WEBVTT - Global Stocks Sell Off as US Tariffs Loom 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.280 --> 0:00:29.680 Krubman's aging he's gone from the New York Times of 0:00:29.800 --> 0:00:32.920 substack and what's he doing? Dials one eight hundred Meal 0:00:33.000 --> 0:00:35.400 Dutta because he wants to find out what a god's 0:00:35.479 --> 0:00:39.319 name is going on Macro Research's renaissance. Macro joins us 0:00:39.720 --> 0:00:42.640 right now, neildt it as well. I want to know, 0:00:42.760 --> 0:00:45.080 I think everybody in the racket. You were my Economist 0:00:45.120 --> 0:00:47.400 of the Year three years ago. You're sitting by the 0:00:47.440 --> 0:00:50.640 bat phone and the Krugman calls up. 0:00:50.920 --> 0:00:51.720 What is that like? 0:00:52.920 --> 0:00:55.440 I mean, I was shocked. I mean, obviously you know 0:00:55.480 --> 0:00:57.960 Tom as you know, I'm just a lowly business economist. 0:00:58.360 --> 0:01:01.480 So to have someone of his stature in the field 0:01:02.440 --> 0:01:04.920 talk to me was, you know, really cool? I mean, 0:01:04.959 --> 0:01:07.399 and he was the nicest guy as not as cutting 0:01:07.440 --> 0:01:10.320 as is written pros that you know that we're all 0:01:10.400 --> 0:01:13.920 used to, so, you know, really the nicest guy. And 0:01:14.080 --> 0:01:16.839 it was just great to talk to him. So yeah, 0:01:16.840 --> 0:01:18.760 I mean, it was always very willing to listen to 0:01:18.800 --> 0:01:20.360 what I had to hear what I said. 0:01:20.640 --> 0:01:22.800 I let's get a Krugman update right now. 0:01:22.959 --> 0:01:26.480 Nominal GDP the combination of real GDP and inflation. You 0:01:26.480 --> 0:01:29.480 look at it, Atlanta GDP. I'm almost framing out a 0:01:29.520 --> 0:01:31.360 negative nominal GDP, which I. 0:01:31.280 --> 0:01:34.000 Know you're going to say is wrong. Where is our 0:01:34.040 --> 0:01:35.560 nominal GDP forward? 0:01:36.560 --> 0:01:39.360 Well, right now, I think nominal GDP's running below four percent. 0:01:40.400 --> 0:01:43.440 If you look at the compensation data that was released, 0:01:43.440 --> 0:01:46.880 the personal income and spending numbers that were released last week. 0:01:47.520 --> 0:01:49.920 We're in a situation now where private sector wage and 0:01:49.920 --> 0:01:52.800 salary growth is barely running three percent and the Fed 0:01:52.840 --> 0:01:55.200 funds rate is over a percentage point above that. So 0:01:55.240 --> 0:01:59.280 whenever you have incomes running below the rate of overnight 0:01:59.320 --> 0:02:03.080 Fed funds, say sure sign that monetary policy is too tight. 0:02:03.400 --> 0:02:07.800 And so we got more confirmation of that last Friday. 0:02:08.880 --> 0:02:10.760 All right, let's do the math here. I got a 0:02:10.880 --> 0:02:14.520 I think it's Liberation Day on Wednesday. What's the math. 0:02:15.760 --> 0:02:16.399 Mean to you? 0:02:16.480 --> 0:02:16.560 Like? 0:02:16.639 --> 0:02:18.080 What are the numbers mean to you? Do I need 0:02:18.080 --> 0:02:19.960 to pay attention to this stuff. I know it's headlines. 0:02:19.960 --> 0:02:24.160 But well, I don't think anyone really knows what any 0:02:24.200 --> 0:02:27.400 of this means. So I think the journals reporting today 0:02:27.440 --> 0:02:30.320 that they're talking about a universal twenty percent tariff, which 0:02:30.880 --> 0:02:32.720 I think would raise about three close to three and 0:02:32.760 --> 0:02:38.720 a half trillion over ten years. So remember during his confirmation, 0:02:38.880 --> 0:02:42.720 Secretary Bessett talked about the various ways that tariffs could 0:02:42.720 --> 0:02:44.840 be used, right. I mean one would be like sort 0:02:44.840 --> 0:02:48.440 of a negotiation. Another way is sort of to get 0:02:48.880 --> 0:02:55.119 Another way that he talked about it was basically revenue source, right, 0:02:55.200 --> 0:02:57.880 I mean a revenue source to pay for you know, 0:02:58.120 --> 0:03:01.120 extending tax legislation and so forth. And if they're talking 0:03:01.200 --> 0:03:07.280 more about universal tariffs, it's clear they're moving away from 0:03:07.360 --> 0:03:11.440 this sort of like let's negotiate lower tariffs across the board, right, 0:03:11.480 --> 0:03:13.520 sort of escalate to de escalate and instead of move 0:03:13.600 --> 0:03:15.760 more towards a pay for mechanism. 0:03:15.840 --> 0:03:18.040 I went back to a twenty eighteen essay at Paul 0:03:18.120 --> 0:03:21.760 Krug been very wonkish, and he skewers in twenty eighteen 0:03:21.760 --> 0:03:25.359 Peter Navarro. Peter Navarro's driving the tariff dialogue at the 0:03:25.400 --> 0:03:29.560 White House. Right now, who's pushing back against Navarro? There's 0:03:29.600 --> 0:03:32.120 no Gary Cohne that I see there. Now, Is it 0:03:32.120 --> 0:03:36.280 the Secretary Treasury who's pushing back against tariffs back to 0:03:36.320 --> 0:03:37.400 the nineteen forties? 0:03:39.080 --> 0:03:42.200 I mean, I think Tom, I mean, my sense of 0:03:42.200 --> 0:03:46.960 it is is that having some belief in tariffs as 0:03:46.960 --> 0:03:51.640 a tool of policy is the price of admission in 0:03:51.680 --> 0:03:55.720 the administration. So at some level all of them agree 0:03:55.760 --> 0:03:58.400 with Trump and they're very they're less likely to push back. 0:03:58.440 --> 0:04:00.000 Where's your unemployment rate right now? 0:04:00.120 --> 0:04:02.480 I mean, I'm on the debate that the FED is 0:04:02.520 --> 0:04:06.400 shifted over to a labor dialogue. Does Neil Datta have 0:04:06.440 --> 0:04:09.520 an unemployment rate out year in that can give pause? 0:04:11.000 --> 0:04:12.840 I think what's important is that the FED has a 0:04:12.840 --> 0:04:14.960 forecast of four point four percent I think for the 0:04:15.040 --> 0:04:17.160 end of the year. We may well be there by 0:04:17.160 --> 0:04:17.800 the middle. 0:04:17.520 --> 0:04:17.920 Of the year. 0:04:18.000 --> 0:04:21.480 And so if you're if we're getting to those year 0:04:21.520 --> 0:04:24.400 and forecasts a couple of quarters ahead of schedule, the likelihood, 0:04:24.440 --> 0:04:26.280 I think is that they start to pull in some 0:04:26.320 --> 0:04:28.400 of the rate cuts that they have in twenty twenty 0:04:28.440 --> 0:04:29.840 six into the current year. 0:04:30.320 --> 0:04:33.400 You know, one of the points from the administration is 0:04:33.640 --> 0:04:36.080 near term pain for longer term gain, and I guess 0:04:36.080 --> 0:04:39.720 longer term gain is more manufacturing on shore here in 0:04:39.720 --> 0:04:42.680 the US. How about the auto industry. That seems like 0:04:43.400 --> 0:04:46.479 one that could happen, but that takes time. 0:04:46.520 --> 0:04:48.200 I would think, right, well, this is one of the 0:04:48.240 --> 0:04:50.960 reasons why I think you have to make the assumption 0:04:51.040 --> 0:04:53.960 that they're moving off tariffs as a negotiating mechanism, because 0:04:53.960 --> 0:04:55.960 at some level you have to keep them on in 0:04:56.080 --> 0:05:00.159 order to force changes in factory capacity. That takes time. 0:05:00.200 --> 0:05:03.200 So if people think it's just a temporary negotiating tool, 0:05:03.320 --> 0:05:04.919 they're not going to actually want to put in the 0:05:04.960 --> 0:05:07.640 investment to make, you know, to bring more final assembly 0:05:07.960 --> 0:05:11.800 to the to the US. So yeah, I mean, I 0:05:11.839 --> 0:05:14.960 don't know about long term gain. You know, I do 0:05:15.040 --> 0:05:18.000 think that there's you know, you think about what's happening 0:05:18.040 --> 0:05:20.400 in the markets with with a lot of these auto companies. 0:05:21.880 --> 0:05:24.680 They can't see it just yet clearly investors. 0:05:25.080 --> 0:05:28.360 So how do you think about I guess the retaliatory tariffs. 0:05:28.360 --> 0:05:30.279 I mean, most of our trading partner talking is to 0:05:30.360 --> 0:05:32.279 just sit there and take it. I would suspect that 0:05:33.000 --> 0:05:35.080 they're going to step up and. 0:05:35.600 --> 0:05:37.840 Look, this is this is what you this is. I mean, 0:05:38.440 --> 0:05:42.240 I'm not a trade expert. I'm not I'm not Michael Pettis. 0:05:42.600 --> 0:05:44.440 But what I will say is one of the things 0:05:44.480 --> 0:05:50.120 you learn in any sort of I think introductory international 0:05:50.160 --> 0:05:54.440 trade course in like a prisoner's dilemma type game. If 0:05:54.680 --> 0:05:58.760 one person does tariffs, usually the other party puts on 0:05:58.800 --> 0:06:01.400 the tariffs, and then you have the worst case outcome, right, 0:06:01.440 --> 0:06:04.200 I mean, there's a retaliation, and so this sort of 0:06:04.240 --> 0:06:06.560 tit for tat is what is what is concerning and 0:06:07.880 --> 0:06:10.400 you know, I mean that's kind of where we are. 0:06:10.920 --> 0:06:13.279 So much of this is the X axis. You mentioned 0:06:13.279 --> 0:06:16.640 the four box prisoner's lemo. Okay, fine, but also it's 0:06:16.640 --> 0:06:18.920 got to run across a time continual. We mentioned this 0:06:19.040 --> 0:06:22.359 an hour ago. Everything short term, short term, the market, 0:06:22.400 --> 0:06:24.840 short term, the show is short term. Neil dutt is 0:06:24.839 --> 0:06:28.440 trying to go long term. Where's the horizon the president's 0:06:28.520 --> 0:06:31.799 talking about? The President says he's going to make America 0:06:31.920 --> 0:06:35.560 great again? In that is that out that manufacturing pick 0:06:35.640 --> 0:06:38.760 up Paul mentioned? Is it out one year or is 0:06:38.800 --> 0:06:40.719 it out four or five years? 0:06:42.360 --> 0:06:43.880 Well, I mean I don't know, Tom. 0:06:43.920 --> 0:06:46.280 I sort of reject the premise that this this sort 0:06:46.279 --> 0:06:49.840 of approach will make the country a greater grand I mean, 0:06:49.880 --> 0:06:52.480 I understand the need to kind of you know, for 0:06:52.640 --> 0:06:55.679 security purposes. You know, you want to have a strong 0:06:55.720 --> 0:06:59.000 manufacturing base. I think going after China makes a lot 0:06:59.040 --> 0:07:02.000 of sense. But you know, just think about it at 0:07:02.040 --> 0:07:04.240 the most basic level. I mean, if every state was 0:07:04.279 --> 0:07:06.919 operating as its own country with their own trade policies, 0:07:06.960 --> 0:07:09.680 do you think that better? You know that more prosperity 0:07:09.680 --> 0:07:11.320 would result as that way? 0:07:11.720 --> 0:07:14.720 What or agy and get we had two percent three percent? 0:07:14.720 --> 0:07:17.560 There's somebody's got a beautiful bar chart out where we're 0:07:17.600 --> 0:07:21.520 bombing ourselves. We don't know, but peers, we're bombing ourselves 0:07:21.920 --> 0:07:24.880 back to the nineteen thirties of the nineteen forties. My 0:07:25.000 --> 0:07:28.600 answer is what we ticked five percent unemployment? We get 0:07:28.680 --> 0:07:32.239 a new run rate of unemployment four point x percent 0:07:32.600 --> 0:07:35.720 or maybe months are here at a five percent unemployment. 0:07:35.240 --> 0:07:38.320 Right, I mean you may have higher unemployment, but you'd 0:07:38.320 --> 0:07:41.600 also probably have somewhat higher inflation and weaker productivity growth 0:07:41.680 --> 0:07:43.840 and over over time, I mean that you know, weaker 0:07:43.880 --> 0:07:46.400 productivity compounds, and so that would over you know, that 0:07:46.440 --> 0:07:48.360 would that would hurt our longer own living standards as 0:07:48.400 --> 0:07:52.720 a result. So you know, I think that they're like anything, 0:07:52.720 --> 0:07:55.720 there's balanced. There's no such thing as free trade, all 0:07:55.760 --> 0:08:00.600 trade is managed across countries, right. But I think there's 0:08:00.640 --> 0:08:03.400 a way to do it right, and there's a way 0:08:03.440 --> 0:08:05.040 to do it in a haphazard way. And I think 0:08:05.040 --> 0:08:09.720 we have the latter inflation. Uh, what's your call on inflation? 0:08:09.880 --> 0:08:12.080 Is just going to accelerate inflation? And if so, to 0:08:12.120 --> 0:08:12.679 what level? 0:08:13.320 --> 0:08:13.680 I think? 0:08:15.160 --> 0:08:17.760 I think the growth consequences of what's going on are 0:08:17.840 --> 0:08:21.480 much more important than than than the inflation consequences. I mean, ultimately, 0:08:21.480 --> 0:08:26.600 in my view, inflation comes down to the household's budget constraint. 0:08:26.840 --> 0:08:29.120 And the household's budget constraint, as we just talked about, 0:08:29.200 --> 0:08:32.720 is coming as shifting inward, right, because the labor markets 0:08:32.720 --> 0:08:35.400 have cooled and private sector wage and salary growth is slowing. 0:08:35.840 --> 0:08:38.520 So if you do have let's say, cars costs more, 0:08:38.559 --> 0:08:40.959 people have to allocate more dollars to cars, they'll have 0:08:41.040 --> 0:08:44.480 less money left over. Ultimately, it comes down to the 0:08:44.480 --> 0:08:45.720 household's budget line. 0:08:46.120 --> 0:08:49.560 Neil, I look at the jobs report Friday. Is this 0:08:49.679 --> 0:08:53.479 the first Trump report? Is this the last Biden report? 0:08:53.880 --> 0:08:56.160 Is there a freshness to the data where you can 0:08:56.240 --> 0:09:00.200 say this is finally Trump mathematics, Trump statistics. 0:09:00.360 --> 0:09:02.200 I mean, I think it's a little bit too soon. 0:09:03.600 --> 0:09:05.400 I mean we're talking about what the survey week was 0:09:05.400 --> 0:09:08.080 the twelfth. I mean you started to have some dialing 0:09:08.160 --> 0:09:10.319 up of the rhetoric. But I don't think it affects 0:09:10.400 --> 0:09:14.920 things that quickly. I mean for firms, you're making a 0:09:14.960 --> 0:09:18.600 trade off, right, I mean, it's not like people didn't 0:09:18.640 --> 0:09:21.480 know what they were getting with Trump. He ran on 0:09:21.559 --> 0:09:24.040 tariff being his favorite word in the dictionary, right. So 0:09:24.760 --> 0:09:27.600 to me, it's the sequencing that might have put people off. 0:09:27.720 --> 0:09:28.480 Are we now where. 0:09:28.360 --> 0:09:31.160 There's a loss of confidence, there's a loss of consumer confidence, 0:09:31.160 --> 0:09:32.679 there's a loss of business com Yeah. 0:09:32.679 --> 0:09:36.000 I mean I think every month that goes on from 0:09:36.120 --> 0:09:40.000 since the inauguration, it becomes more you know Trump. But 0:09:40.040 --> 0:09:43.360 I will say, look, I mean I do think that 0:09:43.440 --> 0:09:45.400 he was dealt a bad hand. I mean, the economic 0:09:45.440 --> 0:09:48.080 buffer was not the same as it was back in 0:09:48.080 --> 0:09:52.120 like twenty seventeen. Let's say, you know, total hours worked 0:09:52.559 --> 0:09:56.280 in the three months ending in February, we're negative, right. 0:09:57.160 --> 0:09:59.760 We just talked about private sector wage and salary growth 0:10:00.040 --> 0:10:02.760 barely running three percent. That was a February data point. 0:10:03.000 --> 0:10:07.959 So the truth is is that the administration inherited a 0:10:08.080 --> 0:10:11.040 very imbalanced economy. One where the labor markets were frozen, 0:10:11.120 --> 0:10:14.080 the housing market was frozen. That continues, and you could 0:10:14.120 --> 0:10:16.920 argue that they've made a bad situation worse. But I 0:10:16.960 --> 0:10:19.400 also think their communication has been a little bit challenged, 0:10:19.440 --> 0:10:22.520 right because look at how they look, at how they look. 0:10:22.840 --> 0:10:24.920 They sort of talked about the last job's number the 0:10:24.960 --> 0:10:30.199 February report, right, they took credit for the big increase 0:10:30.240 --> 0:10:32.760 in auto manufacturing employment. There was like a nine thousand 0:10:32.800 --> 0:10:35.160 increase in factory employment, and you know for motor vehicle 0:10:35.160 --> 0:10:38.000 in parts manufacturing. I mean, you can't say, oh, this 0:10:38.120 --> 0:10:40.160 is us, but all that bad stuff is Biden, right, 0:10:40.160 --> 0:10:42.199 so you have you have to kind of I think 0:10:42.200 --> 0:10:44.400 they would have been served much better had they talked 0:10:44.400 --> 0:10:47.040 the economy down more on their way in the door, Frankly. 0:10:47.760 --> 0:10:50.000 Fed any role for the FED here, I mean at 0:10:50.040 --> 0:10:54.400 two rate cuts, maybe a third item went back to three? 0:10:54.400 --> 0:10:54.920 Where did they? 0:10:55.240 --> 0:10:56.640 I mean, I think the Fed will be going four 0:10:56.640 --> 0:10:59.520 times this year. I think they'll start in June. I 0:10:59.520 --> 0:11:03.120 wouldn't be surprised if you know they could. They could 0:11:03.160 --> 0:11:08.760 start with fifty. Frankly, I think the labor markets are right, 0:11:09.320 --> 0:11:11.199 aren't a bad spot, and I don't think that they 0:11:11.200 --> 0:11:13.760 want to take any chances. Frankly, and as I mentioned, 0:11:13.800 --> 0:11:17.320 you know, ultimately the growth effects are going to dominate 0:11:17.360 --> 0:11:20.680 the inflation risks and and I think if the FED 0:11:20.760 --> 0:11:22.720 is taking that on board, they're going to be cutting 0:11:22.720 --> 0:11:23.720 more aggressively in the market. 0:11:23.720 --> 0:11:23.920 STA. 0:11:24.000 --> 0:11:25.880 I know you're not in speaking terms with Jeff de Graph, 0:11:25.920 --> 0:11:28.839 but when you do talk through your people with mister 0:11:28.920 --> 0:11:33.240 de Graf link in his market analysis into your economics 0:11:33.640 --> 0:11:38.040 over to the grimness of Atlanta GDP. Now talk about 0:11:38.080 --> 0:11:41.880 you know the growth metric. Those are grim statistics in Atlanta. 0:11:42.400 --> 0:11:45.240 Well, I mean, I think for for Jeff's process, credit 0:11:45.320 --> 0:11:48.360 matters a lot, and so I think that's what he's 0:11:48.400 --> 0:11:50.360 looking at. So the fact that credit spreads are starting 0:11:50.360 --> 0:11:52.160 to wake up a little. 0:11:51.920 --> 0:11:54.000 Bit are the vigiland he's going to tell the FED 0:11:54.080 --> 0:11:54.439 what to. 0:11:54.400 --> 0:11:58.680 Do, don't they always? I mean I think you know, 0:11:58.840 --> 0:12:00.559 I mean, look to me, you have to watch high 0:12:00.600 --> 0:12:02.839 yield credit like all this stuff that you're seeing from 0:12:02.840 --> 0:12:04.520 the street. I mean, you mentioned Goldman. 0:12:05.360 --> 0:12:07.040 Better than me. I mean, it's odor is to. 0:12:08.520 --> 0:12:09.959 At least is on top of the whole credit. 0:12:09.840 --> 0:12:11.600 Yield spreads are finally breaking. 0:12:11.920 --> 0:12:14.760 Well, I mean you mentioned Goldman. They took up their 0:12:14.800 --> 0:12:17.080 recession probabilities. I mean, all they're really doing at this 0:12:17.120 --> 0:12:18.960 point is just following the market. If you look at 0:12:19.000 --> 0:12:22.600 like the Fed's excess, you know, riffs premium right like there, 0:12:22.600 --> 0:12:26.040 their measure of using corporate credit to determine recession probabilities. 0:12:26.240 --> 0:12:28.240 That's basically what's going on. So I think you have 0:12:28.280 --> 0:12:30.520 to watch credit spreads and the higher they go, the 0:12:30.559 --> 0:12:32.400 more likely you have to assume the Fed is going 0:12:32.440 --> 0:12:32.800 to go more. 0:12:32.880 --> 0:12:33.640 Get one more in here. 0:12:34.040 --> 0:12:36.160 So, Neil, what's the data point you're looking at here? 0:12:36.200 --> 0:12:38.120 What should the market look at? I mean, we're gonna 0:12:38.120 --> 0:12:41.040 at Jobs Day on Friday. Is that something that's going to. 0:12:41.080 --> 0:12:43.200 Be I'll tell you right now. Go on your Bloomberg 0:12:43.280 --> 0:12:46.680 terminal p I W G T O t L index. 0:12:46.880 --> 0:12:49.000 You go into the economic work bench, look at that 0:12:49.080 --> 0:12:51.920 year over year and then add in the FED funds rate. 0:12:53.120 --> 0:12:55.800 If the Fed funds rate is over that year over 0:12:55.880 --> 0:12:58.960 year rate of growth, bad things tend to happen. And 0:12:59.000 --> 0:12:59.959 that's where we are right now. 0:13:00.120 --> 0:13:04.840 Oh boy, thanks on that note, Tom, I just you 0:13:04.880 --> 0:13:08.600 didn't fill out a brick. Are you too busy looking 0:13:08.640 --> 0:13:08.840 at that? 0:13:08.920 --> 0:13:09.240 Pi? 0:13:09.520 --> 0:13:12.520 Oh me, Well, I went to a Division III school, Tom, 0:13:12.880 --> 0:13:13.720 I went to NYU. 0:13:13.800 --> 0:13:16.959 I mean, hey, the women's fastball to die for this 0:13:17.000 --> 0:13:18.719 guy dominant? 0:13:18.920 --> 0:13:25.080 Yes, Neil, congratulations, huge impact on the nation's market economics. 0:13:25.080 --> 0:13:27.640 Neil dout of there with Renaissance Macro. Thank you so much. 0:13:27.920 --> 0:13:31.800 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:13:31.840 --> 0:13:34.840 starting at seven am Eastern on Apple Corplay and Android 0:13:34.880 --> 0:13:37.920 Auto with the Bloomberg Business App. You can also listen 0:13:38.000 --> 0:13:41.280 live on Amazon Alexa from our flagship New York station. 0:13:41.800 --> 0:13:45.880 Just say Alexa play Bloomberg eleven thirty joining us right now. 0:13:45.960 --> 0:13:49.600 Someone who could have written How Not to Invest Brian Belski, 0:13:49.679 --> 0:13:53.400 chief investment strategist at FEMO Capital Markets. In times like 0:13:53.480 --> 0:13:58.360 this in corrective emotion, he has been liberated by saying 0:13:58.440 --> 0:14:00.000 stay in the market have curged. 0:14:00.559 --> 0:14:03.760 Brian Belski, are you still a bull this morning? 0:14:04.880 --> 0:14:09.040 Good morning Tom, Yes I am, and I just got 0:14:09.080 --> 0:14:12.400 back from yesterday. I just got back from being in 0:14:12.600 --> 0:14:15.080 Canada for a couple of days, so I have some 0:14:15.200 --> 0:14:17.160 unique perspective on that too. 0:14:17.200 --> 0:14:17.600 Of course. 0:14:18.080 --> 0:14:24.000 Was part of my responsibilities is to forecast the Canadian 0:14:24.000 --> 0:14:27.240 stock market as defined by the TSX index. And I'll 0:14:27.280 --> 0:14:30.000 say this that you know we have a bunch of 0:14:30.000 --> 0:14:32.840 different responsibilities there, some of which is to manage actually 0:14:32.920 --> 0:14:37.320 Canadian equity portfolios. And the majority of our majority of 0:14:37.640 --> 0:14:42.240 I'm not being slambuoyant here, the majority of our Canadian 0:14:43.000 --> 0:14:46.440 clients want to sell America and just being in Canada. 0:14:46.480 --> 0:14:50.000 And we think that that is not only a tactical air, 0:14:50.080 --> 0:14:53.760 it's a longer term strategic air, given the fact that 0:14:54.120 --> 0:14:57.560 from a diversification standpoint, given just the fundamental perspective, US 0:14:57.600 --> 0:15:00.720 as America goes, so it goes Canada. It regardless of 0:15:01.440 --> 0:15:04.440 the outcome of this, the countries are still tied together, 0:15:04.520 --> 0:15:07.800 they're still doing business together. And I think anytime in life, 0:15:08.160 --> 0:15:11.680 litt alone investing Tom, when you make decisions based on 0:15:12.120 --> 0:15:15.080 fear and emotion, they're wrong. And I think that's what 0:15:15.120 --> 0:15:17.480 we're kind of heading into. And that's why the market's 0:15:17.520 --> 0:15:19.520 here today. In the next day or so, until we 0:15:19.560 --> 0:15:24.400 get some clarity, and Paul is talking about uncertainty, Oh 0:15:24.480 --> 0:15:26.840 my gosh, we're in one of these times again. So 0:15:26.920 --> 0:15:28.440 we're we're not changing anything. 0:15:29.160 --> 0:15:33.040 So I guess you're of the opinion, Brian, that this 0:15:33.400 --> 0:15:36.240 uncertainty in the marketplace, it will pass to a certain 0:15:36.280 --> 0:15:39.240 degree at some time in the near future. I'm not 0:15:39.240 --> 0:15:41.800 sure if it's as soon as Wednesday, but sometime sooner 0:15:41.880 --> 0:15:42.400 rather than later. 0:15:43.360 --> 0:15:45.120 Oh, it could be today, it could be tomorrow. 0:15:45.200 --> 0:15:47.520 And I think what the problem is, Paul, is that 0:15:47.600 --> 0:15:50.080 you know, all of us collectively on air right now, 0:15:50.120 --> 0:15:51.600 I've been doing this for a long time, and I 0:15:51.680 --> 0:15:54.960 think there's a couple of problems. Number one is I 0:15:55.040 --> 0:15:59.120 believe that the near termism has been exacerbated since COVID, 0:15:59.160 --> 0:16:03.240 that we've become so reactive. Number two is we have 0:16:03.320 --> 0:16:06.200 to deal in life just like again, investing with things 0:16:06.200 --> 0:16:09.480 that we know. We don't know exactly when this is 0:16:09.520 --> 0:16:12.520 going to stop or change, and it all could change 0:16:12.560 --> 0:16:13.720 to the positive as well. 0:16:14.000 --> 0:16:15.640 And I think too many people that. 0:16:15.600 --> 0:16:17.640 Do what I do, want to make the big negative 0:16:17.680 --> 0:16:22.440 call and want to assume and infer, and that's really difficult. 0:16:22.680 --> 0:16:25.440 And so I think I think what we know is 0:16:25.480 --> 0:16:27.360 the markets have corrected more than ten percent, so we 0:16:27.400 --> 0:16:28.560 are in correction zone. 0:16:28.680 --> 0:16:29.400 That's what we know. 0:16:30.000 --> 0:16:32.880 We also know that this is the fastest correction that 0:16:32.880 --> 0:16:36.520 we've seen in multiple decades, if not ever, especially since 0:16:36.600 --> 0:16:39.120 nineteen ninety. But at the end of the day, I 0:16:39.120 --> 0:16:41.360 do believe that America has the best companies in the world. 0:16:41.400 --> 0:16:44.560 Canada is actually quite put quite close in number two. 0:16:45.040 --> 0:16:46.800 And this is the time where you want to start 0:16:46.840 --> 0:16:50.920 a shopping list because we're seeing some quite exacerbated moves 0:16:50.920 --> 0:16:52.520 to the downside. And this is where you want to 0:16:52.520 --> 0:16:53.560 be a long term investor. 0:16:53.640 --> 0:16:56.080 Brian Belski with U female capital markets for. 0:16:56.200 --> 0:17:02.080 Investors, Brian Belski for whatever, and scared stiff. They don't 0:17:02.120 --> 0:17:06.720 have the Belski confidence. How do they slide into this market? 0:17:09.119 --> 0:17:10.720 Well, you know, we have a lot of faith in 0:17:10.800 --> 0:17:12.439 terms of what we do things, and faith in our 0:17:12.480 --> 0:17:15.000 business as fundamentals and in the fundamental construct of the 0:17:15.040 --> 0:17:17.479 United States stock market has not changed the last eight 0:17:17.720 --> 0:17:18.440 eight weeks. 0:17:18.640 --> 0:17:20.480 And now people are gonna say, what about the tariffs 0:17:20.520 --> 0:17:23.520 and what about state plation? Come on, man, we haven't 0:17:23.560 --> 0:17:25.280 had stake plation since the nineteen seventies. 0:17:25.400 --> 0:17:30.200 They're looking at their academic books to define stake inflation 0:17:30.359 --> 0:17:31.760 and they don't understand what happened in. 0:17:31.720 --> 0:17:33.640 The nineteen seventies. You and I live through that. 0:17:33.760 --> 0:17:36.080 Paul, he's much younger than we are ton so he 0:17:36.119 --> 0:17:37.560 didn't really live through the seventies. 0:17:37.840 --> 0:17:40.320 But at the end of the day, you want to 0:17:40.320 --> 0:17:41.680 find really great companies. 0:17:41.960 --> 0:17:44.160 If I take two steps back and I say, okay, 0:17:44.160 --> 0:17:47.680 what are the top ten companies in the world. Oh, 0:17:47.680 --> 0:17:49.360 by the way, they're all here in the United States, 0:17:49.440 --> 0:17:51.399 And so I think this is where you want to 0:17:51.400 --> 0:17:53.639 make your list, and you want to be an investor 0:17:54.080 --> 0:17:57.919 in Google and Apple and Amazon and Costco and United 0:17:57.920 --> 0:17:59.640 Healthcare and Berkshire Hathaway. 0:18:01.080 --> 0:18:02.200 Tesla's no longer a. 0:18:02.080 --> 0:18:05.760 Magnificent seven, by the way, but Tesla is a fantastic 0:18:05.960 --> 0:18:08.880 technology company, and I think you want to own Tesla 0:18:08.960 --> 0:18:12.000 for the operating system right now, just like you wanted 0:18:12.000 --> 0:18:15.679 to initially buy Apple for the operating system back in 0:18:15.720 --> 0:18:17.640 their early two thousand. So I think that's the way 0:18:17.680 --> 0:18:20.320 you want to kind of think thematically. Now, there's no 0:18:20.400 --> 0:18:22.400 doubt that there's bumps in the road. There's no doubt 0:18:22.440 --> 0:18:24.639 that we don't exactly know what President Trump's going to do, 0:18:24.760 --> 0:18:26.399 or we don't know the retaliatory stuff. 0:18:26.680 --> 0:18:28.680 But again, we are negotiating. 0:18:28.840 --> 0:18:31.600 Nothing is certain, and so I think you have to 0:18:31.600 --> 0:18:34.159 deal with what's certain, And what's certain is make your 0:18:34.200 --> 0:18:36.600 shopping list of the top ten companies in the world 0:18:36.840 --> 0:18:41.239 be consistent. And by the way, nobody, nobody's sold at 0:18:41.240 --> 0:18:44.320 the peak. So this peakda trough analysis that a lot 0:18:44.320 --> 0:18:47.560 of people are starting to talk about it's bunk because 0:18:47.600 --> 0:18:50.760 people don't do that, and actually more people buy at 0:18:50.800 --> 0:18:52.200 the top than they sell at the top. 0:18:53.000 --> 0:18:54.840 What are we doing in the fixed income world, Brian? 0:18:56.160 --> 0:18:58.000 You know fixed income? Paul's a great question. 0:18:58.080 --> 0:19:00.000 I think fixed income is starting to get a little 0:19:00.200 --> 0:19:03.680 more interesting, especially given the fact that what treasuries have done. 0:19:03.680 --> 0:19:05.200 So I do think that you want to start looking 0:19:05.240 --> 0:19:07.720 at ten year treasuries and start looking at this dare 0:19:07.760 --> 0:19:11.480 I say sixty to forty scenario, because if fixed income 0:19:11.520 --> 0:19:13.600 is going to be part of your portfolio, which we 0:19:13.640 --> 0:19:16.280 think it should in this realm of what we've been 0:19:16.280 --> 0:19:17.919 saying for the last two to three years is that 0:19:17.960 --> 0:19:21.119 we're returning to normalization. You can, will, and should have 0:19:21.160 --> 0:19:24.159 fixed income as part of your portfolio, as you should 0:19:24.160 --> 0:19:27.560 have small cap and value, so more of a diversified 0:19:27.600 --> 0:19:31.080 total asset perspective, and I think fixed incomes starting to 0:19:31.119 --> 0:19:32.080 look a lot more interesting. 0:19:32.800 --> 0:19:36.800 How upset are the average Canadian towards towards their friends 0:19:36.840 --> 0:19:37.400 below here? 0:19:38.640 --> 0:19:43.280