Latest / Trend Watch / Episode 46: Political Turmoil in France and Germany | Are Forever Chemicals Causing the Decline in Fertility?

Transcript

Episode 46: Political Turmoil in France and Germany | Are Forever Chemicals Causing the Decline in Fertility? · Trend Watch

• 0:04
  SPEAKER_01: Ready to take a deeper look at where history, politics, and economics all intersect?
• 0:10
  SPEAKER_01: Well then, you've come to the right place.
• 0:13
  SPEAKER_01: Each week,
• 0:14
  SPEAKER_01: here's where we pull back the headlines and focus on the big trends,
• 0:18
  SPEAKER_01: the stuff that actually shapes our future.
• 0:21
  SPEAKER_01: Through the noise, we focus on the signal.
• 0:24
  SPEAKER_01: I'm your host, Neil Howe, and this is Trend Watch.
• 0:30
  SPEAKER_01: Today is December 18th, 2024, and this is Trend Watch.
• 0:35
  SPEAKER_01: Welcome back, everybody.
• 0:37
  SPEAKER_01: As usual, I have on my fellow analyst, Christian Ford.
• 0:41
  SPEAKER_01: So Christian, as I always start out by asking, how was your week?
• 0:45
  SPEAKER_00: It was pretty good, Neil.
• 0:46
  SPEAKER_00: I'm up in Maine right now.
• 0:49
  SPEAKER_00: Came up over the weekend for the holidays, but no snow.
• 0:52
  SPEAKER_00: I'm a little disappointed.
• 0:53
  SPEAKER_00: I guess the rain melted it all away, but hopefully we'll have a storm before Christmas.
• 0:58
  SPEAKER_01: Well, it's a sad winter when it's no snow in Maine.
• 1:03
  SPEAKER_01: There has been snow and plenty of ice up here in West Virginia.
• 1:07
  SPEAKER_01: I can attest to that.
• 1:09
  SPEAKER_01: We have cars skidding around in circles, running off the West Virginia hills.
• 1:14
  SPEAKER_01: It's just kind of a West Virginia thing, you know.
• 1:19
  SPEAKER_01: Life is cheap out here.
• 1:22
  SPEAKER_01: But now it's actually the weather's turned a little bit better.
• 1:27
  SPEAKER_01: So we're looking forward to a moderate Christmas season.
• 1:35
  SPEAKER_01: So as always,
• 1:36
  SPEAKER_01: let me remind all of you listeners,
• 1:38
  SPEAKER_01: if you like this podcast,
• 1:40
  SPEAKER_01: please go ahead and share it with your friends,
• 1:42
  SPEAKER_01: family,
• 1:43
  SPEAKER_01: repost it on social media.
• 1:45
  SPEAKER_01: From now on, only some episodes will remain free.
• 1:48
  SPEAKER_01: We should probably tell people,
• 1:51
  SPEAKER_01: this being Demography Unplugged,
• 1:54
  SPEAKER_01: that we did a big demography piece this morning.
• 1:58
  SPEAKER_00: That's right, Neil.
• 1:59
  SPEAKER_00: We did our annual, you know, our 2024 Global Demography Review.
• 2:03
  SPEAKER_00: It was an hour-long webcast, had over 100 slides on it.
• 2:08
  SPEAKER_00: And right now it's only available to our founding members.
• 2:11
  SPEAKER_00: So I would recommend if you're not founding, upgrade to get access.
• 2:16
  SPEAKER_01: But it will soon be out to everyone.
• 2:18
  SPEAKER_01: And I will say that we generally tend to go back and forth here.
• 2:23
  SPEAKER_01: On the other years, we do the U.S.
• 2:26
  SPEAKER_01: update, right?
• 2:27
  SPEAKER_01: So, you know, we're always doing something.
• 2:30
  SPEAKER_01: But this is certainly a lot of news globally, particularly on the fertility front.
• 2:40
  SPEAKER_01: And I thought there was a lot to report on.
• 2:44
  SPEAKER_01: So kind of exhausted after that.
• 2:49
  SPEAKER_01: But there's plenty of news going on in the world.
• 2:51
  SPEAKER_01: And let's get into today's podcast.
• 2:57
  SPEAKER_01: First, we got market news.
• 2:59
  SPEAKER_01: Then, as usual, we'll be covering stories.
• 3:01
  SPEAKER_01: And I guess I should tell people up front what our stories are going to be.
• 3:06
  SPEAKER_01: First of all, on the domestic side.
• 3:08
  SPEAKER_01: President-elect Donald Trump plans to promote Andrew Ferguson,
• 3:13
  SPEAKER_01: a Republican already on the FTC,
• 3:15
  SPEAKER_01: the Federal Trade Commission,
• 3:17
  SPEAKER_01: to chair of the FTC,
• 3:20
  SPEAKER_01: thereby replacing Lena Kahn.
• 3:23
  SPEAKER_01: In oral arguments heard before the bench,
• 3:25
  SPEAKER_01: it seems likely that the Supreme Court will allow a Tennessee law banning medical
• 3:31
  SPEAKER_01: treatments for transgender minors in a case that's been very closely watched.
• 3:38
  SPEAKER_01: Federal officials can offer no satisfying explanations for the thousands of
• 3:43
  SPEAKER_01: sightings of drone aircraft across the northeastern United States,
• 3:49
  SPEAKER_01: causing something of an hysteria out here,
• 3:51
  SPEAKER_01: I think you can attest.
• 3:54
  SPEAKER_01: And and finally,
• 3:56
  SPEAKER_01: on the on the at home side of the news here,
• 3:59
  SPEAKER_01: according to a recent Wall Street Journal article,
• 4:03
  SPEAKER_01: everyday chemicals called endocrine disruptors could be partly responsible for the
• 4:08
  SPEAKER_01: global decline in human fertility.
• 4:11
  SPEAKER_01: Well, we've got to talk about demography once in a while, right?
• 4:15
  SPEAKER_01: So we'll just invent excuses.
• 4:18
  SPEAKER_01: But it was an interesting piece,
• 4:21
  SPEAKER_01: and we will talk about much of the research that this piece sort of went back over
• 4:28
  SPEAKER_01: that we have covered in the past.
• 4:29
  SPEAKER_01: So on to international stories.
• 4:33
  SPEAKER_01: The U.S.
• 4:34
  SPEAKER_01: arranges a temporary ceasefire between Kurdish and Turkish-backed rebel forces in northern Syria.
• 4:43
  SPEAKER_01: French President Emmanuel Macron appoints yet another prime minister,
• 4:47
  SPEAKER_01: François Beirut,
• 4:49
  SPEAKER_01: the fourth prime minister of France since January of last year.
• 4:53
  SPEAKER_01: Well, I should say of January of this year in order to pass an emergency budget bill.
• 4:59
  SPEAKER_01: So this was a government fighting to stay afloat in Germany.
• 5:06
  SPEAKER_01: Chancellor Olaf Scholz,
• 5:08
  SPEAKER_01: as expected,
• 5:09
  SPEAKER_01: lost a no-confidence vote in the Bundestag,
• 5:12
  SPEAKER_01: which ensures a new national election on February 23rd.
• 5:16
  SPEAKER_01: And we'll talk about what that election might actually result in, what kind of coalition results.
• 5:25
  SPEAKER_01: Early last week, in response to Taiwanese President Lai Qingte's visit to Hawaii and the U.S.
• 5:33
  SPEAKER_01: territory of Guam,
• 5:34
  SPEAKER_01: the Chinese Navy conducted its largest naval exercise in the South China Sea in
• 5:40
  SPEAKER_01: nearly 30 years.
• 5:42
  SPEAKER_01: And finally,
• 5:43
  SPEAKER_01: Trump's recent visit to Paris,
• 5:46
  SPEAKER_01: where he met with French President Macron and Ukraine President Volodymyr Zelensky,
• 5:52
  SPEAKER_01: prompted Trump to comment,
• 5:54
  SPEAKER_01: I would say for the first time,
• 5:56
  SPEAKER_01: on exactly how he plans to end the Russia-Ukraine war.
• 6:01
  SPEAKER_01: So with that, as a preview, we've got plenty to talk about.
• 6:06
  SPEAKER_01: Christian, take it away with markets.
• 6:07
  SPEAKER_00: All right, Neil.
• 6:08
  SPEAKER_00: The S&P closed down today 2.95%, and over the last five days is down 3.48%.
• 6:16
  SPEAKER_00: Global Dow down today 2.09%.
• 6:17
  SPEAKER_00: And over the last five business days, down 7.43%.
• 6:23
  SPEAKER_00: Large decline there.
• 6:24
  SPEAKER_00: As for the VIX, that closed today at 24.9%.
• 6:28
  SPEAKER_00: That's significantly higher than what we have been seeing.
• 6:31
  SPEAKER_00: Then for the 10-year Treasury, that's at 4.5%.
• 6:32
  SPEAKER_00: Up 23.8 basis points over the last five days.
• 6:39
  SPEAKER_01: Well, you know, the VIX is slow to decline, but fast to rise, as we know.
• 6:44
  SPEAKER_01: That's the difference between, I don't know, endorphins and adrenaline, right?
• 6:50
  SPEAKER_01: But I will say that a lot of the reaction of the market was around the Fed,
• 6:57
  SPEAKER_01: which decided on today what I think a lot of people are calling a hawkish cut,
• 7:04
  SPEAKER_01: right?
• 7:04
  SPEAKER_01: So they got to go ahead and with their quarter cut,
• 7:07
  SPEAKER_01: but they're slowing down their expectations of how much they want to cut next year,
• 7:11
  SPEAKER_01: I think very reasonably,
• 7:12
  SPEAKER_01: in light of the fact that inflation,
• 7:15
  SPEAKER_01: at least on a month-over-month basis,
• 7:16
  SPEAKER_01: either core or non-core,
• 7:19
  SPEAKER_01: according to the CPI,
• 7:21
  SPEAKER_01: is running...
• 7:22
  SPEAKER_01: Well, above 3%, right?
• 7:25
  SPEAKER_01: I mean, over 3.5% actually.
• 7:27
  SPEAKER_01: And you consider it how hot the economy is currently running.
• 7:31
  SPEAKER_01: You're about to get into the flash S&P Global PMI.
• 7:35
  SPEAKER_01: So we're going to hear some pretty high numbers.
• 7:38
  SPEAKER_01: Right.
• 7:39
  SPEAKER_01: So that's that's coming up.
• 7:40
  SPEAKER_01: But here's my point.
• 7:42
  SPEAKER_01: What's really interesting about the market reaction to this is that the long rates,
• 7:48
  SPEAKER_01: you know,
• 7:49
  SPEAKER_01: the 10 year treasury rose,
• 7:51
  SPEAKER_01: gold slips,
• 7:52
  SPEAKER_01: the U.S.
• 7:53
  SPEAKER_01: dollars up.
• 7:54
  SPEAKER_01: Right.
• 7:54
  SPEAKER_01: So this is, you know, you think reaction to a hawkish cut.
• 7:58
  SPEAKER_01: But the markets crash.
• 8:00
  SPEAKER_01: So you think, what are the markets actually reacting to?
• 8:04
  SPEAKER_01: They don't like preparing perhaps to fight inflation?
• 8:12
  SPEAKER_01: No, apparently not.
• 8:13
  SPEAKER_01: But you think if they took inflation seriously,
• 8:17
  SPEAKER_01: they'd realize that if inflation starts accelerating,
• 8:20
  SPEAKER_01: that would really push long rates up.
• 8:23
  SPEAKER_01: You know what I mean?
• 8:23
  SPEAKER_01: Right.
• 8:24
  SPEAKER_01: So it may be that markets are actually more concerned about the economy slowing down than overheating.
• 8:30
  SPEAKER_01: which is really weird considering,
• 8:33
  SPEAKER_01: as you were about to get to,
• 8:34
  SPEAKER_01: so,
• 8:34
  SPEAKER_01: you know,
• 8:35
  SPEAKER_01: here I am stealing all your fire,
• 8:37
  SPEAKER_01: but we have a PMI that's approaching 60,
• 8:40
  SPEAKER_01: right?
• 8:41
  SPEAKER_01: That the markets are more concerned with the economy slowing than overheating.
• 8:45
  SPEAKER_01: But maybe that's what happens after markets go vertical, right?
• 8:49
  SPEAKER_01: You know, and what they've been, you know, this terrific kind of melt up that we've seen.
• 8:57
  SPEAKER_01: We're in a territory of valuations where just one grain of sand causes these big
• 9:05
  SPEAKER_01: thudding moves downward.
• 9:08
  SPEAKER_01: And it may be that the markets just can't stand any talk of slowing down.
• 9:15
  SPEAKER_01: even if it's to quell inflation that almost anyone could see if the economy remains at this pace.
• 9:22
  SPEAKER_01: But maybe markets don't expect it to remain in this pace.
• 9:26
  SPEAKER_01: Maybe they think it's too good to be true.
• 9:29
  SPEAKER_01: And with that, let's go on and talk about what you've seen.
• 9:33
  SPEAKER_01: I'm sure I've already talked about your global PMIs, but go ahead.
• 9:36
  SPEAKER_00: All right, yes.
• 9:37
  SPEAKER_00: So we have indicators for the U.S.
• 9:39
  SPEAKER_00: and we have the flash S&P PMIs for December.
• 9:42
  SPEAKER_00: Manufacturing fell from 49.7 to 48.3, but services skyrocketed from 56.1 to 58.5.
• 9:50
  SPEAKER_00: That's the highest reading we have seen since October 2021.
• 9:57
  SPEAKER_00: Only other reading we have for the U.S.,
• 9:58
  SPEAKER_00: we have the New York State Manufacturing Index,
• 10:01
  SPEAKER_00: which plummeted from 31.2 in November to 0.2 in December.
• 10:09
  SPEAKER_01: Right, but I will say that that 31.2 is a total fluke, right?
• 10:12
  SPEAKER_01: I mean, it's been zero negative for God knows how many months.
• 10:17
  SPEAKER_01: Along with all the other,
• 10:20
  SPEAKER_01: pretty much all the other Fed manufacturing PMIs were,
• 10:24
  SPEAKER_01: should I just say more technically,
• 10:26
  SPEAKER_01: diffusion indicators.
• 10:27
  SPEAKER_01: Are you satisfied with that?
• 10:28
  SPEAKER_01: But here's my question.
• 10:31
  SPEAKER_01: Why is it that these Fed diffusion indicators can imply contraction in
• 10:37
  SPEAKER_01: manufacturing month after month after month after month when you see the S&P Global PMI?
• 10:43
  SPEAKER_01: Well, OK, it's contracting now, but, you know, occasionally goes positive.
• 10:47
  SPEAKER_01: And you see these very different readings from index to index.
• 10:51
  SPEAKER_01: Now, I have no doubt that when the SMI comes out, when's that coming out?
• 10:55
  SPEAKER_00: That won't come out until like early January.
• 11:00
  SPEAKER_01: That's right, because they don't do a preliminary, do they?
• 11:03
  SPEAKER_01: Yeah, they don't do a flash.
• 11:04
  SPEAKER_01: Okay, so, but when that comes out, that'll be slower.
• 11:08
  SPEAKER_01: But I do, my sense is that the S&P Global Services are the real services.
• 11:14
  SPEAKER_01: It's not just non-manufacturing.
• 11:16
  SPEAKER_01: These are the things, and these are the things, these are,
• 11:19
  SPEAKER_01: You know, services, particularly high-end services.
• 11:22
  SPEAKER_01: I always think about this as being particularly responsive to market highs.
• 11:27
  SPEAKER_01: When was the last time you just said that the PMIs were this high?
• 11:31
  SPEAKER_01: That was in 2021, right?
• 11:33
  SPEAKER_01: I mean, that's when markets hurt.
• 11:34
  SPEAKER_01: And I think it peaked back then at 70, right?
• 11:37
  SPEAKER_01: Right.
• 11:38
  SPEAKER_01: yeah isn't that right it peaked at 70 a little earlier that's when markets were so
• 11:42
  SPEAKER_01: here's what i think of the has a big global pmi it's like markets are so good i'm
• 11:48
  SPEAKER_01: taking my dog out to a high-end restaurant you know what i mean so i think that's
• 11:53
  SPEAKER_01: what's pushing these these pmis anyway we can we can speculate about about that
• 11:59
  SPEAKER_00: what about around the rest of the world we have one thing from the eurozone we also
• 12:03
  SPEAKER_00: have flash december pmis
• 12:05
  SPEAKER_00: Manufacturing was unchanged from 45.2, not looking great there, but services rose from 49.5 to 51.4.
• 12:14
  SPEAKER_00: So we're back in the growth territory.
• 12:18
  SPEAKER_01: Yeah, back in the growth territory, but not for France.
• 12:22
  SPEAKER_01: And we're going to talk about France later and Germany too.
• 12:26
  SPEAKER_01: I mean, this is the amazing thing, right?
• 12:30
  SPEAKER_01: Europe, it just looks like a funeral parlor in terms of these indicators.
• 12:34
  SPEAKER_01: all right let's get into our stories let's not wait any longer let's get into our
• 12:40
  SPEAKER_01: uh domestic stories and let's start with the first one uh ftc who is uh who is
• 12:45
  SPEAKER_00: andrew all right so trump has picked andrew ferguson as the next chair of the
• 12:50
  SPEAKER_00: federal trade commission berguson is currently one of the ftc's five commissioners
• 12:55
  SPEAKER_00: and will replace lena khan who has you know made a reputation for herself as an
• 13:00
  SPEAKER_00: antitrust warrior
• 13:01
  SPEAKER_00: Now, it's kind of interesting.
• 13:03
  SPEAKER_00: Technically,
• 13:04
  SPEAKER_00: Khan doesn't have to resign,
• 13:06
  SPEAKER_00: but Trump has the power to choose a new chair from the current selection of commissioners.
• 13:11
  SPEAKER_00: She has not said whether she will resign.
• 13:13
  SPEAKER_00: Most people assume.
• 13:15
  SPEAKER_00: But if she doesn't, she would simply be demoted to a regular commissioner.
• 13:20
  SPEAKER_00: It would also be odd because there would actually still be three Democrats and only two Republicans.
• 13:25
  SPEAKER_00: What we know about Ferguson, he's expected to continue the scrutiny the FTC has of big tech.
• 13:31
  SPEAKER_00: He's especially critical of social media sites, who he accuses of silencing conservative voices.
• 13:37
  SPEAKER_00: He's also expected to actually reverse some of the tougher standards for mergers
• 13:41
  SPEAKER_00: that Khan had championed.
• 13:43
  SPEAKER_00: Neil, do you have any thoughts on this?
• 13:44
  SPEAKER_00: Yeah.
• 13:46
  SPEAKER_01: Well,
• 13:46
  SPEAKER_01: look,
• 13:48
  SPEAKER_01: there are plenty of conservatives who agree with progressives in wanting,
• 13:56
  SPEAKER_01: you know,
• 13:57
  SPEAKER_01: market power of big corporations curtailed.
• 13:59
  SPEAKER_01: I mean,
• 14:00
  SPEAKER_01: whether you're talking about,
• 14:01
  SPEAKER_01: you know,
• 14:01
  SPEAKER_01: banking or airlines or a big pharma or,
• 14:06
  SPEAKER_01: you know,
• 14:06
  SPEAKER_01: increasingly,
• 14:07
  SPEAKER_01: you know,
• 14:08
  SPEAKER_01: local health care roll ups.
• 14:10
  SPEAKER_01: I mean, the list goes on and on.
• 14:11
  SPEAKER_01: What about...
• 14:13
  SPEAKER_01: you know, Visa and MasterCard.
• 14:14
  SPEAKER_01: I mean, we could go down a long list, right?
• 14:19
  SPEAKER_01: I find it very interesting.
• 14:21
  SPEAKER_01: And there is a wing of the,
• 14:25
  SPEAKER_01: not just the,
• 14:27
  SPEAKER_01: I'd say not so much the Republican Party,
• 14:29
  SPEAKER_01: but of the MAGA Trump Populist Party,
• 14:33
  SPEAKER_01: particularly,
• 14:35
  SPEAKER_01: you know,
• 14:35
  SPEAKER_01: J.D.
• 14:36
  SPEAKER_01: Vance,
• 14:37
  SPEAKER_01: who actually admires Lena Kahn, right?
• 14:40
  SPEAKER_01: This is the famous conservatives.
• 14:42
  SPEAKER_01: You remember,
• 14:43
  SPEAKER_01: there's that famous piece in the Wall Street Journal where they talked about all
• 14:47
  SPEAKER_01: these young conservatives coming up to Lena Kahn in admiration.
• 14:51
  SPEAKER_01: And I think this is an interesting...
• 14:57
  SPEAKER_01: kind of current or cross-current in the new populist Republican Party.
• 15:06
  SPEAKER_01: It's not just that they favor antitrust to silence social media or to stop
• 15:13
  SPEAKER_01: progressive censorship of conservative voices in social media.
• 15:17
  SPEAKER_01: I think there is genuinely an idea that market concentration and pricing power and
• 15:25
  SPEAKER_01: price discrimination is doing no good to the average consumer.
• 15:32
  SPEAKER_01: Right.