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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple Coarclay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube you can't.

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Speaker 2: President Vladimir Zelenski joined Bloomberg News Editor in chief John

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Speaker 2: mclethwaite for an exclusive sit down in Davos, Switzerland. He

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Speaker 2: commented on the relationship between Donald Trump and Chinese President

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Speaker 2: Jiji Ping. Let's listen in the.

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Speaker 3: Phone call during the war not to watch not enough.

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Speaker 3: I think, yes, he can push putin to piece. I'm sure.

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Speaker 3: I think that's only President Trump is strongest ancient zimpion.

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Speaker 3: I think that there's no other allies who can really

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Speaker 3: do it. Yes, because his economy put in a corner

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Speaker 3: after sanch after everything depends worthy much of China.

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Speaker 4: That was Ukraine President Bottomla Zelenski speaking with Bloomberg News

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Speaker 4: editor in chief of John Micklethwaite, want to go to

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Speaker 4: Ras Mathis and now Bloomberg News Director for Europe, Middle

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Speaker 4: East and Africa. Zelenski also telling Bloomberg News the peacekeeping

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Speaker 4: troops in his country must include the US. That's quite

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Speaker 4: a headline. What's the reality of.

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Speaker 5: That, Well, it's a reality that he says any peacekeeping

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Speaker 5: troops supplied by others, including the US, won't be nearly enough.

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Speaker 5: He says he needs many, many more peacekeeping troops to

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Speaker 5: really act as a proper deterrent to Russia in this case.

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Speaker 5: And it's also acknowledgement even in Europe amongst allies, it's

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Speaker 5: going to be a tricky question to get commitments to

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Speaker 5: a sizeable number of peacekeepers. You've got governments in Europe

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Speaker 5: that are fairly fragile at the moment. We've got political

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Speaker 5: chaos still in a couple of countries, elections coming up

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Speaker 5: in Germany, and the mood at home in these countries

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Speaker 5: may not be about putting their own troops potentially directly

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Speaker 5: in the line of five. Because that's what Zelenski is

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Speaker 5: talking about in this interview that we had at Davos.

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Speaker 5: It's not about peace keeping troops back way back behind

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Speaker 5: the lines in cities. It's possibly being directly in harm's way.

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Speaker 5: And so you can imagine for Donald Trump, who really

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Speaker 5: is averse to troops going into conflict zones and to

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Speaker 5: war as a whole, like committing to put US troops

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Speaker 5: potentially in harm's way. That's going to be a very

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Speaker 5: big call.

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Speaker 2: Okay, let's step back a little bit. Ros what's the

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Speaker 2: feeling within your part of the world about President Trump

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Speaker 2: and his administration being able to bring about some type

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Speaker 2: of ceasefire in Ukraine? Is that are the odds hiring?

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Speaker 2: Maybe there were several days ago, and is there center timing.

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Speaker 5: That certainly seems to be the direction of travel. It

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Speaker 5: was happening even before Donald Trump took office. You could

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Speaker 5: see that both Russia and Ukraine are position themselves to

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Speaker 5: get in the best possible space to negotiate. It's clear that,

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Speaker 5: you know, after years of war here that it's grinding on.

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Speaker 5: Russia is still making advances, and the mood, you know,

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Speaker 5: not just outside Ukraine, but increasingly inside Ukraine is do

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Speaker 5: we move towards some kind of negotiated solution. And you

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Speaker 5: can see in the comments from Zelenski in the interview

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Speaker 5: he's really acknowledging that. And so Donald Trump is going

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Speaker 5: to give that a big push, that's for sure, and

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Speaker 5: maybe he's the one who can really push Vladimir Putin

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Speaker 5: to the table, but it's definitely the direction of travel

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Speaker 5: either way.

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Speaker 4: How do you think the next few weeks play out

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Speaker 4: in relation to the chess pieces on the board?

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Speaker 6: Here?

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Speaker 5: An interesting thing is whether there is a phone call

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Speaker 5: between Vladimir Putin and Donald Trump. Is at a preliminary

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Speaker 5: step they have a phone call. Trump has said he

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Speaker 5: is willing to meet Putin in person. That would be

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Speaker 5: a really big meeting. Obviously, you know, thinking about just

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Speaker 5: location where they could do that for a start, and

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Speaker 5: what are the stakes having a face to face meeting.

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Speaker 5: But we're looking for that conversation to happen, and then

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Speaker 5: how does that conversation lead us towards the idea of

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Speaker 5: maybe a formal meeting between the two, and then at

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Speaker 5: some point do we get towards a full sit down?

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Speaker 5: And Ukraine obviously saying it needs to be very much

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Speaker 5: part of any of those negotiations. It cannot be that

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Speaker 5: Trump and Putin do a deal on the sidelines, and

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Speaker 5: very much that's been a vein of the comments in

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Speaker 5: the interview we had today.

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Speaker 2: So Ross, what is this broadly defined? You know that

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Speaker 2: your sources over there in Europe, how are they viewing

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Speaker 2: what's kind of transparent in the last few days here

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Speaker 2: with President Trump at being sworn in and maybe some

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Speaker 2: of the announcements coming out of the White House about

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Speaker 2: of various topics. What's the feeling in Europe generally, Well, you.

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Speaker 5: Can see that it's interesting the conversations at DUBOS because

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Speaker 5: they're very very upbeat on the US, be it CEOs

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Speaker 5: or others, and they're talking about the opportunities in the

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Speaker 5: US economy and the US market and very downbeat in

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Speaker 5: turn on Europe. But for leaders in a mea, it's

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Speaker 5: concerned about are we going to see a trade or

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Speaker 5: are we going to see this really descend into high

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Speaker 5: level trade friction protectionism?

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Speaker 6: What does that look like?

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Speaker 5: Is there a fight between the US and Europe over

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Speaker 5: regulation including a big tech for example, So a lot

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Speaker 5: of worry about how does this play out in practicality.

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Speaker 5: It's very clear Donald Trump is fast out of the

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Speaker 5: gate on a lot of things, and he wants to

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Speaker 5: get a lot of stuff done and he wants to

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Speaker 5: do it fast.

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Speaker 4: Hi, Ras, thanks a lot, really appreciate it. Rids Mathison,

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Speaker 4: Bloomberg News director for Europe, Middle East and Africa, someone

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Speaker 4: we talked to you yesterday on the show is like,

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Speaker 4: if you have something that Donald Trump wants, like, now's

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Speaker 4: the time to show it. A lot of that's in

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Speaker 4: the ground. I don't quite know what Europe brings to

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Speaker 4: that part of the table.

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Speaker 2: No, and as kind of you know, we just look

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Speaker 2: at europeconomically a lot of challenges. There are a lot

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Speaker 2: of headwinds, you know, even with its leading economy's most

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Speaker 2: notably Germany and France.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch the program

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Speaker 1: live weekdays are ten an on Applecarplay and Android Otto

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Speaker 1: on Amazon Alexa from our flagship New York station. Just

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Speaker 1: say Alexa play Bloomberg eleven thirty.

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Speaker 4: Let's get to Trump Day two here. So the latest,

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Speaker 4: of course, was now talking about ten percent TARA on China,

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Speaker 4: President Trump saying yesterday that other countries are bigger users,

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Speaker 4: though it's not just China. He also mentioned the European

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Speaker 4: Union and the three hundred and fifty billion dollar deficit

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Speaker 4: with them joining us now. Wendey Schiller, Professor at Brown University, Professor,

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Speaker 4: are we overestimating or underestimating what the tariff reality will

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Speaker 4: be at this point.

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Speaker 7: Alex, I mean, I think this is really a sort

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Speaker 7: of restraint by you know, literally restraint by Trump in

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Speaker 7: response to I think who you saw at the inauguration

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Speaker 7: inside the capitol, you know, big business, big tech, you know,

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Speaker 7: on a number of fronts, not just tarifs, but also

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Speaker 7: thinking about visas for workers.

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Speaker 8: You know, he's trying to balance.

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Speaker 7: This so that he doesn't impose a big shock to

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Speaker 7: the economy which would raise prices for goods, while he's

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Speaker 7: also deporting a lot of people who do work in

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Speaker 7: the shadow economy, and labor costs are going to go

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Speaker 7: up to So having all that happen means that his

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Speaker 7: promise to reduce inflation will be much harder to keep.

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Speaker 7: So I think that's where he's sort of walking the

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Speaker 7: line of keeping his word but really keeping an eye

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Speaker 7: on what the impact would.

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Speaker 8: Be on inflation.

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Speaker 2: Wendy, I guess one of the issues that I think

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Speaker 2: has kind of been put on the back burner just

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Speaker 2: a little bit is some of these cabinet nominees they

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Speaker 2: still have to go through Senate approval. Are we can

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Speaker 2: have any real challenges laid down by the Senate for

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Speaker 2: some of these nominees, well, Paul.

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Speaker 7: You know, I would have thought heg Seth would sail through,

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Speaker 7: you know, And you know, there's a pretty good margin

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Speaker 7: in the Senate in terms.

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Speaker 8: Of their margin of votes.

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Speaker 7: They fifty three, so unlike the House where they can't

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Speaker 7: really move without one person defecting then installs everything.

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Speaker 8: So these are only the purview of the Senate.

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Speaker 7: But you know, new allegations have come out about Hexseth's behavior,

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Speaker 7: and this question is that a liability Trump really wants

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Speaker 7: to assume and be commander in chief, and so I

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Speaker 7: think that's a little bit tenuous. I think Telsey Gabbard's

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Speaker 7: a little tenuous, and Robert Kennedy Junior.

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Speaker 8: Still there are some questions among some Republicans.

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Speaker 7: It really depends on where the Senate Republicans want to

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Speaker 7: draw a line in the sand with Donald Trump.

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Speaker 8: We haven't seen any of that line yet.

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Speaker 7: But as sort of reaverb comes back on some of

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Speaker 7: the decisions he's making to executive.

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Speaker 8: Orders, there's more pressure on the Senate to exert itself.

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Speaker 4: We saw a little bit around the pardon of January

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Speaker 4: sixth individuals. There was like a touch of that in

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Speaker 4: the Senate, but nothing's sort of full throated, how long

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Speaker 4: do you think that's going to take for us to

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Speaker 4: get a good read on?

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Speaker 8: Well, I think Republican senators are going to pick their battles.

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Speaker 7: Part of that's going to be who's up for reelection,

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Speaker 7: Like Joni Ernst on the hexeth nomination. She's from Iowa,

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Speaker 7: She's got reelection at twenty twenty six. They're worried about

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Speaker 7: being primary. Do they really think Trump will still have

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Speaker 7: the mojo to get somebody really good to primary them

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Speaker 7: a year from now? They're calculating their electoral future, and

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Speaker 7: then the other senators are trying to figure out what's

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Speaker 7: going to be the most important thing to try to

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Speaker 7: block from the Trump administration when it comes to either

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Speaker 7: their beliefs or their state, it's too early for them

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Speaker 7: to make that move or.

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Speaker 8: Make that call.

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Speaker 7: The only ones I think who could step out are

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Speaker 7: people who are not up for reelection for another four

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Speaker 7: years because they don't really see themselves.

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Speaker 8: As tied to Trump electorally.

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Speaker 7: So this is about electoral politics, but it's also about

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Speaker 7: the center prerogative. Rand Paul's gone out there about using

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Speaker 7: the military in terms of deportations.

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Speaker 8: He said, no, he doesn't want to see that.

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Speaker 7: So we'll have to look to the Senate because the

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Speaker 7: House is just barely hanging on in its majority. The

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Speaker 7: Senate Republicans will be key to either moving things forward,

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Speaker 7: objecting or stalling.

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Speaker 2: Uh, Professor, what's the latest on DOGE. What's the filling

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Speaker 2: in Washington, DC about what kind of efficacy that unit

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Speaker 2: could have?

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Speaker 8: Well, well, this is where labeling matters.

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Speaker 7: Department of Government efficiency sounds really official, like it's a

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Speaker 7: big cabinet department, but Congress has to create cabinet departments.

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Speaker 8: You can't just do that whole cloth as president.

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Speaker 7: So now it's really just sort of a commission seless

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Speaker 7: agency which the president can create. In fact, Obama created

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Speaker 7: sort of a similar thing on digital technology. So when

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Speaker 7: you think about that, that makes it sort of smaller

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Speaker 7: and maybe a little bit less scary.

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Speaker 8: It'll be people who are embedded in all of the

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Speaker 8: agencies and.

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Speaker 7: The departments that say, you know, do we need this

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Speaker 7: many people? Can we do this more efficiently?

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Speaker 6: You know?

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Speaker 7: How can we streamline cost expenses and jurisdiction? You know,

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Speaker 7: can we get the federal government to shrink not only

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Speaker 7: in its size but in its reach? And I think

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Speaker 7: that's where Trump can skirt any kind of congressional stalling

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Speaker 7: or objections.

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Speaker 4: Does it make a difference. Can those little tinkerings make

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Speaker 4: a dent in the deficit or budget?

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Speaker 7: Well, you know, everything adds up when you think about it,

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Speaker 7: not just federal employees, which, by the way, Trump is

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Speaker 7: ordering back to work following a lot of big industries,

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Speaker 7: a lot of big companies are saying it's time to

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Speaker 7: come back to work in the office.

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Speaker 8: And of course we've.

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Speaker 7: Seen the damage to local economies big and small in

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Speaker 7: terms of the loss of all those people coming to

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Speaker 7: and from work. So Trump is going to make the

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Speaker 7: claim that getting people back in the office is there

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Speaker 7: for the economy, and if that happens, if local economies

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Speaker 7: pick up because of that, he'll be proven correct.

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Speaker 8: In that assumption.

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Speaker 2: Hi, Wendy, thank you so much. As always, Wendy Schuler,

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Speaker 2: Professor at Brown University.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Applecarclay, and Android Auto

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Speaker 2: David Kopla joins us. He's a founder, chief executive officer

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Speaker 2: and chief investment strategist at Mainstay Capital Management. Hey, David,

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Speaker 2: early into this earning season, but again, you know, double

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Speaker 2: digit earnings is kind of what analysts are forecasting, and

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Speaker 2: some people see that as a head risk. Which what's

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Speaker 2: your sense as to earnings and kind of support for

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Speaker 2: this market.

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Speaker 6: Well, I think that earnings are going to be the

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Speaker 6: catalyst this year. We need earnings to be strong. We're

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Speaker 6: looking at twelve percent earnings growth our estimate for the

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Speaker 6: fourth quarter. As you said, as the introduction of the segment.

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Speaker 6: We had just blowout bank earnings last week, fantastic. We

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Speaker 6: had Netflix come through with very good news, and we

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Speaker 6: think that we'll have a strong earning season and we'll

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Speaker 6: continue to have strong earnings into this year. There's some

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Speaker 6: pretty lofty forecasts, you know, looking at fourteen to fifteen

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Speaker 6: percent earnings for twenty twenty five, and there are some

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Speaker 6: problems that could come. But you know, if we look

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Speaker 6: what's happened so far. Everyone was worried about tariffs. I

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Speaker 6: was quoted in an article last week about tariffs that

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Speaker 6: I think that President Trump will use tariffs more as

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Speaker 6: a negotiating tool than just a simple economic tool. Just

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Speaker 6: impose them, to impose them. He's threatened tariffs at twenty

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Speaker 6: five percent on Canada and Mexico, ten percent on China,

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Speaker 6: but hasn't done anything yet, hasn't his His announcements on

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Speaker 6: at with everything in the last couple of days at

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Speaker 6: least have been pretty benign. So the market has read

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Speaker 6: that as good news because that would be certainly an

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Speaker 6: impact because of impact costs, input costs, potential inflation driver,

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Speaker 6: that could be an impact on earnings. But so far,

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Speaker 6: we continue to look for good earnings in twenty five,

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Speaker 6: and we're seeing good earning surprises so far for the

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Speaker 6: fourth quarter of twenty four.

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Speaker 4: So to that point, will and I'm kind of laughing

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Speaker 4: at myself as I say this, but I mean it

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Speaker 4: will twenty twenty five be the year of the stock picker.

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Speaker 4: Will this finally be the case that you may not

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Speaker 4: see the whole index rise as much, but individually some

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Speaker 4: of these sectors, some of these names can really outperform.

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Speaker 6: Yeah, you know, we hear that all the time. I mean,

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Speaker 6: we hear it all the time. This will be the

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Speaker 6: year of the stock picker. Right now, it's time to

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Speaker 6: pick stocks. You just can't buy the market. I would

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Speaker 6: say in this year that is going to be true.

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Speaker 6: It's important to us as tactico asset allocators. You know,

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Speaker 6: That's what we've been talking about our clients and the

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Speaker 6: other people we're educating, is you know, in an election year,

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Speaker 6: there's so many people that moved the sidelines. Look how

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Speaker 6: much money went to money market funds last year just

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Speaker 6: because of uncertainty or such a conviction about if this

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Speaker 6: candidate wins or this candidate wins, what that'll mean for

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Speaker 6: the market. What's really most important are what are the

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Speaker 6: policies of each of those candidates. The thing to do

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Speaker 6: is stay invested. Twenty twenty four prove that again best

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Speaker 6: election year in decades, right for the markets, And as

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Speaker 6: we roll into twenty twenty five, we're doing well again.

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Speaker 6: But it's we're seeing where policy is going to matter,

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Speaker 6: and we're already seeing where that's affecting these different sectors

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Speaker 6: and different companies. Look at Oracle, you know, with this

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Speaker 6: five hundred billion dollar project that's been announced they might

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Speaker 6: participate in. They've rallied on that news. So it is

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Speaker 6: going to be going through sector by sector, industry by industry,

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Speaker 6: which with the policies that are going into effect which

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Speaker 6: will be favorably impact which won't. And yes, that will

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Speaker 6: drive I think more of a selection of at least

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Speaker 6: sectors versus stocks, and or sectors and stocks versus just

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Speaker 6: being in the index.

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Speaker 2: So, David, one of the stats I see thrown about

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Speaker 2: a lot money market funds and now it's close to

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Speaker 2: seven trillion in assets. Is it fair to think of

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Speaker 2: that as fuel for potential stock and bond rallies or

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Speaker 2: is that just money that is in money market funds

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Speaker 2: and don't expect it to come into risk your assets.

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Speaker 6: I think it's fair to think of it as fuel

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Speaker 6: or dry powder for the markets to a degree. As

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Speaker 6: I said, we know a lot went into the market

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Speaker 6: or went into money markets last year because of concern

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Speaker 6: over the election. I think that'll start coming back out.

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Speaker 6: But also we have now the highest interest rates right,

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Speaker 6: the highest yields on money market accounts that we've had

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Speaker 6: in years over a decade, and so people can enjoy

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Speaker 6: a four and a half five percent return in a

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Speaker 6: money market account with a guaranteed return and feel very

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Speaker 6: safe about that. But you look at last year, there

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Speaker 6: were people that did that and then saw what the

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Speaker 6: market did and looked at that opportunity cost. So I

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Speaker 6: think that as Trump rolls out his policies, we see

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Speaker 6: that the economy is doing maybe better than some might expect.

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Speaker 6: It certainly doesn't look like a recession right now. That

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Speaker 6: we could see the markets continue to do well, and

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Speaker 6: we'll see that money come back in which came out

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Speaker 6: a lot right at the end of last year early

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Speaker 6: this year. And really, you know, when we're setting a

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Speaker 6: record for money market accounts, that's a lot of cash

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Speaker 6: on the sidelines.

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Speaker 4: All right, we appreciate it. Thank you so much for

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Speaker 4: the insight. Looking forward to how this year unfold.

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Speaker 8: I got to be honest at.

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Speaker 4: David Coodluck, Calendar, CEO and Chief Investment Strategy.

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