WEBVTT - Bloomberg Surveillance TV: December 5, 2024 0:00:00.120 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bramwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.920 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 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.880 Terminal and the Bloomberg Business app. 0:00:36.280 --> 0:00:36.320 No. 0:00:36.440 --> 0:00:39.280 We are Rabinie of Rabeni Macro Associates, looking ahead to 0:00:39.320 --> 0:00:42.040 the new year and writing this. Some of Trump's policies 0:00:42.200 --> 0:00:46.560 will increase growth and reduce inflation, while others could be stagflationary. 0:00:46.760 --> 0:00:50.120 So the impact on growth, inflation and on markets depends 0:00:50.120 --> 0:00:53.479 on how much of the former versus the latter. Noriel 0:00:53.560 --> 0:00:55.720 joins us now for more. No want for to see us, sir. 0:00:55.840 --> 0:00:58.600 You're in seeing How difficult does it make it to 0:00:58.640 --> 0:01:00.760 look ahead to next year with any real clarity, to 0:01:00.760 --> 0:01:02.840 come up with some kind of outlook when things are 0:01:02.840 --> 0:01:03.440 so difficult. 0:01:04.880 --> 0:01:08.119 There's a lot of policy uncertainty, as I pointed out 0:01:08.600 --> 0:01:10.920 some of the economic policies of TRAUM may increase over 0:01:10.959 --> 0:01:15.880 time growth, reduce inflation, being overall pro business keeping tax 0:01:15.920 --> 0:01:20.600 rates on capital and labor law, deregulating the economy, and 0:01:20.840 --> 0:01:23.679 things like increasing the production of fossil fuels and pushing 0:01:23.680 --> 0:01:27.440 down the prices of energy. Probably also this Dodge initiative 0:01:27.520 --> 0:01:31.120 over timing is economic efficiency and so on. So those 0:01:31.120 --> 0:01:33.920 are the positives, and over time they could increase growth, 0:01:33.959 --> 0:01:35.760 they could reduce inflation. But we know there are some 0:01:36.040 --> 0:01:38.160 sets of other policy we don't know how much they're 0:01:38.160 --> 0:01:41.600 are to be implemented. They will increase inflation and potentially 0:01:41.600 --> 0:01:45.880 be staflationary. In my view, tariffs are inflationary. Protection is 0:01:45.920 --> 0:01:49.920 the risk of the economic world with China first draconia, 0:01:49.960 --> 0:01:53.280 restriction to migration, if not the mass deportation. If we 0:01:53.320 --> 0:01:57.120 have unfunded physical deficits and the promises imply eight trillion 0:01:57.200 --> 0:02:01.080 dollars of deficits over additional over the next years, that's 0:02:01.120 --> 0:02:03.960 going to craft out growth by increasing interest rates normally 0:02:04.000 --> 0:02:06.720 and real and the bond marketgilands are going to wake up. 0:02:07.160 --> 0:02:09.600 If you try to disorderly weaken the dollar, that could 0:02:09.600 --> 0:02:12.840 be inflationary and if you interfere with independence of the FAT. Now, 0:02:12.880 --> 0:02:14.920 I think on the positive side, I think there are 0:02:14.919 --> 0:02:17.040 a number of factors that are going to constrain the 0:02:17.080 --> 0:02:20.480 bad policies. One is market discipline. If you follow pols 0:02:20.520 --> 0:02:23.360 are inflationary, then bond market vigilands are going to wake up. 0:02:23.400 --> 0:02:25.440 Bond is going to go higher, the stock market is 0:02:25.480 --> 0:02:27.800 going to correct, and it cares about the bond market. 0:02:27.919 --> 0:02:31.959 He cares about the stock market. Secondly, Fed independence. If 0:02:31.960 --> 0:02:34.760 he follows policies the lead to inflation, the Fed may 0:02:35.040 --> 0:02:37.440 not continue to cut traits next year, may even raise 0:02:37.520 --> 0:02:40.440 rates if inflation were to be going higher. And also 0:02:40.600 --> 0:02:43.359 policy choices, as you pointed out, on one side of 0:02:43.440 --> 0:02:46.960 people like Scott Besson want to escalate the escalate on 0:02:47.040 --> 0:02:50.359 tariffs and others were total trade hawks on trade and 0:02:50.480 --> 0:02:52.760 on China, like Peter Navarro. So it depends on the 0:02:52.800 --> 0:02:54.280 balance between who's going to be in power. 0:02:54.520 --> 0:02:56.679 Let's unpack some of that, and Pe can't tariffs to 0:02:56.760 --> 0:02:58.960 pay already so far this morning, you've heard some of it. 0:02:59.040 --> 0:03:01.760 Clase weigh in, if it's targeted, could be a good 0:03:01.800 --> 0:03:03.440 thing for the American economy. 0:03:04.360 --> 0:03:08.040 Well, if it's targeted, I would say that the impacts 0:03:08.040 --> 0:03:10.919 on inflation are going to be modest, and maybe some 0:03:11.000 --> 0:03:13.919 of the reassuring that a radio is occurring is going 0:03:13.919 --> 0:03:17.080 to continue, and there be actually pressure on our trade 0:03:17.120 --> 0:03:19.440 partners to say, if you don't want tariffs, you have 0:03:19.480 --> 0:03:23.359 to bring more investment semiconductors. Authors it beasy you name 0:03:23.440 --> 0:03:26.680 it to the United States. So that's the escalate in 0:03:26.760 --> 0:03:29.160 order to de escalate. But I would say the higher 0:03:29.160 --> 0:03:32.560 the startuff become, the more there's an impact on improprises, 0:03:32.760 --> 0:03:35.000 the more there's an impact on inflation, and the more 0:03:35.040 --> 0:03:37.640 there is global fragmentation. There's also the risk, of course 0:03:38.160 --> 0:03:41.520 of trade wars of our trade partner retaliating against the 0:03:41.600 --> 0:03:44.080 United States. If that occurs, the impact on growth is 0:03:44.120 --> 0:03:45.960 going to be more negative. The impact on inflation is 0:03:46.000 --> 0:03:48.760 going to be value depends on the size of the startifs. 0:03:48.880 --> 0:03:53.120 If it's Navaro types of policies on trade, is taflationary, 0:03:53.200 --> 0:03:56.080 if it's escalated, de escalate, Maybe the impact of inflation 0:03:56.160 --> 0:03:59.080 is modest and the negative impact on growth is also modest. 0:03:59.680 --> 0:04:01.880 Some peopeople are arguing that we're in this wave of 0:04:01.920 --> 0:04:07.360 deglobalization that basically reverses some of the disinflationary forces of 0:04:07.560 --> 0:04:12.040 the three decades following really the mid eighties. I'm wondering 0:04:12.040 --> 0:04:14.880 whether that's actually true, whether that's what we're seeing, because 0:04:15.360 --> 0:04:17.440 there still is quite a bit of trade, it's just 0:04:17.560 --> 0:04:21.240 going different routes, and frankly, you could see that overproduction 0:04:21.400 --> 0:04:24.120 from places like China are going to lower prices in 0:04:24.160 --> 0:04:26.360 certain places, even if they don't in the US if 0:04:26.360 --> 0:04:29.039 there walls up. In other words, are we overestimating the 0:04:29.040 --> 0:04:32.240 inflationary impact on a dramatic level of a lot of 0:04:32.240 --> 0:04:33.120 these tariffs. 0:04:33.440 --> 0:04:37.200 Well, the impact of high tariffs on the United States 0:04:37.279 --> 0:04:39.839 would be inflationary, But if you think about the impact 0:04:40.160 --> 0:04:42.719 on growth and inflation, rest of the world will be 0:04:42.800 --> 0:04:45.599 this inflationary because if there is a shock to the 0:04:45.640 --> 0:04:49.760 demand for the experts of Europe, Asia, China, then there'll 0:04:49.800 --> 0:04:52.800 be access supply growth is weakened in those parts of 0:04:52.880 --> 0:04:55.359 the world, and that leads to these inflation rest of 0:04:55.360 --> 0:04:57.800 the world. So the impact on the US of high 0:04:57.800 --> 0:05:00.400 tariff is inflationary. The impact on the rest of the 0:05:00.440 --> 0:05:03.080 world is this inflationary because the access is applied. 0:05:03.400 --> 0:05:06.120 You used to be called doctor doom. Are you retiring 0:05:06.160 --> 0:05:06.680 that mantle? 0:05:07.440 --> 0:05:09.839 I always said I'm not doctor Doom. No, doctor realist. 0:05:10.680 --> 0:05:12.960 There are plenty of upside in hallomic growth, and by 0:05:12.960 --> 0:05:14.880 the way, some of them are thinking that are more cycular. 0:05:14.880 --> 0:05:18.080 I think the impact of technological innovation implied that potential 0:05:18.080 --> 0:05:20.200 growth in the US by the end of the decade 0:05:20.360 --> 0:05:22.320 could be close to three percent. And the fact we 0:05:22.320 --> 0:05:24.360 already have seen for the last couple of years growth 0:05:24.440 --> 0:05:27.400 of two point five to twenty eight percent with inflation falling, 0:05:27.640 --> 0:05:30.800 is signed that maybe PRODUCTI growth is increasing and potential 0:05:30.880 --> 0:05:33.839 is increasing, and we can grow faster with having lower inflation. 0:05:34.240 --> 0:05:36.359 So I'm not doctor dum well. 0:05:36.240 --> 0:05:38.080 When it comes to terriffs. Just to go back to 0:05:38.080 --> 0:05:40.919 this idea of the personnel. We know what Jamison Greer 0:05:40.960 --> 0:05:45.640 as well thinks about China. In hearing to Congress, he 0:05:45.720 --> 0:05:48.840 had talked about strategically coupling. Do you expect that over 0:05:48.880 --> 0:05:51.320 the next four years between Beijing and Washington. 0:05:52.400 --> 0:05:54.400 Yes, I do. I think that one of the biggest 0:05:54.440 --> 0:05:56.960 risks is not just tariff in general, but a broader 0:05:57.480 --> 0:06:02.240 economic war against China. Fleet they listen to the long 0:06:02.240 --> 0:06:05.919 list of complaints of the drum administration. They say China 0:06:05.920 --> 0:06:09.520 has been thriding on free riding on international trading system, 0:06:09.680 --> 0:06:15.920 Tariff non tariferiy barriers, government procurement policies, FTI policies, intellectual 0:06:15.960 --> 0:06:19.200 property rights, and of course fend and lots of other things. 0:06:19.480 --> 0:06:22.080 And also geopolitically, there may be an attempt to try 0:06:22.120 --> 0:06:24.479 to contain the rise of China. So the biggest risk 0:06:24.560 --> 0:06:26.720 is not just tarif on China, but how much the 0:06:27.000 --> 0:06:30.200 overall policies for China is going to be confrontational. And 0:06:30.200 --> 0:06:32.520 if they feel that we're trying to contain their rise, 0:06:32.600 --> 0:06:34.799 they could become quite aggressive themselves. 0:06:34.880 --> 0:06:36.760 Well, from page of the ft today is talking about 0:06:36.760 --> 0:06:39.680 these four government back authorities that are telling local chip 0:06:39.720 --> 0:06:42.800 companies that you can no longer buy silicon from the 0:06:42.880 --> 0:06:45.680 United States, they're no longer safe or reliable or we 0:06:45.760 --> 0:06:49.080 already in this moment you're describing, Well. 0:06:49.000 --> 0:06:51.520 Certainly in anything to do with the high tech, we've 0:06:51.560 --> 0:06:54.359 started already in the by the administration to be in 0:06:54.360 --> 0:06:57.359 a process of the coupling restriction to experts both of 0:06:57.400 --> 0:07:02.520 semiconductor and secconductor equipment, restriction to anyth investiated with AI 0:07:02.720 --> 0:07:06.080 and high technology. Under Biden was an narrow yard and 0:07:06.160 --> 0:07:09.000 high fences and stuff that was supposed to be critical. 0:07:09.120 --> 0:07:11.120 So the risking I think that in the case of 0:07:11.160 --> 0:07:14.440 Trump administration, we may move from the risking with China 0:07:14.720 --> 0:07:18.720 to decoupling with China did something much more how to say. 0:07:18.560 --> 0:07:20.680 Severe, does Europe need to pick a side? 0:07:22.200 --> 0:07:26.960 They'll be in a very very tough position because geopolitically 0:07:27.040 --> 0:07:30.320 Europeans are close to the United States, NATO and so on, 0:07:30.760 --> 0:07:33.160 but they do a lot of trade and investment with China. 0:07:34.400 --> 0:07:36.640 You know, under the Bider administration was easier because there 0:07:36.680 --> 0:07:40.520 was a compromise within the digit seven about the risking 0:07:40.560 --> 0:07:43.640 as opposed to decoupling. If his US goes towards the coupling, 0:07:43.680 --> 0:07:46.120 it says European I have to follow us. Otherwise the 0:07:46.280 --> 0:07:49.680 consequences not just on trade but also NATO security and 0:07:49.760 --> 0:07:51.960 you name it. Then I think Europe is already weak 0:07:52.120 --> 0:07:53.480 to being a tougher spot. 0:07:53.600 --> 0:07:55.800 How much worse could things get for the Europeans. We've 0:07:55.800 --> 0:07:58.640 been saying through this morning that France is ungovernable at 0:07:58.640 --> 0:08:01.200 the moment, which means it can't still of reforms. And 0:08:01.200 --> 0:08:03.120 you know in Europe things have to get worse before 0:08:03.200 --> 0:08:05.880 ultimately they find solutions. How much worse does it needs 0:08:05.880 --> 0:08:06.160 to get? 0:08:06.880 --> 0:08:09.200 Well, things are really pretty bad already in Europe. I 0:08:09.200 --> 0:08:12.400 think that potential growth is below one percent in Europe. 0:08:12.720 --> 0:08:15.160 Growth Europe is going to be in the Eurozone less 0:08:15.200 --> 0:08:18.760 than one percent next year, and structural reform I'm not 0:08:18.800 --> 0:08:22.520 going to occur anytime soon. There's a fragmentation between these 0:08:22.560 --> 0:08:25.800 twenty seven countries. Some of them want more integration, some 0:08:25.840 --> 0:08:28.160 of them one less. At the core of Europe, German 0:08:28.240 --> 0:08:32.000 and Germany and France are going to politically unstable. So 0:08:32.040 --> 0:08:34.760 I don't see either the Letter Report or the Drug 0:08:34.800 --> 0:08:38.280 Report for more integration, for a common market, for more 0:08:38.280 --> 0:08:42.240 productivity combatants being implemented. So it looks pretty dark for 0:08:42.280 --> 0:08:42.840 Europe right. 0:08:42.760 --> 0:08:44.960 Now, which is the reason why I'm surprised that so 0:08:45.000 --> 0:08:46.880 many people come in and they say it's priced in. 0:08:47.400 --> 0:08:49.280 We don't really see a path out of here. We 0:08:49.280 --> 0:08:52.079 don't necessarily see an economic engine or the political will 0:08:52.160 --> 0:08:55.160 or capability to really counter it. At what point are 0:08:55.160 --> 0:08:57.520 we facing off with a potential dollar shock? And I 0:08:57.600 --> 0:09:00.560 asked this because yes, the euro is likely to stay 0:09:00.600 --> 0:09:02.360 around here a week and further, but what if it 0:09:02.400 --> 0:09:05.600 actually weakens dramatically, is the ECB is forced to cut 0:09:05.679 --> 0:09:07.480 rates and that divergence widens. 0:09:08.120 --> 0:09:10.680 Well, there are many good reasons why the dollar may 0:09:10.800 --> 0:09:14.960 continue to strengthen. One is, of course tariff if they 0:09:15.040 --> 0:09:19.200 reduce the trade deficit, is going to strengthen. Two. Trumpet said, 0:09:19.280 --> 0:09:21.480 I want to have actually the dollar the center of 0:09:21.480 --> 0:09:24.960 the global reserve system. And therefore that implies you want 0:09:25.200 --> 0:09:28.800 strong dollar than a week dollar. Relative grow differential relative 0:09:28.840 --> 0:09:31.800 monetary policies, the fact that the US is innovating and 0:09:31.880 --> 0:09:34.800 capital is flowing into the US capital market and the 0:09:34.800 --> 0:09:38.120 stock market all implied that the dollar over time should 0:09:38.120 --> 0:09:41.640 become stronger, the euro and other currencies should become weaker. 0:09:41.800 --> 0:09:45.000 The problem, however, is that Trump says a strong dollar 0:09:45.000 --> 0:09:48.880 has led to the industrialization, to American carnage, people free 0:09:48.920 --> 0:09:52.000 writing on us, to having large trade deficits, and we 0:09:52.080 --> 0:09:55.680 want at some point a week dollar. The fundamentals imply 0:09:55.800 --> 0:09:59.360 a stronger dollar. But policy that may be an attempt eventually, 0:09:59.400 --> 0:10:01.720 maybe in a second enough of an administration to find 0:10:01.720 --> 0:10:04.679 an agreement on currency, maybe to say either you accept 0:10:04.720 --> 0:10:07.880 ten percent tariffs or you accept a ten percent depreciation 0:10:07.920 --> 0:10:09.920 of the dollar. I would not rule out there'll be 0:10:10.040 --> 0:10:13.480 some big Mara lago agreement. Is you know, the effects 0:10:13.480 --> 0:10:15.880 agreement are always in a resort, you know, Bretton Woods 0:10:15.920 --> 0:10:19.000 and Maria the coach Lasa, you know Louver and so on. 0:10:19.080 --> 0:10:21.760 So Mara lagoa cord is something that they're gotta think about, 0:10:21.800 --> 0:10:23.839 not in the first two years, but down the line 0:10:23.960 --> 0:10:26.760 they're gonna say to the trading partners, you don't want tariffs. 0:10:26.800 --> 0:10:29.480 You have to do other things for us as right 0:10:29.520 --> 0:10:30.439 the currency. 0:10:30.160 --> 0:10:33.200 Talk about bitcoin, Bitcoin pushing one hundred and three k 0:10:33.600 --> 0:10:36.720 upon the session by more than five percent. Norian Repining 0:10:36.880 --> 0:10:39.040 is back with us. Norio. You've had a big move 0:10:39.200 --> 0:10:41.200 in bitcoin over the last month or so. I had 0:10:41.240 --> 0:10:43.360 a big move over the last several years. Have you 0:10:43.440 --> 0:10:46.200 rethought the way you think about what's happening here? 0:10:48.080 --> 0:10:51.479 Not really. I mean people talk about bitcoin being a 0:10:51.520 --> 0:10:54.680 cryptocurrency like the other ones, but they're not really currencies. 0:10:55.320 --> 0:10:58.040 They're not a unit of account, they're not a scalable 0:10:58.080 --> 0:11:00.280 means of payment. They're not a stable store of value, 0:11:00.679 --> 0:11:03.920 not a single numeror Bitcoin in the past went to 0:11:04.000 --> 0:11:07.480 seventeen down, then to sixteen, has above one hundred. You 0:11:07.480 --> 0:11:11.520 could have another fifty percent correction. So it's a speculative 0:11:11.520 --> 0:11:16.520 act like mime stocks, sparks and others, highly volatile. Many 0:11:16.559 --> 0:11:18.920 people are going to eat but don't take El Salvador 0:11:19.280 --> 0:11:22.560 the force. Everyone's used bitcoin as legal tender, and less 0:11:22.760 --> 0:11:25.760 than one percent of all transaction occurring in bitcoin, so 0:11:26.120 --> 0:11:28.240 I don't think it's going to ever become a currency. 0:11:28.559 --> 0:11:30.160 There's going to be a speculative act. 0:11:30.440 --> 0:11:33.920 One thing the dollar is depreciated against is bitcoin, and 0:11:33.960 --> 0:11:35.960 I think this is where I would see some separation 0:11:36.040 --> 0:11:38.320 between what's happening with main coins and main stocks and 0:11:38.360 --> 0:11:40.920 what is happening with bitcoin. There seems to be a preference. 0:11:41.080 --> 0:11:43.680 There are market participants who believe that this is a 0:11:43.720 --> 0:11:46.160 place to be if you're worried about the depreciation of 0:11:46.200 --> 0:11:48.600 the US dollar and a fiscal trajectory of the United 0:11:48.640 --> 0:11:51.920 States of America, Do you see a case for it there? 0:11:52.679 --> 0:11:57.400 Not really, because actually when the FED was essentially arising 0:11:57.480 --> 0:12:00.680 rates and inflation was higher, Bitcoin was falling, like in 0:12:00.720 --> 0:12:03.560 twenty two as there was the stock market correction. And 0:12:03.640 --> 0:12:06.199 now the stocks are going higher and the fact is 0:12:06.240 --> 0:12:09.559 easy and inflation has fallen, Beacon is going higher again. 0:12:09.720 --> 0:12:13.520 So historically has not been a hedge against inflation. Actually 0:12:13.800 --> 0:12:16.920 looks like it's highly correlated. Positively, bit stocks a better 0:12:17.000 --> 0:12:20.160 relative to the equity market, so it's not a traditional 0:12:20.240 --> 0:12:23.600 like hedge like gold that is in periods of time 0:12:23.679 --> 0:12:27.360 or inflation rising, or the basement or worries about the dollarization. 0:12:27.559 --> 0:12:29.960 So it's something to me, it looks like expectedlyve A said, 0:12:29.960 --> 0:12:33.160 it is highly correlated with equity, so it's not a 0:12:33.160 --> 0:12:35.640 hedge against inflation, you say, sort. 0:12:35.480 --> 0:12:38.520 Of parallel tracks to meme stocks and some of the 0:12:38.559 --> 0:12:41.360 other euphoria that we've seen. At the same time, there 0:12:41.400 --> 0:12:44.400 seems to be something more concrete behind this. You mentioned gold, 0:12:44.480 --> 0:12:46.920 and we are seeing that rally in gold and tandem 0:12:46.920 --> 0:12:49.320 because of what John is talking about, that store of 0:12:49.400 --> 0:12:52.480 value outside of the US dollar to protect against some 0:12:52.520 --> 0:12:55.880 sort of laws of fiscal dominance. Do you see with 0:12:56.120 --> 0:13:02.040 a more institutionalized structure endorsed by a presidential administration there 0:13:02.080 --> 0:13:05.400 being a case for at least a crypto based store 0:13:05.440 --> 0:13:10.120 of value that could offset some of the risks of 0:13:10.240 --> 0:13:13.240 volatility in the dollar and the potential loss on the 0:13:13.240 --> 0:13:15.400 margins of fiscal dominance. 0:13:14.960 --> 0:13:15.520 Down the road. 0:13:16.960 --> 0:13:20.040 I'm not sure, because if you're worried about inflation, the 0:13:20.080 --> 0:13:22.840 basement of field currency, or even the dollarization, there are 0:13:22.840 --> 0:13:27.520 plenty of other assets that provide a good hedge. Shortened treasuries, tapes, 0:13:28.240 --> 0:13:31.959 oil out commod it is gold, precious metal, so it's 0:13:32.000 --> 0:13:34.920 not as if there is not other alternatives. And as 0:13:34.920 --> 0:13:37.880 I pointed out, in the last few years, when inflation 0:13:38.000 --> 0:13:41.880 was higher, actually bitcoin was falling. And when inflection has fallen, 0:13:42.080 --> 0:13:44.839 Bigcone is going higher, so it doesn't look like it's 0:13:44.880 --> 0:13:49.199 been actually negatively correlated with inflation. So it is a 0:13:49.280 --> 0:13:52.240 spectultive act for some people. E is a store of value. 0:13:52.520 --> 0:13:55.400 But if you want to hedge yourself against inflation, I 0:13:55.440 --> 0:13:57.920 think that a spectrum of variety about their assets that 0:13:57.960 --> 0:14:02.800 are backed actually by real income or something store of 0:14:02.920 --> 0:14:05.360 value that are a better hedge against some of the 0:14:05.440 --> 0:14:06.480 risks that people worry about. 0:14:06.600 --> 0:14:08.839 But given the change of tone in Washington, do you 0:14:08.920 --> 0:14:12.480 think there could be retail adoption at any point? 0:14:13.000 --> 0:14:16.719 Oh? Yeah, and there's already been retail adoption. But my 0:14:16.840 --> 0:14:19.360 word is actually that the regulation on crypto might become 0:14:19.440 --> 0:14:21.920 looser like they were before, and then you have another 0:14:21.960 --> 0:14:25.960 speculty run, you have another sets of scams like FTXSPF 0:14:26.040 --> 0:14:28.520 and so on, and then you get another bust. So 0:14:28.640 --> 0:14:30.160 there ri is kids who are going to go towards 0:14:30.240 --> 0:14:32.680 a very little regulation. You know, there are lots of 0:14:32.720 --> 0:14:35.920 players in this space. That are quite shady, and the 0:14:36.000 --> 0:14:39.200 lack of regulation actually leads to a bigger bubble and 0:14:39.280 --> 0:14:40.560 a bigger bust down the line. 0:14:40.960 --> 0:14:42.480 None you a long time. Just want to finish up 0:14:42.520 --> 0:14:45.160 with something positive looking out to twenty twenty five. Favorite 0:14:45.200 --> 0:14:48.320 region right now, Favorite economy, the place you're most optimistic 0:14:48.360 --> 0:14:49.880 about for next year? Which one? 0:14:50.640 --> 0:14:53.080 It's a bit consensus, but I think the United States 0:14:53.120 --> 0:14:55.840 still is going to outperform both in terms of economic 0:14:55.920 --> 0:14:57.120 growth and equity markets. 0:14:57.200 --> 0:14:59.000 Yes, seems to be the one place to big here. 0:14:59.040 --> 0:15:01.000 It repeated it. Don't we the United States. It keeps 0:15:01.040 --> 0:15:02.160 coming back to America. 0:15:02.400 --> 0:15:05.200 It feels like Tina. This is the Tina trade. There 0:15:05.320 --> 0:15:08.840 is no alternative at a time or essentially, growth is 0:15:08.920 --> 0:15:12.440 concentrated in the world's biggest economy, and maybe it's trickling out, 0:15:12.640 --> 0:15:15.600 maybe it's not. But nonetheless you also have yield. 0:15:15.440 --> 0:15:18.080 Here, Lariel, It's good to see us, sir, Thanks for 0:15:18.160 --> 0:15:20.280 catching up with us. Thank you. Noria Rabini there of 0:15:20.360 --> 0:15:33.680 Rabini Macro Associates. Let's keep it on the administration, Let's 0:15:33.720 --> 0:15:36.480 stick with politics. President lec. Donald Trump rounding out his 0:15:36.600 --> 0:15:40.400 economic team, naming former Congressman Billy Long to lead the IRS, 0:15:40.680 --> 0:15:44.240 former Georgia Senator Kelly Loffler for Small Business Administrator, and 0:15:44.400 --> 0:15:47.360 former SEC Commissioner Paul Atkins for the role of Chairman 0:15:47.640 --> 0:15:49.880 of the Commission. Joining us now is Tobin Marcus of 0:15:49.920 --> 0:15:52.400 Wolf Research. Tabin, Welcome to the program. A lot of 0:15:52.440 --> 0:15:54.800 focus on the Atkins appointment. A lot of focus because 0:15:54.840 --> 0:15:58.040 bitcoin is rallying so hard when we hear things like 0:15:58.160 --> 0:16:00.760 they are a crypto advocate, they are pro crypto tope 0:16:00.800 --> 0:16:03.160 and in practice, what does that actually mean for policy? 0:16:04.320 --> 0:16:07.040 Well, the big complaint about the SEC from a digital 0:16:07.080 --> 0:16:09.200 asset perspective over the course the past few years was 0:16:09.280 --> 0:16:12.040 the so called regulation by enforcement approach that Gensler took. 0:16:12.480 --> 0:16:14.160 I think that's frankly more of an issue for a 0:16:14.240 --> 0:16:16.880 lot of these sort of smaller and newer entrant digital 0:16:16.960 --> 0:16:19.480 assets in terms of like not being able to get 0:16:19.520 --> 0:16:21.880 the clarity from the SEC that they wanted, either by 0:16:21.960 --> 0:16:24.560 trying to go through formal channels or through sort of 0:16:24.600 --> 0:16:28.400 seeking forgiveness not permission. From a Bitcoin perspective, I mean, 0:16:28.440 --> 0:16:32.480 obviously it's been able to thrive despite Gensler's approach to 0:16:32.480 --> 0:16:34.920 the SEC and has continued to rip hire. So I 0:16:34.960 --> 0:16:37.400 think that's obviously a kind of an animal spirit story. 0:16:38.120 --> 0:16:39.960 What kind of U turns can we see at the 0:16:40.200 --> 0:16:44.800 SEC under akins that were put in place by Gensler. 0:16:46.240 --> 0:16:48.640 I think Acinus is going to be broadly dirego story 0:16:48.680 --> 0:16:51.160 across pretty much every access. I mean, he's talked about 0:16:51.240 --> 0:16:55.120 rolling back formal roles. He's also been critical of penalty 0:16:55.120 --> 0:16:56.800 as imposed by the SEC in the past, So I 0:16:56.880 --> 0:16:59.760 think even where there are enforcement actions, he's going to 0:16:59.800 --> 0:17:03.400 be tending to take a more lenient approach with an 0:17:03.440 --> 0:17:06.200 eye towards not kind of reducing competition, not imposing costs, 0:17:06.200 --> 0:17:09.120 and ultimately flow through to shareholders. You know, a lot 0:17:09.160 --> 0:17:12.119 of the formal rules that Gensler put put forward that 0:17:12.240 --> 0:17:15.680 have faced the most criticism are already in litigation in 0:17:15.760 --> 0:17:18.560 terms of climate disclosures, for example. You know there's already 0:17:18.800 --> 0:17:21.040 litigation against the market structural rules that they put out 0:17:21.560 --> 0:17:24.159 earlier this fall. So you know, I don't know how 0:17:24.240 --> 0:17:25.280 much of it is going to be a story of 0:17:25.359 --> 0:17:27.600 formally rolling back rules as opposed to just sending a 0:17:27.680 --> 0:17:29.680 very clear message that you know, we're not going to 0:17:29.720 --> 0:17:32.520 try and regulate through enforcement. You don't need to sort 0:17:32.560 --> 0:17:34.280 of worry about what we're going to do quite as much. 0:17:34.480 --> 0:17:37.480 We also know who's going to be filling in now 0:17:37.560 --> 0:17:39.680 taking the job of Jonathan kantor over at the DOJ 0:17:39.800 --> 0:17:42.520 when it comes to antitrust, and that's Gail Slater. What 0:17:42.720 --> 0:17:45.600 can we glean into what she has said in the 0:17:45.720 --> 0:17:49.040 past about big tech companies into maybe how Trump two 0:17:49.080 --> 0:17:51.920 point zero might potentially be a continuation of what the 0:17:51.960 --> 0:17:53.600 Biden administration was already doing. 0:17:54.680 --> 0:17:56.399 Yeah, that was a very interesting pick. I think a 0:17:56.400 --> 0:17:58.720 little bit more populoust at the margin than we expected 0:17:58.800 --> 0:18:00.560 heading into the election, where I think are we going 0:18:00.600 --> 0:18:04.919 to get a fairly traditional pro business Republican approach at 0:18:05.000 --> 0:18:08.000 DOJ and FTC From a competition policy perspective, I think 0:18:08.320 --> 0:18:11.000 the clearest signal about what she stands for is what 0:18:11.040 --> 0:18:13.359 Trump said about her announcement and what we can glean 0:18:13.440 --> 0:18:15.639 from her working for Vance, both of which you know, 0:18:15.720 --> 0:18:18.280 are really focused on big tech. In terms of what's 0:18:18.280 --> 0:18:21.359 in the crosshairs, I don't see as much risk on 0:18:22.440 --> 0:18:25.119 in sectors that are not kind of explicitly targeted as 0:18:25.160 --> 0:18:28.879 we saw under connin Canter in the Biden administration, you know, 0:18:28.920 --> 0:18:30.800 but her personal trajectory, I mean, she spent ten years 0:18:30.800 --> 0:18:33.080 as a staff attorney at the FTC. She's done some 0:18:33.240 --> 0:18:35.720 work for the tech industry, so you know, looking at 0:18:35.760 --> 0:18:37.720 her resume, you wouldn't necessarily think that she's going to 0:18:37.720 --> 0:18:40.879 be pitchfork wielding. But I do think the expectation, based 0:18:40.960 --> 0:18:43.640 on what Trump advancer are saying, is that we'll see 0:18:43.720 --> 0:18:44.879 some populism in that approach. 0:18:45.119 --> 0:18:48.080 So far, Tobin populism aside, A lot of businesses are 0:18:48.160 --> 0:18:50.720 looking at the agenda and saying this gives us a 0:18:50.760 --> 0:18:53.639 lot more confidence going forward in our business models. There 0:18:53.680 --> 0:18:56.720 are a couple of surveys done by different places, one 0:18:56.760 --> 0:18:59.640 of them showing that now two thirds of business executive 0:18:59.680 --> 0:19:03.120 survey are optimistic about the path ahead versus twenty six 0:19:03.240 --> 0:19:06.040 percent of respondents in August. Do you think that that 0:19:06.240 --> 0:19:09.480 is justified simply because of the deregulation and do you 0:19:09.520 --> 0:19:11.879 think that was sort of I don't know a commentary 0:19:12.080 --> 0:19:13.679 on the regulatory regime before. 0:19:15.240 --> 0:19:18.359 It's fairly typical to see very dramatic reversals in business 0:19:18.920 --> 0:19:20.720 sentiment on transitions. 0:19:20.800 --> 0:19:21.800 You know, generally. 0:19:21.520 --> 0:19:24.399 Republican leadership tends to be better welcomed. Especially you know, 0:19:24.480 --> 0:19:27.000 some of those surveys like NFIB have a very very 0:19:27.000 --> 0:19:29.520 strong part is in balance to them. So, you know, 0:19:29.560 --> 0:19:32.280 I think that's not terribly surprising. You know, I think 0:19:32.359 --> 0:19:34.440 the sentiment swings tend to be bigger than the activity 0:19:34.440 --> 0:19:36.200 swings in terms of what people are doing versus what 0:19:36.240 --> 0:19:38.919 they're saying. But you know, I think in both cases 0:19:39.359 --> 0:19:41.280 we're seeing stronger animal spirits. 0:19:41.640 --> 0:19:42.359 But you know, our. 0:19:42.320 --> 0:19:44.600 Expectation heading into the Trump administration, or heading into the 0:19:44.640 --> 0:19:46.639 possibility of Trump win, was always that the good news 0:19:46.680 --> 0:19:48.720 would be kind of front loaded on some of those 0:19:49.200 --> 0:19:52.200 priorities like deregulation that were very clear, and then the 0:19:52.520 --> 0:19:54.760