WEBVTT - The stock market crash, explained

0:00:00.520 --> 0:00:04.000
<v Speaker 1>Already and this is the daily This is the Daily

0:00:04.120 --> 0:00:15.920
<v Speaker 1>ohs oh, now it makes sense. Good morning and welcome

0:00:15.960 --> 0:00:18.320
<v Speaker 1>to the Daily OS. It's Tuesday, the eighth of April.

0:00:18.360 --> 0:00:20.040
<v Speaker 1>I'm Billy Fitzimon's.

0:00:19.480 --> 0:00:20.440
<v Speaker 2>I'm Sam Becazowski.

0:00:20.680 --> 0:00:23.079
<v Speaker 1>If you've looked at the news over the past couple

0:00:23.120 --> 0:00:25.800
<v Speaker 1>of days, or if you have shares and you've checked them,

0:00:26.239 --> 0:00:28.720
<v Speaker 1>you would know that there has been a significant fall

0:00:28.840 --> 0:00:32.239
<v Speaker 1>in the stock market. Just yesterday in Australia, more than

0:00:32.280 --> 0:00:36.120
<v Speaker 1>one hundred billion dollars was wiped from the Australian share market.

0:00:36.280 --> 0:00:38.919
<v Speaker 1>It's all because of the tariffs that were imposed by

0:00:39.000 --> 0:00:43.280
<v Speaker 1>US President Donald Trump on all countries, including Australia last week.

0:00:43.640 --> 0:00:46.640
<v Speaker 1>To understand in more detail why this has happened and

0:00:46.680 --> 0:00:49.199
<v Speaker 1>what it means for the average Australian today, I am

0:00:49.240 --> 0:00:54.600
<v Speaker 1>interviewing the chief economist at the Australia Institute, Greg Jericho.

0:00:57.120 --> 0:01:00.200
<v Speaker 2>Billy, this is one of those topics where there is

0:01:00.240 --> 0:01:03.800
<v Speaker 2>so much economic jargon flying around it can be hard

0:01:03.840 --> 0:01:05.319
<v Speaker 2>to keep up and it can be hard to find

0:01:05.319 --> 0:01:06.400
<v Speaker 2>a way into this story.

0:01:06.640 --> 0:01:08.240
<v Speaker 1>Yeah, I feel like this is one of those topics

0:01:08.280 --> 0:01:10.680
<v Speaker 1>where I really should have been paying more attention in

0:01:10.720 --> 0:01:12.279
<v Speaker 1>my year turn commerce class.

0:01:12.400 --> 0:01:14.959
<v Speaker 2>Oh, I definitely missed that, Yeah, and I had to

0:01:14.959 --> 0:01:17.120
<v Speaker 2>catch up. It's taken a long time. We did a

0:01:17.160 --> 0:01:20.520
<v Speaker 2>show on that last week, Zara and I and maybe

0:01:20.520 --> 0:01:22.160
<v Speaker 2>you will throw a link in the show notes. It's

0:01:22.160 --> 0:01:25.319
<v Speaker 2>interesting to listen to that now almost in retrospect, because

0:01:25.319 --> 0:01:27.480
<v Speaker 2>that was kind of almost what we thought was going

0:01:27.520 --> 0:01:29.760
<v Speaker 2>to happen. On Liberation Day, that was the big day

0:01:29.800 --> 0:01:31.760
<v Speaker 2>that Trump announced all the tariffs. He held up that

0:01:31.800 --> 0:01:34.600
<v Speaker 2>big placard with how much countries are going to get

0:01:34.880 --> 0:01:37.479
<v Speaker 2>essentially taxed on all the goods that arrive into the US.

0:01:37.880 --> 0:01:40.000
<v Speaker 2>And it turns out we were pretty much spot on.

0:01:40.040 --> 0:01:41.920
<v Speaker 2>The rest of the world was as well. This was

0:01:41.920 --> 0:01:42.640
<v Speaker 2>a major move.

0:01:43.280 --> 0:01:43.560
<v Speaker 3>Yeah.

0:01:43.560 --> 0:01:45.920
<v Speaker 1>And so just to give you a really quick overview,

0:01:45.920 --> 0:01:47.600
<v Speaker 1>if you're hearing the word tariffs and you're not quite

0:01:47.640 --> 0:01:50.640
<v Speaker 1>sure what it means, it is a tax on import,

0:01:50.760 --> 0:01:54.080
<v Speaker 1>So it means that it's more expensive to import something

0:01:54.280 --> 0:01:57.600
<v Speaker 1>into a country, in this case America. Now, like you

0:01:57.680 --> 0:02:00.960
<v Speaker 1>just said, Sam, last week, Trump announced new tariffs on

0:02:01.160 --> 0:02:05.080
<v Speaker 1>all imports into America and that includes a blanket ten

0:02:05.120 --> 0:02:09.360
<v Speaker 1>percent tax on all Australian goods entering the US. And

0:02:09.400 --> 0:02:12.040
<v Speaker 1>he said he mainly did this because of something called

0:02:12.080 --> 0:02:13.160
<v Speaker 1>a trade deficit.

0:02:13.360 --> 0:02:15.000
<v Speaker 2>And that's another term that comes up a lot. So

0:02:15.040 --> 0:02:17.520
<v Speaker 2>we've got tariffs. Now talk me through a trade deficit.

0:02:17.800 --> 0:02:21.160
<v Speaker 1>Okay, I'm going to explain this using apples. So let's

0:02:21.160 --> 0:02:23.920
<v Speaker 1>say Sam, you and I are both nations, and in

0:02:24.000 --> 0:02:27.000
<v Speaker 1>one year I sent you one hundred apples and you

0:02:27.120 --> 0:02:30.520
<v Speaker 1>sent me seventy apples. That would mean I am in

0:02:30.560 --> 0:02:33.920
<v Speaker 1>a trade deficit of thirty apples because I sent you

0:02:34.040 --> 0:02:35.960
<v Speaker 1>thirty more apples than you sent me.

0:02:36.360 --> 0:02:38.760
<v Speaker 2>Right, So I'm thinking fruit bowls, yes, And I've got

0:02:38.840 --> 0:02:41.560
<v Speaker 2>more apples in my fruit bowl after our trade.

0:02:41.280 --> 0:02:44.080
<v Speaker 1>Relationship because you took more from me, exactly. And so

0:02:44.240 --> 0:02:47.440
<v Speaker 1>President Trump wants to reduce that gap. He wants you

0:02:47.560 --> 0:02:50.400
<v Speaker 1>to buy just as many apples from me as I

0:02:50.440 --> 0:02:53.400
<v Speaker 1>am sending to you. And he argued that a trade

0:02:53.440 --> 0:02:56.799
<v Speaker 1>deficit like this means that countries, he says, are ripping

0:02:56.800 --> 0:03:00.440
<v Speaker 1>off Americans and that America needs to reassert it self

0:03:00.480 --> 0:03:03.480
<v Speaker 1>in the global economy. Now, in terms of who this

0:03:03.600 --> 0:03:07.320
<v Speaker 1>impacts the most, it's actually US consumers because those are

0:03:07.360 --> 0:03:10.600
<v Speaker 1>the ones who absorb the cost of these tariffs, because

0:03:10.600 --> 0:03:13.560
<v Speaker 1>it essentially means that it makes it more expensive for

0:03:13.680 --> 0:03:17.160
<v Speaker 1>them to buy things from other countries. And so Trump's

0:03:17.160 --> 0:03:20.920
<v Speaker 1>big hope here is that Americans don't buy stuff made

0:03:21.040 --> 0:03:25.040
<v Speaker 1>overseas like in Australia because it's now too expensive, and

0:03:25.080 --> 0:03:29.200
<v Speaker 1>instead they'll be more encouraged to buy US made goods.

0:03:29.480 --> 0:03:31.680
<v Speaker 1>And his hope is that by doing this, the US

0:03:31.760 --> 0:03:32.919
<v Speaker 1>economy will grow.

0:03:33.160 --> 0:03:35.400
<v Speaker 2>I heard a really good example over the weekend of

0:03:35.480 --> 0:03:40.800
<v Speaker 2>T shirts. So America only produces three percent of all

0:03:40.840 --> 0:03:43.320
<v Speaker 2>the T shirts that are sold to Americans in a year.

0:03:43.600 --> 0:03:45.880
<v Speaker 2>So ninety seven percent of T shirts bought by an

0:03:45.920 --> 0:03:50.920
<v Speaker 2>American come from overseas. That in Trump's world, he's trying

0:03:50.960 --> 0:03:53.480
<v Speaker 2>to get that to more be one hundred percent. And

0:03:53.560 --> 0:03:55.320
<v Speaker 2>so he's going to make the T shirts that arrive

0:03:55.480 --> 0:03:58.000
<v Speaker 2>from the Philippines or Taiwan, or Sri lank or Cambodi

0:03:58.120 --> 0:04:00.600
<v Speaker 2>or China. He's going to make those T shirts more expensive.

0:04:00.760 --> 0:04:04.640
<v Speaker 1>And that is exactly why he introduced these tariffs. Now,

0:04:04.720 --> 0:04:06.880
<v Speaker 1>if you're listening to this and you're a bit lost,

0:04:06.880 --> 0:04:08.920
<v Speaker 1>don't worry. I think the one thing that I want

0:04:08.920 --> 0:04:11.040
<v Speaker 1>to point out before we dive into this chat with

0:04:11.120 --> 0:04:13.800
<v Speaker 1>Greg Jericho is I think the word that you need

0:04:13.840 --> 0:04:17.200
<v Speaker 1>to keep in mind is uncertainty. Even if you don't

0:04:17.200 --> 0:04:19.800
<v Speaker 1>feel like you're fully grappling with the economics of it all,

0:04:19.839 --> 0:04:23.279
<v Speaker 1>because it is really complicated. The core thing to remember

0:04:23.520 --> 0:04:25.960
<v Speaker 1>is that the events of the past few weeks have

0:04:26.120 --> 0:04:30.080
<v Speaker 1>led to investors feeling uncertain because they can't predict what

0:04:30.240 --> 0:04:32.559
<v Speaker 1>is going to happen next. No one knows what Trump

0:04:32.640 --> 0:04:35.520
<v Speaker 1>is going to do next, and whenever there is uncertainty,

0:04:35.880 --> 0:04:39.760
<v Speaker 1>we usually always see crashes like this in the stock market.

0:04:39.800 --> 0:04:41.800
<v Speaker 1>Even if you think about the pandemic, which you'll hear

0:04:41.880 --> 0:04:44.600
<v Speaker 1>Greg Jericho mention, that's another time when there was so

0:04:44.839 --> 0:04:48.880
<v Speaker 1>much uncertainty and that also led to a stock market crash.

0:04:49.000 --> 0:04:52.000
<v Speaker 2>I always find it helpful to remember that the economy

0:04:52.040 --> 0:04:54.840
<v Speaker 2>is actually based on psychology. It's based on how people

0:04:54.880 --> 0:04:57.280
<v Speaker 2>are feeling. And when there's a bit of fear and

0:04:57.279 --> 0:04:59.360
<v Speaker 2>a bit of panic and a bit of uncertainty, that's

0:04:59.400 --> 0:05:02.080
<v Speaker 2>when you see major moves in the market. So let's

0:05:02.080 --> 0:05:04.560
<v Speaker 2>hear that chat now with Greg Jericho.

0:05:04.960 --> 0:05:07.400
<v Speaker 1>Greg Jericho, thank you so much for joining the Daily OS.

0:05:07.839 --> 0:05:09.160
<v Speaker 3>Norah's Billy great to be here.

0:05:09.680 --> 0:05:13.560
<v Speaker 1>So we are seeing another significant fall in the stock

0:05:13.600 --> 0:05:16.760
<v Speaker 1>market at the moment. Before we get to that, though,

0:05:16.839 --> 0:05:19.520
<v Speaker 1>can you take me through what US President Donald Trump

0:05:19.600 --> 0:05:21.240
<v Speaker 1>announced last week.

0:05:23.360 --> 0:05:28.400
<v Speaker 4>Oh god, how to say it without breaking into sad laughter,

0:05:28.480 --> 0:05:33.440
<v Speaker 4>because what he announced was basically tariff's on every single

0:05:33.920 --> 0:05:37.880
<v Speaker 4>nation on earth. Initially with the story was he was

0:05:37.920 --> 0:05:40.640
<v Speaker 4>going to do this thing called reciprocal tariffs, which is

0:05:40.720 --> 0:05:43.760
<v Speaker 4>pretty straightforward. If you've got a ten percent tariff on

0:05:43.800 --> 0:05:46.680
<v Speaker 4>our stuff, we'll put a ten percent tariff on your stuff.

0:05:47.160 --> 0:05:49.440
<v Speaker 3>But he didn't do that at all. What he did was.

0:05:49.440 --> 0:05:53.400
<v Speaker 4>He worked out what was the trade deficit that America

0:05:53.520 --> 0:05:58.440
<v Speaker 4>had with every country, and so if let's say Vietnam

0:05:58.880 --> 0:06:03.080
<v Speaker 4>exported ninety percent more stuff to America than it bought

0:06:03.120 --> 0:06:06.200
<v Speaker 4>from America, then he said, oh, you've got a ninety

0:06:06.240 --> 0:06:09.400
<v Speaker 4>percent tariff on us, so we'll have that and we'll

0:06:09.400 --> 0:06:12.000
<v Speaker 4>put a forty five percent tariff on you. And it

0:06:12.120 --> 0:06:15.159
<v Speaker 4>made no sense because a lot of these nations are poor,

0:06:15.520 --> 0:06:18.080
<v Speaker 4>they're small, a lot smaller than America, so of course

0:06:18.080 --> 0:06:20.320
<v Speaker 4>they're going to sell more stuff to America than they're

0:06:20.320 --> 0:06:23.080
<v Speaker 4>going to buy from it. And places like Australia, where

0:06:23.120 --> 0:06:26.320
<v Speaker 4>we actually do buy more stuff from America than we

0:06:26.440 --> 0:06:28.719
<v Speaker 4>sell to it, he couldn't do that, so he just

0:06:28.760 --> 0:06:32.400
<v Speaker 4>put a flat ten percent tariff on nations like Australia.

0:06:32.520 --> 0:06:34.279
<v Speaker 3>So that's pretty much what he did.

0:06:34.360 --> 0:06:38.680
<v Speaker 4>And really what that means though, he decided to make

0:06:38.920 --> 0:06:44.400
<v Speaker 4>everything that America imports from anywhere more expensive for Americans

0:06:44.440 --> 0:06:48.400
<v Speaker 4>to buy, and that really has sent everything into a

0:06:48.440 --> 0:06:49.719
<v Speaker 4>bit of a meltdown.

0:06:50.160 --> 0:06:53.839
<v Speaker 1>And so he's made it more expensive for Americans to

0:06:53.920 --> 0:06:57.919
<v Speaker 1>buy products from Australia. But for those of us in Australia,

0:06:58.080 --> 0:07:01.080
<v Speaker 1>what's the tangible impact on us? Or is it more

0:07:01.320 --> 0:07:04.640
<v Speaker 1>businesses in Australia that are impacted than the average consumer.

0:07:05.360 --> 0:07:08.840
<v Speaker 4>Yeah, Australian consumers really shouldn't be affected at all. If

0:07:08.880 --> 0:07:11.200
<v Speaker 4>you go into a shop and someone says, oh, we've

0:07:11.240 --> 0:07:14.640
<v Speaker 4>had to raise prices because of the tariffs, call bullshit

0:07:14.680 --> 0:07:19.320
<v Speaker 4>on them straight away. Because tariffs are paid by the

0:07:19.360 --> 0:07:23.280
<v Speaker 4>country that levies them. So America put all these tariffs

0:07:23.320 --> 0:07:27.280
<v Speaker 4>on other nations who pays the people importing them. So

0:07:27.960 --> 0:07:31.280
<v Speaker 4>if an American wants to buy some bee from Australia,

0:07:31.320 --> 0:07:34.480
<v Speaker 4>suddenly it's going to cost well, potentially ten percent more

0:07:34.520 --> 0:07:37.600
<v Speaker 4>than it did a week ago. It does not affect

0:07:38.040 --> 0:07:41.880
<v Speaker 4>our consumers. The cost of things in Woolli's calls doesn't

0:07:41.880 --> 0:07:45.480
<v Speaker 4>affect all. It does affect businesses. Obviously, if you're a

0:07:45.520 --> 0:07:49.960
<v Speaker 4>business that is selling stuff to America, well, now it's

0:07:50.000 --> 0:07:53.280
<v Speaker 4>going to cost the American importer tempercent more to buy

0:07:53.320 --> 0:07:56.040
<v Speaker 4>that stuff from you, so they might buy a bit less.

0:07:56.600 --> 0:07:59.560
<v Speaker 4>So we don't even really know what the impact on

0:08:00.000 --> 0:08:01.040
<v Speaker 4>owning business.

0:08:00.800 --> 0:08:01.320
<v Speaker 3>Is going to be.

0:08:01.960 --> 0:08:06.800
<v Speaker 4>I think, really we shouldn't be overreacting. It's not going

0:08:06.880 --> 0:08:08.280
<v Speaker 4>to affect them too much.

0:08:08.880 --> 0:08:09.520
<v Speaker 3>Will have an.

0:08:09.400 --> 0:08:11.720
<v Speaker 4>Impact mainly because Americans are are all going to be

0:08:11.720 --> 0:08:15.120
<v Speaker 4>a lot poorer because everything's a lot more expensive. Their

0:08:15.200 --> 0:08:17.920
<v Speaker 4>incomes haven't gone up, so they have to cut back

0:08:17.960 --> 0:08:19.040
<v Speaker 4>on how much they can buy.

0:08:19.720 --> 0:08:22.880
<v Speaker 1>Okay, But the way that it has potentially impacted the

0:08:22.920 --> 0:08:26.440
<v Speaker 1>average Australian consumer is if you have shares and we

0:08:26.600 --> 0:08:29.360
<v Speaker 1>have seen a crash. Can I use that word crash

0:08:29.440 --> 0:08:31.320
<v Speaker 1>or is that a technical term that there has to

0:08:31.320 --> 0:08:33.480
<v Speaker 1>be a certain amount of full before you can use

0:08:33.520 --> 0:08:33.840
<v Speaker 1>that word.

0:08:34.320 --> 0:08:37.200
<v Speaker 4>Oh yeah, I mean I don't know if it's been

0:08:37.240 --> 0:08:39.640
<v Speaker 4>a crash yet. It has just been a big plunge

0:08:39.679 --> 0:08:42.400
<v Speaker 4>I think is the nice way of putting it. But

0:08:42.440 --> 0:08:44.160
<v Speaker 4>I mean, you know, the value of our stock is

0:08:44.240 --> 0:08:46.200
<v Speaker 4>change is full and ten sent in the last week

0:08:46.280 --> 0:08:50.800
<v Speaker 4>since Donald Trump had his moment of madness. Crashes are

0:08:50.840 --> 0:08:53.840
<v Speaker 4>more sort of ten to fifteen percent in a day.

0:08:54.040 --> 0:08:58.400
<v Speaker 4>When you start seeing that, that's when you start thinking crash.

0:08:57.640 --> 0:09:01.000
<v Speaker 1>And so why specifically has it had? Like what's the

0:09:01.160 --> 0:09:04.920
<v Speaker 1>relationship between tariffs and a fall in the stock market?

0:09:05.320 --> 0:09:08.960
<v Speaker 4>Yeah, really, what the investors are worrying about, they're looking

0:09:08.960 --> 0:09:12.080
<v Speaker 4>at what's happening with China as much as anything. Is

0:09:12.160 --> 0:09:15.400
<v Speaker 4>that one, he's put a pretty big tariff on China.

0:09:15.600 --> 0:09:19.120
<v Speaker 4>China has retaliated with a big tariff against America. So

0:09:19.240 --> 0:09:22.560
<v Speaker 4>that's going to make everything more expensive in both America

0:09:22.600 --> 0:09:26.200
<v Speaker 4>and China. So both of their economies are kind of

0:09:26.200 --> 0:09:29.240
<v Speaker 4>going to slow down because they're going to be spending less,

0:09:29.400 --> 0:09:32.920
<v Speaker 4>they're going to be producing less. And if China's economy

0:09:33.000 --> 0:09:36.200
<v Speaker 4>is weaker America's economy is weaker, then there is this

0:09:36.280 --> 0:09:41.400
<v Speaker 4>belief that, oh, Australian mining companies especially are going to

0:09:41.440 --> 0:09:44.439
<v Speaker 4>be worse off. And when that happens, Irvan's like, well,

0:09:44.440 --> 0:09:46.240
<v Speaker 4>I don't want to hold these shares anymore because they're

0:09:46.240 --> 0:09:48.960
<v Speaker 4>going to be worth less, so let's get out of them.

0:09:49.000 --> 0:09:51.720
<v Speaker 4>So that's really what we're seeing everyone kind of freaking

0:09:51.760 --> 0:09:56.240
<v Speaker 4>out thinking, oh, we're in for tough times. Maybe I

0:09:56.240 --> 0:09:57.760
<v Speaker 4>should put my money elsewhere.

0:09:58.360 --> 0:10:02.280
<v Speaker 1>And in the context of how bad is this one?

0:10:02.760 --> 0:10:05.080
<v Speaker 3>Oh, look, it's significant.

0:10:05.200 --> 0:10:07.360
<v Speaker 4>It's not quite as bad as we saw during the

0:10:07.440 --> 0:10:11.400
<v Speaker 4>GFC or even during the first sort of minutes of

0:10:11.440 --> 0:10:15.600
<v Speaker 4>the pandemic, but this is pretty pretty significant. It really

0:10:15.640 --> 0:10:17.880
<v Speaker 4>has kind of wiped out all of the gains of

0:10:18.000 --> 0:10:19.120
<v Speaker 4>the past year or so.

0:10:19.679 --> 0:10:21.800
<v Speaker 3>You know. It's not a case of we're in.

0:10:21.800 --> 0:10:25.680
<v Speaker 4>Great depression territory or things like that, but it's one

0:10:25.720 --> 0:10:28.280
<v Speaker 4>that is certainly going to be remembered. And what is

0:10:28.559 --> 0:10:32.440
<v Speaker 4>more concerning is it seems to be ongoing. You know,

0:10:32.520 --> 0:10:36.080
<v Speaker 4>we had a bit of a fall on Thursday and

0:10:36.120 --> 0:10:39.720
<v Speaker 4>then on Friday, and there was no calming over the weekend.

0:10:40.000 --> 0:10:43.200
<v Speaker 4>It's this ongoing impact of everyone thinking, I don't know

0:10:43.240 --> 0:10:46.280
<v Speaker 4>if Trump has any clue what he's doing, and he

0:10:46.360 --> 0:10:49.040
<v Speaker 4>seems to think he's doing a good thing, which means

0:10:49.200 --> 0:10:51.920
<v Speaker 4>maybe he's not going to reverse it. So that's what

0:10:52.000 --> 0:10:54.360
<v Speaker 4>everyone's scared about. And the worry is that it's just

0:10:54.400 --> 0:10:57.280
<v Speaker 4>going to keep getting worse and worse, and that that

0:10:57.440 --> 0:10:58.520
<v Speaker 4>is certainly a big worry.

0:10:59.040 --> 0:11:01.080
<v Speaker 1>Is this all in the hands Trump? Like, is he

0:11:01.280 --> 0:11:04.240
<v Speaker 1>the only one that can kind of turn this around?

0:11:04.840 --> 0:11:05.480
<v Speaker 3>Pretty much.

0:11:05.559 --> 0:11:07.800
<v Speaker 4>I mean, all of this has happened because of Trump,

0:11:08.200 --> 0:11:12.160
<v Speaker 4>and we know America it's easily the biggest economy in

0:11:12.200 --> 0:11:15.760
<v Speaker 4>the world, China behind it, and so he's the one

0:11:15.800 --> 0:11:19.760
<v Speaker 4>who can pretty much stop all this occurring. If Trump

0:11:19.800 --> 0:11:22.720
<v Speaker 4>decides to keep these tariffs in place, well, then Americans

0:11:22.760 --> 0:11:24.680
<v Speaker 4>are going to be paying a lot more for everything,

0:11:25.000 --> 0:11:27.080
<v Speaker 4>and that means they're going to be buying a lot

0:11:27.160 --> 0:11:29.840
<v Speaker 4>less of stuff. And when you're buying less of stuff,

0:11:30.000 --> 0:11:34.280
<v Speaker 4>then you're producing less around the world. You're employing fewer

0:11:34.280 --> 0:11:37.480
<v Speaker 4>people to produce that, and that has accumulative effect and

0:11:37.720 --> 0:11:39.160
<v Speaker 4>suddenly you're in a recession.

0:11:39.880 --> 0:11:42.240
<v Speaker 1>Do you think there's a chance Trump will reverse his

0:11:42.320 --> 0:11:45.240
<v Speaker 1>tariffs because he doesn't want to go into a recession, right.

0:11:45.840 --> 0:11:47.079
<v Speaker 3>Yeah, Well you'd hope.

0:11:47.120 --> 0:11:50.240
<v Speaker 4>So I think what you're saying is everyone's hope that

0:11:50.400 --> 0:11:54.559
<v Speaker 4>he will pretend that he hasn't backed down, but actually

0:11:54.600 --> 0:11:57.640
<v Speaker 4>back down and he'll declare victory. But the worry is

0:11:57.840 --> 0:12:01.280
<v Speaker 4>he's continuing to go with this line that, oh this,

0:12:01.559 --> 0:12:04.240
<v Speaker 4>you know, there needs to be some strong medicine to

0:12:04.280 --> 0:12:07.199
<v Speaker 4>fix this, and so there will be some pain in

0:12:07.240 --> 0:12:09.079
<v Speaker 4>the short term, but then it's all going to come

0:12:09.200 --> 0:12:12.680
<v Speaker 4>roaring back, and it ain't going to come roaring back

0:12:12.800 --> 0:12:17.560
<v Speaker 4>because the problem is Trump sees a deficit, a trade deficit,

0:12:17.600 --> 0:12:22.040
<v Speaker 4>as America losing, and it's not. It's just Americans getting

0:12:22.120 --> 0:12:26.040
<v Speaker 4>cheaper stuff or getting good quality stuff. I hope that

0:12:26.200 --> 0:12:29.839
<v Speaker 4>he does do his usual thing of back down when

0:12:29.840 --> 0:12:32.520
<v Speaker 4>he's made an error, but make it sound like he's won,

0:12:33.280 --> 0:12:36.080
<v Speaker 4>and all his mega supporters will go, yeah, look at him.

0:12:36.120 --> 0:12:38.480
<v Speaker 4>He got all these great deals done, and everyone who

0:12:38.480 --> 0:12:41.520
<v Speaker 4>actually knows anything will just go, yeah, that was just

0:12:41.600 --> 0:12:44.719
<v Speaker 4>a three months of idiocy that we just endured where

0:12:44.720 --> 0:12:47.840
<v Speaker 4>everyone lost money. But Trump is making it sound like

0:12:47.840 --> 0:12:50.040
<v Speaker 4>it was a win. That's the hope. The problem is

0:12:50.080 --> 0:12:52.800
<v Speaker 4>he's also got some advisors who told him to do

0:12:52.840 --> 0:12:56.600
<v Speaker 4>all this. I worry that he'll keep persisting with that,

0:12:56.720 --> 0:12:59.080
<v Speaker 4>and if he does, the longer this goes on, the

0:12:59.120 --> 0:13:02.000
<v Speaker 4>worst it is for Americas, and as a result, the

0:13:02.040 --> 0:13:03.960
<v Speaker 4>greater the risk that we're going to get caught up

0:13:04.000 --> 0:13:05.880
<v Speaker 4>in all this terrible wash.

0:13:06.040 --> 0:13:09.160
<v Speaker 1>Your expert opinion as an economist is obviously that this

0:13:09.280 --> 0:13:12.440
<v Speaker 1>is a horrible thing. Apart from Trump, Are there any

0:13:12.480 --> 0:13:14.439
<v Speaker 1>economists saying that this is a good thing.

0:13:15.280 --> 0:13:17.640
<v Speaker 4>No, there's no economists out there who are saying this

0:13:17.679 --> 0:13:20.480
<v Speaker 4>is a great thing unless you're someone who's trying to

0:13:21.000 --> 0:13:23.880
<v Speaker 4>curry favor with Trump or or appeal to his type

0:13:23.880 --> 0:13:26.160
<v Speaker 4>of supporters. Everyone else is gone and going this is

0:13:26.280 --> 0:13:29.920
<v Speaker 4>just a bit of idiocy that has just made everything

0:13:29.960 --> 0:13:33.480
<v Speaker 4>more expensive for Americans for no benefit whatsoever.

0:13:34.120 --> 0:13:37.119
<v Speaker 1>Final question, are we heading for a recession?

0:13:37.720 --> 0:13:37.920
<v Speaker 3>Oh?

0:13:37.960 --> 0:13:41.720
<v Speaker 4>Look, I never like predicting those type of things, because

0:13:41.760 --> 0:13:44.080
<v Speaker 4>there are things that can be done. The Reserve Bank

0:13:44.120 --> 0:13:46.880
<v Speaker 4>can cut interest rates, and that seems very likely to

0:13:47.000 --> 0:13:48.360
<v Speaker 4>happen now in May.

0:13:48.320 --> 0:13:51.559
<v Speaker 1>And probably he just explained that why would this result

0:13:51.760 --> 0:13:53.840
<v Speaker 1>in a further interest rate cut?

0:13:54.000 --> 0:13:57.960
<v Speaker 4>Yeah, I mean basically, we've all been worried about inflation,

0:13:58.440 --> 0:14:01.720
<v Speaker 4>and so the Reserve Bank has raised interest rates to

0:14:01.760 --> 0:14:05.679
<v Speaker 4>try and slow the economy to get fewer people employed. Really,

0:14:05.800 --> 0:14:08.520
<v Speaker 4>I mean when the Reserve Bank raises interest rates, it

0:14:08.600 --> 0:14:12.680
<v Speaker 4>means it wants more people to lose jobs, essentially because

0:14:12.880 --> 0:14:15.080
<v Speaker 4>people have got less money to spend in the shops.

0:14:15.080 --> 0:14:17.040
<v Speaker 4>And if you've got less money to spend in the shops,

0:14:17.080 --> 0:14:19.840
<v Speaker 4>then the shop owners going, yeah, I don't think you

0:14:19.880 --> 0:14:22.240
<v Speaker 4>need an extra shift, and actually I'm going to have

0:14:22.240 --> 0:14:25.800
<v Speaker 4>to cut back your shifts completely. But if things look

0:14:25.880 --> 0:14:28.560
<v Speaker 4>like they're slowing down, then the Reserve Bank does the opposite.

0:14:28.600 --> 0:14:30.880
<v Speaker 4>It cuts rates. People feel like, oh, I've got more

0:14:30.920 --> 0:14:34.840
<v Speaker 4>money to spend. Businesses small businesses like, oh it's cheaper

0:14:34.880 --> 0:14:37.600
<v Speaker 4>for me to borrow, so they can borrow. That kind

0:14:37.640 --> 0:14:41.160
<v Speaker 4>of helps keep people employed, helps keep money moving around,

0:14:41.320 --> 0:14:44.480
<v Speaker 4>helps keep the economy going, and so the Reserve Bank

0:14:44.480 --> 0:14:48.440
<v Speaker 4>will definitely look to do that. Certainly we don't need

0:14:48.480 --> 0:14:52.280
<v Speaker 4>to go into recession. But you know, if China slows down,

0:14:52.320 --> 0:14:57.119
<v Speaker 4>if America really goes into recession, if Europe also struggles

0:14:57.160 --> 0:15:00.560
<v Speaker 4>because they're putting tariffs on as well, it's kind of

0:15:00.600 --> 0:15:05.000
<v Speaker 4>hard to avoid everything happening bad in the world happening

0:15:05.000 --> 0:15:08.720
<v Speaker 4>here as well. I mean, we saw fifteen years ago

0:15:08.880 --> 0:15:12.360
<v Speaker 4>during the global Financial crisis, everywhere else in the world

0:15:12.680 --> 0:15:15.560
<v Speaker 4>had the Great Recession. Here in Australia we didn't go

0:15:15.600 --> 0:15:19.000
<v Speaker 4>into recession due to government policies, due to the Reserve

0:15:19.040 --> 0:15:22.000
<v Speaker 4>Bank cutting rates. So you know, it's not a certainty,

0:15:22.880 --> 0:15:26.320
<v Speaker 4>but all the risks are now on the downside. All

0:15:26.400 --> 0:15:31.040
<v Speaker 4>the real concerns are about just how slow things might get.

0:15:31.360 --> 0:15:34.920
<v Speaker 1>Not the rosiest of pictures, but thank you so much

0:15:34.960 --> 0:15:36.120
<v Speaker 1>for explaining it to us.

0:15:36.240 --> 0:15:39.320
<v Speaker 4>Greg Jericho Noah is Billy always good to chat.

0:15:39.640 --> 0:15:42.600
<v Speaker 2>A fascinating chat as always from the Australia Institute's Greg

0:15:42.760 --> 0:15:46.120
<v Speaker 2>Jericho Billy, thank you for facilitating that for us this morning.

0:15:46.480 --> 0:15:49.000
<v Speaker 2>That's all we've got time for on today's episode of

0:15:49.040 --> 0:15:51.280
<v Speaker 2>The Daily Oz. I'm sure there are a lot of

0:15:51.360 --> 0:15:53.960
<v Speaker 2>questions that have come from that podcast. You can always

0:15:54.040 --> 0:15:56.520
<v Speaker 2>jump over to our Instagram and dm us questions that

0:15:56.560 --> 0:15:59.880
<v Speaker 2>you want us to explain, particularly around the global economy.

0:16:00.120 --> 0:16:02.400
<v Speaker 2>We're going to be back in the afternoon with your headlines.

0:16:02.480 --> 0:16:08.680
<v Speaker 2>Until then, have a great date. My name is Lily

0:16:08.720 --> 0:16:12.120
<v Speaker 2>Maddon and I'm a proud Arunda Bungelung Kalkadin woman from

0:16:12.120 --> 0:16:13.000
<v Speaker 2>Gadighl Country.

0:16:13.840 --> 0:16:16.960
<v Speaker 1>The Daily oz acknowledges that this podcast is recorded on

0:16:17.000 --> 0:16:19.520
<v Speaker 1>the lands of the Gadighl people and pays respect to

0:16:19.560 --> 0:16:22.880
<v Speaker 1>all Aboriginal and torrest Rate island and nations. We pay

0:16:22.920 --> 0:16:25.840
<v Speaker 1>our respects to the first peoples of these countries, both

0:16:25.920 --> 0:16:26.800
<v Speaker 1>past and present.