Lots More on Why Neil Dutta Is Sticking With His Recession Call

Neil Dutta (0:02)

Bloomberg Audio Studios. Podcasts, radio, news.

Joe Weisenthal (0:07)

What do you think, recession or no recession?

Tracy Alloway (0:10)

I mean, you had a really good piece out this week in the newsletter where you made the point, and I had made a similar point the day earlier, so maybe I'm not being so nice, but how much of all the market action, all the economic action, I guess, was actually dependent on just one guy, Donald Trump. And that if he came out and said something, he could end the chaos at any moment in time. And then on Wednesday, he actually came out and did that. And then-

Joe Weisenthal (0:40)

Kind of.

Tracy Alloway (0:41)

Kind of. Well, your point was, if he does that, we can all go back to worrying about a slowdown in the labor market or deep seek threatening AI, which so much capital investment in the US actually depends on.

Joe Weisenthal (0:57)

There's a lot. I did a deadlift.

Tracy Alloway (1:02)

I am both the most popular trader and most successful trader at Citadel.

Joe Weisenthal (1:06)

Fed is going viral.

Tracy Alloway (1:08)

Barges.

Joe Weisenthal (1:09)

This is an after school special, except-

Tracy Alloway (1:10)

I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the US.

Joe Weisenthal (1:16)

Black gold.

Tracy Alloway (1:17)

These are the important questions. Is it robots taking over the world?

Joe Weisenthal (1:20)

No, I think that like in a couple of years, the AI will do a really good job of making the Odd Lots podcast. One day that person will have the mandate of heaven.

Tracy Alloway (1:30)

How do I get more popular and successful?

Joe Weisenthal (1:32)

We do have the perfect guest. Welcome to Lots More where we catch up with friends about what's going on right now.

Tracy Alloway (1:40)

Because even when Odd Lots is over, there's always lots more.

Joe Weisenthal (1:44)

And we really do have the perfect guest.

You know who had a really good contribution to the Odd Lots newsletter? February 2024, basically the market top. Neil Dutta sees rising risks to the labor market, calling recession risks right then, essentially at the market top. We got him back on. Neil, yesterday after Trump walked him back, by the way, we're talking to Neil Dutta of Renaissance Macro. Trump walked back some of the tariffs. Goldman pulled its recession call. You sent out an email right away. You said, I'm sticking with my recession call. Why do you see recession in the cards in 2025 still?

Neil Dutta (2:21)

So remember that, for me, it's not really about an NBER defined recession. That, to me, is not the name of the game. The name of the game is trying to translate an economic view into a market call. And even if it's not technically a recession, it might as well be because the underlying problem for the market is not going away. And that's the issue. You know, all the things I mentioned in that newsletter, you highlighted in February, that's all here. That's still here, right? We still have a situation where labor incomes are slowing and the Fed's not budging. We still have a situation where mortgage rates are high and the housing market is weak. And we still have state and local governments cutting back. And we still have a pretty high volume on trade. I mean, in terms of tensions, just because we dialed it back a little bit yesterday doesn't mean that the tensions are not still high. And I think it's what we've basically done is traded, you know, you basically spread the distribution of costs, I guess, I mean, away from everyone just towards China. But that's still pretty bad in and of itself. I don't think it takes a rocket science to figure it out, Joe. I mean, if you're basically trying to break up the relationship with us and our third major trading partner, there's no scenario or that doesn't create some.

Issues for the marketplace.

Tracy Alloway (3:48)

It is true we've ratcheted down tariffs for countries ex-China. But as you say, we've basically gone back to what we were worried about before, right? And the funny thing, I got to say about that Goldman note, and it just underscores how quickly things are changing in the current environment. You know, they published that, they published the recession call basically an hour before Trump did his big Wednesday announcement. And then right after that, like, I didn't realize that within 60 minutes, they had to come out and say, actually, we're rescinding it as Lennon said, there are hours where nothing happens in minutes where days happen.