WEBVTT - Geopolitical and Tariff Variables Impacting markets 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.120 us live on YouTube. 0:00:27.280 --> 0:00:29.840 Joining us now from BAMA from Bank of Montreal, BEMA 0:00:29.920 --> 0:00:34.680 Capital Markets. The acclaim Ian Lincoln the summer You're Ian 0:00:34.840 --> 0:00:37.840 is the following We've got a data and a deficit 0:00:38.320 --> 0:00:41.400 and we're in love with T bills. What's the Lincoln 0:00:41.640 --> 0:00:46.000 radar say about an executive branch that says the solution 0:00:46.760 --> 0:00:49.000 is a record number of T bill issuance. 0:00:51.360 --> 0:00:54.080 Frankly, I think that we're at the point where the market, 0:00:54.360 --> 0:00:57.720 at least for now, can easily absorb an increase in 0:00:57.800 --> 0:01:01.560 T bill issuance. The risk is that they oversaturate the 0:01:01.600 --> 0:01:03.400 front end of the market, and there are many in 0:01:03.440 --> 0:01:06.760 the market that believe that the rise of stable coin 0:01:06.880 --> 0:01:10.119 and demand from that sector is going to create excess 0:01:10.160 --> 0:01:13.200 demand and absorb that the bills in twenty twenty six 0:01:13.240 --> 0:01:15.600 and beyond. That's not so clear to me, but I 0:01:15.600 --> 0:01:17.760 think that the Treasure Department is going to find out 0:01:17.800 --> 0:01:18.320 soon enough. 0:01:18.360 --> 0:01:20.280 Here's a sentence without math. 0:01:20.400 --> 0:01:23.040 One of the key debates in the market at the moment, Damien, 0:01:23.600 --> 0:01:27.120 is whether Trump's tariffs will trigger one time price adjustments 0:01:27.480 --> 0:01:28.759 or persistent inflation. 0:01:29.080 --> 0:01:30.119 So continue with the and. 0:01:30.120 --> 0:01:31.959 Lincoln, Well, I think all three parties take God, we'll 0:01:31.959 --> 0:01:34.080 talk about that later. And I got you and I 0:01:34.080 --> 0:01:35.800 have limited time here. I mean, futures are pricing in 0:01:35.920 --> 0:01:38.360 ninety one percent probability of a twenty five big cut 0:01:38.520 --> 0:01:41.480 in September. Can it be fifty? And what would make it? 0:01:41.680 --> 0:01:42.840 What would meet that they'd go there? 0:01:44.520 --> 0:01:47.280 I think it could be fifty. Again, not our base case. 0:01:47.400 --> 0:01:50.160 But if you get a disastrous payrolls print for the 0:01:50.160 --> 0:01:53.680 month of August and two benign CPI prints, the market 0:01:53.720 --> 0:01:55.760 will start talking about fifty basis points. 0:01:55.840 --> 0:01:57.760 Well, I mean, but then are we really going to 0:01:57.760 --> 0:01:59.760 see a pullback? And consumption? Come on now? I mean 0:02:00.040 --> 0:02:02.600 DP growth, I mean better than expected globally for the 0:02:02.600 --> 0:02:04.360 first half of this year, you know, I mean talk 0:02:04.400 --> 0:02:07.080 to talk to me about the trade up between a 0:02:07.120 --> 0:02:10.120 weaker labor market and resilient income growth here in the US. 0:02:11.720 --> 0:02:16.160 So we have seen a easing of demand in terms 0:02:16.160 --> 0:02:18.840 of personal consumption in real terms over the course of 0:02:18.919 --> 0:02:21.200 Q one and Q two. That's in the data. But 0:02:21.360 --> 0:02:23.679 what we haven't seen is we haven't seen it completely 0:02:23.760 --> 0:02:27.120 stall out. And frankly, if the Fed cuts fifty or 0:02:27.160 --> 0:02:30.680 twenty five in September, the equity market will respond well 0:02:30.880 --> 0:02:33.880 and that will reinforce the wealth effect, which could certainly 0:02:33.919 --> 0:02:35.200 help keep the consumer going. 0:02:35.440 --> 0:02:39.080 Damien, and of twenty twenty three thirty or mortgage eight percent, yeah, 0:02:39.160 --> 0:02:41.240 we're now down to six point seven eight percent. 0:02:41.560 --> 0:02:44.080 Do you anser your great question to Ian? 0:02:44.360 --> 0:02:47.040 If we get a fifty beeps, whether it's one to whatever, 0:02:47.720 --> 0:02:50.440 I mean, it's got to save the housing market, right. 0:02:50.280 --> 0:02:50.560 I mean? 0:02:50.760 --> 0:02:50.959 Yeah? 0:02:51.000 --> 0:02:53.280 And Ian, I mean, I mean can this curve steepen 0:02:53.360 --> 0:02:55.000 even more from where we are? I mean, I think 0:02:55.000 --> 0:02:57.160 you look at fives thirties, we're up what sixty BIPs 0:02:57.200 --> 0:02:59.160 here to date? I think two tens, it's something like 0:02:59.200 --> 0:03:01.639 twenty plus here to day. I mean, just how much 0:03:01.639 --> 0:03:02.560 steeper can this curve go? 0:03:04.200 --> 0:03:06.919 So once the Fed starts cutting, the market will price 0:03:06.960 --> 0:03:09.760 in even more rate cuts in twenty twenty six and 0:03:09.800 --> 0:03:12.800 twenty twenty seven, and so the two year sector will rally, 0:03:12.840 --> 0:03:14.880 so you get a steeper curve that way. I don't 0:03:14.919 --> 0:03:17.160 think ten and thirty year yields are going to back 0:03:17.240 --> 0:03:20.400 up materially from current levels, so you can still get 0:03:20.400 --> 0:03:22.600 a steepener with a front end rally. As far as 0:03:22.680 --> 0:03:27.440 mortgage rates dropping in line with each incremental quarter point cut, 0:03:27.520 --> 0:03:30.120 good luck. The mortgage market hasn't been functioning that way, 0:03:30.320 --> 0:03:32.440 and so I don't think that rate cuts will solve 0:03:32.840 --> 0:03:35.400 the housing market. The housing market has a supply problem 0:03:35.480 --> 0:03:38.320 as much as it does a rate problem. 0:03:38.560 --> 0:03:43.120 Fascinating on an eventful Friday, not boring, to say the least. 0:03:43.520 --> 0:03:47.800 Damien Sassaur with Ian Lingoln of BEMO Capital Markets. 0:03:47.400 --> 0:03:51.280 And talk to us about the runway for continued dollar weakness. 0:03:51.360 --> 0:03:53.360 Is this really the end of king dollar? I mean, 0:03:53.400 --> 0:03:55.760 how much lower can euro dollar go here? 0:03:55.880 --> 0:03:56.320 Well? 0:03:56.320 --> 0:03:57.280 Can the dollar go here? 0:03:58.840 --> 0:04:02.080 Well to a largest It depends on how successful the 0:04:02.120 --> 0:04:06.080 administration is in balancing trade, because if we actually have 0:04:06.360 --> 0:04:08.800 a balanced trade deficit, then there won't be as many 0:04:08.840 --> 0:04:12.200 dollars going out into the global economy to be recycled 0:04:12.240 --> 0:04:14.720 back into treasuries at the end of the day. I 0:04:14.840 --> 0:04:17.720 do think that the dollar will remain the reserve currency, 0:04:18.040 --> 0:04:22.080 and if that's the case, there'll be a stabilization at 0:04:22.080 --> 0:04:26.240 some stage but I'm very hesitant about wanting to go 0:04:26.279 --> 0:04:29.800 aggressively long the dollar given all of the credibility issues. 0:04:30.640 --> 0:04:32.560 But way, look, it yields here in the US to 0:04:32.839 --> 0:04:34.880 relative to the rest of the world. I mean they're high, 0:04:34.960 --> 0:04:37.240 you know. And the carry trade works. I mean, it's 0:04:37.279 --> 0:04:40.120 still working this year, despite what anybody else would have 0:04:40.160 --> 0:04:42.240 told you coming into twenty twenty five. I mean the 0:04:42.279 --> 0:04:45.080 carry trade works. And I mean you're not funding in 0:04:45.160 --> 0:04:46.120 dollars anymore, are you. 0:04:47.720 --> 0:04:50.200 Yeah, that's a fair point. The carry trade works, but 0:04:50.240 --> 0:04:53.040 it only works as long as, as you point out, 0:04:53.320 --> 0:04:56.120 rates are relatively high. When the Fed starts cutting rates, 0:04:56.160 --> 0:04:59.039 that should put downside pressure on the dollar, not upside pressure. 0:04:59.160 --> 0:05:01.599 And the question becomes how much of that is priced in? 0:05:01.839 --> 0:05:02.840 And I think not enough. 0:05:03.400 --> 0:05:08.480 You're pushing against in the panic of price down, yield 0:05:08.600 --> 0:05:10.920 up and say the ten year piece, even the seven 0:05:11.320 --> 0:05:14.479 year as well. Do you still stick with a vector 0:05:14.680 --> 0:05:19.239 of lower yields out eighteen months? 0:05:19.640 --> 0:05:22.640 Yeah, our year in call for tins is still three 0:05:22.720 --> 0:05:25.840 eighty five. Well, I think by eighteen months from now 0:05:25.920 --> 0:05:29.080 we could be closer to three fifty three twenty five. 0:05:29.440 --> 0:05:31.640 And the time I got left with you, mister lingol 0:05:31.640 --> 0:05:33.960 and I want to talk about Canada. You've got a 0:05:34.000 --> 0:05:37.360 pooling of research at the Bank of Montreal. For those 0:05:37.400 --> 0:05:40.800 of you folks are even one hundred and fifty years ago, 0:05:41.160 --> 0:05:43.479 Bank of Montreal was sort of like the Bank of 0:05:43.560 --> 0:05:47.360 England of Canada and Ian Lincoln with all of your 0:05:47.360 --> 0:05:52.479 research capabilities, give us a BMO update on the impact 0:05:52.560 --> 0:05:56.200 of Trump tariffs on mister Kearney and your Canada. 0:05:57.880 --> 0:06:00.560 So it hasn't been good in terms of what the 0:06:00.600 --> 0:06:04.160 tariffs mean for the Canadian economy. We've already seen the 0:06:04.200 --> 0:06:07.480 Bank of Canada respond, would expect more. There's a lot 0:06:07.480 --> 0:06:09.640 of uncertainty and I think at the end of the day, 0:06:10.040 --> 0:06:13.400 the relationship between Canada and the US will weather the storm, 0:06:13.680 --> 0:06:16.760 but it has been recast in a material way because 0:06:16.800 --> 0:06:17.839 of Trump's trade war. 0:06:18.040 --> 0:06:20.680 Ailing and thank you so much to Female Capital. Martin two. 0:06:26.080 --> 0:06:29.640 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:06:29.720 --> 0:06:32.880 weekday afternoons from seven to ten am Eastern Listen on 0:06:32.960 --> 0:06:36.640 Applecarplay and Android Otto with the Bloomberg Business app, or 0:06:36.760 --> 0:06:38.280 watch US live on YouTube. 0:06:38.640 --> 0:06:40.440 Joining us now is people and my people. 0:06:40.440 --> 0:06:42.840 I'm going to argue in for months about trying to 0:06:42.880 --> 0:06:45.960 get him in your Lawrence McDonald joins us he made 0:06:46.040 --> 0:06:49.320 waves years ago, a colossal failure of common sense. 0:06:49.360 --> 0:06:52.040 That was my biography, How to listen. 0:06:51.880 --> 0:06:55.120 To Americans speak as the latest effort. Larry McDonald in 0:06:55.160 --> 0:06:57.880 the studio today. Great to have you here, and I 0:06:57.920 --> 0:07:00.440 want to go right to where Damien was. You had 0:07:00.480 --> 0:07:03.600 my essay of the Year two years ago where you 0:07:03.680 --> 0:07:08.880 walk through in about twelve paragraphs the wall of money 0:07:09.360 --> 0:07:10.440 that's out there. 0:07:10.960 --> 0:07:12.280 It hasn't changed, has it. 0:07:13.000 --> 0:07:16.800 Well, you know what's fascinating Tom. In the last two 0:07:16.800 --> 0:07:21.360 to three weeks. The rrp's coming down again and we 0:07:21.440 --> 0:07:24.560 don't have that release valve that we've normally have had. 0:07:24.960 --> 0:07:27.680 So in the last couple of weeks something has changed 0:07:27.680 --> 0:07:33.720 a little bit because that's the liquidity really, juggernaut is 0:07:33.760 --> 0:07:35.360 the RP. That's been the case. 0:07:35.160 --> 0:07:36.160 For a long se r RP. 0:07:36.320 --> 0:07:39.960 For Lisa Miteo the offensive a reverse repo facility. 0:07:40.000 --> 0:07:41.480 Oh good, And so I. 0:07:41.440 --> 0:07:43.720 Have no idea what that is, Lisa, So stay with it. 0:07:43.760 --> 0:07:45.560 So it's McDonald, it's going to go with it. 0:07:46.040 --> 0:07:47.960 But you know, as a former Lehman trader, I just 0:07:47.960 --> 0:07:50.160 want to say, I tell my wife wants some money 0:07:50.200 --> 0:07:52.280 if we sell a million books will break even on 0:07:52.320 --> 0:07:53.200 our Lehman stock. 0:07:53.480 --> 0:07:55.080 Right, that's good, Yeah, thank you. 0:07:56.640 --> 0:07:59.520 But but to get back to liquidity and Lehman and 0:07:59.560 --> 0:08:02.600 what's happened now, this is you're gonna love this time. 0:08:02.720 --> 0:08:05.520 We did an ideas dinner in San Francisco two weeks 0:08:05.520 --> 0:08:08.600 ago and I was with some of the big family 0:08:09.120 --> 0:08:12.040 CIOs that run money for them in the valley, for 0:08:12.120 --> 0:08:15.400 the big AI type players, and what they said was, 0:08:15.920 --> 0:08:18.440 you know, when academics look at liquidity, they look at 0:08:18.440 --> 0:08:21.880 the RP. The guys in the valley that are tracking momentum, 0:08:21.960 --> 0:08:29.200 they track meticulously these fifteen verticals of tertiary assets versus 0:08:29.640 --> 0:08:33.280 versus established. All that means in English is say arc 0:08:33.360 --> 0:08:37.960 stocks versus the queues, or say companies with ten billion 0:08:38.000 --> 0:08:39.960 market caps and no sales. That's another one. 0:08:40.040 --> 0:08:42.520 Right, is the money gonna move? The wall of money 0:08:42.559 --> 0:08:45.200 that you identified, is it going to move? 0:08:45.280 --> 0:08:47.920 Okay, So this gets back to my point. The tertiary 0:08:47.960 --> 0:08:51.400 assets the last ten days have been starting to underperform 0:08:51.600 --> 0:08:55.720 established solana versus bitcoin. So that tells you the wall 0:08:55.760 --> 0:08:58.920 of money is receding, and it also lines up with 0:08:58.960 --> 0:09:03.520 the decline in the So something's going on. Liquidity is 0:09:03.559 --> 0:09:06.480 drying up to some extent. This is just the genesis 0:09:06.520 --> 0:09:06.720 of it. 0:09:06.760 --> 0:09:09.080 Well, Larry, I'd love to ask you what wine they 0:09:09.080 --> 0:09:11.720 were serving at that dinner with all the Silicon Valley types. 0:09:11.720 --> 0:09:13.560 But you know we're not gonna talk about California Cats. 0:09:13.600 --> 0:09:16.320 Total assets at the four world's four largest central banks. 0:09:16.320 --> 0:09:18.160 I'm talking the FED, the ECB, the BOJ and the 0:09:18.160 --> 0:09:21.080 PBOC has been in decline since March of twenty twenty two, 0:09:21.280 --> 0:09:24.440 when the Feds first started raising rates. But that seems 0:09:24.440 --> 0:09:26.439 to be declining. I just put out of deck this morning. 0:09:26.480 --> 0:09:28.280 I have a great shart in them. Yeah, toot my 0:09:28.280 --> 0:09:31.120 own horn here. But it looks like central bank boundaries 0:09:31.120 --> 0:09:33.200 are going to start expanding yet again. Is that a 0:09:33.200 --> 0:09:37.959 good thing or a bad thing? Oh my god, sorry, Softball. 0:09:38.160 --> 0:09:40.080 It's going to be a good It'll be a good 0:09:40.080 --> 0:09:42.560 thing if we're in a crisis, right, it'll be a 0:09:42.559 --> 0:09:44.760 bad thing if if if we're at this point in 0:09:44.760 --> 0:09:46.560 the cycle, it's going to reaccelerate inflation. 0:09:46.840 --> 0:09:48.840 Larry, this is a good point then, folks. It's the 0:09:48.840 --> 0:09:52.200 Bear Trapp Report. You can get it from mister McDonald's people. 0:09:52.240 --> 0:09:55.359 He doesn't talk to anybody by appointment. 0:09:55.760 --> 0:09:57.679 Larry, are we in a crisis. 0:09:59.080 --> 0:10:02.720 We're in a We're in a situation where we're going 0:10:02.800 --> 0:10:05.720 to have a reacceleration of inflation and that's going to 0:10:05.720 --> 0:10:06.480 create a crisis. 0:10:06.600 --> 0:10:07.280 Mister Sas. 0:10:07.520 --> 0:10:09.880 Yeah, FX reserves and central banks, let's talk about that. 0:10:09.920 --> 0:10:11.640 We want to get into a plumbing of these markets, right. 0:10:11.679 --> 0:10:13.640 I mean, it seems that you know, reserve levels at 0:10:13.720 --> 0:10:16.160 least you look at China obviously, but broadly speaking, it 0:10:16.200 --> 0:10:18.760 looks like central banks outside of the US they don't 0:10:18.760 --> 0:10:20.920 need to hold US treasuries anymore. I mean, what else 0:10:20.960 --> 0:10:22.319 where do they go? What do they I mean, is 0:10:22.360 --> 0:10:26.200 there no demand for liquid you know, cash like assets 0:10:26.240 --> 0:10:27.840 from central banks anymore? Is that the climbing? 0:10:28.360 --> 0:10:30.520 Yes, and so we have less friends in the world. 0:10:30.600 --> 0:10:33.920 That's why the Cent has been out there with the 0:10:33.960 --> 0:10:36.600 bag of tricks. So when you talk to we have 0:10:36.640 --> 0:10:40.080 a business on Bloomberg, a Bloomberg chat with some of 0:10:40.120 --> 0:10:41.800 the largest hedge funds in the world. One of the 0:10:41.840 --> 0:10:44.080 things I've been talking about in the last six weeks 0:10:44.160 --> 0:10:47.880 is the Cents bag of tricks, where they're using a 0:10:47.960 --> 0:10:52.400 number of new facilities to try to replace foreign treasury 0:10:52.440 --> 0:10:53.520 buying because. 0:10:53.280 --> 0:10:55.360 What of their facilities look like like what else is 0:10:55.400 --> 0:10:55.839 there gold? 0:10:56.880 --> 0:10:59.480 Well, you know, using forcing the banks to buy more 0:10:59.480 --> 0:11:02.680 treasuries one, that's just to keep it simple. But when 0:11:02.679 --> 0:11:04.480 you force the banks to buy more treasuries than that, 0:11:04.600 --> 0:11:07.800 in essence, that's financial repression and the only way out 0:11:07.800 --> 0:11:09.320 of a thirty seven This is what we talked about 0:11:09.320 --> 0:11:11.920 in our book how to Listen to market Speak. The 0:11:11.920 --> 0:11:14.240 only way out of a thirty seven trillion dollar debth 0:11:14.280 --> 0:11:18.000 hole is massage interest rates below the rate of inflation. 0:11:18.440 --> 0:11:23.239 Financial repression. That's very bullish for hard assets. That's why gold, bitcoin, 0:11:23.320 --> 0:11:26.320 and platinum pladium are starting to outperform. 0:11:25.960 --> 0:11:28.199 The silver miners. Tom The silver miners. 0:11:27.960 --> 0:11:31.120 Are up sixty two percent this year versus the fangs 0:11:31.120 --> 0:11:35.520 are only up five hard assets versus financials stock market up. 0:11:35.600 --> 0:11:38.480 I mean, it's a grind higher, but it's a constructive grind, 0:11:38.840 --> 0:11:42.000 and you know, earning season, they're delivering the goods, but 0:11:42.080 --> 0:11:44.960 it's like twelve stocks are getting done and the rest 0:11:44.960 --> 0:11:47.880 are flat on their back. Our listeners that they're not 0:11:47.920 --> 0:11:51.280 as esoteric as SaaS Hour or you our listeners and 0:11:51.360 --> 0:11:54.360 viewers are. They're just like, okay, into the weekend, What 0:11:54.640 --> 0:11:57.360 God's name do I do with my four oh one 0:11:57.440 --> 0:11:58.520 k speak. 0:11:58.640 --> 0:12:02.280 Okay, First of all, if you look at the Bloomberg terminal, 0:12:02.559 --> 0:12:07.240 which I do twenty times a day, volatility in August 0:12:07.640 --> 0:12:11.199 in September seasonally it's a trouble spot. You want to 0:12:11.200 --> 0:12:17.360 be raising cash into very for volatility. Probably the worst 0:12:17.440 --> 0:12:19.440 or I guess the best month of the year for 0:12:19.880 --> 0:12:22.360 is the Vicks in August, right the second best might 0:12:22.400 --> 0:12:25.160 be September. So for people listening to us right now, 0:12:25.160 --> 0:12:26.880 that's when you want to raise cash and you want 0:12:26.920 --> 0:12:29.800 to put money to work when there's real fear like 0:12:29.840 --> 0:12:31.520 we had in April and last August. 0:12:31.800 --> 0:12:33.439 Last August we had a. 0:12:33.240 --> 0:12:35.560 Very meaningful drawdown, and so you want to have raise 0:12:35.640 --> 0:12:37.640 cash and be there for the pain. 0:12:37.679 --> 0:12:39.760 How do you build balance and fixed and come portfolios today? 0:12:39.760 --> 0:12:41.600 I mean if no one's buying treasuries, and I mean, 0:12:41.840 --> 0:12:43.840 let's be clear, if you look at em local debt 0:12:43.840 --> 0:12:45.880 for example, which is you know, you know it should 0:12:45.920 --> 0:12:48.199 be yielding way over US treasury, it's only one hundred 0:12:48.200 --> 0:12:49.520 and eighty three BIPs over. 0:12:49.880 --> 0:12:50.439 I don't know that. 0:12:50.600 --> 0:12:53.079 No, it's almost have one of its tightest done record. 0:12:53.120 --> 0:12:54.800 And so I mean if you look at em US 0:12:54.800 --> 0:12:58.079 ten year, you spreads. I mean fourteen of eighteen fourteen 0:12:58.120 --> 0:13:00.680 of eighteen countries are well below the three or average. 0:13:00.679 --> 0:13:02.880 So I mean, just thinking out loud here, what else 0:13:02.880 --> 0:13:03.320 do you buy? 0:13:03.679 --> 0:13:03.959 Right? 0:13:04.400 --> 0:13:07.960 The EMLC, the Emerging Market Local Currency bond fund is 0:13:08.080 --> 0:13:12.760 outperforming the TLT Treasury Fund in a one year, three year, 0:13:12.800 --> 0:13:14.960 and five year bucket air we got. And that's that 0:13:15.080 --> 0:13:16.920 weakness in the dollar we've seen this year. 0:13:17.000 --> 0:13:18.160 I'm almost out of time. 0:13:18.480 --> 0:13:22.680 Your charm is you have an optimism about the American system. 0:13:23.080 --> 0:13:25.679 People say, always gloomy in that and it's a Friday 0:13:25.720 --> 0:13:29.800 gloom crew, except you believe in the system. Okay, what 0:13:29.840 --> 0:13:32.760 do we do after Trump? What does our financial system 0:13:32.840 --> 0:13:35.920 do after the day to day shocks that we receive 0:13:36.000 --> 0:13:36.920 from President Trump? 0:13:36.960 --> 0:13:38.880 So that's what we talk about in our book, Tom, 0:13:39.160 --> 0:13:42.920 We're talking about a whole new portfolio construction. People have 0:13:43.000 --> 0:13:45.440 to get along in nineteen sixty eight to eighty one 0:13:45.559 --> 0:13:50.440 type portfolio where your long companies that own assets. You're 0:13:50.800 --> 0:13:54.040 all kinds of metals, copper copper companies. Right now, the 0:13:54.160 --> 0:13:58.920 COPX is in the perfect spot. Globally, we're undersupplied. The 0:13:59.120 --> 0:14:02.400 artificial intelligen's boom, Tom, we have a power grid in 0:14:02.440 --> 0:14:05.680 the United States that needs a two trillion dollar rebuild, 0:14:05.920 --> 0:14:07.760 all of these growth assumption shumpsons. 0:14:07.800 --> 0:14:10.600 Can you seven this morning? Can you kill? 0:14:10.600 --> 0:14:14.280 But I want to own the COPX because that's going 0:14:14.360 --> 0:14:16.320 to give you the power to fund AI. 0:14:16.800 --> 0:14:20.320 I know you sold the movie rights to the latest book, DiCaprio. 0:14:20.560 --> 0:14:21.680 Is that what we're looking for? 0:14:23.040 --> 0:14:26.120 Well, you know, the latest book right now number number 0:14:26.120 --> 0:14:28.720 within the top three on Amazon right now. How to 0:14:28.800 --> 0:14:31.520 listen when market speak top three again. By the way, 0:14:31.560 --> 0:14:33.680 I'm really proud to I've got two books right now, 0:14:33.800 --> 0:14:35.880 Larry McDonald, two books in the top forty. 0:14:36.040 --> 0:14:36.880 Okay, let's good. 0:14:36.960 --> 0:14:40.920 Lisa Motel's books number one and Glenden Free Breakfast. Lawrence McDonald, 0:14:41.160 --> 0:14:42.160 thank you so much. 0:14:42.280 --> 0:14:46.200 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:14:46.200 --> 0:14:49.520 starting at seven am Eastern on Applecarplay and Android Auto 0:14:49.640 --> 0:14:52.600 with the Bloomberg Business app. You can also listen live 0:14:52.680 --> 0:14:56.240 on Amazon Alexa from our flagship New York station. Just 0:14:56.320 --> 0:15:00.120 say Alexa play Bloomberg eleven thirty Bloomberg reporting. 0:15:00.680 --> 0:15:03.920 Trump Putin meeting in the next few days. Russia and 0:15:04.080 --> 0:15:07.640 US agreed on the place for a potential meeting between 0:15:07.640 --> 0:15:11.120 the presidents but won't announce it yet. We're here to 0:15:11.160 --> 0:15:14.760 break news. They'll be holding that at dan Tanabaum summer place. 0:15:15.080 --> 0:15:15.840 He joins us. 0:15:15.840 --> 0:15:19.960 Now from Oliver Wyman, Dan, you're sort an expert on this, 0:15:20.080 --> 0:15:22.280 I mean at Oliver Wyman, between you and Hugh von 0:15:22.360 --> 0:15:29.320 steinas it's shocking expertise about inside baseball between the United 0:15:29.360 --> 0:15:34.440 States and Russia. What's your observation it would be the 0:15:34.480 --> 0:15:36.960 best thing for mister Trump to bring up. 0:15:38.800 --> 0:15:42.760 Well, firstly, Tom and we haven't planned for the meeting 0:15:42.800 --> 0:15:47.880 here yet. There isn't really a good reason to even 0:15:48.000 --> 0:15:51.880 have this summit. Let's remember there's been threat after threat 0:15:52.080 --> 0:15:54.760 that President Trump has made towards the Russian government, towards 0:15:54.840 --> 0:15:58.600 President Putin, decease hostilities, to work towards the ceasefire. They 0:15:58.640 --> 0:16:01.400 haven't done any of that. Today day was actually supposed 0:16:01.400 --> 0:16:04.760 to be a day where the President was to announce sanctions, 0:16:04.800 --> 0:16:07.360 which you know, by my account, there have been zero 0:16:07.480 --> 0:16:10.800 designations by the US government with respect to Russia since 0:16:10.840 --> 0:16:13.960 Trump has taken office again. So to give this summit 0:16:14.120 --> 0:16:16.560 with Putin in the first place sends really the wrong 0:16:16.600 --> 0:16:21.120 message because Russia hasn't done anything favorably towards ending the conflict. 0:16:21.400 --> 0:16:23.520 Do we have leverage? 0:16:23.840 --> 0:16:26.680 We absolutely do. I mean, it is ironic that the 0:16:26.720 --> 0:16:29.240 President has done more to hurt the Swiss economy than 0:16:29.280 --> 0:16:31.400 the Russian economy the last six months. 0:16:32.160 --> 0:16:33.760 There absolutely is leverage. 0:16:33.840 --> 0:16:36.400 The focus on India, for instance, in trying to get 0:16:36.400 --> 0:16:40.040 them to stop purchasing Russian oil by using tariffs, which 0:16:40.080 --> 0:16:43.280 really will enrich the US at the cost of Ukraine. 0:16:43.440 --> 0:16:46.440 There's primary and secondary sanctions that could be used on 0:16:46.480 --> 0:16:49.520 Indian entities to essentially threaten to cut them off from 0:16:49.560 --> 0:16:52.960 access to the US economy, a far greater threat if 0:16:52.960 --> 0:16:55.560 the objective is to get them to stop buying Russian oil. 0:16:55.840 --> 0:16:56.880 So the leverage is there. 0:16:56.960 --> 0:16:59.200 The President hasn't done anything yet. 0:16:59.200 --> 0:17:01.080 Dan, And part of the press and strategy was to 0:17:01.200 --> 0:17:04.320 increase domestic manufacturing here at home. We know that Oliver 0:17:04.400 --> 0:17:07.200 Wyman one of the most successful management consulting firms here 0:17:07.200 --> 0:17:09.200 in the US. And then I see your note and 0:17:09.240 --> 0:17:12.400 I look at this word and the quotes Empanada. Everyone 0:17:12.520 --> 0:17:16.720 makes promises and never actually does anything. Is that what 0:17:16.800 --> 0:17:20.520 you're telling clients right now? And Panada, I'm. 0:17:20.359 --> 0:17:21.000 Not telling them. 0:17:21.040 --> 0:17:23.960 Another media outlet had actually coined that the other day 0:17:24.080 --> 0:17:26.600 but love I think about it, some of the scale 0:17:26.640 --> 0:17:31.200 of these announcements of investment in the US are fairly high. 0:17:31.840 --> 0:17:35.040 You haven't seen anyone really moving on some of these 0:17:35.080 --> 0:17:38.680 committed investments thus far, and from what we've seen going 0:17:38.720 --> 0:17:42.160 back to the first Trump term, no one's really validating 0:17:42.200 --> 0:17:45.280 that these investments have been made good on. So it 0:17:45.320 --> 0:17:48.000 does seem like some of my clients in an attempt 0:17:48.080 --> 0:17:51.639 to curry favor, to stay out of negative focus of 0:17:51.680 --> 0:17:56.360 the administration or announcing deals. They may be serious about them, 0:17:56.400 --> 0:18:00.159 but when you see hundred six hundred billion dollar investments 0:18:00.520 --> 0:18:04.320 over however long a time horizon, I'm not since the 0:18:04.359 --> 0:18:06.040 companies are going to make good on all of these. 0:18:06.200 --> 0:18:09.840 This is sakermer Commune Tokyo for Bloomberg folks. The Prime 0:18:09.880 --> 0:18:13.520 Minister of Japan is hoping to stay on as calls 0:18:13.560 --> 0:18:17.439 grow for him to exit, and part of it is 0:18:17.520 --> 0:18:22.359 because of the deal we did with Japan that's not 0:18:22.520 --> 0:18:27.160 in writing and open to completely polarized interpretation. 0:18:27.359 --> 0:18:30.919 I mean, that's what it challenge. We have frameworks, we 0:18:31.000 --> 0:18:34.560 don't have specifics. Even on the tariff strategy, there's a 0:18:34.600 --> 0:18:37.959 forty percent tariff on transhipped goods. There's no guidance out 0:18:38.000 --> 0:18:41.359 of the US government on what even constitutes transhipt goods. 0:18:41.680 --> 0:18:44.000 So you take all of these together, there's still a 0:18:44.040 --> 0:18:46.959 ton of uncertainty for my clients, for the market on 0:18:47.080 --> 0:18:50.160 what actually will be moving forward. And we've seen there's 0:18:50.200 --> 0:18:53.000 a tendency to pull some of these deals away to 0:18:53.119 --> 0:18:56.520 readdress them going forward. So there's not really smooth air 0:18:56.600 --> 0:18:57.720 that companies are seeing. 0:18:57.920 --> 0:19:00.160 So Dan, I mean, then, but then correctly if I'm wrong. 0:19:00.240 --> 0:19:02.560 I mean this effective tax rate that everybody's talking about 0:19:02.560 --> 0:19:05.320 fifteen percent, sixteen to twenty percent, you know, I mean, 0:19:05.640 --> 0:19:07.879 how are people coming up and actually calculating that with 0:19:08.119 --> 0:19:10.359 any confidence? Is it a range in your mind? I mean, 0:19:10.440 --> 0:19:12.200 is it fifteen to twenty? Is a ten to fifteen? 0:19:12.240 --> 0:19:13.080 How do you look at things? 0:19:13.680 --> 0:19:16.520 I mean, that is the challenge is the movement is 0:19:16.600 --> 0:19:19.280 so great that trying to take a look at some 0:19:19.760 --> 0:19:23.440 of what this go forward taxes look like is complicated. 0:19:23.520 --> 0:19:27.040 What I'm looking at, probably more closely, are the losses 0:19:27.080 --> 0:19:29.400 that businesses in the US have been announcing in their 0:19:29.400 --> 0:19:32.359 earnings over the last few weeks, because that seems to 0:19:32.359 --> 0:19:35.199 be a bit more real as at least a looking 0:19:35.280 --> 0:19:39.520 backwards issue to try and go where ultimately companies can 0:19:39.600 --> 0:19:42.040 try and recoup some of these losses going forward in 0:19:42.040 --> 0:19:43.399 the form of price increases. 0:19:44.040 --> 0:19:46.800 Dan, if you do have the Trump Putin meeting at 0:19:46.840 --> 0:19:50.800