The Worst Is Still to Come

Summary

Podcast Summary: The Compound and Friends – "The Worst Is Still to Come"

Episode Information:

• Title: The Worst Is Still to Come
• Release Date: April 25, 2025
• Host: The Compound (Downtown Josh Brown and Michael Batnick)
• Guest: Rebecca Patterson

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1. Introduction of Guest: Rebecca Patterson

The episode kicks off with a warm welcome to Rebecca Patterson, a distinguished figure in the economic and investment community. Michael Batnick provides an extensive introduction, highlighting Rebecca's impressive credentials:

[04:25] Michael Batnick: "Rebecca is currently a Senior Fellow at the Council on Foreign Relations. She is also an Independent Director at Vanguard and on the Executive Committee of the Bretton Woods Committee and the Trilateral Commission. She has served on the New York Federal Reserve's Investor Advisory and Foreign Exchange Committees. She currently chairs the Council for Economic Education. Most recently, Rebecca was Chief Investment Strategist for Bridgewater Associates."

Rebecca reciprocates with a light-hearted remark about their similar resumes:

[05:21] Rebecca Patterson: "Our resumes are very similar."

Following her tenure at major financial institutions, including JP Morgan and Bessemer Trust, Rebecca shares her journey to the podcast, emphasizing her extensive experience and expertise in global economic policies.

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2. Current Economic Situation: Tariffs and Trade War with China

The core discussion centers around the escalating trade tensions between the U.S. and China, focusing on the impact of tariffs and the broader economic implications.

[06:29] Josh Brown: "I think we're on 93 days."

Josh Brown references the ongoing trade conflict, highlighting the anticipation of significant economic events around July 4th.

Impact on Markets:

Michael Batnick and Josh Brown delve into the recent volatility in the U.S. stock market, attributing fluctuations to political rhetoric and policy announcements related to tariffs.

[07:26] Josh Brown: "The World Bank's trying to communicate... 'we have a plan. It's all going to be okay.' But the question is, until when?"

They discuss how differing factions within the White House influence market perceptions and investor confidence, with specific mentions of key political figures shaping policy directions.

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3. Market Reactions and Potential Recession

The conversation transitions to the market's response to trade policies and the looming threat of a recession.

[12:13] Josh Brown: "I think there's a decent chance that'll happen."

Josh Brown articulates his concerns about a potential recession, driven by sustained tariffs and their dampening effect on consumer purchasing power. He emphasizes the resilience of the U.S. economy but remains cautious about the future.

Historical Parallels:

Michael Batnick draws parallels with the Y2K episode, illustrating how front-loaded investments can create misleading economic indicators, potentially leading to abrupt downturns.

[11:38] Michael Batnick: "That happened in the Y2K episode... companies start giving their guidance for the next quarter."

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4. Impact on Small Businesses and Specific Industries

The hosts examine how tariffs disproportionately affect small businesses and specific sectors, such as agriculture and manufacturing.

[18:00] Josh Brown: "Companies with armies of lobbyists... they'll be fine, the little guys... don't have someone to go talk to the President."

Rebecca Patterson highlights the struggles of farmers and small business owners who lack the resources to lobby for tariff exemptions, exacerbating economic strain in these sectors.

[19:11] Josh Brown: "America lost market share in soy to Brazil... Now we're going to do it again."

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5. Foreign Investment and the U.S. Global Brand

A significant portion of the discussion focuses on the erosion of the U.S. brand and its impact on foreign investments. The hosts emphasize how diminishing trust affects capital flows and the overall economic landscape.

[49:01] Josh Brown: "Rebecca, you're writing for the New York Times, Financial Times... Foreign investors have about $22 trillion in U.S. assets."

They explore the consequences of declining foreign investments, including higher borrowing costs and reduced market liquidity, underscoring the long-term implications for U.S. economic growth.

[53:19] Josh Brown: "This is gonna happen... It is a long-term capital drought reducing the potential gains of the U.S. stock and bond market."

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6. Safe Haven Assets: Gold Investment

Rebecca Patterson and Josh Brown discuss gold as a strategic investment amidst economic uncertainty, analyzing its performance and future potential.

[59:16] Josh Brown: "Gold tends to do best at tails... safe haven flow and yields are coming down."

They debate the merits of physical gold versus gold ETFs, with a consensus on gold's role as a hedge against dollar devaluation and market volatility.

[63:40] Josh Brown: "Gold is another hedge against that. It could help Bitcoin too, but I think gold is a safer play."

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7. Career Insights: Rebecca Patterson

The latter part of the episode shifts focus to Rebecca Patterson's illustrious career, offering listeners a glimpse into her professional journey and accomplishments.

[65:18] Josh Brown: "I joined in September 1997... First week on the job was during the Korean won and Indonesian rupiah crises."

Rebecca recounts her transition from journalism to JP Morgan and eventually to Bessemer Trust, highlighting her pivotal role in shaping investment strategies and policies.

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8. Closing Remarks and Future Outlook

In the wrap-up, the hosts and Rebecca discuss forward-looking statements on AI integration in finance, personal anecdotes, and upcoming projects.

[70:03] Michael Batnick: "Your retirement is safe for tonight, America. You'll be okay."

They emphasize the importance of staying informed and adaptable in a rapidly changing economic environment, encouraging listeners to engage with emerging technologies like AI.

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Notable Quotes:

• Michael Batnick on IMF and World Bank Meetings:

  [01:41] "It's an incredibly efficient way to just get a deep dive on where the world is."

• Josh Brown on Potential Recession:

  [13:18] "I'm gonna reduce my U.S. equity by 4 or 5 percentage points... switch to consumer staples or something else."

• Rebecca Patterson on Market Indicators:

  [12:44] "We haven't even begun to see the recession yet."

• Josh Brown on Foreign Investments:

  [52:10] "22 trillion is in the US, so I'm a global pension fund... that's a huge number."

• Discussion on Gold as an Investment:

  [60:24] Josh Brown: "Gold tends to do best at tails... safe haven flow and yields are coming down."

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Conclusion:

In "The Worst Is Still to Come," The Compound and Friends delve deep into the intricate dynamics of the current U.S.-China trade war, its reverberating effects on global markets, and the potential onset of a recession. With insightful analysis from Rebecca Patterson, Josh Brown, and Michael Batnick, the episode provides a comprehensive overview of the economic challenges ahead, the vulnerabilities of small businesses, shifts in foreign investments, and strategic investment opportunities in safe havens like gold. The discussion underscores the complexity of navigating today's volatile economic landscape, offering listeners both cautionary insights and strategic perspectives.

For more in-depth analysis and expert opinions, follow Rebecca Patterson on LinkedIn and explore her contributions to the Council on Foreign Relations, New York Times, and Financial Times.

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This summary encapsulates the key discussions, insights, and notable quotes from the podcast episode, providing a coherent and comprehensive overview for those who haven't listened.

Transcript

[Rebecca Patterson]

Rebecca, can I confess something? I don't know the difference between the World bank and the imf.

[Josh Brown]

So the world. That's okay.

[Michael Batnick]

The World World bank has the best professional talk as the logo, right?

[Josh Brown]

I have no idea. Okay, maybe.

[Michael Batnick]

No, that's the world.

[Rebecca Patterson]

That's the Worldwide Panda.

[Michael Batnick]

That's the. That's the World Wildlife Fund.

[Josh Brown]

So the World bank focuses on the poorest countries in the world.

[Michael Batnick]

Rebecca's like, what am I doing?

[Josh Brown]

No, no, no. This is why I'm here. Right. I want to educate people that I'm not judging. I didn't know any of this for the longest time. Why would you. Why would you need to.

[Michael Batnick]

The World Bank's like a relief organization.

[Josh Brown]

The World bank tries to alleviate poverty. So right now one of their big goals is getting electricity to 300 million Africans by 2030. That's what they do. So they're working with local governments, fighting corruption, trying to do that. They're using AI now and putting little teeny chips in basically dry, burnt out farmland. And they're able to track when people should water or not. These people don't have computers, they don't have anything. So they actually created these little gadgets and it just lights up green. They can't even read, but it lights up green when they need to water.

[Michael Batnick]

Okay.

[Josh Brown]

And just from doing stuff like that, there's food and people are starving less.

[Michael Batnick]

It's like, that's a pretty worthy mission.

[Josh Brown]

Yeah.

[Michael Batnick]

The IMF is more about giving headlines to Reuters.

[Josh Brown]

The imf.

[Michael Batnick]

I got you.

[Josh Brown]

The IMF is giving advice to economies advanced and emerging on how to have better policies to be financially stable, economically stable.

[Michael Batnick]

Are they a lender of last resort to sovereigns? Is that a way to think about it?

[Josh Brown]

In a way. In a way. What's interesting about these things. So the imf, World bank have meetings twice a year, every April, every October. And basically central bankers, finance ministers, policymakers from literally all around the world come to DC for a week, twice a year. So it's like speed dating for macro nerds. You can see everybody and you catch.

[Michael Batnick]

Up on everybody's take on everything.

[Josh Brown]

Exactly. So it's an incredibly efficient way to just get a deep dive on where the world is. And that's why I go. And I've been going, I don't know, 20 years.

[Michael Batnick]

Okay, so the one you just coming back from D.C. was. Which specific event was it?

[Josh Brown]

Well, it's all of it.

[Michael Batnick]

Oh, it's all going on at once.

[Josh Brown]

Yeah, yeah, yeah, yeah. You're running around to meetings, running around to conferences. Conferences. You know, I'm. I'm with.

[Michael Batnick]

DC Is nice this time of year.

[Josh Brown]

Well, so is here.

[Michael Batnick]

Yeah. Wow. That's true. That's true. For sure. Okay.

[Josh Brown]

That's why I wear pink. Like, driving from Penn Station, I'm like, oh, my God, it's so beautiful.

[Michael Batnick]

I was gonna say, you're giving. You're giving spring.

[Josh Brown]

I felt a spring vibe.

[Michael Batnick]

Okay. We like it.

[Josh Brown]

All right.

[Michael Batnick]

How we doing, guys?

[Josh Brown]

Josh, it. Is the Compound in place?

[Rebecca Patterson]

Whoa, whoa, whoa. Stop the clock. Here's a word from our sponsor.

[Michael Batnick]

Today's show is sponsored by Public Invest.

[Rebecca Patterson]

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[Michael Batnick]

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[Rebecca Patterson]

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[Michael Batnick]

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[Rebecca Patterson]

Find out [e-mail] compound paid for by Public Investing. Full disclosures in Podcast Descript.

[Josh Brown]

Welcome to the Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick and their castmates are solely their own opinions and do not reflect the opinion of Redholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

[Michael Batnick]

Ladies and gentlemen, welcome to an all new edition of the Compound and Friends, America's favorite investing podcast. Literally. Literally. This goes out worldwide, Rebecca. You will be heard in many countries, many regions, and your words carry weight given your standing in the international economic community. Rebecca is currently a Senior Fellow at the Council on Foreign Relations. She is also an Independent Director at Vanguard and on the Executive Committee of the Bretton Woods.

[Josh Brown]

Wait.

[Michael Batnick]

Executive Committees of the Bretton Woods Committee and the Trilateral Commission. She has served on the New York Federal Reserve's Investor Advisory and Foreign Exchange Committees. She currently chairs the Council for Economic Education. Most recently, Rebecca was Chief Investment Strategist for Bridgewater Associates. Some called you Baby Ray.

[Rebecca Patterson]

Our resumes are very similar.

[Michael Batnick]

Yeah. Previously was Chief Investment Officer of Bessemer Trust, a Multifamily office overseeing 85 billion in client assets. Rebecca also spent 15 years at JP Morgan in research, trading and portfolio strategy roles in the U.S. europe and Asia. I did a chatgpt like, give me 10 highlights from Rebecca's career is 42 pages. It's so much. So we'll take. We'll just. Everyone could take my word for it. Rebecca is a supremely accomplished, widely respected, incredible speaker on some of the most important things happening in the world right now. We are so lucky to have you here. Thank you, Rebecca Patterson, for joining us at the Compounded Friends.

[Josh Brown]

I am very excited to be here.

[Michael Batnick]

Awesome. All right, so let's start with this. Obviously we're in a market situation now where we're hanging on every word from politicians. It's not always like this, but there are these bouts and sometimes it goes on for a year, sometimes goes on for a week. This one is, I don't know, six to eight weeks now, would you say?

[Josh Brown]

I think we're on 93 days.

[Michael Batnick]

Okay.

[Josh Brown]

Yeah.

[Michael Batnick]

All right. And it's going to continue.

[Josh Brown]

Yeah.

[Michael Batnick]

Because it's 90 days from April 2nd takes us to July 4th. Not coincidentally, that's like, like when the rubber really meets the road. But it's almost a market where. Wait, what did Scott Besson say? Why are we. Why is The NASDAQ up 4%? Oh, no, wait. They let Navarro in front of the TV camera. Now the S&P is down 2%. That's what we're doing right now. I think this week one of the things that's happened is that the Besant wing within the administration seems to have gotten the upper hand. They're in the media more. The Lutnik Navarro China hawk wing seems to like have been told back down. And I don't know if that reverses in a week. I don't even know if it matters. But I just wanted to get your take on. Do you agree that that's kind of the backdrop for this three day rally we're experiencing in the US Stock market?

[Josh Brown]

Yeah. So I was in DC for the last few days, so I was able to hear the treasury secretary a couple of times live. And he's definitely trying to communicate with the investment community that there's a plan. It's all going to be okay. We're on it. It's sequencing. We'll get through this hard part and then we'll have some great tax cuts and deregulation. It's all going to be fine. So, yes, he is leading the charge on the communication. But as you just said, the question is, until what? Right. President Trump could say something in the next five minutes. Navarro could come out and say something. Stephen Myron could come out and say something. Stephen Moore could. So you can't count on it lasting. That's the hard part.

[Michael Batnick]

Does a rallying stock market work against the interests of stock market investors? Because it could be perceived in the White House that, okay, everybody's used to this. Now we can drop another shoe. Does it give Trump the impression that the trade war is going well when he sees the Dow retake 40,000? You know, he's watching the Dow.

[Josh Brown]

I'm sure he's watching the stock market. The bond market now increasingly as well. I'm not sure that there's that much strategy going into. Okay, the stock market's been up for three days now. It's time to say X. I don't think there's that much going on on that front. Not to say he's not thinking a lot about policy, but I don't think he's connecting the two quite like that.

[Rebecca Patterson]

So we are recording on Thursday and it has been a dizzying week of headlines. I want to run through four quickly and then get your take. This was just yesterday. So on the front page of the Wall Street Journal, it said the White House considers slashing its steep tariffs on China. And there's all sorts of other articles. Levies could be cut by more than half in some cases. Markets extend rallied. The the markets were a big on the day. And then midday Wiesenthal tweeted, okay, so we're back to this bessant. No unilateral offer from Trump to cut China tariffs. Besant ass on Trump. Trump Powell firing says I'm not a lawyer. Market sold off. Then later in the afternoon, the FT says Trump is going to exempt carmakers from some tariffs on auto parts from China. And then later into the close, all within a day's work. President Trump says he is not considering changes to automobile auto parts tariffs. How are investors?

[Michael Batnick]

Can I extend this? Just, just today, same thing. We're in talks with China. China comes out and says, no, we're not. Who are you talking to? Yeah, you're not talking to us when there are no talks.

[Josh Brown]

Yeah.

[Michael Batnick]

So to extend what Michael's saying, what do you do?

[Josh Brown]

I mean, it depends what kind of investor you are. If you're a day trader right now, you're just thanking God for zero day options. I think you know, because you're just losing your premium. If it goes your way, you're golden. If not, you know what you're losing. But for anyone who has a slightly longer time frame or I feel for you for long term investors you almost just don't want to be looking at that because it's noise. You can't count on any trend lasting to your point more than an hour. So I think you have to take a step back and say, okay, what is the underlying economy doing and what is it going to be doing? And that's really tricky too because right now the job market's solid, people have incomes, they can keep spending. Household net worth was at an all time high at the end of last year. It's down some but it's still good. So the consumer's in good shape. Not a lot of leverage. Companies don't have a lot of leverage. So that part of the economy is at least we're going into this in a strong place. AI CapEx continuing nicely even with uncertainty. That's a big support for the economy. But that's where we've been right when we have this kind of uncertainty and I know people say it's political. University of Michigan it's all swayed by the Democrats being pessimistic. No, I don't buy that. There is so much uncertainty in every survey you see, including the Federal Reserve's beige book yesterday and we are seeing it in earnings guidance. It's coming. The question is when? Because if people are frontloading purchases because of tariffs, the high spending might look like it's lasting another month or two and give us this false sense of everything's gonna be fine, let's pull forward and then we're gonna have a Wile E. Coyote moment and we're just gonna go off the cliff. I'm not sure that'll happen, but I think there's a decent chance that'll happen.

[Michael Batnick]

To the, that happened in the Y2K episode. We had like two years worth of tech spending pulled forward into the last six months of 1999.

[Josh Brown]

Yeah.

[Michael Batnick]

And people thought it's like this new paradigm. You get into March of 2000 and companies start giving their guidance for the next quarter. Where did all the orders go? Well everybody upgraded their computers cuz we thought if they didn't the planes would fall out of the sky.

[Josh Brown]

Right.

[Michael Batnick]

So if everyone is front loading purchases, which I don't know if we have definitive data that they're doing that yet, but I could see that screwing with the headline numbers.

[Josh Brown]

I think we're just gonna have messy data is the point.

[Rebecca Patterson]

So in 2022, Kyla Scanlon famously coined the term the vibe session where there was this gigantic never before seen disconnect between the soft data, how people felt, at least how they were answering surveys about how they felt, fell off a cliff. And you never saw the hard data catch down to that. You're seeing that again this time around, except almost assuredly you are going to see the hard data catch down. The question is to what extent? Like, how much is gonna catch down and when? Because it is coming.

[Josh Brown]

Yeah, yeah. So that's. I mean, again, because we're starting in such a strong place for the US Economy, it's a question if we have a recession or not. My base case is a recession, mainly because I think the tariffs, even if we pull back from some of the crazy Liberation Day numbers, it's still a material, material increase from where we were at the beginning of this year. It is a material tax on the consumer. It is going to affect purchasing power.

[Rebecca Patterson]

What does base case mean to you? Like you're 60% confident or like 80, 90. How certain would you say base case means?

[Josh Brown]

I mean, again, it depends how long, I think, especially tariffs on China. That's the big one. And I don't have a sense that we're going to reach a deal tomorrow. So if we have relatively high tariffs on China for a couple of months, which I think is very, very possible, and we have this 10% universal tariff on everything, that alone would make me think 75% chance, at least a shallow recession later this year.

[Michael Batnick]

Can we, can we put this graphic up from Sherwood Personnel is policy and performance. So if.

[Josh Brown]

Yeah.

[Michael Batnick]

Are we taking. So this. All right, this is the S&P 500 daily return, depending on which Trump official is mentioned in more in news articles. So when it's a Besant day, which today is a Besant day. Yesterday was 2. Have a besant day. Almost sounds like a catch on. We're up. And if it's a Lutnick or a Navarro day, like, if they're hogging the spotlight, we're going down. And it's purely because of the things they're saying, the rhetoric. I want to show you one more version of that. This is from Neil Dutta.

[Josh Brown]

Yeah, I saw this one, too.

[Michael Batnick]

So this one's great. We love Neil. Neil will be on the show soon. Same concept, though. The Navarro Lutnick days are not good days to be long. The Besson days give you a chance to catch your breath. Okay, are we taking it too far? Is it rational?

[Josh Brown]

I mean, I'm not even sure how you. If you can see their schedules in advance and you know where Besson's going to be appearing, maybe you could come up with some algorithmic trading strategy. For that, I think that's pretty cute. I'm not sure I would. We're not doing that here.

[Michael Batnick]

No, I guess what I'm asking is, is the sentiment swinging too much?

[Josh Brown]

We have factions right now. There are factions in the White House. There. There are the isolationists, There are the more international market friendly people. There's the full on MAGA crowd, and then there's the Technocrats. Or I shouldn't say Technocrats. Technocrats.

[Michael Batnick]

The industrialists. Kind of like you would have called them in a prior presidential era. Like the Elon.

[Josh Brown]

Yeah, yeah, yeah, that group. And they don't agree on all this stuff. And whoever can get the President's attention that day, that's gonna be where they run.

[Michael Batnick]

Here's something funny. So what's erupted in the last 48 hours is this. I mean, in plain sight, you probably know. But for most people, they were like, wait, what's going on? There's this massive battle between the Elon faction and the Scott Besant faction. Apparently, Besant doesn't like that. Elon had Howard Lutnick installed at Commerce and picked his own IRS commissioner, and that got reversed. I would have thought that those two would find common cause because I doubt either of them wants the trade war to be exacerbated. But to your point, this is not one side versus the other. This is so many different voices.

[Josh Brown]

There are four or five factions within the White House. They don't agree. They're all trying to get their vision for America through. And so as long as we have those different voices that are conflicting, hitting the airwaves, moving the markets, we're going to continue to have this kind of volatility. So I don't. I think this is a feature. It's not a bug.

[Michael Batnick]

Here's the big Wall Street Journal story today. The only opponent that can make the President back down is the stock market. So I'll just. I'll quote this quickly.

[Rebecca Patterson]

They spelled bond wrong.

[Josh Brown]

Did they really?

[Rebecca Patterson]

No, I'm kidding. It should be the bond market.

[Michael Batnick]

Oh. Yep.

[Josh Brown]

Sorry. Slow. I had a blonde moment.

[Michael Batnick]

The President is also hearing regularly from executives concerned about how his trade policies are affecting their bottom lines. On Monday, Trump met with top execs from the country's big retailers, Target, Walmart, and Home Depot. I think they scare the shit out of him. That's the Journal. Didn't say that. I said that they delivered a stark warning to the President that tariffs could scramble supply chains and raise prices. They were telling the President to expect empty shelves this summer.

[Rebecca Patterson]

Is that bad?

[Michael Batnick]

So I think he walks out of a meeting like that and says, put Scott on cnbc. That's what I think is happening.

[Josh Brown]

Yes. Yeah. I mean, Covid was not that long ago. We all still remember trying to find toilet paper in 2020. And so can you imagine if a few months into President Trump's term, there was a toilet paper hoarding Again, I'm not suggesting that will happen, but just the idea of that could cause the US Consumer to completely lose their mind. And then we would have a Wile E. Coyote moment.

[Michael Batnick]

I think he knows he'll own that too. I mean, he's trying to make this.

[Josh Brown]

Powell thing, but 100%, it's not gonna work.

[Rebecca Patterson]

Right. We have an index for corporate America. It's called the s and P500. It fell 19%. It's since rallied. It's down. It's in a 10% drawdown from all time highs. If there was an index for Main Street America, for the small business owner, I think it would be down 35, 40% with no bounce.

[Josh Brown]

Yes.

[Michael Batnick]

Isn't that the Russell 2000?

[Josh Brown]

Well, and that's part of the tariff thing. Right. So with the exemptions, the whole trade war becomes a piece of Swiss cheese. You've got a hole for Apple, you maybe get a hole for carmakers. But the people who are getting the carve outs, the holes are huge. Companies with armies of lobbyists. Yeah, they'll be fine, the little guys. To your point, the small businesses around the country, which is 85% of the businesses in the country, if not higher, they don't have someone to go talk to the President and say, hey, I need a carve out.

[Rebecca Patterson]

And imagine them calculating what the effect of tariff rate is going to be on their goods. How would they do that?

[Josh Brown]

And even how to pay it. Right. They haven't had to deal with this before.

[Michael Batnick]

What they do have, though, is town halls.

[Josh Brown]

Yes.

[Michael Batnick]

And they are making themselves heard to both Democrat and Republican congressional people. And they're getting loud. And I saw there's a group of farmers in Montana that are suing the President, effectively saying the uncertainty is like costing them their entire livelihood. A lot of these Great Plains states have to support themselves by selling agriculture around the world. Well, China buys soybeans.

[Rebecca Patterson]

Soybeans they buy. Is it 60% of crazy number $12.

[Michael Batnick]

Billion worth of yield.

[Josh Brown]

Yeah. So I wrote about this in October and the New York Times put a headline on it. Your guacamole is about to become a luxury good. And my main point was to talk about the stress on the US Farming industry. Cause they were already stressed before the election came. But I was looking at Trump's campaign pledges and saying, okay, if we have a trade war, retaliatory tariffs immediately going on farmers, if we're deporting immigrants, they rely on immigrants for those farms. So they're stuck.

[Michael Batnick]

They're losing twice.

[Josh Brown]

So during Trump's first term, America lost market share in soy and some other agricultural products to Brazil. After Trump left, trade war basically stopped, paused. It didn't come back. Brazil is now by far the biggest exporter of soy to China. US Used to be. We're not anymore. We're tiny.

[Michael Batnick]

Oh, we lost that permanently.

[Josh Brown]

We lost it permanently. And now we're going to do it again. And last time, the government bailed out the farmers tens of billions of dollars in grants and loans, mainly grants. We don't have as much fiscal space this time. We can't afford to write the same size check this time. So we're doing. We don't have the fiscal room to help them, and we're doing structural damage to the industry.

[Michael Batnick]

His polls are the lowest they've ever been on his handling of the economy. And that includes Covid. That includes. So that includes the first trade war, 2018, while he was doing all those bailouts. So he's at 38% favorability across the board on his handling of the economy. This, along with immigration, were the reason he got elected. All right, so, so, Rebecca, this, this was the actual statement about China. Quote, at present, there are absolutely no negotiations on the economy and trade between China and the U.S. according to the Ministry of Commerce spokesperson. He also, and he also added all sayings regarding progress on bilateral talks should be dismissed. Quote, if the US really wants to resolve the problem, it should cancel all the unilateral measures on China. So then Trump was given a chance to reboot that. He's like, no, we spoke to them this morning. It's cool. Anyway, let me show you a couple of charts. Let's put this first one up. This is the S&P 500's exposure. The names that are most exposed to China. I'm sure you could blindfold yourself and pick them out. But for the people listening, not watching, it looks like the average of these most heavily exposed names to China are in a 33% drawdown. It's Broadcom, it's Corning, it's Agilent Tech, MGM Resorts, Applied Materials, Las Vegas Sands. There are some names in here that you wouldn't necessarily guess, like A.O. smith, which makes water boilers, but it's, it's a big, still a big drawdown for these China names. So let's do one more. This is deciles ofs and P500 percentage daily advancers and subsequent 12 month forward returns.

[Rebecca Patterson]

All right, so here's what we're looking at.

[Michael Batnick]

Tell us the conclusion.

[Rebecca Patterson]

On Tuesday, I think there was three stocks that were down in the S&P 500. It was like a really unusual amount of green on the screen. So for the first 10 deciles, in terms of like where you are, it doesn't really matter. There's no bearing on full returns. But when you isolate it, and now listen, in fairness, n equals 20, but they all happen at market bottoms. We had this on, in, on the bottom in 2009. You had this in 2010 a few times in 2011, in 15, 16, 18, 20, 20 and 22. And now today, and historically on a go forward basis, the S and p is up 22% of 22% 12 months later. Now the difference between this and all of the other events is that we haven't even begun to feel the effects of a recession.

[Josh Brown]

Right. So I'm glad you shared this chart because charts like this make me slightly insane. I appreciate that you mentioned n equals 20.

[Rebecca Patterson]

Yes.

[Josh Brown]

If I have a sample set of 20, I don't really care about it. It's not going to help me make a good investment. So what I would want to do is look at each of those 20 instances and say what was going on? What was going on? Is there a reason that we got this outcome? Is today similar to those or different? It's possible that in those 20 instances the reason you got a signal at the end is because you had a major policy response, central bank cut rates or something. So without knowing more about this chart, I think it's interesting, but I would say you need to do, and I'm not saying you, your audience would want to do more homework.

[Rebecca Patterson]

Totally. So we're always of the opinion that like all this has to be taken with a grain of salt because nobody can see the future. It's a good average. But I guess the point that I just made to counter the point that I just made is we haven't even begun to see the recession yet.

[Josh Brown]

Right?

[Rebecca Patterson]

Well, stocks don't wait for earnings to bottom. John, next chart please. So here's what we have. We have a chart of the trailing twelve months earnings for the S&P 500. And then we have where the stock market bottomed and where earnings bottomed and conclusively what you see over and over again, and this is a permanent feature of the market, is that stocks do bottom before earnings do. The question this time is, when does earnings spot him and from what level and how bad does it ultimately get?

[Josh Brown]

Right. And I would say the answer to that depends a lot on how long the tariffs last, how big the tariffs are. Does the Fed stay independent? Does the Supreme Court give President Trump the ability to get rid of the heads of agencies? And does that include the Federal Reserve? I mean, I can tell you the answer to your question once I know the answer to my questions. Without that, I don't know.

[Michael Batnick]

Some of your questions are about to be tested. Everything he's done up until now has been an executive order. It's a blitz of executive orders. Congress doesn't even need to be consulted. In a lot of cases. They seem relieved. They don't want to weigh in on this stuff. They know it's really popular with the base on the right. They don't want to be the ones that try to stop it. And so they're almost like, relieved. Thank God, Let him do another executive order. We don't have to debate this. We don't have to go on record.

[Josh Brown]

Until their voters get unhappy.

[Michael Batnick]

Yeah, is what I was trying to say.

[Josh Brown]

If the economy softens, if people start losing their jobs, if inflation ticks higher because of the tariffs, which will take months to feed through, but if we start to see that happening, or companies just get nervous and start laying off workers. Yeah, then I think that base is going to be a lot less happy. And then Congress might start trying to pull away a little bit into the midterm.

[Michael Batnick]

Well, here's where it really hits home. This morning, Chipotle reported earnings. They managed to squeak out a one penny beat, which was good enough for the stock to not sell off. They missed on revenue and then they said they're gonna get it coming and going. Their cost of goods is going up by 50 basis points indefinitely, which is a lot of dollars for the rest of this year, if they're lucky. And foot traffic is slowing.

[Rebecca Patterson]

Same store sales for the first time in a long time.

[Josh Brown]

Right.

[Michael Batnick]

Purchases are coming down. That's Chipotle. That's like, that's as good as it gets in that space. They are the best operators in that space. So that's, that's. Who cares? It's burritos. That's a microcosm.

[Josh Brown]

Yep.

[Michael Batnick]

That's the middle class, the upper middle class. That's the working professional, like, who eats Chipotle in Manhattan? People Walking out of an office building.

[Josh Brown]

Me?

[Michael Batnick]

Yeah, okay, Michael. It's right next door by the way. But so that's the. So that's why this is so difficult, I think.

[Josh Brown]

Right.

[Michael Batnick]

Because companies do have a lot of levers and they can pull them and squeak out a one penny beat.

[Josh Brown]

I mean your chart before is important because it is a good reminder, especially for people who are younger in this and haven't lived through lots of cycles that you will see the bottom early in the recession. If we have a recession.

[Rebecca Patterson]

Of the stock market.

[Josh Brown]

Yes, of the stock market. You don't need to wait till we're at the very, very trough with growth. If you've waited that long, you've waited too long. And the best days are at that bottom.

[Rebecca Patterson]

So this idea that oh, I'm going to wait for the dust to settle, that's not.

[Michael Batnick]

But you don't think we've. But you don't think we've gotten the full. I don't either.

[Josh Brown]

Not at all.

[Michael Batnick]

In fact, the full market sell off related to the potential for how bad this gets.

[Rebecca Patterson]

We haven't even seen it.

[Josh Brown]

Right.

[Michael Batnick]

I actually down 19%. I don't think it's done.

[Rebecca Patterson]

We haven't even seen the earnings report start to deteriorate.

[Josh Brown]

Right. I think, I mean right now that the S and p is down 7% year to date. Right. As we're talking.

[Michael Batnick]

Nothing.

[Rebecca Patterson]

Nothing.

[Josh Brown]

It's nothing. It's really not unusual at all. Especially after the last two years we've had. But I'd say for investors who are a little nervous about what's going on, who maybe have overallocated to stocks in the last couple years, this is a wonderful opportunity to take some money off the table. And then the question is, where do you go? I don't think it's in 10 year treasuries right now. I think it's probably in money markets. I think it's in gold. Personally, I'm not a huge fan of bitcoin, but if you are, God bless. It's looking at overseas markets.

[Michael Batnick]

I want to ask you a question about your world. You've spent a lot of time interacting with sovereign wealth funds, extremely large investment organizations. So this is CNBC story today. The world's largest sovereign wealth fund, which is Norges bank in Scandinavia reports $40 billion loss in the first quarter on tech downturn. I guess they had a big NASDAQ overweight.

[Josh Brown]

As did everyone.

[Michael Batnick]

As did everybody. Okay. This is a pretty, I mean this is a pretty big loss for one quarter. I know some of it's like a paper loss. It's not like, oh no, we lost, we misplaced $40 billion. You're in stocks that are in big, that are in big corrections. Okay? But that is the kind of thing, in my view it does change people's attitudes about their allocation going forward, which is why it makes it really hard for stocks that had been leading to remain leadership. Because I think when people take big paper 1/4 losses like that, they start thinking more in terms of being risk averse or looking for things that will not burn them as badly if they go wrong. What do you think about that? As somebody that has lived in that world?

[Josh Brown]

What do you think about that? I mean, that makes sense to me. If you had been heavy on the Magnificent Seven or whatever version of that and you felt the pain over the last couple months, maybe you still believe in them long term, but you realize, gosh, I don't know when this ends. So I want to diversify a little bit. Maybe I'll trim my tech and have a bit of consumer staples or something else, stay in the market, but just get a little lower beta if you will, just a little less risk in my portfolio.

[Michael Batnick]

I think that that's why tops are a process and they are rounded like historic tops for different stock markets, the Nasdaq included. They tend not to be a short sharp event where they go parabolic and then crash. They tend to be more like a gradual give up, lower highs as stocks rally after a correction but don't quite get back to the old high, sell off again, rally again, but again to a lower high and it ends up looking like this dome. So from my perspective, that's how I think this goes. I think we can continue to rally. It's tough to picture US approaching Dow 45,000, 46,000 and the NASDAQ getting back toward its all time highs. Unless this tariff stuff is just completely folded.

[Josh Brown]

See, I agree with you first of all. And part of that is just because you have investors with different time horizons and different processes. If you're at a big pension fund or you're at a sovereign wealth fund or a central bank, if you're at an endowment and you're thinking about making an asset allocation shift, I'm going to reduce my U.S. equity by 4 or 5 percentage points, or I'm going to switch out of U.S. bonds into gold, that you do a bunch of analysis, you present it to your board of directors, they vote on it, then you allocate it. That's going to take months to play out and That I think plays into your idea of a dome or a slow turn because not everyone switches their allocation today. It's going to take a while to do it, but guarantee it's coming. The only question in my mind is.

[Michael Batnick]

How big a hedge fund can make a lightning quick decision. Yeah, a pension fund, not so much.

[Josh Brown]

Not so much.

[Rebecca Patterson]

Well, here's what else can't meant lightning quick decisions. Containers and shipping. So we're already starting to see that. John, throw these charts on, please. So this is at the port of Los Angeles. You've got 120,589 for the week of April 20th to April 26th. And then it's projected to go down to 86,000 and then down to 72,000. You see trucking volume. Next chart, please.

[Michael Batnick]

Jon, That's a lot of treadmills.

[Rebecca Patterson]

Look at this.

[Michael Batnick]

So getting delivered, the full chart is.

[Rebecca Patterson]

Obviously 2024 compared to where we are 2025, you see a steep sell off, like a monster drop. This is going to hit our shores eventually. So Ryan Peterson had it, did a tweet thread. He said in the three weeks since the tariffs took effect, ocean container bookings from China to the United States are down over 60%. Yep, 60% industry wide. He says the US imports $600 billion worth of goods from China every year, 95% of that via ocean freight. Those goods sell at retail for $2 trillion. If the tariffs on China continue at this level. They're not going to, but if they do, just, just for argument's sake, we will see a $2 trillion hit to economic activity in our country, the failure of tens of thousands of American businesses and the laying off of millions of employees. So this is the, the doomsday scenario, right, that. Let's just say that the worst, the worst won't come to pass, hopefully, but there will be damage.

[Josh Brown]

Yeah, well, even if, I mean, we're at 145% on China right now, let's say we take that, which is what Trump originally campaigned on, which at the time we all thought, that's a crazy number.

[Michael Batnick]

Yeah, he's just being crazy.

[Josh Brown]

Right. And now we're like, ooh, 60, that would be good. And maybe you even get a market rally. People are relieved on 60. But let's be real, 60%, if it's sustained for any period of time or anything like that, catastrophic.

[Michael Batnick]

Well, China's at 125. If we go to 60, do they go to 60?

[Josh Brown]

That's a good question. They want us to move first because we started it. They're not gonna do anything until we go. And I don't know how that's gonna work with various personalities involved. I'll give you one little anecdote. Since you talked about ships, I was trying to think about relative winners and losers in all this. And someone had mentioned on a call I was on for Council on Foreign Relations that the United States, we import almost all of our shoes. We make very few shoes in America. So 80% of the shoes that we import in the United States come from China. 80% of our shoes come from China.

[Michael Batnick]

Vietnam, too. Or.

[Josh Brown]

Vietnam is tiny compared to China.

[Rebecca Patterson]

Vietnam.

[Josh Brown]

But Nike. But they're big globally. But they're tiny compared to China. China is the elephant in the room. So if we can't buy Chinese shoes anymore because the tariff is so high, it just doesn't make any sense.

[Michael Batnick]

I wear Italian shoes.

[Josh Brown]

Well, you're special.

[Michael Batnick]

No, no, no. But the Chinese started pushing these videos of people in Gucci workshops in China. Like, here's a Birkin bag. We're gonna make one right now. Watch. It's us. They're not making this in Italy. I don't know if that was like.

[Josh Brown]

I think you're gonna get a very angry call from the Birkin people shortly.

[Michael Batnick]

It was a propaganda video, but it was effective. It spread like wildfire.

[Josh Brown]

So Vietnam, the tariff is 46%. So that's still really expensive. So then who else could make shoes? Brazil. Brazil is not as big as Vietnam. It's tiny compared to China. But the tariff's only 10%. And they already are a big shoe producer. They have the infrastructure. They have very low wages. So Brazil's going to get market share from China and Vietnam on shoes. Brazil is going to get market share from America on agriculture goods that they're selling to China. So they're winning on both sides of the trade war. And I think it's interesting, when I look at the stock markets today, Brazil is up local currency terms. So if you bought the real and then held the stock 21%.

[Rebecca Patterson]

And dollar terms look like it's breaking out.

[Josh Brown]

I mean, dollar terms, 14%.

[Michael Batnick]

But what about. What about the U.S. workers that want to make shoes?

[Josh Brown]

Have you met any?

[Michael Batnick]

Wasn't that the stated intention?

[Rebecca Patterson]

No, dude, it's the state.

[Michael Batnick]

They're mostly elves.

[Rebecca Patterson]

It's the elves in Santa's workshop.

[Michael Batnick]

Brownies. In the traditional fairy tale, they were brownies.

[Josh Brown]

Yeah. This is. I mean, I think there's a lot to be said for making sure the US has resilience in strategic industries. We should make more Semiconductor chips. Exactly. Shoes are not. Children's Christmas toys are not. And I don't think there are many Americans who want those jobs.

[Michael Batnick]

No. How about none?

[Josh Brown]

Right.

[Rebecca Patterson]

All right, but how about this? So we're starting to see tariffs hit us. This chart comes from Ernie Tedeschi. He's looking at the cumulative year to date, custom duties in 25 compared with 24. We're taking a significant leg higher as they start to hit us. Does this mean tax cuts? Is it enough?

[Josh Brown]

So here's a good one for you. All right. Congress is going to do its reconciliation package. That's its fast track to get the budget passed later this year. Trump would like to get it done by July 4th. I think it's much more likely this thing's going to go to Q4 because it's going to get hard because it is a big increase in the deficit. They're going to need spending cuts. They won't want to hit Medicaid because that hits red voters. So this is going to play out for a while. But to pay for the tax cuts, they need to have sources of revenue to bring that total number down. So we don't have a bond vigilante moment. One of the places they're looking for revenue is the tariff revenue. But to have the tariff revenue, because it's not passed by Congress, it's not part of the official package, so they had to work that around. It's a little bit gimmicky. But they also have to promise it's gonna stay in place forever.

[Michael Batnick]

Right. It can't be a pay for if it can be like, at the stroke of a pen, hey, we made a deal with China. We're done.

[Josh Brown]

If you're saying you're gonna cut my tax on tips and you' my tax on Social Security for the next 10 years, that means I need tariff revenue for the next 10 years.

[Michael Batnick]

If that's what you're saying. Is the offset correct? Okay. I don't think anybody believes in this story.

[Josh Brown]

No.

[Michael Batnick]

That taxes can go down because foreign countries are going to pay them like.

[Josh Brown]

It seems like, and they're not, obviously. Let's just be clear. We're paying them because we're going to pay more for our new Brazilian shoes.

[Michael Batnick]

All right, if you are, whose shoes would you rather be in right now? Scott Besance, where he has the President's attention, as much of it as he wants, and he has a lot of sway, or for now, with markets. And anyone will take his call in two seconds. He seems like in a pretty good seat to steer this. Would you rather be him or Jerome Powell, who basically has no options whatsoever that are appealing? He either bows down to the President's demands and cuts rates sooner than he would want to, thus potentially undoing his own soft landing and exacerbating inflation, or he doesn't and has this guy screaming at him on Twitter for the rest of the year. It seems like you'd much rather be at treasury than at Fed right now.

[Josh Brown]

I mean, I think that they're both in very difficult jobs. Right. Scott Bessant has spent his life in the markets. He understands that tariffs are inflationary. He wanted to work in the seat and take the responsibility. And that means he's gonna have to do things that he probably knows are probably not the best thing for America or the global economy or the markets. I would rather be Jerome Powell right now because then I can actually try to do the right thing for the country, regardless of politics.

[Michael Batnick]

Which is what? Cut or don't cut?

[Josh Brown]

No, you can't cut.

[Rebecca Patterson]

Why not?

[Josh Brown]

You can't cut because inflation is way above target and the unemployment rate is low.

[Michael Batnick]

Why do we think cuts lead to inflation when they have for 15 years?

[Josh Brown]

We were in a deflationary environment for 15 years. That was soon. That was created globally. Right. So we were desperate to create inflation.

[Michael Batnick]

We couldn't.

[Josh Brown]

Right.

[Michael Batnick]

We cut to zero and left it there. We put our foot on the gas and held it down. No inflation.

[Josh Brown]

But that's partly because we didn't have as much fiscal stimulus globally after 08. And then we had the European crisis in 11 and 12 and then we had a China crisis in 15. So every time the global economy started recovering, we had other hiccups that pulled us back down. We're in a totally different boat now. We had a huge amount of stimulus after the pandemic that got things going and drove inflation up. Ukraine, obviously. The Russia invasion, commodity prices further drove up inflation. Inflation's back. But beyond that, the fiscal stimulus has created this dynamic where we're issuing a ton of debt, we have upward pressure on yields. The Fed, if they, if the Federal Reserve, given that inflation is now back in the consumer and business mindset, if they cut rates prematurely and inflation expectations keep going up and they're questioned, their independence is questioned. The 10 year yield is going to be at 5% in a week.

[Michael Batnick]

You're probably right and I'm probably wrong, but I still want to, I still want to counter.

[Josh Brown]

The Fed doesn't have data. I mean, inflation's above target, the job market's Strong. Why would you cut?

[Michael Batnick]

Europe has cut seven times. They are trying. So they have zero growth time out. So they screwed up last time and we got it right. Right, like the financial crisis.

[Josh Brown]

Yes.

[Michael Batnick]

They were hiking rates into the crisis.

[Josh Brown]

Yes.

[Michael Batnick]

Cuz they were looking at this transitory thing where oil went to 180 and they were looking at iron ore prices and they were looking in the rearview mirror at this emerging markets boom and they concluded the right move is to raise interest rate. Boy, was that wrong. Yeah, that set back their recovery, I don't know, 10 years maybe permanently.

[Josh Brown]

And then they doubled down on the pain because they had this fiscal straight jacket that they created with the birth of the euro in 1999. So they couldn't do fiscal stimulus either.

[Michael Batnick]

Right, okay, but so doesn't it seem like it's the same situation now, but in reverse? Europe sees that demand is about to fall off a cliff globally because of the trade war. They are slashing rates and intimating that they'll keep going. We're going the other way. We're holding firm on rates, knowing that we're about to have a recession.

[Josh Brown]

But we don't know anything. That's the thing.

[Michael Batnick]

No, no, nobody knows. I agree.

[Josh Brown]

President Trump could come out tomorrow and say, you know what, I've talked to a few more CEOs, I had a long talk with the Treasury Secretary and you know, we're gonna figure it out with China.

[Michael Batnick]

So it's not too late.

[Josh Brown]

Well, I think it's too late. I think it's too late to avoid a major growth slowdown.

[Rebecca Patterson]

So what you're saying is if Trump were to do that, what would then Powell hike and say, just kidding. Like had he cut, if Powell had.

[Josh Brown]

Cut and then Trump pivots, would the Fed hike? I mean, look, the Fed is always gonna be looking at data and it's gonna be talking to companies. The beige book just came out and said things are slowing. The Fed's going to take that on board. So it's not waiting for three months of hard data. It's not that far behind the curve. But it does need to see the jobless rate increasing. Weekly jobless claims are not increasing yet.

[Rebecca Patterson]

Well, the market is agreeing with you because they're saying like the Fed CME watcher is saying that they're not going to cut in May.

[Josh Brown]

No, there's no reason.

[Rebecca Patterson]

I know that. So we've been talking a lot about earnings calls and what companies are saying and it doesn't matter what they report. Right. It's a different world. But it does matter what they're saying. And they do have visibility into the first few weeks of April. And a company like Capital One, which is very, very much exposed to the consumer, that is not. That's not American Express. It's everybody. They even said the subprime unit was looking okay. So it's not to say that it can't change rapidly, but the economy is generally. Pockets of weakness, like always.

[Josh Brown]

Generally. Okay, right. And again, that gets me back to my earlier point. We started this strong. That's our best hope. Right. The fact that we had a strong labor market, strong household wealth.

[Rebecca Patterson]

Not a ton of leverage, not a lot of leverage.

[Michael Batnick]

Funds rate should be four and a half percent given what's going on.

[Josh Brown]

In other words, flat, like where we are. Yeah, yeah, yeah.

[Michael Batnick]

Okay.

[Josh Brown]

Yeah. I don't think it should be cut.

[Michael Batnick]

So you think Powell's doing the right thing?

[Josh Brown]

Yes, I do.

[Michael Batnick]

And you like the hand that he has because he can do the right thing and he won't get blamed.

[Josh Brown]

Well, he will get blamed, but, you know, that's taking the job.

[Michael Batnick]

Yeah. Okay.

[Josh Brown]

But history, I mean, if this trade war lasts and we have a recession because we initiated a trade war, I don't think Powell's gonna be blamed for that.

[Michael Batnick]

I don't either. I think you're dead right on that. Let's. Jon chart 18. So a shift lower in the expected fed funds rate. Not much.

[Josh Brown]

No.

[Michael Batnick]

But basically this is the implied fed funds rate. What you can see here is that it looks like 4% going to 3.7% next year. Is that three cuts in total?

[Josh Brown]

Yes.

[Rebecca Patterson]

So that's where they were when the market peaked on February 19th.

[Josh Brown]

Right. And so now we're down.

[Michael Batnick]

Now it's a little bit more 3.

[Josh Brown]

Basis points lower for the end of next year. I mean, if we have a severe slowdown or a shallow recession, the Fed will cut. That's a given. And the question is timing. I think it's probably summer before we see it in the data, because right now we're in this pause situation. No one knows what's happened. Companies aren't going to lay off prematurely and then have to hire back again, but they'll pause on hiring. They'll pause on capex.

[Michael Batnick]

What's the stock market's reaction, the first cut, expected or not?

[Josh Brown]

Oh, it'll be expected. I bet the Fed will telegraph it.

[Michael Batnick]

They'll telegraph it.

[Josh Brown]

Okay.

[Michael Batnick]

Stock market will rally when they start telegraphing it?

[Josh Brown]

I think so. I think so. But I think that's months and months and months away.

[Rebecca Patterson]

But the two year will telegraph it too.

[Josh Brown]

Yeah, yeah, agreed.

[Michael Batnick]

All right, here's what we want to ask you. And I think this is maybe the first time in my career that this has ever been like a primary concern. Right. It was always this idea of bond market vigilantes. There was always this like stand up comics in their late night routines would do this bit about how China owns us or whatever. So there's always this idea that like there's this threat hanging over us all in the form of foreigners own our treasury bonds. Of course, the truth is the opposite. That's our best export to the world is treasury bonds. We're really good at selling them all over the. Okay, fine. You've heard an earful about this during your week in Washington. So I want to play something for you. John, do we have that audio ready or am I playing it? You got it. Okay.

[D]

The American brand, right? The United States was more than just a nation. It's a brand. It's a universal brand. Whether it's our culture, our financial strength, our military strength. America rose beyond just being a country. It was like an aspiration for most of the world. And we're eroding that brand right now. And if you think of your behavior as a consumer, how many times do you buy a product with a brand on it because you trust that brand? You know, you could buy like a similar dress with no name for less money. But you want the dress that you think is going to not fall apart in two weeks. You want the handbag that you think is well made. You want the television that you know that when you turn it on it's going to work perfectly. You want the car that when you turn the engine on, it's going to run. And when it comes to money management, for example, there are, there are many great American institutions whose the power of their brand that they will deliver service at a fair price, that they'll do well by their investors and put their investors interest first. Whether it's a BlackRock or Fidelity, these are global brands of immense power. But in the financial markets, no brand compared to the brand of the US Treasuries. US treasury market. The strength of the US dollar and the strength, the credit worthiness of US Treasuries. No brand came close. We put that brand at risk.

[Michael Batnick]

Okay?

[D]

And as you and I both know, it can take a very long time.

[Rebecca Patterson]

Evacuation come.

[Michael Batnick]

All right, so that's Ken Griffin of Citadel and somebody that I think when he speaks, everybody pays attention. You probably have some great Ken Griffin.

[Josh Brown]

Stories or I think That's a great analogy.

[Michael Batnick]

I love that analogy. I wanted to play that, you know.

[Josh Brown]

The US has been exceptional basically since 2008, 2009. We did more fiscal stimulus. We had a higher weight in our stock market of tech companies. And they were the leading tech companies in the world. So everyone wanted a piece of our growth. Cause we were growing faster than everyone else. They wanted a piece of our companies. And so over this almost 20 years, we had a ton of foreign capital coming to the United States, which by the way, we benefit from. We benefit from it because it makes us richer too if we're in the market. And it lowers our borrowing costs by pushing down bond yields. So it's not like these people were taking advantage of it, of us. We benefited from that. Okay, so fast forward to today. Foreign investors have about $22 trillion in U.S. assets, stocks and bonds. The brand has been tarnished. Investors globally and I talked to people from probably a dozen different countries in the last four days. They are reviewing how much US Exposure they want. The most extreme example I heard was a very large pension fund from another country saying they're worried, in an extreme example that the US could weaponize capital markets and they won't be able to sell their US private equity assets. They won't be able to get out. There'll be a capital they can't get.

[Michael Batnick]

Out anyway right now because there's no buyer.

[Josh Brown]

But, but capital controls, right? Or taxes on flows. So 22 trillion is in the US so I'm a global pension fund. I'm like, well, the US is still a great economy. This couldn't possibly last. I'm just going to trim my allocation. I'm going to take 2% out of my stocks, 2% out of my bonds, and buy whatever gold, other countries, 4% allocation shift, which is tiny. It is not a crazy number. That would be $880 billion leaving US markets.

[Michael Batnick]

That just that one example.

[Josh Brown]

That one example.

[Michael Batnick]

That's incredible. So much money.

[Josh Brown]

That is a huge amount of money. And I think American investors were so focused on the day to day. What we're listening to on your podcast, what we're seeing on Bloomberg, what we're listening to on cnbc, that sometimes we forget that our markets are heavily influenced by foreign capital flows. And because our brand has gotten hurt, we just, we just did a trade deal with Canada five years ago, usmca.

[Michael Batnick]

Now it's Trump's deal.

[Josh Brown]

Trump made the deal, he said it was a great deal. And now he's like, never mind, I hate the deal. I want a new deal. The Canadians are saying, can we trust you?

[Michael Batnick]

You know, so one of the points that you're making is that this is the kind of shift allocation shift, when it starts, it goes on for longer than people think. And it's not a two day phenomenon where we come out, the market's green, somebody goes on CNBC and wait, all right, the foreigners are done selling now. Once they commit that that's what they're doing. You've made the point that there were these really long drawn out investment committee processes and committees and meetings and discussions. This could be like months or years.

[Josh Brown]

This will be a flow behind the scenes that you'll see in your weekly EPFR data or the investment bank, the bank of America data. Whoever is releasing that, you're gonna be seeing drips and drabs of this, I think for months and months and months. So the day to day will go up and down.

[Michael Batnick]

We had an initial tremor, right. We didn't have the earthquake yet.

[Josh Brown]

And there might not be an earthquake. There might just be a series of tremors or I don't know. We need a better weather analogy. What's a long lasting, a drought, a.

[Michael Batnick]

Prolonged drought of the flows going the other way relative to the direction they have been going for 20 years.

[Josh Brown]

Correct. And that doesn't mean like stock markets can still go up. You know, if American investors say, oh man, these bond Yields, the Treasury 10 year yield, that looks like a great return, I'm in. It's possible Americans can step up, but can they step up if they're losing their jobs and they're losing their confidence? I don't think so.

[Michael Batnick]

Let's do this chart. John. This is 19. This is the biggest foreign selling of U.S. corporate bonds since April of 2020. What's going on here? This is, I mean, this looks a lot, looks like a lot of money coming out of, I guess AAA corporates probably. I don't know if foreigners are dipping much lower down in terms of quality. Probably buying like the greatest hits. Yeah, Apple bonds.

[Josh Brown]

Yes. Yeah. Gold. I mean, there's a reason gold is at record highs right now, because if you don't trust the treasury market, which is the biggest single market in the world, it's about $30 trillion. If you can't trust that anymore, where do you go? I mean, Germany, German bonds, it's a relatively big market, but it's tiny compared to Treasuries.

[Michael Batnick]

But with the ecb, Japanese bond market is not yielding and there's no liquidity.

[Josh Brown]

Really in that market because the bank of Japan owns most of it. So you don't have a lot of.

[Michael Batnick]

Bond options if you're China and you've got all these FX reserves from global trade.

[Josh Brown]

Ooh, I'm glad you asked that.

[Michael Batnick]

Okay. This is a big deal. People are like, oh, the Chinese own all our bonds. They own us. We borrow money from the Chinese. Like no, dumbass, we trade with the Chinese, they get dollars. They need to put those dollars somewhere. They put them into US Treasuries. It's a compliment, it's not a negative.

[Josh Brown]

Right, Right.

[Michael Batnick]

Okay, so nobody understands that, but explain to our audience why that now comes into play. And it's a lot of money.

[Josh Brown]

Right? So foreign investors, both central banks and private Investors own about 30% of the U.S. treasury market.

[Michael Batnick]

Huge.

[Josh Brown]

So about a third of our total market foreigners own because they buy so much, it pushes down yields, which means it's cheaper for us to get a mortgage, it's cheaper for us to buy a car. We benefit from foreign purchases. They help us. Like that's important to understand this isn't evil. It's good. Now they're not about to turn around and start selling bonds actively in the market because as soon as we got wind of that, there would be a crisis in the bond market. Everyone would be rushing to sell their bonds. Yields would spike. It would be.

[Michael Batnick]

They'd ruin their own investments.

[Josh Brown]

Correct. They would do themselves more.

[Michael Batnick]

It would be self sabotage.

[Josh Brown]

But most central bank treasury holdings have very short maturities. Five years or less. A lot of them are two years or less. So even if they don't actively sell bonds, because that would also antagonize the White House, they can just let them.

[Michael Batnick]

Mature and not buy them.

[Josh Brown]

Bingo.

[Michael Batnick]

But what are they doing with the money?

[Josh Brown]

Buying gold. Buying Australian bonds, Canadian bonds, German bonds.

[Michael Batnick]

They have options.

[Josh Brown]

They have options.

[Michael Batnick]

Okay, land. So this is an example of where we may be overplaying our hand.

[Josh Brown]

For sure. Yeah, for sure.

[Michael Batnick]

Okay.

[Josh Brown]

This is gonna happen. It's not a crisis. It is a long term capital drought that is going to reduce the potential gains of the U.S. stock and bond market, which is going to reduce consumer wealth in America. So we are creating conditions to have slower growth for a prolonged period.

[Michael Batnick]

I'm going to ask you about corporate earnings, but as a lead into that, by that same logic, does it depress the multiples that our businesses are worth on the stock market or in the private equity world at the margin? Sure, it has to.

[Josh Brown]

Of course it has to. Because I mean, think of the flywheel. If I have a job and I'm confident I spend. My spend is a company's revenue. They have more revenue. They can hire more and invest more. And you get this beautiful flywheel. The flywheel is now starting to go into reverse.

[Rebecca Patterson]

I just want to ask you this idea. This question comes up a lot. Oh, yeah. If tariffs are so bad, why do other countries tariff us? I'm sure you get that all the time. What do you say to that?

[Josh Brown]

I mean, in a perfect world, we'd have zero tariffs everywhere. And I was really excited when President Trump first said, let's get everybody to zero. And a few countries have gone to him and said, okay, cool, we'll do zero. It's like, oh, never mind, because he needs revenue to pay for the budget.

[Michael Batnick]

Vietnam said that?

[Josh Brown]

Yeah, yeah, yeah, yeah. I mean, that would be amazing.

[Michael Batnick]

Yeah.

[Josh Brown]

I think a lot of countries enact tariffs when they're early in their economic development as a way to protect domestic industries. Domestic companies that are still growing and trying to get their sea legs, they don't want to have overseas competition while they're just building their steel market for the first time, for example. So India has always had high tariffs because India's economy is in a very different place than America's in terms of its growth.

[Michael Batnick]

They have no tariffs. American and European companies will bulldoze their way in there and take over entire industries.

[Josh Brown]

Well, that's the fear, right? That is why they have the tariffs to let them grow. And once they're big enough, in theory, they should be comfortable and the companies should be strong enough that they don't need the tariffs anymore. The problem is when they keep the tariffs even though they don't need them anymore. And there are some instances of that. Like, I. I know I'm coming across as really, really negative on President Trump's policies. I think there are instances where tariffs can make sense for certain countries at a certain point in their development cycle or in certain industries like, you know, semiconductors, that there is a strategic national security issue here.

[Michael Batnick]

Howard Lotnick has argued, in addition to the tariffs that other countries have against us, they use regulatory bodies to torment some of our companies. They're doing it right now with Meta. They've done it with Google. They do it with Apple all the time. They kind of erect these barriers that make it so that we can't actually compete. We can't sell cars in some of these markets. That's not all fake. Even if you're not a fan of tariffs, that's not fake news. That is a thing. We probably do it back Too.

[Josh Brown]

We do it back. But there is a kernel of truth here in Europe's case. Europe. Could I sound like Demi Moore today? I'm getting over a cold.

[Michael Batnick]

I think you sound great.

[Josh Brown]

In Europe's case, even though they've gone a long way to have a monetary union and an economic union. Not everything is a union. You have to cross a lot of legal and regulatory hurdles when you go country to country within Europe in terms of banking and capital markets. And that's prevented them. All the regulations and all these national boundaries and different sets of rules have prevented them from growing the Amazons of the worlds, the Metas of the worlds. And so it's their own darn fault if they could pass. They started working on Capital Markets Union 12 years ago. They know they need to do it. They just can't get it over the finish line. And it really took President Trump to threaten to pull out of NATO to get Germany to say, oh, maybe I should spend a little more on defense. So in a way, like, good for Trump, he got.

[Michael Batnick]

I read recently that Canada, the provinces tariff each other. Like you try to. Seriously?

[Josh Brown]

I believe it.

[Michael Batnick]

Yeah. If you have a homegrown product in one province, they want to bring it into another. There are cross border tariffs.

[Josh Brown]

Well, I haven't done enough homework on this to say something truly educated, but I would be pretty sure that the states in the United States have different regulatory and legal rules to make. Either I want to be a nurse in one state versus another and I need different requirements, or I want to sell booze in one state or another. So we're not completely free of that here.

[Michael Batnick]

Let's do gold. Okay, I'm going to read you a quote. You tell me who said this. What motivates most gold purchasers is their belief that the ranks of the fearful will grow. Beyond that, the rise in price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As bandwagon, investors join any party, they create their own truth for a while.

[Josh Brown]

It's a nice quote. Did you say that?

[Michael Batnick]

No.

[Josh Brown]

Who said it?

[Michael Batnick]

Warren Buffett.

[Josh Brown]

Oh, there you go. Hey, they just gave you a nice compliment.

[Michael Batnick]

Yeah. They asked him, like, why. I think this was during the. I think this was during the last gold bull market, which peaked in 2011. Not a coincidence. It peaked alongside the uncertainty of the European debt crisis. The debt ceiling debate here, that was like gold's last big moment. And now we're having another one.

[Josh Brown]

Yeah, we had a lot of fiscal stimulus in 09 10. And there was a certain cohort of people who thought increase in money supply would also create gold. Have gold going up. I ran the gold trading desk at JP Morgan's private bank during 0809.

[Michael Batnick]

So what do you know?

[Josh Brown]

So I learned a lot about gold. I also had a Forecast Gold for JP Morgan when I first started in the 90s. So I have had an education about gold. Here's what I'd say about gold. Gold tends to do best at tails. So either a crisis recession and you have a safe haven flow and yields are coming down. So gold has no yield. Right. So when yields are coming down, your opportunity cost of owning gold goes down. That's one area where it almost always does well. The other area where it does well is when you have an overheating economy. Not just rising inflation, but inflation rising faster than expected. So almost getting unanchored, we haven't seen that recently. In the middle, it doesn't mean gold can't do well. But then it becomes more about demand and supply. And demand is primarily jewelry from China and India. So then you look at those economies companies. Right now we're in.

[Michael Batnick]

This is not jewelry demand.

[Josh Brown]

No, no, no, no, no, no. This is central bank reserve diversification which has been going on for three years now. They have been buying major, major tonnage of gold. And the World Gold Council does a great job tracking this. So shout out to them. They have been buying gold for the last several years, especially China. But not only China. And then you have retail investors. I bought gold in January. I've been talking up gold for two years. And I finally said, what am I doing? I've been right. Why am I on the stock?

[Michael Batnick]

I want to ask you what you think the so way before this trade stuff, the trigger. If you just look at a price chart. What really seemed to get gold in motion was when Putin invaded Ukraine. And the response, in addition to sending a ton of missiles over there, was to weaponize the US dollar and the swift banking system. All of a sudden that sent a signal to other countries. All this money that we have is ones and zeros on computer screens. That's not money.

[Josh Brown]

Right.

[Michael Batnick]

Money is gold and oil and physical things.

[Josh Brown]

Yes.

[Michael Batnick]

And that coincides perfectly with the start of this gold rally. You agree with that?

[Josh Brown]

I totally agree with that. You saw Russia start to buy gold in 2014. It's been buying gold the whole way. But you're right. When 2022 happened and we froze Russian assets, it was a wake up call for other central banks.

[Michael Batnick]

Okay, so you think this rally takes us to 5,000 an ounce. Oh, yeah, I think it could.

[Josh Brown]

I think it could. Absolutely. At the beginning of the year, Tom Keene at Bloomberg said, do you think we hit 3,000 this year? I'm like, how about next week?

[Michael Batnick]

We just ripped through 3,000 like it wasn't there.

[Josh Brown]

No, we're going higher again. It takes me back to the foreign investor. If you have people selling America, they're selling bonds and stocks, and when they do that, they sell the dollar. Right. Because if I'm a foreign investor, I have to buy dollars to buy the US assets. I'm reversing that trade. I'm selling my stocks and bonds, selling my dollar, going back into my euros or yen or whatever. So the dollar's weakening. So people are going to be worried about a dollar devaluation. And gold is another hedge against that. It could help Bitcoin too. But I think gold is a safer play.

[Rebecca Patterson]

If this nonsense settles down and we get some more clarity and we get a rip in the dollar, what would.

[Josh Brown]

That do to gold if we had clarity? Trade war ends tomorrow. Gold's going to fall hard because the central bank reserve diversification won't go away. They're seeing, okay, we can't trust the US As a reliable partner. We're going to hedge. But the retail money that's gone into gold would pull back out.

[Michael Batnick]

The fear premium will come out of it. And for all we know, that could be $500 an ounce. Yeah, we don't know how big that fear premium is. You know what's funny about the gold rally? So you've been bullish for a couple years. There was a story a year ago, maybe it's two years ago, about how Costco can't keep gold bars, little baby bars. They're selling these tiny little, like, bars in the stores and every time they get a shipment, it gets wiped out that day. The public's not so stupid, it turns out, sometimes.

[Josh Brown]

So note to self, the little bars are fun as a holiday gift or something. But honestly, a gold ETF like gld, which is physically backed, so if something happens to the organization, you aren't a creditor. You actually get physical gold. You have a lot more liquidity and you don't pay a premium. If you actually want gold bars in your home because you think the world's going to end, you'd be better off buying land and a fuel jet. Guns and guns. Yeah, yeah. So buying physical gold, you do that for peace of mind, but it is a suboptimal investment.

[Michael Batnick]

Yeah. We don't have a gold sleeve in our portfolio. We don't talk people out of it if they want to own it. We do have a gun sleeve. We tell people 2% in bullets and guns for exactly that reason. I want to wrap up by doing some career stuff with you. This has been so much fun for us, and we've learned. Have you learned a lot during this?

[Rebecca Patterson]

I've learned everything, including what the World bank does. So thank you.

[Michael Batnick]

You're very welcome, Rebecca. You are. Your career is incredible. So I don't think a lot of people know this about you. So you are moved to Gainesville, Florida, early in life. Your dad gets a job at University of Florida.

[Josh Brown]

Yep.

[Michael Batnick]

Okay. A lot of friends who have kids there right now.

[Josh Brown]

Go Gators.

[Michael Batnick]

Go Gators. You're a very curious person, and you become a journalist and you get discovered while writing the FX column or the FX beat for the Wall Street Journal. And you're in London.

[Rebecca Patterson]

Wait, what were you doing writing about currency in college?

[Josh Brown]

No, no, no, no.

[Michael Batnick]

After college.

[Josh Brown]

No, I'm not that smart. I was having fun in Gainesville. I was not writing for the Journal in Gainesville. No.

[Michael Batnick]

So you end up, though, you're covering the currency beat, and people at JP Morgan are reading your stuff. What era is this? Is this 2000?

[Josh Brown]

This would have been. No, no, no. I'm old. This was going to be 95, 96.

[Michael Batnick]

Okay. So you're making an impact with your columns, and they recruit you. Tell us the story.

[Josh Brown]

I mean, I was writing about foreign exchange markets, which I love. I'm a currency nerd. Love currencies because they're the intersection of everything. And then when I got to London, I was also writing more policy stuff, so. Tony Blair getting elected to be Prime Minister. The bank of England became independent for the first time in 97, which is hard to believe. All the meetings in Brussels trying to figure out what the single currency would look like.

[Michael Batnick]

Oh, the birth of the euro.

[Josh Brown]

Yeah. Super interesting. And JP Morgan called me and said, we read your stuff. You get it. You should be an analyst here at our investment bank. And I said, I don't know anything about banking. And I didn't.

[Michael Batnick]

Honestly, back then, they don't either.

[Josh Brown]

I think Jamie figured out a few things.

[Michael Batnick]

Yeah, yeah.

[Josh Brown]

And I kind of thought about it. I said, well, why not, right? Like, I'll try it, and if I don't like it, I can always go back to journalism. They're not kicking me out. So I joined. Oh, this is. Here you go. What was going on? I joined in September 1997.

[Rebecca Patterson]

Oh, the currency crisis.

[Michael Batnick]

Right on time.

[Josh Brown]

Can you imagine?

[Michael Batnick]

You have plenty to talk about my.

[Josh Brown]

First week on the job.

[Rebecca Patterson]

Unbelievable.

[Josh Brown]

The Korean won, the Indonesian rupiah, the Thai baht are all falling out of bed and I have to. I'm like, can someone please show me how to do a regression?

[Michael Batnick]

So, all right, so you spend time at J.P. morgan.

[Josh Brown]

Yeah, 15 years.

[Michael Batnick]

15 years. And then you end up. You end up at Bessemer.

[Josh Brown]

Yep.

[Michael Batnick]

I have the timeline right.

[Josh Brown]

Yep. So I was at JP Morgan. Very different firms in London, Singapore and New York. Investment bank, trading desk, private bank, asset allocation and asset management. And I loved it. But when I was in asset management, I realized I missed running Risk. I liked running Risk and Bessemer Trust reach out and said, we need a new cio. Are you interested? I love JP Morgan. It's always going to have a place in my heart. But it was the opportunity I was dying to have. Like, I want to be the person who's heads on the block making the decision. And it was great. I was there for eight years. I had an amazing team, great clients. I learned a ton.

[Michael Batnick]

Yeah, it was really good experience. So how do you get the tap from Ray Dalio? Come join us at Bridgewater. We're doing something different.

[Josh Brown]

So I've done a lot of stuff behind the scenes for the Fed my whole career. I used to go back in the day to the New York Fed. They have a thing every year, they've had it for decades now, where they train junior central bankers from around the world. And I would do the foreign exchange class for the baby central bankers.

[Michael Batnick]

Oh, really?

[Josh Brown]

So I've done stuff for the Fed. So I was on this Fed investor advisory committee where the head of the New York Fed senior staff get together with a lot of buy side investors. So Jim Chanos, Bill Ackman, Ray Dalio, Paul Tudor, Jones, the guys and a few gals. I was one of the gals. And Ray got to know me there and I'm guessing, but I think he was impressed that I could hold my own, that I could talk about anything and everything. And I wasn't afraid to disagree if I disagreed. And so he started saying, maybe you should think about coming over to Bridgewater. And I just thought, what an amazing opportunity to learn. Learn to be an algorithmic investor. Learn how a hedge fund runs from inside the world's biggest one.

[Michael Batnick]

And you step in two months before.

[Josh Brown]

COVID Yeah, that was fun.

[Michael Batnick]

Yeah, I mean the timing is remarkable.

[Rebecca Patterson]

What an incredible career.

[Michael Batnick]

Yeah, it was amazing.

[Josh Brown]

It's been great and I'm not done. I am not done by a long shot.

[Michael Batnick]

No, we know, we know. But you're so. You're on all these councils and involved with all of these incredible things and you're always meeting people at the upper echelons of business and policy. And I was asking you before, like, what's next? And you're not in a rush, but if the right thing comes along. But as we were talking, I was thinking like one thing that you haven't done officially is policy.

[Josh Brown]

Yeah.

[Michael Batnick]

Would you, would you want to step into a room and say, guys, you don't know anything. This is how it works. Cuz it sounds like we need you.

[Josh Brown]

Well, if.

[Michael Batnick]

Can I draft you?

[Josh Brown]

Look, if the right policy job came, I would do it in a heartbeat. I would love to serve the country. I really would.

[Rebecca Patterson]

All right, amazing.

[Michael Batnick]

Before we get out of here, the campaign starts now.

[Rebecca Patterson]

So before we get out of here.

[Josh Brown]

We need a new mayor of New York. Right.

[Rebecca Patterson]

Real quick. Google just reported and Josh and I were at least I was really curious to see would search be impacted because we've been talking about the move away from Google and to the chatgpts and the clouds of the world. So they just reported revenue increased 12% to $90 billion. But more importantly, Google services revenues increased 10% to $77 billion, reflecting strong performance across Google search and other Google subscriptions platforms and devices on YouTube ads. And the stock is 5% after hours.

[Michael Batnick]

Thank God.

[Josh Brown]

Yeah.

[Michael Batnick]

Your retirement is safe for tonight, America. You'll be okay. Rebecca, did you have fun on the show today?

[Josh Brown]

This was so much fun. So much fun. And I'm glad you ended on Google and search because everyone listening to this and watching should be learning AI. Everyone should be spending time with Claude, with ChatGPT, with pick your poison, but get used to it. Start asking it to do stuff. I mean, Claude is my boyfriend now.

[Michael Batnick]

Yeah. So I'm a chatgpt. Slash perplexity. Why Claude?

[Josh Brown]

I mean, I think it's just, it's gotten comfortable for me. I use it as a research assistant. If I'm trying to go back and say when is the last time we had a sustained dollar sell off with stocks and bonds? I can put in the prompt, I can ask for tables, correlations, analysis, and it just does a beautiful job and.

[Michael Batnick]

Gets to know because I use Michael for that and I use Claude and he uses Claude's hair.

[Josh Brown]

There you go. See, you're saving money. You're more efficient because of Claude.

[Michael Batnick]

We have kids roughly the same Age. You have two daughters?

[Josh Brown]

Yep.

[Michael Batnick]

They're both in college.

[Josh Brown]

One is a junior in high school and one is a sophomore in college. And she is an AI Policy person.

[Michael Batnick]

Oh, is that right?

[Josh Brown]

Yeah.

[Michael Batnick]

Did you steer her toward that, or.

[Josh Brown]

She jumped it on her? Not. She just found it. She got an internship last summer at Department of Commerce doing AI Policy and just fell in love with it.

[Michael Batnick]

Something tells me we're gonna need a lot of that.

[Josh Brown]

Yeah, I think she'll be good. I think she'll be good.

[Michael Batnick]

So I have a freshman in college and a sophomore in high school. So we're.

[Josh Brown]

Oh, yeah, we're in the same place.

[Michael Batnick]

We're nearby. We always end the show asking people what they're most excited about. And you're excited to watch the two of them grow up and explore the world. Say more. I love that idea.

[Josh Brown]

I mean, I think about myself when I was their age. I didn't know what I was gonna do. I mean, I kind of thought when I was a sophomore in college that I'd be an aeronautical engineer and an astronaut.

[Michael Batnick]

Okay.

[Josh Brown]

Banking was not on my bingo card.

[Michael Batnick]

Oh, Katy Perry took your slide.

[Josh Brown]

I know. I'm so mad.

[Rebecca Patterson]

I thought I was gonna be a professional pothead.

[Josh Brown]

There you go.

[Michael Batnick]

A lot of people did.

[Rebecca Patterson]

Yeah.

[Josh Brown]

Yeah. We're all the same age. I just. I mean, I am so grateful for all the crazy experiences I've had. And I just look at them. I'm like, you've got so much in front of you, and they're very lucky that they're gonna be able to have those things.

[Michael Batnick]

That's awesome. On a very similar note, the thing I'm looking forward to is Detroit, Michigan, per K. I'm gonna go to a basketball game. I thought I was gonna say something really cool, but yours was, like, so much more poetic than mine. I'm gonna go see the Knicks game four this Sunday. A friend of mine is in Michigan. He's like, why don't you come? I thought about it. I said, I don't know. Why wouldn't I go?

[Josh Brown]

Yeah.

[Michael Batnick]

So I'm going, you know what?

[Josh Brown]

Life is short.

[Michael Batnick]

I agree.

[Josh Brown]

And, you know, being in the markets every day is intense. It's a huge responsibility, and you need to have time to just take a deep breath and have fun. And basketball's awesome.

[Michael Batnick]

I'm taking the number one Knicks fan in the world, my son, the Nugget. He's like. This is like, his favorite thing on Earth, so that's awesome. Yeah.

[Josh Brown]

You're a great time.

[Michael Batnick]

I'm super excited. To do it. The flights were easy. Whatever. I'm going both ways in one day, which is not a thing that I normally do. So, Michael, what are you looking forward to?

[Rebecca Patterson]

More original movies. Did you see Sinners yet?

[Michael Batnick]

No.

[Josh Brown]

No.

[Rebecca Patterson]

The Ryan Coogler sensation. It was not 98% rotten tomatoes good, but it was excellent. I don't want to pick nits. It was an excellent movie.

[Josh Brown]

Did you go to a theater?

[Rebecca Patterson]

I did. I saw it on imax.

[Michael Batnick]

You're supposed to see that kind of movie in a theater.

[Rebecca Patterson]

So it is such a sensation and hopefully the studios wake up. We don't need to see Rocky 19 or Creed 74 more original movies.

[Josh Brown]

So I'm looking for that Led Zeppelin documentary on imax.

[Rebecca Patterson]

It's on imax.

[Michael Batnick]

We didn't get to it. I wanted to so badly.

[Josh Brown]

It made me so happy.

[Michael Batnick]

Did you see it on, like, the big IMAX in. What is it called? Lincoln Square? Yes.

[Josh Brown]

Yes.

[Michael Batnick]

Oh, man. I would have done that.

[Josh Brown]

Yeah. And the people in the crowd were there to party.

[Michael Batnick]

Oh, yeah.

[Josh Brown]

I bet everybody was singing. It was a good time.

[Michael Batnick]

Oh, very cool.

[Josh Brown]

Rebecca. Original movies. I'm with you. I'm with you.

[Michael Batnick]

All right, Rebecca, this has been amazing, and we know you were toughing through a little bit of a cough and feel better.

[Rebecca Patterson]

Thank you.

[Michael Batnick]

You're a warrior. So thank you so much for being here. I want to let people know how they should follow along with your insights and. And some of the places that you contribute content.

[Josh Brown]

Council on Foreign. Council on Foreign Relations.

[Michael Batnick]

You're writing there?

[Josh Brown]

I write for them. I write for the New York Times. I write for the Financial Times.

[Michael Batnick]

Okay.

[Josh Brown]

Yeah. And LinkedIn. Whenever I see news in the morning that I think this is important, this is not noise. I'll post on LinkedIn probably five or six times a week.

[Michael Batnick]

I follow. I follow you on LinkedIn. And I think you. You're always putting interesting stuff up, and maybe that's a good, like, home base for people who want to follow along what you think. All right, so everyone follow Rebecca Patterson on LinkedIn. Rebecca, you've been an incredible guest. We'd love to have you back sometime. Thank you so much for spending this time with us. This has been so fun, helping us understand these things. We appreciate it.

[Josh Brown]

Thanks.

[Michael Batnick]

All right, great job this week. Duncan, John, Nicole, the whole team, we appreciate you guys. Thanks for listening. Please make sure to leave ratings, reviews, they go a long way. We love it. Thank you so much. Have a great weekend. All right, so that's like the test run. We just want to give you a sense of what the show's going to be like.