Monday Moneybeat: Ambition vs. reality

MARY REICHARD, HOST: Coming up next on The World and Everything in It: The Monday Moneybeat.

NICK EICHER, HOST: Time now to talk business, markets, and the economy with financial analyst and adviser David Bahnsen. David heads up the wealth management firm The Bahnsen Group. He is here now. David, good morning.

DAVID BAHNSEN: Good morning, Nick. Good to be with you.

EICHER: Apple grabbed headlines last week by announcing a $500 billion capital-expenditures plan on artificial intelligence projects and infrastructure. Some observers say it could transform the AI industry; others note that big ambitions don’t always translate. So does this matter? How do you interpret the big Capex spend?

BAHNSEN: Well, Capex certainly matters. The question is how it matters and what comes of it. But I need to point something out, Nick: This came up before with announcements from other hyper scalers. They didn’t spend $500 billion on AI Capex. They announced that they are willing to. They announced an intention to. They announced a plan. They don’t have anything to spend $500 billion on right now.

But they’re committing to this over a period of time. So the question is not, What’s going to come of this $500 billion? When I refer to questions about AI Capex, it’s will these announcements—the latest one, as you point out, is Apple’s $500 billion—will this happen? Okay?

If in four years, Apple has only spent $80 billion instead of $500 billion, if they’ve hired 5,000 people for AI research instead of 20,000, what will that end up meaning?

I am well aware of a lot of announcements and intentions and plans, but it sort of raises the question, if someone says, I’m planning to get a shovel and go dig for a hundred tons of gold, the question is not if they have a shovel. The question is if they find the gold.

That’s really what we’re talking about here. Will there be $500 billion of opportunity or not? I’m not sure that there will be, but I’m not sure that there won’t be. I just think it’s a matter of big questions about the future.

EICHER: Turning to trade policy, it’s Monday morning, the calm before the storm. We’re hearing about tariffs set to take effect tomorrow. Of course, we’re a little more than a month into the new administration, and we’ve heard announcements of tariffs, followed by delays, followed by re-announcements ... and that seems to have left markets and businesses a bit unsure what’s really going to happen tomorrow. What’s your take on all this?

BAHNSEN: Well, Nick, you notice at one point he had said he was delaying it until April, and then the next day said, “No, we’re gonna go ahead and go Tuesday.” Then they’ve already put other qualifications on what’s supposed to happen tomorrow—and the market was up huge on Friday.

I think that the market at this point is totally done getting fooled by all the threats and negotiations and back and forth.

I maintain my same view that we have a president who loves talking about tariffs and we don’t have a president who loves doing tariffs. We will see how it plays out. This doesn’t mean certain tariffs don’t get put on. But I’m firmly convinced that any tariffs that do get put on are going to be loaded up with exceptions and caveats so they lose their teeth and are not likely to stay on very long.

EICHER: We also saw some late-night drama on Capitol Hill last week, with the House managing to pass its budget. But it’s clear this is only step one. How do you see the political lay of the land right now?

BAHNSEN: Well, we have a long way to go. As we say in my business, there’s a lot of wood to chop and this next step is the harder part. Although the first part that got done this week was very, very hard.

I mean, it was really on the chopping block. They had sent everybody home. okay? They did not have the votes, and then they called the a few people back upon realizing that they were able to kind of flip their votes. So it did matter that the House got that part done, but nobody believes that what the House passed is going to become law.

It now must go to the Senate and then it ends up in conference, where they must get a House and the Senate bill together. But one of the biggest issues in American politics right now, and I’m so grateful that it’s one of the few things not taking place on cameras, not taking place on social media, is the dynamic between Speaker of the House Mike Johnson and Senate Majority Leader John Thune. They have to work together and they have the dignity and class to be doing it privately.

It doesn’t mean they’re going to get it done. Thune can’t speak for his 53 Republicans in the Senate and Mike Johnson can’t speak for all the Republicans in the House. But they are the leaders who have to get this stuff done together and they are trying. They want to get it done as one bill, but then Thune has to maintain a two-bill approach if the one-bill approach falls apart. That’s where we are, Nick.

It’s going to come down to whether or not they can figure out a way to get the spending cuts necessary to allow for tax cuts that are passable to fit into budget reconciliation and do both of those things in a way where there are, shall we say, conflicting interests—from deficit hawks to those who have a certain vision for the tax cuts they want to those who want very specific tax cuts implemented. It’s not going to be easy in conference to bring House and Senate together. It is doable, but a lot is on the line right now.

EICHER: Before we go, I’m eager to hear how you respond to the idea floated by the president and his commerce secretary, Howard Lutnick—the idea of a special immigration “Gold Card.” A $5 million dollar path to citizenship ... Secretary Lutnick saying we can start paying down debt. What do you think?

BAHNSEN: Nick, I guess I would ask if MAGA and the Trump base thought that they were voting to allow wealthy immigrants to buy their way into the country. Politically, I think it’s a disaster for Trump’s base.

Now, I like innovative solutions. I am one who believes we need more skilled labor coming into the country—legally, you know, with the right process. I don’t think that they are going to sell two— I think Secretary Lutnick this week said they were going to sell 250,000 of these at $5 million apiece, bringing in over a trillion dollars.

So if he believes there are 250,000 people that are in a position to pay five million dollars to enter our country, I would love to see that list. But I think it could raise some money, let’s call it, a hundred billion, not a trillion. The question is not whether it makes sense economically, because it does in that regard. It’s just a political question.

So at the end of the day, I’m not sure that the MAGA base will get behind it. They do like throwing stuff out there. They do like throwing, you know, funny titles around it, gold card, whatever. There are some that thought it might have constitutional or legal issues, and I will tell you, I don’t agree. I don’t know of anything that would be illegal about a program like this. But the politics and the optics are probably what’s gonna kill this. That’s my opinion.

EICHER: David Bahnsen, founder, managing partner, and chief investment officer of The Bahnsen Group. David writes at dividendcafe.com and regularly for WORLD Opinions. David, thanks! Have a great week!

BAHNSEN: Thanks so much, Nick.

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