AN ALERT.
DON'T GET ME STARTED ON
SOYBEANS.
>>> ONE THING INTERESTING IN THE
PRESIDENT'S DISCUSSIONS ABOUT
THIS, TRADE DEFICIT ALL OF THAT.
IT DID HELP HERE.
NOT SO MUCH TALKING ABOUT WHAT
IS GOING ON WITH THE BUDGET
DEFICIT.
WE'LL EXPLORE THAT OFF AND OFF
HERE.
GO TO MARKET WATCHERS,
JOHN LAYFIELD, GARY B. SMITH AND
FORMER WHITE HOUSE VISOR AUSTAN
GOOLSBEE.
THIS NUMBER IS GREAT
SECOND QUARTER NUMBER, IT IS
HARD TO REPEAT.
WHAT IS IT ABOUT SUSTAINING
STRONG QUARTERLY NUMBERS, WHAT'S
THE PROBLEM?
>> I DON'T KNOW, THIS IS A VERY
GOOD NUMBER.
IT FOLLOWS ON A FIRST QUARTER OF
THIS YEAR WAS A PRETTY MEDIOCRE
NUMBER.
WHEN THAT CAME IN AND CONSUMER
SPENDING GREW LESS THAN 1% AT AN
ANNUAL RATE, A LOT OF PEOPLE
SAID IT WAS FROM THE WEATHER.
SO IF YOU GET A DOWN QUARTER
FROM THE WEATHER OR FROM
SOMETHING THAT IS TRANSITORY A
LOT OF TIMES YOU GET A REBOUND
IN THE FOLLOWING QUARTER.
VICE VERSA.
IF YOU GET A GOOD QUARTER YOU
GET A REBOUND DOWN.
THE IT IS JUST REFLEX SHUN THERE
IS LOT OF MOVING AROUND.
A NUMBERS MOVE AROUND.
SOME MONTHS YOU'RE UP, SOME
MONTHS YOU'RE DOWN, YOU TEND IT
AVERAGE OUT OVER LONGER PERIOD.
NEIL: IF WE AVERAGE THINGS OUT
NEXT TWO QUARTERS, GARY B.
SMITH, THE VIEW WE'LL AVERAGE
OUT 3% GROWTH FOR THIS ECONOMY
IN THE YEAR.
THAT IS A BIT OF A LEAP.
I'M GOING ON THE ASSUMPTION OF A
3% THIRD QUARTER PICKUP, 2.9%
FOURTH QUARTER PICKUP, I THINK
THAT IS THE CONSENSUS.
WHAT IF THAT IS HOW WE ENDED THE
YEAR IT WOULD BE FANTASTIC AND I
THINK MORE IMPORTANTLY, LIKE
WE'RE SEEING SOME EARNINGS
COMING OUT.
THEY'RE A REFLECTION OF WHAT
HAPPENED AND PEOPLE NOW START TO
LISTEN THE GUIDANCE GOING
FORWARD.
I THINK THE SAME WAY WITH THE
GDP.
WE GET A 3% GROWTH THIS YEAR, I
KICKED IN.
I THINK EVERYONE ON THE PANEL
WOULD AGREE THE GREAT UNKNOWN IS
WHAT HAPPENED WITH TARIFFS BUT
END UP BEING MORE POSITIVE THAN
NEGATIVE.
I THINK THE ECONOMY IS IN GREAT
SHAPE ON STRONG FOOTING RIGHT
NOW.
NEIL: YOU KNOW, JOHN LAYFIELD,
THE MARKETS HAVE A SHRUGGED
REACTION TO THIS, MAYBE BECAUSE
THEY WERE EXPECTING THIS, OR
ACTUALLY MAYBE EXPECTING WHISPER
NUMBERS ADDED A LOT HIGHER.
WHAT IS GOING ON HERE?
>> I THINK FORECASTING AS GARY B
WAS TALKING ABOUT, THE MARKET
EXPECTED LOW FOUR RANGE, THEY
GOT EXACTLY WHAT PERP EXPECTING.
WE GOT A MISS.
IF THE IT WAS HIGHER, MARKET
WOULD BE UP A LITTLE BIT BUT NOT
MUCH THEY EXPECTED 4% RANGE.
GOOD THING GOING INVENTORIES,
1.43 INVENTORY SALES TO A YEAR
AGO, NOW IT IS 1.35.
THAT IS A GOOD SIGN FOR GDP
GOING FORWARD.
NEIL: AUSTAN, WHEN YOU LOOK AT
THIS, THE PRESIDENT SAID TAX
CUTS WERE A REASON, A BIG CHUNK
OF THAT.
DO YOU THINK TAX CUTS LIFTED THE
ECONOMY?
>> ONLY MODESTLY.
I NOTICE HE DIDN'T WANT TO
ATTRIBUTE THE SLOW GROWTH IN THE
FIRST QUARTER TO THE TAX CUTS.
I THINK JURY IS STILL OUT.
THERE IS GOOD NEWS AND BAD NEWS
FROM THAT.
MOST OF THE TAX CUT EFFECT IS
STILL TO COME.
SO IF YOU THINK THAT IS GOING TO
BE A BIG POSITIVE, THAT'S STILL
TO COME.
IT WAS SOLD AS IT IS GOING TO
INCREASE WAGES AND INCREASE
EITHER OF THOSE COME THROUGH.
SO I THINK WE'RE STILL GOING TO
BE HOPING THAT WE GET THAT GOING
FORWARD.
NEIL: YOU KNOW, GARY B., WHO AM
CALCULATIONS HERE BUT I NOTICE
THE PRESIDENT TALKING ABOUT THE
TRADE DEFICIT AGAIN AND AGAIN.
NEVER MENTIONS BUDGET DEFICIT.
GO OVER A TRILLION DOLLARS IN
RED INK.
HE CERTAINLY MADE A BIGGER CASE
RUNNING FOR PRESIDENT.
IGNORES IT AS PRESIDENT.
ON THE PARADE.
NEIL: YES, THAT IS THE WAY I
ROLL.
>> OUT THERE THE BIG BOGEYMAN.
IT IS SO EASY NOT TO SOLVE IT.
IT WILL HIT ONE DAY.
IT WILL HIT HARD.
I OFTEN SAID, WITH YOU AND ON
OTHER SHOWS, THAT, WE'RE HEADING
MORE TOWARD BECOMING GREECE THAN
I HOPE THAT'S NOT THE CASE.
I HOPE WE RIGHT THE SHIP,
ESPECIALLY WITH ENTITLEMENTS.
NEIL: SO WILL I.
I DON'T WANT TO BE A NAYSAYER
HERE.
I ALWAYS SAY THAT, AUSTAN GOING
BACK TO THE OBAMA DAYS, I SAID
THE SAME THING.
JOHN, I AM WORRIED ABOUT A
PRESIDENT FIXATED ON TRADE
DEFICITS.
THAT IN THE SCHEME OF THINGS
VERSUS OUR OVERALL BUDGET
DEFICITS, NO PUN INTENDED, YOU
KNOW, TRUMP CHANGE IF YOU WILL,
AND HE IS TALKING ABOUT THE
GROWTH FROM TAX CUTS, MAYBE THAT
TAKES CARE OF THAT, WHAT DO YOU
MAKE OF THAT?
>> I THINK IT IS INCREDIBLY
DISAPPOINTING, PROVES HE IS
POLITICIAN.
I HATE TO SAY THAT.
I'M ROOTING THE ECONOMY AND TAX
CUTS.
I THINK MY GOOD FRIEND AUSTAN I
THINK IS WRONG.
CORPORATE EARNINGS, 35, 40% OF
GROWTH ATTRIBUTED TO THE
EARNINGS GROWTH THE WAGE GROWTH
HAS NOT FIXED THAT.
IF YOU TAKE A TRILLION DOLLARS
OUT OF GOVERNMENT SPENDING YOU
WILL HURT IT SIGNIFICANTLY.
WHOEVER IS THE POLITICIAN IN
CHARGE PROBABLY WILL NOT GET
REELECTED.
THAT IS WHY NOBODY DOES IT.
DISAPPOINTED THESE GUYS DON'T
HAVE VISION FOR 20 YEARS OUT.
ONLY VISION FOR NEXT ELECTION