4-10-25 - 7am - What's Going On In Trumps Head

Episode Transcript

Speaker 1 (00:00):
Morning from South Dakota.

Speaker 2 (00:01):
When I was in high school, my teachers were encouraging
me to go into the space program. Well what they
actually said, I was taking up space in school.

Speaker 3 (00:09):
So everyone have a great day.

Speaker 4 (00:15):
The Dow closed yesterday at forty thousand and six oh
eight forty five. NASDAK closed up at seventeen thouye four
nine seventy two, and the SMP closed up at five
four hundred and fifty six point nine zero. Futures is
the mark, not quite yet the market. Dow futures are

(00:39):
down slightly, about six hundred and two points, NASDAK futures
are down about four hundred and eighty three points, SMP
five hundred are down about one hundred and eight points.
So the market's the future at the market futures. Uh
This quote at eight fifty five am Eastern time, so
that's what a couple hours ago. Uh So we'll see.

(01:01):
But there's no doubt that the stock markets surged yesterday
in response to Trump's decision to pause the teriffs from
ninety days for all these nations except China.

Speaker 1 (01:16):
And there are a lot.

Speaker 4 (01:18):
Of people out there that are saying that Trump abandoned
his nationalist protectionist agenda, but I don't think that's necessarily true.
It's not completely false. It's not completely true. They left
the flat ten percent global tariff in place, then they
raised the tariffs on the Chinese imports to one hundred

(01:40):
and twenty five percent, kept twenty five percent tariffs on steel, aluminum,
and autos from Canada in Mexico, and is still planning
to move forward on tariffs on copper, lumber, semiconductors, pharmaceuticals,
and I think maybe a couple of others.

Speaker 1 (01:57):
But moreover, there.

Speaker 4 (01:59):
Remains I think a lot of significant uncertainty about future
trade relations between US and all the other say, and
I've heard everywhere from fifty to seventy five nations. Those
trade relations and the uncertainty about them, I don't think
necessarily will end in these ninety days. So we kind

(02:23):
of remain in a messy situation. But I think that's
okay because let's step back and look at kind of
the larger picture. What is really going on here is
a transition, and it's a transition to a new global
economic and security order that is a heavy lift. It's

(02:51):
probably the most significant economic, insecurity or political realignment since
World War two, it's humongous, and so anytime you start
trying to do that, you're trying to reindustrialize this nation.
You are trying to, in my opinion, literally destroy the

(03:17):
Chinese Communist Party. I think I think Trump's brain is
I'm looking for the right verb, not shackled, but it
is consumed by all of these different objectives. He really

(03:38):
does believe in reindustrializing this country. He really does believe
that NAFTA was that giant sucking sound that Ross Perot predicted.
He really does care about the middle class, and he
understands that you need a strong, vibrant, economically sound middle
class to have a strong, growing, and vibrant economy. He

(04:00):
believes in a strong national defense. He believes in the
American world order. He thinks that Russia is not nearly
the existential threat to either Europe or to Us that
many of the globalists believe that it is. I haven't
agree with him on that. Do I think that Russia
is a threat to Western Europe gal because I think

(04:22):
that if Putin doesn't get part of what he wants,
I think he'll just keep pounding and pounding. Because again,
Putin's a dictator, and he doesn't give a ratsass about
his people or the young men that he's sending off
to just die in battle. But he's not seeking world domination.
This is not the era of Nikita Krushchev, when we

(04:44):
are going to overtake you putin, I sincerely believe wants
to I love using his word. He wants to coexist
with us, just on his terms, of course, now don't
get me wrong, on his terms, not on our terms.
But he doesn't seat to expand his dominion over the

(05:04):
entire planet Xijingping does. So this is going to be
a messy transition, not just over the next ninety days,
but over the next couple of years, maybe longer. And
I think during that time we're going to have a
lot of volatility and a lot of uncertainty in both

(05:24):
the markets and in the political realm for the months,
in the perhaps, as I said, the years ahead. Now,
the critics of Trump's tariffs, they all claim that his
administration and his tariffs and tariff announcements crashed the stock market,
and then he reversed course, showing that he obviously had

(05:46):
no clue what he was doing. They say that Trump
and his team are just making up as they go along,
and I'm sure to some extent that may be true.
I think what really happened is he looked at the
bond market. Japan started selling off bonds as fast as
they started selling off our debt as fast as they could.
Now why because uncertainty. They're not really sure. I mean,

(06:10):
Japan's been a great purchase of our debt, and clearly
because we're in a trade deficit with Japan. But suddenly
when they see all this other stuff, when they understand
what Trump's doing, the bond market just began to crash.
Yields just soared, meaning that you need to understand what

(06:34):
that means. When the yields and a treasury when the
interest rate on a treasury the amount that you can
earn by buying a treasury, When that interest rate increases,
that's because they're having a hard time selling it. So
they're trying to entice you to buy these treasuries to
buy our debt because somebody else is selling it off

(06:55):
and they can't find enough buyers, so they increase the
interest rate in order to get someone to ties to
buy a you know, a ninety day or a ten
year treasury bond, whatever it might be. Well, that's what
was happening in the bond market yesterday. I think I
think there were several simultaneous things going on, and I

(07:16):
think this is where most people have a difficult time,
particularly the Democrats. And I think Democrats have a difficult
time understanding the understanding that there's twenty things going on
in Trump's head at one time, some of which contradict
each other, some of which compliment each other, and some

(07:37):
of which are just the polar opposite of each other.
But he's able to hold all of that is in
his head at once. But then there are those that
are the diehard Trump supporters who can see that they
would never admit, like I am trying to convince you
of that.

Speaker 1 (07:56):
I think what was.

Speaker 4 (07:57):
Really going on here was this, And I've I've played
this through my head a thousand times trying to figure
out the context and the components of what I'm about
to say in what order I want to say it
so that I don't lose you, because some of what
I'm about to say is going to piss some people off,

(08:17):
It's going to piss other people off, and then some
people are going to agree with some or all of it,
but not all of it. So it's that's what's going
on in his head. That's what's going on his head.
So let's start with this. He believes in tariffs. We
know that because he's been talking about it for forty years.
He believes in the fact that we do need to

(08:39):
have a realignment of our own economy, we do need
to reindustrialize this economy. He absolutely believes that. He believes
that the Chinese Communist Party is the absolute threat, the
existential threat, not just to our country, but to all
of our allies, and quite frankly, he may not think

(09:01):
this far, but I think even to our enemies. Then
he also believes that by imposing these and this would
be part of his art of the deal, is by
looking at our trade deficits and then calculating what amount

(09:25):
of tariff, what rate of tariff would you need to
impose on a country where we have a trade deficit,
what would that number be in order to recalibrate that
so that we have a trade balance with a country.
And that's where you got some of the outrageous numbers
that really didn't make any sense when he held that

(09:46):
chart up in the rose garden, and that's what caused
the markets to go gyrating because they were like, this
makes they couldn't make any sense of it. Well, it
makes perfect sense when you understand how they made the calculation.
But the way they made the calculation did not fit
necessarily with what they were saying publicly. Because if you're

(10:08):
if you're just going to impose a unitive or as
they kept saying, a reciprocal tariff on another country, well
that means if they were imposing.

Speaker 1 (10:18):
A I was just pull a number out of my butt, a.

Speaker 4 (10:21):
Thirty five percent tariff on us, then we were going
to impose a thirty five percent tariff on them. So
that's what the markets and the economists and everybody thought.
That's that's what they were doing, because that's what uh Navarro,
uh Hassett, the UH Trade rep. And Be'sn't the Secretary

(10:43):
of the Treasury, oh and lutt Make the e Commerce Secretary.
That's what they were all saying publicly, and that's what
Trump was saying publicly. But that's when they held the
chart up. That's not what that represented. The chart represented
something entirely different. So now people were confused. There's a
part of me that said that was deliberate. They wanted
the gyration, they wanted the shock value. They wanted people

(11:07):
to go, holy feez, he's batman. This guy's crazy. He
doesn't know what he's doing. Because sometimes pretending to be
you're the crazy person is a good way of getting
what you want, is a good way of getting people
to pay attention to you. It is a good way
of getting people to stop and go, oh, what was that?

(11:30):
And they stopped and thinking about it?

Speaker 1 (11:32):
What do you think?

Speaker 4 (11:32):
She gene Ping thought, what do you think some of
these What do you think the Prime Minister of Japan thought?
Or whoever? Right now they're in turmoil in South Korea.
But in South Korea, what do you think the old
bag that's the head of the EU, what do you think?

Speaker 1 (11:47):
She thought?

Speaker 4 (11:48):
Well, he's crazy. He's crazy, that's besides what he wanted
to think. And I think in some ways I think
he is crazy. He's crazy as a fox trying to
get what he wants, so he creates to you know,
he's kind of like Bigpenny, you out and create all
this turmoil because you know what you're doing. They don't
know what you're doing, but you know what you're doing.

(12:12):
Then I think the other thing happened. I'm trying to
go I'm trying to do it a little chronological here.
Then I think he didn't care about the market. The
market gyrates, and I think anyone who has ever invested
in equities, who has ever invested in all in the
stock market, knows that you have these gyrations. Now, maybe

(12:34):
they're not quite a huge now, they were back in
two thousand and eight during the financial crisis, and there
have been other times when we've had these huge gyrations.
But if you look at the market, if you look
at all the industrials, at all the indices, there is
an upward trend line over time. The markets will always
make you money. But if you are constantly in and

(12:55):
out of the market, you're trying to time the market, well,
you're not going to do very well. You got some
clarivoyant ability to seize things that other people can't see
because the market has dips and goes up and down.
It's why I'm always fascinated. Well, my mom does this
and drives me crazy. She hears that the market was down,
and I'll instantly get a text message how much money

(13:17):
did I lose today? And I try to explain to
her mom, I don't know. I didn't know how much
money I lost today. And honestly, we can make this
argument neither one of us lost any money because we
didn't sell anything. We may have lost some value, the
value of our stocks may have gone down, but we didn't.
We haven't really realized that loss yet anymore than we've

(13:39):
realized the game yet, because we haven't put that share
of stock on the market to see what somebody will
buy it at, so we can compare that to what
we bought it at. So did we did we make
money on that share or did we lose money on
that share based on our basis based on the price
that we paid for it. So I don't think Trump

(14:01):
cares about the gyrations. Trump does care about the bond market,
because the bond market is where we sell our debt.
That's where we get the money to pay for all
the crap that we shouldn't be paying for, or to
pay for the interest on the interests that we're paying for,
or to pay for all the programs that we're paying

(14:23):
for that we're required by law to pay for that
we can't touch because it's third rail, like Social Security, Medicare,
and Medicaid. So we can't touch that. So that bond
market is incredibly important. And when he saw the yields
on the bonds start to skyrocket, he knew that he
had to do something. So he may not have planned

(14:44):
to do it yesterday. He may not have planned to
do it based on the market, but he did it
based on the market.

Speaker 1 (14:50):
That's my belief. May not be your belief.

Speaker 4 (14:53):
And there will be some people will tell you that, hey, listen,
Treasury secret went to him and said, look, the bond
market's out of control, where it's going to crash if
we don't do something, So let's go ahead and put
a pause on this. Ither people will say that he
put the He always intended to put the pause on.

(15:15):
And then when the bond market began to gyrate like
it was, he pulled the plug yesterday, say as opposed
to tomorrow or next week or next month. Because here's
the other thing that happened. Crazy Trump and the tariff.

(15:36):
Trump and the tariffs that didn't make any sense based
on what they were telling us, got the attention of
and let's just say seventy five countries because I'm not
quite sure what the final number is, but let's just
say let's let's agree to talk about seventy five countries.
So seventy five countries suddenly said, hello, is this the

(15:56):
White House?

Speaker 1 (15:57):
Can we have a meeting? Yeah?

Speaker 4 (15:59):
This is Vietnam, I'm calling. This is Malaysia calling. This
is uh, this is London calling. This is a BBC,
this is London calling. Can Can we can we have
a Can we have a meeting? So he got what
he wanted. Now they're all coming to us except China.
China has now been boxed in. China is now out

(16:22):
there by themselves. Everybody else Vietnam, Cambodia, Thailand, the European Union.
While they're all still there, they're they're trying to play
crazy too by saying all, well, well we're still going
on posy terrors, but but but we want to talk
to you. So they're trying to counter Trump crazy with
their own crazy. But we know what they're doing, so

(16:42):
it's not really crazy. I find all this utterly fascinating
because step back. This is a time, in this little
chronological description of what's taken place, to step back and realize, huh,
where are we today? We're in the first step, well,
maybe the second or third step, but we're in the

(17:05):
initial stages of this realignment, and we're in the initial
stages of getting all these other countries to come to
us and say we want to negotiate. We understand that. Yeah,
we've been for since since World War Two. We've been
taking advantage of you. And now you've got the crazy
guy in there, and we know that he's determined.

Speaker 1 (17:27):
To do it, and we know he will do it.
So yeah, let's sit down and talk.

Speaker 4 (17:32):
Except Shine, what about them?

Speaker 5 (17:41):
It's Michael there has never ever been a politician. It
took this bick of chance on his future, on his past,
and on the country.

Speaker 1 (17:55):
We have the.

Speaker 5 (17:56):
Industrialized ourselves almost to the poorhouse.

Speaker 1 (18:01):
This has to.

Speaker 5 (18:01):
Be done, and it won't be done overnight, and you
know it. And you're trying to tell everybody thank you.

Speaker 4 (18:11):
Before I go to where I wanted to go. That's
a great point that I should have put in my
little chronology of his thinking. The other thing that's going
on is, and I don't know. I've never met Donald Trump,
and in fact, this is probably the first time in
a long time that I don't I'm trying to think

(18:37):
through I really don't know anyone in this administration personally.
There may be you know, there may be somebody that's
out in one of the departments or agencies somewhere that is,
you know, a deputy secretary, an undersecretary.

Speaker 1 (18:53):
But I don't.

Speaker 4 (18:54):
These are people that I don't know, because this is
a truly a new generation and a new group of
people that Trump has brought in. And I think that's
because again, the four years in the wilderness with oatmeal
brain gave him time to think and whether this is
inherently part of his personality or this is something that

(19:18):
he has just decided that based on all of those
things that happened to him, Russia, Russia, Russia, the impeachments.

Speaker 1 (19:27):
How nasty.

Speaker 4 (19:28):
I mean, look, even I was surprised at how nasty Washington,
DC is, and I've been involved in politics my entire life.
Here's a guy who was always just on the outside
of politics, on the periphery of politics. Then he gets
thrown into the highest position of available in politics and
he just gets demolished. Except they don't because he never

(19:56):
backed down. And then the four years in the wild
and so to speak, and then people trying to literally
kill him, I think gave him an attitude of oh,
hold my beer. I'm gonna do this because now for
all the bluster and the bull crap about you know,
I'm gonna run for a third term.

Speaker 1 (20:17):
Again, that's just Trump being Trump.

Speaker 4 (20:20):
And if you take that conversation seriously, then you're falling
for his trap.

Speaker 1 (20:24):
He knows he.

Speaker 4 (20:25):
Can't serve another term, and quite frankly, I don't think
that he would even if he could, because of his age.
I think he's on a mission. This is the Blues Brothers,
and they're on a mission from God. And he's determined
to do this and he does not care about his

(20:45):
political future, which is probably why he jokes about a
third term, because he knows, deep down inside he doesn't
care about that political future. He's got this chance and
he's gonna do this realignment. And to your point, it
is we've not had anyone like this who on his
own is responding to the current landscape and saying this

(21:12):
painting is entirely wrong. I'm going to rip it out
of the frame and we're going to repaint this portrait
this landscape. Let's precisely what he's doing. Now, let's go
back to the crazy, because the crazy is absolutely on purpose.
Scott descent yesterday speaking to the American Bankers Associations.

Speaker 2 (21:35):
We've been overwhelmed with the response to come to DC
and negotiate to President Trump. On Monday, had a very
good call with a Japanese prime minister, a very good
call with the President of Korea yesterday. We're seeing a
delegation from Vietnam. So I think we have about seventy
negotiations lined up. I'm not planning to go anywhere for Easter.

(22:01):
And I believe that I had obviously been providing advice
on the tariffs, working more on the tax bill that
we'll talk about. Uh, and now I'm going to take
a week.

Speaker 4 (22:17):
Now, did you just hear what he just We got
the tariffs, we got the tax bill, we got the budget,
we got reconciliation.

Speaker 1 (22:24):
We've got all of these things going on.

Speaker 4 (22:29):
This is where I just want you to perceive, because
been there, done that, where the amount of time and
energy that it is taking. Now, I know that Trump
is like the energizer Bunny, but I don't know Scott Bessent.
Bessin't and I don't really I keep saying Bescent, but

(22:51):
everybody else keeps saying Bessin.

Speaker 1 (22:52):
So I guess it's bessn' uh.

Speaker 4 (22:55):
I don't know of him very much, but what I've
observed is he's dug in. Whatever personal life he has
is on hold, because when he jokes about I'm not
going anywhere for Easter, that's not a joke. He's not

(23:17):
going anywhere anywhere for a long time because he's devoted
totally to these negotiations. And at the same time he's
doing the negotiations on the tariffs, he's also got in
a tax bill.

Speaker 1 (23:35):
He's got all these other things to do.

Speaker 4 (23:38):
So while we may bitch and moan about federal bureaucrats
or Congress taking two weeks off I think tomorrow for Easter,
these guys don't. They don't do that. And I can
guarantee you too that because I saw this in Bush,
and if Bush did it, Trump's got to be worse

(24:00):
about it. That even though Bush may have gone to Crawford,
anytime I called Bush at Crawford he was available, it
was never like, no, he's out getting a tan right now. No,
he's out in the pool now. There were times when
they'd say, we've got we've got to go get him
because he's out cutting brush. But yeah, hang on, give

(24:23):
us five minutes, ten minutes, and we'll get him on
the phone. And they take us that phone and a secure
phone to wherever he was and I could hear him
breathing hard, and he went brand what's going on? He
was always available. I think Trump's doing exactly the same thing.
When he on the golf course, he stopped playing, he
stopped in the middle of a round to uh the

(24:46):
the White House Tom's office came to him and brought
him a secure laptop so he could watch the bombing
of the Hoothies.

Speaker 1 (24:56):
Yeah.

Speaker 2 (24:57):
Constantly working a negotiating role in a lot of the tariffs,
starting with the Japanese delegation. But in terms of escalation, unfortunately,
the biggest defender in the global trading system is China,
and they're the only country becaus escalated. And I can
tell the rest of the world that I'm not sure

(25:20):
what it was. The Prime minister, the Economic minister in
Spain made some comments this morning, Oh, well, maybe we
should align ourselves more with China. That would be cutting
your own throat, because I can tell you that these
Chinese exports that the US tariff wall is going to
keep out that China for all of you who can

(25:40):
remember that Disney movie of the brooms carrying the buckets
of water. That is the Chinese business model. It never stops.
They just keep producing and producing and dumping and dumping,
and it's going somewhere. And I think rob at the
end of the day that we can probably reach the

(26:01):
ideal with our allies, with the other countries that have
been long term, that been good military allies, not perfect
economic allies, and then we can approach China as a group.

Speaker 4 (26:16):
And that's the plan. And China has fallen for it,
which I find fascinating. The CNN had on their Cairn
just moments ago about you know, we've got our tariffs
on them at eighty four eighty five percent, whatever it is,
and they've now bumped theirs up to one hundred and

(26:36):
twenty four and twenty five percent. They just keep isolating
themselves further and further and further, and I think they just, well,
it gets to what we're going to talk about in
the next hour, China. And this goes to why I
think Trump is moving so rapidly. China is falling apart.

(27:02):
And I'll give you the receipts in the next hour.
But one more time. Here's the Treasury Secretary bessent about China.

Speaker 3 (27:12):
In a hearing yesterday, Josh Holly exposed that the Chinese
government was given access to American data by Mena Zuckerberg.
I don't think you're the patriot you claim you are.

Speaker 4 (27:27):
You know, I think the other thing going on is
that we probably have tech talk is going to disappear.
He gave Trump gave a seventy five I think a
seventy five day extension or something. I don't think China's
going to agree to allow Bite Dance or whatever it is,
whoever it is that owns the company or who owns

(27:49):
the platform to sell it. I think that's that's over with.
That's done. So Descent is absolutely convinced that and is
convincing that China has pushed itself into a corner, and

(28:11):
he's really optimistic about where we're going with this.

Speaker 2 (28:15):
For the last four decades, basically since I became my
career in Wall Street, Wall Street has grown wealthier than
ever before, and it can continue to grow and do well.
But for the next four years, the Trump agenda is
focused on main Street. It's main streets turn, It's main
Street's turn.

Speaker 1 (28:34):
To higher workers.

Speaker 2 (28:35):
It's main street's turn to drive investment, and it's main
streets turn to restore the American dream.

Speaker 4 (28:42):
In other words, this is the transition. This is the transformation.
This is the realignment from a financialized society to an
industrialized society. And that's not going to happen overnight. That's
going to take time. I mean, what was this, Oh,
it was the story about out of Chatham. We did

(29:04):
in the very beginning of the show about in Savannah, Georgia,
they were trying to build a a Department of Safety
building of some sort to house nine to one one
and other stuff. And a year into it they've not
even gotten beyond the bid process. We can't build crap.

(29:29):
That ties then into the other transformation going on, and
that's the deregulation. So think about all the balls in
the air right now. You're trying to do DOSEE, trying
to cut waste, fraud and abuse, trying to get money
back into the system that trillion dollars, which would lower

(29:51):
the debt, lower the deficit, which means that you could
also lower tax rates, you could cut taxes. You're doing
all of that, You're doing the Reconciliation Bill you're trying
to get the budget somewhat towards a pathway to balance.
You're trying to reduce the debt. You're trying to refinance
the debt. You're doing the deregulation, you're doing all of

(30:14):
these things. I mean to the earlier talkback point, there
hasn't been anyone. Reagan came in, and as much as
I door Ronald Reagan, which I do, it was primarily
focused on let's stop inflation and let's get these tax
cuts in place to reboot the economy, which was great

(30:37):
at that time. But now they gonna remember that's nineteen
eighty and then when nineteen eighty eight comes along, you've
got NAFTA and you've got Ross Brow talking about the
sucking sound. Now we start to see the effects of
NAFTA and the d industrialization, the admission of China into
the World Trade Organization, and now we see that, oh,

(30:59):
we we have to fix all of this stuff, and
it's not going to happen overnight. This is a long slog,
which kind of hate to say this, but get ready
because the midterms are probably, as of this very moment,
much more important than most people realize.

Speaker 1 (31:20):
Absolutely critic