| Speaker | Time | Text |
|---|---|---|
|
unidentified
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To continue its ongoing investigation into the possible mismanagement of the federal government's investigation of Jeffrey Epstein and Ghelane Maxwell. | |
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| C-SPAN, Democracy Unfiltered. | ||
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| Welcome back. | ||
| Joining us now to talk about the financial markets and President Trump's economic agenda is Paul Auslander. | ||
| He is a financial analyst and the president of Seabridge Private Wealth. | ||
| Paul, welcome to the program. | ||
|
unidentified
|
Thanks, Mimi. | |
| Thanks for having me. | ||
| So I just want to start in general. | ||
| What's your assessment of President Trump's economic agenda thus far? | ||
|
unidentified
|
Well, things were pretty positive when President Trump was elected and the passing of the Tax Act, various aspects of the economy seemed to be confident in his abilities to run it. | |
| And I think March changed that a little bit with the tariffs. | ||
| The market came down, then the market came back up. | ||
| And then this past week, we had the ruling by the appeals court that said that the tariffs were illegal. | ||
| So I think we're back to uncertainty. | ||
| And I think more importantly for investors, I think we're back to a lot of volatility. | ||
| And so what are your clients telling you regarding their plans for the future? | ||
| Is there a wait-and-see approach? | ||
| Is there optimism? | ||
| Is there, what are they telling you? | ||
|
unidentified
|
Well, it's interesting. | |
| There's two different worlds out there right now. | ||
| Up until February, for example, the real estate market here in Florida was moving along beautifully. | ||
| March, everything slowed to a crawl. | ||
| And I think that was because of the tariffs and the uncertainty. | ||
| It's started to pick up now a little bit. | ||
| But I think what's going to happen, and we'll see the futures are down today. | ||
| I think that's a direct reaction to what happened with the appeals court decision this past week. | ||
| I think you're going to see things slow down again until this uncertainty. | ||
| Markets, investors, everybody does not like the uncertainty that this creates. | ||
| Well, so last week, the Commerce Department released GDP numbers, and it says that the gross domestic product rose 3.3% annualized. | ||
| That's April through June. | ||
| So second quarter. | ||
| What do you make of that number? | ||
| And wouldn't that indicate that the economy is still growing? | ||
|
unidentified
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There's no question. | |
| It's slowing, but it's definitely growing. | ||
| I mean, that's the operative term right now. | ||
| There's no question that those numbers were good. | ||
| And interestingly, the tariffs helped that. | ||
| We were bringing in $25 to $30 billion a month. | ||
| I mean, if you, you know, one of the concerns that many of us have is some of the aspects of this tax act that was recently passed could increase the deficits rather dramatically. | ||
| The tariffs have the ability to keep that from happening. | ||
| 25 to 30 billion a month is 300 plus billion a year over a 10-year period. | ||
| That's a lot of revenue to come in. | ||
| And that dampens that problem with creating more debt. | ||
| But we'll see what happens. | ||
| Meanwhile, I think we're seeing a weakening in the economy a little bit. | ||
| We're seeing unemployment inch up a little bit. | ||
| I don't think it's devastating yet. | ||
| There's no recession in sight, but markets are sensing that things aren't as good as they were a few months ago. | ||
| So, Paul, you know, you mentioned the money coming in from tariffs. | ||
| The inflation numbers have so far been still in check. | ||
| Would you consider that? | ||
| Do you think that that's going to continue, or are we going to see those companies that are paying the tariffs pass that on to consumers and thus the inflation rate go up? | ||
|
unidentified
|
So I don't think the inflation rate's going to go up dramatically. | |
| And I think we've seen evidence of that now. | ||
| I think companies, as long as tariffs are 20% or less, the number I've heard is 12 to 15%, is achievable by these companies eating some of that, having suppliers eat some of that, having manufacturers eat some of that, not pushing it on to the consumer. | ||
| And if that continues, I think the inflation numbers will stay in check. | ||
| I also think that the Fed and others are modifying what they believe is good inflation versus not good inflation, right? | ||
| 2% target seems to be inching up a little bit. | ||
| I think if something stays under 3%, they're in pretty good shape. | ||
| That's the tension right now with the Federal Reserve and interest rates in President Trump. | ||
| The Fed is being very careful not to lower interest rates too soon and spark the economy in such a way that it'll create more inflation. | ||
| President Trump is a real estate developer. | ||
| He's never seen an interest rate. | ||
| He doesn't like to see lower. | ||
| So that tension continues to work, and we'll see what happens. | ||
| I expect rates to come down this month a little bit. | ||
| And again, before the end of the year, I think President Trump has to be careful not to look like he's interfering with the independence of the Fed. | ||
| But assuming that works, I feel that we'll probably be looking at lower interest rates in the not too distant future. | ||
| And I'll just let our audience know that they can join the conversation with our guest, Paul Auslander. | ||
| You can give us a call by party. | ||
| So Democrats are on 202-748-8000. | ||
| Republicans 202-748-8001. | ||
| And Independents 202748-8002. | ||
| If you have a question about the financial markets, the Trump economic agenda, you can go ahead and start calling in now. | ||
| I just want to go back to the conversation about the Fed and President Trump's threatening to fire Jerome Powell, the chair. | ||
| He has fired a Federal Reserve Board member, Lisa Cook. | ||
| You've written in, or you've said in previous interviews, that that would be a bad idea for the president to try to fire the chairman. | ||
| Why do you think that? | ||
| And do you think it's also a bad idea to fire one of the governors? | ||
|
unidentified
|
Well, I think they're two different issues, right? | |
| I mean, it's particularly acute that in this particular case, the governor is being accused of mortgage fraud, is also on a committee that sets interest rates, which ultimately determine mortgage rates. | ||
| So that whole thing has a bad scent around it, right? | ||
| But we live in a country where you're innocent until proven guilty. | ||
| So I'd love to see her defense of this. | ||
| If there's none, then either the president or Chair Powell has a responsibility to fix that. | ||
| But I think in the issue of Chairman Powell, I think that's where President Trump has to really tread carefully. | ||
| You know, he's a businessman. | ||
| He codified the phrase, you're fired in his television show. | ||
| All of those things work well until you talk about independent branches of the government, right? | ||
| And I think one of the issues is how independent is the Federal Reserve. | ||
| One of the great parts of this country is we have a financial system that's the envy of the rest of the world. | ||
| Wouldn't believe that what's coming out of China now with their with, their meeting with with Russia and India and others. | ||
| But the fact of the matter is the way the dollar commands respect and the way the United States markets operate are the envy of the world. | ||
| Part of that is because we have an independent Federal Reserve that can't be manipulated by various parts of the government partisan parts of the government. | ||
| That needs to continue for our markets to do well and for our economy to stay stable. | ||
| And why is that independence so important to you, Paul? | ||
| Is it? | ||
| Is it because they have to make sometimes unpolitically popular decisions for the good of the economy or the long-term good of the economy? | ||
|
unidentified
|
That's exactly right. | |
| That's exactly right. | ||
| Politics has a tendency to put a finger on the economic scale. | ||
| This is an area where that can be disastrous over the long term, and I think people think about when they look at their 401ks and they look at markets in general. | ||
| They think of the stock market. | ||
| What we really are concerned about with these types of matters is the bond market. | ||
| People don't give enough. | ||
| You know. | ||
| The bond market essentially creates the liquidity for for debt, creates businesses being able to borrow, all of the things that are important to the free, you know way in which business runs on a frictionless basis goes to the bond market and and you saw this morning interest rates start to rise. | ||
| The long-term interest rates start to rise as a result of of this tariff ruling. | ||
| That's an indicator to all of us that this uncertainty is is not good for the dollar, is not good for the bond market. | ||
| Uh, president Clinton's political advisor, James Carbil, once said I used to think that if I believed in in reincarnation, i'd want to come back as a 400 baseball hitter or or the pope or something like that. | ||
| I'd rather come back as the bond market and intimidate everybody. | ||
| And I laughed when I think about that. | ||
| Because when you, the financial world, really worries about the instability of the bond market and types of things like this, where you, you have threats to the independence of the FED, various aspects like that create that possibility of threats to the bond market. | ||
| And uh, the uh, One big Beautiful bill. | ||
| Um, I want to talk about the, the tax cuts portion. | ||
| You've uh, you've said in other interviews that you have a concern about the growing national debt. | ||
| Why is that a concern for you from the, the financial and the market perspective? | ||
|
unidentified
|
Well just, you know, everyone knows, if you have a 2 percent mortgage, it's easier to make a payment than when you have a 6 percent mortgage, right? | |
| So the same thing applies to our national debt. | ||
| It's it's much harder for the country it takes up much more of our, our revenues, um to pay down higher interest rate debt that we have out there. | ||
| Now, that's number one. | ||
| Number two, I mean this is a subject that's universal. | ||
| Whether you're Democrat or Republican, everybody believes that the, that that that the debt level in this country is too much and if it continues to grow, will obviously be even more. | ||
| And and that's the issue, of course, Social Security Medicare, all of those things are are, are at risk when you start talking about this. | ||
| So uh, I I think, I think you're gonna. | ||
| The concern that I have is the the tax act. | ||
| If the tariffs come through at the level that they're talking about, the tax act, and if you believe that that the economy should grow as a result of the tax act um you, you should be able to keep the debt at least at the level that it's at now. | ||
| I don't know if you pay it down that much, but it certainly doesn't increase as much if it increases and there's a variety of of opinions as to why it might, then I think you have problems in the future financially. | ||
| All right, let's talk to callers. | ||
| We'll start on the line for Democrats in Pacific Grove, California. | ||
| Nathan, you're on with Paul Auslander. | ||
|
unidentified
|
Good morning. | |
| I would like to ask if these tariffs have ushered in an era of crony capitalism because there have been carve-outs for certain industries, and the lobbyists seem to be prospering greatly. | ||
|
unidentified
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And it's almost pay to play. | |
| If I can get a carve-out, what am I paying to get that carve-out? | ||
| Does it require a contribution? | ||
| Are all people asking for a carve-out treated equally? | ||
| What do you see going on here? | ||
| Well, so to your point, I mean, there's no question that the lobbyists are doing well during this period, but that would be happening whether there are tariffs or there are tax acts to be passed or not. | ||
| That's just part of the business of politics in Washington, and I might add in all the state capitals in the country. | ||
| I think part of this is, you know, President Trump's heart's in the right place when he's trying to make sure that he levels the international playing field, something that hasn't really occurred over the last some 50 years. | ||
| There are markets that are closed to the U.S. where those very countries have open access to our markets. | ||
| And I think that's the Scott Besant and President Trump are trying to close those loopholes. | ||
| And I think what happens is when they change something, sure, it looks like Apple got a sweetheart deal or somebody else did, or maybe the hotels in California or the farm workers, whatever the case may be. | ||
| I think a lot of that's just corrective strategy. | ||
| I don't think it's as nefarious as you make it sound in that. | ||
| I'm sure there's some payback going on, but I think more of it is just when the administration recognizes that they perhaps shot too far, that they added things that are going to be a problem. | ||
| This is the way they pull back on it. | ||
| And here's Gary in Meridian, Connecticut, Independent Line. | ||
| Hi, Gary. | ||
|
unidentified
|
Mimi. | |
| Good morning, Mr. Alex Lander. | ||
| Good morning. | ||
| I'd like to ask, I have a question. | ||
| When Donald Trump became president, the dollar to purchase one Euro, it cost $1.01. | ||
| Since he's become president, the Euro has risen, and it now costs today $1.16 has been as high as $1.18. | ||
| This, in my opinion, doesn't indicate that the dollar is getting stronger, but in fact, it's getting weaker. | ||
| And it's against not a particularly robust European economy. | ||
| How do you explain this when you say the dollar is doing so well and the economy is doing so well that the dollar is dropping in value and it's costing Americans more to buy European products on top of any tariffs? | ||
| Well, you explained it better than I could, and it's absolutely true. | ||
| The dollar has dropped in value, but it's still the most stable currency, the most trusted currency in the world. | ||
| But to your point, it has, yeah, and the Euro has risen as a result. | ||
| But I think part of that was, we talked about that earlier in this discussion, which is the worries and the impacts on the bond market, the worries and the impacts on the Federal Reserve and the independence of that. | ||
| All of that impacts the dollar. | ||
| And then, of course, there's the tariffs and the trade barriers that the tariffs are trying to fix, but inadvertently create other ones. | ||
| I mean, I've heard some pretty strong arguments. | ||
| We talked a little bit about it before with India. | ||
| India was driven into the hands of the Chinese in this particular couple of months because of the hard negotiating position of the United States. | ||
| Whether or not that's a true statement, you're seeing a lot of movement, and that's going to weaken the dollar to some degree. | ||
| So I think you explained it well. | ||
| It's not great, but it's better than the rest of the world. | ||
| Here's John, a Democrat in Grand Rapids, Michigan. | ||
| Hi, John. | ||
| John, are you there? | ||
| In Grand Rapids? | ||
| We got a post on X from MLB who says, how long before we see the results of long-term inflation harm the U.S. economy? | ||
|
unidentified
|
Well, I think we saw the worst of that a couple of years ago. | |
| Inflation shot up because of post-COVID activities, the amount of money that was spent, the amount of liquidity that flooded into the system, the supply chains being ground to a halt all because of post-COVID. | ||
| And I think, you know, some of the policies that happened politically, which I think I supported the idea, we didn't know what the result of COVID was going to be. | ||
| And so the Fed took the position of flooding the markets with liquidity. | ||
| And I think it saved off some potential economic recession. | ||
| But the fact of the matter is inflation, whether it's 2% or 3%, is not a crazy number. | ||
| And I think that's one of the things we're seeing now. | ||
| I don't see we've had very low inflation over the last 20 years. | ||
| It was this 18 to 24 month period that we saw it spike. | ||
| It's back down to earth now, and I think that continues. | ||
| And I don't think there are terrible long-term implications on that front. | ||
| We've got other problems, but I don't think we have to worry about inflation as one of them. | ||
| I want to ask you about President Trump's decision to own part of semiconductor manufacturer Intel. | ||
| But before I get that, I'm going to play Commerce Secretary Howard Lutnick at last week's cabinet meeting talking about that, and then we'll get your response. | ||
| In one week, Intel came in, right? | ||
| The Biden administration had given $11 billion to Intel, given it to them. | ||
| Done. | ||
| Corporate just gift. | ||
| And you turned that into really, you know, it was like less than five minutes of conversation, and Intel agreed to give us 10% of their company, which of course was worth $11 billion. | ||
| So it's not socialism. | ||
| This is capitalism. | ||
| If you give someone $11 billion who's just building an America, they're not doing something special. | ||
| They're building an America. | ||
| And their CEO told the president he didn't need the grant. | ||
| And you said, well, then why don't we get something for it? | ||
| What do you think of that, Paul? | ||
|
unidentified
|
You know, I was surprised, frankly, that this happened because if you go back, I don't know how many years, but at least 30, 40, 50 years, the Republican Party of old would have never stood for something like this, investing into a company, in this case, a publicly traded company as Intel. | |
| I understand what Secretary Lutnick is talking about. | ||
| I'm not sure Intel has had, if you believe in free markets, this is worrisome, right? | ||
| When does something like this stop? | ||
| Putting that kind of money, U.S. money. | ||
| I mean, I remember when we invested, the United States invested in GM to effectively save it. | ||
| And the backlash from that was incredible from both parties. | ||
| Here it's looked at as a good thing. | ||
| Intel has had its problems over the last few years. | ||
| And a number of companies that are in Intel's business have lapped them in research and in development and sales and in profitability. | ||
| And now you could make the argument that we're propping up a company that if the free markets had its way may not be here in a couple of years. | ||
| So I'll use a phrase that I hear a lot of times on your show. | ||
| I'm confused and I'm not sure I understand the benefit other than getting a dividend for their investment that they've put in the money. | ||
| And what do you think the harm might be of that? | ||
| If you sound like you're against it. | ||
| So why would that be a bad thing to invest? | ||
|
unidentified
|
I think it sets a precedent of anti-free markets. | |
| I think going back to one of the callers' comments, the idea that some people are favored over others, that concerns me from the standpoint of free markets, one of our hallmarks in the United States are free markets. | ||
| And I think that that changes that equation to some degree. | ||
| One or two doesn't bother me. | ||
| If this becomes a pattern, I think it does. | ||
| Here's Ginger in Riverside, California, Independent Line. | ||
| Hi, Ginger. | ||
|
unidentified
|
Yes. | |
| This is my opinion is that I believe that he had no business, Trump, purchasing 10% of Intel. | ||
| He had no business doing it. | ||
| I think that anyone that has money in the stock market, pull it out now. | ||
| This guy is doing nothing but destroying this country just piece by piece. | ||
| He couldn't leave anything alone. | ||
| That's my suggestion. | ||
| Thank you. | ||
| Well, I got a clear message as to where you stand on that. | ||
| I think, you know, again, I have mixed feelings about this. | ||
| I understand what they're trying to do and getting revenues into the United States coffers to help reduce the deficit. | ||
| But the other part of that, particularly with tariffs, was level the playing field. | ||
| In this particular case, that second part doesn't come into play with Intel. | ||
| And so again, I'm trying to take a long view on this. | ||
| Scott Besson and others are smarter than I'll ever be. | ||
| So if they think that this is a good idea, I'm willing to wait and see and see how it plays out. | ||
| But right now, I'm not sure. | ||
| And Paul, Congress is back in today after August recess. | ||
| We're 28 days away from a possible government shutdown. | ||
| What's your message to Congress? | ||
|
unidentified
|
Feels like Groundhog Day, doesn't it? | |
| I mean, we keep going through this. | ||
| And for people in my business, and I think consumers in general are just over it. | ||
| But I think people in my business are getting to the point where we're tired of this constant every three months kicking the can down the road and not working out a solution. | ||
| It's not good. | ||
| There's no other way to spin it. | ||
| It's not good. | ||
| It's Congress not living up to its responsibilities and getting this done once and for all. | ||
| We have this question for you on text from Rob in Huntington, West Virginia. | ||
| Can we trust any of the data provided by the federal government that the federal government used for financial decisions with Trump in office? | ||
| He fired the director of the BLS after a negative jobs report and is threatening the independence of the Fed. | ||
| What about data provided concerning inflation or the national debt? | ||
| What do you think? | ||
|
unidentified
|
I think there are too many. | |
| There's two questions there, right? | ||
| Whether it's divided into two or not. | ||
| I think you can trust the economic data that comes out of the government because it doesn't come from one source. | ||
| It comes from multiple agencies and multiple analysts that put this together. | ||
| And then there's a spokesperson. | ||
| The spokesperson in this case was fired by President Trump because he didn't like what was being said. | ||
| Arguably, you could interpret that as they were saying something different than President Trump wanted to hear. | ||
| And so therefore, he fired the messenger. | ||
| Going forward, I'm not sure how that gets changed much because you still have the way in which this is done by various committees in various parts of the country, by various analysts. | ||
| I can't believe you can get everybody to lie about the same thing. | ||
| So I still trust in the system. | ||
| I think you have to watch it a little more carefully. | ||
| I think the spokespeople that you have for these types of things, particularly to the press, could have a tendency to put their finger on the scale so that they please their boss. | ||
| I think that's what you have to watch out for more than anything else. | ||
| And another question on text from Chris in New Mexico. | ||
| Mass deportations are reducing our labor force, particularly in the agriculture, construction, and hospitality sectors. | ||
| Will the resulting labor shortages not drive food and housing prices higher, driving inflation? | ||
|
unidentified
|
I don't think there's any question about that. | |
| I also think the other thing that's going to occur is company businesses, small businesses particularly, are going to go out of business. | ||
| I have a friend in my community that owns a number of restaurants. | ||
| He's 80% of his staff is either gone in terms of deported, or they just won't come to work for fear of coming out and getting deported. | ||
| So you see this on steroids in a number of states that have service industries like that. | ||
| I think President Trump recognized that because you saw him pull back on some of that, particularly out west. | ||
| So it remains to be seen how they dig into that area. | ||
| But yeah, your caller has an absolute good question there, and that's a worry for the economy. | ||
| You know, employment was fairly full. | ||
| We were in a 3% to 4% range of employment. | ||
| Now it's tripped over a little bit, over 4%. | ||
| But that says to me virtually everybody that wants to work is working. | ||
| If you take a whole class of employees and ship them out of here, I'm not getting into the immigration debate for a moment. | ||
| I'm just talking about it from a pure economic sense. | ||
| You're going to have impacts throughout the economy. | ||
| And I think your caller highlighted one. | ||
| On the independent line, Tim in Gasville, Arkansas. | ||
| Good morning, Tim. | ||
|
unidentified
|
Good morning, Mimi. | |
| Your unemployment numbers are based largely on Biden giving jobs to the foreigners, to the illegals. | ||
| When the illegals are out, of course, the numbers are going to change. | ||
| When the illegals are out, of course, the housing is going to change too. | ||
| It will get cheaper. | ||
| But I want to get back to picking winners and losers, as you call it. | ||
| To clarify, Biden gave Intel the money, but Trump got something for it. | ||
| Were you as uncomfortable with Obama giving millions to Solyndra or picking winners and losers as far as electric EVs or picking winners and losers as far as wind energy, solar energy? | ||
| We've been doing this for years, picking winners and losers as in paying student loans. | ||
| This is something the Democrats and the Marxists have done for years and years and years. | ||
| At least I may not say I like it because I'm a free market guy, but at least President Trump is getting something to go back into the coffers to help pay off that national debt instead of just giving it away like to the banks and getting nothing for it. | ||
| All right, Tim. | ||
| Go ahead, Paul Alsonder. | ||
|
unidentified
|
Yeah, on balance, I couldn't agree more. | |
| I mean, you're right. | ||
| Certainly on the Intel thing, he's getting something back for it. | ||
| And it wasn't only Biden, Obama, Bush. | ||
| I mean, you go right down the list of presidents. | ||
| Various presidents, various Congresses have made deals with different companies. | ||
| This is the first that I can recall where we made a direct investment into a publicly traded company of this magnitude. | ||
| But you're right. | ||
| I mean, this is not something new. | ||
| And to his credit, President Trump is trying to get something back for it, some kind of dividend. | ||
| So if it works and Intel doesn't fail, then it was a good idea. | ||
| I worry about an artificial propping up of Intel. |