Surveillance: Iran Risk Has Gone Down, Eurasia's Rome Says

Foreign Minister Muhammed jabats a Reef, tweeting the following around, concluded proportionate measures in self defense, adding we do not seek escalation or war, but will defend ourselves against any aggression. The focus now assessing the damage done, US official insisting there were no US casualties, and, as Tom points out,

the President expected to address the nation later today. Here's to take from Eurasia Group quote it RAN's attacks appear designed for maximum domestic effect with a minimum escalatory risk. Trump will likely declined to retaliate militarily. Eurisia joined us now, Henry rhyme, you write a group global macro analysts joined us on the phone. Henry, great to catch up with you. Walk me through what gives you the conviction that Iran has managed to appease the discontent at home and minimize

the prospect of escalatory risk in the region. Hi, good morning, Tom and John. I think at this point what our our our biggest question going into last night was what Trump would do once I ran strikes back. We were

fairly convinced that Iran would would would do so. The domestic pressure was extreme, and and and and I think looking at what Iran pulled off last night with no US casualties and a clear statement from the leadership that that that this round is over, I think gives us confidence that the President can come out today and say mission accomplished, essentially a perhaps a speak a speech version

of his tweet last night. All as well, the last time we said mission accomplished, that didn't work out so well. What is going to be the outcome of a president saying in his press conference mission accomplished. How will the that be taken by Capitol Hill and far more, how will that be taken by Tehran? Yeah, well, that's perhaps a bad choice of words on my part, but but I think the Iranians will uh take that positively. Frankly, Look,

I mean, what we're not out of the wood. Yet I want to emphasize that point the the the Iranians. I I don't think consider the debt of the Sulimani assassination to be fully paid. And I think we'll see a return to the kind of low level attacks, especially in the cyber world and in terms of terrorism that

that the Iranians have have perfected over the decades. But in terms of a risk of a direct military clash, I think assuming the President comes out and says we got the job done, then then then I think that risk has gone down, and let's talk about objective. Secretary Pompeio said he wanted to establish an effective deterrence. Question

now is whether taking out General Selimony was enough. And after the events of last night, where they feel confident that they have established the terrance with that air strike last week, well I think they will. I think the the US will be able to point to this moment or quite a few I mean certainly years, if not longer, down down the line, to demonstrate a what it what it looks like when the US loses patients uh with

with Iranian activity. So so I think that the Iranians are are fairly chastened by what happened, and you saw that with what they decided to do last night. They launched sophisticated ballistic missiles. Absolutely, but they caused no casualties and it was a single round, if you will, of retaliation. I think that demonstrates that the Iranians were were quite spooked. But Henry, this is so important. I mean, it's like a sterile kind of retaliation. Did you say there were

no casualties at least based on President's reports? Is there any way to run a war? Well, I mean, uh, we were we we we were expecting the Iranians to incur some casualties. But but it looks as though there was a good deal of concern about what that um, what that would cause. I mean sometimes, I mean with with things like this, you often there is um there's risk in over interpreting actions of a of a kinetic type that we don't know if it was an accident

or intentional that that nobody was killed here. But I think the totality of the events last night seemed to indicate that the Iranians, uh decided to tone it down a notch. Henry. I think what was surprising for many, even experts looking at the country is that this was a conventional strike launched from Iran by Iranian forces. It was direct forces to direct forces. This wasn't fire proxies, this wasn't at US allies. And I think that's what

everyone was quite surprised by, Henry. Do you really think that we can just move on from that as the dice progress, Well, I mean, I think we can move on in terms of uh that there will be a return to a kind of low level of of conflict that's kind of pervaded over the past few years, and extraordinary levels of of tension and a good deal of concern, especially about the Iranian nuclear program, which I think is a clear option for the Iranian to continue to escalate

at this point. But but I would say that the risk and and and and panic about a Iran US military to military confrontation that takes out shipping in the Persian Gulf, destroys energy infrastructure in a big way. I think that risk has gone way down after last night. If you're just joining us, Henry rome with US. Here's the Eurasia Group, and of course we've been featuring their top risks of and and we're thrilled the Dector room could be with us here a few days ago and

now joins us on this important morning. What I heard this morning, Uh, Henry, from Rupert Harrison over in London with his government work with the United Kingdom, from Sir Tom Beckett with on the ground experience in the Middle East, and from Ambassador Hormats was very simple the tone of the President. What kind of tone should the President affect

this morning? Well, I think the most uh productive from kind of trying to deescalate the conflicts would be not to go on a victory parade about the killing of General Sulamani, not to kind of rub it in the Iranians face, either the the assassination or the ineffectiveness of the UH missile launch last night. Unfortunately, I don't think

that's the President's style. I mean the I think it would have things would have turned out quite differently if the US had actually just not claimed responsibility for the Silman on the assassination, as you know, in the kind of Israeli practice of just letting it be uh, letting it be vague. But but but I think the President will find it hard not to botht uh and and

perhaps gloat a bit this morning. But I think at the end of the day, as as long as he's somewhat restrained, and I would hope that the past few days have demonstrated to him clearly the risks that going up against Iran can entail, then then then I would expect things to be all right. Henry. By now, we're all familiar with the president's approach, but over the last twelve hours he has been quite restrained. We have had a single twite suggesting he'll address the nation later this morning.

It made me just wonder what was happening inside the White House last night when the president was so restrained the decision making process at the White House? Who is informing the decision making process? Are they providing a menu of responses for the President of United States again or strongly counseling for the president to do one thing over

the other. Your thoughts on what's happening right now as the United States calculates its response, Sure, I would expect that that that that the military, as always, will provide him a range of of options. Though I think at this stage she will be strongly counseled to take this blow and uh call it a day, if you will. I think the risk of retaliating significantly and and having this spiral further is just very high. And I think he's at a he's at a point now politically where

he can claim victory. Will final question for you, Henry China's role expected to be in the United States next week on January for a signing ceremony closer to the Iranian certainly more so than the United States. What do you think that role will be in the coming weeks, if they will establish one at all. So, I think from the Chinese point of view, their big objectives here with regards to Iran is no war and no nuclear

weapon and everything else in between there is negotiable. Think as the Iranians continue to escalate on the nuclear program, the Chinese are one of the more important countries to watch about how much pressure they are on Iran to try to keep things contained. So, yes, they are closer to Iran, but they also have a lot of leverage, so I would expect them to play an active, albeit quiet role in trying to tone things down or urge the Iranian the tone things now. Andry Rome, thank you

so much. Will you raise your group this morning as we move through the morning, with the markets doing better. John Farro now in our studio is an important guests, an important guests. Indeed, great to have you with us. Pop hole mass kissing to associates, Vice Chairman, I'm best always great to catch up with you. The allies have gone, miss Where are they? Where are the Europeans? Why they not more vocal over the last week? Well, I think the US has kept Europe more or less out of

its diplomacy on a wide range of issues. There are obviously major trade frictions uh and the US did not notify its allies with respect to the strike and the killing of General Solimani, and doesn't seem to have been engaging the Europeans on virtually anything that has to do with the Middle East, which is a major departure from the past, when the United States worked hand in glove with the Europeans on a wide range of Middle Eastern issues,

not always convincingly, but at least it worked with them. There was a hope this morning that we avoid escalation risk, underlined by the fact that we're just hearing from a US official that there were no US casualties in those strikes overnight. But the question remains America's future in a rock? What is it? Bob Well? I think for the moment, now we understand that we need to do what we can. I hope we understand least to help stabilized a very

unstable Iraqi situation. If Iraq continues to deteriorate and become more unstable, They're two beneficiaries. One is Iran. Iran's already extremely influential in Iraq because Iraq is predominantly a Sunni a Shia country, although Saddam was Sunny, the government now and most of the leaders are Shia. And the other is that the Russians, now having made major steps forward and increasing their influence in Syria, will now be aiming

to increase their influence in Iraq as well. Putin's visit to Syria, I'm sure it was not an accident and probably was planned before the killing of Sulimani, but um now he is playing a major role in Syria and will probably attempt to do so to a greater degree

in Iraq. The Russians and the Iranians don't always get along, but they both want to defeat Isis, and they both I think we'll be competing for influence but also trying to cooperate to the extent they can and and and Ron wants to get the US out of the region, so does Russia. They work together to do it or will they also have conflict between them. And that's the

final point, is perhaps the most important point. When you try and illuminate the path forward, what the future looks like, you have to look at individual objectives and quite clearly the Iranians making it clear right at night their objective is not war, but their objective is to get the United States out of the region. How do they come about doing that, Well, that's a complicated thing. First of all, they have increased their influence in Baghdad as as we've seen.

And second now they're going to portray the us UH in an adverse light as a result of all this and demonstrate that they UH have backed off and try to deescalate and I want to play a greater role. They don't want more tensions in the region. They're going to advertise that point as well. But the other is that they still want to demonstrate they're going to be tough on ISIS that ISIS is not defeated, and Iraq

needs them to defeat ISIS. And if the US is an uncertain ally and an uncertain presence, then the Iraqi government will have to call on them to a greater degree to make sure ISSIS doesn't undergo a resurgence and visitor homs. You served the nation under both Republicans and Democrats over the years, the last tour of duty with Secretary Clinton and with President Obama. What do we most get wrong about the day of a given secretary of state?

I mean we see Secretary of State Pompeo come out and make comments and that what's the behind the scenes reality for any secretary of state, particularly given this moment. Rule one for the secretary of State is make sure of two things. One that you have influence over the president, that the president listens to you, that you have access to the president, that you are heard uh not only by the President by but by his national security apparatus in the White House. But the second is that you

understand what the president wants. Because the most confusing thing to other countries is if the Secretary of State says one thing or thinks one thing, and the president says or thinks something else. It's very confusing to both our allies because they don't know who to listen to and to our adversaries since they're not sure what to do, and therefore they tend to take advantage of those gaps.

And John we saw that, of course with this question about the cultural targets within Iran, and that had to be when it's a final question, let's ask it. How much dayline is the between what Secretary Pompeio would like to do and what the President of United States ultimately wants. Hard to say at this point, but Secretary Pompeio has taken in general a much tougher line on Iran. The President ran for office on the ground, so pulling the US back from the Middle East in general, So there

clearly are differences in emphasis. In the end, the President, of course prevails in these things. He's the commander in chief. Ambassador, thank you so much for joining us today. Ambassador Robert Hormess's with Kissinger Associates, joining us now in studio as

a gentleman who's truly expert on this. Greg Ferrell was a distinguished career in journalism looking at process of courts, not criminality, not civil issues, but just simply the making of the process what is the process of this press conference? What are your thoughts after observing an hour? In five minutes? Greg Um, First of all, this is an extraordinary thing to have a chief executive fighting allegations in a different country. This the whole saga that's gotten to to this point.

So good question. I was thinking about this. What's his point today? A Um, this should be. I think, like the prosecutors, he needs to make a case that the Japanese authorities are wrong, that there's something wrong with the system. That's a legitimate, you know, platform to take. I think he's getting into too much detail too soon. Um that a twenty minute summary of this is what's wrong. I'm

happy to play this out over time. But he's like he's trying a case right now this morning and in in the study of this that you have done and you're truly expert in this. Does he hire Sullivan and Cromweller name another law firm to go out and represent him in Japan or with the Japanese legal system? Is he is outside of Japan? Can he do that? I don't know. I do know he's been handled by a number of major law firms, including Paul weiss Um where his primary U S firm over there. But I think

that bridge has been burned. I think any like attempt by a firm to at least it too soon right now. And he's he's getting personal. He mentioned Pearl Harbor like you know, he's going ballistic right off. Ballistic is a professional legal phrase of journalists ues. We would not want to use it. Actually after thought went ballistic last night. Now that I think Greg, seriously here, what's the next step for him after this lengthy press conference in Q

and A, Um, this continues to be a public relations battle. Um, he needs to radio. You gotta keep talking. Okay, sorry, except you're so thoughtful. You always got me to be slower. But he needs to keep up the public relations battle. I think he needs to bring other people in. He has to do a better job or at least continue with trying to demonstrate the the what he described as the patent unfairness of how he was treated in Japan. So this is going to go on for some time.

I think ideally, if you could find a neutral third country like the US where something like this could be adjudicated, uh, that would be a you know, there must be a face saving way. I think that's what he's going to look for in the Japanese eventually might look for a face saving way without them backing down completely. Can he leave and go somewhere? Can he go very quickly here? Can he go to Paris? Can he come to New York? No?

He can go to Paris, yes, New York no. Because because strangely, the United States signed an extradition treaty with Japan, just along with South Korea. I'm not I didn't. I'm not sure why this happened, but the fact that it does have it means that it doesn't mean US will necessarily have to turn him over, but it just you know, creates a legal mechanism for that to happen. Greg, thank you so much for joining us on a short notice. Mr Ferrell truly expert on the travails of Mr Gone.

The scope and scale of Africa is extraordinary and any time we could get a vision into it, it is quite important. There's a gentleman in Nigeria who, through family and his grandfather and great grandfather were quite successful in West African business. There is a gentleman in Nigeria who has done better than good David Rubinstein with a peer to peer conversation with Mr Dan Gotti of Nigeria. Here

is Mr Rubenstein and the scope of Africa. Okay, so in terms of Africa itself generally, are you bullish on Africa's prospects as a place to in which people can invest private equity firms or industrial companies to invest. I think I'm very, very bullish when it comes to Africa, and it is the main reason David to they we have twenty billion dollars though I invest in all you know what tele which will finish by the end of next day. First quota of you, I mean in the

next two years. Listen in the next two years, David Rubinstein speaking with Elko. Then go to Mr Rubinstein joins us. Now, David, what an interesting individual. Give our American audience a little scope and scale of who this gentleman is. Okay. Aliko Dante is the wealthiest man in Africa. So it's a continent of a billion plus people and he is by far the wealthiest person. Range. His net worth ranges from twenty to thirty billion, depending on the stock market by

the time. Um he's a Nigerian. His he was from a very wealthy family, but he was not given money when he started, and he basically built the largest cement business in Nigeria and then the largest cement business in Africa. And he's used that to build into other areas petro chemicals, particularly building a large refinery, the largest refinery now in Nigeria. UM. He is a very honest person, very philanthropic. He's very involved with Bill Gates and philanthropic things in Africa and

around the world. So he's quite pressive individual, very modest on assuming in Nigeria. He drives his own car around without security guards. UM. He's very accessible to people, so he's quite a likable person in addition to being very successful. And David, what's so extraordinary and I'd love for you to comment on this with your expertise at Carlyle. He did what's so hard to do. He didn't sell out

to Lafarge years ago, did he? He did not. Um. Lafarge wanted to buy him and at the time he probably could have used Lafarge because he was struggling at the beginning. But he uh built this big business and it's by far the biggest cement business now. He was probably aided by the fact though he wasn't responsible for it. It's it's not easy to import cement into Nigeria, and so by building the biggest cement company in Nigeria, he had a very large market uh in which to work.

But he's built cement businesses in other countries in Africa as well. So very impressive, very smart, low key. If you were to have dinner with him, you wouldn't realize he's fabulously wealthy or fabulously successful. Were very well known in Africa, very modest and unassuming David. It's interesting. This is a fascinating interview from my perspective because I just I was not aware of Mr Dante. Is he have any sense that he would like to raise his profile

in the West. Well, you may know that from time to time you'll see ads on CNN, dan Gote Industries and so forth, and those are probably raising his profile a little bit. But most of his investments, I would say, far as I know, of his investments are really in Africa. He hasn't really diversified out of Africa yet. He might do that at some point. Um. He has a number of daughters and they will ultimately be involved in investing some of his money. No sons and he's uh, you know,

a well respected person. He doesn't use politics to get ahead. Uh. He knows all the political figures, but he basically built a very big business and that's the source of his strength. One time for one more question, David Rubinsteter, And of course this goes to something John Farrell said to me. Farrell emailed and said, you've got to ask, do you have an up to eight on his desire for the number one Arsenal fan in the world to take out

Arsenal give us the Rubenstein update. He is fascinated by, uh by what we what is called football, we call soccer, and I would say that, uh um, it's something that has an appeal to people in certain parts of the world that Americans probably can't understand. But it's much bigger to people in Africa or in Europe than football American football is to us, or to baseball is to us. And so he is a gigantic football fan. There's no doubt about it, exactly. David Rubenstein, thank you so much

for joining us. David Rubinstein show Peer to Peer Conversations airs tonight on Bloomberg Television at nine pm. Wall Street Times. Speaking with the Dan got a Group founder president CEO Aliko dan Gote uh is interesting, richest man in Africa and twenty billion dollars. I didn't know about this guy at all. It's just extraordinary. You know. Some of the moves be created in Africa. Yeah, in a major shoutout to France and Laque was really driven for the Bloomberg

study of what he has done for Nigeria. Paul. This hearkens back to when you and I were starting out in international investment. Your only option in most countries was by shares in the phone company for by shares in

the cement company. That was really yet exactly without exaggeration, exactly and that you know, I kind of got an understanding of the cement business, the construction business when you started looking at Latin America years ago, and that was one of the ways to play the growth in developing markets such as Latin American. Of course, uh, that would obviously apply to Africa as well. So UM, I'm not surprising. I guess if you think about developing markets, developing economies,

what do they need to build? Maybe that's what Jim O'Neal meant when he said brick right, the brick countries as well, anyways, David Rubinstein tonight and through the week when Mr Dangote on Africa. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you refer. I'm on Twitter at Tom Keane before the podcast. You can always catch us worldwide. I'm Bloomberg Radio.