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Speaker 2: After the US election, when Wall Street was all in
Speaker 2: on the prospects of a business friendly President Trump, Peter
Speaker 2: Berezin was sounding the alarm.
Speaker 3: He and his team at the.
Speaker 2: Research shop BCA predicted that broad based, unilateral tariffs were coming,
Speaker 2: and then the new administration's proposals would go well beyond
Speaker 2: what had been implemented in Trump's first term. He was right,
Speaker 2: and now he says we've got a long way to
Speaker 2: go lower before the end of the year. In other words,
Speaker 2: the worst is yet to come. Peter Berezin is chief
Speaker 2: of Global Invents, has been strategists at BCA Research. Their
Speaker 2: client's managed some thirty four trillion dollars. He's featured and
Speaker 2: one of the most read stories on the Bloomberg in
Speaker 2: the last eight hours. He's based in Montreal, Canada. Peter,
Speaker 2: welcome to the program. You've got a forty four fifty
Speaker 2: call on the S and P five hundred. We're at
Speaker 2: about basically fifty one hundred right now, so roughly fifteen
Speaker 2: percent a client from where we are.
Speaker 3: Why are you so bearish?
Speaker 4: I don't think the stock market has yet fully priced
Speaker 4: in recession. I mean keep in mind that up until
Speaker 4: a couple of years, up until a couple of days ago,
Speaker 4: the four hundred and ninety three SMP companies that are
Speaker 4: not the Magnificent seven, we're still actually up slightly for
Speaker 4: the year. And these are generally cyclical companies that one
Speaker 4: would expect to go down in recessionary scenario. So we're
Speaker 4: starting to see that being priced in, but we're not
Speaker 4: there yet. To get down to forty four to fifty,
Speaker 4: which is my target, you don't need to make any
Speaker 4: wild assumptions. All you need to assume is that the
Speaker 4: forward PE multiple drops to eighteen and the earnings estimates
Speaker 4: followed by ten percentage points. That's not crazy at all.
Speaker 4: On average, between twenty fifteen and twenty nineteen, the P
Speaker 4: multiple was sixteen point eight, and I'm talking about eighteen
Speaker 4: in a recessionary scenario. So, if anything, my target, even
Speaker 4: though going into this year it was fifteen hundred points
Speaker 4: below the nearest person, might actually turn out to be
Speaker 4: a little bit too bullish.
Speaker 5: Could we even go lower than that?
Speaker 4: We certainly could go lower than that. I think it
Speaker 4: would require a deepercession. But we could get a deepercession
Speaker 4: if policy continues to be very unfavorable. And I'm not
Speaker 4: just talking about tariff policy. We also have kind of
Speaker 4: this discussion of the Morrow Logo accord, this idea that
Speaker 4: perhaps holders of treasury bills will be forced to roll
Speaker 4: their money over into low yielding long term bonds. I mean,
Speaker 4: this is crazy, right. The treasury market is the ultimate
Speaker 4: risk free asset. If we undermine the sanctity of the
Speaker 4: treasury market, then we're looking at a worse financial crisis
Speaker 4: than what occurred in two thousand and eight.
Speaker 3: This was supposed to be the year.
Speaker 6: Wait you said we could, Sorry, Tim, Hey go ahead.
Speaker 6: I remember living through two thousand and eight. I know
Speaker 6: you did too, and I just remember you're talking to me. Yeah,
Speaker 6: I'm talking to you. I mean, Peter, we thought the
Speaker 6: financial market system globally was coming down. I remember not
Speaker 6: going to bed because headlines were crossing, and it was
Speaker 6: like which Wall Street firm was being bought by whom
Speaker 6: and which one wasn't going to make it, and so
Speaker 6: on and so forth, and what the government was going
Speaker 6: to do. Say that again so that we understand kind
Speaker 6: of the theft of what you are saying.
Speaker 4: The fact that the dollar is weakening now is very,
Speaker 4: very unnerving because the dollar is supposed to be a
Speaker 4: risk off currency. You buy treasuries when everything is going
Speaker 4: to hell, and that requires more dollars, and that pushes
Speaker 4: up the value of the dollar. The fact that the
Speaker 4: dollar is weakening now is telling you that increasingly investors
Speaker 4: are losing confidence in the US financial markets. And you know,
Speaker 4: President Trump wants a lower trade deficit. The counter the
Speaker 4: mirror image of a trade deficit is a capital count surplus. Yeah,
Speaker 4: foreigners decide that they don't want to hold US assets anymore.
Speaker 4: That's going to drive down the value of the dollar.
Speaker 4: That will make imports more expensive, make exports cheaper. That
Speaker 4: will result in a lower trade deficit. But we're talking
Speaker 4: about something that will also entail a huge decline in
Speaker 4: stock prices and probably a financial crisis.
Speaker 5: So not exactly making America great again, Not quite.
Speaker 2: No, You know, it raises the question about how much
Speaker 2: damage can be done before you believe that Trump will
Speaker 2: reverse his policies.
Speaker 3: If that is something you believe, well, I.
Speaker 4: Think, for one thing, we've already sort of passed the
Speaker 4: event horizon. I think at this point it's going to
Speaker 4: be very difficult to avoid a recession just based on
Speaker 4: everything that's already happened. They kind of wasn't that strong
Speaker 4: going into the latest escalation of the trade war. In February,
Speaker 4: real wage and salary income was only one was only
Speaker 4: up one percent year of a year. The CPI swap
Speaker 4: market is telling us that these tariffs could push inflation
Speaker 4: to well over three percent. We're potentially looking at negative
Speaker 4: income growth that's going to be very difficult to maintain
Speaker 4: without the economy weakening significantly, in spending drying up. So
Speaker 4: I think the outlook is quite worrying at this point,
Speaker 4: and it's probably too late to avoid recession. And I
Speaker 4: don't think that Trump is willing to reverse course anyway.
Speaker 4: He's been very very clearly for like thirty years about
Speaker 4: how you want to build this protectionist wall around the US.
Speaker 4: I don't understand where this group think came from where
Speaker 4: people were just saying, Oh, it's going to be a
Speaker 4: negotiating ploy. It's not a negotiating ploy. He wants something
Speaker 4: that resembles autarchy.
Speaker 5: Okay, we're going to pick up on that, but we
Speaker 5: got to do it.
Speaker 2: There's a headline crossing the Bloomberg terminal and I'm going
Speaker 2: to work it into a question here. I Toro has
Speaker 2: said to delay it's IPO roadshow amid market volatility. Put
Speaker 2: that on the list of companies that we've heard from
Speaker 2: today or have been reported on putting their IPOs on hold,
Speaker 2: stub Hub, Klarna, ad Tech Group, n m ntn Ensure, Integrity,
Speaker 2: Specialty Holdings, Chime as well. Are you concerned that we're
Speaker 2: going to see in financial conditions titan too much right now?
Speaker 2: We could start to see some sort of panic or freeze.
Speaker 4: Yeah. We estimate that easing financial conditions last year mainly
Speaker 4: because of rising stock prices, added around a percentage point
Speaker 4: to growth. The fact that financial conditions have tightened mainly
Speaker 4: because stock prices have fallen. Credit spreads of widen is
Speaker 4: based on kind of a very back of the envelope
Speaker 4: and back of the envelope calculation. Will shave around half
Speaker 4: a percentage points from growth, and that's not huge, but
Speaker 4: the risk is that you get kind of in this
Speaker 4: feedback loop situation where stocks go down that means people
Speaker 4: feel less wealthy, that means they spend less, so there's
Speaker 4: less sales, less profits, and even lower stock prices. That's
Speaker 4: what we often see during recessions, and I think that's
Speaker 4: what we're starting to see now.
Speaker 6: You know, I'm looking at something I think you either
Speaker 6: said or shared with MarketWatch, and this was around late March,
Speaker 6: March twenty first, and that even though you had this
Speaker 6: outlook for the S and P five hundred this year,
Speaker 6: forty four fifty by the end of the year, and
Speaker 6: I think when you compared it to anybody else, it
Speaker 6: was the lowest on the street. You did have five
Speaker 6: scenarios that could boost stocks this year, and you talk
Speaker 6: about the scident, you know, walking back much of his
Speaker 6: tariff agenda, kind of caving to pressure from the.
Speaker 5: Market, and a few other things.
Speaker 6: Do you still believe that there are scenarios where the
Speaker 6: market could actually rally.
Speaker 4: There's certainly scenarios, and you know, I wouldn't be surprised
Speaker 4: if over the weekend there's some comforting words from the
Speaker 4: Trump administration, but that's not my base case. I think
Speaker 4: that probably the trade war gets worse rather than better,
Speaker 4: because Donald Trump had kind of had this i'd almost say,
Speaker 4: like naive idea in his mind that he's going to
Speaker 4: raise tariffs and that's going to force other countries to
Speaker 4: reduce their tariffs. Well, there's two flaws without argument. The
Speaker 4: first flaw is that most rich countries don't actually have
Speaker 4: very large tariffs against the US, and don't really have
Speaker 4: very large non tariff barriers against the US. I mean,
Speaker 4: they have regulations. All countries have regulations, but they're not
Speaker 4: specifically targeted at US companies. For the most part. There's
Speaker 4: going to be exceptions, of course, so there's not a
Speaker 4: lot that other countries can do anyway. And the second thing,
Speaker 4: which is more politically relevant. We've seen this is certainly
Speaker 4: true here in Canada, that retaliation is politically popular. Donald
Speaker 4: Trump has single handedly resurrected the Liberal Party, which was
Speaker 4: heading for a huge defeat in the elections, and so
Speaker 4: people are saying, well, wait a second, if we can
Speaker 4: get more votes by retaliating, we'll retaliate. And so we're
Speaker 4: not going to get countries acquiescing to Donald Trump's demands,
Speaker 4: We're going to get retaliation and that could very well
Speaker 4: spark another round of tariffs.
Speaker 7: You know.
Speaker 6: One of the things I also wonder is that is
Speaker 6: it possible that.
Speaker 5: You know this?
Speaker 6: I guess what I'm thinking about is what you said
Speaker 6: before autarchy, and that is the idea that right the
Speaker 6: US produces everything.
Speaker 5: That we need within our borders.
Speaker 6: Is that really you think the goal a present jump,
Speaker 6: because I think that's one of the things that we've
Speaker 6: tried to figure out with the R is that what's
Speaker 6: really his endgame, what's really his mission here?
Speaker 5: But do you believe that his.
Speaker 6: Mission is to that the US is kind of self
Speaker 6: sufficient in providing everything it needs for its citizens within
Speaker 6: its borders and then cut down trade.
Speaker 4: I think Donald Trump sees trade as a zero sum game,
Speaker 4: meaning that if one country is running a trade surplus
Speaker 4: with the US and somehow that country is exploiting the US,
Speaker 4: ripping the US off, as he likes to say, he
Speaker 4: doesn't see trade as something that can lift all boats,
Speaker 4: which is the way most economists see trade.
Speaker 5: Nor does he kind.
Speaker 4: Of realize that the reason the US has this trade
Speaker 4: deficit is because the US has been a very good
Speaker 4: place in which to invest. Rather than buying US goods,
Speaker 4: foreigners have been buying Nvidia stock or treasuries. That has
Speaker 4: been a vote of confidence in the financial system. And yeah,
Speaker 4: if you force people to not buy you US assets,
Speaker 4: you leve a week or dollar to lower trade deficit.
Speaker 4: But is not really what you want.
Speaker 2: Hey, you know you mentioned politics a little earlier, at
Speaker 2: least from the Canadian perspective. Here in the United States,
Speaker 2: I'm wondering the sort of guardrails that you see on
Speaker 2: this president and his policies, because we're getting news now
Speaker 2: that Senator Ted Cruz, who's usually a staunch supporter of
Speaker 2: President Trump, sounded the alarm on the administration's move to
Speaker 2: ramp up tariff saying they pose quote enormous risks to
Speaker 2: the US economy and make Republicans vulnerable to a quote
Speaker 2: bloodbath in next year's mid term elections. He said this
Speaker 2: stuff on his podcast, which was released today. This from
Speaker 2: our team at Bloomberg News. How do you see the
Speaker 2: guardrails around this president here?
Speaker 4: So I think that's going to be what happens next.
Speaker 4: You're going to see more and more Republicans abandoned Trump
Speaker 4: and we're going to have real discord within the Republican Party.
Speaker 4: But unfortunately, the way the system works is that Trump
Speaker 4: does have a lot of discretion over tariffs. And unless
Speaker 4: his popularity plunges and I would say, like it's come down,
Speaker 4: but it hasn't plunged, he's not going to change direction.
Speaker 4: I mean, realistically, if you spend like a month talking
Speaker 4: about a liberation day and then say, oh, wait a second,
Speaker 4: the stocks stocks have gone down, just kidding, he can't
Speaker 4: do that without looking really foolish. And so he's not
Speaker 4: going to do that unless there's a lot more pressure.
Speaker 4: We're just not there yet.
Speaker 6: Hey, one thing I want to ask you, all right,
Speaker 6: So if we buy what you're saying about forty four
Speaker 6: to fifty by the end, and it looks, you know,
Speaker 6: certainly possible, considering.
Speaker 5: What we're going through right now.
Speaker 6: Where are you investing or suggesting investors suggest this money?
Speaker 6: You guys advise a ton of advisors, share your research.
Speaker 6: Where would you be putting money in this environment? Or
Speaker 6: is it too late to move anything around right now?
Speaker 4: I think it still makes sense to have a defensive
Speaker 4: bias in one's portfolio. That means holding more cash than
Speaker 4: one otherwise would hold it means holding more bonds, although
Speaker 4: there's of course risk around bonds given a large fiscal
Speaker 4: deficit and a whole moral logochord discussion. But nevertheless, the
Speaker 4: Fed probably will be forced to cut rates quite aggressively,
Speaker 4: more than what the market is pricing in. So you
Speaker 4: want to have more fixed income, less equity within equities,
Speaker 4: You want to own more staples, healthcare, these defensive sectors,
Speaker 4: and you probably also want to own a bit of gold.
Speaker 4: Now I think that's a true safe haven asset.
Speaker 2: What would you say to folks out there who attempted
Speaker 2: to buy this death.
Speaker 8: Listen?
Speaker 4: I mean, if you're nimble, you can, of course do it.
Speaker 4: But I wouldn't bide with the expectation that stocks have bottomed.
Speaker 4: I think we could get a rally that lasts for
Speaker 4: a few days, perhaps even a few weeks. Ultimately, if
Speaker 4: we end up in recession, and I think that's where
Speaker 4: we're heading, earnings estimates are going to come way down,
Speaker 4: and that whole dragstocks down with them. So I think
Speaker 4: it's too early to move to an overweight stance on stocks.
Speaker 6: Well, it's like we like to remind everybody, markets don't
Speaker 6: just go up they don't go in one direction.
Speaker 5: They go up and they go down. Hey, Peter, thank
Speaker 5: you so much. Double duty.
Speaker 6: We know you spend some time with our TV colleagues
Speaker 6: as well. Glad you could also spend some time with
Speaker 6: us as well. As we said, this story by our
Speaker 6: Vildana Hirich, it is one of the most right stories
Speaker 6: on the Bloomberg Peter Bears and his chief global investment
Speaker 6: strategist at BCA Research joining us from Montreal, Canada.
Speaker 5: Peter, thank you so much.
Speaker 9: This is the Bloomberg Business Week Podcast. Listen live each
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Speaker 6: Liz McCormick is Chief corresponding for Global Macro Markets, joining
Speaker 6: us from New Jersey. Liz, You've had so much reporting
Speaker 6: out there. I'm trying to figure out where we want
Speaker 6: to start, because you know what was interesting is I
Speaker 6: thought what Alex mentioned about what we saw in the
Speaker 6: bond market this week versus what we saw in the
Speaker 6: equity markets. It doesn't match up much more a negative
Speaker 6: tone in the equity trade. What is the treasury trade
Speaker 6: telling you today after the week that was?
Speaker 10: Yeah, and I was listening to you guys talk and
Speaker 10: I heard Alex's points. So I think in some ways,
Speaker 10: like if we look back, remember some days inter days,
Speaker 10: it was like across the board, each each tenor and
Speaker 10: treasuries was down over ten basis points. So we had
Speaker 10: some decent moves. We've kind of come back today. I'll
Speaker 10: talk a little bit about that later, but I think
Speaker 10: I was going to say a bigger picture if we
Speaker 10: step back, remember how far we've come that. You know,
Speaker 10: the two year note yield us down almost a percentage
Speaker 10: point from the high earlier this year. Ten year note
Speaker 10: it seemed like couldn't crack four percent, and it did.
Speaker 10: Now it's just trading quite, you know, hovering near there.
Speaker 10: So I think the treasure market has done it. I mean,
Speaker 10: if you look at the Ian page for US our indices,
Speaker 10: the US Treasury index is up about I think the
Speaker 10: last I looked at yesterday about three percent for the year.
Speaker 10: So it's kind of been doing his job. You have
Speaker 10: seen that flight to haven. It's just the superlatives like
Speaker 10: you say, in these other markets from stocks to what
Speaker 10: worries me, even though my main area is sovereign, what
Speaker 10: I really watch is credit risk, right, and like you mentioned,
Speaker 10: we have these CDs widening, junk bronze spread widening, all
Speaker 10: these other things. People pulling deals. That's where I worry that.
Speaker 10: Like you're saying, it depends if President Trump really ends
Speaker 10: up negotiating. But some things you can't put the genie
Speaker 10: back in the bottle, right, If credit risk keeps going,
Speaker 10: and then we get this hidden leverage, which is always
Speaker 10: like something that's lurking. If people start, you know, losing
Speaker 10: on positions and leverage, things start cracking, you can't fix it, right,
Speaker 10: So that's what I worry about.
Speaker 6: Yeah, I am looking at the Iron page. US aggregate
Speaker 6: up three point six percent? Is that what you're talking about?
Speaker 10: Yeah, I mean, yeah, exactly, Yeah, yeah, Wait, say the
Speaker 10: page one more time for the Glomberg. Oh I love
Speaker 10: that page. Iron go easy in Right, it's all our
Speaker 10: indices and we can look at all the fixed income indicies,
Speaker 10: and so that's at least good that. You know, if
Speaker 10: you're in a portfolio, you're talking about your retirement sixty
Speaker 10: forty at least the bomb side has worked for you,
Speaker 10: so you have some gains where you're getting crushed in
Speaker 10: your stocks. But yeah, I think you know today let's
Speaker 10: talk a little bit and maybe you have a lot.
Speaker 10: But about Chairman palell like, he was very calm and
Speaker 10: I feel like lead with inflation right, Yes, the tariffs
Speaker 10: are bigger than we thought. Of course you mentioned it
Speaker 10: would hurt growth, but he seemed very clear that they
Speaker 10: don't want inflation expectations. Public inflation fears to kind of
Speaker 10: take off. So he was like very like, we have
Speaker 10: time to wait.
Speaker 2: So he seemed very calm. I mean J Powell was
Speaker 2: a very measured, mild mannered person. I don't know him personally,
Speaker 2: but it seems.
Speaker 5: Like, oh, come on, you can share. I know that
Speaker 5: dead concert he went too.
Speaker 2: I actually want to go for a bike ride with him,
Speaker 2: but that's neither here nor there. I think that would
Speaker 2: be a fun thing to do. But it does make
Speaker 2: me ask you, is, given his comments earlier today, did
Speaker 2: you seem like it. Did it seem to you that
Speaker 2: he was really calm about saying, hey, we've got time here.
Speaker 10: Yeah. I want to say that I had a feeling
Speaker 10: of people I think thought I was crazy that, like
Speaker 10: even though the market, the let's say the swaps market
Speaker 10: pricing and FED cuts was really kind of getting over
Speaker 10: at skis pricing in almost five cuts this year. I said,
Speaker 10: let's be weary the chairman Pal, because that's his job.
Speaker 10: He has a dual mandate, right, and like you're talking
Speaker 10: about everyone's cutting their inflation, I mean their growth forecasts.
Speaker 10: Simultaneously they're lifting their PCE forecast, right, So this is,
Speaker 10: to use that word, this is a stagflationary thing. So
Speaker 10: in the FED kind of never got I don't want
Speaker 10: to fold them, but inflation hasn't like sustainably got to
Speaker 10: their two percent target after the pandemic. They did a
Speaker 10: lot of great stuff, and it's down. So I think
Speaker 10: he's very weary because he knows if you let that
Speaker 10: inflation genie out of the bottle, that's the worst problem
Speaker 10: for them. So I think that's why he was very
Speaker 10: measured and calm. And we will see, Like we've had
Speaker 10: some yesterday, we had some economists saying no cuts, some
Speaker 10: saying five cuts. It's like all over the place, so
Speaker 10: I think they're waiting to see. But Pal was very calm.
Speaker 6: Well, one thing I want to ask you too, is
Speaker 6: you always check in with all the trading desks, the
Speaker 6: global you know, fixed income bond trading desks around the world.
Speaker 6: Were people kind of freaking out? Were people saying, yeah,
Speaker 6: we've got a global recession coming. I mean, it's all interconnected, right,
Speaker 6: It's not just even if we are pulling back on
Speaker 6: global trade. I mean, what happens here is going to
Speaker 6: matter what happens in other countries. I mean, it's it's important.
Speaker 6: So I'm just curious. What was the tone, Liz that
Speaker 6: you were hearing.
Speaker 10: Yeah, I would say, like overall for investors, I mean, again,
Speaker 10: it's a bunch of superlatives. But this, even though we
Speaker 10: had the stories about Mary Lago and we thought, you know,
Speaker 10: think Trump will go out of the box. I do think, Carol,
Speaker 10: many investors feel like this on trade is a seismic change, right,
Speaker 10: He's trying to re order everything, right, and and he
Speaker 10: said Trump has said he's willing to take some pain.
Speaker 10: But they didn't realize. I think everyone keeps saying to me, list,
Speaker 10: we knew there would be quote unquote reciprocal, but not
Speaker 10: by this math that they pulled off, right, you know,
Speaker 10: that was much higher than they thought. So I think
Speaker 10: that's what everyone said. It's worse than I thought. I
Speaker 10: will say, Dan Ivison and Pimpco was kind enough to
Speaker 10: talk to me today and he's, you know, they've been
Speaker 10: warning for a while that hey, this tariff is a
Speaker 10: risk and just to be cautious. But he said even
Speaker 10: he said that what President Trump rolled out was a
Speaker 10: little more hawkish than they even expected. So I think
Speaker 10: everyone was taken by surprise at how kind of stringent
Speaker 10: the terrorifts were.
Speaker 5: All right, so there is that is there also an
Speaker 5: expectation list?
Speaker 6: I mean, this is a lot of this came up
Speaker 6: in a lot of our conversations today, is that the
Speaker 6: expectation is just like we're seeing with Vietnam already, right,
Speaker 6: Lulu Lemon rallied, Nike rallied, There were names that rallied
Speaker 6: because there is that expectation that these countries are going.
Speaker 5: To come back and negotiate.
Speaker 6: Is there in the investment community the same feeling.
Speaker 10: Yeah. I mean I had a few say to me,
Speaker 10: you know, like hope is not a plan and even
Speaker 10: though they like they hope to see this, and like
Speaker 10: you said, there was the positive signs on Vietnam, although
Speaker 10: China kind of came in hard. The EU has said,
Speaker 10: and we have stories on that that they're hoping to negotiate.
Speaker 10: So I think there is some hope that this doesn't
Speaker 10: turn out to be as bad as it seems at
Speaker 10: the moment. But then we have President Trump coming out
Speaker 10: on social media kind of saying, hey, my policies are stuck.
Speaker 10: So I think people are very kind of on tinderhooks.
Speaker 10: You know, they're not sure.
Speaker 2: But let's play that out for us, Liz a little bit,
Speaker 2: because I think that is sort of the optimistic view here,
Speaker 2: that this could be an opening salvough and we could
Speaker 2: see a sity like we got a little preview of
Speaker 2: with the Vietnam News earlier today, where we did see
Speaker 2: stocks balance a little bit off of their lows as
Speaker 2: a result of that post from the President who said
Speaker 2: the country is, you know, wants to take their tariffs away.
Speaker 3: If that is indeed the case.
Speaker 2: It still sets up for quite a bit of uncertainty,
Speaker 2: and we know that what executives don't like is uncertainty.
Speaker 2: They want to be able to plan where their next
Speaker 2: plant is going to go. They want to be able
Speaker 2: to plan who they're going to hire for the next year.
Speaker 2: And if these things can get implemented and then pulled
Speaker 2: on such short notice, I think that could create a
Speaker 2: challenge for these companies.
Speaker 10: Yeah, I one hundred percent agree that. You know, even
Speaker 10: if there's some negotiation, I don't think also, Tim that
Speaker 10: anyone thinks that'll be there'll be a wholesale reversal. President
Speaker 10: Trump wants a more tariff heavery policy, right, so even
Speaker 10: if the worst of this is dialed back, it's still
Speaker 10: very different. But I think you're right many companies are saying,
Speaker 10: how can I put it out a big investment. I
Speaker 10: don't want to sell new debt now. I'm not going
Speaker 10: to add to my hiring all these things because, like
Speaker 10: we always say, but it's true, uncertainty is the worst thing.
Speaker 10: And when I was trying to do the coverage right
Speaker 10: after and we were figuring out what's going on when
Speaker 10: President Trump gave his speech on Wednesday, the quick thing
Speaker 10: from a lot of people, even after we got the
Speaker 10: full chart, is we thought we were going to get
Speaker 10: full certainty, and now we don't.
Speaker 5: You know what I mean.
Speaker 10: And I think like even on the negotiation, people don't know,
Speaker 10: and I want to bring in like you know, I
Speaker 10: don't maybe You've been talking about this all day too,
Speaker 10: so sorry if so, but like let's think about there's
Speaker 10: the tariffs and then there's the wealth effect. Like, yeah, Carol,
Speaker 10: you were joking about your retirement.
Speaker 3: I wasn't joking.
Speaker 2: I told Carol, maybe this is a night when she
Speaker 2: goes and orders the pizza not to get toppings exactly.
Speaker 10: I mean, it's real. You start to say, well, or
Speaker 10: somebody was going to switch jobs. Maybe not, you know,
Speaker 10: at the margin, I mean maybe this is like soft data,
Speaker 10: so to speak. But your retirement account is real. And
Speaker 10: even non retirement, I've got young twenty some kids looking
Speaker 10: at their portfolios, so I think everyone it feels a
Speaker 10: little less rich, and that does factor into whether you're
Speaker 10: going to buy that new thing. So again, even if
Speaker 10: slowly some of this gets negotiated down those factors, I
Speaker 10: don't think the stock market will be jumping away turned
Speaker 10: and I'm buying all the dips now, right, you know,
Speaker 10: So I think this is it's a little bit of
Speaker 10: a longer process. So I and again I hope we
Speaker 10: don't get things that break. You know, leverage comes out
Speaker 10: the basis, trade blows up all those things that you know,
Speaker 10: once that gets going, it creates some more kind of
Speaker 10: systemic issues.
Speaker 6: Well, that's what I think about what's most vulnerable right now?
Speaker 6: Listen this environment because I do think about right that,
Speaker 6: you know, the idea of like what stopping something versus
Speaker 6: starting it up. Stopping it can be easier than getting
Speaker 6: it going again. I think about the economy and what
Speaker 6: could be some of the lasting impacts of this tariff policy,
Speaker 6: especially as you say, this is something President Trump has
Speaker 6: been behind for a long, long long time, and it
Speaker 6: doesn't feel like he's going to roll back so easily.
Speaker 6: Even if he pulls back a little bit, it's still
Speaker 6: going to be there. And I do wonder about the
Speaker 6: longer term impact on the US economy here.
Speaker 10: Yeah, And I think these these hidden things are that
Speaker 10: remember we all through twenty nineteen we haven't had a
Speaker 10: repo issue liked seismic now, but leverage there's things you know,
Speaker 10: when people start losing money and you get margin calls
Speaker 10: on different things, then you start selling things that you
Speaker 10: can and that stuff you don't know. It's like you
Speaker 10: don't see coming all the time, right, And that creates issues.
Speaker 10: And then like you said, the even like liquidity in markets,
Speaker 10: when that starts to break down, and that's what the
Speaker 10: FED is concerned about market structure. But overall, remember we
Speaker 10: were like, oh, you know, before all this, maybe we're
Speaker 10: going to get through this with this rare thing of
Speaker 10: no recession. FED tightened all this way, and now they
Speaker 10: dial back and no recession. Now, let's say the worst
Speaker 10: of the Trump tariffs aren't laid out, but like you
Speaker 10: both said that still structurally there's tariffs. You know, who
Speaker 10: is it? Jimmy Morgan saying if this continues, we get
Speaker 10: a sixty percent odds of recession. It just seems like
Speaker 10: the recession case, even if it's non in this had
Speaker 10: aclsmic near depression. People are sometimes saying globally now that
Speaker 10: that slow down. We thought we'd avoid that, you know,
Speaker 10: economics recession.
Speaker 5: Mate, Yeah, we may have it right, you know.
Speaker 10: So that's that's enough to kind of keep the edge
Speaker 10: off stocks and other things.
Speaker 6: We've already seen sentiment, consumer sentiment pulling back, we've seen
Speaker 6: business spending pulling back. So yeah, just watching all of
Speaker 6: these indicators. Liz, this was such a great deep dive.
Speaker 6: Thank you, Thank you so appreciate it. Have a great weekend,
Speaker 6: Liz McCormick.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch US
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Speaker 2: Just before we came on air, we got the news
Speaker 2: that President Trump has said that he's decided to extend
Speaker 2: the deadline for firm Byte Dance to divest TikTok's US
Speaker 2: operations and give his administration more time to finalize a
Speaker 2: plan to keep the popular app running in the country.
Speaker 2: Trump said he will give Beijing, Beijing's bte Dance an
Speaker 2: additional seventy five days. Remember it was April fifth. Was
Speaker 2: it going to be the deadline? This deadline?
Speaker 6: And let's not forget it. It stopped working for a while, right,
Speaker 6: It was shut down in the US for just a beat.
Speaker 6: Then we had to get it back, you know, like
Speaker 6: Snoopy and Charlie Brown and Lucy. Was it Lucy that
Speaker 6: always like pulled the football out? That's what I feel
Speaker 6: like constantly. Sorry, TikTok football.
Speaker 1: Go on, go on.
Speaker 3: You know, I think you're right. I think you're right.
Speaker 2: They were supposed to agree to this deal that US
Speaker 2: operations to an American buyer and avoid a band that
Speaker 2: was set to take effect as soon as this weekend.
Speaker 3: For more we don't want to bring in.
Speaker 2: Michael Sheppard, Senior editor for Technology and Strategic Industries at
Speaker 2: Bloomberg News. Also, Kurt Wagner joins us. He's Bloomberg News
Speaker 2: technology reporter. Kurt is also the author of Battle for
Speaker 2: the Bird Jack Dorsey Musk in the forty four billion
Speaker 2: dollar Fight for Twitter's soul. Michael, I want to start
Speaker 2: with you out in Washington, DC, Byte Dance. We got
Speaker 2: some comments from byte Dance. They've confirmed that the talks
Speaker 2: are ongoing as Trump announced this extension. What are the
Speaker 2: proposals right now that are being reviewed.
Speaker 11: Well, the one that seems to be gaining the most
Speaker 11: favor and is viewed as a leading contender, would actually
Speaker 11: not completely wipe out Byte Dance as an owner in
Speaker 11: this new US app that that the plan would call for. Instead,
Speaker 11: what you would see is their holdings deluded to below
Speaker 11: twenty percent, and that would allow it to fit within
Speaker 11: the parameters of the law that Joe Biden signed last
Speaker 11: year calling for Beijing based Byte Dance to divest to
Speaker 11: below a certain point and lower some of the national
Speaker 11: security risks associated with that, they would no longer have
Speaker 11: a controlling stake in it. Instead, you would see investors
Speaker 11: including Oracle Core, Blackstone and perhaps in recent Horowitz also
Speaker 11: join in buying up, together with other investors, a fifty
Speaker 11: percent portion of this venture, and then Byte Dance American
Speaker 11: investors would buy another thirty percent, and the idea would
Speaker 11: be that it would be an American operation still with
Speaker 11: some nominal connection to byte Dance, but that in doing
Speaker 11: so and allowing this Byte Dance ownership to remain, that
Speaker 11: would perhaps make it easier for the company to sign
Speaker 11: off on the deal and then also win the blessing
Speaker 11: of authorities in Beijing, which is no small matter.
Speaker 6: All right, Wait a minute, Wait a minute. First of all,
Speaker 6: I don't even know who to ask. I want to
Speaker 6: ask both of you, Kurt, let me bring you in.
Speaker 6: Is there even a nomination a nominal connection to byte Dance?
Speaker 6: Is that even possible if the concern is about any
Speaker 6: connection with China and potentially the Chinese government, Is that
Speaker 6: even possible?
Speaker 7: So the ownership breakdown that Mike described is possible under
Speaker 7: the law. I believe Byte Dance could own as long
Speaker 7: as it's less than twenty percent of this company, that
Speaker 7: would be allowed. But what would not be allowed and
Speaker 7: where the sticking point is in my opinion, is on
Speaker 7: the technology itself and control over the algorithm that people
Speaker 7: that is used to show people posts in their feeds. So,
Speaker 7: under some of the previously reported kind of discussions and
Speaker 7: plans that have been floated to Trump Bye Dance, even
Speaker 7: though they'd have under twenty percent ownership, would still control
Speaker 7: this algorithm, and according to the law, that is not allowed.
Speaker 7: And so byite Dance doesn't want to give up control
Speaker 7: of the algorithm. The law says they have to give
Speaker 7: up control of the algorithm. So to me, it's less
Speaker 7: about the ownership here that's the sticking point. And it's
Speaker 7: probably the technology and who gets to control it that's
Speaker 7: the sticking point.
Speaker 11: Right.
Speaker 6: The holy grail that makes TikTok TikTok, Michael come on
Speaker 6: back in here, is that what's kind of making these
Speaker 6: negotiations tricky. I'm curious what you guys are hearing from
Speaker 6: the White House, because it is interesting that it's not
Speaker 6: like we've just said that's it, TikTok's done. They keep
Speaker 6: expanding the timeline here and extending it So is that
Speaker 6: what's holding it up is what's up at the algorithm
Speaker 6: and who really controls.
Speaker 11: It, you know, Carol, it's a good question. You know,
Speaker 11: we don't have that much visibility into what is exactly
Speaker 11: happening behind closed doors in these talks. But the algorithm
Speaker 11: certainly is a sticking point. The law was very clear
Speaker 11: about whether ByteDance or any Chinese entity for that matter,
Speaker 11: could remain in control of this really valuable technology that
Speaker 11: also allows potentially a window into American users and also
Speaker 11: a vehicle for perhaps disseminating propaganda in the US, which
Speaker 11: was another concern cited by US policy makers when this
Speaker 11: was passed. So that is certainly one of the sticking points,
Speaker 11: but there are many others too, including Byte Dance for instance,
Speaker 11: just overall doesn't like the idea of this sale. They
Speaker 11: found it objectionable all the way back in twenty twenty
Speaker 11: when Trump first pushed the idea. Remember he originally signed
Speaker 11: a ban and executive order banning the app and then
Speaker 11: set about trying to find a US buyer. Of course,
Speaker 11: those efforts kind of just fell apart during the pandemic
Speaker 11: among other things and legal challenges too. But for Bite Dance,
Speaker 11: This is has from the start been a non starter.
Speaker 11: The fact that they're confirming confirming some discussions today is news,
Speaker 11: and it's really the first we've heard from them saying
Speaker 11: that they are in talks with the US on this.
Speaker 2: Hey, Kurt, who do you think, in your reporting, is
Speaker 2: the most serious contender to take over by Dance's US
Speaker 2: operations TikTok's US operations.
Speaker 7: Well, I think there's a difference perhaps between who's the
Speaker 7: most serious and who's the most likely, because I think
Speaker 7: there are actually a lot of serious contenders, including you know,
Speaker 7: Frank McCourt and Project Liberty. I mean, they're very serious
Speaker 7: about wanting to do this. But do I think they're
Speaker 7: maybe in the driver's seat. I would say probably not.
Speaker 7: I think Oracle maybe. To get to the real point
Speaker 7: of your question, like who's the most likely, I think
Speaker 7: Oracle is probably the most likely to be involved here
Speaker 7: for a couple reasons. Number One, we know that they
Speaker 7: were part of the consortium of investors that was reviewed
Speaker 7: in the Oval Office on Wednesday by Trump and some
Speaker 7: of his aides. We also know that they have an
Speaker 7: existing relationship with TikTok. They already work with TikTok on
Speaker 7: cloud services on data storage. And we also know that
Speaker 7: Oracle chairman Larry Elson is a Trump supporter, a Trump donor,
Speaker 7: and those Because of those reasons, I think Oracle has
Speaker 7: sort of taken the lead in terms of who is
Speaker 7: almost guaranteed to be in a proposal from Trump. Now, again,
Speaker 7: as Mike pointing out, a lot of this depends on
Speaker 7: whether by Dance and the Chinese government ultimately agree, which
Speaker 7: they may not. But the proposal that Trump puts forward,
Speaker 7: I think we all expect to have Oracle probably involved.
Speaker 6: You know, Michael, one of the things I wanted to
Speaker 6: ask you is how much of these conversations are also
Speaker 6: related to the tariffs imposed on China.
Speaker 5: I'm just curious if it all kind of folds into one.
Speaker 11: Well, you know, in the end, we joke here in
Speaker 11: Washington that it's all one story, and Trump is certainly
Speaker 11: tried to connect these two issues. The question is whether
Speaker 11: officials in Beijing share that view that you can lump
Speaker 11: these things together. If you're Hi Jinping, for instance, do
Speaker 11: you think that there is such an easy trade off
Speaker 11: between you know, this company byt Dance that is considered
Speaker 11: a local star and then the massive tariffs that Donald
Speaker 11: Trump has just imposed on so many exports from China
Speaker 11: into the US. And you know, is there really something
Speaker 11: else to be gained here for Xijianping by doing one
Speaker 11: thing or another? In terms of this with Trump, Trump
Speaker 11: has reiterated his offer to China of perhaps lowering tariffs
Speaker 11: in exchange for getting some help and winning approval for
Speaker 11: a deal. Now, whether she jimping is willing to do that,
Speaker 11: let's take a look and seem.
Speaker 6: Yeah, certainly kind of interesting to see what comes next. Hey,
Speaker 6: just real quickly, Kurt, Amazon, are they out? Are they
Speaker 6: even a contender.
Speaker 5: To They are considered?
Speaker 7: They did submit a bid. It's unclear exactly how serious
Speaker 7: it's being taken, but they did submit a bid this week,
Speaker 7: as we reported. If I could just make one final
Speaker 7: point on this about what's happening this weekend again, because
Speaker 7: this executive order was signed to extend this deadline, we
Speaker 7: presume that TikTok will continue to operate. But you may
Speaker 7: remember that last time around in January when there was
Speaker 7: a ban, even though Trump said, hey, you guys have
Speaker 7: more time. The tech companies that support TikTok, that put
Speaker 7: TikTok in their app stores or an Oracle's case, that
Speaker 7: provide these cloud services, they were actually worried about following
Speaker 7: the law and didn't always take Trump's sort of executive
Speaker 7: order as being good enough for them to keep working
Speaker 7: with TikTok. Right, So we have reached out to these companies.
Speaker 7: We're asking, hey, do you plan to continue to support
Speaker 7: TikTok technologically during this time because if your Apple and
Speaker 7: you're sending there going, Hey, even though Trump says it's okay,
Speaker 7: a future president could come in and there are massive
Speaker 7: fines that they could face for breaking this law down
Speaker 7: the line if they choose to do so. So I
Speaker 7: think that's something we're going to be paying attention to,
Speaker 7: is even though Trump says it's fine, and do their
Speaker 7: tech partners believe enough in his word to continue to
Speaker 7: support TikTok and keep it operational. And we'll only know
Speaker 7: that over the next twenty four to forty eight hours
Speaker 7: if we see whether it goes offline or not.
Speaker 6: All right, So two clocks ticking twenty four to forty
Speaker 6: eight hours, and then of course we've got seventy five
Speaker 6: days because of the presence extension to figure out what's
Speaker 6: next for TikTok and America.
Speaker 5: Hey guys, thank you so much. Have a great week.
Speaker 6: And Mike Shepherd, Senior editor for Technology and Strategic Industries
Speaker 6: at Bloomberg News in DC, and Kirk Wagner, Bloomberg News
Speaker 6: Technology reporter.
Speaker 5: He's there in Denver.
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Speaker 6: All right, let's get back to the general market environment,
Speaker 6: business environment, global environment. We've talked about businesses pulling back
Speaker 6: on CAPEC, slowing global growth here in the US and elsewhere, Tariffs,
Speaker 6: a global trade war, a global market selloup.
Speaker 5: Not an easy macro environment, and on a.
Speaker 6: Day like this it is easy, as we talked about earlier,
Speaker 6: to kind of skip over our US jobs report that
Speaker 6: showed growth exceeding forecast for.
Speaker 5: The month of March.
Speaker 6: It was backward looking, so we wanted to get a
Speaker 6: good gut check on the US macro environment. What he's
Speaker 6: hearing from companies in the C suite about the labor
Speaker 6: market and more.
Speaker 5: Alan Guarino is back with us.
Speaker 6: He's vice chairman in the CEO on board services practice
Speaker 6: at the executive search firm corn Ferry, joining us from
Speaker 6: the West Coast. Alan, Nice to have you here on
Speaker 6: a week that's been a little ectic, to say the least.
Speaker 6: A lot coming out business leaders, a lot coming at
Speaker 6: the markets. What are you hearing from the business community
Speaker 6: about the macro environment?
Speaker 8: Well, thanks, Carol, it's always great to come on with
Speaker 8: you and Tim.
Speaker 12: You know what we're hearing is, you know what we've
Speaker 12: been hearing other than the last forty eight hours or
Speaker 12: what I think we would all categorize as shock, shock
Speaker 12: to the system.
Speaker 8: And so let's just recap.
Speaker 12: So we had a big jobs number on one hand,
Speaker 12: then we had tariffs on the other in the last
Speaker 12: forty eight hours. You know, someone could say it's trade war, right,
Speaker 12: but we had a strong economy going into this, people
Speaker 12: would argue, and we had low unemployment.
Speaker 8: So I think the best thing to describe this is.
Speaker 12: That, you know, if I were a CEO today, I
Speaker 12: feel like I was driving a race car with one
Speaker 12: foot on the gas.
Speaker 8: And one foot on the brake.
Speaker 10: Wow.
Speaker 12: And I think what that means is that, you know,
Speaker 12: as much as we'd like to have really solid smart predictions.
Speaker 8: I think is to wait and see. And I think
Speaker 8: that wait and see is probably the window of ninety days.
Speaker 12: Will you know, us labor be competitive, should manufacturing be
Speaker 12: able to return in some measure to our shores.
Speaker 8: It's just early times right now.
Speaker 6: Listen, one thing I want to get to though, too uncertainty,
Speaker 6: no doubt about it. You know, I'm looking at a
Speaker 6: market that is just getting worse, and we've got about
Speaker 6: an hour and fifteen minutes to go, and we're looking
Speaker 6: at our major equity averages allan at the lows of
Speaker 6: this session, something we haven't seen in a long time.
Speaker 6: S and P five hundreds down six percent, Dow Jones
Speaker 6: Industrial Average almost twenty two hundred points to the downside,
Speaker 6: down about five and a half percent. Na's Deek one
Speaker 6: hundred down almost six percent, down eleven hundred points. You
Speaker 6: know that does rattle businesses and leaders. Certainly if you're
Speaker 6: publicly held, you know, you look at your share price.
Speaker 6: What does this make you stop to? You know, do
Speaker 6: what won't you do as a result of all of this?
Speaker 8: So Carol, honestly, you know, go back to Adam Smith.
Speaker 12: I think he said something to the effect that, you know,
Speaker 12: understanding history will will empower you as to know what
Speaker 12: to do. Let's think back sadly to the pandemic. I
Speaker 12: think we had a thirty percent peak to trough market
Speaker 12: move within a very short period of time, the market
Speaker 12: came back. So CEOs don't usually run their businesses based
Speaker 12: on the stock market. Yes, they run their businesses based
Speaker 12: on creating the right earnings trying to defend their multiples.
Speaker 12: But I don't think thirty sixty to ninety day windows
Speaker 12: in terms of market reactions to clearly identified outside shocks,
Speaker 12: is going to change that. You're going to have some CEOs.
Speaker 12: Let's just say there's job dislocation in this market. I
Speaker 12: don't think there will be, but if there was, that
Speaker 12: means that if some companies cutting back, there's going to
Speaker 12: be a smart CEO who's going to step in and
Speaker 12: acquire that talent.
Speaker 8: Just like Quie.
Speaker 12: Frankly, people are going to over the next couple of months,
Speaker 12: if this market continues to trade lower, are going to
Speaker 12: step in and start taking on stock positions that they
Speaker 12: would have liked to take previously.
Speaker 8: That they felt were overpriced.
Speaker 12: So with all of this, let's call it somewhat chaotic
Speaker 12: market activity. It doesn't short term change the way CEOs
Speaker 12: run and make decisions, especially on hiring.
Speaker 2: So at this point you're not hearing from CEOs that
Speaker 2: they need to pull back on hiring, they need to
Speaker 2: start cutting their workforce, because look, we did get a
Speaker 2: great number this morning from the March payrolls report. It's
Speaker 2: backward looking, but if we start to see stress there,
Speaker 2: that could actually prompt the FED to move rates lower.
Speaker 2: You're not hearing any of that from the folks you
Speaker 2: talk to.
Speaker 8: We're not hearing.
Speaker 12: Anything right now, and I think it's because of the
Speaker 12: foot on the.
Speaker 8: Break and the foot on the gas situation. If anyone
Speaker 8: says they have enough.
Speaker 12: Clarity to make those decisions right now, I would tell
Speaker 12: you that they know something that ninety nine point nine
Speaker 12: percent of the rest of the world doesn't know. So
Speaker 12: I think we'll start hearing that in probably I'm going
Speaker 12: to say forty five days, sixty days, and again, I
Speaker 12: think we'll hear it from both sides of the thinking here.
Speaker 12: Some that may want to cut and others may want
Speaker 12: to take advantage of the opportunity that this talent is
Speaker 12: in the market. But right now, there's nothing shocking happening
Speaker 12: in terms of employment.
Speaker 2: Alan, I want to go back to something that you
Speaker 2: said about this, these tariff announcements being a shock to
Speaker 2: the system. Why was this so shocking to the folks
Speaker 2: you work with each and every day. It was clearly
Speaker 2: telegraphed by the president when he ran He told our
Speaker 2: own editor in chief, John mickelthwet that tariff is his
Speaker 2: favorite word in the English langue, which we knew he
Speaker 2: was going to do this. Why was it still so
Speaker 2: shocking to the markets and shocking to the executives.
Speaker 8: Deem, everyone's asking that question today. It's a smart one.
Speaker 8: It's a shock not because of what he did.
Speaker 12: I think it's a shock because people were expecting it
Speaker 12: to be less significant in terms of scale, so in
Speaker 12: that they had to process, not the idea that we
Speaker 12: had tariffs. And I'm not going to come in on
Speaker 12: whether terroists are a good idea, And I'm not an economist,
Speaker 12: and I don't think anyone knows how this plays out
Speaker 12: mathematically and in terms of actual market equilibrium. But I
Speaker 12: think the shock to the system was the scale, and
Speaker 12: their shocks to the system frequently and people get past it.
Speaker 6: Hey, one of the things I wanted to ask you,
Speaker 6: and here we are again just to remind everybody, since
Speaker 6: we're so focused on the market, you know, a second
Speaker 6: day of some extreme selling. S and P down about
Speaker 6: five point six percent, down down five percent, and the
Speaker 6: Nasdaq one hundred also down five point six percent. Allen,
Speaker 6: the US Labor Secretary, earlier spoke to Bloomberg off of
Speaker 6: the jobs report that was an upbeat one and said
Speaker 6: that this wouldn't be the last positive jobs report under
Speaker 6: President Trump and that companies are now investing billions of.
Speaker 5: Dollars in the economy.
Speaker 6: We're seeing the selling because there's nervousness because of the
Speaker 6: US tariffs, a possible trade war, and then that leads
Speaker 6: to a US slowdown and potentially a global slowdown. So
Speaker 6: the President has stressed all the money that will come
Speaker 6: back into the US economy. Do you and leaders that
Speaker 6: you speak to kind of buy this idea that there
Speaker 6: will be lots of investment or more investment in the US,
Speaker 6: that we will see factories built, make things, create lots
Speaker 6: of jobs, that it will.
Speaker 5: Lead to an economic boom.
Speaker 6: I know what economists say and what history tells us,
Speaker 6: but what do leaders that you talk to say this?
Speaker 6: Do they buy this? This action and this expectation.
Speaker 12: You know, again not hearing a lot enough to say, wow,
Speaker 12: there's a big trend here. But what I do here is,
Speaker 12: you know, there are places in this country where people
Speaker 12: could make a reasonable dollar per hour wage that wouldn't
Speaker 12: be egregious in terms of being competitive and have a
Speaker 12: terrific quality of life.
Speaker 8: And certainly that's not necessarily in the big cities.
Speaker 12: But if we bring in a situation where you know,
Speaker 12: free market of sorts starts to starts to you know,
Speaker 12: see some green shoots in terms of light manufacturing, right
Speaker 12: then then yes, the answer is it could be. And
Speaker 12: by the way, there's another thing to remember it something
Speaker 12: in corn Ferry does. It's this notion of upskilling. So
Speaker 12: you know, as these jobs materialize, if this particular strategy works,
Speaker 12: then we're going to have people right now that are
Speaker 12: in let's say, lower order jobs that make less per hour,
Speaker 12: perhaps get some upskilling and be able to go into
Speaker 12: a light manufacturing opportunity where they could make more. All
Speaker 12: this is still speculationause each of us could argue both sides.
Speaker 12: I quite frankly, don't you know, don't have a particular
Speaker 12: bias here.
Speaker 8: I try to look at it as as you know, measured.
Speaker 5: As possible twenty seconds.
Speaker 6: Everybody's not screaming recession or stagflation or the end of
Speaker 6: globalization just quickly.
Speaker 12: People are worried about stagflation. People are expecting, you know,
Speaker 12: recession because we've been respecting recession for twenty years, so
Speaker 12: you know, And again I think we talk about the
Speaker 12: market if we look at the market today, I think
Speaker 12: if you look at the two year S and P today,
Speaker 12: it's still up thirty five percent over those two years
Speaker 12: or so.
Speaker 8: It's a big number.
Speaker 12: So you know, a lot of the money that's theoretically
Speaker 12: coming off of people's portfolios today is money that they've
Speaker 12: you know, more than earned in returns.
Speaker 8: And again, if you don't sell today, you don't lose.
Speaker 5: Anyone, right, all right, Alan Gorrino, thank you so much.
Speaker 6: Vice chairman and the CEO on board Services practice at
Speaker 6: Cornberry joining us from the West Coast.
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