WEBVTT - Tariffs and Geopolitics Impact 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 --> 0:00:21.960 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.320 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.440 --> 0:00:29.880 Kim Dawson walks in the studio of the market lifts 0:00:29.960 --> 0:00:32.360 NaSTA C up nine tenths of a percent. We need 0:00:32.360 --> 0:00:38.199 a Bloomberg Business Flash from IBKR. Lisa Mattail, you got it. 0:00:38.280 --> 0:00:40.560 Yeah, we do have futures advancing traders kind of assessing. 0:00:40.560 --> 0:00:43.800 Presidents from spledge to impose tariffs on all imports of 0:00:43.840 --> 0:00:46.279 steel and aluminum. We were just talking about it. What 0:00:46.320 --> 0:00:48.680 it's doing is pushing up some American companies linked to 0:00:48.680 --> 0:00:51.120 the metals companies like us Steal up three percent, out 0:00:51.120 --> 0:00:53.840 co Op two percent. We have Cleveland Clips up about 0:00:53.840 --> 0:00:57.160 eight percent, NAZAC futures leading the charge up nine tens 0:00:57.200 --> 0:00:59.040 of percent one hundred and ninety seven points. So we 0:00:59.080 --> 0:01:01.640 have Dow futures up a half percent, SMP futures up 0:01:01.680 --> 0:01:04.040 six ten seven percent, the two year yield at four 0:01:04.040 --> 0:01:07.120 point twenty six percent, that's down two basis points at 0:01:07.120 --> 0:01:09.279 the yield other ten you're four point four to eight percent, 0:01:09.319 --> 0:01:12.720 and that's down one basis point to commodities go hold 0:01:12.800 --> 0:01:15.280 rising to a record. Tariff talk kind of added to 0:01:15.280 --> 0:01:17.400 that uncertainty in the financial market. So we have COMEX 0:01:17.480 --> 0:01:20.119 Gold up twenty nine hundred and twenty four dollars an ounce. 0:01:20.480 --> 0:01:22.960 We go to oil Brent crude seventy five dollars a barrel, 0:01:23.080 --> 0:01:26.480 WTI crewed seventy one dollars a barrel. We'll go to 0:01:26.560 --> 0:01:30.000 shares of BP. They're up six seven percent in London. 0:01:30.120 --> 0:01:33.400 Elliott Investment Management said to have built a significant stake 0:01:33.480 --> 0:01:36.160 in the company. And then we go to earnings. McDonald's 0:01:36.200 --> 0:01:39.000 up two percent. Sales rose in the fourth quarter. Yeah, 0:01:39.000 --> 0:01:42.400 growth in international business actually made up for that drop 0:01:42.520 --> 0:01:45.320 in the US. And it's a big week for earnings. 0:01:45.319 --> 0:01:48.200 This week, we're gonna hear from Wendy's, Deer, Applied Materials, 0:01:48.240 --> 0:01:51.320 Coca Cola, Craft Time, CVS and more. That is your 0:01:51.320 --> 0:01:53.360 Bloomberg business flash, David and Tom. 0:01:53.480 --> 0:01:56.200 He adds, I mean I didn't laugh yesterday except one moment, 0:01:56.240 --> 0:01:58.760 and David, I thought of Cam Dawson. It was a 0:01:58.800 --> 0:02:01.320 wonderful dunk, And don't it's commercial. I wish they do 0:02:01.360 --> 0:02:03.880 them all year round. I thought it was great. And 0:02:04.040 --> 0:02:06.800 Starbucks shows up in the middle of the commercial looking 0:02:06.800 --> 0:02:10.440 for a Coriander latte, and I thought of Kim, And 0:02:10.520 --> 0:02:12.320 you go to Starbucks, what do you order? 0:02:12.440 --> 0:02:14.760 If you're asking me about donuts, I will go for 0:02:14.919 --> 0:02:17.080 Public's donuts every day of the week. 0:02:17.160 --> 0:02:18.080 As a Florida Natives. 0:02:18.080 --> 0:02:19.600 This is a Florida supermarket chain. 0:02:20.080 --> 0:02:22.119 It's They're the greatest, do you know it. 0:02:23.200 --> 0:02:26.440 They're like sweeter than Krispy Kreeks. 0:02:26.560 --> 0:02:27.240 It is Florida. 0:02:27.919 --> 0:02:30.440 Okay, thank you, Kim Dawson joining us right now. In 0:02:30.480 --> 0:02:33.720 the equity markets, and you know, I'm looking at year 0:02:33.760 --> 0:02:36.440 to day Dow up four percent, SPX up two and 0:02:36.480 --> 0:02:39.399 a half percent, and Asda. You know, I'm sorry extrapolated 0:02:39.440 --> 0:02:42.400 out it's a double digit ear Do you model a 0:02:42.560 --> 0:02:46.240 double digit twenty twenty five for the equity market? 0:02:46.680 --> 0:02:48.960 We think that it's going to be more like high 0:02:49.000 --> 0:02:52.280 single digits, but there's potential that you can see ten 0:02:52.320 --> 0:02:55.639 percent rallies, ten percent corrections. Our base case for twenty 0:02:55.680 --> 0:02:59.200 five is a wide, choppy range where you could see 0:02:59.280 --> 0:03:01.280 rallies over the course of the year in these sort 0:03:01.320 --> 0:03:04.040 of risk on moments, but that because you're coming into 0:03:04.040 --> 0:03:07.560 the year at such high valuations, you are very much 0:03:07.639 --> 0:03:09.679 primed to have that downside volatility. 0:03:09.680 --> 0:03:12.160 Okay, I'm gonna get volatility. But the answer is right now, 0:03:12.160 --> 0:03:12.799 we're going up. 0:03:13.200 --> 0:03:17.919 Why we're going up because there still is this risk 0:03:18.000 --> 0:03:20.639 on notion that you are going to see a benefit 0:03:20.639 --> 0:03:24.240 from policy out of Washington. You still are seeing earnings 0:03:24.320 --> 0:03:26.680 go up. So if you look at fourth quarter earnings, 0:03:26.840 --> 0:03:29.799 you went into earning season expecting twelve percent growth. You're 0:03:29.800 --> 0:03:32.960 getting sixteen percent growth for the fourth quarter. But watch 0:03:33.040 --> 0:03:36.840 this closely, you're actually seeing twenty five and twenty twenty 0:03:36.880 --> 0:03:39.000 six estimates for the S and P five hundred get 0:03:39.080 --> 0:03:43.800 trimmed just slightly. If that continues, that portends a bit 0:03:43.880 --> 0:03:46.320 more of a choppy sideways market. 0:03:46.720 --> 0:03:49.520 Peter cherw with us from Academy Securities earlier talking about 0:03:49.520 --> 0:03:52.160 how he is kind of staying invested throughout all of 0:03:52.160 --> 0:03:54.280 this uncertainty and the waves of it. How are you 0:03:54.960 --> 0:03:57.200 approaching the likes of what we saw last night when 0:03:57.200 --> 0:03:58.920 the President was on his plane and flow to what 0:03:58.920 --> 0:04:01.800 maybe announced today. So the ups and downs from a 0:04:01.800 --> 0:04:04.000 policy perspective when it comes just to uncertainty, if we 0:04:04.040 --> 0:04:05.240 could charge if we could chart that. 0:04:05.640 --> 0:04:07.800 Yeah, certainly, we think that there's going to be the 0:04:07.880 --> 0:04:09.960 vagaries of the market as we move through the year. 0:04:10.000 --> 0:04:13.080 And the reality is that unless we are thinking that 0:04:13.120 --> 0:04:17.240 these policies have the potential to significantly dent growth, then 0:04:17.400 --> 0:04:21.560 it does warrant you staying optimistic and invested in writing 0:04:21.600 --> 0:04:25.240 out the volatility. So watch things like credit spreads. We 0:04:25.320 --> 0:04:28.480 think credit spreads will be an important indicator of if 0:04:28.480 --> 0:04:31.440 you're seeing growth start to weaken. If they remain contained, 0:04:31.760 --> 0:04:34.520 it means that it's just equity positioning and valuation. 0:04:34.640 --> 0:04:37.279 Polatility takes It's like scarlet food, it takes. 0:04:37.400 --> 0:04:39.000 Credit right there, credit spreads. 0:04:40.080 --> 0:04:41.800 No, thank you, Yeah, thank you. 0:04:43.200 --> 0:04:48.200 L E s Okay, you know I was off last week, 0:04:48.240 --> 0:04:52.520 but noted the fact that you noted as well in 0:04:52.560 --> 0:04:55.400 that in those Michigan data there was the sense of 0:04:56.480 --> 0:04:58.679 consumer anxiety about inflation where it's headed. 0:04:59.040 --> 0:04:59.440 What do you. 0:04:59.360 --> 0:05:02.360 Extrapolate from that? Putting aside all the concerns about the 0:05:02.400 --> 0:05:06.080 politicization of the Michigan server whatever, how worried are you 0:05:06.120 --> 0:05:10.240 about expectations for inflation becoming kind of unanchry run more, it's. 0:05:10.120 --> 0:05:12.240 Certainly something that's on the fed's mind. 0:05:12.240 --> 0:05:15.080 We do think you have to take the inflation expectations 0:05:15.080 --> 0:05:17.400 stated with a huge grain of salt. First, it's very 0:05:17.400 --> 0:05:21.160 correlated to oil prices, so consumers effectively report what they 0:05:21.240 --> 0:05:24.679 see at the pump, even for long run inflation. Second, 0:05:24.880 --> 0:05:28.720 you have this huge divergence between Republican and Democrat reports 0:05:28.720 --> 0:05:33.320 on inflation expectations. We think watch the independence They've been stable. 0:05:33.640 --> 0:05:36.240 Independents are sitting at three point three percent. It's been 0:05:36.240 --> 0:05:37.880 the same for the last few years. 0:05:38.000 --> 0:05:40.960 You've been great about I gotta be in the market, 0:05:41.040 --> 0:05:45.920 I gotta participate. I forget about the David Gurra political 0:05:46.000 --> 0:05:50.440 overlay right now of basically whatever your politics, total chaos. 0:05:50.960 --> 0:05:53.200 I want you to talk right now to someone in 0:05:53.240 --> 0:05:55.920 a four to one K plan who have a three 0:05:56.279 --> 0:05:59.760 or a seven or a longer term perspective, how do 0:05:59.800 --> 0:06:03.320 they maintain given the news flow. 0:06:03.880 --> 0:06:06.960 Well, certainly we think that keeping that long term perspective 0:06:07.160 --> 0:06:10.080 is incredibly important. And the thing that has to come 0:06:10.120 --> 0:06:14.800 with that is an awareness that volatility is opportunity versus 0:06:14.839 --> 0:06:17.880 something to be afraid of, and that this year is 0:06:18.040 --> 0:06:20.640 likely going to have its twists and turns. We're only 0:06:20.680 --> 0:06:22.839 a month and a half in and we've already gotten them. 0:06:23.160 --> 0:06:26.440 Given the starting point of valuations, you are not set 0:06:26.520 --> 0:06:28.599 up to be able to absorb a lot of bad news. 0:06:28.720 --> 0:06:30.800 But that doesn't mean you should run for the hills. 0:06:31.040 --> 0:06:32.880 We still think that there are good things happening in 0:06:32.920 --> 0:06:36.480 the US economy, really strong things happening in US corporate earnings, 0:06:36.520 --> 0:06:39.359 all things that support risk on assets. And see that 0:06:39.440 --> 0:06:42.599 volatility is an opportunity to add instead of something to 0:06:42.680 --> 0:06:43.440 run away from. 0:06:43.480 --> 0:06:45.599 How why does your aperture when it comes to equities now? 0:06:45.640 --> 0:06:48.320 Are you looking overseas or is the uncertainty of the 0:06:48.360 --> 0:06:50.400 time we just mentioning. I like to harp on something 0:06:50.440 --> 0:06:52.920 that's kind of precluding you from doing that, that there's 0:06:52.960 --> 0:06:56.360 just too much of it and that kind of makes 0:06:56.400 --> 0:06:58.320 difficult investing in overseas markets right now. 0:06:58.400 --> 0:07:01.920 Don't look now, but China tech is outperforming US tech. 0:07:02.120 --> 0:07:06.200 And we've seen this that's short, episodic upside volatility in 0:07:06.320 --> 0:07:08.960 China tech over the course of the last few years, 0:07:09.080 --> 0:07:10.880 and you have a big rally and it gives it 0:07:10.920 --> 0:07:13.560 all back up. So it's not for the faint of heart. 0:07:13.840 --> 0:07:17.360 But we are seeing this shift in some leadership where 0:07:17.360 --> 0:07:19.800 we're seeing signs of life out of non US markets. 0:07:20.120 --> 0:07:23.040 We don't think it's sustainable unless you see a major 0:07:23.080 --> 0:07:25.480 dollar bear market. So we think you have to make 0:07:25.480 --> 0:07:29.280 a dollar call to really push into non US markets, 0:07:29.480 --> 0:07:32.400 And right now we're not seeing signs that the dollar 0:07:32.520 --> 0:07:35.280 is imminently topping, so it could be more of a 0:07:35.320 --> 0:07:36.000 short term. 0:07:35.840 --> 0:07:37.680 Trade, but we think you have to be there. 0:07:37.720 --> 0:07:40.520 You have to be looking because of the discounted valuations, 0:07:40.560 --> 0:07:41.720 even though that's not a catalyst. 0:07:41.800 --> 0:07:43.400 So what do you do with MEG seven right now? 0:07:43.440 --> 0:07:46.000 They just reported The basic theme we got from Anna 0:07:46.080 --> 0:07:49.880 Rag and man Deep was they can't keep up with 0:07:50.000 --> 0:07:55.080 the demand for AI. Is the huge investment numbers we're 0:07:55.120 --> 0:07:57.560 talking about. Do you just maintain MEG seven? 0:07:57.840 --> 0:07:59.960 Well, we put out a note this morning that said, 0:08:00.240 --> 0:08:02.760 maybe it's not the MAG seven, but it's the LAG seven. 0:08:03.320 --> 0:08:07.120 The MAG seven has treated below it's fifty day moving average. 0:08:07.160 --> 0:08:11.120 It's starting to show some signs of a weakening trend, 0:08:11.520 --> 0:08:13.560 and if you look within the MAG seven, there's a 0:08:13.640 --> 0:08:17.559 lot of dispersion. So Microsoft has been flat for a year. 0:08:17.760 --> 0:08:22.360 It's gone nowhere because you've been cutting earning sestiments and 0:08:22.400 --> 0:08:25.120 because they've seen such a huge increase in capex. The 0:08:25.200 --> 0:08:30.040 numbers are wild Microsoft has three exits capex over the last. 0:08:30.520 --> 0:08:32.400 Four years since twenty twenty one. 0:08:32.760 --> 0:08:35.480 So it's cash flow has been weaker, but its operating 0:08:35.520 --> 0:08:38.680 profit is very strong. So we think investors are starting 0:08:38.720 --> 0:08:40.920 to lose a little bit of patience with all of 0:08:40.920 --> 0:08:46.320 this capex that hasn't necessarily materialized in significant uplift in returns. 0:08:46.640 --> 0:08:50.480 How do you respond, Cameron Dawson to people that go, 0:08:50.800 --> 0:08:54.959 I can be solid in munis. They're forminal tax free whatever. 0:08:55.000 --> 0:09:00.199 They are like a set versus equity exposure. 0:09:00.240 --> 0:09:03.280 Well as as a firm that builds custom portfolios for 0:09:03.360 --> 0:09:06.120 our clients. It really depends on your liquidity needs and 0:09:06.160 --> 0:09:07.920 your risk toolery like a lawyer. 0:09:08.200 --> 0:09:11.800 Well, our equity's going to outperform fobal tax free. 0:09:11.760 --> 0:09:14.040 Munis over the long run. 0:09:14.120 --> 0:09:20.680 Yes, but the equity risk premium today is extraordinarily tight. 0:09:21.200 --> 0:09:23.760 Okay, so you're in your all beunies this morning. 0:09:24.000 --> 0:09:26.480 No, we haven't. We maintain a balance portfolio. We are 0:09:26.520 --> 0:09:28.679 so fully invested in that would show up. 0:09:28.720 --> 0:09:31.880 I mean, we had a big sign homes dot Com yesterday. 0:09:31.960 --> 0:09:34.679 It's got the lawyer work go away, Kendogs, thank you 0:09:35.000 --> 0:09:36.480 so much with new Edge. 0:09:36.720 --> 0:09:46.880 Right now, you're listening to the Bloomberg Surveillance Podcast. Catch 0:09:46.920 --> 0:09:50.000 us live weekday afternoons from seven to ten a m Eastern. 0:09:50.160 --> 0:09:54.079 Listen on Applecarplay and Android Auto with the Bloomberg Business app, 0:09:54.280 --> 0:09:56.000 or watch us live on YouTube. 0:09:56.320 --> 0:09:59.480 David Gurth and Tom King of Robert D. Kaplan and 0:09:59.520 --> 0:10:05.400 everyone my affinity for his realist international relations. The body 0:10:05.400 --> 0:10:09.600 of work is absolutely jaw dropping. Years ago my book 0:10:09.600 --> 0:10:13.160 of the summer was the Return of Marco Polo's World. 0:10:13.320 --> 0:10:16.760 My book of the year last year, a wonderful two 0:10:16.800 --> 0:10:20.719 hundred and eighty pages, The Loom of Time between Empire 0:10:20.840 --> 0:10:25.880 and Anarchy. He has been ferociously writing Robert T. Kaplan 0:10:26.360 --> 0:10:31.280 and the must read waste Land, A World in Permanent Crisis. 0:10:31.400 --> 0:10:33.120 David Gura with Robert D. 0:10:33.200 --> 0:10:36.439 Kaplan and few bring in sort of reference to history 0:10:36.559 --> 0:10:39.959 and art and writing with original repretashes as well as 0:10:39.960 --> 0:10:41.959 he Robert Caplan. Great to speak with you this morning, 0:10:41.960 --> 0:10:43.959 and I confess I was thumbing through the galley of 0:10:44.000 --> 0:10:46.680 your latest book, Wasteland, A World in Permanent Crisis, while 0:10:46.679 --> 0:10:49.360 I was covering the G twenty Leaders summ in Brazil 0:10:49.480 --> 0:10:50.920 just a few months ago, and it was such a 0:10:50.920 --> 0:10:53.720 strange moment at which we were looking to see what 0:10:53.800 --> 0:10:56.520 President Biden might say or do. He really stepped back 0:10:57.080 --> 0:10:59.200 and didn't say much of anything during the course of 0:10:59.240 --> 0:11:03.080 that that gathering, and we saw kind of the reconfiguration 0:11:03.160 --> 0:11:06.320 in real time of alliances on the ground there in Brazil, 0:11:07.600 --> 0:11:10.360 the role of America being questioned in other countries coming 0:11:10.400 --> 0:11:14.000 together in new ways as a result, help us understand 0:11:14.240 --> 0:11:16.080 the moment that we're in as we hear so much 0:11:16.120 --> 0:11:19.520 about what's going to happen here, to the rules based order, 0:11:20.200 --> 0:11:22.080 to the way things happen for so much time here, 0:11:22.120 --> 0:11:24.520 as we see a President Trump returning to the White 0:11:24.520 --> 0:11:27.320 House and espousing the protections policies we first saw just 0:11:27.760 --> 0:11:28.520 a few years ago. 0:11:29.679 --> 0:11:32.280 Oh, thanks for having me on. I think we're at 0:11:32.280 --> 0:11:36.559 the end of the post war order, post war I mean, 0:11:36.720 --> 0:11:40.400 post World War two, but also a few decades after 0:11:40.480 --> 0:11:43.640 the end of the Cold War. We've had the same 0:11:43.800 --> 0:11:48.840 international order since nineteen forty five. Essentially, the United States 0:11:48.880 --> 0:11:55.760 has been an empire in reality since then. And you 0:11:55.920 --> 0:11:59.679 see it not only with Trump's lack of interest, not 0:11:59.760 --> 0:12:03.120 just you know, making demands on NATO partners, but his 0:12:03.400 --> 0:12:06.720 lack of interest in the Alliance in general, and the 0:12:06.800 --> 0:12:10.079 Alliance of course rose out of the ashes of World 0:12:10.080 --> 0:12:14.000 War Two. We also see it with his attempt to 0:12:14.160 --> 0:12:18.720 gut to close down the US Agency for International Development 0:12:18.960 --> 0:12:23.000 us ai D, because that too, has been a pillar 0:12:23.080 --> 0:12:26.400 of the postwar order, even though most people until a 0:12:26.440 --> 0:12:29.920 few weeks ago didn't really know much about it, because 0:12:29.920 --> 0:12:33.880 it was through us ai D that American foreign aid 0:12:34.360 --> 0:12:38.320 to countries throughout the developing world was channeled. So you 0:12:38.440 --> 0:12:43.080 had hard power through NATO and our Pacific alliances, and 0:12:43.120 --> 0:12:47.680 you had soft power through us ai D. Trump is 0:12:47.760 --> 0:12:51.200 going after all of that his you know, it's not 0:12:51.360 --> 0:12:56.720 that he's an isolationist. That's absolutely wrong. Trump engages with 0:12:56.880 --> 0:13:02.960 the world. What Trump is doing is he's adding another 0:13:03.880 --> 0:13:09.440 layer to manifest destiny. Manifest destiny you used to be 0:13:09.520 --> 0:13:13.000 about America conquering the west from east to west, from 0:13:13.040 --> 0:13:16.679 the East coast to the West coast in the nineteenth century. 0:13:17.000 --> 0:13:21.360 Now he wants to expand manifest destiny north to south, 0:13:21.440 --> 0:13:25.240 from Greenland to the Panama Canal, from the Arctic to 0:13:25.320 --> 0:13:30.079 the Tropics. He sees a world of regional rather than 0:13:30.120 --> 0:13:33.920 an American led post war order. He sees a world 0:13:34.080 --> 0:13:41.520 of regional regional geography based alliances with China, the United States, etc. 0:13:42.679 --> 0:13:44.079 I want to come back to that in a moment, 0:13:44.120 --> 0:13:45.840 but picking up on something you said a moment ago, 0:13:45.880 --> 0:13:47.880 and that is him kicking that leg of the stool, 0:13:48.200 --> 0:13:50.600 the soft power legout from the stool. What are the 0:13:50.640 --> 0:13:54.040 consequences of that? I mean, we've heard from Samantha Power, 0:13:54.080 --> 0:13:57.000 the most recent head of USAID, making the case for 0:13:57.280 --> 0:14:00.240 preserving that organization and keeping its good work goinging a 0:14:00.280 --> 0:14:03.400 tool Gwande who worked there recently as well. I don't 0:14:03.400 --> 0:14:05.640 know how much that's resonating, But what are the consequences 0:14:05.679 --> 0:14:08.080 of losing that focus on soft power? 0:14:09.880 --> 0:14:14.120 I think there are mens really because solt power you 0:14:14.240 --> 0:14:16.840 need when things are not going well, when you're not 0:14:17.000 --> 0:14:19.360 on top of the heat. When you have you know, 0:14:19.480 --> 0:14:24.680 solt power is influence in countries, you know, having connections 0:14:24.720 --> 0:14:29.240 in company, in countries, knowing people because you're working there, 0:14:29.400 --> 0:14:32.720 you're doing things in case of a hostage crisis or 0:14:32.840 --> 0:14:36.040 some sort of crisis, you always have a phone number 0:14:36.040 --> 0:14:39.400 to call people. You know, it's about building relationships and 0:14:39.560 --> 0:14:43.760 all of that would go just the word on AID. 0:14:44.320 --> 0:14:48.240 You couldn't make the case that AID has not been 0:14:48.320 --> 0:14:52.080 managed as well in recent years. However, the way to 0:14:52.160 --> 0:14:55.960 deal with it is the way the tough Republican presidents 0:14:56.000 --> 0:14:59.160 of the past dealt with it, like Ronald Reagan and others, 0:14:59.480 --> 0:15:02.600 by putting it, by fixing it, by putting in real, 0:15:02.760 --> 0:15:06.280 hard nosed business person types to run it. 0:15:07.480 --> 0:15:10.440 Robert Kaplan with his folks in celebration of his new 0:15:10.480 --> 0:15:14.120 effort two hundred some pages waste Land Gera. Read it 0:15:14.160 --> 0:15:17.320 in Brazil. I haven't be honest read it, but top 0:15:17.360 --> 0:15:20.360 of the pile right now. The loom of time from 0:15:20.400 --> 0:15:24.160 Morocco out to Persia was spectacular in my book of 0:15:24.200 --> 0:15:29.520 the Year last year. Robert Kaplan Egdone alluded to this 0:15:29.520 --> 0:15:33.240 this weekend in the Post. But Richard Nixon in nineteen 0:15:33.360 --> 0:15:37.760 sixty two was an author, and then he enjoyed losing 0:15:37.920 --> 0:15:41.160 as governor of California to Pat Brown. He was at 0:15:41.240 --> 0:15:45.840 his bottom. What comes after Trump? Have you framed out 0:15:46.320 --> 0:15:49.320 in your mind that this let's assume he's not going 0:15:49.320 --> 0:15:53.840 for an FDR three terms, But after President Trump, what 0:15:54.160 --> 0:15:55.880 next for our politics? 0:15:59.680 --> 0:16:03.720 We've had? First of all, one of the problems with 0:16:03.800 --> 0:16:09.360 America in terms of American power and America's trajectory is 0:16:09.400 --> 0:16:13.240 that it is is that the center is gone rather 0:16:13.320 --> 0:16:16.840 than a center, right and a center left governing the country. 0:16:17.120 --> 0:16:22.600 Where elect presidential elections were not existential. You now have 0:16:23.000 --> 0:16:28.600 a progressive left and a populist right. Neither seems to 0:16:28.680 --> 0:16:32.680 talk to the other. I think after Trump, what you're 0:16:32.880 --> 0:16:39.360 likely to get is another populist right regime, or go 0:16:39.560 --> 0:16:43.560 back to the progressive left. The real story in American 0:16:43.720 --> 0:16:48.040 politics is the destruction of the center, the destruction of 0:16:48.080 --> 0:16:52.720 the political center, which is partly the result of the 0:16:52.880 --> 0:16:56.200 end of the print and typewriter age and the beginning 0:16:56.280 --> 0:17:03.440 of the digital video era, where where news is not 0:17:03.800 --> 0:17:09.240 in the middle, nuanced. It's all about passion and anxiety 0:17:09.400 --> 0:17:14.520 and short bursts of simplicity through social media. 0:17:14.600 --> 0:17:16.840 And David, I want to point out from Berkeley, Paul 0:17:16.880 --> 0:17:19.879 Pearson and Eric Schuckler. Folks, for those of you in 0:17:19.920 --> 0:17:23.120 the markets where you want one read here, it's Kaplan 0:17:23.840 --> 0:17:27.560 really accessible Wasteland or the Loom of Time and a 0:17:27.560 --> 0:17:30.520 little more dense. Paul Pearson and Eric Schickler, their book 0:17:30.560 --> 0:17:36.000 Partisan Nation is shocking and describing what doctor Kaplan just mentioned. 0:17:36.119 --> 0:17:37.840 I hear you saying that the center is gone, and 0:17:37.840 --> 0:17:39.880 I can't help but think of the poem from which 0:17:39.880 --> 0:17:42.199 your book takes its name of course the Wasteland by Elliot, 0:17:42.200 --> 0:17:44.320 and how that's always been one we read in compliment 0:17:44.359 --> 0:17:47.359 with or in conversation with the second Coming by Yates. 0:17:47.359 --> 0:17:51.640 Of course, center cannot hold. And what I'm very curious 0:17:51.640 --> 0:17:53.920 about is, and I've thought about it over the course 0:17:53.920 --> 0:17:56.480 of the weekend last week as well, is the role 0:17:56.480 --> 0:17:59.159 that Elon Musk and others from the tech industry are 0:17:59.160 --> 0:18:01.400 playing now in the governance of this country and sort 0:18:01.440 --> 0:18:05.400 of setting the policy direction of the United States. It's 0:18:05.440 --> 0:18:07.399 something that you touch upon in the book, but I 0:18:07.440 --> 0:18:09.400 wonder sort of how what we've seen over the course 0:18:09.400 --> 0:18:11.399 of these last four weeks is advanced. You were thinking 0:18:11.440 --> 0:18:15.440 on that relationship between Silicon Valley, what we identify as 0:18:15.760 --> 0:18:19.639 a genius or technical facility, uh, with with managing this country, 0:18:19.640 --> 0:18:22.240 with with setting its direction, and how perilous that might be. 0:18:23.680 --> 0:18:29.159 Yes, The late Harvard political scientist Samuel Huntington said that 0:18:29.240 --> 0:18:33.040 America was always great, not because of its people, but 0:18:33.200 --> 0:18:37.639 because of its institutions, the separation of powers not just 0:18:37.760 --> 0:18:42.400 in Washington, but between a county, federal and state out 0:18:42.440 --> 0:18:45.560 in the out in the countryside. It was institutions that 0:18:45.680 --> 0:18:49.320 made America great, and the sanctity of them. What we're 0:18:49.359 --> 0:18:54.919 seeing with Elon Musk is an erosion of institutions you 0:18:54.960 --> 0:18:58.240 know where think you know, more and more executive orders. 0:18:58.320 --> 0:19:01.320 This didn't start with Trump, It's started with Biden and 0:19:01.440 --> 0:19:05.320 even before that, but more and more executive orders, the 0:19:05.359 --> 0:19:09.560 increasing power of the executive and the executive in more 0:19:09.600 --> 0:19:14.119 and more collusion with oligars, you know, super wit rich people. 0:19:14.160 --> 0:19:15.879 But then over the week so they were all at 0:19:15.920 --> 0:19:20.200 the Super Bowl, Robert Kaplan with what you just said, 0:19:21.119 --> 0:19:24.320 I think everybody of all political persuasions on this morning 0:19:24.359 --> 0:19:29.480 commute across the nation are simply saying, where's the legislature, 0:19:30.160 --> 0:19:34.600 where's the judiciary? Do you assume that there will be 0:19:34.840 --> 0:19:38.160 checks and balances into March or April? 0:19:39.600 --> 0:19:42.399 I'm not sure. I just know you can devise the 0:19:42.440 --> 0:19:46.760 most brilliant constitution in the world, which the founders did 0:19:46.840 --> 0:19:51.120 through the Federalist Papers. But it oh but and they 0:19:51.280 --> 0:19:55.480 said it that we can devise the greatest constitution. But 0:19:55.600 --> 0:19:59.679 it all ultimately comes down to, you know, to human 0:19:59.800 --> 0:20:04.040 ca character, you know, you know, to the stability of people, 0:20:04.160 --> 0:20:10.480 to their ethics. If you have people who are irrational, unethical, 0:20:11.160 --> 0:20:15.560 or are in some way do not have real standing 0:20:15.720 --> 0:20:19.800 moral standing. The best constitution is not going to help you. 0:20:21.160 --> 0:20:24.760 I have seen you recently described as variously here a pessimist, 0:20:25.240 --> 0:20:30.680 a tragic realist, at a Hobbesian. I wonder what gives 0:20:30.720 --> 0:20:33.400 you any optimism here about the continuation of the American 0:20:33.400 --> 0:20:35.639 experience in light of the reading and work that you 0:20:35.680 --> 0:20:37.040 did on this, this latest volume. 0:20:38.080 --> 0:20:41.560 What gives me optimism is that because America is a 0:20:41.600 --> 0:20:47.159 boisterous democracy, it's gone through these periods before, you know, 0:20:48.160 --> 0:20:51.840 stylistically and in other ways, this is not that much 0:20:52.000 --> 0:20:56.880 different from the Jacksonian upheaval of the early nineteenth century, 0:20:56.920 --> 0:21:03.840 when Andrew Jackson, a rough, un roughun unsophisticated on only 0:21:04.000 --> 0:21:08.639 partially ethical of frontiersmen, came out and wiped out the 0:21:08.760 --> 0:21:13.480 regime of the of the very feet aristocratic people from 0:21:13.520 --> 0:21:17.600 Massachusetts and Virginia and the country. The country went on, 0:21:17.720 --> 0:21:21.680 It went onto a new burst of of development and 0:21:21.680 --> 0:21:26.600 and and and and and and dynamism, et cetera. So 0:21:27.920 --> 0:21:31.240 it's a bad bet to give up on the United 0:21:31.280 --> 0:21:32.520 States completely. 0:21:33.160 --> 0:21:36.600 Robert T. Kaplan, I have to talk here about your 0:21:36.640 --> 0:21:39.520 loom of time, and I just got a minute to 0:21:39.560 --> 0:21:42.679 do it. If you were to write an epilogue of 0:21:42.760 --> 0:21:46.520 the Middle East, of Eurasia, from Morocco over to Persia. 0:21:47.080 --> 0:21:50.480 What would you write of today? What? What? 0:21:50.640 --> 0:21:52.840 I what I would write up today in the loom 0:21:52.880 --> 0:21:57.040 of time. I did not cover the Israel Palestine issue, 0:21:57.080 --> 0:21:59.720 and that was good because I probably would have gotten 0:22:00.080 --> 0:22:03.680 all in the book would have been dated. But I 0:22:03.720 --> 0:22:07.080 would constantly. I would obviously have to write about that, 0:22:07.280 --> 0:22:11.640 what has happened in Gaza, and I would just say 0:22:11.640 --> 0:22:14.800 that the big question out there now that Israel is 0:22:14.920 --> 0:22:20.840 dramatically weakened, Hesba lah Hamas and the hooties in North Yemen. 0:22:21.400 --> 0:22:25.119 The biggest question out there is the future of the 0:22:25.160 --> 0:22:29.840 Iranian regime, because if the Iranian regime were to implode 0:22:29.920 --> 0:22:32.919 in some way or a fashion, it would be a 0:22:32.960 --> 0:22:36.200 world historical event that would change the italiaes. 0:22:36.720 --> 0:22:38.719 I got eight more questions. How many did you have? 0:22:39.040 --> 0:22:41.760 Robert Kaplan? Thank you so much. Too short a visit. 0:22:41.800 --> 0:22:44.240 We thought we'd do that, folks, to frame out where 0:22:44.280 --> 0:22:48.359 our X number of days into Trump second administration. Robert 0:22:48.400 --> 0:22:51.800 Kaplan and celebration of waste Land. Ger is the only 0:22:51.840 --> 0:22:53.840 one on the planet has actually read it, which is 0:22:53.960 --> 0:22:54.400 very cool. 0:22:54.440 --> 0:22:56.600 It is very readable and I commend it to everybody 0:22:56.680 --> 0:22:57.480 you as well. 0:22:57.640 --> 0:23:01.000 Tom. Yeah, I can't say enough about his work. I'll 0:23:01.000 --> 0:23:02.880 do that out on social here in the coming days. 0:23:02.960 --> 0:23:06.560