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Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

The entire city remains captivated for now a third day by the Signal Gate story, as it's being called, which has some new developments today after The Atlantic decided, after not publishing on Monday the specific details shared by the Defense Secretary Pete Hegseth in regard to planning strikes in Yemen, to do so today after repeated statements from the Trump administration and officials who were involved in this signal chat that no classified information had been shared and no war plans were discussed. Enter the receipts, including screenshots of this signal chat, and which for one example, Pete Hegsas says, thirteen forty five trigger based F eighteen first strike windows starts target terrorist at his known location, should be on time. Also, strike drones launch mq nines. Those are Reaper drones, Joe. And this of course is after the Director of National Intelligence Tulci Gabbard. The CIA Director John Ratcliffe had suggested in testimony yesterday that no targets were named, no times were given. This may beg to differ, And of course, the person who originated this Signal Group chat is the National Security Advisor Mike Waltz, who took to Fox last night to try to explain what happened to you.

The entire city remains captivated for now a third day by the Signal Gate story, as it's being called, which has some new developments today after The Atlantic decided, after not publishing on Monday the specific details shared by the Defense Secretary Pete Hegseth in regard to planning strikes in Yemen, to do so today after repeated statements from the Trump administration and officials who were involved in this signal chat that no classified information had been shared and no war plans were discussed. Enter the receipts, including screenshots of this signal chat, and which for one example, Pete Hegsas says, thirteen forty five trigger based F eighteen first strike windows starts target terrorist at his known location, should be on time. Also, strike drones launch mq nines. Those are Reaper drones, Joe. And this of course is after the Director of National Intelligence Tulci Gabbard. The CIA Director John Ratcliffe had suggested in testimony yesterday that no targets were named, no times were given. This may beg to differ, And of course, the person who originated this Signal Group chat is the National Security Advisor Mike Waltz, who took to Fox last night to try to explain what happened to you.

I take responsibility. I built the I built the group.

I take responsibility. I built the I built the group.

Okay.

Okay.

So but look, that's the part that we have to figure out, and that's the part that we were embarrassing. Yes, we made a mistake. We're moving forward and we're going to continue to knock.

So but look, that's the part that we have to figure out, and that's the part that we were embarrassing. Yes, we made a mistake. We're moving forward and we're going to continue to knock.

It out of the park for this president.

It out of the park for this president.

Look at what he's gotten done in under two months.

Look at what he's gotten done in under two months.

We're moving forward. Except that was before the Atlantic came forth with what Kaylee just described to us. The actual texts from those who were in the chat, including the Defense Secretary Pete Hegseth. Laura Davison is with us now, Bloomberg Politics editor at the table, having spent the better part of twenty four hours reporting on all of this. Laura, it's great to see you. In the hearing in the Senate Intelligence Committee yesterday was followed up on the House side today a Tulsa Gabbert, CIA director Ratcliffe were asked did this conversation include information on weapons packages, targets, or timing. They both said no. Do we now believe that the answer is yes.

We're moving forward. Except that was before the Atlantic came forth with what Kaylee just described to us. The actual texts from those who were in the chat, including the Defense Secretary Pete Hegseth. Laura Davison is with us now, Bloomberg Politics editor at the table, having spent the better part of twenty four hours reporting on all of this. Laura, it's great to see you. In the hearing in the Senate Intelligence Committee yesterday was followed up on the House side today a Tulsa Gabbert, CIA director Ratcliffe were asked did this conversation include information on weapons packages, targets, or timing. They both said no. Do we now believe that the answer is yes.

The receipts certainly show that. And they were asked yesterday, you know, did this include any classified information? They denied there was any classified information in this exchange that was happening. And that's when you saw the Atlantic, which initially said no, we're not going to publish the back and forth here, said okay, we're going to go out and put this forward and let the people decide for themselves, you know, where this information, you know, kind of the sensitivities around this information. Gabbert today back on the hill testifying in front of the House, really inconvenient timing for her, but she is now pointing to oh, well, look, Haig says what it was there. He was sharing this information. He has the ability to classify and dclassify information, so therefore you know, nothing wrong was done. That's her argument. It's the same argument that people may remember from a couple of years ago when classified information was seized from mar A Lago. People said, look, it SAT's up to the president's discretion. Nothing to see here. That's not what you're hearing though, from folks in the intelligence community and as well as from Democrats of course.

The receipts certainly show that. And they were asked yesterday, you know, did this include any classified information? They denied there was any classified information in this exchange that was happening. And that's when you saw the Atlantic, which initially said no, we're not going to publish the back and forth here, said okay, we're going to go out and put this forward and let the people decide for themselves, you know, where this information, you know, kind of the sensitivities around this information. Gabbert today back on the hill testifying in front of the House, really inconvenient timing for her, but she is now pointing to oh, well, look, Haig says what it was there. He was sharing this information. He has the ability to classify and dclassify information, so therefore you know, nothing wrong was done. That's her argument. It's the same argument that people may remember from a couple of years ago when classified information was seized from mar A Lago. People said, look, it SAT's up to the president's discretion. Nothing to see here. That's not what you're hearing though, from folks in the intelligence community and as well as from Democrats of course.

Well and all the while, President Trump to this point is standing by his team, no suggestion that he's looking for anyone to lose their job over this. He maintains that Mike Waltz, while he made a mistake, is a good man, reiterating that again this morning. And it does seem that maybe the administration is trying to shift the news cycle, if you will, with other announcements. As Bloomberg is reporting, it could be as early as today, Laura, that the President announces long awaited auto tariffs, which he's been teasing for weeks, if not months.

Well and all the while, President Trump to this point is standing by his team, no suggestion that he's looking for anyone to lose their job over this. He maintains that Mike Waltz, while he made a mistake, is a good man, reiterating that again this morning. And it does seem that maybe the administration is trying to shift the news cycle, if you will, with other announcements. As Bloomberg is reporting, it could be as early as today, Laura, that the President announces long awaited auto tariffs, which he's been teasing for weeks, if not months.

Yes, this would be, you know, sort of ahead of that April twenty, that April second data sort of the big reciprocal tariff day. Auto tariffs is one he's been targeting specifically. The White House has not come out and confirmed whether this is happening, but this is one of the key ones. Trump for a long time has talked about wanting to make other countries' car companies, you know, German car companies wanting them to come to the US. So this is what he's targeting here. But this really has the auto industry worried because, especially across North America, these supply chains are very interconnected. Parts and cars cross the border between Mexico, can and the US multiple times. Car dealers are warning it this could cause the prices of cars to go up by tens of thousands of dollars in some cases. So this really has markets down sharply. After this story popped on the wire earlier today.

Yes, this would be, you know, sort of ahead of that April twenty, that April second data sort of the big reciprocal tariff day. Auto tariffs is one he's been targeting specifically. The White House has not come out and confirmed whether this is happening, but this is one of the key ones. Trump for a long time has talked about wanting to make other countries' car companies, you know, German car companies wanting them to come to the US. So this is what he's targeting here. But this really has the auto industry worried because, especially across North America, these supply chains are very interconnected. Parts and cars cross the border between Mexico, can and the US multiple times. Car dealers are warning it this could cause the prices of cars to go up by tens of thousands of dollars in some cases. So this really has markets down sharply. After this story popped on the wire earlier today.

Well, I guess, I mean, if there is news, we'll bring it to you here on Bloomberg. Hard to tell if that's actually going to happen today. When it comes to tariffs, we do have an X date though, well, we have an X date window from the CBO, the Congressional Budget Office, telling us it's going to be August, maybe September when we hit the debt ceiling. Here, of course, we are already on under extraordinary measures here the Treasury Department. We're talking about extraordinary measures probably exhausted in August or September of twenty twenty five. That's better than May, which some had feared. Does it help to add some urgency to this conversation.

Well, I guess, I mean, if there is news, we'll bring it to you here on Bloomberg. Hard to tell if that's actually going to happen today. When it comes to tariffs, we do have an X date though, well, we have an X date window from the CBO, the Congressional Budget Office, telling us it's going to be August, maybe September when we hit the debt ceiling. Here, of course, we are already on under extraordinary measures here the Treasury Department. We're talking about extraordinary measures probably exhausted in August or September of twenty twenty five. That's better than May, which some had feared. Does it help to add some urgency to this conversation.

It does, and I an'll know that CBO said that if tax re seats don't come in as expected, whether that's because the economy takes a downturn and as a result of all this tariff business, or if the IRS has had a bunch of workers laid off, people are you know, the hours is warm, that people could try to cheat on their taxes more. If tax re seats are down, CBO says, we could be in May facing a potential breach of the debt ceiling. So that's a lot of pressure on lawmakers who are talking about putting this in that bigger tax bill. So the House has sort of moved on this. The Senate is now negotiating. John Thune came out last night and said, yes, we think that we're forming some consensus around moving putting the debt ceiling in the tax bill. But they still have to negotiate everything that's in and out of that bill, and that's going to be a really tough negotiation. It's possible they get there by August, but if this is May, that's a totally different conversation.

It does, and I an'll know that CBO said that if tax re seats don't come in as expected, whether that's because the economy takes a downturn and as a result of all this tariff business, or if the IRS has had a bunch of workers laid off, people are you know, the hours is warm, that people could try to cheat on their taxes more. If tax re seats are down, CBO says, we could be in May facing a potential breach of the debt ceiling. So that's a lot of pressure on lawmakers who are talking about putting this in that bigger tax bill. So the House has sort of moved on this. The Senate is now negotiating. John Thune came out last night and said, yes, we think that we're forming some consensus around moving putting the debt ceiling in the tax bill. But they still have to negotiate everything that's in and out of that bill, and that's going to be a really tough negotiation. It's possible they get there by August, but if this is May, that's a totally different conversation.

Well, yeah, we know Washington loves a deadline, but that deadline may be coming up pretty quick. Yeah, for sure, to the point where it makes some people uncomfortable. Laura Davison, Bloomberg Politics Editor, thank you so much for joining us. And to Laura's point, with the uncertainty around receipts, it points to the idea that this is also an inexact science. It's very hard to nail down an x state, which just speaks to the risk around it and the notion that you could accidentally stumble into default if you don't act quickly enough.

Well, yeah, we know Washington loves a deadline, but that deadline may be coming up pretty quick. Yeah, for sure, to the point where it makes some people uncomfortable. Laura Davison, Bloomberg Politics Editor, thank you so much for joining us. And to Laura's point, with the uncertainty around receipts, it points to the idea that this is also an inexact science. It's very hard to nail down an x state, which just speaks to the risk around it and the notion that you could accidentally stumble into default if you don't act quickly enough.

It's the cable guy window. Of course, you know, August to September a little bit hard to pin down and hard to pick the day off that you're going to take here. But yeah, with regard to what's happening at the IRS, Laura put her finger on, it's not just a question of receipts, it's a question of the agency's ability to process all of this information in the throes of doge cuts.

It's the cable guy window. Of course, you know, August to September a little bit hard to pin down and hard to pick the day off that you're going to take here. But yeah, with regard to what's happening at the IRS, Laura put her finger on, it's not just a question of receipts, it's a question of the agency's ability to process all of this information in the throes of doge cuts.

Well, that's absolutely right. You need to have people to push the paperwork. Yeah, and that paperwork may get pushed a little bit slower this we don't have as many people doing it, So we want to get into all of this now with Douglas holds Egan, who used to direct the Congressional Budget Office that we've been speaking about. He's now president of the American Action Forum. Here with us on Bloomberg TV and Radio. Douglas always good to have you on balance of power. As the CBO says, August to September is the window they would guess for now, but there's a risk it is months earlier then that. What would you put the odds around the X state actually being sooner than late summer.

Well, that's absolutely right. You need to have people to push the paperwork. Yeah, and that paperwork may get pushed a little bit slower this we don't have as many people doing it, So we want to get into all of this now with Douglas holds Egan, who used to direct the Congressional Budget Office that we've been speaking about. He's now president of the American Action Forum. Here with us on Bloomberg TV and Radio. Douglas always good to have you on balance of power. As the CBO says, August to September is the window they would guess for now, but there's a risk it is months earlier then that. What would you put the odds around the X state actually being sooner than late summer.

I think we're going to know pretty quickly.

I think we're going to know pretty quickly.

You know, there are persistent rumors that receipts are coming in lower than expected. CBO included that cautionary note in their report. They didn't just say, look, it's going to be August or September. You know these dates, the key ones being, you know, the April tax payments and then early June a tax payment.

You know, there are persistent rumors that receipts are coming in lower than expected. CBO included that cautionary note in their report. They didn't just say, look, it's going to be August or September. You know these dates, the key ones being, you know, the April tax payments and then early June a tax payment.

The cash flow is the company that can carry you for a while.

The cash flow is the company that can carry you for a while.

But if those cash flows aren't big enough, you know, the date jumps forward by months, and this is not something that we want to, you know, treat cavalierly.

But if those cash flows aren't big enough, you know, the date jumps forward by months, and this is not something that we want to, you know, treat cavalierly.

The fault by the.

The fault by the.

United States will be a cataclysm for the international financial system. No one thinks that's a good idea, But they don't have a plan to raise the debt limit. I think the thing that's significant here is they're still talking about doing this in reconciliation. They haven't yet agreed on a joint budget resolution.

United States will be a cataclysm for the international financial system. No one thinks that's a good idea, But they don't have a plan to raise the debt limit. I think the thing that's significant here is they're still talking about doing this in reconciliation. They haven't yet agreed on a joint budget resolution.

They haven't passed that in the House and Senate.

They haven't passed that in the House and Senate.

They don't yet have draft reconciliation legislation. We are a long way from voting yes or no on a reconciliation bill. And if that's going to carry the debt limit, I'm concerned about the timetable. You may want to think about doing that as a standalone and not risk the financial standing in the United States with this legislative initiative.

They don't yet have draft reconciliation legislation. We are a long way from voting yes or no on a reconciliation bill. And if that's going to carry the debt limit, I'm concerned about the timetable. You may want to think about doing that as a standalone and not risk the financial standing in the United States with this legislative initiative.

Well there you go, Douglas. I first I heard August September. I thought, hey, well, we've got time, we can go to Vegas. There's all kinds of money to spend here. But we just walked us to the news as usual. They can't get this done in reconciliation, which could take the rest of the year. So how should Congress handle it?

Well there you go, Douglas. I first I heard August September. I thought, hey, well, we've got time, we can go to Vegas. There's all kinds of money to spend here. But we just walked us to the news as usual. They can't get this done in reconciliation, which could take the rest of the year. So how should Congress handle it?

I think they should right now be having a discussion with the Democrats in the House and the Senate to talk about passing in regular order a debt limit bill. They may want to combine it with, you know, emergency supplementals for fires in California.

I think they should right now be having a discussion with the Democrats in the House and the Senate to talk about passing in regular order a debt limit bill. They may want to combine it with, you know, emergency supplementals for fires in California.

There's some business.

There's some business.

Congress needs to do. Do that business, do it in a timely fashion. Take off the table. Any risk to the economy, especially given the other things going on that comes with tiptoeing up to a debt default.

Congress needs to do. Do that business, do it in a timely fashion. Take off the table. Any risk to the economy, especially given the other things going on that comes with tiptoeing up to a debt default.

Well, okay, So if ultimately we're talking about tiptoeing here, when they're talking about an accelerated timeline that they want to get this done, who are you going to be watching? Is this ultimately a Senate issue, Douglas? Is this the House issue? Because they're talking about coming more into alignment here, and yet we know even just within the individual conferences in each of those chambers, Republicans can sometimes have difficulty with one another.

Well, okay, So if ultimately we're talking about tiptoeing here, when they're talking about an accelerated timeline that they want to get this done, who are you going to be watching? Is this ultimately a Senate issue, Douglas? Is this the House issue? Because they're talking about coming more into alignment here, and yet we know even just within the individual conferences in each of those chambers, Republicans can sometimes have difficulty with one another.

So they really can't lose any votes in either of the House of the Senate said that they can lose a couple, but there's not really any room for error here. So there has to be a carefully pre negotiated agreement on the numbers that are in the Budge resolution. Who's cutting what, who's creating deficits with tax cuts, who gets those responsibilities, and then how are they going to do that, Like what are the pieces of the policy that are going to be in the tax piece, the energy policy, the border security. That's a lot of issues, and that's a lot of issues to come to agreement with in advance before you go off and take these votes. I view this as a very time consuming process, and you don't get to watch just the Senate or the House because neither can dictate to the other because no one has any room to maneuver. So it's going to be, you know, meet come out announced we made some progress. They will always announce they made progress. But until you have a bill introduced and you can see it and read it and vote on it, you're not done. And this is one of those situations where like nothing's finished until it's all finished.

So they really can't lose any votes in either of the House of the Senate said that they can lose a couple, but there's not really any room for error here. So there has to be a carefully pre negotiated agreement on the numbers that are in the Budge resolution. Who's cutting what, who's creating deficits with tax cuts, who gets those responsibilities, and then how are they going to do that, Like what are the pieces of the policy that are going to be in the tax piece, the energy policy, the border security. That's a lot of issues, and that's a lot of issues to come to agreement with in advance before you go off and take these votes. I view this as a very time consuming process, and you don't get to watch just the Senate or the House because neither can dictate to the other because no one has any room to maneuver. So it's going to be, you know, meet come out announced we made some progress. They will always announce they made progress. But until you have a bill introduced and you can see it and read it and vote on it, you're not done. And this is one of those situations where like nothing's finished until it's all finished.

And that right, and you know, we haven't even gotten to the CBO scoring, which we discussed last time you were on, Douglas. I wonder if you're a Republican leader, if you're Speaker Johnson, if you're Senator John Thune at this moment, are you more worried about the CBO score that lands on a final reconciliation bill or should you be more worried about the parliamentarian the gatekeeper about what can go in.

And that right, and you know, we haven't even gotten to the CBO scoring, which we discussed last time you were on, Douglas. I wonder if you're a Republican leader, if you're Speaker Johnson, if you're Senator John Thune at this moment, are you more worried about the CBO score that lands on a final reconciliation bill or should you be more worried about the parliamentarian the gatekeeper about what can go in.

I think they're equal worries because they have these two big guardrails on the reconciliation progress.

I think they're equal worries because they have these two big guardrails on the reconciliation progress.

The first process. The first is what is in and out? What is Germaine and not Germaine?

The first process. The first is what is in and out? What is Germaine and not Germaine?

And in principle reconciliation bills all of the provisions are primarily budgetary in nature. That definition has been stretched over the years. And so what will the parliamentarian allow us to go in these bills and what will they pull out? Will that, for example, be able to do regulatory reform and reconciliation.

And in principle reconciliation bills all of the provisions are primarily budgetary in nature. That definition has been stretched over the years. And so what will the parliamentarian allow us to go in these bills and what will they pull out? Will that, for example, be able to do regulatory reform and reconciliation.

We'll see.

We'll see.

And then the second big guardrail is you can't create new deficits past the ten year budget window. That comes down to the scoring. What are you doing in the way of spending cuts, What are you doing in the way of tax provisions? That gets to the Joint Committee on Taxation and the CBO. They're both comparably important issues for the leaders, and so they're going to be check them with their members, checking with the scorers, check them with the parliamentarium, and just hoping they can check all three boxes and get to yes.

And then the second big guardrail is you can't create new deficits past the ten year budget window. That comes down to the scoring. What are you doing in the way of spending cuts, What are you doing in the way of tax provisions? That gets to the Joint Committee on Taxation and the CBO. They're both comparably important issues for the leaders, and so they're going to be check them with their members, checking with the scorers, check them with the parliamentarium, and just hoping they can check all three boxes and get to yes.

This is a very difficult endeavor for them.

This is a very difficult endeavor for them.

Well, and we've heard some consternation from Republicans about the idea that the CBO also can't factor into scoring tariffs that are starting in the executive branch, And we just got some news on that, Douglas. The White House Press Secretary Caroline love It has begun her briefing and says that President Trump will be announcing auto tariffs at four pm this afternoon. He of course, has been teasing that this could come in the coming days. We're expecting this could be about twenty five percent on auto imports, and this is before a week from today Liberation Day on April second. If the CBO could factor in tariff revenue that they're scoring, Douglas, do we even have enough clarity as to what exemptions will be, what the levels are, when all of this is going to impact to even consider what kind of revenue source it could be for the United States Treasury.

Well, and we've heard some consternation from Republicans about the idea that the CBO also can't factor into scoring tariffs that are starting in the executive branch, And we just got some news on that, Douglas. The White House Press Secretary Caroline love It has begun her briefing and says that President Trump will be announcing auto tariffs at four pm this afternoon. He of course, has been teasing that this could come in the coming days. We're expecting this could be about twenty five percent on auto imports, and this is before a week from today Liberation Day on April second. If the CBO could factor in tariff revenue that they're scoring, Douglas, do we even have enough clarity as to what exemptions will be, what the levels are, when all of this is going to impact to even consider what kind of revenue source it could be for the United States Treasury.

Yeah, a couple of things that.

Yeah, a couple of things that.

Number One, they can't because they score legislation and the tariffs aren't being legislated. Congress delegated this authority to the executive branches of the President's often.

Number One, they can't because they score legislation and the tariffs aren't being legislated. Congress delegated this authority to the executive branches of the President's often.

Doing it, so they can't be in there.

Doing it, so they can't be in there.

If they were, you would have to write down the tariff schedule. You'd have to write down the date of it becomes enforced, the rate at which is applied, what it is applied to, all the exemptions that would be there. So we'd have a lot more clarity if it was done legislatively and if if you know, originating in the ways and means community the way revenue measures are supposed to.

If they were, you would have to write down the tariff schedule. You'd have to write down the date of it becomes enforced, the rate at which is applied, what it is applied to, all the exemptions that would be there. So we'd have a lot more clarity if it was done legislatively and if if you know, originating in the ways and means community the way revenue measures are supposed to.

We don't have any of that clarity. And you know you've been watching this story. Why do you think the Otter tarif should be announced today?

We don't have any of that clarity. And you know you've been watching this story. Why do you think the Otter tarif should be announced today?

Let's stop talking about wonder's something else?

Let's stop talking about wonder's something else?

That is the only thing that is all This is almost like almost like there.

That is the only thing that is all This is almost like almost like there.

Maybe, I mean it might be good for their messaging. That's bad for the economy. We've seen this before.

Maybe, I mean it might be good for their messaging. That's bad for the economy. We've seen this before.

It's on again, off again uncertainty about the nature of the tariff burden. So this is a bad news day for the economics profession and the outlook for the economy. But it's a good news day if they can change the subject. And that's where we are.

It's on again, off again uncertainty about the nature of the tariff burden. So this is a bad news day for the economics profession and the outlook for the economy. But it's a good news day if they can change the subject. And that's where we are.

Well.

Well.

Great to have you back. Douglas Hole second as always used to run the Congressional Budget Office, President of the American Action forum with us live on Bloomberg TV and radio. He's suggesting the tail is wagging the dog today.

Great to have you back. Douglas Hole second as always used to run the Congressional Budget Office, President of the American Action forum with us live on Bloomberg TV and radio. He's suggesting the tail is wagging the dog today.

Yeah, the timing certainly is something. This was not originally on the White House schedule that was sent out in terms of guidance. This is a new edition four pm Eastern time. The President is expected to announce auto tariffs one week before he's expected to announce reciprocal tariffs.

Yeah, the timing certainly is something. This was not originally on the White House schedule that was sent out in terms of guidance. This is a new edition four pm Eastern time. The President is expected to announce auto tariffs one week before he's expected to announce reciprocal tariffs.

That's correct Liberation Day as you put it. Yes, so we have a little program at five o'clock quoting him five pm Eastern time. That's why you need two balances of Power. We'll have much more on the news conference coming up a little bit later on. We'll assemble our signature panel next for their take.

That's correct Liberation Day as you put it. Yes, so we have a little program at five o'clock quoting him five pm Eastern time. That's why you need two balances of Power. We'll have much more on the news conference coming up a little bit later on. We'll assemble our signature panel next for their take.

Right here on Bloomberg, you're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple Cocklay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just Say Alexa played Bloomberg eleven thirty.

Right here on Bloomberg, you're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Apple Cocklay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just Say Alexa played Bloomberg eleven thirty.

And we've just learned that roughly two and a half hours from now, we add another item to the White House agenda. President Trump at four PM is set to announce tariffs on auto imports. Now he's long said these were coming. He actually said earlier this week he could be making this announcement in the coming days, but we've learned that today is going to be that day.

And we've just learned that roughly two and a half hours from now, we add another item to the White House agenda. President Trump at four PM is set to announce tariffs on auto imports. Now he's long said these were coming. He actually said earlier this week he could be making this announcement in the coming days, but we've learned that today is going to be that day.

Joe.

Joe.

It is an interesting case of timing here, as the day to this point, by and large, has been dominated by the signal group chat story.

It is an interesting case of timing here, as the day to this point, by and large, has been dominated by the signal group chat story.

Signal group chat story that takes on new meaning after The Atlantic went ahead and published some of the attack plans that were texted by the Defense Secretary. Of the reaction that we saw from Michael Waltz, the National Security Advisor, as well as Vice President j. D Vance. It's a little different when you can actually read this having heard that these were not classified and that some of these directives were not shared. Apparently they were, and so we knew we were in for a doozy of a press briefing at the White House, and sure enough, as Kaylee mentioned, Caroline Levitt began by announcing a news conference on auto tariffs. And that's where we start with our signature panel. Back with us today, an hour two of Balance of Power. Rick Davis, Bloomberg Politics contributor, Republican strategist and partner at Stone Court Capital is with us alongside Democratic analyst Genie Shanzano, of course, political science professor at Iona University. This moves now to more of a communications story, at least with regard to our conversation, Rick Davis, what do you make of this idea throwing down own an auto tariff's news conference in the middle of the day like this good good politics, good communications strategy. Yeah.

Signal group chat story that takes on new meaning after The Atlantic went ahead and published some of the attack plans that were texted by the Defense Secretary. Of the reaction that we saw from Michael Waltz, the National Security Advisor, as well as Vice President j. D Vance. It's a little different when you can actually read this having heard that these were not classified and that some of these directives were not shared. Apparently they were, and so we knew we were in for a doozy of a press briefing at the White House, and sure enough, as Kaylee mentioned, Caroline Levitt began by announcing a news conference on auto tariffs. And that's where we start with our signature panel. Back with us today, an hour two of Balance of Power. Rick Davis, Bloomberg Politics contributor, Republican strategist and partner at Stone Court Capital is with us alongside Democratic analyst Genie Shanzano, of course, political science professor at Iona University. This moves now to more of a communications story, at least with regard to our conversation, Rick Davis, what do you make of this idea throwing down own an auto tariff's news conference in the middle of the day like this good good politics, good communications strategy. Yeah.

Look, I mean Donald Trump was sort of teasing this out for a while that he was going to be doing something on auto separate from the April second Independence Day reciprocal tariff announcement, And it makes sense that if it's not a reciprocal tariff, why not take it out and do it separately for impact Obviously today, you know, you don't have to sit through too many communications meetings at the White House to realize what are we going to talk about today? To change the topic away from signal and so it makes sense that this is going to be the case. And the question is what does that do to markets? How is that going to be accepted? I mean, part of the narrative that's building around the economic policies of this administration, specifically to tariffs, is that you never really know what's going to happen day to day. It's not well rolled out, you know, there's no expectation within the affected parties. Are they preliminary communications about how big these tariffs are going to be and what they're.

Look, I mean Donald Trump was sort of teasing this out for a while that he was going to be doing something on auto separate from the April second Independence Day reciprocal tariff announcement, And it makes sense that if it's not a reciprocal tariff, why not take it out and do it separately for impact Obviously today, you know, you don't have to sit through too many communications meetings at the White House to realize what are we going to talk about today? To change the topic away from signal and so it makes sense that this is going to be the case. And the question is what does that do to markets? How is that going to be accepted? I mean, part of the narrative that's building around the economic policies of this administration, specifically to tariffs, is that you never really know what's going to happen day to day. It's not well rolled out, you know, there's no expectation within the affected parties. Are they preliminary communications about how big these tariffs are going to be and what they're.

Going to apply to?

Going to apply to?

And so here we have another like, oh, today we're gonna have a tariff announcement. And it's easy to see why there's so much tumult in the markets because every given day could be some major impact on global markets or domestic markets.

And so here we have another like, oh, today we're gonna have a tariff announcement. And it's easy to see why there's so much tumult in the markets because every given day could be some major impact on global markets or domestic markets.

Well, they're left questioning whether or not this is real or another headfake genie, given that we've seen full on tariff announcements before that then get pulled back or extended delayed just because he's announcing this today and maybe announces an implementation today doesn't actually necessarily, at least historically over the last few months. I mean, these tariffs will go into effect on the initial data announced, right.

Well, they're left questioning whether or not this is real or another headfake genie, given that we've seen full on tariff announcements before that then get pulled back or extended delayed just because he's announcing this today and maybe announces an implementation today doesn't actually necessarily, at least historically over the last few months. I mean, these tariffs will go into effect on the initial data announced, right.

That's right, And as you mentioned, the last eight weeks, it's been a lot of back and forth, fakes, pulling back, so we have to wait and see. They're already talking about some exemptions but Kaylie, I am coining a new phrase. You know, we talk about diversionary foreign policy when we use military action to distract from domestic scandal. Now here we have diversionary tariffs, the use of economic tariffs to distract from domestic scandal.

That's right, And as you mentioned, the last eight weeks, it's been a lot of back and forth, fakes, pulling back, so we have to wait and see. They're already talking about some exemptions but Kaylie, I am coining a new phrase. You know, we talk about diversionary foreign policy when we use military action to distract from domestic scandal. Now here we have diversionary tariffs, the use of economic tariffs to distract from domestic scandal.

So that is my contribution to the lexicon.

So that is my contribution to the lexicon.

And I do think that helps explain what is going on here, and I agree with Douglas Holtz speaking on that.

And I do think that helps explain what is going on here, and I agree with Douglas Holtz speaking on that.

But the reality is it.

But the reality is it.

Is a questionable communication strategy because you should divert with something that is going to rally people together, and the imposition of twenty five percent tariffs at some point on autos is hardly that thing. So I think the White House is starting to lose grip a little bit. I'm not sure how this helps distract in a meaningful or useful way, if that's what they're going for.

Is a questionable communication strategy because you should divert with something that is going to rally people together, and the imposition of twenty five percent tariffs at some point on autos is hardly that thing. So I think the White House is starting to lose grip a little bit. I'm not sure how this helps distract in a meaningful or useful way, if that's what they're going for.

How does this actually change the story today? Rick this update that we got from the Atlantic actually reading the texts or does it? I mean, there were some questions yesterday about whether this information was sent at all. Tulsa Gabbard CIA director Ratcliffe suggested it was not. Is it different to actually see it in publication or are we questioning the source on this still.

How does this actually change the story today? Rick this update that we got from the Atlantic actually reading the texts or does it? I mean, there were some questions yesterday about whether this information was sent at all. Tulsa Gabbard CIA director Ratcliffe suggested it was not. Is it different to actually see it in publication or are we questioning the source on this still.

Yeah, I think the way I read the hearing yesterday, which was very important, I mean, here you had a pre arranged schedule to talk to the heads of the Trump administration's intelligence committee firms, and by the very sober and serious Senate Intelligence Committee, and I saw a lot of hesitation and sort of coming clean. I Mean, the point I made that was made by Tulca Gabbert was that I didn't see or I didn't send any classified information, right, It wasn't that there wasn't any in there. Yeah, And obviously what's happened since then is everyone's basically locking arms. The one consistent thing is there claiming none of.

Yeah, I think the way I read the hearing yesterday, which was very important, I mean, here you had a pre arranged schedule to talk to the heads of the Trump administration's intelligence committee firms, and by the very sober and serious Senate Intelligence Committee, and I saw a lot of hesitation and sort of coming clean. I Mean, the point I made that was made by Tulca Gabbert was that I didn't see or I didn't send any classified information, right, It wasn't that there wasn't any in there. Yeah, And obviously what's happened since then is everyone's basically locking arms. The one consistent thing is there claiming none of.

This was.

This was.

Considered confidential. So you're an administration where the president himself was indicted over the mishandling of classified information, and you've had a hearing that was I would say, arguably a horrible hearing, you know, when it came to what the administration looked like they were doing vis vis the care of our nation secrets. And it's just a really rough start. And it's just stunning to me, like this is month two of this administration and we've got, you know, almost four years left, and we already are seeing all kinds of major swings in the economy, in the domestic politics, in our national security positions.

Considered confidential. So you're an administration where the president himself was indicted over the mishandling of classified information, and you've had a hearing that was I would say, arguably a horrible hearing, you know, when it came to what the administration looked like they were doing vis vis the care of our nation secrets. And it's just a really rough start. And it's just stunning to me, like this is month two of this administration and we've got, you know, almost four years left, and we already are seeing all kinds of major swings in the economy, in the domestic politics, in our national security positions.

Well, let's get a taste of what Rick just described as a horrible hearing. This was an exchange between Gabbard and Ratcliffe and the Democratic senator from New Mexico and Heinrich.

Well, let's get a taste of what Rick just described as a horrible hearing. This was an exchange between Gabbard and Ratcliffe and the Democratic senator from New Mexico and Heinrich.

Did this conversation at some point include information on weapons packages, targets or timing, Not that I'm aware of, Director Gabbert, same.

Did this conversation at some point include information on weapons packages, targets or timing, Not that I'm aware of, Director Gabbert, same.

Question, same answer, and defer to the Department of Defense on that question.

Question, same answer, and defer to the Department of Defense on that question.

Well that those are two different answers. But you're saying that did not that was not part of the conversation. Knowledge the precise operational issues were not part of this conversation, correct, Okay, So.

Well that those are two different answers. But you're saying that did not that was not part of the conversation. Knowledge the precise operational issues were not part of this conversation, correct, Okay, So.

The deference to the Department of Defense, Genie, could that be read as finger pointing at Pete Hegseth, who actually sent the message with the details, or finger pointing at Mike Waltz, who created the group chat in the first place, or those the two individuals. If President Trump were to change his mind and decide he does want someone to take the fall for it, that would have to take that.

The deference to the Department of Defense, Genie, could that be read as finger pointing at Pete Hegseth, who actually sent the message with the details, or finger pointing at Mike Waltz, who created the group chat in the first place, or those the two individuals. If President Trump were to change his mind and decide he does want someone to take the fall for it, that would have to take that.

Fall most likely, and you know.

Fall most likely, and you know.

It is just fascinating because you heard both Tulci Gabbard and Ratcliffe.

It is just fascinating because you heard both Tulci Gabbard and Ratcliffe.

Say we know nothing about it. Go talk to Pete Hegseth.

Say we know nothing about it. Go talk to Pete Hegseth.

I'm waiting for Pete Pete Hegseth to say I'm going to declassify, because he does have that power. But the reality here is that even today in the House hearing, when Tulci Gabbard was asked by Jimmy Gomez if Pete Hegseth was drinking when he wrote these, she didn't say no, she said I don't know. Director Ratcliffe at least came back and said, oh, that's an outrageous question, right. So it is getting ugly in the administration, and I think from a policy perspective, something to keep in mind is that these two who are on the hot seat, Hegseth and Mike Waltz, these are the most conventionally hawkish of the people in the administration. And there is some talk out there that the isolationist, the Tucker Carlson Wing, if you will, who jd. Vance apparently is representing now, they would like nothing more than to Alista Waltz and or at Pete Hegseth in favor of somebody more isolationist, and we saw some of that in the back and forth as well. So there are enormous implications here on both sides. But it is getting ugly and they are pointing fingers.

I'm waiting for Pete Pete Hegseth to say I'm going to declassify, because he does have that power. But the reality here is that even today in the House hearing, when Tulci Gabbard was asked by Jimmy Gomez if Pete Hegseth was drinking when he wrote these, she didn't say no, she said I don't know. Director Ratcliffe at least came back and said, oh, that's an outrageous question, right. So it is getting ugly in the administration, and I think from a policy perspective, something to keep in mind is that these two who are on the hot seat, Hegseth and Mike Waltz, these are the most conventionally hawkish of the people in the administration. And there is some talk out there that the isolationist, the Tucker Carlson Wing, if you will, who jd. Vance apparently is representing now, they would like nothing more than to Alista Waltz and or at Pete Hegseth in favor of somebody more isolationist, and we saw some of that in the back and forth as well. So there are enormous implications here on both sides. But it is getting ugly and they are pointing fingers.

I want to get into that with Rick for a moment. Do you buy that line that we're seeing in reporting today that because Mike Wallts is some sort of traditionalist defense hawk, that he could get blown out by MAGA.

I want to get into that with Rick for a moment. Do you buy that line that we're seeing in reporting today that because Mike Wallts is some sort of traditionalist defense hawk, that he could get blown out by MAGA.

Well, there are always those kinds of things no matter what is happening, The push and shove ideologically and politically in this town is constant, right. There's never a day where you are safe to wander the halls of Congress or the White House that somebody isn't shooting at you. And so that shouldn't surprise anybody. It is a blood sport in Washington, and there's a lot of steak, right. I mean, as Genie mentioned, there are ideological divides within MAGA and they play out on a daily basis.

Well, there are always those kinds of things no matter what is happening, The push and shove ideologically and politically in this town is constant, right. There's never a day where you are safe to wander the halls of Congress or the White House that somebody isn't shooting at you. And so that shouldn't surprise anybody. It is a blood sport in Washington, and there's a lot of steak, right. I mean, as Genie mentioned, there are ideological divides within MAGA and they play out on a daily basis.

That being said, there were a.

That being said, there were a.

Lot of people at risk here and including the Vice president, and so the last thing that the vice president wants to do is draw more attention to a scandal that his name is associated with. And so sure there'll be opportunistic shots on goal, to use a Gretzky phrase, but at this point, I think it's all just damage control.

Lot of people at risk here and including the Vice president, and so the last thing that the vice president wants to do is draw more attention to a scandal that his name is associated with. And so sure there'll be opportunistic shots on goal, to use a Gretzky phrase, but at this point, I think it's all just damage control.

Right.

Right.

The last thing this administration wants is turnover in two months. And that's why you see him holding on so hard to keep everybody sort of on message and together on this, because the last thing that this administration wants is turnover within the first sixty days.

The last thing this administration wants is turnover in two months. And that's why you see him holding on so hard to keep everybody sort of on message and together on this, because the last thing that this administration wants is turnover within the first sixty days.

But would you say they're alltogether on the same message, Genie, because arguably Toolsey Gabbard and John Radcliffe gave some different answers yesterday in the Senate Intelligence hearing. You had Mike Waltz on Fox last night suggesting that it was not a staffer of his that actually was adding numbers to the group chat, when President Trump has suggested that it was an aid, not the principle himself. Do you see a cohesive message here?

But would you say they're alltogether on the same message, Genie, because arguably Toolsey Gabbard and John Radcliffe gave some different answers yesterday in the Senate Intelligence hearing. You had Mike Waltz on Fox last night suggesting that it was not a staffer of his that actually was adding numbers to the group chat, when President Trump has suggested that it was an aid, not the principle himself. Do you see a cohesive message here?

Not at all. I mean I was watching that too, Kille last night.

Not at all. I mean I was watching that too, Kille last night.

It was like they were all sinking from different playbooks. And you know that is a sign that they are either at odds or in disarray at the very best, probably. And it's stunning because to this point, one thing that we have been told is Trump two point zero. They are moving together, growing forward, if you will, and you know.

It was like they were all sinking from different playbooks. And you know that is a sign that they are either at odds or in disarray at the very best, probably. And it's stunning because to this point, one thing that we have been told is Trump two point zero. They are moving together, growing forward, if you will, and you know.

A fine tuned machine. And here we go.

A fine tuned machine. And here we go.

The gloves have come off, and we are seeing that they are not standing together, and they're not even singing from the same playbook. And so I think the President today at four is going to try to move this towards another conversation because Donald Trump is great at communication and he knows that this is a loser for him and the administration.

The gloves have come off, and we are seeing that they are not standing together, and they're not even singing from the same playbook. And so I think the President today at four is going to try to move this towards another conversation because Donald Trump is great at communication and he knows that this is a loser for him and the administration.

All right.

All right.

Jeanie Shanzeno and Rick Davis, Bloomberg Politics contributors are signature political panel here with us on Balance of Power.

Jeanie Shanzeno and Rick Davis, Bloomberg Politics contributors are signature political panel here with us on Balance of Power.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Alma Coarclay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and five pm Eastern on Alma Coarclay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Here in the Void in Washington. If you're with us on YouTube if you're not, search Bloomberg Business News Live. Also, of course, always on the radio Bloomberg Radio and satellite radio Channel one twenty one. This is feeling kind of familiar. You listen to Charlie, He tells you that stocks are lower. You look at the terminal, you see the headline nasdack down one and a half percent as tariff angst royals stocks. Then you look at the next headline. Trump prepares auto tariff announcement as soon as Wednesday. Well, here we are again. This is a familiar place, and as we watch the markets try to get legs back after the brutal reversal that we saw taking us all the way back before the election, we haven't even reached Liberation Day yet. The lovely Kaylee Lyons reminded me this morning when I got to work that were a week out from Liberation Day. Yeah, April second, right, reciprocal tariffs, But what about the auto tariffs? Now we understand those could be coming as soon as today or not. President actually talked about the tariff situation specific to reciprocal as he calls it, in an interview on Newsmax. This idea that there could be lots of exceptions, he said, so yesterday at the White House, maybe not so much.

Here in the Void in Washington. If you're with us on YouTube if you're not, search Bloomberg Business News Live. Also, of course, always on the radio Bloomberg Radio and satellite radio Channel one twenty one. This is feeling kind of familiar. You listen to Charlie, He tells you that stocks are lower. You look at the terminal, you see the headline nasdack down one and a half percent as tariff angst royals stocks. Then you look at the next headline. Trump prepares auto tariff announcement as soon as Wednesday. Well, here we are again. This is a familiar place, and as we watch the markets try to get legs back after the brutal reversal that we saw taking us all the way back before the election, we haven't even reached Liberation Day yet. The lovely Kaylee Lyons reminded me this morning when I got to work that were a week out from Liberation Day. Yeah, April second, right, reciprocal tariffs, But what about the auto tariffs? Now we understand those could be coming as soon as today or not. President actually talked about the tariff situation specific to reciprocal as he calls it, in an interview on Newsmax. This idea that there could be lots of exceptions, he said, so yesterday at the White House, maybe not so much.

Here's the President, not too many, not too many exceptions.

Here's the President, not too many, not too many exceptions.

Now, I don't want to have too many exceptions.

Now, I don't want to have too many exceptions.

We're just going to be reciprocal.

We're just going to be reciprocal.

In fact, I'll probably be more lenient than reciprocal, because if I was reciprocal, that would be very tough for people.

In fact, I'll probably be more lenient than reciprocal, because if I was reciprocal, that would be very tough for people.

As we cover the intersection of Washington and Wall Street, it's great pleasure to bring in Barry Riddle. It's the sage founder of Riddleswealth Management and of course host of Bloomberg Radio's Masters in Business. He's got a new book out as well. We're getting him on the book tour to how not to invest, the idea's numbers, behaviors that destroy wealth and how to avoid them, which I think we could all use right about now. Barry, it's great to see you. Welcome back to Balance of Power. I'm not sure I know where to start with you, other than to ask if we're really building a bottom. Here is Wall Street getting numb to this or this is just the go forward? Donald Trump is the market.

As we cover the intersection of Washington and Wall Street, it's great pleasure to bring in Barry Riddle. It's the sage founder of Riddleswealth Management and of course host of Bloomberg Radio's Masters in Business. He's got a new book out as well. We're getting him on the book tour to how not to invest, the idea's numbers, behaviors that destroy wealth and how to avoid them, which I think we could all use right about now. Barry, it's great to see you. Welcome back to Balance of Power. I'm not sure I know where to start with you, other than to ask if we're really building a bottom. Here is Wall Street getting numb to this or this is just the go forward? Donald Trump is the market.

Yeah, Well, go back to twenty sixteen.

Yeah, Well, go back to twenty sixteen.

If you remember in Trump one point zero or forty five, however you want to call that, that election. He was tweeting back when X was called Twitter at specific companies, at specific CEOs, remember Tim Apple and General Motors, And you know the first couple of weeks.

If you remember in Trump one point zero or forty five, however you want to call that, that election. He was tweeting back when X was called Twitter at specific companies, at specific CEOs, remember Tim Apple and General Motors, And you know the first couple of weeks.

When that happened.

When that happened.

The first few months, every time he would pick a company and tweeted them, the stock would wobble.

The first few months, every time he would pick a company and tweeted them, the stock would wobble.

There'd be all sorts of.

There'd be all sorts of.

You know, people running around with their hair on fire, Analysts downgrade, and then it took a couple of months before people realized, oh, this is just the new operating procedure, this is the environment we're in, and the ability to move markets kind of lost its power. You know, Eventually, if you just have noise blaring in the background, eventually it just becomes background noise. And so maybe this is a little bit of wishful thinking on my part, but it very much feels like that's what's going on now. Hey, we're barely two months into this administration, and we began with Wall Street celebrating, Hey, new administration. We're going to get tax cuts, we're going to get deregulation, business friendly, environment, looked for more M and A and more buybacks, and that narrative dominated for a few months from election to pretty much till January twentieth. And then the crazy thing is none of this is a surprise. This is what Donald Trump candidate told us he would do, is Donald Trump president, Hey, I'm gonna put in some tariffs, brace yourself. And so now he's doing what he said he's doing, and people seem to.

You know, people running around with their hair on fire, Analysts downgrade, and then it took a couple of months before people realized, oh, this is just the new operating procedure, this is the environment we're in, and the ability to move markets kind of lost its power. You know, Eventually, if you just have noise blaring in the background, eventually it just becomes background noise. And so maybe this is a little bit of wishful thinking on my part, but it very much feels like that's what's going on now. Hey, we're barely two months into this administration, and we began with Wall Street celebrating, Hey, new administration. We're going to get tax cuts, we're going to get deregulation, business friendly, environment, looked for more M and A and more buybacks, and that narrative dominated for a few months from election to pretty much till January twentieth. And then the crazy thing is none of this is a surprise. This is what Donald Trump candidate told us he would do, is Donald Trump president, Hey, I'm gonna put in some tariffs, brace yourself. And so now he's doing what he said he's doing, and people seem to.

Be kind of shocked.

Be kind of shocked.

Maybe it's the sort of chaotic nature and it just feels like everybody thing is random and spitballing, the signal snafu and the sort of I don't think we could call that group the best and the brightest. I think that's making people a little nervous. And you're starting to see CEOs say let's just slow our roll with some capex until we have a little clarity because this chaos, I hate the word uncertainty. This chaos is not encouraging us to spend tens of millions of dollars on new projects.

Maybe it's the sort of chaotic nature and it just feels like everybody thing is random and spitballing, the signal snafu and the sort of I don't think we could call that group the best and the brightest. I think that's making people a little nervous. And you're starting to see CEOs say let's just slow our roll with some capex until we have a little clarity because this chaos, I hate the word uncertainty. This chaos is not encouraging us to spend tens of millions of dollars on new projects.

So was it just a matter of getting past Liberation Day the announcement of reciprocal tariffs next week. Is this a market that's basing right now and all of a sudden chaos or uncertainty lifts after that date, or it's going to take a while for us to get to know this new version of Donald Trump.

So was it just a matter of getting past Liberation Day the announcement of reciprocal tariffs next week. Is this a market that's basing right now and all of a sudden chaos or uncertainty lifts after that date, or it's going to take a while for us to get to know this new version of Donald Trump.

I don't know.

I don't know.

I'm a little hesitant to say that the market is basing here, although I will tell you I started on a trading desk thirty years ago, ten percent pullbacks from mull time highs happen, you know.

I'm a little hesitant to say that the market is basing here, although I will tell you I started on a trading desk thirty years ago, ten percent pullbacks from mull time highs happen, you know.

Go back to nineteen fifty.

Go back to nineteen fifty.

We've had about fifty three examples of it. So over that seventy five years, what is that like once every eighteen months or so, Not that it's clockwork, but you know two out of every three years you're going to get a ten percent pullback. I cannot recall more angst and wailing and pulling the hair out of the head for ten percent off the highs?

We've had about fifty three examples of it. So over that seventy five years, what is that like once every eighteen months or so, Not that it's clockwork, but you know two out of every three years you're going to get a ten percent pullback. I cannot recall more angst and wailing and pulling the hair out of the head for ten percent off the highs?

Are you kidding me? Do you not remember down.

Are you kidding me? Do you not remember down.

Fifty seven percent on the financial crisis? Like you have to learn to accept volatility as the cost of admitting for long term gains.

Fifty seven percent on the financial crisis? Like you have to learn to accept volatility as the cost of admitting for long term gains.

So maybe this was due anyway. But if you look at an S and P chart, it's broken still right, We're below the fifty, we're below the two hundred. At what point do you start buying into weakness here so you look like the smart guy when all of this short term pain supposedly pays off in the second half.

So maybe this was due anyway. But if you look at an S and P chart, it's broken still right, We're below the fifty, we're below the two hundred. At what point do you start buying into weakness here so you look like the smart guy when all of this short term pain supposedly pays off in the second half.

So the data tells us never just pick a point you want to if you are buying on weakness.

So the data tells us never just pick a point you want to if you are buying on weakness.

If you have cash, you're lying around first.

If you have cash, you're lying around first.

The data says, put it all in at once two out of three days. On a rolling basis, you're better off doing that than scaling in.

The data says, put it all in at once two out of three days. On a rolling basis, you're better off doing that than scaling in.

However, the psychology of how.

However, the psychology of how.

Humans behave around risk, around volatility, around market pullbacks down ten percent pretty ordinary. If you have a little extra cash, okay, you could roll it into equities. I don't really get excited till down twenty twenty five percent and down thirty percent. I'm flipping over couch cushions and looking for loose change, anything I could do down thirty percent, because that's really a pretty rare event. Q one twenty twenty down thirty four percent. You got to go back to the GFC before that, and then the dot com implosion, and then you really have to go back to eighty seven before you see that again. So that's a much more infrequent event. And you the data says, all right, down ten percent, So what about half the time the pullback stops there and half the time it keeps going down to down ten to ten to twenty percent. So it's really a coin flip here. I know no one likes that answer, but that's the math.

Humans behave around risk, around volatility, around market pullbacks down ten percent pretty ordinary. If you have a little extra cash, okay, you could roll it into equities. I don't really get excited till down twenty twenty five percent and down thirty percent. I'm flipping over couch cushions and looking for loose change, anything I could do down thirty percent, because that's really a pretty rare event. Q one twenty twenty down thirty four percent. You got to go back to the GFC before that, and then the dot com implosion, and then you really have to go back to eighty seven before you see that again. So that's a much more infrequent event. And you the data says, all right, down ten percent, So what about half the time the pullback stops there and half the time it keeps going down to down ten to ten to twenty percent. So it's really a coin flip here. I know no one likes that answer, but that's the math.

Well, you're honest. Yeah, Look, I associate Riddle's wealth management with as you put it getting rich slowly, building wealth slowly, and people who come to you know this, that's why they come to find you. But what's it been like lately? What are the questions? What's the sense of urgency that you're getting from clients over all of this? And are you telling them just to hang on?

Well, you're honest. Yeah, Look, I associate Riddle's wealth management with as you put it getting rich slowly, building wealth slowly, and people who come to you know this, that's why they come to find you. But what's it been like lately? What are the questions? What's the sense of urgency that you're getting from clients over all of this? And are you telling them just to hang on?

So we do quarterly calls for clients, and in the January twenty twenty five quarterly call, having nothing whatsoever to do with President Trump or tariffs or anything else, we said, hey, back to back plus twenty five percent years. That is so rare that when we went back in history and looked at the data, we had to use back to back twenty percent years because you really don't see a lot of twenty five plus twenty five in a row.

So we do quarterly calls for clients, and in the January twenty twenty five quarterly call, having nothing whatsoever to do with President Trump or tariffs or anything else, we said, hey, back to back plus twenty five percent years. That is so rare that when we went back in history and looked at the data, we had to use back to back twenty percent years because you really don't see a lot of twenty five plus twenty five in a row.

And the range that you.

And the range that you.

End up with following that, you know, it could be anywhere from minus ten percent to plus ten percent. But the takeaway was, don't expect double digit gains in a year that follows two years like twenty three and twenty four. Lower your return expectations for equities. Look for a modest year this year and pretty much so far, I mean, and that's not a forecast, that's just here's what's happened historically. Given given how rare this is and the relatively small data set, it's not conclusive, but seems pretty real reasonable to say we don't get a lot of plus twenty fives three times in a row. Let's let's just lower expectations. That seems to have been pretty good advice heading into twenty five.

End up with following that, you know, it could be anywhere from minus ten percent to plus ten percent. But the takeaway was, don't expect double digit gains in a year that follows two years like twenty three and twenty four. Lower your return expectations for equities. Look for a modest year this year and pretty much so far, I mean, and that's not a forecast, that's just here's what's happened historically. Given given how rare this is and the relatively small data set, it's not conclusive, but seems pretty real reasonable to say we don't get a lot of plus twenty fives three times in a row. Let's let's just lower expectations. That seems to have been pretty good advice heading into twenty five.

Wow, this is great. I don't know what we're going to get charged for this, but this is a great session with Barry Riddolts. We've got a couple of minutes left. Berry, What's what's the the the the action item that worries you the most? Is it lawmakers having to deal with the debt ceiling at the same time as Trump tax cuts or is it the unknown about tariffs?

Wow, this is great. I don't know what we're going to get charged for this, but this is a great session with Barry Riddolts. We've got a couple of minutes left. Berry, What's what's the the the the action item that worries you the most? Is it lawmakers having to deal with the debt ceiling at the same time as Trump tax cuts or is it the unknown about tariffs?

So I really don't care about the debt ceiling. I don't care about deficits. Ever since I was ye yahol to a grasshopper, all I've heard, literally my whole adult life, is hey, deficits are going to cause structural inflation. It will crowd out right Uncle Sam from borrowing. It'll it'll crowd out private capital, it'll destroy the dot. All the deficits on the alarm down here yesterday. Can I tell you something when somebody is wrong for half a century, right, If you're wrong every year for half a century, if they were run if the deficit hawks were running a fund, they would have been out of business a long time ago. Politics, you could be wrong forever, and you don't really seem to catch heat in the market. The feedback loop is so quick and so efficient and so brutal that if you're that wrong for that loan, no one pays attention to you. So I'm not all that concerned about deficits. What I am concerned about is three months ago, risk of a weakening dollar, risk of a recession, risk of a market crass, risk of increase volatility, geopolitics.

So I really don't care about the debt ceiling. I don't care about deficits. Ever since I was ye yahol to a grasshopper, all I've heard, literally my whole adult life, is hey, deficits are going to cause structural inflation. It will crowd out right Uncle Sam from borrowing. It'll it'll crowd out private capital, it'll destroy the dot. All the deficits on the alarm down here yesterday. Can I tell you something when somebody is wrong for half a century, right, If you're wrong every year for half a century, if they were run if the deficit hawks were running a fund, they would have been out of business a long time ago. Politics, you could be wrong forever, and you don't really seem to catch heat in the market. The feedback loop is so quick and so efficient and so brutal that if you're that wrong for that loan, no one pays attention to you. So I'm not all that concerned about deficits. What I am concerned about is three months ago, risk of a weakening dollar, risk of a recession, risk of a market crass, risk of increase volatility, geopolitics.

They were all pretty low.

They were all pretty low.

They're not like flashing red yet, but they certainly have out become elevated. Risk of a recession is probably up from ten percent to hold thirty percent. I don't know how you put a real number on that. We've obviously seen volatility bike. Questions about alternatives to the dollar are erupting. Listen, it's our exorbitant privilege that our currency is the world's reserve currency. I'm a little nervous that anyone would do anything to put.

They're not like flashing red yet, but they certainly have out become elevated. Risk of a recession is probably up from ten percent to hold thirty percent. I don't know how you put a real number on that. We've obviously seen volatility bike. Questions about alternatives to the dollar are erupting. Listen, it's our exorbitant privilege that our currency is the world's reserve currency. I'm a little nervous that anyone would do anything to put.

That at risk.

That at risk.

It seems to be a little bit of a self inflicted you know, an own goal. You know, never want to accidentally kick the ball into your own own goal. And so just the general lack of structure, organization, this sort of chaos presidency. We're starting to see this not just the soft data. Make us a little concerned about a potential recession down the road that can easily bleed into the hard data. As we see CAPEC spending fall off as people take fewer vacations, as they throttle back their savings.

It seems to be a little bit of a self inflicted you know, an own goal. You know, never want to accidentally kick the ball into your own own goal. And so just the general lack of structure, organization, this sort of chaos presidency. We're starting to see this not just the soft data. Make us a little concerned about a potential recession down the road that can easily bleed into the hard data. As we see CAPEC spending fall off as people take fewer vacations, as they throttle back their savings.

That's a rising.

That's a rising.

It's still not a flashing red light, but it's worth paying attention to.

It's still not a flashing red light, but it's worth paying attention to.

Fascinating deep dive with Barry Riddles. I'd say he should get his own show, but he has one. It's called Masters in Business. Here on Bloomberg. Founder Riddolts Wealth Management. Thanks for the wisdom, Barry. You're always welcome here. Of the book is How Not to Invest. This is Bloomberg.