1 00:00:03,120 --> 00:00:10,680 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,720 --> 00:00:14,440 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:14,480 --> 00:00:17,720 Speaker 1: noon and five pm Eastern on Apple Coarcklay and Android 4 00:00:17,720 --> 00:00:21,119 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:21,160 --> 00:00:24,680 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,280 --> 00:00:28,040 Speaker 2: Welcome to the threshold of the weekend. Yeah, you made 7 00:00:28,040 --> 00:00:28,720 Speaker 2: it to Friday. 8 00:00:28,880 --> 00:00:32,360 Speaker 3: This is Balance of Power Bloomberg Radio on satellite radio 9 00:00:32,440 --> 00:00:35,280 Speaker 3: Channel one twenty one and on YouTube. We're always standing 10 00:00:35,320 --> 00:00:39,600 Speaker 3: by live. If you search Bloomberg Business News Live, whether 11 00:00:39,680 --> 00:00:42,840 Speaker 3: it's what we're doing in Washington or the great programming 12 00:00:42,840 --> 00:00:45,479 Speaker 3: from World Headquarters in New York, where Charlie Pellett was 13 00:00:45,640 --> 00:00:48,839 Speaker 3: just talking, you can find it all live in studio 14 00:00:48,960 --> 00:00:51,400 Speaker 3: right here on YouTube. So we made it to the 15 00:00:51,479 --> 00:00:53,159 Speaker 3: end of the week and there's still clearly, as you 16 00:00:53,200 --> 00:00:56,640 Speaker 3: heard from Charlie, great uncertainty about what the heck is 17 00:00:56,680 --> 00:00:58,960 Speaker 3: going to happen next week, and we're going to start 18 00:00:59,000 --> 00:01:01,560 Speaker 3: this It's gonna feel like this on Monday, probably Tuesday 19 00:01:01,600 --> 00:01:03,760 Speaker 3: and Wednesday as well as we wait for the word 20 00:01:03,800 --> 00:01:06,600 Speaker 3: from President Trump on reciprocal tariffs and all the rest 21 00:01:06,680 --> 00:01:09,399 Speaker 3: that may come together that day, he did talk to 22 00:01:09,400 --> 00:01:11,880 Speaker 3: the Canadian Prime minister. One of our top stories this morning. 23 00:01:11,880 --> 00:01:14,880 Speaker 3: We found this out on truth Social the President I 24 00:01:14,959 --> 00:01:17,440 Speaker 3: just finished speaking with Prime Minister Mark Carney of Canada. 25 00:01:17,480 --> 00:01:20,119 Speaker 3: An extremely productive call. Wait a minute, back up there, 26 00:01:21,120 --> 00:01:26,320 Speaker 3: Prime Minister Mark Karney. What happened to Governor? Well, I 27 00:01:26,319 --> 00:01:30,680 Speaker 3: guess Trudeau left the building. This could be progress. We 28 00:01:30,720 --> 00:01:33,679 Speaker 3: agree on many things, Donald Trump says, and we'll be 29 00:01:33,680 --> 00:01:37,800 Speaker 3: meeting immediately after Canada's upcoming election to work on elements 30 00:01:37,800 --> 00:01:40,280 Speaker 3: of politics, business, all other factors. That's the twenty eighth 31 00:01:40,319 --> 00:01:42,440 Speaker 3: of April when they do the election up there. 32 00:01:43,200 --> 00:01:45,520 Speaker 2: As we see another headline just went right on the terminal. 33 00:01:45,560 --> 00:01:49,760 Speaker 3: Putin said to test Trump's willingness to push EU on sanctions. 34 00:01:50,400 --> 00:01:51,880 Speaker 3: This is going to be a whole other part of 35 00:01:51,880 --> 00:01:55,560 Speaker 3: the storyline here as we try to find peace in Ukraine. 36 00:01:55,640 --> 00:01:59,040 Speaker 3: The President talking of course with Ukraine and Russia, and 37 00:01:59,080 --> 00:02:04,520 Speaker 3: now apparently this idea from Vladimir Putin to use Donald Trump, 38 00:02:04,520 --> 00:02:06,720 Speaker 3: who I think we can argue it doesn't have a 39 00:02:06,720 --> 00:02:09,960 Speaker 3: lot of capital at the moment in Europe to try 40 00:02:10,000 --> 00:02:12,760 Speaker 3: to get them to pull back on the sanctions. Another 41 00:02:12,800 --> 00:02:16,799 Speaker 3: potential win for Russia. In that case, as we reach 42 00:02:16,880 --> 00:02:20,920 Speaker 3: for better news, the cherry blossoms are peaking. Hey, how 43 00:02:20,960 --> 00:02:23,160 Speaker 3: about it? If you're with us in Washington, DC. The 44 00:02:23,280 --> 00:02:26,320 Speaker 3: National Weather I should say National Park Service makes it official. 45 00:02:26,520 --> 00:02:28,480 Speaker 3: You see the tweet I thought Donald Trump wrote this. 46 00:02:30,560 --> 00:02:36,520 Speaker 3: It's all caps and exclamation points. Peak bloom peak, bloom 47 00:02:36,680 --> 00:02:40,639 Speaker 3: peak bloom. It took one more sunrise and warming temperatures, 48 00:02:40,680 --> 00:02:42,240 Speaker 3: but we're finally here. It's going to be like eighty 49 00:02:42,240 --> 00:02:46,480 Speaker 3: degrees tomorrow in Washington. Now, park your good mood as 50 00:02:46,480 --> 00:02:49,000 Speaker 3: we turn to the economic data. If only Stuart Paul 51 00:02:49,000 --> 00:02:51,959 Speaker 3: were coming on to talk about cherry blossoms. The problem 52 00:02:52,080 --> 00:02:54,640 Speaker 3: is we've got a raft of data here making people 53 00:02:54,680 --> 00:02:58,480 Speaker 3: feel upset on Wall Street. The PCEE today didn't help 54 00:02:59,160 --> 00:03:07,000 Speaker 3: consumer sentiment, didn't help. Inflation expectations not helping. Bloomberg Economics 55 00:03:07,080 --> 00:03:08,880 Speaker 3: US economist Stewart Paul I from New York. 56 00:03:08,919 --> 00:03:10,399 Speaker 2: Right now, Stewart, when's the recession? 57 00:03:12,200 --> 00:03:14,400 Speaker 4: It's certainly not imminent. But I will say that there 58 00:03:14,440 --> 00:03:16,440 Speaker 4: was nothing in the data this morning that was nearly 59 00:03:16,480 --> 00:03:18,919 Speaker 4: as sweet as the cherry blossoms you have in Washington. 60 00:03:19,040 --> 00:03:22,919 Speaker 4: Right now, core inflation surprised, just the touch to the upside, 61 00:03:22,960 --> 00:03:26,400 Speaker 4: registering zero point thirty seven percent month on month, and 62 00:03:26,480 --> 00:03:30,160 Speaker 4: basically across the board within the inflation elements of the report, 63 00:03:30,200 --> 00:03:33,240 Speaker 4: it was pretty bad. Services price is continuing to rise, 64 00:03:33,280 --> 00:03:37,600 Speaker 4: and it's not just shelter within services, it's financial services, healthcare, 65 00:03:37,720 --> 00:03:42,360 Speaker 4: and so on. On the goods side, durable goods, inflation continuing 66 00:03:42,360 --> 00:03:45,280 Speaker 4: to rise, and that's even before we actually see the 67 00:03:45,320 --> 00:03:50,240 Speaker 4: implementation of Trump's plans reciprocal tariffs and so on. The 68 00:03:50,240 --> 00:03:52,240 Speaker 4: inflation side of the report thinks are just outright bad 69 00:03:52,320 --> 00:03:55,640 Speaker 4: if you look at consumer spending. If you look at 70 00:03:55,640 --> 00:03:58,880 Speaker 4: consumer spending, it was a pretty disappointing report. Nominal spending 71 00:03:58,960 --> 00:04:01,640 Speaker 4: rising zero point four percent on the month, in real 72 00:04:01,760 --> 00:04:05,240 Speaker 4: space quite a bit worse, just zero point one percent increase. 73 00:04:05,720 --> 00:04:09,000 Speaker 4: We're on track to have an annualized pace of Q 74 00:04:09,240 --> 00:04:13,280 Speaker 4: one personal spending growth of just about zero point two percent, 75 00:04:13,960 --> 00:04:18,000 Speaker 4: actually probably close to zero, maybe even declining depending on 76 00:04:18,000 --> 00:04:21,040 Speaker 4: what we see in March, but basically nil for the 77 00:04:21,160 --> 00:04:24,839 Speaker 4: quarter on real personal spending so far. That compares to 78 00:04:24,920 --> 00:04:27,840 Speaker 4: a four percent annualized pace of spending growth in the 79 00:04:27,880 --> 00:04:32,080 Speaker 4: fourth quarter. So recession not imminent, but if anything, there's 80 00:04:32,400 --> 00:04:36,000 Speaker 4: clearly two sided risk here. For the FED. Inflation pressures 81 00:04:36,040 --> 00:04:39,440 Speaker 4: still mounting, and on the real spending side, things look 82 00:04:39,720 --> 00:04:42,920 Speaker 4: pretty dismal as consumer sentiment Waneseez. 83 00:04:43,600 --> 00:04:45,080 Speaker 3: I mean, I was kind of just being a pain 84 00:04:45,160 --> 00:04:47,200 Speaker 3: with the recession question, but now I'm wondering if that 85 00:04:47,320 --> 00:04:49,960 Speaker 3: was actually the real question to ask here? Did you 86 00:04:50,000 --> 00:04:52,960 Speaker 3: know there's a bloom cam Brendan in the control room? 87 00:04:53,000 --> 00:04:54,440 Speaker 3: Just put this in front of me. I'm looking at 88 00:04:54,440 --> 00:04:57,479 Speaker 3: people milling around the title base and spending all kinds 89 00:04:57,520 --> 00:04:58,800 Speaker 3: of money here, Stuart, that's. 90 00:04:58,680 --> 00:05:00,960 Speaker 2: The idea, right come to Washington. 91 00:05:01,360 --> 00:05:04,279 Speaker 3: You see the cherry blossoms, You pay too much money 92 00:05:04,320 --> 00:05:05,839 Speaker 3: for the hot dog when you go to the truck, 93 00:05:05,839 --> 00:05:07,400 Speaker 3: and you take the family out after you go to 94 00:05:07,480 --> 00:05:08,240 Speaker 3: the Smithsonian. 95 00:05:08,640 --> 00:05:11,120 Speaker 2: A year from now, will that be happening? 96 00:05:12,920 --> 00:05:18,760 Speaker 4: Probably a bit less consumer discretionary spending on services. Already 97 00:05:18,760 --> 00:05:22,440 Speaker 4: we're seeing consumers reining in their spending on services. I 98 00:05:22,440 --> 00:05:24,400 Speaker 4: think the Washington right now this is a bit of 99 00:05:24,400 --> 00:05:27,640 Speaker 4: a seasonal case with cherry blossom seas and with folks 100 00:05:27,640 --> 00:05:31,279 Speaker 4: going to the Smithsonian. If you walk around New York City, 101 00:05:31,320 --> 00:05:36,279 Speaker 4: it's not quite as quite as much consumer enthusiasm walking 102 00:05:36,279 --> 00:05:41,640 Speaker 4: around Central Parker fifty seventh Street, for example, But where 103 00:05:41,640 --> 00:05:43,680 Speaker 4: we do see the spending is on some of the 104 00:05:43,720 --> 00:05:46,840 Speaker 4: goods that folks are expecting to be tariffed in the future. 105 00:05:46,880 --> 00:05:49,880 Speaker 4: Folks are spending a little bit more in February on autos, 106 00:05:50,000 --> 00:05:54,120 Speaker 4: on household appliances, things like that. Now the problem is 107 00:05:54,160 --> 00:05:57,640 Speaker 4: that folks increase their spending a bit on those durable 108 00:05:57,720 --> 00:06:00,960 Speaker 4: goods in anticipation of tariff's coming down the pipe later 109 00:06:01,040 --> 00:06:06,839 Speaker 4: on reciprocal tariffs getting implemented on quote unquote Liberation Day 110 00:06:06,839 --> 00:06:10,040 Speaker 4: on April second. But the thing is, how many washing 111 00:06:10,040 --> 00:06:11,000 Speaker 4: machines can you buy? 112 00:06:11,279 --> 00:06:11,440 Speaker 5: Right? 113 00:06:11,560 --> 00:06:17,880 Speaker 4: How many new dishwashers or vehicles can you buy? Once 114 00:06:17,920 --> 00:06:20,920 Speaker 4: you pull that spending forward, that's mostly won and done. 115 00:06:21,000 --> 00:06:25,680 Speaker 4: So as spending on those discretionary services, those experiences start 116 00:06:25,760 --> 00:06:28,480 Speaker 4: to wane, as you lose the cherry blossoms getting a 117 00:06:28,480 --> 00:06:31,560 Speaker 4: bit deeper into the spring and into the summer, I 118 00:06:31,680 --> 00:06:33,800 Speaker 4: expect to see a further pullback and spending. 119 00:06:33,880 --> 00:06:38,000 Speaker 3: Actually, I just it just bothers me. When the tourists 120 00:06:38,000 --> 00:06:39,799 Speaker 3: we need them here, we want them to spend money. 121 00:06:39,800 --> 00:06:41,960 Speaker 3: But the jaywalking, it's already hard enough to get through 122 00:06:42,000 --> 00:06:45,920 Speaker 3: the intersections here, Stuart, you mentioned Liberation Day. I will 123 00:06:45,960 --> 00:06:49,520 Speaker 3: love seeing the data on auto sales for this weekend. 124 00:06:50,240 --> 00:06:52,240 Speaker 3: You know, you talk about this idea of front loading, 125 00:06:52,240 --> 00:06:54,559 Speaker 3: front running, There's going to be this blast of buying 126 00:06:54,600 --> 00:06:57,240 Speaker 3: potentially by consumers who are all talking about tariffs. This 127 00:06:57,320 --> 00:07:00,880 Speaker 3: is this is dinner table conversation apparently not just Bluelomberg conversation. 128 00:07:01,880 --> 00:07:05,159 Speaker 3: And so you creep into next week and we're gonna Monday, Tuesday, 129 00:07:05,160 --> 00:07:07,720 Speaker 3: Wednesdays still be fretting about this. I guess my question 130 00:07:07,880 --> 00:07:11,880 Speaker 3: to you is is there any expectation in the markets, 131 00:07:12,040 --> 00:07:14,600 Speaker 3: whether it's the treasury markets and the stock markets, because 132 00:07:14,640 --> 00:07:16,600 Speaker 3: I know what I think the answer is here in Washington. 133 00:07:17,080 --> 00:07:19,600 Speaker 3: Is there any expectation this will be over or do 134 00:07:19,680 --> 00:07:22,280 Speaker 3: we just reset the clock on new uncertainty about tariffs 135 00:07:22,280 --> 00:07:22,760 Speaker 3: next week? 136 00:07:23,000 --> 00:07:26,120 Speaker 4: I think that just the uncertainty continues in rolling waves, 137 00:07:26,800 --> 00:07:29,360 Speaker 4: just when you get the announcement on auto tariffs and 138 00:07:29,440 --> 00:07:31,440 Speaker 4: you get to start thinking a little bit about what 139 00:07:31,520 --> 00:07:33,880 Speaker 4: March auto sales are going to look like, what auto 140 00:07:33,920 --> 00:07:36,720 Speaker 4: sales will then look like after the tariffs are implemented, 141 00:07:37,120 --> 00:07:40,520 Speaker 4: How you start comparing domestic producers versus foreign producers. Just 142 00:07:40,520 --> 00:07:42,080 Speaker 4: when you think you have a little bit of clarity, 143 00:07:42,480 --> 00:07:46,000 Speaker 4: Trump then also includes in his announcement yesterday, Well, maybe 144 00:07:46,040 --> 00:07:48,680 Speaker 4: the reciprocal tariffs aren't going to be as bad as 145 00:07:48,720 --> 00:07:51,440 Speaker 4: some folks are anticipating. Well, let's break it down a 146 00:07:51,440 --> 00:07:53,440 Speaker 4: little bit. How bad could it look? Well, if we 147 00:07:53,560 --> 00:07:57,520 Speaker 4: just go, you know, tariff for tariff, not terrible. If 148 00:07:57,560 --> 00:08:00,000 Speaker 4: you start stacking up all the different items that Trump 149 00:08:00,320 --> 00:08:05,160 Speaker 4: compares to tariff's value added tax, for example, non tariff measures, 150 00:08:05,160 --> 00:08:08,440 Speaker 4: including regulation that are imposed on US companies, you start 151 00:08:08,480 --> 00:08:11,720 Speaker 4: getting to an effective tariff rate on all of our 152 00:08:11,840 --> 00:08:15,240 Speaker 4: imports of nearly thirty five percent. Right now, we're running 153 00:08:15,320 --> 00:08:19,040 Speaker 4: just a touch under five percent. So just and again, 154 00:08:19,280 --> 00:08:21,960 Speaker 4: as Trump was saying that he was imposing a tariff 155 00:08:22,040 --> 00:08:25,480 Speaker 4: on autos, saying, maybe it won't be just that severe. 156 00:08:25,680 --> 00:08:28,760 Speaker 4: So there's this huge gulf between where we are today 157 00:08:28,800 --> 00:08:31,280 Speaker 4: at about a five percent effective tariff rate and what 158 00:08:31,360 --> 00:08:34,440 Speaker 4: it could look maximally at thirty five percent. I don't 159 00:08:34,480 --> 00:08:37,360 Speaker 4: know how you could shrug off uncertainty, just quite yet, 160 00:08:37,440 --> 00:08:40,359 Speaker 4: how you could attach yourself to anything truly concrete. 161 00:08:41,600 --> 00:08:44,040 Speaker 2: Have you ever been to Greenland, Stewart, I have not 162 00:08:44,280 --> 00:08:45,000 Speaker 2: a traveler. 163 00:08:45,120 --> 00:08:47,440 Speaker 4: I have not been to Greenland. I'm not sure if 164 00:08:47,880 --> 00:08:51,120 Speaker 4: anyone with an American. An American passport is quite welcome, 165 00:08:51,200 --> 00:08:53,200 Speaker 4: so I'm not booking my trip anytime soon. 166 00:08:54,400 --> 00:08:57,320 Speaker 3: A couple of them just touched down. Jd Vance has arrived, 167 00:08:57,320 --> 00:08:58,559 Speaker 3: which we're gonna be talking about. 168 00:08:58,559 --> 00:09:02,560 Speaker 2: Stuart with the cherry blossom. Nice job. Great to have Stuart. 169 00:09:02,640 --> 00:09:04,920 Speaker 2: Very thematic Bloomberg Economics. 170 00:09:04,960 --> 00:09:08,559 Speaker 3: I mean, listen, did you hear Weave that narrative here 171 00:09:08,760 --> 00:09:12,560 Speaker 3: live on the air, Bloomberg Economics, US economist, Many things 172 00:09:12,559 --> 00:09:13,319 Speaker 3: to Stuart Paul. 173 00:09:16,200 --> 00:09:19,680 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 174 00:09:19,760 --> 00:09:23,199 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 175 00:09:23,280 --> 00:09:26,280 Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. You 176 00:09:26,320 --> 00:09:29,800 Speaker 1: can also listen live on Amazon Alexa from our flagship 177 00:09:29,840 --> 00:09:34,600 Speaker 1: New York station Just Say Alexa played Bloomberg eleven thirty 178 00:09:34,640 --> 00:09:35,320 Speaker 1: tough tape. 179 00:09:35,400 --> 00:09:38,000 Speaker 6: If you're making your debut in public market, score Weave 180 00:09:38,080 --> 00:09:40,679 Speaker 6: right now indicated at thirty nine dollars and twenty five 181 00:09:40,720 --> 00:09:43,360 Speaker 6: cents a share. That would be below the IPO price 182 00:09:43,840 --> 00:09:46,599 Speaker 6: of forty dollars a share, and it was already downsize. 183 00:09:46,600 --> 00:09:48,280 Speaker 6: That's why the company only raised one and a half 184 00:09:48,280 --> 00:09:51,240 Speaker 6: billion dollars in that initial public offering. The original range 185 00:09:51,280 --> 00:09:53,920 Speaker 6: would have meant it was going to raise up to 186 00:09:53,960 --> 00:09:56,559 Speaker 6: two point seven billion dollars. But the day is a 187 00:09:56,640 --> 00:09:59,320 Speaker 6: rough one. If your long equity isn't it maybe not 188 00:10:00,240 --> 00:10:02,199 Speaker 6: a good one for Core Weave to make its debut. 189 00:10:02,280 --> 00:10:03,840 Speaker 6: And and part of that, Joe is, of course, because 190 00:10:03,840 --> 00:10:05,880 Speaker 6: of the economic data we got over the course of 191 00:10:05,920 --> 00:10:09,640 Speaker 6: the morning, beginning with PCE looking at the FEDS Preferred 192 00:10:09,679 --> 00:10:11,960 Speaker 6: inflation gauge, which came in hotter than expected. Then you 193 00:10:12,000 --> 00:10:15,520 Speaker 6: look at real personal spending, which gives you a look 194 00:10:15,559 --> 00:10:18,720 Speaker 6: at what the consumer is doing that's softer. Add on 195 00:10:18,960 --> 00:10:23,600 Speaker 6: University of Michigan, Sentiment sentiment down, inflation expectations up, specifically 196 00:10:23,679 --> 00:10:27,760 Speaker 6: long term inflation expectations five to ten years out. Consumers 197 00:10:27,800 --> 00:10:29,520 Speaker 6: think it's going to be at four point one percent. 198 00:10:30,080 --> 00:10:30,840 Speaker 2: It's a problem. 199 00:10:31,000 --> 00:10:32,720 Speaker 3: And when you look at Wall Street, you don't have 200 00:10:32,800 --> 00:10:35,360 Speaker 3: to guess too much about the way investors feel about this. 201 00:10:35,440 --> 00:10:37,840 Speaker 2: The question is is the reaction justified? 202 00:10:37,840 --> 00:10:40,040 Speaker 3: And that's where we start our conversation with Anna Wong 203 00:10:40,080 --> 00:10:43,880 Speaker 3: with us in studio Bloomberg Economics, chief US economist ahead 204 00:10:43,880 --> 00:10:45,880 Speaker 3: of our talk with Joe Lavorgnia. And it's great to 205 00:10:45,880 --> 00:10:48,640 Speaker 3: see you, welcome back. Would you say that the reaction 206 00:10:48,760 --> 00:10:51,200 Speaker 3: here in the markets is justified. We're hearing the R 207 00:10:51,240 --> 00:10:54,440 Speaker 3: word more often the worries about the jobs report next week. 208 00:10:54,720 --> 00:10:54,920 Speaker 1: Yeah. 209 00:10:55,000 --> 00:10:57,360 Speaker 7: I think what's interesting is that you're hearing the R 210 00:10:57,480 --> 00:11:00,360 Speaker 7: word more than the S word, because if you look 211 00:11:00,400 --> 00:11:03,559 Speaker 7: at the way that the equities market corrected today, it's 212 00:11:03,720 --> 00:11:09,120 Speaker 7: completely growth fears, right, it's consumer discretionaries, information technology. However, 213 00:11:09,280 --> 00:11:14,080 Speaker 7: the bond market rallied, which suggests that the surprise upside 214 00:11:14,080 --> 00:11:17,880 Speaker 7: surprise to core PCE reading today was actually not the 215 00:11:17,960 --> 00:11:21,880 Speaker 7: dominant driver. So people are trade bond traders are not 216 00:11:21,920 --> 00:11:26,080 Speaker 7: so much worried about inflation as they are worried about growth. 217 00:11:26,160 --> 00:11:28,079 Speaker 7: This is why the bond mark is rallying. 218 00:11:28,240 --> 00:11:30,520 Speaker 6: Yeah, yields going down and steady up, which is where 219 00:11:30,600 --> 00:11:32,480 Speaker 6: you think they would be going if the expectation was 220 00:11:32,480 --> 00:11:35,080 Speaker 6: the Fed is not going to be cutting right anytime soon. 221 00:11:35,360 --> 00:11:37,560 Speaker 6: But the Fed has also pushed back against the notion 222 00:11:37,600 --> 00:11:40,880 Speaker 6: of reading to into some of the sentiment data. Specifically, 223 00:11:41,280 --> 00:11:44,439 Speaker 6: how was asked about and kind of pushed aside concerns 224 00:11:44,480 --> 00:11:47,720 Speaker 6: over you miish inflation expectations data specifically, and how much 225 00:11:47,760 --> 00:11:49,920 Speaker 6: longer can that go on when we're starting to see 226 00:11:49,960 --> 00:11:51,960 Speaker 6: it in the hard data too to some extent. 227 00:11:52,080 --> 00:11:55,520 Speaker 7: Yeah, So the University of Michigan survey has moved toward 228 00:11:55,559 --> 00:11:59,960 Speaker 7: a web based survey late last year, and as a result, 229 00:12:00,120 --> 00:12:04,720 Speaker 7: the share of Democrats respondents has increased in especially those 230 00:12:04,720 --> 00:12:08,559 Speaker 7: who self identify as strongly Democrats. And so as a result, 231 00:12:08,640 --> 00:12:11,880 Speaker 7: the inflation expectations really searched, because if you look at this, 232 00:12:12,440 --> 00:12:17,480 Speaker 7: the inflation expectations really is very much along partisan lines, 233 00:12:17,520 --> 00:12:21,319 Speaker 7: and Republicans actually don't see a problem with inflation, and 234 00:12:22,080 --> 00:12:24,920 Speaker 7: I think you're right on the money, Kayley. The Fed 235 00:12:25,880 --> 00:12:28,400 Speaker 7: has said that they are not getting paid too much 236 00:12:28,440 --> 00:12:32,760 Speaker 7: attention to the inflation expectations and which in you miss reading, 237 00:12:32,800 --> 00:12:34,880 Speaker 7: and this is why the bond market is kind of 238 00:12:34,920 --> 00:12:38,920 Speaker 7: dismissing that you miss reading and bond market being so 239 00:12:39,040 --> 00:12:42,400 Speaker 7: forth looking. They looked at this February reading for core 240 00:12:42,480 --> 00:12:46,720 Speaker 7: PC inflation and kind of dismissed it as backward looking. 241 00:12:47,200 --> 00:12:52,119 Speaker 7: And they are more worried that the growth the consumer 242 00:12:52,240 --> 00:12:56,240 Speaker 7: pullback would be more of a disinflationary driver, which will 243 00:12:56,480 --> 00:13:02,520 Speaker 7: overwhelm even the April second Liberation Day TECHFFS Liberation. 244 00:13:02,160 --> 00:13:04,120 Speaker 3: Day, and Donald Trump is going to be speaking in 245 00:13:04,160 --> 00:13:07,720 Speaker 3: the Oval Office shortly here as part of an unrelated event. 246 00:13:08,000 --> 00:13:10,360 Speaker 3: And along you're an economist, you're a forecaster. You're still 247 00:13:10,360 --> 00:13:13,480 Speaker 3: expected to do your job, which is to forecast what's 248 00:13:13,600 --> 00:13:16,120 Speaker 3: coming in the economy. Is your forecast only as good 249 00:13:16,120 --> 00:13:17,280 Speaker 3: as next Wednesday? 250 00:13:17,840 --> 00:13:20,960 Speaker 7: Well, we were forecasting as of next Friday's payroll and 251 00:13:21,080 --> 00:13:24,200 Speaker 7: so far not. Our forecast for payroll is actually pretty solid. 252 00:13:24,240 --> 00:13:27,160 Speaker 7: We're expecting a two hunderd k increase in non farm 253 00:13:27,200 --> 00:13:31,359 Speaker 7: payrolls lat next Friday. And a lot of this anxiety 254 00:13:31,400 --> 00:13:34,200 Speaker 7: over growth has to do with what we're reading in 255 00:13:34,240 --> 00:13:36,960 Speaker 7: the news, and I think, as Perrell said, the hard 256 00:13:37,080 --> 00:13:40,839 Speaker 7: data so far have not indicated it. It's mostly in 257 00:13:40,920 --> 00:13:41,560 Speaker 7: soft data. 258 00:13:41,600 --> 00:13:45,120 Speaker 3: Anxiety over tariffs those we're talking about, right, Doesn't that change. 259 00:13:44,960 --> 00:13:47,120 Speaker 2: Your world on Wednesday depending on what the President says. 260 00:13:47,400 --> 00:13:47,600 Speaker 1: Yeah. 261 00:13:47,679 --> 00:13:50,000 Speaker 7: So if you look at market options data, what we 262 00:13:50,080 --> 00:13:55,000 Speaker 7: are hearing is that the anxiety over Friday, the expected 263 00:13:55,080 --> 00:13:58,360 Speaker 7: volatility on Friday's payer report is bigger than the ones 264 00:13:58,440 --> 00:14:02,160 Speaker 7: being priced in tariffs on Tuesday. I think it's because 265 00:14:02,200 --> 00:14:06,480 Speaker 7: the market kind of think that the announcement from tariff 266 00:14:06,480 --> 00:14:12,199 Speaker 7: would be more lenient and not as crazy as as 267 00:14:12,240 --> 00:14:15,160 Speaker 7: the worst case scenario, whereas there's so much more uncertainty 268 00:14:15,240 --> 00:14:17,000 Speaker 7: with non farm payrolls. 269 00:14:17,679 --> 00:14:20,320 Speaker 6: Well, and when we consider uncertainty in what the market 270 00:14:20,360 --> 00:14:22,360 Speaker 6: is going to react to. I also wonder here, and 271 00:14:22,520 --> 00:14:24,800 Speaker 6: as we're looking at the data we are which indicates 272 00:14:24,840 --> 00:14:28,840 Speaker 6: a consumer that isn't feeling great, not good vibes, if 273 00:14:28,880 --> 00:14:31,680 Speaker 6: that for American companies who are thinking about the kind 274 00:14:31,720 --> 00:14:34,160 Speaker 6: of higher input costs that they're going to face and 275 00:14:34,200 --> 00:14:37,240 Speaker 6: their ability to pass that on, is it a suggestion 276 00:14:37,360 --> 00:14:39,680 Speaker 6: that actually that pricing power this time around, where they 277 00:14:39,680 --> 00:14:42,760 Speaker 6: were able to exercise it during the supply shortages after 278 00:14:42,800 --> 00:14:46,200 Speaker 6: the pandemic pretty successfully, isn't going to be as successful 279 00:14:46,200 --> 00:14:47,160 Speaker 6: this time Yeah. 280 00:14:47,000 --> 00:14:49,320 Speaker 7: You know. I think the key here is this economic 281 00:14:49,360 --> 00:14:53,040 Speaker 7: concept of budget constrained. And in a pandemic, the budget 282 00:14:53,080 --> 00:14:57,080 Speaker 7: constrain was actually expanding because of the fiscal stimulus and 283 00:14:57,160 --> 00:15:02,560 Speaker 7: also precautionary savings people have from not spending during the pandemic. 284 00:15:02,880 --> 00:15:06,040 Speaker 7: But now this budget constrained that a household faith is 285 00:15:06,080 --> 00:15:11,360 Speaker 7: actually hard. If anything, it's decreasing, right because on one hand, 286 00:15:11,360 --> 00:15:13,720 Speaker 7: it's been eroded by high inflation. On the other hand, 287 00:15:14,120 --> 00:15:19,840 Speaker 7: many of these income transfers that under Biden administration you 288 00:15:19,960 --> 00:15:25,360 Speaker 7: see are being are expiring. For example, just one idea 289 00:15:25,480 --> 00:15:28,960 Speaker 7: is like many student loan borrows had expected that their 290 00:15:28,960 --> 00:15:32,520 Speaker 7: still loans would be forgiven and they have continued with 291 00:15:32,600 --> 00:15:36,160 Speaker 7: spending acting as if it would be forgiven. But now 292 00:15:36,240 --> 00:15:41,240 Speaker 7: these income driven payment stoppage has has been challenged and 293 00:15:41,280 --> 00:15:44,000 Speaker 7: it looks like the Tremd administration would be pulling the 294 00:15:44,000 --> 00:15:47,920 Speaker 7: plug on all this stuff. And so I think a 295 00:15:47,960 --> 00:15:51,160 Speaker 7: lot of this is about the budget constrained. As a result, 296 00:15:51,200 --> 00:15:53,680 Speaker 7: there's only so much money a households to spend. If 297 00:15:54,160 --> 00:15:56,400 Speaker 7: if things are more expensive on one end, they're going 298 00:15:56,440 --> 00:15:59,200 Speaker 7: to pull back on the other. So as a result, yeah, 299 00:15:59,240 --> 00:16:02,360 Speaker 7: I think the come these American companies won't be able 300 00:16:02,400 --> 00:16:05,640 Speaker 7: to pass through these all. 301 00:16:05,480 --> 00:16:08,160 Speaker 6: Of these increase all right, not a good sign for 302 00:16:08,200 --> 00:16:11,440 Speaker 6: the corporate earnings outlook. Anna, welcome Bloomberg Economics. Thank you 303 00:16:11,520 --> 00:16:13,840 Speaker 6: so much for joining us, and we want to expand 304 00:16:14,080 --> 00:16:16,480 Speaker 6: on this conversation now in turn to Joe Lavornia, a 305 00:16:16,520 --> 00:16:18,960 Speaker 6: former Special Assistant to the President and chief economist at 306 00:16:18,960 --> 00:16:22,280 Speaker 6: the National Economic Council during the first Trump administration. He's 307 00:16:22,320 --> 00:16:27,160 Speaker 6: now managing director and chief Economist for SNBC Neco Securities America. 308 00:16:27,240 --> 00:16:30,880 Speaker 6: Welcome back to Bloomberg TV. And radio. Joe. Obviously, there 309 00:16:30,960 --> 00:16:33,240 Speaker 6: is a lot of concern out there and a lot 310 00:16:33,280 --> 00:16:35,520 Speaker 6: of talk about the R word. When you look at 311 00:16:35,560 --> 00:16:37,880 Speaker 6: the data, both the hard and the soft, do you 312 00:16:38,040 --> 00:16:40,640 Speaker 6: have the same growth concerns the market seems to you 313 00:16:40,760 --> 00:16:41,120 Speaker 6: right now? 314 00:16:41,360 --> 00:16:44,280 Speaker 5: I don't, and Anna is great. We actually overlapped a 315 00:16:44,320 --> 00:16:48,320 Speaker 5: bit in the first Trump of White House. As as 316 00:16:48,360 --> 00:16:50,520 Speaker 5: she mentioned, the hard data still look pretty good. The 317 00:16:50,880 --> 00:16:54,280 Speaker 5: trend and private job growth is turning up. Claims numbers 318 00:16:54,320 --> 00:16:59,680 Speaker 5: are still relatively low. Gasoline demand is pretty decent, which 319 00:16:59,720 --> 00:17:01,880 Speaker 5: is a good signed. The households are out driving around them. 320 00:17:01,880 --> 00:17:04,399 Speaker 5: When they do that, they typically are spending. The weekly 321 00:17:04,480 --> 00:17:07,520 Speaker 5: change story numbers are holding up well. So I understand 322 00:17:07,560 --> 00:17:09,639 Speaker 5: the concern in the market. It probably relates to the 323 00:17:09,640 --> 00:17:12,480 Speaker 5: equity market softening. If it softens enough, there's concern there 324 00:17:12,520 --> 00:17:15,000 Speaker 5: might be a negative wealth effect that in turn would 325 00:17:15,240 --> 00:17:17,920 Speaker 5: really damp in consumption because a lot of the gains 326 00:17:17,960 --> 00:17:20,880 Speaker 5: recently have been at the higher income levels. But right now, 327 00:17:20,920 --> 00:17:22,200 Speaker 5: the hard data look good. 328 00:17:23,480 --> 00:17:26,880 Speaker 2: Still Biden data, Joe, when's it Trump data? 329 00:17:27,000 --> 00:17:30,119 Speaker 5: That's a loaded question, Joe. What I will say is 330 00:17:30,160 --> 00:17:33,920 Speaker 5: that the inflation is a problem, and inflation is a 331 00:17:34,000 --> 00:17:38,240 Speaker 5: lagging indicator, the Powells supercre was up four tenths. It 332 00:17:38,280 --> 00:17:41,119 Speaker 5: was up three tenths the month before. The three and 333 00:17:41,200 --> 00:17:43,159 Speaker 5: six month rates a change are running up in the 334 00:17:43,160 --> 00:17:47,560 Speaker 5: mid fours. That's a problem. That's a function of previous policy, 335 00:17:47,880 --> 00:17:50,440 Speaker 5: both of the last administration and also the FED, which 336 00:17:50,520 --> 00:17:52,840 Speaker 5: kept rates too low for too long and may have 337 00:17:52,920 --> 00:17:56,760 Speaker 5: exacerbated the situation, Joe, and when they cut rates last fall. 338 00:17:57,359 --> 00:17:59,480 Speaker 5: The administration has a lot of work to do the 339 00:17:59,520 --> 00:18:02,360 Speaker 5: current miss and getting inflation down. I think they're serious 340 00:18:02,400 --> 00:18:05,199 Speaker 5: about it. We certainly need the lower energy costs that 341 00:18:05,240 --> 00:18:09,280 Speaker 5: will help. We need more capital spending. Supply side initiatives 342 00:18:09,280 --> 00:18:13,399 Speaker 5: to increase the economy's productive capacity will help. My fear 343 00:18:13,480 --> 00:18:15,560 Speaker 5: is that too many people focus on the demand side 344 00:18:15,560 --> 00:18:17,680 Speaker 5: and think you need a recession to bring inflation down. 345 00:18:17,680 --> 00:18:19,040 Speaker 5: That's not necessarily the case. 346 00:18:21,320 --> 00:18:24,320 Speaker 6: Well, sure if we consider the supply side dynamics as well, 347 00:18:24,359 --> 00:18:26,240 Speaker 6: which is what you're speaking to about the ramping up 348 00:18:26,280 --> 00:18:29,639 Speaker 6: of our own capacity. I just wonder about sequencing here, Joe. Obviously, 349 00:18:29,680 --> 00:18:32,160 Speaker 6: we've talked a lot about tariffs hitting first before say, 350 00:18:32,720 --> 00:18:36,199 Speaker 6: expanded tax cuts hit. There's also the question as to 351 00:18:36,200 --> 00:18:39,440 Speaker 6: whether or not yes tariffs are incentivizing more being made 352 00:18:39,480 --> 00:18:42,160 Speaker 6: in the US, but it takes time to build those 353 00:18:42,200 --> 00:18:45,000 Speaker 6: factories to hire those workers. So how do you see 354 00:18:45,040 --> 00:18:48,040 Speaker 6: things playing out sequentially? Here? Can all of that kick 355 00:18:48,080 --> 00:18:50,200 Speaker 6: in in time to avoid the worst case scenario? 356 00:18:50,440 --> 00:18:54,480 Speaker 5: It will depend in large part on the extension of 357 00:18:54,520 --> 00:18:57,520 Speaker 5: the twenty seventeen Tax Cuts and Jobs Act and the 358 00:18:57,560 --> 00:19:00,439 Speaker 5: other programs that the President wants to put forward in 359 00:19:00,480 --> 00:19:03,359 Speaker 5: that for example, lowering the corporate rate from twenty one 360 00:19:03,440 --> 00:19:06,480 Speaker 5: to fifteen percent and then having your one hundred percent 361 00:19:06,520 --> 00:19:09,920 Speaker 5: expensing on capex back to January one. So the sooner 362 00:19:09,960 --> 00:19:14,000 Speaker 5: we get clarity on the tax bill, the better. My 363 00:19:14,119 --> 00:19:15,960 Speaker 5: view when I talk to people is I understand the 364 00:19:16,000 --> 00:19:19,280 Speaker 5: uncertainty around tariffs. I see that mostly as by design, 365 00:19:19,400 --> 00:19:21,960 Speaker 5: not as a bug in terms of the sequencing. We're 366 00:19:21,960 --> 00:19:24,879 Speaker 5: going to get more information next week as the budget 367 00:19:24,920 --> 00:19:28,200 Speaker 5: comes into focus. Since I believe tariffs, this is me speaking, 368 00:19:28,240 --> 00:19:30,440 Speaker 5: tariffs will be used as a revenue source among other 369 00:19:31,080 --> 00:19:34,480 Speaker 5: the desirous things that you're going to have some minimal 370 00:19:34,560 --> 00:19:36,560 Speaker 5: level of tariffs to raise those revenues, and will know 371 00:19:36,680 --> 00:19:39,560 Speaker 5: more exactly how what everything looks like once we get 372 00:19:39,560 --> 00:19:42,600 Speaker 5: a budget bill, and I'm maybe on the optimistic side. 373 00:19:42,600 --> 00:19:44,800 Speaker 5: But I think we can get a bill before Congress 374 00:19:45,400 --> 00:19:48,359 Speaker 5: recesses this summer, and that'll be helpful because I'll provide 375 00:19:48,359 --> 00:19:51,200 Speaker 5: a lot of clarity on the outlook and can get 376 00:19:51,200 --> 00:19:53,960 Speaker 5: these companies to start to reinvest in CAPEX and not 377 00:19:54,040 --> 00:19:56,359 Speaker 5: worry about a massive tax hike that would come in 378 00:19:56,359 --> 00:19:56,960 Speaker 5: twenty six. 379 00:19:57,960 --> 00:20:01,680 Speaker 3: Well, you just said something really important. DELIVERI tariffs as 380 00:20:01,800 --> 00:20:04,560 Speaker 3: revenue generators. That would mean that we'd have to have 381 00:20:04,720 --> 00:20:07,240 Speaker 3: some tariffs in place for long enough to generate revenue. 382 00:20:07,280 --> 00:20:09,760 Speaker 3: And there's a lot of sort of cross current here 383 00:20:09,800 --> 00:20:11,800 Speaker 3: in Washington. A lot of people believe that the President 384 00:20:11,840 --> 00:20:16,480 Speaker 3: will have meetings over the weekend, find concessions with some countries, 385 00:20:17,040 --> 00:20:20,960 Speaker 3: talk about exceptions and carve outs on Liberation Day next week. 386 00:20:21,000 --> 00:20:23,359 Speaker 3: At some point they'll need to be something across the 387 00:20:23,359 --> 00:20:25,920 Speaker 3: board that sticks to generate revenue. 388 00:20:25,960 --> 00:20:27,919 Speaker 2: Which of these tariffs do you think that might be? 389 00:20:28,359 --> 00:20:30,240 Speaker 5: What makes the most sense to me if you look 390 00:20:30,359 --> 00:20:33,199 Speaker 5: right now, we're going to run about ninety billion this 391 00:20:33,320 --> 00:20:38,000 Speaker 5: year on tariff or customs duties revenues, which is a 392 00:20:38,119 --> 00:20:41,439 Speaker 5: decent number, up a lot from where we were prior 393 00:20:41,480 --> 00:20:45,800 Speaker 5: to Trump one point zero. And if with the auto tariffs. 394 00:20:46,280 --> 00:20:49,120 Speaker 5: Those could raise another one hundred billion. We're not assuming 395 00:20:49,119 --> 00:20:51,560 Speaker 5: long term behavioral changes, but it's going to raise a 396 00:20:51,560 --> 00:20:54,560 Speaker 5: substantial amount of money. If you start to carve out 397 00:20:55,119 --> 00:20:57,920 Speaker 5: all these different things, then you have less You're not 398 00:20:57,960 --> 00:20:59,840 Speaker 5: going to raise the money, which in my opinion, would 399 00:20:59,840 --> 00:21:03,159 Speaker 5: make you're harder to do the other factors that are 400 00:21:03,240 --> 00:21:06,639 Speaker 5: very important, keeping marginal rates low on both capital and labor, 401 00:21:06,680 --> 00:21:10,199 Speaker 5: and then of course extending no tax on tips or 402 00:21:10,240 --> 00:21:13,280 Speaker 5: making no tax on tips so security benefits overtime, et cetera. 403 00:21:14,280 --> 00:21:16,120 Speaker 5: It's going to be much harder to do that if 404 00:21:16,160 --> 00:21:21,040 Speaker 5: you don't have a revenue source coming through tariffs, especially 405 00:21:21,080 --> 00:21:24,680 Speaker 5: if you have a lot of Freedom Caucus fiscally conservative members, 406 00:21:24,720 --> 00:21:27,520 Speaker 5: even though won't be scored in a budget, you'll need 407 00:21:27,560 --> 00:21:30,600 Speaker 5: them on board with passing this legislation. And also, of course, 408 00:21:30,640 --> 00:21:35,040 Speaker 5: assault tax people and here in Connecticut, California, et cetera, 409 00:21:35,160 --> 00:21:37,480 Speaker 5: want that deduction to come back. So there are a 410 00:21:37,520 --> 00:21:39,760 Speaker 5: lot of things in this bill, and I don't see 411 00:21:39,800 --> 00:21:41,560 Speaker 5: how you're going to get everybody on board unless you 412 00:21:41,560 --> 00:21:43,280 Speaker 5: don't have a tariff. But also last point I want 413 00:21:43,320 --> 00:21:44,960 Speaker 5: to make on this is if you want to re 414 00:21:45,119 --> 00:21:48,719 Speaker 5: onshore and reindustrialize. Tariff is central to that because it's 415 00:21:48,800 --> 00:21:51,520 Speaker 5: going to incentivize capital to come back into the US. 416 00:21:51,960 --> 00:21:54,080 Speaker 5: Without a tariff, that incentive is not going to be 417 00:21:54,080 --> 00:21:55,119 Speaker 5: anywhere near or strong. 418 00:21:56,440 --> 00:21:58,720 Speaker 6: Yeah, I just want to bring some breaking news to 419 00:21:58,760 --> 00:22:00,959 Speaker 6: our audience here on Bloomberg Tea and Radio Joe. We've 420 00:22:01,000 --> 00:22:04,520 Speaker 6: been waiting for it, and Core we've has indeed started trading. 421 00:22:04,560 --> 00:22:06,920 Speaker 6: The shares opening at thirty nine dollars a share. That's 422 00:22:06,920 --> 00:22:09,120 Speaker 6: two and a half percent below the forty dollars per 423 00:22:09,119 --> 00:22:12,320 Speaker 6: share IPO price, which again was downsize. Part of that 424 00:22:12,400 --> 00:22:17,080 Speaker 6: having to do Joe Matthew with what is deteriorating markets sentiment, 425 00:22:17,080 --> 00:22:19,040 Speaker 6: at least in the equity market, it seems certainly is 426 00:22:19,080 --> 00:22:23,520 Speaker 6: the case. Today we're now slightly lower on Core. We 427 00:22:23,560 --> 00:22:28,119 Speaker 6: have a rough debut as this AI company is trading 428 00:22:28,160 --> 00:22:30,480 Speaker 6: into a market in which the brighter Nasdaq one hundred 429 00:22:30,520 --> 00:22:31,639 Speaker 6: is down two point six percent. 430 00:22:31,720 --> 00:22:33,680 Speaker 3: Right now, you're stuck with two Joe's at the moment. 431 00:22:34,160 --> 00:22:37,240 Speaker 3: This is below thirty nine dollars. Remarkable. This was bad 432 00:22:37,280 --> 00:22:40,680 Speaker 3: news when it fell to forty before this started. Knowing 433 00:22:40,720 --> 00:22:44,360 Speaker 3: as well that companies including in Vidia partner companies Microsoft 434 00:22:44,359 --> 00:22:47,960 Speaker 3: and VideA bought an enormous number of shares to try 435 00:22:48,000 --> 00:22:51,280 Speaker 3: to shore up support for this IPO. And while we 436 00:22:51,320 --> 00:22:53,560 Speaker 3: could be in a different world on another day, this 437 00:22:53,640 --> 00:22:56,080 Speaker 3: already was a bad day, as you mentioned for the markets, 438 00:22:56,119 --> 00:22:59,560 Speaker 3: the AI story being challenged, and now seeing this at 439 00:22:59,560 --> 00:23:01,080 Speaker 3: the moment, it's not going to make a lot of 440 00:23:01,080 --> 00:23:02,840 Speaker 3: people in the AI space feel better. 441 00:23:02,920 --> 00:23:05,520 Speaker 6: Yeah, thirty nine dollars and forty cents roughly per share 442 00:23:05,560 --> 00:23:07,199 Speaker 6: right now is what we're looking at in Joe Ofvornia 443 00:23:07,240 --> 00:23:12,080 Speaker 6: when we consider what this may signal more widely about sentiment. Obviously, 444 00:23:12,119 --> 00:23:14,720 Speaker 6: we began this conversation with concerns around growth, which you 445 00:23:14,720 --> 00:23:17,280 Speaker 6: don't necessarily share. But when we think about the kind 446 00:23:17,280 --> 00:23:20,440 Speaker 6: of market forces and how propped up, at least until recently, 447 00:23:20,480 --> 00:23:23,439 Speaker 6: this market was by bets on artificial intelligence and the 448 00:23:23,480 --> 00:23:26,720 Speaker 6: productivity gains and the revenue kind of driving force that 449 00:23:26,840 --> 00:23:29,800 Speaker 6: it could be. Do you sense that we are kind 450 00:23:29,800 --> 00:23:33,720 Speaker 6: of rethinking that whole narrative and that perhaps that isn't 451 00:23:33,720 --> 00:23:35,840 Speaker 6: going to be able to be leaned on for support 452 00:23:35,880 --> 00:23:38,399 Speaker 6: at the same time that we're seeing at least some 453 00:23:38,600 --> 00:23:40,200 Speaker 6: degree of softening in the economy. 454 00:23:40,359 --> 00:23:43,119 Speaker 5: We probably leaned a lot on that narrative because in 455 00:23:43,160 --> 00:23:46,080 Speaker 5: a lot of these cases, the price to earnings and 456 00:23:46,400 --> 00:23:49,439 Speaker 5: price to revenues and margins, you know, a lot of 457 00:23:49,440 --> 00:23:52,880 Speaker 5: good news is priced intol the AI sector broadly speaking. 458 00:23:52,920 --> 00:23:55,920 Speaker 5: So I understand why the market's pulling back just because 459 00:23:55,920 --> 00:23:59,639 Speaker 5: it was due to pull back, especially after some incredible runs. 460 00:23:59,640 --> 00:24:00,800 Speaker 5: And of course, so as you know, it's been a 461 00:24:00,880 --> 00:24:05,080 Speaker 5: very narrow concentration of stocks driving the market. So this 462 00:24:05,119 --> 00:24:08,080 Speaker 5: doesn't surprise me. There always be a reason why eventually 463 00:24:08,080 --> 00:24:11,520 Speaker 5: the market needs to reset. But the longer term productivity trend, 464 00:24:11,520 --> 00:24:15,600 Speaker 5: to me is very powerful. Productivity growth accelerate under Trump 465 00:24:15,880 --> 00:24:20,520 Speaker 5: the first administration, it continues to accelerate under the Biden administration. 466 00:24:21,160 --> 00:24:25,200 Speaker 5: And I firmly believe if we keep taxes on capital 467 00:24:25,320 --> 00:24:28,760 Speaker 5: low and we can have a more productive, efficient economy. 468 00:24:28,760 --> 00:24:31,359 Speaker 5: And part of that does relate back to what happens 469 00:24:31,400 --> 00:24:33,720 Speaker 5: on the government spending cuts. If we could, I thinks, 470 00:24:33,840 --> 00:24:36,480 Speaker 5: I'm going to paraphrase a secretary vest if we can 471 00:24:36,880 --> 00:24:39,960 Speaker 5: delever the private or if we could deliver the public 472 00:24:40,000 --> 00:24:43,280 Speaker 5: sector and lever up the private sector, that will help 473 00:24:43,440 --> 00:24:46,600 Speaker 5: underlying efficiency and ultimately productivity. So I'm a huge bull 474 00:24:46,600 --> 00:24:49,160 Speaker 5: on the equity market and the economy over the long 475 00:24:49,240 --> 00:24:53,040 Speaker 5: term and obviously short term. There are some digestive issues 476 00:24:53,040 --> 00:24:56,160 Speaker 5: in the market, but that doesn't leave me a pessimistic 477 00:24:57,000 --> 00:24:57,960 Speaker 5: or make me pessimistical. 478 00:24:58,000 --> 00:25:02,199 Speaker 3: We say the initial trades core weave with Joe Lavornia 479 00:25:02,240 --> 00:25:05,760 Speaker 3: live on Bloomberg's TV and radio just above thirty nine 480 00:25:05,800 --> 00:25:08,200 Speaker 3: dollars thirty nine and a half year, done about one 481 00:25:08,240 --> 00:25:11,040 Speaker 3: and a half percent from the IPO price. Joe, We've 482 00:25:11,040 --> 00:25:14,560 Speaker 3: asked you a couple of times recently about President Trump's 483 00:25:14,960 --> 00:25:18,240 Speaker 3: view upon in relationship with the stock market, whether it 484 00:25:18,280 --> 00:25:21,160 Speaker 3: had changed since the first term, Does it down day 485 00:25:21,320 --> 00:25:22,679 Speaker 3: like this get his attention? 486 00:25:22,800 --> 00:25:23,480 Speaker 2: What's he thinking? 487 00:25:23,920 --> 00:25:26,439 Speaker 5: I don't know. I always say I'm not a mind reader. 488 00:25:26,800 --> 00:25:30,360 Speaker 5: But the things that obviously the president cares about our 489 00:25:30,800 --> 00:25:34,000 Speaker 5: everyday issues, and that relates to our mortgage rates down, 490 00:25:34,240 --> 00:25:37,399 Speaker 5: what's the price of gas, the price of food. Obviously, 491 00:25:37,480 --> 00:25:41,159 Speaker 5: the equity market's important. A lot of people don't have 492 00:25:41,280 --> 00:25:44,000 Speaker 5: necessarily the equity exposure that people in the markets have, 493 00:25:44,160 --> 00:25:49,040 Speaker 5: So perhaps the professional investor and the professional managerial class 494 00:25:49,040 --> 00:25:51,399 Speaker 5: gets too worried about the day to day wiggles in 495 00:25:51,440 --> 00:25:54,560 Speaker 5: the market. But ultimately, if we have the right policies, 496 00:25:54,560 --> 00:25:56,880 Speaker 5: in place, and we're able to do the things that 497 00:25:57,520 --> 00:26:00,680 Speaker 5: the administration the Congress ideally will pass and the outlook 498 00:26:00,720 --> 00:26:03,280 Speaker 5: should be good. But you know, we'll see, we'll see, 499 00:26:03,560 --> 00:26:05,400 Speaker 5: you know, several years from now. I don't think they're 500 00:26:05,760 --> 00:26:08,520 Speaker 5: My guess is administration isn't worried day to day on 501 00:26:08,720 --> 00:26:11,600 Speaker 5: market reaction. But where are we a year from now? 502 00:26:11,640 --> 00:26:13,760 Speaker 5: Where are we heading into the midterms. What does the 503 00:26:13,800 --> 00:26:15,960 Speaker 5: economy look like, what's the equity market doing? 504 00:26:16,400 --> 00:26:16,480 Speaker 1: Uh? 505 00:26:16,800 --> 00:26:19,840 Speaker 5: Maybe people are just too focused on the short term dynamics. 506 00:26:21,400 --> 00:26:23,160 Speaker 3: A lot of big questions to be answered. That's why 507 00:26:23,160 --> 00:26:24,720 Speaker 3: we'd love to keep talking with you, Joe, and we 508 00:26:25,000 --> 00:26:25,320 Speaker 3: thank you. 509 00:26:25,400 --> 00:26:26,000 Speaker 2: She at the time. 510 00:26:26,040 --> 00:26:28,720 Speaker 3: As always, Joe Lavornia with us live on Bloomberg TV 511 00:26:28,800 --> 00:26:31,520 Speaker 3: and Radio, as we watch on YouTube as well the 512 00:26:31,600 --> 00:26:33,480 Speaker 3: opening trades of Core Weave. 513 00:26:36,800 --> 00:26:40,280 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 514 00:26:40,359 --> 00:26:43,359 Speaker 1: us live weekdays at noon and five pm Eastern on 515 00:26:43,520 --> 00:26:46,760 Speaker 1: Apple Coarcklay and Android Auto with the Bloomberg Business App. 516 00:26:46,920 --> 00:26:50,200 Speaker 1: Listen on demand wherever you get your podcasts, or watch 517 00:26:50,240 --> 00:26:51,800 Speaker 1: us live on YouTube. 518 00:26:53,040 --> 00:26:57,520 Speaker 3: As we turn to Patufic Greenland here on Balance of Power, 519 00:26:57,560 --> 00:27:00,840 Speaker 3: home of the northernmost base for the US space for US. 520 00:27:00,880 --> 00:27:02,760 Speaker 3: You may not have known that, Kayley, but that is 521 00:27:02,800 --> 00:27:05,200 Speaker 3: where the vice president is found today. J D. 522 00:27:05,400 --> 00:27:07,040 Speaker 2: Vance not just the vice president. 523 00:27:06,800 --> 00:27:08,840 Speaker 3: The second ladies along for the ride, as is someone 524 00:27:09,000 --> 00:27:11,360 Speaker 3: we've been talking about a lot this week, Michael Waltz, 525 00:27:11,640 --> 00:27:15,440 Speaker 3: the President's National security advisor. Presumably this is a round 526 00:27:15,480 --> 00:27:17,480 Speaker 3: trip ticket for all of them. They're not going to 527 00:27:17,520 --> 00:27:18,280 Speaker 3: be there for long either. 528 00:27:18,320 --> 00:27:21,040 Speaker 6: A couple of hours, yeah, like three hours on the 529 00:27:21,040 --> 00:27:23,800 Speaker 6: ground after it's going to be collectively, I think twelve 530 00:27:23,840 --> 00:27:26,440 Speaker 6: hours in the air. It's also eighteen degrees fahrenheit in 531 00:27:26,480 --> 00:27:27,240 Speaker 6: Greenland right now. 532 00:27:27,440 --> 00:27:28,240 Speaker 2: Yes, very cold. 533 00:27:28,320 --> 00:27:28,680 Speaker 6: They looked. 534 00:27:28,880 --> 00:27:30,160 Speaker 2: Yeah, you might have seen JD. 535 00:27:30,280 --> 00:27:33,280 Speaker 3: Vans according to the Pool report stepping off the aircraft quote, 536 00:27:33,520 --> 00:27:36,760 Speaker 3: it is as cold as s here. Nobody told me. 537 00:27:37,200 --> 00:27:40,080 Speaker 3: We're actually waiting for him to start speaking. And it's interesting, Kaylee. 538 00:27:40,119 --> 00:27:42,040 Speaker 3: What we got a bit of a readout on what 539 00:27:42,119 --> 00:27:42,680 Speaker 3: he's going to. 540 00:27:42,640 --> 00:27:43,760 Speaker 2: Be talking about here. 541 00:27:43,800 --> 00:27:48,440 Speaker 3: The mistreatment of the Greenlandic people treated like second class citizens, 542 00:27:48,480 --> 00:27:51,080 Speaker 3: allowing infrastructure on the island to fall and to disrepair. 543 00:27:51,160 --> 00:27:53,240 Speaker 3: His message to Danish leaders today. 544 00:27:53,359 --> 00:27:56,480 Speaker 6: Yeah, he's basically suggesting that Denmark is not being a 545 00:27:56,520 --> 00:27:58,960 Speaker 6: good steward of this territory that the Trump administration has 546 00:27:58,960 --> 00:28:01,000 Speaker 6: made it very clear they would actually like to have 547 00:28:01,080 --> 00:28:04,119 Speaker 6: control over. They think it is strategic for our national 548 00:28:04,160 --> 00:28:07,119 Speaker 6: security when we consider our positioning in the Arctic. The 549 00:28:07,160 --> 00:28:10,360 Speaker 6: problem is the Danish, who, by the way, our NATO allies, 550 00:28:10,600 --> 00:28:13,840 Speaker 6: of ours part of this wider alliance or not into 551 00:28:13,880 --> 00:28:17,040 Speaker 6: the idea. And they've been pushing back on this notion 552 00:28:17,119 --> 00:28:19,720 Speaker 6: quite heavily. And that is also why, in part we 553 00:28:19,800 --> 00:28:22,919 Speaker 6: have seen what was the initial broad more broadly planned 554 00:28:22,960 --> 00:28:25,399 Speaker 6: trip been scaled back to just this visit, to just 555 00:28:25,440 --> 00:28:25,840 Speaker 6: this spase. 556 00:28:25,920 --> 00:28:28,080 Speaker 3: Yeah, they're way up north for this and only for 557 00:28:28,160 --> 00:28:30,960 Speaker 3: a couple of hours here. Remarkable to hear from John. 558 00:28:31,119 --> 00:28:34,800 Speaker 3: Rebecca Clemenson of the Danish Defense Academy told TV they're 559 00:28:34,840 --> 00:28:38,920 Speaker 3: the biggest foreign policy crisis since World War Two for Denmark. 560 00:28:39,360 --> 00:28:42,200 Speaker 6: So let's talk about that crisis if it is indeed 561 00:28:42,800 --> 00:28:44,600 Speaker 6: that big. In turn to Rachel Rizzo, who is here 562 00:28:44,600 --> 00:28:46,840 Speaker 6: with us in our Washington, d C studio. She's non 563 00:28:46,880 --> 00:28:50,440 Speaker 6: resident Senior Fellow at the Atlantic Council's Europe Center. Thanks 564 00:28:50,440 --> 00:28:53,520 Speaker 6: for being here on Bloomberg TV and Radio. Rachel, is 565 00:28:53,560 --> 00:28:56,880 Speaker 6: this really where we are? Is this a world War 566 00:28:56,920 --> 00:28:59,560 Speaker 6: two or a crisis we haven't seen since the World 567 00:28:59,600 --> 00:29:02,280 Speaker 6: War two era with what is an ally of the 568 00:29:02,400 --> 00:29:03,080 Speaker 6: United States. 569 00:29:03,440 --> 00:29:06,600 Speaker 8: Yeah, I mean, over the last few months, Donald Trump 570 00:29:06,600 --> 00:29:11,000 Speaker 8: has been extremely aggressive in saying that he wants the 571 00:29:11,120 --> 00:29:13,160 Speaker 8: United States to acquire Greenland. 572 00:29:13,440 --> 00:29:13,920 Speaker 6: Now JD. 573 00:29:14,040 --> 00:29:17,880 Speaker 8: Vance can go to Greenland and say, you know, Denmark 574 00:29:17,880 --> 00:29:20,560 Speaker 8: has not been a good steward of this territory. But 575 00:29:20,640 --> 00:29:22,680 Speaker 8: this goes a lot deeper than that. There are critical 576 00:29:22,720 --> 00:29:27,720 Speaker 8: raw materials there that are untapped, untapped gas and oil resources. 577 00:29:28,040 --> 00:29:32,800 Speaker 8: It's a strategically sensitive location up in the Arctic, especially 578 00:29:32,840 --> 00:29:37,400 Speaker 8: as Russia and China increase their military exercises up there. 579 00:29:37,480 --> 00:29:39,680 Speaker 8: So there's a lot more to it than just going 580 00:29:39,720 --> 00:29:42,600 Speaker 8: to Greenland. Because Denmark has not been a good steward 581 00:29:42,640 --> 00:29:43,680 Speaker 8: of this territory, well. 582 00:29:43,600 --> 00:29:47,200 Speaker 3: Are those good reasons? Speak to the strategic aspect of that. 583 00:29:47,240 --> 00:29:49,880 Speaker 3: We already have a space force base there. We can 584 00:29:49,920 --> 00:29:52,360 Speaker 3: obviously go there as we see fit. What would owning 585 00:29:52,400 --> 00:29:54,400 Speaker 3: the territory do for us that we don't. 586 00:29:54,160 --> 00:29:57,120 Speaker 8: Have now, Yeah, that's I think the key question here. 587 00:29:57,160 --> 00:29:59,920 Speaker 8: I mean, we do have permanent military presence on Greenland. 588 00:30:00,160 --> 00:30:02,840 Speaker 8: We've had it there for decades and as I said before, 589 00:30:02,880 --> 00:30:07,360 Speaker 8: it is strategically important. But remember Donald Trump is very 590 00:30:07,400 --> 00:30:11,480 Speaker 8: focused on this economic competition with China, and right now, 591 00:30:11,640 --> 00:30:15,959 Speaker 8: China owns the mining, processing refinement of about eighty percent 592 00:30:16,040 --> 00:30:17,760 Speaker 8: of the world's critical raw materials. 593 00:30:18,240 --> 00:30:19,640 Speaker 6: Twenty five of. 594 00:30:19,480 --> 00:30:23,040 Speaker 8: The European Union's thirty four critical raw materials are located 595 00:30:23,080 --> 00:30:26,480 Speaker 8: in Greenland. Now all of this is untapped wealth. Of course, 596 00:30:26,560 --> 00:30:29,520 Speaker 8: this is a harsh territory. It's under a lot of ice. 597 00:30:29,600 --> 00:30:32,520 Speaker 8: This is a small economy. There's only fifty six thousand people. 598 00:30:32,840 --> 00:30:36,880 Speaker 8: They're heavily reliant on Danish subsidies. So that wealth is there, 599 00:30:37,360 --> 00:30:40,040 Speaker 8: but it's expensive and it's hard to get to. So 600 00:30:40,120 --> 00:30:42,760 Speaker 8: this idea that we're going to acquire Greenland and somehow 601 00:30:42,920 --> 00:30:46,200 Speaker 8: reap all of these benefits I think is a stretch. 602 00:30:47,440 --> 00:30:50,360 Speaker 6: Okay, So when we consider the potential reward here, which 603 00:30:50,440 --> 00:30:54,920 Speaker 6: with the potential risk of disrupting a relationship with an ally, 604 00:30:55,000 --> 00:30:57,760 Speaker 6: I do wonder when we consider Denmark and NATO more 605 00:30:57,760 --> 00:31:02,000 Speaker 6: widely in potential in that relationship that could be further 606 00:31:02,040 --> 00:31:05,160 Speaker 6: amplified by this. It already is pretty tense. Does this 607 00:31:05,240 --> 00:31:09,080 Speaker 6: actually serve Russia, which theoretically with an acquisition of Greenlander, 608 00:31:09,160 --> 00:31:10,880 Speaker 6: what have you we'd be trying to counter to a 609 00:31:10,880 --> 00:31:14,160 Speaker 6: greater degree because it may create more division between the 610 00:31:14,280 --> 00:31:15,240 Speaker 6: US and its allies. 611 00:31:15,680 --> 00:31:19,000 Speaker 8: So this is Vladimir Putin's favorite thing. When NATO allies 612 00:31:19,040 --> 00:31:21,280 Speaker 8: are at each other's throats and there are fissures and 613 00:31:21,360 --> 00:31:24,280 Speaker 8: divisions within the alliance, he loves to come in and 614 00:31:24,320 --> 00:31:29,040 Speaker 8: exploit those divisions through things like cyberwarfare, hybrid warfare. But 615 00:31:29,240 --> 00:31:33,000 Speaker 8: you know, looking at Greenlanders, there have been polls that 616 00:31:33,040 --> 00:31:35,480 Speaker 8: have been done. Eighty five percent of Greenlanders do not 617 00:31:35,560 --> 00:31:37,720 Speaker 8: want to be part of the United States. But also 618 00:31:37,760 --> 00:31:40,160 Speaker 8: there's poles done in the United States as well. Seventy 619 00:31:40,160 --> 00:31:43,160 Speaker 8: percent of Americans don't want Greenland as part of America either. 620 00:31:43,560 --> 00:31:46,760 Speaker 8: So overall, this is just a really unpopular idea. It's 621 00:31:46,760 --> 00:31:49,320 Speaker 8: also a really unpopular visit. They've had to scale this 622 00:31:49,480 --> 00:31:55,360 Speaker 8: visit down, and it's creating a bunch of tension with Denmark, 623 00:31:55,960 --> 00:31:58,960 Speaker 8: with our NATO allies. And I think that the quote 624 00:31:59,000 --> 00:32:01,760 Speaker 8: you said earlier that this is creating a crisis that 625 00:32:01,800 --> 00:32:04,400 Speaker 8: we haven't seen for quite some time, is very true 626 00:32:04,440 --> 00:32:05,920 Speaker 8: and it's going to be interesting to watch how this 627 00:32:05,960 --> 00:32:06,360 Speaker 8: plays out. 628 00:32:06,360 --> 00:32:09,480 Speaker 3: I think Vladimir Putin had a policy forum yesterday it 629 00:32:09,520 --> 00:32:11,840 Speaker 3: can look surprising, he said, only at first glance, and 630 00:32:11,880 --> 00:32:13,440 Speaker 3: it would be wrong to believe this is some sort 631 00:32:13,440 --> 00:32:17,560 Speaker 3: of extravagant talk by the current US administration. It's obvious 632 00:32:17,640 --> 00:32:22,520 Speaker 3: the US will continue to systematically advance it's geostrategic, military, political, 633 00:32:22,520 --> 00:32:24,680 Speaker 3: and economic interests in the Arctic. 634 00:32:24,960 --> 00:32:26,280 Speaker 2: So is he going to help us do this? 635 00:32:26,840 --> 00:32:30,080 Speaker 8: So that's really interesting because that sounds like something that 636 00:32:30,160 --> 00:32:33,120 Speaker 8: Vladimir Putin would say about what he's done in Ukraine. 637 00:32:33,320 --> 00:32:33,560 Speaker 5: Right. 638 00:32:33,840 --> 00:32:41,000 Speaker 8: It's this very imperialistic talk about regaining territory, you know, 639 00:32:41,080 --> 00:32:44,480 Speaker 8: regaining this greatness that has been lost. This is kind 640 00:32:44,520 --> 00:32:47,360 Speaker 8: of Putin's approach to this, but it's also Donald Trump's 641 00:32:47,400 --> 00:32:51,000 Speaker 8: approach to the United States and our foreign policy. So 642 00:32:51,600 --> 00:32:54,080 Speaker 8: I think when it comes to Greenland, there is a 643 00:32:54,160 --> 00:32:57,280 Speaker 8: sense that he wants to counter China but also counter 644 00:32:57,400 --> 00:33:00,840 Speaker 8: Russia in the Arctic. But again, the steps that would 645 00:33:00,880 --> 00:33:03,800 Speaker 8: have to be taken for this acquisition to actually go through, 646 00:33:04,120 --> 00:33:07,680 Speaker 8: and the expense that this would cost the United States 647 00:33:07,760 --> 00:33:10,440 Speaker 8: is extravagant. So I think we need to keep that 648 00:33:10,480 --> 00:33:14,600 Speaker 8: in mind when we think through the realistic outcome here 649 00:33:15,520 --> 00:33:17,840 Speaker 8: and the benefits that the United States would be able 650 00:33:17,840 --> 00:33:18,160 Speaker 8: to reap. 651 00:33:18,200 --> 00:33:19,960 Speaker 6: From this well, and I wonder if there is a 652 00:33:19,960 --> 00:33:22,760 Speaker 6: parallel to the efforts that are currently underway, still being 653 00:33:22,840 --> 00:33:25,560 Speaker 6: negotiated for the US to have rights to minerals in 654 00:33:25,720 --> 00:33:28,000 Speaker 6: Ukraine and other according to our reporting, at least in 655 00:33:28,000 --> 00:33:31,240 Speaker 6: a revised deal, right of first refusal, essentially for investments 656 00:33:31,560 --> 00:33:34,760 Speaker 6: in infrastructure. When we're talking about the kind of investment 657 00:33:34,800 --> 00:33:37,080 Speaker 6: it does require to build out that capacity, to get 658 00:33:37,080 --> 00:33:38,480 Speaker 6: the ore out of the ground, to get it where 659 00:33:38,800 --> 00:33:41,400 Speaker 6: it needs to go, how realistic are those objectives on 660 00:33:41,440 --> 00:33:42,520 Speaker 6: the part of the United States. 661 00:33:42,680 --> 00:33:46,400 Speaker 8: So, as I was mentioning, you know, Greenland is harsh territory. 662 00:33:46,520 --> 00:33:50,160 Speaker 8: This is the northernmost island in the world. It's the 663 00:33:50,520 --> 00:33:53,160 Speaker 8: largest island in the world. But it's also under a 664 00:33:53,200 --> 00:33:56,400 Speaker 8: ton of ice. So this would be very expensive. But 665 00:33:56,800 --> 00:33:59,600 Speaker 8: you know, when you compare it to Ukraine, we don't 666 00:33:59,640 --> 00:34:02,960 Speaker 8: need to own Greenland in order to help develop it 667 00:34:03,000 --> 00:34:05,200 Speaker 8: and in order to help, you know, reap some of 668 00:34:05,200 --> 00:34:09,200 Speaker 8: those benefits that could come from potential mining. I think 669 00:34:09,200 --> 00:34:12,439 Speaker 8: we're looking at benefits that would happen years down the road. 670 00:34:12,520 --> 00:34:15,000 Speaker 8: We're not looking at months like this. This is a 671 00:34:15,040 --> 00:34:17,920 Speaker 8: serious investment that would take a long time to actually 672 00:34:18,000 --> 00:34:21,359 Speaker 8: come to fruition. But you can draw parallels here when 673 00:34:21,400 --> 00:34:24,000 Speaker 8: it comes to what the President is trying to do 674 00:34:24,200 --> 00:34:26,960 Speaker 8: in Ukraine. You know, they're the bread basket of Europe. 675 00:34:27,000 --> 00:34:29,560 Speaker 8: They have a ton of critical minerals as well. So 676 00:34:29,640 --> 00:34:31,520 Speaker 8: I think it just goes to show that you don't 677 00:34:31,520 --> 00:34:34,760 Speaker 8: need to acquire a territory to be able to develop 678 00:34:34,800 --> 00:34:36,960 Speaker 8: it and reap economic benefits from it. 679 00:34:37,040 --> 00:34:39,520 Speaker 3: Would it helped to acquire that territory if you're building 680 00:34:39,840 --> 00:34:43,560 Speaker 3: a so called Golden dome that the President has talked about, 681 00:34:43,560 --> 00:34:46,320 Speaker 3: would we be positioning missiles, for instance, in Greenland? 682 00:34:46,680 --> 00:34:49,239 Speaker 8: So the interesting thing about this is that I don't 683 00:34:49,239 --> 00:34:52,920 Speaker 8: think the President has actually sat down with Denmark or 684 00:34:53,000 --> 00:34:54,480 Speaker 8: the Greenlanders and said. 685 00:34:54,440 --> 00:34:56,280 Speaker 2: Here is what we actually want. 686 00:34:56,840 --> 00:35:00,960 Speaker 8: He's had these not even thinly veiled threats, and I 687 00:35:00,960 --> 00:35:04,680 Speaker 8: think the Greenlanders are sitting here thinking, have a conversation 688 00:35:04,920 --> 00:35:08,000 Speaker 8: about what you want in terms of US permanent presence here. 689 00:35:08,200 --> 00:35:10,760 Speaker 8: Do you want more missiles? Do you want a golden 690 00:35:10,800 --> 00:35:12,920 Speaker 8: dome as Donald Trump has talked about? 691 00:35:13,000 --> 00:35:13,680 Speaker 1: And I think that. 692 00:35:13,560 --> 00:35:17,600 Speaker 8: There would be some sort of negotiating possibility there. I 693 00:35:17,600 --> 00:35:20,840 Speaker 8: don't think that's totally an off the wall idea, but 694 00:35:21,000 --> 00:35:23,400 Speaker 8: they have to know what the United States wants in 695 00:35:23,520 --> 00:35:25,279 Speaker 8: order to come to the table, and I don't think 696 00:35:25,280 --> 00:35:27,800 Speaker 8: that this administration has taken that approach yet, and I 697 00:35:27,800 --> 00:35:30,480 Speaker 8: think it would behove them to maybe change their approach 698 00:35:30,600 --> 00:35:31,760 Speaker 8: if this is really what they're. 699 00:35:31,520 --> 00:35:34,239 Speaker 3: Listening to going there to scold Yeah, Jade Vance could 700 00:35:34,280 --> 00:35:37,440 Speaker 3: presumably be sitting down with officials to talk about these issues. 701 00:35:37,160 --> 00:35:38,359 Speaker 7: Today, right absolutely. 702 00:35:38,440 --> 00:35:40,920 Speaker 8: I mean they could have been doing this for months. 703 00:35:41,120 --> 00:35:43,799 Speaker 8: And you know, Donald Trump pitched this idea back in 704 00:35:43,840 --> 00:35:47,200 Speaker 8: twenty nineteen. This isn't new, but he didn't he wasn't 705 00:35:47,200 --> 00:35:49,480 Speaker 8: that serious about it back in twenty nineteen. He sort 706 00:35:49,480 --> 00:35:52,440 Speaker 8: of mentioned it. Other presidents have mentioned this in the 707 00:35:52,440 --> 00:35:54,680 Speaker 8: past as well, back in nineteen forty six, back in 708 00:35:54,719 --> 00:35:56,080 Speaker 8: eighteen sixty seven. 709 00:35:56,280 --> 00:35:57,640 Speaker 6: So it's not a totally off. 710 00:35:57,480 --> 00:36:01,319 Speaker 8: The wall idea, but this approach that he's taking, it's 711 00:36:01,719 --> 00:36:06,040 Speaker 8: extremely provocative. It's seen as extremely aggressive, and the Greenlanders 712 00:36:06,040 --> 00:36:08,839 Speaker 8: and the Danes are sort of backing off and you know, 713 00:36:08,960 --> 00:36:12,399 Speaker 8: are on the defensive clearly. So I think that they 714 00:36:12,480 --> 00:36:14,120 Speaker 8: it would probably be a good idea for them to 715 00:36:14,160 --> 00:36:16,400 Speaker 8: sort of change their approach here if they want to 716 00:36:16,440 --> 00:36:19,279 Speaker 8: have a cooperative relationship, which I would assume that they 717 00:36:19,320 --> 00:36:21,960 Speaker 8: would like to have a cooperative relationship given the strategic 718 00:36:23,360 --> 00:36:25,600 Speaker 8: vulnerability of the assets that we have in Greenland. 719 00:36:26,239 --> 00:36:28,200 Speaker 6: Well, and when we consider in our final moments here 720 00:36:28,640 --> 00:36:31,000 Speaker 6: Rachel this notion that a lot of what Trump is 721 00:36:31,040 --> 00:36:33,080 Speaker 6: saying now hasn't changed from what he was saying in 722 00:36:33,080 --> 00:36:36,440 Speaker 6: his first administration, inclusive of Denmark and other NATO countries 723 00:36:36,440 --> 00:36:38,439 Speaker 6: who he thinks needed to pay more in their fair share, 724 00:36:38,440 --> 00:36:41,000 Speaker 6: that Europe should be investing more in its defense. That 725 00:36:41,160 --> 00:36:43,759 Speaker 6: does seem to only really be changing now though even 726 00:36:43,800 --> 00:36:45,879 Speaker 6: though they knew he was coming into office and has 727 00:36:46,000 --> 00:36:47,400 Speaker 6: espoused these ideas in the past. 728 00:36:47,920 --> 00:36:50,520 Speaker 8: Absolutely, And I you know, I don't want to criticize 729 00:36:50,560 --> 00:36:53,400 Speaker 8: Biden too much, but I do think this message that 730 00:36:53,440 --> 00:36:56,200 Speaker 8: he sent the Europeans that the United States is back 731 00:36:56,520 --> 00:36:59,440 Speaker 8: after he won the election in twenty twenty ignored a 732 00:36:59,440 --> 00:37:03,560 Speaker 8: lot of the political things that were happening under the surface, 733 00:37:03,960 --> 00:37:06,479 Speaker 8: and the Europeans I think should have been preparing more 734 00:37:06,560 --> 00:37:09,200 Speaker 8: over the last four years. But when it comes to Denmark, 735 00:37:09,600 --> 00:37:14,040 Speaker 8: Denmark lost more soldiers per capita in Afghanistan in support 736 00:37:14,040 --> 00:37:17,520 Speaker 8: of the United States than any other NATO troop contributing nation. 737 00:37:17,880 --> 00:37:20,120 Speaker 8: So when JD. Vance says that Denmark is not being 738 00:37:20,120 --> 00:37:23,279 Speaker 8: a good ally. Let's actually remember that they're increasing their 739 00:37:23,320 --> 00:37:25,840 Speaker 8: defense spending along with all of the other NATO allies 740 00:37:25,840 --> 00:37:28,799 Speaker 8: are increasing as well. And let's I think, have a 741 00:37:28,800 --> 00:37:31,000 Speaker 8: better relationship with Europe. I mean, this is a really 742 00:37:31,080 --> 00:37:32,880 Speaker 8: kind of pointless fight that we're starting. 743 00:37:32,960 --> 00:37:34,680 Speaker 2: Well. Great to have you. Thank you for coming and 744 00:37:34,680 --> 00:37:35,400 Speaker 2: sharing the insights. 745 00:37:35,520 --> 00:37:39,479 Speaker 3: Rachel Rissold, non Resident Senior Fellow Atlantic Council's Europe Center, Kaylee. 746 00:37:39,520 --> 00:37:43,440 Speaker 3: As we watch JD Vance make his visit to this base, 747 00:37:44,520 --> 00:37:47,719 Speaker 3: imagine this locked in ice for nine months out of 748 00:37:47,760 --> 00:37:50,080 Speaker 3: the year, this Space Force base. It is a constant 749 00:37:50,200 --> 00:37:54,439 Speaker 3: darkness from November to February and constant daylight from May 750 00:37:54,560 --> 00:37:55,200 Speaker 3: to August. 751 00:37:55,640 --> 00:37:57,280 Speaker 2: Quite a lifestyle, Quite a lifestyle. 752 00:37:57,320 --> 00:38:01,200 Speaker 6: Quite a contrast to here in Washington, shining that cherry 753 00:38:01,239 --> 00:38:03,560 Speaker 6: blossoms are out. Everyone's flocking to the title basin. We're 754 00:38:03,560 --> 00:38:06,600 Speaker 6: at least warmer than Jade Vanson. That's a lady, are right. 755 00:38:06,480 --> 00:38:08,480 Speaker 3: But they'll be back, I guess within hours. Here, Yeah, 756 00:38:08,520 --> 00:38:11,440 Speaker 3: in a two hour tour of Greenland. Cherry blossom's peaking. 757 00:38:11,440 --> 00:38:14,560 Speaker 3: As a matter of fact, this weekend, it'll be eighty tomorrow. 758 00:38:16,640 --> 00:38:19,879 Speaker 3: Thanks for listening to the Balance of Power podcast. Make 759 00:38:19,880 --> 00:38:22,839 Speaker 3: sure to subscribe if you haven't already, at Apple, Spotify, 760 00:38:22,960 --> 00:38:25,520 Speaker 3: or wherever you get your podcasts, and you can find 761 00:38:25,560 --> 00:38:28,840 Speaker 3: us live every weekday from Washington, DC at noontime Eastern 762 00:38:29,120 --> 00:38:30,520 Speaker 3: at Bloomberg dot com