Tariffs-The Best Way Out is Through!

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
The best way out is through, say poem A Servant
to Servants by Robert Frost. I don't know how I
remember some of this stuff from like ninth grade English class,
but I do. The best way out is through, and
that's quite frankly, that's it. There's no shortcuts. I don't

(00:37):
have any answers in regards to what's going to happen next.
You can't go back in time. I have never never
seen anything along with my career. And again we talk
about things that have popped out of nowhere in Black Swans,
we talk about them a lot. With Tallim. This most

(00:58):
certainly wasn't on my dance card for a guy that
was doing everything everything I mean spun on. We're gonna
get gonna be pro business, we're gonna get rid of regulations,
we are going to cut government spending right on down

(01:19):
the list. To do something like this again, I really
can't get my arms around it. Okay, so we're gonna
we're gonna plot our way through and asked me, okay
you said that, Chris easier said than done. Okay, the
best way out is through. There's nothing, okay, nothing fundamentally wrong.

(01:39):
There's no fundamental problems with companies. Nothing. I mean, some
people are talking about, well, you know, if there's a recession,
you're gonna have you know, fifteen percent hit to corporate
profits that was baked in a while ago, that was
baked in by what twelve o'clock yesterday. As far as

(02:02):
stocks are concerned, every calamity that I faced in our
career here, whether it be the dot com collapse, and
discuss that dot com collapse and issues at that point
in time, why well, again, these companies quite frankly, they
didn't have great business models and they were destined to fall,

(02:26):
and they were propped up, and you know eventually again
earnings matter. We talk about it all the time. They
came back down to earth. You want to fast forward,
you want to do great recession. You want to talk about,
you know, letting people borrow money that shouldn't, packaging all
sorts of bad mortgages, putting triple A rated nonsense on it,

(02:46):
selling them all over the world. I'm not going to
break down the entire Great Recession, because we've covered it.
Something fundamentally wrong Asian financial crist long term capital management,
European debt crisis COVID. I have never this is the

(03:09):
first time I've ever seen again again, I try to
be a fairly decent student of history. Do you ever
ever see it President of the United States willingly tank
the stock market? Never? Never, And the thing is quite frankly,

(03:33):
it's not going. It can't last. And I'm going to
tell you why. And this is why I'm saying, you
know what, the best way out is through first and foremost.
These tariffs, for all intents and purposes, are illegal. Are illegal.
They're going to get thrown out in court. The President

(03:54):
of the United States is allowed to put reciprocal tariffs
on other countries. These are not reciprocal tariffs. That's not
what they did. These are not reciprocal tariffs. That formula
that they put out that had, you know, the few
Greek letters in it, As it turns out, those Greek
letters are just fugacies. They just canceled each other out
in the mathematical formula it was ridiculous. And the funny

(04:18):
thing is it's like they threw it into Ai. They
took every country around the world, threw it into Ai
and applied applied their little tariff model. I mean, you
got countries there that are tiny little islands. For crying
out loud, it wasn't thought out, it wasn't intelligent. It
was a rush job. And don't let anybody else tell

(04:38):
you otherwise. So again you've got that. Will Republicans start
to push back on this absolutely already, Ron Johnson, Ted Cruz,
Ran Paul. They will see the writing on the wall,
the people that Trump is throwing out there. You don't

(05:00):
really see much of bescent that much. But Lutnick. Lutnik
is an economic ignoramus. He was on a program yesterday
and he was making a comparison between Poland, spring Water
and Fiji and he said, oh, you know, you know,
foreign stuff is going to become more expensive, but no,

(05:22):
the American stuff, the prices aren't going to go up.
I mean, are you really that stupid? Are you really
that dumb? What you don't think domestic companies are going
to raise prices if they can, of course, sir, And
one of the most ridiculous things I've ever heard is

(05:43):
Commerce Secretary not to mention the fact I'm throwing this
out here. I don't trust that guy as far as
I can throw them. He was the former head of
Cantor Fitzgerald. His kids run it. Now. I want somebody
looking into how they have positioned themselves in regards to
this whole terrif for and how they're trading it. I
don't trust them as far as I can throw them.

(06:04):
But put that away. Let's take a look at what
we're dealing with right now. IPOs have been shelved. IPOs
have been shelved. If you think companies are going to
be making any sort of investment here in the United States,
you're crazy. No way, no how. They're going to hold
off some of the arguments that are being made by people.

(06:29):
They again, people love using that term trade deficit. Take
advantage of it, a trade deficit. I'm going to explain
this to you again. I have I have lots of
trade deficits. Watchdog on Wall Street Show, marcoal schemes. I
got a lot of trade deficits. I you know, I
pay my landscaper, I pay my pool guy, I pay

(06:53):
my dry cleaner. I pay, you know, various different people
to do things. They don't buy anything of me. Well,
some some we manage their money, but for the most part,
you know, they're not buying anything for me. So I
have a trade deficit with them. But I'm more than

(07:14):
happy to have a trade deficit with them because it
frees up my time. It's not to make any sense
whatsoever for me to be spending the time to vacuum
my pool, are, mow my lawn or whatever it may be.
Makes no sense whatsoever because I can spend my time
doing my job. That's trade deficit. Is that bad? You

(07:41):
explain to me how that's bad. Now, Again, I understand
if you have a marketplace where the consumers there are
purchasing or able to purchase the same type of products
that we're able to purchase, and we want to be
able to compete in that market that if there's barriers

(08:02):
put up, that would be a reciprocal tariffle not what
Trump put through, not by any stretch of the imagination.
What I do find interesting, what I'm finding interesting right
now is the fact that despite the selloff, and you've
got to understand this, because I watched these things this
is These are computers. This is Skynet has taken over

(08:23):
and driving the markets down right now, that's how it works.
This is computerized trading at its best. Money is actually
pouring in from retail investors. Retail investors are saying, ah,
you know what, eventually, we're the best way out is
through which I'm thrilled to see. I'm thrilled to see.

(08:47):
I just quite frankly, I don't know where the President
of the United States gets off, gets off thinking that
he has the right to crash the stock market and
whack people's portfolios. It has to be one of, single
hand the most narcissistic thing I've ever seen a president

(09:11):
do in my entire life. That's okay, he's playing golf
this weekend. And stop. You get the various different people
out there, okay that think that all of a sudden,
plants are going to come back here to the United States.
We're going to start making cheap T shirts here in
the United States. That's not going to happen. It's not

(09:35):
going to happen if it costs fifteen dollars to make
a T shirt here in the United States and it
costs three dollars to make it in Vietnam fifty percent
tariff or whatever, or China, whatever it may be. Okay,
that three dollars t shirt is now four fifty the

(09:56):
consumer has to pay more. Again, we can't peed against
that pricing here in the United States. It's not going
to happen. Yeah, one of the things. Unfortunately, get a
lot of these people out there, and this is the
beauty of being able to travel throughout your life and
to see different places and how they live and how
things operate. We don't you know, I talked about how

(10:19):
we don't have tradesmen anymore yet. I here, move to Tampa,
I try to find, you know, a cobbler, you know,
to I fix my shoes, you know, the shoes. I
get nice shoes because again I like quality. But after time, well,
you know what the soul needs to be worked on

(10:41):
other places around the globe. Man, that's a part of
what they have. You go to Italy, you know, you're
walking down the streets there, you can going into places
and you want a briefcase. They're making it there right
in front of you. It's different. I don't see that
happening here in the United States. And the absolutely moronic

(11:04):
are they keep saying this. Ah, you know, they moved.
They moved these plants to Mexico and they shut this down.
A Whirlpool plant got shut down. They moved that. They
keep parading that UAW worker on Fox. Oh he's got
all this Trump gear out there and ease ours. You know,
there's all Trump's gonna bring lock all this these auto

(11:25):
workers here to the United States. Bullshit. Okay. Some of
the reasons why companies decide to move elsewhere, and again,
it's not just cheaper labor. It's also because the cost
of making things. The cost of making things is more
expensive here in the United States do to regulations. We

(11:48):
talked about this before. I said, if Whirlpool were to
open up a washer and drier factory here in the
United States, making washer and dryers the way that they
made them back in the nineteen sixties, in the nineteen seventies,
they sell like hotcakes. But you can't do that because
the people wash you say, oh, you can't have too

(12:09):
much water, and it's got to be an energy saveror
this way, and they do all of these frickin' things
that make it impossible. We used to make high quality
goods like that well, you're going to compare the crap
you buy today the stuff we used to have. I
grew up in a house that three brothers. My mom
used to throw all of our equipment in those things.
Ba boom ba bom ba boom. They never died. Refrigerators, right,

(12:31):
never died. That all changed. Wash your drive just this's
the same thing. I explained this before you think they're
going to start making toasters name of high quality. I'm
trying to think of one actually high quality American appliance maker.

(12:55):
I really none come to the top of my head.
You got a lot of European companies that do that.
And like I said, if you want to go get
yourself a three hundred dollars toaster, you can get one
Maye in Italy made in Switzerland. We don't do that
stuff here. We don't and there's no tariff that's going

(13:16):
to make that happen. They're made already. Unless you know,
somebody decides to open up a business and make a
higher quality toaster that is able to sell here market.
I mean, it could happen, but probably not. But it
also allows for people to go out and buy appliances
at a lower price point. Okay, you go to home

(13:37):
depot and get yourself a toaster, you know, twenty five
thirty bucks rather than spending three hundred bucks. You'll keep
constantly throwing that word around globalization. Not it's globalization, it's
killing everything. Okay, it has brought prices down for a
myriad of things. The way that you bring busy this

(14:00):
is back here to the United States. You do it
the old fashion way. You make our country more attractive
than doing business elsewhere. We had been doing that. And
again I'll take you back in time to the Obama
administration when we had the highest corporate tax rate in
the world. What happened corporations. Corporations would up and leave,

(14:26):
and Ireland was a big one. Dublin conduct a tax
inversion where they would be acquired by a smaller company
in Ireland so they could get around paying At the time,
what was it thirty something. I forget that the corporate
tax rate was at that point in time, and it
was fifteen percent in Ireland. It's done. Remember Biden calling

(14:46):
them unpatriotic companies. You get rid of ridiculous regulations, you
make it easy to do business, You keep energy costs down.
Companies will we'll make stuff here. They will Again, you
watched them the other day. Well, you know they're just assembling.

(15:07):
They're just assembling those BMW's here in the United States.
So what. So they're assembling them here in the United States.
So what that they're making the engines in Bavaria and
shipping over So what they might have the people that
are capable of do it. Have you ever been to
a high end auto manufacturing plant. You see the type

(15:30):
of work that goes. I mean it's different, different products
for different people, whatever it may be. We talked about
this when it came to cars. When the government the
cafe stands, the government forces companies to make cars that
they can't make money on, which they do. Okay, they say, okay,

(15:54):
you've got to have a certain CAFE standard for your
entire fleet. So you have to make this little tiny
car that nobody wants to buy to uh, bring your
CAFE standards to a certain level. You're taking a loss
on a major loss if you're making it here in
the United States, because people really are buying it. So
you make it in Mexico, you offshore due to regulations

(16:17):
and due to rules. That's that's how the government gets
involved with all of this, and it's it's a disaster.
It's a disaster. Again. The best way out is true.
We'll get back to that. The best way out is through. Okay, Chris,

(16:38):
you know markets keep selling off. How long can this
last until it doesn't? Okay? What is that saying that
the beatings won't stop until morale improves. That's true, that's true.
Will it improve? Yeah, yeah, whether it's this weekend, whether

(17:03):
it's next week, whether it's next month, whether it's you know,
five six months from now, it's you know, it will
work its way through. The Trump Trump is also he
is going to be limited here because he's going to
get pushback. Okay. I got to hand it to the

(17:24):
Democrats basically, even keeping their mouth shut in regards to
this little chirping here and there from Chuck Schumer and whatnot,
they're applying the strategy, you know, when somebody is basically
wrecking themselves, let them go ahead, get out of the way,

(17:45):
Get out of the way. And that's that's what Trump
is doing. You're gonna you'll start seeing poles, You'll start
seeing poll up. If the election was held today, who
would you vote for based upon this and you'll see
people move away. Oh you think that maga base is
Is that tough? No? Listen, my son, my son invests.

(18:05):
I get a phone call from him today, Dad, I'm
thinking about taking five thousand dollars out of my saving
and putting it more. And I'm like fine, But he
and his buddies they all do this, and they're pissed off.
They're pissed off. It's again when you see these jerks
on TV. Allright, Wall Street been doing this? Wall Street?

(18:26):
What will define? What do you mean by Wall Street?
Wall Street? Okay, a street in downtown New York where
most nobody works. There's a New York Stock Exchange there
on a corner Wall and Broad. It's not even a
stock exchange. It's a sound stage. Wall Street. Wall Street
built this country, built this country, allowing companies to be financed,

(18:49):
companies to grow, brought wealth into this country. The amount
of people that are involved in the markets, whether it
be through their four to one case, they're I raised pensions.
You imagine the pension hits that are coming through right now.
It can only last for so long. The best bet,

(19:13):
best bet, And again I don't know, I don't know,
because again you know Trump's Trump, and there's no doubt
about it. He again, he's never anyone who's never admitted
he was wrong on anything, is an egomaniac. We all
know this. Again, people love him. He's gonna he's gonna
have to call an audible on this one. You know,

(19:35):
he's he's a quarterback of the economy, which is just ridiculous.
You're gonna have to You're gonna have to change directions
here because you're gonna lose. You're gonna lose people. No
one's gonna trust you anymore. No one's gonna. Yeah, you'll
have those those true believers out there. You'll have the

(19:57):
you know, like the kool Aid drinkers out there, You'll
have them. I trust him. This was nonsensical, the whole
the whole thing, the whole thing is one big steaming
pile of bull excremit. Quite frankly, these are not reciprocal terrorsts, again,
making them unconstitutional. Lawsuit can get rid of them, which

(20:17):
could happen, or Republicans start pushing back, which might happen
to might happen too, because they would. They will lose
one hundred seats. They will lose one hundred seats. I
don't care how many UAW workers you parade on that

(20:39):
ridiculous propaganda network Fox News. I don't care how many
people you parade on there, and then you bring these
people on and again again it's for show. They got
time to fill. The producers do it. Oh, this will
look good, and they don't know what the hell they're
talking about. It's almost it's you know what, it's like,
you're taking advantage of them to some degree. But this

(21:04):
is this is where we're at right now. I wish
I wish I had something better. Okay, I wish I
had something better. I haven't spoken to anyone. I have
not spoken to anyone that expected this type of anarchy,

(21:24):
this type of nons because that's it's it's unnecessary. It
really is. Let's you know, wishful thinking here. Let's say
he comes out and he says, you know what, we're
just going to keep the ten percent tariffs on. We're
going to negotiate everything, and we're going to suspend these
reciprocal tariffs over the next six to eight months. Okay, fine,

(21:50):
market will rock it back up. You'll have a v
type of amounts in that situation. But he's he will
lose people. Okay, people are not going to trust him,
and that's that's an issue. And the other thing as well,

(22:11):
is is that it's good to have a country where
people want to invest and be involved in the markets.
All of the nonsense that happened after the you know,
the Great Depression in that stock market crash, and it
turned people off to investing for a long period of time.
And we don't want that. We don't want that. We

(22:36):
want we want people that we want an ownership nation.
We want people to build wealth. That's what's what I
do for a living. This is you know what we're
watching right now. What's transpired right now, quite frankly, is
it's it's it's not even like I say, it's a joke.
It's a bad joke. Off the jougets can't call it

(22:57):
a joke. It's just narcissistic nonsense. And I don't know,
I hopefully I think that Scott Scott be Sent is
not an idiot. I know that he's probably tied into
the position that he's in right now. I don't think

(23:18):
he's gonna pull a h what's his name there. I'll
think of it in a second. Paul O'Neill under George W.
Bush and resign because he didn't like what Dick Cheney
was pulling. He resigns, does something like that, forget it,
and you steal another leg down in the market. I
think he knows that, but he has to be some
sort of pressure that's brought to bear, because this crime

(23:41):
is just stupid. Quite frankly, it really is. And the
best way through muck murk, stupidity, whatever whatever it may be,
is through Watchdog on Wall Street dot com.