ALL-TIME HIGHS YESTERDAY THE
DOW S&P AND NASDAQ AND THEY
ARE HEADED TOWARDS FURTHER,
UNCHARTERED TERRITORY THIS
MORNING AMID U.S.-CHINA TRADE
OPTIMISM ARE OFFICIALS
AMERICAN COUNTERPARTS AGREE TO
TALK MORE PUT A PHASE ONE
TRADE DEAL, THEY HAD A PHONE
CALL APPARENTLY OVERNIGHT THE
FORMER CHAIRMAN FEDERAL
RESERVE COAUTHOR OF THE BOOK
CAPITALISM IN AMERICA DR. ALAN
GREENSPAN IS HERE THANKS SO
MUCH FOR JOINING US.
>> THANK YOU, NICE TO SEE YOU,
TOO.
>> SO WHAT IS YOUR TAKE ON
BACKDROP IN TERMS OF THE
ECONOMY, ISSUE ARE MARKETS
GETTING IT WILL RIGHT HERE
WHERE WE ARE HITTING RECORD
AFTER RECORD IN TERMS OF YOU
KNOW BASING WHAT THEY
OBVIOUSLY, SEE AS STRONG
BACKDROP?
HOW DO YOU SEE THINGS?
>> WELL, BY THE FACT THAT
THERE IS AN EVER-INCREASING
EXPECTATION THAT THE ISSUE OF
TARIFFS ON THE TARIFF WARS ARE
GOING TO GET RESOLVED BECAUSE
THERE IS NO QUESTION THAT THE
TYPE OF TARIFF STRUCTURE THAT
WE HAVE HAD AND CUSTOMS
FLOWING IN SIGNIFICANT
DETERRENT TO ECONOMIC ACTIVITY
THE CHINESE U.S. RELATIONSHIP
THE MAJOR ONE BY FAR IN THE
WORLD, ARE CAN COME TOGETHER
SO THAT THERE IS A MAXIMUM
AMOUNT OF INTERACTION AND
TRADE THE EXPECTATION IS THAT
THE ECONOMIES WILL RISE FASTER
AND IT IS REFLECTED IN THE
STOCK PRICE.
MARIA: SO YOU DO THINK THAT A
DEAL WILL GET DONE, BECAUSE IT
HAS TO GET DONE BECAUSE HE
THESE OR TWO LARGEST ECONOMIES
AND GOOD FOR BOTH ECONOMIES IS
WHAT YOU ARE SAYING.
>> IT IS GOOD FOR BOTH
ECONOMIES BUT YOU ARE ASKING
ME TO MAKE A POLITICAL
FORECAST, AND IT IS -- THESE
DAYS, IS NOT THE EASIEST
THINGS TO DO.
MARIA: DON'T WORRY LET ME ASK
YOU YOUR TAKE ON MANUFACTURING
DR. GREENSPAN LOOKING AT
REPORT RIGHT HERE FROM
CONNERSTONE MACROAN
INDEPENDENTLY REFER FIRM
MEADED BY NANCY LAZAR WRITES
THIS WEEK, THAT U.S. ISM
MANUFACTURING PICTURING MS.
NEXT IS LIKELY TO MOVER UP TO
52% NEXT SEVERAL MONTHS
INDICATED BY MODELS SHE IS
EXPECTING ISM AND GLOBAL
MANUFACTURING PURCHASING
MANAGERS ARE TURNING UP SHE
THINKS WE HAVE SEEN BOTTOM
WHAT DO YOU SAY?
>> A I SUSPECT THE SAME THING.
BUT LET'S REMEMBER, THAT THE
VERY LONG TERM OUTLOOK IS NO
BETTER THAN IT HAS BEEN
RECENTLY, IF ANYTHING, IT HAS
GOTTEN WORSE.
BUT IT IS THE CASE THAT THERE
ARE INDICATIONS IN THE SHORT
RUN, THAT THE ECONOMY IS
COMING OFF ITS DULLNESS IF I
MAY PUT IT THAT WAY, NOT THAT
IT IS GOING TO ROCKET FORWARD,
BUT IT IS HOLD ITS OWN IF
ANYTHING IT IS BETTER THAN --
SO FAR BETTER THAN I EXPECTED.
MARIA: OKAY.
SO WHERE WILL THE REBOUND BE
IN YOUR VIEW IS IT
MANUFACTURING?
IS IT THE CAPITAL EXPENDITURES
CAPEX ONE AREA THAT HAS BEEN
UNDER PRESSURE BECAUSE OF WHAT
YOU JUST SAID.
THE TRADE UNCERTAINTY.
>> IT IS BASICALLY BOTH.
THE KEY IS CAPITAL INVESTMENT
THE REASON THAT IS THE DECLINE
IN THE RATE OF GROWTH IN
CAPITAL INVESTMENT HAS BEEN A
SIGNIFICANT FACTOR CAUSING
DULLNESS, IN THE ECONOMY.
AND SO IT IS CAPITAL
INVESTMENT FIRST.
MANUFACTURING IS REMEMBER A
DECLINING SHARE OF THE RECENT
MARKET AND MANY CASES,
HIGH-TECH HAS BEEN MORE
SERVICE THAN ANYTHING ELSE.
AND AS A CONSEQUENCE OF THAT
HOW DO YOU CLASSIFY THINGS IS
SOMETIMES SLIGHTLY ARBITRARY.
MARIA: YOU USED TO TALK ALL
THE FWIEM WEALTH EFFECTS DR.
GREENSPAN WHERE WHEN STOCK
MARKET GOES UP PEOPLE FEELE
WEALTHIER A KRIBEL SPEND MORE
MONEY FEELING BETTER WEALTH
EFFECT IS REAL DO YOU SEE
WEALTH EFFECT NOW THAT WE'RE
SEEING RECORD HIGHS IN THE
MAJOR NI
IDDICES O ONE THING WE SEE 10%
RISE IN STOCK PRICES
STATISTICALLY CREATES ONE
PERCENT RISE IN GDP, SO IT IS
BASICALLY VERY CLEARLY IN THE
DATA.
SO AS THE MARKET RISES, IN A
WAY IT IS SELF-PERPETUATING AT
LEAST IN PART, AND THE -- WHEN
YOU COUPLE THAT WITH THE TRADE
DATA PROBLEMS THAT WE HAVE
BEEN HAVING THEN YOU CAN SEE
THAT WE'RE GETTING SEVERAL
DIFFERENT SIDES AND INCREASE
IN THE UNDERLYING FORCES
DRIVING THE WORLD ECONOMIES
FIRST, AND OURS NEXT BECAUSE
UP UNTIL NOW, IT HAS BEEN
PRETTY MISERABLE.
U.S. HAS BEEN AT A 2% ANNUAL
RATE OF GROWTH.
WHICH IS REALLY QUITE --
UNUSUAL FOR US.
>> WE'RE GOING O TO --
>> EUROPE IS DOING --
>> WE ARE GOING TO GET GDP
TOMORROW ANOTHER READING THE
ESTIMATES 1.9% IN GROWTH ARE
YOU SAYING YOU ARE EXPECTING
GDP NUMBERS TO START
INCREASING AND LOOKING BETTER?
>> WELL, THE ONE 1.9% IS
BASICALLY AN INDICATION THAT
WE ARE STABILIZEING WE'RE NOT
GOING DOWN FOR THE -- THIS
ECONOMY IS NOT ABOUT TO RUN
AWAY.
ON THE UPSIDE.
BUT I THINK THAT THE
PRESUMPTION THAT IT IS GOING
TO SINK INTO A RECESSION WHEN
MEANS NEGATIVE RATES OF
GROWTH, I THINK IS VERY
PREMATURE AT THIS STAGE.
>> PERHAPS THE RIGHT MOVE TO
STAY ON HOLD AT THE FED, FED
CHAIRMAN JAY POWELL LAST NIGHT
SAID CENTRAL BANK CUT RATES DO
TO BEARISH VIEW ON ECONOMY BUT
ECONOMY HAD LESS MOMENTUM THAN
ORIGINALLY THOUGHT NOW
BASICALLY ON HOLD.
DO YOU AGREE WITH THAT POLICY.
>> YEAH, I THINK IT IS NOT ON
UNREASONABLE VIEW WAY TO LOOK
AT THIS.
IF WE WERE GOING INTO
IF WE WERE GOING RETO
IF WE WERE GOING RECESSION WE
WOULD BE SLETH ON DOWNSIDE NOW
AND WE ARE NOT ACCELERATING ON
DOWNSIDE.
>> ONE OF THE REASONS I
MENTIONED EARLIER WHEN TRADE
PICKING UP INTERNATIONALLY IT
IS VERY IMPORTANT AND REMEMBER
THAT THE VAST AMOUNT OF
MERCHANDISE TRADE IS -- CHINA,
SHIPPING, NET TO THE UNITED
STATES.
>> YEAH.
>> REMEMBER THE TWO OF THEM
ARE 40% WORLD GDP.
SO YOU HAVE THIS EXTRAORDINARY
SET OF PRESSURES ARISING WHEN
TRADE OVERL
TRADE OVERALL STARTS TO LOOK
BETTER THE GLOBAL ECONOMY
LOOKS BETTER.
>> SOUNDS LIKE YOU'VE GOT
OPTIMISM WHERE WE ARE USMCA
THE OTHER OUTLIER IS THERE YOU
HAVE BEEN IN THAT HEARING ROOM
BEFORE WHEN CONGRESS REALLY
LIKES TO HEAR THEMSELVES TALK,
WE ARE LOOKING AT THAT OVER
AND OVER AGAIN, SO MANY
DIFFERENT AREAS, IN TERMS OF
USMCA HOW BIG AN IMPACT WOULD
THAT HAVE ON ECONOMY ALAN REAL
QUICK BEFORE YOU GO?
>> --
>> HOW BIG IMPACT HOW BIG
IMPACT WOULD PASSAGE OF USMCA
HAVE ON ECONOMIC GROWTH?
>> I HAVE NO IDEA.
>> OKAY.
OKAY.
USMCA IS EXPECTED TO CREATE
200,000 JOBS IF YOU LIVEN TO
PETER NAVARRO SAID THIS
WEEKEND AT THE WHITE HOUSE BUT
DR. GREENSPANS ALSO A A
PLEASURE TO SEE YOU THANKS