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Speaker 1: Your point the camera now to our first guest, Cameron
Speaker 1: Dawson over a new Edge Wealth, joining us right now
Speaker 1: to talk.
Speaker 3: A little bit more a welded.
Speaker 1: That lopsidedness that we saw at the start of twenty
Speaker 1: twenty four is going to be lopsidedness at the start
Speaker 1: of twenty twenty five.
Speaker 4: I think the most important point about breadth is that
Speaker 4: it actually has.
Speaker 3: Been supported by earnings.
Speaker 4: The reason why the market has been narrow, it's because
Speaker 4: earnings growth has been narrow so it's not just valuation alone,
Speaker 4: and we've seen that in the last four months. If
Speaker 4: you look at the mag seven their earnings estimates have
Speaker 4: actually been revised higher by about fifteen percent, but if
Speaker 4: you look at the equal weight index, their earnings have
Speaker 4: been revised lower by about five percent. So that's spread
Speaker 4: in earnings revisions and earning strength is really what has
Speaker 4: been driving the fact that this market is led by
Speaker 4: such a few short names. The question is, if you
Speaker 4: look at estimates in twenty twenty five, they have the
Speaker 4: everything else starting to really participate in earnings. But that's
Speaker 4: a pretty high bar and pretty much has show these
Speaker 4: stories we get into next.
Speaker 1: Year, how much if we do get a broadening of
Speaker 1: the earnings picture, how much of that is dependent on
Speaker 1: economic conditions and for that matter, policy conditions coming out
Speaker 1: of Washington.
Speaker 4: It is rather peculiar that we've seen this economic growth
Speaker 4: environment where we've had consistent upside surprises to growth.
Speaker 3: We've had growth be above.
Speaker 4: Trend, and yet it has not materialized to the everything
Speaker 4: else earnings, meaning that you've had this strong GDP environment,
Speaker 4: but the average stock has continued to struggle. Part of
Speaker 4: that is just an overhang from the pandemic. You had
Speaker 4: some over earning that happened, margins got overextended, and that
Speaker 4: was coming back in But what you have now is
Speaker 4: this expectation that you'll have a huge reacceleration in those
Speaker 4: four ninety three names. We're not sure if you get
Speaker 4: that in a potentially decelerating nominal growth environment.
Speaker 5: You know, it's a little earlier that Romayne had mentioned
Speaker 5: the bond market. You're seeing that bid come back into
Speaker 5: the bond market in the last.
Speaker 3: Week of the year.
Speaker 5: However, just last week we're at four sixty one again
Speaker 5: on the ten year. At what point does that start
Speaker 5: to get in the way of this equity market rally
Speaker 5: or is it already getting in the way.
Speaker 4: The thing that's been most surprising in twenty twenty four
Speaker 4: is how much we've been able to see multiple expansion
Speaker 4: despite having rising bond yields.
Speaker 3: If you look forward, multiples.
Speaker 4: For the S and P five hundred are up about
Speaker 4: seventeen percent over the course of the year, and that's
Speaker 4: with a bond market that has seen this constant pressure
Speaker 4: and rising yields. So at a certain point is a
Speaker 4: twenty two point three times forward multiple consistent with a
Speaker 4: bond yield at four point six percent. We always have
Speaker 4: to remember that valuations are a very poor timing tool,
Speaker 4: but we're getting to a point where equity risk premiums
Speaker 4: are incredibly narrow, incredibly tight, so as equity investors, you're
Speaker 4: not necessarily getting well compensated for.
Speaker 3: The added risk.
Speaker 5: But even if you believe, if you believe that the
Speaker 5: reason yields are higher is because of strong economic data,
Speaker 5: then does that mean that any vulnerable economic data could
Speaker 5: set the market a little Haywire, I think.
Speaker 4: That is a really good point, is that if you're
Speaker 4: looking at things like credit spreads being ultra tight, valuations
Speaker 4: being so high, it's not contemplating any kind of growth
Speaker 4: slow down. So if you were an environment where you're
Speaker 4: seeing growth estimates get cut versus getting raised, that would
Speaker 4: be a challenge to valuations.
Speaker 3: We think the most important.
Speaker 4: Charts over the last two years is GDP estimates for
Speaker 4: twenty three and twenty four. It has been a constant
Speaker 4: climb upwards. And if that starts to go in the
Speaker 4: other direction, meaning we're talking about GDP estimate scene to
Speaker 4: being revised lower, that's a very different market mood.
Speaker 1: I'm curious though, too, when we talk about the expectations
Speaker 1: for economic growth, and we've seen what the market expects,
Speaker 1: what economists expects, so you've even seen what the FED expects.
Speaker 1: It's healthy. It may not be you know, Gangbusters, but
Speaker 1: it seems like a healthy enough foundation. So why are
Speaker 1: people why is there still some trepidation in the market,
Speaker 1: particularly when it comes to like I said, midcaps, small caps,
Speaker 1: the types of companies that would benefit from a stable
Speaker 1: economic environment.
Speaker 3: Well, I think first on.
Speaker 4: The economic growth expectations is that recession risk has been
Speaker 4: effectively completely priced out of the market as.
Speaker 6: We forgot about recession.
Speaker 3: P does that happen, But also it's been priced out
Speaker 3: of the psyche.
Speaker 4: If you go back to Palace comments from a couple
Speaker 4: of weeks ago, he talked about how great the economy
Speaker 4: was and how optimistic he was about future growth. So
Speaker 4: if there's lue, believe me, Well, it does make us
Speaker 4: a little bit nervous if we're not considering any kind
Speaker 4: of downside risk, mostly as we're starting to see some
Speaker 4: signs of things like continuing claims last week, continue to
Speaker 4: march higher. When it comes to small caps in mid caps,
Speaker 4: we have to acknowledge that it really is about the
Speaker 4: balance sheets. It's about interest rates being so high, and
Speaker 4: that there was this notion of sour five until twenty
Speaker 4: twenty five because POWE is going to bail you out, We're.
Speaker 3: Going to get interest rate cuts.
Speaker 4: If those don't come, then we have that balance sheet
Speaker 4: interest cost pressure.
Speaker 3: That remains.
Speaker 1: So in the realm of stocks in if I say
Speaker 1: the word value to you, what does that even mean
Speaker 1: right now? Is there value to be found in this market?
Speaker 4: Value isn't necessarily dirt cheap at this point, but we
Speaker 4: do know that the relative performance has been so abysmal
Speaker 4: that it's likely primed for some kind of snapback. Jeff
Speaker 4: de Graff pointed out this morning that the value relative
Speaker 4: performance has been in about six percentiles, so very very depressed.
Speaker 4: The question is does that start to rotate in the
Speaker 4: other direction that is sustainable, And that's where it comes
Speaker 4: back to earnings, meaning that you can see a snapback
Speaker 4: in value simply because it's underloved and under owned. But
Speaker 4: is that snapback lasting more than let's say, two weeks.
Speaker 4: And that really is when it comes down to the
Speaker 4: earnings line, because those have to deliver for it to
Speaker 4: be more than just a flash in the pan, you know.
Speaker 5: Speaking of value, a lot of investors have been trying
Speaker 5: to rotate out of those high flyers, those big tech
Speaker 5: stocks out of Nvidia, for example, and take on some
Speaker 5: not Nvidia. You have seen some of that pullback here
Speaker 5: and there. But you know, if you think about the
Speaker 5: way that people are rotating, there is not a consensus.
Speaker 5: You've seen that small cap trade, you've seen some value,
Speaker 5: you've seen some rotation into different.
Speaker 3: Sectors as well. How do you play it?
Speaker 5: What is the most sustainable rotation at this point.
Speaker 4: We think it's the steady hand of quality that remains
Speaker 4: still very very important. Over the last four months or so,
Speaker 4: you've seen a big surge in low quality, high beta,
Speaker 4: high momentum kinds of names, and so we do think
Speaker 4: that the best way to be able to take advantage
Speaker 4: of these rotations is to content you to focus on
Speaker 4: things like high free cash flow, good return on investing capital,
Speaker 4: good balance sheets. They're getting left in the dust a
Speaker 4: little bit recently, but we do think over the long
Speaker 4: term that quality is the way to go.
Speaker 5: It's people pulling out there at EQS screens on their
Speaker 5: Bloomberg terminal and running those terminal charts. Hey, listen, do
Speaker 5: you want to go back to something you'd said earlier
Speaker 5: about GDP growth Because so many investors are looking here
Speaker 5: at the way the Trump administration will tackle, of course, the.
Speaker 3: Reorganization of the government.
Speaker 5: Now we're talking about doge more and more on this program,
Speaker 5: aren't we, And.
Speaker 3: Do you believe that that could.
Speaker 5: Cut into growth if we don't see the same type
Speaker 5: of fiscal stimulus that we've seen in the last couple
Speaker 5: of years.
Speaker 4: I think it's a really important point, which is that
Speaker 4: fiscal has been a big contribution to overall GDP growth,
Speaker 4: and so if you start pursuing something that looks like austerity,
Speaker 4: it might be beneficial in the long run if we
Speaker 4: want to talk about budget deficits and balance budgets, But
Speaker 4: in the short run, there is pain that you have
Speaker 4: to have for that gain.
Speaker 3: So it could be that if we actually.
Speaker 4: Are able and that's a big if to rain in
Speaker 4: some of the spending and do some reorganization of government,
Speaker 4: that that could detract from overall GDP growth.
Speaker 3: We saw that the last.
Speaker 4: Time we went through a balanced budget kind of outlook
Speaker 4: post squestration, it was a drag on growth.
Speaker 3: So it is an important watch point.
Speaker 1: Yeah, And it's a good point too, because I think
Speaker 1: a lot of people kind of forget just how much
Speaker 1: government spending contributes to the growth of the economy. And
Speaker 1: it gets to this idea as well about the kind
Speaker 1: of bifurcation. How you have kind of a higher end
Speaker 1: consumer if you will higher income people I just say
Speaker 1: that appear to be doing well. You have people in
Speaker 1: the middle and the lower end that at least anecdotally
Speaker 1: still seem to be struggling.
Speaker 6: And there was some interesting.
Speaker 1: Data that we just got out today about credit card
Speaker 1: delinquencies arising, particularly amongst lower income folks.
Speaker 4: It is still very present that we have this ca
Speaker 4: shaped economy. And if you think about the lower income consumer,
Speaker 4: they're sensitive to things like interest rates, they're far more
Speaker 4: sensitive to inflation, and they're more sensitive to the job market.
Speaker 4: So the fact that you're seeing hiring start to slow down,
Speaker 4: that likely is what is creeping into those issues that
Speaker 4: we're seeing with the delinquencies for the for the low
Speaker 4: income consumer. Then if you shift to the high income consumer,
Speaker 4: that's where we think the equity market is really important
Speaker 4: because that's been one of the things. Loose financial conditions,
Speaker 4: high interest rates, yet really strong stock prices, strong housing
Speaker 4: prices has led to the high income consumer being so
Speaker 4: resilient and good to remember, the top twenty percent of
Speaker 4: consumers make up forty percent of overall consumption, so they
Speaker 4: outpunch their weight.
Speaker 3: And so if you start to see.
Speaker 4: Equity market weakness, and that's an if, but if you
Speaker 4: start to see it, that could be one thing that
Speaker 4: could cause that high income consumer to begun to pull back.
Speaker 1: I should just point out I did my economic part
Speaker 1: this holiday season.
Speaker 6: I haven't seen I haven't seen.
Speaker 1: My credit card statement yet, but I'm sure it will
Speaker 1: make me weep when I get it.
Speaker 5: Yeah, I'm not excited to see it's the holiday seasons
Speaker 5: are always tough, you know. The credit card delinquencies are
Speaker 5: a great point. The other reason to look at them
Speaker 5: is because weeks away we have earning season starting once
Speaker 5: again and it's just starting to see credit card delinquencies rise.
Speaker 5: Do you start to worry about the banks again or
Speaker 5: do you shrug it off because the yields curve is
Speaker 5: steeper and rates are staying hi.
Speaker 3: Yeah, it's a really good question.
Speaker 4: Is that there's also this notion that the banks are
Speaker 4: going to see the benefit of a big IPO and
Speaker 4: M and a cycle.
Speaker 3: That could be a bit of a hope.
Speaker 4: We are seeing good performance out of recently iPod stocks,
Speaker 4: at least over the last couple of months, So maybe
Speaker 4: that's something that can defrost the ice that has been
Speaker 4: present for the last two years within that part of
Speaker 4: the market. But I think it is an interesting point,
Speaker 4: which is that markets have effectively priced out some of
Speaker 4: this credit risk, saying that the economy is strong, so
Speaker 4: we don't need as much compensation for credit risk. But
Speaker 4: you're starting to see some pockets of weakness, and if
Speaker 4: rates remain high, we can't forget that. You have a
Speaker 4: big refinancing cycle that starts in twenty five and into
Speaker 4: twenty six, and maybe that starts to pinch some.
Speaker 3: Of these borrowers.
Speaker 1: All right, Camera, I'm going to have to leave it.
Speaker 7: There.
Speaker 1: No better way to close out the year than a
Speaker 1: conversation with Camera and Dawson to see Iisle over at
Speaker 1: New Edge. Patrick joins us right now to talk a
Speaker 1: little bit more about his outlook for energy prices, and
Speaker 1: it's kind of a big contrast to what we saw
Speaker 1: at the start of twenty twenty four when we had
Speaker 1: that ten to fifteen percent rally and everybody was talking
Speaker 1: about oil at one hundred bucks and beyond. And we've
Speaker 1: come a long way since then, just not in the
Speaker 1: right direction. Well, not in the right direction if you're
Speaker 1: an oil producer.
Speaker 6: Yeah, that's right. I think the bulls have been chased
Speaker 6: away at least for now, and under the President Trump's
Speaker 6: mantro drill, baby drill, I think it may be another
Speaker 6: challenging year, at least for oil. Keep in mind OPEX
Speaker 6: production cuts, keeping about five million barrels a day of
Speaker 6: spare capacity offline. That's where some of the downside risks
Speaker 6: potentially comes. Now. I don't necessarily believe that OPEC is
Speaker 6: going to open this bigot back up in April. That's
Speaker 6: what they've delayed their restoration to for now. But I
Speaker 6: think it's going to be another challenging year for the upstream,
Speaker 6: whereas you still are going to see your seasonal swings
Speaker 6: when it comes to the midstream, the refiners. Maybe good
Speaker 6: news though for pipeline operators who may be able to
Speaker 6: expand a little bit more readily available. And then the
Speaker 6: retail sector. I think the CE store level is going
Speaker 6: to experience another good year. But for oil, you know,
Speaker 6: there aren't a whole lot of upside risks now. I
Speaker 6: think there's more downside potential than upside for twenty twenty five.
Speaker 1: Just staying on oil for one second, particularly on the
Speaker 1: production side, because I know there was a lot of
Speaker 1: optimism about the Trump administration coming in, particularly given the
Speaker 1: policies we saw the first time around. But there is
Speaker 1: an issue of capacity right now and whether there is
Speaker 1: anything to drill baby drill into that we haven't already
Speaker 1: drilled baby drilled already into.
Speaker 6: Yeah, I mean exactly right. The Permian has been maturing. Now.
Speaker 6: There's been talk about potentially reopening the Arctic Wildlife Refuge,
Speaker 6: so you know that's something there as well. But I
Speaker 6: don't look for oil companies to go into rural Alaska
Speaker 6: and to be really excited about potentially drilling there. I
Speaker 6: think there's a lot of challenges with that. And keep
Speaker 6: in mind getting that oil online could take potentially years,
Speaker 6: if not longer than that. So the Permian is slowing down,
Speaker 6: so there are potentially some upside there, but keep in mind,
Speaker 6: ope spare capacity. Guyana as well seeing a huge increase
Speaker 6: in capacity. Think one of the wild cards in terms
Speaker 6: of risk. Keep in mind is that candidate sends US
Speaker 6: over four million barrels of Canadian heavy oil every day
Speaker 6: through a couple of different pipelines, and of course president
Speaker 6: like Trump's promise on tariffs. I think that I'd like
Speaker 6: to fall that hunder as talk, but you never really know.
Speaker 6: And again, President Trump's kind of against the status quo
Speaker 6: at least on some of these issues that do pose
Speaker 6: a potential upside risk for oil in the year ahead.
Speaker 8: I want to go to your outlook for twenty twenty five,
Speaker 8: but first, can you just reflect back on the year
Speaker 8: that was in oil WQI basically flat for twenty twenty four.
Speaker 8: What was really driving that? I guess lack of movement.
Speaker 6: Well, you know, on the supply side, Dopek had been
Speaker 6: taking barrels out of the market. There wasn't a whole
Speaker 6: lot to get excited. On the demand side of things,
Speaker 6: China's economy has been incredibly weak. Not only that, but
Speaker 6: they've been pushing evs much harder. And keep in mind
Speaker 6: that their gasoline demand may have already peaked now moving forward,
Speaker 6: and so Chinese demand is a huge headwind for this market.
Speaker 6: And it comes as there's a lot of supply that
Speaker 6: remains offline. In the US's back at producing record amounts
Speaker 6: of crudal ourselves at about thirteen point six million barrels
Speaker 6: a day. So I think a lot of this story
Speaker 6: is really focused on the China economy that really has
Speaker 6: struggled for much of this year. Now there's a promise
Speaker 6: of stimulus moving forward, but there's simply too many spare
Speaker 6: barrels sitting offline here for the market to really see
Speaker 6: much of a run up. Now. I think we could
Speaker 6: see a bit of a spring surge that may be
Speaker 6: tied more to refined products, but we'll have to keep
Speaker 6: an eye on the US economy. I mean, there's a
Speaker 6: lot of potential possibilities that could slow our economy down,
Speaker 6: which in turn could also slow down global oil consumption.
Speaker 8: How do you think about inflation for twenty twenty five,
Speaker 8: because at least the Federal Reserve, the FOMC members did
Speaker 8: up their inflation projections. How do you kind of take
Speaker 8: inflation into your forecast well.
Speaker 7: As you indicate.
Speaker 6: I mean a year ago, we were sitting here talking
Speaker 6: about waiting for the Fed to cut interest rates rather aggressively,
Speaker 6: and now they've really toned that down, and now there's
Speaker 6: more caution in their statements, and that could post a
Speaker 6: negative for oil as well. I don't think oil or
Speaker 6: energy is going to be inflationary in twenty twenty five,
Speaker 6: but it's obviously a risk factor. If the FED slows
Speaker 6: down its interest rate cuts, there could be ramifications for
Speaker 6: the dollar, and of course a dollar right now has
Speaker 6: been fairly strong. So keep in mind that oil is
Speaker 6: globally traded in dollars. That could even have an impact
Speaker 6: on the price of oil and certainly something we'll be watching.
Speaker 6: In your head.
Speaker 1: I am curious that Patrick could maybe if you can
Speaker 1: circle this back to the consumer. There was obviously a
Speaker 1: lot of talk during this election cycle about gas prices,
Speaker 1: despite the fact that at least as of today, gas
Speaker 1: prices at the pumper about forty percent lower than where
Speaker 1: they were I think about a year ago or so.
Speaker 1: It gets to the question here as to whether we
Speaker 1: see prices at the pump at the retail level kind
Speaker 1: of remain where they are, maybe even go lower, or
Speaker 1: are there some forces out there where maybe we should
Speaker 1: prepare our sales for higher prices ahead.
Speaker 6: Well, I think for consumers it's going to be a
Speaker 6: third year straight of decline so ever since twenty twenty two,
Speaker 6: the yearly national average again in twenty twenty five likely
Speaker 6: to trend lower. Now, consumers shouldn't mistake that for flat
Speaker 6: gas prices through the year, because we will see gas
Speaker 6: prices start to go up as we get closer to
Speaker 6: warmer weather. By the way, according to gas Pity data,
Speaker 6: this morning one of those rare moments where the national
Speaker 6: average has slipped below the three dollars a gallon mark.
Speaker 6: I do think that will be temporary, and in the
Speaker 6: spring we will see that surge. Prices will probably run
Speaker 6: up twenty five to fifty cents a gallon, and they
Speaker 6: could get closer to the mid and upper three dollars mark.
Speaker 6: But that's going to stop short of what we saw
Speaker 6: last year when the national average peaked at about three
Speaker 6: sixty seven a gallon. So it's good news for consumers.
Speaker 6: They probably won't be shelling out as much in twenty
Speaker 6: twenty five. But keep in mind President Trump's promise to
Speaker 6: cut energy prices in half. That's a big difference talking
Speaker 6: about prices at three dollars versus his promise of cutting
Speaker 6: them in half, which would represent a price below two dollars.
Speaker 1: Yeah, something we haven't really seen on a sustained basis,
Speaker 1: probably since I was in diapers. Patrick, I am curious
Speaker 1: about this idea of an export economy for our energy.
Speaker 1: We've obviously seen the US over the last few years
Speaker 1: become energy independent, and of course now has a relatively
Speaker 1: thriving export business. How much can that expand based on
Speaker 1: our own demands here locally and how much is going
Speaker 1: to be left over to ship out and sell to
Speaker 1: other folks overseas well.
Speaker 6: I mean, you look at US exports, A lot of
Speaker 6: that is lighter, sweeter crude oil, and really the bigger
Speaker 6: boom is LNG, and that's what certainly could expand under
Speaker 6: President Trump, the exports of LNG. I mean, he's already
Speaker 6: threatening Europe that if they don't buy additional US energy
Speaker 6: that there's going to be ramifications. And I do think
Speaker 6: there's room to grow.
Speaker 4: Well.
Speaker 6: Natural gas prices have been blossoming here in the last
Speaker 6: couple of months on the promise of potential more exports.
Speaker 6: Now natural gas now above the three dollars mark, so
Speaker 6: I think there is room to grow. The US is
Speaker 6: the world's largest any energy producer, and I think we'll
Speaker 6: probably see that continue to grow in the years ahead,
Speaker 6: especially as Russia continues it's war in Ukraine and Europe
Speaker 6: continues to turn to the US. So I think there's
Speaker 6: a lot of premise in US exports, and again look
Speaker 6: for exports, especially of LNG and crude oil to continue
Speaker 6: increasing this year as countries potentially make the shift, and
Speaker 6: as President Trump may push countries to make the switch
Speaker 6: over to US energy.
Speaker 8: Patrick, what geopolitical risks are you looking at for twenty
Speaker 8: twenty five that could potentially pose a risk to your forecasts?
Speaker 6: Well, again, I think President Trump is a bit of
Speaker 6: a wildcard. You know, what he says and what he does.
Speaker 6: It's a little bit against the status quo to come
Speaker 6: out and you know, talk about potentially putting tariffs on
Speaker 6: oil and other things, everything really from Canada and Mexico.
Speaker 6: So the political relationships could shift in the years ahead.
Speaker 6: And keep in mind China still really big one. How
Speaker 6: they're shifting away from fossil fuels is a big turning
Speaker 6: point here. They've potentially already seen peak consumption. We turned
Speaker 6: to India to see growth there as well. And there's
Speaker 6: a lot of geopolitical issues. The Middle East has been
Speaker 6: quieting down, but there's still the potential of conflict there
Speaker 6: in Russia's invasion of Ukraine certainly something to keep an
Speaker 6: eye on. But I think geopolitically, with somebody like President
Speaker 6: Trump in the White House, he may strong arm other
Speaker 6: countries into potentially doing what he likes a little bit more,
Speaker 6: and that certainly could keep energy prices from climbing much
Speaker 6: more substantially if he uses that strong arm.
Speaker 1: Frequent life curious, do you think there will be any
Speaker 1: sort of meaningful global coordination on some of this? Obviously
Speaker 1: we know OPEK plus has its own cartel, but in
Speaker 1: the past we had seen I guess, cooperation for lack
Speaker 1: of a better word, among some of the other major
Speaker 1: oil producers that aren't in OPEK in dealing with OPEK
Speaker 1: Or is this the relationship so fractured and so disparate
Speaker 1: right now that investors she really shouldn't pay any attention
Speaker 1: to that.
Speaker 6: Well, I think it is certainly fractured. I think there's
Speaker 6: a dissension amongst the ranks at OPEK. I mean, we've
Speaker 6: already seen some of that. Some countries certainly want to
Speaker 6: raise production, Saudi Arabia and Russia kind of going against that,
Speaker 6: trying to hold the line. The Saudis are spending a
Speaker 6: lot of money and they have a lot at stake
Speaker 6: here if oil prices were to decline even more significantly,
Speaker 6: So there's certainly some driving factors. But again some OPEC
Speaker 6: members do want to increase production while others do not,
Speaker 6: And that's something to keep an eye on because certainly
Speaker 6: not as coordinated as it once was.
Speaker 1: All Right, Patrick Craig Patrick Dahan, overhead gas buddy of
Speaker 1: Terry Haynes a Pangaea policy, joins us right now to
Speaker 1: help reflect on the life and legacy of Jimmy Carter.
Speaker 1: A lot of important dates there.
Speaker 7: We talk about.
Speaker 1: January ninth being a day of reflection and remembrance, of
Speaker 1: course his birthday October first, back in nineteen twenty four,
Speaker 1: his death of course on December twenty ninth. But I
Speaker 1: want to start Terry with July fifteenth, nineteen seventy nine.
Speaker 1: That was the day that Carter gave that famous Malaise
Speaker 1: speech and just a few weeks after that appointed Paul
Speaker 1: Vulker as Chairman of the FED to fight what at
Speaker 1: the time was just an almost unprecedented level of inflation
Speaker 1: that this nation was facing, a levelly of the inflation
Speaker 1: that for years he didn't necessarily get credit for taming.
Speaker 9: Oh, I think that's absolutely true, Ramaan, good morning to
Speaker 9: you and Critty. I think it's absolutely true. You know,
Speaker 9: I said to Marcus this morning, I think they should
Speaker 9: all thank and remember Carter for the crucial role that
Speaker 9: he played in breaking the back of inflation.
Speaker 7: Over several years.
Speaker 9: I mean, that was as well as not only appointing
Speaker 9: Paul Vulker, but defending Vulgar personally and fed independence through
Speaker 9: his term, something which President Reagan also did no small
Speaker 9: pull up cost to Reagan, even though he eventually got
Speaker 9: the benefits out of it. You know, that set the
Speaker 9: stage for not only you know, the great markets runs
Speaker 9: that we've seen, even through you know, great geopolitical crises,
Speaker 9: health crises like COVID, a bunch of other things, but
Speaker 9: also set the stage in helping the United States win
Speaker 9: the Cold War by boosting the relative economic strength of
Speaker 9: the United States against the Soviet Union at a crucial time.
Speaker 1: It's kind of interesting to read some of the biographies
Speaker 1: of Carter, particularly some of the ones that have come
Speaker 1: out over the last decade or so that have really
Speaker 1: painted him, I think, in a much better light than
Speaker 1: maybe how the country viewed him back in nineteen eighty
Speaker 1: when he lost to Ronald Reagan. And I am curious
Speaker 1: that if it weren't for the hostage crisis in Iran,
Speaker 1: the oil embargo, and of course the level of inflation.
Speaker 1: Is it possible that he might have been re elected
Speaker 1: in nineteen eighty.
Speaker 7: Oh sure, absolutely.
Speaker 9: You know, the President Reagan's run, the then candidate Reagan's
Speaker 9: run began fairly late, uh and and Carter was absolutely
Speaker 9: bedeviled by a lot of these policies. You know, I've
Speaker 9: met President Carter, but I was privileged to know a
Speaker 9: lot of the people that were his senior aides, most
Speaker 9: prominently including Jody Powell, who I knew decently well and
Speaker 9: so got a window into a lot of these things.
Speaker 9: And you know, Carter's Carter's strengths turned out also to
Speaker 9: be some of his weaknesses.
Speaker 6: You know.
Speaker 9: The mulishness and commitment that he showed to Vulcar, which
Speaker 9: made such a huge difference for the country even today,
Speaker 9: was also in large part what helped bring him down.
Speaker 9: He had a split in his own party that led
Speaker 9: to a primary challenge from Ted Kennedy. He had a
Speaker 9: revitalized right under Reagan that ultimately that ultimately swept him
Speaker 9: out of office.
Speaker 7: And he also was guilty.
Speaker 9: Of probably too much candor in talking to the American public.
Speaker 7: About things lays that you bring up that.
Speaker 9: Led to the impression that he was either out of
Speaker 9: control or unable to respond effectively.
Speaker 10: So, Terry, that's a lot of the domesticstoril. Let's talk
Speaker 10: about his record internationally as foreign policy record, the Camp
Speaker 10: David Accords, his role in the Panama Canal, even boycotting
Speaker 10: the Moscow Olympics as well. These are all flashpoints that
Speaker 10: are just as relevant today as they were during during
Speaker 10: his tenure as president. What does Donald Trump take away
Speaker 10: from that? Are there lessons to be learned?
Speaker 9: Absolutely, And the first lesson to be learned, I think
Speaker 9: is that the presidency has limits. You know, every victor
Speaker 9: in a presidential campaign, and you know the people around
Speaker 9: him tend to be a little triumphalist. They all want
Speaker 9: to talk about the legacies and or excuse me, mandates
Speaker 9: and the like. You know, Clinton came in in ninety
Speaker 9: two talking about a mandate when he had basically won
Speaker 9: forty three percent of the vote. You know, there's the
Speaker 9: there's always a lot of salesmanship that involved in it.
Speaker 9: But the lesson you can learn from a from Carter's presidency,
Speaker 9: and you know a lot of presidencies, frankly is that
Speaker 9: presidency has limits and it is uh, it's wise to
Speaker 9: remember those even even while you're trying to maximize your
Speaker 9: political benefit in the moment. Uh. You know, Carter. What
Speaker 9: Carter's presidency showed really was that he found it very
Speaker 9: difficult to bring his own congressional party along with him.
Speaker 9: Congress is a co equal branch for government and acts
Speaker 9: like it. Uh and uh, and he didn't. And Carter's also,
Speaker 9: while president, did not bring the public along with him
Speaker 9: as much as as try to try to lead public opinion,
Speaker 9: and that also came back to bite him. So it's
Speaker 9: a balancing act with presidents, and any any president after
Speaker 9: Carter was wise to remember that.
Speaker 10: Terry, we we talk a lot about energy security, and
Speaker 10: we certainly did and the contents of oil embargo during
Speaker 10: during Carter's time as president, but we're also talking about
Speaker 10: it now in terms of tariffs, in terms of what's
Speaker 10: going on in the Middle East, and the idea that the
Speaker 10: United States is the largest energy exporter in the world
Speaker 10: at the moment. What does that mean for the here
Speaker 10: and now when we're talking about modern politics. Is that
Speaker 10: is that a good thing or is that a bad
Speaker 10: thing for the United States?
Speaker 9: On balance, I think it's a good thing. I mean,
Speaker 9: we you know, we have strengths and weaknesses geopolitically, but
Speaker 9: one of our geopolitical strengths is energy and energy export.
Speaker 9: And we are in a situation now where we're in
Speaker 9: the most difficult geopolitical risk situation in more than fifty years.
Speaker 9: So it be who's the United States, no matter who's president, frankly,
Speaker 9: to make sure that it uses its advantages wisely, but
Speaker 9: that it maximizes those advantages as well. Certainly energy is
Speaker 9: one of those. And you know, I frankly look to
Speaker 9: the next administration and President Trump personally to try to
Speaker 9: do everything possible to maximum is that advantage.
Speaker 1: Let's talk about President Trump, the forty seventh president, his
Speaker 1: inauguration on January twentieth, what is his relationship going to
Speaker 1: be like with world leaders, particularly in contrast to kind
Speaker 1: of what we saw with Carter back in the seventies.
Speaker 1: I know, there are two completely different people with two
Speaker 1: completely different agendas here, But are there any parallels that
Speaker 1: we can draw?
Speaker 6: Oh?
Speaker 9: Absolutely, And I think Carter had you know, it's Carter
Speaker 9: had a very fractious relationship with many with many countries
Speaker 9: in the world. You know, his China policy was very successful.
Speaker 9: But on the other hand, you know, even coming up
Speaker 9: with the Camp David Accords required that kind of hardheadedness,
Speaker 9: that mulishness that I lauded him for earlier on monetary
Speaker 9: and economic policy, and he succeeded in that. He did
Speaker 9: not shrink from from confronting world leaders in a way
Speaker 9: that he tried to push the benefit of peace and
Speaker 9: the United States a gemony. Frankly, this is a different world,
Speaker 9: but you know Trump is has that same broadly kind
Speaker 9: of push poll relationship and fractiousness. It's going to be
Speaker 9: you know, the thing I would just say to President
Speaker 9: Trump is, you know, a spoonful of sugar will really
Speaker 9: help a little bit. He's he's been largely succeeding in
Speaker 9: pushing allies towards a greater defense spending and a variety
Speaker 9: of other things. He can continue that, but it's going
Speaker 9: to take a little more. It's going to take some finesse,
Speaker 9: and then he's shown the ability to at least understand that,
Speaker 9: and that's a good thing.
Speaker 1: Terry, appreciate you coming on. Obviously we had a totally
Speaker 1: different conversation planned for you, but really great to get
Speaker 1: your insights on the life and legacy of Jimmy Carter,
Speaker 1: Terry Haynes, there of Pangaea policy.
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