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- [00:00]
A
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C
Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [00:57]
B
Tyler Kendall, here in Washington alongside Jo Matthew and Nicholas Maduro has now left the courtroom in New York as we parse through all of these headlines, including this one from our colleagues at Bloomberg Law earlier today. Joe Nicholas Maduro has hired Julian Assange's lawyer, Barry Pollock for his criminal defense, the team saying that Maduro may seek bail at a later date as we learn more about how this schedule is actually going to evolve.
- [01:21]
D
Yeah, another headline just crossing the terminal that the US Is set to meet with oil executives this week on the revival of Venezuela's oil market. And this is a really interesting moment because the President is assuming that these countries will, in his words, be, quote, very much involved in Venezuela. But currently there's only one, and that's Chevron. Whether the likes of ExxonMobil, ConocoPhillips and the rest end up investing the better part of $100 billion is what is said to shore up Venezuela's oil infrastructure remains a big question right now. But after what Charlie just told us, it sounds like everyone is assuming that they're all diving in headfirst, right?
- [01:54]
B
Exactly. It feels like the White House has been banking on some announcements coming, even though we know that the price and the risk premium has to be right. Even the Commerce Secretary, Howard Lutnick yesterday on Air Force One indicating that the administration has also spoken to other private sector companies in the steel and critical mineral industries, so clear that the US Is really ramping up this more vested economic interest in Venezuela. And that is part of the justification perhaps that we've heard from President Trump, including yesterday, saying this about how the US Is going to be involved in Venezuela going forward.
- [02:28]
E
We're going to run the country until such time as we can do a safe, proper and judicious transition. So we don't want to be involved with having somebody else get in. And we have the same situation that we had for the last long period of years. So we are going to run the country.
- [02:51]
B
For the latest, we go now to New York where we find Bloomberg senior national security reporter Miles Miller, who is in front of the courthouse where Nicholas Maduro. Maduro just was. Miles, can you just walk us through what the next steps look like here now that we saw Maduro's appearance today, because in President Trump's words, he is gearing up for a slog of a trial.
- [03:15]
F
Oh, yeah. Nicolas Maduro won't be back in Court until St. Patrick's Day. And it'll be no laughing matter when he returns back to court because he likely will spend the rest of his time while he awaits this trial. At the Metropolitan Detention center in Sunset Park, Brooklyn. He entered a plea of not guilty during his arraignment here at federal court in lower Manhattan to those narco terrorism charges, through an interpreter telling Judge Alvin Hellerstein that he is not guilty, he is innocent and is a decent man, and most importantly, that he's the president of his country. His wife, Celia Flores, also pleading not guilty to three charges. Both of them wore headphones for translation. This is just two days, of course, after US Forces captured him in Caracas during a nighttime raid. He, of course, spent the weekend at MDC in Brooklyn. That's the notorious federal lockup here, where he will continue spending his days, likely in a special housing unit, which means he'll be confined for 23 hours of the day. They waived a public reading of the indictment and for good reason. It's 25 pages long, but prosecutors lay out a case in which there was a narco terrorism conspiracy benefiting four gangs, including the Sinaloa cartel and Trenda Agras. And they believe that starting in 2000 and going up until about 2020, 2020, that they moved over 250 tons of cocaine per year through Venezuela. And that happened facilitated by Maduro and his wife getting passports, diplomatic passports for drug dealers using state oil company planes in order to get those drugs all over the world. Also, their son, the interior minister, former interior minister, and the former leader of Trend Agras in Venezuela. We are told by his lawyer that he has serious health issues and needs to see medical officials, and he will do that, likely at the Brooklyn Hospital center later this week. We are also told by an attorney for his wife that she suffered serious injuries during her capture. Broken ribs, likely, and she will also undergo that medical treatment, but again, won't be back in court until March 17. Trial likely not until next year. But this is a very serious case which follows, you know, charges that came out in 2020 initially. If they are convicted of this, they can face life in prison, a supermax prison, likely the same prison where El Chapo is.
- [06:04]
D
Miles, just quickly, you mentioned the Metropolitan Detention center, the federal jail where he was held over the weekend. I gu both of them and will continue to be. A lot of people have heard of this because that's where El Chapo was held. This is where Luigi Mangione was. Pete Diddy, Ghislaine Maxwell, Sam Bankman, fried. What kind of conditions is he living in there?
- [06:27]
F
Yeah, I've been covering the Metropolitan Detention center for the better part of a decade now. In 2019, there was no heat, no hot water, and so inmates there went on a hunger strike. Not great conditions. The Bureau of Prisons say that they have fix some of those conditions. In fact, I saw a number of procurement documents that they want to get a new H vac system in there, but it's not great. They get three meals a day, they're leaky faucets, seven foot cells. Not great conditions. One judge here in the Southern District said that they were barbaric. So it's a far cry from the presidential palace he was living in in Caracas just 72 hours ago.
- [07:10]
D
Well, it sure sounds like it. Outside the courthouse. Bloomberg's Miles Miller. Thank you so much for the great reporting, Miles. We'll be having another conversation like this when it sounds like on St. Patrick's Day. But there are still huge questions about what happens in Venezuela itself, if in fact the US Is running the country, as the president said, and how all of this will be secured in the meantime, including the oil fields that are apparently going to be in store for a massive US Investment. Here's what the president said himself.
- [07:38]
E
They always say boots on the ground. Oh, so we're not afraid of boots on the ground if we have to have we had boots on the ground last night at a very high level, actually. We're not afraid of it. We don't mind saying it, but we're going to make sure that that country is run properly. We're not doing this in vain. This is not. This is a very dangerous attack. This is an attack that could have gone very, very badly. Could have gone very badly.
- [08:03]
D
When it comes to who's actually running the country as well, there are big questions, as the Secretary of State, Marco Rubio was asked repeatedly on Sunday morning television if he was in fact running Venezuela, as the president suggested at Mar a Lago on Saturday morning, He did not affirm those questions. Eric Farnsworth has been watching all of this unfold for a couple of days now, and I'm really glad he's with us. Tyler, the senior associate with the Americas Program at csis, the center for Strategic and International Studies, former White House State Department official who has been watching all of this unfold along with us. Eric, it's great to have you at the table today in Washington. Thank you for coming to talk to us. Who is running Venezuela right now, if not Del C. Rodriguez, who was sworn in officially Saturday morning and has had a lot of different things to say since then, condemning the capture of Maduro on Saturday and then pledging to cooperate with the US On Sunday. Is she part of the the group the president refers to running the country?
- [09:00]
G
Well, Joe, it's so great to be back with you and Tyler and the Bloomberg group here.
- [09:05]
D
Thank you.
- [09:06]
G
You know, that seems to be the case. It's an evolving situation. Clearly it's what both the president and secretary of State have said, that Delsey Rodriguez will be the acting president for the foreseeable future. I think there's a big question about how long the foreseeable future actually is. This is a matter of days, as a matter of weeks or even longer. I think that's a really important point because many the Venezuelans who have been celebrating this activity on Saturday, and I think if you look around the world, Venezuelans almost uniformly have, they still want to see democracy come to the country. And so this transition period, I think may be a necessary part of the transition. But it's, but, but what is it going to. And I think that's where the questions really are.
- [09:47]
B
Well, let's dig into that time timeline a little bit because as we were mentioning before, President Trump has repeatedly said that he wants to see Venezuela's oil industry rebuilt before we see a transition to democracy. Yesterday he told report Air Force One the country needs to be fixed, in his words, before he'll get into talking about any potential election dates. What do you make of that argument that Venezuela needs more economic stability before we could see this democratic transition? What are the risks there, the balance if it would result in potentially a delay in those elections taking place?
- [10:21]
G
Yeah, I think it's a really important point. I was involved in the State Department in the aftermath of Operation Just Cause when the US Invaded Panama. And the thing that is very much on people's minds is the aftermath of the invasion and the chaos that happened in Panama, the looting, the people that were running around without any security forces keeping things under control. I think the White House and State Department are very mindful of that in Venezuela right now. So you do have to maintain security. Economic security is absolutely essential as well. But we have to remember this is a country that for 26 years of Chavismo has been literally destroyed. The institutions, the infrastructure, the education system. Much of the professional class and the educated class are out of the country as part of the diaspora. They're itching to return to the country, but they're not there now. There is going to have to be a transition period. Whether you can rebuild the energy sector in the near term, I think that's an open question. Certainly there's going to be a lot of activity along those lines, but fully rebuilding, it's going to take a lot of time.
- [11:17]
D
It's been framed as a ten year project to ten year, hundred billion dollar project. So surely we're not going to wait 10 years for an election. We'll play the tape back, I guess at some point. Eric, I guess I'm curious about questions the administration's decision to leave essentially the regime in place without its leader and whether that will prompt a sort of de Ba', athification, if you will, inside Caracas that could lead to more turmoil. You're talking about, you know, roving bands on the streets of Venezuela. This, this could be a security nightmare, could it not?
- [11:53]
G
Well, as I say, the administration wants to make sure that that doesn't happen.
- [11:56]
D
How do you prevent it?
- [11:57]
G
Well, what they're trying to do is maintain the essential elements of the security forces in place to maintain security. And again, another Venezuelan security, Venezuelan security. And you have a real challenge here because of course, until Saturday and perhaps even now, they're completely loyal to Maduro and to the regime. Right. That's been the key element for years of U.S. policymakers, both Republicans and Democrats, suggesting that in order for democracy really to return to, to Venezuela to take root, you have to have the loyalty of the security forces because they have to maintain order and control the de Ba' athification effort in Iraq. I think many people again are mindful of that example. They don't want to repeat those mistakes. They're going to leave in place the elements of security until such time as a real political transition can take place. But again, that's an indeterminate timeframe and people's expectations are high. And you want to maintain that momentum.
- [12:51]
B
Well, when we're talking about signals. What about President Trump saying yesterday that they're considering reopening the US Embassy in Caracas? What kind of message would that send? How does that sort of play into the discussion we're happening, we're having here about what US Communication is going to look like on the ground? Because I believe the embassy has been closed since 2019.
- [13:10]
D
Correct.
- [13:11]
G
And that's actually something I've advocated for in the last 48 hours. Get the embassy reopened, get a presence on the ground, help coordinate activities both of the United States, but also frankly, of some of, of the international community. There's a huge humanitarian effort that's going to have to begin. There's a whole effort, obviously, in terms of dealing with the, the remnants of the Maduro regime about messaging on the ground. These are critical and you can't really do it as effectively from outside the country. So I think that's an important step.
- [13:39]
D
President's talking about who might be next. Yeah, he flagged Colombia. He flagged Cuba both last night while talking to reporters on Air Force One. Let's give it a listen.
- [13:50]
E
Cuba looks like it's ready to fall. I don't know how they can hold out, but Cuba now has no income. They got all of their income from Venezuela, from the Venezuelan oil. They're not getting any of it. And Cuba literally is ready to fall. And you have a lot of great Cuban Americans that are going to be very happy about this.
- [14:10]
D
You see Lindsey Graham standing right next to the president there. He said, just wait for Cuba. Their days are numbered. Is he right?
- [14:18]
G
Well, I think what that refers to is that Cuba really has been dependent on oil from Venezuela.
- [14:25]
D
Is it as simple as that? So we're not putting boots on the ground in Havana. How about Colombia? Could they be targeted in a similar way?
- [14:31]
G
I would not see that happening at all. Look, I mean, Colombia actually has presidential elections in March, in May. Excuse me, parliamentary in May, in March, but presidential election elections in May. So President Petro is not going to be president much longer in Colombia anyway. He can't run for reelection. So that process is going to play itself out. But I think, look, the administration is fully occupied right now on Venezuela. They have their hands full. This is a big deal. It's a tactical major success. They have to turn it into strategic success. That's going to take the time and effort of the administration to the very highest levels. Is there appetite? Is there bandwidth, frankly, to start doing this with other countries? I would argue no. I would also argue that, in fact, Venezuela is somewhat a special case because this issue has been ongoing for years. Maduro has been under indictment for years. In fact, it was President Biden that first put the bounty on his head of $25 million that President Trump raised $50 million. So this has been going on for a while. There is not an equivalent scenario of other countries in the region, but this is something that has captured the attention of people around the region. I think you're quite, quite right to raise it, but we'll have to see how it develops.
- [15:39]
D
Who's getting that money, Tyler? Do we know? Is anyone getting that reward money?
- [15:43]
B
I think the president did mention it. I think during the conference he said, I think we're going to, we're going to keep that one.
- [15:49]
G
Could I just mention one other quick thing? Super quick, super quick is that Maduro's complaining about his circumstances in jail right now. He's been a chief torturer in Venezuela. He needs to close Helicoide, which is the main torture center. That's where the conditions are really bad.
- [16:04]
B
Eric. Eric Farnsworth, senior associate with the Americas Program at the center for Strategic and International Studies, thanks so much for joining us. Keep with us. We'll have continuing coverage of what's happening in Venezuela up next. This is Balance of Power on Bloomberg Television and Radio.
- [16:17]
D
Stay with us on Balance of Power. We'll have much more coming up after this.
- [16:24]
H
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- [17:26]
C
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 11 30.
- [17:45]
B
The Venezuela assembly will swear in Delsey Rodriguez later Monday. She's an official that the Trump administration has signaled they feel they can can work with as President Trump says that the US Will run Venezuela. And we are waiting on additional details on what that cooperation is going to end up being. If you're joining us on Bloomberg Television, you'll see live pictures now. And for our radio listeners, it appears that Nicholas Maduro is in a motorcade heading back to the federal detention center in Brooklyn after Joe Matthew, he had that appearance, his first appearance in federal court in lower Manhattan today.
- [18:19]
D
Not guilty, the plea, and not a big shocker there as the former president of Venezuela now settles into his digs in New York. This is a notorious prison where he's being held at a detention center that Miles Miller was describing to us a short time ago. This is where El Chapo was held, where P. Diddy was held. Didn't even have running water or heat in some instances over the past couple of years. So a far cry from the presidential palace that he was was pulled out of on Friday night into Saturday morning. This is something that we want to play to the panel because the political implications here, just like the legal and economic implications, are huge. And we're joined now by Bloomberg Politics contributors Rick Davis and Jeannie Shan Zaino. Rick is a partner at Stone Court Capital. And our Republican strategist, Jeannie is democracy visiting fellow at Harvard Kennedy School's Ashe Center. Jeannie, I'll start with you here. You were with us on Saturday morning when this was a breaking news story and we were really trying to get our heads around exactly what the motivations were. Since then, President Trump has said that we are running Venezuela. And there have been great questions about what he describes now as the Donroe Doctrine, not the Monroe Doctrine, and how that exactly jives with the rhetoric that we heard from President Trump against interventionism as a candidate and even and as a former president. Is this a new leaf for Donald Trump? How's it going to play for maga?
- [19:45]
C
I think that's the big question. It puts a huge wrinkle into the midterm elections coming up into 2028. I thought it was interesting, and I still think it's interesting that JD Vance has not been part and parcel of most of these public discussions of this. We didn't see him with the president in Mar a Lago. We don't see him going to Congress, even though he's formerly served today. So I interesting, because this thing could fall apart and he certainly doesn't want to be holding the bag for 2028. We haven't heard much pushback from MAGA yet, although we heard a little bit from the usual suspects, Tom Massey, we heard Marjorie Taylor Greene, who I think you and Tyler can correct me, I think today is her last day in Congress. So Mike Johnson's got to be celebrating that. We've heard them push back, but so far we've heard mostly support. I that could change depending on how this rolls out. And I think there's so many questions. So I think for Congress, it's going to depend on what do they hear from their constituents and how does this thing unfold. The American public in polling at least tells us they don't want boots on the ground. They don't want interventions like this. And that's why Donald Trump ran on this for three elections and now has in, you know, decided that he is going to violate that promise. And MAGA may not be happy with that in the end.
- [21:09]
B
Right. What they hear from constituents and also what they hear from senior administration officials, because it's our understanding that there is going to be a large briefing on Capitol Hill later today where they are going to be asking a ton of questions of officials about how this unfolded. But Rick, to pick up on this conversation, could this be a unifying factor for the Republican Party considering it has broadly been applauded beyond those that Jeannie mentioned? And really we've spent the last few weeks, months talking about how divided the Republican Party seemed to be when it came to domestic issues like the way forward on health care.
- [21:42]
E
Yeah, I totally agree. I think it is a unifying concept both for MAGA and the more general party that I've been a part of for the last 40 years. Look, I mean, everyone's talking about the Dunro Doctrine. Teddy Roosevelt was the first corollary, corollary to the Monroe Doctrine. And he basically had the same view. If there are leaders in Latin America that we don't like, we ought to get rid of them. And Donald Trump is basically playing the Teddy Roosevelt card here. And that makes a lot of Republicans happy. MAGA likes it when Donald Trump is a bully and tough guy. They like it when, you know, he talks about taking economics out of one country and putting it into ours. They're going to like this. It's not a popular thing in polling. Prior to the attack, you know, Quinnipiac had our intervention in Venezuela at 60%. But when we are successful, and we were successful in this endeavor, the American public rallies to the support of the chief executive and to the military. And the military is not a small factor here. They distinguish themselves in this operation. Their public image will improve because of this and that in order to the benefit of Donald Trump and the administration. So, yeah, I think it's a strength builder for Republicans and by the way, gives them something to talk about other than being on defense about affordability and health care. And, and that has completely taken Democrats in Congress off of their core message.
- [23:10]
D
What are the risks there, though, Rick? President Trump says we're not afraid to have boots on the ground. But you know, of course, what that could mean when it involves securing not only Caracas, but the oil fields and a number of other interests who don't want to see the US Quote, unquote, running Venezuela.
- [23:27]
E
Yeah, obviously this could go a lot of different ways. And early indications, as late as just an hour ago, we're getting more and more cooperation, at least, you know, in the news from the current regime in Caracas. So hopefully there won't be a need to do that. But, but, you know, Donald Trump's carrying a big stick. He's got this massive flotilla outside the waters of Venezuela that he's obviously used very effectively to send a message. And the fact that he says he's willing to put boots on the ground, take the political impact from that is no small thing. And I think the leadership that was left behind in Caracas should probably believe him when he says does it. And so, sure, it could get worse before it gets better. But right now you're on a trajectory where, you know, I think the Republican Party at a minimum, is going to rally around the president on this. And there's potential great upside for our influence in the region and getting rid of some really bad actors from our backyard.
- [24:30]
B
If you're joining us on radio, we're so showing live pictures right now on Bloomberg Television. Nicolas Maduro's motorcade has arrived back to the detention center in Brooklyn after his appearance in front of a federal judge earlier today in lower Manhattan. Jeannie, I wanted to go back to your point about perhaps the lack of us seeing the Vice President, J.D. vance, and us seeing really another figure in this administration appear to be elevated, and that is Secretary of State Marco Rubio. Of course, his hawkish views have long been standing policy and a cornerstone of his foreign policy, but it hasn't really been of this administration's foreign policy. How are we seeing Marco Rubio's role evolve in the past year, when it comes to who has the President's ear on foreign policy.
- [25:14]
C
Yeah, I think it's such a great point, Tyler. I mean, his marks are all over this. He has long been pushing for this. Although I would say that if Marco Rubio was still sitting in the Senate, he would not be satisfied with an administration that did not inform and go to Congress prior to taking these actions. But he has.
- [25:35]
B
He.
- [25:36]
C
He has been pushing for this, and he is going to own this. And I think if this turns out to be a winning policy, a winning strategy, he could politically benefit that. But history tells us something very different. Whether you look at Afghanistan, whether you look at Iraq, whether you look at Cuba, whether you look at Guatemala, Nicaragua, US Interventions in foreign countries to rebuild other nations almost always go south. And I appreciate what Rick is saying about the rally around the flag effect. And that is short term, long term, it has had exactly the opposite impact, with a few minor exceptions, surrounding World War II. This is the problem for the President politically. This is going to be the problem for Marco Rubio. And I think this is why we see the vice President trying to walk this fine line of not hugging this too close. And I would also say that we need to trust the American public that by and large, regardless of where they stand politically, they believe in the Constitution. And the Constitution says very clearly Article two, you cannot go into a foreign country and remove the President without the authorization of Congress. There's no if, ands or buts about this. This was a violation of U.S. law, UN Charter, the U.S. constitution. And long term, the President and Marco Rubio are probably going to pay a political price for that if history tells us anything.
- [27:00]
D
Back to Capitol Hill for a minute here, Rick. Democrats plan to force a war powers vote in the Senate this week. It won't be the first time. I'm assuming you see that failing. Maybe you can tell me if I'm wrong, but to what extent could the argument over the mission in Venezuela slow down the debate over defense appropriations as we head for a funding deadline at the end of this month?
- [27:25]
E
Yeah, this is the thing that I'm most perplexed about. You know, the barn door is already open and all the horses left. War powers is after the fact. It doesn't really matter and it's going to fail anyway. So why does Schumer invest so much in that and not the winning formula that he had before the last shutdown, which was talking about affordability and the health care crisis that is is going to raise its ugly head again before the end of the month is out. You would think the Democrats would want to get started on that right away. And there isn't a deal between the Senate and the House right now on how to handle these appropriations. So it could get messy, you know, within the Republican leadership ranks around the Appropriations Committee. And the last thing that Tom Cole is saying, chairman of the House Appropriations Committee, is Defense, HHS and labor are going to be the last things he does because those are the hardest things to do, as you point out. So there's a lot of wood to chop here.
- [28:21]
D
We got a couple of cords worth.
- [28:23]
B
Sometimes it feels like deja vu here in Washington all over again. All right, our political panel today, Rick Davis and Jeannie Shan Zaino, both political contributors here at Bloomberg. Stick with us. We're going to have the view from Europe next. This is Balance of Power.
- [28:36]
D
Stay with us on Balance of Power. We'll have much more coming up after this.
- [28:43]
H
Running a business is hard enough, so why make it harder with a dozen different apps that don't talk to each other, one for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software. Instead of growing your business, this is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything, CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins. Just one seamless system that makes work easier. And the best part, Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business, whether you are just starting out or already scaling up. Plus, it's easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for free@odoo.com that's o d o o dot com.
- [29:46]
C
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg business app. Listen on demand wherever you get your podcasts or where. Watch us live on YouTube.
- [30:02]
D
Here we are. Everyone's back from grandma's house and it is the full first full trading week of the year, which is something we wanted to talk to Nora about a little bit more now that we've got the baseline set from Charlie Nora, Melinda, Bloomberg markets correspondent, with us live from world headquarters in New York. You know, there were a lot of questions about what happened to the year end melt up. Nora, you and I talked about it. There was no Santa around around at the end of the year. Are there seasonal factors now that we've seen people get through their tax loss selling at the end of the year or are we just doing a clean slate and jumping back into stocks like nothing ever happened?
- [30:38]
B
Well, it's interesting because I mean obviously we are seeing an uptick in volume. I was here working through the holiday season and there was about five of us. It felt like here on Wall Street. But today we are seeing the S&P 500 having volume that's up about 20% versus the 100 day average. So people are clearly hopping back into this market. But there's a lot of interesting things that are going on right now, especially given the fact that we are coming off of a double digit banner year. That's a third time in a row that we did see three years of consecutive gains. But as we're coming into this year, I mean we are hearing from a lot of strategists that they're also bullish, expecting roughly about 11% gain on the S&P 500 this year. But as we know just over the weekend, geopolitics has really been been front and center and that's what's also really affecting this market today. Joe?
- [31:24]
D
Yeah, looking at Exxon up over 2%, Chevron up over 5%. I guess that shouldn't be a big shock with Chevron already in Venezuela. But this is a little bit of a stretch, isn't it? It's going to take 10 years they said to build out the Venezuelan infrastructure. Are people just looking for a reason to buy?
- [31:39]
B
Well, it certainly will take some time. That's also been etched out and a lot of the reporting that we've had on the Bloomberg terminal, this isn't a one day turnaround or something that's even short term. But you are are seeing a lot of investors betting on the long term here. We know Chevron is one of the only big US Oil companies that still is working in Venezuela as opposed to a lot of the other companies that are no longer present there. But we are still seeing broad based gains here across the board. When we look at the energy sector more broadly, that is the best performing sector in the S&P 500 today. So that's clearly telling you all that you need to know about what traders are thinking about out for the long term.
- [32:16]
D
There it is.
- [32:17]
B
All right, Bloomberg Television's market correspondent Nora Melinda. Thanks so much for joining us here. And as we continue to follow the ongoing story and developments in Venezuela, the Trump administration is engaging with allies worldwide. We're getting some headlines on the Bloomberg Terminal that Secretary of State Marco Rubio is speaking to some of his European counterparts. That includes in the United Kingdom, Yvette Cooper saying that the pair spoke about the the importance of complying with international law. And Joe Matthew, what should happen next in Venezuela, as we know that our allies didn't appear to be notified ahead of these strikes.
- [32:52]
D
That's true.
- [32:53]
B
Yeah.
- [32:54]
D
Our allies, members of Congress had that in common. The president did indicate though, that oil companies got a heads up and then got some consultation afterward. And we're hearing reports as well that they will likely meet at the White House later on this this week, knowing that, of course, this is the massive oil reserve that so many of these companies have wanted to tap. It, as we just mentioned with NORA could take years for that to be realized.
- [33:17]
B
In fact, this is part of the criticism coming from some members of Congress who are trying to thread the needle here, saying that they're upset that the private sector might have been a little bit more read in on the plans before lawmakers were. But to dig into all of this, we're joined now by Heather Conley. She's non resident senior fellow at the American End Enterprise Institute and former deputy assistant secretary of State for the Bureau of European and Eurasian Affairs. Heather, thanks so much for being here. So as we were just mentioning, seems like the US Is now engaging with our European allies. What are we learning about what Europe would like to see the US do next when it comes to Venezuela?
- [33:51]
A
Yeah, the European reaction was fairly muted. They certainly did not see Maduro as a legitimate leader and were very much concerned about the deterioration of democracy. But what you hear consistently is the concern for the violation of sovereignty and the respect for international law. The Europeans also want to make sure because meanwhile, as we've been watching these extraordinary events happen in Caracas, high level talks in Kyiv yesterday, continuing to work through the peace deal, a big important meeting in Paris tomorrow that President Macron is hosting to hopefully get more on security guarantees. So they're also trying to trying to manage increased Russian aggression, obviously watching this incredibly bold military action. And then we'll talk about I'm sure they're also very worried about a violation of the Kingdom of Denmark. So they're managing all of these things.
- [34:45]
D
I can't wait to hear from you on the Greenland aspect with your history dealing with our European allies. But this was framed yesterday by Marco Rubio Venezuela as a crossroads for all of our enemies. And it was, as you and I have discussed over the course of weeks, the evolving justification that we've heard from the White House really resolved into on Friday and into Saturday, one that included Hamas and Iran, which in fact is true. Iran has facilities in Venezuela to train the Revolutionary Guard. They make drones there. There is a direct connection, but it's not one that we heard about until very late in the game.
- [35:21]
A
How come I agree you completely and this is going to be so interesting to see the ripple effect of now that Maduro is gone. How do we see Russia, China, which has an enormous, you know, 80 billion, you know, debt extension to Venezuela, Russia, Iran, Cuba, how our adversaries are interacting and when one of those, you know, adversaries has a significant change, what will happen? But you're absolutely right, Joe. I mean we really had a variety of descriptions here from removing a dictator, democracy, drugs, now it seems much more focused on oil. But this is all about hemispheric defense. And that's where the Greenland question also comes into play.
- [36:03]
B
Well, if we actually stick with what you were just saying about China and the Western Hemisphere, China really has made significant inroads in Latin America. I believe it's 24 signatories between Latin America and the Caribbean on its Belt and Road Infrastructure Initiative. What is sort of the broader geopolitical theme that we should be watching for here? Could this actually be a setback to Beijing's inroads that they've already made in the region?
- [36:27]
A
Well, I will say this is certainly a setback for Vladimir Putin in Russia because he was certainly banking on this. In fact, they just signed an agreement, a strategic partnership between Venezuela and Russia. But you're absolutely right. Look, we're seeing across the board, Brazil, Peru, China has made significant inroads. What does Beijing think about this? Will it lose its credit line? Will there be a grand bargain made? And I think for me, the interesting point on Venezuela, we had Secretary Rubio state very clearly, you know, that the blockade will continue, the sanctions continue. But meanwhile we are seeing that sanctioned tankers are able to leave Venezuela right now with some of them free passage to China and Russia. So we're extremely confused even what they this means for economic interests for China and Russia.
- [37:13]
D
There's some confusion about what the so called Don Row doctrine includes as well, because maybe this is not the end. And the president indulged a lot of possibilities on Air Force One last evening as he looked across the region considering Colombia or Cuba, which may fall on its own, according to the president, we don't necessarily need military intervention there. But let's get to the idea of Greenland. We've been fooling around with this conversation since before the president even took office. Here's what he said last night.
- [37:40]
E
We need Greenland from a national security situation. It's so strategic right now. Greenland is covered with Russian and Chinese ships all over the place. We need Greenland from the standpoint of national security. And Denmark is not going to be able to do it, I can tell you.
- [38:00]
D
Okay, Heather, is Greenland now?
- [38:03]
A
Well, certainly the Danish prime Minister and the Greenlandic prime minister believe it's a possibility, as well as our NATO allies.
- [38:11]
D
So they're taking him literally.
- [38:12]
A
Yeah, they are, very much so. And today the comments by the Danish Prime Minister, Mehdir Fried were very clear. I mean, again, look at the evolution of this. I mean, President Trump has mused about this since 2019. So this carries from the first term. And the Danish and Greenlandic response first started as sort of of, ha, ha, not for sale. No, really. It's a territory and we're a NATO partner and we're a good partner and we've been strong allies. Today was stop enough. And if you do this, you are now ending NATO as we know it because one NATO country is now going to be attacking another NATO country. Interestingly, you had British Prime Minister Keir Starmer, who was again on Venezuela going. He was Maduro was illegitimate. It we don't like this on Greenland. You had the Norwegian Prime Minister, the British Prime Minister, saying, no, really, no, this is not. So you see a change of tone here. Again, I think there'll be pressure that the administration is going to continue to bring to bear on Greenland. But this is. Greenland is important for US national security. But we have a base there. We have a strong relationship. The Danish government, the Greenland, Greenland government will allow us to do more. But it's not about annexing or purchasing the territory.
- [39:27]
D
We actually have. Tyler, the tweet from Denmark's prime minister. I have to say this very directly to the United States. To your point, Heather, it makes absolutely no sense to talk about the need for the US to take over Greenland. The US has no right to annex any of the three countries in the Commonwealth. Pretty straightforward.
- [39:45]
B
I mean, yeah. And as you're putting into context for us, pretty big, huge news and a pretty big shift because it was a redhead on the Bloomberg terminal that Denmark says a U.S. attack on Greenland would mean the end of NATO. If we could take perhaps a broader view here and you hear President Trump talk about how this is important to national security. How are we seeing natural resources play so much into this administration's actions when it comes to foreign policy? Because we have Venezuela and oil reserves. Reserves. But also when we are talking about Greenland, they're sitting on, I believe, the third largest oil reserves in the Arctic. And there's a huge deposit of critical minerals.
- [40:21]
A
So there's absolutely. But again, this gets back to the Venezuela energy picture. Right now we have to be very clear about what's on the ground. We do see, you know, critical minerals, mining in Greenland. There is very limited infrastructure. It will take decades. Plus there were some exploration offshore. Greenland oil and gas. It was not found to be sufficient. And by the way, we have fairly low global energy prices. You were talking about very expensive, decades long investment. It sounds good in theory. The practical implementation of this is far, far away.
- [40:55]
D
We haven't had a reason to pull out the Greenland beauty shots in a while as you're seeing on Bloomberg tv. But is the President right about this, that it's covered with Russian and Chinese ships all over the place? That's the quote.
- [41:06]
A
It's not covered, but there is again, there's importance and we're seeing an uptick in Russian submarine activity. The famous Greenland, Iceland, United Kingdom gap, that Cold War gap to make sure those Russian submarines from the Arctic do not penetrate and threaten North America. You do have Chinese research vessels that are doing research on the subsea on the sea floor, which is concerning. But we don't have have to threaten annexing Greenland. We need to work with our partners. And the Danes have already put a substantial Arctic security package to increase that security. That's the direction we want them to go. But this is distracting them for continuing to focus on their own strengthening of security. They're doing a lot. We see some problems there, but it doesn't require what the President is saying.
- [41:55]
B
We only have a minute left, but since we have spoken so much about Russia, President Trump was asked about the state of negotiations with Ukraine yesterday on Air Force One. Have you seen anything that has indicated positive momentum in your view? As the President says, this could be wrapped up soon, but we haven't really gotten headlines.
- [42:11]
A
So it's not going to be wrapped up soon. But I'm continuing to see really important progress. This meeting tomorrow in Paris. The Europeans will continue to articulate the security guarantees that Ukraine needs before they can move forward in any deal. American commitments have to be an essential part of that that you're seeing the Ukrainians also start to prepare the ground for a referendum for an election if there is a peace deal. So I'm seeing the positives on the Ukrainian and a European side. Russia. Absolutely nothing. In fact, you see Vladimir Putin wanting to expand this war, not taking any of these signals. So progress on the Ukrainian, European side? Nothing on the Russian side right now.
- [42:53]
D
Frustration for President Trump re emerging at Mar a Lago on Saturday saying he's not happy with Putin killing too many people. Heather, it's really great to have you back. Thank you for the insights. To think that this all occurred since we last spoke. Heather Connelly, American Enterprise Institute I'm Joe Matthew alongside Tyler Kendall only on Bloomberg. Stay with us on balance of Power. We'll have much more coming up after this.
- [43:18]
H
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- [44:20]
C
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa.
- [44:36]
D
Play Bloomberg 11:30 as we try to figure out the next move here for the administration when it comes to Venezuela. The president of the course has said repeatedly here that we are running it. When he was asked at Mar a Lago on Saturday, he's well, who's running it? He said these guys behind me, that included the Secretary of State Marco Rubio, who if he didn't do the full Ginsburg yesterday, came pretty darn close and he did not reassert the president's view that we would be quote unquote running the country to that end. In fact, there. Well, there is someone who runs the country. That would be the former vice president here who took the oath on Saturday, Delsey Rodriguez, you've heard that name a couple times, was sworn in as acting president on Saturday morning and had some pretty chippy things to say about President Trump saying that Maduro is the only real president, the only real leader of the country, in a blistering speech, talked about the right to sovereignty. Dan issued a statement yesterday that sounded, or at least read a lot different than she was speaking here. We extend an invitation. Here it is on your screen. To the US Government to work together on a cooperation agenda aimed at shared development within the framework of international law. Leland Lazarus does this for a living. He's the founder and CEO of Lazarus Consulting, spent years working as a diplomat and an official in the Department of Defense focused on China and Latin America. Funny how that works. Networks. Leland, it's great to have you with us here on Bloomberg, and I'm glad that we could make some time. Who is running Venezuela right now?
- [46:18]
I
Well, thank you so much, Joe. The person who's running Venezuela right now is Desi Rodriguez. Up until recently, she was the vice president of Venezuela, now sworn in as the interim president. Her background is interesting because she led the economic development in Venezuela and tried to help the economy limp along despite the various sanctions and, you know, problems that have been dealing with the economy for years. But she was also very much involved in Sabine, which is the Venezuela's intelligence arm. And so she has a lot of connections in and around the country. I think that's exactly why the Trump administration is relying on her and her brother, who's the president of the national assembly, to keep some modicum of stability in the country at this time.
- [47:06]
D
Yeah, well, you heard what I just mentioned in the sort of night and day statements that she made over the weekend. Is she playing her own game here? Is she malleable? Will she work with the United States? What happens in the next couple of days? As Trump says, we're in charge.
- [47:24]
I
Well, Joe, I think that she doesn't really have any choice in the matter. Right. Trump said yesterday that if local Venezuelan officials are not going to do what the US Wants it to do, there may be a second strike. And so that is a very specific threat to the local Venezuelan officials to say, let's get your house in order. And if you are not going to support US Priorities in the region, or rather in the country, there will be consequences.
- [47:56]
G
Hmm.
- [47:58]
D
Pretty remarkable when you consider the regional implications at least the potentially potential regional implications here. And who might be next. The President was speaking openly last evening, Leland, on Air Force One with reporters about Colombia and Cuba. Maybe they'll both be on the target list. Here's a sense of what he said about Cuba.
- [48:17]
E
Cuba looks like it's ready to fall. I don't know how they, if they can hold up, but Cuba now has no income. They got all of their income from Venezuela, from the Venezuelan oil. They're not getting any of it. And Cuba literally is ready to fall. And you have a lot of great Cuban Americans that are going to be very happy about this.
- [48:37]
D
You heard Senator Lindsey Graham coughing there or maybe you saw him standing next to the President at the back of the jet. He said right after the president there, quote, you just wait for Cuba. Their days are numbered, unquote. Vote Leland, is Havana next?
- [48:53]
I
Well, I think the idea is that there will be some sort of a domino effect, right, where not only Cuba but also Nicaragua in this region have really depended on Venezuela's economy in order to support their own. And so with such a key node like Venezuela down, it may be just a matter of time for both Cuba and Nicaragua as well. But Joe, I just want to think about the, the masterstroke of this operation, right? Militarily, there wasn't one service member who was, was injured or hurt during this operation and it killed multiple birds with one stone, right? We now have access to a country that has the world's largest oil reserves. It has so much gold, the most in all of Latin America, other critical minerals. We make her drug trafficking. For so many years, Maduro has basically allowed his territory to be a playground for transnational criminal organizations. And most importantly, it dislodges our main competitors, right, Russia, China and Iran from what they've been using as a strategic beachhead in the region for so long.
- [50:08]
D
I'm glad that you mentioned that. I want to wrap our conversation with that thought because I think it was really Friday and into Saturday, Leland, that we heard Republican talking points, really administration talking points. Add Iran and Hamas to the argument for why Maduro needed to go, right? It started as drugs. Fentanyl became a weapon of mass destruction. Then it was the oil. They stole the oil. We want it back. Now we need to interrupt Hamas and Iran and, and there are in fact drone making facilities and Republican Guard training facilities in Venezuela. To what extent are we going to make a dent when it comes to Tehran with this action?
- [50:49]
I
I think we're going to make a huge dent. I mean, I think that Venezuela and Iran have been mutually supporting each other. You've seen in recent years leaders of Iran visiting Venezuela and further saying support for not only economic issues but also defense. And so with again, a key node in this region going down for some of our major adversaries and competitors, you know, this is a huge blow for them, I think a huge support for US Geostrategic interests in the region.
- [51:28]
D
It's great to have you. Be good to have you back soon. Leland Lazarus with us live on Bloomberg as we consider the geopolitical angle here, but also the economic one. And when everyone talks about the economic implications, you know they're talking about one thing largely, and that's oil. Ask Mike Wirth, the CEO of Chevron, the one major US Based integrated oil company that's actually doing business there. Was with us here on Bloomberg talking about this back in December. Here he is from the 10th of last month.
- [51:59]
G
I don't know what the president's intentions are. We've been in Venezuela for the last hundred years. Our presence there we believe is important.
- [52:08]
D
For the local economy, the regional economy, the people of Venezuela. The Venezuelan oil is sought after by.
- [52:13]
G
US Refiners and we operate there in full compliance with all US Law and sanctions.
- [52:19]
D
We're in discussion, discussions with the administration to ensure that we stay in compliance. And you know, oil prices are moving here. Not only Chevron stock, which is popping along with Exxon even though it doesn't do any work there. I guess there's an expectation it might be involved. Crude oil futures, West Texas Intermediate, up more than one and a half percent right now, about a dollar to top dollar 58 a barrel. Now if you listen to this program and you've heard Miami Mike McGlone talk about oil cycle, it's only down from here is the smart analysis with a looming glut on the horizon. That doesn't mean you can't see a little trigger in a knee jerk move when there's a shock news event like this one though. And we wanted to connect with Mike while we had a moment. Bloomberg Intelligence senior commodity strategist Mike McGlone, am I close to what's going on here? And if that's the case, do you short oil today?
- [53:11]
E
Point traders are looking to short oil. I think levels to do that are maybe $65 a barrel. And you pointed out the biggest rallies come in bear markets. And crude oil is clearly an oversupplied bear market. So for this year, I'm looking maybe at a range between 42 and 65. People are looking to sell. But you pointed out prices are up to everything's up today, even bond prices up. But the one key thing that's down is natural gas, partly because it doesn't care about Venezuela. It's pointing out the winter's probably going to be warmer than normal, is over. As usual, natural gas is down about 5%. It's the time season typically peaks. So what matters is where will we be at this time next year? I fully expect there's going to be more crude oil supply, more natural gas supply, and there's just a little bit of risk if the stock market's here a little bit lower if it goes down a little bit. Those are pretty severe deflationary forces. But right now Mr. Trump is going to get very much likely to get lower energy prices by the time we get to mid.
- [54:06]
H
Interesting.
- [54:08]
D
Well, you know, in our remaining moment here, Mike, I'd love for you to give us a reality check on the work that would need to take place because the oil fields there were told are in disrepair and a massive infrastructure investment to the tune of $100 billion would be required over the next 10 years. Does Exxon show up? Does ConocoPhillips show up?
- [54:27]
E
They all do, including state sponsored, state owned oil companies from Russia and China. They're also involved in Venezuela. So how they work that out of my price range, my game. But I think the key thing is, you think a year or five years from now what happens, Joe, is this technology moves faster now than ever. That's what's been happening in the shale forever. It just happens faster than ever. And we did produce to 20 years ago 3 million barrels a day in Venezuela. Now it's down to 1. Getting it back towards 2 should take a little while, but it's going to happen.
- [54:58]
D
Mike McGlone with us from Miami, Bloomberg Intelligence. Great to have you, Mike. To think of all the time I spent going to sleep with the blinking Sitgo sign outside my bay window on Charlesgate. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify or wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at noontime eastern@bloomberg.com.
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E
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A
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D
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