NEIL:
ALL RIGHT, I'M BACK FOR MY BOOMR
SEGMENT.
SESSION LOWS, GETTING BACK TO
THEM AGAIN, AND JEROME POWELL,
THE FEDERAL RESERVE CHAIRMAN, IS
SPEAKING RIGHT NOW TALKING ABOUT
FURTHER GRADUAL RATE INCREASES.
DIDN'T SEE HOW GRADUAL, TWO,
THREE OR MORE.
I THINK MORE THAN THREE WOULD
ALARM THIS CROWD, BUT WE SHALL
SEE.
LIZZIE MacDONALD, CHARLIE
BRADY, CHARLIE GASPARINO AND --
[INAUDIBLE]
>> CHINA!
[LAUGHTER]
NEIL: NOW, WITH THIS GANG, I
HAVE TO SPEAK EXTRA LOUD BECAUSE
THEY CANNOT HEAR ME.
[LAUGHTER]
SO, LIZZIE, THE FIRST THING --
>> WE'RE BOOMERS.
NEIL: RIGHT, WE'RE BOOMERS.
HEY, I'M A BOOMER, WE'RE ALL
BOOMERS.
SO THE FIRST THING THE PRESIDENT
HAS GOT TO MAKE CLEAR TO THESE
MARKETS IS THAT THIS DOESN'T
ERUPT INTO A TRADE WAR, BECAUSE
I THINK ALL THE EMPLOYMENT STUFF
AND EVERYTHING ELSE IS TAKING A
BACKSEAT TO THIS TRADE DRAMA.
WHAT DO YOU THINK?
>> YOU KNOW, YOU'RE RIGHT.
AND THIS IS SORT OF LIKE --
WATCHING THIS UNFOLD, IT'S
ASTONISHING.
IT'S SORT OF LIKE AD HOC AND ON
THE FLY POLICY WITH TWEETS THAT
ARE UNSAFE AT ANY SPEED NO
MATTER HOW YOU LOOK AT IT.
NEIL: SO YOU DON'T -- YOU THINK
THERE'S A METHOD TO WHAT THE
PRESIDENT --
>> I DON'T THINK THEY HAVE THE
EXACT PLAN READY TO LAUNCH.
[LAUGHTER]
I MEAN, I KNOW THEY KNOW --
[LAUGHTER]
I KNOW WHAT THEIR FEARS ARE AND
THE CONCERNS ARE ABOUT THE THEFT
OF INTELLECTUAL PROPERTY AND THE
TRADE DEFICIT AND SO FORTH.
I JUST -- PAT TOOMEY SAID IT
WELL, HE SAID HE DOESN'T THINK
THAT THE USE OF TARIFFS IS THE
RIGHT TOOL.
NEIL: YOU'RE TALKING ABOUT THE
REPUBLICAN SENATOR FROM
PENNSYLVANIA.
>> CORRECT, THANK YOU.
TO GO AFTER THE TRADE, THE --
>> WHAT I FIND ASTONISHING IS
WHEN TRUMP, I MEAN, WE REPORTED
THIS IN THE LAST HOUR.
TRUMP GETS TWO MAJOR CEOS -- I
WAS GIVEN THIS INFORMATION ON
THE BASIS I WOULD NOT REVEAL THE
NAMES -- YOU WOULD SAY THOSE ARE
MAJOR, OKAY?
THEY BOTH CALLED HIM UP AND
SAID, LISTEN, DO NOT DO A TIT
FOR TAT TRADE WAR.
WE UNDERSTAND THAT THE CHINESE
RIP US OFF, WE UNDERSTAND, YOU
KNOW, YOU HAVE GOOD MOTIVES.
BUT YOU DO A TIT FOR TAT TRADE
WAR, IT'S GOING TO UP WIND ALL
THES POSITIVE STUFF WITH THE
ECONOMY, IT'S GOING TO HURT THE
MARKETS.
DO A COMPREHENSIVE THING SO THE
MARKETS SAY AT LEAST WE'RE
THINKING ABOUT IT.
HE WAS LIKE, NO, THIS IS THE WAY
I'M GOING TO NEGOTIATE.
HE REALLY BLEW THEM OFF.
AND IT WAS GOOD ADVICE.
AND IT'S SO OBVIOUS BECAUSE WE
HAVE A PRETTY GOOD JOBS
NUMBER -- VERY GOOD, ACTUALLY,
IF YOU THINK ABOUT IT --
NEIL: IN OTHER WORDS, IT'S LIKE
A GOLDILOCKS NUMBER --
>> THINK ABOUT IT, IT'S A DECENT
NUMBER.
AND, YOU KNOW, BECAUSE OF OF
THIS TRADE GARBAGE, THE MARKET'S
OFF.
>> BUT THE THING THAT GETS ME, I
MEAN, AT LEAST WE'RE AT THE
RIGHT COUNTRY.
WE'RE HITTING CHINA, NOT OUR
EUROPEAN ALLIES.
AND I REALLY APPRECIATE I THINK
THAT THAT'S RIGHT.
AND I THINK HE'S REALLY
FRUSTRATED.
BECAUSE HE DOESN'T KNOW WHAT TO
DO.
BUT THERE'S A POSITIVE STEP AND,
AGAIN, WE WERE TALKING BEFORE
FOLLOW WHAT WE DID IN THE WAKE
OF A SPUTNIK.
SPUTNIK WE SPENT PROBABLY IN
TODAY'S DOLLARS HUNDREDS OF
BILLIONS --
>> BY THE WAY, THAT'S EVEN
BEFORE --
>> YES.
I'M THE SENIOR BOOMER HERE.
I'M THE SENIOR, I WAS A KID.
>> WHAT'S THE POINT?
>> IN THE '50s --
>> YEAH, YEAH.
>> -- OR WHENEVER.
WE SHOULD BE SPENDING BILLIONS
OF DOLLARS ON CYBER EDUCATION
AND THINGS LIKE THIS.
>> [INAUDIBLE]
>> WHAT?
>> WHO SHOULD BE SPENDING THAT
MONEY?
>> AMERICA.
INSTEAD OF, YOU KNOW, OTHER
THINGS.
NEIL: BUT HOW DOES A WAR WITH
CHINA POTENTIALLY HELP THAT?
>> A WAR WITH CHINA DOESN'T.
IT HURTS IT.
NEIL: OH, OKAY.
SO YOU WOULDN'T BE GOING AFTER
CHINA.
>> I WOULD BE GOING AFTER CHINA,
BUT I WOULD BE GOING AFTER CHINA
IN A WAY THAT WE DON'T HAVE TO
WORRY ABOUT CHINA.
NEIL: SO YOU DON'T LIKE THE
APPROACH HE'S TAKING.
>> NO, I DON'T, BUT HE'S GOT THE
RIGHT COUNTRY.
NEIL: CHARLIE, ONE OF THE THINGS
THAT HAS BEEN RAISED HERE IS
THAT OTHER PRESIDENTS OF EITHER
PARTY HAVE TRIED TO GET THEM TO
BE FAIR, AND I THINK WE CAN ALL
AGREE THEY'RE NOT.
>> RIGHT.
>> WE DON'T HAVE FREE TRADE.
NEIL: SO HE'S, YOU KNOW, CALLING
THEIR BLUFF.
>> BUT WHAT'S RALLYING THE
MARKETS RIGHT NOW --
NEIL: NOTHING'S RALLYING THE
MARKETS --
>> RATTLING.
NEIL: OH, RATTLING.
HUH?
>> -- THE UNCERTAINTY OF IT ALL.
AND MARKETS HATE UNCERTAINTY
MORE THAN ANYTHING, EVEN BAD
NEWS.
AND YOU TOUCHED ON IT AT THE TOP
OF THE SHOW, YOU SAID THE
PRESIDENT RISKS UNDOING HIS OWN
RALLY --
NEIL: HOW REAL DO YOU THINK THAT
IS?
DESPITE THE STORMY DANIELS
COMMENT YESTERDAY, ONE THING
THAT STUCK IN MY MIND WAS THE
NOTION THAT, YEAH, THERE'S GOING
TO BE SOME PAIN.
IT'S THE FIRST TIME HE'S
ACKNOWLEDGED THAT.
AND NOT JUST FOR THE MARKET, BUT
FOR CONSUMERS.
>> YEAH.
NEIL: WE'RE GOING TO FEEL THAT.
>> RIGHT.
>> AND THE BOTTOM LINE IS CHINA
IS IN THIS FOR THE LONG TERM,
RIGHT?
XI IS NOW EFFECTIVELY RULER FOR
LIFE, DONALD TRUMP IS RULER
UNTIL 2020 --
>> 2018 --
>> WELL, 2020.
HOW IS THIS GOING TO PLAY OUT?
NEIL: THE PRESIDENT STILL SAYS
HE NEEDS US MORE THAN WE NEED
HIM.
>> RIGHT.
AND EFFECTIVELY ALL OF THE U.S.
EXPORTS INTO CHINA WOULD BE
TAXED IF CHINA GOES THAT ROUTE.
THAT'S A BIG DEAL.
BUT THE CHINESE PREMIER IS
ALREADY SAYING LAST WEEK THEY
WILL EASE MARKET ACCESS, THEY
WILL BACK OFF ON, YOU KNOW, STOP
FORCING INTELLECTUAL PROPERTY
SHARING TO AVOID A TRADE WAR.
NEIL: WILL THAT BE ENOUGH IF
THEY MAKE GOOD OF IT?
>> HERE'S THE POINT, HANG ON.
REMEMBER WHEN DANIEL PATRICK
MOYNIHAN SAID, LISTEN, WE
OVERESTIMATED THE STRENGTH OF
THE SOVIET UNION, AND WHEN THEY
COLLAPSED, IT RIPPED THE LID OFF
THE PROBLEMS.
CHINA HAS TREMENDOUS POVERTY,
THEY HAVE A DEBT BOMB, AND THEY
HAVE HEALTH CRISES IN CHINA.
BUT THEY DO --
[INAUDIBLE CONVERSATIONS]
NEIL: YOU'RE IN THE CROWD THAT
SAYS THEY'LL BEND FIRST.
>> THEY WILL.
BUT THEY ARE ALSO IN IT FOR THE
LONG --
NEIL: OKAY, CHARLIE, WHO BENDS
FIRST?
>> ULTIMATELY, I THINK WE'LL
HAVE TO BEND FIRST.
NEIL: REALLY?
[INAUDIBLE CONVERSATIONS]
>> I THINK THAT THERE'S A
COMPROMISE.
AND IT'S PRETTY SIMPLE.
THE UNITED STATES DOLLAR IS THE
WORLD'S RESERVE CURRENCY.
THAT'S GREAT.
THAT'S WONDERFUL.
IT GIVES US LOTS OF SPECIAL
PRIVILEGES.
BUT THERE'S ALSO SOMETHING
HORRIBLE ABOUT IT.
IT'S OVERVALUED.
NEIL: RIGHT.
>> WE -- IT'S MUCH MORE, IT'S
DRAMATICALLY OVERVALUED RELATIVE
TO THE YUAN.
>> BECAUSE WE RUN DEFICITS.
>> EXACTLY RIGHT, CHARLIE, WE
RUN DEFICITS --
NEIL: WHICH WE DIDN'T RUN WHEN
SPUTNIK WAS GOING.
>> RIGHT.
[LAUGHTER]
NO, WE DID NOT.
AND WHAT WE COULD DO IS FORCE
CHINA TO DRAMATICALLY REVALUE
THEIR YUAN WHICH I THINK THEY
WANT TO DO ANYWAY.
THIS SHOULD NOT BE HAPPENING.
NEIL: NO.
>> THEY DO.
NEIL: EVEN IF THEY MAKE
CONCESSIONS, HERE'S WHAT I
WONDER, HOW DO YOU DO THE RONALD
REAGAN THING, TRUST BUT VERIFY?
>> TRUST BUT VERIFY IN THIS ONE
IS NOT WEAPONS.
YOU TRUST BY JUST LOOKING AT
YOUR BLOOMBERG SCREEN.
IF YOU SEE THE YUAN --
NEIL: YOU REALIZE THEY'RE A
COMPETITOR TO US.
>> WHAT'S THAT?
NEIL: BLOOMBERG COMPETES WITH
US.
>> OH, I'M SORRY.
MEAN, YOU LOOK AT THE NEWSPAPER
OR -- YOU LOOK AT A FOX NEWS
FEED --
NEIL: OR FOX BUSINESS.
DO YOU KNOW WHERE YOU ARE RIGHT
NOW?
>> I'M SO SORRY.
[LAUGHTER]
>> YOU KNOW, NEIL --
NEIL: I'M KIDDING.
>> CHINA HAS OPENED UP TO US,
OKAY?
THEY HAVE OPENED UP TO US
INCREASINGLY --
NEIL: BUT IT'S BEEN GLACIAL.
>> YOU KNOW WHY?
WE WANT TO DO BUSINESS THERE.
I'M TELLING YOU, EVERY AMERICAN
COMPANY WANTS TO DO BUSINESS
THERE BECAUSE IT'S A BURGEONING
IT IS A MARKET THAT --
NEIL: THAT'S TRUE.
>> -- IS UP FOR GRABS, AND IF WE
DON'T DO BUSINESS THERE, OUR
ECONOMY IS GOING TO GET HIT.
[INAUDIBLE CONVERSATIONS]
NEIL: THEY'VE BEEN EMBARRASSED.
THE ONE THING ABOUT A TRADE WAR,
YOU REALIZE THAT THE DIRTY
LITTLE SECRETS EACH SIDE EXPOSES
ON THE OTHER.
>> EXACTLY.
NEIL AND DO THE CHINESE DON'T
PLAY CLEAN OR FAIR.
>> NO, THEY DON'T --
[INAUDIBLE CONVERSATIONS]
NEIL: RIGHT.
>> MAKE PORK PRODUCTS --
NEIL: STEVE, ANY FINAL COMMENT?
[LAUGHTER]
>> MY FINAL COMMENT IS TO LOOK
FOR A ONE/WIN SITUATION --
NEIL: DO YOU THINK WE'RE GOING
TO HAVE ONE?
>> I THINK IT'S POSSIBLE.
AND I REALLY DO.
CHINA'S NOW TRADING OIL IN YUAN.
THEY WANT THEIR YUAN TO BE MORE
IMPORTANT.
LET THEM HAVE IT.
NEIL: LET THEM HAVE IT.
>> LET THEM REVALUE THEIR YUAN.
CALL THEM A CURRENCY
MANIPULATOR.
LET THE YUAN GO TO .20 --
>> KEEP OUR OWN HOGS HERE.
NEIL: ALL RIGHT.