US Expands Threats to Iran Energy, Water Even as It Hails Talks

Summary

Bloomberg Businessweek
Episode: US Expands Threats to Iran Energy, Water Even as It Hails Talks
Date: March 30, 2026
Hosts: Carol Massar & Tim Stenovec

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Episode Overview

This episode examines the geopolitical, economic, and market ramifications of the fifth week of the US and Israeli war with Iran. It covers military strategies, escalating risks in the Strait of Hormuz, and global energy shocks. In addition, guests weigh in on the evolving nature of modern warfare—including economic weapons—and discuss investment and market responses to unprecedented instability. The show also delves into nuclear technology’s regulatory landscape and the realities of deploying new reactors.

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Key Discussion Points & Insights

1. The US-Israel–Iran War: State and Strategy

Guest: Major General Masten Robinson, Academy Securities Geopolitical Intelligence Group

• Current Situation:

  • The conflict is in its fifth week. Iranian ballistic missiles on Gulf targets have led to the use of over 2,400 interceptors, nearly matching the prewar stockpiles.
  • Momentum is shifting as the US and allies redirect munitions and system resources to the campaign against Iran, worrying other allies about depleted defenses. ([02:07])

• Strategic Objectives:

  • The US’s endgame remains preventing a nuclear Iran.
  • Pathways considered: outright defeat, negotiated settlement/off ramp, or a change in Iran’s supreme leadership—not seeking occupation with ground forces.
  • Quote: “I think we're still looking for a negotiated off ramp. I don't think there's any intent…to obliterate the nation or its capabilities.” — M. Robinson ([02:57])

• Ground Troops & Escalation:

  • US not planning ground troop invasion—focusing on leverage and negotiation.
  • Deployment of additional assets intended to create “negotiation space.”
  • Quote: “I see we positioned sufficient assets to be able to apply additional pressure to create negotiation space.” — M. Robinson ([03:52])

• Nuclear Risk & Maritime Security:

  • Less concerned about a new “nuclear age”; more focused on upholding freedom of navigation and international law in the Strait of Hormuz.
  • Disruption in shipping lanes risks severe economic impact globally.
  • Quote: “We need freedom of navigation globally or the economy really is going to be massively impacted.” — M. Robinson ([05:12])

• Iran’s Leverage in Strait of Hormuz:

  • Iran’s control over shipping raises insurance premiums and curtails global trade. The US is working to regain leverage.
  • Threats to “take Iran’s oil” debated as both leverage and potential bluster.
  • Quote: “...can we take something away… that causes you to say, hmm, maybe this isn't the road we want.” — M. Robinson ([07:26])

• Regional & Nuclear Future:

  • The outcome may drive Iran further toward nuclear ambitions, though Iranian attacks on commercial—not just government—targets have bolstered regional unity against Tehran.
  • Progress on reducing Iran’s nuclear capabilities is partial and ongoing.

• Global Messaging & Taiwan:

  • Moves in the Taiwan Strait signal continued US resolve vis-à-vis both Russia and China. Unlikely the US will directly go to war, but will bolster Taiwan’s defensive capability.
  • Quote: “I think the US is willing for Taiwan to go to war to take that option away from China and would love to be part of facilitating Taiwan's capacity... I don't know that we're looking to be involved..." — M. Robinson ([13:18])

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2. Energy War – Economic and Financial Implications

Guest: Florin Yelpo, Head of Macro, Lombard Odier Investment Managers

• From Military to Economic War:

  • The Strait of Hormuz crisis moves from direct military confrontation to an economic war using oil prices as a weapon.
  • Western investors focus on portfolio protection from energy inflation, particularly via inflation-linked assets and commodities.

• Supply vs. Demand Shocks:

  • Supply-driven inflation (as now) differs from demand-driven; central banks tend to “wait and see” rather than raise rates rapidly.

• Historical Parallels:

  • Gulf War experience: Oil price spikes don’t necessarily trigger recessions if accompanied by strong underlying economic fundamentals.
  • Quote: “If it doesn’t bring you to a recession, there’s no case for shorting. The market is just a future entry point for holding more equities in the future.” — F. Yelpo ([18:54])

• Risk of Recession:

  • Even with doubled energy prices, US GDP impact is likely capped at 1–1.5%, with ongoing AI investment providing a buffer. No recession is base case for the US or Europe. ([19:36])

• Investment Strategy in Uncertain Times:

  • Advocates 40-40-20 allocation: 40% improving growth, 40% deteriorating growth, 20% hedged for inflation.
  • Commodities, inflation linkers, interest rate volatility are especially relevant now. ([20:54])

• AI, Productivity, and Margins:

  • AI productivity surge is an “inflation killer” and supports long-term corporate margins, offsetting short-term labor reduction fears.
  • Quote: “A productivity boom…maybe the software sector is currently being a little bit challenged. We see very positive longer-term prospects.” — F. Yelpo ([22:38])

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3. Nuclear Energy Innovation and Regulation

Guest: James Walker, CEO of Nano Nuclear Energy

• Small Modular Reactors (SMRs):

  • Nano Nuclear submitting permit to the NRC—one of only five companies at this stage.
  • Uses proven high-temperature gas reactor tech paired with new TRISO fuel, which increases safety by encapsulating fuel and nearly eliminating meltdown risk.
  • Quote: “High temperature gas reactors have been used for decades... the only real novel thing that is happening now is it’s old tech being paired with new fuel.” — J. Walker ([28:51])

• Safety and Public Perception:

  • Naval reactors have never caused military fatalities; overall nuclear is statistically the safest energy source per gigawatt-hour.
  • Perception lags reality—most fears rooted in Cold War mentality rather than reactor safety science.

• Civil vs. Military Tech:

  • Military subs use highly enriched uranium, off-limits to civilian use for proliferation reasons. Civilian SMRs are optimized for different enrichment standards. ([31:21])

• Waste & Reprocessing:

  • Interim storage sites built in Texas and New Mexico. Most spent fuel is theoretically reusable, but US policy on reprocessing is restrictive due to proliferation concerns.
  • Quote: “If they change the rules one day and allow…to reprocess…we could go get that fuel back out. It’d be essentially almost free fuel...” — J. Walker ([36:59])

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4. Market Update and Investment Positioning Amid Uncertainty

Guest: Rob Hayworth, Senior Investment Strategy Director, US Bank Asset Management

• Market Mood:

  • Worst S&P 500 month in years; sector splits are nearly even between winners and losers.
  • Clients are concerned, seeking safe investment havens; global infrastructure (including energy) has performed relatively well. ([41:27])

• US Economic Outlook:

  • The US economy remains resilient; as long as Strait of Hormuz reopens soon, substantial economic damage may be avoided.
  • If closure persists, higher oil prices will strain consumers but unlikely to trigger a severe downturn unless jobs or retail sales are significantly hit. ([43:41])

• Market Sentiment:

  • “Not a complacent market as much as it is a patient market.” Investors hopeful for resolution, but signs of nerves as correction thresholds approached. ([45:20])

• Tactical Recommendations:

  • Cautiously re-enter equities, favoring global infrastructure and utilities, which benefit from AI-driven energy demand.
  • Highlight fixed income opportunities: structured credit, non-agency RMBS, catastrophe bonds—all less correlated to broader economic cycles.

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Notable Quotes & Moments (with Timestamps)

• [02:57] “The end state has always been a non-nuclear threat Iran … we’re still looking for a negotiated off ramp.” — Maj. Gen. Masten Robinson
• [05:12] “We need freedom of navigation globally or the economy really is going to be massively impacted.” — M. Robinson
• [09:59] “What's happened over the last month has created more unity among not just Middle East leadership and Middle East populations than we've had in the past.” — M. Robinson
• [18:54] “If it doesn’t bring you to a recession, there’s no case for shorting. The market is just a future entry point…” — Florin Yelpo
• [22:38] “Productivity is an inflation killer and that productivity boom is actually happening.” — F. Yelpo
• [28:51] “We know it works. … High temperature gas reactors have been used for decades.” — James Walker
• [36:59] “If they change the rules one day and allow…to reprocess…we could go get that fuel back out. … almost free fuel that we could build umpteen generations of reactors with.” — J. Walker
• [41:27] “Clients…have questions…it has to do with how long is this going to last and where should we hide?” — Rob Hayworth
• [45:20] “I think it’s not a complacent market as much as it is a patient market…they’re just, they’ve just been hopeful that we’re not disrupting the positive underlying fundamentals.” — R. Hayworth

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Major Segments and Timestamps

• Military-Geopolitical Analysis: Iran War, Strait of Hormuz, Nuclear Risk [02:07–13:50]
• Energy Shock, Global Markets, Investor Strategy with Florin Yelpo [16:35–24:43]
• Nuclear Technology and Regulation: Nano Nuclear CEO Interview [27:38–37:33]
• Market Outlook & Investment Tactics with Rob Hayworth [41:05–48:14]

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Tone and Language

The episode maintains a well-informed, pragmatic, and analytic tone. The hosts and their guests focus on real-world consequences for geopolitics, markets, and innovation—balancing expert perspectives with actionable investment advice and an awareness of public sentiment, particularly regarding energy and technology.

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For Listeners New to the Episode

This episode provides an in-depth look at the intersection of war, energy, economics, and markets. It features expert analysis on the US-Iran conflict, practical investment strategies for turbulent times, insight into nuclear tech’s regulatory path, and discussions on how AI-driven productivity could reshape inflation and corporate margins. The commentary, grounded in recent global events, is both accessible and data-driven.

Transcript

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[C]

Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast Carol Massar and Tim Stanweck on Bloomberg Radio

[A]

While we are now in our fifth week of the US and Israeli war in Iran, you know that Iranian ballistic missiles on Gulf targets have consumed at least 2400 interceptors, a number approaching those countries known pre war stockpiles. And this is something we talk a lot. The drain on munitions has alarmed US Allies around the world as weapons systems and ammunition Tim have been pulled to support the campaign against Iran. Something another angle that we are looking at.

[C]

Back with U.S. major General Masten Robinson, Academy Security Geopolitical Intelligence Group member. He joins us remotely served over 34 years on active duty in the US Marine Corps, during which time he served in more than 60 countries. General Robinson, always good to have you on the program. What is your read on whether this war now in its Second month, its fifth week is actually nearing an end.

[D]

Hey, Carol. Tim, great to be here. I think if you walk the dog back. So what's this all about? The end state has always been a non nuclear threat. Iran, then how do you get to that? So you either have to defeat a country, you have to surrender to a country, you have to find an off ramp. And so I think we're still looking for a negotiated off ramp. I don't think there's any intent at this point to say we are going to defeat Iran in regard to a obliterate the nation or its capabilities, certainly this desire for a supreme leadership authority transition. But the question is, is that something that can be done in the immediate future? Is that something that's going to be done down the road based on the Iranian people's reaction?

[C]

Can it be done without ground troops, without boots on the ground from the US And Iran?

[D]

I don't think we've done with grand. I don't see this being an Iran, a going into Iraq, you know, with 300,000, 500,000 ground troops. I don't see that strategy being what we're pushing for. I see we positioned sufficient assets to be able to apply additional pressure to create negotiation space to try to get the outcome that we're looking for.

[A]

So many questions, so many places to go. What I want to go back, though, is what you talked about. The mission of making sure Iran's nuclear capabilities were reduced, you know, gotten rid of completely like that seems to be the main reason. I guess we all assume that the US And Israel got into this at the same time. We're reporting that President Trump's willingness to attack adversaries while rattling allies, threatening to push the world into a new nuclear age. With governments debating whether they must get the bomb, the US Is assessing a return to atomic bomb tests. China and Russia are upgrading their arsenals. The Atomic Energy Agency, the International Atomic Energy Agency, warning that more nuclear weapons in more countries will not make the world more secure. Are we on the precipice of a new nuclear age, in your view?

[D]

I don't believe we are. I mean, I think actually the bigger immediate thing that we're on the precipice of is trying for this not to become a case where navigation of the sea and the convention of high seas and the rules of international law regarding ICs are completely thrown out of the window, which is sort of what's happened at the Straits of Hormuz. You go back to 1958, conviction of the high seas or the 1994, you know, UNCLOS, which is the, in essence what established the fact that key shipping lanes like this, even though they may be within territorial order, it's illegal to prevent them from being normally used for global commerce. And that's kind of where we are right now. And that has certainly escalated things a bit away from the non nuclear threat Iran objective to say. But at the same time, we need freedom of navigation globally or the economy really is going to be massively impacted. That's not new for us. We've been doing that for decades. My first involvement of an issue like that was in the 1980s, believe it or not, in an obscure location in the Mediterranean where a country is saying, hey, we want to claim this larger body as our own gulf and control everything that goes through it. And we said, no, no, no, 12 miles is what you get unless you're on a key shipping lane like straits, from who's blocking straits? Straits to Gibraltar, et cetera.

[C]

Can the US Sufficiently like, does the US have the technology or the weaponry or the ability to protect ships without Iran's cooperation through the Strait of Hormuz?

[D]

I mean, that is a very loaded question, Tim. And I, I would say that's not what we're chasing. I think what we're trying to achieve here is enough leverage where we have negotiation to be able to have Iran say, okay, we're going to stand this down.

[C]

But it seems like, it seems like Iran has a lot of leverage right now with, with shipping traffic at a standstill.

[A]

Well, they have, all right, they have all the leverage, right?

[D]

Well, I don't think they have all of it, but they certainly have more than we wanted to have, which is why we've introduced new assets into the theater to say we need more capability to tip the balance our direction in regard to the threat of what we can do. And that's where you get into discussions of, you know, Carg island and so forth, of, you know, can we take something away from you that's vitally important to you that causes you to say, hmm, maybe this is, this isn't the road we want to go down.

[A]

Do you believe, you know, Secretary Scott Besson told Fox News the US Is going to retake the control of Hormuz, you know, ensuring the safe navigation President Trump has threatened to take Iran's oil. Is that bluster or do you believe it?

[D]

I hope it's doable. I mean, I think that's the question that we're all sitting around watching and saying, okay, you have more tools in your Kit bag then you have more capacity and capability to influence Iranians desire to come to negotiation. This is not the first time the Straits Fire moves have been at issue. It's not the first time we've been at odds, not just us but the world at odds with Iran regarding shipping lanes. Straits for moves you can go back to them laying mines, you can go back. This is the first time it's gotten into this much threat of shooting. And of course at the end of the day it's it. Yeah, there's the threat of shooting, sinking shifts, but there's a large threat of the cost because of the cost of insurance and the ability for nobody will afford to go through these types of passages, whether it's Bob El Nip Strait or Straits farmers because insurance costs just go through the ceiling.

[A]

General Robinson, one of the things two that I think about is what's life after. Maybe I'm optimistic that that'll happen sooner rather than later and you can weigh in on your timeframe. But I do think about is this still we've had folks say it's an Iran that is going to be even more hell bent on making sure it has nuclear capabilities when it comes to military weapons. And so I just wonder are we creating an enemy that is going to be even more difficult going forward and it may take a few years for their rebuild, or are we helping to create a Middle east with all of our allies in that region that's more positive going forward is that even. I'm just not quite sure which way this goes.

[D]

In my opinion, the results of what's happened over the last month has created more unity among not just Middle east leadership and Middle east population than we've had in the past. I think it was a strategic error on Iran's part though. They didn't really have a choice. I think they had preset targets. You know, when the Ayatollah was taken out and the the communication network went silent in the C2 architecture was dismantled for a while. They immediately turned to their in the box. These are targets were supposed to attack and they attacked. A lot of those were targets that were not at government institutions but at commercial institutions in their neighboring countries, which I believe played to our hand in regard to a more unified Middle Eastern population saying wow, this Persian Iran really is a threat that is bigger than what we've even imagined in the past. So I think in that regard it's improved the status of the Middle east and our relationship. Going to what you're talking about, have we really been able to knock down Iran's nuclear capability or capacity in regard to their development. We certainly have set it back. I don't think we know yet just how far back we've set it. And I don't think we've played every card in the deck yet in how we would set that back.

[C]

What's an example of a card that you think we what's an example of a card you think we still have?

[D]

I don't know that I would want to speculate on that. I'm not sure that would be helpful. I think the point is that both we, Israel and now the Middle east more than ever before are saying this Iranian nation that we're looking at, this supreme leadership authority is as unhelpful as we've ever had it. Therefore, how do we transition that to something that's more helpful?

[A]

So before we wrap up, I'd love to get your thoughts because President Xi is inviting the leader of Taiwan's largest opposition party to visit China for the first time in a decade, setting up a potential one month or meeting one month ahead of President Trump's scheduled summit in Beijing. It's just kind of interesting. You just watch kind of the jockeying that's going on around the world. Just interesting. Made us think about with all that's going on, do you believe that the US Is sending messages to Russia and maybe to China, especially in terms of their military might and what they are willing to do?

[D]

I think it's a fascinating thing that's going to develop. I really don't know how that's going to play out. I don't see Taiwan advocating to China's demands. I don't think she will have any leverage to cause Taiwan to say, okay, we're going to be different. I think Taiwan is not looking for a fight with China, but Taiwan absolutely looking to have the maximum ability to defend the straits and defend themselves from a cross strait attack.

[A]

And do you think just 30 seconds that the US is willing to go to war to support Taiwan against China just quickly?

[D]

I think the US Is willing for Taiwan to go to war to take that option away from China and would love to be part of facilitating Taiwan's capability and capacity to do that. I don't know that we're looking to be involved, but the entire Pacific Rim has a lot at stake here and really the worst scenario is China starting a war against Taiwan.

[A]

Always appreciate our time with you, Major general Mastin Robison, Academy Securities Geopolitical Intelligence Group Member.

[C]

Stay with us. More from Bloomberg businessweek Daily Coming up after this.

[A]

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[A]

Yeah, and we want to get into how the Hormuz situation is mutating from a military war to an economic war through one key Weapon. We're talking about global energy inflation. It's something we continue to highlight here, but so too does our next guest. With us is Florin Yelpo. He is head of macro@ Lombard ODA Investment managers, typically based in Geneva, but here in New York. Lucky for us, on this Monday. Welcome, welcome. Nice to have you here.

[F]

Thanks for having me.

[A]

There's so much to get to and I want to get into your thinking about how this can mutate from a military war to an economic war. But I do want to ask you from your vantage point, I think we report on the war. There's certainly a US Perspective or maybe through our lens. But I'm just curious, from when you're in Geneva, what are the conversations you folks are having around this war and the implications short and longer term?

[F]

From our perspective, the first thing we think of, of course, is the, the human cost of the situation. Okay. And then we have discussion with our clients on what to do about the ongoing energy shock to protect their portfolio, to protect the savings, to protect them, their pensions. Okay. The key message we've, we've, we came up with is that you need to make a very big difference between the source of your energy inflation. Is it coming from demand or is it coming from supply? And the kind of things you need to deploy in your portfolio is clearly not the same demand. Well, you know, you'll see an answer from your central bank trying to tame demand to normalize inflation supply. Usually it's just frictions. So normally your central bank should be rather dismissive with it, saying it's friction, it's temporary, you just need to wait and I'll hold my rates unchanged. Which is a very different type of situation. If it's coming from commodities, then it's probably interesting place to place asset to hold in your portfolio. Holding a direct spirit to say inflation linkers could be interesting. And rates volatility in that situation is very interesting.

[A]

So interesting in that it's hard to make the call right now or your expectation is that global central banks will have to keep rates higher because we're going to have some kind of floor on our energy prices just because there is some destruction that is going to take time to reboot, particularly for European markets, Asian markets, who are more exposed.

[F]

Perhaps true. Now let's think of the Gulf War. I think it's an interesting example.

[A]

Yeah, right.

[F]

It lasts for about six months with the peak in oil prices and a global peak in commodities. And then the normalization. Okay. The U.S. were actually exiting from a recession back then. And this spike in oil did not deteriorate the global economic environment in which the US were or Europe. Okay. One thing we've learned from last year and that if it doesn't bring you to a recession is there's no case for shorting. The market is just a future entry point for holding more equities in the future. For now, we're in this wait until situation.

[C]

You said for now. Is there an idea that this could bring the US or other countries to recession this year if prices remain elevated for some time?

[F]

Our best case scenario is when you double up in the entry prices, which is a significant shock that the average size of any energy crisis we've seen so far. When something like that happens, it chops off about 1 to 1.5% of your GDP in the U.S. just think of the current AI investment situation. This would more than offset already that shock. So our base case is really not a recession this year for the US or for Europe either.

[C]

We should say BRENT Carol of 83% this year, WTI, the U.S. benchmark, up 80% this year.

[D]

Yeah.

[A]

I also just want to get. I'm watching headlines and they are constantly coming, connected to the war, the corporate space. But we've got from CNBC, JetBlue Airways raising bag fees. And this is because of the fuel price hike. And so we're seeing certainly an impact in the share price. Let me just put pull it up on my Bloomberg and you've got shares of JetBlue. They've been down pretty much throughout the day and there's a lot more going on with this airline fundamentally as well, but it's down about 1.8%. So in terms of strategy, are you advising clients to kind of sit tight at this moment? Yeah, that puts it in an opportunity to maybe, you know, pick up assets or various asset classes because they've been depressed a little bit at a lower price.

[F]

There's a matter of what the market is already anticipating in terms of scenario. Now, if I can just step back, the way we think of investing is 40, 40, 20. We say there are three kinds of periods for investing. Improving growth 40% of the time, deteriorating growth 40% of the time, and 20% of the time, which we often forget about, is inflation. And we are precisely in this kind of shock. So when you create your portfolio for the longer run, just make sure you have enough hedges against inflation and against both kinds of shocks, meaning demand driven, supply driven.

[A]

But that 40, 40, 20 you can stick to at this point in this environment where we are on this Monday, March 30th. You can still keep that percentage portfolio

[F]

allocation, especially with the level of valuations we've seen. Think of that in if you look at the break even markets or the inflation expected within the next 12 month by market, there's a surge by 1.3% of expected inflation by year end, which is not the scenario dominating scenario for economists. Quite the opposite. They see 30 basis points. The markets are already overpricing what economists are anticipating at that moment. So there's a balance to be reached between what's priced in, what's not priced in. We see momentum in the commodity market. It's interesting. We see momentum in the volatility of bonds and you can monetize that very easily.

[C]

Actually the war in the energy crisis as a result of the war over the last month, plus certainly a focus for investors separate from that. I would say the other big theme for investors, at least in the last few months, the last couple of years, would be AI and the effect on productivity, the effect on the economy and the effect on traditional software equities. I'm just wondering how you're thinking about AI and the effect on productivity and the effect on the economy.

[F]

There are two, two elements that comes to mind. The first one is an economic elements. If you remember. I remember part of the late 90s back then we had this surge in productivity which came along a moderation in prices at that moment, at that point in time. It's a very important message looking forward to the next 12 to 24 months, which is the perspective of inflation. Productivity is an inflation killer and that productivity boom is actually happening. First element to remember your bondholders could be protected by that. The second element is when you buy a stock index, when you buy stocks, globally speaking, the thing you're buying is not investments, not CapEx. It's not the growth in the number of consumers they have. What you buy is their margin, their ability to deliver on margin. And those margins are guided by productivity. So there's a boom in productivity. Maybe the software sector is currently being a little bit challenged. To say it nicely, we see very positive longer term prospects in terms of margin generation. So thinking that now we're down 7% on you, on your stocks with a situation that should be momentarily something temporary. I'm sorry. At some point we'll have a very interesting entry point and we'll go back to that narrative. AI equals productivity 25 seconds.

[A]

So that margin improvement outweighs anything we might lose in terms of labors and work workforce.

[F]

Or you think that will balance out other ways. Clearly take if you quickly look at Europe, you do a correlation, you do chart with population growth versus productivity and you see that the leaders in productivity are those countries where the number of people are actually going is actually going down. It's a marvelous thing. When you have less people, you need to incorporate productivity. It's a very, very, very strong force

[A]

which is, you know, go around the world and a lot of the developed or major economies. Right. You do see less people flooring. So great to have you in town. Thank you so much. Floriana Yelpo. He is head of macro@ Lombard ODA investment managers joining us here in New York.

[C]

Stay with us. More from Bloomberg businessweek Daily Coming up after this,

[E]

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[A]

James, so good to have you back with Tim and myself. So how do you guys get closer to building and deploying something real? How does this become a reality?

[G]

It's a good question because I think there's probably a great big filter process between companies that love the idea of one day doing it and actually going forward with it. What I can say about us, what very nice thing I can say about us, is that we're about to finish our construction permit application to the nrc. And I think that will make us only one of five commercial companies that have put in for a construction permit to actually build one of these things. So it's almost like a handful of companies that are being, you know, really taking this forward with the NRC to really build, you know, one of these systems. This is how we want to do it. We want to build it full scale, demonstrate it works, work out the kinks of how this thing gets constructed and then that system that will be fully completed, constructed, power outputting licensed in 2030. After that, we want to mass manufacture those systems and then just start, you know, deploying them as far away across the country as we can and internationally too.

[A]

Hey, got to ask you, you said demonstrate that it works. Do we not know that it works yet?

[G]

Yeah, you're right. I should, I should be careful with my language because we know it works. Like the thing is we're using a high temperature gas reactor. High temperature gas reactors have been used for decades across many different countries. I think the only real novel thing that is happening now is that it's old tech and it's being paired with new fuel, like Triso fuel. And the reason why that's happening, and most of the leaders in the industry are utilizing that advanced new fuel type is because it essentially gives the fuel its own containment system. So it eliminates the worst accident scenarios that might be possible with like a big conventional reactor, like meltdown, that kind of thing. So it is working tech. We know it works. It's just being paired with new fuel.

[A]

How can it eliminate it 100%? Like nothing's going to be 100%. Right. Accidents happen. We know that. The reality.

[G]

Well, the thing is, in. I mean, I'm always reluctant to say 100%, but the truth is that, like, if you take our reactor as an example, the operating temperature of this thing is sort of 600, 650 degrees Celsius, but the melting temperature of the fuel is almost 2000 degrees or 1800 degrees. There's no way for the fuel to really even get that high. And this is the reason why this fuel is being utilized like Three Mile island, when people think of that, you've got a fuel melt. Fukushima, you get a core melting because of depressurized system coolant loss. But if the fuel is contained, then that. Then the biggest accident scenario does get eliminated. And you'd have to really break the laws of physics in our reactor to get to that kind of scenario.

[C]

Hey, James, one thing that Carol and I were talking about a little earlier is this idea that there are dozens of nuclear submarines that the US has, and each one of these nuclear subs has what essentially is a nuclear reactor on it that powers it. Why can't we just take that technology and plop it next to a data center?

[G]

So I got my start in submarine reactors. And believe me, if that was possible, I know enough about them where I could kind of design them myself at this point, having worked on them for so many years. But it's very different. Like, they use a type of fuel that civilian companies are not allowed to use, highly enriched uranium. Like, it's. It's enriched over that sort of 90% barrier. And really, as a commercial company, you're capped at about 20 or just below like, 19.75% enrichment. And so the type of reactor that goes into a submarine, you can't directly take that outside of the military without a complete redesign. And so it wouldn't.

[C]

Is that for national security purposes? You wouldn't want that in the wrong hands?

[D]

Yes.

[G]

So there's a lot of laws governing the handling of. Of nuclear fuel, particularly around something like proliferation because it's okay for the military to have highly enriched uranium, but for civilian companies to be handling that kind of enrichment, it's never been done before. So there are limits on what you can enrich up to as a civilian company. And if you suddenly have that enrichment barrier, then you need to make a more optimized design around that level of enrichment, and then that's where you get Nano's reactor.

[C]

So to. In, you know, the layperson understanding this answer would, would. The basic understanding is you can't have a material that is enriched high enough to be powerful enough to power something that small outside of a submarine or outside of Defense department purposes.

[G]

Yeah. So it's, it's. Yeah, it's really just that limit on what you're permitted to as a civil.

[C]

Other than that, though. Other than that, the design.

[G]

Well, if you, if you gave me permission. Yeah, I think if you gave any civilian company permission, then they would probably take the HEU because they would mean all sorts of things. It would mean he.

[A]

Meaning highly enriched uranium. Okay.

[G]

Highly enriched uranium. So that 90% plus enriched stuff, then you could, then you would have longer periods between refueling. You would have more powerful output. Sure. But it's. I think the limits are sensible. I wouldn't go beyond actually what they, they permit for currently that 20%. I think that's a perfectly reasonable limit. So you can make a very good civilian reactor because the fuel that you need to go into the civilian reactors is sufficient for what we need. And these reactors that say nano will be making already, the enrichment levels will be higher than the conventional big, sort of the Homer Simpson nuclear power plant, a bit higher enrichment than those. But like, that allows us to make them smaller, more compact, and like that extra sort of power density.

[A]

I do love when Homer Simpson is a reference point, but. But we all get it. We all get it. James, One thing, though, going back to what Tim was talking about in terms of, you know, naval reactors and naval vessels. I'm just wondering, though, the safety element of what goes on in a naval, you know, a nuclear sub versus how we think about. I mean, obviously you have to be very, very safe. I mean, you're talking about folks on a submarine, a lot of them. Like, what have we learned about safety there that might be really useful in terms of nuclear reactors out on Earth? Because you do know, certainly the feeling in the United States, maybe not elsewhere around the globe, but there is certainly a pushback and maybe with good reason because of some of the accidents we've seen.

[G]

You're right. I Mean, it's, it's always. As a nuclear engineer, obviously, I'm always going to be. I'm always going to sound quite bullish. But what, what the naval program demonstrates is that you can operate dozens of reactors for decades and still have no fatalities as a result. I mean, that's one good thing you can point to, actually. In the United States in general, there's never been an accident that's resulted in a death from nuclear energy. Really. If you were to look at deaths per gigawatt hour, it's safer than everything, safer than solar, safer than wind, everything. And like the new generation of nuclear with the new fuel that we were talking about, where it's encapsulated and it's contained, even safer still. So technically, by metrics, the safest form of energy ever devised, made safer still. So I know I. But I really do believe that a lot of the fear around nuclear came out of the Cold War because, you know, there was the threat of nuclear Armageddon. And that has a psychological impact. And, you know, it's got nothing to do with nuclear energy. It's a very different technology. Very. You know, a nuclear reactor can't blow up. You know, as an example, it's not, you know, basic things that people just do, don't.

[C]

Well, they can melt down.

[G]

Yeah, they can melt down, yes. But even then, Fukushima, Three Mile island, you have a cleanup operation. Chernobyl is going to die. Chernobyl, yep. But like, that's also, doesn't. It's not really a good example because that's a reactor where they said shut down all the safety systems, try and break the reactor under test conditions. You know, it's. It. That would, I mean, that kind of thing is very weird. You know, you would never get anything like that in any other country.

[C]

So, you know, one thing that Carol constantly brings up is, is what you do with the nuclear waste, and you mentioned the highly enriched uranium that the military has access to, to what you would not have access to and what civilians would not have access to. One of the benefits of that is you don't have to replace the fuel as frequently. But what about your fuel and when you replace it, where does it go when it's spent?

[G]

So, I mean, the nice thing at the moment in the US is that spent interim storage facilities in Texas and New Mexico are being built. Really? Like, this is kind of a, this is kind of a big thing because ultimately, when you take the fuel out of a reactor and you call it used fuel, most of that fuel is actually Fresh like the burn up of the actual good fuel and reactor over the lifetime of that fuel cycle is maybe like 3, 4, 5% something in that region which means that like 95% of that fuel could be taken out theoretically and put into a new reactor form. So if you were to take all of the nuclear or nuclear waste really spent fuel in the United States, you could run the country for hundreds of years on just the spend fuel.

[A]

But why don't we do that? What's the cost of doing that?

[G]

Well, the reason why we don't do that is the US currently doesn't permit to do that. But if they change the rules one day and allow us allow companies to reprocess that spent fuel, why don't we

[A]

let them do that?

[G]

If it makes sense Again, it's the same as that HEU reason is that there's a proliferation concerns around it. So they don't allow for reprocessing. But one day they probably will allow for it and then all of that spent fuel that gets put into storage we can take back out. And as and I can tell you Nano would love for that one day to happen because that means all of our spent fuel cores, all of that sort of stuff, we could go get that fuel back out. It wouldn't. It'd be essentially almost free fuel that we could build, you know, umpteen generations of reactors with.

[A]

No, it's interesting and I think, you know, the problem is bad actors, they're out there. So we've got to be super careful. James, thank you so much. Really fun to touch base. James Walker, CEO of Nano Nuclear Energy. It's a $1 billion market cap nuclear energy company joining us on this Monday.

[C]

Stay with us. More from Bloomberg Businessweek Daily coming up after this.

[E]

Support for the show comes from public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts. Yep. High yield cash. Yes again, they even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public holdings brokerage services by Public Investing Member FINRA, SIPC Advisory Services by Public Advisors SEC Registered Advisor Crypto Services by ZeroHash all investing involves risk of loss. See complete [e-mail] disclosures so there's a

[B]

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[A]

All right everybody, we we've got just about 1819 minutes to go until we wrap up the trade on this Monday holiday shortened trading week. As you know, it is Good Friday on this coming Friday and of course the markets are closed. Having said that, we do get a jobs report so it's going to be interesting. Our team here certainly on it as that news breaks and crosses The Bloomberg At 8:30am Wall street time on Friday. Having said that today, right now we are just coming off our lows of this session. Still down 1% on the NASDAQ 100 and we're down about just shy of 6. 10 of a percent on the S&P 500. So just coming off our worst levels of the session, but a bit of a risk off trade. But having said that, dig inside the S&P 500 and you've got almost an even split between winners and losers, gainers and decliners in today's trade.

[C]

Tim well, let's see what Rob Hayworth has to say about it. He's Senior Investment Strategy Director at US Bank Asset Management, joins us from Seattle. Rob, good to have you on the program down 6/10 of 1% on the S&P S&P 500. It follows declines from last week. It looks like March is going to be the worst month in years for the S P500. Have your clients started to call yet? Are they having questions yet?

[H]

Absolutely they have questions and I know it has to do with how long is this going to last and where should we hide. Right. And what are you telling us? The challenging. I'm sorry, what do you tell them? It's been challenging because there hasn't really been any place to hide. The one place we liked to start the month that has actually worked out for us a little bit is global infrastructure with master limited partnerships in that component doing fairly well. But otherwise, unless you owned energy this, this quarter, there's not been a lot of places to hide.

[A]

How much have you would you suggest to a client to shift or change around their portfolio so far this year and kind of almost in a reactionary move or you know, do you feel confident that they, there are some longer term trend plays out there that you can kind of make the bet on right now?

[H]

Yeah, no, it's a, it's a great point. I think as we entered really the economic outlook and the economic backdrop has been fairly constructive, especially here for the US And I think as long as this, the club really, and frankly it's the closure of the Strait of Hormuz, as long as that doesn't go on for too much longer, say longer than another month, this is an economy where both the consumer and businesses are looking really resilient. And as we look through in the longer term, artificial intelligence remains a major play and the US Economy and US Stocks should continue to do very well. I think the question for us as we think about the damage that's being done to the global energy complex over the next couple of weeks is what does that do to energy prices and who does that hurt? And I think the epicenter of that right now is more Europe and Asia, those major oil importers, rather than an oil exporting and energy exporting economy like we have in the US So before

[C]

we get to the AI trade, which I want to get to, I just want to sort of tie things up up here. And if we, if we think about it your view, as long as the Strait of Hormuz does not stay closed for another month, then we should be in okay shape and, and at least consumers should be able to absorb this. What happens if that's not the case? If, when the Strait of Hormuz does open again, there is not $60 a barrel oil. What if it's $85 a barrel?

[H]

Well, and certainly, right, you look at the futures market curve. I mean, the futures market is telling us we're going to have a $70 barrel oil for the next year or so. So I think there is a bit of a cost to this, to this economy, and it's going to dampen the consumer a little bit. But as long as we don't see jobless claims tick higher, meaning people have jobs, and as long as we don't see that a faltering in retail sales, that people are really adjusting what they're doing, I think we'll survive. Right. And I think that's the thing for a, for a solid equity market here. We just need decent US Growth, not great US Growth. Meaning if we can hang around here at this 2% average level, maybe it's 1 and a half, maybe it's 2 and a half. Wherever we end up, the market will generally be okay, even though it's a little painful for many consumers.

[A]

So do you think markets are at all being complacent? And I ask that, knowing the moves that we've seen, certainly down in the S&P 500, the Nasdaq 100 Mag 7 is down 16% year to date, down about 17% from the high back in late October. So we have certainly seen corrections, maybe even more so when you look at individual names or certain sectors. But having said that, is there some complacency where an environment with so much uncertainty or whether or not these energy prices create higher inflation and global central banks that are either leaving rates as is or even raising them because of concerns about inflation, that, you know, you add that all up and it creates kind of an uncomfortable environment.

[H]

Well, I think it's definitely uncomfortable. I think it's not a complacent market as much as it is a patient market. Right. Early in the year, we were reacting to fears that AI was going to lead to job losses and disrupt software business models. So that was the early hit to this market. We saw investors rotating because we still saw good economic growth. So we saw them rotate into small cap. We saw them rotate into the cyclical sectors. And now they're wondering when this is over. Because the President has certainly talked a couple of times about being very close to the end of this conflict and close to reopening the Strait of Hormuz. And with it being that short. Right. Investors came in constructive and they're looking to get constructive. I think today's action as we start to flirt with a 10% peak to trough kind of decline in The S&P 500 indicates there is some nervousness out there that this is taking much longer than it should as we start to touch correction territory on the S&P 500. So I don't think the market is complacent. They're just, they've just been hopeful that we're not disrupting the positive underlying fundamentals behind this market.

[C]

We're touching correction territory. We're not in there yet on the NASDAQ 100. We are buying opportunity, though, for you,

[H]

I think this still hinges on the straight of Hormuz. I think once that gets reopened, I think we'd say yes, as long as the data is holding, in which it looks like it is. And of course, as you teased earlier Friday, Jobs report is going to be very important in telling us a bit of that story because that is the heart of what is driving consumer behavior here in the US So I think if the consumer is okay, yes, it becomes a buying opportunity. But we need a little more evidence. And, and really it is hinging on that binary event of getting, getting oil out of that strait new money.

[A]

Someone has some new money to put to work in this environment. Where would you put it?

[H]

Well, I mean, certainly, as Tim highlighted, stocks are certainly cheaper. It's something to start working your way into. We would look, we'd say there's an opportunity to manage your risk by owning some global infrastructure, which is a heavy utilities component. There's still that drive coming from artificial intelligence, the energy demand from that investment cycle that is going to help utilities along with the sector writ large. On the fixed income side, I think the great news is you're getting fabulous yield opportunities that you haven't seen in a decade. We would look to things with a little more protection behind them like structured credit, non agency residential mortgage backed securities, things that are not connected to the business cycle like reinsurance or catastrophe bonds.

[A]

Yeah.

[H]

Where you're still getting very attractive yields. I think there are places to start working in this market to build your diversification and still get invested in what is a very uncertain time.

[A]

Rob, thanks so much. Be well. Rob Hayworth, He's Senior Investment strategy Director at US Bank Asset Management, joining us here on Bloomberg Business.

[C]

This is the Bloomberg Business Week daily podcast available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm Eastern on bloomberg.com, the iHeartRadio app TuneIn and the Bloomberg business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.

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