WEBVTT - Surveillance: Anti-Tariff Pressure Strongest Ever, says Treyz 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Lee. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.560 Bloomberg dot Com, and of course, on the Bloomberg Allow 0:00:27.640 --> 0:00:30.840 me to get you up to speed. Tariff Man making 0:00:30.840 --> 0:00:34.199 a comeback, hitting Argentina and Brazil with steel levies and 0:00:34.200 --> 0:00:37.640 then retaliating against France's digital tags with a threat to 0:00:37.680 --> 0:00:41.040 slap tariffs on two point four billion dollars of French goods. 0:00:41.400 --> 0:00:45.680 France then retaliating, threatening to retaliate against America's threats of 0:00:46.040 --> 0:00:49.199 retaliation against France. Are you confused? So am I? It 0:00:49.280 --> 0:00:51.800 all comes just twelve days from a deadline before the 0:00:51.840 --> 0:00:55.360 White House hits China with another round of trade penalties, 0:00:55.360 --> 0:00:58.400 the President telling reporters in London this morning that you 0:00:58.520 --> 0:01:01.000 might have to wait a whole lot longer for a deal. 0:01:01.320 --> 0:01:06.440 I have no I think it's better than way to 0:01:06.560 --> 0:01:09.440 after the election. You want to another truth, I think 0:01:09.480 --> 0:01:11.280 in some ways it's better than a week or after 0:01:11.319 --> 0:01:15.039 the election. Was Joe equity futures dropping off the back 0:01:15.080 --> 0:01:18.200 of that the SMP five hundred down by a quarter 0:01:18.400 --> 0:01:21.200 of one percent, Tom Keane, you might have to wait 0:01:21.520 --> 0:01:25.959 until after. It was really sudden, three headlines in a row, 0:01:26.040 --> 0:01:28.600 and we've come back a little bit. But I'll tell 0:01:28.640 --> 0:01:32.360 you there was an immediate reaction to that headline in China. 0:01:32.440 --> 0:01:35.040 This was two thirds of the way through this extraordinary 0:01:35.600 --> 0:01:38.720 press conference that Mr Stoltonberg was there as well of NATO, 0:01:39.120 --> 0:01:41.759 and he sat and sat and sat where the president went. 0:01:41.840 --> 0:01:45.520 It was a press conference forty minutes. It lasted that 0:01:45.600 --> 0:01:48.200 conversation and a whole lot more coming up through the 0:01:48.240 --> 0:01:50.720 daily So a series of bilaterals between the President and 0:01:50.800 --> 0:01:53.400 NATO leaders, and trade very much the focus at the moment. 0:01:53.520 --> 0:01:57.360 Look out nne M Eastern, the French president and the 0:01:57.440 --> 0:02:01.120 US leader sitting down together, a bilateral that I think 0:02:01.240 --> 0:02:02.600 is going to get a whole lot more attention. The 0:02:02.680 --> 0:02:05.440 key question to me this morning is how much optimism 0:02:05.480 --> 0:02:09.000 still is baked into the market based on the idea 0:02:09.040 --> 0:02:10.920 that we would get some sort of deal between the 0:02:10.960 --> 0:02:13.280 US and China by year end. Because yes, you are 0:02:13.320 --> 0:02:16.240 seeing stocks turned negative, but not that negative. And yes 0:02:16.280 --> 0:02:18.000 we saw a sell off that was the biggest in 0:02:18.400 --> 0:02:21.919 since October yesterday, but we had been making new highs 0:02:22.040 --> 0:02:24.520 day after day after day. There still is so much 0:02:24.639 --> 0:02:28.040 enthusiasm built into stocks. How how far does it have 0:02:28.080 --> 0:02:30.079 to go to be unwound? At this point, let's bring 0:02:30.080 --> 0:02:32.079 in Troy as we have Scott Bridys dropping by the 0:02:32.080 --> 0:02:34.560 studio here in New York, Troit right to see you. 0:02:34.639 --> 0:02:36.560 How do you digest the last twenty four hours? It's 0:02:36.560 --> 0:02:38.560 getting a little bit messy at the Yeah. Well, I 0:02:38.600 --> 0:02:41.679 think the two narratives that have started to break the 0:02:41.720 --> 0:02:44.280 first on trade, right, so we've had a narrative develop 0:02:44.360 --> 0:02:47.360 where you know, phase one trade deal is pretty much done. 0:02:47.400 --> 0:02:50.200 Obviously well be face saving, nothing like substantive, but but 0:02:50.360 --> 0:02:53.480 at least it doesn't escalate further. And you know, whether 0:02:53.520 --> 0:02:56.200 you look at Brazil, Argentina now France and you know 0:02:56.240 --> 0:02:59.360 the talk of it going past, clearly there is risk 0:02:59.400 --> 0:03:02.600 again of its cleaning further. You know. Secondarily, and this 0:03:02.639 --> 0:03:06.120 is another big narrative, was that global manufacturing was bottoming 0:03:06.160 --> 0:03:08.639 and starting to look like it was turning. You had 0:03:08.639 --> 0:03:11.160 the decent data out of China, not so bad data 0:03:11.160 --> 0:03:13.960 out of Europe, which means you know, things aren't collapsing, 0:03:14.160 --> 0:03:16.919 which has taken is not so bad news out of Europe. Um. 0:03:17.080 --> 0:03:18.840 And then the I s M number came out yesterday 0:03:18.880 --> 0:03:20.600 in the US and that throw cold water on that 0:03:20.639 --> 0:03:24.240 as well. So Um. The other point of make at 0:03:24.280 --> 0:03:26.200 least so you bring this up is the price action 0:03:26.240 --> 0:03:29.520 has not been that violent, right, and what we think 0:03:29.600 --> 0:03:32.639 is going on there is in the backdrop rather quietly, 0:03:32.800 --> 0:03:35.200 as you know, the FET has been dramatically expanding their 0:03:35.240 --> 0:03:38.160 balance sheet. Um, it's not QUI don't call qi. But 0:03:38.200 --> 0:03:40.800 the reality is they've added two seventy billion dollars and 0:03:40.800 --> 0:03:43.920 are on pace to add another you know, six billion 0:03:44.000 --> 0:03:47.760 over the next call. It's five six, seven months. So um. 0:03:47.800 --> 0:03:51.040 You know that arguably is masking downside volatility in the 0:03:51.080 --> 0:03:54.000 short term. Um. But clearly, if we do get a 0:03:54.040 --> 0:03:56.320 complete break of China, you can look for three to 0:03:56.400 --> 0:03:58.800 five more downside. Had a lot of people messaging me 0:03:58.800 --> 0:04:01.880 in the last four hours word about a repeat of December, 0:04:02.760 --> 0:04:04.400 and I think to your point, it's the Federal Reserve 0:04:04.480 --> 0:04:06.840 and the position of monetary policy right now that makes 0:04:07.000 --> 0:04:13.680 December very different correct to December. As we go into though, Troy, 0:04:14.040 --> 0:04:16.880 your conviction tright, Now, what is it after the big 0:04:16.960 --> 0:04:19.479 run up we've had him risk assets through this year yes. 0:04:19.560 --> 0:04:23.159 So if you're focused like we are, on developed generating 0:04:23.200 --> 0:04:27.039 returns to have as lower beata possible and very little duration. Um. 0:04:27.160 --> 0:04:29.719 You know, we continue to focus on consumer related credit 0:04:29.839 --> 0:04:31.960 with offset by shorts and high yield and I G. 0:04:32.640 --> 0:04:35.240 And as we were discussing, you know on tim shows before, 0:04:35.320 --> 0:04:37.440 I mean, hedges have been brutal this year. I mean 0:04:37.480 --> 0:04:39.919 the cost of hedging has been off the charts. But 0:04:40.000 --> 0:04:42.520 if you think of where spreads and absolute yields are 0:04:42.560 --> 0:04:44.320 now in I G and high yield, we see much 0:04:44.400 --> 0:04:47.680 less downside on that side of the portfolio. And then 0:04:47.720 --> 0:04:49.839 the data for the U S economy continues to be 0:04:49.920 --> 0:04:54.599 relatively strong with the consumer balance sheet in relatively good shape. Um, 0:04:54.640 --> 0:04:57.400 that's our favorite setup. We'd say one of the consensus 0:04:57.400 --> 0:05:00.440 traits for the industry is that your only going to 0:05:00.480 --> 0:05:04.200 see the dollar weekend next year. Uh. That's been a widowmaker, 0:05:04.279 --> 0:05:06.880 so to speak, for quite some time. Uh. You know, 0:05:06.880 --> 0:05:10.200 the viewpoint is with the FEDS expansion the balance sheet, 0:05:10.800 --> 0:05:14.599 the dollars finally topped out, um, and if growth slows 0:05:14.640 --> 0:05:18.080 down further in the US were stabilizers overseas, you could 0:05:18.120 --> 0:05:20.880 finally see a round of dollar weakness. Is there ever 0:05:21.000 --> 0:05:28.760 a widower makers we can we can discuss the sexism 0:05:28.800 --> 0:05:30.960 of it offline. I will say, I want to pick 0:05:31.040 --> 0:05:33.480 up on the idea of the balance sheet, the Fed's 0:05:33.480 --> 0:05:37.159 balance sheet. I'm looking right now contracting contracting, contracting reaching 0:05:37.240 --> 0:05:41.560 a low at the end of August August, and since 0:05:41.600 --> 0:05:45.240 then it's at a nearly three hundred billion dollars system 0:05:45.279 --> 0:05:48.720 most under a told story of the market action we 0:05:48.920 --> 0:05:52.240 put we focus on the trade headlines. So if the 0:05:52.320 --> 0:05:55.560 FED continues to build its balance sheet like this, which 0:05:55.560 --> 0:05:57.760 is mostly coming through the REPO operations, which they say 0:05:57.920 --> 0:06:01.159 is not quantitative easing, is this going to support risk 0:06:01.160 --> 0:06:04.080 assets indefinitely for as long as they do this? Well, 0:06:04.080 --> 0:06:06.520 remember the goal now is to get the balance sheet 0:06:06.560 --> 0:06:09.080 from what the FED has said, So take that somewhat 0:06:09.120 --> 0:06:10.880 with a grain of salt to back ups around four 0:06:10.880 --> 0:06:13.200 point four or four point five trillion, and that should 0:06:13.240 --> 0:06:15.320 be complete by the end of Q two. To be clear, 0:06:15.400 --> 0:06:17.920 it's right now, it's a four point five trillion, that's right, 0:06:17.920 --> 0:06:19.799 that's right. Yeah, I think thanks for point now. So 0:06:19.800 --> 0:06:22.240 so there's quite a bit of scope to expand further. 0:06:22.480 --> 0:06:25.600 So that's part of the narrative fueling why um many 0:06:25.680 --> 0:06:29.440 think will have a risk on Q one early Q two, 0:06:29.560 --> 0:06:31.600 and then from there we get back to the framework 0:06:31.680 --> 0:06:33.960 we were in the most of the post crisis period 0:06:34.040 --> 0:06:38.039 was when quis running risk, assets do well. When QUI stops, 0:06:38.160 --> 0:06:40.920 you have a correction. Bad news becomes bad news, right, 0:06:40.960 --> 0:06:45.600 And what happened is the seventeen eighteen period UH was 0:06:45.680 --> 0:06:49.040 much more about the fundamentals of fiscal policy reform out 0:06:49.040 --> 0:06:52.200 of Washington, and so for like an eighteen twenty one 0:06:52.200 --> 0:06:54.719 month period, markets are much more focused on that. And 0:06:54.760 --> 0:06:58.159 then of course the FED tightening became the driver in 0:06:58.279 --> 0:07:01.120 Q four and now FedEx engine is once again the 0:07:01.120 --> 0:07:04.640 primary driver. We think UH in late nineteen going into 0:07:05.520 --> 0:07:08.720 trigger ask hedge on business the great fear as market 0:07:08.800 --> 0:07:11.119 draw down. You're up at a high, you go down 0:07:11.160 --> 0:07:13.320 and it's not worth keeping the hedge fund going because 0:07:13.320 --> 0:07:15.960 you sit down so far you can't come back a 0:07:16.120 --> 0:07:19.000 year after year in this bull market of market draw 0:07:19.240 --> 0:07:22.520 ups where they just can't catch up, They just can't 0:07:22.520 --> 0:07:25.680 catch up. When's the shell game over, Tom, It's a 0:07:25.840 --> 0:07:28.360 it's a pretty tough terve shell game, my friend. But 0:07:28.840 --> 0:07:32.880 come on, they get Look, I'm an institution, I'm a 0:07:32.920 --> 0:07:36.960 hammer in aut This year within our squared of one 0:07:37.040 --> 0:07:41.560 point oh with costs next to nothing. And I understand 0:07:41.600 --> 0:07:45.640 you keep the game going, but it's the perceptionist. It's 0:07:45.880 --> 0:07:52.000 year after year after year when the institutions just say enough. Look, 0:07:52.040 --> 0:07:55.280 I mean, first of all, fees have come down pretty significant. Industry, 0:07:55.400 --> 0:07:57.520 you know our way to average fees about one point 0:07:57.520 --> 0:08:00.080 one and twelve. Well, okay, well what's a game? And 0:08:00.080 --> 0:08:03.360 if I make a game, are we still no? No? 0:08:03.480 --> 0:08:05.760 So one point one and twelve. I think the industry 0:08:05.800 --> 0:08:10.800 is sevent so there's less less than centi fee. But 0:08:10.800 --> 0:08:12.600 but the point you make is a good one. I 0:08:12.640 --> 0:08:16.280 think if any institution looks at the last ten years 0:08:16.400 --> 0:08:19.680 and extrapolates that out to infinity right along the lines 0:08:19.720 --> 0:08:21.360 of what you were mentioned with the FED balance sheet, 0:08:21.840 --> 0:08:23.840 well then there's no reason to do anything. Would be 0:08:23.840 --> 0:08:26.640 a long equities right. But but the whole point of 0:08:26.760 --> 0:08:29.800 asset allocation is that you don't know the future. Right, 0:08:29.840 --> 0:08:32.480 Equities ten annualize the eight percent over a full market cycle. 0:08:32.920 --> 0:08:36.120 Guess what this cycle they've been annualizing much higher than that, right, 0:08:36.120 --> 0:08:39.680 which means by definition, the next five ten years have 0:08:39.800 --> 0:08:42.400 to be worse. Now we could talk about you know, 0:08:42.400 --> 0:08:45.160 the tenure going to minus two and my three percent 0:08:45.240 --> 0:08:47.040 short end rates and what does that mean for assets? 0:08:47.200 --> 0:08:49.240 But but in a in a zero bound world in 0:08:49.280 --> 0:08:53.160 the US, everyone knows the future returns are gonna be less. Uh. 0:08:53.160 --> 0:08:57.480 And the other point that's uh supportive of the hedge industry, um, 0:08:57.600 --> 0:09:00.280 is that bonnils are so low. Right, it's very hard 0:09:00.320 --> 0:09:03.880 to make a living in bonds, right, certainly anything high quality. 0:09:04.480 --> 0:09:07.640 Uh So so we do think again, we are in 0:09:07.679 --> 0:09:10.600 the industry, so we're somewhat biased. But if you think 0:09:10.600 --> 0:09:13.600 of the future, Uh, the reality is if hedge funds 0:09:13.600 --> 0:09:17.160 can comfortably out perform fixed income, even if they trail equities, 0:09:17.320 --> 0:09:19.200 they're still value to be had there. If you have 0:09:19.240 --> 0:09:22.040 a relatively low data, great to say you thank you, 0:09:24.040 --> 0:09:41.160 better catch you out, okay, John, For anybody joining the 0:09:41.240 --> 0:09:46.079 conversation this morning, I want to summarize here President Tenato, 0:09:46.840 --> 0:09:50.640 we pretty much thought closed meetings, pressers, photo ops in 0:09:50.760 --> 0:09:54.880 that not and in the five am hour we enjoyed 0:09:55.040 --> 0:09:58.640 a forty minute plus press conference in the presence of 0:09:58.760 --> 0:10:01.520 Mr Stoltenberg for to market the focus not on security, 0:10:01.559 --> 0:10:04.040 the focus on trade, the prospect of a trade deal 0:10:04.120 --> 0:10:06.520 before the December fifteenth, line of the sand, that is 0:10:06.559 --> 0:10:08.480 when tariffs is set to go on a hundred and 0:10:08.520 --> 0:10:10.800 sixty billion dollars of Chinese imports. The President said there 0:10:10.800 --> 0:10:14.480 is no deadline. I might wait until after twenty to 0:10:14.559 --> 0:10:17.360 get this deal done. Equity futures roll over, so we're 0:10:17.360 --> 0:10:19.560 doubtned by five tenths of one percent. I think you've 0:10:19.600 --> 0:10:21.439 got to start the story at the start of the week, 0:10:21.640 --> 0:10:24.360 at the start of the month, where issue after issue 0:10:24.480 --> 0:10:27.320 just slowly started to build up, one on top of another, 0:10:27.679 --> 0:10:32.240 tarifs and Argentina on Brazil retaliation with France, the just 0:10:32.360 --> 0:10:35.920 a little bit softer tariff man making a big comeback, 0:10:35.960 --> 0:10:38.320 and the equity market making a move. Love but the 0:10:38.320 --> 0:10:41.439 Wall Street Journal to my friendly to Republican politics with 0:10:41.559 --> 0:10:45.400 a scathing editorial today on the president one year run 0:10:46.040 --> 0:10:49.559 from terrorists. Lisa mentioned December fifteenth coming up, but there 0:10:49.640 --> 0:10:52.040 was a lot more in that press conference. Maybe it 0:10:52.080 --> 0:10:56.040 didn't move markets, but I found absolutely stunning Lisa where 0:10:56.080 --> 0:10:58.880 he basically stated, he said, I'm gonna I'm gonna get 0:10:58.880 --> 0:11:01.480 this wrong. I don't ever run of me. I'm the 0:11:01.520 --> 0:11:04.520 one that has. If it wasn't for me, there would 0:11:04.520 --> 0:11:06.959 be a war in Asia. Something like that. I thought 0:11:06.960 --> 0:11:10.240 that just stunning. It highlights yet again he is the 0:11:10.320 --> 0:11:13.560 one person controlling all of the negotiations and this is 0:11:13.600 --> 0:11:16.559 the key. So so really any deal lives or dies 0:11:16.960 --> 0:11:18.960 on how he feels on any of the day. Henritta 0:11:19.000 --> 0:11:23.560 Treys joining us now and really important conversation because something 0:11:23.640 --> 0:11:27.600 has shifted and this is actually uh notable in markets 0:11:27.600 --> 0:11:31.000 that they have not yet, uh not yet recognized this. 0:11:31.400 --> 0:11:34.199 Henri to Treys a Veta Partners. Why are we now 0:11:34.280 --> 0:11:38.080 talking about escalating trade wars? I think we're talking about 0:11:38.160 --> 0:11:42.600 escalation because the market had become very optimistic that we're 0:11:42.640 --> 0:11:45.720 going to get not just a small scale pause, but 0:11:45.800 --> 0:11:48.079 a robust phase one deal and as I heard from 0:11:48.120 --> 0:11:51.079 several clients in the run up to Thanksgiving, even an 0:11:51.080 --> 0:11:54.400 indication that Phase two could be completed. UM. So I 0:11:54.440 --> 0:11:57.160 don't know where a lot of investors are getting those views, 0:11:57.200 --> 0:11:59.880 but that was something that ran across my desk several 0:12:00.040 --> 0:12:02.440 times um in just recent weeks. And I think that 0:12:02.480 --> 0:12:04.360 it was this building optimism that we were going to 0:12:04.400 --> 0:12:06.920 get this major trade deal that we don't see any 0:12:06.960 --> 0:12:10.480 evidence for um. And obviously the President, in our view, 0:12:10.480 --> 0:12:13.520 has lost his appetite for tariffs against China, but clearly 0:12:13.559 --> 0:12:17.760 not against Brazil, Argentina, France, UM. And obviously that does 0:12:17.800 --> 0:12:20.920 not vode well for let's say, auto tariffs against the 0:12:20.920 --> 0:12:23.240 EU or other nations. And Rietta, what makes you think 0:12:23.280 --> 0:12:27.000 that he's lost his appetite for tariffs against China. Our 0:12:27.120 --> 0:12:30.040 ongoing conversations with the U s d A, with the 0:12:30.080 --> 0:12:35.880 manufacturing institutions, with farmers, with Senate Republican Agriculture Committee staff, 0:12:36.160 --> 0:12:40.520 the pressure on the administration to not impose tariffs is 0:12:41.080 --> 0:12:43.000 larger than it ever has been, and I think that's 0:12:43.000 --> 0:12:46.400 serving as a very effective dampener on the President's willingness 0:12:46.400 --> 0:12:50.400 to impose additional tariffs, specifically on China. US farmers literally 0:12:50.440 --> 0:12:53.560 cannot take it, and the manufacturers are very concerned about 0:12:53.600 --> 0:12:56.920 that escalation threat to and have not factored that into 0:12:57.000 --> 0:13:00.920 their supply chain expectations and will not septa. You mentioned 0:13:00.920 --> 0:13:03.480 all times in Europe. Does the same approach apply to 0:13:03.600 --> 0:13:06.599 Europe or is it a different approach? We're about to say, 0:13:07.000 --> 0:13:09.880 this is what's happening right now with the digital tax 0:13:09.960 --> 0:13:15.079 is entirely different, and interestingly, in extraordinary unifier on Capitol Hill, 0:13:15.080 --> 0:13:17.360 if you ask any member of the Senate Finance Committee, 0:13:17.360 --> 0:13:19.640 and so I'll tell you that they absolutely hate when 0:13:19.920 --> 0:13:22.640 the European Union thinks that they can tax any American 0:13:22.679 --> 0:13:24.760 company that goes all the way back to Apple in 0:13:24.800 --> 0:13:28.360 Ireland so many years ago. So this digital services tax 0:13:28.559 --> 0:13:32.000 is something that the administration has support for both Democrats 0:13:32.000 --> 0:13:34.360 and Republicans to rebuff, and I expect that they will 0:13:34.360 --> 0:13:38.199 continue to. But that's a tiref on wine, keys, et cetera, 0:13:38.320 --> 0:13:42.440 not on automobile, careful French wine cheese. Don't you know 0:13:42.679 --> 0:13:45.839 the important things for the important things resting in there 0:13:45.840 --> 0:13:48.880 and what matters, Henrietta, to your good point, and with 0:13:49.000 --> 0:13:54.040 your wonderful knowledge of Congress, does Congress believe this president 0:13:54.280 --> 0:13:58.480 is acting by himself? Is he alluded to multiple times 0:13:58.800 --> 0:14:02.600 in this press conference. I think that when it comes 0:14:02.679 --> 0:14:05.360 to trade policy, that's absolutely the case to me. And 0:14:05.360 --> 0:14:08.080 he's obviously got a very competent team in USTR, Bob 0:14:08.120 --> 0:14:10.960 Lifeheiser and he surrounded. I didn't hear them in this 0:14:11.080 --> 0:14:15.640 press conference. I heard a president said it's me, right 0:14:15.720 --> 0:14:17.760 of course, And I wouldn't expect him to name anybody 0:14:17.800 --> 0:14:19.640 unless they're physically in the room with him, and he 0:14:19.680 --> 0:14:21.880 can sort of pass off some of the pressure on them. 0:14:21.880 --> 0:14:25.640 That's historically his tactic. But it would be impossible for 0:14:25.680 --> 0:14:27.960 President Trump to pull any of these tariffs off without 0:14:28.040 --> 0:14:31.960 the knowledge and UM ground laying that us t R 0:14:32.000 --> 0:14:34.760 lifetiser has given to him. And you think that the 0:14:34.760 --> 0:14:37.720 markets are correct, then being optimistic that we're not going 0:14:37.760 --> 0:14:41.520 to see the December fifteenth tariffs correct. My odds are 0:14:42.560 --> 0:14:46.720 that we will see the December fifteen pariffs at some point, 0:14:46.800 --> 0:14:48.320 which means that I don't think we're going to see 0:14:48.320 --> 0:14:51.760 it specifically on December fifteenth. UM, y'all have been reading 0:14:51.800 --> 0:14:53.880 my research for a while, you know that is very 0:14:53.920 --> 0:14:56.440 bullish for me. It means that I am not expecting 0:14:56.520 --> 0:15:00.560 to see the tariffs um overwhelmingly that is own from 0:15:00.560 --> 0:15:03.640 my odds of s and higher over the summer when 0:15:03.680 --> 0:15:06.400 the President was very enthusiastic about tariffs. So I think 0:15:06.400 --> 0:15:09.000 the market's appropriate to assume that the December fifteenth tariffs 0:15:09.040 --> 0:15:12.320 will not happen that day. As you guys were discussing earlier, 0:15:12.440 --> 0:15:14.960 it's a totally manufactured date. It has no relevance to 0:15:15.000 --> 0:15:18.080 any underlying key deadline. It's just something that USTR life 0:15:18.080 --> 0:15:20.280 fives are created. As he has for so many of 0:15:20.280 --> 0:15:23.800 these other tariff lists, So December fifteenth could easily, in 0:15:23.800 --> 0:15:27.600 my opinion, become February or March or what have you. 0:15:28.280 --> 0:15:30.080 But that doesn't mean that the tariffs are going to 0:15:30.120 --> 0:15:32.560 go on December fifteenth. I'd also like to say to investors, 0:15:32.800 --> 0:15:35.320 don't expect for whole baskets the tariffs to come off 0:15:35.760 --> 0:15:37.600 in the next two weeks, which is what I think 0:15:37.600 --> 0:15:39.320 a lot of investors have been pricing in, and I 0:15:39.320 --> 0:15:42.920 don't think that's appropriate. What's the tipping point, What's the issue, 0:15:42.960 --> 0:15:46.520 the pivotal issue that would shift those odds back to 0:15:46.720 --> 0:15:50.280 something more substantial in favor of the tariffs in December fifteenth. 0:15:51.800 --> 0:15:54.680 I would be really heartened if the administration signaled at 0:15:54.720 --> 0:15:57.600 all to the House or the Senate that they wanted 0:15:57.600 --> 0:16:01.320 them to stop taking these very poison votes poicsonous to 0:16:01.320 --> 0:16:04.760 Beijing anyway, votes on Hong Kong human rights and democracy, 0:16:04.920 --> 0:16:06.800 or the weaker bill that the House is going to 0:16:06.880 --> 0:16:11.120 pass via unanimous consent after the close this evening, those 0:16:11.200 --> 0:16:14.720 kinds of small pieces, and the knowledge that Senators Rubio 0:16:14.920 --> 0:16:17.480 and Kennedy and a whole handful of others are trying 0:16:17.480 --> 0:16:22.400 to restrict Chinese investment or US pension investments in Chinese companies, etcetera. 0:16:22.720 --> 0:16:24.520 That tip for cat. You know, it's not so much 0:16:24.560 --> 0:16:28.600 one thing as a tiny compendium of so many small 0:16:28.680 --> 0:16:32.120 things that leads us to have huge concerns about reaching 0:16:32.120 --> 0:16:34.520 a Phase one deal at all our odds there are 0:16:34.560 --> 0:16:39.600 only fifteen percent, and those really started to come together attent, 0:16:39.720 --> 0:16:42.160 you know, very low rates when the poultry deal was reached. 0:16:42.360 --> 0:16:44.280 Of course, there were good reasons for the poultry deal 0:16:44.280 --> 0:16:46.960 to be reached, but having it done separately and outside 0:16:47.000 --> 0:16:48.600 of the Phase one deal was the first and a 0:16:48.680 --> 0:16:51.480 string of indicators that pointed in the wrong direction for 0:16:51.520 --> 0:16:53.880 a Phase one deal in our view. He tries always 0:16:53.880 --> 0:16:55.880 great to get your view on this program. Vata Parts 0:16:55.920 --> 0:16:59.120 director of Economic Policy joining us on the lightest and 0:16:59.160 --> 0:17:15.040 they tried to you. It was a distressing email that 0:17:15.119 --> 0:17:18.800 came across the other day, which was that the addiction 0:17:18.960 --> 0:17:22.359 of Wall Street is retiring. Let me frame this John 0:17:22.400 --> 0:17:25.000 and you can bring him Mr Gartman. There is an 0:17:25.000 --> 0:17:29.639 acclaimed single photo of the collapse of Lehman Brothers, and 0:17:29.720 --> 0:17:32.119 it is the young troops where their backs against the 0:17:32.160 --> 0:17:35.840 glass wall of that skyscraper and their screens and their 0:17:35.880 --> 0:17:38.439 Bloombergs are all in front of them, and there's the 0:17:38.480 --> 0:17:41.760 research capability of Lehman at the time, which was magnificent, 0:17:42.600 --> 0:17:45.280 and they're in the screen as they listened to. Their 0:17:45.320 --> 0:17:49.080 fate is the Gartman letter. That is the dirty little 0:17:49.119 --> 0:17:52.400 secret of Wall Street. They may love them, they may 0:17:52.520 --> 0:17:55.800 hate them, but boy do they all read them. And 0:17:55.840 --> 0:17:58.080 it will end suit and often more than thirty years 0:17:58.200 --> 0:18:00.280 it will be returned at South they got. I don't 0:18:00.320 --> 0:18:03.760 believe it, but Dennis Gallama joins us on the phone. 0:18:03.800 --> 0:18:07.240 Dennis walkers through the decision. Oh well, thank you for 0:18:07.280 --> 0:18:09.960 the for the nice introduction, Very very pleasant of y'all. 0:18:10.400 --> 0:18:14.600 It's been a hard decision. But quite honestly, the simply, 0:18:14.840 --> 0:18:17.440 the simple fact is the getting of information has become 0:18:17.520 --> 0:18:21.920 so will ubiquitous. You guys, everybody else are are able 0:18:21.960 --> 0:18:24.560 to get up the news so much more efficiently, so 0:18:24.640 --> 0:18:28.320 much more regularly, so much more quickly, and in many respects, 0:18:28.320 --> 0:18:31.080 so much better than I I started. When I started 0:18:31.080 --> 0:18:33.000 this thirty five years ago, I used to tell people 0:18:33.040 --> 0:18:35.760 that I got this China People's Daily mailed to me 0:18:35.920 --> 0:18:37.840 three days late, and I was still two days ahead 0:18:37.880 --> 0:18:41.040 of everybody else. Now everybody gets the China People's Daily 0:18:41.119 --> 0:18:44.320 or the South China Morning Post on their email every morning. 0:18:44.359 --> 0:18:46.879 So keeping up with the news and being ahead, and 0:18:46.920 --> 0:18:48.720 that was always my forte was to try to be 0:18:48.800 --> 0:18:52.119 ahead of what everybody else understood. Has become almost impossible. 0:18:52.280 --> 0:18:57.480 And finally, I'm almost seventy years old, after getting up, well, 0:18:57.480 --> 0:19:00.399 after getting up every morning for thirty five years, in 0:19:00.520 --> 0:19:03.800 on every business day and writing for five hours, my 0:19:03.880 --> 0:19:07.919 hands are tired. And then finally having gone from a 0:19:07.920 --> 0:19:12.600 four handicap to a fourteen, there we go. That's probably 0:19:12.600 --> 0:19:15.560 closer to the truth. Well, but Dennis, you raise a 0:19:15.600 --> 0:19:18.400 really interesting point the speed of markets and how much 0:19:18.440 --> 0:19:22.360 that's shifted, and how everyone has a glut of information 0:19:22.400 --> 0:19:26.160 that they're facing an onslaught every morning. Has that made 0:19:26.240 --> 0:19:29.360 markets better or worse? From your perspective, I think it's 0:19:29.359 --> 0:19:31.240 made I think it's made it better. I think it's 0:19:31.240 --> 0:19:34.960 made it more difficult, but I do information is always 0:19:34.960 --> 0:19:38.479 better there in the old days, years ago, I used 0:19:38.520 --> 0:19:40.639 to say that my job was to be the sieve 0:19:40.720 --> 0:19:43.480 of information. I I read as much as I could 0:19:43.480 --> 0:19:46.240 get my hands on, read different newspapers, read different news wires, 0:19:46.240 --> 0:19:49.520 listening to different news broadcasts, and tried to hold out 0:19:49.520 --> 0:19:51.720 what I thought was the important pieces and say here, 0:19:51.760 --> 0:19:54.880 look at this, this is what this means. Now there's 0:19:54.920 --> 0:19:57.640 just so much information and so many people pointing out 0:19:57.640 --> 0:19:59.800 to the same thing. Here, look at this. This is 0:19:59.840 --> 0:20:03.439 what this means. That the competition is difficult, the markets 0:20:03.440 --> 0:20:06.520 are far more liquid, the markets are far more efficient 0:20:06.600 --> 0:20:09.560 than they've ever been. It's just a little more difficult 0:20:09.600 --> 0:20:11.440 to do what I do. And so you know there 0:20:11.440 --> 0:20:13.760 comes a time, Dennis, one of your great charms as 0:20:13.800 --> 0:20:16.800 you actually show your recommendations on the back of your letter, 0:20:16.840 --> 0:20:19.240 and when you go down in flames, you're the first 0:20:19.280 --> 0:20:23.680 to report it. There detractors reporting it, and as well, 0:20:23.920 --> 0:20:27.879 you have a dearth of equity wisdom right now, long 0:20:28.160 --> 0:20:31.560 or short? Can you give us a game on the 0:20:31.600 --> 0:20:36.399 stock market into next year? After up this year? It 0:20:36.440 --> 0:20:39.680 ain't gonna be up next year, that we know for certain. 0:20:40.119 --> 0:20:43.360 It's probably going to be down, and rather abundantly. I'm 0:20:43.400 --> 0:20:47.560 afraid the the war that's going on over trade is 0:20:47.600 --> 0:20:50.680 already ill and ugly. The same thing is it's probably 0:20:50.680 --> 0:20:52.960 going to get more ill and more ugly, and and 0:20:53.720 --> 0:20:57.600 any any inhibitions on world trade foreign trade is going 0:20:57.600 --> 0:21:01.120 to be delitarious to stock prices, plus people who really 0:21:01.160 --> 0:21:05.960 have no business trading, no business investing, and our novices. 0:21:06.119 --> 0:21:08.359 I think that it's so easy to make money and 0:21:08.400 --> 0:21:11.119 it's not that easy. And when when the novices become 0:21:11.200 --> 0:21:15.919 the experts. That's one final question, Dennis. Of course we're 0:21:15.920 --> 0:21:18.600 gonna have Mr Gartman back here within his retirement, probably 0:21:18.600 --> 0:21:20.639 from the fifteenth hold of one of the eight golf 0:21:20.640 --> 0:21:25.240 courses he plays in Republican Virginia. You tear the president 0:21:25.320 --> 0:21:29.040 to shreds this morning on round two or around five, 0:21:29.080 --> 0:21:32.679 whatever it is, on tariffs. How can run of the 0:21:32.720 --> 0:21:37.480 mill Republicans support this guy? If Dennis Gartman, who it's 0:21:37.560 --> 0:21:41.240 the GOP golf ball, says, this guy is so wrong 0:21:41.320 --> 0:21:44.760 on trade, it is difficult, isn't it. He he has 0:21:44.880 --> 0:21:47.560 the Republican Party has ceased to be the Republican Party, 0:21:47.680 --> 0:21:50.840 is now the Trump the Trump Party, and and lesser 0:21:50.880 --> 0:21:54.440