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Speaker 1: Hello there, I'm Chuck Todd. Welcome to another episode of

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Speaker 1: the Chuck Podcast. Hey, just a quick little housekeeping note

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Speaker 1: if you will, particularly if you listen to the Check

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Speaker 1: podcast versus watching it on YouTube, although we'd love for

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Speaker 1: you to go to the YouTube channel, subscribe, like and subscribe.

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Speaker 1: You know all of these you know, you know my

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Speaker 1: whining about algorithms. You know, I can whine all I want,

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Speaker 1: but this is the system that we have. You know,

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Speaker 1: as I joke, I cover politics as it is well

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Speaker 1: in the information ecosystem. Just because I think it sucks

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Speaker 1: doesn't mean I'm not going to participate in it as

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Speaker 1: best I can. So would love that. But we're making

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Speaker 1: a slight tweak on the audio front, really based on

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Speaker 1: sort of our own sort of consumer demands, if you will,

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Speaker 1: We're going to break the We're going to offer the

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Speaker 1: podcast now in sort of two different ways. You can

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Speaker 1: get the entire thing as one every episode and that

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Speaker 1: regularly is somewhere two hours or less. Or we will

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Speaker 1: also offer it so if you just do the audio feed,

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Speaker 1: you may see one episode, you may get three beads.

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Speaker 1: One is the entire thing.

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Speaker 2: Soup to nuts.

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Speaker 1: One is just are just the feature interview for that episode.

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Speaker 1: So today, for instance, it's Mark Zandi, the chief economist

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Speaker 1: at Moody's, and then one is just my thoughts for

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Speaker 1: the day, coupled with the Q and A. So it's

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Speaker 1: a way if you want to absorb in chunks or

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Speaker 1: if you want to do it all at once. My

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Speaker 1: feeling is, in this day and age, you know you're

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Speaker 1: in charge is the consumer. We're putting all the content

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Speaker 1: out there and we want it. We want you to

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Speaker 1: be able to consume it anyway you want, not forcing

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Speaker 1: you to consume it the way we want you to

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Speaker 1: consume it for what it's worth. I do think of

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Speaker 1: it as one one whole meal, sort of thoughts of

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Speaker 1: the day, something you know that I've been thinking about,

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Speaker 1: an interview on a topic that I think you should

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Speaker 1: know more about, and then responding to your question. So

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Speaker 1: I do think of it as sort of a complete meal.

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Speaker 1: But I also know in this day and age, people

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Speaker 1: you want to grab Hey, I'm curious of this, So

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Speaker 1: that's an interesting interview, but I want to listen to

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Speaker 1: that later totally get that. So we want to provide

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Speaker 1: the opportunity to give you, to give you basically both

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Speaker 1: options and of course if you want to watch, that's

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Speaker 1: what YouTube is for as well. So we appreciate all

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Speaker 1: the different ways. And that's the thing I've learned since

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Speaker 1: going independent, which is I preached it all the time

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Speaker 1: when I was at NBC. Platform neutral. Don't force consumers

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Speaker 1: to take your content the way you want it. You

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Speaker 1: got to sort of meet them where they are. And

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Speaker 1: this is another attempt of me trying to meet you

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Speaker 1: where you are joining me now. Is the cheap economist

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Speaker 1: for Moody's Analytics. It is Mark Zandi. He is a

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Speaker 1: return guest and as many people who followed me know,

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Speaker 1: somebody I think is as good as anybody in this

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Speaker 1: sort of like data driven analysis.

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Speaker 2: It's not you know, he tells you what is not

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Speaker 2: what he wishes. And so here we are market to

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Speaker 2: see you. Yeah, Chuck, it's good to be on. We

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Speaker 2: were just chatting. I was when was When was I on?

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Speaker 2: Was April?

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Speaker 1: It was early was April and April Yeah, so it

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Speaker 1: was just after Liberation Day, but about a week or

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Speaker 1: so after Liberation Day, and we were talking about, well,

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Speaker 1: the delayed impact, when does it come? And at the

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Speaker 1: time you said, probably the first signs are going to

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Speaker 1: be July and well here we are in August, and

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Speaker 1: you tell me, it feels like we're seeing those signs, right.

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Speaker 1: It's like, oh, look at the Walmart prices there up

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Speaker 1: and look at you know, there are these little areas

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Speaker 1: where you starting to see the to see the impacts,

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Speaker 1: I mean fresh vegetables. That is something I think folks

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Speaker 1: didn't fully appreciate how badly that was going to get

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Speaker 1: impacted by these teriffs.

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Speaker 3: Yeah, you can see it in the data. You know,

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Speaker 3: we got a data point for producer price Indicators at

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Speaker 3: pp I into cy pp producer price in Yes, remind me,

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Speaker 3: I always say pp I never really spelled out what

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Speaker 3: that is exactly.

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Speaker 1: I appreciate you trying because, as I always say, we

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Speaker 1: want to speak American on.

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Speaker 2: This PODCA Yeah, yeah, yeah, PPI.

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Speaker 3: That's what the prices that businesses charge each other right

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Speaker 3: before it gets to consumers. It's kind of a leading

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Speaker 3: indicator for consumer prices, the prices we pay.

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Speaker 2: You and I when we go into the store.

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Speaker 3: And they jumped in July by a lot, you know,

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Speaker 3: so it's coming. And even in the Consumer Price Index

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Speaker 3: a CPI, the one that we all kind of know

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Speaker 3: and love, you can you can see it, you can

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Speaker 3: feel it. I don't know that, you know, if you

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Speaker 3: ask Americans can you feel the tariffs, that they would say, yeah,

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Speaker 3: I feel, I feel But you see it in the

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Speaker 3: data and all the direction of travel here suggests there

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Speaker 3: this is going to continue to be the case. And

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Speaker 3: I think, you know, if you invite me back in two, three,

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Speaker 3: four months, so we'll be able to say to definitively

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Speaker 3: Americans are feeling it.

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Speaker 2: You know, there's been a lot of coverage over the

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Speaker 2: last three or four weeks about how, hey, the predictions

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Speaker 2: of doom and gloom on the tariffs haven't come to fruition.

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Speaker 1: And I'm thinking, why are you writing this story now?

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Speaker 1: It's too early to write this story, is it?

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Speaker 2: Or?

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Speaker 1: Or are you or is it surprising that the hit

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Speaker 1: isn't harder yet?

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Speaker 2: It's pretty much descript you know.

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Speaker 3: You know, I never thought that the tariffs and other

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Speaker 3: policies that are being pursued, like immigration policy, would be

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Speaker 3: a cliff of what I call a cliff event, you know,

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Speaker 3: le we go off a cliff, that's that's you know,

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Speaker 3: immediate recession. I always thought it was more of a corrosive.

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Speaker 2: On the economy.

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Speaker 3: But you know, when the economy is under such pressure

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Speaker 3: and it is, it is vulnerable to anything else that

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Speaker 3: could go wrong, and thus recession risks in.

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Speaker 2: My mind, are very high. But no, it's I think

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Speaker 2: it's stuck pretty much descript.

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Speaker 3: Now. There are a few things that have slowed down

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Speaker 3: the pass through the terrorists to consumers.

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Speaker 2: You know, all the so called front loading that went on,

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Speaker 2: you know, inventory front loading.

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Speaker 3: Yeah, you know, Person Trump is kind of telegraphed very

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Speaker 3: strongly that he's going to raise tariffs, and so importer

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Speaker 3: has been working hard to get product into the United

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Speaker 3: States before the tariffs actually are implemented, and we're still

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Speaker 3: working down that inventory. So it won't be until you

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Speaker 3: get to the other side of that that you start

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Speaker 3: to see the real price increases.

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Speaker 1: You know, if you watch a TV ads, I think

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Speaker 1: it's for Kia, could be Hondai. It's one of the

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Speaker 1: two Korean car companies who brag. They say in their advertising,

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Speaker 1: you know, we're not passing on the tariffs to you,

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Speaker 1: And I'm thinking, yeah, because you already brought these cars

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Speaker 1: over before you had to pay the tariffs.

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Speaker 2: Probably is my guest, but I.

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Speaker 1: Thought, well, good for them for the marketing because they

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Speaker 1: know people are thinking about those things when it comes

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Speaker 1: to buyble.

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Speaker 3: Well, and you know they're in the political spotlight too, right,

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Speaker 3: there's a big shiny light on them, you know. I

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Speaker 3: think though, with the foreign producers, we'll start to see

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Speaker 3: more of the price increases with the shift over in

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Speaker 3: the model year. That's when so we're going to the

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Speaker 3: model year change is over and that's when they generally

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Speaker 3: put in price increases.

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Speaker 1: So we need to watch that very carefully. That's right

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Speaker 1: at the beginning of that process.

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Speaker 3: Right at the beginning, Yeah, generally, you know, it's kind

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Speaker 3: of August September, you know, right and there, so we'll see.

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Speaker 1: So are the conditions there for an interest rate cut

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Speaker 1: and is it a necessity or is this something that

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Speaker 1: it's probably being done with a little political pressure. Even

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Speaker 1: without the political pressure, probably is warranted.

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Speaker 2: I mean.

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Speaker 3: The other aspect of the Terrists when you ask me,

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Speaker 3: in my surprise is growth in there. The economy's growth

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Speaker 3: rates have really slowed very sharply, in significant part due

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Speaker 3: to the uncertainty creative by the Terrists, but also the

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Speaker 3: tariffs themselves. And you can see it in the job market.

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Speaker 3: The job market is really throttled back. I mean, underlying

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Speaker 3: monthly job growth is you know, twenty thirty thousand jobs.

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Speaker 2: I mean, that's nothing.

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Speaker 3: And you're right on the border of a negative number,

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Speaker 3: and I think we're going to get some negative numbers here.

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Speaker 2: So if you're at the FED and you're looking at that.

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Speaker 3: You're saying, oh, you know, I'm going to put more

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Speaker 3: weight on what's going on with respect to growth in

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Speaker 3: the economy that I'm on the inflation.

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Speaker 2: And then you put the political overlay on top of that.

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Speaker 3: Think about if we actually go into recession, what will

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Speaker 3: happen with.

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Speaker 2: Regard to the fedor reserve.

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Speaker 3: There's a lot of, you know, obviously discussion about then

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Speaker 3: in independence. There's some talk in Congress about a piece

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Speaker 3: of legislation to change the Federal Reserve active nineteen thirteen,

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Speaker 3: which would further impair the independence.

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Speaker 2: Of the FED.

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Speaker 3: So if you're sitting at the FED, the last thing

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Speaker 3: you want is, you know, an economy going into recession

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Speaker 3: in that political context. So they're waiting very heavily growth

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Speaker 3: over inflation at this point. So therefore I'd be surprised

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Speaker 3: if they don't cut rates when they meet again in September.

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Speaker 2: That should provide some.

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Speaker 1: Impact in the economy at least, I mean, that's the hope, right,

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Speaker 1: that it triggers some investment, maybe delays plan layoffs.

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Speaker 3: Is that on the margin, I mean, you know, this

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Speaker 3: rate cut is well anticipated. I was just looking a

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Speaker 3: few minutes ago the market so for priced in right,

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Speaker 3: priced in, it's priced in eighty five percent probability that

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Speaker 3: the that's going to do this in September cut rates

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Speaker 3: and then cut rates on consistent bass going forward until

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Speaker 3: they so called normalized rates could rates down to something

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Speaker 3: that probably closer Right now, the federal funds rate targets

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Speaker 3: just over four. If you get it down closer to three,

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Speaker 3: that would be consistent with what they think is what

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Speaker 3: they call equilibrium, where policy is not either supporting or

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Speaker 3: restraining growth. And that's that's baked in, that's discounted, that's

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Speaker 3: in the stock price in stock prices and credits president

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Speaker 3: everything else. It does help in the sense that you know,

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Speaker 3: some interest rates that you know that matter to consumers

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Speaker 3: and businesses will fall. So for example, if you have

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Speaker 3: a few mon in your credit card, you should see

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Speaker 3: that that rate is extraordinarily high. It's over twenty percent.

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Speaker 3: I mean, it's close to record high that should come in.

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Speaker 3: If you have a home equity line of credit, you

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Speaker 3: should be you should see it pretty quickly, a cut.

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Speaker 2: In your interest rate on that loan.

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Speaker 3: If you're a small business person, you have a loan

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Speaker 3: from a bank, it's usually tied to the so called

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Speaker 3: prime rate, which is tied direct.

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Speaker 2: So there are some you know, benefits.

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Speaker 3: If you're a borrower, but the most of the benefit

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Speaker 3: is already baked in to a significant degree because investors

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Speaker 3: already have anticipated, you know, what the it's going to

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Speaker 3: do here.

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Speaker 1: So when you look at the state of the economy,

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Speaker 1: let's start with employment. The current what's a little bit scary.

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Speaker 1: It's like, so we have multiple things happening. You have

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Speaker 1: this cut in government, right, and you have this pullback

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Speaker 1: in government funding to the states, which is going to

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Speaker 1: have a follow on effect.

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Speaker 2: Right.

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Speaker 1: If we've seen federal government workers laid off, you're going

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Speaker 1: to probably see state and local government because there's a

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Speaker 1: whole bunch of money that the federal government had been

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Speaker 1: helping states with, and we know the state budget crunch

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Speaker 1: is coming. Essentially, the next legislative sessions around the country

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Speaker 1: are going to be filled with a lot of tough

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Speaker 1: choices because they've had a lot of free money, COVID

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Speaker 1: being a big.

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Speaker 2: Factor here to do that. So you're going to have this.

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Speaker 1: On the government sector side, a shrinking of the labor force.

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Speaker 1: Then you also have the issues that are associated with

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Speaker 1: tariffs and the cost of things. So if stuff a

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Speaker 1: fewer things are coming in, maybe you just have fewer

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Speaker 1: workers in general dealing with you. And then you have

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Speaker 1: the investment, all of the AI infrastructure investment, which doesn't

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Speaker 1: actually create jobs. So I look at that and think

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Speaker 1: as it just as an amateur observer that's probably a

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Speaker 1: little overly informed, and think, boy, this is a tough

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Speaker 1: job market that's likely to get tougher in the next

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Speaker 1: couple of years. Given where investments are going in corporate America.

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Speaker 1: What do you see and what are you watching to see.

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Speaker 2: Whether whether this sort of jobs armagedin that may be

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Speaker 2: coming for pink collar America is coming. Yeah, yeah, I

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Speaker 2: agree with you. I think it's gonna be a tough

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Speaker 2: job market. Just question of how tough.

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Speaker 3: You know, whether we start getting negative employment numbers here,

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Speaker 3: you know, actual outright declines and employment, I think that's

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Speaker 3: the real possibility. The other way of you framed it

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Speaker 3: very nicely. You kind of went sector bi sector and said,

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Speaker 3: where where the job is going to come from?

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Speaker 2: Where is their job growth? Yeah? Exactly.

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Speaker 1: You know.

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Speaker 3: The only and that's one reason to be very nervous here,

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Speaker 3: the only industry of consequence that's adding significantly to payrolls

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Speaker 3: at this point is healthcare. Healthcare services, hospitals, doctor's offices,

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Speaker 3: that kind of thing.

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Speaker 2: So our aging population creates jobs great, yeah, yeah, And

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Speaker 2: some of that feels like catch up because the healthcare

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Speaker 2: spector was slow to hire coming out of the pen.

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Speaker 2: I make for lots of reasons, but now they've caught up.

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Speaker 3: And then you got to ask yourself, well they continue

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Speaker 3: the healthcare sector continue to create jobs to the degree

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Speaker 3: that it has, And then you throw in all the

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Speaker 3: other things you just said. The thing I'd throw into

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Speaker 3: the mix is immigration. You know, we're seeing a very

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Speaker 3: sharp now decline in the immigrant labor force, and so

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Speaker 3: obviously that's fewer jobs in construction, trades, agriculture, manufacturing.

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Speaker 2: Well, is that fewer jobs or is that just fewer

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Speaker 2: jobs that will get filled?

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Speaker 3: Right?

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Speaker 1: That's the question I have. And what what happens to

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Speaker 1: those jobs? What happens to the chicken processing plans, for instance. Exactly,

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Speaker 1: it's not like those positions are going to go away.

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Speaker 1: They just can't film just a film, so it's going

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Speaker 1: to it shows up as no job growth when you

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Speaker 1: would have you would have expected some job creation in

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Speaker 1: the construction trades or leisure, hospitality or whatever it is,

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Speaker 1: and you're not going to get it because you just

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Speaker 1: don want the You just don't have the bodies.

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Speaker 2: You just don't have the workers.

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Speaker 3: The other way of thinking about it is or framing

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Speaker 3: it is hiring and layoffs. There's no hiring businesses writ

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Speaker 3: large pretty much across the board, healthcare being the exception.

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Speaker 3: They just aren't hiring at this point, and that may

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Speaker 3: go to the uncertainty crea by policy and they're.

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Speaker 2: Just nervous about what it all means.

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Speaker 3: It could go to partly to AI and the impact

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Speaker 3: AI starting to have, because a lot of the lack

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Speaker 3: of hiring is in professional services and financial services and

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Speaker 3: sectors or you expect AI. It's not like they're laying

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Speaker 3: off yet because of AI, but they're not hiring because well.

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Speaker 1: Let's put yourself in the shoes of a CEO wondering

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Speaker 1: if AI can create efficiencies if I were running a

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Speaker 1: small business or medium sized business and I'm you know,

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Speaker 1: I wouldn't fill I wouldn't fill positions as needed yet, right,

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Speaker 1: I'd see, hey, can we what can we do with AI? Right,

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Speaker 1: I wouldn't be laying people off, but i'd be I mean,

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Speaker 1: what you're describing is sort of like a very logical way, like,

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Speaker 1: let's see if AI can fill the gap here, and

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Speaker 1: if you can't, okay, then I'll hire.

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Speaker 2: But I'm gonna wait.

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Speaker 1: Maybe six months, you know, to see how good these

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Speaker 1: tools are and whether this really is a replacement level

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Speaker 1: technology in the moment that we're living.

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Speaker 2: Totally. I think that's now.

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Speaker 3: Small businesses they have less latitude to do that, you know,

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Speaker 3: I think they're because they just less room to maneuver.

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Speaker 3: But bigger businesses absolutely, well, the largest employers in the country, Absolutely,

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Speaker 3: that's I think the way they're thinking.

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Speaker 2: It's probably the mindset.

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Speaker 3: I don't again, they're not laying off yet, That's that's

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Speaker 3: what that's That actually is the firewall between the weak

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Speaker 3: economy that we have and the we in recession. And

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Speaker 3: if if in fact, businesses say, oh I can lay

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Speaker 3: off because of AI or I need to lay off

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Speaker 3: because of terriffs and other reasons, other factors that are

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Speaker 3: wing on the economy or in my business, you start

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Speaker 3: seeing some layoffs, then that's the fodder for an economic

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Speaker 3: downte because at that point consumers will get spooked. Consumers

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Speaker 3: are already very cautious, they're not spending, They're already going

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Speaker 3: to have to pay higher prices for imported goods. Their

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Speaker 3: pursing power is going to be weakened. And and that

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Speaker 3: that that all adds up to a self reinforcing negative

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Speaker 3: cycle called a recession.

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Speaker 1: I have a friend of mine who sometimes who remembers

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Speaker 1: the last couple of recessions and said, any else in economy.

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Speaker 2: No, he's a poker player, Okay, go, but here's here's

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Speaker 2: the thing. He goes to Vegas a lot, okay, and

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Speaker 2: as he said to me last week, he went off

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Speaker 2: to try the World Series of Poker. He's somebody you've

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Speaker 2: never heard of because if once she once he does, well,

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Speaker 2: you'll hear of him. Right, But he hasn't done that yet.

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Speaker 1: But anyway, but you know he's one of those you

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Speaker 1: know he says, hey, nobody was in Vegas, you meaning

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Speaker 1: you know, it felt empty, it felt and he goes.

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Speaker 1: It felt very so similar, like what happened before the

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Speaker 1: housing crisis felt very similar. Like and that that is right,

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Speaker 1: Like it's one of the first places where's the when

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Speaker 1: money's flowing you have a little extra money, Vegas is

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Speaker 1: an easy place to go visit you don't have that

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Speaker 1: extra money. It may be the first the first thing

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Speaker 1: consumers cut back on, right, you know, are there other that?

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Speaker 1: That's an intriguing leading indicator to me? You know, one

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Speaker 1: of those unofficient when was he there? When was he

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Speaker 1: there two weeks ago? It was two weeks ago? Some

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Speaker 1: of this is Canadian? I was going to say, yeah,

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Speaker 1: some of this is the Canadian boycott of America, which I.

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Speaker 2: Think Europeans may be to something right.

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Speaker 1: And that so and that is a and I don't

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Speaker 1: know you know how much you factor that in versus

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Speaker 1: versus domestic right, But what other indicators like that is

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Speaker 1: it worth keeping an eye on?

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Speaker 2: That might be that might be foreshadowing what's coming.

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Speaker 3: Yeah, you know, I tend to be a little bit

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Speaker 3: more data oriented as opposed to why you're here.

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Speaker 2: And I love that, but probably love those anecdotes.

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Speaker 3: I mean they're always kind of cool and I go

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Speaker 3: to take a look, and sometimes they work, sometimes they don't.

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Speaker 3: Of course, there's some esoteric kind of data points that

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Speaker 3: people don't focus on, but I think are useful to gauge,

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Speaker 3: you know, whether we're headed down the dark path. So

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Speaker 3: if we're going back to the job market, there's something

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Speaker 3: called the diffusion Index and the Employment Report. That's the

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Speaker 3: percent of industries covered by the Bureau Labor Statistics, or

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Speaker 3: some three hundred and fift four hundred industries, what percent

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Speaker 3: of them are not adding to payrolls, you know, are

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Speaker 3: actually laying off, And right now it's over fifty percent.

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Speaker 3: Every time it arises over fifty percent, so more than

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Speaker 3: half the industries are reducing payrolls. That's we always we're

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Speaker 3: always in recession. We always go into recession, and we're there,

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Speaker 3: right fifty three percent or something, which doesn't sound very high,

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Speaker 3: but it's pretty damn high. And it goes back to

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Speaker 3: what we were talking about earlier, the kind of the narrow

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Speaker 3: kind of app focus of the job growth. That's really

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Speaker 3: you know, in healthcare and just a handful of other industries.

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Speaker 3: The other one that's really a bit as a check

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Speaker 3: again in the job market is unfilled positions. In the

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Speaker 3: manufacturing sector, because manufacturing tends to be very UH. It's

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Speaker 3: one of the first sectors that goes into recession because

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Speaker 3: it's very sensitive to interest rates and to the business cycle.

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Speaker 3: And if they're if the unfilled positions are coming down

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Speaker 3: in that sector, that's a tell that manufacturers are starting

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Speaker 3: to pull back and UH. And if the manufacturers is

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Speaker 3: going manufacturing is going into recession, it's going to take

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Speaker 3: the rest of the economy with it in their falling,

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Speaker 3: their weakening, there's fewer unfilled positions. I also, because I,

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Speaker 3: you know, I my area of expertise. I'm an economists,

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Speaker 3: not you know, pining as you know about many things,

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Speaker 3: but I spend more time on the housing and mortgage markets.

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Speaker 3: So I watch the housing market very carefully. And one

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Speaker 3: other indicator that I watch is the UH kind of

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Speaker 3: the sentiment of home builders. There's a survey that comes

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Speaker 3: out every month based on a survey conducted by home builders,

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Speaker 3: and that fell again.

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Speaker 2: They've got a data.

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Speaker 3: Point today that fell again to the lowest level since

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Speaker 3: in the middle of the pandemic or when the fight

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Speaker 3: started raising interest rates. And that's a tell you know,

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Speaker 3: that the economy is weakening. So there's a whole range

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Speaker 3: of those kinds of kind of very esoteric, off the

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Speaker 3: beaten track kind of indicators, and they're all kind of saying,

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Speaker 3: you know, some are sending off red flares, some are

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Speaker 3: sending off yellow flares. It's not uniform, but they're all saying,

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Speaker 3: you know, there's an issue here with the economies is struggling.

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Speaker 2: It's got a problem. Any counterfactuals, what's the counterfactual? Or

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Speaker 2: let me let me put it this way. A year

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Speaker 2: from now, you're here, Hey, we never dipped into recession.

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Speaker 2: Why well, I mean, the.

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Speaker 3: President and the Republican Congress can act, right, They've got

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Speaker 3: another reconciliation bill that they can pass through with the

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Speaker 3: next Congress or the next budget year I should say

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Speaker 3: on the other side of September into October. They could

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Speaker 3: use that to provided some additional fiscal stimulus. So there's

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Speaker 3: been a lot of discussion, for example, around cutting so

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Speaker 3: called stimulus checks, just cutting checks to households, presumably they

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Speaker 3: would be lower middle income households. And you could frame

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Speaker 3: it as I've gotten all this tariff revenue you the

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Speaker 3: American people. We know the American people are paying it

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Speaker 3: because you can see it in the tariff revenue that's

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Speaker 3: being generated. We're going to take that teriff revenue or

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Speaker 3: some portion of that teriff revenue and rebate it back

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Speaker 3: in the form of a check, kind of sort of

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Speaker 3: what we did during the pandemic. I would juice things

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Speaker 3: and keep the economy moving forward. We have that supercharge inflation.

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Speaker 3: It would add to inflationary pressures. But if the economy

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Speaker 3: is struggling, if we're losing jobs, you can provide just

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Speaker 3: enough juice to get the economy back on track.

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Speaker 2: No recession, that was your question.

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Speaker 3: But not generate that inflationary pressure, or not generate to

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Speaker 3: the degree that it'll push us back into recession, or

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Speaker 3: or not push us back into recession anytime soon.

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Speaker 2: It's pushing the problems.

437
00:22:14,520 --> 00:22:18,080
Speaker 3: Down the road, so the recession doesn't come next year.

438
00:22:18,160 --> 00:22:21,160
Speaker 3: The recession comes in twenty twenty seven, twenty twenty eight,

439
00:22:21,320 --> 00:22:22,600
Speaker 3: or twenty twenty nine, something like that.

440
00:22:23,760 --> 00:22:35,720
Speaker 2: So that would be one way out. Look.

441
00:22:35,920 --> 00:22:39,760
Speaker 1: I look at obviously, I follow a political calendar, and

442
00:22:39,800 --> 00:22:42,439
Speaker 1: I look at economic data and wonder when does it

443
00:22:42,480 --> 00:22:45,880
Speaker 1: impact the political calendar, and when it comes to the

444
00:22:45,920 --> 00:22:48,760
Speaker 1: midterms of November, what the economy is in the spring

445
00:22:48,800 --> 00:22:51,920
Speaker 1: of twenty six is what voters will be voting on

446
00:22:52,040 --> 00:22:55,480
Speaker 1: come November of twenty six. So where we had it

447
00:22:55,560 --> 00:22:57,400
Speaker 1: in the spring of twenty six, And I asked that

448
00:22:57,480 --> 00:23:02,199
Speaker 1: frankly personally petrified of where we may be headed in

449
00:23:02,240 --> 00:23:06,159
Speaker 1: the spring of twenty six. But you know, look, forecasting

450
00:23:06,200 --> 00:23:09,359
Speaker 1: is not easy. There's always interventions that could happen. But

451
00:23:09,440 --> 00:23:11,480
Speaker 1: as soon we get these couple of ray cuts that

452
00:23:11,520 --> 00:23:16,520
Speaker 1: are coming September and December, that becomes consistent. But this

453
00:23:16,680 --> 00:23:20,840
Speaker 1: job sort of stagnation pattern continues. We have the tariffs

454
00:23:20,880 --> 00:23:23,840
Speaker 1: are more embedded in than ever. There's it looks like

455
00:23:23,880 --> 00:23:27,120
Speaker 1: fewer and fewer waivers that are coming or delays.

456
00:23:28,480 --> 00:23:31,080
Speaker 2: What does what does the spring of twenty six? What's

457
00:23:31,119 --> 00:23:33,320
Speaker 2: the what are the most likely scenarios in the spring

458
00:23:33,320 --> 00:23:35,440
Speaker 2: of twenty six. Yeah, I think that's when economy is

459
00:23:35,480 --> 00:23:36,360
Speaker 2: going to be at its weakest.

460
00:23:38,480 --> 00:23:41,119
Speaker 3: That's when inflation will be at its highest as a

461
00:23:41,119 --> 00:23:44,520
Speaker 3: result of the tariffs and the immigration policy. You just

462
00:23:44,680 --> 00:23:47,080
Speaker 3: kind of do the arithmetic between when the tariffs have

463
00:23:47,160 --> 00:23:48,840
Speaker 3: come in and they're still rising.

464
00:23:48,960 --> 00:23:51,840
Speaker 2: There's still we've not seen the end of this. Now

465
00:23:51,880 --> 00:23:52,280
Speaker 2: there's a.

466
00:23:52,240 --> 00:23:54,680
Speaker 1: Point where it does stop rising right right when it's

467
00:23:54,680 --> 00:23:56,800
Speaker 1: all when they when you hit is it? So?

468
00:23:57,119 --> 00:23:57,360
Speaker 2: Is it?

469
00:23:57,440 --> 00:24:00,240
Speaker 1: Because I've had some people argue to me on the right,

470
00:24:00,280 --> 00:24:03,600
Speaker 1: which is when I say the right, the new right, right,

471
00:24:03,680 --> 00:24:06,959
Speaker 1: it used to be a different type of conservative economic economists.

472
00:24:06,960 --> 00:24:11,760
Speaker 1: But the argument is, well, it's not continuously inflationary, right

473
00:24:11,800 --> 00:24:14,960
Speaker 1: that once you once once it's once the price level

474
00:24:15,000 --> 00:24:17,200
Speaker 1: is baked in, then it's not You're not going to

475
00:24:17,320 --> 00:24:19,239
Speaker 1: you know, it's not going to continue to go up

476
00:24:19,320 --> 00:24:22,960
Speaker 1: once it hits its tariff faceline. And then yes, it'll

477
00:24:23,000 --> 00:24:24,640
Speaker 1: take a little bit for the economy to get used

478
00:24:24,640 --> 00:24:27,000
Speaker 1: to that, but then we can have a new equilibrium.

479
00:24:27,440 --> 00:24:28,240
Speaker 2: Is that just naive?

480
00:24:28,840 --> 00:24:33,040
Speaker 3: No? Well, by itself, that's right, I mean, just that's

481
00:24:33,119 --> 00:24:36,120
Speaker 3: just arithmetic in that sure I put in the tariff,

482
00:24:36,280 --> 00:24:38,919
Speaker 3: that some portion of that tarff gets passed through the consumers.

483
00:24:39,240 --> 00:24:41,120
Speaker 2: Presumably that's a one off increase.

484
00:24:41,200 --> 00:24:43,199
Speaker 3: And then at the end of the the end of.

485
00:24:43,240 --> 00:24:44,920
Speaker 2: All this inflation settles back down.

486
00:24:46,160 --> 00:24:49,360
Speaker 3: But you ask for next spring, and by next spring

487
00:24:50,240 --> 00:24:52,160
Speaker 3: we're still filling effects of the terrace. That one off

488
00:24:52,200 --> 00:24:54,960
Speaker 3: increase is still still going going to see like new

489
00:24:55,040 --> 00:24:57,920
Speaker 3: increase to host. Yeah, I mean the effective tariff for

490
00:24:57,920 --> 00:25:00,760
Speaker 3: of it today is ten percent. Is it started the

491
00:25:00,840 --> 00:25:03,800
Speaker 3: year at two, we're at ten. Everything says we're going

492
00:25:03,840 --> 00:25:06,359
Speaker 3: at least to fifteen, maybe as high as twenty, and

493
00:25:06,400 --> 00:25:08,280
Speaker 3: that's going to play out over the course of the

494
00:25:08,320 --> 00:25:11,199
Speaker 3: next six months. Then that all translates through by the

495
00:25:11,200 --> 00:25:13,800
Speaker 3: spring of twenty twenty six, these tariff increases will be

496
00:25:13,840 --> 00:25:16,960
Speaker 3: at their apex in terms of their impact up on inflation.

497
00:25:17,000 --> 00:25:19,000
Speaker 3: So just to give you a number, if there have

498
00:25:19,080 --> 00:25:22,960
Speaker 3: been no tariffs whatsoever, my sense is that inflation is

499
00:25:23,000 --> 00:25:25,159
Speaker 3: measured by the consumer expenditu inflator in the spring of

500
00:25:25,200 --> 00:25:27,720
Speaker 3: twenty twenty six would have been two and a quarter.

501
00:25:27,640 --> 00:25:30,200
Speaker 2: To that's almost where it needs to be, Like, that's

502
00:25:30,240 --> 00:25:31,800
Speaker 2: where the Fed wanted it to go.

503
00:25:33,359 --> 00:25:35,960
Speaker 3: Now with the tariffs, it's going to be three and

504
00:25:36,000 --> 00:25:39,520
Speaker 3: a half ish, you know, something like that. So that's

505
00:25:39,560 --> 00:25:46,480
Speaker 3: a big difference, and people will feel that.

506
00:25:44,960 --> 00:25:45,520
Speaker 2: Now, you know.

507
00:25:45,560 --> 00:25:48,879
Speaker 3: Of course, going back to your quickly got back to

508
00:25:48,920 --> 00:25:52,200
Speaker 3: the point about whether the teriff increases will result in

509
00:25:52,280 --> 00:25:56,560
Speaker 3: persistently higher inflation. You can't completely dismiss that possibility, right,

510
00:25:56,600 --> 00:26:00,760
Speaker 3: because it does depend on whether the create by the

511
00:26:00,840 --> 00:26:04,520
Speaker 3: teriffs affect people's expectations about future inflation and they start

512
00:26:04,520 --> 00:26:08,680
Speaker 3: demanding from their employer's higher wages, and the employers say, oh, okay,

513
00:26:08,680 --> 00:26:10,960
Speaker 3: I can pass that through. I'll give you the wage increase,

514
00:26:10,960 --> 00:26:13,200
Speaker 3: and then you get into that kind of wage price

515
00:26:13,400 --> 00:26:18,200
Speaker 3: reinforcing dynamic, which means inflation becomes more persistent. Now everyone's

516
00:26:18,240 --> 00:26:20,359
Speaker 3: of the view, including the family start cutting rates, that

517
00:26:20,359 --> 00:26:22,240
Speaker 3: that's not going to happen. But you can't rule that

518
00:26:22,359 --> 00:26:24,520
Speaker 3: out in the context of you know, all the things

519
00:26:24,560 --> 00:26:27,520
Speaker 3: that we know about the inflation expectations. The other thing

520
00:26:27,560 --> 00:26:31,560
Speaker 3: I'd say is the other policies that are being implemented,

521
00:26:31,640 --> 00:26:35,600
Speaker 3: including the restrict of immigration policy, that's inflationary, and that's

522
00:26:35,640 --> 00:26:36,800
Speaker 3: more persistent inflation.

523
00:26:36,920 --> 00:26:38,639
Speaker 2: That's not like that's going away.

524
00:26:39,200 --> 00:26:44,560
Speaker 1: Well, I've been I informed of my listeners. Last week,

525
00:26:44,600 --> 00:26:48,240
Speaker 1: I buy my chicken at Trader Joe's, and Trader Joe's

526
00:26:48,440 --> 00:26:51,480
Speaker 1: clearly is having the cost of chicken has gone up,

527
00:26:52,320 --> 00:26:56,000
Speaker 1: but instead of providing so, but they decided on shrinkflation

528
00:26:56,119 --> 00:26:58,240
Speaker 1: so they didn't have to raise the price of chicken thighs.

529
00:26:58,640 --> 00:27:00,520
Speaker 1: But guess what's that a for chicken thies to a

530
00:27:00,520 --> 00:27:03,199
Speaker 1: package which you could get for about three dollars and

531
00:27:03,200 --> 00:27:07,000
Speaker 1: fifty cents is now three chicken thies to a package.

532
00:27:06,640 --> 00:27:08,040
Speaker 2: That you're getting for about three dollars and.

533
00:27:07,960 --> 00:27:11,919
Speaker 1: Fifteen cents, right, But so they're choosing and they have

534
00:27:11,960 --> 00:27:15,120
Speaker 1: a you know, look there can they know their customer base, right,

535
00:27:15,520 --> 00:27:20,439
Speaker 1: stri inflation is right now where they'd rather be than not.

536
00:27:21,920 --> 00:27:25,760
Speaker 1: But that I mean for me, am I seeing the

537
00:27:27,119 --> 00:27:30,840
Speaker 1: rising price of chicken, that feels like direct impact of

538
00:27:30,880 --> 00:27:31,920
Speaker 1: the immigration policy.

539
00:27:32,000 --> 00:27:33,600
Speaker 2: Now, oh absolutely absolutely.

540
00:27:33,640 --> 00:27:36,399
Speaker 3: And by the way that shrinkflation is captured in the

541
00:27:36,400 --> 00:27:40,000
Speaker 3: inflation statistic, at least in theory your labor statistics. The

542
00:27:40,080 --> 00:27:42,639
Speaker 3: keeper of the data does account for the quote unquote

543
00:27:42,640 --> 00:27:45,399
Speaker 3: the quality of the product or service and.

544
00:27:45,480 --> 00:27:46,080
Speaker 2: That you're buying.

545
00:27:46,400 --> 00:27:49,560
Speaker 3: So if if you're getting fewer ps in the in

546
00:27:49,600 --> 00:27:52,960
Speaker 3: the can or less it was three as opposed to

547
00:27:53,000 --> 00:27:55,640
Speaker 3: four chicken though it was you have to thigh chicken

548
00:27:55,680 --> 00:27:58,840
Speaker 3: thies yeah thized, Okay, THI three are four now?

549
00:27:59,200 --> 00:28:01,760
Speaker 2: Yeah, right, essentially the same price.

550
00:28:02,000 --> 00:28:04,000
Speaker 3: Yeah, just wanted a quick point about your question about

551
00:28:04,000 --> 00:28:05,800
Speaker 3: the spring of twenty six. You know, it's not only

552
00:28:05,880 --> 00:28:08,760
Speaker 3: about inflation, is about jobs because that's when the economy

553
00:28:08,760 --> 00:28:10,120
Speaker 3: could be at its weakest too. So if he said

554
00:28:10,119 --> 00:28:12,640
Speaker 3: to me, hey, Mark, given everything that's going on, when

555
00:28:12,680 --> 00:28:14,840
Speaker 3: do you think that next recession would when the recession

556
00:28:14,880 --> 00:28:18,120
Speaker 3: would hit kind of sort of feels, you know, starting

557
00:28:18,160 --> 00:28:20,920
Speaker 3: maybe late this year and then more likely early in

558
00:28:21,119 --> 00:28:21,440
Speaker 3: x so.

559
00:28:21,520 --> 00:28:28,520
Speaker 2: Spring of twenty twenty six. The economy week. But remember there's.

560
00:28:27,200 --> 00:28:30,200
Speaker 3: A lot of moving parts here, and Congress and the

561
00:28:30,240 --> 00:28:32,879
Speaker 3: administration can come up with a stimulus package to kind of,

562
00:28:33,480 --> 00:28:36,320
Speaker 3: you know, help paper things over for a while at least. No.

563
00:28:36,440 --> 00:28:38,720
Speaker 1: I mean, look, Donald Trump's strategy is you know, I

564
00:28:38,760 --> 00:28:41,360
Speaker 1: always say it's if you actually follow his business practices.

565
00:28:41,400 --> 00:28:43,440
Speaker 1: He's always you know, I mean it is the old

566
00:28:43,440 --> 00:28:46,520
Speaker 1: poppy metaphor, I'll gladly take a hamburger today. I'll pay

567
00:28:46,560 --> 00:28:49,320
Speaker 1: you tomorrow for a hamburger today. I mean, he's constantly

568
00:28:49,360 --> 00:28:51,320
Speaker 1: going to try to push this off as long as

569
00:28:51,320 --> 00:28:54,800
Speaker 1: he can if he can. Right, there's only so many

570
00:28:54,840 --> 00:28:58,280
Speaker 1: tools that they have in the toolbox. Yeah, well you

571
00:28:58,320 --> 00:29:00,320
Speaker 1: said it, not me, So now I understand in that,

572
00:29:00,360 --> 00:29:03,080
Speaker 1: and I'm not asking you to play artisan, but you're

573
00:29:03,120 --> 00:29:06,680
Speaker 1: not wrong to be wondering what what could the government do?

574
00:29:06,960 --> 00:29:09,840
Speaker 2: That is his going to be his instinct, Hey let's

575
00:29:09,840 --> 00:29:11,680
Speaker 2: do something. Yeah, and to.

576
00:29:11,560 --> 00:29:15,240
Speaker 3: Be you know, fair, I think that's most politicians instinct, right,

577
00:29:15,280 --> 00:29:17,200
Speaker 3: I mean at the end of the day. I mean,

578
00:29:17,200 --> 00:29:20,320
Speaker 3: here's you know, these even these tariffs, so they're done

579
00:29:20,320 --> 00:29:23,720
Speaker 3: on an executive order and they're generating a lot of revenue,

580
00:29:23,880 --> 00:29:25,440
Speaker 3: and you're you're thinking, well, look.

581
00:29:25,280 --> 00:29:27,560
Speaker 1: I think the courts could throw them out, and then

582
00:29:28,200 --> 00:29:31,560
Speaker 1: that goes that. Then then it becomes you know that

583
00:29:31,720 --> 00:29:34,320
Speaker 1: this is in my Bailey Wick night yours. Then it

584
00:29:34,360 --> 00:29:37,640
Speaker 1: becomes him asking Congress for the authority back, which is

585
00:29:37,680 --> 00:29:40,280
Speaker 1: what he would do. And then suddenly it becomes a

586
00:29:40,320 --> 00:29:43,440
Speaker 1: vote on a tax increase, right like, you know, okay,

587
00:29:43,560 --> 00:29:46,680
Speaker 1: you're about to raise prices ten percent on everybody's consumer good.

588
00:29:46,880 --> 00:29:49,760
Speaker 1: You're passing essentially a national sales tax of ten percent.

589
00:29:49,920 --> 00:29:53,240
Speaker 1: Are you comfortable doing that in an electioneer? Congressman SCHMANGI, right, like,

590
00:29:53,920 --> 00:29:56,720
Speaker 1: that's going to be Suddenly the political equation enters into

591
00:29:56,720 --> 00:29:57,440
Speaker 1: this conversation.

592
00:29:57,520 --> 00:30:00,520
Speaker 3: But also think about when you if you're thinking about

593
00:30:00,520 --> 00:30:03,800
Speaker 3: the revenue for the budget, you're at the Congressional Budget

594
00:30:03,840 --> 00:30:06,040
Speaker 3: Office and you're CBO, you're thinking about what does this

595
00:30:06,240 --> 00:30:08,680
Speaker 3: these tariffs mean for the budget over the next ten years.

596
00:30:10,120 --> 00:30:13,000
Speaker 3: I wouldn't count on these tarsts being around going back

597
00:30:13,040 --> 00:30:15,920
Speaker 3: to the who is ever President? Because the next recession,

598
00:30:16,600 --> 00:30:18,800
Speaker 3: we are going to get those tarts are going to

599
00:30:18,840 --> 00:30:23,240
Speaker 3: come down. That's a natural quick way for the next president.

600
00:30:23,960 --> 00:30:27,160
Speaker 2: Or it's stimulus without having to do anything right legislation.

601
00:30:27,320 --> 00:30:28,120
Speaker 2: What's better than that?

602
00:30:28,400 --> 00:30:30,640
Speaker 3: Right, So I wouldn't so I wouldn't count on those

603
00:30:30,680 --> 00:30:33,400
Speaker 3: tax revenues, but that those tariff revenues. But I'm just

604
00:30:33,440 --> 00:30:35,320
Speaker 3: saying that you can use those things to kind of

605
00:30:35,720 --> 00:30:37,840
Speaker 3: manage an economy through a period of.

606
00:30:37,800 --> 00:30:40,160
Speaker 2: Time when you want to do it politically.

607
00:30:40,520 --> 00:30:42,720
Speaker 1: All right, let me ask you about two counterfactuals which

608
00:30:42,760 --> 00:30:47,160
Speaker 1: could sort of, you know, which could sort of change

609
00:30:47,560 --> 00:30:48,880
Speaker 1: this potential forecasting.

610
00:30:48,920 --> 00:30:49,440
Speaker 2: One is.

611
00:30:51,240 --> 00:30:54,360
Speaker 1: I've read a lot about the sort of it that moment.

612
00:30:54,440 --> 00:30:56,560
Speaker 1: I guess it was Alan Greenspan with a bunch of

613
00:30:56,640 --> 00:31:00,200
Speaker 1: economists of going, hey, I don't think productivities factory in

614
00:31:00,400 --> 00:31:01,640
Speaker 1: the computer age very well?

615
00:31:02,240 --> 00:31:02,320
Speaker 3: Right?

616
00:31:04,360 --> 00:31:07,120
Speaker 1: Is there hidden productivity not being factored into the data

617
00:31:07,240 --> 00:31:09,680
Speaker 1: right now via AI or is that just too soon

618
00:31:09,760 --> 00:31:10,080
Speaker 1: to tell?

619
00:31:11,040 --> 00:31:15,280
Speaker 2: I think it's too soon to tell. I don't think so.

620
00:31:15,760 --> 00:31:18,400
Speaker 3: I don't you know, I don't think that's what's happening here.

621
00:31:18,600 --> 00:31:24,400
Speaker 2: I mean, back in the nineties, there.

622
00:31:24,440 --> 00:31:28,280
Speaker 3: Was more evidence that prices were falling for different things

623
00:31:28,400 --> 00:31:31,920
Speaker 3: related to the Internet, like chip technology, that kind of thing,

624
00:31:32,240 --> 00:31:34,880
Speaker 3: and we knew that that was not being captured in

625
00:31:34,960 --> 00:31:37,640
Speaker 3: the way the Bautreaful Laboristics was measuring things. So there

626
00:31:37,760 --> 00:31:42,440
Speaker 3: was strong economic statistical evidence that, you know, we were

627
00:31:42,560 --> 00:31:44,280
Speaker 3: missing something here in the data.

628
00:31:44,680 --> 00:31:46,200
Speaker 2: I don't see that in the current data.

629
00:31:46,520 --> 00:31:50,040
Speaker 3: I don't and I even more intuitively, I'm not I'm

630
00:31:50,080 --> 00:31:53,000
Speaker 3: not sure AI is really lifting productivity. You know, for example,

631
00:31:55,840 --> 00:32:00,360
Speaker 3: you're a business person, you have and I'm a business person,

632
00:32:00,440 --> 00:32:02,800
Speaker 3: right I run a business. I have a couple hundred

633
00:32:02,840 --> 00:32:07,160
Speaker 3: comments in my world around the world, and I'm always

634
00:32:07,200 --> 00:32:10,600
Speaker 3: thinking about productivity growth, and I've got in the queue

635
00:32:10,960 --> 00:32:13,640
Speaker 3: a number of productivity enhancing things that I want to do.

636
00:32:14,200 --> 00:32:16,520
Speaker 3: None of them are home runs. All of them are singles.

637
00:32:16,960 --> 00:32:19,000
Speaker 3: But I know I have a high probability of hitting

638
00:32:19,040 --> 00:32:21,600
Speaker 3: the single. But if I'm going to invest in AI,

639
00:32:22,280 --> 00:32:25,520
Speaker 3: I have to redirect resources away from hitting the single

640
00:32:25,600 --> 00:32:28,320
Speaker 3: to try to hit that home run. And by so doing,

641
00:32:28,560 --> 00:32:31,320
Speaker 3: I'm giving up the singles in the interim until I.

642
00:32:31,320 --> 00:32:31,920
Speaker 2: Hit the home run.

643
00:32:32,240 --> 00:32:34,800
Speaker 3: And I'm hoping I hit the home run, because I

644
00:32:35,080 --> 00:32:37,240
Speaker 3: you know, absolutely need it if I don't, But I've

645
00:32:37,280 --> 00:32:39,480
Speaker 3: given up these singles, and I've given up productivity growth,

646
00:32:39,480 --> 00:32:42,440
Speaker 3: so I could even argue reasonably, I think up to

647
00:32:42,520 --> 00:32:46,800
Speaker 3: this point in time in aggregate that the AI may

648
00:32:46,840 --> 00:32:50,120
Speaker 3: be costing us productivity, not enhancing produtivity. And the other

649
00:32:50,160 --> 00:32:53,600
Speaker 3: thing about things like AI to other technologies is they

650
00:32:53,640 --> 00:32:59,880
Speaker 3: don't really lift productivity until business new businesses form and

651
00:33:01,040 --> 00:33:05,080
Speaker 3: optimize their business around that new technology. When in legacy companies,

652
00:33:05,440 --> 00:33:08,560
Speaker 3: old companies built on different technologies try to adopt the

653
00:33:08,600 --> 00:33:11,400
Speaker 3: new technology, it creates all kinds of havoc. You know,

654
00:33:11,560 --> 00:33:13,360
Speaker 3: you've got to change, you got to restructure, you got

655
00:33:13,480 --> 00:33:15,880
Speaker 3: to fire people, you got to hire new people, You've

656
00:33:15,880 --> 00:33:17,000
Speaker 3: got to buy new equipment and.

657
00:33:17,080 --> 00:33:18,440
Speaker 2: Software, you got to do all kinds of stuff.

658
00:33:19,400 --> 00:33:24,360
Speaker 3: And so, uh, it just takes time for these technologies

659
00:33:24,400 --> 00:33:26,760
Speaker 3: like to diffuse in a way that really lives underlying

660
00:33:26,840 --> 00:33:28,280
Speaker 3: product Don't get me wrong.

661
00:33:28,360 --> 00:33:29,920
Speaker 2: I think AI and I'm you.

662
00:33:30,080 --> 00:33:32,520
Speaker 3: We're using it and I'm using it now and I

663
00:33:32,560 --> 00:33:35,560
Speaker 3: can see the power of it and I can feel it. Uh,

664
00:33:36,120 --> 00:33:40,640
Speaker 3: and so I'm I'm confident it will love productivity growth, Uh,

665
00:33:40,960 --> 00:33:43,240
Speaker 3: not in a dystopic way that some people think that

666
00:33:43,280 --> 00:33:44,960
Speaker 3: it's gonna wipe out all these jobs and people are

667
00:33:45,000 --> 00:33:46,960
Speaker 3: gonna be ay. But I think it's a growth but

668
00:33:47,040 --> 00:33:48,600
Speaker 3: I think it's going to take some time. I don't

669
00:33:48,600 --> 00:33:51,160
Speaker 3: think it's this year. I don't think it bails us

670
00:33:51,200 --> 00:33:51,920
Speaker 3: out this year.

671
00:33:52,280 --> 00:33:53,640
Speaker 2: Where it's a little early for that, all right.

672
00:33:53,640 --> 00:33:57,160
Speaker 1: And the other part of AI right now is just

673
00:33:57,320 --> 00:34:00,200
Speaker 1: the massive investments that are taking place right whether it's

674
00:34:00,240 --> 00:34:03,680
Speaker 1: the particularly the largest cap companies who are just what

675
00:34:03,920 --> 00:34:08,239
Speaker 1: does it's I assume that's one time impact into our

676
00:34:08,320 --> 00:34:09,400
Speaker 1: growth numbers.

677
00:34:10,040 --> 00:34:11,320
Speaker 2: Yeah, you're making the investment.

678
00:34:11,400 --> 00:34:14,000
Speaker 1: Yeah, right, when you're making these investments, you know, does

679
00:34:14,080 --> 00:34:17,640
Speaker 1: that stave off recession because of just the amount of

680
00:34:17,719 --> 00:34:20,120
Speaker 1: money and it is I mean this data center now

681
00:34:20,160 --> 00:34:24,239
Speaker 1: it's not creating human jobs, you know, yes for electricians

682
00:34:24,280 --> 00:34:29,239
Speaker 1: and and and some some uh IT specialists, Uh of course,

683
00:34:29,320 --> 00:34:31,319
Speaker 1: but it I mean that's the scary part. It's all

684
00:34:31,360 --> 00:34:35,279
Speaker 1: this investment into a future of no employment employees. But

685
00:34:36,160 --> 00:34:39,960
Speaker 1: I assume that has some positive impact on economic growth

686
00:34:40,320 --> 00:34:41,000
Speaker 1: in the short term.

687
00:34:41,480 --> 00:34:41,839
Speaker 2: It does.

688
00:34:42,320 --> 00:34:44,600
Speaker 3: It is definitely a tailwind to growth. And you know,

689
00:34:44,719 --> 00:34:46,800
Speaker 3: without that tail when we could be in recession already,

690
00:34:46,960 --> 00:34:48,360
Speaker 3: you know, we could get you.

691
00:34:48,360 --> 00:34:49,960
Speaker 2: Think it's possible that it's already.

692
00:34:50,280 --> 00:34:52,759
Speaker 3: So it's definitely using things, but it's not it's it's

693
00:34:52,800 --> 00:34:55,440
Speaker 3: a it's a modest tailwind. I mean, like, for example,

694
00:34:56,040 --> 00:35:00,839
Speaker 3: if you look at all construction spending on construction from

695
00:35:00,920 --> 00:35:06,920
Speaker 3: home building to amusement parks to hospitals to data centers,

696
00:35:07,760 --> 00:35:10,880
Speaker 3: it's falling. It's where the construction sector is in recession.

697
00:35:10,960 --> 00:35:15,920
Speaker 3: And that's despite the booming growth in investment in data centers.

698
00:35:16,000 --> 00:35:21,200
Speaker 3: So it's definitely helping chushion whatever is going on in

699
00:35:21,280 --> 00:35:24,520
Speaker 3: the economy, but it's not enough to forestall you know,

700
00:35:24,600 --> 00:35:27,880
Speaker 3: these broader macro forces that you know, they don't like

701
00:35:27,960 --> 00:35:30,520
Speaker 3: play play out here over the next six twelve months.

702
00:35:30,920 --> 00:35:33,560
Speaker 2: All right, we've just discussed sort of the state of

703
00:35:33,600 --> 00:35:36,320
Speaker 2: the economy, state of the next six months based on

704
00:35:36,880 --> 00:35:38,840
Speaker 2: a lot of data that you give analyzed that is

705
00:35:38,880 --> 00:35:40,120
Speaker 2: produced by the federal government.

706
00:35:41,000 --> 00:35:45,640
Speaker 1: You know where I'm going here exactly, which is, yeah,

707
00:35:46,040 --> 00:35:51,160
Speaker 1: what happens? What walk me through your life with a

708
00:35:51,280 --> 00:35:55,520
Speaker 1: BLS that does not produce monthly data? Well, everyone's life.

709
00:35:55,400 --> 00:35:58,400
Speaker 3: Right, I mean, think about if we don't have timely,

710
00:35:59,040 --> 00:36:04,240
Speaker 3: uh accurate, comprehensive data on how the econiom is performing.

711
00:36:04,320 --> 00:36:07,040
Speaker 3: And the BLS puer of liberal statistics is key to

712
00:36:07,120 --> 00:36:09,840
Speaker 3: that they produce the consumer price index we talked about,

713
00:36:09,880 --> 00:36:11,960
Speaker 3: that they produce the jobs numbers we talked about. That

714
00:36:13,160 --> 00:36:16,040
Speaker 3: businesses can make good decisions about investing.

715
00:36:15,719 --> 00:36:16,800
Speaker 2: Hiring, firing.

716
00:36:17,719 --> 00:36:20,160
Speaker 3: A reserve can make good decisions about should I cut

717
00:36:20,239 --> 00:36:23,799
Speaker 3: rates not cut rates? None of those investors can make

718
00:36:23,840 --> 00:36:27,800
Speaker 3: good decisions about you know, the investment in stocks and bonds,

719
00:36:27,800 --> 00:36:29,719
Speaker 3: that it's going to add to interest rates. There's a

720
00:36:29,760 --> 00:36:31,760
Speaker 3: gazillion ways that we're all going to pay a price

721
00:36:32,400 --> 00:36:36,600
Speaker 3: for that if we don't continue to have timely, accurate

722
00:36:36,680 --> 00:36:39,799
Speaker 3: and comprehensive data. And in the case of the peer

723
00:36:39,840 --> 00:36:43,759
Speaker 3: of liberal statistics, sure they have. There's problems measuring things.

724
00:36:44,120 --> 00:36:48,760
Speaker 3: There always is, and just given the scale and scope

725
00:36:48,760 --> 00:36:49,680
Speaker 3: of what they're trying to do.

726
00:36:50,239 --> 00:36:52,799
Speaker 2: But the ins after that in into your the way

727
00:36:52,840 --> 00:36:54,560
Speaker 2: you look at things like I had somebody tell me

728
00:36:54,640 --> 00:36:59,640
Speaker 2: it takes three months to get one month of good data. No,

729
00:37:01,520 --> 00:37:05,600
Speaker 2: in typical times, is absolutely not true. I mean the revision.

730
00:37:05,719 --> 00:37:08,600
Speaker 3: So he's whatever that person is, whoever that is. They're

731
00:37:08,600 --> 00:37:11,279
Speaker 3: focusing on the revisions to the data. They're saying, I

732
00:37:11,400 --> 00:37:13,600
Speaker 3: have to wait for three months to get enough responses,

733
00:37:13,640 --> 00:37:15,640
Speaker 3: to get enough good information to publish that.

734
00:37:15,719 --> 00:37:21,120
Speaker 2: By August, I'll have a good sense of what June look. Yeah, yeah, in.

735
00:37:22,920 --> 00:37:26,600
Speaker 3: Ninety five percent of the times, not so the data

736
00:37:27,000 --> 00:37:28,480
Speaker 3: when you get the first month sword of the data,

737
00:37:28,560 --> 00:37:30,360
Speaker 3: that's going to tell you exactly what you need to

738
00:37:30,440 --> 00:37:34,280
Speaker 3: know going forward. There are times, though, when the economy turns,

739
00:37:34,840 --> 00:37:37,320
Speaker 3: like now, when it's going from a good economy in

740
00:37:37,360 --> 00:37:40,320
Speaker 3: twenty twenty four to a tough economy in twenty twenty

741
00:37:40,360 --> 00:37:43,080
Speaker 3: five and a potentially recessionary economy in twenty twenty six,

742
00:37:43,400 --> 00:37:46,520
Speaker 3: that's a turning point. When you're turning points, then the

743
00:37:46,600 --> 00:37:50,680
Speaker 3: survey has become more complicated and the data becomes more murky,

744
00:37:50,800 --> 00:37:54,160
Speaker 3: and the initial estimates that you get are less representative

745
00:37:54,160 --> 00:37:57,520
Speaker 3: of the reality of what's going on. Because the economy's turning.

746
00:37:57,800 --> 00:38:00,920
Speaker 3: It's going on, but that's information. So the fact that

747
00:38:00,960 --> 00:38:04,239
Speaker 3: we're getting these big downward revisions is actually a tell.

748
00:38:04,760 --> 00:38:06,840
Speaker 3: That's that's another tell. You ask me what indicators is

749
00:38:06,880 --> 00:38:09,560
Speaker 3: what I look at? I look at that indicator. It's

750
00:38:09,600 --> 00:38:12,040
Speaker 3: a huge indicator. You're getting big downward revisions. That's a

751
00:38:12,239 --> 00:38:14,920
Speaker 3: tell that the economy is suck and wind and it

752
00:38:15,000 --> 00:38:17,279
Speaker 3: may actually be in recession already. You know, you know

753
00:38:17,280 --> 00:38:19,480
Speaker 3: if history is in any guide. So I don't buy

754
00:38:19,520 --> 00:38:22,920
Speaker 3: into that whatsoever that you know. And the answer to

755
00:38:23,000 --> 00:38:27,160
Speaker 3: all of this isn't stop publishing, because the one response,

756
00:38:27,920 --> 00:38:31,400
Speaker 3: one policy step I heard, is well, we're not going

757
00:38:31,480 --> 00:38:34,400
Speaker 3: to publish the data every month, We're going to publish

758
00:38:34,440 --> 00:38:37,160
Speaker 3: it every three months. To your point that we don't, uh,

759
00:38:37,840 --> 00:38:41,040
Speaker 3: you know. But the answer to getting better data isn't

760
00:38:41,120 --> 00:38:44,120
Speaker 3: doing that. But answer to the better data is fund

761
00:38:44,200 --> 00:38:47,080
Speaker 3: the bureaule statistics given the resource of the any. In fact,

762
00:38:47,080 --> 00:38:50,879
Speaker 3: here's another interesting point, consumer price index CPI. We're all

763
00:38:51,239 --> 00:38:53,799
Speaker 3: focused on that like a laser beam, because that tells

764
00:38:53,880 --> 00:38:56,000
Speaker 3: us about inflation and what's going on with inflation. The

765
00:38:56,080 --> 00:38:59,640
Speaker 3: FED needs that information as quickly as it possibly canimate

766
00:38:59,680 --> 00:39:04,600
Speaker 3: could decisions. Almost a third of the products that are

767
00:39:05,040 --> 00:39:08,360
Speaker 3: canvassed by the buer of libertists. To construct that measure,

768
00:39:08,600 --> 00:39:12,240
Speaker 3: they send they send actual people out there to Trader Joe's.

769
00:39:12,320 --> 00:39:14,759
Speaker 2: They get that packet of chicken and they say see

770
00:39:14,800 --> 00:39:15,600
Speaker 2: that for themselves.

771
00:39:15,840 --> 00:39:19,840
Speaker 3: Right, because of the cuts to BLS payrolls, because of

772
00:39:19,880 --> 00:39:22,640
Speaker 3: the DOGE cuts, they can't send out as many people.

773
00:39:22,840 --> 00:39:26,279
Speaker 3: And therefore now they're imputing, I mean so called imputing.

774
00:39:26,480 --> 00:39:30,000
Speaker 3: That's a technical word for you know, coming up making

775
00:39:30,080 --> 00:39:33,279
Speaker 3: stuff up based on other data. It's certainly not as

776
00:39:33,360 --> 00:39:37,600
Speaker 3: accurate good as a as a survey, and that compares

777
00:39:37,680 --> 00:39:41,400
Speaker 3: to a third is now imputed before this if you

778
00:39:41,480 --> 00:39:43,279
Speaker 3: go back a year ago, is ten percent. So the

779
00:39:43,360 --> 00:39:47,320
Speaker 3: answer is, please, you know, give the BLS more people

780
00:39:47,400 --> 00:39:49,680
Speaker 3: so they do more surveys and they can get better

781
00:39:49,840 --> 00:39:53,719
Speaker 3: data and the result will be a more accurate and

782
00:39:53,840 --> 00:39:55,879
Speaker 3: more timely, more comprehensive set of data.

783
00:39:55,960 --> 00:39:57,320
Speaker 2: That's the answer. That's the solution.

784
00:39:57,680 --> 00:39:59,360
Speaker 3: But if you're not going to do that, it certainly

785
00:39:59,400 --> 00:40:01,360
Speaker 3: don't cut back on the on the timeliness of the

786
00:40:01,440 --> 00:40:02,320
Speaker 3: data that we're receiving.

787
00:40:05,719 --> 00:40:08,880
Speaker 2: Look, if this gets so politically interfered with where you

788
00:40:09,080 --> 00:40:12,200
Speaker 2: don't have confidence, forget, forget, forget the politics of this

789
00:40:12,239 --> 00:40:15,360
Speaker 2: a minute, your own politics, anybody's politics. You're at Moody's.

790
00:40:15,760 --> 00:40:19,360
Speaker 1: Your job is to try to assess the state of

791
00:40:19,400 --> 00:40:22,279
Speaker 1: the economy in different aspects. And if you can't get

792
00:40:22,320 --> 00:40:26,000
Speaker 1: reliable data from the US government, what's the alternative?

793
00:40:26,200 --> 00:40:28,440
Speaker 2: How do you? How do you backfill that yourself?

794
00:40:29,680 --> 00:40:33,040
Speaker 1: And and you know, is it realistic to create essentially

795
00:40:33,120 --> 00:40:39,600
Speaker 1: a private BLS that that the financial community could rely on.

796
00:40:40,040 --> 00:40:43,239
Speaker 3: Oh, there's no way to replicate what the beautiful libor

797
00:40:43,239 --> 00:40:46,000
Speaker 3: statistics is doing in the private sector. That's a classic

798
00:40:46,080 --> 00:40:48,439
Speaker 3: what economy is called public good, right, I mean, that's

799
00:40:48,880 --> 00:40:50,640
Speaker 3: the benefit of that's going to be shared broadly by

800
00:40:50,680 --> 00:40:53,160
Speaker 3: everyone in the economy, and it should be paid for

801
00:40:53,320 --> 00:40:55,240
Speaker 3: by everyone. And there's just no way for a private

802
00:40:55,320 --> 00:41:00,160
Speaker 3: sector entity or entities to find the economics.

803
00:40:59,800 --> 00:41:01,680
Speaker 2: Vibe able to do what the bills is doing.

804
00:41:01,800 --> 00:41:03,640
Speaker 3: And by the way, it could be done because there's

805
00:41:03,640 --> 00:41:07,120
Speaker 3: all kinds of privacy issues and security issues. And you know,

806
00:41:07,160 --> 00:41:10,000
Speaker 3: if you're if you're canvassing a major American corporation, how

807
00:41:10,040 --> 00:41:11,520
Speaker 3: many people do you ask them? How many people do

808
00:41:11,600 --> 00:41:13,880
Speaker 3: they employ? They're not going to tell another private sector

809
00:41:13,920 --> 00:41:14,800
Speaker 3: how many private companies?

810
00:41:15,080 --> 00:41:18,239
Speaker 2: Right the government there. They already distressed the government enough and.

811
00:41:19,120 --> 00:41:21,080
Speaker 3: That's one of the reasons why the survey responses are down,

812
00:41:21,160 --> 00:41:24,400
Speaker 3: because they are ready to the lack of trust. So uh,

813
00:41:25,040 --> 00:41:27,960
Speaker 3: but we're some are reststanding still. Well, you know, we're

814
00:41:28,000 --> 00:41:29,000
Speaker 3: going to try hard here.

815
00:41:29,120 --> 00:41:33,280
Speaker 2: So there's some data. We have a better shot at coming.

816
00:41:33,120 --> 00:41:35,759
Speaker 3: Up with estimates of what's going on than others like

817
00:41:35,880 --> 00:41:38,399
Speaker 3: the CPI, the Consumer Price Index. We have a shot

818
00:41:38,440 --> 00:41:41,560
Speaker 3: at that right, because that those are prices that are

819
00:41:41,840 --> 00:41:43,040
Speaker 3: out there in the public domain.

820
00:41:43,120 --> 00:41:46,399
Speaker 2: Amazon posts them, Walmart posts. In theory, you could put

821
00:41:46,440 --> 00:41:50,239
Speaker 2: together something that would give give a fairly accurate you know,

822
00:41:50,960 --> 00:41:51,200
Speaker 2: and in.

823
00:41:51,239 --> 00:41:56,520
Speaker 3: The past some have, like Harvard Lollow Billion Pieces project.

824
00:41:56,800 --> 00:42:00,440
Speaker 3: He did this because of Argentina. Argentina obviously made up

825
00:42:00,440 --> 00:42:02,000
Speaker 3: a lot of data back in the day because they

826
00:42:02,040 --> 00:42:04,920
Speaker 3: were hiding their inflationary problem, and so as a way

827
00:42:04,920 --> 00:42:08,400
Speaker 3: to figure out what was actually going on, he constructed

828
00:42:08,440 --> 00:42:12,640
Speaker 3: this brilliant Pieces project to canvas Argentinian businesses to get

829
00:42:12,640 --> 00:42:14,920
Speaker 3: a better read on what the inflation actually was. And

830
00:42:15,000 --> 00:42:17,160
Speaker 3: it actually it worked for him, and so we're going

831
00:42:17,200 --> 00:42:19,600
Speaker 3: to do We'll do that for CPI, but for jobs

832
00:42:20,080 --> 00:42:22,480
Speaker 3: that's a lot harder. Now we'll rely on other sources there.

833
00:42:22,520 --> 00:42:25,120
Speaker 3: In the case of jobs, we have ADP, that's the

834
00:42:25,200 --> 00:42:27,080
Speaker 3: Human Resource Company and I used to I used to

835
00:42:27,160 --> 00:42:29,640
Speaker 3: construct that data for them, and it is a very

836
00:42:29,880 --> 00:42:31,560
Speaker 3: large sample of companies.

837
00:42:31,640 --> 00:42:34,480
Speaker 2: It's not as representative because it there's.

838
00:42:34,320 --> 00:42:36,719
Speaker 1: Half of Corporate America. Right, there's two big firms that

839
00:42:36,840 --> 00:42:39,359
Speaker 1: do this, right ADP. I feel like there's a COMPETI.

840
00:42:39,000 --> 00:42:41,080
Speaker 3: Will there's only ADP is the largest I think by

841
00:42:41,120 --> 00:42:42,160
Speaker 3: FAAR they're the largest one.

842
00:42:42,320 --> 00:42:44,000
Speaker 2: There's others that are kind of smaller.

843
00:42:45,760 --> 00:42:48,600
Speaker 3: But the problem with ADP though, if you get a payroll,

844
00:42:48,719 --> 00:42:51,520
Speaker 3: if you're using payroll processing services, which is how they

845
00:42:51,600 --> 00:42:54,400
Speaker 3: get the data, you've got to be a pretty good

846
00:42:54,440 --> 00:42:56,239
Speaker 3: sized company. A small company is going to do their

847
00:42:56,280 --> 00:42:58,800
Speaker 3: own payroll. They're not going to hire, so you're missing

848
00:42:58,840 --> 00:43:01,080
Speaker 3: all that stuff that's going on. It's not exactly right,

849
00:43:01,520 --> 00:43:03,719
Speaker 3: but it's it gives you a window into what's going

850
00:43:03,760 --> 00:43:06,560
Speaker 3: on here. But here's the other point. It's not like

851
00:43:06,880 --> 00:43:09,000
Speaker 3: people aren't going to make inferences about what's going on

852
00:43:09,040 --> 00:43:11,360
Speaker 3: in the economy and inflation if they don't get the

853
00:43:11,440 --> 00:43:12,360
Speaker 3: data from the BLUs.

854
00:43:12,640 --> 00:43:14,680
Speaker 1: They're going to continue to do it. This is is

855
00:43:14,719 --> 00:43:17,719
Speaker 1: going to do it based on bad data, worse data. Right, Well,

856
00:43:17,800 --> 00:43:20,080
Speaker 1: let me ask you this. You have to you know,

857
00:43:20,200 --> 00:43:22,719
Speaker 1: there's bad data out there internationally. Like I had an

858
00:43:22,760 --> 00:43:26,759
Speaker 1: economist tell me, you know who's very worried about, you know,

859
00:43:26,880 --> 00:43:30,320
Speaker 1: if the if the FED essentially gets merged with the

860
00:43:30,360 --> 00:43:33,120
Speaker 1: Oval Office. Right, I'm being a little a little dramatic,

861
00:43:33,239 --> 00:43:38,200
Speaker 1: but uh that we've seen a version of this it's

862
00:43:38,280 --> 00:43:41,960
Speaker 1: called Turkey, and that the data you get out of

863
00:43:42,040 --> 00:43:44,600
Speaker 1: Turkey is highly unreliable.

864
00:43:44,840 --> 00:43:44,960
Speaker 2: Is that?

865
00:43:45,480 --> 00:43:49,319
Speaker 1: Like, are there examples like that where maybe we could say, hey,

866
00:43:49,719 --> 00:43:53,320
Speaker 1: be careful here, US Congress, be careful here, government entities.

867
00:43:53,760 --> 00:43:56,279
Speaker 1: You don't want to end up like a country X

868
00:43:56,360 --> 00:44:00,640
Speaker 1: here where we just their economic data is just believable.

869
00:44:01,080 --> 00:44:03,360
Speaker 2: Yeah, for sure. I mean the Turkey's a good example.

870
00:44:03,440 --> 00:44:05,160
Speaker 2: I mentioned Argentina, Chris.

871
00:44:05,360 --> 00:44:09,520
Speaker 3: China is the poster child right for their data, the

872
00:44:09,640 --> 00:44:12,640
Speaker 3: quality of their data, and private sources have figured out

873
00:44:12,680 --> 00:44:14,600
Speaker 3: different ways to kind of measure what's going on. They

874
00:44:14,640 --> 00:44:17,799
Speaker 3: have satellites that look them ount how much how much

875
00:44:17,920 --> 00:44:21,319
Speaker 3: light is emanating from Shanghai. That gives you a sense

876
00:44:21,360 --> 00:44:23,400
Speaker 3: of GDP. That's what we're going to be reduced to.

877
00:44:24,680 --> 00:44:28,239
Speaker 3: So yeah, yeah, that's an issue. But you know, having

878
00:44:28,239 --> 00:44:31,440
Speaker 3: said all that, Chuck, look, I think the BLS has

879
00:44:31,480 --> 00:44:34,279
Speaker 3: been around since eighteen eighty three, right, and it's a

880
00:44:34,480 --> 00:44:38,399
Speaker 3: highly professional organization with lots of checks and balances. It's

881
00:44:38,440 --> 00:44:41,560
Speaker 3: going to be pretty tough to monkey with that, at

882
00:44:41,680 --> 00:44:45,600
Speaker 3: least quickly. I mean maybe over time, and maybe there's

883
00:44:45,640 --> 00:44:47,839
Speaker 3: some things you can put your finger on the scale

884
00:44:47,880 --> 00:44:50,279
Speaker 3: of here or there. And I'm not saying that's what's

885
00:44:50,280 --> 00:44:54,319
Speaker 3: going to happen. It's possible, but I feel I don't

886
00:44:54,360 --> 00:44:57,040
Speaker 3: feel at this point. We'll have to see what happens

887
00:44:57,080 --> 00:45:00,480
Speaker 3: here you know exactly what change is actually a if

888
00:45:00,520 --> 00:45:03,399
Speaker 3: any But you know, at this point, I think it's

889
00:45:03,400 --> 00:45:07,320
Speaker 3: still run in a very professional way, the BLS, the BA,

890
00:45:07,520 --> 00:45:10,520
Speaker 3: the Census, another major government statistical agencies.

891
00:45:10,600 --> 00:45:13,760
Speaker 2: So I think it's we're not Turkey.

892
00:45:13,880 --> 00:45:16,400
Speaker 3: Is it's premature to start going down that path this

893
00:45:17,239 --> 00:45:19,360
Speaker 3: I think we're well a long way from that, but

894
00:45:20,160 --> 00:45:22,279
Speaker 3: all we should keep our eyes on this. It's very,

895
00:45:22,360 --> 00:45:24,520
Speaker 3: very important to understand what's going on.

896
00:45:33,440 --> 00:45:36,080
Speaker 1: When we talk about the potential for a recession in

897
00:45:36,600 --> 00:45:40,880
Speaker 1: twenty six, perhaps under twenty five, you're assuming global recession.

898
00:45:42,440 --> 00:45:44,440
Speaker 3: It's pretty tough for the US to go in in

899
00:45:44,520 --> 00:45:46,360
Speaker 3: recession and not drag a lot of other countries in

900
00:45:46,480 --> 00:45:50,040
Speaker 3: with it. And of course Mexico and Canada already, if

901
00:45:50,120 --> 00:45:53,200
Speaker 3: not in recession, they're even closer than we are because

902
00:45:53,200 --> 00:45:56,400
Speaker 3: they're struggling with all the tariffs have been imposed and

903
00:45:56,880 --> 00:45:59,040
Speaker 3: all the turmoil that's been created by the inside.

904
00:45:59,080 --> 00:46:01,200
Speaker 1: So I mean, I'm here in anecdotal I have Mexican

905
00:46:01,280 --> 00:46:05,120
Speaker 1: relatives who tell me already they're seeing huge price spikes

906
00:46:05,120 --> 00:46:07,560
Speaker 1: in the grocery store like just big ones already and

907
00:46:07,640 --> 00:46:11,320
Speaker 1: in the Walmart that they've felt might And does that

908
00:46:11,440 --> 00:46:13,200
Speaker 1: make sense to you that they might feel the effects

909
00:46:14,600 --> 00:46:15,520
Speaker 1: quicker than we would.

910
00:46:16,280 --> 00:46:21,600
Speaker 3: Uh yeah, well, uh maybe I'm a little surprised, but

911
00:46:21,800 --> 00:46:25,560
Speaker 3: you know, maybe because they're just there's no political spotlight

912
00:46:25,640 --> 00:46:28,400
Speaker 3: on them in Mexico as compared to you here in

913
00:46:28,440 --> 00:46:28,839
Speaker 3: the US.

914
00:46:29,320 --> 00:46:29,640
Speaker 2: Maybe.

915
00:46:29,840 --> 00:46:33,640
Speaker 3: Uh that's interesting though, But you know, Europe is also struggling.

916
00:46:33,800 --> 00:46:37,879
Speaker 3: China's not going gangbusters. It's okay, that's the other major

917
00:46:37,960 --> 00:46:41,480
Speaker 3: economy in the world. So yeah, if we go into recession,

918
00:46:42,040 --> 00:46:43,799
Speaker 3: pretty tough to think that the rest of the world,

919
00:46:44,000 --> 00:46:45,560
Speaker 3: much of the rest of the world won't be dragged

920
00:46:45,600 --> 00:46:49,000
Speaker 3: along and the global sufferer downturn as a result.

921
00:46:49,880 --> 00:46:52,120
Speaker 1: This may be asking you to do too much on

922
00:46:52,280 --> 00:46:54,680
Speaker 1: sort of you know, I know, it's forecasting is hard

923
00:46:54,760 --> 00:46:56,200
Speaker 1: enough when you're trying to do it month to month,

924
00:46:56,280 --> 00:46:59,839
Speaker 1: quarter to quarter, even year to year, But the long

925
00:47:00,080 --> 00:47:02,399
Speaker 1: term impact of this sort of you know, if we're

926
00:47:02,440 --> 00:47:05,520
Speaker 1: going to be nationalist about our economy right and do

927
00:47:05,640 --> 00:47:09,320
Speaker 1: everything we can to protect our economy, every other country

928
00:47:09,400 --> 00:47:13,640
Speaker 1: has to sort of react the same way. What is

929
00:47:13,840 --> 00:47:17,960
Speaker 1: that long term effect if we suddenly have everybody being

930
00:47:18,080 --> 00:47:23,440
Speaker 1: nationalists with their economic policy. I mean, is it just

931
00:47:23,680 --> 00:47:25,960
Speaker 1: things like, hey, you're not going to be able to

932
00:47:26,080 --> 00:47:28,319
Speaker 1: just get certain things at certain times of the year.

933
00:47:28,640 --> 00:47:31,319
Speaker 1: Did you enjoy avocados anytime you want it in the year,

934
00:47:31,440 --> 00:47:35,520
Speaker 1: You're only now only going to get them seasonally? You know.

935
00:47:35,600 --> 00:47:39,240
Speaker 2: That's one example that I've heard that we may feel.

936
00:47:39,520 --> 00:47:40,360
Speaker 2: But what are some of the.

937
00:47:40,600 --> 00:47:45,440
Speaker 1: Larger term impacts of a global race for protectionism.

938
00:47:46,440 --> 00:47:48,799
Speaker 3: Well, this is just the flipping what the world's gone

939
00:47:48,840 --> 00:47:50,439
Speaker 3: through over the past thirty years on its.

940
00:47:50,360 --> 00:47:50,799
Speaker 2: Head, right.

941
00:47:50,880 --> 00:47:54,319
Speaker 3: I mean, we've been on the process of globalizing really

942
00:47:54,480 --> 00:47:58,279
Speaker 3: since the well bringing barriers down everywhere, right since World

943
00:47:58,320 --> 00:48:01,520
Speaker 3: War Two. You know, it's been pready study process. And

944
00:48:01,600 --> 00:48:08,239
Speaker 3: it's across trade, it's across investment, it's across immigration, you know,

945
00:48:08,760 --> 00:48:13,560
Speaker 3: along tourism, kids come into our schools, along every dimension.

946
00:48:14,440 --> 00:48:15,960
Speaker 2: There's been increased globalization.

947
00:48:16,320 --> 00:48:20,560
Speaker 3: And I think the evidence is overwhelming that in aggregate

948
00:48:21,000 --> 00:48:23,440
Speaker 3: we've benefited enormously at the country.

949
00:48:23,760 --> 00:48:26,160
Speaker 2: Just look a low rates. Yeah, yeah, we think about

950
00:48:26,400 --> 00:48:29,960
Speaker 2: people of poverty in the last fifty years than we

951
00:48:30,040 --> 00:48:33,400
Speaker 2: did in the first, right million. I mean, you know,

952
00:48:34,040 --> 00:48:35,040
Speaker 2: you want to calculate it.

953
00:48:35,160 --> 00:48:39,560
Speaker 3: Yeah, yeah, I mean, unfortunately, the benefits of the globalization

954
00:48:39,920 --> 00:48:43,360
Speaker 3: were skewed right to folks like me and you. We

955
00:48:43,440 --> 00:48:45,759
Speaker 3: can tell our talents to the rest of the world,

956
00:48:45,800 --> 00:48:49,040
Speaker 3: and we benefit from that. In much of many other

957
00:48:49,120 --> 00:48:53,160
Speaker 3: parts of the US, particularly manufacturing in the middle part

958
00:48:53,160 --> 00:48:56,239
Speaker 3: of the country in the southeast, got crushed by that

959
00:48:56,360 --> 00:49:00,239
Speaker 3: globalization because China came in and you know, that's it's

960
00:49:00,280 --> 00:49:00,880
Speaker 3: other countries.

961
00:49:00,920 --> 00:49:03,799
Speaker 2: But that's that was the poster child. And I think

962
00:49:03,800 --> 00:49:05,560
Speaker 2: that goes a long way too obviously.

963
00:49:05,320 --> 00:49:09,160
Speaker 3: Explaining our fracture politics at this point, because we screwed

964
00:49:09,200 --> 00:49:09,520
Speaker 3: that up.

965
00:49:09,600 --> 00:49:10,440
Speaker 2: We the collective.

966
00:49:10,480 --> 00:49:14,879
Speaker 3: We didn't think about that everyone needed to come along

967
00:49:14,920 --> 00:49:17,720
Speaker 3: for the ride here and benefit, not not exactly equally,

968
00:49:17,880 --> 00:49:21,000
Speaker 3: because that's this is America, but everyone. No one should

969
00:49:21,000 --> 00:49:23,280
Speaker 3: be left behind as a result of the globalization process.

970
00:49:23,440 --> 00:49:23,879
Speaker 2: But we did.

971
00:49:24,440 --> 00:49:27,120
Speaker 3: And so now here we are and we're in reverse,

972
00:49:27,360 --> 00:49:31,200
Speaker 3: we're we are deglobalizing. And so stands to reason if

973
00:49:31,239 --> 00:49:34,279
Speaker 3: we benefited from the globalization, we're inaggregate going to be

974
00:49:34,440 --> 00:49:37,040
Speaker 3: hurt by the deglobalization that occurs. And by the way,

975
00:49:37,160 --> 00:49:40,319
Speaker 3: the folks that were hurt by the by the globalization,

976
00:49:40,440 --> 00:49:42,800
Speaker 3: I don't necessarily think they're going to benefit from the

977
00:49:42,880 --> 00:49:46,359
Speaker 3: deglobalization either. I mean, it's not like as you point out,

978
00:49:46,840 --> 00:49:48,239
Speaker 3: or maybe you pointed this out before we got on

979
00:49:48,600 --> 00:49:52,720
Speaker 3: we started having the conversation here, Uh, this isn't about jobs.

980
00:49:53,520 --> 00:49:55,759
Speaker 3: You know, even if the teriffs sort of bring back

981
00:49:55,880 --> 00:49:59,759
Speaker 3: manufacturing activity factories, but by the way, I don't think

982
00:49:59,760 --> 00:50:03,239
Speaker 3: that's happened. But even if it did, they don't employ anybody, right,

983
00:50:03,280 --> 00:50:04,600
Speaker 3: these are all automated.

984
00:50:05,680 --> 00:50:07,480
Speaker 2: There's no jobs. There's no jobs there.

985
00:50:08,000 --> 00:50:13,160
Speaker 3: So yeah, I think that's the concernive from broad perspective,

986
00:50:13,239 --> 00:50:14,320
Speaker 3: we will be diminished by that.

987
00:50:14,360 --> 00:50:16,719
Speaker 2: And actually there's a great case study. Just go look

988
00:50:16,760 --> 00:50:17,279
Speaker 2: at the UK.

989
00:50:18,360 --> 00:50:22,040
Speaker 3: UK began deglobalizing in earnest with Brexit in twenty sixteen.

990
00:50:23,080 --> 00:50:26,600
Speaker 3: Do a chart of UK GDP over the last thirty

991
00:50:26,680 --> 00:50:29,719
Speaker 3: years and you can see you'll see very clearly a

992
00:50:29,800 --> 00:50:32,800
Speaker 3: step down during the financial crisis. Then you'll see Brexit,

993
00:50:32,920 --> 00:50:36,360
Speaker 3: and then the slope of the line bends down. So

994
00:50:36,640 --> 00:50:39,160
Speaker 3: here we are growing in a nice pace and now

995
00:50:39,239 --> 00:50:41,439
Speaker 3: it's bent down. And then of course you see another

996
00:50:41,440 --> 00:50:43,120
Speaker 3: step down because of the pandemic.

997
00:50:43,560 --> 00:50:45,960
Speaker 2: So UK is a.

998
00:50:46,239 --> 00:50:49,719
Speaker 3: Shadow today of what it would have been if if

999
00:50:49,760 --> 00:50:52,440
Speaker 3: Brexit had never happened, and that's a great case study

1000
00:50:52,560 --> 00:50:54,640
Speaker 3: for our future if we go down this path.

1001
00:50:55,080 --> 00:50:59,120
Speaker 1: By the way, just as an economy, we came out

1002
00:50:59,160 --> 00:51:02,839
Speaker 1: of COVID about as well as any major economy.

1003
00:51:02,520 --> 00:51:05,919
Speaker 2: Around the world, did better than anybody. Yeah, yeah, better than.

1004
00:51:05,840 --> 00:51:08,120
Speaker 1: I mean, that's I mean, that's you know, it's one

1005
00:51:08,160 --> 00:51:10,040
Speaker 1: of those things I've said this before. It's like, look,

1006
00:51:10,080 --> 00:51:13,719
Speaker 1: I'm aware of the politics and pandemics. I mean, you know,

1007
00:51:13,840 --> 00:51:16,000
Speaker 1: nineteen seventeen and eighteen, you know, we were at each

1008
00:51:16,000 --> 00:51:18,520
Speaker 1: other's throats, and you know, we didn't trust each other either.

1009
00:51:18,600 --> 00:51:21,000
Speaker 1: I mean, this isn't a new phenomenon, right, this is

1010
00:51:21,360 --> 00:51:24,239
Speaker 1: human nature. We don't you know it is, it is

1011
00:51:24,320 --> 00:51:29,600
Speaker 1: something distinct. But it does feel as if, collectively, despite

1012
00:51:29,640 --> 00:51:34,360
Speaker 1: our polarized politics, our lawmakers responded correctly to this crisis

1013
00:51:34,640 --> 00:51:36,760
Speaker 1: in a way that they didn't to the financial crisis

1014
00:51:36,800 --> 00:51:38,080
Speaker 1: of a nine totally.

1015
00:51:38,320 --> 00:51:38,640
Speaker 2: Totally.

1016
00:51:38,760 --> 00:51:42,040
Speaker 3: I mean they were fully committed, both Republican and Democrats

1017
00:51:42,120 --> 00:51:45,399
Speaker 3: ultimately came together and did what was necessary to get

1018
00:51:45,440 --> 00:51:46,080
Speaker 3: the coming roma.

1019
00:51:46,280 --> 00:51:49,560
Speaker 2: I mean, the choice was, as I said, inflation or recession,

1020
00:51:49,600 --> 00:51:50,360
Speaker 2: and we chose inflation.

1021
00:51:50,920 --> 00:51:55,040
Speaker 3: Right. Well, even there, I you know, I think the

1022
00:51:55,200 --> 00:51:58,920
Speaker 3: inflation would have happened almost regardless because of the supply

1023
00:51:59,040 --> 00:52:01,200
Speaker 3: chainesruptions in Russian war and prices.

1024
00:52:01,280 --> 00:52:02,279
Speaker 2: So I'm not even that.

1025
00:52:02,400 --> 00:52:05,160
Speaker 3: I'm not the inflation that we got because of the

1026
00:52:05,440 --> 00:52:09,640
Speaker 3: fiscal support that was by design.

1027
00:52:09,960 --> 00:52:12,120
Speaker 2: I mean, you know, at that point, the FED was

1028
00:52:12,160 --> 00:52:13,160
Speaker 2: trying to get.

1029
00:52:13,120 --> 00:52:16,520
Speaker 3: Inflation above target because they wanted to compensate for the

1030
00:52:16,680 --> 00:52:19,080
Speaker 3: below target inflation that we've seen since the financial crisis.

1031
00:52:19,160 --> 00:52:21,480
Speaker 3: So I don't think there was anything undesirable about the

1032
00:52:21,520 --> 00:52:24,200
Speaker 3: inflation right up until Russia and in Ukraine in twenty

1033
00:52:24,280 --> 00:52:27,080
Speaker 3: twenty two and the other places went skyward. Agricultural prices

1034
00:52:27,080 --> 00:52:29,720
Speaker 3: went skyward, and that's when inflation became the real problem

1035
00:52:29,760 --> 00:52:32,880
Speaker 3: that it was. But the US, in my view, managed

1036
00:52:32,960 --> 00:52:36,640
Speaker 3: through the pandemic admirably well. Now was costly five trillion

1037
00:52:36,640 --> 00:52:41,040
Speaker 3: dollars twenty percent to GDP, so that was was not cheap.

1038
00:52:42,280 --> 00:52:45,640
Speaker 3: We got the economy back up fully of running up

1039
00:52:46,160 --> 00:52:49,640
Speaker 3: in a full swing well before anybody else, you know,

1040
00:52:49,960 --> 00:52:53,320
Speaker 3: compares to China or Europe or anyone else. And actually

1041
00:52:53,800 --> 00:52:56,480
Speaker 3: it's hard to believe, but if you just think back

1042
00:52:56,480 --> 00:52:59,839
Speaker 3: a year ago, the conversation was about American exceptionalism.

1043
00:53:00,040 --> 00:53:02,680
Speaker 2: We were doing better than anybody else, everybody else, and

1044
00:53:02,840 --> 00:53:03,839
Speaker 2: everybody wanted to be us.

1045
00:53:03,920 --> 00:53:05,600
Speaker 3: They want to be just like Mike, you know, they

1046
00:53:05,640 --> 00:53:08,680
Speaker 3: wanted to they want to be What are you guys

1047
00:53:08,800 --> 00:53:09,960
Speaker 3: doing that we should be doing?

1048
00:53:10,040 --> 00:53:12,320
Speaker 2: So we're doing something wrong, but you know, obviously we're not.

1049
00:53:12,600 --> 00:53:14,600
Speaker 2: It's a very different story. Now, all right, let me

1050
00:53:14,640 --> 00:53:16,080
Speaker 2: get you out of here on this. Which is the

1051
00:53:16,160 --> 00:53:17,040
Speaker 2: debt question?

1052
00:53:17,440 --> 00:53:17,560
Speaker 3: Right?

1053
00:53:17,719 --> 00:53:18,200
Speaker 2: Which is this?

1054
00:53:19,160 --> 00:53:23,000
Speaker 1: You know, there's a lot of a lot of smart

1055
00:53:23,040 --> 00:53:26,120
Speaker 1: people that I talked to, very worried about the debt.

1056
00:53:26,640 --> 00:53:29,640
Speaker 1: Continue to wonder when is you know, when is this

1057
00:53:29,800 --> 00:53:32,000
Speaker 1: the moment that we're not crying wolf and the wolf

1058
00:53:32,080 --> 00:53:32,839
Speaker 1: actually is here?

1059
00:53:34,560 --> 00:53:35,040
Speaker 2: What say you?

1060
00:53:37,280 --> 00:53:39,600
Speaker 3: I think we're as close as we've ever been. I mean,

1061
00:53:39,880 --> 00:53:42,520
Speaker 3: you know, I look at three measures, they're all they're

1062
00:53:42,560 --> 00:53:48,000
Speaker 3: all flashing red. One is the deficit to GDP. That's

1063
00:53:48,040 --> 00:53:50,440
Speaker 3: the size of our deficit each year. And six percent

1064
00:53:51,719 --> 00:53:54,680
Speaker 3: that's extraordinary, even excluding the interest payments on the debt.

1065
00:53:54,680 --> 00:53:57,440
Speaker 3: It's three percent. That's called the primary deficit. We're at

1066
00:53:57,480 --> 00:54:02,720
Speaker 3: full employment, everyone's employeed. What happens when we go into recession?

1067
00:54:03,320 --> 00:54:08,040
Speaker 3: Six percent is yeah, three percent is extraordinary.

1068
00:54:08,120 --> 00:54:08,480
Speaker 2: Primary.

1069
00:54:08,960 --> 00:54:13,360
Speaker 3: Second, our interest payments is a share of revenue or GDP.

1070
00:54:14,040 --> 00:54:15,920
Speaker 3: It's almost at a record high, will be at a

1071
00:54:15,920 --> 00:54:18,359
Speaker 3: record high immediately. We're spending more on our interest now

1072
00:54:18,400 --> 00:54:20,879
Speaker 3: than we are on our own defense. All the trend

1073
00:54:20,920 --> 00:54:23,520
Speaker 3: lines there look, you know, pretty ugly. And then the

1074
00:54:23,640 --> 00:54:26,120
Speaker 3: debt to GDP. That's the amount of debt we have

1075
00:54:26,239 --> 00:54:29,040
Speaker 3: out saying that's one hundred percent. It's now at one

1076
00:54:29,080 --> 00:54:31,920
Speaker 3: hundred percent debt to GDP. It was just to give

1077
00:54:31,960 --> 00:54:33,879
Speaker 3: a context, it was closer to twenty five to thirty

1078
00:54:33,880 --> 00:54:36,759
Speaker 3: percent before the financial crisis. So that's how bad how

1079
00:54:36,840 --> 00:54:39,400
Speaker 3: quickly things have turned in terms of our fiscal situation.

1080
00:54:40,000 --> 00:54:42,920
Speaker 3: And here the direction of travel is also very disconcerting.

1081
00:54:43,000 --> 00:54:47,880
Speaker 3: We know exactly going forward what's going on. So we've

1082
00:54:48,120 --> 00:54:51,360
Speaker 3: rarely been in this situation where all these indicators are

1083
00:54:51,400 --> 00:54:55,400
Speaker 3: saying the same thing. We got a problem. And global

1084
00:54:55,440 --> 00:54:57,080
Speaker 3: investors are nervous, they're skittish.

1085
00:54:57,160 --> 00:55:01,800
Speaker 2: That's why the euro still the cleanest pair of dirty underwear,

1086
00:55:01,800 --> 00:55:03,840
Speaker 2: and the well, we're still the cleanest, but we're pretty dirty.

1087
00:55:03,960 --> 00:55:07,239
Speaker 2: And then global investors aren't noticing, you're the dollar.

1088
00:55:07,080 --> 00:55:09,640
Speaker 3: Is not appreciating and all this it's falling in value.

1089
00:55:10,040 --> 00:55:12,319
Speaker 3: Gold prices are a record high, as crypto is at

1090
00:55:12,360 --> 00:55:15,279
Speaker 3: a record high. That you know, is indicative of some

1091
00:55:15,480 --> 00:55:19,760
Speaker 3: concern by global investors in the in the willingston ability

1092
00:55:19,800 --> 00:55:22,200
Speaker 3: of us to pay on our debt in a timely way.

1093
00:55:22,800 --> 00:55:26,200
Speaker 3: And so yeah, I think I don't know when the

1094
00:55:26,320 --> 00:55:28,440
Speaker 3: day of reckoning is, but the trend lines here suggest

1095
00:55:28,480 --> 00:55:30,000
Speaker 3: that there will be one, and it may not be

1096
00:55:30,080 --> 00:55:31,480
Speaker 3: as far often the future as people think.

1097
00:55:31,800 --> 00:55:33,800
Speaker 2: Sounds like if we were a company and not a country,

1098
00:55:35,400 --> 00:55:36,840
Speaker 2: the advice would be to sell the stock.

1099
00:55:37,920 --> 00:55:41,399
Speaker 3: Yeah, except we can print our own money. So that's

1100
00:55:41,640 --> 00:55:44,279
Speaker 3: that's the next step here. So you could if you're

1101
00:55:44,280 --> 00:55:46,040
Speaker 3: a company, you can print your own money, you know,

1102
00:55:46,280 --> 00:55:47,440
Speaker 3: so that buys you a lot of time.

1103
00:55:47,640 --> 00:55:50,040
Speaker 2: Yeah, I think only Amazon does that. I don't know. Okay,

1104
00:55:50,160 --> 00:55:52,040
Speaker 2: there you go. I have no idea, right right right,

1105
00:55:52,200 --> 00:55:57,120
Speaker 2: just more more prime, more prime, right right. Well, you

1106
00:55:57,200 --> 00:56:00,440
Speaker 2: sound like you're cautiously pessimistic about the near termomy. Is

1107
00:56:00,440 --> 00:56:02,279
Speaker 2: that a fair description? Yeah?

1108
00:56:02,360 --> 00:56:04,440
Speaker 3: Look, I think the you know, the underlying strength of

1109
00:56:04,440 --> 00:56:08,560
Speaker 3: the American economy is under you, underlying at all is strong.

1110
00:56:09,000 --> 00:56:12,960
Speaker 3: We are a dynamic economy. Just look at our tech companies.

1111
00:56:13,120 --> 00:56:15,080
Speaker 3: I mean, they're just a marbl will still rather be

1112
00:56:15,160 --> 00:56:18,120
Speaker 3: US than China or anybody else on the planet. Uh,

1113
00:56:18,680 --> 00:56:23,160
Speaker 3: it's just that economic policy is making life very difficult,

1114
00:56:23,480 --> 00:56:27,360
Speaker 3: and that is raising a lot of concerns about pushing

1115
00:56:27,400 --> 00:56:29,799
Speaker 3: the economy into recession when it really doesn't need.

1116
00:56:29,719 --> 00:56:30,759
Speaker 2: To be this at all.

1117
00:56:31,160 --> 00:56:32,520
Speaker 1: Well, I was just going to think, can you think

1118
00:56:32,560 --> 00:56:36,160
Speaker 1: of a time when when essentially politicians created a recession?

1119
00:56:38,560 --> 00:56:43,160
Speaker 2: Uh, it's certainly not like this, well, not that direct

1120
00:56:43,160 --> 00:56:43,759
Speaker 2: where it really is.

1121
00:56:44,600 --> 00:56:47,719
Speaker 3: I mean, policies always plays a role, usually something it's

1122
00:56:47,880 --> 00:56:48,799
Speaker 3: like you're in the middle of some.

1123
00:56:49,000 --> 00:56:52,840
Speaker 1: Mess, right, and a miscalculation or miscalculation. Right, there's a

1124
00:56:52,880 --> 00:56:55,719
Speaker 1: misc This is not a miscalculation, this is an intentional

1125
00:56:56,440 --> 00:56:59,799
Speaker 1: belieast by intent. Yeah, I can't think of I can't

1126
00:56:59,800 --> 00:57:04,080
Speaker 1: think of anything, no Ah, Marcus Andy. I always learn

1127
00:57:04,120 --> 00:57:06,400
Speaker 1: a lot from talking with you, and I think, like

1128
00:57:06,480 --> 00:57:07,840
Speaker 1: I said, you speak American.

1129
00:57:08,160 --> 00:57:09,480
Speaker 2: How many economists noted do that?

1130
00:57:09,560 --> 00:57:09,680
Speaker 1: Oh?

1131
00:57:09,760 --> 00:57:13,600
Speaker 2: I really appreciate that. Thank you, Chuck. Anytime, Well, look

1132
00:57:13,840 --> 00:57:15,799
Speaker 2: at least be a football season to distract us from

1133
00:57:15,800 --> 00:57:20,000
Speaker 2: this weekening Eagles. Eagles. Oh okay, well you've been spoiled.

1134
00:57:20,120 --> 00:57:23,080
Speaker 2: You've been spoiled, now are you Phillies too? I was

1135
00:57:23,200 --> 00:57:27,960
Speaker 2: just in the Natch games this weekend. Yeah, yeah, yeah, man,

1136
00:57:28,240 --> 00:57:30,600
Speaker 2: it is. It's been. It's been pretty good to be

1137
00:57:30,600 --> 00:57:33,760
Speaker 2: a Philly, a Philly area fan these days, isn't it. Yeah.

1138
00:57:34,040 --> 00:57:37,640
Speaker 1: Yeah, we've had with good string I mean, Revens fans.

1139
00:57:37,720 --> 00:57:40,120
Speaker 1: Usually you're more fun when you're when you're not winning,

1140
00:57:40,120 --> 00:57:41,040
Speaker 1: because you, guys get.

1141
00:57:41,120 --> 00:57:44,520
Speaker 2: We complain, A complain regardless.

1142
00:57:45,560 --> 00:57:49,000
Speaker 3: Too much winning, yeah yeah, or you're not winning enough,

1143
00:57:49,120 --> 00:57:50,520
Speaker 3: you're not winning gracefully enough.

1144
00:57:50,600 --> 00:57:52,960
Speaker 1: You know what I do like is your fan base

1145
00:57:53,040 --> 00:57:55,400
Speaker 1: went from questioning Jalen Hurts to now saying, hey, you

1146
00:57:55,480 --> 00:57:57,000
Speaker 1: don't speak bad about our quarterback.

1147
00:57:57,280 --> 00:57:59,760
Speaker 3: We'll speak bad about our quarterback, but you don't to

1148
00:57:59,840 --> 00:58:03,640
Speaker 3: do it right, right, that's so, that's right. Oh but

1149
00:58:04,040 --> 00:58:06,120
Speaker 3: I see you're out here in my rose Bush. I'm

1150
00:58:06,120 --> 00:58:07,439
Speaker 3: gonna hustle. I'm gonna hustle.

1151
00:58:07,440 --> 00:58:09,880
Speaker 2: You got it, take care of now, Chuck as always,

1152
00:58:10,000 --> 00:58:13,880
Speaker 2: save your savior, shrubbery, I got that's my my prize,

1153
00:58:13,960 --> 00:58:18,560
Speaker 2: Rose Bush. Talk to your little hair about mm hmmm