April 9, 2025 • 30 mins
How should we make sense of the Trump tariffs? They've been terrible for the stock market, obviously. Small businesses seem to hate them. Energy companies aren't fans either. US manufacturers are talking about how the tariffs will make manufacturing harder. And yet we have them. So who stands to benefit? What's the point? And how should we understand this moment in American history? On this episode we speak with one of our favorite guests, Viktor Shvets, the head of global desk strategy at Macquarie Capital. Shvets has been warning for a long time about how US history is at a pivot point, with the neoliberal consensus coming to an end. He talks about Trump's revolutionary efforts to remake American society, the attendant shredding of norms, and what it all means for the globally-held view of American exceptionalism.
Read More: Viktor Shvets on Why This Time Really Is Different
Things Are Getting Pretty Weird in Markets
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lots Podcast.
I'm Jill Wisenthal.
Speaker 3 (00:23):
And I'm Tracy Alloway.
Speaker 2 (00:24):
Tracy, you know what I'm proud of.
Speaker 1 (00:26):
Oh, I don't you know.
Speaker 2 (00:28):
I look, I'm not a trader or anything like that.
I don't like try to make a lot of calls
or oh look at you.
Speaker 1 (00:34):
Know, I'm not even a pundit.
Speaker 2 (00:35):
It gets things right that big said. You know what
I thinically did well. I think we took the prospect
of a serious change in the US trading relationship with
the rest of the world is a serious possibility.
Speaker 3 (00:49):
Trump both seriously and literally.
Speaker 2 (00:51):
We definitely Yeah, I think we took it pretty literally
when he was talking on the campaign trail and in
the early days after the election, when the markets were
lying because all they were talking about was tax cuts
and the regulation. I think we were giving serious airtime
and writing time to the aspects of trump Ism that
might not be so market friendly.
Speaker 3 (01:12):
I think that's right. Also, in our newsletter just a
couple of weeks ago, we were talking about how weird
the markets actually were because we weren't seeing that much
risk priced in, right, like spreads on credits still pretty low.
FX volatility at the time was pretty low. Just lots
of weird stuff going on in the markets. And there's
someone else who noticed this.
Speaker 2 (01:33):
Well, that's right, So I'm looking at a edition of
the Odd Lots newsletter. Everyone should google Odd Lots Newsletter
and sign up for it. And we had a guest contributor.
He wrote a piece for us on November twenty seventh,
twenty twenty four, when markets were surging, and he said,
this time really is different.
Speaker 3 (01:52):
And he's a.
Speaker 2 (01:53):
Frequent odd Laws guest and he has been very in
tune with the big changes going on in the world
in major turning points. Some thrilled to have him back.
We are speaking, of course, with the one and only
Victor Schwetz, head of Global Desk Strategy at McCrory Capital,
who said, this time is different, and I think it
turned out to be different.
Speaker 4 (02:14):
Huh, yes, yes it did.
Speaker 2 (02:16):
Yes, not to be different?
Speaker 1 (02:18):
Why, okay, let's just go back. What were you thinking?
Speaker 2 (02:21):
On Wednesday, April second Liberation Day, the chart came out,
massive tariffs announced on the rest of the world. Virtually
every country, friend, foe, et cetera.
Speaker 4 (02:33):
Even small islands even small.
Speaker 2 (02:35):
Islands, depopulated islands, tariff levels that are like higher than
smooth holly or whatever. What went through your mind?
Speaker 4 (02:42):
The question I keep asking myself what is this administration
trying to do?
Speaker 1 (02:48):
So?
Speaker 4 (02:48):
In other words, what is the objective? Is objective to
raise revenue in order to partly pay for tex Scotts?
Is objective to reshape America into some form? Is it
to bring manufacturing back? Is easy to change the flow
of savings and investments on a global basis. What is
this administration trying to do? And my answer consistently is
(03:09):
they want to remake America. They want to make it
different to what it was before. But you can't remake
America unless you remad the world at the same time.
So it's a revolutionary movement rather than just a little
bit of a bypassing it through problems, navigating a few
bumps on the road, it's much much deeper. The only
(03:31):
question that I keep coming back is what is a
pain threshold and what are the sort of breaks on
the system? Because most of the breaks we've been discussing
for the last four or five months have either disappeared
or were in some form co opted by the system.
(03:51):
So there is only very few breaks left, and so
one of the breaks is really the pain threshold, at
which stage people will feel that their lives have gone
much worse than they used to be. And the other break,
of course, is everything to do with electoral cycle associated
with it. And so to me, that's the only question.
(04:12):
It's not that there is any consistent economic theory behind
what this administration is trying to do. Every time I listen,
it's very clear that they don't fully understand sexual balances.
They don't fully understand that you can't have declining deficits
and rising capital influence at the same time. So it's
(04:34):
clearly not guided by some conventional economics. It's sort of
guided by by a desire, as I said, to change America,
and different parts of administration of different views. So there
is a technocratic part, which is Ellen Musk and recent
Peter Teel. They have very different views. They're much more global,
(04:57):
they want technology to progress, they open to immigration, there's
all range of things. Then there is a populist wing,
probably Jed Events is the most obvious example of that,
which are completely opposite. Returning America back to nineteen fifties
or maybe even late nineteenth century closing the borders. Then
there's a little bit more technocratic wing saying that what
(05:18):
Bernaki and Greenspin were discussing in the past, which is
making sure that savings an investment on a global basis
actually balance us at some point in time somewhere. And
so all of those wings are in conflict. If they
are in conflict, expect irrational moves, quick shifts, but do
not expect that suddenly tariffs are going to go away,
(05:40):
suddenly restructuring of capital flows will just go away and
normality will return.
Speaker 3 (05:46):
Okay, So you mentioned capital inflows, and this to me
seems to be the big hole in the Trump administration strategy,
such as it is, and it's we want to build
a bunch of stuff in America. Ostensibly we want to
boost manufacturing. Maybe that goal sits alongside a bunch of
other goals. As you just mentioned, that's really expensive and
(06:08):
when I look at the markets right now, it's very
unclear to me where that money is actually going to
come from.
Speaker 4 (06:16):
Yeah, I agree. One of the ways you can try
to handle basically deglobalization of capital, because so far we've
been talking mostly about the globalization of goods. We have
not yet spoken about diglobalization of services. But with goods
and services comes capital. And so when we start talking
(06:36):
about diglobalization and fracturing of capital, that's where Welsh funds
come in. That's where various superinnuation and pension funds come in.
Now a lot of countries already either started that or
significantly increase the size of those funds. For example, Korea
will start much higher contribution to their pension funds. So
(06:59):
if you sing of Austria, Australia already done it, Singapoore
has done it, Norway has done it. More and more
countries are talking about creating some form of pool of
capital within those countries. But once again, is it efficient
allocation of capital? Not? Not necessarily. Is it looking after
the interest of pensioners that they're supposed to service. Not necessarily,
(07:21):
But that could be one way that you actually will
accumulate some capital of a time in order to fund it.
Speaker 2 (07:29):
I want to go back to your point about the
revolutionary element within trump Ism. Do we need to start
looking at lenin the Russian Revolution maould say tongue to
get it or China to get a better understanding of
what the sort of like Zeitgeist or impulsary.
Speaker 3 (07:46):
Can I just say, can you imagine asking that question
like a year ago?
Speaker 2 (07:51):
Yeah?
Speaker 1 (07:52):
Well I change.
Speaker 2 (07:53):
I got into my you know, I got into my
twentieth century history, have it like right at the right times?
Speaker 1 (07:58):
I read a bunch of Middle eight.
Speaker 2 (08:00):
And what I'm trying to really ask Victor is I
want him to validate my choice to take up a
twentieth century revolutionary history hobby, am I was I right
to go back and study. I'll start reading all those books.
Speaker 4 (08:14):
As you do, and you can go to nineteenth century
as well. Basically anything that resembles more or less the
modern times and the way various breaks in the system. Now,
remember US, I keep highlighting, is not a nation of
laws or rules. It's a nation of habits. It's a
nation of norms. Usually laws in the US are designed
(08:36):
very sloppily, and the idea is that we need to compromise.
Eventually is a judiciary branch will figure out where exactly
the limits are. And so founding fathers never knew whether
they want to have monarchy or whether they want to
have democracy. Like initially George Washington was supposed to be
an addressed as his majesty. It was George Washington who
(08:58):
insisted on being called mister President rather, So they were
never quite sure what to do, so they never delienated
the power. What is an executive power, what is the
state power? What is a federal power? What is legislative?
Was judicial? And so the result is US is a
nation of norms, whereas Europe is a nation of rules
or the nations of rules. And so the result is
(09:19):
in the US, it's actually relatively easy to smash those
norms if anybody wants to. That's what Andrew Jackson tried
to do. That's what Abraham Lincoln did, That's what Theodore
Roosevelt did, that's what FDR did, that's what Richard Nixon did.
And so what you're seeing is every time those changes occurred,
there is a reason why Andrew Jackson or FDR behaved
(09:42):
the way they did, and there was a reason why
they were pushing executive branch as aggressively. And so the
reason for that is some kind of a displacement within
those countries. And so you can't necessarily compare to cultural
revolution because some of the drivers were different necessarily compared
to Bolsheviks in Russia. But the essence is the same.
(10:04):
In every one of those cases, there was a dislocation,
and one of the answers during dislocation is some form
of populist approach, because the right wing usually does it
better than a left wing, because the right wing essentially
saying in many ways, cultural revolution was the right wing.
They essentially saying, blame blame the foreigners, blame the elite,
(10:26):
blame cosmopolitanism. We must go back to tradition, whereas left
tends to be dominated by more complex social and economic issues.
Speaker 3 (10:52):
So I understand the analogy with other countries and their history,
but can you talk about the parallel that you see
in US history? What time period is you know, twenty
twenty five most similar.
Speaker 4 (11:06):
To well, if you go back through a relatively short
US history, probably the times of Andrew Jackson, probably the
times of Abraham Lincoln. And I would argue that times
of Fdr. Franklin Delana Roosevelt probably will be the most
similar periods. You can add Richard Nixon, but that was
(11:28):
very different in my view. The same with Theodore Roosewold,
who also was smashing quite a few things. I sing,
it was different, but those three I sing in my view,
which is the beginning of the US with the first
populist wave in eighteen twenty s eighteen thirties, the Civil
War in the nineteen thirties was FDR.
Speaker 3 (11:46):
Why FDR though, because it seems like, you know, the
Trump administration is backing away from a lot of fiscal spending.
Speaker 4 (11:54):
Yeah. Well, the idea is not whether you're fiscally spent
or not. The idea essentially is what is executive branch
allowed and not allowed to do?
Speaker 3 (12:05):
Oh, I see it.
Speaker 4 (12:05):
And the other idea is the government penetrates more and
more of your life. So, on the one hand, Republican
Party says we're going to deregulate some of the regulations.
On the other hand, they're telling companies what their margins
should be, and what their prices should be, and what
policies they should pursue internally, whether culturally or otherwise. So
is Republican Party deregulating party? Well, the answer is no,
(12:28):
it isn't. It's actually penetrating government much deeper. And that's
very much what I've did through a variety of programs
that you tried through nineteen thirties.
Speaker 2 (12:38):
You know, I would obviously love to just sit here
and talk history and political theory with you too. But
I know also you know, in your day job, you
go around the world and you talk to people and
they ask you questions, etc. One of the things that
we've been talking about is this sort of like, you know,
the end of American exceptionalism, which has been at least
(12:59):
probably long but in some sense at least a fifteen
year story. In markets, the only game in town is
the US. Global diversification is for suckers and losers, et cetera.
Now suddenly you get these little impulses of change when
you're around the world talking to people, do you sense
that there is a real opportunity for a meaningful shift
(13:19):
in terms of allocations of discretionary investment capital.
Speaker 4 (13:23):
Yes, there is no doubt that the last three months
was a incredible shift away from American exceptionalism. The view,
essentially if you go too late last year was, yes,
there will be a lot of stuff going in the
social and cultural areas, there will be a lot of
stuff going on and other stuff in other things, But
from an economic point of view, US will continue to
(13:45):
pursue a relatively rational policy. So as soon as you're
sort of undermined that pillar, then people start asking question,
what is exceptionalism of the United States? Why US has
been growing faster than other countries over the last fifteen
to twenty years. What were the drivers? Do you are
you undermining those pillars? Are you undermining those drivers? Now?
(14:06):
Other countries are not necessarily exceptional. So if you think
of Europe, they're suffering from access capital unlike the United States,
they have slower growth rates. They're mostly mercantilists. But on
the other hand, if Europe is shifting, the growth rates
will improve, utilization of capital will improve, and they will
not be as dependent on trade as you go forward.
(14:28):
So if you think of US equities, adjusting for inflation
risk premia did go up from two and a half
to three and a half percent. But if you think
of Europe, or if you think of China, for example,
you're looking at about six to nine percent inflation adjusted
risk premia. So should that risk premia come down? In
other words, if u AS is not such so distinctly
(14:49):
different to Europe or China, why should be trading at
twenty times when Chinese trading at eleven times? And so
increasingly those questions are asked when you tell people, but
you know US might have an existential problem, but Europe
and China have a massive structural problems. You do understand
that China is an liquidity trap that they will not
(15:11):
be able to get out very easily unless there is
a paradigm shift. You understand that Europe also have a
structural problem than need to overcome. And so there is
a limitation. The way I describe it, we gradually go
into the world that no one is exceptional, and therefore
it becomes much more tradeable opportunity between the markets. Rather
(15:31):
than saying, as you correctly said, Joe, over the last
fifteen years, you never bet against the US. And by
the way, if you think of that phrase, never bet
against the US, if you said it in nineteen thirties,
it would not have resonated. If you said it in
nineteen seventies, it would not have resonated with people that
you don't bet against the United States. So we kind
of going into this period a largely, I must say,
(15:55):
for self inflicted reasons. But nevertheless, I think you're right
there will be more cross flow capital into other markets.
Speaker 3 (16:02):
So, speaking of risk premia, one of the things, just
one of the things that has happened in recent days
is we saw a spike in US treasure yields, and
I think again we're recording this on April eighth, yesterday, Monday,
April seventh, we saw the yield on the benchmark ten
year ago from like just below four percent up to
(16:23):
I think around four point two percent. And everyone's kind
of scratching their heads because normally you would see treasure
yields go down because people buy bonds as a safe haven. Right,
what's your explanation for yields going up?
Speaker 4 (16:39):
Well, to me, there are two explanations. The same applies
to you as dollar because normally you would argue that
when uncertainty is high, a risk is high, people go
into U as dollars and into US treasuries. But now
they do not. They go into other places. There is
even discussion that a European bonds or Japanese bonds might
(16:59):
be a better place to be. So there are two things.
One is US exceptionalism that we've just discussed with Joe.
The other one is potentially liquidation of positions that is
occurring because remember, an average American is probably if you
include the currency, ten fifteen percent wars off than what
they were all poorer than what they were say on
(17:20):
January first, and so there is some liquidation that is
actually occurring as well.
Speaker 3 (17:26):
So sell what you cannot, necessarily what you want, sell
what you can.
Speaker 4 (17:29):
So to me, there are two answers. One answer is
the sunsetting of US exceptionalism, and the other answer is liquidations. However,
coming back to that historical perspectives, you know, Roman Empire
survived many anomalies and many poor administrators, so to speak,
and the reason was the underlying strengths of Roman society
(17:53):
in Roman economy. And so the question is whether the
underlying strengths of the US, which it can contribute less capital,
it's growing multi factor productivity, it's got the best balance
of tangible and intangible assets, it's got a tremendous geopolitical position.
Whether those positives ultimately will reassert themselves or at the
(18:15):
very least reduce the degree of drag that otherwise would
have occurred. And to me, I'm still hopeful that that
is the answer.
Speaker 2 (18:41):
By the way, we're recording this April late right now,
it's nine to twenty am. President Trump posting to his
truth social account. I just had a great call with
the acting President of South Korea, it says that people
on the plane right now, they're clearly in the mode
now where they're like over like trying to try this
is ideal because there was another I mean, yesterday, for example,
(19:02):
there was an FT column from Peter Navarro say this
isn't about deal making. So even the question of is
this about negotiations or deal making is fluid, and there's probably,
if we're being honest, some sensitivity.
Speaker 4 (19:13):
To the market going. I mean, I mean, there are
plenty of inconsistent stuff, but the question you're raising, would
the market react positively when we get more and more
announced when the countries are negotiating. Absolutely. You have to
remember small countries have no leverage whatsoever. So whether you're
Sri Lanka, Malaysia, talent, whatever you are, you have no leverage,
(19:34):
nothing to offer. Well, well, the thing is, the thing
is that at least Korea does have some domestic market.
To ask a country like Sri Lanka to who is
poorer and relatively small, to run a balanced trade with
the United States is impossible. So the only countries that
(19:55):
are capable of a pushbag is Canada, UK, European Union, China,
in Japan. Now UK and Japan decided not to do it. Uh,
And so the question comes down to Canada, European Union
and China and extent to which they're going to play
a hard ball. But to have fifty countries or sixty
countries or whatever the number is coming in trying to negotiate,
(20:18):
that's an easy part. Now the market will react to it,
but it's just temporary. It's not saying more than that.
Speaker 2 (20:24):
By the way, Tracy Trump says he's also waiting for
a call from China, and he says China really wants
a deal. So I'm just.
Speaker 3 (20:30):
Yeah, I have this image in my head of Trump
like sitting by the phone in the Oval office, just.
Speaker 1 (20:36):
Like hearing me.
Speaker 3 (20:38):
Yeah, exactly. Okay, So is it okay to text twice?
Speaker 1 (20:42):
I texted?
Speaker 2 (20:43):
I feel man like, Oh, he doesn't ever reading, doesn't
ever read receipts on I have no idea. That's where
I keep going.
Speaker 3 (20:49):
That's right, Okay. So we mentioned in the intro that
up until recently, markets had been like pretty quiet, pretty complacent,
you might say, given what's happened over the past week
or so. Now that we've seen the big crash in stocks,
we've seen spreads on high yield investment grades start to
(21:10):
go up. It's not a blowout necessarily, but it is
up significantly. Is risks sufficiently priced it, at least for
the short term.
Speaker 4 (21:19):
Nobody knows, because it depends what the policies will be.
If the policies are not changed, then the risk is
nowhere near priced. And in fact, if the high yields,
say triple c which are now ten eleven percent spreads,
if they go up to fifteen, the world will freeze.
If the average spreads, which are now more like four
and a half, go to six, both global economy and
(21:41):
the US economy will freeze. So there are some breaks.
As I said, on the system, at the end of
the day, you can't freeze it. We saw what happened
in Pennsylvania and Wisconsin and Florida. At the end of
this year, you're going to have Virginia and New Jersey
coming up. Then you have, of course, you have a
mid terms, so that there has to be if certain taxes.
(22:02):
Senators are coming out and saying that that there's going
to be a blood buss in midterm if this continues,
is absolutely right. So there are checks and balances still
in a system. But one of the sayings to remember
that even if you, even if we pass the high
point of terrors, we might not have passed the high
(22:23):
point of other things that are going to come through.
And so the question is over the next several years,
are you going to continue seeing it? And I think
the answer the answer is yes. We didn't talk about geopolitics,
for example, an extent to which that could shift as well,
so it's not just terrorfs.
Speaker 3 (22:40):
So speaking of breaks and checks and balances you mentioned earlier,
this idea of a pain threshold for Americans. Talk to
us a little bit more about that, like where do
you sense the pain threshold actually is and what matters
most to potential voters.
Speaker 4 (22:56):
Well, I think the way I look at it, there
is a very soul part of the population which actually
bought into the idea that you must burn down the
house in order to build a bright future. And I
don't know whether it's a thirty percent of the population Ontade,
but there is a very large constituency which fully accepted that.
So when Scott Beason talks about dtalks, this is the
(23:19):
audience that accept that whatever you want to build requires
pain in between. But on the back of that community,
you can't really have political capital, because there are other
people who switched for a variety of other reasons, primarily inflation, inequalities, immigration,
and so that could constitute as march as twenty percent
(23:40):
of your audience. And to those people, I think the
pain is already there, and that is why at some
point in time, and I agree with Jamie Diamond. I
think he said something, we need to wrap it up
reasonably quickly. I think I would agree. Is it not
just because of economic concerntinty and investment uncertainty, not just
(24:02):
because forward soft data which continues to show and enormous
collapses occurring, but also because the pain is going to
spread much much wider and a hard data. We'll start
backing it up very very quickly. Some of the pain companies,
some of the collecting companies already seeing that, You're already
seeing the mortgage market that so you need to wrap
(24:23):
it up. And I think that's what the market is
looking for now. Federal Reserve, of course in a difficult
position because even if we assume average tariffs go down
from say twenty five percent to fifteen, that still implies
an inflationary spike, which could be as much as one
hundred basis points or more, so you'll start looking at
the PC probably three and a half percent or more
(24:44):
as you progress through the year. On the other hand,
economy will be slowing, So the question is with a
fat will take it as a transitory And the other
question that we keep raising is that we're seeing elimination
of independent institutions across the United States. It doesn't matter
Security in Change Commission, EPA, whatever, that is what is
actually protecting Federal Reserve? And the answer, as I said earlier,
(25:06):
US is not a nation of laws and rules. It's
an emanation of conventions and norms. So there is actually
not a great deal of protection legally that Federal Reserve has.
So the next step on this journey if in fact
Federal Reserve is caught between rising inflation and slowing gross
rates otherwise known as deflation. If they're actually caught in that,
(25:29):
the question is weather Federal Reserve will be able to
extend of independence that they have been enjoying certainly over
the last several decades.
Speaker 2 (25:37):
Yeah, we did a really great episode last week, I
think with eleven of nine and exactly this question and
how in the end, just the norms and if the
norms change. That's it, Victor Schwetz, thank you so much
for coming back on outlass.
Speaker 1 (25:49):
Always a thrill to catch up with it.
Speaker 4 (25:51):
Thank you, Thank you.
Speaker 1 (25:52):
Joe, Thanks so much, Tracy.
Speaker 2 (26:06):
I love Victor's characterization of the US as a country
of norms in Europe as.
Speaker 1 (26:12):
A country of rules, because I always.
Speaker 2 (26:15):
Think, like I've said that, joked about every time I'm
in Europe and it's like you're with a group of
people and you try to get like five, squeeze five
people into a cab, you know, like, no, it's impossible,
it's impossible, and then they eventually like, okay, you can
like squeeze one, and they love saying that. Over there.
I've been observing this all No, it's impossible.
Speaker 3 (26:33):
How often are you squeezing into.
Speaker 2 (26:34):
Cabs drinking or something or whatever, like with friends and no,
it's impossible, it's impossible. Oh can we get one more person?
Can we wait?
Speaker 1 (26:43):
And anyway, well, okay, I think at the.
Speaker 2 (26:46):
Point I just want to go on this rant about
this impulse in Europe to always say everything's against the rules.
Speaker 3 (26:51):
I mean, it's right, it's yeah, okay, all right. I
do think the norms point is really important and We've
been bringing it up on the podcast quite a lot,
Like so much of the US is based on habits,
and I guess a sense of shared values or a
sense of this is the way things have always been done,
and we're just going to be polite and keep to
(27:12):
the guardrails that exist. Well, they don't really exist, they're
not codified necessarily in the law, but we're going to
keep them because if we don't, that would be bad.
That's gone for sure. And I think this is feeding
into some of the risk premium that we're seeing around
US assets dollars in US treasuries. As Victor pointed out,
like we're kind of getting a denormalization discount on US assets.
Speaker 2 (27:37):
Yeah, it feels like it certainly does. And like again,
you know, the most simple norm is that policy Bakers
wants ducks to go up.
Speaker 1 (27:47):
Yeah, and they were.
Speaker 2 (27:50):
Now I think maybe right now the middle of this week,
we're seeing a little change because I think there is
this a little bit of whoa, Like, Okay, maybe we
left our hand on this dove a little bit too long.
You can't just have multiple days of meltdown that or
as intense as March twenty twenty or nineteen eighty seven.
So you get these headlines about deals and there was
a report about Scott Bessen, but like you know, it's
(28:13):
very it's very chaotic, but it does feel like maybe
there's some sort of sensitivity going on to what's going
on in the market. But this was a great point
of Victor's like, what are the thresholds that kick in?
The soft data has been absolutely terrible. It seems like
only a matter of time before that spills into hard data.
We'll see.
Speaker 3 (28:33):
Uh. Well, the other thing I would say is the
administration has set up many different goalposts and it kind
of switches between them. So Trump will talk about how
much stocks went up in his first term. Yeah, but
then there's also this narrative that if stocks go down,
you know, lots of people who were shut out of
the market are going to get their chance to buy.
(28:53):
The same with housing. So I don't know, they can
kind of spin it either way, like if stocks go
down a lot, that's successful for them, and if stocks
go up that's successful. It's weird. Yeah, all right, shall
we leave it there.
Speaker 2 (29:07):
Let's leave it there.
Speaker 3 (29:08):
This has been another episode of the aud Loots podcast.
I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2 (29:13):
And I'm Joe wisan Thal. You can follow me at
the Starwort. Check out Victor Schwetz is writing. Just google
Victor Schwetz Odd Lots Newsletter and you can see all
of the things he's written for us. Follow our producers
Carmen Rodriguez at Carmen armand dash Ol Bennett at Dashbot
and Kelbrooks at Kelbrooks. From our Oddlots content, go to
Bloomberg dot com slash odd Lots, where we have all
of our episodes and that daily newsletter you can subscribe to,
(29:37):
and you can chat for free twenty four to seven
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discord dot gg slash hop.
Speaker 3 (29:44):
Lots and if you enjoy add Lots, if you like
it when we connect politics with what's going on in
the markets and history, like Victor Schwetz does, then please
leave us a positive review on your favorite podcast platform.
And remember, if you are a Bloomberg subscriber, you can
listen to all of our episodes absolutely add free. All
you need to do is find the Bloomberg channel on
(30:05):
Apple Podcast and follow the instructions there. Thanks for listening,
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lots Podcast.
I'm Jill Wisenthal.
Speaker 3 (00:23):
And I'm Tracy Alloway.
Speaker 2 (00:24):
Tracy, you know what I'm proud of.
Speaker 1 (00:26):
Oh, I don't you know.
Speaker 2 (00:28):
I look, I'm not a trader or anything like that.
I don't like try to make a lot of calls
or oh look at you.
Speaker 1 (00:34):
Know, I'm not even a pundit.
Speaker 2 (00:35):
It gets things right that big said. You know what
I thinically did well. I think we took the prospect
of a serious change in the US trading relationship with
the rest of the world is a serious possibility.
Speaker 3 (00:49):
Trump both seriously and literally.
Speaker 2 (00:51):
We definitely Yeah, I think we took it pretty literally
when he was talking on the campaign trail and in
the early days after the election, when the markets were
lying because all they were talking about was tax cuts
and the regulation. I think we were giving serious airtime
and writing time to the aspects of trump Ism that
might not be so market friendly.
Speaker 3 (01:12):
I think that's right. Also, in our newsletter just a
couple of weeks ago, we were talking about how weird
the markets actually were because we weren't seeing that much
risk priced in, right, like spreads on credits still pretty low.
FX volatility at the time was pretty low. Just lots
of weird stuff going on in the markets. And there's
someone else who noticed this.
Speaker 2 (01:33):
Well, that's right, So I'm looking at a edition of
the Odd Lots newsletter. Everyone should google Odd Lots Newsletter
and sign up for it. And we had a guest contributor.
He wrote a piece for us on November twenty seventh,
twenty twenty four, when markets were surging, and he said,
this time really is different.
Speaker 3 (01:52):
And he's a.
Speaker 2 (01:53):
Frequent odd Laws guest and he has been very in
tune with the big changes going on in the world
in major turning points. Some thrilled to have him back.
We are speaking, of course, with the one and only
Victor Schwetz, head of Global Desk Strategy at McCrory Capital,
who said, this time is different, and I think it
turned out to be different.
Speaker 4 (02:14):
Huh, yes, yes it did.
Speaker 2 (02:16):
Yes, not to be different?
Speaker 1 (02:18):
Why, okay, let's just go back. What were you thinking?
Speaker 2 (02:21):
On Wednesday, April second Liberation Day, the chart came out,
massive tariffs announced on the rest of the world. Virtually
every country, friend, foe, et cetera.
Speaker 4 (02:33):
Even small islands even small.
Speaker 2 (02:35):
Islands, depopulated islands, tariff levels that are like higher than
smooth holly or whatever. What went through your mind?
Speaker 4 (02:42):
The question I keep asking myself what is this administration
trying to do?
Speaker 1 (02:48):
So?
Speaker 4 (02:48):
In other words, what is the objective? Is objective to
raise revenue in order to partly pay for tex Scotts?
Is objective to reshape America into some form? Is it
to bring manufacturing back? Is easy to change the flow
of savings and investments on a global basis. What is
this administration trying to do? And my answer consistently is
(03:09):
they want to remake America. They want to make it
different to what it was before. But you can't remake
America unless you remad the world at the same time.
So it's a revolutionary movement rather than just a little
bit of a bypassing it through problems, navigating a few
bumps on the road, it's much much deeper. The only
(03:31):
question that I keep coming back is what is a
pain threshold and what are the sort of breaks on
the system? Because most of the breaks we've been discussing
for the last four or five months have either disappeared
or were in some form co opted by the system.
(03:51):
So there is only very few breaks left, and so
one of the breaks is really the pain threshold, at
which stage people will feel that their lives have gone
much worse than they used to be. And the other break,
of course, is everything to do with electoral cycle associated
with it. And so to me, that's the only question.
(04:12):
It's not that there is any consistent economic theory behind
what this administration is trying to do. Every time I listen,
it's very clear that they don't fully understand sexual balances.
They don't fully understand that you can't have declining deficits
and rising capital influence at the same time. So it's
(04:34):
clearly not guided by some conventional economics. It's sort of
guided by by a desire, as I said, to change America,
and different parts of administration of different views. So there
is a technocratic part, which is Ellen Musk and recent
Peter Teel. They have very different views. They're much more global,
(04:57):
they want technology to progress, they open to immigration, there's
all range of things. Then there is a populist wing,
probably Jed Events is the most obvious example of that,
which are completely opposite. Returning America back to nineteen fifties
or maybe even late nineteenth century closing the borders. Then
there's a little bit more technocratic wing saying that what
(05:18):
Bernaki and Greenspin were discussing in the past, which is
making sure that savings an investment on a global basis
actually balance us at some point in time somewhere. And
so all of those wings are in conflict. If they
are in conflict, expect irrational moves, quick shifts, but do
not expect that suddenly tariffs are going to go away,
(05:40):
suddenly restructuring of capital flows will just go away and
normality will return.
Speaker 3 (05:46):
Okay, So you mentioned capital inflows, and this to me
seems to be the big hole in the Trump administration strategy,
such as it is, and it's we want to build
a bunch of stuff in America. Ostensibly we want to
boost manufacturing. Maybe that goal sits alongside a bunch of
other goals. As you just mentioned, that's really expensive and
(06:08):
when I look at the markets right now, it's very
unclear to me where that money is actually going to
come from.
Speaker 4 (06:16):
Yeah, I agree. One of the ways you can try
to handle basically deglobalization of capital, because so far we've
been talking mostly about the globalization of goods. We have
not yet spoken about diglobalization of services. But with goods
and services comes capital. And so when we start talking
(06:36):
about diglobalization and fracturing of capital, that's where Welsh funds
come in. That's where various superinnuation and pension funds come in.
Now a lot of countries already either started that or
significantly increase the size of those funds. For example, Korea
will start much higher contribution to their pension funds. So
(06:59):
if you sing of Austria, Australia already done it, Singapoore
has done it, Norway has done it. More and more
countries are talking about creating some form of pool of
capital within those countries. But once again, is it efficient
allocation of capital? Not? Not necessarily. Is it looking after
the interest of pensioners that they're supposed to service. Not necessarily,
(07:21):
But that could be one way that you actually will
accumulate some capital of a time in order to fund it.
Speaker 2 (07:29):
I want to go back to your point about the
revolutionary element within trump Ism. Do we need to start
looking at lenin the Russian Revolution maould say tongue to
get it or China to get a better understanding of
what the sort of like Zeitgeist or impulsary.
Speaker 3 (07:46):
Can I just say, can you imagine asking that question
like a year ago?
Speaker 2 (07:51):
Yeah?
Speaker 1 (07:52):
Well I change.
Speaker 2 (07:53):
I got into my you know, I got into my
twentieth century history, have it like right at the right times?
Speaker 1 (07:58):
I read a bunch of Middle eight.
Speaker 2 (08:00):
And what I'm trying to really ask Victor is I
want him to validate my choice to take up a
twentieth century revolutionary history hobby, am I was I right
to go back and study. I'll start reading all those books.
Speaker 4 (08:14):
As you do, and you can go to nineteenth century
as well. Basically anything that resembles more or less the
modern times and the way various breaks in the system. Now,
remember US, I keep highlighting, is not a nation of
laws or rules. It's a nation of habits. It's a
nation of norms. Usually laws in the US are designed
(08:36):
very sloppily, and the idea is that we need to compromise.
Eventually is a judiciary branch will figure out where exactly
the limits are. And so founding fathers never knew whether
they want to have monarchy or whether they want to
have democracy. Like initially George Washington was supposed to be
an addressed as his majesty. It was George Washington who
(08:58):
insisted on being called mister President rather, So they were
never quite sure what to do, so they never delienated
the power. What is an executive power, what is the
state power? What is a federal power? What is legislative?
Was judicial? And so the result is US is a
nation of norms, whereas Europe is a nation of rules
or the nations of rules. And so the result is
(09:19):
in the US, it's actually relatively easy to smash those
norms if anybody wants to. That's what Andrew Jackson tried
to do. That's what Abraham Lincoln did, That's what Theodore
Roosevelt did, that's what FDR did, that's what Richard Nixon did.
And so what you're seeing is every time those changes occurred,
there is a reason why Andrew Jackson or FDR behaved
(09:42):
the way they did, and there was a reason why
they were pushing executive branch as aggressively. And so the
reason for that is some kind of a displacement within
those countries. And so you can't necessarily compare to cultural
revolution because some of the drivers were different necessarily compared
to Bolsheviks in Russia. But the essence is the same.
(10:04):
In every one of those cases, there was a dislocation,
and one of the answers during dislocation is some form
of populist approach, because the right wing usually does it
better than a left wing, because the right wing essentially
saying in many ways, cultural revolution was the right wing.
They essentially saying, blame blame the foreigners, blame the elite,
(10:26):
blame cosmopolitanism. We must go back to tradition, whereas left
tends to be dominated by more complex social and economic issues.
Speaker 3 (10:52):
So I understand the analogy with other countries and their history,
but can you talk about the parallel that you see
in US history? What time period is you know, twenty
twenty five most similar.
Speaker 4 (11:06):
To well, if you go back through a relatively short
US history, probably the times of Andrew Jackson, probably the
times of Abraham Lincoln. And I would argue that times
of Fdr. Franklin Delana Roosevelt probably will be the most
similar periods. You can add Richard Nixon, but that was
(11:28):
very different in my view. The same with Theodore Roosewold,
who also was smashing quite a few things. I sing,
it was different, but those three I sing in my view,
which is the beginning of the US with the first
populist wave in eighteen twenty s eighteen thirties, the Civil
War in the nineteen thirties was FDR.
Speaker 3 (11:46):
Why FDR though, because it seems like, you know, the
Trump administration is backing away from a lot of fiscal spending.
Speaker 4 (11:54):
Yeah. Well, the idea is not whether you're fiscally spent
or not. The idea essentially is what is executive branch
allowed and not allowed to do?
Speaker 3 (12:05):
Oh, I see it.
Speaker 4 (12:05):
And the other idea is the government penetrates more and
more of your life. So, on the one hand, Republican
Party says we're going to deregulate some of the regulations.
On the other hand, they're telling companies what their margins
should be, and what their prices should be, and what
policies they should pursue internally, whether culturally or otherwise. So
is Republican Party deregulating party? Well, the answer is no,
(12:28):
it isn't. It's actually penetrating government much deeper. And that's
very much what I've did through a variety of programs
that you tried through nineteen thirties.
Speaker 2 (12:38):
You know, I would obviously love to just sit here
and talk history and political theory with you too. But
I know also you know, in your day job, you
go around the world and you talk to people and
they ask you questions, etc. One of the things that
we've been talking about is this sort of like, you know,
the end of American exceptionalism, which has been at least
(12:59):
probably long but in some sense at least a fifteen
year story. In markets, the only game in town is
the US. Global diversification is for suckers and losers, et cetera.
Now suddenly you get these little impulses of change when
you're around the world talking to people, do you sense
that there is a real opportunity for a meaningful shift
(13:19):
in terms of allocations of discretionary investment capital.
Speaker 4 (13:23):
Yes, there is no doubt that the last three months
was a incredible shift away from American exceptionalism. The view,
essentially if you go too late last year was, yes,
there will be a lot of stuff going in the
social and cultural areas, there will be a lot of
stuff going on and other stuff in other things, But
from an economic point of view, US will continue to
(13:45):
pursue a relatively rational policy. So as soon as you're
sort of undermined that pillar, then people start asking question,
what is exceptionalism of the United States? Why US has
been growing faster than other countries over the last fifteen
to twenty years. What were the drivers? Do you are
you undermining those pillars? Are you undermining those drivers? Now?
(14:06):
Other countries are not necessarily exceptional. So if you think
of Europe, they're suffering from access capital unlike the United States,
they have slower growth rates. They're mostly mercantilists. But on
the other hand, if Europe is shifting, the growth rates
will improve, utilization of capital will improve, and they will
not be as dependent on trade as you go forward.
(14:28):
So if you think of US equities, adjusting for inflation
risk premia did go up from two and a half
to three and a half percent. But if you think
of Europe, or if you think of China, for example,
you're looking at about six to nine percent inflation adjusted
risk premia. So should that risk premia come down? In
other words, if u AS is not such so distinctly
(14:49):
different to Europe or China, why should be trading at
twenty times when Chinese trading at eleven times? And so
increasingly those questions are asked when you tell people, but
you know US might have an existential problem, but Europe
and China have a massive structural problems. You do understand
that China is an liquidity trap that they will not
(15:11):
be able to get out very easily unless there is
a paradigm shift. You understand that Europe also have a
structural problem than need to overcome. And so there is
a limitation. The way I describe it, we gradually go
into the world that no one is exceptional, and therefore
it becomes much more tradeable opportunity between the markets. Rather
(15:31):
than saying, as you correctly said, Joe, over the last
fifteen years, you never bet against the US. And by
the way, if you think of that phrase, never bet
against the US, if you said it in nineteen thirties,
it would not have resonated. If you said it in
nineteen seventies, it would not have resonated with people that
you don't bet against the United States. So we kind
of going into this period a largely, I must say,
(15:55):
for self inflicted reasons. But nevertheless, I think you're right
there will be more cross flow capital into other markets.
Speaker 3 (16:02):
So, speaking of risk premia, one of the things, just
one of the things that has happened in recent days
is we saw a spike in US treasure yields, and
I think again we're recording this on April eighth, yesterday, Monday,
April seventh, we saw the yield on the benchmark ten
year ago from like just below four percent up to
(16:23):
I think around four point two percent. And everyone's kind
of scratching their heads because normally you would see treasure
yields go down because people buy bonds as a safe haven. Right,
what's your explanation for yields going up?
Speaker 4 (16:39):
Well, to me, there are two explanations. The same applies
to you as dollar because normally you would argue that
when uncertainty is high, a risk is high, people go
into U as dollars and into US treasuries. But now
they do not. They go into other places. There is
even discussion that a European bonds or Japanese bonds might
(16:59):
be a better place to be. So there are two things.
One is US exceptionalism that we've just discussed with Joe.
The other one is potentially liquidation of positions that is
occurring because remember, an average American is probably if you
include the currency, ten fifteen percent wars off than what
they were all poorer than what they were say on
(17:20):
January first, and so there is some liquidation that is
actually occurring as well.
Speaker 3 (17:26):
So sell what you cannot, necessarily what you want, sell
what you can.
Speaker 4 (17:29):
So to me, there are two answers. One answer is
the sunsetting of US exceptionalism, and the other answer is liquidations. However,
coming back to that historical perspectives, you know, Roman Empire
survived many anomalies and many poor administrators, so to speak,
and the reason was the underlying strengths of Roman society
(17:53):
in Roman economy. And so the question is whether the
underlying strengths of the US, which it can contribute less capital,
it's growing multi factor productivity, it's got the best balance
of tangible and intangible assets, it's got a tremendous geopolitical position.
Whether those positives ultimately will reassert themselves or at the
(18:15):
very least reduce the degree of drag that otherwise would
have occurred. And to me, I'm still hopeful that that
is the answer.
Speaker 2 (18:41):
By the way, we're recording this April late right now,
it's nine to twenty am. President Trump posting to his
truth social account. I just had a great call with
the acting President of South Korea, it says that people
on the plane right now, they're clearly in the mode
now where they're like over like trying to try this
is ideal because there was another I mean, yesterday, for example,
(19:02):
there was an FT column from Peter Navarro say this
isn't about deal making. So even the question of is
this about negotiations or deal making is fluid, and there's probably,
if we're being honest, some sensitivity.
Speaker 4 (19:13):
To the market going. I mean, I mean, there are
plenty of inconsistent stuff, but the question you're raising, would
the market react positively when we get more and more
announced when the countries are negotiating. Absolutely. You have to
remember small countries have no leverage whatsoever. So whether you're
Sri Lanka, Malaysia, talent, whatever you are, you have no leverage,
(19:34):
nothing to offer. Well, well, the thing is, the thing
is that at least Korea does have some domestic market.
To ask a country like Sri Lanka to who is
poorer and relatively small, to run a balanced trade with
the United States is impossible. So the only countries that
(19:55):
are capable of a pushbag is Canada, UK, European Union, China,
in Japan. Now UK and Japan decided not to do it. Uh,
And so the question comes down to Canada, European Union
and China and extent to which they're going to play
a hard ball. But to have fifty countries or sixty
countries or whatever the number is coming in trying to negotiate,
(20:18):
that's an easy part. Now the market will react to it,
but it's just temporary. It's not saying more than that.
Speaker 2 (20:24):
By the way, Tracy Trump says he's also waiting for
a call from China, and he says China really wants
a deal. So I'm just.
Speaker 3 (20:30):
Yeah, I have this image in my head of Trump
like sitting by the phone in the Oval office, just.
Speaker 1 (20:36):
Like hearing me.
Speaker 3 (20:38):
Yeah, exactly. Okay, So is it okay to text twice?
Speaker 1 (20:42):
I texted?
Speaker 2 (20:43):
I feel man like, Oh, he doesn't ever reading, doesn't
ever read receipts on I have no idea. That's where
I keep going.
Speaker 3 (20:49):
That's right, Okay. So we mentioned in the intro that
up until recently, markets had been like pretty quiet, pretty complacent,
you might say, given what's happened over the past week
or so. Now that we've seen the big crash in stocks,
we've seen spreads on high yield investment grades start to
(21:10):
go up. It's not a blowout necessarily, but it is
up significantly. Is risks sufficiently priced it, at least for
the short term.
Speaker 4 (21:19):
Nobody knows, because it depends what the policies will be.
If the policies are not changed, then the risk is
nowhere near priced. And in fact, if the high yields,
say triple c which are now ten eleven percent spreads,
if they go up to fifteen, the world will freeze.
If the average spreads, which are now more like four
and a half, go to six, both global economy and
(21:41):
the US economy will freeze. So there are some breaks.
As I said, on the system, at the end of
the day, you can't freeze it. We saw what happened
in Pennsylvania and Wisconsin and Florida. At the end of
this year, you're going to have Virginia and New Jersey
coming up. Then you have, of course, you have a
mid terms, so that there has to be if certain taxes.
(22:02):
Senators are coming out and saying that that there's going
to be a blood buss in midterm if this continues,
is absolutely right. So there are checks and balances still
in a system. But one of the sayings to remember
that even if you, even if we pass the high
point of terrors, we might not have passed the high
(22:23):
point of other things that are going to come through.
And so the question is over the next several years,
are you going to continue seeing it? And I think
the answer the answer is yes. We didn't talk about geopolitics,
for example, an extent to which that could shift as well,
so it's not just terrorfs.
Speaker 3 (22:40):
So speaking of breaks and checks and balances you mentioned earlier,
this idea of a pain threshold for Americans. Talk to
us a little bit more about that, like where do
you sense the pain threshold actually is and what matters
most to potential voters.
Speaker 4 (22:56):
Well, I think the way I look at it, there
is a very soul part of the population which actually
bought into the idea that you must burn down the
house in order to build a bright future. And I
don't know whether it's a thirty percent of the population Ontade,
but there is a very large constituency which fully accepted that.
So when Scott Beason talks about dtalks, this is the
(23:19):
audience that accept that whatever you want to build requires
pain in between. But on the back of that community,
you can't really have political capital, because there are other
people who switched for a variety of other reasons, primarily inflation, inequalities, immigration,
and so that could constitute as march as twenty percent
(23:40):
of your audience. And to those people, I think the
pain is already there, and that is why at some
point in time, and I agree with Jamie Diamond. I
think he said something, we need to wrap it up
reasonably quickly. I think I would agree. Is it not
just because of economic concerntinty and investment uncertainty, not just
(24:02):
because forward soft data which continues to show and enormous
collapses occurring, but also because the pain is going to
spread much much wider and a hard data. We'll start
backing it up very very quickly. Some of the pain companies,
some of the collecting companies already seeing that, You're already
seeing the mortgage market that so you need to wrap
(24:23):
it up. And I think that's what the market is
looking for now. Federal Reserve, of course in a difficult
position because even if we assume average tariffs go down
from say twenty five percent to fifteen, that still implies
an inflationary spike, which could be as much as one
hundred basis points or more, so you'll start looking at
the PC probably three and a half percent or more
(24:44):
as you progress through the year. On the other hand,
economy will be slowing, So the question is with a
fat will take it as a transitory And the other
question that we keep raising is that we're seeing elimination
of independent institutions across the United States. It doesn't matter
Security in Change Commission, EPA, whatever, that is what is
actually protecting Federal Reserve? And the answer, as I said earlier,
(25:06):
US is not a nation of laws and rules. It's
an emanation of conventions and norms. So there is actually
not a great deal of protection legally that Federal Reserve has.
So the next step on this journey if in fact
Federal Reserve is caught between rising inflation and slowing gross
rates otherwise known as deflation. If they're actually caught in that,
(25:29):
the question is weather Federal Reserve will be able to
extend of independence that they have been enjoying certainly over
the last several decades.
Speaker 2 (25:37):
Yeah, we did a really great episode last week, I
think with eleven of nine and exactly this question and
how in the end, just the norms and if the
norms change. That's it, Victor Schwetz, thank you so much
for coming back on outlass.
Speaker 1 (25:49):
Always a thrill to catch up with it.
Speaker 4 (25:51):
Thank you, Thank you.
Speaker 1 (25:52):
Joe, Thanks so much, Tracy.
Speaker 2 (26:06):
I love Victor's characterization of the US as a country
of norms in Europe as.
Speaker 1 (26:12):
A country of rules, because I always.
Speaker 2 (26:15):
Think, like I've said that, joked about every time I'm
in Europe and it's like you're with a group of
people and you try to get like five, squeeze five
people into a cab, you know, like, no, it's impossible,
it's impossible, and then they eventually like, okay, you can
like squeeze one, and they love saying that. Over there.
I've been observing this all No, it's impossible.
Speaker 3 (26:33):
How often are you squeezing into.
Speaker 2 (26:34):
Cabs drinking or something or whatever, like with friends and no,
it's impossible, it's impossible. Oh can we get one more person?
Can we wait?
Speaker 1 (26:43):
And anyway, well, okay, I think at the.
Speaker 2 (26:46):
Point I just want to go on this rant about
this impulse in Europe to always say everything's against the rules.
Speaker 3 (26:51):
I mean, it's right, it's yeah, okay, all right. I
do think the norms point is really important and We've
been bringing it up on the podcast quite a lot,
Like so much of the US is based on habits,
and I guess a sense of shared values or a
sense of this is the way things have always been done,
and we're just going to be polite and keep to
(27:12):
the guardrails that exist. Well, they don't really exist, they're
not codified necessarily in the law, but we're going to
keep them because if we don't, that would be bad.
That's gone for sure. And I think this is feeding
into some of the risk premium that we're seeing around
US assets dollars in US treasuries. As Victor pointed out,
like we're kind of getting a denormalization discount on US assets.
Speaker 2 (27:37):
Yeah, it feels like it certainly does. And like again,
you know, the most simple norm is that policy Bakers
wants ducks to go up.
Speaker 1 (27:47):
Yeah, and they were.
Speaker 2 (27:50):
Now I think maybe right now the middle of this week,
we're seeing a little change because I think there is
this a little bit of whoa, Like, Okay, maybe we
left our hand on this dove a little bit too long.
You can't just have multiple days of meltdown that or
as intense as March twenty twenty or nineteen eighty seven.
So you get these headlines about deals and there was
a report about Scott Bessen, but like you know, it's
(28:13):
very it's very chaotic, but it does feel like maybe
there's some sort of sensitivity going on to what's going
on in the market. But this was a great point
of Victor's like, what are the thresholds that kick in?
The soft data has been absolutely terrible. It seems like
only a matter of time before that spills into hard data.
We'll see.
Speaker 3 (28:33):
Uh. Well, the other thing I would say is the
administration has set up many different goalposts and it kind
of switches between them. So Trump will talk about how
much stocks went up in his first term. Yeah, but
then there's also this narrative that if stocks go down,
you know, lots of people who were shut out of
the market are going to get their chance to buy.
(28:53):
The same with housing. So I don't know, they can
kind of spin it either way, like if stocks go
down a lot, that's successful for them, and if stocks
go up that's successful. It's weird. Yeah, all right, shall
we leave it there.
Speaker 2 (29:07):
Let's leave it there.
Speaker 3 (29:08):
This has been another episode of the aud Loots podcast.
I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2 (29:13):
And I'm Joe wisan Thal. You can follow me at
the Starwort. Check out Victor Schwetz is writing. Just google
Victor Schwetz Odd Lots Newsletter and you can see all
of the things he's written for us. Follow our producers
Carmen Rodriguez at Carmen armand dash Ol Bennett at Dashbot
and Kelbrooks at Kelbrooks. From our Oddlots content, go to
Bloomberg dot com slash odd Lots, where we have all
of our episodes and that daily newsletter you can subscribe to,
(29:37):
and you can chat for free twenty four to seven
in our discord with fellow listeners. Go check it out
discord dot gg slash hop.
Speaker 3 (29:44):
Lots and if you enjoy add Lots, if you like
it when we connect politics with what's going on in
the markets and history, like Victor Schwetz does, then please
leave us a positive review on your favorite podcast platform.
And remember, if you are a Bloomberg subscriber, you can
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you need to do is find the Bloomberg channel on
(30:05):
Apple Podcast and follow the instructions there. Thanks for listening,
Hosts And Creators
Joe Weisenthal
Tracy Alloway
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