1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,200 Speaker 1: us live on YouTube. 6 00:00:27,440 --> 00:00:30,280 Speaker 2: I have known Peter Navarro for decades. He's a pinata 7 00:00:30,360 --> 00:00:33,680 Speaker 2: for so many in America. I want to reaffirm who 8 00:00:34,000 --> 00:00:38,600 Speaker 2: doctor Navarro is. In nineteen ninety four, a bombshell of 9 00:00:38,640 --> 00:00:42,239 Speaker 2: a book came out of University of California, Irvine. It 10 00:00:42,320 --> 00:00:46,200 Speaker 2: was called The Coming China Wars, and Peter Navarro Agree 11 00:00:46,240 --> 00:00:51,800 Speaker 2: or Disagree invented a franchise and conversation point on America 12 00:00:52,120 --> 00:00:52,760 Speaker 2: in China. 13 00:00:53,240 --> 00:00:54,200 Speaker 3: A guy up in New. 14 00:00:54,080 --> 00:00:58,120 Speaker 2: York, Donald Trumps citizen looked at mister Navarro and said, hey, 15 00:00:58,480 --> 00:01:01,600 Speaker 2: I can agree with that. And of course, Peter Navarro 16 00:01:01,800 --> 00:01:05,120 Speaker 2: advises our second term president of the United States, a 17 00:01:05,200 --> 00:01:08,880 Speaker 2: senior counselor to the President. Doctor Navarro, thank you so 18 00:01:08,959 --> 00:01:11,080 Speaker 2: much for joining Bloomberg today. I want to get right 19 00:01:11,160 --> 00:01:11,360 Speaker 2: to it. 20 00:01:11,400 --> 00:01:11,640 Speaker 4: Peter. 21 00:01:11,720 --> 00:01:17,200 Speaker 2: When you were at Irvine, you lectured on McKinley's capitulation 22 00:01:17,840 --> 00:01:22,399 Speaker 2: on tariffs, McKinley was the arch Trump like protectionist of 23 00:01:22,440 --> 00:01:26,479 Speaker 2: the nineteenth century, and he did the Buffalo pivot where 24 00:01:26,480 --> 00:01:28,600 Speaker 2: he said, We've got to get more open. Are we 25 00:01:28,680 --> 00:01:31,840 Speaker 2: in the process now of a modern Buffalo pivot? 26 00:01:34,000 --> 00:01:34,280 Speaker 3: Tom? 27 00:01:34,319 --> 00:01:37,119 Speaker 5: First of all, I just want to let the Bloomberg 28 00:01:37,160 --> 00:01:41,320 Speaker 5: audience know how much I admire you. For years I've 29 00:01:41,720 --> 00:01:43,679 Speaker 5: I just love what you do. 30 00:01:43,800 --> 00:01:45,520 Speaker 3: So let me get that out of the way. 31 00:01:46,880 --> 00:01:54,840 Speaker 5: McKinley, Henry Clay, Abraham Lincoln, Alexander Hamilton, these are like 32 00:01:54,920 --> 00:02:00,480 Speaker 5: the four people on the Mount Rushmore of American tariffs. 33 00:02:01,360 --> 00:02:04,840 Speaker 5: And we are not in any pivot away from that. 34 00:02:05,000 --> 00:02:12,000 Speaker 5: We are fully embracing a structural shift engineered by Donald 35 00:02:12,000 --> 00:02:16,880 Speaker 5: Trump in the entire international global trading system in a 36 00:02:16,960 --> 00:02:21,559 Speaker 5: way which will make that system better and more prosperous. 37 00:02:21,600 --> 00:02:25,200 Speaker 3: The problem we've had, Tom, is under the rules, the 38 00:02:25,320 --> 00:02:26,320 Speaker 3: very rules of. 39 00:02:26,280 --> 00:02:31,960 Speaker 5: The World Trade Organization, specifically the most Favored Nation rule, 40 00:02:32,800 --> 00:02:35,519 Speaker 5: every other nation in the world has had a license 41 00:02:35,560 --> 00:02:39,360 Speaker 5: to cheat us through higher tariffs, higher non tariff bearers, 42 00:02:39,960 --> 00:02:44,160 Speaker 5: and the costs, particularly after NAFTA and China joined the 43 00:02:44,160 --> 00:02:47,480 Speaker 5: World Trade Organization in two thousand and one, has been 44 00:02:47,600 --> 00:02:51,400 Speaker 5: in the one hundred thousands of factories and the millions 45 00:02:51,440 --> 00:02:52,480 Speaker 5: of jobs. 46 00:02:52,120 --> 00:02:54,320 Speaker 3: And we are reversing that. 47 00:02:54,680 --> 00:02:57,040 Speaker 5: And you can see fifty thousand on the now, which 48 00:02:57,080 --> 00:02:58,680 Speaker 5: I predicted in April. 49 00:03:00,600 --> 00:03:02,880 Speaker 2: Trump, either you or Kevin Hasset, I'm gonna give credit 50 00:03:02,919 --> 00:03:05,240 Speaker 2: for that. Peter Navarre, We're going to go with you 51 00:03:05,280 --> 00:03:08,680 Speaker 2: on the sequence here. You mentioned the follow on from NAFTA. 52 00:03:08,760 --> 00:03:11,760 Speaker 2: I spoke to our Josh Wingrove this morning and he 53 00:03:11,840 --> 00:03:13,960 Speaker 2: made really clear what we need to know is a 54 00:03:14,040 --> 00:03:19,440 Speaker 2: president actually thinking about moving away from our trade agreements 55 00:03:19,520 --> 00:03:23,320 Speaker 2: with Mexico in Canada. Have you heard the president say 56 00:03:23,680 --> 00:03:27,080 Speaker 2: I want out of NAFTA and everything that followed it. 57 00:03:28,080 --> 00:03:32,440 Speaker 5: Tom, I'm one of three people, Stephen Miller Dan Scavino 58 00:03:32,520 --> 00:03:36,080 Speaker 5: being the other two who was with the president from 59 00:03:36,160 --> 00:03:39,920 Speaker 5: the twenty sixteen campaign through all four years of the 60 00:03:40,000 --> 00:03:44,120 Speaker 5: first term. And the reason why that happened, among other things, 61 00:03:44,200 --> 00:03:46,880 Speaker 5: is I never get ahead of the president. I can 62 00:03:46,920 --> 00:03:56,000 Speaker 5: tell you this that USMCA has some significant flaws in 63 00:03:56,040 --> 00:04:00,280 Speaker 5: it and it's going to be reevaluated in July. The 64 00:04:00,320 --> 00:04:04,960 Speaker 5: Great Jamison Greer or US Trade representative will be taking 65 00:04:05,000 --> 00:04:08,280 Speaker 5: the lean on that. But nothing ever happens in the 66 00:04:08,320 --> 00:04:12,240 Speaker 5: White House without the Commander in chief, particularly on trade. 67 00:04:12,680 --> 00:04:15,880 Speaker 5: So as the boss says, uh, let's see what happens. 68 00:04:15,960 --> 00:04:17,840 Speaker 3: But we're in a situation. 69 00:04:19,160 --> 00:04:20,520 Speaker 5: One of one of the things you know, I'm the 70 00:04:20,640 --> 00:04:22,920 Speaker 5: senior Counselor of Trade and Manufacturing, and one of one 71 00:04:22,920 --> 00:04:25,799 Speaker 5: of the things that's really troubling right now, it should 72 00:04:25,800 --> 00:04:31,080 Speaker 5: be troubling to the variant people, is that Mexico UH 73 00:04:31,240 --> 00:04:36,400 Speaker 5: and and to UH extent, Canada are basically being used 74 00:04:36,440 --> 00:04:42,039 Speaker 5: by staging areas for countries like China, UH, some of 75 00:04:42,080 --> 00:04:46,080 Speaker 5: the European countries, in the Asian countries, Japean, Korea, they 76 00:04:46,120 --> 00:04:51,080 Speaker 5: come into China, into Mexico and they leverage NAFTA, UH 77 00:04:51,120 --> 00:04:53,720 Speaker 5: and now U S m c A to get into 78 00:04:53,800 --> 00:04:57,760 Speaker 5: our markets in a way which essentially is terriff avoidance 79 00:04:57,800 --> 00:04:59,680 Speaker 5: at best and tariff of evasion at worst. 80 00:05:00,360 --> 00:05:01,520 Speaker 3: I could have to deal with. 81 00:05:01,440 --> 00:05:03,400 Speaker 4: That, Tom accrastination and worldwide. 82 00:05:03,400 --> 00:05:06,400 Speaker 2: Peter Navarro with us, with the Trump administration, our Paul 83 00:05:06,440 --> 00:05:07,880 Speaker 2: Sweeney with doctor Navarro. 84 00:05:08,160 --> 00:05:10,159 Speaker 6: Mister Navarro, I guess last night we saw in the 85 00:05:10,160 --> 00:05:13,960 Speaker 6: House of Representatives they voted and some of President's tariff 86 00:05:14,000 --> 00:05:18,520 Speaker 6: agenda against Canada. Did they overstep their bounds? What is 87 00:05:18,600 --> 00:05:20,240 Speaker 6: the response of the administration. 88 00:05:21,080 --> 00:05:27,440 Speaker 5: Well, I think it's highly ironic, Paul, that the Democrat 89 00:05:27,720 --> 00:05:33,960 Speaker 5: Party is opposing tariffs on behalf of working class Americans 90 00:05:34,000 --> 00:05:37,280 Speaker 5: when it was the Democrat Party, which is supposed to 91 00:05:37,279 --> 00:05:40,560 Speaker 5: be the party of the working class. They simply because 92 00:05:40,560 --> 00:05:44,799 Speaker 5: they hate Donald Trump, now they're anti tariff. I think 93 00:05:45,080 --> 00:05:49,000 Speaker 5: the bigger story is the shame on the three Republicans 94 00:05:49,920 --> 00:05:54,840 Speaker 5: who defected. Although Thomas Massey I don't consider him of 95 00:05:55,200 --> 00:05:56,560 Speaker 5: being nice anymore. 96 00:05:57,040 --> 00:06:00,400 Speaker 3: I'm being nice. What I'm just selling like it is, 97 00:06:00,720 --> 00:06:03,080 Speaker 3: it's like Nancy. 98 00:06:02,279 --> 00:06:05,359 Speaker 5: Hang on, let me give a compliment to the Democrats, Sez, 99 00:06:05,680 --> 00:06:11,720 Speaker 5: the Democrats hold ranks and we don't, and we got 100 00:06:11,720 --> 00:06:13,920 Speaker 5: to stop not holding ranks, sir. 101 00:06:13,920 --> 00:06:15,760 Speaker 4: Because Okay, it's. 102 00:06:15,720 --> 00:06:19,720 Speaker 5: Very harmful to the party and to this country when 103 00:06:19,800 --> 00:06:21,479 Speaker 5: we have that kind of thing going on. 104 00:06:21,560 --> 00:06:24,400 Speaker 2: Okay, Peter Well said, but let's give two examples right now. 105 00:06:24,440 --> 00:06:28,279 Speaker 2: Tom Barrett, who's the congressman from Lancing, Michigan, he's got 106 00:06:28,279 --> 00:06:33,680 Speaker 2: two GM factories up here, his Republican working class constituents 107 00:06:33,839 --> 00:06:37,919 Speaker 2: who President Trump stole from the Democrats. Tom Barrett is 108 00:06:37,960 --> 00:06:41,279 Speaker 2: going to fight for his life in that congressional district 109 00:06:41,279 --> 00:06:43,760 Speaker 2: of Lancing, Michigan. What do you need to do to 110 00:06:43,800 --> 00:06:45,400 Speaker 2: get Tom Barrett re elected? 111 00:06:47,800 --> 00:06:51,839 Speaker 5: Well, okay, so that's a bigger conversation. I can tell 112 00:06:51,839 --> 00:06:56,279 Speaker 5: you this, The stakes have never been higher in a 113 00:06:56,320 --> 00:07:01,560 Speaker 5: mid term congressional election. If we lose the House in 114 00:07:01,720 --> 00:07:06,160 Speaker 5: twenty twenty sixteen, we will see a repeat of the 115 00:07:06,160 --> 00:07:11,320 Speaker 5: impeachment circus craziness that we saw beginning in twenty eighteen. 116 00:07:11,960 --> 00:07:17,960 Speaker 5: It really was tremendously harmful. The Democrats they hate Trump 117 00:07:18,120 --> 00:07:21,840 Speaker 5: more than they love this country, as Corey Lewandowski once said, 118 00:07:22,840 --> 00:07:28,200 Speaker 5: and our strategy now, look, they're coming at us on 119 00:07:28,320 --> 00:07:30,480 Speaker 5: affordability number one. 120 00:07:30,800 --> 00:07:33,679 Speaker 3: We are turning that around as we speak. 121 00:07:33,720 --> 00:07:38,000 Speaker 5: We're taking a micro approach to the macro problem inflation. 122 00:07:38,520 --> 00:07:42,320 Speaker 5: We're taking it cow by cow, fish by fish, gallon 123 00:07:42,440 --> 00:07:46,880 Speaker 5: by gallon. And nothing is more important to the President 124 00:07:47,760 --> 00:07:54,080 Speaker 5: than strong growth in a deflationary environment. Following the four 125 00:07:54,200 --> 00:08:00,120 Speaker 5: pillars of trump Nomics, tax cuts, we got strategic enter 126 00:08:00,120 --> 00:08:04,400 Speaker 5: g dominance, we got deregulation, and of course fair trade. 127 00:08:04,520 --> 00:08:08,880 Speaker 5: So we're gonna first of all, address the affordability crisis 128 00:08:09,200 --> 00:08:14,960 Speaker 5: head on. We're making great progress on that. The border 129 00:08:15,040 --> 00:08:22,320 Speaker 5: issue remains troublesome. I've got a peace out in a 130 00:08:22,480 --> 00:08:28,160 Speaker 5: rival network thing today that does the body count when 131 00:08:28,240 --> 00:08:32,640 Speaker 5: you let millions of illegal aliens in. 132 00:08:32,040 --> 00:08:32,959 Speaker 3: To this country. 133 00:08:33,040 --> 00:08:39,880 Speaker 5: I mean, we lost two Americans in Minneapolis because of 134 00:08:39,880 --> 00:08:40,360 Speaker 5: what was. 135 00:08:40,360 --> 00:08:41,320 Speaker 3: Going on there. 136 00:08:41,360 --> 00:08:47,400 Speaker 5: But my calculations, tens of thousands of Americans are going 137 00:08:47,480 --> 00:08:53,160 Speaker 5: to be either murdered, burgled, raped, or assaulted by the 138 00:08:53,280 --> 00:08:55,840 Speaker 5: illegal aliens unless we deport them. 139 00:08:56,360 --> 00:08:59,960 Speaker 6: So that's going to be and that bounds your You know, 140 00:09:00,080 --> 00:09:03,120 Speaker 6: one of the things. We saw very strong jobs report yesterday, 141 00:09:03,960 --> 00:09:05,520 Speaker 6: but a lot of economs will say, this is an 142 00:09:05,559 --> 00:09:09,000 Speaker 6: economy that is kind of slow hiring or no hiring, 143 00:09:09,280 --> 00:09:12,640 Speaker 6: but slow or no cuts in jobs. It's just kind 144 00:09:12,640 --> 00:09:15,040 Speaker 6: of hanging out there. If you want this economy to grow, 145 00:09:15,080 --> 00:09:18,719 Speaker 6: many economers would argue, you'd need a larger workforce. Does 146 00:09:18,760 --> 00:09:22,360 Speaker 6: that suggest the Trump administration maybe rethink their immigration policy? 147 00:09:22,440 --> 00:09:26,119 Speaker 5: Hey, hey, god, we had one hundred and seventy thousand 148 00:09:26,840 --> 00:09:30,760 Speaker 5: private sector jobs created last month. 149 00:09:30,760 --> 00:09:32,280 Speaker 3: One hundred and seventy thousand. 150 00:09:33,120 --> 00:09:35,840 Speaker 5: And by the way, Paul, the best answer to your 151 00:09:35,920 --> 00:09:40,640 Speaker 5: question is increase the labor force participation. Oh, it went 152 00:09:40,720 --> 00:09:43,320 Speaker 5: up yesterday in the report. 153 00:09:43,440 --> 00:09:45,840 Speaker 3: Even as the unemployment rate went down. 154 00:09:45,920 --> 00:09:49,280 Speaker 5: How many times do you see that we're looking at 155 00:09:49,400 --> 00:09:54,640 Speaker 5: five percent GDP growth, and we're looking at earnings which 156 00:09:54,679 --> 00:09:58,840 Speaker 5: you're off the charts and back in April April seventh, 157 00:09:58,960 --> 00:10:02,400 Speaker 5: to be exact, when the futures for the Dow word 158 00:10:02,520 --> 00:10:08,120 Speaker 5: thirty eight thousand, my friend, thirty eight thousand Onipical Titanic. 159 00:10:08,520 --> 00:10:11,000 Speaker 3: I said fifty thousand. 160 00:10:10,600 --> 00:10:12,640 Speaker 4: On the data tied out to Hasset. That's all. 161 00:10:12,640 --> 00:10:16,680 Speaker 5: Look, Peter Navarre with Kevin wrote a book like years ago. 162 00:10:16,840 --> 00:10:19,480 Speaker 5: He never said fifty thousand on the Dow this year. 163 00:10:19,559 --> 00:10:22,199 Speaker 2: I've just to be clear, Peter Navarro with us here 164 00:10:22,320 --> 00:10:25,360 Speaker 2: nationwide and of course some miservine California as well. Peter, 165 00:10:25,640 --> 00:10:28,760 Speaker 2: you mentioned the midterm elections. Here's the reality for the 166 00:10:28,800 --> 00:10:32,679 Speaker 2: president right now. You go out I eight across Illinois, 167 00:10:33,000 --> 00:10:36,440 Speaker 2: you run into the Big River and there's Davenport, Iowa. 168 00:10:36,760 --> 00:10:40,959 Speaker 2: The Republican in the first congressional district won that district 169 00:10:41,360 --> 00:10:46,560 Speaker 2: by six votes last time around. They didn't cross the 170 00:10:46,600 --> 00:10:50,080 Speaker 2: aisle yesterday to vote with the Democrats. But they've had 171 00:10:50,120 --> 00:10:53,680 Speaker 2: it with the Navarro Trump trade. What do you need 172 00:10:53,720 --> 00:10:58,280 Speaker 2: to amend to get Republicans re elected in November? 173 00:10:58,880 --> 00:11:02,559 Speaker 3: I just so disagree with that. 174 00:11:02,840 --> 00:11:08,640 Speaker 5: We Iowa loves Donald Trump and by the way, farmers 175 00:11:08,840 --> 00:11:09,960 Speaker 5: love Donald Trump. 176 00:11:10,080 --> 00:11:11,559 Speaker 3: Farmers above all. 177 00:11:11,559 --> 00:11:16,559 Speaker 5: Understand the necessity for tariffs. And every time there's been 178 00:11:16,640 --> 00:11:21,560 Speaker 5: retaliation by China or the Europeans or by the Canadians, guess. 179 00:11:21,360 --> 00:11:22,880 Speaker 3: Who's had the farmers back. 180 00:11:22,960 --> 00:11:26,640 Speaker 5: I've personally been involved with the great Brook rawlings over 181 00:11:26,640 --> 00:11:30,360 Speaker 5: at the Department of Agriculture and making sure that farmers 182 00:11:30,440 --> 00:11:34,520 Speaker 5: are made whole and can't be used as bargaining chips 183 00:11:34,559 --> 00:11:37,600 Speaker 5: and pawns in a bigger game. So, I you know, 184 00:11:37,760 --> 00:11:43,040 Speaker 5: Iowa is Trump country, and I just it's like you're 185 00:11:43,080 --> 00:11:47,000 Speaker 5: making assertions that I just I mean, if you start 186 00:11:47,040 --> 00:11:49,599 Speaker 5: with an assertion that's wrong, then everything that else that 187 00:11:49,760 --> 00:11:51,319 Speaker 5: follows is not. 188 00:11:52,120 --> 00:11:53,720 Speaker 3: Peter, what we're talking about. 189 00:11:53,920 --> 00:11:56,160 Speaker 2: This is too important, and Paul wants to talk about 190 00:11:56,200 --> 00:12:00,480 Speaker 2: the legal background as well. Peter Navarro a two to 191 00:12:00,559 --> 00:12:04,200 Speaker 2: three percent terraf regime for whatever reasons, and you were 192 00:12:04,240 --> 00:12:07,400 Speaker 2: providing leadership on this. We had Liberation Day in the 193 00:12:07,520 --> 00:12:10,280 Speaker 2: Rose Garden and we went up, up and away, and 194 00:12:10,559 --> 00:12:13,560 Speaker 2: Toby n Angle at the Ft has brilliantly shown that 195 00:12:13,600 --> 00:12:16,960 Speaker 2: we've pulled back our blended terrifyrate right now I'm guessing 196 00:12:17,440 --> 00:12:22,240 Speaker 2: to ten to eleven percent, where is Peter Navarro's optimum 197 00:12:22,280 --> 00:12:26,160 Speaker 2: blended terrifyrate if it's not the two to three percent 198 00:12:26,480 --> 00:12:28,959 Speaker 2: that President Biden and others had before you. 199 00:12:30,640 --> 00:12:37,160 Speaker 5: Great question, and the way I like to think about it. 200 00:12:35,800 --> 00:12:37,400 Speaker 3: Is the trade deficit. 201 00:12:37,600 --> 00:12:42,320 Speaker 5: The trade deficit, when it's chronic like it has been, 202 00:12:42,440 --> 00:12:47,200 Speaker 5: and large like it has been, is toxic to the 203 00:12:47,240 --> 00:12:49,880 Speaker 5: future of this country. First of all, a big trade 204 00:12:49,960 --> 00:12:55,520 Speaker 5: deficit that's chronic, that's opposed to occasional, is a proxy 205 00:12:55,679 --> 00:12:58,840 Speaker 5: for all the factories and jobs and supply chains that 206 00:12:58,960 --> 00:13:02,600 Speaker 5: go offshore that happens. That not only hurts us economically, 207 00:13:03,000 --> 00:13:06,199 Speaker 5: it's hurts us from a national security point of view, 208 00:13:06,240 --> 00:13:09,000 Speaker 5: as the pandemic underscored. 209 00:13:09,160 --> 00:13:10,520 Speaker 3: So there is that. 210 00:13:10,840 --> 00:13:16,720 Speaker 5: Secondly, when you run a chronic trade deficit, you're basically 211 00:13:16,880 --> 00:13:21,680 Speaker 5: shipping your wealth offshore. We've done that by the last calculation, 212 00:13:21,840 --> 00:13:25,000 Speaker 5: I made something like fifteen trillion. 213 00:13:24,679 --> 00:13:27,040 Speaker 3: Dollars of our property. 214 00:13:30,600 --> 00:13:33,840 Speaker 5: Bottom line time is when the trade deficit gets to zero, 215 00:13:34,840 --> 00:13:37,960 Speaker 5: then you've got to run with that thing. Well but 216 00:13:38,080 --> 00:13:42,680 Speaker 5: by the way, by the way, the goal here is 217 00:13:42,760 --> 00:13:45,800 Speaker 5: simply fair trade. And what we're doing, what the President 218 00:13:45,880 --> 00:13:50,679 Speaker 5: is doing with Jamison Greer, Scott Bessen, Howard Lugnik are 219 00:13:50,840 --> 00:13:55,320 Speaker 5: doing is working with our allies and countries around the 220 00:13:55,360 --> 00:13:59,760 Speaker 5: world to get them to lower their tariffs and trade bearers. 221 00:14:00,160 --> 00:14:04,240 Speaker 5: Who in bloomberg Land could disagree with that as. 222 00:14:04,360 --> 00:14:06,800 Speaker 3: Okay, So Peter disagree with the results. 223 00:14:06,840 --> 00:14:09,120 Speaker 2: Tom, I gotta get this in because Sweeney's like all 224 00:14:09,160 --> 00:14:12,040 Speaker 2: Supreme Court right now. Peter and NEvAr, you didn't answer 225 00:14:12,040 --> 00:14:15,000 Speaker 2: my question. We came up, we had Liberation Day, we 226 00:14:15,080 --> 00:14:17,160 Speaker 2: did No, you did not that. 227 00:14:17,440 --> 00:14:20,960 Speaker 5: Your question was what will satisfy Peter Navar? And I said, 228 00:14:21,000 --> 00:14:21,760 Speaker 5: when the trail. 229 00:14:21,960 --> 00:14:27,680 Speaker 2: What is the what is the optimum blended terrifrate? James 230 00:14:27,720 --> 00:14:30,520 Speaker 2: Diamond wants to know that. Brian moynan wants to know that. 231 00:14:31,160 --> 00:14:33,680 Speaker 2: Solomon over at Golden Sax wants to know that. And 232 00:14:33,720 --> 00:14:37,040 Speaker 2: the people in the first Congressional District of Iowa, where 233 00:14:37,080 --> 00:14:40,280 Speaker 2: are we heading? Is these exemptions come in? Do you 234 00:14:40,320 --> 00:14:44,560 Speaker 2: see a seven percent optimal terrifright? Four percent? Do we 235 00:14:44,600 --> 00:14:47,160 Speaker 2: capitulate and go right back to two to three percent? 236 00:14:48,040 --> 00:14:54,120 Speaker 5: So here's a Kevin Spacey aside here, Jamie Diamond, lower 237 00:14:54,160 --> 00:14:55,320 Speaker 5: your fringing. 238 00:14:55,120 --> 00:14:56,640 Speaker 3: Credit card interest rates. 239 00:14:56,960 --> 00:14:59,480 Speaker 5: You are a criminal the way you charge the American 240 00:14:59,520 --> 00:15:03,200 Speaker 5: people at twenty two twenty five and thirty percent, and 241 00:15:03,240 --> 00:15:06,920 Speaker 5: the President wants you to lower that. So until Jamie, 242 00:15:08,080 --> 00:15:10,400 Speaker 5: until you do that, please refrain. 243 00:15:10,120 --> 00:15:12,440 Speaker 3: From commenting on other public policies. 244 00:15:12,600 --> 00:15:15,720 Speaker 5: Okay, got that off my church. Now answer with respect 245 00:15:15,720 --> 00:15:16,520 Speaker 5: to your question. 246 00:15:16,880 --> 00:15:17,240 Speaker 4: Please. 247 00:15:17,880 --> 00:15:21,400 Speaker 3: The way we think about it, Tom, and this is important, is. 248 00:15:21,320 --> 00:15:26,120 Speaker 5: That every country that we trade with is like figure prints, right, 249 00:15:26,160 --> 00:15:29,040 Speaker 5: they're unique, which is to say they cheat us in 250 00:15:29,120 --> 00:15:32,520 Speaker 5: their own way. It's like some countries like India have 251 00:15:32,680 --> 00:15:37,280 Speaker 5: had the highest tariffs, some countries like Japan have had 252 00:15:37,600 --> 00:15:41,480 Speaker 5: the highest non tariff barriers, some countries like China have 253 00:15:41,720 --> 00:15:44,600 Speaker 5: all of that stuff going on. So when you ask 254 00:15:44,720 --> 00:15:49,760 Speaker 5: me what the appropriate tariff would be, it's it's bespoke. 255 00:15:49,880 --> 00:15:51,680 Speaker 3: It's like what President Trump does. 256 00:15:51,720 --> 00:15:55,360 Speaker 5: He goes country by country by country and he sets 257 00:15:55,400 --> 00:15:58,800 Speaker 5: the tariffs according to how badly they're cheating us. So 258 00:15:58,840 --> 00:16:02,000 Speaker 5: there's no blended tariff concept here. 259 00:16:02,040 --> 00:16:03,600 Speaker 3: It's like a country specifically. 260 00:16:03,600 --> 00:16:05,920 Speaker 4: Thank you for that. Let's get Paul Sweeney in here, hitter. 261 00:16:05,880 --> 00:16:09,880 Speaker 6: Just real quickly. There's some of President Trump's tariff policies 262 00:16:09,920 --> 00:16:12,200 Speaker 6: in front of the Supreme Court. To the extent the 263 00:16:12,240 --> 00:16:16,520 Speaker 6: Supreme Court rules against the administration, what will be its response. 264 00:16:17,080 --> 00:16:19,520 Speaker 5: Well, first of all, let's let's talk about the law 265 00:16:19,720 --> 00:16:23,720 Speaker 5: and the use of i EPAH. If the Supreme Court 266 00:16:23,800 --> 00:16:27,560 Speaker 5: wants to rule in favor of President Trump, the law 267 00:16:27,720 --> 00:16:31,440 Speaker 5: is clearly on the Supreme Court side, and you have. 268 00:16:33,680 --> 00:16:35,520 Speaker 3: Is a teriff attacks, No, it's a. 269 00:16:35,520 --> 00:16:42,360 Speaker 5: Tariff on foreigners, and is a tariff a form of 270 00:16:42,480 --> 00:16:46,920 Speaker 5: restriction on imports. Of course, it is just like quotas 271 00:16:46,960 --> 00:16:51,280 Speaker 5: and other things and embargoes. So those are the two 272 00:16:51,360 --> 00:16:55,480 Speaker 5: points of law which this case is about. And if 273 00:16:55,520 --> 00:16:59,440 Speaker 5: the Supreme Court wants to rule in President's favor. 274 00:16:59,520 --> 00:17:01,200 Speaker 3: Clearly laws on their side. 275 00:17:01,280 --> 00:17:04,239 Speaker 5: With respect to Plan B, of course, we have a 276 00:17:04,240 --> 00:17:07,000 Speaker 5: Plan B, but this is not the place. 277 00:17:06,760 --> 00:17:07,959 Speaker 3: For me to talk about it. 278 00:17:08,800 --> 00:17:12,600 Speaker 5: If the decision comes out next Friday, which would be 279 00:17:12,680 --> 00:17:15,280 Speaker 5: the next time the Supreme Court is going to be 280 00:17:15,320 --> 00:17:20,520 Speaker 5: releasing decisions, then the President will speak first on what's 281 00:17:20,560 --> 00:17:23,760 Speaker 5: going to happen, and then folks like me will come 282 00:17:23,760 --> 00:17:26,640 Speaker 5: in behind him and explain the details. 283 00:17:26,760 --> 00:17:28,520 Speaker 4: Peter, thank you so much for joining us. 284 00:17:28,520 --> 00:17:30,920 Speaker 2: Thank you for commenting on the realities for the first 285 00:17:31,000 --> 00:17:32,520 Speaker 2: Congressional District of Iowa. 286 00:17:33,160 --> 00:17:34,280 Speaker 4: I believe it's the eighth. 287 00:17:34,160 --> 00:17:37,760 Speaker 2: Congressional District of Michigan, as well, and on the world 288 00:17:37,880 --> 00:17:41,159 Speaker 2: of trade Peter Navarro, Senior Counselor to the President for 289 00:17:41,240 --> 00:17:45,120 Speaker 2: Trade and Manufacturing for the President of the United States. 290 00:17:46,960 --> 00:17:47,680 Speaker 4: Stay with us. 291 00:17:47,920 --> 00:17:51,160 Speaker 2: More from Bloomberg Surveillance coming up after this. 292 00:17:58,400 --> 00:18:02,000 Speaker 1: You're listening to The Bloombergs Valen's podcast. Catch us Live 293 00:18:02,040 --> 00:18:05,199 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 294 00:18:05,280 --> 00:18:08,720 Speaker 1: Apple Karplay and Android Otto with the Bloomberg Business app, 295 00:18:08,880 --> 00:18:10,600 Speaker 1: or watch us Live on YouTube. 296 00:18:10,840 --> 00:18:12,320 Speaker 2: You're going to get a good amount of time here 297 00:18:12,320 --> 00:18:15,119 Speaker 2: with Brian Belski to reframe this bull market. 298 00:18:15,400 --> 00:18:16,879 Speaker 4: I'm looking at this Brian, and I'm. 299 00:18:16,720 --> 00:18:19,879 Speaker 2: Looking company to company and Paul and I remember times 300 00:18:19,920 --> 00:18:25,959 Speaker 2: where there was exuberance without profit. I'm absolutely overwhelmed at 301 00:18:25,960 --> 00:18:31,440 Speaker 2: the set of companies that have extraordinary profit. We've never 302 00:18:31,520 --> 00:18:34,359 Speaker 2: seen the margins of some of these companies. 303 00:18:34,800 --> 00:18:37,520 Speaker 7: We've never seen the margins of some of these companies, Tom, 304 00:18:37,880 --> 00:18:40,440 Speaker 7: But I think more importantly, we haven't seen the consistency 305 00:18:40,480 --> 00:18:43,200 Speaker 7: and earnings that I think people are missing. I think 306 00:18:43,720 --> 00:18:47,280 Speaker 7: at the end of the day, this fourth year, the 307 00:18:47,280 --> 00:18:49,960 Speaker 7: bullmarket that started in October of twenty twenty two, part 308 00:18:50,000 --> 00:18:53,119 Speaker 7: of our big secular bullmarket call that we've had in 309 00:18:53,160 --> 00:18:56,600 Speaker 7: place since two thousand and nine twenty ten, we're transitioning. 310 00:18:57,000 --> 00:19:00,240 Speaker 7: We're transitioning to more of an earnings driven market, and 311 00:19:00,400 --> 00:19:05,240 Speaker 7: traditionally and historically an earnings driven market still positive, but 312 00:19:05,400 --> 00:19:09,560 Speaker 7: not as positive as a multiple driven market, momentum driven market, 313 00:19:09,600 --> 00:19:12,960 Speaker 7: which we've clearly been in since early twenty twenty three. 314 00:19:13,000 --> 00:19:15,160 Speaker 7: So I think investors are having a hard time understanding that. 315 00:19:15,520 --> 00:19:17,639 Speaker 7: But I think the biggest thing, too, is that the 316 00:19:17,680 --> 00:19:21,159 Speaker 7: broadening out is real and it's showing up in the 317 00:19:21,280 --> 00:19:24,320 Speaker 7: fundamental numbers where you're seeing smaller areas in the market, 318 00:19:24,359 --> 00:19:26,280 Speaker 7: not just the s top five hundred, but smaller cap 319 00:19:26,320 --> 00:19:30,320 Speaker 7: companies are actually showing great earnings and better earnings than 320 00:19:30,320 --> 00:19:32,639 Speaker 7: the large cap But more importantly, something that you and 321 00:19:32,680 --> 00:19:34,800 Speaker 7: I and Paul's been involved in a conversation too, is 322 00:19:34,840 --> 00:19:37,359 Speaker 7: we talk about price or free cash flow and cash 323 00:19:37,359 --> 00:19:39,760 Speaker 7: on these companies continue to grow, and that's something to 324 00:19:39,840 --> 00:19:42,639 Speaker 7: us that is very, very very positive in terms of 325 00:19:42,640 --> 00:19:44,879 Speaker 7: how we talk about our small MidCap portfolio that we 326 00:19:44,920 --> 00:19:46,040 Speaker 7: offer clients. 327 00:19:46,080 --> 00:19:47,480 Speaker 6: Brian, one of the things we have seen over the 328 00:19:47,560 --> 00:19:50,040 Speaker 6: least three months, let's call it is a little bit 329 00:19:50,080 --> 00:19:52,120 Speaker 6: of a rotation out of some of the growth parts 330 00:19:52,160 --> 00:19:55,040 Speaker 6: of the market into some more cyclical sectors of the market, 331 00:19:55,080 --> 00:19:57,520 Speaker 6: maybe even small in mid cap. Is that a short 332 00:19:57,600 --> 00:20:00,399 Speaker 6: term trade? Is that a longer term rotation? How do 333 00:20:00,440 --> 00:20:01,160 Speaker 6: you think about that? 334 00:20:01,359 --> 00:20:04,159 Speaker 7: I think it's a longer term rotation. You know, the 335 00:20:04,200 --> 00:20:07,600 Speaker 7: market had these fits and starts into small cap through 336 00:20:07,600 --> 00:20:10,040 Speaker 7: the years, as the last couple of years in particular 337 00:20:10,160 --> 00:20:13,040 Speaker 7: when the ten year treasury went down, and then everybody 338 00:20:13,080 --> 00:20:15,760 Speaker 7: just kind of assimilated to you buy small caps because 339 00:20:15,760 --> 00:20:17,280 Speaker 7: the rates are downe and you buy small caps from 340 00:20:17,280 --> 00:20:21,880 Speaker 7: a fundamental perspective because they have better growth or attractive valuations. Again, 341 00:20:21,960 --> 00:20:24,240 Speaker 7: going back to the operating performance with respect to return 342 00:20:24,280 --> 00:20:26,840 Speaker 7: on equity, return on invested cap, all these things, they're 343 00:20:26,840 --> 00:20:30,679 Speaker 7: looking really, really great. And I think I think that 344 00:20:30,800 --> 00:20:33,440 Speaker 7: ten years from now we're going to be kicking ourselves 345 00:20:33,440 --> 00:20:35,200 Speaker 7: that we didn't own more small cap companies. 346 00:20:35,440 --> 00:20:38,560 Speaker 2: Brian Belski with this with him list. We're waiting on 347 00:20:38,600 --> 00:20:41,480 Speaker 2: Peter Navara. We'll go to him at age fifteen. Here 348 00:20:41,600 --> 00:20:45,280 Speaker 2: the trade representative for the President of the United States, 349 00:20:45,320 --> 00:20:48,080 Speaker 2: Paul Sweety with Brian Belski here in New York City. 350 00:20:48,280 --> 00:20:51,560 Speaker 6: Earning seemed pretty solid. Brian or sixty seventy percent away 351 00:20:51,560 --> 00:20:53,680 Speaker 6: through the S and P five hundred reporting double digit 352 00:20:53,720 --> 00:20:57,000 Speaker 6: earnings growth. I mean, corporate America continues to come through. Here, 353 00:20:57,000 --> 00:21:00,639 Speaker 6: are these good quality earnings are enough to support this market? 354 00:21:00,680 --> 00:21:00,880 Speaker 4: Nice? 355 00:21:00,960 --> 00:21:02,560 Speaker 7: We think they are, and I think earnings are actually 356 00:21:02,600 --> 00:21:04,200 Speaker 7: going to continue to grow because we're going to continue 357 00:21:04,200 --> 00:21:08,000 Speaker 7: to see them from other areas, including financials, parts of industrials, 358 00:21:08,560 --> 00:21:13,359 Speaker 7: consumer discretionary, and communication services. Is not just all about tech. 359 00:21:13,400 --> 00:21:16,119 Speaker 7: We haven't even mentioned it yet. So how amazing is 360 00:21:16,119 --> 00:21:19,399 Speaker 7: that that we haven't talked about tech. But at the 361 00:21:19,440 --> 00:21:21,520 Speaker 7: end of the day, we think the broadening out and 362 00:21:21,640 --> 00:21:24,240 Speaker 7: we're seeing a broader distribution of earnings, which is very, 363 00:21:24,320 --> 00:21:27,280 Speaker 7: very positive. Number of years ago we talked about how 364 00:21:28,160 --> 00:21:31,640 Speaker 7: we need to see more of a normalization of the market. Yep, 365 00:21:31,920 --> 00:21:33,439 Speaker 7: And I think that one of the last times I 366 00:21:33,480 --> 00:21:35,160 Speaker 7: was here live and Soon we talked about the ninety 367 00:21:35,200 --> 00:21:37,240 Speaker 7: five ninety six market when I was at Dane and 368 00:21:37,280 --> 00:21:40,360 Speaker 7: you're at Rauscher, Tom, and we talked about how that 369 00:21:40,440 --> 00:21:43,399 Speaker 7: market was probably the last time we've seen more normalized trading. 370 00:21:44,080 --> 00:21:45,840 Speaker 4: I look at this, folks, I want to go to Kimilis. 371 00:21:45,920 --> 00:21:48,480 Speaker 4: So what the story is? Belski He didn't like. 372 00:21:48,480 --> 00:21:52,840 Speaker 2: His mantre Canadian ticket and see it Cimill's investment strategies 373 00:21:52,880 --> 00:21:56,040 Speaker 2: and the website really pretty cool. And you have something 374 00:21:56,080 --> 00:21:59,280 Speaker 2: that I'm huge on away from the mathematics of any 375 00:21:59,359 --> 00:22:07,160 Speaker 2: finance will intentional concentration. Yeah, discuss intentional concentration when Apple's 376 00:22:07,240 --> 00:22:10,879 Speaker 2: up sixteen percent twelve months trailing and Microsoft is flat 377 00:22:10,960 --> 00:22:11,959 Speaker 2: twelve months trailing. 378 00:22:12,600 --> 00:22:13,399 Speaker 4: It's a great question. 379 00:22:13,440 --> 00:22:17,560 Speaker 7: That's why our tagline is investing with conviction and humility. 380 00:22:17,640 --> 00:22:20,399 Speaker 7: You know, in my old institutional days that I that 381 00:22:20,480 --> 00:22:23,560 Speaker 7: I ended late October when I left my prior employer 382 00:22:23,760 --> 00:22:26,080 Speaker 7: and started off my own shop. When you go into 383 00:22:26,119 --> 00:22:29,280 Speaker 7: an institutional account and you talk to a fancy portfolio 384 00:22:29,280 --> 00:22:30,880 Speaker 7: manager one of the big banks, they own two hundred 385 00:22:30,880 --> 00:22:35,720 Speaker 7: stocks yep. And to me, that's not conviction. And so 386 00:22:35,920 --> 00:22:40,520 Speaker 7: we typically and historically have run portfolios now since two 387 00:22:40,560 --> 00:22:43,440 Speaker 7: thousand and five, real live money that we like to 388 00:22:43,520 --> 00:22:46,560 Speaker 7: run fifty stock portfolios are back testing in terms of 389 00:22:46,760 --> 00:22:50,160 Speaker 7: all of the fancy portfolio analysis tools that we have 390 00:22:50,600 --> 00:22:52,800 Speaker 7: and still have shown that that fifty numbers is pretty 391 00:22:52,800 --> 00:22:55,560 Speaker 7: good number. So we have an opportunity to have this 392 00:22:55,600 --> 00:22:58,280 Speaker 7: thing called tracking here To answer Tom's question, so you 393 00:22:58,320 --> 00:23:01,119 Speaker 7: can be you can place your quote unquote bets. I 394 00:23:01,119 --> 00:23:03,159 Speaker 7: don't like that phrase, but it's probably the best way 395 00:23:03,240 --> 00:23:04,919 Speaker 7: to say it. So do I want to own eight 396 00:23:04,960 --> 00:23:07,400 Speaker 7: percent Apple and four percent Microsoft? Or do I want 397 00:23:07,400 --> 00:23:09,240 Speaker 7: to flip around? We want to continue to own both 398 00:23:09,280 --> 00:23:11,879 Speaker 7: those names, but from the conviction side of things, we 399 00:23:11,920 --> 00:23:15,960 Speaker 7: can own order less or more through time, but add 400 00:23:16,000 --> 00:23:18,920 Speaker 7: and delete the actual position. So that's how we run money. 401 00:23:18,920 --> 00:23:21,480 Speaker 7: That's how we've been able to outperform for so many years, 402 00:23:21,480 --> 00:23:23,919 Speaker 7: and we're very blessed fortunate having a great team and 403 00:23:23,960 --> 00:23:25,320 Speaker 7: a great process and discipline. 404 00:23:25,359 --> 00:23:29,159 Speaker 6: It's okay, so let's I mean eight minutes into this, 405 00:23:29,200 --> 00:23:32,960 Speaker 6: let's talk technology here. Yeah, software is a surface. Boy. 406 00:23:33,000 --> 00:23:34,320 Speaker 6: They took a hit on the chin there over the 407 00:23:34,400 --> 00:23:35,240 Speaker 6: last several weeks. 408 00:23:35,560 --> 00:23:35,879 Speaker 3: AI. 409 00:23:36,840 --> 00:23:38,960 Speaker 6: You could make the call. I don't know what AI 410 00:23:39,119 --> 00:23:41,399 Speaker 6: is going to be. Therefore, I'm not sure what the 411 00:23:41,480 --> 00:23:44,920 Speaker 6: risk is to anything I own, particularly technology. 412 00:23:45,040 --> 00:23:47,960 Speaker 7: Well, it seems to me, Paul, like the markets has 413 00:23:48,000 --> 00:23:50,199 Speaker 7: a checklist. Okay, Now, first we're gonna pick on the 414 00:23:50,200 --> 00:23:53,000 Speaker 7: big semi conductors. Then we're going to the meg seven, 415 00:23:53,040 --> 00:23:55,840 Speaker 7: Then we're going to go to the chips, and then 416 00:23:55,880 --> 00:23:58,240 Speaker 7: we're gonna go to financials. Then we're going to what's next. 417 00:23:58,320 --> 00:23:59,600 Speaker 7: Is it gonna be healthcare? Is it going to be 418 00:23:59,640 --> 00:24:02,120 Speaker 7: in dust? Are going to be energy? So I think 419 00:24:02,119 --> 00:24:04,040 Speaker 7: the Marcus done a good job kind of doing that. 420 00:24:04,080 --> 00:24:06,920 Speaker 7: We don't know, but you know, we've always said control 421 00:24:07,000 --> 00:24:08,959 Speaker 7: what you could control. So at the end of the day, 422 00:24:08,960 --> 00:24:10,560 Speaker 7: you don't have to own all the Makes seven. You 423 00:24:10,560 --> 00:24:12,199 Speaker 7: can own some of them. We don't own all the 424 00:24:12,200 --> 00:24:13,919 Speaker 7: Makes seven. And the portfolio is that we run the 425 00:24:13,920 --> 00:24:18,119 Speaker 7: five US centric portfolios and in three North American portfolios, 426 00:24:18,119 --> 00:24:20,200 Speaker 7: we run up in Canada. But at the end of 427 00:24:20,240 --> 00:24:22,840 Speaker 7: the day, we think AI is here to stay. We 428 00:24:22,880 --> 00:24:24,679 Speaker 7: think it's going to be more of a diversified thing. 429 00:24:24,680 --> 00:24:26,920 Speaker 7: And oh, by the way, too, I think I think 430 00:24:26,960 --> 00:24:29,680 Speaker 7: we've made binary decisions on open AI. 431 00:24:30,320 --> 00:24:32,520 Speaker 4: And I think for last year it was all in. 432 00:24:32,640 --> 00:24:35,399 Speaker 4: Remember last year when everybody sold Google. We doubled our 433 00:24:35,400 --> 00:24:38,200 Speaker 4: position in Google and everybody sold the sample in April 434 00:24:38,240 --> 00:24:40,440 Speaker 4: when mister Cook was good, exactly exactly, it. 435 00:24:40,400 --> 00:24:42,960 Speaker 2: Is going to be terrible. I got twenty seconds. We 436 00:24:43,000 --> 00:24:45,920 Speaker 2: have twenty four hour treating like bitcoin inequities. 437 00:24:46,000 --> 00:24:47,800 Speaker 7: I don't think so, because I want to sleep a 438 00:24:47,840 --> 00:24:50,520 Speaker 7: little bit. I think let's let's afford people a little arrest. No, 439 00:24:50,600 --> 00:24:51,480 Speaker 7: I don't think twenty four hours. 440 00:24:52,240 --> 00:24:54,600 Speaker 4: Thank you so much for Jake John Jamilus this morning. 441 00:24:54,680 --> 00:24:57,399 Speaker 2: Can't say enough about the density of his notes and 442 00:24:57,440 --> 00:24:59,840 Speaker 2: the work here on participating in. 443 00:24:59,800 --> 00:25:03,160 Speaker 4: The stay with us. 444 00:25:03,400 --> 00:25:06,640 Speaker 2: More from Bloomberg Surveillance coming up after this. 445 00:25:13,880 --> 00:25:17,480 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch US Live 446 00:25:17,520 --> 00:25:20,679 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 447 00:25:20,760 --> 00:25:24,439 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 448 00:25:24,600 --> 00:25:26,240 Speaker 1: watch US Live on YouTube. 449 00:25:26,560 --> 00:25:29,119 Speaker 6: Monica Desnzo joins us here Global. She's head of the 450 00:25:29,119 --> 00:25:33,240 Speaker 6: global Investment Strategy for the JP Morgan Private Bank. Monica, 451 00:25:33,240 --> 00:25:34,560 Speaker 6: what are you and your team? What do you think 452 00:25:34,600 --> 00:25:36,800 Speaker 6: about some of that sell off we've seen in some 453 00:25:36,840 --> 00:25:39,359 Speaker 6: of these blue chips software names. A lot of people 454 00:25:39,359 --> 00:25:42,320 Speaker 6: are saying, boy, this might be the opportunity of a 455 00:25:42,359 --> 00:25:44,600 Speaker 6: lifetime to kind of get into these names. But the 456 00:25:44,640 --> 00:25:45,480 Speaker 6: concerns are real. 457 00:25:46,080 --> 00:25:48,440 Speaker 8: The concerns are very real. I think as everyone's trying 458 00:25:48,480 --> 00:25:51,400 Speaker 8: to understand the next phase of this AI cycle, we're 459 00:25:51,400 --> 00:25:52,679 Speaker 8: trying to figure out who are the winners, who are 460 00:25:52,680 --> 00:25:55,680 Speaker 8: the losers, And clearly the market is telling you software 461 00:25:55,760 --> 00:25:57,960 Speaker 8: as a whole has risk to it. I think we're 462 00:25:58,000 --> 00:26:00,600 Speaker 8: all grappling with what's the right multi well, what is 463 00:26:00,640 --> 00:26:03,200 Speaker 8: the growth trajectory? What do these businesses look like in 464 00:26:03,240 --> 00:26:04,840 Speaker 8: five or ten years. It's a really hard thing to do. 465 00:26:04,880 --> 00:26:06,800 Speaker 8: And so you're just seeing a broad cell off which 466 00:26:06,840 --> 00:26:08,920 Speaker 8: is tempting to add and we're looking, we're trying to 467 00:26:08,920 --> 00:26:11,560 Speaker 8: sift through names. I will tell you I've seen traction. 468 00:26:11,680 --> 00:26:14,000 Speaker 8: I've seen some clients who want to take a long 469 00:26:14,080 --> 00:26:16,320 Speaker 8: term view start to add on this tip to some 470 00:26:16,359 --> 00:26:18,159 Speaker 8: of the higher holy names. And they're doing it in 471 00:26:18,200 --> 00:26:19,880 Speaker 8: a really interesting way that they're not making a trade 472 00:26:19,920 --> 00:26:21,280 Speaker 8: for the next week or month, because I think these 473 00:26:21,240 --> 00:26:23,520 Speaker 8: headwinds will persist. They're saying one or two years out, 474 00:26:23,800 --> 00:26:25,560 Speaker 8: these are still names I want to own. They're buying 475 00:26:25,560 --> 00:26:26,560 Speaker 8: long calls things like that. 476 00:26:26,840 --> 00:26:29,679 Speaker 2: Right now, Gene Monster, Dan Eyes, if you're listening, this 477 00:26:29,800 --> 00:26:32,040 Speaker 2: is the most important conversation of the day. 478 00:26:32,240 --> 00:26:34,880 Speaker 4: First of all, Monica, can you do my taxes? 479 00:26:35,560 --> 00:26:38,240 Speaker 8: You know, I am technically a CBA, but I do 480 00:26:38,280 --> 00:26:39,040 Speaker 8: not do taxes. 481 00:26:39,400 --> 00:26:39,800 Speaker 4: Thank god. 482 00:26:40,119 --> 00:26:44,760 Speaker 8: I used to do my own and it ended badly. 483 00:26:42,000 --> 00:26:43,960 Speaker 4: So bad, Monica. 484 00:26:44,280 --> 00:26:47,720 Speaker 2: You know, you get serious, serious cred here in accounting 485 00:26:47,720 --> 00:26:50,600 Speaker 2: at Georgetown and as a CPA as well. How do 486 00:26:50,640 --> 00:26:55,320 Speaker 2: you interpret the depreciation raging debate that you hear from 487 00:26:55,720 --> 00:26:59,639 Speaker 2: tech analysts like Gene Munster, Gil Luria, or Dan Eyves. 488 00:27:00,200 --> 00:27:02,760 Speaker 8: I mean, it is a very valid debate. I think 489 00:27:02,760 --> 00:27:04,840 Speaker 8: this is the problem with the AI question in general. 490 00:27:04,840 --> 00:27:07,280 Speaker 8: It's just we're still in such the early innings of 491 00:27:07,320 --> 00:27:09,560 Speaker 8: this transition that I think it is really hard to 492 00:27:09,600 --> 00:27:11,920 Speaker 8: figure out who's spending too much, who's beending too little. 493 00:27:11,920 --> 00:27:13,960 Speaker 8: How do you think about, again the accounting side of 494 00:27:13,960 --> 00:27:15,960 Speaker 8: this and anmorization everything over the next five ten years. 495 00:27:16,080 --> 00:27:18,159 Speaker 8: I don't think people know, and so you have to 496 00:27:18,840 --> 00:27:20,639 Speaker 8: just try to. I think, take the big picture of 497 00:27:20,680 --> 00:27:23,080 Speaker 8: you here. We look across the US. We smate less 498 00:27:23,080 --> 00:27:25,160 Speaker 8: than twenty percent of US companies use AI in any 499 00:27:25,200 --> 00:27:27,679 Speaker 8: meaningful way, and until you get above fifty percent, you 500 00:27:27,720 --> 00:27:29,840 Speaker 8: really don't see mass adoption and the real impact. So 501 00:27:30,280 --> 00:27:32,760 Speaker 8: I just still think it's too early to try to 502 00:27:32,800 --> 00:27:34,800 Speaker 8: call all the winners and losers. I do think you 503 00:27:34,880 --> 00:27:37,080 Speaker 8: have to be a little more choosy. I've been guiding 504 00:27:37,080 --> 00:27:39,320 Speaker 8: my clients this is the time for active management to 505 00:27:39,320 --> 00:27:41,680 Speaker 8: get in tech, be very careful about just owning ETFs 506 00:27:41,720 --> 00:27:44,440 Speaker 8: or everything broadly, work with managers to try to figure 507 00:27:44,480 --> 00:27:45,520 Speaker 8: out who are the winners and losers. 508 00:27:45,640 --> 00:27:48,159 Speaker 2: Oh, it's like the depreciation of the New York Yankees 509 00:27:48,200 --> 00:27:48,919 Speaker 2: pitching staff. 510 00:27:49,040 --> 00:27:50,520 Speaker 3: Yeah, figure that going out. 511 00:27:50,960 --> 00:27:53,560 Speaker 6: What are your family offers is? How are they thinking 512 00:27:53,600 --> 00:27:57,960 Speaker 6: about alternative investments? That's become such a big story. I 513 00:27:58,040 --> 00:28:00,439 Speaker 6: used to think the allocation was five percent, ten percent, 514 00:28:00,640 --> 00:28:02,960 Speaker 6: coming here in much bigger numbers these days. 515 00:28:02,800 --> 00:28:05,600 Speaker 8: Much bigger. We have our new Family Office report out 516 00:28:05,640 --> 00:28:07,680 Speaker 8: where we've surveyed a number of larg framilies. We work 517 00:28:07,680 --> 00:28:11,479 Speaker 8: with globally alternatives. Again, what is an alternative? We do 518 00:28:11,520 --> 00:28:13,159 Speaker 8: lump real estate in there, so we think of it 519 00:28:13,160 --> 00:28:15,320 Speaker 8: as anything that's not a liquid investment. So for us, 520 00:28:15,400 --> 00:28:18,880 Speaker 8: that's real estate, that's infrastructure, that's pe things like that. 521 00:28:19,600 --> 00:28:22,560 Speaker 8: We see allocations for large families of generational wealth forty 522 00:28:22,560 --> 00:28:24,879 Speaker 8: to fifty percent. We'll get that high now, but that 523 00:28:24,920 --> 00:28:26,280 Speaker 8: makes sense for you if you're not going to touch 524 00:28:26,320 --> 00:28:28,560 Speaker 8: this money. This is for two generations too. Now that 525 00:28:28,640 --> 00:28:31,679 Speaker 8: makes sense, But again that's not everyone on average. I 526 00:28:31,680 --> 00:28:33,760 Speaker 8: see people trying to build towards twenty to thirty percent 527 00:28:34,000 --> 00:28:37,560 Speaker 8: for these large families, but we still see gaps everyone 528 00:28:37,600 --> 00:28:39,400 Speaker 8: tells me they're worried about inflation, yet they don't own 529 00:28:39,400 --> 00:28:42,840 Speaker 8: infrastructure or not real estate, So there's pivots happening. People 530 00:28:42,840 --> 00:28:45,280 Speaker 8: were very long growth for a long time. Now they're 531 00:28:45,280 --> 00:28:47,000 Speaker 8: trying to make sure they have a little more diversification 532 00:28:47,040 --> 00:28:47,720 Speaker 8: in their old book. 533 00:28:48,240 --> 00:28:52,240 Speaker 6: How important is the FED here in terms of cutting 534 00:28:52,280 --> 00:28:54,920 Speaker 6: rates for your longer term view? Here, we think we've 535 00:28:54,960 --> 00:28:57,680 Speaker 6: got one, maybe two cuts priced in. I guess for 536 00:28:57,680 --> 00:28:59,160 Speaker 6: a lot of people that's fine. For the markets, that 537 00:28:59,160 --> 00:29:01,000 Speaker 6: seems to be fine how you think about it. 538 00:29:01,080 --> 00:29:03,040 Speaker 8: Yeah, we're still looking for one. I mean, our investment 539 00:29:03,040 --> 00:29:04,800 Speaker 8: being is a bit of a debate. There's maybe saying none, 540 00:29:04,840 --> 00:29:07,320 Speaker 8: we're saying one. I think anything in that realm is fine. 541 00:29:07,680 --> 00:29:10,040 Speaker 8: I think for my clients, the bigger debate is we 542 00:29:10,120 --> 00:29:13,120 Speaker 8: just need to maintain FED independence and the credibility that FED, 543 00:29:13,200 --> 00:29:15,400 Speaker 8: especially roughly because I work with a lot of clients 544 00:29:15,440 --> 00:29:17,760 Speaker 8: overseas and like they're watching us very closely and they're 545 00:29:17,760 --> 00:29:19,440 Speaker 8: nervous and they want to make sure that things stay 546 00:29:19,960 --> 00:29:20,600 Speaker 8: on course here. 547 00:29:20,800 --> 00:29:23,480 Speaker 2: Jana Martin Adams and Torsten Slock have published together in 548 00:29:23,520 --> 00:29:26,120 Speaker 2: the last forty eight hours two Blistering Notes, which goes 549 00:29:26,160 --> 00:29:29,040 Speaker 2: Monica right to the heart of the matter. No signs 550 00:29:29,080 --> 00:29:32,680 Speaker 2: of profit margins going up outside of tech. That's some 551 00:29:33,160 --> 00:29:35,720 Speaker 2: slock it. Apollo and Gina Martin Adams at the same 552 00:29:35,760 --> 00:29:39,240 Speaker 2: tone yesterday at her new shop. What does JP Morgan 553 00:29:39,360 --> 00:29:41,680 Speaker 2: see in the profit margin dynamic? 554 00:29:41,800 --> 00:29:44,000 Speaker 4: Almost the calculus of at the first derivative? 555 00:29:44,400 --> 00:29:46,080 Speaker 8: And that goes back to this whole AI debate, like, 556 00:29:46,320 --> 00:29:47,560 Speaker 8: we're spending a lot of money now, and I can 557 00:29:47,600 --> 00:29:48,520 Speaker 8: tell you Jp Morgan. 558 00:29:48,320 --> 00:29:48,760 Speaker 4: We are too. 559 00:29:49,360 --> 00:29:52,480 Speaker 8: It's still early days. You're just we're not seeing broadly 560 00:29:52,640 --> 00:29:54,600 Speaker 8: the flow through yet. I do think the next couple 561 00:29:54,640 --> 00:29:56,160 Speaker 8: of years you are going to see that. And then 562 00:29:56,160 --> 00:29:58,400 Speaker 8: again the question becomes is it for the entire market? 563 00:29:58,560 --> 00:30:00,680 Speaker 8: Are there certain sectors where you see more of an 564 00:30:00,720 --> 00:30:02,800 Speaker 8: opportunity And that's where we think of sectors like healthcare, 565 00:30:02,840 --> 00:30:04,800 Speaker 8: where we know AI is going to help you bring 566 00:30:04,920 --> 00:30:07,200 Speaker 8: drugs to market faster, cheaper. So you just got to 567 00:30:07,200 --> 00:30:09,040 Speaker 8: make sure you're finding the right companies who can take 568 00:30:09,040 --> 00:30:10,520 Speaker 8: advantage of that broad market. 569 00:30:10,600 --> 00:30:13,320 Speaker 6: How do you feel about this market right here? It's 570 00:30:13,320 --> 00:30:14,960 Speaker 6: had a great run, you know, a good run in 571 00:30:14,960 --> 00:30:17,720 Speaker 6: twenty twenty five. How about thinking about the US versus 572 00:30:17,720 --> 00:30:19,520 Speaker 6: non US, because it's as good. As the US market 573 00:30:19,520 --> 00:30:21,600 Speaker 6: performed in twenty five, the rest of the world did 574 00:30:21,640 --> 00:30:22,120 Speaker 6: a lot better. 575 00:30:22,320 --> 00:30:24,560 Speaker 8: Yes, I was doing with some clients, as you know, 576 00:30:24,760 --> 00:30:26,600 Speaker 8: we were up what eighteen percent last year. It was 577 00:30:26,600 --> 00:30:28,560 Speaker 8: one of the worst performing acquitty right, So still a 578 00:30:28,560 --> 00:30:31,040 Speaker 8: great year, but again relative to everything else didn't. 579 00:30:30,800 --> 00:30:31,280 Speaker 1: Look so great. 580 00:30:31,600 --> 00:30:33,080 Speaker 8: We think there was a bit of a catchup trade. 581 00:30:33,440 --> 00:30:35,640 Speaker 8: I still think there's opportunities in Europe, as opportunities in 582 00:30:35,720 --> 00:30:39,320 Speaker 8: Japan and Asia. But for again long term allocation, I 583 00:30:39,320 --> 00:30:40,960 Speaker 8: still want to have a large allocation in US, and 584 00:30:41,000 --> 00:30:42,960 Speaker 8: we still do. We think twenty six is going to 585 00:30:43,000 --> 00:30:44,480 Speaker 8: look a lot like twenty five well, and the year 586 00:30:44,520 --> 00:30:47,800 Speaker 8: probably higher in equities, more modest returns I think probably 587 00:30:47,880 --> 00:30:49,800 Speaker 8: high single digits, but I think it's gonna be bumpy, 588 00:30:49,840 --> 00:30:53,200 Speaker 8: and we do have midterms. Historically speaking, mid terms are 589 00:30:53,200 --> 00:30:55,720 Speaker 8: a positive. If you do get that balance of power 590 00:30:55,720 --> 00:30:57,000 Speaker 8: in the House, which you think we're going to get, 591 00:30:57,160 --> 00:30:58,800 Speaker 8: that should be a good thing for markets. I would 592 00:30:58,800 --> 00:31:01,400 Speaker 8: expect volatility into that and then probably a relief rally 593 00:31:01,440 --> 00:31:01,840 Speaker 8: after it. 594 00:31:02,280 --> 00:31:04,920 Speaker 6: What's your your clients in the private bank, what's the 595 00:31:04,960 --> 00:31:06,720 Speaker 6: fixed income call here? What do they want to own? 596 00:31:06,840 --> 00:31:09,200 Speaker 6: They wanted to your treasuries at three point five percent, 597 00:31:09,280 --> 00:31:10,600 Speaker 6: or do they want to take some credit risk? 598 00:31:10,720 --> 00:31:11,600 Speaker 4: What are they doing there? 599 00:31:11,800 --> 00:31:14,640 Speaker 8: I mean, you guys know the debate around private credit. Right, 600 00:31:14,640 --> 00:31:15,880 Speaker 8: so we've got a lot of people who have moved 601 00:31:15,880 --> 00:31:18,800 Speaker 8: into more of these evergreen vehicles and others. Really interesting 602 00:31:18,840 --> 00:31:20,959 Speaker 8: for a lot of clients to get accessing it invested quickly. 603 00:31:21,520 --> 00:31:23,280 Speaker 8: I think they'll still make a lot of sense, a 604 00:31:23,360 --> 00:31:25,920 Speaker 8: ton of interest less so in like treasuries, more in 605 00:31:26,120 --> 00:31:28,640 Speaker 8: things like bank preferreds. If you're a US taxpayer, these 606 00:31:28,720 --> 00:31:31,560 Speaker 8: hybrid instruments pay you a very compelling tax aggesity. 607 00:31:32,080 --> 00:31:33,880 Speaker 4: I got this is too important. I'm going to go here. 608 00:31:34,000 --> 00:31:36,800 Speaker 2: What's the yield that you're selling on a private credit? 609 00:31:37,040 --> 00:31:39,720 Speaker 2: I mean, just as a general statement, you're saying, I'm 610 00:31:39,720 --> 00:31:41,760 Speaker 2: going to make four or five percent? Sweet, you're making 611 00:31:41,760 --> 00:31:42,600 Speaker 2: what nine percent? 612 00:31:43,600 --> 00:31:45,040 Speaker 6: Sure, New Jersey Munis. 613 00:31:44,800 --> 00:31:46,520 Speaker 4: What was a private credit yield? 614 00:31:46,960 --> 00:31:47,400 Speaker 2: This is the thing. 615 00:31:47,440 --> 00:31:49,560 Speaker 8: A few years ago you were talking double digits. We've 616 00:31:49,560 --> 00:31:52,280 Speaker 8: now guided clients to say that in this rate environment, 617 00:31:52,320 --> 00:31:54,280 Speaker 8: it's going to be lower, so anchor towards like eight 618 00:31:54,360 --> 00:31:57,120 Speaker 8: to ten, which is still attractive. But again, if you're 619 00:31:57,160 --> 00:31:59,600 Speaker 8: a full taxpayer, you'll start thinking about does that make 620 00:31:59,600 --> 00:32:01,280 Speaker 8: sense for in Union, so for my clients in New 621 00:32:01,360 --> 00:32:04,560 Speaker 8: York California, like Muni's actually still stand out being preferred standout. 622 00:32:04,600 --> 00:32:07,680 Speaker 4: Yeah, Lisa Mateo emails in. She says, that's a great idea. 623 00:32:07,720 --> 00:32:10,640 Speaker 4: Can Monica do my text and still look kill a bunch? 624 00:32:10,880 --> 00:32:12,960 Speaker 8: Hey, I'm happy to try, but I gotta tell you 625 00:32:12,960 --> 00:32:14,200 Speaker 8: I messed mine up a few years ago and I 626 00:32:14,200 --> 00:32:17,760 Speaker 8: stopped after that. You can come over to Park's ird 627 00:32:17,880 --> 00:32:18,880 Speaker 8: sit do. 628 00:32:19,200 --> 00:32:21,880 Speaker 2: That, Monica Descenzo, Thank you so much for JP Morgan 629 00:32:21,920 --> 00:32:23,120 Speaker 2: Private Banks. 630 00:32:24,800 --> 00:32:25,520 Speaker 4: Stay with us. 631 00:32:25,760 --> 00:32:28,960 Speaker 2: More from Bloomberg Surveillance coming up after this. 632 00:32:36,240 --> 00:32:39,840 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 633 00:32:39,880 --> 00:32:43,080 Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on 634 00:32:43,120 --> 00:32:46,800 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 635 00:32:46,960 --> 00:32:48,440 Speaker 1: watch us live on YouTube. 636 00:32:48,760 --> 00:32:51,840 Speaker 2: Martha Gimball provides leadership at the Budget Lab at Yale. 637 00:32:52,040 --> 00:32:54,280 Speaker 2: They were, without question, my think tank of the year 638 00:32:54,360 --> 00:32:57,720 Speaker 2: last year, last year, just killing it on tariff talk. 639 00:32:58,120 --> 00:33:00,200 Speaker 4: I didn't get an answer from Peter and avar H. 640 00:33:00,240 --> 00:33:02,200 Speaker 2: Let's see if we get one from Martha Grunde to 641 00:33:02,240 --> 00:33:05,000 Speaker 2: try Kimball. Martha, we came out of a two to 642 00:33:05,080 --> 00:33:09,479 Speaker 2: three percent tariff. We had Liberation Day and popped up 643 00:33:09,480 --> 00:33:13,320 Speaker 2: to twenty ish or higher, and we come back right 644 00:33:13,360 --> 00:33:17,400 Speaker 2: now to a ten eleven twelve percent blended teriff. Right, 645 00:33:18,000 --> 00:33:20,800 Speaker 2: are we just doing what William McKinley did in nineteen 646 00:33:20,840 --> 00:33:24,000 Speaker 2: oh one with a buffalo pivot? But we're doing a 647 00:33:24,040 --> 00:33:27,800 Speaker 2: slow motion getting back down to lower tariffs. 648 00:33:29,520 --> 00:33:31,280 Speaker 9: You know, I think that's a question for the President, 649 00:33:31,280 --> 00:33:33,640 Speaker 9: and he's the only one who really knows what's going 650 00:33:33,680 --> 00:33:36,960 Speaker 9: to happen with tariffs, except I guess the Supreme Court. 651 00:33:37,880 --> 00:33:40,680 Speaker 9: So if you can get the President or Chief Justice 652 00:33:40,760 --> 00:33:42,160 Speaker 9: roberts On here, I would ask. 653 00:33:42,040 --> 00:33:42,640 Speaker 3: Them, not me. 654 00:33:44,120 --> 00:33:48,720 Speaker 9: I do agree that this is feeling very early nineteen hundreds, 655 00:33:49,520 --> 00:33:50,880 Speaker 9: late eighteen hundreds. 656 00:33:51,160 --> 00:33:54,320 Speaker 6: It's got that vibe to it. Martha, you and your 657 00:33:54,560 --> 00:33:57,920 Speaker 6: team at the Yale budget Abbotistion Yeoman's work on tracking 658 00:33:58,080 --> 00:34:01,440 Speaker 6: these tariffs. Do we have any data that shows who's 659 00:34:01,480 --> 00:34:03,800 Speaker 6: really paying them? How is it kind of cycling through 660 00:34:03,800 --> 00:34:05,720 Speaker 6: the US economy. 661 00:34:06,360 --> 00:34:09,640 Speaker 9: It's so funny that you asked that, because yesterday the 662 00:34:09,719 --> 00:34:14,279 Speaker 9: Congressional Budget Office released its updated baseline and they said 663 00:34:14,280 --> 00:34:17,439 Speaker 9: that ninety five percent of tariffs are paid for by 664 00:34:17,520 --> 00:34:22,160 Speaker 9: the American consumer. So for all of the discussion from 665 00:34:22,360 --> 00:34:25,400 Speaker 9: the administration that you know, know, China's going to be 666 00:34:25,400 --> 00:34:27,040 Speaker 9: paying this, Mexico is going to be paying this. 667 00:34:27,960 --> 00:34:29,080 Speaker 6: That's just not where we are. 668 00:34:29,880 --> 00:34:32,440 Speaker 9: You know, all of the economists agree, you're paying this. 669 00:34:32,719 --> 00:34:36,640 Speaker 6: I'm paying this, Martha. We had some labor data yesterday, 670 00:34:36,920 --> 00:34:40,839 Speaker 6: pretty solid results here, kind of better than expected for 671 00:34:40,960 --> 00:34:45,560 Speaker 6: the monthly data. The headline unemployment rate coming down. How 672 00:34:45,600 --> 00:34:48,040 Speaker 6: do you guys look at that data? 673 00:34:48,520 --> 00:34:51,280 Speaker 9: You know, it's kind It's so interesting because in between 674 00:34:51,400 --> 00:34:54,600 Speaker 9: job reports, it feels like everyone starts having a nervous 675 00:34:54,600 --> 00:34:58,280 Speaker 9: breakdown about where the labor market is going and convincing 676 00:34:58,320 --> 00:35:01,319 Speaker 9: themselves that, you know, it's all over, we're going into 677 00:35:01,360 --> 00:35:01,960 Speaker 9: a recession. 678 00:35:02,600 --> 00:35:03,960 Speaker 6: And then each month. 679 00:35:04,840 --> 00:35:06,400 Speaker 9: You know, the job report pops up and kind of 680 00:35:06,400 --> 00:35:09,760 Speaker 9: goes it's kind of fine, everyone, could you calm down? 681 00:35:10,200 --> 00:35:11,480 Speaker 4: That one says, oh great. 682 00:35:11,280 --> 00:35:14,160 Speaker 9: We're calm, We're totally calm, and then in two weeks 683 00:35:14,200 --> 00:35:18,279 Speaker 9: everyone starts panicking again. So I do expect you to 684 00:35:18,360 --> 00:35:21,279 Speaker 9: have some people panicking on your show, and let's say 685 00:35:21,800 --> 00:35:25,080 Speaker 9: ten days, but right now, you know, if you look 686 00:35:25,120 --> 00:35:29,440 Speaker 9: at the data, it's fine. You sup pretty substantial revisions 687 00:35:29,480 --> 00:35:33,080 Speaker 9: down to job growth last year, but that was expected, right, 688 00:35:33,239 --> 00:35:36,759 Speaker 9: particularly given the massive changes of immigration policy that are 689 00:35:36,840 --> 00:35:38,440 Speaker 9: literally removing. 690 00:35:37,960 --> 00:35:39,080 Speaker 3: Workers from the workforce. 691 00:35:39,320 --> 00:35:41,640 Speaker 9: Margaret is up, but only barely. 692 00:35:41,880 --> 00:35:45,120 Speaker 2: Martha Gimble with a CEO budget lab. Martha, you took 693 00:35:45,160 --> 00:35:48,200 Speaker 2: the kool aid at the University of California at San Diego, 694 00:35:48,520 --> 00:35:52,840 Speaker 2: which is arguably the most hippous rigorous mathematics in America. 695 00:35:53,000 --> 00:35:57,000 Speaker 2: Conometrics with the laureates Granger and Angle, and they own 696 00:35:57,160 --> 00:36:01,880 Speaker 2: time series analysis. Help our viewers and listeners who are mortal. 697 00:36:02,560 --> 00:36:05,600 Speaker 2: Is all this tear of stuff countable like a we 698 00:36:05,719 --> 00:36:08,920 Speaker 2: are we guessing in our math here? Or is it 699 00:36:09,080 --> 00:36:12,480 Speaker 2: rigorous and countable like what you studied at San Diego? 700 00:36:14,040 --> 00:36:17,480 Speaker 9: Well, I mean, first of all, any estimates and I 701 00:36:17,480 --> 00:36:19,440 Speaker 9: do feel that I have to say this or they're 702 00:36:19,760 --> 00:36:22,000 Speaker 9: going to get mad at me. You know, any estimates 703 00:36:22,000 --> 00:36:26,200 Speaker 9: have standard errors. Any estimates, you know, have a range 704 00:36:26,239 --> 00:36:29,560 Speaker 9: of confidence. There's always some amount of guessing, you know 705 00:36:29,680 --> 00:36:33,640 Speaker 9: that being said, the you know, standard errors, the range 706 00:36:33,640 --> 00:36:36,560 Speaker 9: of confidence on this is pretty small in a lot 707 00:36:36,560 --> 00:36:39,440 Speaker 9: of ways, right, Like we do know that it's getting 708 00:36:39,520 --> 00:36:43,799 Speaker 9: passed on. We can see prices for durables rising and 709 00:36:43,880 --> 00:36:45,560 Speaker 9: so you know, I don't think this is one where 710 00:36:45,560 --> 00:36:49,360 Speaker 9: people are going to be sitting in ECON seminars debating 711 00:36:49,440 --> 00:36:52,600 Speaker 9: standard errors at nauseum. I think, you know, people are 712 00:36:52,640 --> 00:36:54,960 Speaker 9: pretty agreed on what's going on here, Martha. 713 00:36:54,960 --> 00:36:57,040 Speaker 6: We're waiting for the Supreme Court to rule on the 714 00:36:57,080 --> 00:37:01,520 Speaker 6: AIPA terrorisa they get pushed back against it administration. Will 715 00:37:01,520 --> 00:37:05,080 Speaker 6: that deal a serious blow to the administration's of tariff 716 00:37:05,400 --> 00:37:09,160 Speaker 6: capabilities or that they have some flexibility, some plan b's 717 00:37:09,200 --> 00:37:09,600 Speaker 6: and c's. 718 00:37:11,400 --> 00:37:13,640 Speaker 9: You know, they've said that they have a plan ready 719 00:37:13,640 --> 00:37:14,000 Speaker 9: to go. 720 00:37:14,160 --> 00:37:15,560 Speaker 4: I mean, the thing that's useful for. 721 00:37:15,480 --> 00:37:18,600 Speaker 9: Them about a EPA is they can just do it right. 722 00:37:19,040 --> 00:37:23,319 Speaker 9: IPA is the legal authority that they're currently using. You know, 723 00:37:23,480 --> 00:37:26,560 Speaker 9: President Trump can see an ad in Ontario that he 724 00:37:26,560 --> 00:37:29,160 Speaker 9: doesn't like and putting new pariffs on in Canada that minute. 725 00:37:29,680 --> 00:37:31,799 Speaker 9: The other legal authorities that they have are a little 726 00:37:31,800 --> 00:37:34,560 Speaker 9: bit more complicated. So it's understandable that they went for 727 00:37:34,600 --> 00:37:37,759 Speaker 9: AEPA first. But people shouldn't fool themselves that if the 728 00:37:37,800 --> 00:37:41,200 Speaker 9: Supreme Court says that they can't use the IEPA authority 729 00:37:41,200 --> 00:37:43,680 Speaker 9: for terraffs, that tariffs are going away, if anything, that 730 00:37:43,719 --> 00:37:47,160 Speaker 9: will just stretch out the uncertainty of what the tariff 731 00:37:47,200 --> 00:37:49,120 Speaker 9: regime is going to look for Martha. 732 00:37:48,800 --> 00:37:49,480 Speaker 4: Thank you so much. 733 00:37:49,560 --> 00:37:52,200 Speaker 2: After Peter Navarro, Martha gimbal That's the way we roll. 734 00:37:52,320 --> 00:37:54,920 Speaker 2: She's with a budget lab at Yale. 735 00:37:55,640 --> 00:38:00,520 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple's Spotify 736 00:38:00,600 --> 00:38:04,880 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 737 00:38:05,000 --> 00:38:08,480 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 738 00:38:08,560 --> 00:38:12,600 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 739 00:38:12,640 --> 00:38:16,000 Speaker 1: can also watch us live every weekday on YouTube and 740 00:38:16,200 --> 00:38:17,920 Speaker 1: always on the Bloomberg terminal