Buck Brief - Porter Stansberry

wise do. I wanted to dive in because you wrote something this is in my inbox, uh from from you about not only what's going on now with Boeing, one of the most well known American probably best known American engineering related company. Maybe gees up there, but you saw this coming. Tell me what you saw a year ago, and then we can get into what's happening now.

pure metocracy would have belonged to someone else. You give those opportunities to someone of color, or someone who's a woman, or someone who has confused sexuality issues that somehow the DEI theory is that that'll make your products better, that'll make your customers happier, that'll make your profits bigger. But what we see as investment analysts time and time again that firms that embrace this kind of DEI I think,

or the general ESG. They call it mindset, actually perform poor going forward, in part because their cultures get wrecked and buck I'm sure you can understand this. If you're working with a group of people and suddenly promotions and raises and bonuses start getting doled out because of factors other than performance, it has a really shockingly bad impact on the culture. It leads to all kinds of bad

things happening. But the most notable thing is that the truly talented people are going to leave and go work for SpaceX, which is what they've done, and the people you get left with are the people who are really good at corporate infighting and corporate politics, but not necessarily good at all at engineering. And as a as a part of all that, I'd like to I'd like to call your attention to the woman who is currently the

the chief operating officer at Boeing and UH. Her name is Stephanie, and she has a thirty year career as an accountant. So she was the you know, the top accountant at Boeing Airplanes and and she has a degree from Southwestern Missouri State and she has an NBA hold on. I got to reference my notes for this because I'd never heard of this school. Oh, this intellectual powerhouse, Lyndon Wood University. So so what you've got here as a as a as a female with no engineering background, And

I'll go public with this. I'll bet one thousand dollars that Stephanie cannot change the oil in her car. But she is the director of operations for Boeing, which is the most important engineering firm in the United States by a mile, and one of the most important companies in the world. The whole global transportation infrastructure requires Boeing aircraft and they need to be well made and safe.

Missouri State and Lindenberg sorry Lyndon Wood University. I don't think that is the sharpest engineer or tool and drawer. So why would Stephanie get one of the most important jobs in engineering. Well maybe because she is the executive sponsor of Boeing's Women Inspiring Leadership. What's that, Buck, It's a group that's dedicated to increasing gender diversity awareness and that,

by the way, is right off of Boeing's website. So what is going on at Boeing is you have a whole bunch of people who are being promoted and getting opportunities because of their political orientation or because of the buy in that they have made into ESG and DEI. But that is not the way to make safe airplanes.

We've already seen this happen. There is an Atlas Air flight in twenty nineteen that crashed near Houston, where both pilots were, in my opinion, most likely there because of the role they played in meeting diversity targets, not because of their flight awareness or their success in training. And both have failed out of training. So this is a real issue. And it's not just for companies like Disney, which you're performing miserably. I mean, at least a theme

part can't fall out of the sky. But I'm not so sure you'd want to go ride those roller coasters right now, because you're going to have a whole bunch of people who are not qualified in jobs that are very demanding and very technical. And this is not just going to impact Boeing, It's going to impact our whole country.

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coming months. In a year that's moved your cash now dot com, or you could end up holding a bunch of dollars that are worth a lot less than they are now paid for by Palm Beach Research Group. All right, Porter, the it feels like in the last year or so, I mean you wrote this piece. I saw the piece, and you know we revisited it today. I mean I saw you saw it when it came out. You visited today about Boeing and what's going on there as a

corporate culture. But we've had a number of very high profile instances, whether it's the backlash at Budweiser a lot of pressure on Disney. When does corporate America you think, start to listen to the voices out there that are shouting stop doing things that aren't about good business but you think are about good social justice.

can happen. Then, you know, changing the the snow White film to become a you know, a play on diversity, and those things are going to impact our entire economy. It's it's it's I think when when this stuff, when this rot gets into health and safety, that's when you're

going to see a really big political shift. And the chieft is already underway when it comes to Boeing, though buck let me tell you how I found the problem, because you might you might not remember, but I first started writing about this a year ago in January of twenty twenty three. And what I said back then was

that Boeing stock was going to collapse. And I said that not because I suspected that the planes to start falling out of the sky necessarily, but that I saw that the entire engineering culture had been gutted and it had been replaced, first of all, with accountants from GE. And what they know how to do is wreck corporate balance sheets. That's what they did to GE and that's why I recommended shorting the stock for so many years.

They did exactly the same thing. The two people who are running Boeing now, both the CEO and the CFO, are veterans of G's finance group, and they do the exact same playbook. What did they do. They took Boeing from a company that had net cash on its balance sheet to a company that now has fifty two billion dollars in debt, and that's including net debt of over forty billion dollars. They've got to refinance about twenty five

billion of that in the next two years. And because of the safety issues of their planes, they're also facing the potential downgrade into junct bond status if that happens, their interest expenses are going to soar, and there's a real risk that the company could go bankrupt. Nobody sees that, but that's what we were talking about a year ago, and we updated that short call in December on the twenty second, about three weeks ago. So I just want you to realize that my work on Boeing is not

about this latest news thing. It's about the fact that for the last five or six years they've been building shoddy aircraft and their balance sheet has been destroyed by their leadership. And that's why I started focusing on it, because the bad choices I could see looking at the finances of the company have also flowed through now to

the engineering of the company. It's a very serious matter, not just for Boeing shareholders, but also for the bond markets and for our country's transportation networks.

DEI wokeness problem. I mean, look, United is bragging about how they have changed, you know, the incoming class of pilots to be more diverse. But I also know that the training programs that pilots are going through so they can meet the standards necessary for training are being lowered. That is happening. So the people that are moving the plane, you're telling me that the people making the planes are

losing a step or ten. And the people piloting the planes right now are also not the same caliber than what people have been used to for a long time.

this whole thing started. That's unconstitutional, that's illegal. You can't actually do that, and you can't continue this system of pretending you're not discriminating by race when you are. Well, that's in college admissions. But it's starting now to filter I think through the broader American political and an economic landscape, which is a good thing. But I think we're just in the early early stages this.

with a couple of months of pilot training. He's now going to be captive captaining you know, a United aircraft with two hundred people on board like that. There is there is such an absolute, utter lack of judgment. There is such a disparity between the theory of DEI or ESG and the reality of engineering and flight, and those two things are on a conclusion conclusion course. But let me just give you a couple of data points to

make this a little bit more objective. If you were in charge of Boeing and you knew that your your cumulative net income over the past three years is minus twenty billion dollars, and that your twelve month interest expense currently is two and a half billion dollars a year, and you knew that your credit rating was one notch above junk status at Fitch and SMP is, the last thing that you would do is to let a door

fly off of your plane in mid flight. My point about all this is the people running the company have such poor judgment they can't even run the company. And by the way, Bones one of only two major aircraft manufacturers in the world, and it is a dominant defense contractor. There's plenty of margin to be made in all those

defense contracts. So how do these guys lose twenty billion dollars in the last three years alone, and how did they run their balance sheet just in the last five years from net cash positive to forty two billion roughly and net debt. This is I mean, it's almost is if somebody was deliberately trying to destroy this company, because you can't make decisions this bad if you weren't trying.

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that size. I just don't believe they can be financed through to legitimate means, which means you're gonna have eventually more interest rate manipulation, more bond market manipulation, and more money printing. It's just a matter of time. And all they've done so far really is just change the name of what they're calling the MOUNTI printing. You know, they used to call it. What do they call it? Easing? Yes, easying? Yeah, sorry, there's so much jargon now I can't keep up with

it all. But the new way that they're doing it is they've just been printing money and handing to banks

that have underwater bond portfolios. So there's something right now in the order of seven hundred billion dollars plus worth of losses and the banks on their bond portfolios, and rather than accept any of those losses and have a run on the banking system, the Federal Reserve is just printing up money and then giving it to those banks as collateral at par so that they don't have to suffer the losses that they have.

write to market where its bond portfolio is. And the reason why is because it made enormous investments in bonds during the COVID bubble when interest rates are very, very low, and then of course the FED had to raise rates to stop the resulting inflation from all the money printing that they did. So you know, the whole banking system is just inside out and there is no way that the FED is going to be able to By the way,

the FED doesn't even want to actually stop inflation. The FED wants inflation to be three to four percent a year so that they can print print their way out of all these government obligations that they can't meet and

so that they can keep the banking system liquid. And so I think that all the talk you're hearing about the possibility of deflation or the possibility of a recession in terms of nominal GDP as mallarchy, you're not going to see any kind of actual recession because they're going to print so much money and there is so much deficit spending that in nominal terms, the GDP growth is going to be probably between four and six percent over

the next three or four years at least. And how will they do that, Well, they just deal with government spending and they print the money to do it. So that's going to have a really big impact on people's wages. And you've already seen that happening, and that's a giant problem.

fifty percent in the last ten years at least. So, you know, we can argue about CPI we want, but it has nothing to do with the impact of these policies on real people's wages and buck. The saddest part for me is the people who are suffering the most from these kinds of policies and from DEI and from ESG and all this stuff to defund the police, all this stuff. The people who suffer the most are the

people who keep voting for it. It's not hard for people like me and you to protect ourselves from inflation. We go buy a property, We go buy gold, which you can now buy at Costco, which I think is great. You know, we go buy bitcoin, we go invest in high quality stocks, which we have the training to do, and inflation just keeps us floating along. But for the people that we employ to you know, to take care of our houses and our kids, and to teach school

and to do the plumbing and the electrical work. All the people who actually work in this economy, they're getting destroyed there. They're real wages keep going down at three to four percent a year, and that doesn't take long before you can't afford any kind of standal living. And so when societies do that, what happens. You see a huge uptick in gambling. You see that in America, the

enormous rise of online gambling is startling. You see a big increase in prostitution because people can't make a living in a you know, in a reputable way, so they go into that Look at the what's it called the Only Fans site where you have every college girl America taken off for clothes to make some bitcoin. And the other things that you see, of course, are just a general breakdown of law and order. You can't even go in a drug store anymore and buy deodor, and it's

all locked up. When or if ever are Americans going to say enough of this. We need to have sound money and have a return to a real legitimate free market system. You know, I don't know the answer to that question, but it didn't get me any time soon. Not nless people are willing to default on government debt.

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Oxford Gold Group slash free. That's Oxford Goldgroup slash free. So Porter, Actually, I want to know where can people go to follow your research more closely? Again, I'm launching a newsletter with market Wise this year, but you've already got so many great phyticals. But they want to see what Porter's thinking.

me out. Absolutely, We certainly love to have your listeners stuff. Come, come see what we're doing in our in our financial news letter.