4/14/25: Wall St Panic Amid Tariff Flip Flop, China Bans Rare Earth From US, CEOs Say Recession Is Here, Consumer Sentiment Plunges
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Good morning, everybody. Happy Monday. We have an amazing show for everybody today. There it is. People live for the pound. Bro Show. Crystal will be in for, what is it? She's filling in for you on Wednesday? Yeah, Ladies Day on Wednesday. All right, there you go. What do they call it? Who knows? That's for the other people. That's for them. Yeah, that's for them to decide. That's for the audience to decide. I did not even coin Bro Show. That was an audience. We're pro-choice around here. Maybe it was you, actually. I don't know.

But anyway, yeah, that's right. We believe in women's choice here on the show. So that's what you're going to see this week. Let's go ahead and see. What the hell do we even have? All right, come up on me. This is the toughest part of the job here, actually saying what we have to do today. We're going to start off with tariffs. There aren't really any clues at the bottom there. I know, but Ryan, the amount of high-end eye coordination that this all requires is unbelievable. It's unbelievable.

Okay, so we're going to be starting off with tariffs. We're going to talk about some major flip-flops from the administration. Nobody knows what the hell is going on from industry to Wall Street. People are dizzying in their reactions. The dollar is sinking to new lows. We're going to talk about China. This specifically is very interesting. Some major new initiatives from the Chinese to ban regulations.

rare earth mineral exports to the United States trying to choke off critical American industries. We're going to talk about recession watch and how many CEOs on Wall Street and others responsible, unfortunately, for many of our fates in terms of employers now already believe we're in a recession. Next, the Consumer Sentiment Index from the University of Michigan, one of the most watched studies there in terms of indicators, how Americans are feeling about the economy, mortgage rates, and others just came out. The

The response is absolutely devastating for the Trump administration. A rare spot of good news here. The Iran negotiations appear to have gone well with this presidential envoy, Steve Witkoff. Some interesting stuff from behind the scenes. The pro-Israel lobby is absolutely flabbergasted.

freaking out over these developments. We'll break some of that down for you. Then there is Bukele, the president of El Salvador, is currently in Washington today. There's been some developments there with the Trump administration appearing at least not to comply with the Supreme Court order or at the very least complying in their own way. I'll let Ryan break a lot of that down for you. And then finally,

some really devastating and terrible news. It appears an arsonist tried to assassinate Governor Josh Shapiro and his family in the governor's mansion. Some of the images that have come out are absolutely harrowing. We do know that a suspect has been arrested. We have some video there from the governor, Josh Shapiro, breaking down the incident. We don't have full details yet, but Ryan, it is obviously, you know, political violence, awful, but more so it's just, you know, it's

the images coming out of that are horrible and it does look like it was a lot closer than anybody initially thought from the initial results. Yeah, the police are saying that the man intended to beat Shapiro with the hammer if he had gotten to him. He,

The family got out. He didn't catch him, but a close call. Very close call. Way too close. Way too close. The images of it are genuinely crazy. So some questions about the governor's security detail, about who the suspect is and more. We're going to try and break some of that down for you with the latest developments that we have here. Thank you to all of our premium subscribers, BreakingPoints.com, people who are supporting the show, some expansion efforts and other things.

They're going to see here behind the scenes. We will have some big announcements this week, tomorrow, when Crystal is back here at the desk. So we will bring that to you then. So you can stay tuned. Actually, if you want to become a premium subscriber today, you'll be the very first to hear about it, breakingpoints.com. There you go. All right, let's go ahead and start off with these tariffs. This is just the most insane thing that we have seen yet, honestly, from the Trump administration since the announcement of these reciprocal tariffs. So markets absolutely exploded.

exploded with optimism over the weekend from this announcement from the White House. Let's put it up there on the screen. Apple and Nvidia score relief from U.S. tariffs with exemptions. Now, you might be asking how exactly that makes sense when the Commerce Secretary Howard Lutnick had said that we as a country actually want to build the iPhone and how we want a nation of people screwing, what was it, screwing tiny little screws to assemble them. But

clearly what happened is that there was an immense pressure campaign from the White House to on the White House from the consumer electronics industry, 90% of which comes from China, both smartphone and smartphone and laptops. That

were basically telling the White House, they're like, if you do this, it will make it genuinely impossible to be able to afford these electronics. Now, at that time, it was already completely out of step with the White House's discussion saying consistently there will be no exemptions. Exemptions are impossible. Don't even think about it. And actually, the net result of that exemption would have meant

that children's toys and textiles and small business commerce goods, which are cheaper, actually would go way up. So it would have devastated small businesses while protecting Apple and Nvidia's bottom line. And so initially that was a pretty insane announcement. Markets were set to shoot

up dramatically, the NASDAQ and other tech-focused industries. But then, the Trump administration, in only a way the Trump administration can, literally the next day, reversed course. Put this up there on the screen, please. This is from Trump, who now says, this was on Sunday, nobody is getting off the hook. Uh,

for the unfair trade imbalances that other countries have used against us, especially China. Quote, there was no tariff exemption announced on Friday. Now, this is news to all of us, Ryan, because the release from the White House, it's not a joke, from whitehouse.gov was titled exemptions. So, yeah. And, yeah.

It's so funny because what happened is the exemptions were announced. People, rightfully, I think, smaller importers, non-electronic importers, were furious about it. And then the White House came out and said actually there were no exemptions. And Howard Lutnick gave an interview on the Sunday shows where he completely reversed course from just 24-hour earlier about the so-called non-exemptions. Here's what he had to say. So you're saying that the big tariffs on things like smartphones and laptops –

iPhones, all those iPhones built in China, that those tariffs are temporarily off, but they're gonna be coming right back on in another form in a month or so? Or what are you saying?

Correct. That's right. That's right. Semiconductors and pharmaceuticals will have a tariff model in order to encourage them to reshore to be built in America. We need our medicines and we need semiconductors and our electronics to be built in America. We can't be the holden and rely upon foreign countries for fundamental things that

we need. We can't be relying on China for fundamental things that we need. Our medicines and our semiconductors need to be built in America. Donald Trump is on it. He's calling that out. So you should understand these are included in the semiconductor tariffs that are coming and the pharmaceuticals are coming. Those two areas are coming in the next month or two. So this is not like

a permanent sort of exemption. He's just clarifying that these are not available to be negotiated away by countries. These are things that are national security that we need to be made in America. The president's made it -- -So how can consumers and businesses make decisions when it seems as though the president's trade policies are shifting at a moment's notice? -So this is unfolding exactly like we thought it would in a dominant scenario.

Got it. Makes a lot of sense, Ryan. We had exemptions, then we don't have exemptions. And actually, while there is a temporary exemption, that exemption will be gone in a month. The exemption that doesn't exist. The exemption that was never announced will be lifted in a month.

That's where we're at. You got that? I mean, people – it's not funny because – what does it mean for industry, Ryan? What would any business watching this do right now? Just hold your cash. Bingo. And probably get it out of dollars, actually. So it's not just rush to cash. That's – what's so sad about all of this is that –

The 300 million people in the United States across the board, whether you voted for Trump, voted for Kamala Harris, didn't vote at all, are all going to suffer as a result of this. And everything Lutnick is saying there is true. We should be making our chips here. We should be making our medicines here. Yes, that's absolutely right.

None of this is going to lead to that. And we're going to talk about a little bit about how it's actually going to get us further away from that. And we're going to find out what it means to deliberately break our own supply chains without having any backup plan. The monkey, you know, they always say, if you're a monkey, grab the next vine before you let go. Trump just let go. And he thought that the falling to the jungle floor would be the leverage. Instead, we're just going to wind up on the jungle floor.

And my friend Ryan Peterson, who we had on the show, you guys might remember him, the port expert, and he tweeted this as a result. He said, quote, tariffs on semiconductors and electronics will be introduced in about a month. Quote, those products were exempted from tariffs just yesterday. The whole system seems designed to create paralysis. So it is now clear if you're a CEO and if you greenlit a major investment decision, you should short that person's stock.

That person should be fired. As a shareholder, I would vote to fire any CEO who greenlit a major investment in the United States over the next 90 days while all of this tariff stuff is happening, especially if you're a NASDAQ investor for any of these major technology companies that manufacture anything. Same with Apple. If you're Apple, you know what you're going to do for the next 90 days? We're not importing shit. We're literally just going to sit—

On our iPhone stockpile, we're going to hustle as much as we can. Except wait, but no, there is a 20% tariff. It could go to 104. Nobody knows. Right now, we'll just let that sit here. Everybody else, good luck. You see the cargo planes? They had like four cargo planes smuggling in items.

iPhones. And I saw you tweeting about this as well, that the NVIDIA CEO, Jason Wang, had a, you know, paid, his company paid a million dollars to go to a Trump super PAC dinner. It's unclear if he talked with Trump or whatever, but you know, if I pay a million dollars to get into a party, I'm going to talk to the, oh, we're talking. Yeah, we're talking. We're going to do a couple minutes. And then boom, all of a sudden this, the chips,

The chips, like NVIDIA makes the chips that make the world run and will make DeepSeek run a little faster.

Oh, yeah, we're going to carve those out. That's cool. So we're talking about a multi-trillion dollar restructuring of the economy that the most important chipmaker can get a carve out for after paying a million dollars. Which is nothing for them. Right. This is a multi-trillion dollar company. A million dollars, are you joking? Right. The market cap of NVIDIA is larger than the entire stock exchange in the United Kingdom. They lost like billions in the last couple of weeks. Exactly. So like a million? Yeah, a million is absolutely nothing. So this gets to the issue, which...

Again, look, NVIDIA, they're going to be fine. Oh, and it's a million-dollar dinner. He may have given a lot more than a million. He absolutely probably did. So NVIDIA, they're going to be fine. Apple, they're going to be fine. These people have hundreds of billions of dollars in cash, market cap, all this other stuff. But all of these other smaller importers, let's say that you're a company. If you ever read about the history of the iPhone, the people that made the glass for this.

phone that's in front of me, the laptop that's in front of me. Over 90% of these products are manufactured in China, entirely in China. There are a lot of actually small businesses and others. Let's say you make iPhone cases on Etsy or something like that, right? All of these input costs and surrounding ecosystem and things, those people actually, their inputs under these exemptions would have skyrocketed and actually will continue to be subject to the tariff regime. And they're the very ones who will be the most devastated and

And also because the way our economy works with just-in-time delivery and no government incentive to do anything about it means that you are inflicting an incredible amount of suffering to any D2C brand, somebody running e-commerce, even just general – like a bike shop is always the classic example.

Example, a lot of those metals, we don't even have them, period. Or if we do, let's say Australia has them. They don't refine them. They have to send them to China, and China has to refine it, and they have to send it over here for the ability, for fabrication purposes, et cetera. All of these are exactly the type of businesses which are about to see a massive increase. Now, I can be conceptually supportive of tariffs, just as you said. Pharmaceuticals, great example.

why did China dominate in pharmaceuticals? Why did Chinese and the Europeans dominate? Well, the Europeans have the legacy kind of design framework, very much like we have with Intel. But then China, of course, saw it as a national strategic industry to have all of these plants which create and can, what is it, compound pharmaceuticals to be able to make all this stuff. They don't do it because it's profitable per se. It helps to make a little bit of a profit, but

they do it because they know that it's vital to their own strategic autonomy. We as fools, of course, just allow this to be outsourced. Now, the MAGA folks would say, yeah, of course, Sagar. That's why we immediately need to bring it over here. I would say, yeah, great. Well, then you need to offer, let's say, a dollar for dollar tax credit. For every dollar that you're going to lose in business, you're going to get X amount of tax credit for your CapEx, which is the amount that you're about to invest here in the US. Everybody, it's a win-win situation. Instead, what we're saying is we're going to increase your cost by 140%.

And by the way, maybe and maybe not in the next 90 days. So what do you do as that person with that possible cash outlaw? If you're lucky enough to even have cash on your books, which many businesses do not because they run on such a tight margin. You are going to hoard that as much as possible. In fact, you're probably going to fire some people.

to free up a little bit of cash flow. Let's say you take a 60% haircut or whatever. Not only are you going to fire people, you need even more cash on your balance sheet to make sure you can prepare for the future. So there's a contractual effect across the entire economy. Yeah, and currently, if you are a business like, let's say, Apple, that makes your entire product in China, puts it in the box,

puts a little cellophane on it, puts it in a ship. Designed in Cupertino. Yeah, designed. You're right, designed in Cupertino. You put it on a ship and you come over here, you're exempt from these 150% tariffs or whatever. If you're a company...

that is in Columbus, Ohio and has been trying to bring back like serious jobs to Ohio and you bring, you get some, like you were saying, you get some inputs from China, but then you assemble the rest of the pieces in Columbus and you're working with a distributor in Toledo and like you, you are paying the tariffs. Yes, that's right. But if you take everything that you do, fire every one of your workers,

Find some plant on TikTok and ask him to make your thing completely in there and then figure out a way to get it in or your Apple and you can just pay, you bribe your way in, then you're going to do better. So it incentivizes offshoring. It incentivizes doing all of your work in China. And it also is going to bankrupt, as we speak,

of small and medium-sized companies, which will then get bought up by the bigger ones and we'll have more corporate concentration. Oh, that would never happen, except, oh, it happened 15 years ago. Right, I forgot about that. Let's go and put the futures up there on the screen. Futures are actually slightly up today.

Because NVIDIA and Apple are like half of the NASDAQ. I think 7% of the S&P 500 is NVIDIA. And so NVIDIA and Apple's stock are increasing in their futures just over the next month. People are optimistic even about that month-long exemption in tariffs. But the irony is that if the White House had kept—

a permanent exemption, or at least the idea of a permanent exemption, the NASDAQ will be up way higher, up 6%, 7% right now because people thought that, oh, we're going to be having some deals. Let's go and put A4 up on the screen. This guy did such a good job of just summarizing. This is just since Wednesday. This is five days. This is five days in the United States of America.

We have had universal reciprocal tariffs, a removal back down to 10%, 50% Chinese tariffs, 90% Chinese tariffs, 104% Chinese tariffs, 125% Chinese tariffs, 145% Chinese tariffs, electronics exempted, electronics now back on. As he says, if you were a CFO of Fortune 500, would you improve any new investment in a country this unstable? Answer honestly, no.

As I said, I would personally, as a shareholder, vote to fire any CEO who made a major outlay of cash, investment, or import decision under these conditions. And I can tell you, for the people who run this business, Crystal and I, we're like, yeah.

There's going to be – we're going ultra-conservative, probably even more conservative than we ever were before. And we're just going to sit here and wait to see what the macroeconomic conditions do. On that point, I saw Cernovich talking about this. Yes, that's right. And the connection is – He did a good job, actually. The podcast universe, which was pretty heavily pro-Trump this time around, as the media loves to remind us.

One of the big legs of their economic business model is e-commerce. And that's not just podcasters. That's TikTokers. That's the entire kind of creator economy is organized around advertising. And the advertising is about selling stuff online. So if you just get your money from ad revenue, you're taking a hit because companies are going to spend less. They're going to have less to spend on advertisements if they have less that they're able to sell.

sell to the public. And then there's the direct sales, your little store. You think those counterpoints and breaking points socks are expensive now? Actually, no. All of ours are made in the USA. So all of ours are made in the USA, union labor. I guess we're going to find out. Yeah. Well, I mean, the way that you would say it is that even though it is made in the USA, and even though it is made in the USA with union labor, is that the input cost of cotton or

whatever. It certainly comes from China. I've actually learned this in the suit industry. Actually, by the way, this is a PSA for anybody who is out there. I have some friends who are getting married. I did not realize that the vast majority of wedding dresses are made in China. And I don't even believe it's possible to buy a Made in America branded wedding dress right now. And so if you're getting married, you should order that wedding dress sometime soon and just hope and pray that you're not getting married.

And if you have American-made products like cars or socks, let's say you even sourced the cotton, which unlikely here, and everything is done in here because demand is getting, theoretically, in a world where things are stable. That's not the world we're in, but let's pretend there's some stability. Demand is getting funneled into those American products. So if you own a used Ford,

Like the price of it's going to go up. You're going to be able to get more for that. Yeah, that's right. But wait a minute. Why is that? Well, did you already see that? There's a story going around of a guy who drove off the lot with a brand new CRV. And the dealer called him the next day and he's like, hey, man, I will pay you a lot more than you paid for this brand new. I mean, that never happens. What, you're supposed to lose 20% of your value the moment that it goes pump? Right, yeah.

uh officer by the way crv owners undefeated here thank you shout out to the crv bros right i count myself in your ranks since there's so much more demand i mean that's so the idea is then that price increase is then supposed to incentivize more domestic production like that's the whole that's the whole theory behind it but for the very

medium term, there's not going to be that production. So you're just going to pay $55 for those stocks instead of $35. It's rough out there, Ryan. Let's put A5 guys, can we, up on the screen. This is from Charles Gasparino. Forgive the block of text, but it actually is important. And so he quotes a prominent investor and Wall Street tech analyst who's been there for basically 20 years. And his word, it's one of those things on Wall Street, these analysts who've been around for a

Take a listen to him. He goes, let's be clear. On Friday night, the White House excluded big tech in the chip sector from these Chinese tariffs, right, which would have made the tech stocks rally, as I said initially. This is a huge victory. But now, according to the White House and Howard Lutnick, this morning, the semiconductor sectoral tariffs will be coming over the next month or two, including smartphone and computers. So the mass confusion created by this constant news flow is, quote, dizzying for the industry and investors, creating a massive uncertainty and chaos for companies trying to plan their supply chain inventory as in demanded.

As we are in Masters Week and it's Sunday, this would be like changing the hole locations for pro golfers in Augusta while the final round is going on in real time. This is how investors feel right now. What are the rules of the game? What do earnings look like? What will the new tariffs look like? Can they be negotiated? How can companies give guidance?

in this environment. We are in a much better spot than Friday and last week heading into Sunday night, but there is still, quote, mass uncertainty, chaos, and confusion around the next steps, with all focus on the China tariff negotiations being front and center, and any progress on a game this high stakes poker between Beijing and DC being crucial to the markets and the economy this week. So with the chaos at the market- One amendment to that, it's like changing the whole-

you swing. Yeah. Like your ball is, your balls look like if you change the hole right before you, right before you take your shot, like, all right, give me a different club and I'll take a different shot. You swing, you hit the ball and then they're like, oh no, by the way, you're actually supposed to be going to the 14th tee. Yeah. You were playing at the 17th tee. I don't know enough about golf. I don't know anything about golf.

I didn't watch it because I don't have time on weekends to do anything. I don't really get it. McElroy. Yeah. Would he want a comeback or something? This is what I mean. This is the extent of my question. He hadn't won in 11 years and he locked up. Really? Yeah. Oh, good for him. So he's now won all the –

He's got the Grand Slam, the career Grand Slam. What is a career Grand Slam in golf? It means you win all the Masters. What is it? PGA, US Open, Masters. I don't know. What's the fourth one? I don't know. That's what I'm asking you. You guys tell us what the fourth one is. All the big ones. Okay. All right. Got it. Yeah. So this shows you the extent of my golf knowledge. There was some...

There was some guy who I met. What's his name? Bryson DeChambeau. I had no idea who this guy was. He was the guy like neck and neck with McElroy. Yeah, I saw him once. We were at this event and he was there and all these people were taking pictures. I was like, who is this guy? Someone was like, oh, he's one of the biggest golfers in the world. I was like, oh, cool. He almost won the Masters. Yeah, shows you the extent of my golf knowledge. Sorry, Bryson. No offense. I promise. It's truly not you. He has bigger problems today. Yeah, okay. All right. There we go.

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All right, let's go and transition to these China tariffs because this is the biggest part of the story. Let's go and put this up there on the screen. Quote, the rift is here. This is from Bill Ackman, who has, I guess, been kind of a Cassandra around these tariffs in terms of being in the MAGA orbit.

He says, the rift is healing. China, quote, asks for relief from the tariffs, creating an opening for a 90-day China tariff pause and negotiations. Remember previously that Bill was one of the first big MAGA people to call for a 90-day pause, and that did eventually become the eventual policy. Nobody knows necessarily if he was responsible for that, but I'm paying attention just because previously what he had called for was something that Trump was willing to listen. But the thing is, is that now as these China tariffs start to set in,

And remember, they are the policy. This is the policy of the United States government. These are being hit right now with these tariffs. It is somewhat funny. There's been some news about how Doge fired the entire team to collect the tariffs. So the amount of revenue actually coming in right now is zero. Although my wife is a trade expert and I asked her and she said that actually tariffs are liable. It's kind of like taxes. Even if you don't pay on April 15th, you still owe it. Yeah, so they're coming. Yeah, they're not going to forget. You have 270 days or something.

They're trying to find those guys' phone number, get them back in. Right, they're going to get them back in. Eventually, yeah. So if you're an exporter, don't cheat because you will be in charge. If you're those fired Doge, you were fired by Doge and you worked on tariffs, you're getting offered many millions of dollars to work for the private sector to show them how to get out of these tariffs. I'm starting a boutique consulting firm going to work for NVIDIA tomorrow if I'm one of those folks. But as we said,

The tariffs are now in place. This is the policy. We have 145% tariffs. The Chinese are roughly around 83% on their tariffs. They say they won't go any higher. There has been some, quote, exemption. Again, nobody knows what's going on. But arguably, it's the Chinese tariffs do not matter as much as where those targeted tariffs are. And so this was the single biggest news to me. Let's put it up there on the screen. And obviously, we've been covering it from last week, and we knew it was coming.

But China has now, quote, halted critical exports as the trade war intensified. They have suspended exports of certain rare earth minerals and magnets that are crucial for the world's car, semiconductor, and aerospace industries. Now, this is a very important story because it really does reveal the entire game. Quote, 90% of the six rare earth minerals, which they have now ordered export restrictions,

restrictions on, are produced in China and refined in China. The metals and the special magnets made with them can now only be shipped out of China with a special export license for which U.S. companies no longer qualify. Quote,

But China has barely started even setting up that system for issuing those licenses, meaning that the concentration there is a complete freeze. If factories in Detroit and elsewhere run out of these rare earth magnets that would prevent them from assembling cars and products with electric motors that require them, companies vary widely in their size of emergency stockpiles. So the timing of production disruption is very hard to predict. But the main flag was actually a quote that was buried deep within, which just shows either rot at

the center of the US economy. Quote, many American companies keep little or no inventory because they do not want to tie up cash in stockpiles of costly materials. One of the metals, for example, subject to the new controls, dysprosium oxide, trades for $204 per kilogram in Shanghai, but much, much more than that outside of China. Meaning that, first of all, you would be competing for almost 10% of whatever of the

minerals or the refined minerals and magnets and other inputs that you need for your car. But second, that you are in a situation where when you create, you know, produce over 90% of something and you yourself have nothing on the balance sheet. Again, we are looking at just a freeze of economic activity. I would rather shut my entire production line down at that point

and just wait and see what the hell is going to happen. The exact opposite of what you want in an intended policy. So remember, they have a lot of cards here. You know, the infamous line, like, you have no cards. That's true for Ukraine. Not true whenever it comes to China.

When you said it so well, was it with a monkey? If you're going to grab onto something you want to grab, make sure that you have something else. If you're going to let go, you want to let go one vine. We have no planning here for U.S. companies. We have no tax incentive. We have no strategic stockpile. We have a strategic stockpile of oil. But we've been talking about this now for a decade. You and I, how many discussions have we had about onshoring? We went through the whole COVID thing. Our trade deficit actually increased with China. We did not bring very much manufacturing back here. A little bit with the

The chips act and a few things, but not even close to where we're supposed to be. So the number was going in the right direction. It was going up. The line was going up. If you go down by 90 and you go up by 5, it's like, okay, you're still down 85%.

But my point is just with these rare earth minerals, there has been no plan from the government around a stockpile. It's not like we can look to the EPA or some other agency, the energy department, and have confidence. And they're like, we have gone to Australia and we've ensured that US companies will have preferential export agreements here with our allies. No, instead, we're actually hitting Australia with 10% tariff at the same time. Why would they give you

They don't wanna give us anything. - And we also, we print the world's currency. If we wanted to go into a trade war with China, knowing that they control all of these refined rare earths that we need, knowing that in 2019 they threatened to do this, knowing that they did this to Japan when they were in a trade war with Japan, for 15 years the Pentagon has been talking about how this is an issue for our defense industrial base and that we should do something about it. We could have, if we chose,

created a strategic reserve of these elements. You get a bottom up. We do it with, like you said, we do it with oil. We decided not to. And then we went in and

Went started this trade war without the cards cards made in China and here we are Before the show was mentioned we talked about this on the show on Wednesday because China I think was on Tuesday that China announced that they were gonna slap these export licenses on these products And so it was clear it was only in the trade press at the time, but it was clearly Oh export licenses

I don't think you're going to be able to get an export license if you're – I think I broke it down on Tuesday. People can go roll the tape. It was in the Financial Times. It's there. Like they're not shocked. But then the mainstream press is picking it up like a week later and the US being like, oh, hmm.

Wait a minute, we didn't see this one coming. Now you need a dysprosium guy if you're going to keep your lines running. Yeah, I hope we have a good dysprosium. Do you have a good dysprosium guy? Yeah, do you have a good dysprosium? I don't, I confess. Hope one of the cameras in this studio doesn't break, by the way, because I wonder where they're all made from. Yes, go down to a one-camera shot. Can we put, let's see, A9, please, up on the screen? Because this does a really good job, this Financial Times tear sheet, of showing where all of the major concentrations of goods are.

from China, it's even more shocking sometimes even when you look at it. 80% of smartphones, 66% of laptops, and that is only the finished product. I'm not even talking about the input products. Some 69% of lithium ion batteries. You have three quarters of all children's toys. You have 50% of headphones. You've got 56% of sports footwear.

You've got 53% of rubber footwear, ceramic sinks. I mean, you know, you can go down the line for video game consoles, 86%. Electric fans, 88%. Christmas festivity goods, 87%. I guess we won't be saying Merry Christmas in December. Stainless steel household goods, 86%. You know, plastic kitchenware, 80%. Now, do you need to live, do you need a fulfilled life and have plastic kitchenware? I don't even use plastic kitchenware, I can tell you that.

because I'm concerned about some of the inputs and all that. But yeah, is it that easy to buy? No, it's not. You know why people use it? Because it's convenient and because it's cheap. Can we blame them? No, not in the current economy that we're in. If we want all as a country to be buying like Lodge products

you know, cast iron steel pans and stuff like I'm all for it. But, you know, you need a real cultural revolution, I think, in terms of convenience and the way that our entire society and daily life and all of that is structured. You know, right now it's like weirdos and crunchy granola moms who are into that stuff. But the rest of the world is or the rest of the country is trying to eat and they're trying to make sure that you can work two jobs and not be bankrupt, you know, rather than have to

rely on a lot of these other health concerns or whatever. And that's kind of my point around the entire thing. We are so dramatically reliant on China, and I would love to be able to change that. I don't think it's made our lives materially much richer. However, with no government dollar for dollar policy, industrial policy, I mean, just general theory about preparation, how can the public not conclude that this is not just a chaotic process

that with a net effect that will just make everybody much worse off in the immediate term. That's effectively what has happened here. Yeah. And the structure of the deal that we had cut with China was effectively, like you said, designed in Cupertino. So Cupertino's going to do a lot of, they're going to have the nice cushy laptop jobs. Yes. And China's going to make those laptops for those laptop jobs. And

The Cupertino people are going to make most of the money out of that. Like this is a – Intel is the same thing. The major amount of wealth is going to flow to these vice presidents, these middle managers. Take a service economy. And then to the Apple Store employees who are – an Apple Store employee makes more than –

If you opened a factory and were paying somebody to screw in, like the screws into the iPhone, you're actually paying more for that person there. So that's the deal. Now, and you're seeing this on TikTok all over the place, China's like, you know what? How about we rip that deal up? It wasn't that great a deal for us.

Like this whole thing where we do the work and we take like a tiny margin on top and you take everything else. So you have the military and you have the intellectual property. So we were comfortable with this arrangement for now because it was helping us develop our manufacturing capacity. But now, you know what? We can just go ahead and make the stuff. We have smart executives here. We'll just keep that. We'll steal your IP and we'll just sell the stuff. How do you like that? And we're like, oh, you can do that?

Yeah, well, that's kind of the issue, isn't it? We got some of those TikToks, right? Yeah, let's play one of these TikToks. There's a guy who has apparently been going viral on TikTok. And not just him. There's many others who are just blowing up on TikTok right now.

I hate that I even have to say those words. But, you know, let's talk about this before we can. You know, at the very same time that the TikTok is obviously putting its finger on the algorithm of trying to undermine Trump's tariffs, he's trying to save TikTok, right? So...

A little ironic there. Some of us have warned about that, but oh, he won the youth vote or whatever. So that was worth completely reversing his position on it. So these are the types of videos that are going mega viral all across the country right now. Let's take a listen. Hello from China. Let me show you the United States products in my home. Nothing. Do you have something from China in your home? You got to give it to the guy. He's right. Yeah. I mean, what does he have? Nothing. Yeah. He doesn't even, he doesn't need anything.

He's living a fine enough life there in Shenzhen. Max said he was talking about the move bombing in Philadelphia. He's digging up our history. Is he really? Wow. I mean, all right. We can trade insults or whatever.

Yeah, I mean, if we want to do propaganda about China, that's fine. The U.S., what does Trump say? We're not innocent either. Yeah, that's right. Look, I mean, when you go over there and you talk to, I've met many Chinese people who are just like wholehearted CCC believers and they're always like, they're like, you're going to lecture me? They're like, what about Chicago? What about, and I'm like,

Yeah, he's got a good point. He's one of those. Listen, I do encourage people to visit China if you're able to and to talk to Chinese people, especially around this, because a lot of them don't care nearly as much, actually, as some of the people over here. And part of the reason why is it's pretty clear, as you can see, where he just said. He's like, we don't have any products from you.

That's made in my home. Now, that may not technically be true, you know, designed in Cupertino, et cetera. We can hit them back with like, oh, we never designed that. It's like, yeah, but they've also got – it's not like we have a monopoly on smartphones. They've got Huawei phones. They're pretty good actually. Yeah, and at least we don't like sweep people off the streets just for writing op-eds. Oh, right. Oh, wait. No, never mind. All right. All right, Brian. All right. It's a little different, but we'll get to that.

We'll talk about it later. Okay. It's not different per se in this case, but on a mass scale level. Perhaps you're right. We do allow people to criticize our country, just not Israel. Yeah, that's right. There you go. Okay. So that's an important caveat. The point, finally, around all of this is just to show people –

how they have a tremendous amount of leverage on the refined rare earth minerals. They have incredible state capacity. And this is one thing I do not want people to miss. Let's put this last part up on the screen. A10, please. So I mentioned this on our Friday show, but I really want to underscore. JD.com, which is one of those massive e-commerce giants, it's one of the biggest companies in the global 500.

says they are going to purchase 200 billion yuan, equivalent to $27 billion of goods from Chinese exporters, quote, to help manufacturers shift to the domestic market.

The Chinese company also said Friday it would provide training, subsidies, and other support for export-oriented manufacturers to sell their products in China. That is what a functioning state looks like. So you're in the middle of a trade war. Your greatest importer and reliable, quote, trading partner cuts you off. So what do you do? You mobilize the full capacity of the state, and you order your equivalent of like Amazon or whatever, whatever.

Wayfair, et cetera, one of those types of companies, actually, frankly, bigger in terms of market cap. And you say, hey, we've allowed you guys to operate now for some years. You're going to pump $27 billion into the economy. And now you multiply that

times 100, and you have a state which is able to mobilize the full force of so-called private government, which is in tech or private industry, not really private, it's government controlled. The full government already, if you read again, all you have to do is go read what they say they're going to do.

They have full control over their currency. They're going to manipulate their currency. They have full control over their interest rates. They're going to drop interest rates, make borrowing costs much easier on the overall domestic. They're going to pump billions of dollars into their domestic economy to make sure that their manufacturers –

do not miss a beat and can continue to supply the Chinese market. They're currently on a global campaign trying to strike deals with U.S. allies, exporters who feel very snubbed. President Xi Jinping will be in Vietnam today. Remember, Vietnam is the number eight trading partner.

of the United States of America. And Vietnam actually was a major success story in overall US efforts to try to cultivate a manufacturing base outside of China. There have been accusations, there's been a trans shipping hub, et cetera. But 60 some percent of the Vietnamese people, even after what we did to them, are actually very approving of the United States of America. And we're ready to do business. It's called the Communist Party in the same way the Chinese are. But that's what they're doing over there.

And meanwhile, they strike deals with the Europeans about BYD cars, right? So they have a full strategy. They know exactly what they're doing. Over here, we've got Howard Lutnick and Trump changing their mind every 24 hours. Who would you rather do business with today? This is not caping for China. I just respect them. You have to respect competence.

What we see here is a complete incompetence with devastating results for real people. These are people's lives. Screw even the retirement accounts and all that stuff. People are just going to start getting laid off like in the next month. And that's step one. And there's no private capacity. There's no CCP to pay for your health care or make sure you get an apartment.

You're on your own in this country. Yes, and the move that is available to them that they're wisely taking isn't available to us on the flip side. In other words, we have to try to increase supply. We have to try to build manufacturing capacity overnight.

They have to just find demand somehow. It is much easier. Think about it. It's much easier to increase demand. And that's a great example of how they did it. Twenty seven billion dollars. We're going to you. You made a bunch of crap that you were going to sell to the United States, but now you can't sell it. We're going to buy a bunch of that stuff.

And they're going to get creative and they're going to find other places. With currency manipulation and with state subsidies, they will move it into Africa, South Asia, Europe, like you just mentioned, South America. A lot of these countries are going to get some real good deals on some Chinese stuff. And maybe that...

It produces long-lasting relationships, and it could, let's say in East Africa, it could end up with a little bit of economic stimulus because then the products come in and then the products get resold on the secondary market. And that creates jobs for people, and it creates a chain then between those countries and China. That's so much easier now.

to think through and to do, especially if you're planning it from the top, than it is to create supply overnight. Especially when the inputs to make that supply are controlled by China. It's so comically stupid that it could never have worked in this way. The only thing the US could have done and could still do is invest in its own manufacturing capacity. Invest in education and building up a trade workforce,

subsidize the construction of manufacturing facilities, and then use American diplomatic power to create markets for those companies. And then down the road, if they're deeply struggling, you can do targeted tariffs on the particular industry. That could work. Like that's not, it doesn't take a genius to come up with that. But this never was going to work.

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So let's go to recession, shall we? And some of the major titans of Wall Street are now saying, "Recession." Now, I want to be clear. I don't like these people, Ray Dalio, Larry Fink, all these other folks. You still have to listen because Wall Street is an expectations game, right? It's a fugazi. It's all fake.

And so whenever somebody who is a global market player says we're in a recession, it can actually become a self-fulfilling prophecy. So even if we don't like these people, we don't like what they represent, and we think they're responsible for a lot of bad that's happened in the country, it doesn't matter. Because when you control hundreds of billions of dollars literally at your disposal, not to mention basically an arm of overall UF soft power, of market activity, of deals, if you say...

there's going to be a contraction and recession on CNBC. It will cause all your peers, also titans of industry, to do the same thing. So that's why we have to pay attention when these people speak. Let's take a listen. Larry Fink, CEO of BlackRock, here's what he had to say. The United States post-World War II was a global stabilizer. We are the global destabilizer. Right, right. And that's a very

That's a very hard thing to say because I pride ourselves of bringing the leadership, bringing the conversations. Yes, I do believe we're probably starting. If not, we're in a recession. Yes, I think the market is still anticipating, underestimating how high inflation can get.

If you factor in all the tariffs, you factor in all these other issues, it's going to be quite additive. I mean, I read in a report that if you just take the tariffs in the cost of home building, the average new home could be up as much as 26%. We already have a housing affordability problem. None of this sounds any good to me.

And it's all self-inflicted, by the way. None of it needed to happen. This is not a pandemic. This is not a financial crisis. This is something that we've created. So you can see from his comments there, specifically about recession and about contraction, increase of goods, that this is, quote, if we are not in a recession, if you factor in all the tariffs, it's going to be quite additives. I do believe we are probably starting. So you could see from him. We also have Ray Dalio, the...

quote, legendary investor. I'll tell you more about Dalio in a little bit. But you got to hand it to him. He actually wrote a decent enough book and is always worth listening to. Here's what he had to say. I think that right now we are at a decision making point and very close to a recession. And I'm worried about something worse than a recession if this isn't handled well. A recession is two negative quarters of GDP. And whether it goes slightly there, we always have those things.

We have something that's much more profound. We have a breaking down of the monetary order. We are going to change the monetary order because we cannot spend the amounts of money, so we have that problem. And when we talk about the dollar and we talk about tariffs, we have that. We are having profound changes in our domestic order.

how ruling is existing, and we're having profound changes in the world order. Such times are very much like the 1930s. I've studied history, and this repeats over and over again. So if you take tariffs, if you take debt, if you take the rising power challenging the existing power, if you take those factors and look at the factors...

Those changes in the orders, the systems are very, very disruptive. How that's handled could produce something that is much worse than a recession. Much worse than a recession. That's not what you want to hear for no reason. And specifically what he's talking about is the dollar market. So like literally right as you and I are speaking, Ryan, there's been a huge decline in the dollar.

People are fleeing the dollar, and the currency is now basically – the reason why it matters is that not only do we have an import shock in terms of tariffs, but now those imports priced in foreign currencies will be more expensive relative. So there's been an overall slight increase in the currency exchange rate that is being added on top of the tariffs. At the same time, we have the bond market problem.

that is happening right now, increasing the amount of costs for borrowing from the United States of America and debt servicing. So bond market yield increases, dollar decreases, the overall imports here, you have a contractual environment. This is genuinely akin to like the 1970s and some sort of stagflation level crisis. The only thing that we are missing is high unemployment. And luckily we are not.

very yet, but we have all of the ingredients to create high unemployment if we do not back away and change this policy. I mean, look, let's also say this. Trump has the off-ramp any time that he wants. He can be like, look, we're going to do bilateral negotiations, and it's going to take a year, right? But this current idea is 90 days. The current 90-day hypothesis, I looked it up, the actual

Average bilateral negotiation between the United States and another country takes one to five years. One to five years for a bilateral trade. So the idea that you're going to do 70 different negotiations over a 90-day period, preposterous. We can't even do one with the UK, with our greatest allies. You.

And we still don't even have a freaking bilateral team. And you don't have to make anything. Yeah. And yeah, you're right. They don't even do anything. All they do is send a scotch. All right? Yeah. It's not even difficult. We'll figure out. I'm joking. My good friend's over there. Yeah, calm down. Calm down. Calm down. We love you. Go ahead. Yeah, no, it's like, let's put up Charlie Gasparino, the next element here too, which is, you know, and he's saying that what Sagar is saying is reflected in all of the conversations that Gasparino is having with investors and CEOs. That, you know,

All of these factors are coming together to produce a recession. And my quibble with Sagar's point is, so you're saying that Trump could end this. Yes, he could, and there would be a nice spike, and we'll start to pick up the pieces again. There's already, and it's hard to maybe even explain this to people, there's already significant damage done. Yeah.

businesses are, you know, some, I'm sure there are, you can, if you run one of these businesses, let us know, like businesses are going under, like companies that run in this just in time cashflow fashion, which is basically any company under like Apple, those are, those are struggling. And then the other question is, okay, Trump will, Trump could make a decision here. How does China respond? Is Chairman Xi merciful?

Because maybe Chairman Xi is like, you know what? We've got our boot on their neck right now. And we're actually liking the soybean deal that we're getting from Brazil right now. Brazil and Argentina, yeah. I saw Mike Rounds complaining in a political article this morning because they're getting absolutely wrecked. Something like 28% of commodities exported out of South Dakota go to China. It's crazy.

over a billion, you know, more than a billion dollars. Like this, this is just one little state. What, so does China have to automatically immediately be like, all right, you know, it's cool. You guys had a bit of a temper tantrum. All's well, we're back. All the deals that we had before are back on. But, and that's on the, on the fantasy kind of that Trump just immediately buckles on everything because Trump just keeps coming back with,

Oh, whoa, whoa, guys, I'm not done with this. Like, we've been getting ripped off for decades and I'm going to do this. Like, Trump seems deeply committed to this bit, like all the way down. To me, you'd have to have Congress step in and be like, no, the president doesn't have

the authority anymore to just move tariffs around. Yeah, I'm sure that- And that needs two-thirds. That needs two-thirds. Because Trump is going to veto that. Do you have any idea where the doubt would have to be for that to happen? There's a place. There's a spot. I'm thinking 70. And 7% unemployment. What do you think, 70%? 70% drop. Yeah, maybe a 70- I think three-fourths drop in the- Three-fourths drop. Because even 50-

2009, we came back. It would have to be, yeah, I think 70%. Or you lose 800,000 jobs in a month. Right. And you lose, you know, 5,000. Mass unemployment, 13% interest rate. Yeah, maybe. And then Congress is like, okay, you know what, actually, we're taking these toys away from you. Yeah.

You can't play with these matches. I mean, that is one fantasy I keep seeing people saying. Oh, my gosh. We do not want that fantasy to come true because it means that we will have marched through the valley of death. Well, I meant people have this fantasy that Congress is going to do something about it. No, they're not. Okay? Congress is currently, the Republican Congress is currently trying to cut $1 trillion from the overall government, spending, meanwhile, also increasing the amount spent on the Pentagon, just so everybody understands. Right.

That's the stated goal. I'm not kidding. Trump said, let's cut a trillion. He said that. All right. And the Republicans are the currently – by the way, the only way to do that actually would be to reduce overall manufacturing tax credits, just so you all know. Also, our borrowing costs. Really genius. Our borrowing costs, like you said, are going through the roof because interest rates are going up. Debt soaring is going up. 30-year mortgage rates are at their highest levels, which is – I think they're at like 70%. Yeah, it's a disaster. Yeah.

So, yeah, things are not good. And finally, B3, let's put this up there on the screen. This is very important, and this kind of gets to your point, Ryan. Quote, Trump tariffs on China will soon bring irreversible damage to many businesses. And the reason why is that, you know, anybody who's ever run a business—

can you really take a 90-day freeze to your books? No. I mean, the vast majority of people cannot survive that. Yeah, if you're Apple, sure. If you're meta, yeah. And you have this business that spits off all this cash. That's not what most people do, especially smaller businesses, e-commerce businesses, and more. If you look at here, quote, canceled freight orders and abandoned freight from China are

quickly becoming the norm, according to supply chain executives. Furniture producers in China have seen a, quote, "complete halt in orders from US importers." We are seeing the same across toys, apparel, footwear, sports equipment. We have had same across Southeast Asia. Now we may have some restart because of the 90-day pause.

Almost everything is on hold as it relates to China's business. Basically, it will stop all trade between the United States and China. These are all people I'm quoting who are supply chain and logistics experts. I also, you know, we had Ryan Peterson on the show who I previously mentioned. And Ryan is just constantly flagging about how difficult it is.

for all of these people to do business under these current economic conditions. And look, there are some who are able to take advantage with some decent enough cash that are on the books, but there are not enough people who are able to survive any of this and are just simply having to freeze everything.

And we are seeing already the stories come out across the board of e-commerce businesses, smaller people who produce things with a limited amount of cash, can't afford lots of inventory. They didn't do anything wrong, right? And if you're going to kill their business overnight, I think the government should give you something for it.

Kind of like COVID, you know? And look, you can disagree with lockdowns and all of that. And you're right, if we didn't do lockdowns, then I guess we wouldn't have had to do bailouts or any of that. But can we all agree that if we did lock you down, then the government, of course, owes you some remuneration? If they're gonna explicitly tell you that, then of course, you can't just kill somebody overnight, you know, whenever you're doing business and not just, you know, and just take it. But apparently that is the current state of where things are. - That's what a strategic approach to a trade war would look like.

Which is what the Chinese are doing. Right, exactly. Like this is going to be hard for 180 days. And this is how we as a government are going to help our people weather this because this is important for all of us and we're in this together. Yeah, we're not getting that. They are. Okay. Or we're not. They are. That's right. Yeah, actually I'm really curious to see. Let's say this lasts a year.

We need to compare the material life of the American after one year and the average Chinese, and not just some guy in Shenzhen, like an actual, like a normal middle-class Chinese person. And I would love to see how that actually goes. I mean, look, it's possible they're bluffing, right? It's technically possible. Yes, they have high amounts of state capacity. They still have a billion people. They have, you know, they're addicted to 6% to 8% economic growth. They had the zero COVID pandemic.

nonsense, which really exposed the fragility of the overall Chinese system. For all the BYD talk and all of that, you still have a lot of people who are very concerned sociologically about mass unemployment. There's worries that the AI bubble. Yeah, AI bubble, right? But just generally, I would still rather be them than I would rather be us right now, at least in terms of how things are working out.

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Okay, let's go to consumer sentiment. And this is kind of what we were teasing. And this really does demonstrate some of the issues where these are always self-fulfilling prophecies. So if people have less consumer sentiment and want to spend money, then they will spend less money, which will lead to an overall economic contraction. Let's go and put this up there on the screen. Quote, from anxious to petrified, consumer sentiment plunges further.

The University of Michigan's closely watched index has now hit its second-lowest reading on record, dragged down by fears of higher prices and unemployment. Americans turned much more pessimistic about the economy in April. The University of Michigan Consumer Sentiment Index nosedived to 50 from 57 just last month. Sentiment has been falling steadily through 2025, and expectations for inflation have now hit the highest level in 44 years.

according to the survey. Sentiment is now at its lowest, second lowest in history, only slightly lower in June 2022 when inflation was soaring thanks to snarled supply chains and pandemic buying. Back in 2022, the index actually did touch 50, which was the lowest reading on record going back to 1952. So that's basically where we're back.

in terms of inflation expectations. The survey, basically what they do is it actually took place over the turf time. So it's important to note that, that a lot of this is in real-time data. People are accepting this. And what you're watching in the data is that people are very concerned about their ability to buy things

and specifically about the expectation for inflation hitting some 44-year high, which means they are going to keep cash, hoard cash if you've got it, not spend it, not do any normal economic activity, not make any major plans, and in a 70% consumer-based society, that is the worst possible thing you could do. In China, you can get away with a lower consumer sentiment. You're not as hooked on it. You've got manufacturing. You've got a lot more fundamentals. In America, with cheap TVs and all this other, Walmart and all these other countries,

All these other companies, good luck. You know, talking about what Easter's coming up. Are people going to be buying present? Are people going to be traveling? Are people, you know, these are all decisions that people make. Already Delta Airlines came out and said, we have seen a mass cancellation of bookings across the board. We are watching economic activity go down. We have to revise earnings. Walmart actually is expecting, hilariously enough, increased business on the theory that they always do well during recessions. So keep that in mind, you know. Yeah.

The companies, or what is it, Walmart, McDonald's always do well. Dollar Tree, Dollar General. The recession-proof industries, not recession-proof, the people who thrive in recession. They're actually thinking, oh, actually, we're going to see more low-priced customers. All of the data out there for forecasts on the books shows that consumer good retailers, they're getting crushed at the stock market level. I mean, Nike was down some 20%.

or something like that as a result of a lot of these tariffs at one point. Even with Vietnam, things have changed a little bit for them. But you can just see that the danger lurks for all of them in this consumption-based society, though.

Yeah, this is the whole thing. And so that's all well said on the economic model. My colleague, Maz Hussain over at Dropside, I've seen him often make this point that he observes a lot of different cultures around the world. And one thing that he talks about with the United States is that

We are, as much as we love to hate on ourselves, one of the most successful pluralistic societies. Yes, we have our divisions. People don't like each other. But like,

Not compared to other countries. Like we have a multicultural society that gets along. Relatively well. Relatively well. And definitely relative to other countries. The glue that stitches all that together is our consumer society. We all love stuff. And we love the shows that are organized around us buying stuff. We love events that are built around stuff. Black Friday. And also you go to like parties in the U.S. Like there's...

little cheap stuff everywhere, consumer-driven things. Everybody's buying stuff for these events. The culture is tied together by the consumer society, and it is effectively done so to, you don't have to love the consumer society, but it's laudable that you can have a multicultural pluralistic society that isn't breaking out into sectarian violence in a routine way. Pull that away, good luck.

So, like, just, like, no matter how bad you think things are, like, they can always get a lot worse. And so if you rip the rug out from underneath that, we might be at each other's throats. Yeah. What's the quote? It's like, it's always darkest just before it's completely black. If we can't have, like, Sunday NFL? Yeah, NFL Sunday. Monday night and Thursday night. Right.

Well, that's what I was saying about Easter. I mean Easter candy, right? Let's say you even see a 10% drop in overall – that's a lot. I mean that's a lot of inventory. Now you've got to discount it. Now you've got to house it. You've got all these problems. What do you do? People are going to try and drop the price on 60%, 70%. People usually go home for Easter Sunday or so they're not buying gas if they decide not to. They decide to cancel their travel.

Or sometimes you give gifts to your nieces and nephews. This year, you're going to give a little bit. These are all these decisions compound. For example, I was talking to my barber. And I was like, hey, I'm just curious. Have you seen anything? He goes, yeah. I have noticed that people who used to come in every three weeks are now going five. And that's...

It doesn't sound crazy to you individually. It adds up. Compound that over your entire customer base, and you're seeing a churn of a pretty serious hit to your bottom line. And you multiply that across the entire economy. And the NFL, for instance, like the whole reason that it's able to be the league that it is is because of the advertising revenue that comes in. And if people are not buying the stuff that's advertised on those commercials, then you're not going to pay –

You're not going to pay the advertising rates anymore. And then the thing starts to collapse, starts to go backwards. Actually, we can serve as a good indicator as well because of our YouTube backend. I remember, I will never forget what the YouTube backend over at Rising looked like back in March and in April of 2020. Oh, it evaporated, right? God, it was like this, gone. Over probably like 90% of the revenue. So yeah, I can, unfortunately, we can tell you real quick. Have you noticed anything? I'm taking a look now. Oh.

No, actually, things seem fine. Hanging tight? Okay. Things seem fine. You guys are still buying stuff? All right, keep buying. Actually, you know what? This is a good time to say this. So, you know, our premium show that we send out to people. Oh, this is a good point. Yeah, I've always noticed this. Our premium show, which we send out, it's an unlisted link and also available on local Spotify, et cetera. One of the places people watch it is sometimes an unlisted YouTube video that is available. Our premium subscribers have been telling us that even though we earn, again,

We earn no money from this. We are not turning monetization on. YouTube reserves the right to monetize that if they want to. And it's always a recession indicator to me when they start doing that. Because I remember right back in 2022 when we launched the show, immediately when the gas prices skyrocketed and we saw the pullback, that's when they started doing it a lot. They stopped. Now, recently, just in the last two weeks, people have been complaining ad nauseum saying, oh, my God. Which they should because they're paying. Yeah, of course they should. I'm not

mad at them. What I'm telling you is that that is a major sign to me that they're trying to fill as much inventory as possible to blast it and satisfy some of their advertising. And again, we make not $1 from that. We don't want them to do it. So I guess that's a shout out. If you do want to watch it, totally ad free. Spotify is still there and Locals is still there as well. But unfortunately, if you watch this on YouTube, there is nothing that we can do. And it's infuriating, but that is a signal to me.

you know, that YouTube is basically throwing everything they've got, all inventory that they've got, they're throwing as many ads into that as possible. And when they do that, it means that they're probably making less in terms of their CPM. So they've got to fill it up with more ad blocks than normal. So just a little bit of insight behind the scenes. Let's go to the last part here. Just C3, please. This is just about the bond market. This is the same thing that we have been looking at, but you can really see that those yields continue to increase to levels which they really do not want them

to. They're very worried about you going to a yield of some 5% with a 0.5% increase of percent, which is not supposed to happen, really, if you look at the overall long-term trends. And that right now,

with the current stated goal of bringing that yield down and being unable to be to do so if there's a worry about some runaway you know basically selling of u.s bonds which would make it so that the yield increases borrowing costs and mortgage rates and interest rates and all that continue to go very high and it would very much cripple the administration so that's another feedback loop where mortgage rates continue to go up i actually think they're i

I think they went down after they were up at some 7% or whatever. Again, everybody continues- I think it went down to like 5.9 or something. Right. But people are still watching, right, for the Federal Reserve. And if the Federal Reserve and Jerome Powell and them decide not to do any sort of emergency rate cut, we really are stuck in this for a long time. And there's a lot of things pulling- 6.62? That's high. You don't want that-

And there is some question about how organized this is. We're still trying to sort this out. But there was reporting that Japan was dumping bonds. Mm-hmm.

And Japan is obviously one of the biggest holders of bonds. Now China, huge holder of bonds as well, Canada. So we are out there antagonizing all of these countries while they literally hold our cards. And if they take our cards and they just start selling a few of them, that drives down the price of our bonds and then drives up the yield. That's just mathematically, like there's no other, that's how it's gonna work.

If there's a sell-off and it's never worked that way before for the most part. You have a crash in the stock market, that means people are selling stocks and moving to the safety of treasury bonds. That is the orthodox understanding of the global economy that's broken right now. And it's probably a combination of people leaving the kind of structure of the American dollar economy

and our adversaries, like Japan, who should be our friends, but we've turned them into adversaries, deliberately bringing pain to us so that we will back off of this. Because it costs them, too. They don't want to do this. Because if you are a holder of American treasuries right now and you're selling into a down market, you're losing money.

millions and billions of dollars, but you're costing us a lot more. So you're prioritizing geopolitics over your bottom line in the interest of your bottom line doing better down the road. And it is what, like Trump was asked when he caved, why did you do this? And he said, his exact quote was, the bond market is a very tricky thing. Yeah.

Isn't it? Isn't it? James Carville famously. They're getting yippy. Getting yippy. James Carville famously in 1993 said if he was ever reincarnated, he wanted to come back as the bond market because it was the most powerful thing in the world. Did he say that? I didn't know that. Because it's what. What's the context for that? So Clinton came in with a grand economic vision. Yeah, I know. And Larry Summers and his buddies told him if you do this, the bond market is going to panic. Interest rates are going to go up and you'll have a recession. Huh.

They're like, so you're telling us we ran on this whole thing that we want to do and we can't because of the bond market? They're like, yes, that's what we're telling you. And so Carville was like, when I get reincarnated, I want to come back to the bond market. I need to go back. The bond market just slapped Trump back into line. Do you have any good books on the history of the Clinton administration? I only read My Life, which is complete propaganda. It's just laughable. Clinton's book. Let me think on that. I'm not sure. I don't know any decent ones.

I still can't believe I even wasted my time reading that book. It's so stupid. It's like 700 pages. No, it's two lifetimes. Yeah, we wrote that in longhand. Yeah, it's two volumes. It's so big. Anyway, all right. Long, long, long time ago.

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