WEBVTT - Bloomberg Surveillance TV: April 23, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify, or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.519 Terminal and the Bloomberg Business App. Julian and Manuel of 0:00:37.640 --> 0:00:40.320 Evercore looking for deals. Our base case is that the 0:00:40.360 --> 0:00:42.680 lows of this sell off have been seen and that 0:00:42.760 --> 0:00:45.880 a recession will be narrowly averted. But the clock is ticking. 0:00:45.920 --> 0:00:49.159 The art of the deal needs to begin bearing through. Julian, 0:00:49.200 --> 0:00:51.479 good morning, Good morning. How exhausting is all of this? 0:00:52.040 --> 0:00:56.320 You said twenty four hours. It's felt like twenty four weeks. Basically, Look, 0:00:57.120 --> 0:00:59.320 we knew this was going to be this way. 0:00:59.640 --> 0:00:59.920 Okay. 0:01:00.280 --> 0:01:02.920 I think if you go back to January twentieth and 0:01:03.000 --> 0:01:06.319 you saw everything that was done on inauguration. 0:01:05.880 --> 0:01:07.640 Day, to expect this. 0:01:09.360 --> 0:01:13.120 Is part for the course, really, but again, it is 0:01:13.200 --> 0:01:14.720 the narrative of. 0:01:15.120 --> 0:01:16.039 Several weeks ago. 0:01:16.200 --> 0:01:19.800 There were still questions as to whether the Trump administration 0:01:20.319 --> 0:01:23.600 was willing to tolerate a recession to achieve some of 0:01:23.640 --> 0:01:26.680 its aims. What we've seen in the last twenty four 0:01:26.720 --> 0:01:28.720 hours and going back to. 0:01:28.640 --> 0:01:30.640 The pivot in early April, is. 0:01:30.600 --> 0:01:35.160 That is absolutely not the case, and removing the large 0:01:35.240 --> 0:01:38.360 left tail outcome in markets has been very positive. 0:01:38.400 --> 0:01:40.920 Rewiring the system is difficult. We've talked about it a 0:01:40.959 --> 0:01:42.959 few times on this program, that you've got both a 0:01:43.000 --> 0:01:45.640 shock to the cycle and a potential shock to the system. 0:01:45.880 --> 0:01:48.160 But what we've also seen and witnessed down in Washington, 0:01:48.240 --> 0:01:51.120 DC is that some of these policies are so extreme, 0:01:51.520 --> 0:01:54.280 so out there that they're somewhat self limiting, that are 0:01:54.280 --> 0:01:56.920 almost negotiating with themselves on certain issues. You get the 0:01:56.960 --> 0:01:59.640 same sense when you look at what's happening down in Washington. 0:02:00.040 --> 0:02:02.600 There is an element to that, and again it is 0:02:02.600 --> 0:02:04.640 is the you know, the shock to the system. 0:02:04.720 --> 0:02:07.440 This this concept that you know. 0:02:07.440 --> 0:02:10.760 The all in raw number to global way to taris 0:02:11.040 --> 0:02:13.960 is higher than smooth Hawley. You don't really need to 0:02:14.000 --> 0:02:16.920 say much more than that, And that is the element 0:02:17.400 --> 0:02:21.760 of you know, self limiting. But again it goes back 0:02:21.800 --> 0:02:26.120 to the negotiating style. You know, throw out the maximalist 0:02:26.160 --> 0:02:29.040 case out there and then see and wait for the 0:02:29.080 --> 0:02:31.000 other side to start responding. 0:02:31.080 --> 0:02:32.799 And we saw that in Trump's first administration. 0:02:32.960 --> 0:02:33.639 This is a phrase. 0:02:33.639 --> 0:02:35.320 I don't think the president likes this idea of a 0:02:35.360 --> 0:02:38.519 Trump put. But have we now seen that there is 0:02:38.560 --> 0:02:40.280 a Trump put and there is a level that they 0:02:40.320 --> 0:02:42.240 are unwilling to deal with. 0:02:42.440 --> 0:02:45.200 Well, I wouldn't necessarily call it a put per se, 0:02:45.320 --> 0:02:48.840 but again it just goes back to this idea that 0:02:48.880 --> 0:02:52.359 there's an acknowledgment that the extremity of what they're trying 0:02:52.400 --> 0:02:54.680 to do and the speed with which they're trying to 0:02:54.720 --> 0:02:57.320 do it. And remember all of this is set against 0:02:57.440 --> 0:03:01.080 a debt ceiling negotiation that has to happen in the 0:03:01.120 --> 0:03:04.840 next two months, and then further on down the line, 0:03:04.919 --> 0:03:08.880 the acknowledgement that the traditional historical tendency is for the 0:03:08.960 --> 0:03:12.720 Republicans will lose the House of Representatives in twenty twenty six, 0:03:12.919 --> 0:03:14.240 so you have to front. 0:03:14.000 --> 0:03:16.320 Load all of this. So that is the shock to 0:03:16.360 --> 0:03:17.000 the system. 0:03:17.120 --> 0:03:20.920 But again, you know there is no wish for a recession, 0:03:21.240 --> 0:03:25.040 and so you know by that virtue the Trump put 0:03:25.080 --> 0:03:28.320 itself does seem to exist south of five thousand. 0:03:28.400 --> 0:03:30.000 On the end desk, John brought up a great point 0:03:30.040 --> 0:03:32.440 on whether or not they're negotiating with themselves. Maybe the 0:03:32.480 --> 0:03:35.080 President is going through the motions out loud, but also 0:03:35.120 --> 0:03:39.200 behind the scenes there are two three different rivals. This 0:03:39.360 --> 0:03:42.040 is a cast of characters. In terms of the cabinet. 0:03:42.240 --> 0:03:44.360 At this moment, it does look like Scott Besson, the 0:03:44.360 --> 0:03:47.080 Treasury Secretary, is leading the charge on a lot of this. 0:03:47.600 --> 0:03:48.320 Is this rally? 0:03:48.440 --> 0:03:50.760 Is this relief just temporary? I say, if Peter Navarro 0:03:51.280 --> 0:03:53.960 comes back into being one of those driving forces. 0:03:53.840 --> 0:03:57.880 Well, if you look at the cast of characters, there 0:03:57.880 --> 0:04:01.560 are some who are more volatile, some who are less volatile. 0:04:02.040 --> 0:04:06.240 Secretary Bestent is clearly the lower volatility, the vic sub 0:04:06.360 --> 0:04:09.880 thirty type individual, which is what we have this morning. 0:04:10.960 --> 0:04:14.880 But again going back to the first Trump administration, that's 0:04:14.920 --> 0:04:18.120 the way he likes to run it. The court fights 0:04:18.240 --> 0:04:19.120 amongst itself. 0:04:19.160 --> 0:04:20.839 The problem that Jindine, you've touched on it. That's what 0:04:20.880 --> 0:04:23.360 we have this morning. What do we have tomorrow? You've 0:04:23.360 --> 0:04:25.640 got a constructive view that goes beyond just five minutes. 0:04:26.040 --> 0:04:27.279 What does the rest of the year break. 0:04:28.440 --> 0:04:32.960 The rest of the year brings progress on the initiatives 0:04:33.320 --> 0:04:37.000 that have been brought forth. You know, look, from our 0:04:37.040 --> 0:04:40.640 point of view, if you think about a timeline, what 0:04:40.680 --> 0:04:43.679 you're going to get on May seventh from the Fed 0:04:44.000 --> 0:04:46.560 is a we told you we weren't budging. 0:04:46.880 --> 0:04:48.480 We're waiting to see more data. 0:04:48.800 --> 0:04:51.400 We have every indication that we don't need to move 0:04:51.440 --> 0:04:54.760 on interest rates now. So by that virtue, you've actually 0:04:54.760 --> 0:04:57.159 got to put some tariff points on the board between 0:04:57.200 --> 0:05:00.120 now and May seventh more likely, and you know it 0:05:00.200 --> 0:05:03.040 seem reasonable to expect you'll start to hear better news. 0:05:03.160 --> 0:05:05.080 I think this is an important exercise. You've got to 0:05:05.080 --> 0:05:07.240 try and get your head through summer. Let's get to 0:05:07.240 --> 0:05:09.480 the end of the summer and look out twelve months. 0:05:09.640 --> 0:05:10.680 What does that world look like. 0:05:11.000 --> 0:05:13.920 We actually have to project that far out, Jonathan. I mean, 0:05:14.000 --> 0:05:18.520 investing is only a one week thing now. No, Look, 0:05:20.200 --> 0:05:24.280 the bottom line here is all of this has been 0:05:24.560 --> 0:05:30.000 a disruption to the way America does business, no question 0:05:30.040 --> 0:05:33.160 about that. And what you're hearing from companies now is 0:05:33.240 --> 0:05:36.680 earning season gets into full swing is how they're trying 0:05:36.680 --> 0:05:39.080 to deal with it. But the bottom line is is 0:05:39.360 --> 0:05:42.920 after they're dealing with it. The last two years of 0:05:43.080 --> 0:05:50.200 really being incredibly diligent and responsible about guarding and maintaining 0:05:50.279 --> 0:05:54.400 margins at the corporate America level means there is going 0:05:54.440 --> 0:05:57.560 to be an ability to make the transition. And so 0:05:57.640 --> 0:06:01.040 from our point of view, if you're thinking about the markets, 0:06:01.320 --> 0:06:05.120 the fact that consensus is looking for nine percent earnings 0:06:05.120 --> 0:06:08.640 growth this year down from fourteen our views, you're still 0:06:08.640 --> 0:06:09.400 going to get. 0:06:09.200 --> 0:06:11.960 Five actually means that, you. 0:06:11.920 --> 0:06:14.520 Know, the implication is a, there won't be a recession, 0:06:14.960 --> 0:06:19.400 which we is our base case, but B for equity markets, 0:06:19.960 --> 0:06:23.799 that's fine, that's his quote unquote transition period. 0:06:23.880 --> 0:06:25.480 What would make you change your mind and think we 0:06:25.680 --> 0:06:27.240 the US could tip into a recession. 0:06:28.920 --> 0:06:33.640 The data would have to start rolling over severely, you know. 0:06:33.760 --> 0:06:37.200 And look, we do think the data is going to moderate. 0:06:37.920 --> 0:06:42.480 But again it goes back to this idea that what 0:06:42.640 --> 0:06:47.960 we have seen post pandemic is a different world pre pandemic. 0:06:48.080 --> 0:06:52.040 So the sentiment data has been absolutely abysmal, but it 0:06:52.120 --> 0:06:56.039 really hasn't had any material effect on the hard data. 0:06:56.480 --> 0:06:59.200 If that is no longer the case, and we switch 0:06:59.320 --> 0:07:03.200 back to pre pandemic relationship, which we don't see, and 0:07:03.240 --> 0:07:05.799 that's why everyone is so much on pins and needles, 0:07:06.000 --> 0:07:09.600 particularly for the May second employment report and then the 0:07:09.640 --> 0:07:14.720 weekly jobless data. That's a different set of circumstances. We 0:07:14.800 --> 0:07:15.880 just don't see that right now. 0:07:15.920 --> 0:07:18.240 We're already seeing the data be distorted, though flatted, by 0:07:18.280 --> 0:07:20.760 some pull forward. We saw that in retail sales, particularly 0:07:20.760 --> 0:07:23.400 auto purchases, which I find amazing. You're worried about the economy, 0:07:23.440 --> 0:07:26.200 so you've got to buy car America. That's where we are. 0:07:26.480 --> 0:07:28.080 I want to understand what the rest of the summer 0:07:28.120 --> 0:07:30.640 brings once you pull forward activity. Are we going to 0:07:30.680 --> 0:07:32.480 hit some an pockets in the next few months. 0:07:32.840 --> 0:07:33.760 I think there will be. 0:07:34.080 --> 0:07:37.320 And if you go back to that last inflation report, 0:07:37.800 --> 0:07:42.000 which was softer than expected, is that a lot of 0:07:41.720 --> 0:07:45.920 the distortion was by a decline in price in used 0:07:45.960 --> 0:07:49.320 cars because people were buying new cars in front of 0:07:49.760 --> 0:07:53.240 the tariffs. So I think, again, this is one of 0:07:53.240 --> 0:07:57.840 these things in this higher volatility environment we're living with 0:07:58.560 --> 0:08:05.240 the data being distorted. But if the overall trend remains intact, 0:08:05.600 --> 0:08:07.480 you know, our assumption is we're going to be. 0:08:07.440 --> 0:08:08.920 Able to get through this without a recess. 0:08:08.920 --> 0:08:10.360 So I spick up the pieces. We've done a lot 0:08:10.360 --> 0:08:12.840 of damage, not just at the index level, but Nathan index. 0:08:12.880 --> 0:08:15.360 We're seeing some real damage to some big tech names, 0:08:15.520 --> 0:08:18.000 some high fliers of the last several years. As you 0:08:18.040 --> 0:08:19.800 look at picking up the pieces what you like this. 0:08:19.760 --> 0:08:24.360 Morning, we actually are of the view and this is 0:08:24.440 --> 0:08:29.440 typical in when bear markets end, is that the things 0:08:29.480 --> 0:08:32.520 that got sold off the harders, which in this case 0:08:32.720 --> 0:08:35.720 where the bull market leaders of the prior two years. 0:08:35.520 --> 0:08:37.040 Are going to resume the mantle. 0:08:37.480 --> 0:08:39.960 Call it mag seven, call whatever you want, but the 0:08:40.000 --> 0:08:43.160 fact is is that part of the US market's, a 0:08:43.240 --> 0:08:45.920 large part of the US market's out performance has been 0:08:45.960 --> 0:08:49.640 driven by technology, and for US, that is a story 0:08:49.679 --> 0:08:50.880 that has further to run. 0:08:50.960 --> 0:08:53.040 Alphabet and it's twenty four rounds of white Julian. It 0:08:53.120 --> 0:08:54.840 is good to see you, sir. As a wise, Ji 0:08:54.880 --> 0:09:07.560 and Emmanuel have evercore kitchigs of self gen writing. Less 0:09:07.559 --> 0:09:10.680 FED independence equals a weeker dollar. Even if we assume 0:09:10.720 --> 0:09:12.960 the president can't or won't fire the FED chair, the 0:09:13.040 --> 0:09:16.400 makeup of the FMC can change over time. Kit joined 0:09:16.440 --> 0:09:18.240 us now for more, Kit, welcome to the program, Sir? 0:09:18.440 --> 0:09:21.200 Do those words do enough to repair the damage done? 0:09:22.640 --> 0:09:25.960 They do enough to stop the move We've had and 0:09:26.080 --> 0:09:28.920 calm things down. You know, it looked stretched, But no, 0:09:29.520 --> 0:09:32.559 I think that the heart of the issue is that 0:09:32.760 --> 0:09:35.839 the rest of the world is dramatically overinvested in US 0:09:35.920 --> 0:09:40.400 assets and probably now realizes that they need to. 0:09:40.480 --> 0:09:43.720 Like not, Kit, we've seen that rebalancing it started, and 0:09:43.760 --> 0:09:45.839 to your point, the dollar long that's built up goes 0:09:45.880 --> 0:09:48.199 beyond just a couple of years. It's been built up 0:09:48.480 --> 0:09:50.000 over the space of more than a decade. 0:09:50.280 --> 0:09:50.480 Kit. 0:09:50.520 --> 0:09:53.520 How much but rebalancing do you expect to see in 0:09:53.600 --> 0:09:54.640 the years to come? 0:09:56.559 --> 0:09:57.959 How long would be the string? I guess. 0:09:59.120 --> 0:10:02.160 I mean, it's still the world strongest economy, biggest economy. 0:10:02.320 --> 0:10:05.800 You know, they still do great things, So I don't 0:10:05.840 --> 0:10:08.839 think it'll all get reversed. I do sort of sit 0:10:08.880 --> 0:10:12.560 and ponder the nineteen eighties when the dollar went straight 0:10:12.640 --> 0:10:15.880 up on the back of President Reagan's policies, and it 0:10:16.480 --> 0:10:19.800 gave it all up without the lews US losing its exceptionalism. 0:10:20.800 --> 0:10:23.000 So I, you know, kind of it could go down 0:10:23.000 --> 0:10:24.360 in the long run further than I think. 0:10:26.360 --> 0:10:29.040 Kid, the Treasury Secretary recently said to me last week 0:10:29.080 --> 0:10:32.600 that the US still has a strong dollar policy. Do 0:10:32.720 --> 0:10:36.760 their policies actually match that? 0:10:36.800 --> 0:10:37.079 Well? 0:10:37.320 --> 0:10:41.480 Yes, well, okay, the dollar is strong. The US has 0:10:41.559 --> 0:10:46.200 been running fiscal policies that are consistent with a strong currency, 0:10:46.200 --> 0:10:50.480 not a weaker one. But I don't see how the 0:10:50.600 --> 0:10:55.920 current policies are consistent with the dollar not losing some 0:10:56.000 --> 0:10:57.560 of its exceptional. 0:10:56.960 --> 0:11:00.880 Strength, except some strength maybe will be lost. But you 0:11:01.000 --> 0:11:05.160 still think that the US is the reserve currency. 0:11:07.080 --> 0:11:10.679 Yeah, Look, we still don't have a candidate or an alternative. 0:11:11.679 --> 0:11:14.600 You know, we've done We've done gold, silver, the pround, 0:11:14.600 --> 0:11:17.200 and the dollar in the last five hundred years. 0:11:18.080 --> 0:11:19.280 Which is why a lot of people are going to 0:11:19.280 --> 0:11:20.080 stick with the US dollar. 0:11:20.120 --> 0:11:20.240 Kate. 0:11:20.280 --> 0:11:23.040 There are questions though about the current account deficit that's 0:11:23.080 --> 0:11:26.000 currently been ran and how you would track that foreign capital. 0:11:26.080 --> 0:11:27.839 You're either going to do that through the FX channel 0:11:27.960 --> 0:11:30.640 through a weaker currency, or you need much higher rates. 0:11:30.920 --> 0:11:32.439 Is it one or the other or both for you? 0:11:32.559 --> 0:11:33.840 And how do you think that plays out in the 0:11:33.840 --> 0:11:34.440 coming months. 0:11:37.679 --> 0:11:40.480 I think it's going to be both over time. But 0:11:40.760 --> 0:11:45.240 I think part of the challenges if domestic capital leaves, 0:11:45.240 --> 0:11:48.840 for example, you know, the world's biggest net investor abroad, 0:11:49.080 --> 0:11:52.600 Germany has work to do at home, so they'll attract 0:11:52.640 --> 0:11:56.760 capital back. Then the US needs to save more at 0:11:56.800 --> 0:12:00.480 the margin as well. They can't go on running such 0:12:00.480 --> 0:12:03.720 a big current account deathits can't necessarily run such a 0:12:03.720 --> 0:12:07.240 commodative fiscal policy, and so I think we'll see a 0:12:07.320 --> 0:12:08.440 change in the States as well. 0:12:09.120 --> 0:12:11.760 The most interesting chart for me KIT is over in Europe, 0:12:11.800 --> 0:12:15.960 and it's the euro versus China EUROCNY. I think over 0:12:16.000 --> 0:12:18.440 the last several months has been fascinating KIT, because, as 0:12:18.480 --> 0:12:20.640 we've talked about in this program, the biggest threat to 0:12:20.679 --> 0:12:23.320 price stability in Europe at the moment might be Chinese exports. 0:12:23.640 --> 0:12:25.880 Based on that chart, could become a bigger problem in 0:12:25.920 --> 0:12:28.000 the months to camp. KIT. What kind of relationship do 0:12:28.040 --> 0:12:30.520 you anticipate in between the two trading blocks in the 0:12:30.520 --> 0:12:32.120 next year or so, What does it mean for this 0:12:32.200 --> 0:12:35.199 currency pair, and what ultimately does it mean for interest 0:12:35.240 --> 0:12:35.960 rates to the ECB. 0:12:38.880 --> 0:12:41.280 I think it's going to be a difficult relationship at 0:12:41.280 --> 0:12:44.480 the margin anyway, just because China needs to find other 0:12:44.520 --> 0:12:47.559 places to export to and Europe is going to be 0:12:47.679 --> 0:12:51.880 very wary of them dumping in any form into the 0:12:51.880 --> 0:12:55.200 European market. The challenge that we have at the foreign 0:12:55.200 --> 0:12:58.600 ex change level is that the yuan, the Chinese currency, 0:12:58.800 --> 0:13:02.200 really doesn't move very much, so it's static. So if 0:13:02.200 --> 0:13:03.920 the euro goes up against the dollar, it's going to 0:13:03.920 --> 0:13:12.199 go up again against the yuan. Kit you said that, no, continue, sorry, 0:13:12.200 --> 0:13:14.000 and I was gonna say so. The result of that 0:13:14.160 --> 0:13:17.760 is that we're getting a very strong euro against the yuan, 0:13:18.160 --> 0:13:21.320 which is going to deflate Europe at a time when 0:13:21.320 --> 0:13:23.440 that's not really what they want to do, and it 0:13:23.520 --> 0:13:27.160 leans against the fiscal expansion, and it limits how strong 0:13:27.160 --> 0:13:28.640 the euro can stay and get. 0:13:29.440 --> 0:13:31.840 You said that the Europeans are going to be weary 0:13:31.920 --> 0:13:34.440 of the Chinese dumping on their market. Kit, do you 0:13:34.440 --> 0:13:36.959 think it's enough for the Europeans to put up their 0:13:37.000 --> 0:13:38.839 own tier walls when it comes to China. 0:13:40.920 --> 0:13:44.720 No, I don't think. I think Europe is very aggressively 0:13:44.760 --> 0:13:48.600 against formal tariffs, so, but I do think that once 0:13:48.640 --> 0:13:53.920 you've started kind of challenging free trade, that the whole 0:13:53.960 --> 0:13:56.440 thing is a more fragile edifice. And so it'll with 0:13:56.480 --> 0:13:58.720 a splinter a bit because we just get all these 0:13:58.800 --> 0:13:59.560 knock on effects. 0:13:59.679 --> 0:14:02.360 Quick final question for your kit, Euro dollar one fourteen. 0:14:02.720 --> 0:14:05.160 At the moment, we will remember the day's pre negative 0:14:05.200 --> 0:14:08.280 rates back in twenty fourteen, when they were implemented that summer. 0:14:08.559 --> 0:14:11.959 We remember how stubborn the euro was, stubborn euro strength. 0:14:12.200 --> 0:14:14.040 What are we going back to? What kind of world? Kit? 0:14:14.120 --> 0:14:16.040 Are we going back to the pre negative rate era 0:14:16.120 --> 0:14:18.480 of say one twenty one, thirty one, forty? How do 0:14:18.520 --> 0:14:19.240 you think about that? 0:14:20.520 --> 0:14:23.320 I can't see how in real terms that the europe 0:14:23.320 --> 0:14:25.360 can justify the levels of sort of sly, the one 0:14:25.400 --> 0:14:27.880 thirty one to forty levels, I think they're gone. Frankly, 0:14:28.640 --> 0:14:30.560 I think we'll see one twenty again. I think that's 0:14:30.600 --> 0:14:33.000 probably that's the bit I can manage in my head. 0:14:33.440 --> 0:14:39.040 But the European economy needs to develop much stronger underlying 0:14:39.080 --> 0:14:41.960 growth to get above that for a lot, to stay above. 0:14:41.720 --> 0:14:44.640 That, Kit, appreciate your input as always, sir, Thank you. 0:14:44.720 --> 0:14:57.880 Kit Jig's there of selk gen danis of Wentworth raising 0:14:57.920 --> 0:15:01.320 its price targets a three point fifty writing recommitting a 0:15:01.440 --> 0:15:04.120 CEO and leaving its dogs Roll is the biggest and 0:15:04.160 --> 0:15:07.160 best possible news investors could have heard. Tesla got back 0:15:07.200 --> 0:15:10.280 its biggest asset, Musk Dana. I've joined this now for 0:15:10.320 --> 0:15:12.920 more Dank and Monica to see it. Okay, so you're 0:15:12.920 --> 0:15:14.880 saying this is a recommitment other people would look at 0:15:14.880 --> 0:15:16.320 this and say, well, he's still going to be that 0:15:16.360 --> 0:15:17.880 two days a week, and that's a problem. 0:15:18.040 --> 0:15:20.280 I mean, I view this this was an off rahnd. 0:15:20.400 --> 0:15:22.200 I mean, however, you want to sort of weave what 0:15:22.360 --> 0:15:24.600 one to two days. I think this is the beginning 0:15:24.600 --> 0:15:27.800 of the end for him at duge with Trump Whitehouse, 0:15:28.280 --> 0:15:31.040 because that was a different musque. On the conference call, 0:15:31.320 --> 0:15:33.320 that was a different musk. And we've seen actually over 0:15:33.360 --> 0:15:36.080 the years he dressed it head on, read the. 0:15:36.160 --> 0:15:38.200 Room, and we've talked about it. This was it was 0:15:38.240 --> 0:15:38.920 a fork. 0:15:38.680 --> 0:15:40.360 In the road, a moment of truth. 0:15:40.480 --> 0:15:43.400 Sure he took advantage of it, and I believe now 0:15:43.400 --> 0:15:44.480 it's a new chapter. 0:15:45.480 --> 0:15:47.240 And anyway, the dark chapter. 0:15:47.040 --> 0:15:47.520 In the past. 0:15:47.600 --> 0:15:49.920 Let's unpack the perceived problem of the last few months 0:15:49.920 --> 0:15:52.720 that you called a dark chapter. Some people believe money 0:15:52.760 --> 0:15:55.840 in fact, that the president and Elon Musk relationship has 0:15:55.960 --> 0:15:58.440 damaged the brand in the mind of liberals. Want to 0:15:58.440 --> 0:16:01.080 be very clear about that. Points had the stock. Do 0:16:01.120 --> 0:16:03.240 you acknowledge that that is what's happened over the past 0:16:03.280 --> 0:16:03.840 few months. 0:16:03.880 --> 0:16:04.800 We've talked about it. 0:16:04.880 --> 0:16:07.840 I mean, it's the brand damage is real. 0:16:07.920 --> 0:16:10.400 It's been a dark cloud on Tesla's that we talked 0:16:10.400 --> 0:16:14.520 about anywhere from ten to twenty percent because Tessa became 0:16:15.080 --> 0:16:16.240 a political symbol. 0:16:16.360 --> 0:16:18.600 Why would that change If Elon Musk is still that 0:16:18.640 --> 0:16:19.640 two days a week. 0:16:20.280 --> 0:16:22.400 Again and I don't believe he's a good again. The 0:16:22.440 --> 0:16:24.000 one two days a week, however you want to like 0:16:24.080 --> 0:16:26.720 phrase it. My view is, and we talked about in 0:16:26.760 --> 0:16:30.360 the show, this is the off ram to be like, okay, 0:16:30.520 --> 0:16:32.680 one two days a week and I'm gone. I'm not 0:16:32.720 --> 0:16:34.720 saying that you're not going to see him at times 0:16:34.800 --> 0:16:39.560 with Trump, but we believe this is his taking a 0:16:39.600 --> 0:16:44.080 massive step back recommitting to Tesla. And look, this was 0:16:44.080 --> 0:16:46.440 a different Musk on the conference call. This was not 0:16:46.640 --> 0:16:50.480 the normal Musk. This is one reading the room, aware 0:16:50.520 --> 0:16:53.120 of everything going on from a brand perspective, and I 0:16:53.200 --> 0:16:56.040 believe this it's going to start a new chapter with 0:16:56.200 --> 0:16:58.320 the brand damage is still going to be there, but 0:16:58.400 --> 0:17:00.680 I believe at least it will be continued. He doesn't 0:17:00.720 --> 0:17:03.840 double down, and this was an important time I think 0:17:03.880 --> 0:17:08.080 would define the future of Tesla if Musk actually doubled down. 0:17:08.160 --> 0:17:10.360 Dude, But how does he fix a brand damage? Now, 0:17:10.400 --> 0:17:12.680 to Jonathan's point, one to two weeks in the White House, 0:17:12.680 --> 0:17:15.760 he's also still the self proclaimed first buddy. He's still 0:17:15.800 --> 0:17:18.640 going to be out there advocating for the president. 0:17:19.160 --> 0:17:22.080 I think that's gonna be significantly diminished. I mean, I'd 0:17:22.080 --> 0:17:25.400 be surprised if we sit here one two, three months 0:17:25.440 --> 0:17:28.239 and that's still happening, even on social media. I mean, 0:17:28.240 --> 0:17:30.680 he's still gonna say what he wants, but I think 0:17:30.720 --> 0:17:33.080 even some of that will be diminished. Look, I don't 0:17:33.080 --> 0:17:35.600 know if it's the board, if it's some of his confidence, 0:17:35.720 --> 0:17:37.440 but the reality is for Tesla. 0:17:37.720 --> 0:17:39.280 Look, that's why this was a code read. 0:17:40.080 --> 0:17:42.600 Is this a moment though for Tesla to realize that 0:17:42.680 --> 0:17:46.639 they actually need to brand themselves as Tesla, not as 0:17:46.760 --> 0:17:48.200 synonymous with Elon Musk. 0:17:48.480 --> 0:17:51.760 I think that's that ship sailed because I think the 0:17:51.840 --> 0:17:52.560 reality is. 0:17:52.680 --> 0:17:55.200 Musk as Tesla, Tesla is Musk. 0:17:55.960 --> 0:17:59.080 And so much of that has been a positive despite 0:17:59.119 --> 0:18:02.359 you know, maybe some critic the last three months. 0:18:02.480 --> 0:18:03.879 It's been the reason it's. 0:18:03.800 --> 0:18:06.400 Been a dark chapter, not just because of the quarter delivered, 0:18:06.720 --> 0:18:10.520 but the brand damage and what ultimately Tess became a 0:18:10.520 --> 0:18:13.760 political symbol. And I think it's a recognition that needs 0:18:13.760 --> 0:18:14.160 to end. 0:18:14.320 --> 0:18:16.480 Where in the world do they need to do the 0:18:16.520 --> 0:18:18.760 most work to bring customers back. 0:18:19.119 --> 0:18:21.440 Well, I think China or China's the hearts and lungs 0:18:21.480 --> 0:18:23.800 of the growth story. I mean BYD has obviously been 0:18:24.040 --> 0:18:26.800 very strong Neo and others, and I think China is 0:18:26.840 --> 0:18:29.480 where you really need to start to turn this around. 0:18:29.880 --> 0:18:31.720 The brand damage in Europe, I think a. 0:18:31.720 --> 0:18:33.400 Lot of that you might be permanent. 0:18:33.400 --> 0:18:36.880 And we've talked about potentially twenty percent US maybe ten 0:18:36.920 --> 0:18:41.400 percent brand damage. And my view is just that's still 0:18:41.400 --> 0:18:43.920 going to be there, but you had to contain it. 0:18:44.280 --> 0:18:46.879 You have to start to in terms of autonomous robotics 0:18:47.160 --> 0:18:49.320 and this was this was a moment, so. 0:18:49.320 --> 0:18:51.359 Show me the gross where does it come from and 0:18:51.440 --> 0:18:52.399 how soon does it come. 0:18:52.520 --> 0:18:55.480 Well, I believe a huge part of the valuation is 0:18:55.520 --> 0:18:57.760 going to be autonomous and robotics. I mean my view, 0:18:57.800 --> 0:19:00.919 like on Supervised FST, you will start in Austin in June, 0:19:01.280 --> 0:19:03.520 when you look out over the coming years, I I 0:19:03.600 --> 0:19:08.199 believe autonomous and robotics will be ninety percent of the 0:19:08.280 --> 0:19:10.480 valuation of the story over the coming years. 0:19:10.480 --> 0:19:12.120 You spend a lot of time with the product. How 0:19:12.160 --> 0:19:14.160 good is it right now? Full self trying to think. 0:19:14.480 --> 0:19:17.919 I mean, I think we're probably what's called seventy five 0:19:18.359 --> 0:19:20.280 percent that to where you need to. 0:19:20.240 --> 0:19:22.639 Be seventy progress half we made so I think seventy 0:19:22.640 --> 0:19:24.920 five to I see now where we say, twelve months ago, 0:19:25.080 --> 0:19:25.760 three months ago. 0:19:25.640 --> 0:19:27.520 I think we were probably if I go back maybe 0:19:27.520 --> 0:19:27.960 a year. 0:19:27.800 --> 0:19:30.800 Ago, say we're probably sixty percent sixty five. No, you 0:19:30.840 --> 0:19:33.080 got now technically you gotta get to nine nine point 0:19:33.119 --> 0:19:36.000 nine nine us to get there. But I believe they're 0:19:36.000 --> 0:19:39.480 making huge traction. And I think when we get to 0:19:39.560 --> 0:19:43.439 unsupervised FSD in Austin, it's a huge step to where 0:19:43.480 --> 0:19:45.879 the story needs to get to. And my whole point 0:19:45.920 --> 0:19:50.720 is if this was an Intel, a Boeing, okay it's 0:19:50.760 --> 0:19:53.479 a disaster, it doesn't even matter in terms of but 0:19:53.560 --> 0:19:55.919