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Speaker 2: And the Equity Americans Now is someone who has been
Speaker 2: a confirmed believer in American capitalist and Benjamin Ladler that
Speaker 2: joins at Brudesco BBI. Ben to tariff's matter and the
Speaker 2: confidence to hold equities.
Speaker 3: Yeah, I think they do. Unfortunately, I think we'll do
Speaker 3: a bit of a reality check here. I mean, I
Speaker 3: think tariff complacency is high. I think the Trump administration's emboldened.
Speaker 3: I think the traditional Trump puts uh frankly nowhere in sight,
Speaker 3: and that's just I think feeding this this loop and
Speaker 3: maybe further inboldening the administration. So yeah, I think we'll
Speaker 3: do a bit of a reality check. It doesn't make
Speaker 3: me particularly bearish, you know, looking further out, but I
Speaker 3: would certainly mind the gap a little bit in the
Speaker 3: short term.
Speaker 4: What do you think we're going to get from earnings here?
Speaker 4: Ben Again, We're going to kick off tomorrow with Jamie
Speaker 4: Diamond and JP Morgan and some of the other big banks.
Speaker 4: What do you expect this quarter from, you know, the
Speaker 4: corporate American.
Speaker 3: Yeah, so I'd be focused on two things. The good
Speaker 3: news is that the expectations are very low three four
Speaker 3: percent earnings growth. That's a very low bar, which I
Speaker 3: think everyone's going to easily beat. The less good news,
Speaker 3: and I think the focus of earning season is going
Speaker 3: to be on the company guidance, especially with all this
Speaker 3: tariff uncertainty that I think is where the sort of
Speaker 3: rubber may hit the road a little bit and we're
Speaker 3: going to maybe get some less good news from corporate
Speaker 3: I do think this uncertainty remains very corrosive for corporate
Speaker 3: America for investment plans, and I would expect to hear
Speaker 3: a little bit about that from the earning scourse.
Speaker 4: Do you think the markets here again we're looking at
Speaker 4: the US equity mark. It's at our near all time
Speaker 4: highs here again retracing the selloff from a liberation day?
Speaker 5: Is that too much?
Speaker 4: Are the markets too complacent about the potential economic headwinds
Speaker 4: from tariffs?
Speaker 3: Yeah, I think we've become too reliant on this taco narrative.
Speaker 3: It's a sort of boiling the frog scenario. I mean,
Speaker 3: I think we're going to wake up potentially in a
Speaker 3: month or two's time and find out that somehow Trump
Speaker 3: has walked us up from ten percent taris to twenty
Speaker 3: percent tarifs, flipping the sort of narrative on its head.
Speaker 3: And I think that will have an impact. It's a
Speaker 3: question I think of when, not if we may start
Speaker 3: to get a little bit of signs that tomorrow in
Speaker 3: the inflation print and the PPI print the day after that,
Speaker 3: and then the guidance from companies. But it's still early.
Speaker 3: But that's not fool ourselves. It's it's definitely coming.
Speaker 2: It looks then at the terrace and right right now
Speaker 2: yell budget labs at eighteen percent and they may model
Speaker 2: it in to a nineteen thirty four equivalent. Anybody that's
Speaker 2: studied this knows that's impossible. Does Bridesco, and particularly with
Speaker 2: your Latin American excellence, do you have a number that's doable?
Speaker 2: I mean to me, if we were at two or
Speaker 2: three percent before, is five percent doable? Dare I say
Speaker 2: eight percent on a blended basis?
Speaker 3: Well, I think the market has sort of made its
Speaker 3: peace with you know, something like ten I think the
Speaker 3: reality here is, though we may end up at double that,
Speaker 3: And and to your earlier point, the market's at twenty
Speaker 3: two times earnings. That's above average. The vix is at sixteen.
Speaker 3: Last time I looked well below average. I think that's
Speaker 3: just a very vulnerable you know, setup as I say,
Speaker 3: I'd probably buy any significant weakness, you know, looking further out,
Speaker 3: I wouldn't want to bet against corporate America. I will
Speaker 3: certainly been buying the rest of the world, where you
Speaker 3: have a sort of double discount of sort of cheaper
Speaker 3: currencies and cheaper evaluations. But yes, I think this could
Speaker 3: be our sort of long hot summer with a bit
Speaker 3: of volatility.
Speaker 2: This is a ben I've ever heard. Are you in ken.
Speaker 3: I would certainly be holding a little bit of cash
Speaker 3: ready to buy that dip which I think is coming.
Speaker 3: And I would certainly be looking at the rest of
Speaker 3: the world. I mean, I think the rotation narrative remains
Speaker 3: in place. I think this is worse news for the
Speaker 3: United States than it is for the rest of the
Speaker 3: world economically, and I think the rest of the world
Speaker 3: has buffers that the US doesn't have. The US still
Speaker 3: has this double premium of an expensive currency and expensive
Speaker 3: equity markets, and the rest of the world doesn't. As
Speaker 3: I say, I wouldn't want to bet too much against
Speaker 3: corporate America. I'd be looking for opportunities any sell off
Speaker 3: in tech and healthcare. But I do think, I do
Speaker 3: think we've taken the Tacho narrative too much at face value.
Speaker 3: You know, right here, I think there are you know,
Speaker 3: the Trump puts are still out there, They're just further away.
Speaker 3: I mean, I think there's maybe a new one you
Speaker 3: alluded to earlier of the sort of American stomach. What's
Speaker 3: going to happen when your coffee or induce your sugar,
Speaker 3: your beef is all fifty percent more expensive. You know,
Speaker 3: time will tell and we will find out.
Speaker 2: Ben Leader, thank you so much.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 2: This was scheduled and to be an interview of Joy
Speaker 2: talking about the House, the Budget Committee and all. Jody
Speaker 2: Errington is from the Texas that a lot of people,
Speaker 2: particularly Northerners, don't know we fly into DFW. Maybe we've
Speaker 2: got a wandering understanding of San Antoni and down to
Speaker 2: the Mexican border. But the northern Texas of Abilene and
Speaker 2: Delbert McClinton and Buddy Holly's Lubbock is just not talked about.
Speaker 2: Mister Errington is of the nineteenth district in the House
Speaker 2: of Representatives and with the Budget Committee. Jody Errington, thank
Speaker 2: you so much for joining bloomber Well.
Speaker 6: What a beautiful introduction. My folks in the food, fuel
Speaker 6: and fiber capital of the world would be would be
Speaker 6: very pleased and proud by that introduction.
Speaker 2: It is three hundred and some miles down eighty three
Speaker 2: south to Kernville. There's people making that drive today. This
Speaker 2: flood has turned the nation upside down. Give us an update,
Speaker 2: sir well.
Speaker 6: It's unimaginably heart wrenching for the families who've lost, especially
Speaker 6: their children overnight. A wall of river that rows almost
Speaker 6: thirty feet in less than an hour. That area is
Speaker 6: prone to flash floods. We have a ranch about three
Speaker 6: miles up the road from Camp Mystic, which is at
Speaker 6: the epicenter of this, but we've never seen anything like this.
Speaker 6: I don't know how you could prepare for it, but
Speaker 6: we're all praying for that community and those families, and
Speaker 6: there's still folks missing, and I know the governor's committed to,
Speaker 6: you know, not ceasing the search and rescue until everybody's found.
Speaker 2: It's Atlanta, States, Rise less Federal. You had a horrific
Speaker 2: winter storm. The swinter storms, folks in northern Texas are glacial.
Speaker 2: I mean they're like back to the ice age and
Speaker 2: the answers in nineteen twenty one, Lollock and Avelene was
Speaker 2: absolutely leveled and you dialed one eight hundred FEMA to
Speaker 2: get assistance. Is the FEMA of twenty twenty one the
Speaker 2: same as the FEMA now?
Speaker 6: Well, I hope it's much improved, but I'm not sure
Speaker 6: that's the case. I think the President's right to push
Speaker 6: that down at the state, local level, not necessarily the
Speaker 6: resources we're taxed on it one way or the other.
Speaker 6: I just think folks at the local and state level
Speaker 6: are probably best to handle it.
Speaker 4: So Congressman talked to us about this legislation that is
Speaker 4: a big success story for the Trumpet administration. I know
Speaker 4: you had a big hand and it talked to us
Speaker 4: about what this spending bill of this tax bill. What
Speaker 4: does it mean for this economy do you think going forward?
Speaker 6: I think it's significant and it couldn't come at a
Speaker 6: better time. I know there's some uncertainty with the tariff realignment.
Speaker 6: I think that will work out in a very positive
Speaker 6: way when we get these new deals and we have
Speaker 6: reciprocal trade relationships with folks, so I'm supportive of that.
Speaker 6: In the meantime, we have supercharged the growth that we
Speaker 6: saw from the first Trump tax cuts by making permanent,
Speaker 6: for example, business expensing for R and D, capital interest expensing,
Speaker 6: the pro growth provisions there. And then just tax relief
Speaker 6: to working families, not just the marginal rates, but improving
Speaker 6: the standard deduction and making it permanent. And then of
Speaker 6: course there are several working working man provisions. Tax on tips,
Speaker 6: no tax on overtime. Families with children get a supercharge
Speaker 6: of child deduction.
Speaker 4: How does it impact maybe people in your district, some
Speaker 4: a rural district, for example, the folks in your district,
Speaker 4: they here a global walltery here at bloomber we talked
Speaker 4: tariffs all day every day. Did the people in your
Speaker 4: district did they think about that or how did they
Speaker 4: think about some of the economic issues that you're trying
Speaker 4: to address in your bill and maybe the president's trying
Speaker 4: to address with tariffs.
Speaker 6: Well, on the bill, it's just more money in their
Speaker 6: in their pockets, right, that's a good thing for them,
Speaker 6: and they recognize it.
Speaker 5: On the on the other piece, you got ag and
Speaker 5: energy dominate. Yeah, I mean it is the.
Speaker 6: Largest oil patch and cattle feeder system and in the world.
Speaker 6: And so they understand unfair trade, they understand that it's
Speaker 6: not sustainable, and I think they're all in to support
Speaker 6: this president getting to that even competitive playing field.
Speaker 2: I'm looking for folks with this. Jody Arrington here from Texas,
Speaker 2: were thrillies with us in nineteenth congressional district of Northern Texas.
Speaker 2: You know, I look at you. You slipped by in
Speaker 2: the last election. You win eighty percent of the vote.
Speaker 2: I mean, they gotta do better next time. The president
Speaker 2: took Texas with fifty six percent. I don't know what
Speaker 2: you know off the top of your head what he
Speaker 2: took in the nineteenth congressional.
Speaker 5: Lesson me, less you Okay, So we're going to get
Speaker 5: him up there, okay.
Speaker 2: But the bottom line is, at least they had this
Speaker 2: for Michael bart today, student loans are going to affect
Speaker 2: Texas Tech. They're going to affect your Texas Tech. How
Speaker 2: do you balance the Trump mantra of tear the federal
Speaker 2: government apart with those eight hundred and forty two kids
Speaker 2: at Texas Tech. They can't go there this fall. I'm
Speaker 2: making it up, folks, they can't go there this fall
Speaker 2: because of the student loan shifts he's proposing.
Speaker 6: Well, I think the fact that we have all of
Speaker 6: this student aid and not targeted necessarily the people who
Speaker 6: need it, I think is an inflation area, has an
Speaker 6: inflation effect on the cost of education. I'm a former
Speaker 6: vice chancellor at Texas Tech.
Speaker 2: That's my alma mater. And the larger they do with
Speaker 2: the walk on football players, they give him like a
Speaker 2: fancy job. What was it like and you walked down?
Speaker 2: I mean with Patrick Mahams on the field, when you walked.
Speaker 5: Down, I would never have a chance.
Speaker 6: I couldn't even catch the balls that he throws today.
Speaker 6: But this was under the Spike Dyke's era, where just
Speaker 6: about anybody in their body you could fog a mirror,
Speaker 6: could walk on and and in fact, I didn't play
Speaker 6: football in high school. And when the recruiter asked me
Speaker 6: when we sat down right before my physical, He said,
Speaker 6: what did you play in high school?
Speaker 5: I said tennis? And he thought, old man, I want
Speaker 5: to see this question.
Speaker 2: Cowboys are chiefs, you know what.
Speaker 6: Cowboys over the chiefs. But I'm a college football guy.
Speaker 6: I'm not really interested. And we're losing that uniqueness in
Speaker 6: college sports because of Beniel's another conversation. I think we're destroyed.
Speaker 2: Another D one powerhouse, Duke Cosman.
Speaker 4: One of the key topics and key issues for President
Speaker 4: Trump and in his election was immigration. You come from
Speaker 4: a state that is boy that is right on the
Speaker 4: front lines of immigration. How do the folks in your
Speaker 4: district think about it? I mean a lot of these
Speaker 4: folks that come over, they pick our agricultural they build
Speaker 4: our homes, they do all that kind of stuff.
Speaker 5: They bust our tables.
Speaker 4: How do people in your district think about it?
Speaker 6: Well, I think they appreciate the fact that we don't
Speaker 6: have Americans that would do the jobs that are needed
Speaker 6: in the fields. As you mentioned in agriculture. Probably the
Speaker 6: same could be said in the in the oil patch.
Speaker 6: But I think they first and foremost wanted security and
Speaker 6: from a return to law and order from the chaos.
Speaker 6: It's been devastating and I'm just there with law enforcement.
Speaker 6: I'm telling you, the gangs, the drug activity exponential.
Speaker 5: Over the last four years.
Speaker 6: So in order to have the conversation that we need
Speaker 6: to have about legal immigration and making sure we have
Speaker 6: a win win situation with people who want a better
Speaker 6: life and filling the jobs that we need to produce
Speaker 6: the food, fuel, and fire, we had to do. We
Speaker 6: needed a president with the will to do what is
Speaker 6: being been done by this president in terms of border security,
Speaker 6: but there's more to be done on the legal side
Speaker 6: so that we can continue to facilitate the economic.
Speaker 2: Okay, including agriculture, which is a small matter from apling
Speaker 2: to love it to cut to the chase. Henrietta Tre's
Speaker 2: beautiful analyst was on earlier and says they're almost hiding
Speaker 2: the president's langeductedness because Jodie Arrington has to get re
Speaker 2: elected in November of twenty twenty six. What's your Republican
Speaker 2: Party in particularly the Texas delegation look like after President Trump?
Speaker 2: Is this like a moment and you guys shift back
Speaker 2: to you know, hating Lyndon Baines Johnson or you know
Speaker 2: what does the framework look like after Trump.
Speaker 6: I think President Trump's philosophy and focus on America First
Speaker 6: is here to stay. I think it's here to stay
Speaker 6: for all the right reasons, and I think it resonates
Speaker 6: with all the Republican districts, certainly in Texas. I mean,
Speaker 6: it's a ruby red state, and so putting our ag
Speaker 6: producers first in trade, putting our families first in allowing
Speaker 6: them to keep more of their money, putting the safety
Speaker 6: of our families first.
Speaker 5: Again, We've been at ground zero in.
Speaker 6: This border crisis for several years now, So.
Speaker 5: I don't think it.
Speaker 6: I think it remains the America First agenda into the future,
Speaker 6: and I think that's a good thing, and I think
Speaker 6: they will support that.
Speaker 2: Does he understand H two A program and dairy farms.
Speaker 5: I think he does. I think he does.
Speaker 6: In fact, he's the one that led me did that well.
Speaker 6: In the first Trump administration. You'll recall he actually pushed
Speaker 6: our party to a deal in fixing H two A.
Speaker 5: It was called H two C. It was a reform,
Speaker 5: it was a.
Speaker 6: Much improved reform along with giving legal status to Dhaka.
Speaker 6: He pushed our party outside of our comfort. It failed
Speaker 6: ultimately because we didn't get a Democrat to support it.
Speaker 2: We continue with Jody Arrington of the nineteenth Congressional Diistic.
Speaker 2: This is Northern Texas. Paul did an all night or
Speaker 2: Friday and Saturday. Did you watch all of land Man?
Speaker 7: Oh?
Speaker 5: Yeah, I'm all in. I know everything you know about oil.
Speaker 2: And gas when you see Landman? Is it fiction?
Speaker 3: No?
Speaker 5: I think he's pretty true to form.
Speaker 2: Actually, yeah, for better for worse.
Speaker 4: So it's funny when you think about Texas and energy.
Speaker 4: Obviously you think about the oil and gas, but you
Speaker 4: guys also have tons of wind farms and solar and
Speaker 4: you kind of lead the nation all of those things.
Speaker 4: So how does the folks out in your district? How
Speaker 4: did they think about, you know, fossil fuels versus you know,
Speaker 4: alternative energy? I guess is the term?
Speaker 5: How did they think about that?
Speaker 6: I think most folks are for all the above. I
Speaker 6: just think it's how you get there. Accelerating R and
Speaker 6: D for example, where we accelerate the amortization. We make
Speaker 6: that expensing immediate and permanent in this tax bill, as long.
Speaker 5: As it's technology neutral.
Speaker 6: I don't think they want the government picking winners and losers.
Speaker 6: I think they see the good that could come of
Speaker 6: renewable resources in the future. Obviously fossil is finite, but
Speaker 6: after the natural gas shale revolution, we have an ocean
Speaker 6: of this great resource, and so we don't want a distortion.
Speaker 6: We don't want regressive inflationary energy policies. We want it
Speaker 6: even playing field. But no one's averse to all the above,
Speaker 6: including renewable. It's just how aggressive we've been a at
Speaker 6: accelerating with tax benefits for renewable while b over the
Speaker 6: last four years being hostile to our bread and butter,
Speaker 6: which has put a lot of people on the defensive.
Speaker 2: Question, how do you respond in the bill that Paul
Speaker 2: mentioned that the huge benefit goes to the wealthy, granted
Speaker 2: the wealthy on a percentage basis or paying a lot
Speaker 2: of taxes. How the middle class of Lubbock and Abolene
Speaker 2: fair in this bill.
Speaker 6: I think they believe and have experienced that the value
Speaker 6: of the tax breaks that we extended from the first
Speaker 6: Trump administration in seventeen are greater among the lower and
Speaker 6: middle income folks than the upper upper income, and in fact,
Speaker 6: the top one percent pay a greater share, and in fact,
Speaker 6: the top ten percent of the income owners in the
Speaker 6: country paid seventy percent of all the federal bills.
Speaker 5: Now they pay seventy five percent.
Speaker 2: You're in a Paul mentioned this earlier. You're in a house.
Speaker 2: You guys are riding tall. Maybe you lose House, Senate
Speaker 2: president here over the next two four years ago, what's
Speaker 2: your response to how the Democrats have been so ineffective
Speaker 2: off of the election. You barely won the House. We
Speaker 2: witnessed that, you barely won the Senate. Good morning, Vice
Speaker 2: president advantage, we witnessed. We witnessed that. I mean, are
Speaker 2: you surprised that the Democrats can't get their act together?
Speaker 5: I am?
Speaker 2: I mean, I'm in the land of Anne Richards. I mean,
Speaker 2: she was iconic.
Speaker 5: I am. They are still wondering why. I don't know.
Speaker 6: I think they're so used to being against President Trump
Speaker 6: and making demonizing him that that has become And then
Speaker 6: you've got the left that has overpowered their party to
Speaker 6: the point that it's going to be really difficult to
Speaker 6: break free from their agenda that is disconnected from from
Speaker 6: mainstream Americans.
Speaker 2: Why are you in New York?
Speaker 6: Well, I'm here to tell the good news, the gospel
Speaker 6: of prosperity and security and opportunity that is going to
Speaker 6: come when you get the right policies and set the
Speaker 6: right conditions. We've done it, and I want people to
Speaker 6: know that help is on the way.
Speaker 2: If if we do a remote from Abilene, all we're
Speaker 2: the Lukes's Love Texas.
Speaker 5: This guy knows his Texas. He knows his Texas well.
Speaker 5: You're well choed anytime.
Speaker 2: Jody, thank you so much for joining us. Today's an
Speaker 2: nineteenth district the Real Texas at Delbert McClinton and one
Speaker 2: Buddy Holly from years ago. Jody Erinton, thank you so much.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: This is going to be a good interview now, it's
Speaker 2: a critical interview. In fact, it may be our interview
Speaker 2: of the day. Joining us now from London, Jane Foley
Speaker 2: joins US head of Foreign Exchange statu to Strategy and
Speaker 2: tariff theory at Robobank. Jane, Robobank, with all of its
Speaker 2: centuries of tradition has to have a radar on the
Speaker 2: tariff dynamics. How is the chure now? The thirty year
Speaker 2: French bond in price has declined over seven percent since
Speaker 2: Donald Trump's inauguration, with a markets seizing in Europe? Is
Speaker 2: this different than Liberation Day one, say April third?
Speaker 8: Oh yeah, well, good morning Tom, Well, good morning everyone
Speaker 8: that you know it is. There's a very different feeling.
Speaker 8: And I think we can really extrapolate from what you
Speaker 8: were just hearing from your former guest, you know, straight
Speaker 8: back into the bond market, straight back into to foreign exchange.
Speaker 8: The market is just not as worried right now as
Speaker 8: it was on April the second. Now, you know, in
Speaker 8: agreement with your your previous guest, if we are in
Speaker 8: for a shock then on August the FIR with significant tariffs,
Speaker 8: say thirty twenty five percent tariffs for Europe, well the
Speaker 8: market is not necessarily priced for that, and that could
Speaker 8: certainly send you know, significant amount of gloom. Particularly you know,
Speaker 8: you consider the Eurozone economy. You know what is Germany
Speaker 8: facing right now? Well, it's always been facing pretty high
Speaker 8: energy cast labor market shortages, and then of course you
Speaker 8: put on top of that at the possibility of tariffs
Speaker 8: at a time with the exchange rate is is really
Speaker 8: quite strong. Well, you know that is not a pretty picture,
Speaker 8: and certainly the market will be worried.
Speaker 2: Fancy excuse me, Jane, I'm thinking I'm talking to Francy Lacuah.
Speaker 2: I mean they both went to Wimbledon. I'm sorry, Jane,
Speaker 2: I'm looking at the linkage here between your litmus paper
Speaker 2: pH in exchange and I got log convexity in the
Speaker 2: French thirty year bond price down big time. Mister mcclah
Speaker 2: has gone ooh la la uh Jane, how are they linked?
Speaker 2: And does it mean dxy back to one hundred Paul
Speaker 2: gets euro back to one oh five before he goes
Speaker 2: to Rome. I mean, wor's the accelerative tendency right now
Speaker 2: into Trump's second round of tariffs.
Speaker 8: Well again, you know, the market doesn't seem to be
Speaker 8: that concerned. The market seems to think that what Trump
Speaker 8: is saying rap right now is a negotiation tactic. So
Speaker 8: you know, it's looked at what Trump has said, what
Speaker 8: Trump has pulled back on, you know, since April and
Speaker 8: decided that the thirty percent tariffs, so he was warning
Speaker 8: about at the weekend are just a threat and won't
Speaker 8: necessarily be pushed through. So if they are, if they
Speaker 8: do stick, how August the first, you know, that's going
Speaker 8: to be a massive, great, big shock. Now in terms
Speaker 8: of you know, the French market particularly, we had over
Speaker 8: the weekend, even warnings from macran or Macron or promises
Speaker 8: that they would step up the sense very significantly. Now
Speaker 8: that of course is in tune with the political sort
Speaker 8: of win that's been blowing over Europe for some months now,
Speaker 8: but it's not clear how that would be funded, how
Speaker 8: that fits into the French budget that we were all
Speaker 8: so concerned about, you know, just six seven months ago.
Speaker 8: So you know that there are lots of question marks
Speaker 8: over the growth out looks for still Europe. They already were,
Speaker 8: but if you land, you know, thirty percent tariffs on
Speaker 8: top of that, these rise more significantly and on top
Speaker 8: of the budgets in most European countries, with perhaps the
Speaker 8: exception of Germany, there were still considerable doubts. So these
Speaker 8: are all things that the market is not pricing for
Speaker 8: that the US he isn't reflecting right now.
Speaker 2: I agreeative, I agree, Paul. The Euro's not shown at
Speaker 2: the equity markets. JP Morgan tomorrow. Guess what James Diamond's.
Speaker 5: Going to say, We don't care.
Speaker 2: I'm looking at a chart of the thirty year French
Speaker 2: piece in its log Convex price down, well, yield up.
Speaker 2: It's moving, it's moving a vengeance.
Speaker 5: Jane Foley.
Speaker 4: Is it a time to buy the US dollar here?
Speaker 8: Yeah? I think it probably is. That the dollar is
Speaker 8: the best performing D ten currency in July. It's still
Speaker 8: performed really very poorly from the year to day. But
Speaker 8: you know, if you look at what's happened with the
Speaker 8: SMP in a series of all time highs recently, if
Speaker 8: you look at TAM premier even you know, on the
Speaker 8: long end of the treasury market, it's come off those
Speaker 8: April highs. So there's a lot of calmers that you know,
Speaker 8: we've been discussing this month, and yet it's only really
Speaker 8: in the last week or so that the dollar has
Speaker 8: begun to, you know, pick up a little bit of steam.
Speaker 8: And I think with the SMP at full time highs,
Speaker 8: I think we've got a question whether or not that
Speaker 8: rotation trade that we saw in the first five months
Speaker 8: of the year out of US ass whether or not
Speaker 8: it's just pausing whether or not it's it's stopped. But
Speaker 8: there does seem to be a lot more optimism now
Speaker 8: with respect to the relative resilience of the US economy
Speaker 8: and with the market and have short US dollars. I
Speaker 8: think the dollar can recover some ground right here.
Speaker 4: One ten year oh I love, Yeah, I'll take a
Speaker 4: one ten year old come September. Japanese, yen, Jane. What's
Speaker 4: the Bank of Japan doing these days?
Speaker 8: Well, that the Bank of Japan, I think, is sitting
Speaker 8: watching and waiting, and that in that respect not that
Speaker 8: dissimilar to the Fed. You know, the market is concerned
Speaker 8: because the market is watching these CPI inflation rates in
Speaker 8: Japan above three percent, you know, looking fairly firm. But
Speaker 8: the Bank of Japan is looking at its own measures
Speaker 8: of underlying inflation saying, yeah, you know what, these are
Speaker 8: still quite benign and therefore is taking its time. But
Speaker 8: you know that there is a cost of living pressure
Speaker 8: issue in Japan that is you know, dripping through into
Speaker 8: the politics. It has been quite a while, is she
Speaker 8: by the prime minister very unpopular? He could be about
Speaker 8: to resign if the LDP, you know, lose its position,
Speaker 8: lose that majority in the upper House elections at the weekend.
Speaker 8: So there's a lot of stuff going on. They would
Speaker 8: like to have, you know, a friendly trade deal done
Speaker 8: with the US administration quite soon. That doesn't seem to
Speaker 8: be coming.
Speaker 6: You know.
Speaker 8: We three months ago Japan was expected to be one
Speaker 8: of those first countries, but that does not appear to becoming.
Speaker 8: The Japanese electorate not in the right frame of mind
Speaker 8: to see Japan give up too many concessions in its
Speaker 8: point of view to the US.
Speaker 2: Jane Foley, thank us so much for the Morning Brief
Speaker 2: with robber Bank on a Monday. Jane Foley had a
Speaker 2: foreign exchange strategy.
Speaker 1: And this is the Bloomberg Surveillance Podcast. Listen live each
Speaker 1: weekday starting at seven am Eastern on Apple Corplay and
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Speaker 2: What Henrietta Trace knows she goes on the political campaigns.
Speaker 2: When you're invaded partners, you don't go from town to town,
Speaker 2: you go from diner to diner. And she knows in
Speaker 2: Manchester you go to the Puritan back Room, which is
Speaker 2: Greek New England food. They invented the chicken tenders there.
Speaker 2: Henrietta always has the chicken tenders with a coconut add on.
Speaker 2: That's what you do when you're from New Orleans, you know, Henriette.
Speaker 2: I look at the granular politics of the moment. New
Speaker 2: Hampshire has been democrat since twenty ten is a general statement.
Speaker 2: I mean, what does the tensions of papas, of Puritan
Speaker 2: back room all of New Hampshire was shahen returing, What
Speaker 2: does it mean about this absolute certitude that Trump could
Speaker 2: win a third term, how the Republicans could maintain power?
Speaker 2: How fragile is it on a July Monday.
Speaker 7: Well, first of all, I do love it contenders, so
Speaker 7: thank you for the opportunity to talk about those.
Speaker 9: But secondarily, the Republican conference.
Speaker 7: Does have some pretty serious headwinds at its back when
Speaker 7: it looks at the thirty five seats that they're defending
Speaker 7: on the House side, which Shaqim Jefferies is coming out,
Speaker 7: you know, sort of guns blazing about him the weekend,
Speaker 7: he was even in Louisiana talking about it. And then
Speaker 7: the sentences where they're trying to shore up runners who
Speaker 7: can either stay in the race or staunch retirements but
Speaker 7: members do not want to be there, whether it's Shaheen
Speaker 7: Susan Collins in neighboring Maine, Tom Tillis in North Carolina,
Speaker 7: there are a host of members. Joni Ernst is on
Speaker 7: the perennial list of will she won't she. The Republican
Speaker 7: Conference is going to have to spend a lot of
Speaker 7: money next year to stay in these Senate races that
Speaker 7: they've been able to hold on to, but that are
Speaker 7: going to come under serious dress, especially with the One
Speaker 7: Big Beautiful Bill, which has a seventy one percent disapproval
Speaker 7: rating amongst independents, and tariffs, so there's a lot of headwinds.
Speaker 4: Speaking of tariff, Henriette, I mean, we're getting close to
Speaker 4: that August one deadline.
Speaker 5: I'm not really sure.
Speaker 4: What that means. But one thing we're not seeing is
Speaker 4: we're not seeing a lot of trade deals, are we?
Speaker 5: Why is that?
Speaker 7: No? We have no deals, We have no text of
Speaker 7: any deals, and even the one that we sort of
Speaker 7: have is really more of a framework.
Speaker 9: That's the one with the UK. What's happening here and.
Speaker 7: What we are seeing increasingly from the foreign nations that
Speaker 7: we're trying to negotiate with, whether it's Japan, South Korea,
Speaker 7: or the EU. Is a litany of issues. First amongst
Speaker 7: them is the two thirty two tariffs. I can't negotiate
Speaker 7: a temporary IEPA rate when I have a tariff pending
Speaker 7: on pharmaceuticals of like two hundred percent, which is what
Speaker 7: President Trump discussed in the cabinet room last week. When
Speaker 7: I have tariffs on automobiles, autmobile parts, copper and all
Speaker 7: these components that could come on and rise at the
Speaker 7: President's discretion, and those are permanent tariffs. So it's not
Speaker 7: really in your best interest to be negotiating a temporary
Speaker 7: IEPA rate of you know, let's call it twenty twenty
Speaker 7: five percent, even though that is highly putitive and well
Speaker 7: above the original you know, two and a half percent
Speaker 7: tirefreight that we had going into this administration.
Speaker 9: But the two thirty two is a the lig bit.
Speaker 7: And then you look at Brazil and you see, oh, well,
Speaker 7: we don't like your political here, so we're going to
Speaker 7: launch a Section three on one investigation into you over
Speaker 7: extensibly the digital services tax. But we could tire if
Speaker 7: now anything coming in from Brazil. And that's the That's
Speaker 7: just two of what I listed in my report over
Speaker 7: the weekend of seven different items that foreign nations are
Speaker 7: considering when they address this administration and negotiate these trade
Speaker 7: deals that are obviously not forthcoming.
Speaker 2: Paul, did you read Hendria this report over the weekend.
Speaker 4: I am reading it right now. I just called out
Speaker 4: to Lease and metized that this is unbelievable.
Speaker 5: Every week she packs it.
Speaker 4: With unbelievable detail.
Speaker 5: It's crazy.
Speaker 2: It's just so conjunctuous, it's unbelievable.
Speaker 4: So, Henriette, if I'm a country and I don't do
Speaker 4: a trade deal, okay, tariffs are going to go on.
Speaker 4: But if I'm the president, I don't think tariffs are
Speaker 4: really polling that well with Americans. So what is the administration.
Speaker 5: To do here?
Speaker 7: Yeah, the the tariffs are really a problem for the
Speaker 7: gene Janes of the world, for the members that are
Speaker 7: up next year.
Speaker 9: As Tom points out, Trump is not up again. He
Speaker 9: doesn't have to run ever again.
Speaker 7: The third term stop is really just to stave off
Speaker 7: disappearance of being a lame duck. But the reality is
Speaker 7: that the Republicans in the House and the Senate are
Speaker 7: the ones who have to run, and they're going to
Speaker 7: be in a situation where the American public. Eighty seven
Speaker 7: percent of Americans are concerned about higher.
Speaker 9: Prices somewhat or very much. That's a crazy number.
Speaker 7: So they're preposed, whether the tariffs are hitting or not,
Speaker 7: to be flipped out about tariffs.
Speaker 2: The Street's sort of saying, I'm going to voice this
Speaker 2: for Global Wall Street. MS trays Besson is once again
Speaker 2: going to have to go in and set on the
Speaker 2: couch and say, mister president, back off from liberation two.
Speaker 2: Is that gonna happen?
Speaker 7: I mean, Scott Besson just said in what Aspen last week,
Speaker 7: you'll mess around and find out, except with different words.
Speaker 7: You know, I don't know how comfortable that couch is
Speaker 7: going to be. I think that the administrator talks about
Speaker 7: generating three hundred million dollars in tariff revenue and we're
Speaker 7: at one hundred now, so that math means more tires.
Speaker 2: Henrietta, we can't wait for the New Hampshire primary. Michael
Speaker 2: Barr will lead our entourage to the Puritan back room
Speaker 2: for the chicken tenders. Parmesant, Oh nice, it's there, yep,
Speaker 2: good morning. Chris Pappus in the Papist family, decades of
Speaker 2: dedication seriously to Manchester New Hampshire and their wonderful business
Speaker 2: up there. I'mrinna Trace. Thank you so much.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also listen
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Speaker 1: Just say Alexa Play Bloomberg eleven thirty.
Speaker 2: Back from Chicago, Lisa Matteo. Do you start with the
Speaker 2: Chicago Tribune?
Speaker 5: I do not know.
Speaker 10: I should have looked into it there for the.
Speaker 2: Time article on Deep Dish pizza.
Speaker 10: No, but it was fantastic. I am starting with a
Speaker 10: Wall Street Journal. This is the look into the super
Speaker 10: fake luxury handbags. Okay, we're not talking regular fake. This
Speaker 10: is super fake fake. Yes, these are mean. They go
Speaker 10: beyond you know, you think fake. Right, you pick them
Speaker 10: up on the streets, Paul, you've talked about it, right,
Speaker 10: and you go where in Chinatown get something. But the
Speaker 10: counterfeiters are making them look as good as the real thing.
Speaker 10: And the thing is they're not cheap. You're going to
Speaker 10: pay between five hundred and five thousand dollars for these
Speaker 10: super fake bags. People get them on WhatsApp, telegram, they
Speaker 10: come straight to your door in like a branded box.
Speaker 10: They're paying influencers to promote them. So now the younger.
Speaker 2: Audience in Chinatown on a curve.
Speaker 5: This is beyond.
Speaker 10: This is a big money deal. Yeah, they're saying it's
Speaker 10: hurting the economics of the luxury brand and.
Speaker 5: Super fu See.
Speaker 10: I don't know if I can justify paying over five
Speaker 10: hundred dollars for a fake.
Speaker 9: Bag that we're still talking.
Speaker 2: Yesterday and there was chaos and I think it was
Speaker 2: fifty fourth Street and it was the Chelsea lads getting
Speaker 2: on buses. Yeah, hundreds and hundreds of people. Missus Kean
Speaker 2: went mental. Wow, she saw a Minie Kelly on them
Speaker 2: getting back next.
Speaker 10: Okay, so this is for moms and dads who are
Speaker 10: getting ready to send their kids to college. Right, that's
Speaker 10: my daughter getting ready. A change is coming into how
Speaker 10: much you can borrow for college and grad school two
Speaker 10: from the federal government. So this is starting July first,
Speaker 10: twenty twenty six, parents will be able to borrow only
Speaker 10: twenty thousand dollars per year or sixty five thousand and four,
Speaker 10: you know, a grand total from that Parent Plus program.
Speaker 10: And then you get to the grad students, right, so
Speaker 10: they'll have just over a twenty thousand dollars annual cap
Speaker 10: on those federal loans, one hundred thousand total. And even
Speaker 10: you look into medical school, law school, they have a
Speaker 10: cap of fifty thousand per year and then two hundred
Speaker 10: thousand the total limit. So the question is where do
Speaker 10: you go.
Speaker 2: Exactly, I mean all of us are living it. We
Speaker 2: know all of our people nationwide it on YouTube, Paul
Speaker 2: are living in I mean, they're just the gap here
Speaker 2: is these teenc ween see numbers versus what it actually
Speaker 2: cost to put a chairub one years through school.
Speaker 4: I don't this is a huge issue, But I don't
Speaker 4: know when people are gonna really rebel on this whole thing.
Speaker 4: It's just the economics of higher education.
Speaker 2: I believe the admonistration wants to force the colleges to
Speaker 2: lower the cost, which is kind of sounds great. The
Speaker 2: gap between the numbers you just gave, it's huge and
Speaker 2: the reality is just genuine.
Speaker 10: And then where so where do you go? You know,
Speaker 10: go to these you know, private student loan lenders are
Speaker 10: that what interest rates are they going to charge? And
Speaker 10: what does that mean for families? So that's a big us.
Speaker 10: So one more this was in screen Time. He put
Speaker 10: together look as Shaw he put to get us some
Speaker 10: lessons from the first half of the year, and he
Speaker 10: focused on Netflix. They report, you know, earnings later this week.
Speaker 10: But so Nielsen said, Netflix, Amazon, Apple, Right, they're the
Speaker 10: account for the five most watched streaming shows so far.
Speaker 10: But he says, what's happening is that Netflix is starting
Speaker 10: to lose its share of streaming because as you have
Speaker 10: companies like you know, Amazon, Apple, Hbo, Max, Hulu, Paramount,
Speaker 10: like there's more and more and more, and they all
Speaker 10: have shows in the top ten so far this year,
Speaker 10: their share the top shows is slipping, but it's still
Speaker 10: more than any other service combined. I mean, you have
Speaker 10: to look at it kind of that way too. But
Speaker 10: he said, one thing to keep an eye on are
Speaker 10: these free advertising supported services like YouTube, the Roku channel
Speaker 10: to be they're stealing those viewers from broadcasting cable, so
Speaker 10: that can give some competition to can't say.
Speaker 2: Enough about screen Time, folks. It's hugely entertaining. It's got
Speaker 2: music in there and everything. He's super informative too. Yeah,
Speaker 2: and the movies were still the Paul screening here, Yes, Lisa.
Speaker 1: Tiff This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,
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