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I love what jillmo X said at AXA in Paris.
He said, it is searching in vain for information.
In charge of information for Bloomberg Surveillance, Lori Kelvisina with RBC Capital Markets.
I say, when you walked in.
Today, what'd you first look at? But like all of us, you were working all weekend. What were you both stirring in the Kelvisina system this weekend?
Well, so I'll tell you. On Friday I wrote my weekly and then what I was doing Saturday night and Sunday night because I have little kids, so you know, I have to do a lot of this at night after they go to sleep.
But I was reading Please, you said the what's the masters?
Mom's got to work, I was saying to Gargy earlier. I'm now starting to watch White Lotus. This is the first TV show I've watched in years because I just don't have time. But honestly, my free time this weekend, I was reading through Earning's called transcripts, and then I was also reading through conference transcripts. And my team had done a first pass on me last week for me last week, but we were reading across the Russell three thousand, not just the SMP five hundred. And I'm a little
bit of a transcript junkie. I have been really since twenty sixteen, twenty seventeen, twenty eighteen, and we've learned that in these periods where everything is uncertain and shifting, don't just look at the SMP five hundred. The Russell companies, the smaller cap companies have simpler business models and they can often sort of help you home in on specific issues with a lot more clarity.
And this is so much in honor of work at Bloomberg by rich Yamarone, who we had lost way too early. Yamarone did the Orange Book, which invented forget about all the numbers, just listen to people. After someone like Lauri Kelvicina says, great.
Quarter exactly, So, Laurie, what have you guys done at RBC and your group there with your S and P five hundred targets and your earnings.
So we've cut them twice this year. March seventeenth was the first time. I'm honestly it was. It was the Thursday night after Liberation Day. I can't remember what date that was that we did the second hut. Time is warping in here, but we cut things twice. And what we did in that sort of early April adjustment was we shifted from our bullcase to our barecase. And we've been telegraphing that we would need to do so if
we broke below ten percent from the February peak. What was interesting was pre rose Garden the market was trying to hold in sort of garden variety five to ten percent correction territory. The market's kind of doing the same thing right now in growth scare territory.
We went down on.
Tuesday's clothes and touched minus eighteen point nine percent from the peak. That is very similar to what we did back in twenty eighteen, and that's basically in line with your average kind of growth scare where there's a fear of a recession or big breakdown that doesn't happen.
So what do we I guess, let's just go to the earning front. Since we're starting to kick into the earning season here, it's not so much what they what we're going to hear about their first quarter performance as warm about what companies are. Do you expect any companies to provide guidance or how do you think about the earnings out.
Well, so there are some that are still doing it and there are some that are not. What I will tell you is a positive development, Paul, and I know I was sort of ranting about this on television last week, but companies are finally giving us a more detailed conversation about their exposure, not just to China. We've been hearing about that since November, but they're finally starting to talk
about Vietnam and Mexico and Canada and other countries. So they've been sort of shocked into having a more honest and detailed conversation with the south Side community and the Byside community. Frankly, and to me, that's more important than why whether or not, you know, we suspend guidance. Some companies are baking some tariffins, some aren't, But it's the level of discussion. We just have needed more disclosure. I think that's why we've seen such big gaps in here.
So what do we do going forward?
Here?
Is it?
Are you recommending more cash and you typically do? Are you reckoning a bigger treasury portfolio than you typically do?
Or so I stick in the equity world, and so you know, I don't you know, I always like us equities, you know, I tend to say, And you know, we haven't made a change in our target. We're still sticking with the fifty five to fifty. We have said if recession is starting to get baked in, we're going to have another break lower. I don't think that's baked into
the price now. Okay, But I was on the road last week with Amy with Silverman, my partner in crime, over at RBC, and we were seeing a bunch of clients and we actually saw these younger guys who'd only been in the business a couple of years, and they just sort of, you know, I forget how we got on this topic. And the advice I gave them, I think applies to everybody. I said, we never know in these periods, in the moment where we bought them, we never know how low exactly it's going to go. We
have our milestones. We're going to check those off. We're going to keep an eye on those. We want to do two things right now. You want to look for the defensive opportunity and the rebound opportunity, and you kind of have to do both. So on the defensive side, we've liked utilities all along, we're sticking with that. On the offensive side, we really like financials. And our point to these guys was you're not going to be able to peg the bottom, so don't even try.
All right, So financials on the rebound d s. Do you hear anything on Friday that it kind of gave you a greater conviction when we heard from some of the big banks, and we hear from Goldman today.
Yeah, so you know, we're definitely seeing, right the benefits of increased activity and getting some rotation in the market and things, you know, generally functioning properly. I know there were some questions about that on the bond market last week, but that seems to have been, you know, died down at this point anyway. But I think that what I really have heard, you know, from the banking community in particular, is their ability to manage through crises and so all
of the learnings from the GFC, even SBB. Frankly, I think was a great road test for these companies and I felt like I heard that confidence come through last week.
What's the.
Idea of do nothing? Is that an efficacious strategy?
It is sometimes you need to sit and listen to the market and let things play out. And I know that that is difficult for Wall Street people to do, but I do think this is one of those times.
Excuse me, folks, I'm distracted learning about the amazing Blue Origin flight we're going to see here in twenty minutes, really extraordinary.
Lori Kelvcina, where.
It's for those of you across the nation, across Canada of RBC Capital Markets, the Royal Bank of Canada. Good Morning worldwide as well in your commute and of course on YouTube subscribe to Bloomberg Podcast. Just can't say enough about the YouTube distribution. We knew it was working, but in this crisis, we've been humbled by the growth. Thank you so much. Their futures up eighty eight, I mean, Gold and Sacks went out and it's completely unfair question
to you. They popped a forty billion dollars share buyback twenty five point two percent of their market cap? Are we going to see more of these shocks where people just say, we don't know what the White House is going to do, We're going to be opportunistic.
So when I was talking to investors last week, we were sort of debating pe multiples. Can you even really you know, value a company right now and we don't have visibility into the earnings. And what one investor told me was, they're really buying good management teams right now, and I think that's a very you know, sort of smart way to think about it. Who can navigate through?
I will say on the buybacks in particular, when I did my last round of updates on my S and P earnings model, we actually had actual data and for share counts as of one queue and it grew by I think point nine percent year over year, and that's
the biggest we've seen. But we've had a string of several quarters where the sharecounts have been growing, so I don't think that And of course you have buybacks, but there's issue went so but when you do all the math right, like, we haven't had a de equitization theme, you know, the way my former colleague Brob Bucklin used to talk about. So it's it's interesting, you know, to sort of hear that news in the context of this hasn't really been a great period for shrinking the share counts.
Paul's the equidization English or is that Lori Kelvicina.
Ill That's that's Rob Bucklan, my old one of my old mentors in the city.
What is it where we with small and mid cap stocks these days?
So they were trying really hard before the rest starting to bottom, and you're actually seeing some outperformance on the big down days. As we have moved past that event, investors are sort of toggling between sluggish growth, near stall speed or recession. I don't think that it's a clear cut case for recession yet, to be honest, but the small caps are acting like it is, and so we
continued to see some underperformance. You've also been starting to see growth outperform value, which is also consistent with the sluggish economy. So it's there's opportunity there. We know we need to buy them mid recession if we get one. But in the short term they're they're expressing the economic case.
You mentioned being some financials just you know, to pick on them in this Meliu is this where smaller banks throw in the towel and we get an M and A surprise and small in midcast I think.
That, you know, an old investment or back in my back in my my first investment bank, I worked at an investment banker there once told me that you look at confidence, you look at the vics, you know, for M and A deals, and we have lousy confidence. And we've actually, you know, no one's debating if the BIX
is broken anymore. We've seen a breakout there. So I do have a feeling, at least in the short term, the kind of gloom on M and A that you heard from some of the bigger banks late last week is probably deserved and.
We should not expect or rely upon the FED to kind of magically fix this. They can't really deal with consumer confidence and those types of issues.
Look, we have a data driven FED, right, and I think that there you know, let's put aside what was going on in the bond market last week, right, but if you if you just think about sort of the tension between you know, inflation and the potential inflation that may be coming from the A policy, that it's a tough spot for them to be in that is part of their mandate, and the labor data is holding up.
And to be honest, in everything I've read, and I've been reading really closely across the rustle three thousands since probably like the last two weeks of February, and I'm not seeing a lot of alarmism on labor. We do see it in the survey data, but in terms of what companies are actually saying when they're going out to conferences, when they're on earnings calls, they're not ringing the alarm bell on labor right.
Now, even lower lower wage labor because of you know, President Trump and his administration have been pretty effective in kind of slowing down, if not stopping illegal immigration. Have we seen that in the housing market in the Are we hear in any of the agricultural world.
So I didn't read any homebuilders from like the last week and a half, But in my last batch of reading, I did read a couple of the homebuilders that reported early and they specifically said they weren't seeing any kind of derivative negative pressures on labor because of immigration.
David Sasar is north of New York City. You should see what he's like. Eight thousand square.
Oh good for him.
The Christmas tree, it's almost as big as scarlet foods.
Yea.
Damien said, it's just booming. He said, there's absolutely no let up whatsoever.
And look, I will say if we're thinking short term long term, if you go back to twenty eighteen, companies didn't really raise the alarm bell on tariffs until like September in that conference season, before the earnings reporting season, kind of post labor day. So it may take some time to see the residual impacts. We are seeing in company commentary indications of tariff pre buying. We saw one of the banks call that out. And also you know, some and some of my clients I met with last
week also clued me in on this. But the idea of managing your inventories and pulling forward some of that inventory, I would you know, we called this earning season in our latest weekly as potentially like a box of chocolates. We don't know exactly what we're going to get. We could get some good ones.
You have to stop talking, But if you could just sit there, because when you sit here, the market goes up.
Yeah, that works.
SMB Futures ninety dow p getting them ere up five hundred and four to seventy four on a Lori Kelvin scene of Dow Jones Industrial Average. Miss Calvacina is with the Royal Bank of Canada RBC Capital Markets.
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
We're gonna digress here.
We got too short a visit with Gargi Chowdry, but we've got to take the time out of here because it's a time of year where someone like me looks out the window goes, I gotta get in shape. We got a division here today in the studios, Folks are wonderful studios here at Bloomberg.
Over here on the north side of the studio is the.
Out of shape Sunday. We're going to run studio. On the other side of the studio, Lisa Matteo and Gargy Choudry are the real deal.
Gargy, how do you.
Get moti evated to jump into the Hudson River swim five.
Miles two and a half, But I will say that the Hudson is cleaner than its reputation has you believe.
See, but again just a whole look.
Dogs get okay, there are.
Certain people that do that stuff.
I get this some missus Keane. You got to learn to stretch. Can you see me stretching? Lisa and Gargy, how do you stretch? What's the most efficacious way to stretch?
Yoa glass? Yoga?
Oh there you go?
What's yoga?
Yeah?
Lisa? How do you stretch? You got to get out of you to the body.
Do it a little pilates? Maybe I have a machine.
I have a machine too. If that Bill has it, you know it's a dog pilates. Thank you for that.
Uh.
These two are really.
Committed to doing iron Man and triathle On and all that. It's wonderful to see that Gurgy. I got to get the boy market one l think out.
Making the circuit this weekend.
Explain the worry at black Rock that we hear from Larry Fink and that we hear from Gardisha.
Color, the quality of the.
Angst, color, the quality of the angst. I love that. So I think the best way I can speak to it is what we saw sort of over forty eight period where thirty treasury yields moved up by call it seventy two basis price down, yields moved up price down, Yes, and I think a part of that we all know was to make room for the auction. Some of that was the big basis unwind, it was around swap spreads. But I do want to be very clear there was
no panic in the market. There was volumes trading. You know, we monitor a lot what ETFs are doing as a percentage of tape. You had a few days where et apps were allowing to be that release valve of the market. So yes, a big fear around what deficits might do, which is leading to long ends moving higher. Today they are a bit stable, but certainly that's been the price action for long end which is why we think the belly of the curve still offers you better value at
the same time, not panicked move. There's still risk changing hands. I think that's really important for all your listeners to be aware of.
So just broadly speaking in terms across all of your portfolio, I mean black Rock's got a couple of dollars under management. We understand that. How do you guys internally when you sit down and have your meetings, say, what are we going to do this week? Is realistically, we have no idea what's going to come out of the White House which will whipsaw markets? How do you guys have black Rock kind of think about that.
Yeah, So you know, we have a lot of internal meetings as you point out, and senior investors get together and talk about what they're seeing in their corner of the markets. And I think one of the things that everyone's trying to do is separate the signal from the noise. So there obviously has been some noise around, especially this weekend, around some exceptions perhaps and then some tweets around maybe those exceptions are not exactly what we first not them
to be. But taking a giant step back coming into the cl what was the tariff rate and what do we think projections for tariff rates are going to be in the next few months. Looking at the soft versus the hard data, obviously soft data a little bit worrisome. We saw that Michigan softening again and inflation picking up pretty meaningfully in the Michigan five to tenure inflation expectations, but at the same time in the herd data you have not yet seen. Any of the concerns are on
rising inflation and slowing growth. So recognizing both of those and most importantly telling our clients what to do. That's our role. Telling clients stay invested, add some diversifiers, add some hedges, clip some coupons, and the fixed and come markets.
What do you do with cash? Do you increase cash? Do you wait with cash? I mean to me, you know, to our listeners and viewers. That's a key key question.
Here, Tom great question when we.
Think, yeah, this is it, I'm going home.
Cash has seen a lot of inflows. SGOV, which is our t bill sort of ETF, has seen the most amount of inflos. It's one of the highest gathering asset classes this year. So investors are thinking about cash as an asset class. I think we need to recognize that there continues to be a role for things like SGOV in your portfolio. But what we're telling investors is also think of opportunities to you sort of look at areas of the market that have had perhaps too much of
a correction. We're telling investors add some minimum volatility, add some gold, think of areas to buy quality technology, in your portfolio.
So longer term.
I mean again, the administration is promising perhaps some near term pain for some longer term gain in terms of productivity investment. Is that something you can think about or is it just trying to deal with the day.
To day No, absolutely, that's the job trying to think about. Like I said, what is the signal versus what is the noise in the future? Is the signal towards a more productive world in the future. Are we going to get to a point where we can point to higher growth as a result of all of the noise that we might be getting today. I think it's a little
too early to tell. I'm looking at price action in the markets now, and I'm very relieved to see that bond markets are behaving in a pretty normalized manner, which gives us a little bit of confidence in where equities can go.
To the Okay, this is Keith, thank you for bringing us up. I've got a whole set of things. I look at some of them pretty esoteric. I look at libr or ois a new and SO for ten year. Damien Sasauer looks at SO for two year. They're behaving well. This morning, Sweeney's brilliant. He looks at the TUESDA ten spread. What does Gargie Chowdery suggest we should look at to say the bond market's deteriorating?
The bond market's.
Okay, yeah, absolutely, so I would say look at what on the run versus off the run treasuries are doing. So how much are off the runs getting? You know, how much illiquidity is there in the markets. That's one thing I would look at the repo markets is are the repo markets functioning proper? Is there any squeeze?
Okay, we're hearing from Irish Jersey when he's not watching aston Vila that the repo market is functioning properly.
Do you agree as of right now?
Absolutely, the repot markets are functioning properly. And I think that's one of the reasons why we haven't found this move over the last week to be panic inducing.
Paul panic inducing. You just gave Paul panic. He thought he's going to get his vesper repod.
Yes.
The answer to repel market, folks, is short, short term paper. I call it the trust market. It's wrapped around lots of It's there on the bt M M screen of Bloomberg, and I no I Mike came up to me. He said to me once he is, do you have any idea what one single statistic is on the bt MM screen is no, No, mister treasure money markets, I don't gargy. Thank you so much, particularly for the what's the key thing with yoga like in Heal Deep? What's what's this thing called on radio?
What? What's this thing called?
I think you're trying to do the mountain post? Is that what's happening?
I think Doom's doing the Mountain tors.
We're play Mountains. The next song out Leslie West, Get prepared, Gardi Showbery. Thank you so much, greatly, greatly appreciate it.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Applecarplay and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty Trust Company.
The West is TCW, and they have all sorts of wonderful people. We can literally the quality is so good, like they're good competitor in La Capitol Group that we can take anybody blind any time. Penny Foley is flat out a legend out of TCW in emerging markets and joins US. Right now, You've aged after last.
Week, you and I have never seen this.
I mean, you go back to Ecuador, you go back Carl Weinberg's Lehman, you go back to the financial crisis ninety eight. You could feel the sweat on the beach.
All the others. This is unique. Why is it unique for Pennyfolio?
It's it's uh, you know, the uncertainty factor is huge, uh, and that means that you've got to have higher you know, higher risk premia. There is an absolute surprise at you know, at every level. You know, I think EM growth is really fit facing multiple shocks, you know, uncertainty, which has had an impact on you know, business and consumer uh decline and realed income, supply chain disruptions and you know,
and really a huge negative wealth effect. You know. For the rest of the world, it's been more of a straightforward demand shock. So I think the downward pressure on US growth, all other things being equal, is estimated. It's sort of one to two percentage points for the next four quarters. The impact on the rest of the world x China is probably only half that. And you said earlier central banks have the ability to cut rates in EM and also provide some fiscal UH stimulus. You know,
I think the differentiation in EM is going to be key. Obviously, oil exporters are going to be hurt. Importers with relatively closed economies, they're going to do a whole lot better.
You know.
What we did was essentially re underwritten every high yield position in the portfolio to identify those that will face a higher default risk in the current environment.
And we've used kind of the baby with.
The Bathwater sell off in the course of the last ten days to pick up select names that seem significantly under sold UH, mostly corporates, small corporates, but were very, very cautious because I think the you know, the technicals are still really pretty challenging, and a lot of the cell side have been told to away from it.
I could clients for TCWS listen to this, I can ignore I have every years.
Penny from your perspective in emerging markets? Is US economic exceptionalism?
Is that over?
You know, it's it's a it's a great question. I mean, I think you've I heard you a little earlier saying that you know, the US. You know, markets last week were very unusually so yields up, on prices down, currency was weaker, stock flower you know, that usually spells capital outflows, and it's pretty common in emerging markets. You know, in the case of the US, you've seen that happen maybe just a handful of times in the last thirty years. And you know, and as you both know, foreigners owned
about a third of the US treasuring market. They own twenty five percent of US corporate bonds and close to twenty percent of equity, So the potential for outflows is not inconsiderate, you know, inconsiderable. You know, the erosion of social and political norms and loss of trust could pose longer term issues for the US, but you know, in my view, it's probably just at the margin at this point.
I mean, they're just too many factors that support US dominance, and it's you know, it's entrepreneurial culture, technological and you know, in scientific advances, flexible label markets, and just the sheer size, you know, and depth of our capital markets. But no question, the narrative around US exceptionalism has lost a bit of its steam in the last couple of.
Where do you see value out there these days? In your world of emerging markets? I wouldn't even know how to look or value or characterize value. But where do you guys see opportunities these days?
You know what's interesting in in EM You've seen UH outperformance relative to the developed world, to the US, So somebody's seeing value somewhere, and I think they're you know, on average, UH, you've seen EM spreads outperform U US peers. And this compression is at every at every rating level.
So there are a couple of reasons for that. You know, most EM sovereigns are in the early to mid stage of the credit cycle, having gone through, you know, a pretty big restructuring and default cycle in twenty one twenty two. Also since the Taper tantrum, you know, a number of EM sovereigns have undertaken pretty broad based structural reform. So that makes them, you know, resilient or more resilient in an external volatility.
You know.
And in fact, this year or last year, you saw positive BM rating changes exceed negative ones retiring, you know, for the first time in you know, in a decade.
With the time we got left, I gotta ask you about la mister Ahmanson was one of my first supporters in doing this act years ago. The Cross Company to the West goes back to mister Day in nineteen seventy one, is well, you're a pillar out there with the La Opera and all house laws angels doing after the fire.
You know, I think the fire obviously was was a huge issue. And and you know what is astounded me is how quickly people came together as a community to rebuild. And uh, you know TCW, for example, was absolutely extraordinary. There are a number of people that lost their homes at TCURE, including our our CEO, and and they came together to really you know, support employees. We all came into the office. There was you know, nobody said life is you know, life is too short.
There was just a real great.
Sense of community, probably more so than you've seen in Los Angeles.
For what's the number one thing the East Coast gets wrong about the larger LA experiment. I'm sitting on Sunset Boulevard going this place is rocket with all the gloom and all that. What's the number one thing East Coast idiots get wrong about LA?
Oh?
I think they you know, they look at at l A and say, well, you know it's a soft you know, kind of you know, not so serious.
You mean coast, Okay, so serious the place.
It is a serious place. I mean, no question when I get on a plane to come to the East Coast, I get all repped up when I you know, going out to Los Angeles. You know, I saw you know, it's going to be quieter, it's going to be but it's it's a you know a lot of people in on the West Coast have come from the East Coast. There's a very vibrant industry away from away from the you know, the movie industry, and the movie industry itself
is driving a lot of innovation and change. So I think it's a very exciting.
Thank you so much for visiting pennyfolio with us, I kind of get TCW and of course with the Emerging Markets Group.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on applecar Play and Android Ato with the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.
This is way cool. Plus RENI in time came.
We welcome all of you extended conversation now with Henrietta Treys. She's killing it in Washington, discussing this moment we're all living and you wonder.
Where it came from? Well, inter ute.
She worked for Marty's Wags Wagged Demnum and before that she worked for somebody of all respect across the aisle, Joseph Crowley, Joe Crowley, a Democrat from New York. Henrietta Trees and studio here in New York. What was it like working for Joe Crowley? And where are the Joe Crowley's today?
To say? The Democratic Party?
Oh, it was so great.
Some of my most incredible, impressive memories are from the folks I met there, Kevin Casey, Greg Shiowitz.
There's a crimal scream, including from Republicans Democrats, find your inner Crowley?
Where is it?
It is searching for an issue that they can seize on to unite them. I will say I notice a lot of that with the Ways and Means Committee chiefs of Staff right now around the issue of pharmaceutical tariffs. The Democratic Party has a real choke hold on the topic of healthcare in this country. And so as the President starts to migrate into the section two thirty two on pharmaceutical tariffs. I think the Democratic Party will really start to coalesce and we'll see that.
Well, she's the only one I know before eight am that can talk stuff.
So, Henriette, what's the what's the next? I know Congress is out for another recess. I don't know how they happen. They seem to have more recesses than anybody. But what's the to do list over the next couple of weeks that's really going to be impactful.
There's only one to do list, and that's get the tax bill written. I think it's going to take until the end of the July recess, which is July twenty fourth. So if you want to like circle a date on your calendar for when this whole thing could pass, that's my base case expectation. It's going to be a really tough road from here. But I do not buy the narrative that somehow the Freedom Caucus is going to vote against a tax increase on all Americans. As y'all know,
this is not a tax cut. There's very little that's stimulative from this bill. But there's no way that you vote to raise tax rates on every single income bracket. Maybe if you maybe you do the sea salt, the corporate solid rate, maybe you raise the millionaire tax.
But other than that, you've got to vote for this bill.
So you have to vote for this bill. And is President Trump, I mean, his obviously his sway over his party, his sway over Congress seems extraordinarily strong at the moment. Is that a time for him to push through everything he wants? Because is this something that may not last four years?
Exactly?
And that's that's my base case expectation. Same as it was during the first term. You get one year in a pass legislation, and then the next three are all voted to tariffs. The difference now is that he gets all four years for tariffs, one year for a taxi.
You'veon stenus with an incredibly important ft. Yes, say this weekend, mister von stein Is will join us next week. I believe that you know dark in the door here in New York where he hearkens the madness. Now back to Nixon nineteen seventy one. I'm the only one east to the Mississippi River that remembers that. And the answers to annery Horden will speak with the Secretary of Treasure or Treasury today. He's had a pretty good weekend distancing himself
from the rest of the Trump mob. What will you listen for from the Secretary of Treasury today?
Yeah, the street is definitely hoping that Scott Bessett is the calm voice in the room. I think they've been trying to elevate that potentiality and you've seen it, you know, whether it's knives out for Howard Lutnik or distancing themselves from the Peter Navarros and Kevin Hassetts of the world.
From Treasury Secretary Bessett, you want to see, I want to see some detailed conversations about exactly what nations are being negotiated with first, some sequencing, you know, Vietnam in any fine Vietnam.
She is flying into Vietnam today, I believe, are you kidding me? What is the incentive for these people to negotiate with a vacillating White House? I mean, I love Jill Malwak this morning, X in Paris has a great code. If I can find it, I'm not going to be able to find it now. But basically, he says, this vain moment, how do they negotiate.
And what are you even negotiating exactly? You want to bring the tires?
We're one and a half percent to zero percent. Yeah, I don't think that there's anything.
Real to be gleaned from a negotiation with them.
I think the street wants to hear it, and frankly, i'd like Secretary best and to get very specific. We've had enough of these like really broad statements about the whole semiconductor industry is excluded. Okay, let's talk about the actual magnets from China, the critical minerals, right, what's going into what?
Where are the cargo ships? Are they being hauled up at the at the ocean level? You know, when are they going to be off there?
And Paul, you miss this? You're at the masters. I mean I can understand you missed it. Magnets, I mean that's what this is.
The granularity is going to come down to shirts from Vietnam, magnets from wherever, China, and something from Poland I can't pronounce.
I mean that's the reality, right, That's exactly the reality.
So we have consumer confidence numbers coming down pretty dramatically, inflation expectations coming up from consumers pretty dramatically. It's the economy stupid, that's tough politics. What are Republicans in Congress, who do have maybe some races coming up in twenty six how are they trying to deal with what is potentially a very difficult economic fallout from President Trump's even discussions forget about implementation, just discussions.
Yeah.
Well, I think that polling data really tells them all that they need to know. And going into primary season, the Republicans need to be careful to stay to the right of Trump, not get on his bad side, because primary season is obviously where the very engaged voters go.
So the latest data, I think it's from CBS News is anywhere between eighty and ninety one percent of Republican voters think that this is temporary, that prices will ultimately come down, and we need to give the president more time.
So that is their playbook.
The real struggle is the independent voter, because now they're underwater. They used to be thinking that President Trump was going to be good on the economy, and now they're going in the opposite direction. They think this is going to lead to permanent higher prices, job loss, etc.
People ask me who am I following and of course, I just voice what I hear from Henrietta Trade. To me, the most important person inside the Beltwigh is how King Jeffries. What does he do in the coming weeks to get the Democrats going given this tear of crisis.
Well, I think really we need to see. The next couple weeks are going to be hard because everybody's on recess. But the focus on pharmaceutical tariffs, I think is what you'll see the individual anecdotes about manufacturing plants, small businesses going bankrupt, not having enough cash to stay liquid during the increase in tariffs.
However temporary these may be for a lot of companies. It's too long.
Doesn't he get on an airplane and go out to some district in western Pennsylvania and try to f in his center tendency Democrat who can actually compete against a majority Republican Pennsylvania I.
Think they tribe.
I mean, I've been materially disappointed by how example had no unification.
Well a Republican or Democrats.
You can't even get out to Illinois, which I think they could compete and compete.
When does that start with Congressman Jefferies?
And honestly, if it hasn't started already. When is it going to? Because it's been what four.
Months now of this administration, there's plenty of things to discuss. I think they're underwater.
Have you ever met Daniel lanwat down in New Orleans?
A record producer?
I don't think so.
Like to zero, it's like it's like it's like it's like magical. They did Chris Whitley's album Done give.
Us thirty seconds House New Orleans.
Doing That's fantastic. It's so fun.
French Quarterfest this weekend was incredible. Went out there, hurt the Dirty Dozen Brass Band, come on down. It's a great time.
So it's just a great, great city. I've been here a few times. I need to get there more.
Why would say?
With Martin Feldstein and Robert Schuller, we all three of us were sitting there.
Eating and we said can we not leave? Yeah, that's what happen to be. You went down and just said I'm not leaving.
I went down fifteen years ago. I can't get out.
Lisa. Does it say remote? I mean to me, it's just surveillance.
Remote, surveillance, remote, ne Orlans James carvel On, have you had a trace do this more often. You know, if you need to get up here, we can free up the surveillance golf stream and get you out here. Fantastic a trace Veda partners, huge value add for us.
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