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I'm Lisa A.
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The question is certainly shifted away from how far are they going to hike? To how far were they cut? Prams were joined just now had a global rate strategy at TD Securities Prayer. Let's start with the economic data. It's changed since we last spoke. It's started to weaken. That process seems to be continuing. Do you expect it to accelerate in the coming months?
We do.
I mean the Fed still hiking QT is still ongoing, long end real rates high, and now you've got the bank tightening lending standards. I guess our viewer is this is not an idiosyncratic mismanagement of a few banks. This is going to have long lasting issues. We think deposits continue to fly out of banks into money market funds, and so the banks are going to have to cut lending standards. You know, even if you ignore the CIRE issue. I think as lending slows down, our views is going
to accelerate. But it's a really tricky time for the market because things are slowing. I don't think I can point to any data right now and say here's the recession, but we think it is going to happen. I think that speed of the decline, particularly in high frequency data, is what we're looking at. In our view, it is going to accelerate into the second half. We see a recession in the fourth quarter, But really, I think you have to be nimbled because the data is just slowing.
I think it's not obvious right now, but we do think it's all the signs point towards this accelerating into the end of the year.
Preer, I'd love you to take on Alan Roskin's comments with respect to the divergence that we see with respect and manufacturing and services. He says that this is a sign that if the FED pauses, they may have to hike again later on as some of the distortions from the pandemic era build up of inventory starts to work itself through. Do you agree that there actually is a risk here signaled by this divergence of inflation that stickier and remains much higher than people expect.
So I agree that inflation is likely to be more sticky. We think there are structural factors demographics, you know, on shoring, etc. You know, But I would say manufacturing is a most
cyclical industry. Manufacturing typically slows down before services services have been strong because the consumers have a saving buffer and monetary policy works with a lad Our view is manufacturing is actually a harbinger for the fact that services is going to slow down as that savings buffer comes down and I can't really max out my credit card and I can't get another credit card. I think that's when
consumer spending starts to slow down. So our view is that the FED is going to be torn, really torn between inflation north of two percent but the unemployment rates starting to rise.
I think we.
Don't know their pain threshold. Is it four percent, is it four and a half, is it five? I think the market's going to grapple with that for the rest of the year. But I actually think that services is going to slow down, and so you know, I hiking again. I think that we should be talking about that in twenty twenty five. I think first they're going to have
to cut rates. They're going to have to take rates into accommodative territory, which is not priced and we're still pricing in a torough rate above three percent on FED funds. If the economy is in a recession at the end of this year, I think we'll be talking about how low they are going rather than stopping around three percent rare.
This is pretty incredible at a time, and a lot of people don't think that FED is ever going to go back to the ultra low rates that we saw pre pandemic. Are you saying that zero or even half a percent or one percent is very much on the table for a FED funds rate?
So I look at real rates. I think real rates should probably be closer to zero negative. You know, if inflation is going to be three percent next year or heaven FORURID four percent next year, you know, then how low can the FED go in terms of nominal rates? Perhaps two one, you know? But I do think if the if the unemployment rate is rising we see it peaking at five and a half next year, is very similar to what happened after the savings and loan crisis.
If you get that much weakening in the labor market, the FED has to take real rates negative. So I don't know about zero or QE, but can they get to two percent on FED funds? I think that would be our base case, two two and a half at least get rates that low, and the market is not pricing that, and so I think we should keep an eye on inflation clearly, but those real rates and real rates right now are well in restrictive territory. I think that's what we'll be watching how much the Fed cuts.
But right now they're in a bind. I don't think they can signal any near term cuts. So our views that they start later in terms of rate cuts. They're going to be pulled in, as we call it, kicking and screaming into rate cuts. But when they start that cutting, they're going to be much more aggressive than the market's pricing in.
Prayer just awesome to get your perspective, as always, Prayer mesure of TV Securities. Let's talk about Tesla and the next narrative around this name. So yesterday price cuts again this morning, price high specific ones they've increased prices if they're model SNX and those vehicles in the United States after the state markdowns that we've seen through the whole year so far. Yesterday, the stock at absolutely hammered. This morning, the stock looks like this positive by about a half
of one percent DNA. I've senior equity research analyst of web Bush joins us now to talk about it. Dan, can you help frame the strategy? Hit yesterday, cuts, this morning, hikes. What's happening?
Look, they're trying to find the yin yang the bounds because I think for right now it's about a driving demand but also aggressive because of competition that we're seeing global, and I think we're going to continue to see this some cut, some hikes. I think over the next few months you'll starting to see it level off. But I think it just speaks to some odjita that investors have because of margins, and that's why the stock got crossed yesterday.
The sort of flip flopping though of messaging in terms of cutting or raising prices. What do you make of Elon Musk's somewhat I don't know, random approach in terms of how he's signaling, at least to the pricing.
Yeah, at least I think a lot of it is inventory driven as well as what they're seeing in demand. I think you know, from month to month they could tell if ultimately they cut too much or maybe they need to cut more, and I think they're trying to find that balance. Now when you look at SNX, that's a little different than what's a model Y and three. I think you're starting to see more of a sort of leveling off from a supplied demand mile three mile
of why. I mean, that's really the focus of the street in terms of how many more price cuts, what margins look like, because right now they're kind of going Game of Throne style in terms of what they're trying to do from a pricing perspective. That's great for demand from a unit perspective, but obviously margins that continues to be the elephant in the room.
We were speaking with Jullian Emmanuel yesterday and he said that Tesla is not just in aduosyncratic story, that it is a macro story, as J'ah miss mentioning earlier, because it does signal this need to cut prices and a disinflationary force. How much are you expecting to see that as a th bleeding through some of the tech earnings that we start getting next week.
Look, I do think it is a little separate from what we're going to see next week, and maybe even if I go back next call a few weeks. I mean Apple, we see iPhone demand that continues to be pretty resilient in the storm. I think cloud. When you look in Microsoft, what we're going to see out of Amazon, Google and others, I think slight beats. But I think overall we're starting to see some stabilization relative to what
we saw in the summer. Jen you, at least from an enterprise spent, I think in terms of tech stocks, in terms of going to earnings, it's a green light to continue to in tech. I think this earning season is something I think more investors are ultimately going to start to then dive back into tech rather than fearing it. In terms of where I believe are fundamentals starting to stabilize.
Dan dive back in. Talk to me about yet today, What do you think people have been doing already?
They've ripped, no doubt, But I think from an institutional perspective, still many hate the rally. May I think on the sidelines ultimately sort of bending against tech, and which is argue, you know, we can see tech stocks up another ten percent plus for the rest of the year because you look what's happened in terms of numbers that are starting to stabilize. They already ripped the band aid off on guidance.
I think big tech specifically when I look at fang names, logan names like Apple, Google, Amazon, and I think these are stocks that could be fifteen to twenty percent for the rest of the year. You know, red by Apple.
Well, you mentioned the cloud story. Can we just build on that a little bit more? There was obviously massive pull forward in demand for a range of things across this whole spectrum through the pandemic. Dan, I just wonder how much the cloud story has become much more of a cyclical issue now for some of these companies. What's your feel on that, Dan.
But I think we'll see with Microsoft and with what comes out of REDMINU on Tuesday. I think the big issue is that a lot of companies, you know, budgets were not set, but during the they're halfway through massive cloud deployments, so now you're starting to see more and more only forty five percent of workloads during the cloud, so that I believe goes to seventy percent next two years.
And I think that's why names like Microsoft continues to sort see share gains versus the likes of Amazon, and I think Google is another one that continues to see success. But I think ultimately, I mean, these are rock Gibraltar sectors in terms of where I've seen cloud cybersecurity, which is why we're bullish going into earnings.
What about disappointments. We were speaking earlier with lu Kawa and he said that if there is some kind of earning disappointment, it will be punished a proportionately because his sense is people are waiting for the cash behemoths to continue to be cash behemoths.
Do you agree, Oh, no doubt. And also never underestimate just how bad imagined team could be or overestimate how good. That's why you have tacticians like Cook and Nadella and others on one side. But you're going to see, especially in smid Caplan, I mean it's almost a fork in the road where you're going to see weekends play out. I think there is still some fraud, and I think you know this is ultimately really going to be I think,
a defining earning season for winners and losers. But I believe I almost viewed as a stock pickers market, which is why I really enjoyed this year in terms of just the way texts playing out. You know, especially as we go into earning.
Season, Dan, you've got Leaster excited. There was a glimmer of bearishness there. Can you build on that? What do you perish about?
Dan?
Oh, it's not. What I'm saying is this is not a Roses and Rainbow and Champagne macra. So ultimately you're going to see weekends fall by the wayside. Competition is going to continue to increase, But ultimately that's why I think you got to pick the right stocks. It's not necessarily a basket approach, and I think that's what we're going
to see playoff continued during earning season. But I think when it comes to large cap tach, when it comes to high quality tech cybersecurity cloud, I just continue view that as a green light going into earnings.
Okay, then I was a wet bush down, not doubt with touch base of the nice company were going to get those endings, thank.
CUSA gil doubt of joining us right now ahead of US economic research. It retissan to Macro, and I am curious about your view after hearing all of the pessimistic prognostications about why we should remain bearish, while you're coming on now to tell us we are all completely misguided and we need to be a little bit more optimistic.
Well, good to see you, Lisa, Happy Friday, Happy Friday. You know. Look, I mean I think what's this business is about is about what the consensus is pricing in and what the likely outcome is going to be. Uh, that's how that's how we distinct, you know, create some distinction here. And remember the consensus is basically priced for, you know, essentially sudden stop dynamics in the economy. I mean, people are calling for recession starting, you know, sometime this week.
It feels like, and I got to tell you that's just not in the data. I mean, in my view, the time to have been concerned about recession was last year. I mean, it's not to say that we're not worried about things now, but it would have been more prudent to be even more worried last year. You had energy prices spiking, the global economy was going down the tubes, right, I mean, people are worried about Europe, whether they're going to be able to keep the heat and the lights on.
China was slowing down. In the US, we had the housing market weakening, fiscal tightening, right, the you know, and all the rest of it. So think about each of these things in turn. Right, fiscal policy, that's a tail and for the economy now there is no fiscal drag. The government's the tail went for growth housing. Take a look at a chart of homebuilding stocks. Anybody have that on their Bengo card for twenty twenty three.
I think that people missed a lot of things.
Globalis that came out this morning.
Now, admittedly the manufacturing piece of it wasn't as strong, but you know, it's pretty clear that global growth in the aggregate is stronger so far this year than it was before. So if the consensus is talking about, you know, some sort of cliff dive moment in the second quarter, that's not happening. It doesn't mean that you don't pencil in a recept I mean, I do think that if you want to be honest with yourself, you have to kind of keep this in the baseline outlook for the
next eighteen months. But the question is whether it's going to happen imminently, because that's what the consensus is expecting, and I don't really see it.
In the data, Neil.
There are two aspects of this. There's growth and there's inflation. And what we have seen is that growth has slowed, but it has not cratered in the same kind of way. To highlight what you're talking about, and in certain sectors is actually accelerated and inflation seems to be coming down. Do you believe that this can continue, that you will see the sort of disinflation at the same time that there still is a lot of momentum underputting the growth.
Oh wow, Lisa Bramwitz, growth in some parts of the economy accelerated. Man, that must have tasted like vitterger coming out of your mouth.
Well, I've actually bought airplane tickets, so I understand that in some areas there is complete capacity carry out.
Look, I think to me, it actually feels a little bit. I mean, I might get crucified for saying this, but it does feel a little bit. It does feel a little bit like a soft landing. I mean, at the margin the data is consistent with soft landing. I mean, think about what you just said. Inflation is slowing down activities holding up right. I mean you look at some of what the early reads are for auto sales in April.
They're planting to sequential acceleration Lisa for for auto sales in April despite this financing costs and the rest of it. And the builders are doing the same thing sequential improvement and activity in April.
So remember everyone.
Was talking about how housing is a leading indicator and because housing was collapsing in twenty twenty two, that was going to spell the death of the economy in early twenty twenty three. Well, now housing's rea accelerating and it's highly likely that single family residential construction picks up over the next few months.
Well, so I.
Hear what you're saying, Neil, and I think that a lot of people would agree with you, which is a reason why you've seen the rallies year to date. That has surprised a lot of people, even in some of the areas that people had left for dead or said that they were going to underperform. Now, however, a lot of people are saying just wait for it, because the tightening credit conditions are going to really play out, and we're starting to see it around the margins with loan
originations and credit loss provisions. How do you push back against that and say, look, it's just not going to happen. It's not that big of a drag. This happens as a feature of every single tightening cycle that we've ever had.
Yeah, I mean it's not good.
The question is whether that's enough to push the economy into a below potential growth state that pushes up the unemployment rate.
And I think we're not there yet. I mean, if you and you know, speaking to the.
Point about credit, keep in mind, the housing market's working, that must mean that credit is flowing to households. But more broadly, if you take a look at loan and leases long growth, you know, bank credit relative to GDP, it's basically been flat since twenty sixteen twenty seventeen, So perhaps the economy is not nearly as credit sensitive as
as is being made out to be. You know, what I see is the reason why the economy has been holding up is because is because consumers have been doing okay. And the reason they're doing okay is because disposable incomes have been holding up, and that's going to continue because lower natural gas prices will bleed into household utilities.
And you know the fact that.
You know, wholesale gasoline futures have been declining, that's probably going to show up in lower pump prices in coming weeks. So we're not going to get as much of a food and energy and frankly food tax as we've seen, and that's going to push up disposable income, which in turn will support consumer spending. So I think that the credit sensitivity of the economy, you know, it certainly affects
some sectors. I mean, I don't want to, you know, sort of sound like everything's great here, but you know, my sense is that disposable income growth will remain relatively stable and probably continue climbing in.
The second quarter.
Yeah, you said that you.
Think that's and I think that's an important story.
You said that you think that you'll get crucified by saying that this is looking a lot like a soft landing. I would actually beg to differ. I think that probably people will say yes finally saying the quiet part out loud, because the market agrees with you. It seems like the equity markets are pricing in a soft landing right now in a lot of sectors. Do you disagree, I mean, how much is this already priced in? Not necessarily the recession calls that people keep waiting for.
I think there's more room to go. I mean, I do think that you probably continue to see you know, growth holding up. You know, I think you start to see parts of the inflation picture continue to continue to improve somewhat. You know, we did see shelter come in quite a bit in March, and remember that's very inertial, it's sticky, so it's not going to start to reaccelerate right away. So I think that that's an important development.
And you know, when I think about the FED, I mean, they're they're closer to the end of this than not, so it's unlikely that they're going to begin ratcheting up hikes immediately as well. So I do think you can
make a case for equities here. You know, over the over the next you know, a couple of quarters for for equities to rally, and we continue to see a tailwind as well from from what's going on globally that will continue to pressure take pressure I think off the dollar which should provide earning support for a lot of the the cyclical names that do a lot of business overseas.
How much do you see tech participating in this, especially with the earnings coming up next week? Are they still going to be the leaders at a time when there are a lot of areas that could perhaps recover if what you're saying comes to.
Pass, well, if the FED is backing off, which I think is likely at some point this summer, you know that should that should provide some talent for for for technologlogy stocks given their rate sensitivity.
How do you push back against the idea that we're getting right now? Sentiment really shifting and we saw that in the leading economic indicators, We saw that in the FED Beaige book. We saw that when it comes to just marginal softening in the labor market around the edges, and yes, you could say it's just marginal. On the
other hand, it's starting, it's starting in a more meaningful way. Now, how do you say that is just par for the course, it's controlled, it's not going to pick up more meaningfully.
Well, I mean it's something that you have to be concerned about. I mean, to me, the risk is that you know, you get this sort of you know, snowballing effect in unemployment. But you know, I would just say that they're offsets. It's very rare. I mean, people are pointing to continuing claims. Obviously they're up I think, like what forty percent from the lows. But you've also typically
when that's happened, that's always been a recession. But then again, what about this recovery has been typical as that's happened, You've seen prime age employment rates rise to cycle highs. That's never happened. You know, typically, when continuing claims rise this much off the low, the prime age employment rate is already declining. It's off about, you know, anywhere from three tens to half a percentage point from its peak.
From its cycle peak. Hasn't happened.
Right now, it's still going up to new highs. Consumer attitudes about the labor market it's still very very strong. So I think it's really hard to know, x Anti, and I think people should be a little bit more shows, a little bit more like humility about this. It's very difficult to know, x Anti, whether you know this is the start of something truly nefarious or just a normalization of labor market conditions from unsustainably hot level hot rates
last year. My sense is that there are offsets least. I mean, you have global growth getting better, you have US housing, you have fiscal tailwind. Now, you're going to have real income still holding up, and you have the FED backing off, you know sometime after, like probably in June. And I think the risk is is that you know the I mean, they may have to come in later. That to me still is the risk. But I think
you can make a case here for risk assets. You know, over the next couple of quarters, when you get this sort of confluence of slowing inflation, growth, holding up, FED backing off.
I guess that before we have to end, I do want to just raise this one issue. And I think you're right about the humility point, and I feel it, and I think broadly I hear it all the time. I wonder about the fact that suddenly deposits aren't free anymore and the longer term implications of that in the main credit impulse of this economy, which is a smaller regional banks. How do you factor that into your calculus at a time when that has to be before it happens.
It cannot be with any material data just yet.
No, I mean, I look, I take that point. There are there are certainly areas of concern within the banking system. I mean, I think obviously people have been talking a lot about commercial real estate, but and the how the regional banks drive credit to that sector of the economy. But it's also important to remember that, you know, when we think about structures investment in GDP LISA, that has rarely been as low a share of GDP as it
is right now. Right, So even if you're talking about a twenty percent drop in structor's investment annualized, yeah, that probably gets you maybe half a point off of GDP growth. So you know, as I say, I mean, there are issues. And clearly, you know, residential lending I think continues and that's a big piece of it too. Right, So household they're still getting credit when they want it. But I take your point about what's going on with the small business.
The question is, you know, there are areas of you know, of the economy that are weak, that look very bad, right, I mean, no one's denying that. The question is is that enough to push the economy into a below potential growth state?
Remember, that's what's required.
Yeah right, I mean, if Beed believes we need below potential growth for a period of time to basically quell the inflation.
Issue, we're getting it.
I don't see it yet, Neil Dota Renissans Macro.
Let's talk about the banks right now. We can do that with Maro Rodriguez Veladadas, the managing director principal at MRV Associates. Mayra Wander for to catch up with you. I really want your thoughts on the region ors, the small banks first, and maybe we can shift back to some of the bigger lenders in just a moment. Lisa jumped all over it yesterday, the net interest margins, the
profitability story. Do you think it's too early to see some of the pain, to see how this is going to evolve over the next coming quarters.
Yes, definitely.
We have to remember that the banking turmoil started really the second and the third week of March, and by that point, the vast majority of regional bank strategies, all their transactions were well underway, and they certainly have benefited from high interest rates. They have definitely been charging more on a variety of loans and credit facilities, but they haven't been paying more as much over on the deposit side,
and so that net interest margin really benefited them. However, I do see a few trouble spots in the horizon, like what well, you definitely see just about every single regional bank increasing their provisions for credit losses, and some of them had even released them a couple of quarters ago, and so that's certainly a big sign that all of these banks are preparing, at worst for the beginning of a recession or at best for a softening of the economy.
You also, of course, had a lot of banks had a decrease in deposits, and for regional banks this is incredibly important. Anywhere from seventy five to eighty five percent of their funding come from deposits. They're not diversified like the globally systemically important banks, so it's very important to watch not just the level of their deposits, but the
diversity of the deposits. And that can be really hard for some of the really small regional banks because by definition they're concentrated in the communities and regions that they serve.
There's a lot there to unpack.
I want to stick on the loan loss provisions there are two ways to read this. One is that they're continuing to lend more aggressively and just provisioning for more potential losses, or they are withdrawing some of their lending prowess on the heels of some of the deposit outflows as well as the concern about loan losses that keep taking up. Which is it, you.
Know, Unfortunately the answer may not be so satisfactory to investors.
It's a bit of both.
There are a lot of signals in the economy, in the market that we really do need to pay attention to. We've got a lot of tech companies, consulting companies, retail media that all little by the little have been announcing layoffs. So how are these people eventually going to pay their mortgages and their other credit facilities. You have American companies at their most embedded level in history. Many of those loans are leverage, which means six seven times debt over ibidah.
The Page Book just this week already stated that some of the banks had already been tightening their credit conditions. So a lot of these banks are actually exhibiting good risk management when they increase their provisions. And I'm not seeing big rises and lending you have trouble areas over in the auto loan sector. You're already seeing high housing prices in the West. So there's a lot there to remind banks they need to remember the religion of good risk management.
Maray, yesterday at four thirty pm, we got some data from the FED on the latest emergency borrowings from that discount window, as well as a new program. I almost laughed at the way that it was interpreted. Optimists said the show's stability. The pestmist said, the shows that people are still drawing down at some of these emergency facilities. How would you read the fact that we said the first increase in usage of some of these operations in five weeks.
Yeah, that's a great point.
You really the banks should no longer be barring if they're iss stable and as liquid as they say they are. And this is one of the reasons why legislators and regulators really should be demanding that banks be more transparent. By the time that you and I get some of their liquidity metrics, such as the liquidity coverage ratio or deposits as a percent of total funding, it's already too late. That information is old. But any of these facilities from the FED is not the way that banks in a
capitalist system should be running. They should be depending on their own cash flow, and that's why most of them need to be much better managed than they currently are.
Just to finish on this word, crisis, would you call it a crisis? This time last week? Muhammadel Erin was with us and he said, this is not a crisis. Brian moynihan, Bank for America, not a crisis. What's in a word? Why is that word so important?
It is incredibly important because unfortunately it starts to really be overused. This is bank turmoil caused by serious lack of good risk management. And there's really no excuse for that Silicon Valley bank signature. All of those banks needed to have been back on the basics a long time ago of managing their interest rate, risk, managing their liquidity. We have to be very careful not to over use words. This is banking turmoil and it is not a crisis.
A crisis is when we're really talking about massive interconnections with banks and the real economy as well, of course, as corporations. Two thousand and seven, two thousand and nine was a crisis. This is not a crisis, and I'm really hoping that it doesn't go that way.
Preciate your perspective as always, Maira Rodriguez Viadarus there of MRFI associates. Let's get back to something we might know something about with Dantann about iv Oliver wire meant Dan joined us now, Dan, wonderful to catch out with you, buddy. I want to build on the reporting from our colleague Jenny Leonard from earlier on this morning that President Biden aims to sign an executive order in the coming weeks there will limit investment in key parts of China's economy
by American businesses. Dan, where'd you see this one going?
Yeah? No, thanks John. This outbound sythius, as it's been labeled for the last few months, is really the culmination of a focus of the Biged administration for the last two years. And I actually spent some time on the Hill a few weeks ago at some Senior House GOP members that have been looking at this as well. I mean, this is actually something that one is very bipartisan issue
in the US. I think also you're going to begin to see more clarity as there has been a lot of investor concern on what does this actually look like, because we've seen in the past the US government attempted to regulate certain or limit investment in certain Chinese companies and it had a pretty adverse impact on threats to
dlist and other sorts of challenges. But really, this executive order is going to cover specific investment of semiconductor companies, artificial intelligence, and quantum computing companies in China, with a focus on US firms playing an active role in management. So venture and private equity firms are really under the magnifying glass where they're largely managing and not just taking a passive investment in some of these specific sectors, not anything necessarily more.
Broadly, Dan, forgive me for asking you to read the political tea leaves, but Jenny pointing out that this push will take place at this May summit for the G seven in Japan, do you think the allies will be on board with this push coming from the US side.
Yeah, It's something I've been looking at as well. I'm not sure how much Allied support really exists for this package only has a chance of any sort of success with multilateral support. Otherwise you're just going to essentially open up opportunities for other G seven plus allies to take the investments that American businesses are essentially restricted or investors are restricted from. You know, I think the US administration has had a pretty good track record of beginning to
chin up support for these type of issues. I think a lot of the challenge has been the confusion of what is this And again, it's really been labeled as outbound scifius for the last few months, which takes on a much broader connotation than what we're talking about here, which is a narrower swath of Chinese firms, and what type of investment restrictions would really be placed on US companies.
Dan, you're at the IMF meetings last week. What's your read on how where policymakers are on what kind of hit economically there would be if there was some sort of true fragmentation or breakdown in the relationship between China and the US.
Firstly, I can't believe that was a week ago. But that's a second issue. I think there are a lot of a lot of concerns, and this is where this Biden administration team in Treasury is very careful about looking for unint unanticipated consequences, especially when doing dealing with anything that has broader market impact. I think there's a huge focus on not disrupting the China US China Western efforts from a business standpoint, because there's still a substantial amount
of trade. I think the decoupling threats have been somewhat overblown by the numbers, and Bloomberg certainly covered this as well. But I think there's a huge recognition that you can't only play around with this relationship too much before it
has too many adverts consequences. I mean, who can forget at the end of the Trump administration one exchange that was delisting then not delisting, then delisting certain Chinese telecom companies that created some pretty massive confusion for a number of weeks.
Well, but Dan just sort of spind us forward. Then how comprehensive can some of these restricts be that the Biden administration plans to put out there. How much meat can there be behind what Jennet Yellen had to say last week about the potential to put national security over economic interest.
Yeah, it's a balancing act. I mean, there's obviously national security concerns, there's it protection concerns. You know, it's hard to say that they don't have broader economic protections for
the US economy as well. I mean, really, this is the investment restriction equivalent of some of the bands that the US government has put in place as well as certain other European nations on the ability for China to import certain high tech components they need to potentially catch up in some of their technology manufacturing.
Done.
Just a final word on enforcement. We mentioned your name a little bit earlier on this morning, just with regards to foreign exchange in the US dollar dam a de emphasis around the US dollar, a push for that coming from China other countries as well, just based implied by some of the actions agreements we've seen develop over the last month. Dan, where'd you see that one heading?
Yeah, I've had this discussion with your Sileiah Mosen a number of times over the last five years. Look, we've heard the d dollarization threat for the last fifteen years, since the US has tried to force other countries to certainly choose in foreign policy decisions. I'm not sure that the world is going to move off the dollar quite so fast. And while we have seen larger countries like Brazil kind of push for this, India look to settle
certain transactions outside of the dollar. I still don't know if the dollar dominance is going to erode quite so quickly, Dan, I think.
A lot of people listening to this right now might agree with you. Downtown abound of voldable Iman.
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