Episode Transcript
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Speaker 1 (00:00):
Previously on your Morning show with Michael Del Choono.
Speaker 2 (00:04):
Now, it's possible that narratives can be right, it's possible
they can be irrelevant.
Speaker 3 (00:09):
They have nothing to do with right and wrong.
Speaker 2 (00:12):
One of the ways I try to do that is
our weekly visit with David Bonson from the Bonson Financial Group.
He also presides over Dividend Cafe, which I highly encourage
people go to if you want more of his in
depth analysis. I saw him first. I think it was
on Fox Business and that how I found you, David.
That turned out you were a theologian, and our first
interview was on your book I Believe on work, I
Believe You're right.
Speaker 3 (00:33):
Seems so long ago.
Speaker 2 (00:34):
But what I love about the segment, and a lot
of my faithful listeners love about the segment, is we
don't play political narratives.
Speaker 3 (00:39):
We talk real and by the way, on.
Speaker 2 (00:41):
This topic the economy, it's one of the great Achilles
weaknesses of America. We just don't get economy. So I
know the definition of a recession is and I know
we've had one down GDP and two would mean recession.
But let's forget the political narratives. One side says this
is chaos, this is a tyrant, this is recession coming,
(01:02):
and this is regret. The other side saying, is the
greatest thing ever, what is the economy right now? And
how close are we to officially being in a recession.
Speaker 4 (01:14):
Well, here's the thing that is so frustrating for someone
I need, because I appreciate your compliment that I want
to call balls and strikes and offer nuance and.
Speaker 3 (01:24):
Not worry about narratives.
Speaker 4 (01:26):
I'm one who all at once believes we are likely
headed to recession, that it will be largely because of
the impact of these announcements over the last month regarding
tarris and trade. And I don't think the Q one
contraction that we saw yesterday where the economy came back
point three percent when it was projected to grow point
(01:48):
three percent, I don't actually think that was related to it.
I think that you saw a big spike in Q
one in business investment, but unfortunately it's very obvious to
that spike was because a lot of companies were getting
orders in ahead of the tariffs. You had a twenty
(02:08):
two percent increase in business investments, so it was front
loading some of the capital expenditures in advance of the
anticipated tariffs, and the contraction was largely because of the
way that we measure imports and exports, and so you
just had a big inventory issue in advance of the tariffs. Now,
(02:28):
I think the recessionary fears are more in Q two data,
whereby I expect you're going to see a big contraction
and activity, and every single day, Michael, I'm getting more
anecdotal evidence. We're right now at about a fifty percent
drop in import activity in Los Angeles. We are confirmed
(02:51):
over one million containers of cargo that have been canceled
or delayed coming from China to the US, one million
containers of goods that are not getting into the US.
So I think those things are likely going to lead
to recession. By the way, you had mentioned before to
(03:11):
really hit home the point about not being partisan in
the way we look at this data.
Speaker 5 (03:18):
It isn't technically.
Speaker 4 (03:19):
True that two quarters in a row of contracting GDP
is what a recession is. It's a general rule of thumb,
but it is two quarters in a row contracting GDP
where there is a decline in wages, jobs, and corporate profits.
So there was two quarters at the beginning of twenty
twenty two where the GDP was lower, and everyone said, see,
(03:43):
the Biden administration has given us a recession.
Speaker 5 (03:46):
And they never declared a recession.
Speaker 4 (03:49):
The NBER, the National Bureau of Economic Research, who gets
to make these calls sort of the referees of this,
they never did, and the media went crazy, And you know,
I wrote an article for a world.
Speaker 5 (04:02):
Magazine at the time arguing, you know.
Speaker 4 (04:04):
It isn't really a recession because there's some data anomalies
that are a negative and GDP, and yet what kind
of recession is it? Where jobs are going higher, wages
are going higher, corporate profits are going higher. It's like saying,
you know, I'm on a diet where I'm gaining weight,
Like it just sort of reverses the vocabulary. Well maybe Trump,
(04:25):
President Trump ends up with some of that, because that's
what I think. Q one was that the GDP did
go negative, but it wasn't really in the normal category
we think of as recessions. So you do such a
good job of this show calling balls and strikes, and
as long as you keep having me on, I'm going
to do my best to do the same.
Speaker 3 (04:43):
Yeah.
Speaker 2 (04:43):
But David, but what is your prognostication is to when
he has two down GDPs that they'm not declaring. I mean,
they're going to give the same treatment to Trump. You
think that they gave to Biden worse.
Speaker 4 (04:55):
I mean, first of all, who's the they. It's a
bunch of nerds. These are not partisans. This is not
the NBR, is not Kamara Harris's polsters.
Speaker 5 (05:05):
It's just a bunch of nerds.
Speaker 4 (05:06):
They're not sitting around looking to step to spike the
thing for Biden or for Trump, orfore Harris or against Obamber,
against Bush or it's just not true. And by the way,
they don't do it till much later. Okay, when the
data matters politically, it is like a day like yesterday
when it comes out and you get all the warnings
(05:27):
on CNN GDP down, and two or three years ago
when it happened to Biden, Fox News going crazy, Oh
the GDP down.
Speaker 5 (05:36):
That's when it's matters.
Speaker 4 (05:37):
NBR comes in six months later and says, oh, yeah,
remember two quarters ago when that GDP was down. Well,
it turns out we're in a recession, or it turns out,
you know, we're not in a recession.
Speaker 5 (05:48):
I mean.
Speaker 3 (05:50):
A recession. Yeah. No.
Speaker 4 (05:53):
My answer is that I believe we're more likely to
go and wan than not. And that and that that
is based on my projection of what I'm seeing now
in a decline of economic activity.
Speaker 2 (06:06):
So I was just gonna say, David, I'm gonna do
the reset because people tune in and out. David Bonson's
with the Financial Bonson Financial Group. He joins us every
Thursday to give a great analysis on the economy. What
did you make of the president and all the CEOs yesterday?
I I know Red was very curious and I was too. Uh,
these kinds of projected or announced investments that are coming,
(06:29):
what does that really accomplish or does it not accomplish?
Really until it's on the ground, the plants are built
and they're producing something, Well, it.
Speaker 4 (06:38):
Doesn't produce something until it's on the ground. I have
announced many times in my life that I intended to
lose a lot of weight, and it has been irrelevant.
It has been totally irrelevant to the scale.
Speaker 5 (06:50):
Now I will say, by the way, that's not true.
I lost thirty five pounds last year.
Speaker 4 (06:55):
So there was one year in the year at which
I turned fifty where apparently it did matter. But for
about twenty years before that, it didn't matter.
Speaker 5 (07:03):
So you know, look, I don't want to I don't want.
Speaker 4 (07:06):
To say anything negative here. President Trump lives for those announcements.
He loves them, and I believe some of them are substantive.
Speaker 5 (07:14):
But because a lot of these.
Speaker 4 (07:15):
Are coming from companies I own and have been a
part of for years, I know the difference between companies
announcing things for an audience of one, namely the occupant
of sixteen hundred Pennsylvania Avenue versus companies are announcing new information.
When a company like IBM, which I've owned for many,
many years, comes out and says we're going to do
(07:36):
fifty billion of infrastructure and R and D in the US,
and I go, well, that's what you've been doing every
year that I've been a found those are not really
new announcements. But when they say and we're going to
increase the portion of US hires, or we have a
certain domestic focus, we're moving certain things we were doing
in Brussels to Alabama, you know that that has, on
(08:00):
the margin a chance of being meaningful, and it certainly
is stuff the President wants to hear. But all I
can tell you is a lot of these announcements are
kind of hyperbolic, and some of them are substantive.
Speaker 2 (08:13):
Big picture though, here's what a lot of people have witnessed.
Maybe you could put it into perspective for them. They've
certainly witnessed this the last few years. One the dumbest
thing I think I've witnessed in my life was all
the notion that you could just turn an economy off,
like with COVID, and like a light switch, turn it
back on. And the amount of unearned money, printed money
(08:36):
and not real money, just dumped unearned into an economy.
What that did to inflation? And then the reverse of that,
I guess would be building an economy where we're back
to making things, making things that real people go to
work to make, and then real people at other jobs buy.
Speaker 3 (08:55):
I mean that is you know, so part of.
Speaker 2 (08:57):
Me wants to see the president didn't have kind of
a long term vision one he won't be here to fulfill,
but start a direction towards. And then the other part
of me is saying, pivot from these terriffs that never should.
Speaker 3 (09:10):
Have been threatened a sap.
Speaker 2 (09:13):
It's about to become a political demise, let alone an
economic recession.
Speaker 3 (09:18):
Help me sort all that out. These feelings I'm having Yeah.
Speaker 4 (09:21):
I mean, you know, first of all, let me just
say as someone who values very much the American worker
and wants desperately the American economy to be something that
lifts all boats. And I have no idea why we
believe that goods are somehow innarratively superior to services, or
(09:41):
that services are innarrowly superior to goods.
Speaker 5 (09:44):
You right now are conducting a service.
Speaker 4 (09:47):
Okay, you are producing a show that is a service
by definition of economic vocabulary, and you are using equipment
to do it. That is the definition of a good.
So goods and services both matter. And when we say
we need to get back to Americans making things, you know,
there are a lot of things we do not get
(10:10):
need to get back to Americans making that America that
it can be made much cheaper offshore, and that's okay.
Speaker 5 (10:16):
They are not.
Speaker 4 (10:17):
Going to get some of these things made in America,
and that's because they can get made cheaper offshore. And
then it frees us up to do other things that
are more profitable. And if we believe that every single
good the Americans use by way of imports and that
we will find the jobs to have those made here
(10:38):
without cost, going up five hundred percent.
Speaker 5 (10:42):
We are crazy.
Speaker 4 (10:44):
They're not going to do it, But it's okay because
we don't need to because we are the largest exporter
of services in the world, and there are tons of
goods American things we make that we make better than anyone.
Speaker 5 (10:58):
Else in the world.
Speaker 4 (11:00):
But most of those things are higher tech, their higher IP,
their higher sophistication, and very low sophistication things coffee beans, widgets,
certain t shirts.
Speaker 5 (11:11):
It's okay that.
Speaker 4 (11:12):
We're importing them at a very cheap price. But my
point to you is we need lower taxes, low regulating
drive those things. And yes, we have to walk back
all these crazy threats of tariffs.
Speaker 5 (11:25):
But then the President's done it.
Speaker 4 (11:26):
And I got to tell you, it's one of the funniest.
Speaker 5 (11:28):
Things I've ever heard, saying, Oh, everyone said.
Speaker 4 (11:31):
Stock prices we're going to go down, but look at
they're really not down that much anymore. And it's like
a crazy person is running around on the freeway naked,
and then we go, hey, look everything's better.
Speaker 5 (11:42):
We got this guy off the freeway. But he was
on the freeway. Now we took him off the freeway.
Speaker 2 (11:49):
Right as I speak to you on an electro voice
probably made in Michigan, maybe made here in Tennessee microphone,
with my backup German Sindheiser microphone, with my Japanese I'm
on board and my Macintosh computer.
Speaker 3 (12:05):
That's a that is an amazing.
Speaker 2 (12:08):
Teachable moment right there on goods and services and the
ones that really don't matter. And I really don't. I
don't necessarily need my board to be made in America
and to have costed more than the three hundred dollars
this one cost it cost. David Botson, what's coming up
on the Dividend Cafe this week?
Speaker 4 (12:26):
I have to really kind of do an around the
horn this week. I got to cover the updated economic data.
We got job support coming, a lot of companies reporting earnings.
Speaker 5 (12:36):
So we're going to do it general. Just let's do
a lay of the land to where we are in
the economy, cover cover a whole lot of categories.
Speaker 4 (12:42):
So looking forward to fun Dividendcafe dot com.
Speaker 2 (12:45):
Tomorrow, recession seems as though it's coming. How quickly could
the president pivot and end this tariff thing, whether he
takes a couple of victories and then just moves on
dot org, How quickly does he need to put this
behind him for us to Uh.
Speaker 4 (13:00):
It's really it's really about China. It's really about China, Michael.
He's pretty much already pivoted with everybody else. He's walked
back most of the things that we're doing damage with, Japan, India, Korea, Vietnam, Canada.
Speaker 5 (13:13):
Mexico Auto industry.
Speaker 4 (13:15):
Uh, there's more room to walk back, there's more room
to get some of the deals announced and all that
kind of stuff.
Speaker 5 (13:20):
But it's really China that's the big one.
Speaker 1 (13:22):
Miss a little, miss a lot, miss a lot, and
will miss you. It's your Morning Show with Michael del Churno.