WEBVTT - Bloomberg Surveillance TV: July 24th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.400 with Lisa Bromwitz and a Marie Hordern. Join us each 0:00:18.480 --> 0:00:21.360 day for insight from the best in markets, economics, and 0:00:21.400 --> 0:00:24.720 geopolitics from our global headquarters in New York City. We 0:00:24.760 --> 0:00:27.400 are live on Bloomberg Television weekday mornings from six to 0:00:27.480 --> 0:00:31.000 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.200 --> 0:00:33.479 or anywhere else you listen, and as always on the 0:00:33.479 --> 0:00:35.840 Bloomberg Terminal and the Bloomberg Business app. 0:00:36.440 --> 0:00:37.560 Let's turn to the Federal Reserve. 0:00:37.640 --> 0:00:41.440 The Trump administration parling the pressure on FED share Jpowell. 0:00:41.920 --> 0:00:45.240 The President said he is not going to fire Chair Powell. 0:00:45.280 --> 0:00:48.280 It would do Chair Powell a favor, and he would 0:00:48.320 --> 0:00:54.040 be doing the Institution of favor if if he did 0:00:54.160 --> 0:00:58.880 an internal review. This mission creep from the FED is 0:00:59.000 --> 0:01:01.720 endangering their independence and monetary policy. 0:01:02.000 --> 0:01:04.400 President Trump making a rev visit to the Federal Serve 0:01:04.440 --> 0:01:07.360 this afternoon to see the two point five billion dollar renovation. 0:01:07.720 --> 0:01:10.640 A Chi Raja Yaksha of Barclay's writes and concerns about 0:01:10.680 --> 0:01:14.600 FED independence persists, but we expect status quo to prevail 0:01:14.920 --> 0:01:16.920 actually joins us now for more a j E goodmonic, 0:01:17.040 --> 0:01:20.520 Good morning. This market is shaken off a lot, threats 0:01:20.560 --> 0:01:24.479 to fed independence, trade tariffs, threats actual tariffs. 0:01:24.720 --> 0:01:26.839 Can this economy keep shaking it off? 0:01:27.040 --> 0:01:27.680 Yeah? 0:01:27.760 --> 0:01:29.480 I think as long as you don't get a polysym 0:01:29.480 --> 0:01:32.800 mistake out of Washington on the magnitude of actually trying 0:01:32.800 --> 0:01:34.720 to fire the fetchure, which I don't think will happen. 0:01:35.280 --> 0:01:37.039 I think we are past the worst of it and 0:01:37.080 --> 0:01:39.400 we are looking forward to a big, you know, big 0:01:39.720 --> 0:01:41.360 boost and growth over the next few concert. 0:01:41.440 --> 0:01:43.600 This is really important because some people still fear that 0:01:43.640 --> 0:01:45.520 the worst of the data is ahead of us. 0:01:45.600 --> 0:01:48.120 What gives you confidence the fact that that I've been 0:01:48.200 --> 0:01:51.400 virtually no second order effects. Remember I agree with your 0:01:51.400 --> 0:01:53.760 Plivi's gust living made the point to that there have 0:01:53.880 --> 0:01:55.720 been substantial talis. If you told me we are a 0:01:55.760 --> 0:01:57.880 two and a half percent during the year we finished 0:01:57.880 --> 0:02:01.240 at seventeen eighteen, I would have been But part of 0:02:01.280 --> 0:02:02.840 the reason I would have been shaken is that because 0:02:02.840 --> 0:02:05.000 I would have expected business investment to pull back, I 0:02:05.040 --> 0:02:07.680 would have expected consumer precautionary savings to go up. 0:02:08.000 --> 0:02:10.000 Factors matters, John, None of those things. 0:02:09.880 --> 0:02:12.520 Have happened, and that's to do with the You know, 0:02:12.600 --> 0:02:13.919 if they were going to happen, they were going to 0:02:13.919 --> 0:02:15.920 happen with the headlines, they were not going to happen. 0:02:15.919 --> 0:02:18.040 When it actually plays out, it's. 0:02:18.040 --> 0:02:20.919 Very very hard for me to see big new second 0:02:21.000 --> 0:02:24.639 order effects now the consumer pulling back hard, and without that, 0:02:24.800 --> 0:02:28.200 you do not get a lusting like a recession, a 0:02:28.320 --> 0:02:29.480 lusting hit two years growth. 0:02:29.520 --> 0:02:32.160 Are we measuring the economy correctly? And I asked that 0:02:32.240 --> 0:02:36.480 because there is. There are pockets that are clearly suffering, 0:02:36.840 --> 0:02:40.280 and you're seeing that in numbers like from Southwest where 0:02:40.400 --> 0:02:42.640 consumers who don't have as much money aren't able to 0:02:42.680 --> 0:02:45.359 travel as much. But then you have this industrial revolution, 0:02:45.480 --> 0:02:49.160 this renaissance, this huge investment AI technology that's generating efficiency 0:02:49.160 --> 0:02:52.720 and profitability at the biggest and the most powerful companies 0:02:52.760 --> 0:02:53.640 and individuals. 0:02:54.320 --> 0:02:55.240 Is this showing up in. 0:02:55.200 --> 0:02:57.200 The data or is this just changing the way we 0:02:57.280 --> 0:02:58.280 understand our economy. 0:02:58.320 --> 0:02:59.840 I think it's the latter. I think we are measuring 0:02:59.880 --> 0:03:02.359 it correctly. There's no reason to believe that we've suddenly changed. 0:03:02.440 --> 0:03:04.440 The fact of the matter is what you said, the 0:03:04.560 --> 0:03:07.239 United States is two different economis. 0:03:07.520 --> 0:03:08.679 One is the old economy. 0:03:08.720 --> 0:03:10.720 You know, we all grow up believing housing is a 0:03:10.720 --> 0:03:13.600 business cycle, for example, and you know housing is struggling 0:03:13.600 --> 0:03:14.840 with mortgage rates staying. 0:03:14.600 --> 0:03:15.160 Where they are. 0:03:16.080 --> 0:03:18.640 The durable goods sector, you know, you mentioned airlines, they 0:03:18.639 --> 0:03:19.280 are struggling. 0:03:19.520 --> 0:03:20.160 Doesn't matter. 0:03:20.600 --> 0:03:24.240 You have the large tech side and the AI dividends 0:03:24.280 --> 0:03:27.440 starting to kick in, and I think that matters far 0:03:27.560 --> 0:03:30.000 more at an index level, at an economy white level. 0:03:30.000 --> 0:03:32.400 The fact that the hyperscaler is just never pulled back 0:03:32.440 --> 0:03:35.000 on spending. You know, you might have worried as an 0:03:35.040 --> 0:03:38.240 important into the United States about Mexico Canada, where I 0:03:38.280 --> 0:03:40.480 can make my business work or not. Who cares when 0:03:40.480 --> 0:03:42.360 Google is spending on the eighty five million dollars at 0:03:42.400 --> 0:03:43.080 a macro level. 0:03:43.160 --> 0:03:45.600 Well, at the same time, back during the pandemic, it 0:03:45.640 --> 0:03:47.200 was sort of the revenge of the physical world. That 0:03:47.280 --> 0:03:49.200 was something that John said every morning as we walked in, 0:03:49.240 --> 0:03:51.480 and it was sort of the reality of trying to 0:03:51.480 --> 0:03:53.440 get toilet paper. Although he is tacked up, I am 0:03:53.480 --> 0:03:55.840 just wondering whether we're going to end up with revenge 0:03:55.840 --> 0:03:58.600 of the physical world once more. We're talking about investment 0:03:58.960 --> 0:04:03.320 in the cloud, all of this sort of technology that's 0:04:03.360 --> 0:04:05.440 for companies, the way we think, the way we do 0:04:05.680 --> 0:04:08.400 work in white collar businesses. What about the goods and 0:04:08.440 --> 0:04:10.680 services that have to go overroun on ships. 0:04:10.760 --> 0:04:12.760 I don't think there's going to be a revenge of 0:04:12.760 --> 0:04:15.200 the physical world. I almost think it's the other way around, 0:04:15.200 --> 0:04:18.239 meaning that right now we are all focused on llm's. 0:04:18.320 --> 0:04:19.840 You know, you put in text and you get out 0:04:19.880 --> 0:04:21.880 a bunch of information that is the AI models and 0:04:21.920 --> 0:04:23.880 that we think will hit services jobs. 0:04:24.160 --> 0:04:25.159 The fact of the matter is. 0:04:25.160 --> 0:04:27.840 I think there are three four five years away from 0:04:27.880 --> 0:04:30.559 the same thing happening where you put in a bunch 0:04:30.560 --> 0:04:33.120 of texts and you have a robot doing subtasks. I'm 0:04:33.120 --> 0:04:35.680 not kidding. This is not sci fi. It's you know, 0:04:35.720 --> 0:04:37.760 this is I feel the way I did about NVDA 0:04:37.760 --> 0:04:38.400 five years ago. 0:04:38.600 --> 0:04:40.160 You know, none of us thought it would get as 0:04:40.160 --> 0:04:40.800 big as it is. 0:04:41.120 --> 0:04:42.960 But the fact of the matter is, you know that 0:04:43.640 --> 0:04:46.080 Moore's law, you know the fact that things are twice 0:04:46.080 --> 0:04:49.200 as cheap every eighteen months or twice as powerful does 0:04:49.320 --> 0:04:52.200 work in the semiconductor world, doesn't work in the physical world. 0:04:52.640 --> 0:04:56.080 Fusing air and robotics is powerful, and I almost worry 0:04:56.080 --> 0:04:57.720 that you're going to have more of the. 0:04:57.680 --> 0:04:59.440 Profits continue to go to capital. 0:05:00.120 --> 0:05:03.080 We always go believing, you know, plumbers, you'll always need plumbers. 0:05:03.080 --> 0:05:05.120 Well you might not five seven, eight. 0:05:05.040 --> 0:05:08.800 Years from what you're saying could relatively mean the market 0:05:08.880 --> 0:05:11.679 is okay, but the employment market gets a whole lot worse. 0:05:12.520 --> 0:05:16.640 It does, and with our limits to that. The limits 0:05:16.680 --> 0:05:17.960 are put in by society. 0:05:18.000 --> 0:05:18.679 At some point. 0:05:18.880 --> 0:05:21.400 If there's seventy million knowledge workers in the United States, 0:05:21.440 --> 0:05:24.200 you know, I've had this A person I considered the 0:05:24.240 --> 0:05:26.800 single best investor of all time make the argument to 0:05:26.839 --> 0:05:29.120 me that he's looked at this upwards downwards five years 0:05:29.160 --> 0:05:31.680 from side, you know, Sunday, and he's telling me that 0:05:31.839 --> 0:05:34.400 ten million of these workers will not be needed in 0:05:34.440 --> 0:05:35.120 five to seven years. 0:05:35.160 --> 0:05:36.360 He's not saying they want have jobs. 0:05:36.680 --> 0:05:38.800 The economic activity that they do now, the value add 0:05:38.839 --> 0:05:40.760 will be done by machines. We see it in big tech, right, 0:05:40.800 --> 0:05:43.839 forty percent of coding. You realize Microsoft's let go of 0:05:43.880 --> 0:05:46.200 twenty thousand people. They have money coming out of the years. 0:05:46.440 --> 0:05:49.800 There's a reason why that this is happening. Eventually society 0:05:49.800 --> 0:05:53.479 pushes back. It's happened in every technological revolution. But the 0:05:53.600 --> 0:05:56.039 difference now, John, is that in the past, when you 0:05:56.120 --> 0:05:59.560 had had this right. We were okay with Debtor's prisons 0:05:59.560 --> 0:06:01.640 were ok which I one hundred years ago, you know, 0:06:01.960 --> 0:06:04.120 the transition that we didn't make noise this time it 0:06:04.160 --> 0:06:04.920 will make a lot of. 0:06:04.839 --> 0:06:06.840 Fun share with you are concerns mean, and I'll be 0:06:06.920 --> 0:06:10.280 open and personal abouts here for children of Thatcher and Reagan. 0:06:11.000 --> 0:06:14.159 I am highly concerned that if you concentrate capital and 0:06:14.200 --> 0:06:16.159 wealth in the hands of just a few, that the 0:06:16.160 --> 0:06:19.039 political movement, the corrective course of action on behalf of 0:06:19.040 --> 0:06:20.480 the paper, will be for the state to get a 0:06:20.520 --> 0:06:24.080 whole lot bigger, to go forward with higher taxes, universal 0:06:24.120 --> 0:06:27.119 basic income. And for people like me who don't really 0:06:27.120 --> 0:06:30.960 believe ideologically in that view of the world, that's scarce 0:06:31.000 --> 0:06:32.159 they live in daylight sadamy. 0:06:32.440 --> 0:06:35.160 It should, but that is a very real risk. 0:06:35.279 --> 0:06:37.440 Now, until we get there, you're going to have corporate 0:06:37.480 --> 0:06:40.120 earnings flat flattened, you know, for years to come, you're 0:06:40.160 --> 0:06:42.600 going to have operating margin leverage. And then the other 0:06:42.640 --> 0:06:44.479 side of it will be society pushing. 0:06:44.520 --> 0:06:45.560 But it's happened before. 0:06:45.839 --> 0:06:47.720 I mean, you know, six of the seven big oil 0:06:47.720 --> 0:06:50.320 majors came out of one company, Standard Oil, remember, you know, 0:06:50.400 --> 0:06:54.359 so this is not every fifteen to twenty fifty years. 0:06:54.360 --> 0:06:56.760 If you have a big technology change, but all of 0:06:56.800 --> 0:06:59.640 advantages go to capital, which is what is going to happen. 0:07:00.320 --> 0:07:03.160 I think eventually society will push back, But until it happens, 0:07:03.200 --> 0:07:04.960 it's actually a very nice ride the building. 0:07:04.960 --> 0:07:07.560 On John's point, should we just expect higher deficits then. 0:07:08.400 --> 0:07:09.720 No, I think so. 0:07:10.560 --> 0:07:15.960 The OBBA and the tariffs from revenues, the total deficit 0:07:16.040 --> 0:07:19.000 from that is not higher than if just the trump 0:07:19.000 --> 0:07:21.240 casks that were expiring had been extended, and we all 0:07:21.240 --> 0:07:24.440 thought they would be extended if nothing else right. The problem, 0:07:24.520 --> 0:07:26.559 the reason why the long bound in the United States 0:07:26.760 --> 0:07:29.640 refuses to come below five percent is not because the 0:07:29.680 --> 0:07:31.000 OBBA is more profligate. 0:07:31.040 --> 0:07:32.520 It's because it locks in. 0:07:33.000 --> 0:07:35.040 It makes it clear that we are not going to 0:07:35.040 --> 0:07:37.360 go away from six and a half to seven percent deficits, 0:07:37.720 --> 0:07:39.400 which is where we were this year, last. 0:07:39.280 --> 0:07:41.239 Year, for at least ten more years. 0:07:41.720 --> 0:07:45.040 You know, you mentioned Rachel Rees and the conversation from 0:07:45.040 --> 0:07:47.840 three weeks ago. The significant part was not that she 0:07:47.880 --> 0:07:50.400 got emotional in person. The significant part for me was 0:07:50.800 --> 0:07:55.080 Labor has a big parliamentary majority and cannot pass a 0:07:55.280 --> 0:07:57.640 simple change, a small change to the welfare build that 0:07:57.720 --> 0:07:58.680 was the significance of it. 0:07:58.680 --> 0:07:59.600 There's no political will. 0:08:00.360 --> 0:08:02.360 I appreciate your time, enjoy the right of the market 0:08:02.400 --> 0:08:04.200 right now sings for the message, and we'll catch up 0:08:04.200 --> 0:08:16.200 in five fist time. We just around a time you 0:08:16.200 --> 0:08:18.920 called Libby cantroll of Libby, goodmonic. 0:08:18.520 --> 0:08:19.560 Good morning August. 0:08:19.560 --> 0:08:21.160 First, are we going to wrap this up for it's 0:08:21.160 --> 0:08:22.520 not in new July ninth? 0:08:23.520 --> 0:08:25.240 Yeah, I mean, look, I think what we were been 0:08:25.240 --> 0:08:26.760 telling our clients is that we are going to be 0:08:26.840 --> 0:08:29.560 living with trade policy and tear policy uncertainty for the 0:08:29.640 --> 0:08:32.079 duration of this administration. So maybe we get a little 0:08:32.120 --> 0:08:34.880 bit more clarity. I would agree that fifteen percent is 0:08:34.920 --> 0:08:37.120 the new ten percent, ten percent is the new zero percent. 0:08:37.720 --> 0:08:39.199 Kind of the best. 0:08:39.000 --> 0:08:42.520 That a country can hope for those with trade surpluses 0:08:42.640 --> 0:08:45.080 is going to be ten percent, and then everything else 0:08:45.120 --> 0:08:46.760 is going to be higher. I mean, Japan got I 0:08:46.800 --> 0:08:49.240 think arguably a pretty good deal here. 0:08:49.280 --> 0:08:51.199 But again, if you just look, if we just take a. 0:08:51.120 --> 0:08:53.640 Step back and go back to December, right after the election, 0:08:54.000 --> 0:08:55.720 and we were just saying we're going to be sitting 0:08:55.720 --> 0:08:58.120 here and talking about how fifteen percent seems pretty benign 0:08:58.200 --> 0:09:01.520 on one of our closest ally and trading partners. 0:09:01.520 --> 0:09:02.840 I don't think anybody would believe it. 0:09:02.880 --> 0:09:04.880 So I think that the Overton window, if you will, 0:09:04.960 --> 0:09:07.920 has really been expanded here, kind of shattered in terms 0:09:08.000 --> 0:09:11.120 of what is acceptable in the markets and in Washington. 0:09:11.480 --> 0:09:13.920 And again, I think from an economic and markets perspective, 0:09:13.920 --> 0:09:16.320 we do think this will start having a bite at 0:09:16.360 --> 0:09:19.800 some point, even though maybe markets are just, you know, 0:09:19.960 --> 0:09:21.880 willfully ignoring the reality here. 0:09:21.960 --> 0:09:23.000 Well, all the market's numb. 0:09:23.040 --> 0:09:26.520 Has Trump basically conditioned them to accept fifteen percent because 0:09:26.520 --> 0:09:30.160 they're not as a sky high April second terraffs originally 0:09:30.240 --> 0:09:31.480 this administration came out. 0:09:31.360 --> 0:09:33.079 With yet and I think you know what we have 0:09:33.160 --> 0:09:35.240 been talking to our clients are the sort of like 0:09:35.280 --> 0:09:38.000 the taco man versus tariff man, this idea of Trump 0:09:38.000 --> 0:09:41.080 always chickening out, And if you actually look at the 0:09:41.080 --> 0:09:43.800 tariff level right now, it would not suggest that he 0:09:43.920 --> 0:09:44.640 is chickening out. 0:09:44.720 --> 0:09:44.880 Yet. 0:09:44.960 --> 0:09:48.840 Yes, he has softened his most extreme stands. So will 0:09:48.840 --> 0:09:51.360 the effect of average tar freight go up to thirty percent? 0:09:52.040 --> 0:09:53.520 Not likely, But. 0:09:53.640 --> 0:09:56.360 Where we think it probably will Land is between fifteen 0:09:56.440 --> 0:09:59.000 and twenty percent. Fifteen and twenty percent tariff, I mean 0:09:59.320 --> 0:10:02.320 that's you know, that's not insignificant. So yes, I do 0:10:02.440 --> 0:10:05.360 think that in some ways, again this idea of you know, 0:10:05.480 --> 0:10:08.600 the Overton window sort of what's possible in Washington, he's 0:10:08.640 --> 0:10:12.959 expanded that so much that the market is somewhat desensitized. 0:10:12.960 --> 0:10:14.720 But we really, we do think this will start having 0:10:14.720 --> 0:10:16.800 actually real economic effects at some point. 0:10:16.760 --> 0:10:18.120 When it comes to these negotiations. 0:10:18.160 --> 0:10:20.280 I was really struck by the Japanese one because of 0:10:20.280 --> 0:10:22.320 that five hundred and fifty billion dollar fund, and I'm 0:10:22.360 --> 0:10:24.560 still kind of confused about exactly what it is because 0:10:24.559 --> 0:10:27.240 the Prime Minister of Japan is talking about that these 0:10:27.280 --> 0:10:31.280 are basically loan guarantees, and Howard Lutnik, the Commerce Secretary, 0:10:31.360 --> 0:10:33.960 is saying it's much much more than that. Almost sounds 0:10:33.960 --> 0:10:35.840 like a bit of a slush fund. Do you understand 0:10:35.920 --> 0:10:37.960 what the administration is looking for when it comes to 0:10:37.960 --> 0:10:38.760 training partners? 0:10:39.000 --> 0:10:41.840 Yeah, I think what we are, we are, like everybody else, 0:10:41.920 --> 0:10:44.520 is waiting for the details. I mean think a couple 0:10:44.520 --> 0:10:47.880 of things on this one is that, you know, for 0:10:47.880 --> 0:10:51.200 for another country to be funding our industrial policy, that 0:10:51.240 --> 0:10:55.080 could actually have some implications. So I think there's there's 0:10:55.120 --> 0:10:57.480 one of just sort of is this sort of politically 0:10:57.520 --> 0:11:02.000 realistic that you're actually relying on another country to actually 0:11:02.040 --> 0:11:04.920 make investments in things that are important from a national 0:11:04.960 --> 0:11:08.560 security or from an economic perspective for the country. The 0:11:08.600 --> 0:11:10.440 other which is a little bit technical and a little 0:11:10.440 --> 0:11:12.680 bit walking, but I think also important is if the 0:11:12.720 --> 0:11:16.280 adjective for the administration is to reduce the trade deficit, 0:11:16.640 --> 0:11:18.880 you can't reduce the trade deficit with the country and 0:11:19.000 --> 0:11:22.920 increase the capital account. Those things are supposed to be offset. So, 0:11:23.880 --> 0:11:26.040 you know, I think that you're trying to have kind 0:11:26.080 --> 0:11:27.120 of both ways here. 0:11:26.960 --> 0:11:29.200 So we'll sort of see what the details are. 0:11:29.880 --> 0:11:31.920 I think, you know, our you know, our suggestion to 0:11:31.960 --> 0:11:33.640 our clients is just to focus on what we do 0:11:33.760 --> 0:11:36.320 know though, which is the fifteen percent tariffs. And again 0:11:36.720 --> 0:11:38.720 that's that's an increase from the three percent that we 0:11:38.760 --> 0:11:39.360 had in January. 0:11:39.400 --> 0:11:41.840 And you have the joy on the opportunity of going 0:11:41.880 --> 0:11:44.520 around the world and explaining this to everybody. And I'm 0:11:44.520 --> 0:11:48.080 curious how different the reaction is for people not in 0:11:48.080 --> 0:11:51.160 the US versus the United States and how they plan 0:11:51.280 --> 0:11:52.480 to sort of operate around that. 0:11:52.960 --> 0:11:55.120 Yeah, I was just I was just saying before before 0:11:55.120 --> 0:11:57.480 the before the segment, that I was in Canada yesterday 0:11:57.520 --> 0:11:59.480 meeting with some of our large institutional clients. 0:11:59.480 --> 0:12:01.000 I've been all, you know, all over the world. 0:12:01.240 --> 0:12:04.280 We have the benefit of having long standing relationships with clients, 0:12:04.720 --> 0:12:06.720 you know, again outside of the US and inside the US, 0:12:06.840 --> 0:12:08.760 and then the perspective is different, you know. I think 0:12:08.760 --> 0:12:12.120 that you know, in some ways, there's there's asymmetry around 0:12:12.160 --> 0:12:15.120 the information. So I think there's some assumptions that are 0:12:15.160 --> 0:12:19.640 made that maybe are not necessarily right for our for 0:12:19.679 --> 0:12:22.160 our foreign clients. But I think more importantly, you know, 0:12:22.240 --> 0:12:25.200 our clients were already over index to sort of US 0:12:25.200 --> 0:12:28.720 equities to US dollar based assets coming into this year, right, 0:12:28.720 --> 0:12:32.440 the sort of the narrative of American exceptionalism, the expectation 0:12:32.600 --> 0:12:35.240 for you know, just blockbuster growth in the US and 0:12:35.320 --> 0:12:38.880 sort of languishing growth elsewhere come you know, in January, 0:12:39.280 --> 0:12:42.600 that obviously has changed. Those expectations have changed. So our 0:12:42.679 --> 0:12:45.600 clients in some ways, we're already reevaluating some of their 0:12:45.679 --> 0:12:47.679 dollar based asset allocation. 0:12:47.760 --> 0:12:50.080 And I think this probably has accelerated that. 0:12:50.760 --> 0:12:53.520 Certainly, the tariffs, I think again maybe they're impervious to that, 0:12:53.559 --> 0:12:56.160 maybe a little bit more desensitized some of the knocks 0:12:56.160 --> 0:12:57.800 on the FED, some of the cut questions about the 0:12:57.800 --> 0:13:00.800 in strength of the institutions, sort of the you know, 0:13:00.840 --> 0:13:05.120 the political, you know, functionality of Washington. I think those 0:13:05.160 --> 0:13:08.040 all are still questioned. The questions are front in terms 0:13:08.040 --> 0:13:08.880 of their in their minds. 0:13:08.960 --> 0:13:09.120 You know. 0:13:09.240 --> 0:13:11.760 Sam Zef of jpm Worgan Private Bank was on earlier 0:13:11.800 --> 0:13:14.720 and he said, initially people just work in the derivatives 0:13:14.760 --> 0:13:19.640 market to hedge their dollar exposure, but the actual reallocation 0:13:19.880 --> 0:13:22.800 happens over time. Is that something that you're seeing too, 0:13:22.840 --> 0:13:25.080 that there's a lot of reallocation away from dollar to 0:13:25.120 --> 0:13:28.120 dominated assets in the pipeline that hasn't fully come to 0:13:28.120 --> 0:13:28.680 the four yet. 0:13:28.920 --> 0:13:29.120 Yeah. 0:13:29.120 --> 0:13:30.960 I would say with our clients, we are seeing exactly 0:13:31.000 --> 0:13:33.120 that we were seeing them this sort of being taken 0:13:33.120 --> 0:13:35.640 out in the FX market, you know, hedging their dollar 0:13:35.720 --> 0:13:39.400 based exposure, and you know, you know, broadly speaking, there 0:13:39.520 --> 0:13:41.920 was some discussion around the tax bill. There was a 0:13:41.960 --> 0:13:45.040 section eight ninety nine, the revenge tax, which was definitely 0:13:45.360 --> 0:13:48.199 I think would have had some significant implications on actual 0:13:48.240 --> 0:13:53.040 asset allocation. I think now they are maybe sort of 0:13:53.040 --> 0:13:56.760 taking a step back and not necessarily divesting from the US, 0:13:56.800 --> 0:13:58.640 but I think sort of maybe hitting the hitting in 0:13:58.760 --> 0:14:00.760 a little bit more of the pose. But in terms 0:14:00.760 --> 0:14:03.400 of your new allocation new allocations, yes, but of course 0:14:03.400 --> 0:14:05.120 it's different for every client, so I don't want to 0:14:05.160 --> 0:14:07.760 sort of generalize, but I do think that there is, 0:14:08.040 --> 0:14:09.880 you know, more of which is a reevaluation of some 0:14:09.920 --> 0:14:11.000 of their dollar based assets. 0:14:11.360 --> 0:14:13.480 It's going to say thanks for being here. Let me 0:14:13.480 --> 0:14:14.520 cancher that a thin. 0:14:24.120 --> 0:14:25.080 Dan, I's of wet Bush. 0:14:25.120 --> 0:14:27.120 It's the biggest Tesla bull on the street with a 0:14:27.160 --> 0:14:30.280 price target of five hundred and an outperform rating. Dan 0:14:30.400 --> 0:14:31.840 joins us now for more, Dank and Mornic. 0:14:32.120 --> 0:14:32.720 Great to be here. 0:14:32.840 --> 0:14:36.680 Revenue down twelve percent, vehicles deliver down, average sunning, price down, 0:14:37.200 --> 0:14:38.920 and yet you're at five hundred dollars. 0:14:39.320 --> 0:14:39.920 Tell me why? 0:14:40.000 --> 0:14:42.880 Yeah, I mean, look the quarter itself nothing right home about, 0:14:42.880 --> 0:14:47.320 But I mean our view, it's about autonomous robotics. AI 0:14:47.440 --> 0:14:50.040 is the future for Tesla. So to me, yeah, it's 0:14:50.040 --> 0:14:53.760 a rough few quarters ahead, but I believe autonomous we 0:14:53.840 --> 0:14:55.520 are in the beginning what's going to be a trillion 0:14:55.560 --> 0:14:59.560 dollar valuation alone for a Tesla. So that's why I 0:14:59.560 --> 0:15:03.200 don't get so concern. We talk about deliveries which actually 0:15:03.200 --> 0:15:05.280 were kind of in line, you know, when we look 0:15:05.280 --> 0:15:07.760 at what's gonna happen the second half the story here 0:15:07.880 --> 0:15:11.240 when it comes to physical AI. Two best ones out there, 0:15:11.400 --> 0:15:13.160 it's gonna be Tessa and then video. 0:15:13.400 --> 0:15:16.280 Moving from a pre autonomy to a post autonomy world. 0:15:16.640 --> 0:15:18.240 Did he do enough on the call last night to 0:15:18.240 --> 0:15:20.920 convince investors that it's going to be smooth sigbink. 0:15:21.160 --> 0:15:23.720 Look, I mean obviously the call, you know, definitely some 0:15:23.840 --> 0:15:26.680 could have criticism in terms of you promising so much. 0:15:26.800 --> 0:15:29.720 Well, my view is if twenty to thirty. 0:15:29.440 --> 0:15:32.320 Percent of what he promised, you see in the next year, 0:15:32.880 --> 0:15:36.320 this is a stock that's up seventy eighty percent from here. 0:15:36.440 --> 0:15:39.480 So that's that's why when I look at Tesla, I 0:15:39.480 --> 0:15:41.440 don't focus, and we've talked about so much in the 0:15:41.480 --> 0:15:44.920 show over the years, I don't focus near term deliveries 0:15:45.040 --> 0:15:47.840 what that means in terms of you know, ev tax credits. 0:15:48.080 --> 0:15:50.840 This is an autonomous robotics story, and I think, look 0:15:50.880 --> 0:15:54.240 the AI revolutions we saw from you know, from from Alphabet. 0:15:54.280 --> 0:15:56.640 I mean, we are just in the early days of 0:15:56.720 --> 0:15:57.440 this playing out. 0:15:57.760 --> 0:15:59.600 Maybe I'm chicken little, but I was looking at this 0:15:59.640 --> 0:16:01.800 press call, diference. I was reading this and I was thinking, 0:16:01.800 --> 0:16:03.880 this is a disaster. I mean, Essentially this was a 0:16:03.960 --> 0:16:06.800 dreamstock and suddenly they're talking about tax credits and things 0:16:06.800 --> 0:16:09.040 of that nature. They used to talk about an affordable vehicle. 0:16:09.080 --> 0:16:11.400 Now they're talking about a stripped down model hy that 0:16:11.400 --> 0:16:13.080 doesn't sound that sexy at all, and they're going to 0:16:13.120 --> 0:16:17.000 expedite production of pre of other vehicles and put that 0:16:17.080 --> 0:16:19.200 on hold. What would it take for you to get barished? 0:16:19.240 --> 0:16:19.520 Yeah? 0:16:19.560 --> 0:16:21.520 Look, I mean you bring up great points and that 0:16:21.680 --> 0:16:23.640 will be the bearish points. And when it comes to 0:16:23.680 --> 0:16:27.760 the affordable next vehicle, is that just a stripped down version. Look, 0:16:28.440 --> 0:16:31.880 my view is that it comes down to like ROBOTAXI. 0:16:32.080 --> 0:16:34.200 If you're in twenty five cities in the next year 0:16:35.120 --> 0:16:38.200 and you should actually start to get volume production of optimists. 0:16:38.200 --> 0:16:40.920 When it comes to robotics, I think ninety percent of 0:16:40.960 --> 0:16:43.960 the future value is going to be in the AI story, 0:16:44.040 --> 0:16:45.720 not on the actual deliveries. 0:16:45.760 --> 0:16:46.920 In terms of cars out there. 0:16:46.920 --> 0:16:50.000 You have ten million vehicles in terms of teslas out there. 0:16:50.000 --> 0:16:52.760 It's all about the data and I believe the big 0:16:52.800 --> 0:16:55.160 thing is going to be the Sherelder mean where they'll 0:16:55.160 --> 0:16:58.520 have a significant investment XAI and I think that's where 0:16:58.520 --> 0:17:02.080 you get more of a wartime CEO in Musk, and 0:17:02.120 --> 0:17:03.560 I think that's really going to be the difference. 0:17:03.600 --> 0:17:07.480 Re satisfied by his answers about Xai, about the investments there, 0:17:07.520 --> 0:17:09.639 the crossover with Tesla, because there was a lot of 0:17:09.720 --> 0:17:12.400 ambiguity and he was asked that directly and he wasn't 0:17:12.440 --> 0:17:14.760 able to explain that connection and how it really does 0:17:14.840 --> 0:17:17.000 rebound over other than some people who are in this 0:17:17.040 --> 0:17:18.639 industry don't really want to work at a car company. 0:17:18.680 --> 0:17:20.200 I want to offer them an opportunity to. 0:17:20.320 --> 0:17:22.359 Yeah, I wouldn't say like that conference call is not 0:17:22.480 --> 0:17:24.840 you wouldn't put him in the Neery Hall of Fame 0:17:25.080 --> 0:17:28.600