WEBVTT - BlackRock CEO Larry Fink Talks Further Market Drops 0:00:00.360 --> 0:00:03.920 Larry, where should we begin? There is as we were 0:00:03.960 --> 0:00:09.559 just discussing a lot of history in this club, there's 0:00:09.600 --> 0:00:11.680 a lot of history in this building. 0:00:14.280 --> 0:00:16.520 So where are you going with this? 0:00:16.600 --> 0:00:17.960 How would you characterize? 0:00:19.360 --> 0:00:21.800 How would you characterize this moment in American history? 0:00:24.239 --> 0:00:27.440 It's no different than anything else. We're fine. I mean, 0:00:27.520 --> 0:00:33.040 you know, look at in our thirty seven years of 0:00:34.360 --> 0:00:40.880 running Black Rock were not focused on the day to day. 0:00:43.240 --> 0:00:46.600 We try to consistently talk with a narrative about long 0:00:46.680 --> 0:00:51.279 termsm working with clients in the long run. I mean, 0:00:51.320 --> 0:00:55.200 obviously things when you see a twenty percent market decline 0:00:55.200 --> 0:00:58.240 in three days, obviously it has significant impacts. And the 0:00:58.320 --> 0:01:03.600 ripple effects of of the potential of teriffs is going 0:01:03.640 --> 0:01:06.480 to be longstanding. And so our job right now is 0:01:06.480 --> 0:01:11.479 to just be We're having more conversation with clients. Probably 0:01:11.480 --> 0:01:13.760 the last time we had this many client conversations that 0:01:13.840 --> 0:01:17.959 Blackrocks was right when we closed our economy in March 0:01:18.040 --> 0:01:23.839 of twenty twenty. And this is a type of time 0:01:24.200 --> 0:01:29.520 where we really try to connect. We manage money for 0:01:30.280 --> 0:01:33.520 people in one hundred and six different countries. We have 0:01:33.600 --> 0:01:38.000 offices in thirty six countries. So what we need to 0:01:38.000 --> 0:01:43.120 be doing every moment is bringing all this global information 0:01:43.200 --> 0:01:46.559 that we gather with eleven plus trillion dollars of money 0:01:46.560 --> 0:01:49.120 and hearing and paying attention to the flows and where 0:01:49.160 --> 0:01:56.160 the money is going. But the magic sauce of Blackrock 0:01:56.320 --> 0:02:01.200 is the last twenty percent of being local and being 0:02:01.320 --> 0:02:06.040 really connected to each and every client worldwide and try 0:02:06.040 --> 0:02:07.920 to really add to them. So we're bringing all this 0:02:08.000 --> 0:02:11.200 global information, but we really try to be local in 0:02:11.240 --> 0:02:15.959 every community where we operate and work. And as a fiduciary, 0:02:16.000 --> 0:02:19.520 our job is to be helping Canadians right now. Our 0:02:19.639 --> 0:02:23.440 jobs are helping Europeans now. Our job is to be 0:02:23.480 --> 0:02:28.200 helping Americans now. And so you know, obviously markets are 0:02:28.240 --> 0:02:32.320 down twenty percent, some stocks are down over thirty forty 0:02:32.360 --> 0:02:36.400 percent from their high water marks of just from January. 0:02:38.200 --> 0:02:41.240 But in the long run, I would say, in the 0:02:41.240 --> 0:02:43.480 long run, this is more of a buying opportunity than 0:02:43.480 --> 0:02:46.800 a selling opportunity. That doesn't mean we can't follow another 0:02:46.840 --> 0:02:50.760 twenty percent from here too, But I do believe over 0:02:50.760 --> 0:02:53.680 the long run the vitality of the United States will persist, 0:02:54.680 --> 0:02:59.360 and I do and I'm still proud in terms of 0:02:59.440 --> 0:03:01.480 working with every investor worldwide. 0:03:02.320 --> 0:03:03.280 When you just said. 0:03:03.760 --> 0:03:06.880 It doesn't mean that the market can't drop another twenty percent. 0:03:07.040 --> 0:03:09.000 Yeah, bit of a gas go through the audience. 0:03:10.200 --> 0:03:13.560 I won't like it, but it's not gonna you know, 0:03:13.720 --> 0:03:18.720 and and and but but unlike most like let's say 0:03:18.960 --> 0:03:20.639 eight to o nine, I don't you don't see the 0:03:20.760 --> 0:03:24.480 leverage in the system. You see, you don't see systemic risk. 0:03:24.960 --> 0:03:30.280 You see. This is more geopolitical issues. Look, the fundamental 0:03:30.280 --> 0:03:35.360 issue that that we're all trying to recognize. Post World 0:03:35.440 --> 0:03:41.680 War Two, the United States was a global stabilizer. And 0:03:42.040 --> 0:03:43.880 I've been now you know, in July will be my 0:03:43.960 --> 0:03:46.840 forty ninth year in finance here in New York City, 0:03:48.600 --> 0:03:52.680 and that's been one of the foundational tenets of of 0:03:52.800 --> 0:03:56.280 I would say the financial community that you know, we 0:03:56.280 --> 0:04:02.640 we we live and work and grow with our economy. 0:04:03.200 --> 0:04:05.160 And one of the main foundations in the US that 0:04:05.200 --> 0:04:08.040 we are a global stabilizer. Obviously, in the last week 0:04:08.080 --> 0:04:11.880 we have not been a global stabilizer, and I think 0:04:12.080 --> 0:04:15.880 that is something that we Is this going to persist? 0:04:17.279 --> 0:04:20.120 Are they going to be new global stabilizers in the world. Well, 0:04:20.120 --> 0:04:22.120 if there are new global stabilizers in the world, and 0:04:22.160 --> 0:04:24.080 I'm not suggesting there will be. These are questions that 0:04:24.080 --> 0:04:27.719 that must be asked. You know, what is the role 0:04:27.760 --> 0:04:31.640 of the dollar in that in that ecosystem. So there's 0:04:31.680 --> 0:04:34.240 a lot of questions that we need to be asking yourselves. 0:04:35.720 --> 0:04:43.039 But you know, eighty days ago in Davos, the phrase 0:04:43.160 --> 0:04:47.160 was American exceptionalism. You heard everywhere. I would say, probably 0:04:47.200 --> 0:04:51.640 every meeting I went to everyone who's focusing on how 0:04:51.680 --> 0:04:55.080 to do more in the United States. And obviously that's 0:04:55.120 --> 0:04:58.000 been thrown out right now. Obviously you could look back 0:04:58.040 --> 0:05:01.200 and say that was, you know, just irrational exuberance of 0:05:01.680 --> 0:05:05.200 too much related to the US. And so that we 0:05:05.279 --> 0:05:08.080 are seeing a recalibrations. You know, seventy five percent of 0:05:08.120 --> 0:05:10.839 the market value, this would before the last few days, 0:05:11.000 --> 0:05:13.360 seventy five percent of the market value of the global 0:05:13.400 --> 0:05:16.160 capital market was here in the United States. Can there 0:05:16.200 --> 0:05:18.800 be a re ordering of that in the short run, 0:05:19.360 --> 0:05:23.200 maybe in the middle, medium term? Sure, And so all 0:05:23.240 --> 0:05:26.039 of this this is the type of questions. Clients have 0:05:26.320 --> 0:05:30.840 historically underweighted Europe. Okay, so far this year that's been 0:05:30.880 --> 0:05:35.039 a bad trade. Should clients be reorienting themselves back into Europe? 0:05:35.080 --> 0:05:39.400 Should to be reoriented into more of a a more 0:05:39.480 --> 0:05:44.440 broadening of a portfolio. So all these questions are being asked, 0:05:44.440 --> 0:05:46.240 and I don't have a good answer yet. But I 0:05:47.120 --> 0:05:52.520 am troubled by that we are not the stabilizer as 0:05:52.520 --> 0:05:55.919 a country. We are destabilizing. And I think this is 0:05:55.920 --> 0:05:57.839 what the financial markets are trying to grapple with. 0:05:58.040 --> 0:06:03.760 There are, let's say, at least a couple of competing narratives. 0:06:04.200 --> 0:06:07.080 One of those narratives is from President Trump himself. He 0:06:07.120 --> 0:06:10.080 says that the tariffs he rolled at last Wednesday in 0:06:10.120 --> 0:06:13.960 the Rose Garden will create an economic renaissance and make 0:06:14.120 --> 0:06:17.760 America wealthy like never before. And then the other narrative 0:06:17.800 --> 0:06:20.320 is the public market narrative. That's the one that's telling 0:06:20.360 --> 0:06:23.240 us something altogether different, that the tariffs are an economic 0:06:23.360 --> 0:06:26.960 train wreck in the making, and if anything, they'll make 0:06:27.040 --> 0:06:30.919 not only the US but perhaps other countries a lot poorer. 0:06:31.240 --> 0:06:32.520 Which of those narratives is right? 0:06:33.120 --> 0:06:35.440 There's probably something in between. But you know, as a 0:06:35.440 --> 0:06:39.240 market partsis what I'm more in the market narrative. So 0:06:39.320 --> 0:06:43.120 let's be clear. In the United States right now, eight 0:06:43.160 --> 0:06:48.560 percent of workers who are in manufacturing eight percent, eight 0:06:49.000 --> 0:06:54.039 eight So how much more should it be sixteen percent? 0:06:54.200 --> 0:06:56.240 I don't know. But it's not I don't think you know. 0:06:59.240 --> 0:07:02.640 I looked up what they are. The new entry level 0:07:03.279 --> 0:07:05.880 of an automotive worker is today. It's about twenty five 0:07:05.920 --> 0:07:08.120 dollars an hour. Twenty five to twenty eight dollars an hour. 0:07:08.800 --> 0:07:14.520 That's not that's not a great job versus today. And 0:07:14.720 --> 0:07:19.080 and Brad Smith, the president of Microsoft, talked about this 0:07:19.160 --> 0:07:22.880 last Monday, stating that we have we're going to have 0:07:22.920 --> 0:07:27.200 a shortage as large as five hundred thousand electricians in 0:07:27.240 --> 0:07:30.680 this country. Electricians today are paid over one hundred and 0:07:30.680 --> 0:07:33.360 fifty thousand dollars a year, especially to the advanced electricians 0:07:33.400 --> 0:07:37.440 are doing AI and all that. So there are you know, 0:07:37.520 --> 0:07:40.440 there are many ways where we could create great jobs 0:07:41.120 --> 0:07:48.320 instead of this whole reordering. And so I'm I'm I 0:07:48.360 --> 0:07:52.200 believe the markets. I've always believed in the markets, and 0:07:52.240 --> 0:07:54.440 I believe the markets are telling you the real story. 0:07:54.920 --> 0:07:57.280 And the markets are telling it that story right now. 0:07:57.520 --> 0:08:00.120 Could the story be a little too negative? Now? Maybe? 0:08:00.160 --> 0:08:02.320 Could it be not negative? Not? Maybe too I'm not 0:08:02.360 --> 0:08:05.280 here to suggest we're over this pathway. We'll have to 0:08:05.280 --> 0:08:10.040 see how this plays out, you know. And so we're 0:08:10.040 --> 0:08:12.000 going to have to see how this plays out. But 0:08:14.560 --> 0:08:17.600 let me step back and respond to another statement you said. 0:08:19.200 --> 0:08:21.600 Let me just reiterate, seventy five percent of the global 0:08:21.640 --> 0:08:24.400 capital markets rested here in the United States. I would 0:08:24.480 --> 0:08:30.040 say that means the United States is fabulously successful when 0:08:30.080 --> 0:08:32.440 you have that. That being said, and I wrote this 0:08:32.480 --> 0:08:34.760 with my CEO letter that came out a week ago today, 0:08:35.720 --> 0:08:39.000 the biggest issue we have in capitalism, the biggest difference 0:08:39.000 --> 0:08:42.160 that we have today is we have not seen a 0:08:42.240 --> 0:08:45.439 broadening of the economy as much as we need to. 0:08:45.480 --> 0:08:47.120 And I think this is what President Trump is trying 0:08:47.160 --> 0:08:49.160 to do. How can we brought in the economy that 0:08:49.200 --> 0:08:52.040 we can have more opportunity for more I mean, like 0:08:52.080 --> 0:08:54.520 I said, I think we need more more you know, 0:08:54.720 --> 0:08:58.760 more schools that helped men and women in the trades 0:08:58.800 --> 0:09:01.560 like electricians and other where we know we have a 0:09:01.600 --> 0:09:04.480 severe shortage right now. And the other thing I would say, 0:09:04.480 --> 0:09:08.240 if you look across the different manufacturer expectum, there's a 0:09:08.240 --> 0:09:11.520 lot of job openings. My biggest issue is all of this, 0:09:11.920 --> 0:09:15.360 and this is where the market is not focusing on enough. 0:09:15.880 --> 0:09:18.439 All of this, in my mind, is much more inflationary 0:09:18.559 --> 0:09:21.800 than the market is expecting right now. How much more 0:09:21.840 --> 0:09:25.240 inflationty Well, the market is talking about all the recessionary pressures, 0:09:25.320 --> 0:09:34.559 which obviously will mute down prices. But if all the terrats, 0:09:34.559 --> 0:09:36.240 and I'm not saying they're going to be put into place, 0:09:36.559 --> 0:09:38.199 if all the terrafts would be it would be put 0:09:38.240 --> 0:09:40.760 in place. Almost so many items are going to be 0:09:40.880 --> 0:09:45.880 much more elevated, two more expensive, much, yes, more expensive. 0:09:45.880 --> 0:09:50.800 We have we have so many needs for jobs already 0:09:51.480 --> 0:09:53.280 and we only have we're you know, we're at four 0:09:53.320 --> 0:09:56.480 percent of employment. When I started in walterd in nineteen 0:09:56.559 --> 0:10:05.640 seventy six, full employment was considered six percent, and you know, 0:10:05.679 --> 0:10:09.200 we evaluate it and now we say, maybe what is 0:10:09.240 --> 0:10:12.120 full employment three or four? I don't know if they 0:10:12.160 --> 0:10:16.120 even to use that term anymore. But you know, you know, 0:10:17.080 --> 0:10:19.520 we have shortages of workers, and we're going to have 0:10:19.559 --> 0:10:22.080 even more shortage of workers. And if you overlay a 0:10:22.120 --> 0:10:24.760 part of the reason why we had American exceptionalism eighty 0:10:24.840 --> 0:10:29.839 days ago and AI, the need to build out infrastructures 0:10:29.920 --> 0:10:32.640 just as great today. And my biggest fear as we 0:10:32.720 --> 0:10:35.600 roll out AI in the United States, building these data centers, 0:10:36.000 --> 0:10:40.840 building our electricity grids, building out America, building out our infrastructure, 0:10:40.840 --> 0:10:42.920 we don't have enough workers already. All of this is 0:10:42.960 --> 0:10:46.600 going to lead to higher elevated wages, which is in 0:10:46.600 --> 0:10:48.600 some respect a good thing, but a lot of it 0:10:48.640 --> 0:10:52.040 is going to be elevated inflation. So this notion that 0:10:52.040 --> 0:10:54.400 the federal Reserve is going to tighten, I mean, see 0:10:54.400 --> 0:10:57.760 the ease four times this year. I see zero chance 0:10:57.800 --> 0:11:00.840 of that. I mean, I'm much more worried that, you know, 0:11:00.880 --> 0:11:03.280 we could have a we could have an you know, 0:11:03.559 --> 0:11:06.120 elevated inflation that's going to bring rates up much higher 0:11:06.160 --> 0:11:06.880 than they are today. 0:11:07.240 --> 0:11:11.520 Zero chance of four or five FED cuts, depending on 0:11:12.280 --> 0:11:15.400 what what what moment we're looking at futures prices, or 0:11:16.400 --> 0:11:17.920 zero chance of any cuts whatsoever. 0:11:20.120 --> 0:11:24.120 That's not an unrealistic idea because and I think the 0:11:24.200 --> 0:11:27.600 Chairman Paul said that last week, but he said we 0:11:27.640 --> 0:11:29.360 need to have more information, right you know, I don't 0:11:29.360 --> 0:11:32.480 see any reason to cut right now. And that's how 0:11:32.520 --> 0:11:34.199 I interpret his comments last week. 0:11:34.400 --> 0:11:39.280 So you're concerned about inflation, you briefly, but. 0:11:39.080 --> 0:11:42.880 Can I interruptxcuse me? Sure, I'm concerned about inflation if 0:11:43.760 --> 0:11:47.400 all the proposed terrorists truly go into place at the 0:11:47.480 --> 0:11:53.920 same time, at the same time, you have you know, 0:11:53.960 --> 0:11:57.920 the you know, as if the president is successful and 0:12:00.440 --> 0:12:03.640 changing the behaviors of other countries by bringing down the terrafs, 0:12:04.760 --> 0:12:07.440 you know, we could actually the end result could be 0:12:07.480 --> 0:12:11.320 lower terraffs across the board. And I think that's what 0:12:11.360 --> 0:12:14.680 they're when he talks about reciprocal terrafts. He's talking about 0:12:14.880 --> 0:12:17.200 I'm going to match your terraces and if we both 0:12:17.240 --> 0:12:18.800 you bring him down, I'm going to bring him back down. 0:12:18.840 --> 0:12:21.920 And so there is some value to that to read. 0:12:23.240 --> 0:12:27.280 Our terrace system was founded post World War two, post 0:12:27.320 --> 0:12:32.120 Korean War, where we believe that if we could lift 0:12:32.520 --> 0:12:37.440 these other countries posts, these crisises American business, that would 0:12:37.480 --> 0:12:42.880 be the biggest beneficiary. And we have not changed how 0:12:42.960 --> 0:12:47.120 these asymmetric tariffs that we've created over the last eighty years. 0:12:47.720 --> 0:12:51.439 And you know, is it is it is there a 0:12:51.520 --> 0:12:54.720 value today to relook at how we have terrafts today 0:12:54.720 --> 0:12:57.760 and how to try to make it more symmetrical. Sure, 0:12:59.640 --> 0:13:05.760 and so see how this all plays out the But 0:13:05.880 --> 0:13:12.280 the uh, my former partner rough lost time. 0:13:16.800 --> 0:13:20.320 So you've touched on this idea, Larry, that perhaps there's 0:13:20.320 --> 0:13:23.600 some justification for a change in. 0:13:24.400 --> 0:13:27.680 Yeah, I mean, look at I was with a senator 0:13:27.720 --> 0:13:33.439 today and he talked about we import twenty nine million tons, 0:13:33.600 --> 0:13:37.000 which seems like a lot of beef from Australia. Yeah, 0:13:37.000 --> 0:13:40.520 and yet our beef cannot go to Australia. Okay, there's 0:13:40.559 --> 0:13:42.640 something that sounds like a legitimacy. 0:13:42.720 --> 0:13:46.000 So that's that's one of the justifications that President's sites, 0:13:46.040 --> 0:13:49.280 right fairness, yeah, right, other countries are, in his words, 0:13:49.559 --> 0:13:50.320 ripping us off. 0:13:51.000 --> 0:13:53.160 The second, I'm not going to go talk about that, Okay. 0:13:53.200 --> 0:13:57.880 The second is revenue taxing imports will raise trillions of 0:13:57.920 --> 0:13:59.680 dollars to pay down the federal debt. 0:13:59.559 --> 0:14:01.880 At who's costs, So no, that's never the same. 0:14:01.960 --> 0:14:04.880 Then there's a third, right, rein industrialization that companies will 0:14:04.880 --> 0:14:07.360 bring jobs and factories back to America. Which of those 0:14:08.600 --> 0:14:10.720 is that a package of arguments that makes sense? 0:14:12.040 --> 0:14:15.000 I believe there are in some areas where we need 0:14:15.000 --> 0:14:18.600 to bring back manufacturing for national security areas. I don't 0:14:18.600 --> 0:14:22.000 think Barbie dolls is something that we're gonna or Swiss 0:14:22.000 --> 0:14:24.080 watches or anything like that that we have to have 0:14:24.240 --> 0:14:28.520 or or or shrimp from this from Vietnam. I mean 0:14:28.600 --> 0:14:31.440 all these different things there are. I'm you know, there 0:14:31.480 --> 0:14:35.040 are some industries where having a more control of your 0:14:35.040 --> 0:14:37.280 supply chains is probably very. 0:14:37.240 --> 0:14:41.200 You're making the case from much more calibrated, But that's 0:14:41.200 --> 0:14:41.680 why I am. 0:14:41.800 --> 0:14:44.520 I'm always a little more balanced in the center. 0:14:44.640 --> 0:14:52.000 Yes, what about the the theory that these retaliatory tariffs 0:14:52.040 --> 0:14:57.200 are part of a Nixonian grand strategy like dropping the 0:14:57.240 --> 0:14:59.960 gold standard was to solve America's debt problem by four 0:15:00.000 --> 0:15:02.680 seeing down treasury yields and weakening the dollar. 0:15:03.800 --> 0:15:05.560 That's a theory that has some purchase right now. 0:15:05.600 --> 0:15:07.640 Well, I do believe the dollar will be weakened. I mean, 0:15:07.760 --> 0:15:10.920 most political theory is, or economic theory is tear us 0:15:11.120 --> 0:15:13.000 raise the value of the currency. I think it's going 0:15:13.040 --> 0:15:19.800 to weaken the dollar. And look, one thing I would 0:15:19.840 --> 0:15:22.920 say with certain you know, the economy is weakening as 0:15:22.920 --> 0:15:28.440 we speak, and so the need for the administration to 0:15:28.480 --> 0:15:31.560 focus on these pro growth agendas, which was much of 0:15:31.640 --> 0:15:35.320 what the President campaigned on. We have to get that going, 0:15:35.480 --> 0:15:39.840 whatever it's the tax cut. We need to be deregulating, 0:15:40.080 --> 0:15:43.560 we need to be streamlining, permitting exactly all the things 0:15:43.600 --> 0:15:45.920 I've been writing about where we need to get the 0:15:46.000 --> 0:15:50.240 private capital, private markets to start investing in the United States. 0:15:50.880 --> 0:15:52.520 We need to you know, and I think right now 0:15:52.520 --> 0:15:54.800 the market is not focusing on all these We forgot 0:15:54.840 --> 0:15:57.280 about the power of AI, the power of all these 0:15:57.320 --> 0:16:00.360 different changes. We're focusing on the market, But the macro 0:16:00.480 --> 0:16:03.960 trends of AI, the macro trends of rebuilding our infrastructure, 0:16:04.320 --> 0:16:08.920 these macro and if the President is successful in deregulating, 0:16:09.040 --> 0:16:15.120 if he's successful in streamlining permitting, then you know, we 0:16:15.160 --> 0:16:17.080 could go back to this view that we have a 0:16:17.120 --> 0:16:20.680 major growth agenda in front of us. The President has 0:16:20.720 --> 0:16:23.640 been focusing on right now areas that in my mind, 0:16:23.640 --> 0:16:27.240 in the short run, are very inflationary and destabilizing the economy. 0:16:27.280 --> 0:16:29.520 And that's what we've been talking about. But if we 0:16:29.560 --> 0:16:35.080 can find ways of rebuilding, rebuilding growth through these agendas, 0:16:35.120 --> 0:16:37.960 and then you know, as I said at the beginning, 0:16:38.360 --> 0:16:42.040 these the market declines, we're going to look back and say, 0:16:42.440 --> 0:16:44.160 this might be a good entry level. Did we get 0:16:44.160 --> 0:16:46.160 back into the market. Are we. 0:16:48.000 --> 0:16:49.920 Headed for recession? Are we inter recession? 0:16:50.560 --> 0:16:54.400 You know, most CEOs I talked to I would say 0:16:54.400 --> 0:16:57.080 we are probably in a recession right now, right now, 0:16:57.240 --> 0:17:00.600 right now. A couple of airline CEOs told me. One 0:17:00.640 --> 0:17:04.560 COO specifically said, you know, the airline industry is like 0:17:06.640 --> 0:17:11.080 a proverbial bird in a coal mine, canary in the 0:17:11.080 --> 0:17:14.280 coal mine, and I was told that the canary is 0:17:14.320 --> 0:17:18.080 sick already. If you look at what's going on in 0:17:18.119 --> 0:17:21.159 air traffic, and how people are changing, and how so 0:17:21.240 --> 0:17:23.800 many people who like Canadians, who are not coming to 0:17:23.800 --> 0:17:26.960 the United States, we're seeing in very different sectors are 0:17:26.960 --> 0:17:28.400 real downturn. 0:17:29.800 --> 0:17:32.439 I have no doubt that people in this room and 0:17:32.480 --> 0:17:35.520 elsewhere are encouraged by this idea of yours, that there 0:17:35.560 --> 0:17:39.000 are opportunities to seize. And it doesn't surprise me to 0:17:39.040 --> 0:17:41.760 hear you say that, because in the sixteen years that 0:17:41.800 --> 0:17:44.960 we've known one another, you've always found a way to 0:17:44.960 --> 0:17:48.439 think constructively about the future, to make a case for 0:17:48.520 --> 0:17:51.639 taking risk, to make a case for staying invested. 0:17:53.240 --> 0:17:55.520 So explain that case right now. 0:17:55.640 --> 0:17:59.639 If, as you say, there's the possibility that at the 0:17:59.720 --> 0:18:03.480 very least, equity prices continue to go down, what should 0:18:03.480 --> 0:18:03.919 people do? 0:18:04.000 --> 0:18:05.480 Where are these opportunities? 0:18:05.600 --> 0:18:07.600 I can see why there might be opportunities for a 0:18:07.640 --> 0:18:10.040 firm like black Rock, but what does everybody else do? 0:18:10.040 --> 0:18:12.280 Do you stay invested, do you take risk, do you 0:18:12.280 --> 0:18:13.280 take money off the table? 0:18:13.280 --> 0:18:16.480 What do you do well? I would not be taking 0:18:16.480 --> 0:18:18.360 money off the table right here. I think that we've 0:18:18.359 --> 0:18:21.720 had enough, you know, from the high water point of January, 0:18:21.800 --> 0:18:26.440 which may have been excessive. You know, I think rolling 0:18:26.480 --> 0:18:31.080 one year average S and P is down about seven percent. Now, yeah, 0:18:31.240 --> 0:18:32.639 could it be down, as I said, could it be 0:18:32.680 --> 0:18:36.320 down seventeen percent from rolling one year average? Sure, that's 0:18:36.440 --> 0:18:39.000 that would be. That would be about forty percent from 0:18:39.000 --> 0:18:39.880 the high water mark. 0:18:40.600 --> 0:18:41.120 That's a lot. 0:18:41.280 --> 0:18:43.280 That's a lot, and it's a great entry level of 0:18:43.280 --> 0:18:45.760 getting because I think the macro trends are not are 0:18:45.760 --> 0:18:48.640 not going to change the need for the United States 0:18:48.680 --> 0:18:53.359 to rapidly build out AI as imperative today as it 0:18:53.560 --> 0:18:58.439 was three months ago. Our need to invest in our 0:18:58.480 --> 0:19:04.000 infrastructures as great as today as ever before. And so 0:19:04.680 --> 0:19:07.720 some of the big macro trendsors have not changed. The 0:19:09.040 --> 0:19:11.720 narrative that has changed. We're not talking about it. But 0:19:11.760 --> 0:19:15.159 I think if you spent time right now with the 0:19:15.200 --> 0:19:19.600 CEOs of the Hyperscalers and this, the Navidia and other players, 0:19:19.640 --> 0:19:21.560 they would say the need is just as great today 0:19:21.560 --> 0:19:23.840 as there was three months ago. And I think some 0:19:23.880 --> 0:19:26.760 of the big macword trends are just are still in place. 0:19:28.119 --> 0:19:31.800 Do you believe in in a Trump put who Trump put? 0:19:31.960 --> 0:19:35.600 What is that if the market's weakened too much that 0:19:36.440 --> 0:19:40.639 he'll reverse course, oh on policy tariffs for example, or 0:19:41.400 --> 0:19:45.640 somehow engineer a combination of stimulative measures to bail them out. 0:19:46.320 --> 0:19:48.160 That's what I said, if you know, I do believe 0:19:48.200 --> 0:19:50.160 the president is going to be focusing on these pro 0:19:50.160 --> 0:19:53.879 growth agendas, and so we'll see how that offsets on. 0:19:54.040 --> 0:19:57.080 Front though, that's something that he's been promising the whole 0:19:57.080 --> 0:20:00.960 way along, correct, and so Trump put would be effectively 0:20:01.000 --> 0:20:02.399 about the president getting scared. 0:20:04.119 --> 0:20:05.880 I don't know how to value that. 0:20:09.440 --> 0:20:13.880 Tariffs, Larry, are just one piece of a much more 0:20:13.920 --> 0:20:19.679 comprehensive policy agenda. Since the inauguration, we've seen major initiatives 0:20:19.720 --> 0:20:24.760 on everything from immigration and the border to rolling back DEI. 0:20:26.440 --> 0:20:27.000 I could go on. 0:20:27.040 --> 0:20:33.160 There's a lot, most of it by executive order. Again, 0:20:33.200 --> 0:20:37.960 trying to take a step back from the burning question 0:20:38.040 --> 0:20:40.919 of tariffs, which are occupying the markets of the moment. 0:20:41.520 --> 0:20:43.720 How would you evaluate these first eleven weeks of Trump 0:20:43.760 --> 0:20:44.400 two point zero. 0:20:49.840 --> 0:20:53.159 A lot of volatility, a lot of change, and I 0:20:53.200 --> 0:20:55.560 think even before the tariffs there is so much change, 0:20:55.560 --> 0:20:57.399 so much volatility. I think this is one of the 0:20:57.400 --> 0:21:00.840 reasons why even four or five weeks ago, most CEOs 0:21:00.840 --> 0:21:04.639 were telling me businesses incrementally getting worse. I think, whether 0:21:05.160 --> 0:21:07.680 it was a threat of terrorists, whether it's just all 0:21:07.680 --> 0:21:11.080 these changes. I think more and more people were pausing 0:21:11.080 --> 0:21:14.440 and slowing down consumption as we speak, and I think 0:21:14.480 --> 0:21:16.240 all of this is just going to slow down consumption. 0:21:16.560 --> 0:21:18.960 One interesting fact that I wrote about this in my 0:21:19.600 --> 0:21:22.320 CEO letter this here. You know, there was always this 0:21:22.440 --> 0:21:26.159 notion that Main Street was different than Wall Street, and 0:21:26.200 --> 0:21:29.280 we always, you know that you had it was it 0:21:29.320 --> 0:21:34.159 was good political statements about you know, Wall Street is 0:21:34.200 --> 0:21:37.679 here and Main streets here. Well, the reality is sixty 0:21:37.680 --> 0:21:42.200 two percent of Americans now invest in equities. So the 0:21:42.880 --> 0:21:50.320 market impact is impacting Main Street. And so even before 0:21:50.440 --> 0:21:54.119 this market setback you had, you were starting to see 0:21:54.160 --> 0:21:58.360 more and more I would say trepidation by consumers more 0:21:58.359 --> 0:22:03.600 and more slowing down on their purchases, slowing down theirifacation plans, 0:22:05.160 --> 0:22:07.159 and all of this. I would imagine now where the 0:22:07.160 --> 0:22:10.960 market setback is going to freeze more and more consumption, 0:22:11.560 --> 0:22:13.679 and I think we're going to start seeing that really quickly. 0:22:14.000 --> 0:22:16.600 So there's you know, and so I do believe that 0:22:16.760 --> 0:22:19.240 in the coming months, we're going to we're going to 0:22:19.240 --> 0:22:23.080 see more evidence of a slowdown in this economy, and. 0:22:22.920 --> 0:22:24.879 Investors are going to have to continue pricing that in, 0:22:24.960 --> 0:22:29.480 whether that's question on economic growth, whether it's whether less 0:22:29.480 --> 0:22:30.640 consumption leads to. 0:22:30.880 --> 0:22:34.520 But we're going to also see how companies navigate these 0:22:35.320 --> 0:22:38.200 these tariffs. Are they going to navigate the terrafs by 0:22:38.200 --> 0:22:42.760 trying to jam it down the manufacturers and lowering prices. 0:22:42.840 --> 0:22:46.280 We've already heard a couple of US retailers going back 0:22:46.320 --> 0:22:48.720 to their place and manufacturing and telling you got to 0:22:48.720 --> 0:22:52.720 lower your prices. So that's one point. One point is 0:22:52.760 --> 0:22:57.199 are they going to absorb the terraffs in their in 0:22:57.280 --> 0:23:00.119 their margins that's not good for the equity mark mar 0:23:00.680 --> 0:23:02.280 or are they going to just pass it all the 0:23:02.280 --> 0:23:05.960 way on to the consumer and elevate prices. It's probably 0:23:06.000 --> 0:23:09.959 going to be a combination of all three. But so 0:23:11.000 --> 0:23:14.000 until we see how this all plays out, and then 0:23:14.040 --> 0:23:16.320 two how much of these tariffs are going to be 0:23:16.440 --> 0:23:24.080 actually implemented, we'll see. But I think most of America 0:23:24.119 --> 0:23:27.320 does not understand the extent of these TIFFs. What is 0:23:27.359 --> 0:23:31.159 it eighty six percent of toys are manufactured in China. 0:23:31.240 --> 0:23:34.480 So there's what a sixty seven percent cumulative tariffs Now 0:23:34.840 --> 0:23:38.800 in China, those are going to be expensive barbie dolls, 0:23:39.960 --> 0:23:43.199 they are and mean, But across the board, you know, 0:23:43.280 --> 0:23:46.960 the terraffs across the board, everything we're talking about is 0:23:47.000 --> 0:23:49.879 just going to be you know, I'm not saying one 0:23:49.920 --> 0:23:52.000 hundred percent is going to be passed on in terms 0:23:52.040 --> 0:23:54.639 of the final purchase price, but a lot of it 0:23:54.680 --> 0:23:58.199 can be passed in and then the cumulative effect of that. 0:23:58.280 --> 0:24:02.399 So just think about there are more American jobs in 0:24:02.520 --> 0:24:06.359 the fabrication of steel and aluminum there than there is 0:24:06.400 --> 0:24:09.600 an in making steel in aluminum. So we now have 0:24:09.680 --> 0:24:14.480 these aluminum and steal terrorists in place. What does that 0:24:14.600 --> 0:24:18.680 impact in the demand of the fabricated products? So all 0:24:18.720 --> 0:24:21.240 these things have major ripple effects that we have. Nope, 0:24:21.320 --> 0:24:24.080 and this is why the market's down because it just 0:24:24.160 --> 0:24:27.240