Claire Corlett

Fish Food, Fish Tanks, and More

$50B-$60B in tariffs are not enough: Ken Fisher


NEIL: ALL RIGHT, CHINA IS ALL RIGHT RESPONDING TO THESE TARIFF S, $3 BILLION WORTH OF U.S. IMPORTS ABOUT 138 DIFFERENT PRODUCTS, INDUSTRIES WHATEVER YOU WANT TO CALL IT THAT THE CHINESE ARE LOOKING AT HERE A GOOD DEAL WE’RE TOLD AGRICULTURAL ALTHOUGH THEY HAVE ALLUDED TO THE FACT THEY COULD BE LOOKING TO THE AEROSPACE INDUSTRY THAT BY THE WAY MIGHT BE BOEING WHICH IS WHY THAT STOCK HAS BEEN UNDER PRESSURE, THE DOW 30, FISHER EXECUTIVES KEN FISHER IS VERY GOOD TO HAVE YOU.>>SO GOOD TO BE WITH YOU NEIL. NEIL: SAME HERE. MY BIG CONCERN WITH THE TARIFF THING YOU AND I WERE BRIEFLY TOUCHING ON IS THAT BE CAREFUL WHAT YOU WISH FOR MR. PRESIDENT YOU MIGHT JUST GET IT BUT YOU THINK THERE’S SOMETHING ELSE GOING ON HERE?>>I DO, BUT FIRST, FORGETTING ABOUT WHAT I THINK WHICH MIGHT BE WRONG AND I’M NOT ALL THAT IMPORTANT, THERE IS SOMETHING THAT’S SIMPLY IMPORTANT WHICH IS THAT TO MOVE FROM A WORLD THAT WE’VE BEEN INTO A WORLD THAT FEARS WHAT WE’RE DOING WHICH IS THE TARIFFS CAUSE RECESSION AND AND AND AND YOU KNOW THE REST OF THE NARRATIVE, THEY MISS A SIMPLE POINT, WHICH IS IS THAT TO TIP ECONOMIC GROWTH 3% INTO RECESSION, YOU’VE GOT TO COME UP WITH 3 TRILLION BUCKS OF NEW GLOBAL NEGATIVE GDP. A COUPLE BILLION IS LIKE THROWING PEBBLES INTO A LAKE. PEOPLE MISSING THE IN SIGNIFICANCE OF THE RELATIVE SCALE PEOPLE AREN’T GOOD AT SCALING, THEY’RE MISSING POINT OF THESE TARIFFS WHICH ARE BAD, WRONG IT’S A MISTAKE, AREN’T BIG ENOUGH TO DO ENOUGH TO CAUSE THE THING THAT PEOPLE ARE EXTRAPOLATING FOR. NEIL: SO IF IT’S 50-$60 BILLION OF THESE TARIFFS?>>50-$60 BILLION OF TARIFFS ARE NOT ENOUGH YOU NEED TO COME UP WITH SEVERAL, IT’S BAD. IT’S BAD. BAD IS BAD. NEIL: I KNOW TARIFFS ARE BAD BUT SHOULD THEY HAVE BEEN HIGHER>>SO LET’S GO BACK TO I’M OPPOSED TO BAD. BADS WRONG, BUT IF YOU ARE GOING TO TIP INTO RECESSION YOU NEED TO COME UP WITH TWO, $3 TRILLION OF NEW BAD IN A WORLD THAT’S OTHERWISE GROWING AT 3% GLOBAL GDP AND THIS ISN’T GOING TO DO THAT. NEIL: WHAT DO YOU THINK HE’S UP AGAINST?>>I’M LISTENING TO BANNON YESTERDAY. NEIL: STEVE BANNON?>>YES AND HE’S REAL CLEAR THAT TRUMP CAN’T GO IMMEDIATE WITH KIM JONG-UN IN CURRENT CIRCUMSTANCES REGARDLESS OF WHAT YOU’D LIKE TO SAY BECAUSE KIM JONG-UN CAN’T GET OUT OF NORTH KOREA AND IT’S NOT SAFE TO PUT TRUMP THERE. ONCE YOU GET THAT HE’S GOT TO PUT PRESSURE ON CHINA AND I SEE THIS AS A CHINA TRUMP CLASSIC, LET’S GET PEOPLE TO LOOK OVER HERE WHILE I DO THIS OVER THERE BECAUSE — NEIL: SO THE TWO OF THEM MEET AT A NEUTRAL LOCATION?>>HE’S GOT TO FORCE CHINA PUT PRESSURE ON KIM JONG-UN. NEIL: YOU THINK THIS IS IT?>>I THINK HE’S TRYING TO PUSH ON CHINA. IS IT RIGHT, SMART, WILL IT WORK , I DON’T KNOW. I’M NOT GOING THERE I DON’T HAVE A CLUE, BUT I DON’T THINK THIS IS ABOUT TRYING TO PROMOTE, I DON’T THINK HE THINKS THAT HOURS HIM WITH HIS BASE BUT I DON’T THINK THIS IS ABOUT WHAT PEOPLE THINK IT’S ABOUT AND CERTAINLY ISN’T ENOUGH TO CAUSE RECESSION. THE STOCK MARKET IN MY MIND IS LOOKING LIKE A MODEL CONFORMING DOUBLE BOTTOMING CORRECTIONS. LOOKING AT THE WORLD INSTEAD OF THE S&P OR THE DOW, WE’RE LESS THAN 1% AWAY FROM CREATING A DOUBLE BOTTOM. NEIL: AND WHAT WOULD THAT MEAN WE DO THAT THEN WHAT?>>THEN AFTER THAT ALL THESE FOLKS LOOKING FOR REASONS FOR THE CORRECTION, LOOKING FOR REASONS WHERE THERE’S NOT REALLY ENOUGH THERE TO MATTER TO A HILL OF BEANS, THINGS GET FORGOTTEN ABOUT OVER TIME AND YOU RAMP UP OFF THE OTHER SIDE. NEIL: BE CAREFUL WHAT YOU WISH FOR RIGHT? I KEEP SAYING THAT WITH THESE, WE HAD TRADE BOARDS THAT HAVE STARTED INSIGNIFICANTLY AND GROWN TO INCLUDE OTHER ITEMS THIS ONE STARTED REMEMBER WITH SOLAR PANELS FROM SOUTH KOREA AND NOW IT’S TO INCLUDE ALL OF THESE ITEMS AND IT GET THE BIGGER?>>IF IT DOES GET BIGGER AND BIGGER IT’S A VERY BAD THING NEIL WE AGREE ON THAT. NEIL: SO YOU TELL YOUR CLIENTS WHAT THESE DAYS KEN DON’T WORRY ABOUT IT?>>SIT TIGHT FOR NOW BECAUSE IT ISN’T BIG ENOUGH AND BAD ENOUGH TO DO ENOUGH BAD TO CAUSE THE THING THAT PEMEX TRAP LATE FROM IT AND IN FACT OTHERWISE THINGS LOOK PRETTY GOOD. I NOTE YESTERDAY PEOPLE ARE UPSET ABOUT THE DISAPPOINTING PM I’S. YOU SAW THAT? NEIL: RIGHT.>>BUT THE FACT OF THE MATTER THEY’RE STILL POSITIVE JUST LOWER THAN EXPECTATION. THEY’RE STILL POSITIVE. BUT ACROSS-THE-BOARD. NEIL: IT’S A CONTINUOUS TREND OF THINGS GETTING SLOWER AND SLOWER>>ONE OF MY POINTS PEOPLE FREAK OUT ABOUT POWELL AND THE FED AND I’M NOT A FAN OF MR. POWELL, I NEVADA MUCH CARED FOR THE FED. IF IT WERE UP TO ME WE’D DO ALL OF THAT BUSINESS BUT IT’S NOT MY BUSINESS OR MINE TO SAY BUT WHAT I WILL SAY IS THAT THE U.S. YIELD CURVE IS NOT NEARLY IMPORTANT AS THE GDP GLOBAL WEIGHTED CURVE BECAUSE MONEY FLOATS ACROSS BORDERS PRETTY DARN FREELY THESE DAYS. THE COST OF MOVING MONEY FROM THIS COUNTRY TO THAT COUNTRY ISN’T BIG ENOUGH TO STOP THE MONEY FROM FLOWING DOWNHILL AND THE FACT OF THE MATTER IS THE GLOBAL YIELD CURVE HAS BEEN NOT SHIFTED REALLY AT ALL OVER THE LAST SIX MONTHS. GDP WEIGHTED GLOBAL YIELD CURVE AND THAT’S THE ONE THAT MATTERS. NEIL: EVEN THOUGH IT’S FLATTEN ING FAST HERE?>>IT’S FLATTENING HERE BUT ITS BEEN STEEPENING IN PLACES OVERSEAS TO OFFSET IT. NEIL: I UNDERSTAND THAT BUT IN THE PAST WHEN ITS FLATTENED HERE BUT YOU’RE NOT WORRIED ABOUT WHAT’S HAPPENING HERE.>>I’M WORRIED ABOUT THE GLOBAL YIELD CURVE BECAUSE MONEY HELPS US MOVE AROUND THE WORLD. NEIL: BUT IT MOVES AWAY FROM US.>>MOST OF THE TIME, YES IT’S AN ARGUMENT AGAINST AMERICA, YOU’RE ABSOLUTELY RIGHT ABOUT THAT . MOST OF THE TIME, WHEN IT FLATTENS HERE IT ALSO FLATTENS EVERYWHERE ELSE. THAT’S THE TRADITIONAL PATTERN WE’VE SEEN MOST OF THE TIME, AND THAT IF IT FLATTENS EVERY WHERE THAT’S BAD, BUT BECAUSE MONEY FLOATS IT’S REALLY THE GLOBAL. THERE’S AN AGE-OLD SAYING YOU’VE HEARD IT FOREVER. WE’VE ALL HEARD IT. THINK GLOBAL FIRST. FOCUS LOCAL. THINK GLOBAL FIRST. THAT BECAUSE THEY TEND TO GO FROM THE LOCAL AND EXTRAPOLATE OUT AND THAT’S A MISTAKE IT’S THE WRONG WAY TO THINK. NEIL: HOW DO YOU THINK FOR YOUR INVESTORS THEN WHEN YOU LOOK AT AMERICAN COMPANIES VERSUS THE WORLD, HOW DO YOU PLAY IT FOR THEM?>>I THINK BADLY. THE FACT OF THE MATTER IS I’M IN A BUSINESS WHERE IF YOU’RE RIGHT 70% OF THE TIME IN A LONG TERM YOU’VE BECOME A LIVING LEGEND SO YOU BETTER BE USED TO BEING WRONG 30% OF THE TIME SO BE COMFORTABLE AND THINK ABOUT HOW DO I MINIMIZE WRONGNESS SO I’VE GOT TO NOT OVEREXTEND AND NOT THINK TOO MUCH AND TRY TO KEEP IT SIMPLE, AND THIS IS A BULL MARKET WE HAVEN’T GOTTEN TO JOHN TEMPLETON’S FAMOUS GROWING SKEPTICISM AND THEY DO THAT UNLESS YOU HIT THE WALLOP WHICH IS SOME TWO OR $3 TRILLION OF NEW NEGATIVE BAD THAT COMES OUT

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