Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordernt. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
Speaker 2: from our global headquarters in New York City. We are
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Speaker 2: Terminal and the Bloomberg Business app. The Ark and Vest
Speaker 2: CEO Kathy would one of Tesla's biggest spores, the ev maker,
Speaker 2: the top holding in her flagship Arc Innovation ETF, has
Speaker 2: this to say, I do not understand why investors are
Speaker 2: voting against Elon's pay package when they and their clients
Speaker 2: would benefit enormously if he and his incredible team meet
Speaker 2: such high goals. Kathy joined us now for more. Kathy,
Speaker 2: thanks for making some time for us this morning. Good
Speaker 2: morning to you all. Do you think, Kathy, the incentives
Speaker 2: are well alive?
Speaker 3: Yes, we do.
Speaker 4: I do not believe any company anywhere near this size
Speaker 4: has ever delivered a compound annual rate of growth for
Speaker 4: ebit dot, which is a bottom line number of forty
Speaker 4: one percent over ten years. No company has done that,
Speaker 4: so yes, indeed the incentives are aligned. If he and
Speaker 4: his team are able to deliver on that number, the
Speaker 4: stock is going to outperform enormously.
Speaker 5: Kathy, if by chance this proposal is rejected, would you
Speaker 5: consider shedding some of your Tesla position.
Speaker 4: So I'm happy that the prediction markets are at ninety
Speaker 4: to ninety five percent in terms of this is going through,
Speaker 4: so we don't have to think about that clearly. If
Speaker 4: Elon left, we think about it in two ways. One
Speaker 4: we think robotaxis. He has them at the starting gate
Speaker 4: as of June and now they're rolling out, and that
Speaker 4: AI project is well underway.
Speaker 3: If he had left five years ago, three years ago,
Speaker 3: it probably.
Speaker 4: Wouldn't be anywhere near where it is. What we now
Speaker 4: think though, is in order to capitalize on humanoid robots,
Speaker 4: which that's a much more difficult project. That yes, Elon's
Speaker 4: brilliance and the team he has attracted around him are
Speaker 4: going to be necessary to pull that off. Our price
Speaker 4: target twenty six hundred dollars in twenty thirty is ninety
Speaker 4: percent of that valuation is robotaxi, we have very little
Speaker 4: for humanoid robots. If humanoid robots evolve as quickly as
Speaker 4: Elon things, now remember that's Elon time. But he already
Speaker 4: has a running start because robotaxis are robots, they're electric,
Speaker 4: they're powered by AI. Those are the three innovation platforms
Speaker 4: that will power humanoid robots as well. So he's ahead
Speaker 4: of the game on that one as well. But I
Speaker 4: do believe he's the right leader to bring that part
Speaker 4: of the story to life as well.
Speaker 6: Kathy.
Speaker 2: I've got to answer you this though, to follow up
Speaker 2: on Lisa's question. If you wouldn't sell, if he wasn't CEO,
Speaker 2: then why should we pay him that much to be
Speaker 2: the CEO.
Speaker 4: What I'm saying is we would feel comfortable with robotaxi
Speaker 4: part of the model, but we would not be able
Speaker 4: to build with confidence the humanoid robot part of the model.
Speaker 4: So over time, of course, as the story would depend
Speaker 4: more and more on that leg of the story, we
Speaker 4: would be taking our position down.
Speaker 5: You talked earlier, Kathy, in the past couple of days
Speaker 5: about this reality check that's going on in the tech sector,
Speaker 5: and I understand that Tesla is sort of in its
Speaker 5: place that you do hold them for the long term.
Speaker 5: How do you understand the reality check that's currently going
Speaker 5: on within a lot of the biggest tech stocks and
Speaker 5: the sense of skepticism about whether they can keep growing
Speaker 5: at that rate versus the long term bullish bet.
Speaker 4: You know, I'm really happy that there is so much
Speaker 4: skepticism out there. Anyone who went through the late nineties
Speaker 4: will remember there was no skepticism, and we had valuations
Speaker 4: based on the number of eyeballs on a website maybe
Speaker 4: ten years from then. We're not seeing that right now,
Speaker 4: we are seeing Wait a minute, they're spending a lot
Speaker 4: of money on these data centers. This is a little
Speaker 4: bit of a different story than I was investing in,
Speaker 4: certainly in terms of when I say I the average
Speaker 4: investor was investing in with the mag six, those were
Speaker 4: just cash cows and had huge cash positions. Something's changing here.
Speaker 4: It's making the typical investor a little more i'll say, skeptical.
Speaker 4: This is not just the cash register ringing anymore. This
Speaker 4: is wait, a big bet on the future. So I'm
Speaker 4: happy there's skepticism.
Speaker 3: I think it's a good thing.
Speaker 5: Are you buying right now? Are you seeing the skepticism
Speaker 5: as a chance to build some of your portfolio.
Speaker 4: Oh sure, you know, And probably the most undervalued part
Speaker 4: of our portfolios is in life sciences healthcare, because we
Speaker 4: think that is going to present the most profound application
Speaker 4: of AI out there, and yet it is highly underappreciated
Speaker 4: because you know, healthcare analysts aren't comfortable with tech, and
Speaker 4: tech analysts aren't comfortable with healthcare. And you know, we've
Speaker 4: got a very siloed ecosystem in terms of the way
Speaker 4: research is done at ARC. We're very focused on the
Speaker 4: technologies first and how they're going to scale a sectors.
Speaker 4: So our analysts are organized by technology and we think
Speaker 4: there's a huge inefficiency there.
Speaker 2: Stay with us. More Bloomberg surveillance coming up after this
Speaker 2: of principle asset management writing where there are threats to
Speaker 2: the risk on stands, particularly amidst lofty valuations. Fundamentals continue
Speaker 2: to underpin markets. Seema joint us Now for more Seema,
Speaker 2: welcome to the program. Meta last week, Palan, AMD and
Speaker 2: now quoll Com all reporting fairly decent numbers for most
Speaker 2: of them, and this equity market has pushed back. What's
Speaker 2: the signal you take from that?
Speaker 3: Hi, John, Thanks having on.
Speaker 7: Yeah, it's been really interesting this earning season to see
Speaker 7: how the market is punching companies even as they're continuing
Speaker 7: to deliver, And I think that speaks to a lot
Speaker 7: of skepticism within the market, which is certainly started to
Speaker 7: really gain momentum I think within the last few weeks
Speaker 7: as well, probably around the size, you know, the kind
Speaker 7: of the size of numbers that we're seeing with regards
Speaker 7: to the A cavax, the hope that these companies are
Speaker 7: really going to continue to promise on some of the
Speaker 7: productivity gains that they.
Speaker 3: Have, so I think the jury is out.
Speaker 7: What we're trying to do is look through some of
Speaker 7: the noise, some of the fears that may be around
Speaker 7: and thinking, want to look look at the earning story,
Speaker 7: look at the macro backdrop.
Speaker 3: There are concerns, absolutely, but in terms.
Speaker 7: Of the data that we're getting through from companies, we
Speaker 7: still have some confidence that this economy can continue to
Speaker 7: perform and companies accroad a broad spectrum can also continue
Speaker 7: to perform too.
Speaker 2: Or say, well, let's talk about some of the good
Speaker 2: news in the last day or so, I some services
Speaker 2: a nice ubside surprise. Do you think that's a sign
Speaker 2: of things to come in our future.
Speaker 7: I'm not sure it's necessarily a sign of things to come.
Speaker 7: And when we're we're taking a step back and we're
Speaker 7: looking at the economy, putting all the data as much
Speaker 7: of it as we have, what we see as an
Speaker 7: economy which is likely to slow down from its current pace,
Speaker 7: is probably going to come down sometime during twenty twenty
Speaker 7: six closer to a trend level. Now that is okay,
Speaker 7: it's not wonderful, but it is still an economy that
Speaker 7: is growing, and so earnings can continue to do well.
Speaker 7: The more concerning pitch, of course, which we have to
Speaker 7: take more notice of, and of course the Fed is
Speaker 7: going to be debating, so much is really around that
Speaker 7: labor market picture. So when we're talking about our forecast,
Speaker 7: we are building in the assumption that the Fed is
Speaker 7: going to continue to deliver some rate cards in order
Speaker 7: to make sure that whatever weaknesses there is in the
Speaker 7: labor market aren't allowed to accelerate. So a lot of
Speaker 7: it is actually resting on this assumption that there continues
Speaker 7: to be some support coming in from policymakers.
Speaker 5: This really goes to the contradiction of the moment where
Speaker 5: you're talking about maybe a slowing in the economy. Some
Speaker 5: people are talking about a reacceleration in the economy, but
Speaker 5: not necessarily in the labor picture. In other words, reacceleration
Speaker 5: of profits from companies that are getting nimble with using
Speaker 5: AI and other efficiencies of scale, while people are not
Speaker 5: finding jobs as easily and wages are not keeping pace.
Speaker 5: As an investor, does that make you more reluctant to
Speaker 5: invest in the United States, or frankly, does it give
Speaker 5: you confidence in the corporate dynamism story of the United States,
Speaker 5: regardless of what happens to the underlying jobs economy.
Speaker 7: It is such an important question, Lisa, and I think
Speaker 7: that question is coming about sooner than people have been anticipating.
Speaker 7: I mean, ultimately, we're in this environment where the structural
Speaker 7: impact of AI both on labor, on wages and then
Speaker 7: general growth and essentially the kind of the bifurcation between
Speaker 7: what's happening in the labor market and earnings growth, and
Speaker 7: it's making it really difficult to try to decipher what
Speaker 7: the new structure of the economy is, what the impact
Speaker 7: is is, and also how the FED is going to
Speaker 7: be responding. In this backdrop, we have to go with,
Speaker 7: I think, clearly diversification, but still this focus on the
Speaker 7: US because it continues to be the most robust, you know,
Speaker 7: the companies with the strongest balance shees continue to play
Speaker 7: out in the US.
Speaker 3: But also at the.
Speaker 7: Same time thinking about where else can we deploy to
Speaker 7: ensure that we are maintaining some kind of diversification against
Speaker 7: the risk that things do start to turn a little
Speaker 7: bit more negative, both from a cyclical side and of
Speaker 7: course on a structural side too.
Speaker 5: So in other words, to sell America trade is over.
Speaker 5: It might be diversify around the edges, but the US
Speaker 5: still is the place that is supposed to be the
Speaker 5: growth engine for the world.
Speaker 3: Is that correct? That is exactly right, So we continue.
Speaker 7: Look, we have skepticism, some concerns I think healthy skepticism
Speaker 7: around the AI story and how these companies are ultimately
Speaker 7: going to deliver, But we do believe in the narrative.
Speaker 3: If you believe in that, then really you should still
Speaker 3: be focused on the US.
Speaker 7: Other countries around the world, specifically Europe for example, just
Speaker 7: doesn't have the same kind of prowess now. At the
Speaker 7: same time, because of those concerns are on AI having
Speaker 7: some diversification in companies across Europe once it maybe can
Speaker 7: leverage on some of the structural benefits that could come
Speaker 7: out from AI. Still, but the other parts of the
Speaker 7: cyclical story is important. And then of course across asset classes.
Speaker 7: So it's not just about regions, but it's about asset classes, equity,
Speaker 7: fixed income, infrastructure, some areas that you can feel some
Speaker 7: safety in this kind of environment.
Speaker 2: See and can we finish on trade? Some key fliers
Speaker 2: on a Supreme Court sounding deeply skeptical of the president's
Speaker 2: broad sweeping trade effort. It remains now I think the
Speaker 2: consensus for you coming into Thursday that these tariffs won't last,
Speaker 2: they'll be struck down by the Supreme Court. How well
Speaker 2: priced is that story, How well understood is it.
Speaker 7: I'm not sure it's necessarily very well understood, But I
Speaker 7: think what the market is assuming here is that even
Speaker 7: if they're struck down, the Trump administration will find alternative avenues.
Speaker 7: So we do, for example, think that trade tariffs are
Speaker 7: old when you're going to rise a little bit further
Speaker 7: from here, even in the event that they're struck off.
Speaker 7: I think the bigger question mark is something you've been
Speaker 7: alluding to just earlier, which is what is a near
Speaker 7: to mimpat in terms of revenues from the fiscal story,
Speaker 7: and what is the impact on the bond market going
Speaker 7: to be. I think that's going to be really the
Speaker 7: focus for the market over the coming months with regards
Speaker 7: to that trade story.
Speaker 2: Stay with us more Bloomberg surveillance coming up after this.
Speaker 2: Let's turn to the Federalist of recent dissents highlighting the
Speaker 2: lack of consensus of that institution as the Central Bank
Speaker 2: struggles with a data drought. The former Kansas City FED
Speaker 2: president as the George joins us now for more. As
Speaker 2: the way, we're just tracking that story with Mike McKay.
Speaker 2: I'm sure you were following along. Do you think's fed
Speaker 2: a reserve is attempting to address a structural problem with
Speaker 2: interest rates?
Speaker 6: Yes?
Speaker 1: I do, Jonathan, and I think that's what makes this
Speaker 1: so challenging for the committee.
Speaker 3: You can't ignore the.
Speaker 1: Story you just heard, which is there's something going on
Speaker 1: in the labor market. Things are moving in a way,
Speaker 1: and yet you can't really put your finger on is
Speaker 1: this change happening in real time? Is this going to
Speaker 1: settle out to a more stable view of what's going
Speaker 1: on with that labor market, particularly when you are looking
Speaker 1: at what I would characterize as easy financial conditions and
Speaker 1: many of the other traditional signs that would go along
Speaker 1: with this labor market data would lead you to think
Speaker 1: something different. So it is a challenging time and those
Speaker 1: cross currents of information and data are making it a
Speaker 1: tough job for the FMC, and it's an.
Speaker 5: Even tougher job for investors to understand how the FOMC
Speaker 5: is going to respond to that data because the reaction
Speaker 5: function doesn't seem clear. You have a lot of descent,
Speaker 5: and you've got a lot of fissures on the committee,
Speaker 5: but you also have, frankly, a question of how much
Speaker 5: they're looking at the unemployment rate versus the actual total
Speaker 5: number of jobs, and how much that's taking priority over inflation.
Speaker 5: Do you have a greater sense of what that reaction
Speaker 5: function is?
Speaker 1: Well, I do not, Lisa, and I think you see
Speaker 1: that in the discussion at the committee level, which is
Speaker 1: to say where are we putting our weight. In September,
Speaker 1: the Committee came out very clearly and said we're putting
Speaker 1: our weight on the labor market. When we see this softening,
Speaker 1: we're inclined to bring our policy rate back to something
Speaker 1: that we are guessing is more normal than where it
Speaker 1: currently sits, and that narrative is held through to two meeting,
Speaker 1: and this meeting, of course we got the question mark,
Speaker 1: I think of whether that narrative would continue. So the
Speaker 1: information coming in and the fact that you don't have
Speaker 1: official data to back up some of those views, it's
Speaker 1: going to make this I think difficult for individual members
Speaker 1: to really reconcile their views and come to terms with that.
Speaker 5: Is this a FED that has a dual mandate still
Speaker 5: or does it have more mandates than that? And I
Speaker 5: wonder if it's also keeping interest rates within a reasonable level,
Speaker 5: especially with the deficit where it is, if that's an
Speaker 5: increasing factor, even if not verbalized in the back of
Speaker 5: people's heads.
Speaker 1: Well, it is the idea that the FED needs to
Speaker 1: keep rates low to assist the federal government's debt position
Speaker 1: is certainly not one of its mandates. Notwithstanding the pressure
Speaker 1: that you see coming from various corners to try to
Speaker 1: accommodate that, it is going to become, I think an
Speaker 1: increasingly difficult issue that will intersect with monetary policy because
Speaker 1: we know that these higher debt levels without some plan
Speaker 1: in place, to bring those deficit spendings down are going
Speaker 1: to put pressure on the Fed. It will put higher
Speaker 1: interest rates in front of them. Inflation issues will begin
Speaker 1: to become more dominant, I think. And so that intersection
Speaker 1: is a very difficult one for a monetary policy group
Speaker 1: that is assigned to judge labor markets and price stability
Speaker 1: in their mandate.
Speaker 2: Aster we do you think will be on December tenth?
Speaker 2: I've got no idea how much dates it will have.
Speaker 2: Do you think we could settle any of these debates
Speaker 2: by the time we get to the middle of next month.
Speaker 1: Well, it doesn't seem likely. And Jonathan, what you hope
Speaker 1: is whenever you're in a period of uncertainty and trying
Speaker 1: to weigh the risk that you don't get an unexpected
Speaker 1: shock to the economy. And again, I don't see anything
Speaker 1: out there that says we resolve this uncertain But I
Speaker 1: think that's why it makes it a difficult time for
Speaker 1: this committee to reconcile views, is because that uncertainty looks
Speaker 1: like it is going to persist for some time.
Speaker 2: So is that another way of saying that race might
Speaker 2: remain on hold for some time, at least until say,
Speaker 2: spring of next year.
Speaker 1: Well, they could, and you're going to have people argue
Speaker 1: for that for sure. But I also think the committee
Speaker 1: will have to wrestle with the narrative of the labor
Speaker 1: market signs of weakening, and that was the beginning of
Speaker 1: their rate cut, So the Chairman's put the markets on
Speaker 1: notice not to presume that that cut is coming. On
Speaker 1: the other hand, if the data, however informal, however pieced
Speaker 1: together it might be, does not change that narrative, they
Speaker 1: could be inclined to continue that cutting cycle.
Speaker 5: As tu. If the Supreme Court overturns the president's use
Speaker 5: of IEPA for tariffs, and you don't have that revenue
Speaker 5: coming in, and that isn't necessarily any kind of discussion
Speaker 5: on the inflationary pressure. If that money gets refunded, do
Speaker 5: you think that gives the incentive to the frenteral reserves
Speaker 5: the FOMC to cut rates more aggressively.
Speaker 3: Well, not necessarily, Lison.
Speaker 1: The reason I think that is because I think this
Speaker 1: throws another log of uncertainty onto the fire. If the
Speaker 1: federal government has to do something different with those tariffs,
Speaker 1: that then raised the prospect of where do we find
Speaker 1: that happening?
Speaker 3: Will it be sectorial.
Speaker 1: Is it going to be in terms of lowering revenues
Speaker 1: immediately or in the long term. It is another, I
Speaker 1: think reminder of why it is so important for policy makers,
Speaker 1: not at the FED, but policymakers that are thinking about
Speaker 1: our fiscal situation to really begin to be more forward
Speaker 1: looking about what we face as a way to lay
Speaker 1: a foundation for future economic growth, because right now we're
Speaker 1: in a bit of a soup that isn't isn't providing
Speaker 1: the kind of foundation that I think we need.
Speaker 2: Stay with us more Bloomberg surveillance coming up after this
Speaker 2: track in the White House, and the President Lisa doesn't
Speaker 2: appear that this is on top of the priority list
Speaker 2: for them this week. The major one in the last
Speaker 2: week has been the last twenty four hours at the
Speaker 2: Supreme Court.
Speaker 5: There's been more commentary about that. Yes, we are hearing
Speaker 5: about ratcheting up the pressure and I'm looking and if
Speaker 5: you're leaving any major airport anywhere around the country, you
Speaker 5: will get to laid at some point. That's basically the
Speaker 5: takeaway here. Nonetheless, the focus really is will the primary
Speaker 5: trade objective get overturned by the top court in the
Speaker 5: United States, and what are the consequences of that.
Speaker 2: This at the moment just background noise. Of course, that
Speaker 2: could change, but certainly at the moment, just kind of
Speaker 2: background noise. John Lieber, if you're RAIS a group is
Speaker 2: in a studio here in New York for more, johnk
Speaker 2: and Mornich, let's start with trade. How instructive was yesterday's
Speaker 2: hearing for you and the team?
Speaker 6: I thought it was.
Speaker 8: I mean, the justices were clearly skeptical of the government's argument.
Speaker 8: So if I'm the Trump administration, I'm not feeling great
Speaker 8: about the ability the fact that the court is going
Speaker 8: to uphold my signature project right now, and if that happens,
Speaker 8: there's a lot of uncertainty in questions that generates, such
Speaker 8: as will there be refunds generated for people who paid
Speaker 8: the tariffs already? And what's the fiscal path going forward?
Speaker 8: Because this is for trillion dollars in revenue over the
Speaker 8: next four years. They'll be able to recreate that wall
Speaker 8: through other methods over time, but there's going to be
Speaker 8: This introduces a big dose of uncertainty into twenty twenty
Speaker 8: six on who's getting tariffs, what does it mean for
Speaker 8: the status of the deals that have been struck with Japan,
Speaker 8: with Korea, with China, with the UK, and I think
Speaker 8: the administration doesn't isn't offering answers to that right now.
Speaker 8: They're hoping the court sides with them. But there's at
Speaker 8: least three conservative justices that looked very skeptical of their
Speaker 8: arguments yesterday, and it does look more today more like
Speaker 8: those tariffs will be struck down than it did two
Speaker 8: days ago.
Speaker 5: How surprised were you that there was such definitive tone
Speaker 5: out of the Supreme Court justices, including those in the
Speaker 5: conservative block of the court give and that pretty much
Speaker 5: most people were expecting that they would okay this, they
Speaker 5: would essentially sign off on it, as they have other
Speaker 5: initiatives by the president.
Speaker 8: Well, if you look at the lower court arguments, they're
Speaker 8: pretty solid. I mean, this is the terroiffs have raised
Speaker 8: a number of questions as the presidential authority. You know,
Speaker 8: there's questions about whether or not the power to regulate
Speaker 8: trade includes the power of attacks. That's something that Neil
Speaker 8: Gorsich was focused on. And then some of these tariffs
Speaker 8: I think are just clearly not related to national security
Speaker 8: at all. You can't put tariffs on Brazil because you
Speaker 8: don't like the way they're treating your political ally and
Speaker 8: then claim that's an economic national security emergency. I think
Speaker 8: there's obviously some tariffs here that are weaker, and there
Speaker 8: are some that are potentially stronger, like the fentanyl tariffs,
Speaker 8: which you could claim is an emergency.
Speaker 5: Is President Trump losing his clutch over the narrative? And
Speaker 5: I say this given that he really dominated the Republican Party,
Speaker 5: But now you have conservative leading justices talking about tariff's attacks,
Speaker 5: which is exactly what he is pushing back against, and
Speaker 5: talking about things that Democrats have been talking about for
Speaker 5: a while. Do you think that this is significant regarding
Speaker 5: a broader shift that you're seeing in the political mindset.
Speaker 8: I think it was only a matter of time before
Speaker 8: we started to see some of the institutions that govern
Speaker 8: the US come back and bite. An executive who's been
Speaker 8: very active and aggressive in his first ten months in office.
Speaker 6: This is his second term.
Speaker 8: He came in with the plan, he came in with
Speaker 8: the people in order to execute on that plan, and
Speaker 8: he's accomplished a lot. He's particularly accomplished a lot in
Speaker 8: foreign policy. But he's going to run into the limits
Speaker 8: of his power at some point. And it's the Supreme
Speaker 8: Court that's the one that's going to be raining him
Speaker 8: back in and I think we saw some evidence of
Speaker 8: that yesterday. I think for investors this is actually an
Speaker 8: important signal because what's this narrative of the US this
Speaker 8: year has been is one of the big questions has
Speaker 8: been is this the US that we know and love?
Speaker 8: Or is something different now? And I think the institutional
Speaker 8: constraints on President Trump is a positive sign for the
Speaker 8: investment community that he can be restrained, that executive power
Speaker 8: is not unlimited, and that the Court still does his job.
Speaker 2: Let's extend this conversation the Supreme Court job. How far
Speaker 2: are they going to take this? Are they going to
Speaker 2: prescribe a refund process? Just how fun will they tyke this?
Speaker 2: The refund process is tough.
Speaker 8: I mean, the court doesn't want to be The Supreme
Speaker 8: Court in particular doesn't want to be the administrator of
Speaker 8: a refund process. There's lots of different ways that this
Speaker 8: could go. They could say everybody who paid a tariff
Speaker 8: so far this year gets a refund and then they
Speaker 8: all get the money back. That seems unlikely, though. What
Speaker 8: looks more likely is that the lower courts are going
Speaker 8: to be charged with administering some kind of refund process.
Speaker 8: We don't know what that looks like. It could be
Speaker 8: the case that individual companies have to sue and say, hey,
Speaker 8: you know there's this law, it's unconstitutional, it's illegal, we
Speaker 8: paid the tariffs, we want our money back, and then
Speaker 8: that works its way through the courts. So that's uncertainty
Speaker 8: that could go for six to twelve months or longer
Speaker 8: next year for those individual companies, even though we know
Speaker 8: at a high level that these tariffs are illegal.
Speaker 2: If this's a guy knife Scott down in Washington day
Speaker 2: say this is going to have to figure out some
Speaker 2: new revenue, why is it going to come from?
Speaker 6: I think?
Speaker 8: I mean, they got plenty of other tools for raising tariffs.
Speaker 8: They're Section one twenty two, which allows I'm sure your
Speaker 8: viewers have all heard these codes by now. It's sectionally
Speaker 8: one twenty two, which allows one hundred and fifty days
Speaker 8: of fifteen percent tariffs. And then there's all these individual
Speaker 8: entry tariffs called the three oh ones. It's how they're
Speaker 8: raising revenue on China. And of course let's not forget
Speaker 8: that some of the most powerful tools that Trump has
Speaker 8: are the sectoral National security tariffs, which are the two
Speaker 8: thirty two. So there's plenty of other tools they have,
Speaker 8: they just have to go through the process of getting there,
Speaker 8: and they haven't yet AIPA.
Speaker 6: It was quick they allowed to give.
Speaker 8: The president a lot of power and allows them to
Speaker 8: change his mind quickly. But these other tools allow a
Speaker 8: little more process and a little more time to put
Speaker 8: into place.
Speaker 5: So it's really good to see you in person. And
Speaker 5: I'm just wondering, when you go back to DC, are
Speaker 5: you going to fly there.
Speaker 6: I'm taking a train. I'm not getting on a plane
Speaker 6: right now.
Speaker 5: I'm just wondering. I'm looking at this and I'm seeing,
Speaker 5: you know, Ronald Reagan, Washington National and seeing LaGuardia and
Speaker 5: seeing pretty much every airport in every major metropolitan area.
Speaker 5: Is this a warning shot from the government essentially saying
Speaker 5: we're going to raise the ante, We're going to make
Speaker 5: you feel this to try to push people to the
Speaker 5: negotiating table sooner.
Speaker 8: Absolutely, And I think the real deadline here it's not today,
Speaker 8: it's not this weekend.
Speaker 6: It's Thanksgiving.
Speaker 8: And you've got millions of American families that are, including mine,
Speaker 8: that's looking forward to traveling on Thanksgiving on a plane,
Speaker 8: and those planes better be flying, and so that means
Speaker 8: the government has to be open by that point. Otherwise
Speaker 8: they're going to have a lot of angry Americans out there.
Speaker 8: So I think that puts a backstop on how long
Speaker 8: this shutdown can end.
Speaker 6: That's two weeks away.
Speaker 8: Still got some time here to negotiate, but they better
Speaker 8: solve this problem by then, or else I'm going to
Speaker 8: be down to the Capitol buility protesting.
Speaker 2: I like that you went to the Washington airports first,
Speaker 2: because this is about inconvencing the polititizens themselves right about
Speaker 2: the rest of the account.
Speaker 6: I mean both to be fair.
Speaker 5: I mean, it's absolutely confise everyone, but they're trying to
Speaker 5: raise the pressure.
Speaker 6: Is this going to work?
Speaker 5: I guess that's my question. Is this going to work
Speaker 5: on the Republicans end? Given the fact that Democrats haven't
Speaker 5: borne the brunt of it so far in the polls?
Speaker 2: Joldn Can we talk about data? What's just data collection?
Speaker 2: Look like, let's say it ends before Thanksgiving because no
Speaker 2: one wants to go through that. I can go with that.
Speaker 2: Let's go with that. I hope that's the case. What
Speaker 2: happens with the dates are after that?
Speaker 6: So you know, in the past. What they've done is
Speaker 6: they've doubled up on data releases when they have the data.
Speaker 8: So they collected the September payroll data, for example, they
Speaker 8: just didn't release it. They haven't collected the October or
Speaker 8: and if the shutdown goes in the next week, they'll
Speaker 8: probably miss the November household survey as well, and so
Speaker 8: if they don't have that data, they can't release it.
Speaker 6: If they haven't done the surveys.
Speaker 8: It's possible they could do the employment survey because that's electronics.
Speaker 8: So the employers fill it out, and they fill it out.
Speaker 6: Over a long period of time.
Speaker 8: It's one of the reasons we have such big revisions
Speaker 8: because it takes a long time to get all the
Speaker 8: employers to fill it out. But you know, there's precedent
Speaker 8: here where they've skipped data releases and then they just
Speaker 8: kind of catch up over time.
Speaker 6: But that is one of the big questions.
Speaker 8: And you've got a whole bunch of other data as well,
Speaker 8: CPI and other crucial data sets that are going to
Speaker 8: be skipped because no one's doing the work right now.
Speaker 2: The question mark about the quality of that data once
Speaker 2: it is collected.
Speaker 6: That's pre existing right. We don't know. I think the
Speaker 6: faith in that data was starting to descride anyway.
Speaker 1: Right.
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