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#FinanceDaily: Klarna eyes IPO | Bessent interview | OECD cuts outlook
Recorded: March 17, 2025 Duration: 1:11:24Space Recording
Short Summary
The transcript discusses potential declines in the crypto market, with revenues dropping and bearish predictions for Bitcoin. However, there are also signs of growth, such as China's efforts to stimulate its economy and the potential for Bitcoin to be integrated into international transactions. The expectation of asset inflation and signaling to the upside suggests a complex interplay of decline and growth in the market.
Full Transcription
All right. I can't tell if everybody is up or not.
Spaces is doing its thing again, but...
I think David Nikoski's up.
I can't tell.
But I think we have quorum enough that we can start.
Also, Klarna is spelled incorrectly.
So let's get that done.
Lots and lots to talk about.
It was an eventful weekend.
Robert.
I still don't feel comfortable calling you Robert.
I'm just going to keep calling you in for, but just kidding.
That's okay.
Robert.
Robert.
Besson had he did the interview circuit this weekend
He was on I believe meet the press I can't remember which one the one with Kristen Walker
And it was an interesting interview I feel like he is
He is staying on message
But he is more bearish in his tone and
than even the administration.
So it's kind of an interesting sort of dynamic.
Did you have a chance to see any of those interviews this weekend on Sunday?
Yeah.
Yeah.
What did you think?
I don't know.
They needed someone to go out and message that stuff.
I mean, I tried.
I did my best to compile a list of the real story, you know,
like the things that...
that instead of focusing on a six or seven percent decline from an already insane valuation
that was you know caused by a move higher that was only due to excessive government spending like
you know i i i did my best but someone someone from their the administration has to go out and
like message clearly because trump is so inarticulate and um
frustrating sometimes for me.
He just, you know, he's Trump.
And I think if there's an intelligent, educated, articulate person that can go out there
and message the case for kind of this restructuring, I think that they'll have a lot
much more success rather than, you know, Trump making stupid kind of asinine little
comments that then get,
kind of carried as the administration's narrative. I think it's much better for them to have
someone like Bessent go out every single week, you know, multiple times a week, and make those
kind of appearances and make the case and articulate to the American people just how badly the
economy is broken. And why?
they're doing the things that they're doing
and kind of the pros and cons and risks and rewards
and what to expect and the timeline, right?
Like all that stuff is super important
and you cannot trust Trump.
to articulate anything.
So, you know, they need someone who's, who's halfway intelligent and articulate enough to kind of, you know, prepare the American people and get them on board.
And I think he did a good job of that. I mean, you know, there's so many points to touch on and he hit on a good number of them.
But yeah, I think that he needs to do like a lot more of that.
And I think Stephen Moran too.
That guy's super smart.
And, you know, I think he would be a good messenger for kind of the agenda.
And like, you know, like I said, like what to expect and why we're doing it and why the economy is the way it is.
All those kinds of things.
Because if the American,
the American people are still kind of economically illiterate
because our public education system is so broken,
that, you know, you need that.
Otherwise, it's just, it's not going to go well.
Well, I think back to Mnuchin,
and he was pretty good.
I would say in terms of communication,
I don't know about his policies,
but he was out there quite a lot,
just kind of undoing the damage done from,
Trump tweets and so it's a I feel like
Besant is gonna need to do a lot of the same
and now he doesn't just have to make up for Trump
he also has to make up for Lutnik who I actually like Lutnik
because he says what he thinks which is kind of cool
very unusual in a commerce secretary,
but Lutnik also gets ahead of Trump,
ahead of the administration,
doesn't know the talking points,
doesn't care about the talking points.
And so it is interesting to see both...
Besson have to make up for both Lutnik and Trump.
It's like two Trumps in the White House right now.
But Paul, your thoughts on Besson's interviews.
I don't know if you had a chance to look at them,
but would be helpful to give your thoughts.
I saw the...
Kristen Walker, Meet the Press.
And I think, you know, he tried to summarize it, but, you know, one of the things you could just say is, like, the best way to explain it is when you're trying to turn around a battleship, like, you're going to make waves.
You're going to make waves that you didn't anticipate.
There's going to be things.
And that's what I think essentially they're trying to do.
You know, they're repositioning the economy in a lot of different ways.
One, bringing back more manufacturing, refinancing the debt, cutting waste, cutting spending,
re-extending the tax policies from 2017.
So there's a lot of things happening, you know, killing birds and the avian flu.
Like there's all these things happening, and they're doing it really rapidly fast, right?
Years ago, they would do maybe one.
portion of kind of some policy and then let it take two years to propagate, maybe fill in some small things.
They're doing everything at once between the tariffs, Doge, you know, the...
foreign policy, all these things, like, very rapidly.
And so, you know, people are not absorbing it.
They can't absorb it.
It's happening so fast.
The one interesting thing that Besson said, and maybe infra slash Robert will like this,
is like, he had said, like, the American dream is not cheap flat panels, right?
And he goes, like, you can't eat a flat panel.
You can't eat iPads.
He didn't say that, but that's kind of like the...
Intention because the American dream is having your children be able to like
You know
Have a better standard living that you had having you know being yourself to afford a house all these things and so
That was a clear and he that was in response to
Kristen Walker saying like
like pulling some quote that he had said a like the day or two before like they're not focused on affordable goods or something like that it was just like it was a little like trying not to take him out of context but just like maybe missing the point like he's saying listen like we can get
Getting cheap goods from China is not the American dream, right?
The American dream is much more than that.
It's a way of life.
It's owning a home, having a good standard of living, having a stable employment, all these things.
And so I think that was the thing that stuck out to me, just that one quote that he had said after that regarding the standard of, you know, the American way of life standard of living.
Sorry, I don't know, there's some issue with my audio.
It sounded very similar to what Infra's been saying.
I mean, it's kind of interesting to hear Besson-parriding, similar talking points.
I will say that I don't think he did as great of a job explaining what's going on.
I think it's hard to explain what's going on right now to the American people because there's so many moving pieces.
And...
Just focusing on tariffs is probably the wrong answer, right?
Just focusing on that because I don't think Americans care that much.
They don't understand what it means and trying to bring it back to the middle class is interesting,
but I don't think it's going to get folks to believe in this.
I think the average American could care less about the middle class.
If you ask the average American what it means to be successful,
they will say things like, well, you need to make half a million dollars a year.
young people, at least. And so they have such a warped sense of what the middle class is, but I am kind of curious.
That is what it is nowadays. Most people still cannot wrap their heads around just how much the money was debased during those four years.
That is what it takes.
Robert, appreciate your thoughts always, but to claim that you have to make half a million dollars to be in the middle class is kind of...
Yeah, I want to say half a million.
I'd say here in Southern California, I'd say 300 to 350.
But the point, the thrust of the point is still the same, right?
Which is 300K, 250K is the new 100K.
And most people can't wrap their head around just how much the money was debased.
I mean, they printed 40% of the entire money supply in a year and a half.
Well, what I would say is even 100K back in the day, like, let's say 10 years ago, was considered upper, like way upper middle class.
You know what I mean?
And so I'll just say, like, again, I think we sometimes get warped in our...
bubbles, but...
Well, you need 300K here in LA to qualify on a piece of shit house.
300K. That's what it takes to qualify for...
Yeah.
There's actually like a really simple solution to that.
People should move.
Like, I'm sorry, but it's an awful thing to say, but that seems like the obvious move.
There are other places in the world in LA, right?
And so that's the unfortunate part of it, which is what ends up happening is people move and
there's less demand, which then reduces prices.
I mean, like, we like to believe in free markets, but then we want to suppress...
Again, I'm not saying homes in L.A. are not atrociously overpriced,
but L.A. is a very attractive place to live, right?
Like, if you move to Chattanooga, Tennessee...
They're probably like somebody from Chattanooga is listening just saying, look, what the fuck, Donish? Why are you picking on us? I'm just saying like if you move to Chattanooga, I'm sure you can get a great house with a $150,000 salary, like an incredible nice house.
Where are the 150K salaries, right? Because like the cost of living is lower, but so are the wages.
But we have remote work.
And that's the point that I'm making, which is like, I just want to be honest about it too, which is like I get it.
It sucks in certain parts of the country.
But like there's a really simple solution.
Move.
Move to as Americans have done for generations, by the way.
Like when my, you know, even when my family got here, we didn't automatically say I want to live in the city.
I don't want to live in Chicago.
Like we were like.
an hour and some change out of Chicago, right? Which is still quote of quote a suburb. So,
I'm not, I'm just saying, I'm not talking to LA, LA. I'm talking about like the suburbs of
LA, right? Like an hour commute out of LA. And you have an hour commute is like four miles.
Well, yeah, yeah, but, but you still have to make 300k a year to a, like when I say LA, I don't
mean L.A. Like,
Like that is so prohibitively expensive.
That's not even worth talking about.
I'm talking about the San Fernando Valley.
I'm talking about like a thousand oaks, Camarillo, right?
Like San Bernardino County, the San Gabriel Valley.
Like I'm talking about like not nice areas that are an hour commute each direction.
And it's still you have to make three interk a year to qualify for a house.
And this is after the exodus.
So many like rich people moved away to Texas.
So yeah, it's kind of, I mean, again, you know,
You're not going to hear anything but empathy from someone like me who
believes that they're stealing away the American dream my point is just that like it is interesting to hear
sort of the only way that we can fix this is to bring the whole thing down. It's kind of a doomerish, but it was interesting because Besson actually
I have to say if you're a dumer
Besson is like your boy right now if you listen to those interviews you're like this guy and
is in the he's this he's in the treasury like we're we're we're we're we got this dude
talking and it's like i've never heard someone in such a powerful position be like no no it's gonna
suck for a little bit it was if we're not even in a recession we're nowhere close we barely had a
correction
I'm hoping, just so people know, that we can get a little bit more of a correction
without breaking everything because then people can get a good buying position heading
into the next couple of years.
But Dwayne, your thoughts on all of this.
I mean, did you watch the best interview?
Just want to make sure, because I want to make sure that we're commenting on it because it was
very different than what I've seen previously from the Trump administration.
Yeah, thanks. Good morning. I did see one of the best in interviews.
And the thing that stood out to me was that, I guess, well, the pace, right?
Because he's really trying to, you know, pull back some of the comments that Trump has been making.
So to see his pace where he's saying, you know, okay, let's slow down and let's look at these things.
topic by topic is, you know, it's pretty interesting because he's trying to
go back the reins while Trump is still going full speed.
So it's almost like you're getting a weird contrast between him and then you're getting
a different kind, you're getting a different style from Lutnik because Lutnik seemed like he was
initially saying his own thing, but he seems like he's more in line with the administration
now and he's kind of...
trying to counter some of the you know some of the questions that he's getting from the media
what i found interesting was the comments about tariffs in the sense that he was saying that
tariffs are really at large a negotiation tactic so there's more tariffs or talk about
imposition of tariffs coming in april and then
you know, he's saying that a lot of the partners,
the biggest trading partners that have a trade imbalance with the US
are going to come to the table and want to negotiate
and that some of these tariffs may be pulled
back and we'll have a different environment by say June or July. So I thought that was interesting
because it's the biggest clear contrast between some of Trump's rhetoric where he's saying,
you know, I'm going to put on these these massive tariffs and, you know, I'm going to keep them on
if I don't get a response, et cetera, et cetera. So he's really, you know, he's fully willing to,
you know, dive head first into it. So I thought that was interesting. Also the comments about
cheap goods as well. And just to echo some of the comments here, you know, saying that the American dream isn't about receiving cheap goods is one thing, but it's just when you have this, you know, low wages in America and, you know, the cost of living is relatively low in a lot of places in America. But at the same time when you're not making a lot of money, you know, you're going to feel that you're entitled to cheap goods.
that needs cheap goods in order to survive.
And that's been the case for the last 20 years, right?
America is addicted to cheap goods in regards to, you know,
NAFTA and some of the, you know, some of the offshoring of manufacturing
from China and so in Indonesia and other places, right?
So it's it's a bit of a funny message to tell Americans when they're
struggling with inflation and struggling, you know,
with paying, you know, paying for things here and saying that it's a
affordability crisis so he does have a bunch of different points to make here and then he you know
he also was what was uh talking about energy and basically saying if we can get if we can get
cheap energy prices and um bring the cost of business and regulations down we should be fine
everyone don't panic here but it's just um there isn't as much of uh
coherent message coming from the administration if they were all on the same page and they all had sort of the same pace
I think that the American people could have you know something more tangible to grab onto like say give three points as opposed to
Trump talking specifically about terrorists and then Bessens and
you know Lutnik and some of the others coming in and talking about 10 points so those are some of the things I thought about once.
Yeah it's interesting.
I will say, I liken this to, and I think they're doing too much too fast.
I feel very strongly about that.
I think it's a big, big, I think politically it makes sense, but I think financially it could break everything.
So I will continue to maintain that they're doing way too many things too fast.
And this is not a game of risk.
This is like, you know.
global geopolitics and financial, you know, and like trade wars.
I mean, this is a real big, big and complicated situation.
But, but I do get the point that he's making.
And I do want our listeners to understand that.
And obviously, we can hear from Paul and Robert about that too.
But I was going to say, what they're saying is imagine that you're chained against a wall, right?
Right.
You're chained against a wall. You can't get away.
And someone comes to you and gives you a little bit of water, just a little bit of food, just a little bit of water, just a little bit of food.
You don't say thank you for that. You're chained against a fucking wall.
What they're saying is if we're going to unshackle you, yeah, you might have to go chase some food because the warden that's bringing you a little bit of food is not going to give it to you for free anymore.
At least you're free.
And I think that's the point that they're making is that we need to unshackle you.
It's time to unshackle you from global trade policies that are clearly draconian and anti-American.
And I think, like, I get it.
I just wish they would do one thing at a time.
Because it's incredibly hard to follow.
This uncertainty is incredibly high for the markets.
But also, it's incredibly dangerous because they could make one wrong move.
And I think, Anas said it the other day, and I'll repeat it.
History is full of governments making mistakes.
full of it. Like to try to envision that this will be a government, probably the first government
ever to never make a mistake is insanity. It's like literally stupidity, right? And cultism.
Like we got to know that governments make mistakes. So when they're doing a lot, they're more
likely to make a mistake. And I think that's the thing that is concerning. I do think that
The cheap goods, like the fact that Timu could kill American companies
because of some stupid loophole in customs is insane.
And draconian.
It's messed up, right?
So I do want to say that.
Fast fashion being a thing is the most ridiculous thing I've ever heard.
The same people that claim that we care about the, and I'll talk about this in a little bit,
that we care about the climate, don't give a shit when it comes to getting things for $4.
Right?
Getting a shirt for $4 that you're going to throw away.
So consumption is not always good.
Sorry, Paul, go ahead and then we'll go to Robert.
Yeah, I'm just, I'm comparing it or I'm trying to think of it in terms of like Reagan, Volcker, like fighting inflation.
Not that the policies are necessarily fighting inflation that the Trump administration is doing.
It's just when Reagan came in, like I actually can still remember this, like they had to crush the economy to fix it.
And it was a hard thing to say, and obviously media is different today and the whole cycle is a lot faster now.
But they had to do that to kind of control inflation.
Like they tried it, like Nixon tried it, Ford tried it, Carter, kind of maybe tried it a little bit.
But from 71 through 79, we had this massive amount of inflation.
Right.
for a lot of different reasons, but to fight it, they had to raise interest rates massively.
I'm not saying that's the solution now.
I'm just saying, you know, they had to basically tell people, hey, it's going to be a little rough for a while, but we're going to fix the problem.
Like...
you know, President Ford, like, they would put out these little buttons and win, whip inflation now.
Like, and they were like, say, turn down your heating and, and wear a sweater and stuff like that, like self-sacrifice.
Well, you know, Paul Volcker just said, you know what?
Like, he knew what to do.
He said, I'm going to, like, raise rates to, like, 20%.
And that's going to crush the economy, but it's also going to create, get rid of, like, slow to stop inflation and actually be, you know, maybe you have disinflation.
And then we'll build from there.
Now, no one wants to hear that.
No one wants to take the pain.
And maybe that's what Bessent was kind of like saying a little bit.
It's like, hey, maybe in four years from now,
you're going to have a nicer setup in terms of being able to afford a house or have a better,
more stable job or have more manufacturing in the United States. But we have to go through
this kind of like, you know, pain. Like you got to go through purgatory to get to heaven, right?
Like that's the, you know, let's say maybe from the Catholicism. We can kind of tie it into St. Patrick's Day.
The Irish took a lot of pain to get to their own independent country.
Right. So tie it into the date here.
But.
That's something that it's hard to swallow and, you know, people have already, people are already hurting, but how do you fix the problems without kind of like shaking things up? You know, tariffs aren't going to be permanent, but you can see some countries are actually pulling back a little bit. So long term, that could be a solution, but.
what's the right messaging to tell you someone, hey, like, we're going to screw your life up for a while, but then things are all going to be better in four years.
And I think the other side is, you know, do you have a position?
We haven't seen a president, you know, in a hundred years that has, you know, knows the game and is a lame duck president coming in.
Trump doesn't care, like he doesn't worry,
he's not worried about getting reelected,
he's worried about like fixing the problems,
things that he sees are problems.
And so that may, you know, lead to some of this,
like, hey, we're gonna take some pain,
but we're gonna fix the problems.
Like, what's the right messaging?
I don't know.
And is it happening very fast?
Yes.
But, you know, thinking back to the 1980s,
because, you know, I don't think David's here to like,
remember how old, the older guys are here.
It's something that, you know, they crushed the, like, you couldn't get it.
You couldn't buy a house.
You couldn't get a car.
Everyone had a crappy car.
You know, people, there was very high unemployment, but things kind of.
By 1984-85, you know, there was people felt that things were better now.
And they re-elected Reagan.
They don't have to re-elect Trump.
He can't be re-elected.
But, you know, I think that's what they're trying to do.
They just got to figure out how to tell people this, honestly.
And how do you protect people, too?
You can't really protect people if you're cutting, spending,
and trying to fix the economy through tariffs and other means.
Also, as a reminder...
Even in the 80s, the comparison of wages to assets were nowhere close to as bad as they are right now.
So, yes, it was bad, but if they try to do what they're doing right now without some stopgap measure to help lower middle class,
I think it's going to be pandemonium.
There will be hunger and awful, awful things coming.
And by the way, one of their first actions was to say we're going to cut money out of,
entitlements, which again, I am for, I just wish they went out for the rich first.
So like, means testing social security.
I think that's a very fair.
I can't imagine anybody being against that.
Like, why don't we means test social security?
Oh, that's right, because boomers say that they earned it.
Sure, why don't we cover it up to the point that you donated during your time or whatever,
get paid in?
And then after that, no more coverage.
I don't know.
But, like, having, like, a real conversation around.
around those things doesn't work because it's not politically expedient. It's easier to go after the vulnerable. So all I will say is yes, it is his last term, but
I think he still cares way too much about politics.
But Robert, go ahead, sir.
And then we'll go to Simon and we'll keep moving on.
The economy was not as hyper-financialized back then in the 80s, number one.
And the reason it's so hyper-financialized is because of the dollar's reserve status.
The data here is super clear and I think it's important to like go through this just very clearly for people that I know it makes their headspend.
Go back to three or four slides and you'll see Asari Millennials.
That is the median sales price divided by the median family income overlaid with the trade deficit.
And we can see that it's essentially a perfect fit.
The only real divergence was following 2008
when QE and stimulus buying mortgage back securities,
all that.
It's the same chart as the trade deficit gets worse,
home affordability gets worse.
It's the same chart with S&P 500.
It's the same chart with the net worth of the top 1%.
And it's the same chart with the corporate profits.
So as a trade deficit goes up,
Who benefits? The top 1% financial assets like the SMP 500 and sadly, homes,
homes have become a financial asset, not a utility good. And corporate profits. That's who benefits
as the trade deficit gets bigger, as the gap gets wider. So who loses? Okay, now go back.
It's the third slide back. That is the average.
you know, wage, personal income, divided by M2 and gold.
And you can see that since China was admitted
into the WTO, the World Trade Organization,
that was when globalization kind of really took off
in the early 2000s, late 90s.
Real wages, real purchasing power of the average Americans' wages
have been declining in perpetuity, just
relentlessly for decades. The real purchasing power of Americans' wages has been declining
relentlessly. So we know who it benefits.
corporate profits financial assets like homes and the s mp 500 corporate profits net worth of the top
1%. Okay, we know it's hurting the average you know 99% American whose real wages have been
declining relentlessly so then that makes us wonder okay well like what is all this GDP growth
that's the the first slide
And the only thing that has been outperforming GDP is debt to GDP, government debt to
GDP, you know, from insane government spending.
the corporate profits of the SMP 500 and financial assets.
And so this is a consequence of hyperfinancialization where your entire economy rests on the nominal return of financial assets.
That's what we've turned our economy into where debt to GDP just goes up forever.
Government spending just goes up forever because it's one of the few things that can prop up GDP.
Corporate profits go up and financial assets go up.
And meanwhile, the average Americans wages in real purchasing power terms as a share of M2 money supply are going down.
So it's really that simple. The data is like crystal clear on this.
It's not up for debate. I've been begging for someone to, I mean, these are just a few of the many dozens of
of charts that I've posted, I've been begging for someone to refute it.
No one has been able to refute it because the data is the data.
So we know who it benefits and we know who it harms.
So restructuring if there's some pain and we can't get a $200 flat screen TV,
but our real wages are going up.
The real purchasing power of wages is going up.
Then I say good.
Who cares what that's good.
No, but that is so important.
Shouldn't we forego all these tax cuts in this new regime?
I'm not saying later, do the tax cuts right before you leave.
How about that?
But like right now, aren't we trying to, what I'm saying,
I'm trying to be as clear about the premise that I'm saying,
which is let's not do tax cuts in 2025.
Let's do tax cuts in 2027.
Right? Right before you go, let's do tax cuts.
Well, you know, because you don't trust the other government.
Right. Okay, but you know what the biggest stimulus would be for the middle class?
If you cut my federal income tax rate, I would have like $30,000 more per year.
Okay, just cut yours. Just cut middle class. Why put corporate tax?
You just mentioned corporate profits have been skyrocketing.
Yeah, yeah.
The corporate profits, corporate profits have been incredible.
I don't think these corporations need these tax cuts.
No, they don't.
And here's the thing.
I am not a socialist.
I don't believe in socialism.
I don't believe in redistribution.
I don't believe in a wealth tax.
I don't really believe in any of that stuff.
But it is insane that if you work for a living, your marginal tax rate is twice...
that of if you just hoard a bunch of money, right, in financial assets,
uh, in the S&P 500 or houses or whatever,
your tax rate is like half of what the average,
but that's assuming you sell it.
Yeah, of course.
No, hold on.
That's assuming you sell it.
You can just take a loan against it.
Well, it's even worse, right?
So it's even worse.
Yeah.
So, so I would, I am in favor of equalizing that, right?
And, and I think you can do that without making it,
without doing a wealth tax, I think you can get, you can start to address the kind of income
income side of the balance sheet. I think you can do that without like a wealth tax or any crazy,
you know, 70% for the millionaire. Right. Right. Like you don't have to do any of that.
You just slightly raise the capital gains tax. I don't know as much about the corporate, uh,
income tax how it compares to the rest of the world because we do want to remain competitive.
So and I'm not an expert in that. But, but I do think that it's safe to say you could raise
the capital gains tax while lowering the income tax and it offsets, right? Like you at least bring
them somewhat closer to being in balance because you look at how how much more capital has
outperform labor over the past three, four, five decades. And it is like mind boggling.
Well, also, as a reminder, this weekend, at least, we were talking about
corporate taxes and shell companies.
So the reason I'm bringing that up is because of shell companies.
And I don't know when this was actually passed.
This is per the US Treasury.
It came out this weekend, according to unusual Wales.
The US government, oh yeah, it did come out this weekend.
The US government will no longer require shell companies
to disclose their owners and beneficiaries.
I thought we were America first.
What's happening?
How is this America first?
Build a company, put a company somewhere else.
Don't tell me who owns it.
And let's just keep keeping on.
It's not very America first, gentlemen.
Not very America first, Mary.
I'm just saying, all right.
Simon, you've had your hand up.
Let's keep moving on to the next topic.
Because I do want to get to OECD cuts and get to UNIS.
Go ahead.
Okay, yeah, just want to, a quick comment.
The one thing I have learned about the Trump administration is ignore everything he says and look at what he actually does.
So we're talking about cuts.
If you look on the Doge website, there's about $105 billion a cut.
Many of those are very questionable.
Many of the people that have been fired have been re-employed.
And this weekend on Friday, it was approved to have a $1.7 trillion budget,
which is the same as the Biden administration and 53% greater than what the Obama administration had.
If you look at also $6 billion is going for war, and Trump has escalated or sent already $12 billion, which has escalated wars in West Bank, Gaza, Lebanon, Syria, Somalia.
And so I don't see any...
Yemen, Ruthis.
and now Yemen. So I don't see any cuts yet. So just follow the money rather than the rhetoric.
I think it's the same model as the Biden administration. Just more shock and awe.
There's more shock and all. Lots and lots of... I mean, I will say it's fascinating to see how they went after the Houthis in the last week.
It seems incredibly dangerous.
Again, trade wars.
You've been bombing him for 10 years.
It's no change.
It's just the same result.
Yeah, yeah, but I thought he was going to be, you know, he was going to, he at least claimed to govern differently.
And so it is sad to see more of the same.
But I will say I'm going to, despite all this commentary, because we have a daily show, I will say that I am curious to see how this all plays out in 12 months since he comes in.
Because at 12 months, he doesn't get to blame.
He will.
He will blame the last administration, but he doesn't get to really, American people won't buy that shit.
So I am curious to see how it plays out.
Talking about Houthis, I want to get what's happening with oil and gas and, any other comments you might have.
Is this escalation going to affect things in any way?
Good morning, everyone. Do you hear me?
Yes, we can hear you well.
All right, thank you. First of all, for those who are surprised by the attacks on the Houthis,
the decision to attack them and finish them, whether they can finish them or not, that's a different
story. But the decision was taken months ago. And to prove it to you, all you got to do,
just check my timeline from yesterday where I linked a space we had with one of the top
experts on the Saudi Arabia and the Houthis and the Arab Peninsula.
who talked about this months ago and he said there will be massive attacks on the Houthis
and the objective is to finish them completely enhance Sannaa to the, what they call the legitimate
government of Yemen.
So this is part of an old plan.
It's not new.
However...
Given what we've been doing in terms of research on the Red Sea, the impact of shipping, etc.,
there is nothing, the attacks have nothing to do with shipping.
Period.
Even if you go back to that space,
you will find out that it has nothing to do with shipping.
It has something to do with Yemen, with the UAE,
with Saudi Arabia, with Iran,
everything else but not with shipping.
Again, the question that I asked so many times
and people should pay attention to,
why Russia can send all its ORLs crude
through the Red Sea without any incident.
but it cannot send a single LNG tanker through the RITIC.
Once we get the answer to this question,
we understand that it has nothing to do with shipping.
The attacks on the Houthis has little impact on the oil market.
We see some New Jerk reaction from the market for a few hours.
The tankers that are at risk, they are all going around Africa.
The other tankers basically are going through without any problems
because they already have agreements with the Houthis.
And one of the ironies is if you follow those ships, especially for the
those who follow shipping 24-7, you will see that those ships going through the H.C.
are broadcasting a message that they have nothing to do with Israel.
I personally and other experts believe the same too,
that the Houthi attacks on shipping in the Red Sea
has nothing to do with Gaza, has nothing to do with Israel.
It's a cover.
And for the Houthis, it is literally the strongest
and the most powerful card they have to be influential.
In terms of numbers, they are very small.
In terms of power, they have power simply because they get the weapons from Iran.
Otherwise, they are a small minority and they have impact only if they make a lot of noise.
Otherwise, they are irrelevant.
We are waiting for Trump's visit to Saudi Arabia.
Some people are saying that this attack on the Houthis, although the Houthis said they will
start hitting the Israeli ships again.
the day before yesterday, but some people are looking at it as the attacks are related to Trump's visit to Saudi Arabia.
And again, as we mentioned before, this visit is extremely important on several fronts.
It's related to Ukraine, it's related to Gaza, it's related to Sudan, it's related to the Houthis, to the Red Sea, to the future of Saudi Arabia, to a lot of things.
So this is really a very important visit.
Going back to the oil market, we still see the oil market range bound, what we call the sideways scenario, but we are at the lower end of it.
Our fear right now is a recession.
If you seriously look at what's happening right now, you look at the cost of steel.
You cannot have an oil industry without steel.
You cannot have an LNG industry without steel.
And you look at the LNG terminals that we are having right now, the spending is over $80 billion, about $40 billion.
are affected by the tariffs, 40 billion.
And this is just in the next two years.
So there is tremendous impact.
Honest, sorry, it's connected and it's breaking.
Retail sales miss really big.
Holy cow.
February retail sales, 0.2% versus 0.6 expectations.
But more importantly, January was revised down to negative 0.2% from negative 0.5%.
And Empire Manufacturing, negative 20% versus negative 2%.
Holy crap. Okay, Mark, bloodbath coming on us.
Markets are not going to be happy on those retail sales myths.
Or maybe they will because there might be a cut coming.
We have all kinds of signs that probably we are heading for a reaction.
Yeah, futures are down too much.
If you look at the number of tankers in the Mediterranean that's been stuck at sea for more than three weeks, it could be a historic number.
I don't have the historic numbers over the years, but I never seen recent years that many tankers stuck at sea in front of the Swiss Canal simply because there is no demand.
So there is definitely something going on.
Back to you.
I will say, we might be back in the portion of the cycle where bad news is good again.
It is interesting.
All I need to know is I know.
It's crazy.
For a little bit, it was like bizarre a world because good news was good news and bad news was bad news.
But we're back to being bad news is potentially good again.
I don't know about that.
I don't know about that.
Because the Fed, if it starts cutting...
They're not going to cut yet, Robert.
It's going to be Powell versus Besant.
It's kind of an interesting match because they both have, I would say, similar personalities.
And since they're both very calm, very collected, very thoughtful.
But they have very different visions of how the world will be run.
And it seems like...
This data on retail sales plus the jobs data from last week plus the GDP from Atlanta Fed
plus
Concerns around commodities and others dropping I mean
We could be seeing some arm twisting happening and I I don't think they do interest rates cuts
But I think they start signaling signaling the end of QT
They say, look, he might say something as simple as.
This is like the Danish thought process.
I'm just speaking out loud.
I have no specific information.
This is my thought process.
Saying, well, look, we're still doing some tightening.
So we have multiple tools outside of just interest rate cuts.
And one of those is reducing QT.
They don't do it, but they say that they have a tool they can use.
And if he says those words, the market will start acting as if he has already done it.
So it's not about the markets and the stock market per se.
It's about all these other measures.
And I think we have to remind ourselves that we have stimulative measures.
I just don't, I really hope he doesn't do QE, but if they start seeing all of these, I just
have to remind myself, just like the Yen-carry trade, just like other things that have
happened in the last 12 to 18 months, the BTFP.
Governments are willing to do things that are awful for the long term in order to protect their short-term interests.
I have now learned that lesson loud and clear.
This is clearly...
possible.
BTFP made zero sense.
It was incredibly dangerous for the Fed to do.
So the fact that they've actually done that is now telling me that we have a compromise
Fed.
And Simon would say we've always had a compromise Fed.
But, you know, especially since moral hazard, but in 2008, 2009.
But I will say that this is interesting.
The game of chess continues.
Honest, your thoughts.
Yes, I just want to mention that the politics of LNG right now is way, way bigger than the politics of oil.
I'm going to give you some examples.
USLNG reached Syria yesterday.
This is, no one could have imagined this just a couple of weeks ago.
And Iraq right now is switching its import from Iran to LNG.
And Qatar is going to supply Iraq with LNG, but Qatar will not send that LNG to Europe,
which means that the replacement is going to come from the United States.
And for Japan and South Korea to kiss the ring and please Trump,
they already announced plans to import more LNGG.
Ukraine, who is in the other side of the world next to Russia, they are going to import, they already signed contract, they are going to import LNG to Greece, and then that LNG is going to be re-gazified in Greece, and then it's going to go through a web of pipelines until it reaches Ukraine.
So you look at Syria, you look at Iraq,
you look at Ukraine, you look at Japan,
you look at South Korea,
you can see the politics of LNG.
You look at the Red Sea,
you can see the politics of an G.
Qatar has already promised to supply Syria with gas,
but Qatar cannot send
a single lNG carrier from Qatar because it cannot go through the Red Sea.
So the only way Qatar can supply Syria with gas is to buy USLNG from the Mediterranean
and bring it to Jordan and then it will go to Syria.
Back to you.
Thanks on us.
Yeah, I would love to get folks thoughts on.
where we are recession fears i think we're going to hear the r word quite a lot
recessions people are going to be talking about it for a while i am curious to hear people's thoughts
on it matthew last year you know before the market kind of skyrocketed i believe you were concerned
about recession we're hearing now a significant reversal in market sentiment
Is it, are we starting to see early signs of a recession, or is this just a small dip along the way?
Yeah, I think so. As you know, as you rightly say, I've been concerned for a long time.
I got caught out recently. One of your amazing traders who doesn't trade with stop losses.
Thankfully, I do. So I got stopped off when it stopped out when the market turned down recently.
I'm now beginning to get a bit worried that we might be heading a bit lower.
But I still think we're due for a fifth wave pump to the upside. So I think short term we will see some good upside in the markets.
When I say short term, it's a little bit rocky right now.
We're in a corrective wave at the moment, but I still think there's one more push to the upside.
And I think that might be the beginning of easing of monetary policy, whether it's the end of QT,
whether it's obviously the rates this Wednesday are going to stay the same, but maybe further down the line,
they're going to be signaling potentially lower rates.
Let's see.
But it is in response, obviously, to a slowing economy.
We've had that Sarm rule, you know, the chart that shows...
When the three-month average unemployment goes over the 12-month, whatever, it's over half percent, it signals recession coming.
So that has been the most accurate measure or predictor of recession for many, many, many years.
And it is predicting recession.
Obviously, we had the inversion of the yield curve.
So all the signs were there.
It hasn't changed.
Right.
Things are looking really bad from a crypto perspective, and I think they're looking really topy on the equities, on the S&P and so on.
On the crypto side, obviously with meme coins are now out of fashion, we're seeing pump dot fun.
There's now revenues are dropped rock bottom.
So there's a lot of negativity out there, but I think that this is setting the environment really for a nice little pump that we're going to get reasonably soon.
Hopefully, even this Wednesday, if we start to hear talk of lower interest rates, that's going to give us the pump.
But I said, you know, last year I was saying, I think somewhere around April this time, we're going to see a nasty turn to the downside.
So I think that this short-term pump will be very short-term, and I think we're heading to troubled waters.
It's not, you know, obviously helped, I say helped in a bad way by Trump tariffs, etc.
I mean, I don't understand Trump tariffs because obviously it's inflationary and that it raises prices.
But at the same time, it's kind of deflationary as well.
Because obviously it limits growth.
And so you've got a counter there on the on the inflation side.
Inflation does appear to be falling.
The last two reads we had CPI and PPI both the way below expectations.
We just had retail sales falling sharply.
All the signs are there.
So I think it is coming to pass.
Unfortunately, we're going to have a difficult 2025 and I think it will end far worse than it started.
It's interesting because.
I think again, I've been clear on the show.
I actually think it'll be a lot choppier than people think.
I don't think it's going to be like some big crash that goes, you know, 30, 40, 50% drawdown or even 20, 30%.
I think we're likely seeing more chop in the markets.
It just seems like this is the year that everybody's going to think that, hey, think the sky's falling.
But there's so many counterbalancing narratives.
I keep thinking about the Fed.
I keep thinking about, you know, China just coming out and talking about how they're going to
stimulate their economy.
Let me put, they just got on the Biden plan team.
They just got on, I should call it the Yellen plan, but did you all see this?
China comes out and says that they're stimulating.
David Nikoski would love your thoughts.
We're going back to China?
Yeah, I mean, I still like China. I don't own it right now. I've, you know, been in a number of times, you know, three times here in the last, you know, 60 weeks. I still like it. It's just too extended for me to put new positions on. Did very well in it, you know, and again, you know, money is being squished out of the U.S. markets more so.
than anything else. And, you know, most emerging markets are up, you know, say for India,
Indonesia, and there's a few others. But there's some great charts. You know, if you look at the
New York Stock Exchange, you know, the breath on it is actually very good. By the way,
that the New York Stock Exchange contains ADRs, the SMP 500 doesn't. So if you're looking at the New York
composite versus the S&P, it's far outperforming.
Oh, that's a great, great tip.
If you want some emerging market coverage, New York Stock Exchange would be better position.
Oh, fascinating.
I just wanted to say, I, yeah.
I mean, I like to give people a benefit of the doubt, and I've been fairly negative towards Trump,
but I just wondered, and I just put it out there trying to be giving the benefit to say,
maybe he's actually been brave in biting a bullet, because I really think that the QE back in
2008, 9, even the COVID QE was a big, big mistake.
You know, it's shown theoretically that QE doesn't really produce productivity.
It just pumps asset prices, which is, I think, exactly what we've seen.
Because as it hasn't increased productivity, that's why we're having the problems as
QE begins to, you know, as the money starts to tighten a little bit more.
as we're seeing.
We're not got the productivity, so the QE was just covering a sticking plaster.
And maybe Trump is being smart with this and maybe, as I say, biting the bullet.
But I actually think that probably a better way to deal with it all to slow the economy
or maybe more investment into things like AI.
I think AI is definitely the future.
And maybe this is a mistake again, as I say, biting the bullet
because we needed to face the problems back then.
And this probably isn't the best way to face them.
Anyway, it's just a little comment I wanted to throw in.
Yeah, I mean, again, I see the benefit.
I see the thought process.
David Nicoski, just want to make sure,
was that you're cutting off or were you done?
Oh, okay, he's done.
Cool.
Cool.
There were a couple of quick, let's run through some news articles and then we'll close.
I was going to say, Clarna that's eyeing IPO just stole Walmart as a giant customer from a firm that is incredibly bullish for Clarna.
For people that don't know, Clarna is one of the buy now, pay later companies that I still think is going to end up causing more harm than good.
This is not about that. This is about the fact that there's competition that's heating up in Walmart is giving the contract to Klarna over a firm.
So it's a fascinating situation that continues to play out.
It makes Klarna's IPO pretty attractive compared to a firm.
But I think a lot of those financial...
companies they have you know it's complicated I don't have a good thesis on the
buying out pay later companies because as the consumer continues to get a little
bit extended right consumer has been pretty healthy still right they still have
some savings they're getting rid of their savings but they are they still
have some savings as people are forced to go to
go to credit, right, as their credit card debt increases,
will Klarna actually be used,
Klarna and buy now, pay later actually be used as a way
to supplement their fixed income or low income
if their unemployment benefits.
And so that is something that needs to be seen.
I predict that they will be hurt significantly
because overall demand will go down,
but I do think,
Because just as a reminder, by now, pay later is rarely used for staples and primarily used for discretionary spending.
And I think discretionary spending, no matter whether you believe a recession is coming or not, we do expect discretionary spending to go down.
So I'm a little bit.
confused I think there's multiple moves happening at the sorry one last point on that at the same time
if interest rates drop that's positive for clarn on their cost side so clara in a firm and these buy now
pay later companies and so it is a complex situation I don't know if anybody has a good thesis on this but
happy to hear it
You have your hand up on this. I would love to get your thoughts.
It wasn't on this. Say if you want someone else on this.
Go ahead. Let's keep moving on. What's next?
Do you want to do Bitcoin or not?
We can do Bitcoin. I did see Michael Saylor did a whopping 130, not 130, not 130,000, not 1,300, 130 Bitcoin.
Oh my God.
Clearly, the faith may not be there, but I'd love to get your thoughts, Simon.
Micro Strategy continues to...
Sorry, strategy.
They must have gotten McKinsey as their branding expert.
Strategy, let's call it Strategy Bank, because that's where they're going,
has bought 130 Bitcoin this morning.
Is that going to have a major impact on the market, Simon?
No, absolutely won't have any impact at all.
But it's a little signal.
I mean, what it really says is that the pilot is dry and needs to raise more finance.
I don't think it's anything about his conviction in Bitcoin.
He announced a strategy announced a 21-10,
you know, a 21 billion fundraise, I think it was through preference shares.
It'll be interested to see what the market appetite is for that.
What I think is...
You know, if, again, I'll do a if then.
If we are moving into recession, I say that because I actually believe that Trump will just do a fiscal stimulus and the Fed will do a monetary stimulus and we'll just go back to Ponzi as usual.
But if that doesn't happen and we do go into a recessory environment,
I think if the Bitcoin market does correct into that lack of liquidity on the fiscal, on the
Fiat side, there is so much that is going to be happening over the next year or so with Bitcoin
that I think it's a great time to accumulate more Bitcoin into weakness if it's going
into a long-term weakness.
The Bitcoin Strategic Reserve is a thing, highly likely to happen in my book.
We had announcements from BRICS countries like Russia that they're actually allowing all of their banks to get into the Bitcoin Ethereum and Stablecoin size.
And they're actually clearing into trades between China, India and Russia using Bitcoin Ethereum and Stablecoins.
On the Middle Eastern side, they may, you know, the Abu Dhabi sovereign wealth funds invested $2 billion into Binance.
And the only one that's kind of lagging is while we've got our regulations across Europe with Mika, they seem to be the ECB wants to push towards the Europe, the central bank digital currency path, while America pushes towards the stable coin path.
All that to say is that's going to take a while to build.
But Bitcoin is looking more and more like it's going to be in the plumbing of these international transactions and an integral part of all strategies.
So I think if we end up getting a correction, buying into such weakness is a great opportunity to be able to accumulate your stake in Bitcoin, as it were.
Simon, Tom Lee is saying that at least from a technical standpoint, it could drop as low as 62, I believe, was the number.
Okay, that would be beautiful. Another opportunity for people to buy $62,000 Bitcoin, I think, is, it would be a great opportunity for everybody, not financial advice.
Yeah, yeah. I mean, it's fascinating.
I feel like that moment has passed.
And I think that people are going to...
Because everybody feels doom and gloom,
I'm going to take the opposite of that.
I think we're going to continue...
This week is going to be a week
where there's going to be a lot of signaling to the upside.
Data will be negative,
but all the negative data will be positive
because there will be a ton of signaling to the upside.
People like myself,
and I will take my arrows for that,
forget...
That there are a lot of tools in the toolbox.
This week, Trump might come out and say,
hey, I am going to do the $5,000 check from Doge,
even though, by the way, Doge has not saved $5,000.
This week, Trump might come out and say,
hey, Ukraine war, we're close to the table.
By the way, they kind of signaled that over the weekend.
There's so many.
That's the problem with...
15 different things happening at the same time.
And so I think they'll find a way to inflate assets away.
It's going to happen.
So we will see.
I think people are overly, like OECD came out and said,
hey, we're going to have cut.
We expect outlook to be cut significantly globally.
But then they didn't take into account probably when they were writing this over the course of three months.
This is why some of these organizations are going to struggle.
They probably wrote that report over the course of the last month, let's say.
Well, China comes out and says that, hey, we're going to be stimulating.
China announces plan to vigorously boost consumption in bid to shore up economy.
China announced a special action plan to boost consumption yesterday in a bid to prop up domestic
consumption in the world's second largest economy.
Wide-ranging release showed multiple measures to stabilize the stock market and develop more
bond products suitable for individual investors, Jesus.
We know where that goes.
China is currently facing...
Yeah, their recent CPI was low.
Their PPI has been negative growth territory since 2022.
So just as, you know, Hangseng is up about a percent.
And they're trying to boost tourism.
They're trying to boost consumption.
I bet you it ends with some form of stimmy.
So there's just too many moving pieces, everybody.
So don't, just because you hear doom and gloom in the markets,
I wouldn't automatically jump into that.
I was going to say to close up today, a couple of, oh, before I close.
Another piece of news was, I don't know why.
But the Democrats have kind of lost their entire position.
This is the problem with being morally, quote unquote,
considering yourself morally superior about everything.
Mark Kelly, the now senator from Arizona,
a Democratic senator for Arizona,
who used to drive a Tesla,
kind of jumped on the bandwagon of people saying,
I don't support Tesla anymore because I am...
Uh...
anti-elon. The problem is that's like an entire personality right now. And it's kind of boring.
It's very, very boring, Senator Kelly. So if I can give you a little bit of advice, you see,
for years the Democrats, including it was in the party charter that they wanted to move to all EVs by 2035.
They then snubbed Elon at the EV summit where they brought GM and Ford.
How did that end up for you?
Now Elon goes and supports the other party and you double down on this?
Instead of just saying, hey, we need to look past partisan politics and just support good American companies.
They said, no, no, no, we're going to go all in on anti-Elon bias.
I will say by Mark Kelly didn't go and buy a GM EV.
He didn't do that, by the way.
You know why?
Because nobody does that.
Nobody wants those EVs. They're pretty awful, right? And so instead he goes and he buys, I'm not kidding, a Chevy Tahoe that I believe is like 20 miles per gallon or less, probably 15 miles per gallon. And I have to ask my Democrat friends, people were like, oh, this is great. Fuck Elon, all this stuff.
Are we not doing the climate change thing anymore?
Is that over?
Like, is that not the current thing anymore?
Do we not care about the climate anymore?
Like, I'm a little bit confused about why suddenly, like, the climate change party is telling
you to buy gas guzzlers.
Are we going all in on oil and gas?
I didn't get the memo from the Democrat Party.
You all should have definitely sent an email to let us all know that we were very pro
oil and gas now.
Like...
This is, is this the new Democrat Party?
Or are you so confused because you have so many things that you're against
that you don't know what you're actually for anymore?
Maybe that's the problem.
Maybe that's why people don't want to vote for you
because your entire party line is I'm against X.
I'm against Y.
Maybe you should be for something now.
Because if you're against everything, nobody is going to be for you.
That's the problem.
That's why you suck.
That's why nobody wants to vote for you.
It's because people in the middle are just like, this doesn't add up.
You're kind of speaking out of both sides of your asshole.
And I think like it's totally completely contradictory.
You went and put in, you got rid of a car that you claimed help the environment.
And then you went and got a car that you know for sure hurts the environment
and uses oil and gas from companies and from countries that you hate.
Kind of a tough situation.
So maybe figure out, why don't you all meet?
Why don't you all sit down on a table and just kind of hash out who you actually are?
Because if you don't do that, then we don't know what the fuck you're talking about.
All right.
Actually, that is probably a good place for us to end.
I know there are hands up, but I do have to end.
Because if I keep going, then I will lose all my Democrat friends.
So with that, I will see you all tomorrow at 8 a.m. Eastern.
Thanks, everybody. Have a wonderful day.
