WEBVTT - Musk Mulls Next Move as Stocks Swing Again 0:00:02.520 --> 0:00:10.760 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business Week, 0:00:10.880 --> 0:00:14.720 Daily reporting from the magazine that helps global leaders stay 0:00:14.760 --> 0:00:18.800 ahead with insight on the people, companies, and trends shaping 0:00:18.840 --> 0:00:23.760 today's complex economy. Plus global business finance and tech news 0:00:23.800 --> 0:00:27.800 as it happens. The Bloomberg Business Week Daily Podcast with 0:00:27.960 --> 0:00:31.760 Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.240 --> 0:00:34.599 A couple of stocks making big moves today. Shares an 0:00:34.520 --> 0:00:37.199 Apple fell as much as seven point three percent earlier 0:00:37.240 --> 0:00:39.360 in this session, the stock on track for its biggest 0:00:39.400 --> 0:00:42.279 three day sell off in decades. I mean, i'mgoing uncertainty 0:00:42.320 --> 0:00:44.760 about the Trump Administration's tariff policies. Look a lot can 0:00:44.760 --> 0:00:46.640 happen in the next ninety minutes, but that's how things 0:00:46.640 --> 0:00:50.080 were earlier. Today, Tesla shares fell as much as ten 0:00:50.120 --> 0:00:52.920 point five percent, extending losses, dropping below a price at 0:00:52.920 --> 0:00:56.240 which Howard Lutnik, the Commerce Secretary, predicted they'd never fall 0:00:56.280 --> 0:00:59.720 to again. Dan Ives is watching these moves closely. He's 0:00:59.720 --> 0:01:02.480 globe ahead of technology at Webbush Securities. Yesterday he cut 0:01:02.480 --> 0:01:05.320 his price targets on both of these stocks. He joins 0:01:05.360 --> 0:01:07.760 us here in the Bloomberg Business Week Studio, Dan, I 0:01:07.760 --> 0:01:09.600 want to start with Tesla because you are a longtime 0:01:09.640 --> 0:01:11.080 ball I never thought I would see the day where 0:01:11.120 --> 0:01:13.480 you became bearish on the stock. But this weekend you 0:01:13.560 --> 0:01:16.120 lowered your price target from five hundred and fifty dollars 0:01:16.640 --> 0:01:20.240 to three hundred and fifteen dollars. There are haircuts, and 0:01:20.280 --> 0:01:22.600 there are haircuts. This is a big haircut. Why'd you 0:01:22.640 --> 0:01:22.920 do it? 0:01:23.160 --> 0:01:24.480 I mean there's two reasons. 0:01:24.600 --> 0:01:29.840 One the political damage that Musk has self inflicted between 0:01:29.959 --> 0:01:33.119 Doge and obviously everything we're seeing play out, you know, 0:01:33.240 --> 0:01:38.320 along with the Trump administration. I believe it's destructed demand. 0:01:38.400 --> 0:01:40.840 Twenty percent in Europe, ten percent in the US. Net 0:01:40.840 --> 0:01:43.759 could be conservative, and I think that's something that's also 0:01:43.840 --> 0:01:47.280 starting to show up in China, which is ultimately look 0:01:47.360 --> 0:01:49.800 that's if you look at our new estimates, it's really 0:01:49.920 --> 0:01:52.320 taken a huge haircut to what China growth is going 0:01:52.400 --> 0:01:54.960 to look like. The second thing is when you look 0:01:54.960 --> 0:01:57.680 at the tariff, tariff's ahead one, there's no way as 0:01:57.720 --> 0:02:01.800 sure code and the reality that the US Car Company 0:02:02.000 --> 0:02:04.880 makes cars in the US with all US parts. That's 0:02:04.880 --> 0:02:08.639 a fairy tale, it's Pinocchio story. And I think for Tesla, 0:02:09.480 --> 0:02:12.799 and for Musk, it's a moment of truth because you 0:02:12.840 --> 0:02:17.360 can't be three percent CEO ninety percent Doge and the 0:02:17.560 --> 0:02:22.240 brand issues. It's created Tesla into a political symbol and 0:02:22.320 --> 0:02:24.840 that that is a very, very bad thing, and I 0:02:24.880 --> 0:02:26.440 think it speaks to what's happened to stop. 0:02:26.520 --> 0:02:28.760 Do you see any hope that that image could be 0:02:28.800 --> 0:02:31.280 turned around? And I asked that not so much in 0:02:31.360 --> 0:02:33.440 terms of what mus can do, but maybe the question 0:02:33.480 --> 0:02:36.160 that investors aren't going to start having to ask is 0:02:36.160 --> 0:02:38.359 whether the company just needs new leadership altogether. 0:02:38.400 --> 0:02:40.920 Look, I mean, in the next four to six weeks, 0:02:41.120 --> 0:02:45.360 he makes a choice, you step out of Doge. You 0:02:45.480 --> 0:02:48.720 literally now back to CEO of Tesla. You could still 0:02:48.760 --> 0:02:51.600 be some sort of you know, official unofficial advisor or 0:02:51.639 --> 0:02:54.040 whatever it may be. But the reality is then the 0:02:54.080 --> 0:02:55.639 brand damage would be contained. 0:02:55.720 --> 0:02:58.959 It would be stitches a black eye? Will it though? 0:02:59.000 --> 0:03:01.600 Because it's on him. I mean, it's not just people saying, oh, 0:03:01.600 --> 0:03:03.600 we think Tesla is a bad car. They're looking at 0:03:03.639 --> 0:03:06.520 the CEO and they're saying, you know, we think you're 0:03:06.800 --> 0:03:09.880 you know, from not my words, you're a fascist, you're 0:03:09.880 --> 0:03:11.920 a Nazi. These are things. These are and this is 0:03:11.919 --> 0:03:14.040 a taint that you just don't scrub off overnight. 0:03:14.120 --> 0:03:16.120 And I don't think you scrib it all. There's no 0:03:16.200 --> 0:03:17.839 way that you scrub it all. Like you said, there's 0:03:17.880 --> 0:03:22.040 a permanent brand damage up tire. But here's the key. 0:03:22.760 --> 0:03:26.640 You continue down this road, then that permanent brand damage 0:03:26.680 --> 0:03:31.120 it becomes something much bigger. And the shame is that 0:03:31.360 --> 0:03:34.920 and it's Look, the reason we kept the rating and 0:03:34.960 --> 0:03:38.440 then downgrade is because I believe in one with Nvidia 0:03:38.960 --> 0:03:41.800 to the best disruptive technology companies in the world. But 0:03:41.880 --> 0:03:44.640 here's the thing. This is to fork in the road 0:03:46.480 --> 0:03:49.760 for Musk now to make the right decision. 0:03:50.080 --> 0:03:52.080 Maybe email him with that as the subject line and 0:03:52.080 --> 0:03:54.960 see if see if he replies, Hey, do you want 0:03:54.960 --> 0:03:56.920 to get some breaking news? Apple plants to source more 0:03:56.960 --> 0:03:58.600 iPhones from India over tariffs. 0:03:58.600 --> 0:03:59.400 We're going to talk about that. 0:04:00.040 --> 0:04:03.240 Andjustment at the Wall Street Journal is reporting that I 0:04:03.280 --> 0:04:05.680 want to go back to Tesla though and talk about 0:04:05.760 --> 0:04:09.040 China a little bit. Shaw me byd the technology that 0:04:09.080 --> 0:04:13.040 those car companies have among other car companies in China. 0:04:13.760 --> 0:04:15.760 You've spent a lot of time traveling around the world 0:04:15.960 --> 0:04:21.040 looking at this technology. Do Americans actually understand how innovative 0:04:21.800 --> 0:04:24.760 Chinese homegrown evs are no. 0:04:25.320 --> 0:04:28.440 And actually it almost speaks broader to even some of 0:04:28.440 --> 0:04:30.000 the issues that would tell aout in terms of like 0:04:30.520 --> 0:04:32.720 tariffs to constant that we can meet things here in 0:04:32.760 --> 0:04:35.719 the US. Look China when you look on the EV side, 0:04:35.720 --> 0:04:38.080 I mean, China's really front and center, because. 0:04:37.880 --> 0:04:40.080 That seems like a huge headwind for TESTAE well. 0:04:40.040 --> 0:04:42.800 Especially when it comes to BYD in terms of because 0:04:42.839 --> 0:04:46.760 thinking about it right now, BYD they're going after Europe, 0:04:47.040 --> 0:04:51.280 South America aggressively, going after rest of the world at 0:04:51.320 --> 0:04:53.800 a time where Tesla this should be the time that 0:04:53.839 --> 0:04:56.560 it's go time that you're going after the rest of 0:04:56.560 --> 0:04:59.839 the world. But the political damage, the brand damage that 0:05:00.080 --> 0:05:05.440 US is done self created has it's hurt that issue. 0:05:05.960 --> 0:05:08.960 So my whole point is is that the longer term 0:05:09.279 --> 0:05:13.719 for Tesla, this is it's one of those moments where 0:05:13.960 --> 0:05:17.520 its future will be determined. A lot of it how 0:05:17.640 --> 0:05:20.240 must handles next thirty sixty to ninety days. 0:05:20.360 --> 0:05:22.280 But this is still a company that gets pretty much 0:05:22.279 --> 0:05:24.520 happen if it's revenue from outside of the United States's 0:05:24.560 --> 0:05:26.159 a big chunk of that in China, at least based 0:05:26.200 --> 0:05:28.240 on the numbers that they end up last year. So 0:05:28.320 --> 0:05:30.520 if China goes or at least it starts to wither 0:05:30.839 --> 0:05:33.480 to a much smaller percentage of sales, can he make 0:05:33.520 --> 0:05:35.160 up those sales anywhere else in around the world. 0:05:35.200 --> 0:05:35.360 No? 0:05:35.360 --> 0:05:37.720 No, I mean that's why it's the hearts and wungs. 0:05:38.240 --> 0:05:40.440 There's no When you and I was like, when you 0:05:40.480 --> 0:05:42.200 look at what's happened in China, and we've talked about 0:05:42.279 --> 0:05:46.239 over the weekend, all the issues with tariffs and everything China, 0:05:46.240 --> 0:05:50.560 Whiz it do drives buy more domestic byd over Tesla, 0:05:51.040 --> 0:05:55.000 Huawei over Apple. It speaks to the broader issue that 0:05:55.200 --> 0:05:57.960 a lot what's happened here is that the companies that 0:05:58.080 --> 0:06:01.760 take a moost on the Chin, we'll be Tesla and Apple. 0:06:02.040 --> 0:06:03.120 But with Tesla. 0:06:03.200 --> 0:06:05.960 Just one last question on Tesla, though, is what's the 0:06:06.040 --> 0:06:09.000 alternative if I'm shopping for an electric vehicle? And this 0:06:09.080 --> 0:06:11.720 was the advantage Tesla had for years, Really was there 0:06:11.720 --> 0:06:14.440 really wasn't an alternative and not a viable alternative. Now 0:06:14.440 --> 0:06:16.120 I know there are a lot more vehicles out there, 0:06:16.320 --> 0:06:19.479 ev vehicles out there, but not necessarily at the scale 0:06:19.560 --> 0:06:21.919 of production. The Tesla had no one careerly for the 0:06:21.960 --> 0:06:23.160 pricing the Tesla. 0:06:22.960 --> 0:06:25.640 Price and look in that, but it speaks to what's 0:06:25.680 --> 0:06:29.479 so frustrating about what's going on If this was Intel. Look, 0:06:29.680 --> 0:06:32.960 these are disasters relatives like Okay, the stock is a 0:06:33.080 --> 0:06:39.120 cheap of fallen knife Tesla. It's about the massive opportunity ahead. 0:06:39.720 --> 0:06:43.120 But when Musk is doing in terms of it's a 0:06:43.200 --> 0:06:47.839 self inflicted wound that needs stitches now surgery. 0:06:47.880 --> 0:06:50.200 And that's our whole point. It's like, you got made 0:06:50.240 --> 0:06:52.440 the decision, let's get to Apple. 0:06:52.839 --> 0:06:55.640 Shares of Apple right now are lower by about four 0:06:55.680 --> 0:06:58.360 point two percent. You cut your price target on the 0:06:58.400 --> 0:07:00.839 stock to two hundred and fifty dollars from three hundred 0:07:00.839 --> 0:07:02.279 and twenty five dollars. I want to start with the 0:07:02.279 --> 0:07:04.479 headline that we're getting from the Wall Street Journal. The 0:07:04.480 --> 0:07:07.440 company plans to source more iPhones from India as a 0:07:07.480 --> 0:07:10.680 potential fix for tariffs. A big part of your note 0:07:10.680 --> 0:07:13.480 has to do with exposure to China. Maybe in the 0:07:13.480 --> 0:07:17.360 first Trump administration, this would be news that investors would 0:07:17.400 --> 0:07:21.360 cheer because okay, well, India hadn't been hit with tariffs. 0:07:21.360 --> 0:07:23.200 It was between the US and China during the first 0:07:23.240 --> 0:07:26.800 Trump administration with global tariffs, does anything matter? 0:07:26.920 --> 0:07:29.080 But that's the whole I mean think about Vietnam. You 0:07:29.120 --> 0:07:32.760 moved to Vietnam. Vnam's worse than China. And then like 0:07:32.800 --> 0:07:35.480 when you do about India, it would take years to 0:07:35.520 --> 0:07:37.600 even make that more than five percent, just given the 0:07:37.640 --> 0:07:40.960 logistics and the nature of India. You know, in terms 0:07:41.000 --> 0:07:43.960 of as Apple tries to move some stuff there, Look, 0:07:44.280 --> 0:07:49.560 no company in the world is hurt more from ones 0:07:49.640 --> 0:07:52.200 that came out of Trump's mouth in terms of Taiwan 0:07:52.680 --> 0:07:56.920 and China tariffs than Apple. Yeah, because you're talking about 0:07:57.280 --> 0:08:01.600 ninety percent iPhones are made in China, and the reality 0:08:01.760 --> 0:08:03.920 and even over the way what we got meeking you 0:08:04.040 --> 0:08:07.440 as it. Here's the deal. If you won thirty five 0:08:07.520 --> 0:08:10.360 hundred dollars iPhones, we should make them in New Jersey, 0:08:11.040 --> 0:08:15.600 maybe make them in California. If you like thousand dollar iPhones, yeah, 0:08:15.640 --> 0:08:16.760 you make them in China. 0:08:16.880 --> 0:08:17.880 And that's just the reality. 0:08:17.960 --> 0:08:20.400 Well, it raises the question too, is whether Apple really 0:08:20.400 --> 0:08:22.440 would try to move I mean, do they have enough 0:08:22.440 --> 0:08:25.679 pricing power where if they have to raise the cost 0:08:25.720 --> 0:08:28.560 of an iPhone by twenty thirty percent, I mean, I 0:08:28.560 --> 0:08:30.840 don't know they've convinced people somehow to pay one thousand 0:08:30.880 --> 0:08:32.600 bucks or more for it already. 0:08:32.200 --> 0:08:35.920 But that'd be massive demand destruction. And Okay, my whole 0:08:35.960 --> 0:08:39.240 point is is that it would take tens of billions 0:08:39.240 --> 0:08:42.240 of dollars to even move ten percent on the suppot chaet. 0:08:42.240 --> 0:08:44.920 That would take three years. So that's why the reality 0:08:45.040 --> 0:08:47.160 right now what's going on in terms of taffs and 0:08:47.240 --> 0:08:50.760 the reaction investors, Okay, it's untenable and it would be 0:08:50.800 --> 0:08:54.640 an economic army geddon to US tech industry, in my opinion, 0:08:54.679 --> 0:08:56.600 is set US tech industry back a decade. 0:08:57.160 --> 0:09:00.000 Do you think the White House understands the economic armageddon? 0:09:00.200 --> 0:09:02.880 Look, I think it's easy to stand in front of 0:09:02.920 --> 0:09:06.800 a microphone and I get it politicians talk. The reality 0:09:06.920 --> 0:09:09.800 is when you spend time walking through fabs in Taiwan 0:09:10.520 --> 0:09:13.880 Fox con in terms of China, you spend time there 0:09:13.920 --> 0:09:16.760 and then you come here and you actually think, given 0:09:16.760 --> 0:09:19.679 our labor for its manufacturing costs of weaver, that we're 0:09:19.679 --> 0:09:20.640 going to meet that here. 0:09:21.480 --> 0:09:23.079 That is just, in my. 0:09:23.080 --> 0:09:27.040 Opinion, it's massively unrealistic. And that's why it just speaks 0:09:27.120 --> 0:09:32.000 to what's happened with stocks because investors they're not this 0:09:32.040 --> 0:09:36.880 has none the Republican Democrat investors know math in the reality. 0:09:37.080 --> 0:09:39.800 Yeah, I'm kind of playing devil's advocate here. But with 0:09:39.880 --> 0:09:43.120 regards to Apple and its ability to find some transition 0:09:43.240 --> 0:09:45.199 through all of this, is there a way that they 0:09:45.320 --> 0:09:48.600 could maybe increase sales outside of the US. And I 0:09:48.640 --> 0:09:50.400 bring that up because Tim Cook was just over there 0:09:50.440 --> 0:09:53.240 in China for that big meeting. He obviously toured a 0:09:53.280 --> 0:09:56.920 lot of other facilities and universities for some reason or another. 0:09:56.960 --> 0:10:00.079 He seems to have a relatively decent relationship with the 0:10:00.160 --> 0:10:04.959 Chinese government politician ninety percent. Yeah, and he's done it right. 0:10:05.000 --> 0:10:07.600 He navigated the first Trump administration, and I do wonder 0:10:07.880 --> 0:10:10.600 if maybe we're counting him out that he might find 0:10:10.640 --> 0:10:11.720 a way to navigate through this. 0:10:11.760 --> 0:10:14.360 Look the five hundred billion they announced that getting some 0:10:14.400 --> 0:10:17.360 sort of exemption here and there. Look, and that's something 0:10:17.400 --> 0:10:20.920 that investors are holding out for. But the reality is, 0:10:21.400 --> 0:10:24.040 if you want a body blown an upper cut and 0:10:24.120 --> 0:10:27.240 cut the knees off of the it might be probably 0:10:27.280 --> 0:10:30.200 the best technology starward in the world in terms of Apple. 0:10:31.000 --> 0:10:32.040 This does it well? 0:10:32.840 --> 0:10:34.360 Forgive me, Dan, I want to go back to Tesla 0:10:34.400 --> 0:10:37.040 because I'm getting a question from a viewer right now 0:10:37.400 --> 0:10:40.880 who says that Elon's brand damage has been evident for months. 0:10:41.120 --> 0:10:43.160 Why Did you just downgrade the stock as a result 0:10:43.240 --> 0:10:43.440 of this? 0:10:43.520 --> 0:10:46.360 That's a great question because I believe from everything we're 0:10:46.440 --> 0:10:49.880 seeing in Europe and the US and deliveries going into 0:10:49.920 --> 0:10:52.920 two Q that it went from something that was containable 0:10:53.080 --> 0:10:57.000 five percent set to something much broader. And I believe 0:10:57.160 --> 0:11:01.000 it was also our view that he'd hold the line 0:11:01.440 --> 0:11:05.760 start to step back instead he hasn't. So the point 0:11:05.800 --> 0:11:08.679 is that brand damage, when we model that out into 0:11:08.880 --> 0:11:11.920 three Q and four QWO, that's us basically modeling out 0:11:12.080 --> 0:11:14.160 what we believe the brand damage is going to do 0:11:14.280 --> 0:11:16.680 to the next few quarters. And look, and I would 0:11:16.679 --> 0:11:19.360 also say, like it's something where it's become a life 0:11:19.400 --> 0:11:22.600 of its own and Tesla has become a political symbol 0:11:22.960 --> 0:11:26.040 and it's a very unfortunate situation. But on but look, 0:11:26.040 --> 0:11:28.040 it's self inflicted by musk. 0:11:28.120 --> 0:11:30.240 We're heading into earning season. At some point they're going 0:11:30.280 --> 0:11:32.920 to have to address investors directly. I think Tesla reports 0:11:32.960 --> 0:11:35.440 in mid April and then Apple not to May. First, 0:11:36.080 --> 0:11:38.160 what do you think the CEOs and the CFOs for 0:11:38.200 --> 0:11:40.840 that matter, can actually tell investors to sort of calm 0:11:40.880 --> 0:11:41.280 them down. 0:11:42.040 --> 0:11:44.840 No company is going to give guidance, in my opinion, 0:11:44.920 --> 0:11:47.560 during earning season. A guy, I'd be shocked if any 0:11:47.600 --> 0:11:49.959 company gives God, if you want to play blindfold the 0:11:50.040 --> 0:11:53.840 darts look, and I think the reality is actually blindfold 0:11:53.880 --> 0:11:56.800 dogs actually is pretty fun. Beside the point it's look, 0:11:57.360 --> 0:11:59.480 I think they're basically going to have to give some 0:11:59.520 --> 0:12:03.160 sort of guard rails. How they're going about it, How 0:12:03.200 --> 0:12:05.880 are these scenario planning? And that because invest want to 0:12:05.960 --> 0:12:09.079 unders in worst case bea'st case. Best case. 0:12:09.559 --> 0:12:12.560 Dan, i'ves Global head of Technology at Webbush Securities. 0:12:12.559 --> 0:12:14.560 Thanks so much for coming. Great to be here, Good 0:12:14.559 --> 0:12:15.760 to see you. 0:12:15.760 --> 0:12:19.440 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:19.520 --> 0:12:22.520 live weekday afternoons from two to five e's during Listen 0:12:22.559 --> 0:12:26.120 on Apple, Karplay and Android Otto with the Bloomberg Business app, 0:12:26.320 --> 0:12:29.320 or watch us live on YouTube. 0:12:30.400 --> 0:12:35.480 I got the HCPI function on the Bloomberg terminal fell 0:12:35.480 --> 0:12:39.200 as much as four point seven percent today rose as 0:12:39.240 --> 0:12:42.400 much as three point four percent. As we just heard 0:12:42.400 --> 0:12:45.120 from Charlie Pellett. We're down right now by about four 0:12:45.160 --> 0:12:49.680 tenths of one percent. Lots of volatility, to say the least, 0:12:50.120 --> 0:12:53.079 and that's exactly why we wanted to talk to Eric Wiener. 0:12:53.080 --> 0:12:55.800 He's Bloomberg News Equities Team America's team leader. He's the 0:12:55.800 --> 0:12:58.560 author of several books, including What goes Up, An oral 0:12:58.600 --> 0:13:00.439 history of Wall Street from the Great to Press through 0:13:00.440 --> 0:13:02.199 the Internet Bubble. In the nine to eleven attacks, he 0:13:02.280 --> 0:13:05.679 joins us from just outside, Well, no, you're here today. 0:13:05.760 --> 0:13:07.600 I'm here. Oh my gosh, he's back with us. 0:13:08.000 --> 0:13:12.080 On Friday, he was remote and we relied a lot 0:13:12.120 --> 0:13:14.800 on you, and we're doing that again because when you 0:13:14.840 --> 0:13:19.079 wrote that book What goes Up, that time span included 0:13:19.120 --> 0:13:21.640 Black Monday. A lot of people over the weekend. The 0:13:21.720 --> 0:13:24.440 chatter online was a little concern that what we're going 0:13:24.480 --> 0:13:26.720 to see on Monday is going to look a little 0:13:26.760 --> 0:13:31.280 bit like what we saw in nineteen eighty seven, the volatility. Yes, 0:13:32.240 --> 0:13:37.280 maybe the massive crash. No, I would say there was 0:13:38.040 --> 0:13:42.280 in eighty seven. There was a palpable sense of things 0:13:42.320 --> 0:13:47.160 coming on Glude and then on the Sunday before, well 0:13:47.200 --> 0:13:50.040 it was the Saturday and the Sunday before, Targery secretary 0:13:50.080 --> 0:13:52.280 at the time, Jim Baker came out and made a 0:13:52.280 --> 0:13:53.559 couple of remarks. 0:13:53.120 --> 0:13:56.880 That really scared the market. So when you came in 0:13:56.920 --> 0:14:00.760 on Monday morning, when the traders came in on Monday morning. 0:14:01.520 --> 0:14:03.880 They were looking at it going, oh my god, you know, 0:14:03.960 --> 0:14:07.280 things are going to blow up here. It was less clear. 0:14:07.360 --> 0:14:10.439 I mean, I remember I was looking at futures last night. 0:14:10.800 --> 0:14:13.600 They came down a lot, but they weren't down as 0:14:14.120 --> 0:14:18.200 much as say, China was, So there wasn't this sense 0:14:18.440 --> 0:14:21.400 that like the US was just going to bottom out. 0:14:21.560 --> 0:14:23.320 If anything, it was going to be like more of 0:14:23.320 --> 0:14:28.840 a global spread. So Black Monday was kind of a 0:14:28.880 --> 0:14:33.280 more predictable route, and then it had to be lifted 0:14:33.320 --> 0:14:37.480 out by the Fed. This was something where you know, 0:14:37.640 --> 0:14:38.960 it's it's kind of building. 0:14:40.200 --> 0:14:44.720 What does that tell us then about the sell off 0:14:45.200 --> 0:14:49.680 that we're in. If this is just gradually building, we 0:14:49.760 --> 0:14:52.560 don't have one Black Monday? Does that mean. 0:14:52.840 --> 0:14:58.480 That's exactly it? So the concern, bizarrely, the concern is 0:14:58.560 --> 0:15:03.760 that things are actually moving fairly normally, which means we 0:15:03.800 --> 0:15:07.040 haven't hit a bottom, which means we aren't seeing panic 0:15:07.520 --> 0:15:12.480 or capitulation, whatever word you really want to use. What 0:15:12.560 --> 0:15:17.320 you are seeing is people desperately wanting the President to 0:15:17.440 --> 0:15:21.080 back off of tariffs. So as soon as that rumor hit, 0:15:21.720 --> 0:15:24.280 we went up. You know, we moved, as you pointed out, 0:15:24.320 --> 0:15:28.640 you know, eight basis eight percentage points, so wham swing 0:15:28.880 --> 0:15:32.240 up and then it gets taken out because that's not 0:15:32.360 --> 0:15:36.560 exactly true. But there is a very simple cure. Like 0:15:36.760 --> 0:15:39.920 Black Monday was, there were systemic problems. There were people 0:15:39.920 --> 0:15:42.800 who were missing right, Yeah, there were people who were 0:15:42.960 --> 0:15:44.840 going to have This is what I was watching for 0:15:44.920 --> 0:15:48.520 last night, was like margin calls and situations where big 0:15:48.600 --> 0:15:51.280 hedge funds had been caught off sides weren't going to 0:15:51.320 --> 0:15:53.800 be able to make the payments, and now you have 0:15:54.240 --> 0:15:57.080 counterparties that are wondering where the money's going to come from. 0:15:57.320 --> 0:16:00.320 That is not the case. Now they're just begging in 0:16:00.360 --> 0:16:02.680 Trump to get rid of the tariffs. In other words, 0:16:02.760 --> 0:16:06.560 like you said on Friday, this is orderly. This is orderly. 0:16:07.000 --> 0:16:11.360 It's and the orderliness of it is what's scary to 0:16:11.920 --> 0:16:17.320 market pros because it's when things get disorderly you sort 0:16:17.320 --> 0:16:21.160 of have that catharist we're still waiting for the caiss 0:16:21.440 --> 0:16:24.120 The difference is that this was and you know, it's 0:16:24.160 --> 0:16:27.040 been pointed out by many, many Wall Street people other 0:16:27.080 --> 0:16:31.200 than me, that this is caused by one thing exactly. 0:16:31.200 --> 0:16:33.080 And I think, you know, one of the criticisms I've 0:16:33.120 --> 0:16:38.080 see of this h on TV. Our markets guests we 0:16:38.120 --> 0:16:42.880 speak to outside of the building online, is that they're 0:16:42.920 --> 0:16:45.000 saying this is self inflicted. 0:16:45.320 --> 0:16:50.080 Yeah, it's like shooting yourself in the foot. Now, what Trump? 0:16:50.200 --> 0:16:53.520 The question is what the goal is with these tariffs. 0:16:53.680 --> 0:16:58.560 So if the goal is to reshure industry, that's going 0:16:58.600 --> 0:17:00.200 to take a long time. 0:17:00.240 --> 0:17:02.640 We had Dan Ives from Red Bush sitting in that 0:17:02.760 --> 0:17:06.440 chair right there, telling us an hour ago that he 0:17:06.560 --> 0:17:09.680 spent time in Taiwan. He's seen the way that these 0:17:09.680 --> 0:17:12.680 devices are made, He's seen the factories. He said, that's 0:17:12.680 --> 0:17:15.560 not happening in New Jersey. No, and it's and it 0:17:15.600 --> 0:17:17.040 would take forever to do. 0:17:17.320 --> 0:17:19.800 I mean, there's a reason why they moved there in 0:17:19.840 --> 0:17:23.240 the first place as well. And so if we want 0:17:23.320 --> 0:17:26.440 cheaper goods, that's part of this. There are a bunch 0:17:26.520 --> 0:17:29.880 of different things that go into the creation of our 0:17:30.480 --> 0:17:34.520 you know, our economic flow. This is like, what are 0:17:34.680 --> 0:17:36.720 we what are we trying to do? Are we trying 0:17:36.720 --> 0:17:39.560 to change the behavior of other countries? Are we trying 0:17:39.560 --> 0:17:43.240 to behave change the financial system itself? What's the goal? 0:17:43.600 --> 0:17:46.199 I also think of you know, if I were running 0:17:46.280 --> 0:17:51.800 a business, what I necessarily start building a factory in 0:17:51.840 --> 0:17:57.919 the US and completely pull my operations from offshore, only 0:17:57.960 --> 0:18:03.159 to then have potentially these tariffs reversed slightly and then 0:18:03.200 --> 0:18:04.240 you already started building. 0:18:04.280 --> 0:18:06.480 Do you think that's a good point? Is that that's 0:18:06.880 --> 0:18:08.480 this is all in the this is going to all 0:18:08.480 --> 0:18:11.199 be in the earnings reports. Because what's going what you do, 0:18:11.280 --> 0:18:13.679 if you're a CEO right now is sort of stand 0:18:13.680 --> 0:18:17.520 pat So growth is going to be more challenging. The 0:18:17.640 --> 0:18:22.639 idea of expansion becomes should we or shouldn't we? I mean, 0:18:22.680 --> 0:18:26.360 you have to realize that there's a reason why manufacturing 0:18:26.440 --> 0:18:31.040 move to Malaysia, move to Vietnam, and that's because China 0:18:31.119 --> 0:18:35.480 has become more expensive. You know, because because as economies grow, 0:18:35.600 --> 0:18:39.679 their employees expect more pay so they go to the 0:18:39.760 --> 0:18:43.399 lowest producer. So the idea that like we're going to 0:18:43.640 --> 0:18:47.520 bring everything back here, that's a multi year project with 0:18:47.720 --> 0:18:51.920 dubious results and flies in the face of capitalism as 0:18:51.920 --> 0:18:56.000 we know it. If the idea is to get countries 0:18:56.040 --> 0:18:59.600 to change their behavior and negotiate with the president, then 0:18:59.680 --> 0:19:00.720 we'll see what we can do. 0:19:01.640 --> 0:19:07.040 So when Emily came over here twenty minutes ago, the 0:19:07.119 --> 0:19:08.920 S and P five hundred was in the green. It's 0:19:08.960 --> 0:19:11.760 now down eight tenths of one percent. Why is there 0:19:11.800 --> 0:19:16.360 such a lack of conviction directionally with today's trade. 0:19:16.040 --> 0:19:19.000 Because we don't really know what's going on. There was there. 0:19:19.240 --> 0:19:22.280 Conviction based on saving the white House port cold water 0:19:22.320 --> 0:19:24.960 on Oh yeah, there was, Well, there was conviction when 0:19:25.000 --> 0:19:26.840 we came in and we were down like four percent 0:19:27.000 --> 0:19:28.520 right away or whatever it was. 0:19:28.840 --> 0:19:31.840 And then there was conviction on the upside because what 0:19:32.000 --> 0:19:36.000 that leak was was something that the traders have kind 0:19:36.000 --> 0:19:39.760 of been expecting, so that kind of played into their 0:19:39.840 --> 0:19:44.040 priors and suddenly it just went whoosh, everything went up. 0:19:45.040 --> 0:19:48.080 But the right now, it's hard to know where we're 0:19:48.080 --> 0:19:49.040 going to go next. 0:19:49.720 --> 0:19:51.880 What you're referring to it is actually the most read 0:19:51.920 --> 0:19:54.040 story on the Bloomberg terminal in the last hour. I 0:19:54.119 --> 0:19:56.159 encourage everybody to go check it out. Jess Mett and 0:19:56.160 --> 0:19:59.560 Bailey Lipschultz, Eshra Day. It's called this is madness. The 0:19:59.600 --> 0:20:02.440 fifteen minutes that rock to stock market desks. 0:20:02.840 --> 0:20:04.640 We got to get these people on. At just after 0:20:04.720 --> 0:20:07.920 ten am, shouting erupted on the Seabert trading floor in 0:20:07.960 --> 0:20:10.520 downtown Manhattan. I won't read the rest of the story, 0:20:10.560 --> 0:20:13.080 but that is the tough it's kind of wild. 0:20:13.200 --> 0:20:15.440 We were going through it as on the team as 0:20:15.440 --> 0:20:17.320 it was happening. I mean it it was happening all 0:20:17.320 --> 0:20:21.760 around us, and it was wild. We were yeah, go ahead. 0:20:21.920 --> 0:20:22.760 Well I'm wondering. 0:20:22.840 --> 0:20:26.960 I mean, you've obviously seen a lot of market downturns, 0:20:27.000 --> 0:20:30.320 a lot of single day crashes. How does this one 0:20:30.400 --> 0:20:35.280 compare to history? When you think about this sell off 0:20:35.320 --> 0:20:39.840 seems to be all focused on one very specific event, 0:20:40.480 --> 0:20:42.919 whereas I don't know, I think the financial crisis obviously 0:20:43.000 --> 0:20:46.400 there wasn't just one headline that traders were all counting. 0:20:46.040 --> 0:20:46.880 On or waiting for. 0:20:47.200 --> 0:20:49.720 But this is so specific to just one. 0:20:50.400 --> 0:20:55.560 So the the scary thing with crashes is when credit 0:20:55.720 --> 0:21:01.240 is heavily involved, When you have your traders concerned that 0:21:01.320 --> 0:21:04.760 debts aren't going to get paid off, or that you know, 0:21:04.960 --> 0:21:09.560 rates are just you know, tumbling or rising. This is 0:21:09.640 --> 0:21:14.120 not a credit meltdown. It's it's an equity meltdown. And 0:21:14.160 --> 0:21:17.760