WEBVTT - Trump Tariffs Upend the Investing Class

0:00:02.520 --> 0:00:07.000
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

0:00:08.920 --> 0:00:13.240
<v Speaker 2>This is Bloomberg Business Week Daily reporting from the magazine

0:00:13.240 --> 0:00:17.840
<v Speaker 2>that helps global leaders stay ahead with insight on the people, companies,

0:00:17.880 --> 0:00:22.800
<v Speaker 2>and trends shaping today's complex economy. Plus global business, finance

0:00:22.800 --> 0:00:26.520
<v Speaker 2>and tech news as it happens. The Bloomberg Business Weekdaily

0:00:26.640 --> 0:00:31.720
<v Speaker 2>Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.

0:00:32.080 --> 0:00:34.640
<v Speaker 3>Well, not exactly what many were thinking about when it

0:00:35.040 --> 0:00:37.120
<v Speaker 3>came to a second term for Donald Trump, and as

0:00:37.120 --> 0:00:39.560
<v Speaker 3>our Max Ablson puts it, less than one hundred days

0:00:39.560 --> 0:00:42.640
<v Speaker 3>into the new US administration, bankers from Wall Street to

0:00:42.680 --> 0:00:46.199
<v Speaker 3>Shanghai's Poondong and the city of London are bracing for

0:00:46.280 --> 0:00:50.920
<v Speaker 3>soured loans, canceled deals, forfeited fees, and perhaps threats to

0:00:51.000 --> 0:00:54.480
<v Speaker 3>their own jobs. Credit markets are paralyzed, while mergers and

0:00:54.520 --> 0:00:57.840
<v Speaker 3>initial stock offerings are being pulled amid fears of recession.

0:00:58.000 --> 0:01:01.520
<v Speaker 3>Out a big out not with people we're expecting. Max is,

0:01:01.560 --> 0:01:05.080
<v Speaker 3>of course, Bloomberg News Finance reporter joining us here in studio.

0:01:06.800 --> 0:01:10.000
<v Speaker 4>I it's safe to say, if you think.

0:01:09.840 --> 0:01:13.240
<v Speaker 3>About the rally coming off of the election, right, everybody

0:01:13.319 --> 0:01:19.520
<v Speaker 3>expected easier regulatory environment, pro business policies. I think all

0:01:19.560 --> 0:01:22.560
<v Speaker 3>of the tech CEOs thought all of those cases from

0:01:22.600 --> 0:01:24.880
<v Speaker 3>the government were not going to happen, and then yet

0:01:24.959 --> 0:01:25.520
<v Speaker 3>here we are.

0:01:26.040 --> 0:01:28.760
<v Speaker 4>It's very different. It's very different. And let's go back

0:01:28.800 --> 0:01:32.360
<v Speaker 4>to that moment. Actually, the post the post election giddiness

0:01:32.440 --> 0:01:34.640
<v Speaker 4>from from the kind of billionaire class, from from the

0:01:34.720 --> 0:01:38.399
<v Speaker 4>high echelons of the international finance industry, which is what

0:01:38.440 --> 0:01:40.640
<v Speaker 4>I focus on what I write about. I think there

0:01:40.680 --> 0:01:43.160
<v Speaker 4>was everything you said is is so accurate, Carol, But

0:01:43.160 --> 0:01:45.319
<v Speaker 4>then there was this other there was other, this other

0:01:45.400 --> 0:01:47.720
<v Speaker 4>dynamic that was happening at the same time too, which

0:01:47.880 --> 0:01:51.680
<v Speaker 4>was there was a kind of dismissal of the more

0:01:51.800 --> 0:01:55.880
<v Speaker 4>chaotic side of Trump, the part that zigzags and goes

0:01:55.960 --> 0:01:58.760
<v Speaker 4>left but then goes right and then goes left again.

0:01:59.280 --> 0:02:03.480
<v Speaker 4>And there was a thing that Trump was going to

0:02:03.520 --> 0:02:07.600
<v Speaker 4>deliver the things that they wanted and would avoid the

0:02:07.640 --> 0:02:10.200
<v Speaker 4>things that make them nauseous or that make them angry,

0:02:10.320 --> 0:02:12.959
<v Speaker 4>or that would make the market tank out of out

0:02:12.960 --> 0:02:16.520
<v Speaker 4>of a difference that they saw in Trump. They saw

0:02:16.560 --> 0:02:19.200
<v Speaker 4>that Trump had a difference for the stock market, both

0:02:19.360 --> 0:02:22.280
<v Speaker 4>both for the kind of Manhattan financial elite in particular,

0:02:22.720 --> 0:02:25.720
<v Speaker 4>and then also for the more abstract stock market as

0:02:25.760 --> 0:02:28.480
<v Speaker 4>a kind of benchmark, a report card. This this is

0:02:28.480 --> 0:02:31.080
<v Speaker 4>what they believed. I mean, this is what they told

0:02:31.120 --> 0:02:33.440
<v Speaker 4>me and talked about publicly. I wrote a couple of

0:02:33.480 --> 0:02:35.400
<v Speaker 4>stories for Business Week and Bloomberg Markets at the time

0:02:36.880 --> 0:02:40.800
<v Speaker 4>that it is fair to say was really wrong and

0:02:41.120 --> 0:02:44.320
<v Speaker 4>they were wrong based on what we're seeing now. The

0:02:44.919 --> 0:02:47.160
<v Speaker 4>lovely sentence that you that you read aloud is from

0:02:47.360 --> 0:02:50.760
<v Speaker 4>Leonard and Claudia and Arnold. I just think you really

0:02:50.840 --> 0:02:53.520
<v Speaker 4>I want to give them a credit. Listeners know that

0:02:53.560 --> 0:02:55.560
<v Speaker 4>it was them who read it, not me, beautifully written,

0:02:56.000 --> 0:03:02.079
<v Speaker 4>and the wrongness is has caught them unawares.

0:03:03.480 --> 0:03:05.400
<v Speaker 3>They really shocked, like when you talked to him, or

0:03:05.400 --> 0:03:06.880
<v Speaker 3>they're like, oh my god, Carol.

0:03:06.960 --> 0:03:10.679
<v Speaker 4>They are surprised, but more than a surprise, they're annoyed.

0:03:11.040 --> 0:03:15.000
<v Speaker 4>They're annoyed and they're angry and they did not see

0:03:15.040 --> 0:03:15.600
<v Speaker 4>this coming.

0:03:15.840 --> 0:03:19.000
<v Speaker 5>Is it because they took him seriously but not literally

0:03:19.480 --> 0:03:22.960
<v Speaker 5>the famous way that people were described to take the

0:03:22.960 --> 0:03:25.280
<v Speaker 5>way that Trump spoke. Is it because of what he

0:03:25.320 --> 0:03:28.680
<v Speaker 5>did during his first term pointing two the Dow in

0:03:28.680 --> 0:03:32.480
<v Speaker 5>the s and P five hundred as a scorecard, or.

0:03:32.440 --> 0:03:34.400
<v Speaker 4>The fact that he was the president for four years

0:03:34.400 --> 0:03:37.480
<v Speaker 4>and he did not put on gigantic tariffs on every

0:03:37.480 --> 0:03:39.480
<v Speaker 4>country in the world, almost every country, I should say,

0:03:39.960 --> 0:03:44.760
<v Speaker 4>but you know, taking someone serious or someone literal, they

0:03:44.800 --> 0:03:47.480
<v Speaker 4>could have taken Trump at his word. But the thing

0:03:47.520 --> 0:03:50.240
<v Speaker 4>about his leadership is he really does seem to change

0:03:50.240 --> 0:03:52.840
<v Speaker 4>his mind pretty quickly. In fact, there was that burst

0:03:52.880 --> 0:03:55.800
<v Speaker 4>earlier today, like as in a few hours ago, where

0:03:55.840 --> 0:03:58.720
<v Speaker 4>I think people, I think that there was a sense

0:03:58.760 --> 0:04:00.600
<v Speaker 4>of relief in the market that he going to change

0:04:00.600 --> 0:04:04.240
<v Speaker 4>his mind again. And you know, woe to the journalist

0:04:04.400 --> 0:04:06.920
<v Speaker 4>or to the investor, or to the executive who thinks

0:04:06.920 --> 0:04:09.040
<v Speaker 4>that he's that they know what he's going to do.

0:04:09.200 --> 0:04:11.640
<v Speaker 4>I think that the one thing that I feel sure

0:04:11.680 --> 0:04:13.680
<v Speaker 4>about when it comes to Donald Trump, and I really

0:04:13.720 --> 0:04:15.960
<v Speaker 4>don't feel sure about much. The one thing I feel

0:04:15.960 --> 0:04:19.400
<v Speaker 4>sure about is that it's sort of impossible to prognosticate.

0:04:19.800 --> 0:04:24.599
<v Speaker 4>It's impossible to predict. I really admire anyone who can

0:04:24.680 --> 0:04:27.000
<v Speaker 4>sort of say with honesty that they've got him right

0:04:27.080 --> 0:04:28.880
<v Speaker 4>and that they know what's going to happen, because I

0:04:28.920 --> 0:04:31.719
<v Speaker 4>certainly don't. And these investors who thought that he was

0:04:31.760 --> 0:04:35.200
<v Speaker 4>going to really koutout to the market, they certainly don't either.

0:04:35.360 --> 0:04:37.000
<v Speaker 3>Well, you know, what's interesting in Max and I think

0:04:37.000 --> 0:04:39.760
<v Speaker 3>about this all the time, that we said so often

0:04:39.839 --> 0:04:42.640
<v Speaker 3>going into the election that if he wins a second term,

0:04:42.680 --> 0:04:44.760
<v Speaker 3>he's not going to have the guard rails right that

0:04:44.800 --> 0:04:47.679
<v Speaker 3>he had during the first term. That were people from

0:04:47.920 --> 0:04:51.760
<v Speaker 3>business CEOs. I guess from the more I don't want

0:04:51.760 --> 0:04:54.279
<v Speaker 3>to say normal community, but people who would say, wait,

0:04:54.279 --> 0:04:55.920
<v Speaker 3>you can't do that, mister president, or you need to

0:04:55.920 --> 0:04:59.160
<v Speaker 3>think about this. There are some people, though, Scott bessont

0:04:59.240 --> 0:05:03.640
<v Speaker 3>right whose Treasury secretary, who understands the importance of markets

0:05:03.640 --> 0:05:07.720
<v Speaker 3>that function well, understands the impact tariffs have, and yet

0:05:08.640 --> 0:05:10.599
<v Speaker 3>not so sure that he's a guardrail.

0:05:11.200 --> 0:05:12.800
<v Speaker 4>Well, I think, how does that now?

0:05:12.839 --> 0:05:14.320
<v Speaker 3>Are the people you talk to do they say, well,

0:05:14.320 --> 0:05:16.360
<v Speaker 3>wait a minute, we thought he might be a guardrail.

0:05:16.880 --> 0:05:19.839
<v Speaker 4>Well, your your excellent question brings to mind Anie Massa

0:05:19.880 --> 0:05:22.680
<v Speaker 4>and Kathy Burton's absolutely terrific story this morning. That's the

0:05:22.680 --> 0:05:25.560
<v Speaker 4>Bloomberg Big Take. That's a profile of Bill Ackman, who

0:05:25.760 --> 0:05:28.159
<v Speaker 4>Bill Ackman is one of many members of you. You

0:05:28.200 --> 0:05:30.040
<v Speaker 4>called it normal. I think a little bit tongue in cheek.

0:05:30.040 --> 0:05:32.000
<v Speaker 4>I think you're really talking about the professional class and

0:05:32.320 --> 0:05:34.640
<v Speaker 4>the executive class, the billionaires. That's why you're the reporter

0:05:34.680 --> 0:05:36.800
<v Speaker 4>in the right. No no, no, no, no no, you can

0:05:36.839 --> 0:05:40.800
<v Speaker 4>do not wrong in my mind. But what their piece

0:05:40.880 --> 0:05:44.880
<v Speaker 4>captures so well is the sense of my bad app

0:05:45.000 --> 0:05:47.200
<v Speaker 4>which is a well that's a quote from from Acman.

0:05:47.240 --> 0:05:50.159
<v Speaker 4>I mean, really, he really said that. He this is

0:05:50.200 --> 0:05:56.000
<v Speaker 4>exactly what we're talking about. He predicted pro growth, probate, business,

0:05:56.400 --> 0:06:00.360
<v Speaker 4>pro American. That was That was Acman celebrating Trump's victory,

0:06:00.400 --> 0:06:02.480
<v Speaker 4>saying that this is going to be this incredible administration.

0:06:02.560 --> 0:06:05.600
<v Speaker 4>And then and then what does he say on on X.

0:06:05.839 --> 0:06:09.120
<v Speaker 4>I don't think this was foreseeable. I assumed economic rationality

0:06:09.120 --> 0:06:10.400
<v Speaker 4>would be paramount.

0:06:11.080 --> 0:06:14.680
<v Speaker 5>This was the sorry the president telegraph this. He said

0:06:14.680 --> 0:06:17.400
<v Speaker 5>this that he would he said he loves tariffs.

0:06:17.040 --> 0:06:19.679
<v Speaker 4>Right, and in fact, he told our editor in chief

0:06:20.080 --> 0:06:22.840
<v Speaker 4>that for an interview last year. But let's talk about that,

0:06:23.720 --> 0:06:27.520
<v Speaker 4>because what he said was that he loved tariffs. He

0:06:27.600 --> 0:06:32.720
<v Speaker 4>did not, however, talk about the depth, the extent, the volume,

0:06:33.080 --> 0:06:36.479
<v Speaker 4>the hugeness, to use a Donald Trump word, of his tariffs.

0:06:36.720 --> 0:06:40.760
<v Speaker 4>I'm thinking of the difference between the moment, speaking of markets,

0:06:41.160 --> 0:06:44.320
<v Speaker 4>the moment when when the markets seemed to breathe a

0:06:44.360 --> 0:06:46.599
<v Speaker 4>sigh of relief, when he when he used the number

0:06:46.640 --> 0:06:50.520
<v Speaker 4>ten ten percent tariffs. I'm talking about the big presentation

0:06:50.839 --> 0:06:52.800
<v Speaker 4>just a few days ago. Feels like ancient history, right,

0:06:53.200 --> 0:06:55.920
<v Speaker 4>the difference. What he did not telegraph. What he did

0:06:55.960 --> 0:06:59.120
<v Speaker 4>not telegraph was the remember the giant signs, you know,

0:06:59.200 --> 0:07:02.360
<v Speaker 4>country by country down to like small islands, island nations

0:07:02.760 --> 0:07:05.159
<v Speaker 4>filled with penguins, filled with penguins. Shout out to penguins,

0:07:05.160 --> 0:07:05.880
<v Speaker 4>a wonderful animal.

0:07:05.960 --> 0:07:06.240
<v Speaker 1>Love them.

0:07:06.360 --> 0:07:09.920
<v Speaker 4>But those are those were high numbers, Yeah, those are

0:07:10.000 --> 0:07:12.880
<v Speaker 4>high numbers. What he did not telegraph was that that

0:07:12.920 --> 0:07:16.800
<v Speaker 4>mathematical equation that my friend to colleague Matt Levine wrote

0:07:16.800 --> 0:07:22.520
<v Speaker 4>about where they're basically they're doing something that was you know,

0:07:22.560 --> 0:07:24.320
<v Speaker 4>I don't know, is unthinkable the right word? How about

0:07:24.360 --> 0:07:26.960
<v Speaker 4>just simply unpredictable? Unpredictable?

0:07:27.000 --> 0:07:29.200
<v Speaker 3>I was going to ask you just got twenty seconds,

0:07:29.200 --> 0:07:31.120
<v Speaker 3>there is there one word from the people that you

0:07:31.200 --> 0:07:33.680
<v Speaker 3>talk to that kind of came to mind in trying

0:07:33.680 --> 0:07:36.120
<v Speaker 3>to assess the situation. And I know we've used uncertainty

0:07:36.160 --> 0:07:37.760
<v Speaker 3>a lot, but I just I was just curious.

0:07:38.360 --> 0:07:41.440
<v Speaker 4>I want to just quickly the words startled, surprise and

0:07:41.520 --> 0:07:44.840
<v Speaker 4>ultimately very disappointed. Those are Tom Glosser's words, and Tom

0:07:44.840 --> 0:07:47.680
<v Speaker 4>Glosser is the lead and independent board member at Morgan Stanley.

0:07:47.800 --> 0:07:50.520
<v Speaker 4>So this is a guy who's a perfect symbol of

0:07:50.840 --> 0:07:53.520
<v Speaker 4>that professional class, and he's talking about a group of

0:07:53.560 --> 0:07:55.320
<v Speaker 4>people who are used to being inner circle, used to

0:07:55.360 --> 0:07:59.200
<v Speaker 4>being relevant, working to preserve access, and they are startled.

0:07:59.280 --> 0:08:01.000
<v Speaker 3>It's Keller Stone Worry, both of them men, the one

0:08:01.000 --> 0:08:03.760
<v Speaker 3>on Bill Ackman as well Maxabilsen, Bloomberg News Finance reporter,

0:08:03.880 --> 0:08:05.680
<v Speaker 3>right here in our studio. I feel like those words

0:08:05.680 --> 0:08:08.520
<v Speaker 3>are something you might use with a teenager startled.

0:08:08.640 --> 0:08:10.680
<v Speaker 5>Have you had experience just a little.

0:08:10.880 --> 0:08:13.200
<v Speaker 4>She's really great, though. This is Bloomberg.

0:08:14.080 --> 0:08:19.520
<v Speaker 1>This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify,

0:08:19.680 --> 0:08:23.720
<v Speaker 1>and anywhere else you get your podcasts. Listen live weekday

0:08:23.760 --> 0:08:27.960
<v Speaker 1>afternoons from two to five pm Eastern on Bloomberg dot com,

0:08:28.080 --> 0:08:31.880
<v Speaker 1>the iHeartRadio app, tune In, and the Bloomberg Business App.

0:08:32.080 --> 0:08:34.920
<v Speaker 1>You can also watch us live every weekday on YouTube

0:08:35.160 --> 0:08:37.360
<v Speaker 1>and always on the Bloomberg terminal.