Latest / Trend Watch / Episode 57: Beware the Boomer—Trump the Risk Taker Is All In

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Episode 57: Beware the Boomer—Trump the Risk Taker Is All In · Trend Watch

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  Ready to take a deeper look at where history,
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  politics,
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  and economics all intersect?
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  SPEAKER_01: Well, then you've come to the right place.
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  SPEAKER_01: Each week,
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  SPEAKER_01: here's where we pull back the headlines and focus on the big trends,
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  SPEAKER_01: the stuff that actually shapes our future.
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  SPEAKER_01: Through the noise, we focus on the signal.
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  SPEAKER_01: I'm your host, Neil Howe, and this is Trend Watch.
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  SPEAKER_01: Today is April 10th, 2025, and this is Trend Watch.
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  SPEAKER_01: Welcome back, everybody.
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  SPEAKER_01: As usual, I have on my fellow analyst, Christian Ford.
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  SPEAKER_01: So, Christian, how was your week in D.C.?
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  SPEAKER_00: It was pretty good, Neil.
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  SPEAKER_00: You know, this weekend I did the ultimate millennial activity.
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  SPEAKER_00: I went axe throwing.
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  SPEAKER_01: Yeah, that definitely fills the bill.
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  SPEAKER_00: How did he do?
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  Well,
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  I went with about 20 friends and I came in second in the tournament.
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  SPEAKER_00: I choked right at the end.
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  SPEAKER_00: Yeah, so you lost first and then tried to come back?
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  SPEAKER_00: How did that work?
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  SPEAKER_00: Yeah, it was double elimination.
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  So I went down into the loser's bracket,
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  but I was able to keep alive until the very end.
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  SPEAKER_00: About 10 feet away, maybe one rotation.
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  SPEAKER_00: Yep, one rotation of the axe.
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  SPEAKER_00: And, you know, it takes a little bit to get the hang of it.
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  SPEAKER_00: But once you do, I was pretty good at getting it to stick.
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  SPEAKER_01: Well, that's, you know, in my day, one thing we did was throwing knives.
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  SPEAKER_01: We used to go into the woods.
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  SPEAKER_01: And I remember throwing knives are differently weighted, you know.
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  SPEAKER_01: They're designed to rotate in the air.
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  But,
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  yeah,
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  I always was amazed at these movies that showed people,
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  you know—
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  how people could throw knives over distances very accurately
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  obviously the longer
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  the distance the harder it is harder it is to get it rotate
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  right rotate the right
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  number of times but it's definitely getting that flick you know
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  kind of kind of
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  getting that flick you because you got to get it to rotate
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  right right so yeah what
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  we should really be talking about is your big celebrity now
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  getting a feature piece
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  SPEAKER_00: in the wall street journal my god
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  SPEAKER_01: Yeah, yeah, that did come out.
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  And I don't know,
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  I'll let you say what it was worth,
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  you know,
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  and we'll leave it at that.
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  SPEAKER_00: Right.
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  Well,
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  you know,
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  the writer didn't go too much into your theories of the fourth turning.
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  SPEAKER_00: They're more just talking about what investing during the apocalypse.
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  SPEAKER_01: Yes, yes.
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  SPEAKER_01: What do you do during, you know, how do you trade the real apocalypse?
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  SPEAKER_01: I think that was somewhere in the headline.
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  SPEAKER_01: So, well, we'll let listeners see what they think of that.
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  SPEAKER_01: As always,
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  SPEAKER_01: let me remind you,
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  SPEAKER_01: if you like this podcast,
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  please go ahead and share it with your friends and family and
• 2:39
  repost it on social media.
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  SPEAKER_01: Christian, let's get into today's podcast.
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  SPEAKER_01: I would say the last few episodes, we really do have a lot to talk about.
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  SPEAKER_01: We got market news.
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  SPEAKER_01: We'll be covering stories from around the world.
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  SPEAKER_01: And I guess I should...
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  SPEAKER_01: Give, as I always do, a preview of what's coming up.
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  President Donald Trump ordered a 90-day suspension of his newly
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  imposed reciprocal
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  SPEAKER_01: tariffs on over 75 countries.
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  SPEAKER_01: That was yesterday, right?
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  SPEAKER_01: I'm just trying to remember now.
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  SPEAKER_01: But he kept...
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  He kept the universal 10% tariff rate in place and doubled down
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  on China,
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  raising the U.S.
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  SPEAKER_01: tariff rate to 125%.
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  SPEAKER_01: I think that's right.
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  SPEAKER_01: Is that the latest number?
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  SPEAKER_01: 125%.
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  SPEAKER_01: 45.
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  SPEAKER_01: I think it just got upped.
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  SPEAKER_01: I think, yes, exactly.
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  SPEAKER_01: We need to update that 145%.
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  Although at some point here,
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  it's really probably not going to make a lot of difference.
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  SPEAKER_01: On Saturday,
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  the Senate passed a budget resolution that could pave the way
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  to make the Trump era
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  SPEAKER_01: tax cuts permanent.
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  It did this,
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  by the way,
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  by disregarding a congressional rule intended to control the deficit.
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  SPEAKER_01: We will certainly talk about that.
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  SPEAKER_01: Trump's legal battles are still moving through the courts.
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  SPEAKER_01: And so far,
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  the Supreme Court has issued several procedural rulings that I
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  think you could say
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  SPEAKER_01: overall have tilted in his favor.
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  SPEAKER_01: Moving abroad.
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  SPEAKER_01: On Friday,
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  South Korea's Constitutional Court unanimously upheld the
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  impeachment and removal
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  SPEAKER_01: of President Jung Suk-yul,
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  SPEAKER_01: and a snap presidential election has been scheduled for June 3rd.
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  SPEAKER_01: On Monday, President Trump announced that the U.S.
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  SPEAKER_01: and Iran will hold direct high-level nuclear talks in Oman on April 12th.
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  though key disagreements remain over whether the two parties
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  will speak to each other directly.
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  SPEAKER_01: And on Tuesday,
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  Ukrainian President Volodymyr Zelensky announced that Ukrainian
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  forces have
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  SPEAKER_01: captured two Chinese nationals fighting alongside Russian troops.
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  SPEAKER_01: raising new questions about China's role in the war.
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  With that,
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  wow,
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  what a...
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  Not just today,
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  but what a week it's been in markets.
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  SPEAKER_01: I don't know how you're going to summarize this,
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  SPEAKER_01: Christian,
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  SPEAKER_01: but this just...
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  SPEAKER_01: The last time I recall it was like this was probably...
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  SPEAKER_01: March 2020.
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  SPEAKER_01: Rocking and rolling there.
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  SPEAKER_01: Give us the overall dimensions.
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  SPEAKER_00: So early in the week, we saw huge declines.
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  Then,
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  you know,
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  yesterday with Trump's announcement on the terror of pause,
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  we saw a huge high.
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  SPEAKER_00: I think the S&P was up over 9%.
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  SPEAKER_00: But today, things have gone down.
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  SPEAKER_00: The S&P closed down 3.46%.
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  SPEAKER_00: Over the last five market days, it's down 2.38%.
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  SPEAKER_00: Global Dow is actually up today, 0.63%.
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  SPEAKER_00: And over the last five days, it's down 5.09%.
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  SPEAKER_00: The VIX, Neil, closed today, 40.91%.
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  SPEAKER_00: So still...
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  SPEAKER_00: Very high up there.
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  Then we have the 10-year Treasury at 4.12%,
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  up 27.9 basis points over the last five days.
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  SPEAKER_00: Yeah, that's kind of incredible, actually.
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  SPEAKER_01: We want to talk about that.
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  Maybe we should go through and talk about global news first and
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  come back to that.
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  SPEAKER_01: Look, on Monday, the VIX was at 60.
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  SPEAKER_01: And what did it close today, in the 40s or high 30s?
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  SPEAKER_01: Yeah, right up like 40.
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  SPEAKER_01: And I think the talk about,
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  SPEAKER_01: you know,
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  SPEAKER_01: because of the ups and downs,
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  SPEAKER_01: take a look at the VIX,
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  SPEAKER_01: right?
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  SPEAKER_01: Instead of the implied standard deviation of the actual,
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  SPEAKER_01: you know,
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  SPEAKER_01: SPY ticker,
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  SPEAKER_01: what about the standard deviation of the standard deviation,
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  SPEAKER_01: right?
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  SPEAKER_01: So why not the volatility of volatility?
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  SPEAKER_01: It's in the 100.
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  It's interesting because it's shown abrupt moves in both directions,
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  right?
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  SPEAKER_01: Yeah.
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  SPEAKER_01: It's fascinating to think that people actually trade that.
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  SPEAKER_01: I've often tried to put myself in the mind of someone who thinks just,
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  SPEAKER_01: you know,
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  SPEAKER_01: the volatility of volatility,
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  SPEAKER_01: right?
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  SPEAKER_01: I want to go long on that.
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  SPEAKER_01: That's difficult.
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  SPEAKER_01: But I think with practice, maybe I could do it.
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  SPEAKER_01: Let's talk about indicators and go around the world.
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  And then I think we should talk a little bit about what the
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  indicators are.
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  SPEAKER_01: hear me and talk a little bit about just, you know,
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  SPEAKER_01: Stock markets and rate changes, particularly in the long bond.
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  SPEAKER_00: All right.
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  SPEAKER_00: Well, for indicators, we'll start with the U.S.
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  SPEAKER_00: Non-farm payrolls rose from 117,000 in February to 228,000 in March,
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  beating market forecasts and the strongest figure we've seen in
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  three months.
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  SPEAKER_00: We also have the NFIB small business optimism,
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  SPEAKER_00: which fell from 100.7 in February to 97.4 in March.
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  That 3.3 point decline is the largest drop we've actually seen
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  since June 2022.
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  SPEAKER_00: We also have the year over year inflation rate,
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  SPEAKER_00: which cooled from 2.8% in February to 2.4% in March.
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  SPEAKER_00: Core inflation fell from 3.1% to 2.8%.
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  Then if we only have one global,
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  we have China,
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  the Caixin PMIs for March.
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  Manufacturing rose from 50.8 to 51.2,
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  highest reading China has seen since November.
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  SPEAKER_00: And services rose from 51.4 to 51.9.
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  That was also above market forecasts and the strongest growth
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  they have seen since December.
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  SPEAKER_00: So China's PMIs are looking a little better than what we saw last month.
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  SPEAKER_01: Well,
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  SPEAKER_01: I just think it's a lot of speeding up,
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  SPEAKER_01: both on the export and on the import side,
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  SPEAKER_01: to beat the tariffs,
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  SPEAKER_01: right?
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  SPEAKER_01: Right.
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  SPEAKER_01: And you're going to see the opposite on the other end, right?
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  SPEAKER_01: Once they're in force, you're going to see things go way down.
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  SPEAKER_01: Look, here's how I see this last week.
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  And I do want to come back,
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  particularly what people are talking a lot about equities.
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  SPEAKER_01: I really want to end this by talking about long-term equity.
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  SPEAKER_01: long-term rates on US debt.
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  SPEAKER_01: Because I think that's where the real news is.
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  SPEAKER_01: Even after this big backstep that we saw yesterday,
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  SPEAKER_01: getting rid of these retaliatory,
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  SPEAKER_01: I guess,
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  SPEAKER_01: what do you call them?
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  SPEAKER_01: He called them reciprocal tariffs, right?
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  SPEAKER_00: Yes.
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  America still has taken a large step back from its previous
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  integration into the
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  SPEAKER_01: global economic system.
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  SPEAKER_01: I mean, that's my take.
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  SPEAKER_01: It looks like we're closing off
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  SPEAKER_01: almost any trade relationship with China.
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  SPEAKER_01: And that's 14% of our imports right there.
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  SPEAKER_01: We see big hits to Canada and Mexico.
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  SPEAKER_01: That's another 28% of our imports.
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  SPEAKER_01: I can't remember, but outside of the US, what's the treaty?
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  SPEAKER_01: The USMCA?
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  SPEAKER_01: USMCA.
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  SPEAKER_01: Yeah, thank you.
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  SPEAKER_01: USMCA.
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  SPEAKER_01: I think it's a little bit more than half of Canadian imports,
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  SPEAKER_01: plus we have the other tariff on energy.
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  It's a little bit less than half on Mexico,
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  but that's well over 10% on that.
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  SPEAKER_01: We have 10% on the rest of the world.
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  SPEAKER_01: The near-term consequence is going to be economic slowdown.
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  SPEAKER_01: Perhaps, I
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  SPEAKER_01: These tariffs don't change, probably recession this year.
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  SPEAKER_01: We may well have been bound to hit a recession anyway.
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  SPEAKER_01: The longer term consequences is that in the future,
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  there will be not only less trading between America and the
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  rest of the world,
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  SPEAKER_01: but also less capital flows between America and the rest of the world.
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  SPEAKER_01: And obviously in America's case,
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  SPEAKER_01: this mostly means less importing,
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  SPEAKER_01: which is most of what we're doing on the trading side,
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  SPEAKER_01: and less borrowing,
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  SPEAKER_01: which is mostly what we're doing on the capital flow side,
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  SPEAKER_01: right?
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  SPEAKER_01: Those are mirror images of one another.