Hey, guys, Saga and Crystal here.
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We need your help to build the future of independent news media and we hope to see you at Breakingpoints dot com. Good morning, everybody, Happy Monday. We have an amazing show of everybody today. There it is people Live for the pound Bro Show. Christal will be in for Rott. What is She's feeling for you? On Wednesday?
Ladies Day on Wendess All right, what do they call it?
Who knows? That's that's for the other room, that's for yeah, that's for them to decide. That's for the audience to decide. I did not even coin Bro show that was.
An audio choice room.
Maybe it was you actually, I don't know, but anyway, Yeah, that's right. We believe in women's choice here on the show. So that's what you're going to see this week. Let's go ahead and see what the hell do we even have? All Right, come up on me. This is the toughest part of the job here, actually saying what we have to do today. We're going to start off with tariffs. There's clues at the bottom, I know, but Ryan, the amount of high end eye coordination that this all requires
is unbelievable. Okay, So we're going to be starting off with tariffs. We're going to talk about some major flip flops from the administration. Nobody knows what the hell is going on from industry to Wall Street. People are dizzying in their reactions. The dollar is sinking to new lows. We're going to talk about China. This specifically is very interesting. Some major new initiatives from the Chinese to ban rare earth mineral exports to the United States, trying to choke
off critical American industries. We're going to talk about Recession Watch and how many CEOs on Wall Street and others responsible unfortunately for many of our fates in terms of employers now already believe we're in a recession. Next, the Consumer Sentiment Index from the University of Michigan, one of the most watched studies there in terms of indicators how Americans are feeling about the economy, mortgage rates, and others, just came out. The response is absolutely devastating for the
Trump administration. A rare spot of good news here the Iran negotiations appear to have gone well with the presidential Envoy Steve Whitcoff some interesting stuff from behind the scenes. The pro Israel lobby is absolutely freaking out over these developments. Will break some of that down for you. Then there is Bucel, the President of l Salvador, is currently in
Washington today. There's been some developments there with the Trump administration appearing at least not to comply with the Supreme Court order, or at the very least complying in their own way at Ryan break a lot of that down for you. And then finally some really devastating and terrible news. It appears and arsonists tried to assassinate Governor Josh Shapiro and his family in the Governor's mansion. Some of the images that have come out are absolutely harrowing. We do
know that suspect has been arrested. We have some video there from the Governor, Josh Shapiro breaking down the incident. We don't have full details yet, but Ryan, it is obviously you know, political mind and it's awful, but more so it's just, you know, horrible. The images coming out of that are horrible, and it does look like it was a lot closer than anybody initially thought from the initial results.
Yes, the police are saying that the man intended to beat Shapiro with the hammer if he had gotten to him. The family got out, he didn't catch him.
But the close call, like very close call, too way too close, way too clear. The images of it are genuinely crazy. So some questions about the governor, security, detail about who this suspect is, and more. We're going to try and break some of that down for you with the latest developments that we have here. Thank you to all of our premiumsubscribers Breakingpoints dot Com people who are supporting the show, some expansion efforts and other things they're
going to see here behind the scenes. We will have some big announcements this week tomorrow when Crystal is back here at the desk, so we will bring that to you then, so you could stay tuned. Actually, if you want to become a previous describer today, you'll be the very first to hear about it. Breakingpoints dot Com. There you go. All right, let's go ahead and start off with these tariffs. This is just the most insane thing that we have seen yet, honestly from the Trump administration,
since the announcement of these reciprocal terrors. So Mark is absolutely exploded with optimism over the weekend from this announcement from the White House has put it up there on the screen. Apple and Vidia score relief from US tariffs
with exemptions. Now you might be asking how exactly that makes sense when the Commerce Secretary, Howard Lutnik had said that we as a country actually want to build the iPhone, and how we want a nation of people to screwing what was it screwing tiny little screws to assemble them.
But clearly what happened is that there was an immense pressure campaign from the White House or to on the White House, from the consumer electronics industry ninety percent of which comes from China, both smartphone and smartphone and laptops, that were basically telling the White House they're like if you do this, it will make it genuinely impossible to be able to afford these electronics. Now, at that time, it was already completely out of step with the White
House's discussion saying consistently there will be no exemptions. Exemptions are impossible, don't even think about it. And actually the net result of that tar or exemption would have meant that children's toys and textiles and small business commerce goods which are cheaper actually would go way up. So would have devastated small businesses while protecting Apple and Nvidia's bottom line.
And so initially that was a pretty insane announcement. Markets were set to shoot up dramatically, the NASDAK and other tech focused industries. But then the Trump administration in only a way the Trump administration can literally the next day reversed course. Put this up there on the screen. Please, this is from Trump, who now says this was on Sunday. Nobody is getting off the hook for the unfair trade imbalances that other countries have used against, especially China. Quote,
there was no tariff exemption announced on Friday. Now this is news to all of us. Ryan, because the release from the White House is not a joke from white House dot gov was titled exemptions. Oh yeah, and it's so funny because what happened is the exempts were announced at people. Rightfully, I think smaller importers, non electronic importers, were furious about it. And then the White House came
outs and actually there were no exemptions. And Howard Lutnik gave an interview on the Sunday Shows where he completely reversed course from just twenty our earliers about the so called non exemptions. Here's what he had to say.
So, you're saying that the big tariffs on things like smartphones and laptops, iPhones, all those iPhones built in China, that those tariffs are temporarily off, but they're going to be coming right back on in another form in a month or so or what are you saying?
Correct?
That's right, that's right.
Semiconductors and pharmaceuticals will have a tariff model in order to encourage them to re sure to be built in America. We need our medicines and we need semiconductors and our electronics to be built in America. We can't be to hold and rely upon foreign countries for fundamental things that we need. We can't be relying on China for fundamental things that we need. Our medicines and our semiconductors need to be built in America.
Donald Trump is on it.
He's calling that out.
So you should understand these are included in the semiconductor tariffs that are coming, and the pharmaceuticals are coming. Those two areas are coming in the next month or two. So this is not like a permanent sort of exemption. He's just clarifying that these are not available to be negotiated away by countries. These are things that are national security that we need to be made in America.
The present's mini So how can consumers and businesses make decisions when it seems as though the president's trade policies are shifting at a moment's notice.
So this is unfolding exactly like we thought it would in a dominant scenario.
Got it makes a lot of sense.
Ryan.
We had exemptions and we we don't have exemptions, and actually, well, there is a temporary exemption. That exemption will be gone in a month.
The exemption that doesn't exist.
The exemption that we've never announced, where we lifted. That's where we're at. Got that I mean people, it's not funny because what does it mean for industry? Ryan, What would any business watching this do right now?
Just hold your cash and probably get it out of dollars. Yes, actually, so it's not just rush to cash. That's what's so sad about all of this is that the three hundred million people in the United States, across the board, whether you voted for Trump, voted for Kamala Arris, didn't vote at all, are all going to suffer as a result of this. And everything Lutnik is saying there is true. We should be making our chips here, we should be making our medicines here. Yes, that's absolutely right. None of
this is going to lead to that. And we're going to talk about a little bit about how it's actually going to get us further away from that, and we're going to find out what it means to deliberately break our own supply chains without how having any backup plan. The monkey, you know, they always say, if you're a monkey, you grab the next vine before you let go.
Trump just let go.
It's a good and he thought that they thought that the falling to the jungle floor would be the leverage. Instead, we're just going to wind up on the jungle floor.
Yeah, and my friend Ryan Peterson, who had on the show. You guys might remember him, the port expert, and he tweeted this As a result, he said, quote, tariffs on semiconductors and electronics will be introduced in about a month. Quote those products were exempted from tariffs just yesterday. The whole system seems designed to create paralysis. So it is now clear if you're a CEO and if you green lit a major investment decision, you should short that person stock.
That person should be fired as a shareholder. I would vote to fire any CEO who greenlit a major investment in the United States over the next ninety days while all of this tariff stuff is happening, especially if you're a Nasdaq investor for any of these major technology companies and manufacture anything. Same with Apple. If you're Apple, you know what you're going to do for the next ninety days. We're not important shit, literally just gonna sit on our iPhone.
We were gonna hustle much as they can. We're gonna as much as me. Except wait, but no, there is a twenty percent tariff. It could go to one hundred and four. Nobody knows, right, no, right, now, we'll just let that sit here. Everybody else is good luck.
You see the cargo planes, they had like four cargo planes smuggling in iPhones. And I saw you tweeting about this as well, that the Nvidia CEO, Jens Wang had a you know, paid his company paid a million dollars to go to a Trump Super pac dinner. It's unclear if he talked with Trump or whatever. But you know, if I pay a million dollars to get into a party, I'm I'm gonna talk to that. Oh we're talking. Yeah, we're talking. We're gonna do a couple of minutes. Yeah,
and then boom, all of a sudden. The chips, the chips like Nvidia makes the chips that like make the world run, and we'll make deep seat run a little faster.
Oh yeah, we're gonna carve those out though. That's cool.
So we're talking about a multi trillion dollar restructuring of the economy. That the most important chip maker can get a car about four after paying a million.
Dollars, which is nothing for them, right right, This is a multi right, the market cap and Endvidia is larger than the entire stock exchange in the United Kingdom.
They lost like billions. Yeah, in the last couple of weeks exactly like a million.
Yeah, a million is absolutely nothing. This gets to the issue which again you know, look, n Video, they're going to be fine.
Oh and it's a million dollar dinner. Yeah, he may have given a lot more than a million.
Yeah, yeah, probably did so. Uh, you know, Nvidia, they're going to be fine. Apple, they're going to be fine. These people have hundreds of billions of dollars in cash, market cap, all this other stuff. But all of these other smaller importers. Let's say that you're a company, I'm gonna you know, if you ever read about the history of the iPhone, they're you know, the people that made the glass for this phone that's in front of me,
of the laptop that's in front of me. Over ninety percent of these products are manufactured in China, and entirely in China. There are a lot of actually small businesses and others. Let's say you make iPhone cases on ens or something like that. Right, all of these input costs and around the ecosystem and things, those people actually their inputs under these exemptions would have skyrocketed and actually will continue to be subject to the tariff regime and they're
the very ones who will be the most devastated. And also because the way our economy works with just in time delivery and no government incentive to do anything about it, means that you are inflicting an incredible amount of suffering to any D two C brand, somebody running e commerce, even you know, just general like a bike shop is always a classic example. A lot of those metals, we don't even have them period, or if we do, let's
say Australia has them, they don't refine them. They have to send them to China, and China aster to refine it, and they have to send it over here for the ability for fabrication purposes, et cetera. All of these are exactly the type of businesses which are about to see a massive increase. Now I can be conceptually supportive of tariffs, just as you said, pharmaceuticals, great example. Why did China
dominate in pharmaceuticals? Why did Chinese and the Europeans dominate? Well, the Europeans have the legacy, you know, kind of design framework, very much like we have with Intel. But then China of course saw it as a national strategic industry to have all of these plants which create and can what is it compound pharmaceuticals to be able to make all this stuff. They don't do it because it's profitable per se. It helps to you know, make a little bit of
a profit. But they do it because they know that it's vital to their own strategic autonomy. We as fools, of course, just allow this to be outsourced. Now, the MAGA folks would say, yeah, of course, soccer, that's why we immediately need to bring it over here. I would say, yeah, great, Well, then you need to offer let's say a dollar for dollar tax credit. For every dollar that you're going to lose in business, you're going to get x amount of tax credit for your capex, which is the amount that
you're about to invest here in the US. Everybody, it's a win win situation. Instead, what we're going to saying is we're going to increase your cost by one hundred and forty percent and by the way, maybe and maybe not, you know, in the next ninety days. So what do you do as that person with that possible cash outlaw If you're lucky enough to even have cash on your books, which many businesses do not because they run on such a tight margin. You aren't going to hoard that as
much as possible. In fact, you're probably going to fire some people to free up a little bit of cash flow for let's say you take a sixty percent haircut or whatever. Not only are going to fire people, you need even more cash on your balance sheet to make sure you can prepare for the future. So this is a contractual effect across the entire economy.
Yeah, and currently, if you are a business like let's say Apple that mostly that makes your entire product in China, puts it in the box, puts a little cell of fane on.
It, puts shined in Cupertina.
Y design sign you right, design it. You know, you put it on a ship and you come over here. You're exempt from these one hundred and fifty percent tariffs
or whatever. If you're a company that is in Columbus, Ohio, and has been trying to bring back like serious jobs to Ohio, and you bring you get something like you were saying, you get some inputs from China, but then you assemble the rest of the pieces in Columbus and you're working with, you know, a distributor in Toledo and like you, you are paying the tariffs.
Yes, that's right.
But if you take everything that you do, fire every one of your wor find some plant on TikTok and ask him to make your thing completely in there and then figure out a way to get in or your Apple and you can just you'll pay you bribe your way in.
Uh, then you're going to do better.
So it incentivizes offshoring, it incentivizes doing all of your work in China, and it also is going to bankrupt as we speak, tons of small and medium sized companies, which will then you know, get bought up by.
The bigger ones and we'll have more corporate concentrations.
Oh, that would never happen except oh it happened fifteen years ago, right, yeah, I forgot about that. Yeah, let's go and put the futures up there on the screen. Futures are actually slightly up today.
Because video and Apple are like house.
I think seven percent of the S and P five hundred is nvideo and so videos up the Apple stock are increasing in their futures just over the next month when people are optimistic even about that month long exemption in teriffs. But the irony is is that if the White House had kept a permanent exemption, or at least the you know idea of a permanent exemption, the Nasdaq would be up way highed sixty seven percent right now because people thought that, oh, we're going to be having
some deals. Let's go and put a four up on the screen. This guy did such a good job of just summarizing. This is just since Wednesday, this is five days. This is five days in the United States of America, we have had universal reciprocal tariffs, a removal back down to ten percent, fifty percent, Chinese tariffs ninety percent, Chinese tariffs one hundred and four percent, Chinese tariffs one hundred and twenty five percent, Chinese tariffs one hundred and forty
five percent, Chinese tariffs electronics exempted electronics. Now back on, as he says, if you were a CFO of fortune five hundred, would you improve any new investment in a country this unstable answer? Honestly no, As I said, I would personally, as a shareholder, vote to fire any CEO who made a major outlay of cash, investment or import
decision under these conditions. And we can tell you for the people who run this business Crystal and I were like, yeah, there's going to be We're going ultra conservative, probably even more conservative than we ever were before, and we're just going to sit here and wait to see what the macroeconomic conditions do.
On that point, I saw Cernovich talking about this, Yes, right, And the connection is he did a good job the podcast, the podcast Universe, you know, which was pretty heavily you know, pro Trump. This this time around us, the media loves to remind us. You know, one of the big legs of their of their economic business model is e commerce. And that's not just podcasters, that's uh, you know, TikTokers.
That's the entire kind of creator. Economy is organized around not you know, advertising, and the advertising is about selling stuff online. So if you just get your money from ad revenue, you're taking a hit because companies are going to spend less, they're going to have less to spend on advertisements. If they have less that they're able to.
Sell to the public.
And then there's the direct sales that your your little little store. You think those counterpoints and breaking points socks are expensive now.
Like actually know all bars are made in the USA, so all of us are made in the USA.
Labor, I guess we're going to find out.
Yeah, well, I mean the way that you would say it is that even though it is made in the USA, and even though it is made in the USA with union labors, at the input costs of cotton or whatever it certainly comes from. Try I've actually learned this in the suit industry. Actually, by the way, this is a PSA for anybody who's out there have some friends who are getting married. I did not realize that the vast
majority of wedding dresses are made in China. And if I don't even believe it's possible to buy a made in America branded wedding dress right now. And so if you're getting married, you should get order that wedding dress sometime soon and just hope and pray that you're not there.
And if you have American made products like cars or socks, let's say you even sourced the cotton, which unlikely here and everything is done in here because demand is getting theoretically in a world where things are stable, that's not the world we're in, but let's pretend that's Let's pretend there's some stability. Demand is getting funneled into those American products. So if you if you own a used Ford, like the price of it's going.
To go up.
Yeah, you're going to be able to get more for that. Yeah, that's forwards. And wait a minute, why why is that?
Well did you already see that? There's a story going around of a guy who drove off the lot with a brand new CRV and the dealer called him the next day and he's like, hey, man, I will pay you a lot more than you paid for this brand. I mean, that never happens. What you're supposed to lose twenty percent of your value the moment that it goes pump off. By the way, CRV owners undefeated here, thank you, shout out to the CRV bros.
Account myself in your ranks. There's so much more demand.
I mean that's so.
The idea is then that price increase is then supposed to incentivize more domestic production. Like that's the whole that's the whole theory behind it. But for the very medium term, there's not going to be that production. So you're just going to pay fifty five dollars for those socks instead of fIF to thirty.
Tis rough out there, Ryan, Let's put a five guys, can we up on the screen. This is from Charles Gasperino. Forgive the block of tax, but actually is important. And so he quotes a prominent investor and Wall Street tech analysts who's been there for you basically twenty years, and his word, it's one of those things on Wall Street, these analysts who've been around for a long time. Everybody really does take a listen to him. He goes, Let's
be clear. On Friday night, the White House excluded big tech in the chip sector from these Chinese tariffs, right, which would have made the tech stat for soocks rally. As I said, initially, this is a huge victory. But now, according to the White House and Howard Lutnik this morning, the semiconductor sectoral tariffs will be coming over the next
month or to including smartphone and computers. So the mass confusion created by this constant news flow is quote dizzying for the industry and investors, creating a massive uncertainty and chaos for companies trying to plan their supply chain inventory as in demand as we are in Master's week and in Sunday. This would be like changing the whole locations for pro golfers in Augusta while the final round is going on in real time. This is how investors feel
right now. What are the rules of the game, What do earnings look like? What will the new tariffs look like? Can they be negotiated? How can companies give guidance in
this environment? We are in a much better spot than Friday and last week heading into Sunday night, but there is still quote mass uncertainty, chaos, confusion around the next steps, with all focused on the China tariff negotiations being front and center, and any progress on a game, this high stakes poker between Beijing and DC being crucial to the markets and the economy this week. So with the chaos.
One amendment to that, it's like changing the whole after you swing, Yeah, like your ball is your balls look like if you change the whole right before you right before you take your shot, Like all right, give me a different club and I'll take a different shot. You swing, you hit the ball, and then they're like, oh no, by the way, you're actually supposed to be going to the fourteenth t.
Yeah, you were playing at the seventeenth T.
I don't know I watched that balls. By the way, I don't know anything about golf.
I didn't watch it because I don't have time on weekends and do anything.
I don't really get it. Macilroy, Yeah, what he want to come back or something.
This is the He hadn't won it, hadn't won eleven years and he locked up.
Really yeah, oh, good f riend.
So he's now won all the He's got the Grand Slam, the career good Slam. Right, what is a career Gland Slam In golf? It means you win all the masters? So yeah, what is it, PGA, PGA, us O Open Masters.
I don't watch What's what's the fourth one?
I don't know.
You guys.
All the big ones?
Okay, all right, got it? Yeah, So this shows you the extent of my my golf knowledge. There was some There was some guy who I met what's his name, Bryson Deshambo. I had no idea who this guy was.
He was the guy like neck and neck with Yeah.
Once we were at this event and he was there and all these people were taking picture. I was like, who is this guy. Someone was like, oh, he's one of the biggest golfer in the world.
I was like, oh cool, he almost almost almost won the Master.
Shows you the extent of my golf knowledge. So sorry, Bryce has no offense. I promise it's It's truly not you.
He has bigger problems today.
Okay, there we go. All right, let's go in transition to these China tariffs, because this is the biggest part of the story. Let's go and put this up there on the screen. Quote, the rift is here. This is from Bill Ackman, who has a guess brand, kind of a Cassandra around these tariffs in terms of being in the MAGA orbit. He says, the rift is healing China. Quote asks for relief from the tariffs, creating an opening
for a China tariff pause and negotiations. Remember previously that Bill was one of the first big MAGA people to call for a ninety day pause, and that did eventually become the eventual policy. Nobody knows necessarily if he was responsible for that, but I'm paying attention just because previously what he had called for was something that Trump was willing to listen. But the thing is is that nas these China terrifts start to set in, and remember they
are the policy. This is the policy of the United States government. These are being hit right now with these tariffs. It is somewhat funny. There's been some news about how DOGE fired the entire team to collect the tariffs, so the amount of revenue actually coming in right now is zero. Although my wife is a trade expert and I asked her and she said that actually tariffs are liable to It's kind of like taxes. Even if you don't pay on you still owe it. Yeah, so they're coming. Yeah,
they're not going to forget. If you have a two hundred and seventy days or something.
They're trying to find those guys phone number, get them back in, right, They're going to get.
Him back in eventually. Yeah. So if you're an export, don't cheat, because you will.
If you're those fired Doge, you're fired by dos and you worked on tariffs, right, You're getting offered many millions of dollars to work for the private sector to show them how to get out of there.
I'm I'm starting a boot teek consulting firm, going to work for video tomorrow if I'm one of those folks. But as we said, the tariffs are now in place. This is the policy. We have one hundred and forty five percent tariffs. The Chinese are roughly around eighty three percent on their tariffs say they say they won't go
any higher. There has been some quote exemption. Again, nobody knows what's going on, but arguably it's the Chinese tariffs do not matter as much as where those targeted tariffs are. And so this was the single biggest news to me. Let's put it up there on the screen. And obviously we've been covering it from last week and we knew it was coming. But China has now quote halted critical
exports as a trade war intensified. They have suspended exports of certain rare earth minerals and magnets that are crucial for the world's car, semiconductor and aerospace industries. Now, this is a very important story because it really does reveal the entire game. Quote. Ninety percent of the six rare earth minerals which they have now ordered export licenses restrictions
on are produced in China and refined in China. The metals and the special magnets made with them can now only be shipped out of China with a special export license for which US companies no longer qualify quote. But China has barely started even setting up that system for issuing those licenses, meaning that the concentration there is a
complete freeze. If factories in Detroit and elsewhere run out of these rare earth magnets, that would prevent them from assembling cars and products with electric motors that require them. Companies very widely in their size of emergency stockpiles, so the timing of production disruption is very hard to predict. But the main flag was actually a quote that was buried deep within which just shows either rot at the
center of the US economy quote. Many American companies keep little or no inventory because they do not want to
tie up cash and stockpiles of costly materials. One of the metals, for example, subject to the new controls, dysproucium oxide trades for two hundred and four dollars per kilogram in Shanghai, but much much more than that outside of China, meaning that you first of all, you would be competing for almost ten percent of whatever of the minerals or the refined minerals and magnets and other inputs that you
need for your car. But second that you are in a situation where when you create, you know a produce over ninety percent of something and you yourself have nothing on the balance sheet. Again, we are looking at just a freeze of economic activity. I would rather shut my entire production line down at that point and just wait and see what the hell is going to happen. The exact opposite of what you want in intended policy. So remember they have a lot of cards here. You know,
the infamous line like you have no cards. That's true for Ukraine, not true whenever it comes to China. When you you said it so well, was it with a monkey. If you're going to grab onto something you want to grab, make sure that you have something else. If you're gonna let go, you want to let go. We have no planning here for US companies. We have no tax incentive, we have no strategic stockpile. We have a street stockpile of oil. But we've been talking about this now for
a decade. I literally know you and I how many discussions that we had about onshoring. We went through the whole COVID thing. Our trade deficits actually increased with China. We did not bring very much manufacturing back here a little bit, you know, with the chipsack and a few things, but not even close to But where we're so the number was going in the right therea it was, it was going on the line was Remember if you go down by ninety and you go up by five, it's like, okay,
you're still down eighty five percent. But my point is just with these rare earth minerals, there has been no plan from the government around a stockpile. It's not like we can look to the you know, EPA or some other agency, you know, the Energy Department and have confidence and they're like, we have gone to Australia and we've ensured that US companies will have preferential export agreements here with our allies. No, instead, we're actually hitting Australia with
ten percent tariff. At the same time, why would they give you anything? They don't want to give us anything.
And we also we print the world's currency.
If we wanted to go into a trade war with China, knowing that they control all of these refined rearers that we need, knowing that in twenty nineteen they threatened to do this, knowing that they did this to Japan when they were in a trade war with Japan. For fifteen years, the Pentagon has been talking about how this is an issue for our defense industrial base, and that we should do something about it. We could have, if we chose, created a strategic reserve of these elements.
So you get a bottom up. We do it like you said, we do it with oil. We decided not to.
And then and then we went in and started this trade war without the cards. Cards made in China, and here we are before the show, I was mentioned we talked about this on the show on Wednesday because China, I think it was on Tuesday at China announ said they were going to slap these export licenses on these products, and so it was clear. It was only in the trade press at the time, but it was clear like, oh, export licenses.
I don't think you're going to be able to get an export license.
I think I broke it down on Tuesday. Yeah, people can roll the tame. It was in the financial time. It's there, but they're not.
But then the main mainstream press is picking it up like a week later, and the US being like, oh, oh wait a minute, we didn't see this one coming.
Now you need a disprosium guy. If you're gonna like keep.
Your lines running, I hope we have a good disproceed You have a good disprosium guy. Yeah, do you have your dispris? I don't, I confess, you know, hope one of the cameras in this studio doesn't break, by the way, But I wonder where they're all made from.
Yes, go down to a what camera show can we.
Put let's see a nine, Please up on the screen. Because this does a really good job, this Financial Times tearsheet of showing where all of the like the major concentrations of goods from China. It's still it's even more shocking sometimes even when you look at it. Eighty percent of smartphones, sixty six percent of laptops, and that is only the finished product. I'm not even talking about the
input products. Some sixty nine percent of lithium ion batteries, you have, three quarters of all children's toys, you have, fifty percent. Of headphones, you've got, but fifty six percent of sports footwear you've got fifty three and of rubber footwear, ceramics sinks. I mean, you know, you can go down the line for video game consoles eighty six percent, electric fans eighty eight percent, Christmas festivity goods eighty seven percent. I guess we won't be saying Merry Christmas. In December,
stainless China World on Christmas eighty six percent. You know, plastic kitchen where eighty percent? Now do you need to live? Do you need to fulfilled life and have plastic kitchen? I don't even use plasticichen word. I can tell you that because I'm concerned about some of the inputs and all that. But yeah, is it that easy to buy? No, it's not, you know, but you know why people use it because it's convenient and because it's cheap. Can we
blame them? No, not in the occurrent economy that we're in. If we want all as a country to be buying like lodge, you know, cast iron, steel pans and stuff like, I'm all for it, but you know, you need a real cultural revolution, I think in terms of convenience, in the way that our entire society and daily life and all of that is structured.
You know.
Right now it's like weirdos and crunchy granola mo who are into that stuff. But the rest of the world is or the rest of the country is trying to eat and they're trying to make sure that you can work two jobs and not be bankrupt, you know, rather than have to rely on a lot of these other health concerns or whatever. And that's kind of my point around the entire thing. We are so dramatically reliant on China, and I would love to be able to change that.
I don't think it's made our lives materially much richer. However, with no government dollar for dollar policy, industrial policy, I mean just general like theory about preparation, how can the public not conclude that this is not just a chaotic process that with a net effect that will just make everybody much worse off in the immediate term. That's effectively what has happened here.
Yeah, And the structure, the structure of the deal that we had cut with China was effectively, like you said, designed in coopertinos. So Coopertino's gonna do a lot of They're gonna have the nice, cushy laptop jobs. Yes, and China's gonna make those laptops for those laptop jobs, and the Cupertino people are gonna make most of the money.
Out of that.
Like this is a you know, Intel is the same thing all the what the major amount of wealth is going to flow to these vice presidents, these middle managers, service and then and then to the the Apple store employees.
Who are you know, an Apple Store employee makes more.
Than if you if you if you open a factory, and we're paying somebody just screw in like the screws into the iPhone, you're actually paying more for that person there. Uh, so that's the deal now, and you're seeing this on TikTok all over the place.
China's like, you know what, how about we rip that deal up? Like are it wasn't that great a deal for us?
Like this this whole thing where we do the work and we take like a tiny margin on top, and you take everything else. So you have the military and you have the intellectual property. So we were comfortable with this arrangement for now because it was helping us develop our manufacturing capacity. But now, you know what, we can just go ahead and make the stuff. We have smart executives here, we'll just keep that. We'll steal your IP and we'll just sell the stuff.
How do you like that?
And we're like, oh, you can do that.
Yeah, Well that's kind of the issue is, yeah, we got some of these tiktoks right about. Yeah, let's play one of these tiktoks there's a hilarious there's a guy who has apparently so TikTok, and they're not just him. There's many others who are just blowing up on TikTok right now. I hate that I even have to say those words, but you know, let's talk about this before
we can. You know at the very same time that the TikTok is obviously putting his finger on the algorithm of trying to undermine Trump's tariffs, He's trying to save TikTok, right, So a little ironic there. Some of us have warned about that, but oh he got won the youth boat or whatever, so that was worth completely reversing his position on it. So these are the types of videos that are going megaviral all across the country right now. Let's take a listen. Hello from China. Let me show you
the United States products in my home? Nothing. Do you have something from China in your home? You gotta give it to the guy he's right, Yeah, I mean what does he have? Nothing? Yeah? He doesn't mean, he doesn't need anything, right, he's living He's living a fine enough life there.
Max said he was talking about the move bombing in Philadelphia.
He's digging up our history?
Is he really?
Wow?
I mean all right, like we can trade insults or whatever.
About China. That's why there's fine the US. What does Trump say, We're not We're not innocent either.
Yeah, yeah, that's right. Look, I mean when you go over there and you talk to I've met many Chinese people who are just like wholehearted CCC believers, and they're always like, they're like, you're gonna lecture me. They're like, what about Chicago? What about And I'm like, yeah, it's got a good point. Yeah, it's one of those words.
Listen.
I do encourage people to visit China if you're able to, and to talk to Chinese people, especially around this because a lot of them don't care nearly as much actually as some of the people over here. And part of the reason why is it's pretty clear as you could see where he just said, He's like, we don't have any products from you that's made in my own No, I may not technically be true, you know, design in Kupertino, et cetera. We can hit them back, we're like, oh
you never designed that. It's like yeah, but they've also got it's not like we have a monopoly on smartphones. They've got Wildwei phones. They're pretty good.
Actually, yeah, and at least we don't like sweet people off the streets just for writing op eds.
Oh right, oh wait, no, never mind, all right.
All right, it's a little different, but we'll get to that. No, no, it's okay. It's not different per se in this case, but on a mass scale level.
Perhaps we do allow people to criticize our country just not.
Is Yeah, that's right, there you go. Okay, So that's an important cave yacht in the point. Finally, around all of this is just to show people how they have a tremendous amount of leverage on the like the refined rare earth minerals. They have incredible state capacity. And this is one thing I do not want people to miss. Let's put this last part up on the screen A ten please, So this I mentioned this on our Friday show, but I really want to underscore JD dot Com, which
is one of those massive e kermis giants. It's one of the biggest companies in the global five hundred. It says they are going to purchase two hundred billion one equivalent to twenty seven billion dollars of goods from Chinese exporters Quote to help manufacturers shift to the domestic market. The Chinese company also said Friday it would provided training, subsidies, and other support for export oriented manufacturers to sell their products in China. That is what a functioning state looks like.
So you're in the middle of a trade war. Your greatest importer and relying reliable quote trading partner cuts you off.
So what do you do.
You mobilize the full capacity of the state and you order your equivalent of like Amazon or whatever Wayfair, etc. One of those types of company actually frankly bigger in terms of market cap. And you say, hey, we've allowed you guys to operate. Now for some years, you're going to pump twenty seven billion dollars.
Into the economy.
And now you multiply that times one hundred, and you have a state which is able to mobilize the full force of so called private government, which is in tech or private industry, not really private. It's government controlled, the full government already. If you read again, all you have to do is go read what they say they're going to do. They have full control over their currency. They're going to manipulate their currency. They have full control over
their interest rates. They're going to drop interest rates make borrowing costs much easier. On the overall domestic They're going to pump billions of dollars into their domestic economy to make sure that their manufacturers do not miss a bait and can continue to supply the Chinese market. They're currently on a global campaign trying to strike deals with US allies exporters who feel very snubbed. President Chi Chingping will
be in Vietnam today. Remember, Vietnam is the number eight trading partner of the United States of America, and Vietnam actually was a major success story in overall US efforts to try to cultivate a manufacturing base outside of China. There have been accusations, there's been a trans shipping hub, etc. But you know, sixty percent of the Vietnamese people, even after what we did to them, are actually very approving of the United States of America and we're ready to
do business. It's called the Communist Party in the same way the Chinese are. But that's what they're doing over there. And meanwhile they strike deals with the Europeans about byd cars, right, So they have a full strategy. They know exactly what they're doing over here. We've got Howard Lutnik and Trump change in their mind every twenty four hours. What are who would you rather do business with today? This is not caping for China. I just respect them. You have
to respect competence. What we see here is a complete incompetence with devastating results for real people. These are people's lives. Screw even the retirement accounts and all that stuff. People just can start gettinglaid off like in the next month. It's that's and that's step one. You know. And there's no private compat there's no CCP to pay for your health care or make sure you get an apartment. You know, you're on your own in this country.
Yes, And the move that is available to them that they're wisely taking woodn't isn't available to us on the flip side. In other words, we have to try to increase supply. We have to try to build manufacturing capacity overnight. They have to just find demands somehow. It is much easier, think about it. It's much easier to increase demand. And that's a great example of how they did twenty seven billion dollars. You made a bunch of crap that you were going to sell to the United States, but now
you can't sell it. We're going to buy a bunch of that stuff, and they're going to get creative, and they're going to find other places. They'll be with currency manipulation and with state subsidies. They will move it into Africa, South Asia, Europe, like you just mentioned South America.
A lot of these countries are going to get some real good.
Deals on some Chinese stuff and maybe that produces long lasting relationships, and then it could, let's say, in peace to Africa, it could end up, you know, with a little bit of economic stimulus, because then the products come in and then the products get resold on the secondary market, and that creates jobs for people, and it creates and it creates a chain between those those countries and China.
That's so much easier to think through and to do, especially if you're planning it from the top, than it is to create supply overnight, especially when the inputs to make that supply are controlled by China. It's so comically stupid that it could never have worked in this way. The only thing the US could have done and could still do, is invest in its own manufacturing capacity, invest
in educate, education and building up a trade workforce. UH subsidize the construction of manufacturing facilities, and then use American diplomatic power to create markets for the for those companies. And then down the road, if they're deeply struggling, you can do targeted tariffs, you know, on the particular industry that that could work.
Like that's that's that's that's not doesn't take a genius to come.
Up with that.
But this never was going to work.
No, so let's go to recession, shall we? And miss major titans of Wall Street are now saying recte. Now, I want to be clear, I don't like these people, Ray Dalio, Larry Fink, all these other folks. You still have to listen because Wall Street is an expectations game, right, so fu gets it's all fake. And so whenever somebody who is a global market player says we're in a recession,
it can actually become a self fulfilling prophecy. So even if we don't like these people, we don't like what they represent, and we think they're responsible for a lot of bad that's happened in the country, it doesn't matter because when you control hundreds of billions of dollars literally at your disposal, not to mention, you know, basically an arm of overall UF soft power of market activity of deals.
If you say that there's going to be a contraction in recession on CNBC, it will cause all your peers, also titans of industry, to do the same thing. So that's why we have to pay attention when these people speak. Let's take a listen Larry Fank, CEO of Black Ride. Here's what we had to say.
The United States post World War Two was a global stabilizer. We are the global destabilizer right now. That's a very you know, that's a very hard thing to say because I pride ourselves of being, you know, bringing the leadership, bringing the conversations, celebrate. Yes, I do believe we're probably starting, if not, we're in a recession. Yes, I think the market is still anticipating underestimating how high inflation can get.
If you factor in all the terraces, right, you factor in all these other issues, it's going to be quite additive. I mean I read in a report that if you just take the terrace in the cost of home building, the average new home could be up as much as twenty six percent. We already have a housing affordability problem.
None of this sounds any good to me, all right, I mean, and it's all self inflicted, by the way, none.
Of it needed.
This is not a pandemic, This is not a financial price is. This is something that we've created.
So you can see from his comments there specifically about recession and about contraction increase of goods, that this is quote, if we are not in a recession, if you factor in all the terariffs, is going to be quite additives. I do believe we are probably starting so you could see from him. We also have Ray Dallio, the quote legendary investor. I'll tell you more about Dalio in a little bit, but you got to hand it to him. He actually wrote a decent enough book and as always
as worth listening to. Here's what he had to say.
I think that right now we are at a decision making point and very close to recession, and I'm worried about something worse than a recession if this isn't handled well. A recession is two negative quarters of GDP, and whether it goes slightly there, we always have those things. We have something that's much more profound. We have a breaking down of the monetary order. We are going to change the monetary order because we cannot spend the amounts of money.
So we have that problem.
And when we talk about the dollar and we talk about tariffs, we have that we are having profound changes in our domestic order, how ruling is existing, and we're having profound changes in the world order. Such times are very much like the nineteen thirties. I've studied history and
this repeats over and over again. So if you take tariffs, if you take debt, if you take the rising power challenging existing power, if you take those factors and look at the factors, those changes in the orders the systems are very, very disruptive. How that's handled could produce something that is much worse than a recession.
Much worse than recession. Yeah, that's n I want to hear for no reason.
And specifically, what he's talking about is the dollar market. So like we're literally right as you and I are speaking, Ryan, there's been a huge decline in the dollar globally. People are fleeing the dollar and the currency is now now Basically the reason why it matters is that not only do we have an import shock in terms of tariffs, but now those imports priced in foreign currencies will be
more expensive with relatives. So there's been an overall slight increase in the currency exchange rate that is being added on top of the tariffs. At the same time, we have the bond market problem that is happening right now, increasing the amount of costs for borrowing from the United States of America and debt servicing, So bond market yield increases, dollar decreases the overall imports. Here, you have a contractual environment. This is genuinely akin to like the nineteen seventies in
some sort of stagflation level crisis. The only thing that we are missing is high unemployment, and luckily we are not there yet, but we have all of the ingredients to create high unemployment if we do not back away and change this policy. Look, let's also say this Trump has the off ramp any time that he wants it can be like, look, we're going to do bilateral negotiations and it's going to take a year, right, but this current idea is ninety days. The current ninety day hypothesis.
I looked it up. The average bilateral negotiation between the United States and another country takes one to five years. One to five years for a bilateral trading goes. So the idea that you're going to do seventy different negotiations over a ninety day period preposterous. We can't even do one with the UK, with our greatest allies in years, and we still don't even have a freaking violence make anything.
Yeah, and yeah, you're right, they don't even do anything. All they do is send is scotch right. Yes, it's not even difficult.
To figure out. I'm joking my good friends over there combat we love you.
Yeah, I know.
It's like, let's put up Charlie Gasparino the next element here too, which is you know, and he's saying that what what Sager is saying is reflected in all of the conversations that Gasparino is having with the investors and CEOs, that all of these factors are are coming together to produce a recession. And my quibble with Sager's point is, so you're saying that Trump could Trump could end this. Yes he could, and there would be a nice, nice spike and we'll start to pick up the pieces again.
There's already and it's hard to maybe even explain this to people. There's already significant damage done. Businesses are you know some I'm sure there you can if you run one of these businesses. Let us know, like businesses are going under, like companies that run in this just in time cash flow fashion, which is basically any company under like Apple.
Uh.
Those are those are struggling.
Uh.
And then the other question is, okay, Trump, will Trump could make a decision here? How does China respond? Is chairman she merciful? Because maybe Chairman she is like, you know what, we've got our boot on their neck right now, and we're actually liking the soybean deal that we're getting from Brazil Argentina.
Yeah, I saw Mike Grounds.
Complaining in a political article this morning because they're getting absolutely wrecked. Something like twenty eight percent of commodities exported out of South Dakota go to China. It's over a billion, you know, more than a billion dollars like this, this is just one little state. What so does China have to automatically immediately be like all right, you know, it's cool.
You guys had a bit of a temper tantrum.
All's well, we're back all the deals that we had before back on. And that's on the on the fantasy kind of that Trump just immediately buckles on everything is Trump just keeps coming back with, Oh, well, well guys, I'm not done with this, Like.
We've been getting ripped off for decades and I'm going to do this.
Like Trump seems deeply committed to this bit, like all the all the way down to me, you'd have to have Congress step in and be like, no, president doesn't have the authority anymore to just move tariffs around. Yeah, I'm sure, and that needs two thirds. That needs two thirds because Trump is going to veto. Then do you have any idea where the doubt would have to be for that to happen? Yeah, there's a place you have to be.
There's a spot.
I'm thinking seventy and seven percent on employment.
What do you think seventy percent? Seventy percent drop?
Yeah, maybe a seventy I think three fourths drop.
In the three fourths drops because even fifty oh, two thousand and nine we came back, it would have to be yeah, I think seventy percent.
Or you lose eight hundred thousand jobs in a month, right, and and you lose you know, five thousand.
Mass unemployment, thirteen percent interest right, yeah, maybe, and.
Then Congress is like, okay, you know what, Actually, we're taking these toys away from you. You can play with these matches.
I mean, that is one fantasy. I keep seeing people saying, oh my gosh.
We did not want that fantasy to come true because it means that we will have marched right through.
Well. I meant people have this fantasy that Congress is going to do something. No, they're not. Okay, Congress is currently the Republican Congress is currently trying to cut one trillion dollars from the overall government spending, meanwhile also increasing the amount spent on the Pentagon. Just so everybody understands, that's the stated goal. I'm not kidding. Trump said, let's cut a trillion. He said that, yeah, all right, and
the the Republicans are the currently. By the way, the only way to do that actually would be to reduce overall manufacturing tax credits.
Just so you all though, so a sort of borrowing really genius baring costs, like you said, are going through the roof because our cost interest rates are going up.
That's storing thirty thirty.
Her mortgage rates are at their highest levels, which.
Is I think they're at like seventy percent. Yeah, it's a disaster. Yeah, so yeah, things are not good. And finally, B three, let's put this up there on the screen. This is very important and this kind of gets to your point, Ryan, quote Trump tariffs on China will soon bring irreversible damage to many businesses. And the reason why is that, you know, anybody who's ever run a business, can you really take a ninety day freeze to your books?
No?
I mean the vast majority of people cannot survive that. Yeah, if you're Apple, sure, if you're Meta, yeah, and you have you know, this business that spits off all this cash. That's not what most people do. Is actually smaller businesses, e commerce businesses and more. You know, if you look at here, quote canceled freight orders and abandoned freight from China are quickly becoming the norm. According to supply chain executives, furniture producers in China have seen a quote complete halt
in orders from US importers. We are seeing the same across toys, apparel, footwear, sports equipment. We have had same across Southeast Asia. Now we may have some restart because of the ninety day pause. Almost everything is on hold as it relates to China's business. Basically, it will stop all trade between the United States and China. These are all people I'm quoting who are supply chain and logistics experts.
I also, you know, we had Ryan Peterson on the show, who I previously mentioned, and Ryan is just constantly flagging about how difficult it is for all of these people to do business, you know, under these current economic conditions. And look, there are some who are able to take advantage with some decent enough cash that are on the books, but there are not enough people who are able to survive any of this. Are simply having to freeze everything.
And we are seeing already the stories come out. You know, across the board of e commerce businesses, smaller people who produce things limited an amount of cash, can't afford lots of inventory. You know, they didn't do anything wrong, right, and if you're going to kill their business overnight, I think the government should give you something for it, kind
of like COVID, you know. And look, you can you could disagree with lockdowns and all that, and you're right, if we didn't do lockdowns, and I guess we wouldn't have had to do bailouts or any of that. But can we all agree that if we didn't lock you down, then the government of course owes you some renunration. If they're going to explicitly tell you that, then of course you can't just kill somebody overnight, you know, whenever you're doing business and not just you know, and just take it.
But apparently that is that is the current state of where things are.
That's what a strategic approach to a trade war would look like to say, oh, which is what the Chinese are doing right exactly, like this is going to be hard for one hundred and eighty days. Yeah, and this is how we as a government are going to help our people. Whether this because this is important for all of us and we're in this together in Yeah, we're not getting that.
Yeah, well they are, okay or.
Not they are?
Yeah, that's right.
Yeah. Actually, I'm really curious to see, let's say this last year, we need to compare the material life of the American after one year and the average Chinese and not just some guy inching in like an actual like a normal middle class Chinese person, And I would love to see how that actually, I mean Look, it's possible they're bluffing, right, It's technically possible. Yes, they have high amounts of state capacity. They still have a billion people.
They have you know, they're addicted to six to eight percent economic growth. They had the zero COVID nonsense, which really exposed like the fragility of the overall Chinese system. For all the BYD talk and all that, you still have a lot of people who are very concerned sociologically about mass unemployments.
Worries that they yeah, AI bubble right.
I mean, but just generally I would still rather be them than I would rather be us right now, at least in terms of how things are working out. Okay, let's go to consumer sentiment, and this is kind of what we were teasing, and this really does demonstrate some of the issues where these are always filming prophecies. So if people have less consumer sentiment and want to spend money, then they will spend less money, which will lead to an overall economic contraction. Let's go and put this up
there on the screen. Quote from anxious to petrified, consumer sentiment plunges further. The University of Michigan's Closely Washed index has now hit its seconst lowest reading on record, Dragged down by fears of higher prices and unemployment, Americans turned much more pessimistic about the economy. In April, the University of Michigan Consumer Sentiment Index nosedive to fifty from fifty
seven just last month. Sentiment has been falling steadily through twenty twenty five, and expectations for inflation have now hit the highest level in forty four years. According to the survey, sentiment is now at its second lowest in history, only slightly lower in June twenty twenty two, when inflation was soaring thanks to snarl supply chains and pandemic buying. Back in twenty twenty two, the index actually did touch fifty, which was the lowest reading on record going back to
nineteen fifty two. So that's basically where we're back at in terms of inflation expectations. The survey basically what they do is it actually took place over the Turff time. So it's important to note that that a lot of
this is in real time data. People are, you know, accepting this, and what you're watching in the data is that people are very concerned about their ability to buy things, and specifically about the expectation for inflation hitting some forty four year high, which means they are going to keep cash or cash if you've got it, not spend it, not do any normal economic activity, not make any major plans. And in a seventy percent consumer based society, that is
the worst possible thing you can do. In China, you can get away with a lower consumer sentiment. You're not as hooked on it out manufacturing, we got a lot more fundamentals. And in America with cheap TVs and all this other Walmart and all these other countries that are all these other companies good luck, you know, talking about what Easter's coming up? Are people going to be buying present we're going to be traveling or people you know,
these are all decisions that people make already. Delta Airlines came out and said, we have seen a mass cancelation of bookings across the board. We are watching economic activity go down. We have to revise earnings. Walmart actually is expecting, hilariously enough increase business on the theory that they always do well during recessions. So keep that in mind. You know, the companies or what is it, Walmart, McDonald's always did
well tree, dollar Tree dollar general. The recession proof industries not recesion proof. Of the people we thrivesion. They're actually thinking, oh, actually we're going to see more low price customers. All of the data out there for forecasts on the books shows that consumer good retailers, and they're getting crushed at the stock market level. I mean, Nike is down some twenty percent or something like that. I resolved of a
lot of these tariffs at one point. Even with Vietnam, things have changed a little bit for them, but you can just see that the danger lurks for all of them in this consumption based society.
That word, yeah, this is the whole thing. And so that that's all well said on the economic model. My colleague Mobs is saying over drop Side is I've seen him often make this point that, and you know he's he observes a lot of different cultures around the world, and one thing that he talks about with the United States is that we are, as much as we love to like hate on ourselves, one of the most successful
pluralistic societies. Like, yes, we have our divisions, people don't like each other, but like not compared to other countries, like we have a multicultural society that gets along relatively relatively well and definitely relative to other countries. The glue that stitches all that together is our consumer society. We all love stuff, and we love the shows that are organized around us buying stuff. We love events that are
built around stuff like Friday. And also you go to like parties at the in the US, like there's the cheap stuff everywhere there consumer driven things, like everybody's buying stuff for these events. Like the culture is tied together by the consumer society and it is effectively done so too. You don't have to love the consumer society, but it's laudable that you can have a multicultural, pluralistic society that isn't breaking out into sectarian violence in a in like a routine way.
Pull that away, good luck.
So like just like no matter how bad you think things are, like, they can always get a lot worse. And so you've you ripped the rug out from underneath that we might be at each other's throats.
What's the quote, It's like it's always darkest just.
Before if we can't have like the Sunday NFL, Yeah, that's Thursday night.
Well, that's why I was saying about Easter, I mean Eastern candy. Right, Let's say you even see a ten percent drop in overall, that's a lot. I mean, you know, that's a lot of inventory. Now I got a discount and I got to house it. You got all these problems, what do you do? You know, people are going to try and drop the price on the sixty seventy percent. People usually go home for Easter Sunday or so they're not buying gas if they decide not to decide to
cancel their travel. Or sometimes you give gifts to your nieces and nephews. This year, you're gonna give a little bit, Like these are all these decisions compound, you know. For example, I was talking to my barber and I was like, I'm just curious. Have you seen anything goes? Yeah, I have noticed that people who used to come in every three weeks are now going five, you know, and that's
sounds like it doesn't sound crazy to you. Individuals. A compound that over your entire customer base and you're seeing a turn of a pretty serious hit to your bottom line, and you multiply that across the entire economy.
And the NFL, for instance, like the whole reason that it's able to be the league that it is is because of the advertising revenue, right, that comes in, and if people are not buying the stuff that's advertised on those commercials, then you're not gonna pay You're not gonna pay the advertising rates anymore.
And then the thing starts to collapse, starts to go backwards.
Actually, we can serve as a good indicator as well because of our YouTube back end. I remember, I will never forget what the YouTube backhand over at Rising looked like back in March, and in April of twenty twenty it evaporated, right, It was like this gone over, probably like ninety percent of the revenue. So yeah, I can Unfortunately we can tell.
You really, have you noticed anything.
I'm taking a look now. No, I actually think it seems fine and tight. Things seems fine.
We're still buying stuff. Fu I think seems.
Actually, you know, this is a good time to say this. So you know our premium show that we send out to people, this is a good Uh, yeah, this is I've always noticed this our premium show which we send out. It is an unlisted link and also available on local Spotify, et cetera. One of the places people watch it is sometimes an unlisted YouTube video that is available. Our premium describers have been telling us that even though we earn again we earn no money from this. We are not
turning monetization on. YouTube reserves the right to monetize that if they want to, and it's always a recesion indicator to me when they start doing that, because I remember right back in twenty twenty two when we launched a show immediately when the gas price is skyrocketed and we saw the pullback. That's when they started doing it a lot. They stopped. Now recently, just in the last two weeks, people have been complaining at an auseum, saying, oh my god,
because they're paid. Yeah, of course it should. I'm not mad at them. I'm telling you is that that is a major sign to me that they're trying to fill as much inventory as possible to blast it and satisfy some of their advertising. And again, we make not one dollar from that. We don't want them to do it, So I guess that's a shout out if you do want to watch it totally add free. Spotify is still there and locals is still there as well. But unfortunately,
if you watch it on YouTube. There is nothing that we can do, and it's infuriating, but that is a signal to me. You know that YouTube is basically throwing everything they've gotten, a little bit, all inventory that they've got there, thrown as many ads into that as possible. And when they do that, it means that they're probably making less in terms of their CPM, so they got to fill it up with more ad blocks than normal. So just a little bit of insight behind the scenes.
Let's go to the last part here. Just see three. Please, This is just about the bond market. This is the same thing that we have been looking at. But you can really see that those yields continue to increase to
levels which they really do not want them to. They're very worried about going to a yield of some five percent with a point five percent increase of a percent, which is not supposed to happen really if you look at the overall long term trends and that right now with the current stated goal of bringing that yield down and being unable to be to do so, if there's a worry about some runaway you know, basically selling of US bonds, which would make it so that the yield increases,
borrowing costs, and mortgage rates and interest rates and all that continue to go very high, and it would very much cripple the administration. So that's another feedback loop where mortgage rates continue to go up. I actually think they're I think they went down after they were up at
some seven percent or whatever. Again, if everybody continues to so, but people are still watching, right for the Federal Reserve, and if the Federal Reserve and Jerome Powell and them decide not to do any sort of emergency rate cut, we really are stuck in this for a long time. And there's a lot of things six point.
You don't want that UH.
And there is some question about how organized this is UH, and we're still trying to sort sort this out. But there was reporting that Japan was dumping UH, that Japan was dumping bonds.
And Japan is.
Obviously one of the biggest holders of bonds now, China huge holder of bonds as well Canada. So we are out there antagonizing all of these countries while they literally hold our cards. And if and if they take our cards and they just start selling a few of them, that that drives down the price of our bonds and then drives up the yield. That's just mathematically like, there's no other's that's that's that's how it's going to work if there's a.
Sellouf and it's never worked that way before.
For the most part, you have a crash in the stock market, that that means people are selling stocks and moving to the safety of treasury bonds. That is the orthodox understanding of the global economy that's broken right now, and it's probably a combination of people.
Leaving the kind of structure of.
The American dollar economy and our adversaries like Japan, who should be our friends, but we've turned them into adversaries, deliberately bringing pain to us so that we will back off of this because it costs them too. They don't want to do this, because if you are a holder of American treasuries right now and you're selling into a down market, you're losing millions and billions of dollars, but
you're costing us a lot more. So, You're you're you're prioritizing geopolitics over your bottom line and the interests of your bottom line doing better down the road. And it is what like Trump was asked when he caved, why did you do this? And he said his exact quote was, the bond market is a very tricky thing.
In it. James Carville famously Nippy James Carville.
Famously in nineteen ninety three said he if he was ever reincarnated, he wanted to come back as the bond market because it was the most powerful world. I didn't know that because it's what what's the context?
Right?
So Clinton came in with grand a grand economic vision, and Larry Summers and his and his buddies told him, if you do this, the bond market is going to panic. Interest rates are going to go up, and you'll have a recession. They're like, so you're telling us we ran on this whole thing that we want to do and we can't because of the bond market. They're like, yes, that's what we're telling you, huh. And so that's the Carbo was like, when I get reincarnated, I want to come back bond market.
I need to go back and just slap Trump back into line. So do you have any good books on the history of the Clinton administration? I only read My Life, which is complete propaganda. Yah, it's just laughable.
Clinton's book let me think on that. I'm not sure.
I don't know any decent ones. I still can't believe I even waste my time reading.
It's seven hundred pages, two lifetimes.
Yeah, it's two volumes. It's so big anyway, all right, long, long, long time ago
M.