't, they didn't bunch. So they just
negotiated in Switzerland a ninety day day tant on the

(14:18):
whole tariffs thing. And then We're gonna go ahead and
raise tariffs on China because they're buying Russian oil. It's
it's incongruent with Trump's broader agenda, and I think it's
a bluff.

Speaker 3 (14:31):
He clearly doesn't want to implement the sanctions.

Speaker 4 (14:33):
The Russians and the Chinese and the Indians frankly don't care.
There's all manner of things the US wants from India,
for example, and the whole hot war with Pakistan that
broke out briefly, that would that would make sanctioning them
very difficult. Just give you one example. Apple is moving
you know, iPhone production out of China and to India,

(14:57):
So we're gonna go ahead and sanctioned India before even
sets up shop it.

Speaker 3 (15:02):
Sanctions don't work.

Speaker 4 (15:03):
Ever, it's long past time we stopped listening to the
Lindsay Grahams of the world and just set about the
business of improving American excellence across all dimensions, which Trump
is clearly for and trying to do.

Speaker 3 (15:16):
And we woleheartedly applaud that.

Speaker 1 (15:19):
I will I will offer one minor quibble, and then
I want to switch gears with you for our last
couple of minutes. You said that Trump doesn't want to
impose tariffs. Did you say tariffs are sanctions either.

Speaker 3 (15:32):
He doesn't want to impost sanctions on Russia.

Speaker 4 (15:34):
He wants out of Russia, and I don't think he
wants to reimpose tariffs on China when they're in the
middle of sensitive negotiations and close to an outcome that
Trump could credibly call.

Speaker 1 (15:44):
Right, So I think I think he does want to
impose tariffs in the sense that for forty years he's
been talking about and writing about how much he dislikes
and mistrusts free trade.

Speaker 2 (15:55):
I think at this point.

Speaker 1 (15:56):
He's starting to get a little bit of a dose
of reality of the downsides of imposing tariffs. So maybe
he's looking for sort of a graceful way out right
now where he can claim that it was always negotiating
leverage and that he was just trying to get a
good deal even though he wasn't. He was imposing them
because he really believes in them. But at this point now,
as a matter of just dealing with reality, I think

(16:18):
he would like to find something of a graceful way out.
You want to just comment in on that briefly, and
then I want to do something else, sure.

Speaker 4 (16:25):
Sure, just to clarify, I was talking specifically about new
tariffs on China and India. Now, Okay, got his broad
objective of getting tariffs, And by the way, just the
ten percent tariff across all imports is a huge game
changer for Trump to get done, and in reality, the
chaos that he caused on Liberation Days cover for that
and nobody's talking about it.

Speaker 1 (16:42):
But here we are, right, Okay, let's switch gears. We
got about two minutes. You wrote a piece a couple
of days ago actuarial examinations, and you mentioned nuclear power
in passing.

Speaker 2 (16:55):
A few minutes ago.

Speaker 1 (16:56):
But just give us a minute or so on and
what we should want in what we should expect for
the development of new nuclear generation in America.

Speaker 3 (17:09):
Yeah, great question. Appreciate the opportunity to talk to it.

Speaker 4 (17:12):
Trump can leave a lasting legacy on par with Dwight
Eisenhower if he plays his cards right, and the early
signs are that he will. So what we wrote about
actually published this morning, is that we believe that Trump
is going to issue and has been widely reported, Trump
is going to issue four new.

Speaker 3 (17:30):
Executive orders changing the way in which new.

Speaker 4 (17:33):
Nuclear reactors are brought online, specifically reforming this crazy linear
no threshold safety model that the Nuclear Regulatory Commission has
effectively used to halt all new construction of reactors.

Speaker 3 (17:45):
In the United States.

Speaker 4 (17:46):
But most importantly and most interestingly, we think the Defense
Production Act is going to be leveraged. The military will
host the Googles of the world to build giant data
centers on military sites powered by rapidly approved and built
nuclear reactors, and once a reactor is built, history says
it almost never gets turned off. And if you could

(18:08):
just let the military do it to circumvent the civilian legal,
bureaucratic malaise, you might end up in a situation where
if you told me two years ago off Fox and
Friends weekend host would be on the critical path of
the US nuclear renaissance, I would have laughed. But it
looks like Pete Hegseth is going to be given the
job to unstick US nuclear energy.

Speaker 2 (18:30):
Remarkable, remarkable. I hope you're right. I hope you're right.

Speaker 1 (18:32):
We need we desperately, the world needs more nuclear power.

Speaker 2 (18:36):
Doomberg is.

Speaker 1 (18:38):
An energy analyst a group of energy analysts who turned
what initially was maybe a little more than a hobby
into the most successful finance category substack.

Speaker 2 (18:51):
It is a must read and a must subscribe. You
can go to.

Speaker 1 (18:56):
Doomberg dot substack dot com or just search Doomberg and
you will we'll find the green chicken.

Speaker 2 (19:01):
Please do subscribe.

Speaker 4 (19:03):
Do me.

Speaker 1 (19:03):
Thank you so much as always for making time for
me anytime. Ross.

Speaker 4 (19:07):
You're a great host, and I'm sure you have the
smartest audience in radio.

Speaker 1 (19:10):
I like to think so, but smarter after talking to you.
All right, go eat some corn or whatever it is
you eat.

Speaker 2 (19:16):
You bet Bye,