Bloomberg Audio Studios, podcasts, radio news. What do you think or recession?

Bloomberg Audio Studios, podcasts, radio news. What do you think or recession?

I mean, you had a really good piece thank you out this week in the newsletter where you made the point and I had made a similar point the day earlier. So maybe I'm not being so nice, but like, how much of all the market action, all the economic action, I guess, was actually dependent on just one guy, Donald Trump, and that you know, if he came out and said something, he could end the chaos at any moment in time.

I mean, you had a really good piece thank you out this week in the newsletter where you made the point and I had made a similar point the day earlier. So maybe I'm not being so nice, but like, how much of all the market action, all the economic action, I guess, was actually dependent on just one guy, Donald Trump, and that you know, if he came out and said something, he could end the chaos at any moment in time.

And then on Wednesday he actually came out.

And then on Wednesday he actually came out.

And did that, and then kind of kind of well, your point was, if he does that, we can all go back to worrying about like a slowdown in the labor market or deep seek threatening AI, which so much capital investment in the US actually depends on.

And did that, and then kind of kind of well, your point was, if he does that, we can all go back to worrying about like a slowdown in the labor market or deep seek threatening AI, which so much capital investment in the US actually depends on.

There's a lot. I did a deadlist.

There's a lot. I did a deadlist.

I'm both the most popular trader and most successful trader at Citadel. That is going viral.

I'm both the most popular trader and most successful trader at Citadel. That is going viral.

Uh barges.

Uh barges.

This isn't after school special, except.

This isn't after school special, except.

I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the US.

I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the US.

Black goals. These are the important question.

Black goals. These are the important question.

Is it robots taking over the world.

Is it robots taking over the world.

No, I think that like in a couple of years, the AI will do a really good job of making the Odd Lots podcast. One day that person will have the mandate of Heaven.

No, I think that like in a couple of years, the AI will do a really good job of making the Odd Lots podcast. One day that person will have the mandate of Heaven.

How do I get more popular and successful?

How do I get more popular and successful?

We do have the Welcome to lots More, where we catch up with friends about what's going.

We do have the Welcome to lots More, where we catch up with friends about what's going.

On right now, because even when Odd Lots is over, there's always lots More.

On right now, because even when Odd Lots is over, there's always lots More.

And we really do have the perfect guest you know who had a really good contribution to the Odd Lots newsletter February twenty twenty fourth. Basically the market top Neil Dunnas's rising risks to the Lake market calling recession risks right there and essentially at the market top. We got it back on Neil yesterday after Trump walked it back. By the way, we're talking to Neildutta of Renaissance Macro. Trump walked back some of the tariffs. Goldman pulled it to recession call you. We sent out an email right away you said, I'm sticking with my recession call. Why do you see recession in the cards in twenty twenty five?

And we really do have the perfect guest you know who had a really good contribution to the Odd Lots newsletter February twenty twenty fourth. Basically the market top Neil Dunnas's rising risks to the Lake market calling recession risks right there and essentially at the market top. We got it back on Neil yesterday after Trump walked it back. By the way, we're talking to Neildutta of Renaissance Macro. Trump walked back some of the tariffs. Goldman pulled it to recession call you. We sent out an email right away you said, I'm sticking with my recession call. Why do you see recession in the cards in twenty twenty five?

Still, so remember that, you know, for me, it's it's not really about an Nber defined recession like that, to me is not the name of the game. The name of the game is trying to translate an economic view into a market call. And even if it's not technically a recession, it might as well be because the underlying problem for the market is not going away. And that's the issue. You know, all the things I mentioned in that newsletter, you highlight it in February, that's all here. That's still here, right. We still have a situation where labor incomes are slowing and the Fed's not budget. We still have a situation where mortgage rates are high and the housing market is weak, and we still have state in local governments cutting back, and we still have a pretty high volume on trade. I mean, in terms of tensions. Just because we dialed it back a little bit yesterday doesn't mean that the tensions are not still high. And I think it's what we've basically done is traded. You know, you basically spread the distribution of costs. I guess I mean away from everyone, just towards China. But that's still pretty bad in and of itself. I don't think it takes a rocket science to figure it out. You I mean, if you're basically trying to break up the relationship with US and our third major trading partner. There's no scenario or that doesn't create some issues for the marketplace.

Still, so remember that, you know, for me, it's it's not really about an Nber defined recession like that, to me is not the name of the game. The name of the game is trying to translate an economic view into a market call. And even if it's not technically a recession, it might as well be because the underlying problem for the market is not going away. And that's the issue. You know, all the things I mentioned in that newsletter, you highlight it in February, that's all here. That's still here, right. We still have a situation where labor incomes are slowing and the Fed's not budget. We still have a situation where mortgage rates are high and the housing market is weak, and we still have state in local governments cutting back, and we still have a pretty high volume on trade. I mean, in terms of tensions. Just because we dialed it back a little bit yesterday doesn't mean that the tensions are not still high. And I think it's what we've basically done is traded. You know, you basically spread the distribution of costs. I guess I mean away from everyone, just towards China. But that's still pretty bad in and of itself. I don't think it takes a rocket science to figure it out. You I mean, if you're basically trying to break up the relationship with US and our third major trading partner. There's no scenario or that doesn't create some issues for the marketplace.

It is true we've ratcheted down tariffs for countries ex China, but as you say, we've basically gone back to what we were worried about before, right And the funny thing I got to say about that gold a note, and it just underscores how quickly things are changing in the current environment. You know, they publish that, they published the recession call basically an hour before Oh Trump did his big Wednesday announcement, and then right after that, like we didn't realize that within sixty minutes, they had to come out and say, actually, we're rescinding it.

It is true we've ratcheted down tariffs for countries ex China, but as you say, we've basically gone back to what we were worried about before, right And the funny thing I got to say about that gold a note, and it just underscores how quickly things are changing in the current environment. You know, they publish that, they published the recession call basically an hour before Oh Trump did his big Wednesday announcement, and then right after that, like we didn't realize that within sixty minutes, they had to come out and say, actually, we're rescinding it.

As Lenin said, there are hours where nothing happens, in minutes where days happen, and we've had two minutes you now, we're seeing a lot of that right now.

As Lenin said, there are hours where nothing happens, in minutes where days happen, and we've had two minutes you now, we're seeing a lot of that right now.

Do you have like a little book of Lenin quotes that you keep with you? Where are you getting those from?

Do you have like a little book of Lenin quotes that you keep with you? Where are you getting those from?

I also might be mangling the quote a little bit. I mean you you should trade tensions are high, but tariffs are really high right now. I mean, that's really like the core thing. Well, that's the other thing, right, job, I mean, it's just tensions, it's reality.

I also might be mangling the quote a little bit. I mean you you should trade tensions are high, but tariffs are really high right now. I mean, that's really like the core thing. Well, that's the other thing, right, job, I mean, it's just tensions, it's reality.

One hundred percent, and I kind of sympathize with it, right, Like it's the uncertainty that he's creating. No, no, No, it's also what he's actually doing, and that is going to weigh on investment by itself, right, because if you introduce tariffs and actually follow through with the tariffs, the uncertainty around what you're doing is going down. The reality of what you're doing is what businesses will respond to through growth expectations, and they'll pull back, right, Because ultimately what drives investment is what's happening with growth. If real growth is slowing, then it's inevitable that investment spending will follow suit because largely what investment responds to is sort of an accelerated effect. Right, That's basically the idea that is growth picks up, investment tends to rise. More so the fact that growth is slowing and expectations around growth are coming down, that's ultimately what's going to pull down investment. So it's not so much the uncertainty, although that that's probably not good. It's also what he's actually doing.

One hundred percent, and I kind of sympathize with it, right, Like it's the uncertainty that he's creating. No, no, No, it's also what he's actually doing, and that is going to weigh on investment by itself, right, because if you introduce tariffs and actually follow through with the tariffs, the uncertainty around what you're doing is going down. The reality of what you're doing is what businesses will respond to through growth expectations, and they'll pull back, right, Because ultimately what drives investment is what's happening with growth. If real growth is slowing, then it's inevitable that investment spending will follow suit because largely what investment responds to is sort of an accelerated effect. Right, That's basically the idea that is growth picks up, investment tends to rise. More so the fact that growth is slowing and expectations around growth are coming down, that's ultimately what's going to pull down investment. So it's not so much the uncertainty, although that that's probably not good. It's also what he's actually doing.

Wait, just on that note, so you sent an email earlier this week where you said the SMP five hundred trading like fart coin is probably not a good thing. There's a sentence I never thought I would necessarily read out loud, But the S and P five hundred trading like that? Is that mostly a reflection of the uncertainty aspect of all of this or are you implying that it's going to feed into things like funding costs and the capital investment environment and I guess the wealth effect for the US economy as well.

Wait, just on that note, so you sent an email earlier this week where you said the SMP five hundred trading like fart coin is probably not a good thing. There's a sentence I never thought I would necessarily read out loud, But the S and P five hundred trading like that? Is that mostly a reflection of the uncertainty aspect of all of this or are you implying that it's going to feed into things like funding costs and the capital investment environment and I guess the wealth effect for the US economy as well.

Yeah, I think so. I mean, I think the stock market going down is usually bad, and I think that that'll have effects on household psychology for sure. And remember, like a lot of the reason why consumer spending ran so much more rapidly than real income growth last year was because the savings rate was going down. And one of the reasons why the savings rate was going down was probably because stock prices were going up and that was juicing you know, enthusiasm for the high end consumer.

Yeah, I think so. I mean, I think the stock market going down is usually bad, and I think that that'll have effects on household psychology for sure. And remember, like a lot of the reason why consumer spending ran so much more rapidly than real income growth last year was because the savings rate was going down. And one of the reasons why the savings rate was going down was probably because stock prices were going up and that was juicing you know, enthusiasm for the high end consumer.

Yeah, and this is really important. Like, if you think that consumer spending was driving a lot of the surprising growth in some respects that we've seen recently, then you should really focus on what the higher end consumer was doing. And most of those higher end consumers have stock portfolios.

Yeah, and this is really important. Like, if you think that consumer spending was driving a lot of the surprising growth in some respects that we've seen recently, then you should really focus on what the higher end consumer was doing. And most of those higher end consumers have stock portfolios.

Yeah, I think that's right. And I guess the other thing I would say is, you know, there's a whole literature I think about, you know, the stock market as a passive informant or an active informant. Right, so, is there anything about the share price of a company that tells the CEO of that company something about their firm they don't already know? Usually it's probably not. But if you get this sort of macro type environment, which is kind of where we are right now, then the stock market takes more, takes on more of a role of an active informant, and you know, then you kind of have business the business community kind of looking for the stock market as a aggregator of macro risk. And right now, you know, the fact is that stock prices are down quite a bit from their February highs, and that's probably creating a cautionary mood for most of corporate America.

Yeah, I think that's right. And I guess the other thing I would say is, you know, there's a whole literature I think about, you know, the stock market as a passive informant or an active informant. Right, so, is there anything about the share price of a company that tells the CEO of that company something about their firm they don't already know? Usually it's probably not. But if you get this sort of macro type environment, which is kind of where we are right now, then the stock market takes more, takes on more of a role of an active informant, and you know, then you kind of have business the business community kind of looking for the stock market as a aggregator of macro risk. And right now, you know, the fact is that stock prices are down quite a bit from their February highs, and that's probably creating a cautionary mood for most of corporate America.

I'm a big fan of the stocks matter, a hypothesis I've been bringing the drum. Stocks matter, don't, don't just dismiss the stock market is this thing that US Wall Street elites which we are are obsessed with, they actually matter in this family. I do not believe in Wall Street versus Main Street. I only believe in one constant, contiguous street that connects all roads in America.

I'm a big fan of the stocks matter, a hypothesis I've been bringing the drum. Stocks matter, don't, don't just dismiss the stock market is this thing that US Wall Street elites which we are are obsessed with, they actually matter in this family. I do not believe in Wall Street versus Main Street. I only believe in one constant, contiguous street that connects all roads in America.

Neil. Wait, Wait, isn't that Neil's saying that? You know, people say that the stock market it's not the economy, but it's not not.

Neil. Wait, Wait, isn't that Neil's saying that? You know, people say that the stock market it's not the economy, but it's not not.

The Where did you get that, Neil? Where'd you get that?

The Where did you get that, Neil? Where'd you get that?

Oh, we're going to settle this, Neil.

Oh, we're going to settle this, Neil.

I got it from Joe Wisenthal.

I got it from Joe Wisenthal.

Yeah, right, Okay.

Yeah, right, Okay.

Most painful thing is Tracy has to acknowledge I get some credit for something.

Most painful thing is Tracy has to acknowledge I get some credit for something.

It's a good quote.

It's a good quote.

Thank you.

Thank you.

That's why I thought Neil had it.

That's why I thought Neil had it.

Outside of elder care, do you do you feel confident that there is a single major sector of the US economy right now that's adding headcount in elder care and healthcare?

Outside of elder care, do you do you feel confident that there is a single major sector of the US economy right now that's adding headcount in elder care and healthcare?

Not really, No, I mean most of the growth in employment has been in sort of what what you would call like acyclical industries like private education and healthcare. You know, when you look at the more cyclically sensitive areas of the job market. I mean that's clearly slowing down. You look at residential construction employment, I mean that's actually down against last year, you know, I mean service sector.

Not really, No, I mean most of the growth in employment has been in sort of what what you would call like acyclical industries like private education and healthcare. You know, when you look at the more cyclically sensitive areas of the job market. I mean that's clearly slowing down. You look at residential construction employment, I mean that's actually down against last year, you know, I mean service sector.

I mean.

I mean.

The other thing, of course, is that if the tar as the tariffs come on, that's likely to push up goods prices. Right, given the fact that the labor markets are slowing down to the extent that people have to allocate more of their household budgets towards goods, that'll leave less left over for everything else, which means they'll ultimately have to start cutting back on services consumption, and that'll drive down the prices for services. So that to me is a bigger concern because obviously service sector employment is huge in the US. Yes, that's where most of the meat is, so you know, leader in hospitality, you know, things like that. I mean that's going to come under pressure. I would think, yea as the quarters go on.

The other thing, of course, is that if the tar as the tariffs come on, that's likely to push up goods prices. Right, given the fact that the labor markets are slowing down to the extent that people have to allocate more of their household budgets towards goods, that'll leave less left over for everything else, which means they'll ultimately have to start cutting back on services consumption, and that'll drive down the prices for services. So that to me is a bigger concern because obviously service sector employment is huge in the US. Yes, that's where most of the meat is, so you know, leader in hospitality, you know, things like that. I mean that's going to come under pressure. I would think, yea as the quarters go on.

We are recording this on Thursday, April tenth, and we did just see CPI actually come in lower than expected. But everyone's talking about imminent tariffs impact. And I guess my question on inflation is like a lot of people seem to be debating between well, most people agree the teriffs will immediately push up prices. The big question is at what point will enough demand destruction actually kick in to reduce demand for consumer goods and potentially lower prices. But it's really interesting that you're saying that, you know, we could have the impact feed into services, and then if you get higher unemployment that would certainly add to the demand destruction dynamic.

We are recording this on Thursday, April tenth, and we did just see CPI actually come in lower than expected. But everyone's talking about imminent tariffs impact. And I guess my question on inflation is like a lot of people seem to be debating between well, most people agree the teriffs will immediately push up prices. The big question is at what point will enough demand destruction actually kick in to reduce demand for consumer goods and potentially lower prices. But it's really interesting that you're saying that, you know, we could have the impact feed into services, and then if you get higher unemployment that would certainly add to the demand destruction dynamic.

The Fed's policy at the moment is to be behind the curve proceed accordingly. That's all I can tell you. I mean, they're basically telling you that they're waiting for growth conditions to deteriorate before they cut. That's all that really matters. They're not changing the nomenal anchor just yet. I mean, so that basically tells you that their solution to the inflationary consequences of tariffs is disinflation.

The Fed's policy at the moment is to be behind the curve proceed accordingly. That's all I can tell you. I mean, they're basically telling you that they're waiting for growth conditions to deteriorate before they cut. That's all that really matters. They're not changing the nomenal anchor just yet. I mean, so that basically tells you that their solution to the inflationary consequences of tariffs is disinflation.

As of right now, naszak down six percent. There's that big green candle we got yesterday rapidly melting s and P five hundred down five point two four percent. US tenure yields up on the date. Not a cocktail. You want to see what if?

As of right now, naszak down six percent. There's that big green candle we got yesterday rapidly melting s and P five hundred down five point two four percent. US tenure yields up on the date. Not a cocktail. You want to see what if?

What if this just keeps going for the next four years.

What if this just keeps going for the next four years.

It might be.

It might be.

Lots more is produced by Carmen Rodriguez and Dashel Bennett, with help from Moses Ondom and kel Brooks.

Lots more is produced by Carmen Rodriguez and Dashel Bennett, with help from Moses Ondom and kel Brooks.

Our sound engineer is Blake Maples. Sage Buman is the head of Bloomberg Podcasts.

Our sound engineer is Blake Maples. Sage Buman is the head of Bloomberg Podcasts.

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