AWAY, THAT THEY DON'T EVEN
ATTEMPT TO DO THAT.
THIS HAS GONE WAY FURTHER THAN
THAT.
WE'VE GOT DINENE BORELLI HERE,
JOHN LONSKI, MAX BURNS.
A QUICK PEEK AT THE CORNER OF
WALL AND BROAD, I WANT TO GET
YOUR GUYS' THOUGHTS ON THAT, SO
FAR OUR MARKETS ARE DEALING WITH
IT.
ONE THING THAT'S INTERESTING,
JOHN, WE ARE DEALING WITH IT
BECAUSE WE LIKE MAYBE THE TRADE
BLINKING ON THE PART OF THE
PRESIDENT, MADE THE TRADE
OVERTURE ON HIS PART TO HELP THE
CHINESE OR AT LEAST GIVE THEM
SOMETHING TO AMELIORATE THIS
HONG KONG, WHO KNOWS BUT IT DID
PUT OFF TARIFFS ON SOME OF THE
CHINESE IMPORTS THAT WERE GOING
TO GO INTO EFFECT SEPTEMBER 1.
THE MARKETS LIKE THAT.
>> YOU CAN ALSO SAY TRUMP IS
LISTENING TO THE MARKETS, YOU
KNOW.
HE WANTS TO KEEP THIS ECONOMY
GROWING SO HE'S BACKING OFF A
BIT ON THE TRADE FRONT.
OF COURSE, THAT'S GOOD NEWS FOR
U.S. EQUITIES.
NEIL: WHAT DO YOU THINK OF THAT?
IT COULD BE A GOOD OR BAD THING.
WHAT DO YOU THINK?
>> I THINK IT'S A GOOD THING.
THE MARKET DID RESPOND BECAUSE
OF THE ANNOUNCEMENT COMING FROM
THE TRUMP ADMINISTRATION THAT
THE TARIFFS, ADDITIONAL TARIFFS
HAD BEEN SUSPENDED.
SO REALLY, THIS GOES BACK TO THE
PRESIDENT LOOKING OUT FOR THE
FORGOTTEN MEN AND WOMEN IN
AMERICA BECAUSE CHINA HAS BEEN
GETTING AWAY WITH MANY, MANY
YEARS OF CHEATING AND STEALING
AND LYING AND NOW IT IS TIME TO
CALL THEM OUT ON THEIR ACTIONS.
NEIL: ALL RIGHT.
BUT HE WAS THE ONE THAT MADE
THIS OVERTURE, MAYBE FOR
PERFECTLY SOUND AND VALID
REASONS, THE MARKETS WERE
GETTING WORRIED.
>> WORRIED ABOUT THE
SUSTAINABILITY OF THE CURRENT
ECONOMIC RECOVERY.
HE'S GOT TO KEEP THAT
UNEMPLOYMENT RATE MOVING LOWER.
NEIL: HE HAD TO KNOW THAT WOULD
HAPPEN WHEN HE SUGGESTED THE
TARIFFS IN THE FIRST PLACE.
>> MAYBE HE THOUGHT THE RESPONSE
WOULD HAVE BEEN MORE MUTED FOR
WHATEVER REASON.
BUT WHEN YOU HAVE MAJOR BANKS
COMING OUT WITH UPWARDLY REVISED
FORECASTS OF RECESSION RISK, YOU
HAD THAT DROP IN TREASURY BOND
YIELDS, MY GOODNESS, YESTERDAY
FOR AWHILE, THE 30-YEAR TREASURY
BOND YIELD WAS JUST UNDER THE
FEDERAL FUNDS RATE.
THAT'S RIDICULOUS.
THAT SHOWS A LOT OF FRIGHT IN
THE FINANCIAL MARKETS AS FAR AS
THE OUTLOOK FOR THE U.S.
ECONOMY.
NEIL: AND GLOBALLY, RATES HAVE
BEEN DECLINING.
I'M WONDERING, DEMOCRATIC
CANDIDATES MAYBE WITH THE
EXCEPTION OF KAMALA HARRIS HAVE
BEEN LARGELY SILENT ON THIS
ISSUE.
I THINK SHE WAS THE ONE WHO CAME
FORWARD TO SAY IN THE LAST
DEBATE THE FED HAD TO CUT RATES
TO SORT OF CLEAN UP AFTER THE
PRESIDENT, I'M PARAPHRASING, AND
NO DOUBT THE FED MIGHT HAVE TO
DO THAT AGAIN AND AGAIN AND
AGAIN.
I'M WONDERING HOW THIS DOES PLAY
OUT POLITICALLY, BECAUSE THERE
ARE A LOT OF DEMOCRATIC VOTERS
WHO LIKE WHAT THE PRESIDENT'S
DOING WITH CHINA.
WHAT DO YOU THINK?
>> THERE ARE VERY FEW PEOPLE IN
THE COUNTRY THAT SEEM TO LIKE
WHAT THE PRESIDENT'S DOING ON
TRADE.
CERTAINLY NOT THE FARMERS WHO
HAVE SEEN THEIR CONTRACTS GO
AWAY.
NEIL: UNION WORKERS.
>> WELL, I MEAN, THIS IS NOT
JUST A FARMERS' ISSUE.
THIS IS CONSTRUCTION, THIS IS
MATERIALS FOR INDUSTRIAL WORK --
NEIL: WHY DON'T THEY SPEAK OUT
MORE?
>> THEY HAVE.
THERE HAVE BEEN A FLOOD OF
STORIES JUST THIS WEEK ON
FARMERS, ON CONSTRUCTION WORKERS
SAYING THEIR CONTRACTS ARE GONE.
THESE ARE CONTRACTS THAT THEY
WORKED ON FOR 10, 20, 30 YEARS
TO BUILD TRUST.
THOSE AREN'T GOING TO COME BACK
WHEN THE TRADE WAR STOPS.
NEIL: I'M NOT DISPUTING THE FACT
THEY ARE CONCERNED AT ALL, BUT I
THINK A LOT OF THE CANDIDATES
THEMSELVES GET CONCERNED ABOUT
MAYBE SUPPORTING THE FARMERS BUT
BEING VERY LEERY OF TICKING OFF
UNION VOTERS WHO INCREASINGLY DO
LIKE THIS PRESIDENT.
ARE YOU WORRIED ABOUT THAT?
>> THE NUMBERS IN PENNSYLVANIA
DON'T SEEM TO BEAR THAT OUT.
HE'S UNDER WATER THERE BY 15
POINTS.
SO THIS IS MUCH MORE I THINK
DAMAGE CONTROL THAN ANYTHING
ELSE FOR THE PRESIDENT.
NEIL: WHAT DO YOU THINK?
>> WITH REGARDS TO THE UNION
WORKERS, LOOK AT HOW DEMOCRATS
WANT TO IMPLEMENT THE GREEN NEW
DEAL.
WHAT IS THAT GOING TO DO TO
JOBS, ESPECIALLY TO UNION JOBS
AND RAISE ENERGY PRICES AND ALL
THE OTHER THINGS THAT THEY WANT
TO DO TO REALLY DISRUPT OUR WAY
OF LIFE, AND BE MORE ONEROUS ON
AMERICANS, HARD-WORKING
AMERICANS, ESPECIALLY THE UNION
WORKERS.
JOE BIDEN, THE COAL FIGHT.
COME ON, HE SAID YEARS OF NO
MORE COAL IN USA AND HE'S STILL
TRYING TO BRING BACK THAT MANTRA
NOW.
HE HAS A WAR AGAINST COAL AGAIN
FROM THE PREVIOUS
ADMINISTRATION.
>> YOU KNOW, I WOULD GO AHEAD
AND ADD, TOO, THAT THE DEMOCRATS
WITH THIS ISSUE ON TRADE, WITH
CHINA, INTELLECTUAL PROPERTY
THEFT, SAID NOTHING ABOUT IT.
THEY DIDN'T SEEM TO CARE MUCH
THAT THESE COMMUNITIES IN
PENNSYLVANIA, MICHIGAN AND OHIO,
WHERE ELSE MANUFACTURING AREAS
DOWN SOUTH WERE BEING CLOBBERED
BY THE MOVEMENT OF PRODUCTION
FACILITIES FROM THE UNITED
STATES TO CHINA.
THAT SHOULD HAVE BEEN AN ISSUE.
MAYBE THAT HAD TO HAPPEN
EVENTUALLY BUT YOU CAN'T IGNORE
IT.
NEIL: WHEN THEY WERE IN IOWA FOR
THE STATE FAIR AND ALL THAT
STUFF, THE FARMER THING, THE
IMPACT THERE, WAS VERY
PRONOUNCED.
THAT WAS A BIG ISSUE.
NOW THINGS ARE IMPROVING ON THAT
FRONT WHILE ALMOST EVERY SECTOR,
WE WILL BE RIFLING THROUGH A LOT
OF THESE, FROM RETAIL DOING
WELL, ALL DOW 30 STOCKS ARE UP
FOR THE TIME BEING, BUT WHEN IT
COMES TO A LOT OF THE ISSUES
NEAR AND DEAR TO FARMERS,
THEY'RE NOT DOING TOO WELL.
A LOT OF CORN FUTURES DOWN,
SOYBEAN FUTURES DOWN, WHEAT,
BARLEY, DOWN.
SO THERE'S OPTIMISM, TO YOUR
POINT, ABOUT THIS GETTING
RESOLVED, FUNNY WAY OF SHOWING
IT.
>> WE CAN TALK ABOUT WHAT THE
GREEN NEW DEAL MIGHT DO TO THE
ECONOMY OR WE CAN TALK ABOUT
WHAT PRESIDENT TRUMP'S TRADE
SCHIZOPHRENIA IS DOING NOW.
THE BOND YIELDS AREN'T GOING
DOWN BECAUSE I'M BUYING BONDS.
INSTITUTIONAL INVESTORS --
NEIL: I THOUGHT YOU WERE.
>> -- ARE FLEEING OUT OF THE
MARKET FOR FEAR OF RECESSION.
WE HAVE THE SMART MONEY AND
LARGE INVESTORS ALREADY STARTING
TO COVER THEIR POSITIONS FOR
FEAR OF WHAT MIGHT HAPPEN.
NEIL: ALL THAT MONEY IS COMING
HERE FOR THE TIME BEING.
WE ARE A SAFE PLACE TO PARK --
>> THAT'S DEFINITELY THE CASE.
AS THE FEDERAL RESERVE GOES
AHEAD AND CUTS INTEREST RATES,
THAT REDUCES THE COST OF HEDGING
FOR THESE FOREIGN INVESTORS AND
IT MAKES U.S. BONDS ALL THE MORE
ATTRACTIVE RELATIVE TO BONDS
FROM GERMANY THAT NOW HAVE A
MINUS ONE HALF PERCENT INTEREST
RATE.
BONDS EVEN FROM THE UK WITH
BREXIT, YOU KNOW WHAT THE
INTEREST RATE THERE IS ON A
TEN-YEAR BOND?
ONE HALF OF 1%.
WE ARE STILL WAY UP THERE AT
NEARLY 1.7%.
I THINK THERE'S A LOT OF ROOM
FOR U.S. TREASURY YIELDS TO MOVE
LOWER.
I THINK WE WILL BE IN A RAGE
EVENTUALLY.
NEIL: WE DON'T HAVE A LOT MORE
TO GO.
>> HEY, 1.25%, 1.5% IS LOWER
THAN WHERE WE ARE TODAY.
I THINK THERE'S A VERY GOOD
CHANCE THAT AT SOME POINT IN
2019, WE ARE GOING TO SET A NEW
LOW FOR THE TEN-YEAR TREASURY
YIELD GOING BACK MAYBE 50 OR NO,
EXCUSE ME, LONGER THAN THAT,
GOING BACK 60, 70 YEARS.
NEIL: REALLY.
>> YES.
NEIL: POLITICALLY, THE
PRESIDENT, YOU KNOW, IS TRYING
TO SAY HE DID WHAT HE DID TODAY
TO HELP AMERICAN CONSUMERS SO
THEY WON'T BE SHOCKED, YOU KNOW,
RIGHT BEFORE THE HOLIDAYS WITH
THESE STICKER INCREASES WHICH IS
THE FIRST TIME I EVER HEARD HIM
QUASI-ACKNOWLEDGE THAT THERE IS
A BILL FOR AMERICANS TO PAY AS A
RESULT OF TARIFFS.
HE HAS SAID WE DODGED THAT
BULLET BECAUSE CHINA'S PAYING
THEM.
OF COURSE, THE TRUTH IS U.S.
ENTITIES PAY THEM.
IT'S HOW MUCH THEY CAN PASS
ALONG TO CONSUMERS.
WHAT DO YOU THINK OF THAT?
THE PRESIDENT'S PIVOTING ON THIS
ISSUE?
>> I THINK HE'S REALLY PUTTING
THE FACTS OUT THERE.
I THINK THAT IS WHAT HIS
SUPPORTERS LIKE THE MOST.
FIRST OF ALL, WHO IN AMERICA,
HOW MANY KNEW THIS ISSUE WITH
CHINA WAS SO BAD?
WHO KNEW THAT IT WAS $500
BILLION A YEAR WE WERE LOSING
BECAUSE OF CHINA LYING AND
CHEATING AND STEALING
INTELLECTUAL PROPERTY --
NEIL: WE WERE ALSO GETTING A LOT
OF INVESTMENT HERE, ALSO.
>> SURE.
THAT'S RIGHT.
NEIL: YOU LOSE THAT.
>> I'M SORRY?
NEIL: YOU LOSE THAT IF CHINA IS
ALL OF A SUDDEN AT ODDS.
>> BUT THE THING IS HOPEFULLY
THIS IS A SHORT-TERM --
NEIL: HOPEFULLY.
BEEN GOING ON A YEAR AND A HALF.
>> TRUE.
BUT HOW MANY YEARS HAS IT BEEN
GOING ON?
THEY HAVE BEEN STEALING FROM
AMERICANS.
>> WELL, I THINK FROM THE
POLITICAL PERSPECTIVE, THE
IMPORTANT THING TO NOTE, TOO, AS
I STATED EARLIER, THE DEMOCRATIC
PARTY DIDN'T SEEM TO CARE ALL
THAT MUCH THAT THESE PEOPLE WERE
BEING LEFT BEHIND IN MIDDLE
AMERICA, THE MIDDLE WEST,
WHATEVER, AND THEY DIDN'T REALLY
COME UP WITH IDEAS SUCH AS
TRAINING PROGRAMS AND SO ON.
TAKE MONEY FROM OTHER PROGRAMS
AND PUSH IT INTO THESE AREAS SO
THAT THESE PEOPLE COULD
REESTABLISH THAT STANDARD OF
LIVING THAT THEY ENJOYED FOR SO