Surveillance: Broad Virus Testing Needed, Hochul Says

key countries, and we hope that continues. Tom. Great lineup of guests through this morning, Bam bloom Book Surveillance as always, and we begin this morning with Troitsky of sky Bridge. Troy, always great to catch up with you. Howard Mark's putting out a memo yesterday. Let me bring you a quote

from that, just to start this conversation off. The bottom line for me is that I'm not all troubled, at all, troubled saying markets may well be considerably lower sometime in the coming months, and we're buying today when we find good value. I don't find in these statements inconsistence. Your response to that, Troy, Yeah, No, I think he's right.

I mean, you can never time a bottom perfectly right, and so I think the broader point there is that you know, there are many asset classes that are pricing in apocalypse and many securities um Yet at the same time, as you guys always note, you've seen unprecedented government government stimulus, both at the fiscal level and more importantly in our opinion, on the FED balance sheet level, and in terms of

money supply growth. So you know, it would be nice to sit back in a perfect world and say, hey, I'm going to time the perfect bottom and every security and every asset class. But the reality is is that you have tremendous discounts. Now you could take a little bit of mark to market pain as you're legging in, but that's the price you have to be willing to take or to pay in order to have you know,

extraordinary upside. And that's one of the reasons why you know, groups like oak Tree have been so successful over time, and that they're in a position to add capital and monetize dislocations, huge dislocations off the back of forced liquidation, an ugly face that draw down a number of weeks ago.

Many people have been taking advantage of those dislocations, particularly in high grade credit, and a question I want to explore beginning with you this morning, Troy, is what the recovery looks like in the lower quality segments of this market towards high yield across an A M. What are you looking at the moment? Yeah, so I think that

that's a million dollar question. And I think, you know, the way this has always worked historically, in the way it appears to be working now, but just at a much more rapid pace, given you know the fact that the FED response has been so much more muscular, and you know you have TALF too that's coming online and

in the government stimulus. Is that you know, when you go through a deep downturn in markets and markets are pricing in you know, in some cases armageddon, in other cases, you know, severe recession, you know the upend quality always

starts to move first, right. Analysts always have more confidence when they're looking at you know, a company with an unlovered balance sheet, or you're looking you know, at the top of the capital structure and commercial real estate, or or Celo said, hey, you can run math six ways to Sunday doomsday, this to the cows come home. But there's still money, good securities, and so you know, you've seen that rebound start, you know, it's slow and fitful um.

And then what happens is as that liquidity starts to filter down in and some of the more you know, dire scenarios don't play out, um, you start to see lower parts of the capital structure starting catch up or lower quality. The thing that's interesting know about this is that you've already had a pretty significant rebound in high yield um. You know that. You know, dollar prices are back up to about eighty five cents and a dollar.

So you know, I wouldn't get carried away right now on specific high yield because you know, so much of the potential upside has always been realized, already been realized. Try You've got a beautiful vision into the hedge fund business. And I know the media loves to try out somebody who's up a hundred in the last three days. It's all great and wonderful. What's the real story our alternative investments doing? Are they? As a general statement, surviving creating

alpha here? Yeah? So I think it's a general statement that would be true. I mean it's not like, you know, the hedge fund industry has had a great run um by, but there are time you always choke around it. But but if you think of what's happened so far this year, you know, in the most part capital has been protected. I think discretionary macro managers and systematic trend followers have done fairly well. You know. Some of the bigger MULTIPM shops um you know, like you guys report on, like

Citadel and Millennium have done fine. Where there's a cute pain. Um Hare's been more in the credit instructure, credit area where they got caught up in the margin calling that was hid in the reeds and a lot of their assets were sold down, you know, in sympathy. And so that's where you know, when we look at risk reward versus fundamentals, we think there's the most upside there, and we also think there's the most upside in distress corporate credit.

But again you have to be selective, you know, firmly focus on good, good company with good balance sheet. You know, no reason to get involved in energy or anything of that nature. But you know, even hospitality names or you know, six Flags is a good example of a of a company that's good, good balance sheet, low dollar prices, that

franchise is very strong, and we'll survive, Troy. I think it's interesting you're talking about margin calls and some of the technical stress in markets appears that we've moved from a financial market crisis going forward to a real economic crisis, which is what we're looking at trying to assess. Now there's sort of a knee jerk by the dip mentality

because it's worked in the past. What's the risk that it's not going to work the same way this time as people look into the abyss of a potential downturn economically that rivals what we saw in in the nineties. Yeah, no, No, it's a great question least. And I think you hit the nail on the head with your w analysis. I mean, I think that is arguably the biggest risk or that you know and know the dreams of v shape recovery went out the window, you know, four to six weeks ago.

No market participants thinks that's going to happen. But maybe the you tend to have you know, a much much longer bottom, right um So, And the other thing I'd say is, no one is really recklessly buying dips, right Uh. You know, people are trying to be very careful and calculated on again like that we talked about with credit quality, Like okay, let's start with the higher, higher top of

the capital structure. You know, obviously an I G. Credit you're getting fed support directly, and then let's roll down. So no, no one's you know, I think delusional enough to think that markets are going to rebound in a

straight line. And you know, we're gonna have this you know or twenty percent annualized keyword and annualized economic contraction, and you know, mortgage delinquencies are going to go from point nine percent to eight percent and then suddenly all those people are gonna start paying in you know, two weeks later. No one's doing that. People are trying to

be very careful and selective. UM. But but to your point, if if things get materially worse than the economic level, like meaning we don't really bottom in Q two, which is the expectation, now, don't start to recover you know in Q three, in Q four, UM, and instead it's a it's a much longer stretch or or or a false don with a W. Then clearly you know that's the scenario where you could have more downside and markets. UM. But then again against that uh and I know you

saw probably saw no it's coming over. I mean you think of what the FED is doing from a liquidity standpoint, it's just it's incredible. I mean, it's unreal. They're expanding their balance sheet at almost fifteen times the taste of q E three fifteen times. Money supply growth is growing at an analyzed rate of seventy eight percent, while the banking system excess reserves have gone up by you know, probably about seven fift billion. That data series has to

come out, but that's you know, that's our estimate. So you know that is that, in our humble opinion, is what's really put a floor under market. Obviously, the fiscal stimulus is very critical. TOALTH two is very critical. An expansion of TOALTH two to include other assets like they did back you know eight, you know they gradually expanded that very critical. Hi, Troy, always great to get your

thoughts on a program. So I'm my best of the team of Skybridge Anti even yours, Troyasky Skybridge Capital right now to bring us up to date on the state of the State of New York. Cathy Hokel joins us. Of course, the Lieutenant Governor of this state Kathy, these are extraordinary times. It is a test for all politicians and the test of exhaustion. How are you getting to the weekend? What is the path on this Wednesday to

get to a long weekend and to Easter. Well, for those of us who are on the front lines, there is no thought that this week is going to end. So I'm looking forward to Easter to celebrate remotely with my family Lisa virtually, and I want I wish everyone a happy pass Over and happy Easter as we head

into this week. But this is a week where there's tremendous temptation to uh start hearing some little glimmers of hope and saying that people could become a little more complacent, and you haven't seen Graham and Grandpa in a while, you want to catch up with your siblings because these are wonderful celebration. We have to make sure that people

do not succumb to that temptation. And that is the warning that I cannot convey strongly enough that if we start going back to our old ways or even just taking a little more steps out, they're becoming a little less uh, you know, guarded in our behavior toward others. If we don't stay home, we could actually set ourselves back, and after all the sacrifice that New Yorkers in American have had to go through for the last three weeks, we do not want to go there. And that's a

strong message. I wanted to make sure that everyone hears these are wonderful holidays, and we'll certainly have next year to celebrate, but let's make sure that everyone who can will be sitting at those tables with us next year because we took those preventative steps now and continued our social distancing. I will say, I'm I'm looking forward to my zoom pass a versator tonight. Lieutenant Governor. I'm wondering everyone's trying to figure out how quickly New York can

restart its economy. Do you have any sense of the path for that and what the plan is to reopen. Before we can reopen, we have to have broad broadly undertaken testing. And what we're doing now in the Governor announced this yesterday, is that we are working with our businesses to try to find ways to increase the capacity

for rapid testing. There are possibilities to do testing in five minutes, fifteen minutes and get results back quickly, and only when we feel secure that we can have a workforce that is free of coronavirus because they've already contracted it and they have developed the antibodies and are not vulnerable themselves, or that they would spread it to others. I think those are important scientific metrics that we're going to be focusing on as we I start to identify

which industries can come back online. But again, this is a conversation we want to have because we are anxious to get this going again. But it is a little bit premature to start giving out dates, and it's certainly premature to know how that's going to look. All we do know is that we have to continue these distancing from each other, the social distance, reduced density, but the increased testing will really be the link that tells us when we were able to test enough New Yorkers to

start jump starting our economy again. Kathy, premature to be thinking about many many things at this point. I'm sure, given the crisis that it's unfolding right before our eyes over the last few weeks. One thing we can discuss, though there's not too premature to discuss, is the help that you might need in the future. Kathy, what do you need from the federal level. What kind of assistance

do you need from the government. We need money. Uh, this is something that the governor just yesterday rode to our congressional delegation. He's spoken to the President when there is the next stimulus plan, and there needs to be another one. They cannot overlook the fact that a place like New York City, the epicenter, has now taken a ten to fifteen billion dollar hit to our budget, and we just wrapped up a budget a couple of days ago.

But it allows the governor to have flexibility to reopen if necessary based on either a decline or hopefully an increase in revenues. But we need financial assistance from the federal government. We also have been asking for them to invoke the Events Production Act much earlier than has been even used at all in a wide scale way to get us the personal protection equipment, to ramp up testing kits,

the testing supplies as well. As we've been saying for weeks and liarly months, we need more ventilators to be produced in this country. I think this crisis is going to have a wholesale rethinking of where we get our life saving products, are supplies, our medical supplies, our ventilators, and I think that's going to make us wonder do we want to continue to be reliant on other countries when we have the capacity, that know how, in the ability to make those right here in New York. And

I think that's going to be a conversation. They will be had sooner than later. Another thing that's not theoretical is the impact that the coronavirus and the shutdowns have had on the economy. And one area that you highlighted in a recent OpEd in The Hill was that women are hit hardest. You argue by the impact of the coronavirus. Why do you say that? In two areas, One is that seventy six percent of healthcare workers are female. That's staggering when you think about how we are honoring our

frontline workers. The people are putting on uniforms and hopefully protective equipment going into their jobs, literally going into the heat of battle every day. The majority of them, vast majority, are women, and they've many of them have children, children who otherwise would be occupied in school or being watched by grandparents, So there is literally childcare crisis associated with them. Secondly,

two thirds of America's minimum wage workers are women. These are the ones who worked in restaurants, and had worked in hotels, and had worked in housekeeping, and all this work that had to get done and now either laid off or they're the ones vulnerable having to go in to work every single day. Tenant Governor, you are more qualified than any politician in this country to talk about the cittiness of this pandemic. You are out of Buffalo.

You know the distance to Lockport, the distance to Batavia down the US rather down the New York State Thruway system. Is well. Explain to those in smaller cities, villages in rural America why they need to support the big cities in this pandemic. Oh. Absolutely, And I've been on radio Intellivision NonStop saying, you know, we think about when there's a snowstorm that paralyzes upstate New York, those utility trucks are coming up from Long Island and New York City

to get our power back on. So I'll just talk about something we all can relate to it in upstates. I represent the entire state, and I spend vacia majority of my time in New York City. So I feel

I'm adapted there as well. But what I've been saying to Western New Yorkers just like we route one team up here of football seas and we are one state, and the Governor and I have said for sure, if there is any part of that state upstate boundstate that need life staving equipment, we will personally transform their ourselves. We had to reassure people, and there was some anxiety, some political people trying to make hay out of it, which I think is disgraceful. But you know, we shut

exactly that. You know, that's that's not happening. We are one state, period. That's the answer. Don't be a stranger. Lieutenant Governor Oco from Buffalo and from New York, stay, thank you so much for joining Bloomberg Surveillance worldwide. I think we should carry forward into the Chairman's comments that we'll see tomorrow. Of course, we'll have a lot of

details on that across all of the Bloomberg platforms. Steven Roach is identified at Yale University with China and of course his leadership at Morgan Stanley on the China Watch for many years involving his Wonderful Look the Next Asia and other efforts as well. Before that he had leadership and looking at what we do with our monetary and fiscal systems within the United States, and maybe we can focus on that today. Stephen Rotch, I know you, John,

Lisa me. We never imagined this expansion of the balance sheet back to calculus one. Is there a limit to where a balance sheet can go? No, there's no limit numerically in a world of electronic or fiat currencies. The question is is there a limit economically? And um what this ultimately means for addressing the problems that are now afflicting the world. Tom The underpinning of this, and we

talked to William White about this yesterday. The folks the conversation was hugely valuable was to go back to something Joe Stiglitz has talked about, which is the underpinning of this is the small G and economics, which is the growth rate could be the growth rate of it'll the growth rate of the US, it can be the growth rate of New York City for that matter. How do you Dove tell Steve Roach what we're going through right now with the small G that's in all the equations. Well, look, um,

the monetary um stimulus, the fiscal stimulus. You know, the two words we described to address these actions UH during the global financial crisis of oh, you know nine was big bazooka UH. And they're effective and addressing UH financial problems,

but they're not effective in addressing a pandemic. We know that, and Chairman Powell said it very clearly when he gave his rare interview on the Today Show now close to a couple of weeks ago, when he said that, you know, the FEDS actions are aimed at sparking post COVID recovery, not in addressing the downside of containment and workers being told to stay at home. So we're deluding ourselves into thinking that these actions are going to bring an end

to this crisis. The only thing they can bring an end to the crisis is containing the disease. We're trying to build a bridge to the other side here, Professor, on a number of levels and help companies get through an unpresidented economic shutdown. I'm just wondering, from your perspective, Stephen, what more needs to be done on the fiscal side, both in terms of size and just calibration. The specific policies that you'd like to see in the coming weeks

and months if we haven't seen them already. Well, you use the words on calibration, I mean, I don't know quite what that means, but I would take that as meaning that the fiscal actions need to be focused at providing support for our public health infrastructure which is woefully inadequate, adequate the scientific research we need for anti viral medication

and ultimately the vaccine um. You know, I've I've argued that we should place as much emphasis on that as we do to bridge loans to corporations and even small and medium sized businesses. Certainly, we've got to put a floor under the economic carnage. But you know as well as I do that, the longer the shutdown exists, the more and more we're gonna have to go back to the well, uh, in dealing with the these bridge loans.

We've got to get the science and the public health infrastructure right before we can hope to do anything in terms of supporting economic recovery. Stephen Roe, professor and former Morgan Stanley Asia chairman, joining us right now. I'm wondering, Stephen, taking a look at what the roadmap will be to reopen the US economy. A lot of people are looking to China. What are the initial size You're seeing a lot of people questioning, uh, the sort of veracity of

the numbers that we're getting out of China. Are you optimistic about what you've seen in terms of a bounce back from the shut out over there? Look, the Chinese template tells us some important things. It told us how to address the disease, as did South Korea. And they're there are two different models, and one is about Drayconian lockdowns China, and the others about rigorous testing and contact

tracing South Korea. Uh, And what they're telling us about, you know, the reopening is that, uh, it's possible to reopen the supply side, but it's very very difficult to reopen the demand side, given the shock that's occurred to behavioral norms of disease infected and fearful of people, families slash consumers. And so we've got to look very carefully at at other countries in terms of their struggles to reopen their systems and go back to anything close to normal.

It's gonna be very difficult to put Humpty Dumpty back together again. The immediacy of the health crisis the entire world is facing as a sort of overwhelmed some of the tensions that seem to be percolating and ongoing between the US and China. And I'm wondering how that plays out at a time when there seems to be something of an information war with a lot of bickering going back and forth with US and China as to the message who's who's it blame and taking leadership globally and

managing the health crisis. You know, look, that's a great point. I've written about that on on the Bloomberg platform and and elsewhere. Finger Pointing in the blame game is going to get us nowhere if we really aspire for a collaboration, which is what we need to address a global problem. That's what a pandemic is. And and you know, the Trump administration, you know, is backed off a little bit from naming this the Chinese virus, or Secretary of State

Pompeo calls it the Wuhan virus. But you know where we continue to uh point fingers uh and one another in uh trying to assess culpability and blame and that's just not the stuff of collaborating. We gotta put that aside and UH and really work together. There's so much we can do together. Stephen the China Watch. Elizabeth Economy at c FAR I thought was way away out front on the challenges domestically that Mr g has in China.

Minxing Pay of Claremont wrote a fabulous article for Foreign Affairs in the last ten days on the Chinese Communist Party on the future for we've given the shocks that we've seen in the Chinese system. Do you share with doctor Economy this worry about the stability of of of president She's rain No, I don't. I think she's overblown that, And I've felt that it was a case um before

this crisis, and I certainly feel that's the case now. Certainly, the Chinese leadership did not necessarily perform admirably during the early days of this horrific disease, and there's a there's a lot of questions that are being raised both inside of China, especially outside of China and looking back on that, but you know, to to view this as an existential threat to his leadership into the party I think goes well beyond what is um actually accurate in the current situation. Professor,

you say we should collaborate with China. According to our reporting, China is still concealing the cases and deaths and they're intentionally leaving those cases and the reporting of those cases incomplete. How can we collaborate with a country that intelligence of

fishals in this country think we shouldn't trust. Well, that's a great question, and so you know, you've got to look at, you know, what what the results are in terms of how the Chinese economy is getting back to UM at least production and what they're attempting to do

on consumption. If the numbers were as poor as you're reporting, uh suggests, then UM, they would not have reopened Wuhan, they would not have made progress in normalizing and bringing production back and the travel back that they're doing right now. So certainly there's issues of accuracy down to the last decent point. We have problems with that in our country as well, because we don't have data on testing and

the incidence of the disease. And you know, I just think we have to be careful in um pointing fingers at others. It's like the pot calling the kettle black hair. Stephen roaches, thank you so much. With the university greatly appreciated that. Today. What we've tried to do here, not all the time, but throughout Bloomberg Surveillance is to bring you the smartest asked, the most informed that we can.

Within the medical community. That's been someone like Dollar Bernheim here Dr Brenheim, i should say, rather at Mount Sinai and radiology Dr Hotez at Baylor University, Stephen Reiley, the great epidemiologist over at Imperial College in London. And now for the emergency room, she is Lauren Sour. She is at the Johns Hopkins University and their medical system out

of their Bloomberg School of Public Health. And of course we have to mention that Mr Bloomberg, of course is with Bloomberg LP and a great benefactor of his engineering school Johns Hopkins. And with that said, Laurence Sour is exceptionally competent in emergency medicine and on the doings of emergency rooms. Here is Lauren Soer. I think the key is to actually not walk into the emergency room unless

you're absolutely critically ill. Um We want to keep people out of the emergency department to make sure that the space is there for the patients. We need this critical resource the road. You're going to see stick patients in the emergency department now, Um, a lot of emergency departments are separating patients using KENT to separate out COVID likely patients and COVID unlikely patients to reduce the risk of

spread in waiting rooms and things like that. Lauren, we have seen in the last couple of days the beginning of an understanding of this virus with the ebbs and the flows, and of course all focused on the Prime Minister of the United Kingdom, but for each and every virus patient, there seems to be a point where they get better and then they get worse as well. What have you learned with the Johns Hopkins medical team about the ebb and flow of the virus the day to

day of this pathogen. One of the things we've seen about these patients is that they have to be watched really carefully. UM. Their oxygen saturation can look like it's going to be fine and then go uh, then really

go off the rails. We've seen these patients. We really we really need to pay a close eye to them to make sure that they're at the right resource level for managing them, so trying not to move them out of the CU into a step down unit too early with the risk that they might get worse and then have to be moved back to the I c U. We want to avoid transferring patients as much as possible and reduce the number of transfers within our public health system.

With a belinguered New York and yes there's other geographies across this country. They're just overwhelmed right now. It's a movement from the emergency room to a hospital bed and then as the Prime Minister, to an intensive care unit. Explain the differences of I see you. Explain the nuances

there that we need to know. Sure, So when the patients move from the emergency department, depending on how sick they are, they may go to a regular floor that or up to the I see you and that I see you level of care is really important for these patients who may need mechanical ventilation or other higher level care.

That mechanical ventilation piece is really important. So if someone can't breathe on their own and it's going to need to be intibated and mechanically ventilated, which we've talked a lot about with these patients, UM, you need that I see you level of care because the staffing is higher.

So UM, you have more nurse to patient, higher nurse to patient race vio, higher level of critical care doctors, and you have the respiratory therapist you need to need to manage the ventilators, and you have the antise geologists there to manage the levels of medication that these patients require. Explain to us your view on this debate of the protection of nurses, the protection of doctors, and indeed of all of hospitals in America. It's a ranging debate right

now about getting per tective gear in give us your perspective. Please. We absolutely have to keep our medical staff are frontline healthcare workers healthy because the patients are going to keep coming, whether the physicians and the nurses and the respiratory therapist and everyone else to keep the hospital running is there and healthy or not. So the personal protective equipment or we call it PPE is critical to protecting these these

healthcare workers. We need the masks or the pappers, the personal air purifying devices, UM, so that you can safely come and go from these patients rooms. You can safely do the procedures you need to do to keep the patients UH breathing. A lot of our procedures that we do for these respiratory patients generate air assaults or smart small particles that have the virus in it. So the PPE is critical to keeping healthcare workers safe and and

the hospital running. Laurence with the Johns Hopkins University in their Bloomberg School of Public Health just in Paul I thought, there's just an extraordin ordinary time interview. She's truly in the trenches. She's out of Boston University, and of course Johns Hopkins as well, in her whole career is focused on that room. We hate to go in. You know, every parent dreads it for all sorts of reasons. I hate to go on emergency rooms and these people to

spend their whole careers in them. I'm one block away or from Mount Sinai's acclaimed emergency room, and it's it's a science under its own within hospitals. Yeah, it's a special calling I think for for those types of people. Tom and they and they really are on the front lines here. And you know Dr Sowers commentary there at the end about the importance of PPE having the proper equipment to protect our healthcare providers, particularly on the front lines,

is really critical. And that's something we've seen called out by you know lots of politicians and speakers, whether it's Andrew Cuomos talking about initially we have to have the ppe UH and we have to have ventilators. And those are the two key issues we've heard from you know leaders around the country, around the world as they talk about their response to this from the health care system. Let me U move this to oil and this is extraordinary, folks.

It's off the radar to a great many of us as we focus on this pandemic, we focus on this massive economic contraction. I read not one, not too but three Bloomberg hydrocarbon articles today on Alberta and it is a depression. Paul sanky has been following this for years. He's with MISSOOO. He is one of the best best best is taking the microeconomics of oil and dovetailing it into some vision of where oil and natural guests are heading.

Paul Sanki joins us UH this morning. Paul I was flabbergasted by the financial price boosted by all that money betting on higher oil prices. And rebound versus the physical price, witnessing Western Canada oil plunging from ten and eight dollars a barrel down under five dollars a barrel. Are we actually going to be giving oil away for nothing? It's getting close, I mean, certainly elaborates which doesn't as you know, have a traditionally strong hand of cards when dealing with Russia.

But there are reports that Belarius offered four dollars a barrel and and and the bid was hit by Russia. Though. Yeah, things are obviously extraordinarily low and will remain that way because obviously the demand environment here is unlike anything other than ever seen times five for tomorrow, Okay, plus is mating that we're talking about supply. Can they do enough on the supply side to offset this massive drop we've

had in demand over the last several months. Obviously not in the short term, but I think the markets very focused on the level of inventory build, which will follow obviously from from excess production over lack of demands. The question is, um, you know, how long does the inventory overhang? And there's a risk which really tom was reference thing, which is that if you ultimately exceed storage capacity, which is within the parameters of the current market. That's when

you could go negative on price. We've talked about this since the Opaque meeting early March, that if the cost of storage is above the price of a barrel, the price will be negative. And we've seen it with natural gas, and you know, we've seen it actually with barking creues. Further to what Tom was saying as recently as a couple of weeks ago. So the key question here is is the extent to which imagery overhang can be mitigated. It's not very bullish for the old price because you

then have specupacity for production. But at least we don't have a total cataclysm in terms of um, you know, just the inability to manage this black fiscus, you know, somewhat dangerous liquid. Paul to that point, I think of my favorite, my favorite story on the Bloomberg is about the cost to rent out supertankers. In six months, it has surged to more than seventy thousand dollars a day, from thirty to forty thousand a day earlier last month.

And I'm wondering when din't we reach that tipping point. Let's say there is a ten million barrel per day production cut which some people are hoping for between Saudi Arabia and Russia. How long do we still have before we sort of tip the scales and and and exceed capacity. Um, well, actually there's a slew to that. There's an interesting development this week, which is that with a lack of need for pipelines in the US, Phillips sixty thinks, for example,

is offering its new pipeline is a storage facility. So this, you know, this is a very innovativety know in the industry that can manage the extreme situations. So there's we always thought that there would be a lot of different ways. Filling train cars is another one, but as you can imagine, and the old joke is the starts swimming filling swimming

pools around Houston. But you know that the fact is that by by June, at the current rate, assuming that New York is at a lockdown twenty eighth of April, you would still be that the Saudi oil is on the water, as you know, so that hits in May.

Um that May period is the one where you have the lowest refining utilization with the highest supply, and that's the point where you think that maybe we'll go over the top of the tanks beyond that, hopefully demanded snapping back, I think, you know, and I'm sure you guys have a stronger you than me, But I don't think you can keep the US economy, New York economy shutdown much beyond the twenty eight I'd add that Tom would be very interested by the combination here of OPEC plus and

then an emergency meeting of G twenty energy ministers on Good Friday is also a very interesting moment the loyal history. Well, Paul, let's talk about it. What do you expect the outcome of that meeting to actually be? And when the Russians start talking about US participation, I think a question we've had on a program like this is what does US participation in any cuts actually look like? Well, from the Russian point of view, less sanctions, I think you can.

I don't think it will be explicitly, you know, I don't think anyone's going to be dumb enough to link it directly to the outcome of the meeting, But I think in a few weeks time you might find, you know, things are a bit easier for Russians around the world, But in all seriousness, it's it's obviously a very big deal. And it was described to me by your own truly excellent journalists. Have you a Blast was saying this is actually too big to fail. You know, Saudi's got so

much on the line here. If obviously it's annoyedly go ahead. But I was just gonna say, it's enormously risky to bring together the G twenty energy ministers at a time like now and not deliver on Good Friday, exactly deliver a big deal. You know. Well, let's help Pavey Blast with his next story. Paul, we can all do that

together here. What is your recommendation of the correct approach of the State Department and I guess our Energy Department in Washington in these two sets of talks, what is the most efficacious way for the US to help the

world out of this mess? Well, I think the optics that they point to yesterday's short term energy Outlook published by the US Department of Energy, and and they've got production down, you know, a million, million and a half barrels a day this year, and say, there you go, that's the market and we will be cutting and that's good enough for Stauity quite frankly, and then it becomes a question of Russia versus Sauty, which is another very interesting issue which surrounds a the fact that Staudi is

at search levels, so they're at over twelve million. Are they cutting from there or are they cutting from where they were before they searched. That's the problem for the Russians. The Russians are physically constrained that they're going to have to cut anyway, so they're starting with a cut offer. But the understanding is the Russia is only down I think only down about a million barrels a day. But also it doesn't have storage, you know, they're short storage

where Staudy is not. Additionally, technically, Snawity can just flick a switch. They've signed this system to be uh you know, they can just turn it off and there's no damage, whereas if Russia cuts hard, that's going to damage that productive capacity, which is a key point. So you know, there's a ton of things here. And then of course, as you mentioned, Albertsa is cutting a million. I think Brazil is struggling to so so there's a lot of optical cut to the market driven West Saudi. Okay, it's

really just Russia versus Saudi that we're worried about. Paul, thank you, thank you so much. Let us know in a gallon a guest gets under a dollar gallon that would like to know that as well. He is with missool. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keane before the podcast. You can always catch us worldwide. I'm Bloomberg Radio