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Speaker 1: Welcome to the Daybreak Asia podcast. I'm Doug Prisner. On

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Speaker 1: today's episode, we'll take a look at the trading week ahead.

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Speaker 1: Markets are reigning in expectations on FED easing as they

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Speaker 1: come to terms with the cost of President elect Trump's

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Speaker 1: proposed fiscal and trade policies. In a moment, I'll be

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Speaker 1: speaking with Rebecca Walser, president of wallser Wealth Management. But

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Speaker 1: first we want to take a look at some of

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Speaker 1: the incoming president's cabinet picks. In the past several days,

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Speaker 1: the incoming Trump administration has announced to members of the

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Speaker 1: President elect's cabinet. Now, one position still unknown is that

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Speaker 1: of the powerful post of Treasury Secretary, and two Trump

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Speaker 1: advisors are publicly battling for this position. Let's take a

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Speaker 1: closer look now with Bloomberg's Tony Chichka, one of our

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Speaker 1: Washington d C editors, joining us from the nation's capital.

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Speaker 1: Thanks for making time. This has been very, very intriguing.

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Speaker 1: What's been going on, particularly now that Elon Musk is involved.

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Speaker 1: Can you explain to me where things are at the moment?

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Speaker 2: Basically, Musk has intervened after of course, giving a huge

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Speaker 2: bump to Trump's campaign winning campaign. We should say and

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Speaker 2: come out in favor of Howard Lutnick, who is the

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Speaker 2: co chair of Trump's presidential transition team for Treasury Secretary. Now,

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Speaker 2: a lot of the betting seems to have been instead

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Speaker 2: on Scott Bessant, a hedge fund manager who has been

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Speaker 2: one of Trump's economic advisors during the campaign. Musk said, well,

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Speaker 2: Bessent is too conventional a choice. He literally said, business

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Speaker 2: as usual as driving America bankrupt, and Lutnik is the

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Speaker 2: more sort of transgressive choice, if you like, who would

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Speaker 2: sort of bring in new ideas. That brought in another investor,

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Speaker 2: Kyle Bass, who said Bessant was eminently more qualified. He

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Speaker 2: understands markets, economics, people, and geopolitics better than anyone I've

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Speaker 2: ever interacted with, according to Bass. So now you have

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Speaker 2: these two sort of very very qualified and high flying

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Speaker 2: Wall Street personalities vying for Trump's nod.

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Speaker 1: Tony I was reading a piece in the FT indicating

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Speaker 1: that Trump advisors have really been seeking assurances that these

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Speaker 1: candidates are committed to plans for sweeping tariffs. Are both

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Speaker 1: of these gentlemen, Vessent and Lutnik aligned in terms of

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Speaker 1: where they see Trump's economic policy going forward?

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Speaker 2: Well, my colleagues in Washington. What they've reported on that

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Speaker 2: particular issue is that Lutnik has seized on the tariffs issue.

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Speaker 2: We all know Trump is a tariff man, and he's

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Speaker 2: made various for reaching proposals on tariffs to be implemented

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Speaker 2: once he's in the White House. Lutnik is the one

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Speaker 2: who serves spreading the words that Besant is not tough

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Speaker 2: enough on that particular front. And of course that's a big,

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Speaker 2: big issue, possibly the biggest economic issue for Donald Trump.

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Speaker 2: Now where does that leave us? Trump himself has not

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Speaker 2: been very forthcoming in recent days. This has played out

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Speaker 2: in public and on x formerly known as Twitter, but

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Speaker 2: Trump itself has been pretty much a mom on it.

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Speaker 2: And so you can take that as you like. But

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Speaker 2: obviously support for Trump's ideas around tariffs is going to

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Speaker 2: be presumably a key factor here.

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Speaker 1: Last week we heard from the President announcing a couple

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Speaker 1: of other cabinet posts, many surprised members of the GOP.

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Speaker 1: Florida Congressman Matt Gets as Attorney General, Pete Hegseth as

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Speaker 1: a Defense Secretary, Robert F. Kennedy Junior to hell Robert F.

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Speaker 1: Kennedy Junior to lead to health and Human Services. Did

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Speaker 1: we get any announcements over the weekend that you think

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Speaker 1: may capture the market's attention.

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Speaker 2: Yeah, we did have one for sure, which is Trump's

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Speaker 2: choice of Energy secretary. This is a very much in

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Speaker 2: line with what Trump has promised Drilly, which is to

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Speaker 2: you know, we heard this drill, baby, drill throughout his

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Speaker 2: campaign and bringing vacuous energy dominance. And that choice went

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Speaker 2: to Chris Wright, who runs a Colorado based oil and

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Speaker 2: natural gas fracking services company, and he's in line to

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Speaker 2: lead the Department of Energy. I think it gives you

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Speaker 2: an idea of how Trump is trying to be uncompromising

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Speaker 2: and very directed in terms of his picks because he

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Speaker 2: feels that he or he and his team feel that

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Speaker 2: he's won a mandate to do exactly what he's promised

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Speaker 2: to do.

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Speaker 1: That said, the critique has been that some of these

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Speaker 1: nominees are inexperienced, conflicted, maybe even reckless. Now we know

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Speaker 1: Republicans are in control of the Senate when it comes

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Speaker 1: down to the issue of confirmation, is it a foregone

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Speaker 1: conclusion that each of these gentlemen will will be seated

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Speaker 1: as a cabinet secretary?

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Speaker 2: I don't think you can say, it's a foregone conclusion.

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Speaker 2: As we know, the Senate guards it's prerogatives pretty jealously.

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Speaker 2: In other words, the right to the role of confirming

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Speaker 2: presidential nominees. Some of the statements from senior senators and

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Speaker 2: Republican senators has been pretty clear that these don't look

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Speaker 2: to us to make these nominees shoeings. And of course

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Speaker 2: they're talking about people like Matt Gates, the former now

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Speaker 2: former representative whom Trump wants to have as an attorney

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Speaker 2: general US Attorney General. Gates resigned from the House as

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Speaker 2: soon as Trump mateor's announcement, which effectively closed the investigation,

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Speaker 2: and House Speaker Mike Johnson on Sunday again reiterated that

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Speaker 2: he does not want that investigation to be made public.

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Speaker 2: He said, it's only a draft, it's unfair, and besides,

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Speaker 2: it's against protocol. There's been some argument about that, but

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Speaker 2: that's where we stand on Matt Gates.

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Speaker 1: Tony, thanks so much for joining us, Tony Chucchka there

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Speaker 1: Bloomberg Washington editor joining us here on the Daybreak Gaisia podcast.

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Speaker 1: Joining us now is Rebecca Walzer. She is president of

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Speaker 1: wallser Wealth Management, and she joins us from our studios

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Speaker 1: here in New York. So it seems like when you

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Speaker 1: look at the US equity market price action, the Trump

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Speaker 1: trade has lost a little bit of steem. Yeah, does

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Speaker 1: that come as a surprise.

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Speaker 3: Well, I think it's really induced by Powell and his comments.

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Speaker 3: He really is feeling put into a corner now because

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Speaker 3: they announced previously obviously we were expecting to have six

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Speaker 3: rate cuts and from all the hikes, and we then

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Speaker 3: saw inflation, so he was kind of hamstrung and couldn't

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Speaker 3: do that, and now he started. So the market kind

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Speaker 3: of is expecting to see another twenty five basis points

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Speaker 3: in December.

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Speaker 4: Next month at the FOMC. But his comments this.

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Speaker 3: Past week basically said, whoa, we are going to look

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Speaker 3: at the data. And I think, Doug, it's because if

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Speaker 3: you look at the last twenty five basis point cut,

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Speaker 3: we're right back the ten years, right back to where

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Speaker 3: it was prior to that cut. So what you're seeing

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Speaker 3: is the market and the risk of the market pricing

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Speaker 3: in higher yield even as the Fed cuts.

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Speaker 1: Well that's an important point. Do you think that a

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Speaker 1: lot of what you're hearing coming out of the President

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Speaker 1: elect and the new administration, the policies that are being

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Speaker 1: articulated seem to be a little inflationary, and maybe that's

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Speaker 1: what's causing the Fed a little concern here. Is that

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Speaker 1: a fair statement.

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Speaker 3: Yeah, I think that what we're seeing really is a

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Speaker 3: strengthening dollar on a weakening world, and that is making

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Speaker 3: everything yields come up higher. You know, you're the dollar

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Speaker 3: going up hyperbolically compared to the global world is a

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Speaker 3: problem for us because that's going to make our you know,

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Speaker 3: everything too expensive for.

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Speaker 4: Us, and that is an issue.

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Speaker 3: I think Powell is realizing that we have a one

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Speaker 3: trillion dollar deficit every one hundred days, and that is

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Speaker 3: creating the Treasury Department having to just you know, consistently

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Speaker 3: fund more than what we're used to. Yellen has been

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Speaker 3: doing everything on the two year as opposed to what's

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Speaker 3: more normal on the longer term ten and twenty, and

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Speaker 3: so she's doing that intentionally, Doug to keep the longer

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Speaker 3: term yields down. So now you can see both the

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Speaker 3: Fed and the Treasury both in concert working to make

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Speaker 3: sure that long term yields stay lower. And that tells

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Speaker 3: me that they are pushing up against a tsunami of

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Speaker 3: risk that is getting priced automatically into this spawn market.

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Speaker 1: So you mentioned the stronger dollar there right as the

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Speaker 1: consequence of higher yields, But the flip side of a

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Speaker 1: strong dollar is weaker oil prices. What do you understand

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Speaker 1: to be happening in the oil market.

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Speaker 3: Well, that's where I'm really alarmed because several actually two

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Speaker 3: different traders and commodity brokers that I really respect and

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Speaker 3: have a long term track record are saying so much

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Speaker 3: weakness is coming in the global demand for crude that

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Speaker 3: if we break through a sixty four threshold level, we're

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Speaker 3: probably going to get to a fifty to fifty five

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Speaker 3: price per barrel, which would be you know, for I

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Speaker 3: think of Saudi Arabia and NBS, and I know he's

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Speaker 3: going to fall out of his bed on his head.

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Speaker 3: I mean, he can't afford to run his you know,

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Speaker 3: empire on that level of oil. And that's with OPEC

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Speaker 3: still cutting, that's with OPEC still not having you know,

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Speaker 3: additional supply, so constrained supply and still weak demand. We're

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Speaker 3: looking at Germany, We're looking at China, and between those two,

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Speaker 3: in the Asian theater and the European theater, we can

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Speaker 3: just see global sort of pullback recessionary trends coming.

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Speaker 1: So if these forecasts are right and we see a

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Speaker 1: big pullback in the price of oil, that removes the

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Speaker 1: incentive for these companies to try to.

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Speaker 4: Drill for more, right, I mean, that is a problem.

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Speaker 3: I do think that we are going to have an

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Speaker 3: administration who is more domestic production producing, And we've already

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Speaker 3: seen Europe post elections say all right, we might be

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Speaker 3: interested in buying gas are you know, recrued from America

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Speaker 3: instead of Russia. Although that you know, that's been that's

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Speaker 3: been changing, So that's a problem, Doug like we we

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Speaker 3: would see in Trump someone who could domestically create that

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Speaker 3: engine of growth again unless the world doesn't want to

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Speaker 3: buy our oriel because no one's buying.

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Speaker 1: So where do you see the global economy headed right now?

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Speaker 1: You mentioned weakness in Europe, you mentioned weakness in China.

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Speaker 1: Are things across the world right now downshifting into a

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Speaker 1: much slower rate of growth?

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Speaker 3: Absolutely, without a doubt, without a question. And I think

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Speaker 3: it's been so obfiscated for us here because we've been

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Speaker 3: so election We had a crazy election cycle and nothing

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Speaker 3: like that has happened in decades, So we really had

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Speaker 3: some craziness happening, and I think that a lot of

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Speaker 3: people were concerned who was going to get in and

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Speaker 3: how was the market going to handle that person. You know,

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Speaker 3: I wasn't a fan of some of Kamala's and realize

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Speaker 3: tax gains plans that would would not have been good

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Speaker 3: for investors, Doug. So I think from that perspective, from

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Speaker 3: a taxation perspective, investors are a little bit better off

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Speaker 3: under the Trump's tax policies. But the fact is is

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Speaker 3: if we get this global slowdown that we're starting to

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Speaker 3: see materialize to the United States, which of course it

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Speaker 3: comes to us last, since we're the reserve world currency,

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Speaker 3: we will not be able to really get ourselves out

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Speaker 3: of this. And that really sends me to like Elon Muskin,

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Speaker 3: Viviq wasawmi with their DOGE Department of Government Efficiency. We're

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Speaker 3: spending over six trillion dollars right now, and Elon Musks

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Speaker 3: is saying he wants to cut two trillion dollars from

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Speaker 3: the budget. Now, I think that's great, because we can't

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Speaker 3: sustain all of these things, and definitely to perpetuity. However,

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Speaker 3: how much of that two trillion dollars is contributable to

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Speaker 3: waste fraud and abuse, because if it's not waste fraud

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Speaker 3: and abuse that we're cutting, then we're cutting real benefits

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Speaker 3: to real Americans that really deserve them. And that is

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Speaker 3: a really big issue that we're going to have to

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Speaker 3: figure that out.

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Speaker 1: Let's talk about another part of the Trump economic plan,

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Speaker 1: which is tariffs, especially where Chinese goods are concerned. Now,

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Speaker 1: we just had Chi Jinping meeting with President Biden over

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Speaker 1: the weekend, and the message through Biden from she to

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Speaker 1: President elect Trump is that we will strike back. Are

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Speaker 1: you worried about the potential here for a much hotter

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Speaker 1: trade war than we saw in the first Trump administration.

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Speaker 3: I mean, I am super concerned and alarmed, and I

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Speaker 3: think all Americans need to be much more informed. And

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Speaker 3: I know Bloomberg does a really good job of it,

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Speaker 3: but it's not common knowledge. It's certainly not Wall Street

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Speaker 3: is pushing out there, and that is the Bricks block,

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Speaker 3: you know. And you just saw the Bricks symposium in

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Speaker 3: October and Russia, because obviously Putin is the charge of

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Speaker 3: the Bricks Block this year, and they were talking about

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Speaker 3: specifically Doug Project m Bridge, which was a Bank of

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Speaker 3: International Settlements project with five central banks including Saudi Arabia

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Speaker 3: and Hong Kong, and it was to exchange bilaterally and cryptocurrency,

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Speaker 3: and it was basically an alternative of being developed to swift.

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Speaker 4: Well, when Putin.

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Speaker 3: Came out and said at that Brick symposium that this

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Speaker 3: is a payment platform that we could use to buy

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Speaker 3: directionally trade amongst our partners in the Bricks block, the

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Speaker 3: BIS came out and said we're going to exit that

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Speaker 3: project and turn that over to China. So that is

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Speaker 3: alarming because this is something that is quite far along

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Speaker 3: in development and could be leveraged pretty quickly to buy

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Speaker 3: directionly trade using a cryptocurrency.

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Speaker 1: So dedollarization is obviously a part of that story. Is

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Speaker 1: that a concern to you?

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Speaker 3: Well, I think that we all kind of say it's

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Speaker 3: going to take years, But the truth is once you

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Speaker 3: understand that they're going to be able to do this

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Speaker 3: on the blockchain and therefore they do not need a

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Speaker 3: reserve currency. See that's the mental shift that no one's understanding.

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Speaker 3: We're all saying it will take years and decades to

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Speaker 3: really and truly fundamentally change a reserve currency. The fact is,

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Speaker 3: if you're dealing I directionally on the blockchain, you don't

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Speaker 3: need a reserve. You simply maybe need like let's say

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Speaker 3: we could have a new I'm just gonna hypothetical. We

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Speaker 3: say we could have a new brick central bank, and

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Speaker 3: every country member country could have a depositive gold at

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Speaker 3: that central bank, and on every quarter time period or

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Speaker 3: monthly time period, you settle up and you say, hey,

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Speaker 3: you have a net deficit or a net trade surplus,

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Speaker 3: and so we're going to pay you gold or you're

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Speaker 3: going to pay us gold, and there's no reserve because

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Speaker 3: of the fact that we're by directly trading in cryptos.

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Speaker 1: We'll have more with Rebecca Wallser of Wallser Wealth Management.

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Speaker 1: Coming up. I'm Doug Prisoner and this is Bloomberg. Welcome

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Speaker 1: back to the Bloomberg Daybreak Asia podcast. I'm Doug Prisoner.

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Speaker 1: We're speaking with Rebecca Wallser, president of Wallser Wealth Management.

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Speaker 1: She joins us here in our studios in New York.

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Speaker 1: So we're talking about a world that's becoming more polarized,

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Speaker 1: a lot more protectionistic. How do you translate that into

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Speaker 1: an investment strategy.

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Speaker 3: Well, that's really difficult because until we really see what

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Speaker 3: happens as Trump's administration takes you know, is going into bear.

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Speaker 3: We're just not going to know how the markets are

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Speaker 3: going to react. We don't know if this global drop

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Speaker 3: off and demand for oil is going to materialize before

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Speaker 3: his you know, inauguration in January. So right now we're

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Speaker 3: sort of just like wait and see, like what's happening

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Speaker 3: long term? Long term holds Doug always with the AI space,

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Speaker 3: you could definitely, you know, be an Nvidia, but you

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Speaker 3: have to understand that those things are for the frontier,

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Speaker 3: which means they will regress back, they will retrench back,

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Speaker 3: and people should understand that, and then they'll move forward

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Speaker 3: again and retrench and move forward. That's what happened to

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Speaker 3: the dot com bus. That's that's what happens all the time.

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Speaker 3: We have a new frontier of technology. So I think

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Speaker 3: that long term there's still a great upside runway and

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Speaker 3: trajectory for AI. But uh, the other traditional you know

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Speaker 3: plays that we might make utilities, consumer staples, those kinds

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Speaker 3: of things in a pullback, you know, it's just it's

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Speaker 3: kind of just maintaining and flo right now.

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Speaker 1: If anything else, what are you assuming for twenty twenty

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Speaker 1: five economic growth is going to do? What tax cuts?

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Speaker 1: What are we going to see I mean.

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Speaker 3: I think that Trump will, especially if he has both

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Speaker 3: Houses of Congress, which looks like he will, he will

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Speaker 3: try to extend and work through because his original Tax

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Speaker 3: Jobs Cut Act of twenty seventeen expires at the end

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Speaker 3: of twenty twenty five, so that's something that they're going

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Speaker 3: to need to actually go through legislation this year with

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Speaker 3: them both houses.

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Speaker 4: So we'll see tax policy.

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Speaker 3: But I'm much more concerned in twenty twenty five at

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Speaker 3: the direction of the global demand. If we see global

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Speaker 3: demand coming down, Trump is going to have a hard

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Speaker 3: time in this next very first year of his new term.

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Speaker 3: If we see that he can come in there that

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Speaker 3: demand is not so tepid globally, and that he really

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Speaker 3: can do new tax policy and he can start, you know, drill,

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Speaker 3: baby drill, and get the leases and things going again,

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Speaker 3: then I think we could start to see some robust

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Speaker 3: spreading out of the upside growth that we've really just

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Speaker 3: seem relegated to AI in twenty twenty four.

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Speaker 1: What about some of the trades that have been put

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Speaker 1: on during the Biden administration, green energy, sustainable energy, I mean,

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Speaker 1: do you want to exit those in a big way

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Speaker 1: right now?

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Speaker 3: I thought it was really interesting Elon Musk saying that

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Speaker 3: he thinks all government subsidies should be eliminated, including the

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Speaker 3: seventy five hundred dollars per electric vehicle purchase that's in

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Speaker 3: the American Infrastructure Reduction Act, you know, the that was

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Speaker 3: the largest green bill that we've ever passed. And Trump

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Speaker 3: has already said he wants to cut the seventy five

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Speaker 3: hundred dollars EV credit tax credit, our tax rebate.

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Speaker 4: So that is.

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Speaker 3: Definitely going to have an impact on the uptick of

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Speaker 3: electrical vehicles. We've naturally seen dog a drop off in

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Speaker 3: electrical vehicle demand, just as we've seen a drop off

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Speaker 3: in automobile demand. It's because people are feeling the pinch

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Speaker 3: in their pocketbook. They're really struggling with the inflation prices.

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Speaker 3: The problem with evs is that you know you're going

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Speaker 3: to have to replace your battery at some point a

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Speaker 3: couple of years down the road. For example, I just

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Speaker 3: ran my Tesla by accident through a puddle after the hurricane.

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Speaker 4: It wasn't even to me that big of a puddle.

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Speaker 3: Certainly a puddle of my car could make it through,

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Speaker 3: but that puddle got the water to reach my battery,

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Speaker 3: and my battery within ten days had a it's corrupted failure.

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Speaker 3: It was like a scary message, like you can not

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Speaker 3: drive this car. Take it immediately, get it towed, and

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Speaker 3: I have to replace the battery seventeen thousand dollars. So

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Speaker 3: I think that people are starting to realize, Okay, it's

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Speaker 3: not just the initial price tag that's also higher. It's

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Speaker 3: also the battery life. I have to replace the battery

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Speaker 3: in like three four years. And these batteries if they

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Speaker 3: get wet, like in a state like Florida has salt

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Speaker 3: water from storms, it would be corroded.

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Speaker 4: It's over, it's done.

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Speaker 1: We were talking about tariffs earlier, and I think the

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Speaker 1: thinking behind this in a perfect world is that you're

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Speaker 1: going to get some reshoring of American manufacturing. Yeh, Is

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Speaker 1: that a trade that you're interested in playing.

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Speaker 4: Well, it's a little late, right, Doug.

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Speaker 3: I mean, China is the manufacturer to the world, and

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Speaker 3: certainly there are a number one trading partner, clearly by

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Speaker 3: far and away. And I'm not suggesting that that's where

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Speaker 3: we want to stay, and that we don't want policies

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Speaker 3: to repatriate manufacturing base here in the United States.

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Speaker 4: But the problem with the United States is.

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Speaker 3: That our laws, our laws, our consumer protection laws, our

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Speaker 3: labor laws, all of these things make building things here

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Speaker 3: way more expensive than they are over an Asian on

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Speaker 3: They're not as the more expensive as they used to

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Speaker 3: be because China's costs have also gone up as they've industrialized,

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Speaker 3: but still not anywhere near the price of American manufacturing

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Speaker 3: costs based on our laws.

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Speaker 4: So if we get some kind.

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Speaker 3: Of tort reform, if we get we need some more

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Speaker 3: reforms over here to be competitive and viable to compete

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Speaker 3: with Asia, to compete with the Vietnam. We've got to

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Speaker 3: do that. And the problem is Americans aren't for that.

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Speaker 3: They want the jobs, they want the manufacturing base, but

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Speaker 3: they also want to keep this administrative state that we've

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Speaker 3: kind of created, and that's also a problem.

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Speaker 1: One of the things, obviously, that the Biden administration put

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Speaker 1: on export controls when it comes to specific technologies largely

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Speaker 1: targeted at China. Is that a policy that you think

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Speaker 1: the Trump administration will build on, something that the Biden

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Speaker 1: administration started and that the Trump administration could extend.

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Speaker 4: Yeah.

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Speaker 3: Absolutely, I think that President Trump called China out consistently,

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Speaker 3: methodically and all the time when he was president before

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Speaker 3: and specifically talking about their ability to get companies over

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Speaker 3: there and then backdoor and get all of our trade

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Speaker 3: secured information.

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Speaker 4: And you know, there's a lot of multinational.

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Speaker 3: US corporations that have obviously Chinese you know, divisions, and

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Speaker 3: there's a lot of technology transfer that we're just not

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Speaker 3: keeping because of that sieve of information that goes through

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Speaker 3: the way China runs their economy. It's it's a communist

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Speaker 3: quasi capitalist design that we've never seen before in the

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Speaker 3: history of time, and that is allowing them access to

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Speaker 3: information that they're the government itself otherwise would never have.

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Speaker 3: So I definitely think that Trump would even be more

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Speaker 3: hawkish on China than even Biden.

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Speaker 1: We had a report on the Bloomberg Terminal talking about

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Speaker 1: the fact that maybe some of these policies from the

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Speaker 1: Biden administration have really accelerated a lot of tech development

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Speaker 1: in China. Now, this is coming at an interesting time

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Speaker 1: for the Chinese economy. We know things they are very sluggish.

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Speaker 1: We just had the roll out of a lot of stimulus.

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Speaker 4: I had to, Yeah, how would you assess.

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Speaker 1: The Chinese economy right now? Is it's still kind of

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Speaker 1: trapped in a deflationary period right now that it may

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Speaker 1: take years to emerge from or are things beginning to turn?

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Speaker 1: Do you see a bottom beginning to happen right now?

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Speaker 3: Well, we just got their their consumption was the largest

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Speaker 3: it had been in eight months because of the stimulus

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Speaker 3: that they just what we would expect that, right though, Doug.

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Speaker 3: If you wuent of off trillions of dollars of stimulus,

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Speaker 3: you're going to get, you know, a higher consumption and

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Speaker 3: the for the first time in eight months. So that

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Speaker 3: was we saw it impacting. But really the way China

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Speaker 3: did the stimus was very unique. They actually went to

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Speaker 3: the banks and said, hey, banks, we're going to give

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Speaker 3: you money. We want you to go out and buy

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Speaker 3: more real estate. Well, the banks are really nervous about

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Speaker 3: buying this real estate because there is a real estate collapse.

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Speaker 3: And you know, I know that it's been mentioned, but

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Speaker 3: the way Chinese buy real estate, the Chinese citizens is

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Speaker 3: they actually have to pay them morgas before the property

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Speaker 3: is even done. So now you've got people that are

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Speaker 3: to buy property, pay a mortgage and yet not even

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Speaker 3: actually have the property. We don't have that in this country.

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Speaker 3: So there's that is a problem. And then you've got

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Speaker 3: the bank saying, yeah, I think it's great China, you're

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Speaker 3: giving us money, but we really, you know CCP, we

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Speaker 3: don't really want to buy more property until we see

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Speaker 3: that the property to collapse has been stymied. So have

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Speaker 3: a I don't think that this stimulus is going to

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Speaker 3: do what they think it's going to do. And so

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Speaker 3: when you see the weakness and their financial sector and

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Speaker 3: their banking sector, and then you see the fact that

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Speaker 3: you've got now a really a hawkish president coming in

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Speaker 3: who's not afraid to call them out, who's not afraid

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Speaker 3: to say, hey, we'll put a two hundred percent tarify

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Speaker 3: on your ev so you can't import them. You're going

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Speaker 3: to have more problems in China. So but but do

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Speaker 3: not think that the United States is just going to

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Speaker 3: be able to slap them off and they're going to

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Speaker 3: have to just adjust to us. Because this is what

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Speaker 3: I'm saying, dog, with this bricks block, with this imbridge.

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Speaker 3: Now under the authority of the Chinese, they have so

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Speaker 3: many nations that want to buy directionly trade India, China, Russia.

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Speaker 3: Those three alone, the population of those three is over

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Speaker 3: two billion people, I mean almost three billion people. That

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Speaker 3: is three billion of eight billion people.

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Speaker 4: That live here.

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Speaker 3: So I think that this is a massive collective that

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Speaker 3: is forming before our eyes, and we need to understand

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Speaker 3: the power economically that they're going to be able to

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Speaker 3: wield when they may become operational.

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Speaker 1: So before I let you go, if you could share

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Speaker 1: with me some of the conversations that you're having with

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Speaker 1: clients right now. What are they most concerned about.

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Speaker 3: I think that they are most concerned about Trump and

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Speaker 3: is he going to be able to get the tax

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Speaker 3: you know, the tax scheme that he passed in twenty

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Speaker 3: seventeen re established, because you know, that is a really

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Speaker 3: big issue with the estate plan and not just as

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Speaker 3: a tangent.

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Speaker 4: Really side for a second.

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Speaker 3: Right now, we have a massive you know, over twelve

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Speaker 3: million dollars per person that you can pass through death,

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Speaker 3: and that is set to revert back to twenty ten levels,

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Speaker 3: so you know, somewhere in the five million dollar range.

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Speaker 3: So that's seven million dollars plus that each person's losing.

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Speaker 4: So you know, there's a lot of tax that has

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Speaker 4: to come.

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Speaker 3: Obviously, I'm much more concerned about the global economy. Trump

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Speaker 3: is going to be good as far as an engine

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Speaker 3: driver of growth, but that still will only be able

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Speaker 3: to be as successful as the world is.

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Speaker 1: Do you expect capital markets to follow in lockstep? Or

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Speaker 1: is there going to be some pushback here when it

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Speaker 1: comes to certain policy. If we were talking a moment

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Speaker 1: ago about the inflationary policy that the bond market seems

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Speaker 1: to be sensing right now, are there other things that

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Speaker 1: Corporate America is going to kind of reject?

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Speaker 3: Well, I think that what we're really concerned about is

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Speaker 3: that is potentially a debt spiral coming to be to fruition,

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Speaker 3: which is the worst case scenario for us. And it

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Speaker 3: wouldn't matter who was in office when you are accumulating

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Speaker 3: a trillion dollars in deficit every one hundred days. You know,

478
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Speaker 3: our interest expense is now our third largest expense behind

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Speaker 3: Social Security, Medicare interests.

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Speaker 4: So we really have.

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Speaker 3: A third rail here that if we do not get

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Speaker 3: a lan of action together on how we're going to

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Speaker 3: deal with it, this is why the bond market is

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Speaker 3: pricing in so much risk and Powell coming out and

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Speaker 3: kind of saying, hey, we don't know if we're going

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Speaker 3: to see the data, We don't know if we need

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Speaker 3: another twenty five basis point cut in December at the

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Speaker 3: December FOM ANDC. He's saying that because his November twenty

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00:25:17,080 --> 00:25:19,639
Speaker 3: five BIPs has already been reassumed by the market. In

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00:25:19,640 --> 00:25:21,439
Speaker 3: other words, the market is back up on the tenure

491
00:25:21,480 --> 00:25:23,840
Speaker 3: to where it was prior to his cut, and that

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Speaker 3: is a problem for him because when the market is

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Speaker 3: starting to price and risk and taking it away from

494
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Speaker 3: the Fed, the Fed is becoming irrelevant. That is really

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Speaker 3: when we're starting to get into potentially a situation where

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Speaker 3: the market's going to say, we don't care what you do, Pow.

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Speaker 3: This is the risk of the bond yields.

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Speaker 1: Tough times ahead if that comes to pass exactly, most definitely. Rebecca,

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Speaker 1: Thank you so much. Rebecca Wallser, president of Wallser Wealth Management,

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Speaker 1: joining us here on the Daybreak Asia podcast. Thanks for

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00:25:52,000 --> 00:25:56,560
Speaker 1: listening to today's episode of the Bloomberg Daybreak Asia Edition podcast.

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Speaker 1: Each weekday, we look at the story shaping markets, finance,

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00:26:00,280 --> 00:26:03,320
Speaker 1: and geopolitics in the Asia Pacific. You can find us

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00:26:03,359 --> 00:26:07,520
Speaker 1: on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere

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00:26:07,520 --> 00:26:10,560
Speaker 1: else you listen. Join us again tomorrow for insight on

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00:26:10,600 --> 00:26:14,680
Speaker 1: the market moves from Hong Kong to Singapore and Australia.

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Speaker 1: I'm Doug prisoner and this is Bloomberg