April 10, 2025 • 48 mins
Krystal and Saagar discuss Trump admits to caving on tariffs, bond market bomb that forced Trump's hand, insider trading scandal.
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Speaker 1 (00:00):
Hey guys, Saga and Crystal here.
Speaker 2 (00:01):
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Speaker 3 (00:25):
We need your help to build the future of independent
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dot com. Good morning, everybody, Happy Thursday. Have an amazing
show for everybody today. What do we have, Crystal?
Speaker 4 (00:38):
Indeed we do.
Speaker 2 (00:38):
It looks like the cultural revolution is off that intellectuals
are going to get at least a reprieve from being
sent to the iPhone factory to screw in all of
the little little screw for ninety days temporarily. Anyway, of course,
we're going to cover a lot about the tariffs. Show
is not one hundred percent tariffs, but it's about ninety
percent tariffs. I would say we've got Joe Wisenthal coming
in to break down what Trump is doing, what it means,
(01:01):
market reaction, all of that good stuff. We've got some
pretty serious and I think pretty credible allegations of insider trading.
So we will break down for you the timeline and
the evidence and you can evaluate for yourself. We got
a bunch of you know, Republicans and administration officials.
Speaker 4 (01:17):
What they were saying.
Speaker 2 (01:18):
Before the pause or the roll back, what they're saying now.
Speaker 4 (01:22):
It's pretty extraordinary.
Speaker 2 (01:23):
The President himself being much more honest about the reason
that he decided to change course. Basically got freaked out
by the bond market, so he joined the Panicans. I
guess I'm really excited for this. We have Ryan Peterson,
he's the CEO of Flexport, coming on to talk about
also this terraf regime, what is going to mean. But
also more importantly, there's another change that's coming down the
(01:45):
pike that we briefly mentioned the other day that could
be incredibly significant and quite devastating to supply chains and
to global shipping. So really want to hear from him
on that. And then we've got a couple of updates
with regard to both immigration policy, social media accounts are
now going to be filtered for any sort of quote
unquote anti semitism before people are given student visas or
(02:09):
green card status, things like that. And also we have
a quite significant couple of court updates with regard to
the Alien Enemies Acts that wanted to follow up on
that since we had that segment with Peaceco breaking down
the Supreme Court.
Speaker 4 (02:20):
Ruling the other day.
Speaker 2 (02:22):
So to all of you guys who have been helping
us out this week amidst a lot of economic turmoil,
we have really really appreciated. We've seen a big spike
this week just because of interest in tariffs on what's
going on. So if you can become a premium member,
of course, we really appreciate it. If you can't do that,
totally get it. If you can like, if you can subscribe,
if you can share the videos, that helps us tremendously.
Speaker 1 (02:43):
Exactly right Breakingpoints dot com.
Speaker 3 (02:44):
And for the podcast listeners, we don't forget about you either.
As we said, the best thing you can do leave
a five star review or take the episode literally, just
share it with a friend. It's tremendously impactful. So let's
you go ahead and start with the tariffs, as you
said the White House. I'm sure some of you have
heard at the point a pause is on. Let's go
and put it up there on the screen. Quote based
on the lack of respect China has shown to the
(03:06):
world market, I am hereby raising the tariff charged to
China by the United States of America to one hundred
and twenty five percent effective immediately. That's a retaliation for
their eighty four percent tariff that was put into place.
There's still some big questions as to that one hundred
and twenty five percent tariff. Does it in addition to
the twenty percent tariff that we're there meaning would be
(03:27):
what is that one hundred and fifty five percent tariff?
Speaker 1 (03:30):
Seems to be possible, he says, But this is the
most important point.
Speaker 3 (03:33):
I have authorized a ninety day pause and substantially lowered
reciprocal tariff during this period of ten percent effective immediately,
he says, as a result of more than seventy five
countries that have called representatives of the United States to
express interest in negotiations. So immediately afterwards, there were a
lot of questions here did Trump cave? Did he Was
(03:53):
this his strategy all along? Was he a madman. Was
he bluffing? Did he have to convince people he was crazy?
Was it the art the deal?
Speaker 5 (04:01):
Well?
Speaker 1 (04:01):
Trump actually answered that for himself.
Speaker 3 (04:03):
He came out immediately in front steps of the White
House and he's like, yeah, I did it because people
were getting afraid.
Speaker 1 (04:10):
Let's take a lesson.
Speaker 6 (04:11):
Why you decided to put a ninety day pause.
Speaker 7 (04:14):
Well, I thought that people were jumping a little bit
out of line. They were getting yippie, you know, they
were getting a little bit yippy, a little bit afraid,
unlike these champions. Because we have a big job to do.
No other president would have done what I did. No
other president I know, the presidents, they wouldn't have done it.
And it had to be done. What was happening to
(04:35):
us on trade, not only with you know, if you
look at it, not only with China, but China is
by far the biggest abuser in history and others also.
But somebody had to do it. They had to stop
because it was not sustainable. Last year, China made one
trillion dollars off trade with the United States.
Speaker 6 (04:55):
It's not right. And now I've reversed it. It's for a.
Speaker 7 (04:59):
Short period of time, but we made two billion dollars.
We're making now two billion dollars a day, and somebody
had to do it. Roger actually said that Josh Schwab
was here a little while ago, one of the great
financial people, and he said he's been waiting for forty
years for somebody to do what I did over the
(05:19):
last month. Nothing's over yet, but we have a tremendous
amount of spirit from other countries, including China.
Speaker 6 (05:26):
China wants to make a deal. They just don't know
how quite to go about it.
Speaker 3 (05:29):
You know.
Speaker 6 (05:30):
It's one of those things that are not quite proud people.
Speaker 3 (05:34):
People are getting a little bit eppy. That's what the
president says. Yet, if you listen to his advisors, this
was the plan all along. Here's the Commerce Secretary, Howard
luck Nick. Nobody backed off. Absolutely, this was all part
of the plan.
Speaker 1 (05:45):
Let's take a listen.
Speaker 8 (05:47):
So Miss Secretary tonight, you can definitively say this was
not a walk back. This was not something that the
bond markets were cratering and you were worried about it.
You know that this is part of your plan. There's
a lot of folks saying and there were just mixed
messages that really left the markets jitterary.
Speaker 9 (06:05):
Donald Trump is the best negotiator that there is. He
understands how to do these things, and he gave these
were crystal clear instructions. No negotiating till two days ago.
He would be willing to negotiate, but broadly, and then
yesterday was I'll do bespoke, and bespoke that's what launched it.
I mean, every country wanted to come and talk to
(06:27):
us and what are we supposed to do? So Scott
and I went in and talked to him about what
do we do and how do we do it? And
I think this is where we are. So the President
made his decision. He truthed it out with Scott and
I in the room, just the three of us together,
and this is where we are. We just Scott vested,
myself and Ambassador Jameson Greer, who's our USTR, and just
(06:48):
have so much work to do with so many different countries.
But we've got to make fair deals for America. And
Donald Trump said, for the big countries, the lead negotiator
of those of those transactions is going to be Donald Trump.
He wants to do it, he wants to drive it.
And what could be more fun for Scott and I it.
Speaker 4 (07:07):
Was not a background what could be more fun Sager.
Speaker 3 (07:10):
Marcus Gonning itpie, And so Trump says, we're doing it
because people got afraid.
Speaker 1 (07:16):
Howard Ludning all part of the plan. You idiots never
read art of the deal.
Speaker 3 (07:21):
Yeah, there's lot a single scrap of evidence to support that.
And in reality, all of the talk from behind the
scenes was not only that he was not going to negotiate,
he didn't care about the markets. And then he comes
out and he just says it. He actually undermines all
of his big defenders. Yeah, that are in the media.
So before we get to the bond market thing, you
have anything you want to say, Well.
Speaker 2 (07:41):
Yeah, a couple of just pieces of reporting to add
to the context. There are apparently two big things. So
first of all, I don't know if you guys saw
this floating around, this interview that Jamie Diamond did with
Marie Barbiromo reporting, is that Trump watched that where he
said I think that we are going to be in
a recession because of these moves. Many other people had
already said this, but and it was like increasingly glaringly obvious.
(08:05):
And by the way, odds are still pretty decent that
we're going to end up in a recession. But we'll
put that aside and talk to Joe Wisenthal a little
bit more about that. But apparently that, for whatever reason,
had an impact on him. And then the real thing
was the bond markets and the Typically when you have
the stock market fall, you have a lot of people
fleeing and buying up treasury bonds because it's a flight
(08:28):
to safety, that's what they call it. The very opposite
thing was happening here. That freaked everybody out because it's
an indication that, first of all, things are so bad,
everyone's just having to liquidate everything to make margin calls
or keep their head above water. It's what an indication
of that. It's also an indication guess what, guys, maybe
the US isn't going to be the safe harbor anymore.
(08:49):
So when you have those factors, and then also think
about Trump as a real estate guy who is known
to use astronomical levels of debt, Well, guess what, but
your bank loans, the interest rate that you get on
that is going to be related to the treasury rate.
So he had a very long time, deep understanding of
(09:11):
how bad this would be for you know, real estate
developers or other businesses that want to borrow money from
the bank. Not to mention one of the eight d
chess theories of what was going on here is they're
crashing the economy in order to get the interest rates down.
The exact opposite thing is happening.
Speaker 4 (09:27):
So if you're going to.
Speaker 2 (09:28):
Have to roll this debt that the US has, there's
this big debt wall coming up, you're going to be
paying an even higher price because of these moves that
you're making. So in the end, he did join the
Panicans and was like, holy shit, this could be worse.
And one of the things that was reported, I can't
remember which outlet reported this, but he was like, you know,
I'm okay with a recession, but I was getting worried
(09:49):
that we might be in an actual depression, and so
he walks back from the edge. Now, to be clear,
there's still a very hefty terror.
Speaker 4 (09:56):
Regime in place.
Speaker 2 (09:57):
I mean, China's our number one trading partner, know, so
many of our consumer goods come from China. There is
an insanely high tariff one hundred and twenty five or
whatever the hell it is, forty percent one hundred and
forty percent on goods coming in from China. That alone
is insanely impactful. Then you still have ten percent tariffs
across the board. You know, if this is what he
(10:18):
had originally announced going out to the Rose Garden in
that speech, there would have been a massive market reaction
because it's actually worse than what was expected going into
that speech. But there's a relief because number one, just
you know, it's not as bad as it was. And
number two, because it showed that Trump could be moved
(10:40):
and wasn't just a total madman going for the next
great depress.
Speaker 1 (10:44):
Yes, that's right.
Speaker 3 (10:44):
That's an important point, and it actually gets to kind
of a market veto. Let's get into this for the
bond market before we bring in.
Speaker 1 (10:52):
Joe Wisenthal.
Speaker 3 (10:53):
Charles Gasprino over at Fox News really broke down the
scare in the bond market and why it ultimately forced
the White House is hand.
Speaker 1 (11:00):
Let's take a listen.
Speaker 5 (11:01):
I want to tell you right now that Donald Trump
out smarted the world. Trust me, I'm an American. I
support my president, but that's not really what happened here
from what I understand, and I know I'll get pushed back,
but here's what it is. First, off, we should point
out that one of the good things about this is
that Scott besson is finally in the White House. He's
finally leading this. I mean, up until a couple of
(11:23):
days ago, it was Lutnik, it was Peter Navarro, the
Commerce Secretary, the Trade Advisor, very much hawks now with
Scott Bessont, who believes in cutting deals as opposed to
not just putting these tariffs out there. And let's be
amercantilistic economy.
Speaker 1 (11:38):
That's number one.
Speaker 5 (11:39):
But number two, let's recall what happened overnight and from
what I understand, and I'm getting this from people that
are talking to the White House, what happened in the
bond market overnight, the spike in yields on the thirty
year and the ten year bond, which showed that people
were dumping our bonds. And who are those people dumping
our bonds? Japan, the biggest holder of bonds, was selling bonds.
(12:03):
That's what I'm getting from some very big money managers.
China maybe to some extent, but it was largely Japan
and others. If you have a mass sale of bonds,
that means people are losing confidence in the US economy.
On the ability to do deals with us, and from
what I understand, this is what forced the hand of
this ninety day reprieve. Now is it a good thing?
(12:26):
You know, are people coming to the table. Yeah, But
if you know, if you read between the lines or not,
even what Scott Besson said, we have no deals, right,
there's nobody that is really there saying this is what
we're going to do. And they paused it anyway. So
my thing that said, well, I'll give you this, there
is some art of the deal here. And by the way,
(12:46):
brilliant move by putting China in the corner. But that's
a whole separate thing because remember that's a very difficult negotiation.
Everybody else is a lot easier. They really want to
they do want to deal with us, whether they want
to be, you know, forced into really bad trade deals
on their end as a whole other negotiating story. But
make no mistake about it, you cannot divorce this decision
(13:08):
right here from what happened last night, which was you know,
I people focus on the stock market all the time.
It's the bond market and the sort of lending markets
that's the plumbing of the economy, and those markets were
imploding last night, and that's why we have a ninety
day freeze. Let's see if those markets improve. If someone
(13:29):
told me we had a decent treasury auction today, but
if you can't sell your treasures, guys, and people are
unloading your treasures, like Japan, which is I believe the
largest foreign holder after China.
Speaker 3 (13:41):
So as you guys can see there from Charles Gasprino's reporting,
the bond market is really what forced Donald Trump's hand.
Spooks to the United States Treasure sector who coming into this
had said one of the stated goals was to make
sure that the yield on these bonds was going to
go lower. That would have, of course, increase in the
yield would have made mortgages more expensive, it would have
made the debt servicing more expense. And it's one of
those where the massive size of that and the overall
(14:03):
financial impact was a major recessionary indicator. So very very
clear what went on here, h Donald Trump. This is
not ourt of the deal. This was straight up he
got panicked because of the bod market. And now we'll see,
well he admits it himself, yeah he so, I mean,
I'm not saying it.
Speaker 2 (14:18):
And it was funny because Gasper that was on Fox
Fox News or Fox Business was Fox News? Yeah, Fox News,
and you know it's in the midst of all this
like North Korea style propaganda about oh art of the
deal and this was the planel along whenever He's like, well,
not really based on reporting and now based on the
president z own words. So let's go and get to
Joe Wisenthal Bloomberg to break all of us down and
(14:38):
where we are and what might happen next.
Speaker 3 (14:43):
Very excited now to be joined by Joe Wisenthal of
the Odd Lots podcast over at Bloomberg.
Speaker 1 (14:47):
He's an all star.
Speaker 3 (14:48):
Him and his co host Tracy are incredible and we
highly recommend you all listen to them. Joe has been
making their rounds everywhere explaining to the people about what
the hell is going on, and we decided that we
had to have him on here to tell us specifically
about this whole bond market thing, which we're doing our
best to break down. Joe, let's take a listen to
what Donald Trump had to say about the bond market.
Speaker 1 (15:09):
Get your reaction and also in explanations. So let's take
a listenin the.
Speaker 10 (15:13):
Phone markets that persuaded you to reverse.
Speaker 6 (15:17):
I was watching the bond market. That bond market is
very tricky. I was watching it. But if you look at.
Speaker 7 (15:21):
It now, it's beautiful.
Speaker 6 (15:25):
The bond market right now is beautiful.
Speaker 7 (15:28):
But yeah, I saw last night where people were getting
a little queasy. I think everything had well. The big
move wasn't what I did today. The big move was
what I did on Liberation Day. We had Liberation Day
in America. Were liberated from all of the horrible deals that.
Speaker 6 (15:44):
Were made, all of the horrible trade deals that were made.
Speaker 7 (15:47):
And I was helped by people just like this senator,
congressman and friends, right, and we had great help in
the Senate. Of course, Republican senators have been amazing. They
still a doll and likewise in the House.
Speaker 3 (16:02):
So Joe Trump all but meeting there that the bond
markets are really what forced his hand.
Speaker 1 (16:07):
Can you explain specifically.
Speaker 3 (16:09):
About why that was so impactful for his decision making.
Speaker 11 (16:13):
Yeah, there's a lot of like I would say, sort
of exoticization of the bond market, particularly in media, and
people like to have these panises China's jumping bonds you response,
or Japan dumping bonds and response. It's not that complicated
really what was going on Tuesday night was extreme panic.
(16:33):
And in a state of extreme panic, what do you
do you think about. I got to pay my mortgage
at the end of the month, I got to pay
my cell phone bill, I have to pay my Bloomberg subscription,
and all of that stuff is denominated in dollars.
Speaker 10 (16:45):
Do you sell anything that's not dollars.
Speaker 11 (16:47):
You start selling stocks, you start selling gold, you start
selling bonds, even which are you know, essentially the safest
asset in the world, because you want are just those
liquid dollars to pay your bills. It doesn't help that
one of the stated goals of this administration outside and
everything else, was to lower yields, and so this was
the exact opposite going on. And I think if there's
probably one market that really resonates with Trump more than
(17:09):
the stock market, it's the bottom market. Because when your
real estate your whole, you know, you sort of like
live and die on your cost, to borrow at your
cost and capital, it became an untenable situation when you
saw those dynamic Maybe you can tolerate a hits of
the stock market, and which I'm actually kind of skeptical
that the people have the public would have put up
with very much longer, but it truly becomes untenable when
(17:31):
people start having to dump what is perceived as like
the second safest asset in the world. Where the safest
asset in the world, which is just over nine dollars.
Speaker 2 (17:39):
Got it, guys, can you put a six up on
the screen. I thought this was interesting chart showing that
now the midst of tariffs is now actually more tilted
towards consumer goods, which is just an overall reminder that
everyone's sort of acting like, okay, well that's over, but
there's still actually a very steep and almost unprecedented level
(18:02):
of tariffs that are hitting countries around the world, and
obviously the massive tariff on China in.
Speaker 4 (18:09):
And of itself is a huge deal.
Speaker 2 (18:12):
So can you help people understand what the reality is
now and what sort of potential impact it can have
on the real economy, and you know, your assessment of
what the markets have done and where they might be added.
Speaker 11 (18:26):
Yeah, look, I'm surprised that we had this huge stock
market rally yesterday after he pulled back from the brink
a little bit, because, as I mentioned again Tuesday night, panic, Look,
the reality is if you just go from now versus
sort of like pre Rose Garden speech, and you don't
pay attention to anything that happened. In the meantime, you
have stock futures that are significantly lower.
Speaker 10 (18:47):
So we've made a hit to the valuation of corporate America.
Rates are higher.
Speaker 11 (18:52):
Than they were, and the US economy or you know,
our imports are significantly more tariff than they were. Even
if you accept this theory that well, you know what
this is about this big strategy because we're going to isolate,
We're going to like box out China, We're going to.
Speaker 10 (19:07):
Make all these deals with all these countries that.
Speaker 11 (19:10):
Have lined up to avoid any aggressive reciprocal tariff. Even there,
we've actually started to drive a wedge between US and
all of those countries that we want to make a
deal within, including US, including our continental partners, which are
more higher tariff. So the fact that is the matter
that consumer prices will be hired. Now, how this speech
(19:31):
through to like CPI like actual inflation. I don't think
it's like totally obvious because if business is slowing, then
incomes are going to be Hiring is going to be slowing,
investment's going to be slowing. Maybe you don't actually get insallation,
but you certainly get less affordability of what people were
able to buy several weeks ago.
Speaker 10 (19:48):
I think that's the real key thing. The cost of.
Speaker 11 (19:50):
Doing business in the United States is now materially higher
than it was a week.
Speaker 3 (19:55):
One of the things, Joe, that you were constantly talking
about over the last week is there are there's a
lot of cope coming from MAGA influencers in the White House,
but the stock market is not the real economy.
Speaker 1 (20:06):
It has no connection.
Speaker 3 (20:08):
And I think you have such a good way of
articulating why that's just empirically not correct. And I want
people to also to understand you're not some Wall Street
explainer somebody.
Speaker 10 (20:17):
Yeah, you know, nobody more than you.
Speaker 3 (20:20):
In many respects, but as somebody's been covering this now,
yeah what twenty years, just explain that to people why
that's incorrect.
Speaker 11 (20:27):
I've always hated this term, that it's just a cliche
that probably some columnists once came, Oh, the stock market
is not the economy. The stock market matters in the
economy in various ways, and I'll just sort of run
through them. A lot of people own stocks, at least
more than half of the US is some sort of explosure.
So it's not just this niche rich thing to the
extent that it is skewed. And it is true that
(20:49):
the ownership of stocks is highly distributed to the ridge.
Speaker 10 (20:52):
It's also true that consumption.
Speaker 11 (20:53):
Is highly skewed, so you're gonna like hit parts of
the economy that are important drivers of consumption and ongoing activity.
But there is more than that, because also, like business
investments is in part going to be determined by the
cost and capital and the stock market. And when companies
see their stocks going up and they're being rewarded for
what they're doing, they do.
Speaker 10 (21:12):
More of it.
Speaker 1 (21:13):
Uh.
Speaker 11 (21:13):
And then when they're not and the stock market goes down,
they take that as a message, oh, we need.
Speaker 10 (21:18):
To cut workers, we need to expand. So it has
an impact on that.
Speaker 11 (21:21):
It has an impact on VC and early stage higher
because the dream of any startup is to either go
public or sell to a public company ultimately. And if
the if that IPO window is closed, or if those
public companies have diminished valuations, that reduces your possible exit.
That reduces the multiples and the valuations you're going to get.
In the early stage or early stage activity, and then
(21:42):
finally beyond that, I would just say that, like, no
one really talks or speaks up for the stockholder. And
I don't mean that in a facetious way like it's
going to think of the poor stockholder. I mean a
lot of people you know, like by stocks on Robinhood.
Speaker 10 (21:56):
And you know, it's so funny to me that.
Speaker 11 (21:58):
There's all this anxiety, particularly from Democrats, like how are
we going to like reach out to you know, young
brothers who listen to podcasts and stuff like that, but
they don't talk about them. They working families and the
costs of you know, buy stuff, all.
Speaker 10 (22:13):
Of which really matters. But a lot of you know,
young men who listen to podcasts have Robbinood accounts.
Speaker 11 (22:19):
And so there's there's sort of like ignorance of the
fact that a lot of people are in some way or.
Speaker 10 (22:23):
Another directly exposed to the stock market.
Speaker 11 (22:25):
Which is why I say they even setting aside the
bond market tell off that we saw over the last
couple of days before the blank, I don't think it's
like tenable to just let stocks fall apart like that
and not acknowledge how much that directly is going to
affect things, and how quickly it's going to affect things
both from a consumption and hiring.
Speaker 2 (22:44):
Stand what is your sense of what this is actually
all about? You know, because you get all these different explanations.
Speaker 4 (22:52):
Depends on the day.
Speaker 2 (22:53):
Sometimes the same person will say multiple different things. It's reindustrializing,
it's more round new, it's you know, it's a it's a.
Speaker 4 (22:59):
Go siating tactic.
Speaker 2 (23:01):
Actually, we want Republicans that one of their coked like
free trade type republicans like, oh, we're actually going to
try to get to a zero terraff resu. Yeah, that's
the real goal. I mean, what are you able to divine?
And by the way, another theory of what's going on
here is just like insider trading that you know, Trump
can make announcements and move the market and buy you know,
and if you're on the inside you can profit off
(23:23):
of that, and if you're not, then you don't. What
is your sense of what's actually going on here?
Speaker 10 (23:27):
Yeah?
Speaker 11 (23:27):
The insider trading theories of assign a level of coordination
internal coordination in the White House that I do not.
Then I think it's probably giving the White House too
much credit. You read those that reporting in the Wall
Street Journal or the New York Times.
Speaker 10 (23:43):
We're knowing even on the inside.
Speaker 11 (23:45):
Knew that there was going to be this pivot until
maybe ten minutes before, and so I, you know, I
do not think that the entire plan was like that
well crafted to like, okay, we're going to put the
word out among the insiders. All that being said, I
don't know, And I think this is part of what
the issue for the market is.
Speaker 10 (24:02):
You know, it's hard to know what the end goal is.
We all, what do we know.
Speaker 11 (24:05):
We know Trump has been a fan of tariffs for decades,
so that's a reality one possible. There seems to be
this cultural thing among a lot of influencers where they
just like think that manufacturing is like per se good
that'll be sort of rejuvenating for the nation. In some respective,
more people were working in the manufactured goods sector.
Speaker 10 (24:27):
What I find annoying about that take is this.
Speaker 11 (24:30):
Sort of uh, you know, covering the eyes of the
fact that we actually had a lot of factories built
in twenty twenty two to twenty twenty three, et cetera.
Speaker 10 (24:37):
A lot of this was already going on.
Speaker 11 (24:39):
In fact, it might even get worse of their terraf
regime if imported intermediate goods to build things actually get costlier,
so it could actually reverse it. And then the other
thing I'm wondering about afterwards is, you know, I used
to think that part of the goal here was like
it's important for the.
Speaker 10 (24:56):
US to match China on key.
Speaker 11 (24:59):
Manufactured or strategic goods, particularly related to high seed or
particularly related to things that go into weaponry. Now I'm
wondering if the goal is just to crush the Chinese economy,
which again is about the US China tension, but is different.
It's a little bit more overt and like the goal
is not to madge China or supersede China. The goal
(25:20):
is to actually do damage to a growing geopolitical ride.
Speaker 1 (25:23):
Yeah, it's certainly possible.
Speaker 3 (25:25):
One of the things that you and I have been
talking a lot about recently, Joe, is about this idea
of bringing manufacturing or jobs. But what you have consistently
pointed out is that since the imposition of tariffs, it
is the manufacturers themselves who are screaming about increasing costs.
So in any regime where there would be tariffs, what
sort of capital injection tax plan confidence with these people
(25:48):
have to have to actually.
Speaker 1 (25:49):
Wind up to the stated goal of the White House.
Speaker 3 (25:52):
And I think of many Americans who brings some certain
critical industry, manufacturing, et cetera back to here.
Speaker 1 (25:57):
We don't see that right now.
Speaker 11 (25:59):
Industrialization is insane insanely difficult. Most countries historically seem to
fail at these efforts. Where they seem to work, there
seems to be a sort of two things have to happen.
Speaker 10 (26:11):
You have some protection for.
Speaker 11 (26:14):
Domestic industry, and then you have to create some mechanism,
sorry for those companies to compete, like help in the
global marketplace, to prove that they're actually doing good things
rather than just taking a government money or rather than
just being protected and getting protectionism.
Speaker 10 (26:29):
And so in theory, what you.
Speaker 11 (26:30):
Would want to see is you'd want to see, Okay,
we're going to give you some degree of protection, either
in the form of tariffs, you're going to own the
US market, or export subsidies. But to continue to get
these things, you have to prove that you're doing the
best highest tech production and competing at the global level.
One way that you could theoretically do it, which I
don't know if there's any appetite for really, but I
(26:53):
would say invite VID and showing me to set up
car factories in you know, Georgia, Miss Sippy, et cetera.
And then you get twofold, you get that technology transfer
where they're like, okay, this is experienced people who know
how to build up a plan. And then you make
contenzloas on the Fords of the GMS compete in the
world's biggest auto market or maybe the second biggest auto market.
(27:13):
Now again some of the best players in the world,
force them to step up their game even further, and
then you actually can combine industrial policy with capitalist competition.
It's very hard to do. It's very hard to do politically.
You know, shareholders still love it. But if you're actually serious.
Speaker 10 (27:29):
About what we want to.
Speaker 11 (27:30):
Have a dynamic manufacturing industry, and I don't think we
want to have an un dynamic manufacturing industry because then
it's we're really just talking about assembly line jobs, right, Like,
if you're having an un dynamic manufacturing these are not
particularly desirable jobs. And I think again like people should
sort of, like, I don't know, stick up a little
bit for the laptop class. And remember, we are very
(27:51):
lucky to have a lot of employment in this country
that doesn't require back breaking labor that you can do
in a cool and air conditioned, comfortable office.
Speaker 10 (28:00):
These are not fandsakes.
Speaker 11 (28:01):
I feel very fortunate the many Americans to get to
work in an office instead of an assembly line.
Speaker 10 (28:05):
But if you want to.
Speaker 11 (28:06):
Bring back un dynamic on competitive manufacturing, you would bring
back a lot of pretty miserable jobs.
Speaker 2 (28:13):
Well, especially at a point in time when you know
the labor movement has been decimated. So you are not
talking about going back to the fifties. You are talking
about going back to the nineteen hundreds when you had
much less labor regulation and lower wages and no federal
child labor laws and things of that nature. I mean,
I'm being a little bit hyperbolic here, but the reality
is you're not going back to those sort of like
(28:35):
solid union middle class jobs that can support a whole
family and buy a house because also those things like
housing have become wildly more expensive. Healthcare, education, those things
have become wildly more expensive. Something else I wanted to
get you to weigh in on, Joe is, guys, can
we put a five up on the screen? People are
sharing this chart around Yesterday obviously was a big.
Speaker 4 (28:52):
Rebound in the market. One of the biggest gains.
Speaker 2 (28:57):
In the S and P History eighth best day in history.
When you go look at the other large games that
are on that list, and it's like, oh, nineteen thirty three,
nineteen twenty nine, nineteen thirty one, two thousand and eight,
and even you know, twenty twenty makes the list here
as well. So you know, I guess give people a
sense are we kind of out of the woods here
or One of the things that we've been asking the
(29:19):
question about as well is even when you roll back
the tariffs, yeah, we've got a ninety day pause, we're
going through We're going through all this again in ninety days.
Speaker 4 (29:28):
Like if you're a business owner.
Speaker 2 (29:30):
Yeah, this desis owners like, you can't how can you
make any decision? I would expect that most CEOs are
just going to kind of freeze in place and see
what the hell's going to shake down?
Speaker 11 (29:41):
Why would you take an your risk at least for
ninety days and look like, you know, this is the
Trump White House. Why would you want the drama to
end in ninety days? Why would you want to show
to end in ninety days? Well, yeah, like why at
least for the next three months, Why would you want
to make any major capital outlayer seriously think about expanding
(30:01):
headcounts in an environment like that. But yes, it's just
completely true that many of the biggest games have been
during periods of extreme market volatility and historically have proceeded
more ugliness. I notice even today some of the games
are holding particularly well.
Speaker 9 (30:16):
I know.
Speaker 11 (30:16):
Look, I don't like to get too worked up by
short term stuff. Again, I'm not surprised that we saw
that big rally yesterday, but there are reasons to think,
both on the financial side and the real economic side
that like the story isn't over it.
Speaker 3 (30:31):
Yeah, that's my last question for you, Joe, is as
you just alluded to ninety days, what does that? I mean,
that's an entire quarter of business activity. There's going to
be very little investment. There will be no major capital
allocation or decision. That seems to be the exact opposite
of what you want for a roaring economy. So how
is this all going to play out over the next
(30:52):
three months in our capital markets and our job markets? Yeah,
economic consumer confidence? What are people supposed to do?
Speaker 10 (31:00):
I mean I would actually I like, actually what I've.
Speaker 11 (31:01):
Been trying to talk to people for the last twelve hours,
So what is the counter argument, because the way you
like this articulating that didn't just seem so obvious to me.
So I'm like, what am I missing? Like where's the
growth impulse going to come from? And I mean that
like in a serious way, Like I'm like asking people,
like what is it? Because it sounds very bad at
a minimum.
Speaker 10 (31:19):
And I think there's.
Speaker 11 (31:19):
Something else too, which is that even if you take
Secretary of Vesson's comments yesterday, very seriously, Okay, now, loogal
China has been exposed as a bad actor, and we're
going to make these deals and we're going to like
isolate that.
Speaker 10 (31:31):
We're going to make these deals with our friends. We're
going to isolate them.
Speaker 11 (31:34):
This administration has spent the last several weeks insulting various friends,
threatening the sovereignty of Canada, threatening Denmark via the claims
that we're going to acclore Greenland, deeply insulting things that
have completely shaken some of the most you know, sort
of stable relationships that we've had to even setting aside
the tariff shop. This ninety day negotiation is coming in
(31:57):
an environment in which perceptions of us internationally, which.
Speaker 10 (32:01):
Normally I don't care a lot about let people dislike
us if.
Speaker 11 (32:05):
We want, But now we're at the point where we're
negotiating deals with their democratically, in many cases, elected leaders
who have to be accountable to people who now have
a much more negative impression of the United States, which
is not give me a lot of hope that in
these next ninety days we're going to have these big,
beautiful deal.
Speaker 1 (32:22):
Yeah.
Speaker 2 (32:22):
Well, not to mention, I think Sager said this the
other show, so I'm stealing from him. But China's fighting
a trade war against us. We're fighting a trade war
apparently against the whole planet.
Speaker 10 (32:33):
So ten percent terms are still in place.
Speaker 4 (32:36):
That's exactly right.
Speaker 2 (32:37):
That's exactly right, and God only knows what happens next week,
the week after that, ninety days from now, et cetera.
So Jill, thank you so much. Like I said, I know,
super busy. Thank you for making the time. I'm really
glad to have you on the show.
Speaker 3 (32:47):
Thanks brother, see you, everybody goes thanks side to the
Odd Lots podcast.
Speaker 1 (32:51):
Share it, listen to it with a friend. It's a
great show. See man.
Speaker 10 (32:54):
Thank you.
Speaker 2 (32:58):
All right, So let's talk a little bit about the
time timeline of what unfolded yesterday. And these pretty significant
questions about who might have had some inside knowledge here
and been into a position to benefit from the massive
market spike that came after Trump's announcement of this tariff rollback.
Speaker 4 (33:15):
So let's put this up on the screen.
Speaker 2 (33:17):
Early in the day, he posted this on true Social
this is a great time to buy DJT now. Apparently,
according to the reporting, at least at this point he
hadn't necessarily decided what he was going to do.
Speaker 4 (33:30):
But I mean, who knows, right, who knows?
Speaker 2 (33:32):
So he posts this, okay, and then of course later
on in the day he makes his announcement. Even before this,
there were some questions about whether he was just like
screwing with the market to benefit the people around him.
And I'm not talking about fringe internet figures or whatever.
Even on CNBC they were raising questions about whether or
(33:55):
not this was part of what was going on.
Speaker 4 (33:57):
Let's take a listen to that.
Speaker 12 (33:58):
Given what the government's been doing and this administration has
been doing, it would not shock me, and I hate
to speculate, if we were to find out that a
whole bunch of people who work in Washington as our
elected leaders, one way or the other, ultimately sold stocks
last week or potentially worse than that short.
Speaker 1 (34:15):
Of the market.
Speaker 4 (34:16):
So Andrew ross Orkin there, that's.
Speaker 1 (34:19):
A big deal.
Speaker 3 (34:19):
We should explain that because people don't release it. Like
Andrew ross Storkin is the guy who wrote Too Big
to Fail. Andrew ross Storkin is the voice of like
the the what between Walls. He's like the wit Wall
Street whisper he wrote Too Big to Fail.
Speaker 1 (34:33):
He is.
Speaker 3 (34:35):
I mean, I'm having trouble describing him to a lay person.
I guess what the Morning Joe of Financial News, like
everybody hangs on his word. He's got the best reporting.
He does the New York Times deal Book. You can
get an interview, he can get an interview with every
billionaire on the I remember talking to a guy who
worked for a billionaire and he goes, I don't understand
this Andrew ross Storkin guy, He's like, he goes around
(34:56):
all of us and he gets to these people's phones.
He's like, he doesn't even have a phone number. He
changes his phone number every month. Well, that's the type
of person we're talking about.
Speaker 2 (35:03):
And if he says it, there are a lot of
people on Wall Street who are saying because these are
people who think in terms of market movements and who.
Speaker 4 (35:12):
Stands to benefit.
Speaker 2 (35:13):
So when you have one man who is and you know,
with this very small, cloistered group of advisors who are
making these extraordinary seat of the pants announcements that are
sending the entire market into total meltdown or reviving it
with a new truth, you have to ask the question
(35:34):
who knew and who was in a position to place
the trades at the right time. And we're going to
show you in a minute there. I mean, there is
some evidence based on market moves to back up some
of these theories. It wasn't just Andrew ross Orkin on
CNBC either, though. After the Trump announcement, Commerce Secretary Howard
Lutnik is on CNBC and the host comes right up
(35:57):
to the break of asking him flat out basically, was
this is Trump just manipulating markets and trying to inside
or trade here.
Speaker 4 (36:04):
Let's take a listen to how that went down.
Speaker 13 (36:06):
He also seems to be a great stock pundit, mister secretary.
Earlier this morning, before the past he put out a
message saying it's a great time to buy and here
we are here, we are much higher.
Speaker 9 (36:17):
I know is bet on Donald Trump? Every time I
know better.
Speaker 13 (36:21):
He also wrote dj T, which is a ticker for
for his media company.
Speaker 9 (36:25):
No, no, no, every every text, every text he sends
to me, that's his name.
Speaker 13 (36:29):
But that was a great time to buy the market, right, I.
Speaker 1 (36:31):
Mean, on can Donald look?
Speaker 9 (36:34):
Donald Donald Trump understands that it's America is the greatest country.
All right, we are the greatest country, and we have
the capacity for incredible greatness. But someone needs to take
the shackles off, someone needs to let our carn our
farmers sell corn to India.
Speaker 2 (36:51):
So she tiptoes right up to but this doesn't quite
come out and say she really should have though, actually
go ahead and put C five up on the screen.
This is from our friend Unusual Whales, who pointed out, okay,
interesting before Trump posted that now would be a great
time to buy. On true social you had traders opening
(37:12):
up these certain type of calls.
Speaker 4 (37:14):
These are exchange traded.
Speaker 2 (37:16):
Funds that track either the Nasdaq or the S and
P five hundred. So, just to put this in layman's terms,
this means you see the spike, you had a huge
jump in somebody who was betting that these markets were
going to go up significantly, and on one of these
(37:36):
in particular, they were betting it was like a just
a day was the timeframe. So they're basically saying, like,
I think this market is going to jump up like
crazy today, and these are highly leveraged, So this is
a very very risky bet, especially to make in the
midst of a massive market meltdown.
Speaker 1 (37:56):
You can go to actual zero.
Speaker 3 (37:57):
It's not like buying the S and P five hundred
exactly exactly.
Speaker 2 (38:00):
So right before the news he says, someone opened up
five hundred and nine of these calls expiring today, and
those calls are up twenty one hundred percent in a
single hour. So if you happened to be in on
what was gonna unfold during the day, this would be
exactly the type of market move.
Speaker 1 (38:22):
That you would mis Yes.
Speaker 3 (38:23):
And for example, billionaire Charles Schwab was literally in the
Oval office around the time that this announcement was made.
Here's Trump actually bragging about it on camera while he's
in the Oval office, pointing to Charles Schwab and saying,
this guy made two point five billion today.
Speaker 1 (38:38):
Take a listen, it's not just.
Speaker 10 (38:50):
Financial wow.
Speaker 3 (38:52):
Just say look, I mean, as Joe said, was there
really a concerted effort.
Speaker 1 (38:56):
I don't know.
Speaker 3 (38:57):
Listen, if you're Charles you hear this going on and
you don't get on the phone, you'll call your broker.
You're an idiot, right, those like why wouldn't you do it?
Or elected officials let's say Trump, read in John Thune
or any of these other folks. We don't know if
any of that is true, or Speaker Mike Johnson. We
know from unusual wills and others. These people are trading
all the time. And if any of this sounds ridiculous,
(39:21):
I mean, let's not point to the fact that during
the market crash, remember Senator Richard Burr.
Speaker 1 (39:26):
Was under federal investigation.
Speaker 3 (39:27):
They seized his cell phone for insider trading allegations and
even the appearance of corruption.
Speaker 1 (39:33):
Don't forget.
Speaker 3 (39:33):
Also, we will not even get the disclosures from members
of Congress for months now before we even know if
they were able to trade on this information, let alone
White House officials. The way that they're reporting all works,
it's going to take forever for this to be able
to come out.
Speaker 1 (39:47):
So there is zero transparency.
Speaker 4 (39:49):
If they even bother to complain.
Speaker 3 (39:51):
Yeah, right, even if they do, and actually a lot don't,
there's a lot of these exclusions and things that you
can get. Even the form is ridiculous. It's like, I'm
worth between twelve and fifty million. You're like, okay, great,
thank you for the disclosure there, Yes, right, exactly, Yeah,
I don't know anything about this, but my point just
broadly is that if you look at the data, it
is obvious something happened.
Speaker 14 (40:12):
Here.
Speaker 1 (40:12):
We have, for example C seven.
Speaker 3 (40:14):
Please you can see exactly similar spike in the graph
that unusual Whales found. This is increase of over ten
percent on call to options ten minutes before the announcement.
Somebody was making a huge bet right before that.
Speaker 2 (40:29):
This all this was ten minutes before Trump says guess
what guys were switching switching it up ten percent tariffs
ninety day pause, ten minutes before that person. They just
must be a market genius.
Speaker 3 (40:44):
Acre maybe market look theoretically possible, Like they were like, oh,
I really think Trump is going to make a big
move today, and so middle of the day right around
and I'm like, yeah, I don't know, No, no, nobody's
got really that. I mean, remember that whole October seventh
insight that we had and we covered here on the show.
Speaker 1 (41:00):
To this day.
Speaker 3 (41:00):
Nobody really knows who shorted the market there immediately before
what we like, shorted on October sixth and got miraculously lucky.
There are all these apocryphal tales about nine to eleven
as well. And look, we can just simply add this
one to the list. The data is clear somebody did
make it, So SEC and IRS will know exactly who
this person is.
Speaker 1 (41:20):
It would be nice. Yeah, at the very least, just
do an investigation.
Speaker 4 (41:24):
Sir, Trump's SEC will be all over it.
Speaker 3 (41:27):
Well, this is the problem with the data is that
this stuff, I mean dramatically undermines confidence in the overall system,
as it should because everybody's like, uh, I'm sitting at home,
like let's say you're one of the Joe just stood
up for the stockholder, and you're just like average Joe,
like Joe, and you're at home and you're watching CNBC
and you're just sitting there panicking or thinking. And I
(41:48):
read a horrible article in the Wall Street Journal, And
this is a good example of how stock crashes can
be very impactful. Of people who have mandatory withdrawals for
their children's five twenty nine plans. These are people who
are responsibly saved and whose kid must go to college
in the fall, and they're like, yeah, now it's down
twenty percent and I may need to take out a
long that's horrible, you know. And yes, they've been investing
(42:12):
over an eighteen year period. They've definitely made a killing
on the first half, But what about the last couple
of years that they put their money in, or maybe
the money in that they just put in. Now they've
actually taken a net loss, you know, on that. That
is exactly the type of thing behavior savings and all
that otherwise where there are real consequences, not to even
mention all the retirees who have mandatory withdrawals from their
(42:32):
four to one k's right now.
Speaker 4 (42:33):
That's right. Well, think about it this way.
Speaker 2 (42:35):
So yesterday was the largest gain I believe in history
for billionaires, just like astronomical amounts of money made.
Speaker 3 (42:42):
You mean from law, I guess technically, yeah, we're still
down to it time, okay.
Speaker 2 (42:46):
Yeah, But if you were in a position to know
that this news was coming out and you were in
a position to make those moves, you if you're like
you know, a union with a pension fund that you're running,
you weren't on the inside, and you're talking about that
is to benefit ordinary working class people, so you are
still down right some people were in a position to
(43:08):
make a killing. Apparently Charles schwas made billions of dollars yesterday.
That is a direct upward transfer of wealth from retail,
from pensions, from you know, all of these groups that
you know are just sort of like normal regular people.
Speaker 14 (43:27):
What is this.
Speaker 2 (43:28):
Sixty percent of Americans have some exposure to the stock mortgage.
So that's why these stories really Matt. I mean, when
we think about we covered so much of the insider
trading allegations with Congress Nancy Pelosi and all of these people,
and she would be in a position to benefit from
the knowledge that she has of what Congress is up
to and what particular companies stand to benefit. That is
(43:51):
much more indirect, frankly than I mean vastly more indirect
than Trump literally being able to truth out a total
new global trading regime. And lord knows, these people have
no scruples. I mean, Trump did a pump and dump
with his shitcoin and his wife's shitcoin. Like they're not
ethical people. They are happy to cash in to their benefit.
(44:13):
He certainly is, when you know he has knowledge that
can benefit him, so frankly, I'd be shocked.
Speaker 4 (44:19):
The big question is whether that's the whole purpose of
what they're up to here.
Speaker 2 (44:22):
And you know, some people are looking at this and
are like, I can't really divine any other purpose that
makes any sense here.
Speaker 4 (44:29):
So it is possible that the whole point.
Speaker 2 (44:32):
Is just a sort of like global economic wide pump
and dump. And if that is the goal, well so
far they've been phenomenally successful for that. There is one
person that does not seem to have been on the
inside in terms of knowing what was going on, and
that's the US Trade Representative Jameson Greer, who also that's
the person who Emily had floated might have been mistaken
(44:52):
for Jeffrey.
Speaker 4 (44:53):
Goldberg, but I think it was. I think it might.
I saw that it might have been someone different.
Speaker 2 (44:56):
But in any case, maybe he was supposed to be
on the signal chat letting everybody know, and instead Jeffrey
Goldberg gotta instead sorry, was testifying before Congress when and
learned in real time what was going on with this,
and the Democratic member who was questioning him when he
finds out, he also immediately goes to the place of
like what the hell are you people doing? How do
(45:17):
you you're in the US Trade rep How do you
not know what's going on and who does and what
billionaire are standing to benefit here?
Speaker 4 (45:23):
Let's take a.
Speaker 2 (45:24):
Listen to how that went, Dad, This is C four guys,
let's go ahead and play that.
Speaker 15 (45:27):
Are you aware that the terrors have been paused?
Speaker 14 (45:30):
I am yes.
Speaker 15 (45:31):
When were you made aware of that?
Speaker 9 (45:34):
Well?
Speaker 14 (45:34):
I understood the decision was made a few minutes ago.
Speaker 16 (45:36):
Sitting here under discussion, sitting here under discussion.
Speaker 15 (45:40):
So did you know that this was under discussion?
Speaker 16 (45:42):
And why did you not include that as part of
your opening remarks?
Speaker 14 (45:46):
So typically, what I don't do is divulge the contents
of my discussions.
Speaker 15 (45:50):
What are the details of the pause?
Speaker 14 (45:52):
Well, my understanding is that because so many countries have
decided not to retaliate, we're going to have about ninety
days No.
Speaker 16 (46:01):
Excuse me, you we are the China increase their tariffs
on the United States.
Speaker 15 (46:07):
Trump blinked.
Speaker 14 (46:10):
What's the blink? Sir?
Speaker 15 (46:12):
What do you know about this pause? What are the
details of it?
Speaker 14 (46:16):
Well, the details, as I understand it, is that China
continues to retaliate. Other countries didn't retaliate. The President two
or three days ago said we wanted to negotiate with
those countries that ask for that, ask for meetings. That's
what we're doing.
Speaker 16 (46:29):
What are the wed How long is the pause? How
many days? How many weeks?
Speaker 14 (46:33):
I understand it's ninety days. I haven't spoken to the
present since I.
Speaker 16 (46:36):
So the Trade Representative hasn't spoken to the President of
the United States about a global reordering of trade?
Speaker 14 (46:45):
Yes, I have, and yet hearing with you so.
Speaker 15 (46:47):
But yet he announced it on a tweet. WTF who's
in charge?
Speaker 14 (46:53):
The President of United States is in charge?
Speaker 16 (46:54):
And what do you know about those details?
Speaker 4 (47:01):
I don't know what I do.
Speaker 3 (47:02):
You know why that's nuts is because he Jamison Greer.
Not only is he the US Trade Representative, that's a
cabinet level official who's technically supposed to be in charge
of a lot of this stuff. But even more, you know,
when you implement the tariffs, he's the guy who writes
all the stuff. He did the formula, you know, all
the justification of the formula.
Speaker 1 (47:21):
It was him. That's his office. That's what their job
is supposed to be.
Speaker 3 (47:25):
They're supposed to work with customs and border patrol and
all of these other agencies to actually implement these tariffs.
So it's pretty insane that he not only was not
in the room, he wasn't even consulted, and he learned
about it by a truth law. He's testifying live before
the United States Congress. And the thing is, if you
look at his opening statement, the entire opening statement is
a justification of the terriff for shame. And then he
has to be like, actually, it's very smart. What are
(47:45):
we doing?
Speaker 4 (47:46):
Insane and insanity, it's part of the deal.
Hey guys, Saga and Crystal here.
Speaker 2 (00:01):
Independent media just played a truly massive role in this election,
and we are so excited about what that means for
the future of this show.
Speaker 3 (00:08):
This is the only place where you can find honest
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Speaker 3 (00:25):
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 Thursday. Have an amazing
show for everybody today. What do we have, Crystal?
Speaker 4 (00:38):
Indeed we do.
Speaker 2 (00:38):
It looks like the cultural revolution is off that intellectuals
are going to get at least a reprieve from being
sent to the iPhone factory to screw in all of
the little little screw for ninety days temporarily. Anyway, of course,
we're going to cover a lot about the tariffs. Show
is not one hundred percent tariffs, but it's about ninety
percent tariffs. I would say we've got Joe Wisenthal coming
in to break down what Trump is doing, what it means,
(01:01):
market reaction, all of that good stuff. We've got some
pretty serious and I think pretty credible allegations of insider trading.
So we will break down for you the timeline and
the evidence and you can evaluate for yourself. We got
a bunch of you know, Republicans and administration officials.
Speaker 4 (01:17):
What they were saying.
Speaker 2 (01:18):
Before the pause or the roll back, what they're saying now.
Speaker 4 (01:22):
It's pretty extraordinary.
Speaker 2 (01:23):
The President himself being much more honest about the reason
that he decided to change course. Basically got freaked out
by the bond market, so he joined the Panicans. I
guess I'm really excited for this. We have Ryan Peterson,
he's the CEO of Flexport, coming on to talk about
also this terraf regime, what is going to mean. But
also more importantly, there's another change that's coming down the
(01:45):
pike that we briefly mentioned the other day that could
be incredibly significant and quite devastating to supply chains and
to global shipping. So really want to hear from him
on that. And then we've got a couple of updates
with regard to both immigration policy, social media accounts are
now going to be filtered for any sort of quote
unquote anti semitism before people are given student visas or
(02:09):
green card status, things like that. And also we have
a quite significant couple of court updates with regard to
the Alien Enemies Acts that wanted to follow up on
that since we had that segment with Peaceco breaking down
the Supreme Court.
Speaker 4 (02:20):
Ruling the other day.
Speaker 2 (02:22):
So to all of you guys who have been helping
us out this week amidst a lot of economic turmoil,
we have really really appreciated. We've seen a big spike
this week just because of interest in tariffs on what's
going on. So if you can become a premium member,
of course, we really appreciate it. If you can't do that,
totally get it. If you can like, if you can subscribe,
if you can share the videos, that helps us tremendously.
Speaker 1 (02:43):
Exactly right Breakingpoints dot com.
Speaker 3 (02:44):
And for the podcast listeners, we don't forget about you either.
As we said, the best thing you can do leave
a five star review or take the episode literally, just
share it with a friend. It's tremendously impactful. So let's
you go ahead and start with the tariffs, as you
said the White House. I'm sure some of you have
heard at the point a pause is on. Let's go
and put it up there on the screen. Quote based
on the lack of respect China has shown to the
(03:06):
world market, I am hereby raising the tariff charged to
China by the United States of America to one hundred
and twenty five percent effective immediately. That's a retaliation for
their eighty four percent tariff that was put into place.
There's still some big questions as to that one hundred
and twenty five percent tariff. Does it in addition to
the twenty percent tariff that we're there meaning would be
(03:27):
what is that one hundred and fifty five percent tariff?
Speaker 1 (03:30):
Seems to be possible, he says, But this is the
most important point.
Speaker 3 (03:33):
I have authorized a ninety day pause and substantially lowered
reciprocal tariff during this period of ten percent effective immediately,
he says, as a result of more than seventy five
countries that have called representatives of the United States to
express interest in negotiations. So immediately afterwards, there were a
lot of questions here did Trump cave? Did he Was
(03:53):
this his strategy all along? Was he a madman. Was
he bluffing? Did he have to convince people he was crazy?
Was it the art the deal?
Speaker 5 (04:01):
Well?
Speaker 1 (04:01):
Trump actually answered that for himself.
Speaker 3 (04:03):
He came out immediately in front steps of the White
House and he's like, yeah, I did it because people
were getting afraid.
Speaker 1 (04:10):
Let's take a lesson.
Speaker 6 (04:11):
Why you decided to put a ninety day pause.
Speaker 7 (04:14):
Well, I thought that people were jumping a little bit
out of line. They were getting yippie, you know, they
were getting a little bit yippy, a little bit afraid,
unlike these champions. Because we have a big job to do.
No other president would have done what I did. No
other president I know, the presidents, they wouldn't have done it.
And it had to be done. What was happening to
(04:35):
us on trade, not only with you know, if you
look at it, not only with China, but China is
by far the biggest abuser in history and others also.
But somebody had to do it. They had to stop
because it was not sustainable. Last year, China made one
trillion dollars off trade with the United States.
Speaker 6 (04:55):
It's not right. And now I've reversed it. It's for a.
Speaker 7 (04:59):
Short period of time, but we made two billion dollars.
We're making now two billion dollars a day, and somebody
had to do it. Roger actually said that Josh Schwab
was here a little while ago, one of the great
financial people, and he said he's been waiting for forty
years for somebody to do what I did over the
(05:19):
last month. Nothing's over yet, but we have a tremendous
amount of spirit from other countries, including China.
Speaker 6 (05:26):
China wants to make a deal. They just don't know
how quite to go about it.
Speaker 3 (05:29):
You know.
Speaker 6 (05:30):
It's one of those things that are not quite proud people.
Speaker 3 (05:34):
People are getting a little bit eppy. That's what the
president says. Yet, if you listen to his advisors, this
was the plan all along. Here's the Commerce Secretary, Howard
luck Nick. Nobody backed off. Absolutely, this was all part
of the plan.
Speaker 1 (05:45):
Let's take a listen.
Speaker 8 (05:47):
So Miss Secretary tonight, you can definitively say this was
not a walk back. This was not something that the
bond markets were cratering and you were worried about it.
You know that this is part of your plan. There's
a lot of folks saying and there were just mixed
messages that really left the markets jitterary.
Speaker 9 (06:05):
Donald Trump is the best negotiator that there is. He
understands how to do these things, and he gave these
were crystal clear instructions. No negotiating till two days ago.
He would be willing to negotiate, but broadly, and then
yesterday was I'll do bespoke, and bespoke that's what launched it.
I mean, every country wanted to come and talk to
(06:27):
us and what are we supposed to do? So Scott
and I went in and talked to him about what
do we do and how do we do it? And
I think this is where we are. So the President
made his decision. He truthed it out with Scott and
I in the room, just the three of us together,
and this is where we are. We just Scott vested,
myself and Ambassador Jameson Greer, who's our USTR, and just
(06:48):
have so much work to do with so many different countries.
But we've got to make fair deals for America. And
Donald Trump said, for the big countries, the lead negotiator
of those of those transactions is going to be Donald Trump.
He wants to do it, he wants to drive it.
And what could be more fun for Scott and I it.
Speaker 4 (07:07):
Was not a background what could be more fun Sager.
Speaker 3 (07:10):
Marcus Gonning itpie, And so Trump says, we're doing it
because people got afraid.
Speaker 1 (07:16):
Howard Ludning all part of the plan. You idiots never
read art of the deal.
Speaker 3 (07:21):
Yeah, there's lot a single scrap of evidence to support that.
And in reality, all of the talk from behind the
scenes was not only that he was not going to negotiate,
he didn't care about the markets. And then he comes
out and he just says it. He actually undermines all
of his big defenders. Yeah, that are in the media.
So before we get to the bond market thing, you
have anything you want to say, Well.
Speaker 2 (07:41):
Yeah, a couple of just pieces of reporting to add
to the context. There are apparently two big things. So
first of all, I don't know if you guys saw
this floating around, this interview that Jamie Diamond did with
Marie Barbiromo reporting, is that Trump watched that where he
said I think that we are going to be in
a recession because of these moves. Many other people had
already said this, but and it was like increasingly glaringly obvious.
(08:05):
And by the way, odds are still pretty decent that
we're going to end up in a recession. But we'll
put that aside and talk to Joe Wisenthal a little
bit more about that. But apparently that, for whatever reason,
had an impact on him. And then the real thing
was the bond markets and the Typically when you have
the stock market fall, you have a lot of people
fleeing and buying up treasury bonds because it's a flight
(08:28):
to safety, that's what they call it. The very opposite
thing was happening here. That freaked everybody out because it's
an indication that, first of all, things are so bad,
everyone's just having to liquidate everything to make margin calls
or keep their head above water. It's what an indication
of that. It's also an indication guess what, guys, maybe
the US isn't going to be the safe harbor anymore.
(08:49):
So when you have those factors, and then also think
about Trump as a real estate guy who is known
to use astronomical levels of debt, Well, guess what, but
your bank loans, the interest rate that you get on
that is going to be related to the treasury rate.
So he had a very long time, deep understanding of
(09:11):
how bad this would be for you know, real estate
developers or other businesses that want to borrow money from
the bank. Not to mention one of the eight d
chess theories of what was going on here is they're
crashing the economy in order to get the interest rates down.
The exact opposite thing is happening.
Speaker 4 (09:27):
So if you're going to.
Speaker 2 (09:28):
Have to roll this debt that the US has, there's
this big debt wall coming up, you're going to be
paying an even higher price because of these moves that
you're making. So in the end, he did join the
Panicans and was like, holy shit, this could be worse.
And one of the things that was reported, I can't
remember which outlet reported this, but he was like, you know,
I'm okay with a recession, but I was getting worried
(09:49):
that we might be in an actual depression, and so
he walks back from the edge. Now, to be clear,
there's still a very hefty terror.
Speaker 4 (09:56):
Regime in place.
Speaker 2 (09:57):
I mean, China's our number one trading partner, know, so
many of our consumer goods come from China. There is
an insanely high tariff one hundred and twenty five or
whatever the hell it is, forty percent one hundred and
forty percent on goods coming in from China. That alone
is insanely impactful. Then you still have ten percent tariffs
across the board. You know, if this is what he
(10:18):
had originally announced going out to the Rose Garden in
that speech, there would have been a massive market reaction
because it's actually worse than what was expected going into
that speech. But there's a relief because number one, just
you know, it's not as bad as it was. And
number two, because it showed that Trump could be moved
(10:40):
and wasn't just a total madman going for the next
great depress.
Speaker 1 (10:44):
Yes, that's right.
Speaker 3 (10:44):
That's an important point, and it actually gets to kind
of a market veto. Let's get into this for the
bond market before we bring in.
Speaker 1 (10:52):
Joe Wisenthal.
Speaker 3 (10:53):
Charles Gasprino over at Fox News really broke down the
scare in the bond market and why it ultimately forced
the White House is hand.
Speaker 1 (11:00):
Let's take a listen.
Speaker 5 (11:01):
I want to tell you right now that Donald Trump
out smarted the world. Trust me, I'm an American. I
support my president, but that's not really what happened here
from what I understand, and I know I'll get pushed back,
but here's what it is. First, off, we should point
out that one of the good things about this is
that Scott besson is finally in the White House. He's
finally leading this. I mean, up until a couple of
(11:23):
days ago, it was Lutnik, it was Peter Navarro, the
Commerce Secretary, the Trade Advisor, very much hawks now with
Scott Bessont, who believes in cutting deals as opposed to
not just putting these tariffs out there. And let's be
amercantilistic economy.
Speaker 1 (11:38):
That's number one.
Speaker 5 (11:39):
But number two, let's recall what happened overnight and from
what I understand, and I'm getting this from people that
are talking to the White House, what happened in the
bond market overnight, the spike in yields on the thirty
year and the ten year bond, which showed that people
were dumping our bonds. And who are those people dumping
our bonds? Japan, the biggest holder of bonds, was selling bonds.
(12:03):
That's what I'm getting from some very big money managers.
China maybe to some extent, but it was largely Japan
and others. If you have a mass sale of bonds,
that means people are losing confidence in the US economy.
On the ability to do deals with us, and from
what I understand, this is what forced the hand of
this ninety day reprieve. Now is it a good thing?
(12:26):
You know, are people coming to the table. Yeah, But
if you know, if you read between the lines or not,
even what Scott Besson said, we have no deals, right,
there's nobody that is really there saying this is what
we're going to do. And they paused it anyway. So
my thing that said, well, I'll give you this, there
is some art of the deal here. And by the way,
(12:46):
brilliant move by putting China in the corner. But that's
a whole separate thing because remember that's a very difficult negotiation.
Everybody else is a lot easier. They really want to
they do want to deal with us, whether they want
to be, you know, forced into really bad trade deals
on their end as a whole other negotiating story. But
make no mistake about it, you cannot divorce this decision
(13:08):
right here from what happened last night, which was you know,
I people focus on the stock market all the time.
It's the bond market and the sort of lending markets
that's the plumbing of the economy, and those markets were
imploding last night, and that's why we have a ninety
day freeze. Let's see if those markets improve. If someone
(13:29):
told me we had a decent treasury auction today, but
if you can't sell your treasures, guys, and people are
unloading your treasures, like Japan, which is I believe the
largest foreign holder after China.
Speaker 3 (13:41):
So as you guys can see there from Charles Gasprino's reporting,
the bond market is really what forced Donald Trump's hand.
Spooks to the United States Treasure sector who coming into this
had said one of the stated goals was to make
sure that the yield on these bonds was going to
go lower. That would have, of course, increase in the
yield would have made mortgages more expensive, it would have
made the debt servicing more expense. And it's one of
those where the massive size of that and the overall
(14:03):
financial impact was a major recessionary indicator. So very very
clear what went on here, h Donald Trump. This is
not ourt of the deal. This was straight up he
got panicked because of the bod market. And now we'll see,
well he admits it himself, yeah he so, I mean,
I'm not saying it.
Speaker 2 (14:18):
And it was funny because Gasper that was on Fox
Fox News or Fox Business was Fox News? Yeah, Fox News,
and you know it's in the midst of all this
like North Korea style propaganda about oh art of the
deal and this was the planel along whenever He's like, well,
not really based on reporting and now based on the
president z own words. So let's go and get to
Joe Wisenthal Bloomberg to break all of us down and
(14:38):
where we are and what might happen next.
Speaker 3 (14:43):
Very excited now to be joined by Joe Wisenthal of
the Odd Lots podcast over at Bloomberg.
Speaker 1 (14:47):
He's an all star.
Speaker 3 (14:48):
Him and his co host Tracy are incredible and we
highly recommend you all listen to them. Joe has been
making their rounds everywhere explaining to the people about what
the hell is going on, and we decided that we
had to have him on here to tell us specifically
about this whole bond market thing, which we're doing our
best to break down. Joe, let's take a listen to
what Donald Trump had to say about the bond market.
Speaker 1 (15:09):
Get your reaction and also in explanations. So let's take
a listenin the.
Speaker 10 (15:13):
Phone markets that persuaded you to reverse.
Speaker 6 (15:17):
I was watching the bond market. That bond market is
very tricky. I was watching it. But if you look at.
Speaker 7 (15:21):
It now, it's beautiful.
Speaker 6 (15:25):
The bond market right now is beautiful.
Speaker 7 (15:28):
But yeah, I saw last night where people were getting
a little queasy. I think everything had well. The big
move wasn't what I did today. The big move was
what I did on Liberation Day. We had Liberation Day
in America. Were liberated from all of the horrible deals that.
Speaker 6 (15:44):
Were made, all of the horrible trade deals that were made.
Speaker 7 (15:47):
And I was helped by people just like this senator,
congressman and friends, right, and we had great help in
the Senate. Of course, Republican senators have been amazing. They
still a doll and likewise in the House.
Speaker 3 (16:02):
So Joe Trump all but meeting there that the bond
markets are really what forced his hand.
Speaker 1 (16:07):
Can you explain specifically.
Speaker 3 (16:09):
About why that was so impactful for his decision making.
Speaker 11 (16:13):
Yeah, there's a lot of like I would say, sort
of exoticization of the bond market, particularly in media, and
people like to have these panises China's jumping bonds you response,
or Japan dumping bonds and response. It's not that complicated
really what was going on Tuesday night was extreme panic.
(16:33):
And in a state of extreme panic, what do you
do you think about. I got to pay my mortgage
at the end of the month, I got to pay
my cell phone bill, I have to pay my Bloomberg subscription,
and all of that stuff is denominated in dollars.
Speaker 10 (16:45):
Do you sell anything that's not dollars.
Speaker 11 (16:47):
You start selling stocks, you start selling gold, you start
selling bonds, even which are you know, essentially the safest
asset in the world, because you want are just those
liquid dollars to pay your bills. It doesn't help that
one of the stated goals of this administration outside and
everything else, was to lower yields, and so this was
the exact opposite going on. And I think if there's
probably one market that really resonates with Trump more than
(17:09):
the stock market, it's the bottom market. Because when your
real estate your whole, you know, you sort of like
live and die on your cost, to borrow at your
cost and capital, it became an untenable situation when you
saw those dynamic Maybe you can tolerate a hits of
the stock market, and which I'm actually kind of skeptical
that the people have the public would have put up
with very much longer, but it truly becomes untenable when
(17:31):
people start having to dump what is perceived as like
the second safest asset in the world. Where the safest
asset in the world, which is just over nine dollars.
Speaker 2 (17:39):
Got it, guys, can you put a six up on
the screen. I thought this was interesting chart showing that
now the midst of tariffs is now actually more tilted
towards consumer goods, which is just an overall reminder that
everyone's sort of acting like, okay, well that's over, but
there's still actually a very steep and almost unprecedented level
(18:02):
of tariffs that are hitting countries around the world, and
obviously the massive tariff on China in.
Speaker 4 (18:09):
And of itself is a huge deal.
Speaker 2 (18:12):
So can you help people understand what the reality is
now and what sort of potential impact it can have
on the real economy, and you know, your assessment of
what the markets have done and where they might be added.
Speaker 11 (18:26):
Yeah, look, I'm surprised that we had this huge stock
market rally yesterday after he pulled back from the brink
a little bit, because, as I mentioned again Tuesday night, panic, Look,
the reality is if you just go from now versus
sort of like pre Rose Garden speech, and you don't
pay attention to anything that happened. In the meantime, you
have stock futures that are significantly lower.
Speaker 10 (18:47):
So we've made a hit to the valuation of corporate America.
Rates are higher.
Speaker 11 (18:52):
Than they were, and the US economy or you know,
our imports are significantly more tariff than they were. Even
if you accept this theory that well, you know what
this is about this big strategy because we're going to isolate,
We're going to like box out China, We're going to.
Speaker 10 (19:07):
Make all these deals with all these countries that.
Speaker 11 (19:10):
Have lined up to avoid any aggressive reciprocal tariff. Even there,
we've actually started to drive a wedge between US and
all of those countries that we want to make a
deal within, including US, including our continental partners, which are
more higher tariff. So the fact that is the matter
that consumer prices will be hired. Now, how this speech
(19:31):
through to like CPI like actual inflation. I don't think
it's like totally obvious because if business is slowing, then
incomes are going to be Hiring is going to be slowing,
investment's going to be slowing. Maybe you don't actually get insallation,
but you certainly get less affordability of what people were
able to buy several weeks ago.
Speaker 10 (19:48):
I think that's the real key thing. The cost of.
Speaker 11 (19:50):
Doing business in the United States is now materially higher
than it was a week.
Speaker 3 (19:55):
One of the things, Joe, that you were constantly talking
about over the last week is there are there's a
lot of cope coming from MAGA influencers in the White House,
but the stock market is not the real economy.
Speaker 1 (20:06):
It has no connection.
Speaker 3 (20:08):
And I think you have such a good way of
articulating why that's just empirically not correct. And I want
people to also to understand you're not some Wall Street
explainer somebody.
Speaker 10 (20:17):
Yeah, you know, nobody more than you.
Speaker 3 (20:20):
In many respects, but as somebody's been covering this now,
yeah what twenty years, just explain that to people why
that's incorrect.
Speaker 11 (20:27):
I've always hated this term, that it's just a cliche
that probably some columnists once came, Oh, the stock market
is not the economy. The stock market matters in the
economy in various ways, and I'll just sort of run
through them. A lot of people own stocks, at least
more than half of the US is some sort of explosure.
So it's not just this niche rich thing to the
extent that it is skewed. And it is true that
(20:49):
the ownership of stocks is highly distributed to the ridge.
Speaker 10 (20:52):
It's also true that consumption.
Speaker 11 (20:53):
Is highly skewed, so you're gonna like hit parts of
the economy that are important drivers of consumption and ongoing activity.
But there is more than that, because also, like business
investments is in part going to be determined by the
cost and capital and the stock market. And when companies
see their stocks going up and they're being rewarded for
what they're doing, they do.
Speaker 10 (21:12):
More of it.
Speaker 1 (21:13):
Uh.
Speaker 11 (21:13):
And then when they're not and the stock market goes down,
they take that as a message, oh, we need.
Speaker 10 (21:18):
To cut workers, we need to expand. So it has
an impact on that.
Speaker 11 (21:21):
It has an impact on VC and early stage higher
because the dream of any startup is to either go
public or sell to a public company ultimately. And if
the if that IPO window is closed, or if those
public companies have diminished valuations, that reduces your possible exit.
That reduces the multiples and the valuations you're going to get.
In the early stage or early stage activity, and then
(21:42):
finally beyond that, I would just say that, like, no
one really talks or speaks up for the stockholder. And
I don't mean that in a facetious way like it's
going to think of the poor stockholder. I mean a
lot of people you know, like by stocks on Robinhood.
Speaker 10 (21:56):
And you know, it's so funny to me that.
Speaker 11 (21:58):
There's all this anxiety, particularly from Democrats, like how are
we going to like reach out to you know, young
brothers who listen to podcasts and stuff like that, but
they don't talk about them. They working families and the
costs of you know, buy stuff, all.
Speaker 10 (22:13):
Of which really matters. But a lot of you know,
young men who listen to podcasts have Robbinood accounts.
Speaker 11 (22:19):
And so there's there's sort of like ignorance of the
fact that a lot of people are in some way or.
Speaker 10 (22:23):
Another directly exposed to the stock market.
Speaker 11 (22:25):
Which is why I say they even setting aside the
bond market tell off that we saw over the last
couple of days before the blank, I don't think it's
like tenable to just let stocks fall apart like that
and not acknowledge how much that directly is going to
affect things, and how quickly it's going to affect things
both from a consumption and hiring.
Speaker 2 (22:44):
Stand what is your sense of what this is actually
all about? You know, because you get all these different explanations.
Speaker 4 (22:52):
Depends on the day.
Speaker 2 (22:53):
Sometimes the same person will say multiple different things. It's reindustrializing,
it's more round new, it's you know, it's a it's a.
Speaker 4 (22:59):
Go siating tactic.
Speaker 2 (23:01):
Actually, we want Republicans that one of their coked like
free trade type republicans like, oh, we're actually going to
try to get to a zero terraff resu. Yeah, that's
the real goal. I mean, what are you able to divine?
And by the way, another theory of what's going on
here is just like insider trading that you know, Trump
can make announcements and move the market and buy you know,
and if you're on the inside you can profit off
(23:23):
of that, and if you're not, then you don't. What
is your sense of what's actually going on here?
Speaker 10 (23:27):
Yeah?
Speaker 11 (23:27):
The insider trading theories of assign a level of coordination
internal coordination in the White House that I do not.
Then I think it's probably giving the White House too
much credit. You read those that reporting in the Wall
Street Journal or the New York Times.
Speaker 10 (23:43):
We're knowing even on the inside.
Speaker 11 (23:45):
Knew that there was going to be this pivot until
maybe ten minutes before, and so I, you know, I
do not think that the entire plan was like that
well crafted to like, okay, we're going to put the
word out among the insiders. All that being said, I
don't know, And I think this is part of what
the issue for the market is.
Speaker 10 (24:02):
You know, it's hard to know what the end goal is.
We all, what do we know.
Speaker 11 (24:05):
We know Trump has been a fan of tariffs for decades,
so that's a reality one possible. There seems to be
this cultural thing among a lot of influencers where they
just like think that manufacturing is like per se good
that'll be sort of rejuvenating for the nation. In some respective,
more people were working in the manufactured goods sector.
Speaker 10 (24:27):
What I find annoying about that take is this.
Speaker 11 (24:30):
Sort of uh, you know, covering the eyes of the
fact that we actually had a lot of factories built
in twenty twenty two to twenty twenty three, et cetera.
Speaker 10 (24:37):
A lot of this was already going on.
Speaker 11 (24:39):
In fact, it might even get worse of their terraf
regime if imported intermediate goods to build things actually get costlier,
so it could actually reverse it. And then the other
thing I'm wondering about afterwards is, you know, I used
to think that part of the goal here was like
it's important for the.
Speaker 10 (24:56):
US to match China on key.
Speaker 11 (24:59):
Manufactured or strategic goods, particularly related to high seed or
particularly related to things that go into weaponry. Now I'm
wondering if the goal is just to crush the Chinese economy,
which again is about the US China tension, but is different.
It's a little bit more overt and like the goal
is not to madge China or supersede China. The goal
(25:20):
is to actually do damage to a growing geopolitical ride.
Speaker 1 (25:23):
Yeah, it's certainly possible.
Speaker 3 (25:25):
One of the things that you and I have been
talking a lot about recently, Joe, is about this idea
of bringing manufacturing or jobs. But what you have consistently
pointed out is that since the imposition of tariffs, it
is the manufacturers themselves who are screaming about increasing costs.
So in any regime where there would be tariffs, what
sort of capital injection tax plan confidence with these people
(25:48):
have to have to actually.
Speaker 1 (25:49):
Wind up to the stated goal of the White House.
Speaker 3 (25:52):
And I think of many Americans who brings some certain
critical industry, manufacturing, et cetera back to here.
Speaker 1 (25:57):
We don't see that right now.
Speaker 11 (25:59):
Industrialization is insane insanely difficult. Most countries historically seem to
fail at these efforts. Where they seem to work, there
seems to be a sort of two things have to happen.
Speaker 10 (26:11):
You have some protection for.
Speaker 11 (26:14):
Domestic industry, and then you have to create some mechanism,
sorry for those companies to compete, like help in the
global marketplace, to prove that they're actually doing good things
rather than just taking a government money or rather than
just being protected and getting protectionism.
Speaker 10 (26:29):
And so in theory, what you.
Speaker 11 (26:30):
Would want to see is you'd want to see, Okay,
we're going to give you some degree of protection, either
in the form of tariffs, you're going to own the
US market, or export subsidies. But to continue to get
these things, you have to prove that you're doing the
best highest tech production and competing at the global level.
One way that you could theoretically do it, which I
don't know if there's any appetite for really, but I
(26:53):
would say invite VID and showing me to set up
car factories in you know, Georgia, Miss Sippy, et cetera.
And then you get twofold, you get that technology transfer
where they're like, okay, this is experienced people who know
how to build up a plan. And then you make
contenzloas on the Fords of the GMS compete in the
world's biggest auto market or maybe the second biggest auto market.
(27:13):
Now again some of the best players in the world,
force them to step up their game even further, and
then you actually can combine industrial policy with capitalist competition.
It's very hard to do. It's very hard to do politically.
You know, shareholders still love it. But if you're actually serious.
Speaker 10 (27:29):
About what we want to.
Speaker 11 (27:30):
Have a dynamic manufacturing industry, and I don't think we
want to have an un dynamic manufacturing industry because then
it's we're really just talking about assembly line jobs, right, Like,
if you're having an un dynamic manufacturing these are not
particularly desirable jobs. And I think again like people should
sort of, like, I don't know, stick up a little
bit for the laptop class. And remember, we are very
(27:51):
lucky to have a lot of employment in this country
that doesn't require back breaking labor that you can do
in a cool and air conditioned, comfortable office.
Speaker 10 (28:00):
These are not fandsakes.
Speaker 11 (28:01):
I feel very fortunate the many Americans to get to
work in an office instead of an assembly line.
Speaker 10 (28:05):
But if you want to.
Speaker 11 (28:06):
Bring back un dynamic on competitive manufacturing, you would bring
back a lot of pretty miserable jobs.
Speaker 2 (28:13):
Well, especially at a point in time when you know
the labor movement has been decimated. So you are not
talking about going back to the fifties. You are talking
about going back to the nineteen hundreds when you had
much less labor regulation and lower wages and no federal
child labor laws and things of that nature. I mean,
I'm being a little bit hyperbolic here, but the reality
is you're not going back to those sort of like
(28:35):
solid union middle class jobs that can support a whole
family and buy a house because also those things like
housing have become wildly more expensive. Healthcare, education, those things
have become wildly more expensive. Something else I wanted to
get you to weigh in on, Joe is, guys, can
we put a five up on the screen? People are
sharing this chart around Yesterday obviously was a big.
Speaker 4 (28:52):
Rebound in the market. One of the biggest gains.
Speaker 2 (28:57):
In the S and P History eighth best day in history.
When you go look at the other large games that
are on that list, and it's like, oh, nineteen thirty three,
nineteen twenty nine, nineteen thirty one, two thousand and eight,
and even you know, twenty twenty makes the list here
as well. So you know, I guess give people a
sense are we kind of out of the woods here
or One of the things that we've been asking the
(29:19):
question about as well is even when you roll back
the tariffs, yeah, we've got a ninety day pause, we're
going through We're going through all this again in ninety days.
Speaker 4 (29:28):
Like if you're a business owner.
Speaker 2 (29:30):
Yeah, this desis owners like, you can't how can you
make any decision? I would expect that most CEOs are
just going to kind of freeze in place and see
what the hell's going to shake down?
Speaker 11 (29:41):
Why would you take an your risk at least for
ninety days and look like, you know, this is the
Trump White House. Why would you want the drama to
end in ninety days? Why would you want to show
to end in ninety days? Well, yeah, like why at
least for the next three months, Why would you want
to make any major capital outlayer seriously think about expanding
(30:01):
headcounts in an environment like that. But yes, it's just
completely true that many of the biggest games have been
during periods of extreme market volatility and historically have proceeded
more ugliness. I notice even today some of the games
are holding particularly well.
Speaker 9 (30:16):
I know.
Speaker 11 (30:16):
Look, I don't like to get too worked up by
short term stuff. Again, I'm not surprised that we saw
that big rally yesterday, but there are reasons to think,
both on the financial side and the real economic side
that like the story isn't over it.
Speaker 3 (30:31):
Yeah, that's my last question for you, Joe, is as
you just alluded to ninety days, what does that? I mean,
that's an entire quarter of business activity. There's going to
be very little investment. There will be no major capital
allocation or decision. That seems to be the exact opposite
of what you want for a roaring economy. So how
is this all going to play out over the next
(30:52):
three months in our capital markets and our job markets? Yeah,
economic consumer confidence? What are people supposed to do?
Speaker 10 (31:00):
I mean I would actually I like, actually what I've.
Speaker 11 (31:01):
Been trying to talk to people for the last twelve hours,
So what is the counter argument, because the way you
like this articulating that didn't just seem so obvious to me.
So I'm like, what am I missing? Like where's the
growth impulse going to come from? And I mean that
like in a serious way, Like I'm like asking people,
like what is it? Because it sounds very bad at
a minimum.
Speaker 10 (31:19):
And I think there's.
Speaker 11 (31:19):
Something else too, which is that even if you take
Secretary of Vesson's comments yesterday, very seriously, Okay, now, loogal
China has been exposed as a bad actor, and we're
going to make these deals and we're going to like
isolate that.
Speaker 10 (31:31):
We're going to make these deals with our friends. We're
going to isolate them.
Speaker 11 (31:34):
This administration has spent the last several weeks insulting various friends,
threatening the sovereignty of Canada, threatening Denmark via the claims
that we're going to acclore Greenland, deeply insulting things that
have completely shaken some of the most you know, sort
of stable relationships that we've had to even setting aside
the tariff shop. This ninety day negotiation is coming in
(31:57):
an environment in which perceptions of us internationally, which.
Speaker 10 (32:01):
Normally I don't care a lot about let people dislike
us if.
Speaker 11 (32:05):
We want, But now we're at the point where we're
negotiating deals with their democratically, in many cases, elected leaders
who have to be accountable to people who now have
a much more negative impression of the United States, which
is not give me a lot of hope that in
these next ninety days we're going to have these big,
beautiful deal.
Speaker 1 (32:22):
Yeah.
Speaker 2 (32:22):
Well, not to mention, I think Sager said this the
other show, so I'm stealing from him. But China's fighting
a trade war against us. We're fighting a trade war
apparently against the whole planet.
Speaker 10 (32:33):
So ten percent terms are still in place.
Speaker 4 (32:36):
That's exactly right.
Speaker 2 (32:37):
That's exactly right, and God only knows what happens next week,
the week after that, ninety days from now, et cetera.
So Jill, thank you so much. Like I said, I know,
super busy. Thank you for making the time. I'm really
glad to have you on the show.
Speaker 3 (32:47):
Thanks brother, see you, everybody goes thanks side to the
Odd Lots podcast.
Speaker 1 (32:51):
Share it, listen to it with a friend. It's a
great show. See man.
Speaker 10 (32:54):
Thank you.
Speaker 2 (32:58):
All right, So let's talk a little bit about the
time timeline of what unfolded yesterday. And these pretty significant
questions about who might have had some inside knowledge here
and been into a position to benefit from the massive
market spike that came after Trump's announcement of this tariff rollback.
Speaker 4 (33:15):
So let's put this up on the screen.
Speaker 2 (33:17):
Early in the day, he posted this on true Social
this is a great time to buy DJT now. Apparently,
according to the reporting, at least at this point he
hadn't necessarily decided what he was going to do.
Speaker 4 (33:30):
But I mean, who knows, right, who knows?
Speaker 2 (33:32):
So he posts this, okay, and then of course later
on in the day he makes his announcement. Even before this,
there were some questions about whether he was just like
screwing with the market to benefit the people around him.
And I'm not talking about fringe internet figures or whatever.
Even on CNBC they were raising questions about whether or
(33:55):
not this was part of what was going on.
Speaker 4 (33:57):
Let's take a listen to that.
Speaker 12 (33:58):
Given what the government's been doing and this administration has
been doing, it would not shock me, and I hate
to speculate, if we were to find out that a
whole bunch of people who work in Washington as our
elected leaders, one way or the other, ultimately sold stocks
last week or potentially worse than that short.
Speaker 1 (34:15):
Of the market.
Speaker 4 (34:16):
So Andrew ross Orkin there, that's.
Speaker 1 (34:19):
A big deal.
Speaker 3 (34:19):
We should explain that because people don't release it. Like
Andrew ross Storkin is the guy who wrote Too Big
to Fail. Andrew ross Storkin is the voice of like
the the what between Walls. He's like the wit Wall
Street whisper he wrote Too Big to Fail.
Speaker 1 (34:33):
He is.
Speaker 3 (34:35):
I mean, I'm having trouble describing him to a lay person.
I guess what the Morning Joe of Financial News, like
everybody hangs on his word. He's got the best reporting.
He does the New York Times deal Book. You can
get an interview, he can get an interview with every
billionaire on the I remember talking to a guy who
worked for a billionaire and he goes, I don't understand
this Andrew ross Storkin guy, He's like, he goes around
(34:56):
all of us and he gets to these people's phones.
He's like, he doesn't even have a phone number. He
changes his phone number every month. Well, that's the type
of person we're talking about.
Speaker 2 (35:03):
And if he says it, there are a lot of
people on Wall Street who are saying because these are
people who think in terms of market movements and who.
Speaker 4 (35:12):
Stands to benefit.
Speaker 2 (35:13):
So when you have one man who is and you know,
with this very small, cloistered group of advisors who are
making these extraordinary seat of the pants announcements that are
sending the entire market into total meltdown or reviving it
with a new truth, you have to ask the question
(35:34):
who knew and who was in a position to place
the trades at the right time. And we're going to
show you in a minute there. I mean, there is
some evidence based on market moves to back up some
of these theories. It wasn't just Andrew ross Orkin on
CNBC either, though. After the Trump announcement, Commerce Secretary Howard
Lutnik is on CNBC and the host comes right up
(35:57):
to the break of asking him flat out basically, was
this is Trump just manipulating markets and trying to inside
or trade here.
Speaker 4 (36:04):
Let's take a listen to how that went down.
Speaker 13 (36:06):
He also seems to be a great stock pundit, mister secretary.
Earlier this morning, before the past he put out a
message saying it's a great time to buy and here
we are here, we are much higher.
Speaker 9 (36:17):
I know is bet on Donald Trump? Every time I
know better.
Speaker 13 (36:21):
He also wrote dj T, which is a ticker for
for his media company.
Speaker 9 (36:25):
No, no, no, every every text, every text he sends
to me, that's his name.
Speaker 13 (36:29):
But that was a great time to buy the market, right, I.
Speaker 1 (36:31):
Mean, on can Donald look?
Speaker 9 (36:34):
Donald Donald Trump understands that it's America is the greatest country.
All right, we are the greatest country, and we have
the capacity for incredible greatness. But someone needs to take
the shackles off, someone needs to let our carn our
farmers sell corn to India.
Speaker 2 (36:51):
So she tiptoes right up to but this doesn't quite
come out and say she really should have though, actually
go ahead and put C five up on the screen.
This is from our friend Unusual Whales, who pointed out, okay,
interesting before Trump posted that now would be a great
time to buy. On true social you had traders opening
(37:12):
up these certain type of calls.
Speaker 4 (37:14):
These are exchange traded.
Speaker 2 (37:16):
Funds that track either the Nasdaq or the S and
P five hundred. So, just to put this in layman's terms,
this means you see the spike, you had a huge
jump in somebody who was betting that these markets were
going to go up significantly, and on one of these
(37:36):
in particular, they were betting it was like a just
a day was the timeframe. So they're basically saying, like,
I think this market is going to jump up like
crazy today, and these are highly leveraged, So this is
a very very risky bet, especially to make in the
midst of a massive market meltdown.
Speaker 1 (37:56):
You can go to actual zero.
Speaker 3 (37:57):
It's not like buying the S and P five hundred
exactly exactly.
Speaker 2 (38:00):
So right before the news he says, someone opened up
five hundred and nine of these calls expiring today, and
those calls are up twenty one hundred percent in a
single hour. So if you happened to be in on
what was gonna unfold during the day, this would be
exactly the type of market move.
Speaker 1 (38:22):
That you would mis Yes.
Speaker 3 (38:23):
And for example, billionaire Charles Schwab was literally in the
Oval office around the time that this announcement was made.
Here's Trump actually bragging about it on camera while he's
in the Oval office, pointing to Charles Schwab and saying,
this guy made two point five billion today.
Speaker 1 (38:38):
Take a listen, it's not just.
Speaker 10 (38:50):
Financial wow.
Speaker 3 (38:52):
Just say look, I mean, as Joe said, was there
really a concerted effort.
Speaker 1 (38:56):
I don't know.
Speaker 3 (38:57):
Listen, if you're Charles you hear this going on and
you don't get on the phone, you'll call your broker.
You're an idiot, right, those like why wouldn't you do it?
Or elected officials let's say Trump, read in John Thune
or any of these other folks. We don't know if
any of that is true, or Speaker Mike Johnson. We
know from unusual wills and others. These people are trading
all the time. And if any of this sounds ridiculous,
(39:21):
I mean, let's not point to the fact that during
the market crash, remember Senator Richard Burr.
Speaker 1 (39:26):
Was under federal investigation.
Speaker 3 (39:27):
They seized his cell phone for insider trading allegations and
even the appearance of corruption.
Speaker 1 (39:33):
Don't forget.
Speaker 3 (39:33):
Also, we will not even get the disclosures from members
of Congress for months now before we even know if
they were able to trade on this information, let alone
White House officials. The way that they're reporting all works,
it's going to take forever for this to be able
to come out.
Speaker 1 (39:47):
So there is zero transparency.
Speaker 4 (39:49):
If they even bother to complain.
Speaker 3 (39:51):
Yeah, right, even if they do, and actually a lot don't,
there's a lot of these exclusions and things that you
can get. Even the form is ridiculous. It's like, I'm
worth between twelve and fifty million. You're like, okay, great,
thank you for the disclosure there, Yes, right, exactly, Yeah,
I don't know anything about this, but my point just
broadly is that if you look at the data, it
is obvious something happened.
Speaker 14 (40:12):
Here.
Speaker 1 (40:12):
We have, for example C seven.
Speaker 3 (40:14):
Please you can see exactly similar spike in the graph
that unusual Whales found. This is increase of over ten
percent on call to options ten minutes before the announcement.
Somebody was making a huge bet right before that.
Speaker 2 (40:29):
This all this was ten minutes before Trump says guess
what guys were switching switching it up ten percent tariffs
ninety day pause, ten minutes before that person. They just
must be a market genius.
Speaker 3 (40:44):
Acre maybe market look theoretically possible, Like they were like, oh,
I really think Trump is going to make a big
move today, and so middle of the day right around
and I'm like, yeah, I don't know, No, no, nobody's
got really that. I mean, remember that whole October seventh
insight that we had and we covered here on the show.
Speaker 1 (41:00):
To this day.
Speaker 3 (41:00):
Nobody really knows who shorted the market there immediately before
what we like, shorted on October sixth and got miraculously lucky.
There are all these apocryphal tales about nine to eleven
as well. And look, we can just simply add this
one to the list. The data is clear somebody did
make it, So SEC and IRS will know exactly who
this person is.
Speaker 1 (41:20):
It would be nice. Yeah, at the very least, just
do an investigation.
Speaker 4 (41:24):
Sir, Trump's SEC will be all over it.
Speaker 3 (41:27):
Well, this is the problem with the data is that
this stuff, I mean dramatically undermines confidence in the overall system,
as it should because everybody's like, uh, I'm sitting at home,
like let's say you're one of the Joe just stood
up for the stockholder, and you're just like average Joe,
like Joe, and you're at home and you're watching CNBC
and you're just sitting there panicking or thinking. And I
(41:48):
read a horrible article in the Wall Street Journal, And
this is a good example of how stock crashes can
be very impactful. Of people who have mandatory withdrawals for
their children's five twenty nine plans. These are people who
are responsibly saved and whose kid must go to college
in the fall, and they're like, yeah, now it's down
twenty percent and I may need to take out a
long that's horrible, you know. And yes, they've been investing
(42:12):
over an eighteen year period. They've definitely made a killing
on the first half, But what about the last couple
of years that they put their money in, or maybe
the money in that they just put in. Now they've
actually taken a net loss, you know, on that. That
is exactly the type of thing behavior savings and all
that otherwise where there are real consequences, not to even
mention all the retirees who have mandatory withdrawals from their
(42:32):
four to one k's right now.
Speaker 4 (42:33):
That's right. Well, think about it this way.
Speaker 2 (42:35):
So yesterday was the largest gain I believe in history
for billionaires, just like astronomical amounts of money made.
Speaker 3 (42:42):
You mean from law, I guess technically, yeah, we're still
down to it time, okay.
Speaker 2 (42:46):
Yeah, But if you were in a position to know
that this news was coming out and you were in
a position to make those moves, you if you're like
you know, a union with a pension fund that you're running,
you weren't on the inside, and you're talking about that
is to benefit ordinary working class people, so you are
still down right some people were in a position to
(43:08):
make a killing. Apparently Charles schwas made billions of dollars yesterday.
That is a direct upward transfer of wealth from retail,
from pensions, from you know, all of these groups that
you know are just sort of like normal regular people.
Speaker 14 (43:27):
What is this.
Speaker 2 (43:28):
Sixty percent of Americans have some exposure to the stock mortgage.
So that's why these stories really Matt. I mean, when
we think about we covered so much of the insider
trading allegations with Congress Nancy Pelosi and all of these people,
and she would be in a position to benefit from
the knowledge that she has of what Congress is up
to and what particular companies stand to benefit. That is
(43:51):
much more indirect, frankly than I mean vastly more indirect
than Trump literally being able to truth out a total
new global trading regime. And lord knows, these people have
no scruples. I mean, Trump did a pump and dump
with his shitcoin and his wife's shitcoin. Like they're not
ethical people. They are happy to cash in to their benefit.
(44:13):
He certainly is, when you know he has knowledge that
can benefit him, so frankly, I'd be shocked.
Speaker 4 (44:19):
The big question is whether that's the whole purpose of
what they're up to here.
Speaker 2 (44:22):
And you know, some people are looking at this and
are like, I can't really divine any other purpose that
makes any sense here.
Speaker 4 (44:29):
So it is possible that the whole point.
Speaker 2 (44:32):
Is just a sort of like global economic wide pump
and dump. And if that is the goal, well so
far they've been phenomenally successful for that. There is one
person that does not seem to have been on the
inside in terms of knowing what was going on, and
that's the US Trade Representative Jameson Greer, who also that's
the person who Emily had floated might have been mistaken
(44:52):
for Jeffrey.
Speaker 4 (44:53):
Goldberg, but I think it was. I think it might.
I saw that it might have been someone different.
Speaker 2 (44:56):
But in any case, maybe he was supposed to be
on the signal chat letting everybody know, and instead Jeffrey
Goldberg gotta instead sorry, was testifying before Congress when and
learned in real time what was going on with this,
and the Democratic member who was questioning him when he
finds out, he also immediately goes to the place of
like what the hell are you people doing? How do
(45:17):
you you're in the US Trade rep How do you
not know what's going on and who does and what
billionaire are standing to benefit here?
Speaker 4 (45:23):
Let's take a.
Speaker 2 (45:24):
Listen to how that went, Dad, This is C four guys,
let's go ahead and play that.
Speaker 15 (45:27):
Are you aware that the terrors have been paused?
Speaker 14 (45:30):
I am yes.
Speaker 15 (45:31):
When were you made aware of that?
Speaker 9 (45:34):
Well?
Speaker 14 (45:34):
I understood the decision was made a few minutes ago.
Speaker 16 (45:36):
Sitting here under discussion, sitting here under discussion.
Speaker 15 (45:40):
So did you know that this was under discussion?
Speaker 16 (45:42):
And why did you not include that as part of
your opening remarks?
Speaker 14 (45:46):
So typically, what I don't do is divulge the contents
of my discussions.
Speaker 15 (45:50):
What are the details of the pause?
Speaker 14 (45:52):
Well, my understanding is that because so many countries have
decided not to retaliate, we're going to have about ninety
days No.
Speaker 16 (46:01):
Excuse me, you we are the China increase their tariffs
on the United States.
Speaker 15 (46:07):
Trump blinked.
Speaker 14 (46:10):
What's the blink? Sir?
Speaker 15 (46:12):
What do you know about this pause? What are the
details of it?
Speaker 14 (46:16):
Well, the details, as I understand it, is that China
continues to retaliate. Other countries didn't retaliate. The President two
or three days ago said we wanted to negotiate with
those countries that ask for that, ask for meetings. That's
what we're doing.
Speaker 16 (46:29):
What are the wed How long is the pause? How
many days? How many weeks?
Speaker 14 (46:33):
I understand it's ninety days. I haven't spoken to the
present since I.
Speaker 16 (46:36):
So the Trade Representative hasn't spoken to the President of
the United States about a global reordering of trade?
Speaker 14 (46:45):
Yes, I have, and yet hearing with you so.
Speaker 15 (46:47):
But yet he announced it on a tweet. WTF who's
in charge?
Speaker 14 (46:53):
The President of United States is in charge?
Speaker 16 (46:54):
And what do you know about those details?
Speaker 4 (47:01):
I don't know what I do.
Speaker 3 (47:02):
You know why that's nuts is because he Jamison Greer.
Not only is he the US Trade Representative, that's a
cabinet level official who's technically supposed to be in charge
of a lot of this stuff. But even more, you know,
when you implement the tariffs, he's the guy who writes
all the stuff. He did the formula, you know, all
the justification of the formula.
Speaker 1 (47:21):
It was him. That's his office. That's what their job
is supposed to be.
Speaker 3 (47:25):
They're supposed to work with customs and border patrol and
all of these other agencies to actually implement these tariffs.
So it's pretty insane that he not only was not
in the room, he wasn't even consulted, and he learned
about it by a truth law. He's testifying live before
the United States Congress. And the thing is, if you
look at his opening statement, the entire opening statement is
a justification of the terriff for shame. And then he
has to be like, actually, it's very smart. What are
(47:45):
we doing?
Speaker 4 (47:46):
Insane and insanity, it's part of the deal.
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